Central Coast Bancorp Announces a 22.7% Increase in First Quarter Earnings per Share
SALINAS, CA -- 04/21/2005 -- Central Coast Bancorp (NASDAQ: CCBN), the
holding company for Community Bank of Central California, today announced a
22.7% increase in diluted earnings per share for the first quarter of 2005
as per share earnings were $0.27 versus $0.22 in the prior year period.
The Company also achieved record quarterly net income of $3,845,000 for an
increase of 20.5% over the $3,192,000 reported in the first quarter of
2004. As compared to the fourth quarter of 2004, net income increased
24.6% over the $3,086,000 reported in that quarter and diluted earnings per
share increased 17.4% over the $0.23 reported. All earnings per share and
applicable share data for the 2004 periods have been adjusted for the
five-for-four stock split distributed on February 28, 2005.
The annualized return on average equity and a return on average assets were
15.0% and 1.34%, as compared to 14.0% and 1.27% for the same period in
2004.
The Company ended the first quarter with total assets of $1,168,457,000,
for an increase of $4,036,000 (0.3%) from the 2004
year-end balance of $1,164,661 and an increase of $147,235,000 (14.4%) from
the $1,021,222,000 balance at March 31, 2004. At the end of the first
quarter of 2005, total loans were $927,739,000, a slight decrease of
$3,777,000 (0.4%) from
year-end, but an increase of $153,214,000 (19.8%) on a year-over-year
basis. Deposits at quarter-end totaled $1,051,166,000, which was
essentially flat from the 2004 year-end balance. On a year-over-year
basis, deposits increased $133,580,000 (14.6%).
"Our year-over-year growth in the major balance sheet items of assets,
loans and deposits has been achieved internally and is reflective of the
continuing strength of our community based banking franchise," stated Nick
Ventimiglia, Chairman and CEO. He continued, "We are pleased with the
record quarterly earnings and the 22.7% increase in per share earnings in
this first quarter of 2005. The continuing actions to raise interest rates
taken by the Federal Reserve Board through its Federal Open Market
Committee (FOMC) have had a favorable impact on the Company's net interest
margin. The Company's balance sheet is positioned such that further rate
increases should continue to have a favorable impact on earnings going
forward."
Financial Summary:
Interest income, net interest income, net interest margin and the
efficiency ratio are discussed below on a fully taxable equivalent basis.
These items have been adjusted to give effect to $297,000 and $272,000 in
taxable equivalent interest income on tax-free investments in the
three-month periods ending March 31, 2005 and 2004.
Net interest income for the first quarter of 2005 was $13,292,000, an
increase of $2,956,000 (28.6%) from the first quarter of 2004. Interest
income for the first quarter of 2005 was $16,865,000, an increase of
$3,813,000 (29.2%) from the first quarter of 2004. Increases in both the
average earning assets and the yields earned on the assets contributed to
the substantial improvement in interest income. In the first quarter of
2005, average earning assets were $159,322,000 (17.0%) over the prior year
period. This increase in volume of earning assets added $2,441,000 to
interest income. The average yield increased 63 basis points to 6.22%,
which added $1,372,000 to interest income. The yield on earning assets
reflected an increase of 19 basis points from the 6.03% earned in the
fourth quarter of 2004.
Interest expense in the first quarter of 2005 totaled $3,573,000, which was
an increase of $857,000 (31.6%) over the first quarter of 2004. Rates paid
on interest bearing liabilities have begun to move up on a year-over-year
basis. The average rate paid on interest bearing liabilities in the first
quarter of 2005 increased 24 basis points to 1.88% as compared to 1.64% in
the year earlier period and increased 21 basis points from 1.67% in the
fourth quarter of 2004. The higher rates increased interest expense by
$353,000 from the year earlier period. Average balances of interest
bearing liabilities in the first quarter of 2005 increased by $106,605,000
(16.1%) over the prior year period, which added $504,000 to interest
expense.
The net interest margin for the first quarter of 2005 was 4.90% as compared
to 4.87% for the fourth quarter of 2004 and 4.42% in the first quarter of
2004. If the FOMC continues to raise the interest rates, we would expect
the net interest margin to improve slightly during the second quarter.
The Company provided $1,150,000 for loan losses in the first quarter of
2005 as compared to $65,000 in the first quarter of 2004. At March 31,
2005, nonperforming and restructured loans totaled $1,041,000 as compared
to $835,000 at December 31, 2004 and $10,520,000 at March 31, 2004. The
ratio of the allowance for loan losses to total loans was 1.86% at March
31, 2005, 1.75% at December 31, 2004 and 2.15% at March 31, 2004.
Noninterest income increased $136,000 (14.8%) in the first quarter of 2005
as compared to the first quarter of 2004. Much of the change was due to
realizing a $12,000 gain on the sale of securities in 2005 as compared to a
loss of $104,000 in 2004.
Noninterest expenses increased $667,000 (11.1%) to a total of $6,703,000 in
the first quarter of 2005 as compared to the first quarter 2004.
Noninterest expenses increased primarily due to increased business activity
and the two branches added in 2004. The efficiency ratio for the period
ended March 31, 2005 reflected a significant decrease to 46.7% from the
53.6% realized in the first quarter of 2004. The improvement in the
efficiency ratio is the result of income growing at a faster rate than did
the noninterest expenses.
During the first quarter of 2005, the Company repurchased 49,615 shares of
its common stock at an average price of $17.60. The Company has 197,749
shares authorized for repurchase remaining under its February 2001
repurchase plan. The above shares have been adjusted for the five-for-four
stock split distributed on February 28, 2005.
Central Coast Bancorp operates as a holding company for Community Bank of
Central California. Community Bank, headquartered in Salinas, has fourteen
branch offices located in: the Monterey County communities of Salinas (2),
Monterey (2), Seaside, Marina, Castroville, Gonzales, Soledad and King
City; the Santa Clara County community of Gilroy; the Santa Cruz County
communities of Santa Cruz and Watsonville; and in the San Benito County
community of Hollister. The Bank provides traditional deposit, lending,
mortgage and commercial products and services to business and retail
customers throughout the California Central Coast area.
Information on the Company and its subsidiary Bank may be obtained from the
Company's website www.community-bnk.com. Copies of the Company's annual
report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K, and all amendments thereto are available free of charge on the
website as soon as they are filed with the SEC. To access these reports
through a link to the Edgar reporting system simply select the "Central
Coast Bancorp -- Corporate Profile" menu item, then click on the "Central
Coast Bancorp SEC Filings" link. Section 16 insider filings can also be
accessed through the website. Follow the same instructions and select
"Central Coast Bancorp SEC Section 16 Reports."
Forward-Looking Statements
In addition to the historical information contained herein, this press
release contains certain forward-looking statements. The reader of this
press release should understand that all such forward-looking statements
are subject to risks and uncertainties that could cause actual results to
differ materially from those projected. Changes to such risks and
uncertainties, which could impact future financial performance, include,
among others, (1) competitive pressures in the banking industry; (2)
changes in the interest rate environment; (3) general economic conditions,
nationally, regionally and in operating market areas, including a decline
in real estate values in the Company's market areas; (4) the effects of
terrorism, the threat of terrorism or the impact of potential military
conflicts; (5) changes in the regulatory environment; (6) changes in
business conditions and inflation; (7) changes in securities markets; (8)
data processing problems; (9) variances in the actual versus projected
growth in assets; (10) return on assets; (11) loan losses; (12) expenses;
(13) rates charged on loans and earned on securities investments; (14)
rates paid on deposits; and (15) fee and other noninterest income earned,
as well as other factors. This entire press release and the Company's
periodic reports on Forms 10-K, 10-Q and 8-K should be read to put such
forward-looking statements in context and to gain a more complete
understanding of the uncertainties and risks involved in the Company's
business.
CENTRAL COAST BANCORP
CONSOLIDATED CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands, except share and per share data)
Three Months Ended
March
2005 2004
----------- -----------
Statement of Income Data
Interest income
Loans (including fees) $ 14,690 $ 11,137
Investment securities 1,765 1,578
Other 113 65
----------- -----------
Total interest income 16,568 12,780
----------- -----------
Interest expense
Interest on deposits 3,501 2,647
Other 72 69
----------- -----------
Total interest expense 3,573 2,716
----------- -----------
Net interest income 12,995 10,064
Provision for loan losses 1,150 65
----------- -----------
Net interest income after
provision for loan losses 11,845 9,999
Noninterest income
Service charges on deposits 716 740
Other 338 178
----------- -----------
Total noninterest income 1,054 918
Noninterest expenses
Salaries and benefits 4,124 3,564
Occupancy 768 638
Furniture and equipment 532 483
Other 1,279 1,351
----------- -----------
Total noninterest expenses 6,703 6,036
----------- -----------
Income before provision for income taxes 6,196 4,881
Provision for income taxes 2,351 1,689
----------- -----------
Net income $ 3,845 $ 3,192
=========== ===========
Common Share Data
Earnings per share (adjusted for 5/4
stock split distributed on February 28, 2005)
Basic $ 0.28 $ 0.23
Diluted $ 0.27 $ 0.22
Weighted average
shares outstanding 13,946,000 13,630,000
Weighted average
shares outstanding - diluted 14,486,000 14,306,000
Book value per share $ 7.43 $ 8.52
Tangible book value $ 7.43 $ 8.52
Shares outstanding 14,084,000 10,862,000
CENTRAL COAST BANCORP
CONSOLIDATED CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands)
March Dec. 31 March
Balance Sheet Data 2005 2004 2004
----------- ----------- -----------
Assets
Cash and due from banks $ 37,828 $ 49,068 $ 45,612
Federal funds sold 17,107 9,029 20,901
Available-for-sale securities
- at fair value 179,422 169,151 180,163
Loans:
Commercial 242,361 261,408 205,349
Real estate-construction 71,878 61,366 38,628
Real estate-other 601,749 594,507 519,010
Consumer 13,074 15,463 12,630
Deferred loan fees, net (1,323) (1,228) (1,092)
----------- ----------- -----------
Total loans 927,739 931,516 774,525
Allowance for loan losses (17,281) (16,270) (16,654)
----------- ----------- -----------
Net loans 910,458 915,246 757,871
Premises and equipment, net 3,711 3,944 2,730
Accrued interest receivable
and other assets 19,931 18,223 13,945
----------- ----------- -----------
Total assets $ 1,168,457 $ 1,164,661 $ 1,021,222
=========== =========== ===========
Liabilities and Shareholders' Equity
Deposits:
Demand, noninterest bearing $ 263,933 $ 344,244 $ 239,958
Demand, interest bearing 145,623 141,190 145,267
Savings 289,740 259,319 254,579
Time 351,870 306,615 277,782
----------- ----------- -----------
Total Deposits 1,051,166 1,051,368 917,586
Accrued interest payable
and other liabilities 12,583 12,177 11,092
Shareholders' equity 104,708 101,116 92,544
----------- ----------- -----------
Total liabilities and
shareholders' equity $ 1,168,457 $ 1,164,661 $ 1,021,222
=========== =========== ===========
Asset Quality
Loans past due 90 days or
more and accruing interest $ 348 $ - $ 236
Nonaccrual loans - 102 9,468
Restructured loans 693 733 816
----------- ----------- -----------
Total nonperforming assets $ 1,041 $ 835 $ 10,520
=========== =========== ===========
Allowance for loan losses
to total loans 1.86% 1.75% 2.15%
Allowance for loan losses to NPL's 1660% 1949% 158%
Allowance for loan losses to NPA's 1660% 1949% 158%
Regulatory Capital and Ratios
Tier 1 capital 105,240 100,473 90,233
Total capital 117,782 113,104 100,782
Tier 1 capital ratio 10.5% 10.0% 10.8%
Total risk-based capital ratio 11.8% 11.2% 12.0%
Tier 1 leverage ratio 9.0% 9.1% 9.0%
CENTRAL COAST BANCORP
CONSOLIDATED CONDENSED FINANCIAL DATA
(Unaudited)
(Dollars in thousands)
Three Months Ended
March
2005 2004
---------- ----------
Selected Financial Ratios
Return on average total assets 1.34% 1.27%
Return on average shareholders' equity 15.01% 14.03%
Net interest margin (tax equivalent basis) 4.90% 4.42%
Efficiency ratio (tax equivalent basis) 46.72% 53.63%
Selected Average Balances
Loans $ 906,798 $ 750,714
Taxable investments 118,219 113,163
Tax-exempt investments 55,277 49,419
Federal funds sold 18,730 26,417
---------- ----------
Total earning assets $1,099,024 $ 939,713
---------- ----------
Total assets $1,165,918 $1,008,129
---------- ----------
Demand deposits - interest bearing $ 139,154 $ 131,397
Savings 288,395 252,526
Time deposits 338,798 275,738
Other borrowings 4,383 4,464
---------- ----------
Total interest bearing liabilities $ 770,730 $ 664,125
---------- ----------
Demand deposits - noninterest bearing $ 282,542 $ 246,703
---------- ----------
Shareholders' equity $ 103,864 $ 91,498
---------- ----------