BVC Bay View Cap Cp

Bay View Capital Corporation Announces First Quarter Results SAN MATEO, Calif., April 27 /PRNewswire-FirstCall/ -- Bay View Capital Corporation (the "Company") today reported its results for the first quarter of 2004. As previously announced, during the fourth quarter of 2003, the Company's Board of Directors amended the Plan of Dissolution and Stockholder Liquidity (the "Plan"), which the Company adopted in October 2002, to become a plan of partial liquidation. As a result, the Company discontinued its use of the liquidation basis of accounting and re-adopted the going concern basis of accounting effective October 1, 2003. The Company reported its results under the liquidation basis of accounting from September 30, 2002 through September 30, 2003. First Quarter Results The Company reported a first quarter 2004 net loss of $1.1 million, or $0.02 per diluted share, compared to a fourth quarter 2003 net loss of $0.9 million, or $0.01 per diluted share. Net interest income increased to $2.6 million for the first quarter of 2004 from $1.0 million for the prior quarter. The increase in net interest income was primarily due to lower interest expense resulting from the redemption of $63.5 million, or approximately 74%, of the 9.76% Cumulative Capital Securities (NYSE:BVS) in December 2003. At March 31, 2004, the Company's total assets were $368 million compared to $364 million at December 31, 2003. The Company continues to make progress in resolving the remaining assets and liabilities from discontinued banking activities. During the quarter, the Company's investment in operating lease assets was reduced by $21.6 million primarily as a result of repayments. Also during the quarter, the Company sold approximately $5.1 million of its mortgage-backed securities and received approximately $5.5 million of loan repayments from its liquidating loan portfolio. At March 31, 2004, the net carrying value of the Company's remaining investment in loans to be liquidated totaled $6.8 million compared to $12.1 million at December 31, 2003. The Company's total nonperforming assets, net of mark-to-market valuation adjustments, declined to $5.8 million at March 31, 2004 from $7.1 million at December 31, 2003. The decrease in nonperforming assets was primarily due to a decline in nonaccruing asset-based loans and the sale of real estate owned and other repossessed assets. Total loans delinquent 60 days or more declined to $652 thousand at March 31, 2004 from $748 thousand at December 31, 2003. At March 31, 2004, the Company had deferred tax assets of approximately $16.5 million, consisting of net deferred tax assets of $38.0 million less a valuation allowance of $21.5 million. On March 31, 2004, the Company paid the quarterly dividend due on the remaining Bay View Capital I Trust, 9.76% Cumulative Capital Securities (the "Capital Securities") outstanding as of March 30, 2004 totaling $0.61 per Capital Security. In connection with the liquidation of the assets and satisfaction of the liabilities of Bay View Bank, N.A. (the "Bank"), remaining after the Bank's September 30, 2003 dissolution, the Company anticipates making a cash distribution of $0.25 per share to common stockholders at the end of the second quarter of 2004 as previously indicated. The Company further anticipates continuing to redeem the Capital Securities through a series of one or more additional partial redemptions beginning in June 2004. The Company's Board of Directors has authorized the Company to seek stockholder approval to authorize an amendment to the Company's Certificate of Incorporation to effect a 1-for-10 reverse stock split of the issued and outstanding shares of the Company's common stock in the second quarter of 2004. If approved by the Company's stockholders, a reverse stock split would affect all shares of common stock, including those shares underlying stock options and warrants, outstanding immediately prior to the effective time of the reverse stock split. The Company intends to file a preliminary proxy statement regarding the reverse stock split proposal with the Securities and Exchange Commission and mail a definitive proxy statement regarding this proposal to its stockholders. Bay View Acceptance Corporation BVAC, a wholly-owned subsidiary of the Company, is a Southern California-based auto finance company engaged in the indirect financing of automobile purchases by individuals. BVAC currently acquires auto installment contracts from over 7,000 manufacturer-franchised and independent auto dealers in 24 states and has positioned itself in the market as a premium priced lender for well-qualified borrowers seeking extended financing terms and higher advances than those generally offered by traditional lenders. This strategy has enabled BVAC to establish a loyal dealership network by satisfying a unique niche within the indirect auto finance arena, which is not dominated by large commercial banks and captive finance companies. BVAC's first quarter 2004 net income was $412 thousand compared to net income of $586 thousand for the fourth quarter of 2003. The decrease was primarily the result of higher noninterest expense and lower noninterest income partially offset by an increase in net interest income. During the quarter, BVAC sold $5.3 million of auto installment contracts and received repayments of $22.8 million. BVAC purchased $69.3 million of auto installment contracts during the first quarter of 2004, compared to $67.4 million for the prior quarter. Purchase volume for the first quarter of 2004 consisted of 2,289 contracts with a weighted-average contract rate of 7.90% and a weighted-average FICO score of 734; purchase volume for the fourth quarter of 2003 consisted of 2,292 contracts with a weighted-average contract rate of 8.03% and a weighted-average FICO score of 735. At March 31, 2004, BVAC was servicing 29,824 installment contracts representing $560 million compared to 30,800 installment contracts representing $563 million at December 31, 2003. Other As discussed above, the Company reported its results under the liquidation basis of accounting for the periods September 30, 2002 through September 30, 2003. The Company is providing herein: Financial Condition: Consolidated Statements of Financial Condition as of March 31, 2004 and December 31, 2003 Results of Operations / Change in Net Assets: Consolidated Statements of Operations and Comprehensive Loss for the three-month periods ended March 31, 2004 and December 31, 2003 and a Consolidated Statement of Changes in Net Assets in Liquidation (Liquidation Basis) for the three-month period ended March 31, 2003. The Company will host a conference call at 2:00 p.m. PDT on April 28, 2004 to discuss its financial results. Analysts, media representatives and the public are invited to listen to this discussion by calling 1-888-793-6954 and referencing the password "BVC." An audio replay of this conference call will be available through Friday, May 28, 2004 and can be accessed by dialing 1-800-294-2498. Bay View Capital Corporation is a financial services company headquartered in San Mateo, California and is listed on the NYSE: BVC. For more information, visit our website at http://www.bayviewcapital.com/. Forward-Looking Statements All statements contained in this release that are not historic facts are based on current expectations. Such statements are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995) in nature and involve a number of risks and uncertainties. Although the Company currently believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated by the forward-looking statements will be realized. For information regarding factors that could cause the results contemplated by the forward-looking statements to differ from expectations, such as the inability to achieve the financial goals of both our plan of partial liquidation, including any financial goals related to contemplated asset resolutions; and our plan for the continuing operation of the auto business, including the inability to use net operating loss carryforwards that the Company currently has, please refer to the Company's Reports on Forms 10-K and 10-Q filed with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such statements should not be regarded as a representation by the Company or any other person. The Company disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Bay View Capital Corporation Consolidated Statements of Financial Condition March 31, December 31, 2004 2003 (Unaudited) Going Concern Basis (Dollars in thousands) ASSETS Cash and cash equivalents: Cash and due from depository institutions $1,052 $11,434 Short-term investments 3,077 129 4,129 11,563 Restricted cash 40,939 32,240 Securities available-for-sale: Retained interests in securitizations 29,040 28,590 Mortgage-backed and other securities 750 6,139 Loans held-for-sale: Installment contracts 206,929 165,574 Other loans 6,817 12,074 Investment in operating lease assets, net 45,133 66,657 Real estate owned, net 4,254 4,955 Premises and equipment, net 373 371 Repossessed vehicles 420 438 Income taxes, net 15,540 21,149 Goodwill 1,846 1,846 Other assets 12,191 12,340 Total assets $368,361 $363,936 LIABILITIES AND STOCKHOLDERS' EQUITY Borrowings: Warehouse credit facility $155,158 $138,221 Other borrowings 10,211 16,055 Junior Subordinated Deferrable Interest Debentures 24,784 24,784 Other liabilities 12,361 17,500 Liquidation reserve 10,550 11,626 Total liabilities 213,064 208,186 Stockholders' equity: Common stock ($.01 par value); authorized, 80,000,000 shares; issued, 2004 - 65,820,977 shares; 2003 - 65,793,330 shares; outstanding, 2004 - 65,786,545 shares; 2003 - 65,758,898 shares 658 658 Additional paid-in capital 156,615 156,588 Accumulated deficit (1,943) (855) Treasury stock, at cost; 34,432 shares (587) (587) Accumulated other comprehensive gain (loss) 554 (54) Total stockholders' equity 155,297 155,750 Total liabilities and stockholders' equity $368,361 $363,936 Bay View Capital Corporation Consolidated Statements of Operations and Comprehensive Loss (Unaudited) For the Three Months Ended March 31, December 31, 2004 2003 (Amounts in thousands, except per share amounts) Interest income: Interest on loans and leases $3,754 $3,457 Interest on mortgage-backed securities 29 166 Interest and dividends on investment securities 728 1,013 4,511 4,636 Interest expense: Interest on borrowings 1,942 3,612 1,942 3,612 Net interest income 2,569 1,024 Noninterest income: Leasing income 5,228 6,907 Loan fees and charges 500 213 Loan servicing income 947 1,132 Gain (loss) on sale of assets and liabilities, net (305) 842 Other, net 771 1,241 7,141 10,335 Noninterest expense: General and administrative 6,541 5,747 Leasing expenses 4,667 5,938 Real estate owned operations, net 291 831 11,499 12,516 Loss before income tax benefit (1,789) (1,157) Income tax benefit (702) (302) Net loss $(1,087) $(855) Basic loss per share $(0.02) $(0.01) Diluted loss per share $(0.02) $(0.01) Weighted-average basic shares outstanding 65,778 64,187 Weighted-average diluted shares outstanding 65,778 64,187 Net loss $(1,087) $(855) Other comprehensive income (loss), net of tax: Change in unrealized gain (loss) on securities available-for-sale, net of tax expense (benefit) of $389 and ($35) for the three months ended March 31, 2004 and December 31, 2003, respectively 608 (54) Other comprehensive income (loss) 608 (54) Comprehensive loss $(479) $(909) Bay View Capital Corporation Consolidated Statement of Changes in Net Assets in Liquidation (Liquidation Basis) (Unaudited) For the Three Months Ended March 31, 2003 (Dollars in thousands) Net assets in liquidation, December 31, 2002 $410,064 Pre-tax income from operations 1,415 Changes in estimated values of assets and liabilities (1,664) Income tax benefit 802 Net income from operations 553 Dividends on Capital Securities (2,251) Other changes in net assets in liquidation (A) 2,598 Net assets in liquidation, March 31, 2003 $410,964 (A) Primarily represents proceeds from stock options and warrants exercised. BAY VIEW CAPITAL CORPORATION SELECTED FINANCIAL DATA (Unaudited) For the Three Months Ended March 31, December 31, March 31, 2004 2003 2003 Liquidation Going Concern Basis Basis (Amounts in thousands, except per share amounts) Selected Results of Operations/Changes in Net Assets in Liquidation Information: Net interest income (A) $2,569 $1,024 $3,294 Leasing income 5,228 6,907 12,911 Gain (loss) on sale of assets and liabilities, net (305) 842 53 Other income, net 2,218 2,586 1,970 General and administrative expenses (6,541) (5,747) (9,460) Leasing expense (4,667) (5,938) (9,454) Other expense (291) (831) (150) Pre-tax loss from operations (1,789) (1,157) (836) Changes in estimated liquidation values of assets and liabilities -- -- (1,664) Income tax benefit 702 302 802 Other changes in net assets in liquidation -- -- 2,598 Change in net assets in liquidation -- -- $900 Net loss $(1,087) $(855) At Dec. 31, At March 31, 2004 2003 At March 31, 2003 Going Concern Basis Liquidation Basis (Amounts in thousands) Loans and Leases Receivable: Auto installment contracts (B) $206,929 $165,574 $157,701 Other loans and leases: Multi-family mortgage loans -- -- 1,417 Commercial mortgage loans -- -- 3,061 Franchise loans 6,314 6,428 37,849 Asset-based loans, syndicated loans, factored receivables and commercial leases 503 844 24,261 Business loans -- 4,802 7,206 Total other loans and leases 6,817 12,074 73,794 Loans and leases receivable (C) (D) $213,746 $177,648 $231,495 Credit Quality: Nonperforming assets - total (E) $5,828 $7,133 $ 22,008 Nonperforming assets - franchise $5,045 $5,757 $17,451 Nonperforming assets as a percentage of consolidated assets 1.58% 1.96% 3.70% Loans and leases delinquent 60 days or more $652 $748 $8,515 Loans and leases delinquent 60 days or more - franchise $-- $-- $6,431 Loans and leases delinquent 60 days or more as a percentage of loans and leases 0.31% 0.42% 3.68% Per Share Data: Book value per share $2.36 $2.37 N/A Net assets in liquidation per diluted share outstanding N/A N/A $6.41 Other Data: Full-time equivalent employees, including BVAC 134 143 236 (A) Effective July 1, 2003, the Company adopted Statement of Financial Accounting Standards No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." Dividend expense on the Capital Securities is now reflected as interest expense on borrowings. (B) Excludes auto-related operating lease assets reported separately from loans and leases totaling $45.1 million, $66.7 million and $154.0 million at March 31, 2004, December 31, 2003 and March 31, 2003, respectively. (C) All loans and leases are classified as held-for-sale. (D) Includes mark-to-market valuation reserves of $0.9 million, $3.2 million and $24.1 million at March 31, 2004, December 31, 2003 and March 31, 2003, respectively. (E) Nonperforming assets include mark-to-market valuation reserves of $0.8 million, $1.4 million and $9.9 million at March 31, 2004, December 31, 2003, and March 31, 2003, respectively. BAY VIEW ACCEPTANCE CORPORATION At Dec. 31, At March 31, 2004 2003 At March 31, 2003 Going Concern Basis (Amounts in thousands) Selected Balance Sheet Information: Cash and cash equivalents $(642) $2,841 $(147) Restricted cash 9,025 5,130 278 Retained interests in auto loan securitizations 29,040 29,789 24,671 Installment contracts 206,929 165,574 157,701 Other assets 6,522 6,861 3,494 Total assets $250,874 $210,195 $185,997 Advances from parent $22,771 $802 $119,122 Warehouse line 155,158 138,221 -- Other liabilities 11,623 10,118 7,975 Total liabilities 189,552 149,141 127,097 Stockholder's equity 61,322 61,054 58,900 Total liabilities and stockholder's equity $250,874 $210,195 $185,997 For the Three Months Ended March 31, December 31, March 31, 2004 2003 2003 Going Concern Basis (Amounts in thousands, except per share amounts) Selected Results of Operations Information: Interest on auto contracts $3,512 $2,994 $2,816 Interest on investment securities 666 540 750 Interest expense on borrowings (1,319) (1,269) (708) Net interest income 2,859 2,265 2,858 Loan fees and charges 215 215 244 Loan servicing income 939 1,056 973 Gain (loss) on sale of assets, net (212) 16 -- Other income, net (183) (144) 50 Unrealized loss on auto contracts held-for-sale -- -- (93) General and administrative expenses (2,910) (2,394) (2,847) Income before income tax expense 708 1,014 1,185 Income tax expense (296) (428) (494) Net income $412 $586 $691 Selected Production Information: Installment contracts purchased $69,337 $67,413 $71,635 Number of contracts purchased 2,289 2,292 2,533 Average balance of contracts purchased $30.2 $29.4 $28.3 Weighted-average contract rate 7.90% 8.03% 8.70% Average FICO credit score 734 735 728 Net yield on contracts purchased 7.08% 7.16% 7.67% Net yield on warehouse inventory 7.30% 7.79% 6.54% Selected Credit Quality Information: Net chargeoffs on managed contracts for period $1,739 $1,882 $1,984 Net chargeoffs as a percentage of average managed contracts (annualized) 1.23% 1.32% 1.28% Contracts delinquent 30 days or more as a percentage of managed contracts (as of period-end) 0.41% 0.49% 0.45% Average Managed Contracts $566,371 $567,549 $627,858 At Dec. 31, At March 31, 2004 2003 At March 31, 2003 (Amounts in thousands) Managed Contracts (period-end): Total managed contracts $560,389 $562,771 $601,682 Total number of contracts 29,824 30,808 35,200 Other Data: Full-time equivalent employees 101 102 136 DATASOURCE: Bay View Capital Corporation CONTACT: John Okubo of Bay View Capital Corporation, +1-650-294-7778 Web site: http://www.bayviewcapital.com/

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