BVC Bay View Cap Cp

Bay View Capital Corporation Announces Fourth Quarter Results SAN MATEO, Calif., Jan. 25 /PRNewswire-FirstCall/ -- Bay View Capital Corporation (NYSE:BVC) (the "Company") today reported a fourth quarter 2004 net loss of $1.1 million, or $0.17 per diluted share, compared to a third quarter 2004 net loss of $1.4 million, or $0.22 per diluted share, and a fourth quarter of 2003 net loss of $673 thousand, or $0.10 per diluted share. The per share data reflects the 1-for-10 reverse split effective June 30, 2004. Results of Operations Net interest income totaled $3.9 million for the fourth quarter of 2004 compared to $3.8 million for the third quarter of 2004. The increase in net interest income was primarily due to an increase in interest income generated by continued growth of BVAC's portfolio of auto contracts, which was partially offset by an increase in the cost of funds on BVAC's warehouse credit facility resulting from rising market interest rates. Noninterest income was $2.9 million for the fourth quarter of 2004 compared to $1.5 million for the third quarter of 2004. The increase in noninterest income was primarily the result of unrealized gains on interest rate swaps held by BVAC, partially offset by decreased leasing income associated with the declining balance of the Company's liquidating auto lease portfolio. Noninterest income for the fourth quarter of 2004 included $1.0 million of unrealized gains on interest rate swaps, while the third quarter of 2004 included $1.4 million of unrealized losses. This volatility was primarily due to fluctuations in intermediate-term interest rates during this period. During 2004, BVAC had $2.1 million of unrealized gains on interest rate swaps, reflecting the increase in intermediate term rates that occurred since the beginning of the year. Total noninterest expense was $7.8 million for the fourth quarter of 2004 compared to $7.3 million for the third quarter of 2004. The increase in noninterest expense was primarily due to $0.8 million of writedowns in the Company's real estate owned portfolio and a $0.5 million increase in general and administrative expenses resulting primarily from consulting fees incurred in connection with the Company's implementation of the Sarbanes-Oxley Act of 2002. These increases were partially offset by a $0.8 million decrease in leasing expense. Financial Condition The Company's total assets were $423.8 million at December 31, 2004, compared to $364.1 million at December 31, 2003. The growth in total assets was primarily due to $162.0 million of net growth in auto loan contracts, partially offset by $56.6 million of payoffs on the Company's auto leasing business. At December 31, 2004, the Company had tax assets of approximately $16.7 million, consisting of net tax assets of $38.2 million less a valuation allowance of $21.5 million. On December 31, 2004, the Company distributed $14.8 million in cash, or $2.25 per share, to the holders of its common stock. BVAC BVAC acquires auto installment contracts from a network of approximately 7,000 manufacturer-franchised and independent auto dealers in 33 states. BVAC has positioned itself in the market as a lender for well-qualified borrowers. While BVAC competes with other lenders for good credit quality auto loans, it offers specialized products such as extended term financing and larger advances for high credit quality customers and uses these products to establish relationships with automobile dealers. BVAC's net interest income for the fourth quarter of 2004 improved to $3.8 million from $3.6 million in the third quarter of 2004, primarily due to continued growth in its inventory of auto contracts. During the fourth quarter of 2004, BVAC purchased $80.7 million of auto contracts, an increase of 16.1% compared to purchases of $69.5 million in the third quarter of 2004 and an increase of 19.7% from purchases of $67.4 million in the fourth quarter of 2003. BVAC attributes this increase to the initial success of its efforts to broaden its market for good credit quality customers and its focus on expanding its origination of high quality loans. BVAC has consistently improved its monthly loan originations since September 2004, and its December 2004 loan originations were the highest achieved during any month in 2004. For the fourth quarter of 2004, BVAC's purchased contract rates averaged 8.09% compared to third quarter rates that averaged 8.06%. Credit quality indicators also improved in the fourth quarter of 2004. FICO scores for the quarter averaged 746 compared to an average of 742 for third quarter 2004 production. Net chargeoffs were at 1.11% of managed contracts in the fourth quarter of 2004 compared to 1.01% for the third quarter of 2004. During 2004, BVAC sold $24.8 million of auto contracts on a "whole loan" basis with servicing retained. At December 31, 2004, BVAC was servicing 28,283 auto contracts with an aggregate outstanding balance of $571 million compared to 28,146 auto contracts with an aggregate outstanding balance of $557 million at September 30, 2004. Liquidation Activities The Company continues to dispose of the assets and satisfy the liabilities it assumed from Bay View Bank, N.A., whose dissolution was effective on September 30, 2003. Since December 31, 2003, $98.2 million of these assets have been liquidated and $45.4 million of liabilities have been discharged. At December 31, 2004, remaining assets to be liquidated totaled approximately $61.5 million compared to $159.7 million at December 31, 2003. Remaining liabilities to be satisfied totaled $19.7 million at December 31, 2004 compared to $65.0 million at December 31, 2003. Nonperforming assets, net of mark-to-market valuation allowances, were $4.7 million at December 31, 2004. Total loans that were delinquent 60 days or more were $0.9 million at December 31, 2004. Other 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, which it used from September 30, 2002 through September 30, 2003, and re-adopted the going concern basis of accounting effective October 1, 2003. Accordingly, the Company is providing the following financial statements herein: Financial Condition: Consolidated Statements of Financial Condition as of December 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 December 31, 2004, September 30, 2004 and December 31, 2003 as well as for the year ended December 31, 2004 and a Consolidated Statement of Changes in Net Assets in Liquidation (Liquidation Basis) for the nine-month period ended September 30, 2003. The Company will host a conference call at 2:00 p.m. PST on January 26, 2005 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, February 25, 2005 and can be accessed by dialing 1-888-568-0871. Bay View Capital Corporation is a financial services company headquartered in San Mateo, California. Its common stock is listed on the NYSE: BVC. For more information, visit the Company's 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 the Company's plan of partial liquidation, including any financial goals related to contemplated asset resolution and the Company's 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 forward-looking statements or to announce publicly 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 December 31, December 31, 2004 2003 (Unaudited) (Dollars in thousands) ASSETS Cash and cash equivalents: Cash and due from depository institutions $4,436 $11,434 Short-term investments 11 129 4,447 11,563 Restricted cash 26,845 32,240 Securities available-for-sale: Retained interests in securitizations 22,636 28,590 Mortgage-backed and other securities -- 6,139 Loans held-for-sale: Installment contracts 75,021 165,874 Other loans 902 12,074 Installment contracts held-for-investment, net 252,863 -- Investment in operating lease assets, net 10,041 66,657 Real estate owned, net 3,379 4,955 Premises and equipment, net 733 371 Repossessed vehicles 439 438 Income taxes, net 16,699 21,031 Goodwill 1,846 1,846 Other assets 7,907 12,340 Total assets $423,758 $364,118 LIABILITIES AND STOCKHOLDERS' EQUITY Borrowings: Warehouse credit facility $298,755 $138,221 Other borrowings 1,895 16,055 Junior Subordinated Deferrable Interest Debentures -- 24,784 Other liabilities 9,629 17,500 Liquidation reserve 8,856 11,626 Total liabilities 319,135 208,186 Stockholders' equity: Common stock ($.01 par value); authorized, 80,000,000 shares; issued, 2004 - 6,597,303 shares; 2003 - 6,579,333 shares; outstanding, 2004 - 6,593,860 shares; 2003 - 6,575,890 shares 66 658 Additional paid-in capital 109,579 156,588 Accumulated deficit (4,156) (673) Treasury stock, at cost; 2004 - 3,443 shares; 2003 - 3,443 shares (587) (587) Accumulated other comprehensive loss (279) (54) Total stockholders' equity 104,623 155,932 Total liabilities and stockholders' equity $423,758 $364,118 Bay View Capital Corporation Consolidated Statements of Operations and Comprehensive Loss For the Three Months Ended Dec. 31, Sept. 30, Dec. 31, 2004 2004 2003 (Unaudited)(Unaudited) (In thousands, except per share amounts) Interest income: Interest on loans and leases $5,820 $5,217 $3,757 Interest on mortgage-backed securities -- -- 166 Interest and dividends on investment securities 705 743 1,013 6,525 5,960 4,936 Interest expense: Interest on borrowings 2,593 2,147 3,612 2,593 2,147 3,612 Net interest income 3,932 3,813 1,324 Provision for losses on installment contracts 760 331 -- Net interest income after provision for losses on installment contracts 3,172 3,482 1,324 Noninterest income: Leasing income 1,607 2,510 6,907 Loan servicing income 624 720 1,132 Unrealized gains (losses) on interest rate swap agreements 976 (1,433) (176) Unrealized losses on installment contracts and other loans (289) (249) -- Loan fees and charges 154 239 213 Gains (losses) on sale of assets and liabilities, net (293) (367) 657 Other, net 83 68 1,602 2,862 1,488 10,335 Noninterest expense: General and administrative 6,515 6,009 5,747 Leasing expense 458 1,190 5,938 Real estate owned operations, net 866 109 831 7,839 7,308 12,516 Loss before income tax benefit (1,805) (2,338) (857) Income tax benefit (708) (917) (184) Net loss $(1,097) $(1,421) $(673) Basic loss per share $(0.17) $(0.22) $(0.10) Diluted loss per share $(0.17) $(0.22) $(0.10) Weighted-average basic shares outstanding 6,591 6,588 6,419 Weighted-average diluted shares outstanding 6,591 6,588 6,419 Net loss $(1,097) $(1,421) $(673) Other comprehensive loss, net of tax: Change in unrealized loss on securities available-for-sale, net of tax benefit of $254, $254 and $35 for the three months ended December 31, 2004, September 30, 2004 and December 31, 2003, respectively (397) (398) (54) Other comprehensive loss (397) (398) (54) Comprehensive loss $(1,494) $(1,819) $(727) Bay View Capital Corporation Consolidated Statement of Operations and Comprehensive Loss (Unaudited) For the Year Ended December 31, 2004 (In thousands, except per share amounts) Interest income: Interest on loans and leases $19,700 Interest on mortgage-backed securities 31 Interest and dividends on investment securities 2,878 22,609 Interest expense: Interest on borrowings 8,845 8,845 Net interest income 13,764 Provision for losses on installment contracts 1,612 Net interest income after provision for losses on installment contracts 12,152 Noninterest income: Leasing income 12,941 Loan servicing income 3,143 Unrealized gains on interest rate swap agreements 2,140 Unrealized losses on installment contracts and other loans (1,643) Loan fees and charges 1,117 Loss on sale of assets and liabilities, net (1,630) Other, net 1,679 17,747 Noninterest expense: General and administrative 25,211 Leasing expense 9,163 Real estate owned operations, net 1,255 35,629 Loss before income tax benefit (5,730) Income tax benefit (2,248) Net loss $(3,482) Basic loss per share $(0.53) Diluted loss per share $(0.53) Weighted-average basic shares outstanding 6,585 Weighted-average diluted shares outstanding 6,585 Net loss $(3,482) Other comprehensive loss, net of tax: Change in unrealized loss on securities available-for-sale, net of tax benefit of $144 for the year ended December 31, 2004 (225) Other comprehensive loss (225) Comprehensive loss $(3,707) Bay View Capital Corporation Consolidated Statement of Changes in Net Assets in Liquidation (Liquidation Basis) (Unaudited) For the Nine Months Ended September 30, 2003 (Dollars in thousands) Net assets in liquidation at beginning of period $410,064 Pre-tax loss from operations (4,595) Changes in estimated values of assets and liabilities (5,995) Income tax benefit 6,252 Net loss from operations (4,338) Other changes in net assets in liquidation (A) 4,088 Net assets in liquidation at end of period $409,814 (A) Primarily represents proceeds from stock options and warrants exercised. BAY VIEW CAPITAL CORPORATION SELECTED FINANCIAL DATA For the For the Year Nine For the Three Months Ended Ended Months Ended Dec. 31, Sept. 30, Dec. 31, Dec. 31, Sept. 30, 2004 2004 2003 2004 2003 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Going Concern Liquidation Going Concern Basis Basis Basis (Dollars in thousands) Selected Results of Operations/Changes in Net Assets in Liquidation Information: Net interest income (A) $3,932 $3,813 $1,324 $13,764 $9,540 Provision for losses on installment contracts (760) (331) -- (1,612) -- Leasing income 1,607 2,510 6,907 12,941 32,578 Loan servicing income 624 720 1,132 3,143 3,689 Unrealized gains (losses) on interest rate swap agreements 976 (1,433) (176) 2,140 (1,448) Unrealized losses on installment contracts and other loans (289) (249) -- (1,643) -- Loan fees and charges 154 239 213 1,117 1,007 Gain (loss) on sale of assets and liabilities, net (293) (367) 657 (1,630) 787 Other income, net 83 68 1,602 1,679 474 General and administrative expense (6,515) (6,009) (5,747) (25,211) (26,338) Leasing expense (458) (1,190) (5,938) (9,163) (24,421) Other expense (866) (109) (831) (1,255) (463) Pre-tax loss from operations (1,805) (2,338) (857) (5,730) (4,595) Changes in estimated liquidation values of assets and liabilities -- -- -- -- (5,995) Income tax benefit 708 917 184 2,248 6,252 Other changes in net assets in liquidation -- -- -- -- 4,088 Change in net assets in liquidation -- -- -- -- $(250) Net loss $(1,097) $(1,421) $(673) $(3,482) At At At Dec. 31, Sept. 30, Dec. 31, 2004 2004 2003 (Unaudited) (Unaudited) Going Concern Basis (Dollars in thousands, except per share amounts) Installment Contracts and Loans Receivable: Auto installment contracts (B) Installment contracts held-for-sale $75,021 $129,371 $165,874 Installment contracts held-for-investment 252,863 147,703 -- Total auto installment contracts 327,884 277,074 165,874 Other loans and leases: Franchise loans 583 593 6,428 Asset-based loans, syndicated loans, factored receivables and commercial leases 319 332 844 Business loans -- -- 4,802 Total other loans and leases 902 925 12,074 Installment contracts and loans receivable (C) $328,786 $277,999 $177,948 Credit Quality (Liquidating Portfolio): Nonperforming assets - total (D) $4,282 $5,104 $6,795 Nonperforming assets - franchise $3,792 $4,602 $5,757 Loans and leases delinquent 60 days or more $902 $925 $563 Loans and leases delinquent 60 days or more - franchise $583 $593 $-- Per Share Data: Book value per share (E) $15.87 $18.35 23.71 Other Data: Full-time equivalent employees, including BVAC 125 128 143 (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" and, accordingly, dividend expense on the Capital Securities has been reflected in interest on borrowings. (B) Excludes auto-related operating lease assets reported separately from loans and leases totaling $10.0 million, $16.5 million, and $66.7 million at December 31, 2004, September 30, 2004 and December 31, 2003, respectively. (C) Includes allowances for mark-to-market valuation reserves and credit losses of $2.7 million, $2.0 million and $3.2 million at December 31, 2004, September 30, 2004 and December 31, 2003, respectively. (D) Nonperforming assets include mark-to-market valuation reserves of $1.2 million, $1.2 million and $1.4 million at December 31, 2004, September 30, 2004 and December 31, 2003, respectively. (E) Book value per share is presented on a post-reverse stock split basis. BAY VIEW ACCEPTANCE CORPORATION At At At Dec. 31, Sept. 30, Dec. 31, 2004 2004 2003 (Unaudited) (Unaudited) Going Concern Basis (Dollars in thousands) Selected Balance Sheet Information: Cash and cash equivalents $3,278 $5,226 $2,841 Restricted cash 7,540 9,768 5,130 Retained interest in auto loan securitization 22,636 24,680 29,789 Installment contracts held-for-sale 75,021 129,371 165,874 Installment contracts held-for-investment, net 252,863 147,703 -- Advances to parent 3,010 -- -- Other assets 8,677 8,215 6,861 Total assets $373,025 $324,963 $210,495 Advances from parent $-- $4,220 $802 Warehouse line 298,755 246,006 138,221 Other liabilities 11,502 12,247 10,236 Total liabilities 310,257 262,473 149,259 Stockholder's equity 62,768 62,490 61,236 Total liabilities and stockholder's equity $373,025 $324,963 $210,495 BAY VIEW ACCEPTANCE CORPORATION (Continued) For the For the Year Year For the Three Months Ended Ended Ended Dec. 31, Sept. 30, Dec. 31, Dec. 31, Dec. 31, 2004 2004 2003 2004 2003 (Unaudited) (Unaudited) (Unaudited) Going Concern Basis (Dollars in thousands) Selected Results of Operations Information: Interest on auto contracts $5,821 $5,170 $4,713 $19,298 $13,351 Interest on investment securities 620 638 540 2,576 2,859 Interest expense on borrowings (2,647) (2,177) (1,269) (7,831) (4,193) Net interest income 3,794 3,631 3,984 14,043 12,017 Provision for losses on installment contracts (760) (331) -- (1,612) -- Loan servicing income 621 712 1,056 3,093 3,884 Unrealized gains (losses) on interest rate swap agreements 976 (1,433) (176) 2,137 (1,624) Unrealized gains (losses) on installment contracts held-for-sale (289) 181 (702) (1,213) 380 Loan fees and charges 124 204 215 734 888 Gain (loss) on sale of assets, net (452) (863) 595 (1,770) 232 Other income, net 49 50 370 176 1,430 General and administrative expense (2,950) (2,668) (3,694) (11,274) (13,244) Income (loss) before income taxes 1,113 (517) 1,648 4,314 3,963 Income tax benefit (expense) (438) 166 (676) (1,797) (1,643) Net income (loss) $675 $(351) $972 $2,517 $2,320 Selected Production Information: Dollar value of contracts purchased $80,689 $69,474 $67,413 $295,348 $279,521 Number of contracts purchased 2,889 2,364 2,292 10,043 9,762 Average balance of contracts purchased $27.9 $29.4 $29.4 $29.4 $28.6 Weighted-average contract rate 8.09% 8.06% 8.03% 7.98% 8.35% Average FICO credit score 746 742 735 739 732 Selected Credit Quality Information: Net chargeoffs on managed contracts for period $1,566 $1,409 $1,882 $6,404 $6,994 Net chargeoffs as a percentage of average managed contracts (annualized) 1.11% 1.01% 1.32% 1.14% 1.17% Contracts delinquent 30 days or more as a percentage of managed contracts (as of period-end) 0.63% 0.30% 0.49% 0.63% 0.49% Average Managed Contracts $564,667 $557,744 $569,057 $562,155 $593,207 At At At Dec. 31, Sept. 30, Dec. 31, 2004 2004 2003 (Unaudited) (Unaudited) (Dollars in thousands) Managed Assets: Total managed contracts $570,864 $556,802 $567,293 Total number of contracts 28,283 28,146 31,035 Other Data: Full-time equivalent employees 104 106 102 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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