Capital Corp of the West Announces an 18% Increase in Annual Earnings; Fourth Quarter 2001 Earnings Increased 21% From a Year Ago Quarter.Business Editors MERCED Merced (mərsĕd`), city (1990 pop. 56,216), seat of Merced co., central Calif.; inc. 1889. It is a growing city and a center for tourism and farm trade in a cotton, fruit, and dairy region. , Calif.--(BUSINESS WIRE)--Jan. 22, 2002 Capital Corp of the West (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CCOW CCOW Clinical Context Object Workgroup CCOW Channel Control Order Wire CCOW Control Channel Order Wire CCOW Contributing to Coalition Operations Worldwide CCOW Computer Care on Wheels (Brantford, Ontario, Canada) ) today announced an 18% increase in net income for the year ended December December: see month. 31, 2001. "This year has been one of substantial expansion for Capital Corp of the West," stated Chief Executive Officer, Tom Hawker. "We have achieved significant results while absorbing ab·sorb tr.v. ab·sorbed, ab·sorb·ing, ab·sorbs 1. To take (something) in through or as through pores or interstices. 2. To occupy the full attention, interest, or time of; engross. the start-up Start-up The earliest stage of a new business venture. expenses of opening three new locations. We opened new corporate banking offices in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden and Stockton Stockton, city (1990 pop. 210,943), seat of San Joaquin co., central Calif., on the San Joaquin River; inc. 1850. One of the fastest-growing U.S. cities during the late 20th cent., Stockton is an inland seaport located at the head of the San Joaquin delta. in 2001 and opened our second retail branch in Fresno Fresno (frĕz`nō), city (1990 pop. 354,202), seat of Fresno co., S central Calif.; inc. 1885. Settled in 1872 as a station on the Central Pacific RR, Fresno profited from irrigated farming as early as the 1880s. very late in the year 2000." "The decline of interest rates throughout the year have impacted the net interest margins of all financial institutions, ourselves included. However, when looking at the big picture, and the opportunities for the vibrant regions in which we operate, we believe that this margin contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction is relatively temporary and we are very encouraged by the growth we have experienced this past year in several key areas: Loan growth was 29%, asset growth was 31%, deposit growth was 22%; our capital grew by 20%, book value was up by 16% and tangible Possessing a physical form that can be touched or felt. Tangible refers to that which can be seen, weighed, measured, or apprehended by the senses. A tangible object is something that is real and substantial. An automobile is an example of tangible Personal Property. book value was up by 20%. In addition, a new tax reduction strategy implemented during the fourth quarter of 2001 allowed us to reduce our effective tax rate for the fourth quarter and will continue to benefit us throughout 2002," continued Tom Hawker, the CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . Net earnings were $7,911,000 or $1.58 per share for the year. This compares to earnings of $6,706,000 or $1.37 per share for 2000. Cash earnings per share, defined as earnings before amortization of intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. , for the 2001 and comparable 2000 year were $1.74 and $1.53. Annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on average assets and return on average equity were 1.03% and 13.40% for the 2001 year compared with 1.09% and 14.33% for 2000. Net earnings results for the three month period ended December 31, 2001 were $2,109,000 or $.42 per share. This compares to earnings of $1,746,000 or $.36 per share for the three month period ended December 31, 2000. Cash earnings per share were $0.46 and $0.40 for these two comparable quarters. Annualized return on average assets and return on average equity were 1.0% and 13.28% for the three month period ended December 31, 2001 compared with 1.07% and 13.68% for the three month period ended December 31, 2000. Fourth quarter 2001 results include an income tax reduction from an annual effective rate of 26% for the year to a 18% effective rate for the quarter. This reduction in effective tax rate is primarily the result of a new tax reduction strategy implemented during the quarter. During 2002 the effective tax rate for the Company is projected to be in the 23% to 25% range as benefits from the newly implemented tax strategies continue to be realized. Earnings Discussion The full year 2001 earnings of $7,911,000 showed a $1,205,000 increase over the comparable 2000 earnings due primarily to a $5,348,000 improvement in net interest income. The increase in net interest income was driven by a $147,960,000 or 27% increase in average interest earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin . The net interest margin for the full year 2001 was 5.01%, a decrease of 45 basis points from the 5.46% achieved during the year 2000. Other expenses increased by $4,123,000 due primarily to increases in salaries and benefits of $2,549,000 that were the result of additional branch offices, management and support staff increases necessary to accommodate branch expansion and normal salary progression progression, in mathematics, sequence of quantities, called terms, in which the relationship between consecutive terms is the same. An arithmetic progression is a sequence in which each term is derived from the preceding one by adding a given number, d, . Earnings for the fourth quarter of 2001 showed an increase of $363,000 to $2,109,000, which compares favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. with the $1,746,000 achieved during 2000. The increase in year over year results was primarily due to an increase of $965,000 in net interest income that was achieved by an increase of $181,085,000 or 30% in average interest earning assets. The net interest margin for the fourth quarter of 2001 was 4.48%, a decrease of 103 basis points from the 5.51% achieved during the fourth quarter of 2000. Other expenses in 2001 increased $1,207,000 over 2000 levels due primarily to increases in salaries and benefits of $672,000 that were the result of management and support staff increases necessary to accommodate branch expansion and normal salary progression. Income tax expense decreased $178,000 to $465,000 during the fourth quarter of 2001, which compares favorably to the $643,000 recorded during the same period in 2000. Credit Quality The Company's allowance for loan losses was $9,743,000 or 1.83% of loans at December 31, 2001. Nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. totaled $5,328,000 or 0.60% of total assets and nonperforming loans stood at $4,856,000 or 0.91% of total loans. At December 31, 2001 the allowance for loan loss totaled 201% of nonperforming loans. This compares to an allowance for loan loss of $8,207,000 or 1.99% of total loans at December 31, 2000. At December 31, 2000, nonperforming assets totaled $2,588,000 or 0.38% of total assets, nonperforming loans totaled $2,340,000 or 0.57% of total loans and the allowance for loan loss totaled 351% of nonperforming loans. The growth in nonperforming assets during 2001 is primarily the result of placing one $2,400,000 well secured credit on nonperforming status at the end of the third quarter 2001. Book Values -- Capital The Company's capital at December 31, 2001 stood at $64,120,000 compared with $53,451,000 as of December 31, 2000. Book value and tangible book value per share totaled $13.01 and $12.31 as of December 31, 2001 as compared to $11.18 and $10.29 as of December 31, 2000. The Company's tangible leverage capital ratio stood at 7.71% at December 31, 2001, compared with 7.56% as of December 31, 2000. The Company's risk based capital ratio stood at 10.74% at December 31, 2001, compared with 10.92% as of December 31, 2000. Forecasted Information Looking forward to 2002, R. Dale Dale , Sir Henry Hallett 1875-1968. British physiologist. He shared a 1936 Nobel Prize for work on the chemical transmission of nerve impulses, particularly for the isolation and study of acetylcholine (1914). McKinney McKinney, city (1990 pop. 21,283), seat of Collin co., N Tex.; inc. 1849. It is a shipping point for cotton, cattle, and grains. Manufacturing includes electronic equipment, leather and food products, marble items, and copper wire. , CFO See Chief Financial Officer. of the Corporation, comments, "The recent and historically rapid drop in rates experienced by all financial institutions will continue to have an impact on earnings going forward. The company follows the practice of being materially interest rate neutral to a plus or minus 200 basis points swing in interest rates. This unprecedented drop in rates impacts our net interest income and margin directly. Although this year margins have averaged 5.01%, the year ended at a 4.48% fourth quarter average margin. If the current rate environment continues through all of 2002, additional margin compression compression, external stress applied to an object or substance, tending to cause a decrease in volume (see pressure). Gases can be compressed easily, solids and liquids to a very small degree if at all. is anticipated with an average anticipated margin for 2002 in the 4.35% to 4.45% range. Although excellent results have been achieved in expense control and growing non interest income Non-interest income is derived from the execution/processing business, the advisory business and any principal business that does not appear on the balance sheet. Financial institutions that wish to maximize execution/processing income depend on volume and efficiency for profits. at a 12% to 14% rate, a slowing of the pace of total earnings growth for 2002 is anticipated." "In the current environment, earnings increases in the 9% to 12% range are anticipated for 2002 or fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of in the $1.66 to $1.72 range for the full year. Net charge offs for 2001 were $2.6 million and, if the current environment continues, net charge offs are anticipated to continue at these relative levels for 2002. Both loans and deposits grew at a brisk Brisk as a proper name may refer to:
Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. " regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. definitions. The ability to internally generate capital to support corporate growth is projected to continue with resulting risk based capital ratios anticipated in the 10.25% to 10.50% range and leverage capital ratios anticipated in the 7.5% to 8.0% range for 2002." Capital Corp of the West's fourth quarter 2001 earnings conference call is scheduled for January January: see month. 23, 2002 at 7:00 am PDT PDT abbr. Pacific Daylight Time PDT Pacific Daylight Time PDT n abbr (US) (= Pacific Daylight Time) → hora de verano del Pacífico PDT . Investors have the opportunity to listen to a recording of the conference call by going the web site of the company www.ccow.com just after the call and following the instructions to play back the recorded conference call. The recording will be available on the web site for 30 days following the conference call. "During the last year our customer service and product delivery capability has been significantly expanded", stated Becky Becky is a diminutive of the name Rebecca. This article is about the Japanese-British celebrity. For other persons of the same name, see Rebecca Becky (ベッキー Perez, SVP SVP S'il Vous Plaît (French: Please) SVP Senior Vice President SVP Schweizerische Volkspartei (Swiss People~s Party) SVP Society of Vertebrate Paleontology SVP Social Venture Partners SVP St Vincent de Paul of Marketing. "Through our new product development task force, we have been able to analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. and implement desired products which has enabled us to offer our customers the best in technological products available in our market, i.e.; personal and business online banking which includes cash management services as well as bill pay services. We also revamped some of our existing products to result in more value to the customer. Both the new and existing enhanced products were successful in increasing revenue for the bank," added Ms. Perez. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. In addition to historical information, this release includes certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. regarding events and trends which may affect the Company's future results. Such statements are subject to risks and uncertainties that could cause the Company's actual results to differ materially. These factors include general risks inherent to commercial lending; risks related to asset quality; risks related to the Company's dependence on key personnel and its ability to manage existing and future growth; risks related to competition; risks posed pose 1 v. posed, pos·ing, pos·es v.intr. 1. To assume or hold a particular position or posture, as in sitting for a portrait. 2. To affect a particular mental attitude. by present and future government regulation and legislation; and risks resulting from federal monetary policy. Reference Information Capital Corp. of the West, a bank holding company established November November: see month. 1, 1995, is the parent company of County Bank, with more than 24 years of service as "Central California's Community Bank." Currently County Bank has eighteen branch offices serving the communities of Fresno, Madera, Mariposa, Merced, Stanislaus, San Francisco, Stockton, Tulare Tulare (təlâr`, t  lâr`ē), city (1990 pop. 33,249), Tulare co., S central Calif., in the San Joaquin valley; inc. 1888. and Tuolumne Tu·ol·um·ne A river, about 249 km (155 mi) long, of central California flowing generally westward to the San Joaquin River. counties. As of the latest FDIC FDIC See: Federal Deposit Insurance Corporation FDIC See Federal Deposit Insurance Corporation (FDIC). data, County Bank has 5.1% market share of the six counties in which it has retail branches. This ranks County Bank sixth out of forty-one financial intuitions in these counties. For further information about the Company's financial performance, contact Tom Hawker, President & Chief Executive Officer at (209) 725-2276, or R. Dale McKinney Chief Financial Officer, at (209) 725-7435.
Capital Corp of the West
Consolidated Statements of Income
For the Three Months For the Twelve Months
Ended Dec. 31, Ended Dec. 31,
2001 2000 2001 2000
---- ---- ---- ----
Interest income $14,520 $13,995 $58,167 $50,888
Interest expense 5,391 5,831 22,699 20,768
Net interest income 9,129 8,164 35,468 30,120
Provision for loan
losses 1,036 963 4,115 3,286
Other income:
Service charges
on accounts 1,048 922 3,981 3,527
All other income 728 354 2,293 1,880
Other expenses:
Salaries and
related benefits 3,548 2,876 13,615 11,066
Premises and
occupancy 571 455 2,133 1,714
Equipment 732 696 2,739 2,558
Professional fees 158 299 467 1,101
Marketing 217 212 949 890
Goodwill and
intangible
amortization 198 198 792 792
Supplies 229 186 885 660
Other expenses 1,489 1,166 4,795 3,993
Dividends on
Capital
Securities 153 -- 522 --
Total Other
Expenses 7,295 6,088 26,897 22,774
Income before
income taxes 2,574 2,389 10,730 9,467
Provision for
income taxes 465 643 2,819 2,761
NET INCOME $2,109 $1,746 $7,911 $6,706
======= ======= ======= =======
Capital Corp of the West
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands) At December 31, 2001 Averages
2001 2000 YTD QTD
---- ---- --- ---
Assets
Cash and noninterest-
bearing deposits in
other banks $38,003 $46,353 $28,498 $29,674
Federal funds sold 11,285 1,415 19,280 17,365
Time deposits at
other financial
institutions 500 100 385 500
Investment securities
available for sale,
at fair value 229,852 155,830 198,251 217,415
Investment securities
held to maturity at
cost, fair value
of $42,185,000, and
$35,412,000 at
December 31, 2001
and December 31, 2000 41,559 35,222 31,969 35,311
Loans, net of
allowance for loan
losses of
$9,743,000 and
$8,207,000 at
December 31, 2001
and 2000 522,677 404,457 444,733 497,411
Interest receivable 5,757 5,215 4,600 5,211
Premises and
equipment, net 13,143 13,021 13,358 13,410
Intangible assets 3,493 4,277 3,876 3,582
Other assets 28,058 17,131 23,283 25,855
Total assets $894,327 $683,021 $768,233 $845,734
======== ======== ======== ========
Liabilities and
Shareholders'
Equity
Deposits
Noninterest-bearing
demand $132,496 $107,581 $105,888 $117,429
Negotiable orders of
withdrawal 102,055 84,521 86,011 94,151
Savings 203,721 184,073 196,838 205,829
Time, under $100,000 163,195 131,669 154,883 165,711
Time, $100,000 and
over 131,174 93,654 111,029 124,452
Total deposits 732,641 601,498 654,649 707,572
Short term borrowings 35,510 13,272 18,835 19,775
Long term borrowings 45,175 9,155 24,937 43,433
Accrued interest,
taxes and other
liabilities 10,881 5,645 5,620 5,413
Total liabilities 824,207 629,570 704,041 776,193
Trust Preferred
Securities 6,000 -- 5,145 6,000
Preferred Stock, no
par value;
10,000,000 shares
authorized;
None outstanding -- -- -- --
Common stock, no
par value;
20,000,000 shares
authorized;
4,927,465 and
4,779,164 issued &
outstanding at
December 31, 2001
and 2000 40,089 35,918 38,817 39,845
Retained earnings 22,372 17,449 18,853 21,003
Accumulated other
comprehensive income 1,659 84 1,377 2,693
Total
shareholders'
equity 64,120 53,451 59,047 63,541
Total liabilities
and shareholders'
equity $894,327 $683,021 $768,233 $845,734
======== ======== ======== ========
Loan Portfolio Composition
December 31 December 31
(In thousands) 2001 2000
---- ----
Percent Percent
Loan Categories: Dollar Amount of loans Dollar Amount of loans
Commercial $ 118,626 22% $ 71,920 17%
Agricultural 96,489 18 84,032 20
Real estate
construction 57,989 11 30,133 7
Real estate mortgage 187,586 35 141,575 35
Consumer 71,730 14 85,004 21
Total 532,420 100% 412,664 100%
Less allowance for
loan losses (9,743) (8,207)
Net loans $ 522,677 $ 404,457
Allowance for Loan Loss Activity
December 31,
2001 2000 1999
---- ---- ----
(In thousands)
Allowance for Loan
Losses:
Balance at beginning
of period $8,207 $6,542 $4,775
Provision for loan
losses 4,115 3,286 2,659
Charge-offs:
Commercial and
agricultural
loans 863 423 531
Real estate loans -- -- --
Consumer 2,288 1,971 1,323
Total
charge-offs 3,151 2,394 1,854
Recoveries
Commercial and
agricultural
loans 158 410 715
Real estate-
mortgage -- -- --
Consumer 414 363 247
Total recoveries 572 773 962
Net charge-offs 2,579 1,621 892
Balance at end of
period $9,743 $8,207 $6,542
======== ======== ========
Loans outstanding at
period-end $532,420 $412,664 $331,268
======== ======== ========
Average loans
outstanding $453,503 $369,367 $303,463
======== ======== ========
Annualized net
charge-offs to
average loans 0.57 % 0.44 % 0.29 %
Allowance for
loan losses
To total loans 1.83 % 1.99 % 1.97 %
To nonperforming
assets 169.66 % 317.12 % 292.45 %
Selected Financial Data
Three Three Twelve Twelve
Months Months Months Months
Ended Ended Ended Ended
12/31/01 12/31/00 12/31/01 12/30/00
Capital Corp of the West
Selected Financial Data
Basic Earnings
Per Share $.43 $.37 $1.63 $1.41
Diluted earning
Per Share $.42 $.36 $1.58 $1.37
Annualized
Return on:
Average Assets 1.00 % 1.07 % 1.03 % 1.09 %
Average Equity 13.28 % 13.68 % 13.40 % 14.33 %
Net Interest Margin 4.48 % 5.51 % 5.01 % 5.46 %
Efficiency Ratio 67 % 62 % 62 % 62 %
Annualized Net
Charge-offs to
Average Loans 0.26 % 0.07 % 0.57 % 0.44 %
Capital/Shareholder information
12/31/01 12/31/00
-------- --------
Book Value Per Share $ 13.01 $ 11.18
Tangible Book Value Per Share $ 12.31 $ 10.29
Leverage Capital Ratio 7.71% 7.56%
Risk Based Capital Ratio 10.74% 10.92%
Nonperforming Assets
December 31 December 31
2001 2000
---- ----
(In thousands)
Nonaccrual loans $4,247 $2,243
Accruing loans past due 90 days or more 609 97
Total nonperforming loans 4,856 2,340
Other real estate owned 472 248
Total nonperforming assets $5,328 $2,588
====== ======
Nonperforming loans to total loans .91% .57%
Nonperforming assets to total assets .60% .38%
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