BVC Bay View Cap Cp

Bay View Capital Corporation Announces First Quarter Results SAN MATEO, Calif., May 3 /PRNewswire-Firstcall/ -- Bay View Capital Corporation (the "Company") (NYSE:BVC) today reported a first quarter 2005 net loss of $334 thousand, or $0.05 per diluted share, compared to a restated first quarter 2004 net loss of $901 thousand, or $0.14 per diluted share. Per share data reflects a 1-for-10 reverse stock split that was effective June 30, 2004. Results of Operations Net interest income increased to $3.4 million for the first quarter of 2005 from $3.0 million for the same period a year ago. Interest expense for the first quarter of 2005 reflects the benefit of a $0.6 million savings in connection with redemption of the remaining $22.0 million of Capital Securities in 2004. Noninterest income declined to $4.1 million for the first quarter of 2005 from $7.0 million for the first quarter of 2004, largely on a $3.2 million decline in leasing income resulting from continued runoff of the Company's liquidating auto lease portfolio offset, in part, by favorable experience on the disposition of vehicles coming off lease. Noninterest expense declined to $7.1 million for the first quarter of 2005 from $11.5 million for the first quarter of 2004 on a $4.2 million decline in leasing expense. Financial Condition Total assets increased to $502.9 million at March 31, 2005 from $423.3 million at December 31, 2004, on $75.2 million of growth in auto contract receivables. Outstanding borrowings increased by $80.7 million during the quarter. At March 31, 2005, the Company had tax assets of $17.1 million, consisting of net tax assets of $38.6 million less a valuation allowance of $21.5 million. BVAC Bay View Acceptance Corporation ("BVAC"), the Company's auto finance subsidiary, acquires retail auto installment contracts from a network of approximately 7,000 manufacturer-franchised and independent auto dealers in 30 states and 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. For the first quarter of 2005, BVAC produced net income of $788 thousand compared to $596 thousand for the first quarter of 2004. First quarter 2005 net interest income of $3.3 million was flat when compared with first quarter 2004 net interest income as increased funding costs, caused by rising market interest rates, largely offset increased interest income resulting from growth in its auto contracts receivable. During the first quarter of 2005, BVAC purchased $115.5 million of auto contracts, an increase of 43% compared to purchases of $80.7 million in the fourth quarter of 2004 and an increase of 67% from first quarter 2004 purchases of $69.3 million. BVAC attributes this increase to the initial success of its efforts to broaden its market for good credit quality customers and expand its origination of high quality loans. BVAC has consistently improved its monthly loan purchase volumes since September 2004, and its March 2005 loan purchase volume was the highest achieved in the Company's history. For the first quarter of 2005, BVAC's purchased contract rates averaged 8.30% compared to first quarter 2004 rates of 7.90%. Credit quality indicators also improved during the quarter. FICO scores for the quarter averaged 742 compared to an average of 734 for first quarter 2004 production. Net chargeoffs improved to 1.11% of managed contracts in the first quarter of 2005 from 1.23% in the first quarter of 2004. During the quarter, BVAC, through Bay View 2005-LJ-1 Owner Trust, issued $232.1 million of auto receivable backed notes. The issue was comprised of five classes of notes, Classes A-1 through A-4, and Class I which is an interest only security. The notes have a weighted-average stated coupon of 4.19% and final maturities ranging between February 27, 2006 and May 25, 2012. The notes are insured as to the timely payment of principal and interest and they contain a call provision that grants the Company the option of calling the notes at any time after the aggregate balance of receivables has been reduced to 15% of the original pool of receivables. Proceeds from the issuance of the notes were used to repay $217.8 million of borrowings on the Company's revolving warehouse credit facility. At March 31, 2005, BVAC was servicing 30,409 auto contracts with an aggregate outstanding balance of $619 million compared to 29,824 auto contracts with an aggregate outstanding balance of $560 million at March 31, 2004. Liquidation Activities The Company continued 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. During the quarter, $5.1 million of these assets, primarily auto leases and real estate owned, were liquidated and $4.0 million of liabilities were discharged. Nonperforming liquidating assets, net of mark-to-market valuation allowances, were $3.0 million at March 31, 2005. Total liquidating loans that were delinquent 60 days or more were $0.4 million at March 31, 2005. Other As previously reported, the Company is restating its consolidated financial statements for the first, second and third quarters of 2004 to correct its accounting for derivatives (interest rate cap contracts) maintained by an affiliated special purpose owners trust entity in connection with BVAC's $350 million revolving receivables warehouse credit facility. The impact of the restatement to first quarter 2004 results is to increase net loss by $58 thousand and decrease total assets by the same amount. The Company will host a conference call at 2:00 p.m. PDT on May 6, 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 Sunday, June 5, 2005 and can be accessed by dialing 1-866-360-3305. 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 March 31, 2005 December 31, (Unaudited) 2004 (Dollars in thousands) ASSETS Cash and cash equivalents $8,079 $4,447 Restricted cash 33,112 26,845 Retained interests in securitizations 21,880 22,636 Auto installment contracts and loans held-for-sale: Auto installment contracts 109,617 75,021 Other loans 375 902 Auto installment contracts held-for-investment, net 293,470 252,863 Investment in operating lease assets, net 5,941 10,041 Real estate owned, net 2,654 3,379 Premises and equipment, net 710 733 Repossessed vehicles 250 439 Deferred and current income taxes, net 17,098 16,977 Goodwill 1,846 1,846 Other assets 7,870 7,199 Total assets $502,902 $423,328 LIABILITIES AND STOCKHOLDERS' EQUITY Borrowings: Warehouse credit facility $160,304 $298,755 Securitization notes payable 220,475 -- Other borrowings 607 1,895 Other liabilities 8,771 9,629 Liquidation reserve 8,768 8,856 Total liabilities 398,925 319,135 Stockholders' equity: Common stock ($.01 par value); authorized, 80,000,000 shares; issued, 2005 - 6,597,303 shares; 2004 - 6,597,303 shares; outstanding, 2005 - 6,595,886 shares; 2004 - 6,593,860 shares 66 66 Additional paid-in capital 109,243 109,578 Accumulated deficit (4,919) (4,585) Treasury stock, at cost; 2005 - 1,417 shares; 2004 - 3,443 shares (252) (587) Accumulated other comprehensive loss (161) (279) Total stockholders' equity 103,977 104,193 Total liabilities and stockholders' equity $502,902 $423,328 Bay View Capital Corporation Consolidated Statements of Operations and Comprehensive Loss (Unaudited) For the Three Months Ended March 31, December 31, March 31, 2005 2004 2004 As Restated (In thousands, except per share amounts) Interest income: Interest on installment contracts and loans $6,350 $5,820 $4,155 Interest on mortgage-backed securities -- -- 29 Interest and dividends on investment securities 721 705 728 7,071 6,525 4,912 Interest expense: Interest on borrowings 3,678 2,593 1,942 3,678 2,593 1,942 Net interest income 3,393 3,932 2,970 Provision for losses on installment contracts 837 760 -- Net interest income after provision for losses on installment contracts 2,556 3,172 2,970 Noninterest income: Leasing income 2,070 1,607 5,228 Loan servicing income 552 624 947 Unrealized gain (loss) on derivative instruments 1,480 779 (308) Unrealized loss on installment contracts and other loans (10) (32) (5) Loan fees and charges 183 154 500 Loss on sale of assets and liabilities, net (439) (550) (300) Other, net 242 83 984 4,078 2,665 7,046 Noninterest expense: General and administrative 6,606 6,515 6,541 Leasing expense 515 458 4,667 Real estate owned operations, net 4 866 291 7,125 7,839 11,499 Loss before income taxes (491) (2,002) (1,483) Income tax benefit (157) (786) (582) Net loss $(334) $(1,216) $(901) Basic loss per share $(0.05) $(0.18) $(0.14) Diluted loss per share $(0.05) $(0.18) $(0.14) Weighted-average basic shares outstanding 6,594 6,591 6,578 Weighted-average diluted shares outstanding 6,594 6,591 6,578 Net loss $(334) $(1,216) $(901) Other comprehensive income (loss), net of tax: Change in unrealized gain (loss) on securities available-for-sale, net of tax expense (benefit) of $29, ($254) and $389 for the three months ended March 31, 2005, December 31, 2004 and, March 31, 2004, respectively 45 (397) 608 Other comprehensive income (loss) 45 (397) 608 Comprehensive loss $(289) $(1,613) $(293) BAY VIEW CAPITAL CORPORATION SELECTED FINANCIAL DATA (Unaudited) At At At March 31, December 31, March 31, 2005 2004 2004 (Dollars in thousands, except per share amounts) Auto Installment Contracts and Loans Receivable: Auto installment contracts (1) Auto contracts held-for-sale $109,617 $ 75,021 $207,630 Auto contracts held-for-investment 293,470 252,863 -- Total auto installment contracts 403,087 327,884 207,630 Other loans and leases: Franchise loans 375 583 6,314 Asset-based loans -- 319 503 Total other loans and leases 375 902 6,817 Auto installment contracts and other loans receivable (2) $403,462 $328,786 $214,447 Credit Quality (Liquidating Portfolio): Nonperforming assets - total (3) $3,029 $4,281 $5,718 Nonperforming assets - franchise $2,859 $3,792 $5,045 Loans and leases delinquent 60 days or more $375 $902 $435 Loans and leases delinquent 60 days or more - franchise $375 $583 $-- Per Share Data: Book value per share (4) $15.77 $15.80 $23.66 Other Data: Full-time equivalent employees, including BVAC 125 125 134 (1) Excludes auto-related operating lease assets reported separately from loans and leases totaling $5.9 million, $10.0 million, and $45.1 million at March 31, 2005, December 31, 2004 and March 31, 2004, respectively. (2) Includes allowances for mark-to-market valuation reserves and credit losses of $3.3 million, $2.7 million and $0.9 million at March 31, 2005, December 31, 2004 and March 31, 2004, respectively. (3) Nonperforming assets include mark-to-market valuation reserves of $1.2 million, $1.2 million and $0.8 million at March 31, 2005, December 31, 2004 and March 31, 2004, respectively. (4) Book value per share is presented on a post-reverse stock split basis. BAY VIEW ACCEPTANCE CORPORATION (Unaudited) At At At March 31, December 31, March 31, 2005 2004 2004 As Restated (Amounts in thousands) Selected Balance Sheet Information: Cash $7,387 $3,278 $(642) Restricted cash 13,800 7,540 9,025 Retained interests in auto loan securitizations 21,880 22,636 29,040 Auto installment contracts held-for-sale 109,617 75,021 207,630 Auto installment contracts held-for-investment, net 293,470 252,863 -- Advances to parent 398 3,010 -- Other assets 8,443 7,969 6,427 Total assets $454,995 $372,317 $251,480 Warehouse credit facility $160,304 $298,755 $155,158 Securitization notes payable 220,475 -- -- Advances from parent -- -- 22,771 Current and deferred taxes 7,565 6,947 6,411 Other liabilities 3,408 4,277 5,450 Total liabilities 391,752 309,979 189,790 Stockholder's equity 63,243 62,338 61,690 Total liabilities and stockholder's equity $454,995 $372,317 $251,480 BAY VIEW ACCEPTANCE CORPORATION (Continued) (Unaudited) For the Three Months Ended March 31, December 31, March 31, 2005 2004 2004 As Restated (Amounts in thousands, except per share amounts) Selected Results of Operations Information: Interest on auto contracts $6,350 $5,821 $3,913 Interest on investment securities 630 620 666 Interest expense on borrowings (3,659) (2,647) (1,319) Net interest income 3,321 3,794 3,260 Provision for losses on installment contracts (837) (760) -- Loan servicing income 543 621 939 Unrealized gain (loss) on derivative instruments 1,480 779 (308) Unrealized loss on auto contracts (10) (32) (5) Loan fees and charges 150 124 215 Loss on sale of assets, net (510) (709) (207) Other income, net 44 49 30 General and administrative expenses(2,822) (2,950) (2,910) Income before income tax expense 1,359 916 1,014 Income tax expense (571) (360) (418) Net income $788 $556 $596 Selected Production Information: Dollar value of contracts purchased $115,536 $80,689 $69,337 Number of contracts purchased 4,701 2,889 2,289 Average balance of contracts purchased $24.6 $27.9 $30.2 Weighted-average contract rate 8.30% 8.09% 7.90% Average FICO credit score 742 746 734 Selected Credit Quality Information: Net chargeoffs on managed contracts for period $1,680 $1,566 $1,739 Net chargeoffs as a percentage of average managed contracts (annualized) 1.11% 1.11% 1.23% Contracts delinquent 30 days or more as a percentage of managed contracts (as of period-end) 0.41% 0.63% 0.41% Average Managed Contracts $598,190 $564,667 $566,371 At At At March 31, December 31, March 31, 2005 2004 2004 (Amounts in thousands) Managed Contracts (period-end): Total managed contracts $618,792 $570,864 $560,389 Total number of contracts 30,409 28,283 29,824 Other Data: Full-time equivalent employees 104 104 106 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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