Bay View (NYSE:BVC)
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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/