MERCED, Calif.--(Business Wire)--
Capital Corp of the West (NASDAQ:CCOW), parent company of County
Bank, today announced first quarter 2008 net income of $2.3 million,
or $0.21 per diluted share, compared to $3.9 million, or $0.36 per
diluted share, for the first quarter of 2007. The Company's first
quarter 2008 net income of $2.3 million is a $16.5 million improvement
over its reported fourth quarter 2007 net after-tax loss of $14.2
million.
"Reporting positive net income for the first quarter of 2008
demonstrates Capital Corp of the West's management team's resolve to
strengthen the Company during this very difficult time for the Central
Valley and the financial services industry in general," said Ed J.
Rocha, County Bank President and Chief Operating Officer.
The Company's Board of Directors is confident that the proper
steps are being implemented to position County Bank for renewed
success and continued growth during this difficult period. As part of
these steps, the Company continues to evaluate the need to raise
capital and the alternatives to do so.
While preparing its financial statements for the year ended
December 31, 2007, the Company worked with independent credit
consultants to perform an extensive review of a significant portion of
the Company's loan portfolio as of December 31, 2007. Continuing this
effort, the Company expanded its internal credit review process during
the first quarter of 2008 to include a credit review of all
construction loans and all land loans in excess of $250,000, resulting
in additional loans being placed on non-accrual status while other
loans were removed from non-accrual status.
The Company determined that some of these non-accrual loans, while
impaired, were still performing. Several of these borrowers have
granted the Company additional collateral, reducing the need for a
significantly greater allowance for loan losses at March 31, 2008.
As of March 31, 2008, the Company received additional collateral
allowing the Company to reverse specific loan loss reserves of $10.9
million established as of December 31, 2007. Furthermore, while the
Company reported impaired loans of $77.2 million as of March 31, 2008
(an increase of $24 million since December 31, 2007), 36% of those
loans, totaling $27.8 million, were either still performing loans or
loans for which sufficient additional collateral has been received by
the Company.
"We have experienced significant and meaningful cooperation with
our borrowers to improve the status of non-accrual loans," said John
Incandela, County Bank Executive Vice President and Chief Credit
Officer. "There have been a lot of economists and analysts reports
discussing this unparalleled period of economic upheaval in the
Central Valley, and we have certainly seen our share of the effects
this has had on our industry. California could see further
deterioration in home prices and construction delinquencies before the
economy begins to recover."
The first quarter 2008 decrease in net income compared to the
first quarter of 2007 is attributed primarily to an increase in the
provision for loan losses of $1.2 million, or $700,000 after-tax, and
an increase of $5.8 million, or $3.3 million after-tax, in
non-interest expenses, partially offset by increases in net interest
income of $3.0 million, or $1.7 million after-tax, and non-interest
income of $1.6 million, or $945,000 after-tax. The additional
provision for loan losses was necessary due to the continued
deterioration in real estate values in California's Central Valley,
which includes the Company's primary market area. The increase in net
interest income and non-interest expenses are primarily due to the
expanded activities of the Company arising from the acquisition of The
California Stockmen's Bank and Bay View Funding in the fourth quarter
of 2007.
The Company's net interest income rose 18% in the first quarter of
2008 compared to the first quarter of 2007, an increase to $19.7
million from $16.7 million, primarily due to interest-earning assets
acquired from The California Stockmen's Bank and Bay View Funding as
well as the Company's internal growth. Average interest-earning assets
rose in the first quarter of 2008 7.9% to $1.8 billion compared to
$1.7 billion in the first quarter of 2007, primarily due to
interest-earning assets acquired from The California Stockmen's Bank
and Bay View Funding, which averaged $171 million in the first quarter
of 2008, as well as the Company's internal growth. The Company's net
interest margin increased to 4.29% as of March 31, 2008, compared to
3.98% as of March 31, 2007.
Non-interest income increased $1.6 million, or 55%, to $4.5
million and service charges on deposit accounts increased by $535,000,
or 31%, to $2.2 million for the first quarter of 2008 compared to the
first quarter of 2007. The increase in service charges on deposit
accounts for the first quarter of 2008 was the result of The
California Stockmen's Bank acquisition as well as increased Bank fees
and reduced waivers on service charges.
As of March 31, 2008, the Company's subsidiary County Bank had a
total risk-based capital ratio of 9.92%, a Tier 1 capital ratio of
7.49% and a leverage ratio of 6.38%. The Bank's capital is within
adequately capitalized levels. The Company itself had a total
risk-based capital ratio of 10.46%, a Tier 1 capital ratio of 8.61%
and a leverage ratio of 7.22% as of March 31, 2008.
"County Bank remains the Central Valley's leading regional
community bank and will continue to enhance its full-service product
and service offerings in 2008 while providing the kind of personal
service that its customers expect and appreciate," said Rocha. "We've
always prided ourselves on superior customer service and building
solid, long-term relationships with our customers. We'd like to say
thank you to our customers, and also to our shareholders, for standing
with us and helping us work through these challenging times."
Financial Statements and Commentary
For complete financial statements and commentary for the quarter
ended March 31, 2008, please refer to the Company's 2008 Quarterly
Report on Form 10-Q which can be found online at www.ccow.com.
About Capital Corp of the West
Capital Corp of the West, a bank holding company established
November 1, 1995, is the parent company of County Bank, which has more
than 30 years of service as "Central California's Community Bank."
County Bank currently has 40 branch offices serving 13 counties in
California. Its primary concentration is in California's Central
Valley. As of the latest FDIC data, County Bank has a 7.29 percent
market share in the six Central California counties in which it has a
significant retail branch presence, ranking County Bank fifth out of
41 financial institutions in that market area.
Contact Information
For further information about the Company's financial performance,
contact Thomas Smith, First Vice President, Director of Marketing, at
209-725-4540.
The Company continues to evaluate the need to raise capital and
the alternatives to do so and therefore will not be conducting an
investor conference call regarding the results of operations for the
first quarter of 2008 at this time.
Safe Harbor
This press release includes forward-looking statements and
information is subject to the "safe harbor" provisions of Section 27A
of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. In addition to historical information, this
press release includes certain forward-looking statements that are
subject to risks and uncertainties and include information about
possible or assumed future results of operations. Many possible events
or factors could affect the future financial results and performance
of the Company. This could cause results or performance to differ
materially from those expressed in our forward-looking statements.
Words such as "expects", "anticipates", "believes", "estimates",
"intends", "plans", "assumes", "projects", "predicts", "forecasts",
variations of such words and other similar expressions are intended to
identify such forward-looking statements. These statements are not
guarantees of future performance and involve certain risks,
uncertainties and assumptions which are difficult to predict. Certain
of these risks, uncertainties and assumptions are discussed in the
Risk Factors section of the Company's Form 10-Q for the quarter ended
March 31, 2008 and Form 10-K for the year ended December 31, 2007.
Among the factors that may cause future performance to vary
significantly from current expectations are uncertainties in the
following areas: local, national and international economic
conditions; volatility in the credit, equity and other markets;
competition; volatility of real estate values and difficulties in
obtaining current information on values; the Company's credit quality
and the adequacy of its allowance for loan losses; actions by banking
regulators in response to the Company's loan losses; deposit customer
confidence in the Company and the sufficiency of the Company's cash
and liquid assets to meet high levels of withdrawal requests resulting
from announcement of unfavorable operating results; availability of
borrowings from the Federal Reserve Bank and Federal Home Loan Bank;
changes in market interest rates; risks in integrating acquired
businesses and branches; regional weather and natural disasters; the
possible adverse effect of concentrations in the loan portfolio;
turmoil in credit and capital markets and potential impaired access to
additional capital if needed; potential adverse changes in market
interest rates; and the effect of existing and future regulation of
the banking industry and the Company in particular; civil disturbances
or terrorist threats or acts, or apprehension about the possible
future occurrences or acts of this type; outbreak or escalation of
hostilities in which the United States is involved, any declaration of
war by the U.S. Congress or any other national or international
calamity, crisis or emergency. Therefore, actual outcomes and results
may differ materially from what is expressed or forecasted in, or
implied by, such forward-looking statements.
Capital Corp of the West
Thomas Smith, 209-725-4540
First Vice President, Director of Marketing
Copyright Business Wire 2008
