Bay View Capital Corporation Announces First Quarter Results

Apr 24, 2001, 01:00 ET from Bay View Capital Corporation

    SAN MATEO, Calif., April 24 /PRNewswire Interactive News Release/ --
 Bay View Capital Corporation (NYSE:   BVC) (the "Company") today reported a
 first quarter 2001 net loss of $7.97 million, or $0.24 per share, as compared
 to a net loss of $92.5 million, or $2.83 per share, for the fourth quarter of
 2000 and net income of $0.5 million, or $0.02 per share, for the first quarter
 of 2000.  First quarter results reflected pre-tax operating earnings of
 approximately $2.4 million offset primarily by specific franchise-related
 charges consistent with the Company's new strategic plan which will be
 implemented upon the successful completion of its ongoing rights offering.
     As previously announced, Bay View is in the process of raising between
 $110 and $137 million of additional capital through a common stock rights
 offering.  Upon successful completion of this offering, the additional capital
 will be used to implement a new strategic plan, administered by new
 leadership, enabling the Company to absorb specific charges necessary to
 reduce credit risk and improve capital levels.
     Robert B. Goldstein, Bay View's new President and Chief Executive Officer,
 confirmed, "We are very encouraged by the initial response to the rights
 offering.  We are on track towards raising at least $110 million by the end of
 May.  This infusion of new capital will allow Bay View to rid itself of most
 of its remaining high-risk assets and renew its focus on core banking
 operations.  My goal, and the Company's new commitment, is to realize the
 intrinsic value of Bay View by focusing on the fundamentals of sound banking."
     Specific charges recognized during the first quarter consistent with Bay
 View's new strategic plan included $16.9 million in pre-tax charges associated
 with the revaluation of franchise-related assets and $3.4 million of
 supplemental loan loss provision specifically associated with franchise loans.
 The franchise-related asset charges included a $3.3 million adjustment to
 residual interests and a $13.6 million adjustment to servicing assets related
 to franchise loan securitizations.  The Company's first quarter results also
 included $10.6 million in net gains on sales of assets representing additional
 gains on December 2000 asset sales and net gains on the sale of approximately
 $95 million in franchise loans.
     Bay View's banking operations and deposit franchise remain strong.  Bay
 View Bank's retail deposits, a lower-cost funding source relative to wholesale
 borrowings, grew $10 million during the quarter.  Transaction accounts, which
 are lower-cost deposits relative to retail certificates of deposits, grew
 $104 million during the quarter and increased to 49.1% of total retail
 deposits from 46.2% for the prior quarter.  The increase in retail deposits
 was primarily related to the Company's continuing marketing and promotional
 efforts.  Further, the Company reduced its reliance on wholesale borrowings,
 including brokered certificates of deposit, by $335.8 million during the
 quarter.
     "We are very pleased with the continued strength of Bay View Bank's
 deposit franchise," commented Matthew L. Carpenter, Executive Vice President
 and Chief Operating Officer.  "While extensive effort has been expended to
 address our capital needs and our exposure to franchise-related assets, the
 increase in the percentage of transaction accounts during the quarter reflects
 our continued commitment and focus on enhancing and growing our deposit
 franchise."
     Loan originations remained strong, totaling $135.8 million for the
 quarter.  Originations for the quarter included $73.1 million in auto loans,
 $21.2 million in mortgage loans, $16.4 million in home equity loans and
 $25.1 million in commercial and business loans.  Total franchise loans
 decreased from $780 million at December 31, 2000 to $662 million at
 March 31, 2001 due to loan sales, paydowns and scheduled amortization.
     "The sale of nearly $200 million in franchise loans during the past
 two quarters has been encouraging," commented Mark E. Lefanowicz, Executive
 Vice President and Chief Financial Officer.  "The loan sales have essentially
 been executed at par, with gains realized based on the mark-to-market
 valuation adjustment recognized at the end of 2000.  We will continue to look
 for opportunities to reduce our overall risk profile."
     The Company's net interest income and net interest margin for the first
 quarter of 2001 were $32.5 million and 2.93%, as compared to $37.4 million and
 2.95% for the prior quarter.  The decrease in net interest income was
 primarily due to lower average interest-earning asset balances resulting from
 asset sales during the past two quarters.  The slight decrease in net interest
 margin was primarily due to lower asset yields offset by lower funding costs.
 Normalized net interest margin, which the Company defines as net interest
 margin adjusted to include the net rental income from its auto leasing
 activities and the expenses related to its Capital Securities, was 3.22% as
 compared to 3.21% for the previous quarter.
     Credit quality continued to be impacted by the performance of franchise
 loans as various sectors of the franchise market, particularly certain fast
 food brands, were still affected by market pressures.  Nonperforming assets
 were $113.2 million at March 31, 2001 as compared with $101.7 million at
 December 31, 2000.  Loans and leases delinquent 60 days or more at
 March 31, 2001 improved to $80.6 million as compared with $84.8 million at
 December 31, 2000.  Annualized net charge-offs as a percentage of average
 loans and leases were 1.23% for the quarter as compared with 0.31% for the
 prior quarter.  Included in nonperforming assets at March 31, 2001 were
 approximately $33.5 million in franchise-related loans that the Company
 anticipates will either be paid-off or returned to performing status by the
 end of the second quarter.  These resolutions resulted from ongoing
 negotiations with both franchisees and franchisors.  The Company remains
 optimistic about its ability to continue to work out and resolve the remaining
 problem credits.
     Nonperforming assets excluding franchise-related assets were
 $25.8 million at March 31, 2001 as compared with $29.4 million at
 December 31, 2000, while non-franchise delinquencies were $26.4 million as
 compared with $31.4 million at prior quarter end.  The loan loss provision for
 the quarter totaled $7.3 million as compared with $32.1 million for the prior
 quarter.
     No tax benefit was recorded on the pre-tax loss recognized in the current
 quarter because management has determined that it is more likely than not that
 the Company will not realize benefits in the amount of these additional
 deferred tax assets.
     Bay View Capital Corporation is a diversified financial services company
 headquartered in San Mateo, California.  The Company's principal subsidiary is
 Bay View Bank, a nationally chartered commercial bank which is the largest
 deposit franchise exclusively serving the San Francisco Bay Area with 57 full
 service branches.  Bay View offers a full array of retail and commercial
 banking products and services to customers throughout the nation.
 
     Forward-Looking Statements
     This press release contains forward-looking statements which describe the
 Company's future plans, strategies and expectations.  All forward-looking
 statements are based on assumptions and involve risks and uncertainties, many
 of which are beyond the Company's control and which may cause actual results,
 performance or achievements to differ materially from those that the Company
 anticipates.  Factors that might affect forward-looking statements include,
 among other things:
 
     -- the ability to remain in compliance with certain written agreements
        with government agencies;
     -- the successful completion of the rights offering or alternative
        transactions raising additional capital;
     -- the demand for products;
     -- actions taken by competitors;
     -- tax rate changes, new tax laws and revised tax law interpretations;
     -- adverse changes occurring in the securities markets;
     -- inflation and changes in prevailing interest rates that reduce margins
        or the fair value of the financial instruments held;
     -- economic or business conditions, either nationally or in current market
        areas, that are worse than expected;
     -- legislative or regulatory changes that adversely affect business;
     -- the timing, impact and other uncertainties of asset sales or
        securitizations;
     -- technological changes that are more difficult or expensive than
        expected;
     -- increases in delinquencies and defaults by borrowers and other loan
        delinquencies;
     -- increases in provision for losses on loans and leases;
     -- the inability to sustain or improve the performance of subsidiaries;
     -- the inability to achieve the financial goals of strategic plans,
        including any financial goals related to both contemplated and
        consummated asset sales or acquisitions;
     -- the outcome of lawsuits or regulatory disputes;
     -- credit and other risks of lending, leasing and investment activities;
        and
     -- the inability to use the net operating loss carryforwards.
 
     As a result of the above, the Company cannot assure that future results of
 operations or financial condition or any other matters will be consistent with
 those presented in any forward-looking statements.  Accordingly, the Company
 cautions you not to rely on these forward-looking statements.  The Company
 does not undertake, and specifically disclaims any obligation, to update these
 forward-looking statements, which speak only as of the date made.
 
 
                            BAY VIEW CAPITAL CORPORATION
                   CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                    (Unaudited)
                                                     March 31,   December 31,
                                                        2001        2000
                                                      (Dollars in thousands)
 
     ASSETS
     Cash and cash equivalents:
       Cash and due from depository institutions      $49,884       $694,934
       Short-term investments                         416,463             --
                                                      466,347        694,934
     Securities available-for-sale:
       Investment securities                           30,223         33,009
       Mortgage-backed securities                         564            578
     Securities held-to-maturity:
       Investment securities                           30,746             --
       Mortgage-backed securities                     661,617        535,478
     Mortgage-backed securities due from creditor          --        106,572
     Loans and leases held-for-sale                   281,249        345,207
     Loans and leases held-for-investment, net      2,679,896      2,751,794
     Investment in operating leased assets, net       452,401        479,829
     Investment in stock of the Federal Home Loan
      Bank of San Francisco                            41,120         40,190
     Investment in stock of the Federal Reserve
      Bank                                             19,590         19,590
     Real estate owned, net                               128          1,041
     Premises and equipment, net                       16,065         17,303
     Intangible assets                                131,985        134,936
     Other assets                                     188,038        200,470
     Total assets                                  $4,999,969     $5,360,931
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Deposits:
       Transaction accounts                        $1,712,363     $1,608,499
       Retail certificates of deposit               1,778,347      1,872,562
       Brokered certificates of deposit               139,438        265,251
                                                    3,630,148      3,746,312
     Advances from the Federal Home Loan Bank
      of San Francisco                                732,253        804,837
     Short-term borrowings                             59,878        197,375
     Subordinated Notes, net                          149,583        149,567
     Other borrowings                                   1,071          1,664
     Other liabilities                                 47,117         73,327
     Total liabilities                              4,620,050      4,973,082
 
     Guaranteed Preferred Beneficial
      Interest in the Company's Junior
      Subordinated Debentures
      ("Capital Securities")                           90,000         90,000
 
     Stockholders' equity:
       Serial preferred stock: Authorized,
        7,000,000 shares; Outstanding, none                --             --
       Common stock ($.01 par value): Authorized,
        60,000,000 shares; issued,
        2001-32,650,244; 2000-32,640,039
        outstanding, 2001-32,585,192;
        2000-32,574,987                                   326            326
       Additional paid-in capital                     456,118        456,045
       Accumulated deficit                          (164,843)      (156,877)
       Treasury stock, at cost, 65,052 shares         (1,081)        (1,081)
       Accumulated other comprehensive income
        (loss):
         Unrealized gain (loss) on securities
          available-for-sale, net of tax                 (27)             10
       Debt of Employee Stock Ownership Plan            (574)          (574)
     Total stockholders' equity                       289,919        297,849
     Total liabilities and stockholders' equity    $4,999,969     $5,360,931
 
 
                            BAY VIEW CAPITAL CORPORATION
       CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                                    (Unaudited)
 
                                                For the Three Months Ended
                                              March 31,   Dec. 31, March 31,
                                                 2001      2000      2000
 
                            (Amounts in thousands, except per share amounts)
 
     Interest income:
       Interest on loans and leases           $72,350    $87,014   $97,193
       Interest on mortgage-backed securities  12,215     15,687    12,207
       Interest and dividends on investment
        securities                              9,894      9,922     5,065
                                               94,459    112,623   114,465
 
     Interest expense:
       Interest on deposits                    43,921     47,734    39,908
       Interest on borrowings                  14,339     23,801    27,651
       Interest on Senior Debentures and
        Subordinated Notes                      3,715      3,715     3,715
                                               61,975     75,250    71,274
 
     Net interest income                       32,484     37,373    43,191
     Provision for losses on loans and leases   7,300     32,100     8,000
     Net interest income after provision for
      losses on loans and leases               25,184      5,273    35,191
 
     Noninterest income:
       Leasing income                          24,383     24,798    22,470
       Loan fees and charges                    1,406      2,206     2,570
       Loan servicing income                    1,815      1,768     1,485
       Account fees                             2,030      1,972     1,914
       Sales commissions                        1,297      1,193     1,370
       Gain (loss) on sale of assets and
        liabilities, net                       10,626    (52,125)    3,198
       Other, net                                 550        850     1,465
                                               42,107    (19,338)   34,472
 
     Noninterest expense:
       General and administrative              35,417     35,713    33,380
       General and administrative
        - FMAC loan production                     --         --     4,890
       General and administrative
        - Bankers Mutual                           --         --     3,086
       Restructuring expenses - FMAC               --     (1,269)       --
       Revaluation of FMAC-related assets      16,945     59,409        --
       Leasing expenses                        17,757     19,690    15,381
       Dividend expense on Capital Securities   2,288      2,287     2,233
       Real estate owned operations, net          (18)        17        13
       Amortization of intangible assets        2,868      2,726     3,572
       Amortization of intangible assets
        - FMAC                                     --         --     2,735
                                               75,257    118,574    65,290
 
     Income (loss) before income tax
      expense (benefit)                        (7,966)  (132,639)    4,373
     Income tax expense (benefit)                  --    (40,176)    3,855
 
     Net income (loss)                        $(7,966)  $(92,463)     $518
 
     Basic earnings (loss) per share           $(0.24)    $(2.83)    $0.02
     Diluted earnings (loss) per share         $(0.24)    $(2.83)    $0.02
 
     Weighted-average basic shares
      outstanding                              32,647     32,647    32,629
     Weighted-average diluted shares
      outstanding                              32,647     32,647    32,636
 
     Net income (loss)                        $(7,966)  $(92,463)     $518
     Other comprehensive income (loss),
      net of tax: Change in unrealized
      gain or loss on securities
      available-for-sale, net of tax expense
      (benefit) of ($26), ($145) and $132
      for the three months ended
      March 31, 2001, December 31, 2000 and
      March 31, 2000, respectively                (37)      (205)      182
     Comprehensive income (loss)              $(8,003)  $(92,668)     $700
 
 
                            BAY VIEW CAPITAL CORPORATION
                              SELECTED FINANCIAL DATA
                                    (Unaudited)
 
                                         At and For the Three Months Ended
                                           March 31,    Dec. 31,   March 31,
                                             2001         2000       2000
                            (Amounts in thousands, except per share amounts)
 
     Loans and Leases Held-for-Investment:
       Retail:
         Single-family mortgage loans      $366,157    $383,140   $625,085
         High loan-to-value home
          equity loans                      101,016     100,573    412,073
         Other home equity loans            194,918     202,324    213,227
         Auto loans (A)                     327,640     287,020    171,920
       Total retail loans                   989,731     973,057  1,422,305
       Commercial:
         Multi-family mortgage loans        604,831     611,484    628,301
         Commercial mortgage loans          333,448     339,764    356,703
         Franchise loans and leases         389,586     443,622    909,785
         Asset-based loans, factoring
          loans, and commercial leases      338,072     353,362    283,465
         Business loans                      73,931      81,365     81,230
       Total commercial loans and leases  1,739,868   1,829,597  2,259,484
     Gross loans and leases               2,729,599   2,802,654  3,681,789
     Premiums and discounts and deferred
      fees and costs, net                    21,719      22,878     43,677
     Allowance for losses on loans and
      leases                                (71,422)    (73,738)   (49,344)
     Loans and leases
      held-for-investment, net           $2,679,896  $2,751,794 $3,676,122
 
     Other Franchise-Related Assets
       Residual interest in franchise
        loan securitizations                $11,177     $14,394    $26,703
       Franchise loan servicing asset           $--     $14,069    $29,876
 
     Credit Quality:
       Nonperforming assets - total        $113,223    $101,713    $26,594
       Nonperforming assets - FMAC          $87,444     $72,330     $4,496
       Nonperforming assets as a
        percentage of consolidated assets     2.26%       1.90%      0.41%
 
       Loans and leases delinquent
        60 days or more                     $80,627     $84,836    $27,668
       Loans and leases delinquent
        60 days or more - FMAC              $54,254     $53,391     $3,511
       Loans and leases delinquent
        60 days or more as a percentage of
        gross loans and leases, including
        loans and leases held-for-sale        2.68%       2.70%      0.71%
 
       Allowance for losses on loans
        and leases                          $71,422     $73,738    $49,344
       Allowance for losses on loans
        and leases as a percentage of
        gross loans and leases
        held-for-investment                   2.62%       2.63%      1.34%
       Allowance for losses on loans
        and leases as a percentage of
        nonperforming assets                    63%         72%       186%
       Annualized net charge-offs as a
        percentage of average total loans
        and leases                            1.23%       0.31%      0.59%
 
     Regulatory Capital Ratios: (B)
       Bay View Bank regulatory capital
        ratios
         Tier 1 leverage ratio                4.43%       4.23%      6.40%
         Tier 1 risk-based capital ratio      6.21%       6.30%      8.09%
         Total risk-based capital ratio       8.93%       9.00%     10.26%
 
       Bay View Capital Corporation
        regulatory capital ratios
         Tier 1 leverage ratio                3.76%       3.47%      6.09%
         Tier 1 risk-based capital ratio      4.63%       4.59%      7.11%
         Total risk-based capital ratio       8.20%       8.14%     10.86%
 
     Per Share Data:
       Book value per share                   $8.90       $9.14     $19.32
       Tangible book value per share          $4.85       $5.00     $ 8.93
 
     Other Data:
       Transaction accounts as a percentage
        of total retail deposits               49.1%      46.2%       51.3%
       Full-time equivalent employees           955       1,018      1,281
       Franchise loans held-for-sale, net,
        as a percentage of unpaid principal
        balance                                89.3%      88.7%      100.0%
 
 
                            BAY VIEW CAPITAL CORPORATION
                        SELECTED FINANCIAL DATA (continued)
                                    (Unaudited)
 
                                               For the Three Months Ended
                                            March 31,    Dec. 31,  March 31,
                                                2001       2000         2000
                                                   (Dollars in thousands)
 
     Net Interest Margin (GAAP):
       Loan yield                             9.28%       9.49%       8.66%
       Mortgage-backed securities yield        7.48        7.09       6.86
       Investment yield                        6.62        7.65       8.23
         Interest-earning assets yield        8.65%       8.88%       8.41%
       Transaction accounts cost               3.34        3.55       3.30
       Retail certificates of deposit cost     5.94        5.89       4.99
       Brokered certificates of deposit
        cost                                   7.20        7.02       6.29
         Total deposits cost                  4.84%       5.01%       4.36%
       Wholesale borrowings cost               6.50        6.91       6.02
       Debt cost                               9.94        9.94       9.94
         Total borrowings cost                7.00%       7.21%       6.28%
         Interest-bearing liabilities
          cost                                5.31%       5.63%       5.04%
       Net spread                             3.34%       3.25%       3.37%
       Net interest margin                    2.93%       2.95%       3.16%
 
       Average interest-earning assets   $4,387,371  $5,042,349 $5,446,436
       Total average assets               5,170,665   5,862,830  6,531,615
       Total average equity                 302,942     376,341    629,507
 
     Loan and Lease Production:
       Originations:
         Home equity loans and lines of
          credit                            $16,438     $17,413    $16,129
         Auto loans and leases (C)           73,123      73,065    133,077
         Multi-family and commercial
          mortgage loans                     21,190      23,691     38,319
         Franchise loans                         --         775    192,527
         Bankers Mutual multi-family
          mortgage loans (D)                     --          --    130,774
         Asset-based loans, factoring
          loans, and commercial leases       14,288      37,824     38,179
         Business loans                      10,807      15,867     14,845
     Total originations                    $135,846    $168,635   $563,850
 
     A) Excludes auto-related operating lease assets reported separately from
        loans and leases totaling $452.4 million, $479.8 million and
        $504.2 million at March 31, 2001, December 31, 2000, and
        March 31, 2000, respectively.
     B) March 31, 2001 capital ratios are subject to the finalization and
        submission of the Company's March 31, 2001 regulatory reports.
     C) Includes auto-related operating lease assets of $62.5 million for the
        three months ended March 31, 2000.  The Company's agreement with Lendco
        Financial Services for the purchase of auto leases expired on
        June 30, 2000.
     D) 100% of Bankers Mutual multi-family mortgage loans were originated and
        sold through seller-servicer programs administered by Fannie Mae and
        Freddie Mac.  Effective June 30, 2000, substantially all of the assets
        and liabilities of Bankers Mutual were sold.
 
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SOURCE Bay View Capital Corporation
    SAN MATEO, Calif., April 24 /PRNewswire Interactive News Release/ --
 Bay View Capital Corporation (NYSE:   BVC) (the "Company") today reported a
 first quarter 2001 net loss of $7.97 million, or $0.24 per share, as compared
 to a net loss of $92.5 million, or $2.83 per share, for the fourth quarter of
 2000 and net income of $0.5 million, or $0.02 per share, for the first quarter
 of 2000.  First quarter results reflected pre-tax operating earnings of
 approximately $2.4 million offset primarily by specific franchise-related
 charges consistent with the Company's new strategic plan which will be
 implemented upon the successful completion of its ongoing rights offering.
     As previously announced, Bay View is in the process of raising between
 $110 and $137 million of additional capital through a common stock rights
 offering.  Upon successful completion of this offering, the additional capital
 will be used to implement a new strategic plan, administered by new
 leadership, enabling the Company to absorb specific charges necessary to
 reduce credit risk and improve capital levels.
     Robert B. Goldstein, Bay View's new President and Chief Executive Officer,
 confirmed, "We are very encouraged by the initial response to the rights
 offering.  We are on track towards raising at least $110 million by the end of
 May.  This infusion of new capital will allow Bay View to rid itself of most
 of its remaining high-risk assets and renew its focus on core banking
 operations.  My goal, and the Company's new commitment, is to realize the
 intrinsic value of Bay View by focusing on the fundamentals of sound banking."
     Specific charges recognized during the first quarter consistent with Bay
 View's new strategic plan included $16.9 million in pre-tax charges associated
 with the revaluation of franchise-related assets and $3.4 million of
 supplemental loan loss provision specifically associated with franchise loans.
 The franchise-related asset charges included a $3.3 million adjustment to
 residual interests and a $13.6 million adjustment to servicing assets related
 to franchise loan securitizations.  The Company's first quarter results also
 included $10.6 million in net gains on sales of assets representing additional
 gains on December 2000 asset sales and net gains on the sale of approximately
 $95 million in franchise loans.
     Bay View's banking operations and deposit franchise remain strong.  Bay
 View Bank's retail deposits, a lower-cost funding source relative to wholesale
 borrowings, grew $10 million during the quarter.  Transaction accounts, which
 are lower-cost deposits relative to retail certificates of deposits, grew
 $104 million during the quarter and increased to 49.1% of total retail
 deposits from 46.2% for the prior quarter.  The increase in retail deposits
 was primarily related to the Company's continuing marketing and promotional
 efforts.  Further, the Company reduced its reliance on wholesale borrowings,
 including brokered certificates of deposit, by $335.8 million during the
 quarter.
     "We are very pleased with the continued strength of Bay View Bank's
 deposit franchise," commented Matthew L. Carpenter, Executive Vice President
 and Chief Operating Officer.  "While extensive effort has been expended to
 address our capital needs and our exposure to franchise-related assets, the
 increase in the percentage of transaction accounts during the quarter reflects
 our continued commitment and focus on enhancing and growing our deposit
 franchise."
     Loan originations remained strong, totaling $135.8 million for the
 quarter.  Originations for the quarter included $73.1 million in auto loans,
 $21.2 million in mortgage loans, $16.4 million in home equity loans and
 $25.1 million in commercial and business loans.  Total franchise loans
 decreased from $780 million at December 31, 2000 to $662 million at
 March 31, 2001 due to loan sales, paydowns and scheduled amortization.
     "The sale of nearly $200 million in franchise loans during the past
 two quarters has been encouraging," commented Mark E. Lefanowicz, Executive
 Vice President and Chief Financial Officer.  "The loan sales have essentially
 been executed at par, with gains realized based on the mark-to-market
 valuation adjustment recognized at the end of 2000.  We will continue to look
 for opportunities to reduce our overall risk profile."
     The Company's net interest income and net interest margin for the first
 quarter of 2001 were $32.5 million and 2.93%, as compared to $37.4 million and
 2.95% for the prior quarter.  The decrease in net interest income was
 primarily due to lower average interest-earning asset balances resulting from
 asset sales during the past two quarters.  The slight decrease in net interest
 margin was primarily due to lower asset yields offset by lower funding costs.
 Normalized net interest margin, which the Company defines as net interest
 margin adjusted to include the net rental income from its auto leasing
 activities and the expenses related to its Capital Securities, was 3.22% as
 compared to 3.21% for the previous quarter.
     Credit quality continued to be impacted by the performance of franchise
 loans as various sectors of the franchise market, particularly certain fast
 food brands, were still affected by market pressures.  Nonperforming assets
 were $113.2 million at March 31, 2001 as compared with $101.7 million at
 December 31, 2000.  Loans and leases delinquent 60 days or more at
 March 31, 2001 improved to $80.6 million as compared with $84.8 million at
 December 31, 2000.  Annualized net charge-offs as a percentage of average
 loans and leases were 1.23% for the quarter as compared with 0.31% for the
 prior quarter.  Included in nonperforming assets at March 31, 2001 were
 approximately $33.5 million in franchise-related loans that the Company
 anticipates will either be paid-off or returned to performing status by the
 end of the second quarter.  These resolutions resulted from ongoing
 negotiations with both franchisees and franchisors.  The Company remains
 optimistic about its ability to continue to work out and resolve the remaining
 problem credits.
     Nonperforming assets excluding franchise-related assets were
 $25.8 million at March 31, 2001 as compared with $29.4 million at
 December 31, 2000, while non-franchise delinquencies were $26.4 million as
 compared with $31.4 million at prior quarter end.  The loan loss provision for
 the quarter totaled $7.3 million as compared with $32.1 million for the prior
 quarter.
     No tax benefit was recorded on the pre-tax loss recognized in the current
 quarter because management has determined that it is more likely than not that
 the Company will not realize benefits in the amount of these additional
 deferred tax assets.
     Bay View Capital Corporation is a diversified financial services company
 headquartered in San Mateo, California.  The Company's principal subsidiary is
 Bay View Bank, a nationally chartered commercial bank which is the largest
 deposit franchise exclusively serving the San Francisco Bay Area with 57 full
 service branches.  Bay View offers a full array of retail and commercial
 banking products and services to customers throughout the nation.
 
     Forward-Looking Statements
     This press release contains forward-looking statements which describe the
 Company's future plans, strategies and expectations.  All forward-looking
 statements are based on assumptions and involve risks and uncertainties, many
 of which are beyond the Company's control and which may cause actual results,
 performance or achievements to differ materially from those that the Company
 anticipates.  Factors that might affect forward-looking statements include,
 among other things:
 
     -- the ability to remain in compliance with certain written agreements
        with government agencies;
     -- the successful completion of the rights offering or alternative
        transactions raising additional capital;
     -- the demand for products;
     -- actions taken by competitors;
     -- tax rate changes, new tax laws and revised tax law interpretations;
     -- adverse changes occurring in the securities markets;
     -- inflation and changes in prevailing interest rates that reduce margins
        or the fair value of the financial instruments held;
     -- economic or business conditions, either nationally or in current market
        areas, that are worse than expected;
     -- legislative or regulatory changes that adversely affect business;
     -- the timing, impact and other uncertainties of asset sales or
        securitizations;
     -- technological changes that are more difficult or expensive than
        expected;
     -- increases in delinquencies and defaults by borrowers and other loan
        delinquencies;
     -- increases in provision for losses on loans and leases;
     -- the inability to sustain or improve the performance of subsidiaries;
     -- the inability to achieve the financial goals of strategic plans,
        including any financial goals related to both contemplated and
        consummated asset sales or acquisitions;
     -- the outcome of lawsuits or regulatory disputes;
     -- credit and other risks of lending, leasing and investment activities;
        and
     -- the inability to use the net operating loss carryforwards.
 
     As a result of the above, the Company cannot assure that future results of
 operations or financial condition or any other matters will be consistent with
 those presented in any forward-looking statements.  Accordingly, the Company
 cautions you not to rely on these forward-looking statements.  The Company
 does not undertake, and specifically disclaims any obligation, to update these
 forward-looking statements, which speak only as of the date made.
 
 
                            BAY VIEW CAPITAL CORPORATION
                   CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                    (Unaudited)
                                                     March 31,   December 31,
                                                        2001        2000
                                                      (Dollars in thousands)
 
     ASSETS
     Cash and cash equivalents:
       Cash and due from depository institutions      $49,884       $694,934
       Short-term investments                         416,463             --
                                                      466,347        694,934
     Securities available-for-sale:
       Investment securities                           30,223         33,009
       Mortgage-backed securities                         564            578
     Securities held-to-maturity:
       Investment securities                           30,746             --
       Mortgage-backed securities                     661,617        535,478
     Mortgage-backed securities due from creditor          --        106,572
     Loans and leases held-for-sale                   281,249        345,207
     Loans and leases held-for-investment, net      2,679,896      2,751,794
     Investment in operating leased assets, net       452,401        479,829
     Investment in stock of the Federal Home Loan
      Bank of San Francisco                            41,120         40,190
     Investment in stock of the Federal Reserve
      Bank                                             19,590         19,590
     Real estate owned, net                               128          1,041
     Premises and equipment, net                       16,065         17,303
     Intangible assets                                131,985        134,936
     Other assets                                     188,038        200,470
     Total assets                                  $4,999,969     $5,360,931
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Deposits:
       Transaction accounts                        $1,712,363     $1,608,499
       Retail certificates of deposit               1,778,347      1,872,562
       Brokered certificates of deposit               139,438        265,251
                                                    3,630,148      3,746,312
     Advances from the Federal Home Loan Bank
      of San Francisco                                732,253        804,837
     Short-term borrowings                             59,878        197,375
     Subordinated Notes, net                          149,583        149,567
     Other borrowings                                   1,071          1,664
     Other liabilities                                 47,117         73,327
     Total liabilities                              4,620,050      4,973,082
 
     Guaranteed Preferred Beneficial
      Interest in the Company's Junior
      Subordinated Debentures
      ("Capital Securities")                           90,000         90,000
 
     Stockholders' equity:
       Serial preferred stock: Authorized,
        7,000,000 shares; Outstanding, none                --             --
       Common stock ($.01 par value): Authorized,
        60,000,000 shares; issued,
        2001-32,650,244; 2000-32,640,039
        outstanding, 2001-32,585,192;
        2000-32,574,987                                   326            326
       Additional paid-in capital                     456,118        456,045
       Accumulated deficit                          (164,843)      (156,877)
       Treasury stock, at cost, 65,052 shares         (1,081)        (1,081)
       Accumulated other comprehensive income
        (loss):
         Unrealized gain (loss) on securities
          available-for-sale, net of tax                 (27)             10
       Debt of Employee Stock Ownership Plan            (574)          (574)
     Total stockholders' equity                       289,919        297,849
     Total liabilities and stockholders' equity    $4,999,969     $5,360,931
 
 
                            BAY VIEW CAPITAL CORPORATION
       CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                                    (Unaudited)
 
                                                For the Three Months Ended
                                              March 31,   Dec. 31, March 31,
                                                 2001      2000      2000
 
                            (Amounts in thousands, except per share amounts)
 
     Interest income:
       Interest on loans and leases           $72,350    $87,014   $97,193
       Interest on mortgage-backed securities  12,215     15,687    12,207
       Interest and dividends on investment
        securities                              9,894      9,922     5,065
                                               94,459    112,623   114,465
 
     Interest expense:
       Interest on deposits                    43,921     47,734    39,908
       Interest on borrowings                  14,339     23,801    27,651
       Interest on Senior Debentures and
        Subordinated Notes                      3,715      3,715     3,715
                                               61,975     75,250    71,274
 
     Net interest income                       32,484     37,373    43,191
     Provision for losses on loans and leases   7,300     32,100     8,000
     Net interest income after provision for
      losses on loans and leases               25,184      5,273    35,191
 
     Noninterest income:
       Leasing income                          24,383     24,798    22,470
       Loan fees and charges                    1,406      2,206     2,570
       Loan servicing income                    1,815      1,768     1,485
       Account fees                             2,030      1,972     1,914
       Sales commissions                        1,297      1,193     1,370
       Gain (loss) on sale of assets and
        liabilities, net                       10,626    (52,125)    3,198
       Other, net                                 550        850     1,465
                                               42,107    (19,338)   34,472
 
     Noninterest expense:
       General and administrative              35,417     35,713    33,380
       General and administrative
        - FMAC loan production                     --         --     4,890
       General and administrative
        - Bankers Mutual                           --         --     3,086
       Restructuring expenses - FMAC               --     (1,269)       --
       Revaluation of FMAC-related assets      16,945     59,409        --
       Leasing expenses                        17,757     19,690    15,381
       Dividend expense on Capital Securities   2,288      2,287     2,233
       Real estate owned operations, net          (18)        17        13
       Amortization of intangible assets        2,868      2,726     3,572
       Amortization of intangible assets
        - FMAC                                     --         --     2,735
                                               75,257    118,574    65,290
 
     Income (loss) before income tax
      expense (benefit)                        (7,966)  (132,639)    4,373
     Income tax expense (benefit)                  --    (40,176)    3,855
 
     Net income (loss)                        $(7,966)  $(92,463)     $518
 
     Basic earnings (loss) per share           $(0.24)    $(2.83)    $0.02
     Diluted earnings (loss) per share         $(0.24)    $(2.83)    $0.02
 
     Weighted-average basic shares
      outstanding                              32,647     32,647    32,629
     Weighted-average diluted shares
      outstanding                              32,647     32,647    32,636
 
     Net income (loss)                        $(7,966)  $(92,463)     $518
     Other comprehensive income (loss),
      net of tax: Change in unrealized
      gain or loss on securities
      available-for-sale, net of tax expense
      (benefit) of ($26), ($145) and $132
      for the three months ended
      March 31, 2001, December 31, 2000 and
      March 31, 2000, respectively                (37)      (205)      182
     Comprehensive income (loss)              $(8,003)  $(92,668)     $700
 
 
                            BAY VIEW CAPITAL CORPORATION
                              SELECTED FINANCIAL DATA
                                    (Unaudited)
 
                                         At and For the Three Months Ended
                                           March 31,    Dec. 31,   March 31,
                                             2001         2000       2000
                            (Amounts in thousands, except per share amounts)
 
     Loans and Leases Held-for-Investment:
       Retail:
         Single-family mortgage loans      $366,157    $383,140   $625,085
         High loan-to-value home
          equity loans                      101,016     100,573    412,073
         Other home equity loans            194,918     202,324    213,227
         Auto loans (A)                     327,640     287,020    171,920
       Total retail loans                   989,731     973,057  1,422,305
       Commercial:
         Multi-family mortgage loans        604,831     611,484    628,301
         Commercial mortgage loans          333,448     339,764    356,703
         Franchise loans and leases         389,586     443,622    909,785
         Asset-based loans, factoring
          loans, and commercial leases      338,072     353,362    283,465
         Business loans                      73,931      81,365     81,230
       Total commercial loans and leases  1,739,868   1,829,597  2,259,484
     Gross loans and leases               2,729,599   2,802,654  3,681,789
     Premiums and discounts and deferred
      fees and costs, net                    21,719      22,878     43,677
     Allowance for losses on loans and
      leases                                (71,422)    (73,738)   (49,344)
     Loans and leases
      held-for-investment, net           $2,679,896  $2,751,794 $3,676,122
 
     Other Franchise-Related Assets
       Residual interest in franchise
        loan securitizations                $11,177     $14,394    $26,703
       Franchise loan servicing asset           $--     $14,069    $29,876
 
     Credit Quality:
       Nonperforming assets - total        $113,223    $101,713    $26,594
       Nonperforming assets - FMAC          $87,444     $72,330     $4,496
       Nonperforming assets as a
        percentage of consolidated assets     2.26%       1.90%      0.41%
 
       Loans and leases delinquent
        60 days or more                     $80,627     $84,836    $27,668
       Loans and leases delinquent
        60 days or more - FMAC              $54,254     $53,391     $3,511
       Loans and leases delinquent
        60 days or more as a percentage of
        gross loans and leases, including
        loans and leases held-for-sale        2.68%       2.70%      0.71%
 
       Allowance for losses on loans
        and leases                          $71,422     $73,738    $49,344
       Allowance for losses on loans
        and leases as a percentage of
        gross loans and leases
        held-for-investment                   2.62%       2.63%      1.34%
       Allowance for losses on loans
        and leases as a percentage of
        nonperforming assets                    63%         72%       186%
       Annualized net charge-offs as a
        percentage of average total loans
        and leases                            1.23%       0.31%      0.59%
 
     Regulatory Capital Ratios: (B)
       Bay View Bank regulatory capital
        ratios
         Tier 1 leverage ratio                4.43%       4.23%      6.40%
         Tier 1 risk-based capital ratio      6.21%       6.30%      8.09%
         Total risk-based capital ratio       8.93%       9.00%     10.26%
 
       Bay View Capital Corporation
        regulatory capital ratios
         Tier 1 leverage ratio                3.76%       3.47%      6.09%
         Tier 1 risk-based capital ratio      4.63%       4.59%      7.11%
         Total risk-based capital ratio       8.20%       8.14%     10.86%
 
     Per Share Data:
       Book value per share                   $8.90       $9.14     $19.32
       Tangible book value per share          $4.85       $5.00     $ 8.93
 
     Other Data:
       Transaction accounts as a percentage
        of total retail deposits               49.1%      46.2%       51.3%
       Full-time equivalent employees           955       1,018      1,281
       Franchise loans held-for-sale, net,
        as a percentage of unpaid principal
        balance                                89.3%      88.7%      100.0%
 
 
                            BAY VIEW CAPITAL CORPORATION
                        SELECTED FINANCIAL DATA (continued)
                                    (Unaudited)
 
                                               For the Three Months Ended
                                            March 31,    Dec. 31,  March 31,
                                                2001       2000         2000
                                                   (Dollars in thousands)
 
     Net Interest Margin (GAAP):
       Loan yield                             9.28%       9.49%       8.66%
       Mortgage-backed securities yield        7.48        7.09       6.86
       Investment yield                        6.62        7.65       8.23
         Interest-earning assets yield        8.65%       8.88%       8.41%
       Transaction accounts cost               3.34        3.55       3.30
       Retail certificates of deposit cost     5.94        5.89       4.99
       Brokered certificates of deposit
        cost                                   7.20        7.02       6.29
         Total deposits cost                  4.84%       5.01%       4.36%
       Wholesale borrowings cost               6.50        6.91       6.02
       Debt cost                               9.94        9.94       9.94
         Total borrowings cost                7.00%       7.21%       6.28%
         Interest-bearing liabilities
          cost                                5.31%       5.63%       5.04%
       Net spread                             3.34%       3.25%       3.37%
       Net interest margin                    2.93%       2.95%       3.16%
 
       Average interest-earning assets   $4,387,371  $5,042,349 $5,446,436
       Total average assets               5,170,665   5,862,830  6,531,615
       Total average equity                 302,942     376,341    629,507
 
     Loan and Lease Production:
       Originations:
         Home equity loans and lines of
          credit                            $16,438     $17,413    $16,129
         Auto loans and leases (C)           73,123      73,065    133,077
         Multi-family and commercial
          mortgage loans                     21,190      23,691     38,319
         Franchise loans                         --         775    192,527
         Bankers Mutual multi-family
          mortgage loans (D)                     --          --    130,774
         Asset-based loans, factoring
          loans, and commercial leases       14,288      37,824     38,179
         Business loans                      10,807      15,867     14,845
     Total originations                    $135,846    $168,635   $563,850
 
     A) Excludes auto-related operating lease assets reported separately from
        loans and leases totaling $452.4 million, $479.8 million and
        $504.2 million at March 31, 2001, December 31, 2000, and
        March 31, 2000, respectively.
     B) March 31, 2001 capital ratios are subject to the finalization and
        submission of the Company's March 31, 2001 regulatory reports.
     C) Includes auto-related operating lease assets of $62.5 million for the
        three months ended March 31, 2000.  The Company's agreement with Lendco
        Financial Services for the purchase of auto leases expired on
        June 30, 2000.
     D) 100% of Bankers Mutual multi-family mortgage loans were originated and
        sold through seller-servicer programs administered by Fannie Mae and
        Freddie Mac.  Effective June 30, 2000, substantially all of the assets
        and liabilities of Bankers Mutual were sold.
 
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 SOURCE  Bay View Capital Corporation