SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2000 .
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-25418 .
CENTRAL COAST BANCORP
------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
California 77-0367061 .
---------- ----------------
(State or other jurisdiction of (IRS Employer ID Number)
incorporation or organization)
301 Main Street, Salinas, California . 93901 .
----------------------------------------- ---------
(Address of principal executive offices) (Zip code)
(831) 422-6642 .
----------------
(Registrant's telephone number,
including area code)
not applicable
--------------
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
No par value Common Stock - 6,768,049 shares outstanding at November 6, 2000.
Page 1 of 24
The Index to the Exhibits is located at Page 22
1
<PAGE>
<TABLE>
<CAPTION>
PART 1-FINANCIAL INFORMATION
Item 1.FINANCIAL STATEMENTS:
CENTRAL COAST BANCORP AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited)
September 30, December 31,
(Dollars in thousands) 2000 1999
---- ----
<S> <C> <C>
Assets
Cash and due from banks $ 41,297 $ 39,959
Federal funds sold 14,461 -
----------------- ---------------
Total cash and equivalents 55,758 39,959
Available-for-sale securities 140,220 145,435
Loans:
Commercial 161,105 159,385
Real estate-construction 38,147 35,330
Real estate-other 231,382 188,600
Consumer 9,935 13,003
Deferred loan fees, net (731) (721)
----------------- ---------------
Total loans 439,838 395,597
Allowance for loan losses (8,389) (5,596)
----------------- ---------------
Net Loans 431,449 390,001
----------------- ---------------
Premises and equipment, net 3,910 3,888
Accrued interest receivable and other assets 11,591 14,162
----------------- ---------------
Total assets $ 642,928 $ 593,445
================= ===============
Liabilities and Shareholders' Equity
Deposits:
Demand, noninterest bearing $ 148,089 $ 141,389
Demand, interest bearing 94,771 100,871
Savings 105,707 97,833
Time 227,534 178,096
----------------- ---------------
Total Deposits 576,101 518,189
Accrued interest payable and other liabilities 9,887 21,951
----------------- ---------------
Total liabilities 585,988 540,140
----------------- ---------------
Commitments and contingencies (Note 2)
Shareholders Equity:
Preferred stock-no par value; authorized
1,000,000 shares; no shares issued
Common stock - no par value; authorized 25,000,000 shares;
issued and outstanding: 6,818,159 shares at September 30, 2000
and 6,440,257 shares at December 31, 1999 46,182 40,223
Shares held in deferred compensation trust (271,862 at September 30, 2000
and 247,148 at December 31, 1999), net of deferred obligation - -
Retained earnings 14,090 17,784
Accumulated other comprehensive loss - net of taxes of $2,316
at September 30, 2000 and $3,267 at December 31,1999 (3,332) (4,702)
----------------- ---------------
Shareholders' equity 56,940 53,305
----------------- ---------------
Total liabilities and shareholders' equity $ 642,928 $ 593,445
================= ===============
See Notes to Consolidated Condensed Financial Statements
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
CENTRAL COAST BANCORP AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
(In thousands, except per share data) 2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Interest Income
Loans (including fees) $ 10,830 $ 8,457 $ 30,193 $ 23,284
Investment securities 2,353 2,273 6,785 6,864
Other 393 25 781 100
---------------- ----------------- ----------------- ----------------
Total interest income 13,576 10,755 37,759 30,248
---------------- ----------------- ----------------- ----------------
Interest Expense
Interest on deposits 4,834 3,402 13,113 9,668
Other 67 123 287 299
---------------- ----------------- ----------------- ----------------
Total interest expense 4,901 3,525 13,400 9,967
---------------- ----------------- ----------------- ----------------
Net Interest Income 8,675 7,230 24,359 20,281
Provision for Loan Losses 1,530 418 2,856 955
---------------- ----------------- ----------------- ----------------
Net Interest Income after
Provision for Loan Losses 7,145 6,812 21,503 19,326
---------------- ----------------- ----------------- ----------------
Noninterest Income 672 529 1,849 1,662
---------------- ----------------- ----------------- ----------------
Noninterest Expenses
Salaries and benefits 2,561 2,294 7,408 6,875
Occupancy 385 300 1,063 877
Furniture and equipment 404 320 1,204 905
Other 948 1,197 3,079 3,101
---------------- ----------------- ----------------- ----------------
Total noninterest expenses 4,298 4,111 12,754 11,758
---------------- ----------------- ----------------- ----------------
Income Before Income Taxes 3,519 3,230 10,598 9,230
Provision for Income Taxes 1,266 1,227 4,027 3,508
---------------- ----------------- ----------------- ----------------
Net Income $ 2,253 $ 2,003 $ 6,571 $ 5,722
================ ================= ================= ================
Basic Earnings per Share $ 0.33 $ 0.28 $ 0.94 $ 0.81
Diluted Earnings per Share $ 0.32 $ 0.27 $ 0.92 $ 0.78
See Notes to Consolidated Condensed Financial Statements
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
CENTRAL COAST BANCORP AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
Nine months ended September 30, 2000 1999
---- ----
<S> <C> <C>
Cash Flows from Operations:
Net income $ 6,571 $ 5,722
Reconciliation of net income to net cash provided
by operating activities:
Provision for loan losses 2,856 955
Net loss on sale of fixed assets 21 107
Depreciation 871 607
Amortization and accretion (39) 81
(Increase) decrease in accrued interest receivable and other assets 1,428 (1,108)
Increase in accrued interest payable and other liabilities 807 2,347
Increase in deferred loan fees 10 139
-------------- --------------
Net cash provided by operations 12,525 8,850
-------------- --------------
Cash Flows from Investing Activities:
Purchases of investment securities (56,346) (89,431)
Proceeds from maturities of investment securities 64,114 96,728
Proceeds from sale of investment securities - 5,988
Proceeds from sale of premises and equipment - 17
Net increase in loans (44,314) (64,343)
Purchases of premises and equipment (915) (1,593)
-------------- --------------
Net cash used in investing activities (37,461) (52,634)
-------------- --------------
Cash Flows from Financing Activities:
Net increase in deposit accounts 57,912 26,915
Net increase (decrease) in short-term borrowings (12,662) 14,233
Net decrease in long-term borrowings (210)
Proceeds from issuance of stock 89 1,098
Shares repurchased (4,394) (2,680)
-------------- --------------
Net cash provided by financing activities 40,735 39,566
-------------- --------------
Net increase (decrease) in cash and equivalents 15,799 (4,218)
Cash and equivalents, beginning of period 39,959 48,886
-------------- --------------
Cash and equivalents, end of period $ 55,758 $ 44,668
============== ==============
Other Cash Flow Information:
Interest paid $ 12,506 $ 9,856
Income taxes paid 4,660 2,289
See Notes to Consolidated Condensed Financial Statements
</TABLE>
4
<PAGE>
CENTRAL COAST BANCORP AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
September 30, 2000 (Unaudited)
1. CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of Management, the unaudited consolidated condensed
financial statements contain all adjustments (consisting of only
normal recurring adjustments) necessary to present fairly Central
Coast Bancorp's (the "Company's") consolidated financial position at
September 30, 2000 and December 31, 1999, the results of operations
for the three and nine month periods ended September 30, 2000 and 1999
and cash flows for the nine month periods ended September 30, 2000 and
1999.
Certain disclosures normally presented in the notes to the financial
statements prepared in accordance with accounting principles
generally accepted in the Untied States of America have been omitted.
These interim consolidated condensed financial statements should be
read in conjunction with the consolidated financial statements and
notes thereto included in the Company's 1999 Annual Report to
Shareholders. The results of operations for the three and nine month
periods ended September 30, 2000 and 1999 may not necessarily be
indicative of the operating results for the full year.
In preparing such financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets
and liabilities as of the date of the balance sheet and revenues and
expenses for the period. Actual results could differ significantly
from those estimates. Material estimates that are particularly
susceptible to significant changes in the near term relate to the
determination of the allowance for loan losses and the carrying value
of other real estate owned. Management uses information provided by
an independent loan review service in connection with the
determination of the allowance for loan losses.
Management has determined that since all of the commercial banking
products and services offered by the Company are available in each
branch of the Community Bank of Central California, its bank
subsidiary (the "Bank"), all branches are located within the same
economic environment and management does not allocate resources based
on the performance of different lending or transaction activities, it
is appropriate to aggregate the Bank branches and report them as a
single operating segment.
2. COMMITMENTS AND CONTINGENCIES
In the normal course of business there are outstanding various
commitments to extend credit which are not reflected in the financial
statements, including loan commitments of approximately $135,537,000
and standby letters of credit of $4,475,000 at September 30, 2000.
However, all such commitments will not necessarily culminate in actual
extensions of credit by the Company during 2000.
Outstanding loan commitments of approximately $24,988,000 at September
30, 2000 were for real estate construction loans and are expected to
fund within the next twelve months. The remaining commitments
primarily relate to revolving lines of credit or other commercial
loans, and many of these are expected to expire without being drawn
upon. Therefore, the total commitments do not necessarily represent
future cash requirements. Each potential borrower and the necessary
collateral are evaluated on an individual basis. Collateral varies,
but may include real property, bank deposits, debt or equity
securities or business assets.
Stand-by letters of credit are commitments written to guarantee the
performance of a customer to a third party. These guarantees are
issued primarily relating to purchases of inventory by commercial
customers and are typically short-term in nature. Credit risk is
similar to that involved in extending loan commitments to customers
and accordingly, evaluation and collateral requirements similar to
those for loan commitments are used.
5
<PAGE>
3. EARNINGS PER SHARE COMPUTATION
Basic earnings per share is computed by dividing net income by the
weighted average common shares outstanding for the period (6,887,000
and 6,974,000 for the three and nine month periods ended September 30,
2000, and 7,103,000 and 7,069,000 for the three and nine month periods
ended September 30, 1999). Diluted earnings per share reflect the
potential dilution that could occur if outstanding stock options and
stock purchase warrants were exercised. Diluted earnings per share is
computed by dividing net income by the weighted average common shares
outstanding for the period plus the dilutive effect of options and
warrants (197,000 and 195,000 for the three and nine month periods
ended September 30, 2000 and 194,000 and 254,000 for the three and
nine month periods ended September 30, 1999).
4. COMPREHENSIVE EARNINGS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
(In thousands) 2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Earnings $ 2,253 $ 2,003 $ 6,571 $ 5,722
Other comprehensive income (loss)- Net unrealized
gain (loss) on available-for-sale securities 1,210 (1,751) 1,370 (4,047)
Reclassification adjustment for gains included in
income, net of taxes of $5 for the
nine month period ended
September 30, 1999 - - - 8
------- ------- ------- -------
Total comprehensive earnings $ 3,463 $ 252 $ 7,941 $ 1,683
======= ======= ======= =======
</TABLE>
5. STOCK DIVIDEND
On January 31, 2000, the Board of Directors declared a ten percent
stock dividend, which was distributed on February 28, 2000, to
shareholders of record as of February 14, 2000. All share and per
share data have been retroactively adjusted to reflect the stock
dividend.
6
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In addition to the historical information contained herein, this
report on Form 10-Q contains certain forward-looking statements. The
reader of this report should understand that all such forward-looking
statements are subject to various uncertainties and risks that could
affect their outcome. The Company's actual results could differ
materially from those suggested by such forward-looking statements.
Factors that could cause or contribute to such differences include,
but are not limited to, variances in the actual versus projected
growth in assets, return on assets, loan losses, expenses, rates
charged on loans and earned on securities investments, rates paid on
deposits, competition effects, fee and other noninterest income
earned, general economic conditions, nationally, regionally and in the
operating market areas of the Company and the Bank, changes in the
regulatory environment, changes in business conditions and inflation,
changes in securities markets, as well as other factors. This entire
report should be read to put such forward-looking statements in
context. To gain a more complete understanding of the uncertainties
and risks involved in the Company's business this report should be
read in conjunction with Central Coast Bancorp's annual report on Form
10-K for the year ended December 31, 1999.
Interest income, net interest income and net interest margin are
presented on a fully taxable equivalent basis (FTE) within the
Management's Discussion and Analysis.
Business Organization
---------------------
Central Coast Bancorp (the "Company") is a California corporation
organized in 1994, and is the parent company for Community Bank of
Central California, a state-chartered bank, headquartered in Salinas,
California (the "Bank"). Other than its investment in the Bank, the
Company currently conducts no other significant business activities,
although it is authorized to engage in a variety of activities which
are deemed closely related to the business of banking upon prior
approval of the Board of Governors of the Federal Reserve System (the
"FRB"), the Company's principal federal regulator.
The Bank offers a full range of commercial banking services, including
a diverse range of traditional banking products and services to
individuals, merchants, small and medium-sized businesses,
professionals and agribusiness enterprises located in the counties of
Monterey, San Benito and Santa Cruz, which are in the central coastal
area of California.
Overview
--------
Central Coast Bancorp recorded net income of $2,253,000 for the
quarter ended September 30, 2000, which was a 12.5% increase over the
$2,003,000 reported for the same period of 1999. Diluted earnings per
share for the third quarter of 2000 was $0.32 versus $0.27 reported in
the year earlier period. The return on equity (ROE) and the return on
assets (ROA) for the third quarter of 2000 were 15.8% and 1.36% as
compared to 15.4% and 1.38% for the same period in 1999.
Net income for the nine months ended September 30, 2000 and 1999 was
$6,571,000 and $5,722,000 with diluted earnings per share of $.92 and
$.78, respectively. For the first nine months of 2000, ROE was 15.9%
and ROA was 1.40% as compared to 14.7% and 1.38% for the same period
in 1999. The earnings per share for the 1999 periods have been
adjusted for the 10% stock dividend distributed in February 2000.
Year over year balance sheet growth reflects a $55,399,000 (9.4%)
increase in total assets, a $57,312,000 (15.0%) increase in loans and
a $59,993,000 (11.6%) increase in deposits at September 30, 2000 from
the ending balances at September 30, 1999. Assets totaled $642,928,000
at September 30, 2000. This was down $5,889,000 from the June 30,
2000 ending balance as the Bank returned $18,000,000 of the
$20,000,000 of State of California certificates of deposit placed in
the Bank in February 2000.
Central Coast Bancorp ended the third quarters of 2000 and 1999 with
Tier 1 capital ratios of 11.8% and total risk-based capital ratios of
13.0%.
7
<PAGE>
On October 16, 2000, the Bank continued to expand its service area by
opening its 10th full service branch in the city of Hollister in San
Benito County. The economic environment in San Benito County is
similar to the agricultural communities the Bank serves in Monterey
County.
As previously reported, in the second quarter of 2000, the Board of
Directors authorized a stock repurchase plan for 5% of the then
outstanding shares. Under this plan, the Company may repurchase up to
approximately 348,000 shares. As of October 16, 2000, the Company had
repurchased 167,605 shares at an average price of $16.07 with a total
value of $2,694,000.
The following table provides a summary of the major elements of income
and expense for the periods indicated.
<TABLE>
<CAPTION>
Condensed Comparative Income Statement Percentage Percentage
Three Months Ended Change Nine Months Ended Change
September 30, Increase September 30, Increase
(In thousands, except percentages) 2000 1999 (Decrease) 2000 1999 (Decrease)
---- ---- ---------- ---- ---- ----------
<S> <C> <C> <C> <C> <C> <C>
Interest Income (1) $ 13,777 $ 10,951 26% $ 38,352 $ 30,818 24%
Interest Expense 4,901 3,525 39% 13,400 9,967 34%
--------- --------- --------- --------- --------- --------
Net interest income 8,876 7,426 20% 24,952 20,851 20%
Provision for Loan Losses 1,530 418 266% 2,856 955 199%
--------- --------- --------- --------- --------- --------
Net interest income after
provision for loan losses 7,346 7,008 5% 22,096 19,896 11%
Noninterest Income 672 529 27% 1,849 1,662 11%
Noninterest Expense 4,297 4,111 5% 12,754 11,758 8%
--------- --------- --------- --------- --------- --------
Income before income taxes 3,721 3,426 9% 11,191 9,800 14%
Income Taxes 1,267 1,227 3% 4,027 3,508 15%
Tax Equivalent Adjustment 201 196 3% 593 570 4%
--------- --------- --------- --------- --------- --------
Net income $ 2,253 $ 2,003 12% $ 6,571 $ 5,722 15%
========= ========= ========= ========= ========= ========
1) Interest on tax-free securities is reported on tax equivalent basis.
</TABLE>
Net interest income / net interest margin
-----------------------------------------
Net interest income, the difference between interest earned on loans
and investments and interest paid on deposits and other borrowings, is
the principal component of the Bank's earnings. Net interest margin
is net interest income expressed as a percentage of average earning
assets.
Third quarter 2000 net interest income of $8,876,000 was a 19.5%
increase of $1,450,000 over the same period in 1999. The interest
income component was up $2,826,000 (25.8%). Average loan balances
were $60,684,000 (16.6%) higher in the third quarter of 2000 versus
the year earlier period. This volume difference added $1,407,000 to
interest income. The average loan yield for the third quarter of 2000
was 93 basis points higher than the average yield in the year earlier
quarter. The higher yield increased interest income by $966,000.
There have been six rate increases implemented by the Bank in the past
twelve months as a result of the rate tightening by the Federal
Reserve Board. The last rate increase was on May 16, 2000. The
average balance of investment securities in the third quarter of 2000
was slightly lower by $1,227,000 (0.8%) from the third quarter of
1999. Since yields on securities were somewhat higher, the
investments contributed an additional $85,000 in interest income.
Average balances for Federal funds sold for these two periods
increased $22,492,000 to $24,459,000. Interest income for Federal
funds sold increased $368,000 on a period over period basis.
Interest expense was up $1,376,000 (39.0%) on a quarter over quarter
basis. The average balances on interest bearing liabilities were
$54,493,000 (14.0%) higher in the third quarter of 2000 versus the
same quarter in 1999. The higher balances accounted for $750,000 of
the increase in interest expense. Rates paid on interest bearing
8
<PAGE>
liabilities for the third quarter 2000 averaged 4.39%. This was an
increase of 80 basis points from the like quarter last year and
accounted for $626,000 of the interest expense increase. It was also
a 17 basis point increase from the average rate paid in the second
quarter of 2000. As the longer term certificates of deposit mature,
it is expected that there will be some continuing upward pressure on
interest expense. This may result in a decline in the net interest
margin the Bank is able to generate in future quarters. Net interest
margin for the third quarters of 2000 and 1999 were 5.82% and 5.62%,
respectively.
For the nine-month period ending September 30, 2000, net interest
income increased $4,101,000 (19.7%) over the first nine months of
1999. The interest income component increased $7,534,000 to
$38,352,000. Average balances of earning assets were $77,182,000
(15.4%) higher in the first nine months of 2000 than the same period
in 1999. The average balance of loans was $71,110,000 higher, which
accounted for $4,922,000 of the increase in interest income. The
average yield received on loans in the first nine months of 2000 was
64 basis points higher than the 9.22% received in the year earlier
period. The higher yield on loans added $1,987,000 to interest
income. The average balance of investment securities in the first nine
months of 2000 was lower by $7,655,000 (4.8%) over the year earlier
period. Average balances for Federal funds sold for these two
periods increased $13,727,000 to $16,556,000. Interest income for the
investing activities increased $625,000 on a period over period
basis. As mentioned in the quarterly analysis above, the Federal
Reserve Board increased interest rates six times for a total of 150
basis points since June 30, 1999. As a result, the average yield of
8.87% received on all earning assets in the nine months ended
September 30, 2000 was 64 basis points higher than the yield received
in the first nine months of 1999.
Interest expense for the nine-month period increased $3,433,000
(34.4%) from the expense in the same 1999 period. Volume increases in
deposits and borrowings added $2,112,000 of interest expense. Overall
average rates paid on interest-bearing liabilities in the first nine
months of 2000 increased 63 basis points to 4.22% from the same period
in 1999. The interest expense increase attributable to the higher
rates was $1,321,000. Net interest margin for the first nine months
of 2000 was 5.77% versus 5.57% in the year earlier period.
The first two following tables provide a summary of the components of
net interest income and the changes within the components for the
periods indicated. The second two tables set forth a summary of the
changes in interest income and interest expense from changes in
average asset and liability balances (volume) and changes in average
interest rates.
9
<PAGE>
<TABLE>
<CAPTION>
(Unaudited)
Three Months Ended September 30,
(Taxable Equivalent Basis) 2000 1999
------------------------------------ ------------------------------------
Avg. Avg. Avg. Avg.
(In thousands, except percentages) Balance Interest Yield Balance Interest Yield
------- -------- ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Assets:
Earning Assets
Loans (1) (2) $ 425,424 $ 10,830 10.13% $ 364,740 $ 8,457 9.20%
Taxable investments 119,876 1,952 6.48% 121,794 1,881 6.13%
Tax-exempt securities (tax equiv. basis) 36,572 602 6.54% 35,881 588 6.50%
Federal funds sold 24,459 393 6.39% 1,967 25 5.04%
------------ ----------- ------------ ------------
Total Earning Assets 606,331 $ 13,777 9.04% 524,382 $10,951 8.29%
----------- ------------
Cash & due from banks 39,561 42,086
Other assets (4) 9,164 8,762
------------ ------------
$ 655,056 $ 575,230
============ ============
Liabilities & Shareholders' Equity:
Interest bearing liabilities:
Demand deposits $ 97,569 $ 403 1.64% $ 110,659 $ 503 1.80%
Savings 112,054 1,026 3.64% 105,693 863 3.24%
Time deposits 230,299 3,405 5.88% 163,833 2,036 4.93%
Other borrowings 4,113 67 6.48% 9,357 123 5.22%
------------ ----------- ------------ ------------
Total interest bearing liabilities 444,035 4,901 4.39% 389,542 3,525 3.59%
----------- ------------
Demand deposits 148,324 128,831
Other Liabilities 6,005 5,266
------------ ------------
Total Liabilities 598,364 523,639
Shareholders' Equity 56,692 51,591
------------ ------------
$ 655,056 $ 575,230
============ ============
Net interest income & margin (3) $ 8,876 5.82% $ 7,426 5.62%
=========== ========= ============ =========
---------------------------------------------------------------------------------------------------------------------------
1 Loan interest income includes fee income of $271,000 and $268,000 for the three month periods
ended September 30, 2000 and 1999, respectively.
2 Includes the average allowance for loan losses of $7,460,000 and $5,039,000 and average deferred
loan fees of $717,000 and $845,000 for the three months ended September 30, 2000 and 1999, respectively.
3 Net interest margin is computed by dividing net interest income by the total average earning assets.
4 Includes the unrealized loss on available-for-sale securities.
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
(Unaudited)
Nine Months Ended September 30 ,
(Taxable Equivalent Basis) 2000 1999
--------------------------------- ---------------------------------
Avg. Avg. Avg. Avg.
(In thousands, except percentages) Balance Interest Yield Balance Interest Yield
------- -------- ----- ------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
Assets:
Earning Assets
Loans (1) (2) $408,885 $30,193 9.86% $337,775 $23,284 9.22%
Taxable investments 116,231 5,602 6.44% 125,241 5,726 6.11%
Tax-exempt securities (tax equiv. basis) 36,067 1,776 6.58% 34,712 1,708 6.58%
Federal funds sold 16,556 781 6.30% 2,829 100 4.73%
----------- ----------- ----------- ----------
Total Earning Assets 577,739 $38,352 8.87% 500,557 $30,818 8.23%
----------- ----------
Cash & due from banks 38,327 41,835
Other assets (4) 8,279 10,287
----------- -----------
$624,345 $552,679
=========== ===========
Liabilities & Shareholders' Equity:
Interest bearing liabilities:
Demand deposits $97,338 $1,200 1.65% $102,249 $1,315 1.72%
Savings 104,459 2,757 3.53% 105,168 2,569 3.27%
Time deposits 216,447 9,156 5.65% 155,712 5,783 4.97%
Other borrowings 6,015 287 6.37% 7,984 300 5.02%
----------- ----------- ----------- ----------
Total interest bearing liabilities 424,259 13,400 4.22% 371,113 9,967 3.59%
----------- ----------
Demand deposits 139,590 125,049
Other Liabilities 5,466 4,538
----------- -----------
Total Liabilities 569,315 500,700
Shareholders' Equity 55,030 51,979
----------- -----------
$624,345 $552,679
=========== ===========
Net interest income & margin (3) $24,952 5.77% $20,851 5.57%
=========== ======== ========== =========
----------------------------------------------------------------------------------------------------------------------------
1 Loan interest income includes fee income of $745,000 and $816,000 for the nine month
periods ended September 30, 2000 and 1999, respectively
2 Includes the average allowance for loan losses of $6,563,000 and $4,650,000 and average deferred
loan fees of $714,000 and $806,000 for the nine months ended September 30, 2000 and 1999, respectively.
3 Net interest margin is computed by dividing net interest income by the total average earning assets.
4 Includes the unrealized loss on available-for-sale securities.
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Volume/Rate Analysis
(in thousands)
Three Months Ended September 30, 2000 over 1999
Increase (decrease) due to change in:
Net
Volume Rate (5) Change
------- --------- ------
<S> <C> <C> <C>
Interest-earning assets:
Net Loans (1)(2) $ 1,407 $ 966 $ 2,373
Taxable investment securities (30) 101 71
Tax exempt investment securities (4) 11 3 14
Federal funds sold 286 82 368
----------- ----------- -----------
Total 1,674 1,152 2,826
----------- ----------- -----------
Interest-bearing liabilities:
Demand deposits (59) (41) (100)
Savings deposits 52 111 163
Time deposits 826 543 1,369
Other borrowings (69) 13 (56)
----------- ----------- -----------
Total 750 626 1,376
----------- ----------- -----------
Interest differential $ 924 $ 526 $ 1,450
=========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30, 2000 over 1999
Increase (decrease) due to change in:
Net
Volume Rate (5) Change
------- -------- ------
<S> <C> <C> <C>
Interest-earning assets:
Net Loans (1)(3) $ 4,922 $ 1,987 $ 6,909
Taxable investment securities (413) 289 (124)
Tax exempt investment securities (4) 67 1 68
Federal funds sold 487 194 681
---------- ---------- --------
Total 5,063 2,471 7,534
---------- ---------- --------
Interest-bearing liabilities:
Demand deposits (63) (52) (115)
Savings deposits (17) 205 188
Time deposits 2,266 1,107 3,373
Other borrowings (74) 61 (13)
---------- ---------- --------
Total 2,112 1,321 3,433
---------- ---------- --------
Interest differential $ 2,951 $ 1,150 $ 4,101
========== ========== ========
1. The average balance of non-accruing loans is immaterial as a percentage of total loans and, as such,
has been included in net loans.
2. Loan fees of $271,000 and $268,000 for the quarters ended September 30, 2000 and 1999, respectively, have
been included in the interest income computation.
3. Loan fees of $745,000 and $816,000 for the nine months ended September 30, 2000 and 1999, respectively, have
been included in the interest income computation.
4. Includes taxable-equivalent adjustments that relate to income on certain securities that is exempt from
federal income taxes. The effective federal statutory tax rate was 34% for 2000 and 1999.
5. The rate / volume variance has been included in the rate variance.
</TABLE>
12
<PAGE>
Provision for Loan Losses
-------------------------
The provision for loan losses was $1,530,000 for the third quarter of
2000 as compared to $418,000 in the third quarter of 1999 and $800,000
in the second quarter of 2000. For the nine-month period ended
September 30, 2000, the Bank provided $2,856,000 versus $955,000 in
the year earlier period. Loan balances increased $13,765,000 in the
third quarter of 2000 and are up $57,312,000 on year over year basis.
Industry experience indicates that higher provisions may be required in
circumstances when there has been significant loan growth and/or there are
credit concentrations in loan categories, industries or geographical area.
The loan portfolio of the Bank is reflective of all of these factors and
the provision for loan losses has been adjusted accordingly. In particular,
the agricultural sector in the Bank's service area has been under pricing
pressures for the last few years. Continuing weaknesses in these markets
could have a negative impact on the local economy and consequently on the
economic viability of some of the Bank's borrowers. Besides providing an
allowance for loan losses for the preceding factors during the year, an
additional loan loss provision of approximately $1.4 million was needed
for some specific loan classifications made in the third quarter. At
September 30, 2000 non-performing assets were $591,000 as compared to
$2,219,000 at the same date in 1999. The ratios of the allowance for
loan losses to nonperforming assets on those two dates were 1419% and
238%, respectively. The allowance for loan losses to total loans was
1.91% and 1.38% at September 30, 2000 and 1999, respectively.
Noninterest Income
------------------
Noninterest income consists primarily of service charges on deposit
accounts and fees for miscellaneous services. Noninterest income
totaled $672,000 in the third quarter of 2000, which was up $143,000
(27.0%) over the same period in 1999. Income from service charges on
deposit accounts was $156,000 higher mostly due to higher volumes and
new business account fees. The higher interest rates in 2000 have
resulted in significantly lower fees generated from mortgage
originations. These fees were down $28,000 (53.3%) in the third
quarter of 2000 versus the same period last year.
For the first nine-months of 2000, noninterest income was $1,849,000
versus $1,662,000 in the same period last year. Service charges on
deposits were up $295,000 (30.2%) due to higher volumes and new
business account fees. As discussed in the previous paragraph, due to
the higher interest rates the activity in residential mortgage lending
slowed significantly in 2000. Consequently, the fees generated from
mortgage originations decreased $101,000 (49.3%) in the first nine
months of 2000 as compared to the same period in 1999.
Noninterest Expense
-------------------
Noninterest expenses increased $186,000 (4.5%) to a total of
$4,297,000 in the third quarter of 2000 versus the third quarter of
1999. Salary and employee benefits increased $267,000 (11.6%) because
of additional staff due to growth, higher benefit costs, and normal
salary increases. On a quarter over quarter basis, premises and fixed
asset expenses were higher by $169,000 (27.3%). Ongoing costs
associated with two branch relocations and remodel of office space in
the second half of 1999 plus the addition of the Watsonville branch in
June of 2000 were the major factors contributing to the increased
premises and fixed asset expenses. Other expenses for the third
quarter of 2000 were down $249,000 (20.8%) from the prior year
quarter. In the third quarter of 1999 the Bank incurred approximately
$190,000 in one time costs associated with merging Bank of Salinas and
Cypress Bank together. The efficiency ratios (fully taxable
equivalent) for the 2000 and 1999 third quarters were 45.0% and 51.7%,
respectively.
Noninterest expenses for the nine-month period ending September 30,
2000 were $12,754,000 versus $11,758,000 for the same period in 1999.
Salaries and benefits increased $533,000 (7.8%) due to increased
staffing levels, higher benefit costs and normal salary progressions.
Premises and fixed asset expenses were up $485,000 (27.2%) due to the
items as detailed in the previous paragraph. Other expenses were down
$22,000 (0.7%). In the first nine months of 1999, approximately
$284,000 of one-time costs were incurred for the merger discussed in
the above paragraph. By eliminating the effect of the one-time
expenses the other expenses were up $262,000 (9.3%) in 2000. These
higher expenses are attributable to higher volumes due to growth,
opening the Watsonville office and price increases. The
efficiency ratio (fully taxable equivalent) for the first nine-months
of 2000 was 47.6% as compared to 52.2% in the same period of 1999.
13
<PAGE>
Provision for Income Taxes
--------------------------
The effective tax rates for the third quarter and first nine-months of
2000 were 36.0% and 38.0%, respectively, versus 38.0% in the same two
periods of 1999.
Securities
----------
At September 30, 2000, available-for-sale securities had a market
value of $140,220,000 with an amortized cost basis of $145,868,000.
The pretax unrealized loss of $5,648,000 at September 30, 2000 was a
decrease of $2,051,000 from the unrealized loss at June 30, 2000. The
lower unrealized loss resulted from a decrease in the interest rates
in the securities markets in the third quarter. For other than
short-term commercial paper, the Bank's purchase of investment
securities during the third quarter of 2000 was minimal.
Loans
-----
Ending loan balances at September 30, 2000 were $439,838,000, which
was an increase of $44,241,000 (11.1%) from year-end 1999 balances
and $57,312,000 (15.0%) from September 30, 1999 balances. All
categories of loans were higher on a year over year basis. Loan
demand has remained brisk and the current pipeline would indicate that
the demand is continuing into the fourth quarter.
Nonperforming Assets
--------------------
Nonperforming assets are comprised of loans delinquent 90 days or more
with respect to interest or principal, loans for which the accrual of
interest has been discontinued, and other real estate which has been
acquired through foreclosure and is awaiting disposition.
Unless well secured and in the process of collection, loans are placed
on nonaccrual status when a loan becomes 90 days past due as to
interest or principal, when the payment of interest or principal in
accordance with the contractual terms of the loan becomes uncertain or
when a portion of the principal balance has been charged off. When a
loan is placed on nonaccrual status, the accrued and unpaid interest
receivable is reversed and the loan is accounted for on the cash or
cost recovery method thereafter, until qualifying for return to
accrual status. Generally, a loan may be returned to accrual status
when all delinquent interest and principal become current in
accordance with the terms of the loan agreement and remaining
principal is considered collectible or when the loan is both well
secured and in process of collection.
Real estate and other assets acquired in satisfaction of indebtedness
are recorded at the lower of estimated fair market value net of
anticipated selling costs or the recorded loan amount, and any
difference between this and the amount is treated as a loan loss. The
costs of maintaining other real estate owned and gains or losses on
the subsequent sale are reflected in current earnings.
14
<PAGE>
The following is a summary of nonperforming assets:
<TABLE>
<CAPTION>
(In thousands, except percentages) September 30, December 31,
2000 1999
------------------ ------------------
<S> <C> <C>
Past due 90 days or more and still accruing :
Real estate $ - $ 303
Commercial 70 51
Consumer and other - -
------------------ ------------------
70 354
------------------ ------------------
Nonaccrual:
Real estate 10 1,565
Commercial 411 11
Consumer and other - -
------------------ ------------------
421 1,576
------------------ ------------------
Total nonperforming loans 491 1,930
------------------ ------------------
Other real estate owned 100 180
------------------ ------------------
Total nonperforming assets $ 591 $ 2,110
================== ==================
Allowance for loan losses as a percentage of nonperforming loans 1709% 290%
Nonperforming loans to total loans 0.11% 0.49%
</TABLE>
Nonperforming loans decreased $1,439,000 during the first nine months
of 2000 with $207,000 of that in the third quarter. This decrease
coupled with the year-to-date increase of the provision for the
allowance for loan losses resulted in improvement in the coverage
ratio of the allowance for loan losses to nonperforming loans from
290% at year-end to 1,709%.
At September 30, 2000, the recorded investment in loans that are
considered impaired under SFAS No. 114 was $1,930,000 of which
$387,000 is included in nonaccrual loans above. At December 31, 1999,
the recorded investment in loans that were considered impaired under
SFAS No. 114 was $2,165,000 of which $1,586,000 is included in nonaccrual
loans above. Such impaired loans had valuation allowances totaling
$617,000 and $821,000 at the two dates, respectively. The amount of
impaired loans includes all restructured loans.
Management is not aware of any potential problem loans, which were
accruing and current at September 30, 2000, where serious doubt exists
as to the ability of the borrower to comply with the present repayment
terms.
Allowance for Loan Losses
-------------------------
The allowance for loan losses reflects management's judgement as to
the level considered adequate to absorb probable losses inherent in
the loan portfolio. The allowance is increased by provisions charged
to expense and reduced by loan charge-offs net of recoveries.
Management determines an appropriate provision based upon information
currently available to analyze loan loss potential, including (1) the
loan portfolio balance in the period; (2) a comprehensive grading and
review of new and existing loans outstanding; (3) actual previous
charge-offs; and, (4) changes in economic conditions.
In determining the provision for estimated losses related to specific
major loans, management evaluates its allowance on an individual loan
basis, including an analysis of the creditworthiness, cash flows and
financial status of the borrower, and the condition and the estimated
value of the collateral. Specific valuation allowances for secured
loans are determined by the excess of recorded investment in the loan
over the fair market value or net realizable value where appropriate,
of the collateral. In determining overall general valuation
allowances to be maintained and the loan loss allowance ratio,
management evaluates many factors including prevailing and forecasted
economic conditions, regular reviews of the quality of loans, industry
experience, historical loss experience, composition and geographic
concentrations of the loan portfolio, the borrowers' ability to repay
and repayment performance and estimated collateral values.
15
<PAGE>
Management believes that the allowance for loan losses at September
30, 2000 is adequate, based on information currently available.
However, no prediction of the ultimate level of loans charged off in
future years can be made with any certainty.
The following table summarizes activity in the allowance for loan
losses for the periods indicated:
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
(In thousands, except percentages) 2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Beginning balance $ 7,018 $ 4,882 $ 5,596 $ 4,352
Provision charged to expense 1,530 418 2,856 955
Loans charged off (181) (23) (200) (150)
Recoveries 22 14 137 134
-------------- ------------- -------------- --------------
Ending balance $ 8,389 $ 5,291 $ 8,389 $ 5,291
============== ============= ============== ==============
Ending loan portfolio $ 439,838 $ 382,526
============== ==============
Allowance for loan losses as percentage of ending loan protfolio 1.91% 1.38%
</TABLE>
Liquidity
---------
Liquidity management refers to the Company's ability to provide funds
on an ongoing basis to meet fluctuations in deposit levels as well as
the credit needs and requirements of its clients. Both assets and
liabilities contribute to the Company's liquidity position. Federal
funds lines, short-term investments and securities, and loan
repayments contribute to liquidity, along with deposit increases,
while loan funding and deposit withdrawals decrease liquidity. The
Bank assesses the likelihood of projected funding requirements by
reviewing historical funding patterns, current and forecasted economic
conditions and individual client funding needs. Commitments to fund
loans and outstanding standby letters of credit at September 30, 2000
were approximately $135,537,000 and $4,475,000, respectively. Such
loan commitments relate primarily to revolving lines of credit and
other commercial loans, and to real estate construction loans.
The Company's sources of liquidity consist of its deposits with other
banks, overnight funds sold to correspondent banks, unpledged
short-term, marketable investments and loans available for sale. On
September 30, 2000, consolidated liquid assets totaled $101.5 million
or 15.8% of total assets as compared to $91.1 million or 15.4% of
total consolidated assets on December 31, 1999. In addition to liquid
assets, the Bank maintains lines of credit with correspondent banks
for up to $80,000,000 available on a short-term basis. Informal
agreements are also in place with various other banks to purchase
participations in loans, if necessary. The Company serves primarily a
business and professional customer base and, as such, its deposit base
is susceptible to economic fluctuations. Accordingly, management
strives to maintain a balanced position of liquid assets to volatile
and cyclical deposits.
Capital Resources
-----------------
The Company's total shareholders' equity was $56,940,000 at September
30, 2000 compared to $53,305,000 at December 31, 1999.
The Company and the Bank are subject to regulations issued by the
Board of Governors and the FDIC which require maintenance of a certain
level of capital. A banking organization's total qualifying capital
includes two components, core capital (Tier 1 capital) and
supplementary capital (Tier 2 capital). Core capital, which must
comprise at least half of total capital, includes common shareholders'
equity, qualifying perpetual preferred stock, trust preferred
securities and minority interests, less goodwill. Supplementary
capital includes the allowance for loan losses (subject to certain
limitations), other perpetual preferred stock, trust preferred
securities, certain other capital instruments and term subordinated
debt. The Company's major capital components are shareholders' equity
in core capital, and the allowance for loan losses in supplementary
capital.
16
<PAGE>
The following table shows the Company's actual capital amounts and
ratios at September 30, 2000 and December 31, 1999 as well as the
minimum capital ratios for capital adequacy under the regulatory
framework:
<TABLE>
<CAPTION>
For Capital
Actual Adequacy Purposes:
(In thousands, except percentages) Amount Ratio Amount Ratio
------ ----- ------ -----
<S> <C> <C> <C> <C>
As of September 30, 2000
------------------------
Total Capital (to Risk Weighted Assets): $ 65,706 13.0% $ 40,370 8.0%
Tier 1 Capital (to Risk Weighted Assets): 59,396 11.8% 20,185 4.0%
Tier 1 Capital (to Average Assets): 59,396 9.1% 26,202 4.0%
As of December 31, 1999:
------------------------
Total Capital (to Risk Weighted Assets): $ 62,489 13.8% $ 36,125 8.0%
Tier 1 Capital (to Risk Weighted Assets): 56,938 12.6% 18,062 4.0%
Tier 1 Capital (to Average Assets): 56,938 9.7% 23,593 4.0%
</TABLE>
Year 2000
---------
During 1998 and 1999, management of the Company focused the
appropriate resources to address the potential problems that could
arise regarding the Year 2000 (Y2K) century date change. The
Company's mission critical systems were evaluated, modified as required
and contingency plans were put into place should the systems have
experienced any failures. The Y2K readiness of vendors and customers
was also evaluated and monitored. The century date change passed
without any operational difficulties for the Company, its vendors or
its customers. There are certain dates within the year 2000 that have
been identified as critical processing dates. The first was January
31, the end of the first month of the year. The second was February
29, leap year day. The third was March 31, the end of the first
quarter. The fourth was October 10, the first date to require an
8-digit field (10/10/2000) (This date has passed as of the date of
this report.) The Company did not experience any processing problems
on those dates. The one remaining date is December 31, the end of the
year. The December 31 date was tested as part of the Y2K project.
The Company does not anticipate having any processing problems at year
end, however failure by third parties to adequately remediate Y2K
issues could have an impact upon the Company, which is impossible to
quantify. Nevertheless, the Company currently expects that its Y2K
compliance efforts will be successful without material adverse effects
on its business.
Item 3. MARKET RISK MANAGEMENT
Overview. The goal for managing the assets and liabilities of the
Bank is to maximize shareholder value and earnings while maintaining a
high quality balance sheet without exposing the Bank to undue interest
rate risk. The Board of Directors has overall responsibility for the
Company's interest rate risk management policies. The Bank has an
Asset and Liability Management Committee (ALCO) which establishes and
monitors guidelines to control the sensitivity of earnings to changes
in interest rates.
Asset/Liability Management. Activities involved in asset/liability
management include but are not limited to lending, accepting and
placing deposits, investing in securities and issuing debt. Interest
rate risk is the primary market risk associated with asset/liability
management. Sensitivity of earnings to interest rate changes arises
when yields on assets change in a different time period or in a
different amount from that of interest costs on liabilities. To
mitigate interest rate risk, the structure of the balance sheet is
managed with the goal that movements of interest rates on assets and
liabilities are correlated and contribute to earnings even in periods
of volatile interest rates. The asset/liability management policy
sets limits on the acceptable amount of variance in net interest
margin and market value of equity under changing interest
environments. The Bank uses simulation models to forecast earnings,
net interest margin and market value of equity.
17
<PAGE>
Simulation of earnings is the primary tool used to measure the
sensitivity of earnings to interest rate changes. Using computer
modeling techniques, the Company is able to estimate the potential
impact of changing interest rates on earnings. A balance sheet
forecast is prepared using inputs of actual loan, securities and
interest bearing liabilities (i.e. deposits/borrowings) positions as
the beginning base. The forecast balance sheet is processed against
three interest rate scenarios. The scenarios include a 200 basis
point rising rate forecast, a flat rate forecast and a 200 basis point
falling rate forecast which take place within a one year time frame.
The net interest income is measured during the first year of the rate
changes and in the year following the rate changes. Based on a
forecast using August 31, 2000 balances and measuring against a flat
rate environment, in a one-year horizon an increase in interest rates
of 200 basis points would result in an increase of $2,374,000 in net
interest income. Conversely, a 200 basis point decrease would result
in a decrease of $3,010,000 in net interest income.
The simulations of earnings do not incorporate any management actions,
which might moderate the negative consequences of interest rate
deviations. Therefore, they do not reflect likely actual results, but
serve as conservative estimates of interest rate risk.
Accounting Pronouncements
-------------------------
The Financial Accounting Standards Board issued an exposure draft of a
proposed statement, "Business Combinations and Intangibles," in
September 1999 which included the elimination of "pooling of interest"
accounting. The result of this accounting change would be that all
mergers consummated after a designated date would be accounted for as
"purchase" transactions, resulting in the recognition of goodwill in
any merger where the purchase price exceeds the asset value of the
acquired company. The Board is in the process of researching and
discussing the accounting for goodwill and its impact on the future
reported income of merged companies. Additionally, in bank mergers,
the goodwill in a purchase accounting transaction would not be
included in the calculation of regulatory capital requirements. The
Board will redeliberate the related issue of whether to retain the
pooling method, but not until it has reached a set of tentative
decisions with respect to the accounting for goodwill that will best
meet the concerns of investors, creditors, and other users of
financial statements-as well as companies that prepare those reports.
The Board expects to issue a final statement near the end of the first
quarter of 2001.
18
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal proceedings.
None.
Item 2. Changes in securities.
None.
Item 3. Defaults upon senior securities.
None.
Item 4. Submission of matters to a vote of security holders.
None
Item 5. Other information.
None.
Item 6. Exhibits and reports on Form 8-K.
(a) Exhibits
(2.1) Agreement and Plan of Reorganization and Merger
by and between Central Coast Bancorp, CCB Merger
Company and Cypress Coast Bank dated as of
December 5, 1995, incorporated by reference from
Exhibit 99.1 to Form 8-K filed with the
Commission on December 7, 1995.
(3.1) Articles of Incorporation, incorporated by
reference from Exhibit 4.8 to Registration
Statement on Form S-8, No. 33-89948, filed with
the Commission on March 3, 1995.
(3.2) Bylaws, as amended, incorporated by reference
from the Registrant's 1998 Annual Report on Form
10-K filed with the Commission on March 29,1999.
(4.1) Specimen form of Central Coast Bancorp stock
certificate incorporated by reference from the
Registrant's 1994 Annual Report on Form 10-K
filed with the Commission on March 31, 1995.
(10.1) Lease agreement dated December 12, 1994, related
to 301 Main Street, Salinas, California
incorporated by reference from the Registrant's
1994 Annual Report on Form 10-K filed with the
Commission on March 31, 1995.
(10.2) King City Branch Lease incorporated by reference
from Exhibit 10.3 to Registration Statement on
Form S-4, No. 33-76972, filed with the Commission
on March 28, 1994.
(10.3) Amendment to King City Branch Lease
incorporated by reference from Exhibit 10.4 to
Registration Statement on Form S-4, No. 33-76972,
filed with the Commission on March 28, 1994.
*(10.4) 1982 Stock Option Plan, as amended, incorporated
by reference from Exhibit 4.2 to Registration
Statement on Form S-8, No. 33-89948, filed with
the Commission on March 3, 1995.
19
<PAGE>
*(10.5) Form of Nonstatutory Stock Option Agreement under
the 1982 Stock Option Plan incorporated by
reference from Exhibit 4.6 to Registration
Statement on Form S-8, No. 33-89948, filed with
the Commission on March 3, 1995.
*(10.6) Form of Incentive Stock Option Agreement under
the 1982 Stock Option Plan incorporated by
reference from Exhibit 4.7 to Registration
Statement on Form S-8, No. 33-89948, filed with
the Commission on March 3, 1995.
*(10.7) 1994 Stock Option Plan incorporated by reference
from Exhibit 4.1 to Registration Statement on
Form S-8, No. 33-89948, filed with the Commission
on March 3, 1995.
*(10.8) Form of Nonstatutory Stock Option Agreement under
the 1994 Stock Option Plan incorporated by
reference from Exhibit 4.3 to Registration
Statement on Form S-8, No. 33-89948, filed with
Commission on March 3, 1995.
*(10.9) Form of Incentive Stock Option Agreement under
the 1994 Stock Option Plan incorporated by
reference from Exhibit 4.4 to Registration
Statement on Form S-8, No. 33-89948, filed with
the Commission on March 3, 1995.
*(10.10) Form of Director Nonstatutory Stock Option
Agreement under the 1994 Stock Option Plan
incorporated by reference from Exhibit 4.5 to
Registration Statement on Form S-8, No. 33-89948,
filed with the Commission on March 3, 1995.
*(10.11) Form of Bank of Salinas Indemnification Agreement
for directors and executive officers incorporated
by reference from Exhibit 10.9 to Amendment No. 1
to Registration Statement on Form S-4, No.
33-76972, filed with the Commission on April 15,
1994.
*(10.12) 401(k) Pension and Profit Sharing Plan Summary
Plan Description incorporated by reference from
Exhibit 10.8 to Registration Statement on Form
S-4, No. 33-76972, filed with the Commission on
March 28, 1994.
*(10.13) Form of Employment Agreement incorporated by
reference from Exhibit 10.13 to the Company's
1996 Annual Report on Form 10-K filed with the
Commission on March 31, 1997.
*(10.14) Form of Executive Salary Continuation Agreement
incorporated by reference from Exhibit 10.14 to
the Company's 1996 Annual Report on Form 10-K
filed with the Commission on March 31, 1997.
*(10.15) 1994 Stock Option Plan, as amended, incorporated
by reference from Exhibit A to the Proxy
Statement filed with the Commission on September
3, 1996 in connection with Registrant's 1996
Annual Shareholders' Meeting held on September
23, 1996.
*(10.16) Form of Indemnification Agreement, incorporated
by reference from Exhibit D to the Proxy
Statement filed with the Commission on September
3, 1996 in connection with Registrant's 1996
Annual Shareholders' Meeting held on September
23, 1996.
(10.17) Purchase and Assumption Agreement for the
Acquisition of Wells Fargo Bank Branches
incorporated by reference from Exhibit 10.17 to
Registrant's 1996 Annual Report on Form 10-K
filed with the Commission on March 31, 1997.
20
<PAGE>
*(10.18) Employee Stock Ownership Plan and Trust
Agreement incorporated by reference from Exhibit
10.18 to Registrant's 1996 Annual Report on Form
10-K filed with the Commission on March 31, 1997.
(10.19) Lease agreement dated March 7, 1997, related to 484
Lighthouse Avenue, Monterey, California
incorporated by reference from Exhibit 10.19 to
Registrant's 1997 Annual Report on Form 10-K
filed with the Commission on March 27, 1998.
(21.1) The Registrant's only subsidiary is its
wholly-owned subsidiary, Community Bank of
Central California.
(27.1) Financial Data Schedule
*Denotes management contracts, compensatory plans or arrangements.
(b) Reports on Form 8-K - None
21
<PAGE>
SIGNATURES
------------------------------------------------------------------------
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
November 10, 2000 CENTRAL COAST BANCORP
By: /S/ ROBERT M. STANBERRY
----------------------------
Robert M. Stanberry
(Chief Financial Officer, Principal
Financial and Accounting Officer)
22
<PAGE>
EXHIBIT INDEX
Exhibit Sequential
Number Description Page Number
------ ----------- -----------
27.1 Financial Data Schedule 23
