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UNITED STATESSECURITIES 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 March 31, 2003

OR

|  |  |                                                   | 
|- |  | ------------------------------------------------- | 
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) | 
|  |  |                                                   | 
|  |  | OF THE SECURITIES EXCHANGE ACT OF 1934            | 

For the transition period from          to
Commission file number 001-14879

BAY VIEW CAPITAL CORPORATION

(Exact name of registrant as specified in its charter)


|                                |  |                    
|------------------------------- |  | -------------------
|Delaware                        |  | 94-3078031         
|(State or other jurisdiction of |  | (I.R.S. Employer   
|incorporation or organization)  |  | Identification No.)

1840 Gateway Drive, San Mateo, California 94404
(Address of principal executive offices)        (Zip Code)

Registrants telephone number, including area code (650) 312-7200

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 for 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 by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [X] No [  ]

Indicate the number of shares outstanding of each of the registrants
classes of common stock, as of the latest practicable date.

|                             |  |                              
|---------------------------- |  | -----------------------------
|Common Stock, Par Value $.01 |  | Outstanding at April 30, 2003
|(Title of Class)             |  | 63,647,590 shares            

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TABLE OF CONTENTS



|                              |                                                                                               |                                                                                    |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | Item 1. Financial Statements                                                                 
|                              |                                                                                               | Consolidated Statements of Net Assets (Liquidation Basis)                         
|                              |                                                                                               | Consolidated Statement of Changes in Net Assets in Liquidation (Liquidation Basis)
|                              |                                                                                               | Consolidated Statement of Operations and Comprehensive Loss                       
|                              |                                                                                               | Consolidated Statement of Stockholders Equity (Going Concern Basis)              
|                              |                                                                                               | Consolidated Statements of Cash Flows                                             
|                              |                                                                                               | Notes to Consolidated Financial Statements                                        
|                              | Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
|                              | Item 3. Quantitative and Qualitative Disclosures About Market Risk                           
|                              | Item 4. Controls and Procedures                                                              
|PART II. OTHER INFORMATION   
|SIGNATURES                   
|CERTIFICATIONS               



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##### Table of Contents



FORM 10-Q
INDEX

BAY VIEW CAPITAL CORPORATION

|                                    |  |                                                                                                                        |  |        
|----------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------- |  | -------
|                                    |  |                                                                                                                        |  | Page(s)
|                                    |  |                                                                                                                        |  |        
|PART I.       FINANCIAL INFORMATION |  |                                                                                                                       
|Item 1.                             |  | Financial Statements (Unaudited):                                                                                      |  |        
|                                    |  | Consolidated Statements of Net Assets (Liquidation Basis)                                                              |  | 4      
|                                    |  | Consolidated Statement of Changes in Net Assets in Liquidation (Liquidation Basis)                                     |  | 5      
|                                    |  | Consolidated Statement of Operations and Comprehensive Loss                                                            |  | 6-7    
|                                    |  | Consolidated Statement of Stockholders Equity (Going Concern Basis)                                                   |  | 8      
|                                    |  | Consolidated Statements of Cash Flows                                                                                  |  | 9-10   
|                                    |  | Notes to Consolidated Financial Statements                                                                             |  | 11-18  
|Item 2.                             |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                  |  | 19-32  
|Item 3.                             |  | Quantitative and Qualitative Disclosures About Market Risk                                                             |  | 33     
|Item 4.                             |  | Controls and Procedures                                                                                                |  | 33     
|PART II.       OTHER INFORMATION    |  |                                                                                                                       
|                                    |  | Other Information                                                                                                      |  | 34     
|                                    |  | Signatures                                                                                                             |  | 35     
|                                    |  | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002 |  | 35     

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Forward-Looking Statements

This Form 10-Q contains forward-looking statements that describe the
implementation and timing of the Plan of Dissolution and Stockholder Liquidity
(the Plan) adopted by the stockholders of Bay View Capital Corporation (the
Company) on October 3, 2002. These forward-looking statements are based on
assumptions as of the date of this Form 10-Q and involve risks and
uncertainties. Accordingly, the results of the Companys dissolution and the
timing and amounts of stockholder distributions may differ materially from
those that the Company currently anticipates. The factors that may affect
these forward-looking statements include the following:



| |  | The distributions the Company proposes to make in the future to its
stockholders are subject to a number of contingencies. The factors that
could reduce the amounts ultimately distributed or that could cause a
delay in making the distributions include the following:
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Until the dissolution of Bay View Bank, N.A. (the Bank) is
completed later this year, a number of actions the Company and the Bank
intend to take, including distributions to the Companys stockholders,
cannot be taken unless approvals are obtained from the Board of
Governors of the Federal Reserve System (the FRB) in the case of the
Company and the Office of the Comptroller of the Currency (the OCC) in
the case of the Bank;                                                      
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Unforeseen delays in the disposition of the assets of the Company and
the Bank and their formal dissolution may occur;                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  |  | The realization of the Companys deferred tax assets could be less
than the Company currently projects;                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  |  | The Company and the Bank may encounter difficulty in selling some of
their assets, and certain assets may not be able to be sold for the
prices the Company and the Bank currently anticipate;                                                                                                                                                                                                                                                                                                         
|
| |  |  | The Company and the Bank may not be able to discharge certain
liabilities for the amounts the Company and the Bank currently estimate;                                                                                                                                                                                                                                                                                                                                                                 
|
| |  |  | The Company and the Bank may incur or discover presently
unanticipated claims, liabilities or expenses;                                                                                                                                                                                                                                                                                                                                                                                                
|
| |  |  | The Companys ability to obtain commercial financing to fund the
ongoing operations of our auto lending business, Bay View Acceptance
Corporation (BVAC);                                                                                                                                                                                                                                                                                                                                            
|
| |  |  | The amounts the Bank is able to distribute to the Company and the
amounts the Company is able to distribute to its stockholders could be
adversely affected by the results of operations of the Companys and the
Banks remaining operations, particularly in the case of BVAC while the
dissolution process is being implemented;                                                                                                                                                                    
|
| |  |  | These estimates of the distribution amounts include projections of
future events and performance as distant as 2006 and, accordingly, are
inherently subject to many uncertainties;                                                                                                                                                                                                                                                                                                                    
|
| |  |  | The expenses of the disposition of assets and the dissolution
proceeds may exceed the amounts currently estimated; and                                                                                                                                                                                                                                                                                                                                                                                 
|
| |  |  | Court proceedings could restrict or delay distributions to
stockholders if claimants or creditors satisfy the court that the
amounts to be distributed by the Bank or the Company to stockholders are
needed to provide for the payment of expenses and liabilities of the
Company or the Bank; or, if the amounts ultimately required to discharge
the expenses and liabilities of the Company or the Bank in full exceeds
the value of the remaining assets of the Company or the Bank,
respectively.



| |  | The Companys stockholders could be liable to the extent they receive
distributions in the event the Company does not make adequate provision
for all of its expenses and liabilities, including its contingent
liabilities, as part of its dissolution.
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As a result of the foregoing factors, there can be no assurance that the
anticipated stockholder distributions from the implementation of the Plan will
be consistent with those described in any forward-looking statements.
Accordingly, no stockholder should place undue reliance on any forward-looking
statements. The Company does not undertake, and specifically disclaims, any
obligation to update any forward-looking statements and all forward-looking
statements speak only as of the date made.

3



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PART I. FINANCIAL INFORMATION




Item 1. Financial Statements

Bay View Capital Corporation and Subsidiaries




Consolidated Statements of Net Assets (Liquidation Basis)
(Unaudited)


|                                                                                                                |                                           |   |                        |        |                   |   |         |         | 
|--------------------------------------------------------------------------------------------------------------- | ----------------------------------------- | - | ---------------------- | ------ | ----------------- | - | ------- | ------- | 
|                                                                                                                |                                           |   | March 31, 2003         |        | December 31, 2002
|                                                                                                                |                                           |   |                        |        |                  
|                                                                                                                |                                           |   | (Dollars in thousands)
|ASSETS                                                                                                          |                                           |   |                        |        |                   |   |         |        
|Cash and cash equivalents:                                                                                      |                                           |   |                        |        |                   |   |         |        
|                                                                                                                | Cash and due from depository institutions |   | $                      | 30,847 |                   |   | $       | 71,611  | 
|                                                                                                                | Short-term investments                    |   |                        | 50,083 |                   |   |         | 151,684 | 
|                                                                                                                |                                           |   |                        |        |                   |   |         |        
|                                                                                                                |                                           |   | 80,930                 |        |                   |   | 223,295 |        
|Securities available-for-sale:                                                                                  |                                           |   |                        |        |                   |   |         |        
|                                                                                                                | Investment securities                     |   |                        | 33,160 |                   |   |         | 38,137  | 
|                                                                                                                | Mortgage-backed securities                |   |                        | 28,063 |                   |   |         | 32,516  | 
|Loans and leases held-for-sale                                                                                  |                                           |   | 231,495                |        |                   |   | 311,014 |        
|Investment in operating lease assets, net                                                                       |                                           |   | 153,983                |        |                   |   | 191,005 |        
|Investment in stock of the Federal Home Loan Bank of San Francisco                                              |                                           |   | 339                    |        |                   |   | 16,075  |        
|Investment in stock of the Federal Reserve Bank                                                                 |                                           |   | 13,659                 |        |                   |   | 13,659  |        
|Real estate owned, net                                                                                          |                                           |   | 3,104                  |        |                   |   | 2,402   |        
|Premises and equipment, net                                                                                     |                                           |   | 1,124                  |        |                   |   | 1,327   |        
|Repossessed vehicles                                                                                            |                                           |   | 209                    |        |                   |   | 502     |        
|Income taxes, net                                                                                               |                                           |   | 5,244                  |        |                   |   |        |        
|Other assets                                                                                                    |                                           |   | 43,893                 |        |                   |   | 45,613  |        
|                                                                                                                |                                           |   |                        |        |                   |   |         |        
|Total assets                                                                                                    |                                           | $ | 595,203                |        |                   | $ | 875,545 |        
|                                                                                                                |                                           |   |                        |        |                   |   |         |        
|LIABILITIES                                                                                                     |                                           |   |                        |        |                   |   |         |        
|Deposits:                                                                                                       |                                           |   |                        |        |                   |   |         |        
|                                                                                                                | Brokered certificates of deposit          |   |                        |       |                   |   |         | 224,189 | 
|                                                                                                                |                                           |   |                        |        |                   |   |         |        
|                                                                                                                |                                           |   |                       |        |                   |   | 224,189 |        
|Other borrowings                                                                                                |                                           |   | 46,261                 |        |                   |   | 61,969  |        
|Income taxes, net                                                                                               |                                           |   |                       |        |                   |   | 8,646   |        
|Deferred gain                                                                                                   |                                           |   | 12,817                 |        |                   |   | 12,817  |        
|Other liabilities                                                                                               |                                           |   | 14,737                 |        |                   |   | 23,907  |        
|Reserve for estimated costs during the period of liquidation                                                    |                                           |   | 20,424                 |        |                   |   | 43,953  |        
|                                                                                                                |                                           |   |                        |        |                   |   |         |        
|Total liabilities                                                                                               |                                           |   | 94,239                 |        |                   |   | 375,481 |        
|                                                                                                                |                                           |   |                        |        |                   |   |         |        
|Guaranteed Preferred Beneficial Interest in the Companys
Junior Subordinated Debentures (Capital Securities) |                                           |   | 90,000                 |        |                   |   | 90,000  |        
|                                                                                                                |                                           |   |                        |        |                   |   |         |        
|Net assets in liquidation                                                                                       |                                           | $ | 410,964                |        |                   | $ | 410,064 |        
|                                                                                                                |                                           |   |                        |        |                   |   |         |        

The accompanying notes are an integral part of these consolidated financial
statements.

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Bay View Capital Corporation and Subsidiaries




Consolidated Statement of Changes in Net Assets in Liquidation (Liquidation Basis)
(Unaudited)


|                                                      |  |                        |         |  
|----------------------------------------------------- |  | ---------------------- | ------- | -
|                                                      |  | For the Three         
|                                                      |  | Months Ended          
|                                                      |  | March 31, 2003        
|                                                      |  |                       
|                                                      |  | (Dollars in thousands)
|Net assets in liquidation, December 31, 2002          |  | $                      | 410,064 |  
|Pre-tax income from operations                        |  |                        | 1,415   |  
|Changes in estimated values of assets and liabilities |  |                        | (1,664  | )
|Income tax benefit                                    |  |                        | 802     |  
|                                                      |  |                        |         |  
|Change in net income from operations                  |  |                        | 553     |  
|Dividends on Capital Securities                       |  |                        | (2,251  | )
|Other changes in net assets in liquidation            |  |                        | 2,598   |  
|                                                      |  |                        |         |  
|Net assets in liquidation, March 31, 2003             |  | $                      | 410,964 |  
|                                                      |  |                        |         |  

The accompanying notes are an integral part of these consolidated
financial statements.

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Bay View Capital Corporation and Subsidiaries




Consolidated Statement of Operations and Comprehensive Loss
(Unaudited)


|                                                                                             |                                                 |   |                       |        | 
|-------------------------------------------------------------------------------------------- | ----------------------------------------------- | - | --------------------- | ------ | 
|                                                                                             |                                                 |   | For the Three Months 
|                                                                                             |                                                 |   | Ended                
|                                                                                             |                                                 |   | March 31, 2002       
|                                                                                             |                                                 |   |                      
|                                                                                             |                                                 |   | Going Concern Basis  
|                                                                                             |                                                 |   |                      
|                                                                                             |                                                 |   | (Amounts in          
|                                                                                             |                                                 |   | thousands, except per
|                                                                                             |                                                 |   | share amounts)       
|Interest income:                                                                             |                                                 |   |                       |       
|                                                                                             | Interest on loans and leases                    |   | $                     | 46,471 | 
|                                                                                             | Interest on mortgage-backed securities          |   |                       | 3,551  | 
|                                                                                             | Interest and dividends on investment securities |   |                       | 3,671  | 
|                                                                                             |                                                 |   |                       |        | 
|                                                                                             |                                                 |   | 53,693                |       
|Interest expense:                                                                            |                                                 |   |                       |       
|                                                                                             | Interest on deposits                            |   |                       | 15,002 | 
|                                                                                             | Interest on borrowings                          |   |                       | 1,832  | 
|                                                                                             | Interest on Subordinated Notes                  |   |                       | 3,715  | 
|                                                                                             |                                                 |   |                       |        | 
|                                                                                             |                                                 |   | 20,549                |       
|Net interest income                                                                          |                                                 |   | 33,144                |       
|Provision for losses on loans and leases                                                     |                                                 |   | 4,900                 |       
|                                                                                             |                                                 |   |                       |        | 
|Net interest income after provision for losses on loans and leases                           |                                                 |   | 28,244                |       
|Noninterest income:                                                                          |                                                 |   |                       |       
|                                                                                             | Leasing income                                  |   |                       | 20,349 | 
|                                                                                             | Loan fees and charges                           |   |                       | 1,293  | 
|                                                                                             | Loan servicing income                           |   |                       | 205    | 
|                                                                                             | Account fees                                    |   |                       | 1,936  | 
|                                                                                             | Sales commissions                               |   |                       | 1,840  | 
|                                                                                             | Gain on sale of assets and liabilities, net     |   |                       | 332    | 
|                                                                                             | Other, net                                      |   |                       | 227    | 
|                                                                                             |                                                 |   |                       |        | 
|                                                                                             |                                                 |   | 26,182                |       
|Noninterest expense:                                                                         |                                                 |   |                       |       
|                                                                                             | General and administrative                      |   |                       | 30,792 | 
|                                                                                             | Leasing expenses                                |   |                       | 15,007 | 
|                                                                                             | Real estate owned operations, net               |   |                       | 540    | 
|                                                                                             | Provision for losses on real estate owned       |   |                       | 204    | 
|                                                                                             | Amortization of intangible assets               |   |                       | 331    | 
|                                                                                             |                                                 |   |                       |        | 
|                                                                                             |                                                 |   | 46,874                |       
|Income from operations                                                                       |                                                 |   | 7,552                 |       
|Income tax benefit                                                                           |                                                 |   | (1,935                | )     
|Dividends on Capital Securities                                                              |                                                 |   | 2,573                 |       
|                                                                                             |                                                 |   |                       |        | 
|Net
income before cumulative effect of change in accounting principle                        |                                                 |   | 6,914                 |       
|Cumulative effect of change in accounting principle, net of
applicable taxes of $2.3 million |                                                 |   | (18,920               | )     
|                                                                                             |                                                 |   |                       |       
|Net loss                                                                                     |                                                 | $ | (12,006               | )     
|                                                                                             |                                                 |   |                       |       

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Bay View Capital Corporation and Subsidiaries
Consolidated Statement of Operations and Comprehensive Loss (continued)
(Unaudited)

|                                                                                      |                                                                                                 |   |                       |      |  
|------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | - | --------------------- | ---- | -
|                                                                                      |                                                                                                 |   | For the Three Months 
|                                                                                      |                                                                                                 |   | Ended                
|                                                                                      |                                                                                                 |   | March 31, 2002       
|                                                                                      |                                                                                                 |   |                      
|                                                                                      |                                                                                                 |   | Going Concern Basis  
|                                                                                      |                                                                                                 |   |                      
|                                                                                      |                                                                                                 |   | (Amounts in          
|                                                                                      |                                                                                                 |   | thousands, except per
|                                                                                      |                                                                                                 |   | share amounts)       
|Basic earnings per share before cumulative effect of change in
accounting principle   |                                                                                                 | $ | 0.11                  |     
|Cumulative effect of change in accounting principle, net                              |                                                                                                 |   | (0.30                 | )   
|                                                                                      |                                                                                                 |   |                       |     
|Net basic loss per share                                                              |                                                                                                 | $ | (0.19                 | )   
|                                                                                      |                                                                                                 |   |                       |     
|Diluted earnings per share before cumulative effect of change in
accounting principle |                                                                                                 | $ | 0.11                  |     
|Cumulative effect of change in accounting principle, net                              |                                                                                                 |   | (0.30                 | )   
|                                                                                      |                                                                                                 |   |                       |     
|Net diluted loss per share                                                            |                                                                                                 | $ | (0.19                 | )   
|                                                                                      |                                                                                                 |   |                       |     
|Weighted-average basic shares outstanding                                             |                                                                                                 |   | 62,668                |     
|                                                                                      |                                                                                                 |   |                       |     
|Weighted-average diluted shares outstanding                                           |                                                                                                 |   | 63,124                |     
|                                                                                      |                                                                                                 |   |                       |     
|Net loss                                                                              |                                                                                                 | $ | (12,006               | )   
|Other comprehensive loss, net of tax:                                                 |                                                                                                 |   |                       |     
|                                                                                      | Change in unrealized gain on securities available-for-sale, net of tax benefit
of $209 thousand |   |                       | (297 | )
|                                                                                      |                                                                                                 |   |                       |     
|Other comprehensive loss                                                              |                                                                                                 |   | (297                  | )   
|                                                                                      |                                                                                                 |   |                       |     
|Total comprehensive loss                                                              |                                                                                                 | $ | (12,303               | )   
|                                                                                      |                                                                                                 |   |                       |     

The accompanying notes are an integral part of these consolidated financial
statements.

7



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Bay View Capital Corporation and Subsidiaries




Consolidated Statement of Stockholders Equity (Going Concern Basis)
(Unaudited)




|                                                                       |  |                                                  |        |        |  |         |     |             |  |          |         |  |  |   |          |   |  |   |      |  
|---------------------------------------------------------------------- |  | ------------------------------------------------ | ------ | ------ |  | ------- | --- | ----------- |  | -------- | ------- |  |  | - | -------- | - |  | - | ---- | -
|                                                                       |  | Number                                           |        |        |  |         |     | Additional  |  |          |         |  |  |   |          |  
|                                                                       |  | of Shares                                        |        | Common |  | Paid-in |     | Accumulated |  | Treasury
|                                                                       |  | Issued                                           |        | Stock  |  | Capital |     | Deficit     |  | Stock   
|                                                                       |  |                                                  |        |        |  |         |     |             |  |         
|                                                                       |  | (Amounts in thousands, except per share amounts)
|Balance at December 31, 2001                                           |  |                                                  | 62,628 |        |  | $       | 626 |             |  | $        | 595,258 |  |  | $ | (258,047 | ) |  | $ | (808 | )
|Exercise of stock options, including tax benefits                      |  |                                                  | 62     |        |  |         | 1   |             |  |          | 291     |  |  |   |         |   |  |   |     |  
|Distribution of directors retirement plan shares                      |  |                                                  | 1      |        |  |         |    |             |  |          | 5       |  |  |   |         |   |  |   |     |  
|Exercise of stock warrants                                             |  |                                                  | 1      |        |  |         |    |             |  |          | 4       |  |  |   |         |   |  |   |     |  
|Expense recognized on stock options with below
market strike price     |  |                                                  |       |        |  |         |    |             |  |          | 671     |  |  |   |         |   |  |   |     |  
|Change
in unrealized gain on securities available-for-sale,
net of tax |  |                                                  |       |        |  |         |    |             |  |          |        |  |  |   |         |   |  |   |     |  
|Change in debt of ESOP                                                 |  |                                                  |       |        |  |         |    |             |  |          |        |  |  |   |         |   |  |   |     |  
|Net income                                                             |  |                                                  |       |        |  |         |    |             |  |          |        |  |  |   | 6,914    |   |  |   |     |  
|                                                                       |  |                                                  |        |        |  |         |     |             |  |          |         |  |  |   |          |   |  |   |      |  
|Balance at March 31, 2002                                              |  |                                                  | 62,692 |        |  | $       | 627 |             |  | $        | 596,229 |  |  | $ | (251,133 | ) |  | $ | (808 | )
|                                                                       |  |                                                  |        |        |  |         |     |             |  |          |         |  |  |   |          |   |  |   |      |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                                       |  |                                                  |      |             |  |           |      |               |  |   |        |   |  |   |         |  
|---------------------------------------------------------------------- |  | ------------------------------------------------ | ---- | ----------- |  | --------- | ---- | ------------- |  | - | ------ | - |  | - | ------- | -
|                                                                       |  | Unrealized                                       |      |             |  |           |      |               |  |   |        |   |  |  
|                                                                       |  | Gain on                                          |      | Minimum     |  | Debt of   |      |               |  |  
|                                                                       |  | Securities                                       |      | Pension     |  | Employee  |      |               |  |  
|                                                                       |  | Available-for-                                   |      | Liability   |  | Stock     |      | Total        
|                                                                       |  | Sale,                                            |      | Adjustment, |  | Ownership |      | Stockholders
|                                                                       |  | Net of Tax                                       |      | Net of Tax  |  | Plan      |      | Equity       
|                                                                       |  |                                                  |      |             |  |           |      |              
|                                                                       |  | (Amounts in thousands, except per share amounts)
|Balance at December 31, 2001                                           |  | $                                                | 523  |             |  | $         | (294 | )             |  | $ | (1,071 | ) |  | $ | 336,187 |  
|Exercise of stock options, including tax benefits                      |  |                                                  |     |             |  |           |     |               |  |   |       |   |  |   | 292     |  
|Distribution of directors retirement plan shares                      |  |                                                  |     |             |  |           |     |               |  |   |       |   |  |   | 5       |  
|Exercise of stock warrants                                             |  |                                                  |     |             |  |           |     |               |  |   |       |   |  |   | 4       |  
|Expense recognized on stock options with below
market strike price     |  |                                                  |     |             |  |           |     |               |  |   |       |   |  |   | 671     |  
|Change
in unrealized gain on securities available-for-sale,
net of tax |  |                                                  | (297 | )           |  |           |     |               |  |   |       |   |  |   | (297    | )
|Change in debt of ESOP                                                 |  |                                                  |     |             |  |           |     |               |  |   | 1,071  |   |  |   | 1,071   |  
|Net income                                                             |  |                                                  |     |             |  |           |     |               |  |   |       |   |  |   | 6,914   |  
|                                                                       |  |                                                  |      |             |  |           |      |               |  |   |        |   |  |   |         |  
|Balance at March 31, 2002                                              |  | $                                                | 226  |             |  | $         | (294 | )             |  | $ |       |   |  | $ | 344,847 |  
|                                                                       |  |                                                  |      |             |  |           |      |               |  |   |        |   |  |   |         |  

The accompanying notes are an integral part of these consolidated financial
statements.

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##### Table of Contents



Bay View Capital Corporation and Subsidiaries




Consolidated Statements of Cash Flows
(Unaudited)


|                                                                                                                                          |                                                                                               |   |                            |         |           |   |         |        |  
|----------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | - | -------------------------- | ------- | --------- | - | ------- | ------ | -
|                                                                                                                                          |                                                                                               |   | For the Three Months Ended
|                                                                                                                                          |                                                                                               |   |                           
|                                                                                                                                          |                                                                                               |   | March 31,                  |         | March 31,
|                                                                                                                                          |                                                                                               |   | 2003                       |         | 2002     
|                                                                                                                                          |                                                                                               |   |                            |         |          
|                                                                                                                                          |                                                                                               |   | (Dollars in thousands)    
|CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                      |                                                                                               |   |                            |         |           |   |         |       
|Net
income (loss) and certain changes in net assets in liquidation                                                                        |                                                                                               | $ | (1,698                     | )       |           | $ | 6,914   |       
|Adjustments
to reconcile net income (loss) and certain changes in net assets in liquidation to net cash
provided by operating activities: |                                                                                               |   |                            |         |           |   |         |       
|                                                                                                                                          | Amortization of intangible assets                                                             |   |                            |        |           |   |         | 331    |  
|                                                                                                                                          | Net increase in loans and leases held-for-sale resulting from
originations, net of repayments |   |                            | (34,953 | )         |   |         |       |  
|                                                                                                                                          | Proceeds from sales of loans and leases held-for-sale                                         |   |                            | 115,466 |           |   |         |       |  
|                                                                                                                                          | Provision for losses on loans and leases and real estate owned                                |   |                            |        |           |   |         | 5,104  |  
|                                                                                                                                          | Depreciation and amortization of premises and equipment                                       |   |                            | 170     |           |   |         | 945    |  
|                                                                                                                                          | Depreciation and amortization of investment in operating lease assets                         |   |                            | 8,055   |           |   |         | 12,716 |  
|                                                                                                                                          | Accretion of retained interests in securitizations                                            |   |                            | (726    | )         |   |         |       |  
|                                                                                                                                          | Amortization of premiums, net of discount accretion                                           |   |                            | (1,540  | )         |   |         | 2,793  |  
|                                                                                                                                          | Gain on sale of assets and liabilities, net                                                   |   |                            | (53     | )         |   |         | (332   | )
|                                                                                                                                          | Increase in other assets                                                                      |   |                            | (3,317  | )         |   |         | (3,438 | )
|                                                                                                                                          | Decrease in other liabilities                                                                 |   |                            | (17,816 | )         |   |         | (3,308 | )
|                                                                                                                                          | Decrease in reserve for estimated costs during the period of liquidation                      |   |                            | (22,529 | )         |   |         |       |  
|                                                                                                                                          | Adjustment for liquidation basis                                                              |   |                            | 1,664   |           |   |         |       |  
|                                                                                                                                          | Other, net                                                                                    |   |                            | 384     |           |   |         | 2,692  |  
|                                                                                                                                          |                                                                                               |   |                            |         |           |   |         |       
|Net cash provided by operating activities                                                                                                 |                                                                                               |   | 43,107                     |         |           |   | 24,417  |       
|                                                                                                                                          |                                                                                               |   |                            |         |           |   |         |       
|CASH FLOWS FROM INVESTING ACTIVITIES                                                                                                      |                                                                                               |   |                            |         |           |   |         |       
|Net increase in loans and leases held-for-investment resulting from
originations, net of repayments                                       |                                                                                               |   | 24,891                     |         |           |   | (13,660 | )     
|Purchases of mortgage-backed securities                                                                                                   |                                                                                               |   |                           |         |           |   | (39,201 | )     
|Purchases of investment securities                                                                                                        |                                                                                               |   |                           |         |           |   | (40,531 | )     
|Principal payments on mortgage-backed securities                                                                                          |                                                                                               |   | 4,263                      |         |           |   | 44,047  |       
|Principal payments on investment securities                                                                                               |                                                                                               |   | 2,797                      |         |           |   | 5,642   |       
|Proceeds from sale of mortgage-backed securities available-for-sale                                                                       |                                                                                               |   | 130                        |         |           |   | 29,404  |       
|Proceeds from sale of investment securities available-for-sale                                                                            |                                                                                               |   | 2,735                      |         |           |   |        |       
|Proceeds from sale of real estate owned                                                                                                   |                                                                                               |   |                           |         |           |   | 2,493   |       
|Additions to premises and equipment                                                                                                       |                                                                                               |   | (25                        | )       |           |   | (57     | )     
|Decrease (increase) in investment in stock of the Federal Home Loan Bank
of San Francisco                                                 |                                                                                               |   | 15,736                     |         |           |   | (363    | )     
|Other, net                                                                                                                                |                                                                                               |   |                           |         |           |   | 83      |       
|                                                                                                                                          |                                                                                               |   |                            |         |           |   |         |       
|Net cash provided by (used in) investing activities                                                                                       |                                                                                               |   | 50,527                     |         |           |   | (12,143 | )     
|                                                                                                                                          |                                                                                               |   |                            |         |           |   |         |       

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Bay View Capital Corporation and Subsidiaries
Consolidated Statements of Cash Flows (continued)
(Unaudited)

|                                                          |                                        |                                       |          |                            |          |           |          |        |          |  
|--------------------------------------------------------- | -------------------------------------- | ------------------------------------- | -------- | -------------------------- | -------- | --------- | -------- | ------ | -------- | -
|                                                          |                                        |                                       |          | For the Three Months Ended
|                                                          |                                        |                                       |          |                           
|                                                          |                                        |                                       |          | March 31,                  |          | March 31,
|                                                          |                                        |                                       |          | 2003                       |          | 2002     
|                                                          |                                        |                                       |          |                            |          |          
|                                                          |                                        |                                       |          | (Dollars in thousands)    
|CASH FLOWS FROM FINANCING ACTIVITIES                      |                                        |                                       |          |                            |          |           |          |       
|Net decrease in deposits                                  |                                        | $                                     | (224,189 | )                          |          | $         | (168,227 | )     
|Repayment
of other borrowings                             |                                        |                                       | (14,408  | )                          |          |           | (21,811  | )     
|Proceeds from issuance of common stock                    |                                        |                                       | 2,598    |                            |          |           | 301      |       
|                                                          |                                        |                                       |          |                            |          |           |          |       
|                                                          |                                        | Net cash used in financing activities |          |                            | (235,999 | )         |          |        | (189,737 | )
|                                                          |                                        |                                       |          |                            |          |           |          |       
|Net decrease in cash and cash equivalents                 |                                        |                                       | (142,365 | )                          |          |           | (177,463 | )     
|Cash and cash equivalents at beginning of period          |                                        |                                       | 223,295  |                            |          |           | 521,388  |       
|                                                          |                                        |                                       |          |                            |          |           |          |       
|Cash and cash equivalents at end of period                |                                        | $                                     | 80,930   |                            |          | $         | 343,925  |       
|                                                          |                                        |                                       |          |                            |          |           |          |       
|Cash
paid during the period for:                          |                                        |                                       |          |                            |          |           |          |       
|                                                          | Interest                               |                                       | $        | 4,857                      |          |           | $        | 23,092 |         
|                                                          | Income taxes                           |                                       | $        | 13,087                     |          |           | $        | 21     |         
|Supplemental non-cash investing and financing activities: |                                        |                                       |          |                            |          |           |          |       
|                                                          | Loans transferred to real estate owned |                                       | $        | 1,086                      |          |           | $        |       |         

The accompanying notes are an integral part of these consolidated financial
statements.

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##### Table of Contents



Bay View Capital Corporation and Subsidiaries




Notes to Consolidated Financial Statements
March 31, 2003
(Unaudited)


Note 1. Basis of Presentation

The information provided in the consolidated financial statements as of
and for the three months ended March 31, 2003 reflects our adoption of
liquidation basis accounting effective September 30, 2002 in accordance with
accounting principles generally accepted in the United States of America
(GAAP). Liquidation basis accounting requires us to value
our assets at
their estimated net realizable values and our liabilities to include accruals
for estimated costs associated with carrying out the Plan of Dissolution and
Stockholder Liquidity (the Plan). The consolidated statement of operations
and comprehensive loss for the three months ended March 31, 2002, the
consolidated statement of stockholders equity for the three months ended March
31, 2002, and the consolidated statement of cash flows for the three months
ended March 31, 2002 have been prepared using the historical cost (going
concern) basis of accounting on which the Company had previously reported its
financial position and results of operations.

The consolidated financial statements include the accounts of Bay View
Capital Corporation (the Company), a bank holding company incorporated under
the laws of the state of Delaware, and our wholly owned subsidiaries: Bay View
Bank, N.A. (the Bank), a national bank; Bay View Securitization Corporation,
a Delaware corporation; Bay View Capital I, a Delaware business trust; FMAC
Insurance Services, a Delaware corporation; FMAC 2000-A Holding Company, a
California corporation; and FMAC Franchise Receivables Corporation, a
California corporation. Bay View Bank includes its wholly owned subsidiaries:
Bay View Acceptance Corporation (BVAC), a Nevada corporation; Bay View
Commercial Finance Group, a California corporation; XBVBKRS, Inc., a California
corporation; MoneyCare, Inc., a California corporation; and Bay View Auxiliary
Corporation, a California corporation. All significant intercompany accounts
and transactions have been eliminated.

Through BVAC, the Bank continues to operate its auto finance business in
20 states. In 2003, we intend to transfer BVAC from the Bank to the Company,
subject to regulatory approval. The Company believes this will allow for a
full liquidation of the Bank while BVAC continues to originate new loans and
expand geographically throughout the liquidation period ending September 2005.
The Company intends to spin off BVAC to stockholders or sell it at the end of
the liquidation period.

The information provided in these interim financial statements reflects
all adjustments which are, in the opinion of management, necessary for a fair
presentation of our net assets in liquidation as of March 31, 2003, the changes
in net assets in liquidation for the three-month period ended March 31, 2003,
the results of our operations for the three-month period ended March 31, 2002,
and cash flows for the three-month periods ended March 31, 2003 and 2002.
These adjustments are primarily liquidation basis mark-to-market adjustments
and expense accruals. As necessary, reclassifications have been made to prior
period amounts to conform to the current period presentation. These
reclassifications had no effect on our financial position and results
of operations. These interim
financial statements have been prepared in accordance with the instructions to
Form 10-Q, and therefore do not include all of the necessary information and
footnotes for a presentation in conformity with GAAP.

The information included in Managements Discussion and Analysis of
Financial Condition and Results of Operations was written assuming that you
have read or have access to our 2002 Annual Report on Form 10-K, which contains
the latest audited consolidated financial statements and notes, along with
Managements Discussion and Analysis of Financial Condition as of December 31,
2002 and 2001 and Results of Operations for the years ended December 31, 2002,
2001 and 2000. Accordingly, only certain changes in financial condition and
results of operations are discussed in this Form 10-Q. Furthermore, the
interim financial results for the three-month period ended March 31, 2003 are
not necessarily indicative of the results that may be expected for the entire
fiscal year or any other interim period.

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Bay View Capital Corporation and Subsidiaries
Notes to Consolidated Financial Statements
March 31, 2003
(Unaudited)

Note 2. Plan of Dissolution and Stockholder Liquidity

On October 3, 2002, a special meeting of Bay View Capital Corporations
stockholders was held to vote on the Companys proposed Plan and the sale of
the Banks retail banking assets to U.S. Bank, N.A. (U.S.
Bank). Both of
these proposals were approved by a majority of the common stockholders. As a
result of these approvals and the close of the U.S. Bank transaction on
November 1, 2002, we adopted liquidation basis accounting effective September
30, 2002 in accordance with GAAP. Accordingly, assets have been valued at
their estimated net realizable values and liabilities include accruals for
estimated costs associated with carrying out the Plan. In accordance with
liquidation basis accounting, our stockholders equity was transferred to net
assets in liquidation. Our net assets in liquidation totaled $411.0 million at
March 31, 2003 or $6.41 in net assets in liquidation per outstanding share
based on 64,120,863 diluted common shares in liquidation.

The Plan outlines the steps necessary to fully liquidate the Company. We
completed the sale of the Banks retail banking assets to U.S. Bank on November
1, 2002. Our remaining assets are to be sold in an orderly manner and the
liabilities and expenses are to be paid, including our outstanding debt and the
outstanding debt of the Bank and the Capital Securities. Once these
transactions have been completed, we intend to distribute the net proceeds of
the asset sales to our stockholders.

For the quarter ended March 31, 2003, we recorded $1.6 million of net
charges for additional liquidation valuation adjustments.

Under liquidation basis accounting, we have estimated future liabilities
associated with carrying out the Plan. We have not reflected any future
revenues and expenses of an operating nature, as such revenues and expenses
will be recognized when realized.

Note 3. Earnings Per Share

Basic earnings per share are calculated by dividing net earnings or loss
for the period by the weighted-average common shares outstanding for that
period. There is no adjustment to the number of outstanding shares for
potential dilutive instruments, such as stock options. Diluted earnings per
share takes into account the potential dilutive impact of such instruments and
uses the average share price for the period in determining the number of
incremental shares to add to the weighted-average number of shares outstanding.

During the third quarter of 2002, we recorded $18.9 million in goodwill
impairment charges, net of taxes, which was recognized as the cumulative effect
of a change in accounting principle as of January 1, 2002. Accordingly, the
results for the first quarter of 2002 were restated to reflect the adjustment.

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Bay View Capital Corporation and Subsidiaries
Notes to Consolidated Financial Statements
March 31, 2003
(Unaudited)

The following table illustrates the calculation of basic and diluted
earnings (loss) per share for the period indicated:

|                                                                                      |  |                    |         |  
|------------------------------------------------------------------------------------- |  | ------------------ | ------- | -
|                                                                                      |  | For the Three     
|                                                                                      |  | Months Ended      
|                                                                                      |  | March 31, 2002    
|                                                                                      |  |                   
|                                                                                      |  | (Amounts in       
|                                                                                      |  | thousands, except 
|                                                                                      |  | per share amounts)
|Net
income before cumulative effect of change in accounting principle                 |  | $                  | 6,914   |  
|Cumulative effect of change in accounting principle, net of taxes of $2.3 million     |  |                    | (18,920 | )
|                                                                                      |  |                    |         |  
|Net loss                                                                              |  | $                  | (12,006 | )
|                                                                                      |  |                    |         |  
|Weighted-average basic shares outstanding                                             |  |                    | 62,668  |  
|Add: Dilutive potential common shares                                                 |  |                    | 456     |  
|                                                                                      |  |                    |         |  
|Weighted-average diluted shares outstanding                                           |  |                    | 63,124  |  
|                                                                                      |  |                    |         |  
|Basic earnings per share before cumulative effect of change in
accounting principle   |  | $                  | 0.11    |  
|Cumulative effect of change in accounting principle, net                              |  |                    | (0.30   | )
|                                                                                      |  |                    |         |  
|Net basic loss per share                                                              |  | $                  | (0.19   | )
|                                                                                      |  |                    |         |  
|Diluted earnings per share before cumulative effect of change in
accounting principle |  | $                  | 0.11    |  
|Cumulative effect of change in accounting principle, net                              |  |                    | (0.30   | )
|                                                                                      |  |                    |         |  
|Net diluted loss per share                                                            |  | $                  | (0.19   | )
|                                                                                      |  |                    |         |  

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Bay View Capital Corporation and Subsidiaries
Notes to Consolidated Financial Statements
March 31, 2003
(Unaudited)

Note 4. Stock Options

As of March 31, 2003, we had five employee stock option plans and three
non-employee director stock option plans. The employee stock option plans were
as follows: the Amended and Restated 1986 Stock Option and Incentive Plan,
the Amended and Restated 1995 Stock Option and Incentive Plan, the 1998-2000
Performance Stock Plan, the 1999 FMAC Stock Option, Deferred Stock and
Restricted Stock Plan, and the 2001 Stock Option and Incentive Plan, which
authorize the issuance of 1,759,430, 2,500,000, 400,000, 270,576 and 3,200,000
shares of common stock, respectively. The non-employee director stock option
plans were as follows: the Amended and Restated 1989 Non-Employee Director
Stock Option and Incentive Plan, the 1998 Non-Employee Director Stock Option
and Incentive Plan, and the 2001 Non-Employee Director Stock Option Plan,
which authorize the issuance of up to 550,000, 200,000, and 500,000 shares of
common stock, respectively.

The following table illustrates the stock options available for grant as
of March 31, 2003:

|                             |  |                       |            |                       |  |       |            |   |  |  |             |  
|---------------------------- |  | --------------------- | ---------- | --------------------- |  | ----- | ---------- | - |  |  | ----------- | -
|                             |  |                       |            |                       |  |       |            |   |  | 
|                             |  |                       |            | Non-Employee Director |  |       |            |  
|                             |  | Employee Stock Option |            | Stock Option and      |  |       |            |  
|                             |  | and Incentive Plans   |            | Incentive Plans       |  | Total
|                             |  |                       |            |                       |  |      
|Shares reserved for issuance |  |                       | 8,130,006  |                       |  |       | 1,250,000  |   |  |  | 9,380,006   |  
|Granted                      |  |                       | (9,239,892 | )                     |  |       | (1,137,000 | ) |  |  | (10,376,892 | )
|Forfeited                    |  |                       | 3,034,481  |                       |  |       | 235,000    |   |  |  | 3,269,481   |  
|Expired                      |  |                       | (428,688   | )                     |  |       | (166,000   | ) |  |  | (594,688    | )
|                             |  |                       |            |                       |  |       |            |   |  |  |             |  
|Total available for grant    |  |                       | 1,495,907  |                       |  |       | 182,000    |   |  |  | 1,677,907   |  
|                             |  |                       |            |                       |  |       |            |   |  |  |             |  

At March 31, 2003, we had outstanding options under the plans with
expiration dates ranging from the year 2003 through 2014, as illustrated in the
following table:

|                                 |  |               |           |                |  |                  |            |  |  |   |       | 
|-------------------------------- |  | ------------- | --------- | -------------- |  | ---------------- | ---------- |  |  | - | ----- | 
|                                 |  | Number of     |           | Exercise Price |  | Weighted-Average
|                                 |  | Option Shares |           | Range          |  | Exercise Price  
|                                 |  |               |           |                |  |                 
|Outstanding at December 31, 2002 |  |               | 5,201,104 |                |  | $                | 4.59-34.41 |  |  | $ | 8.80  | 
|Granted                          |  |               |          |                |  |                  |           |  |  |   |      | 
|Exercised                        |  |               | (707,500  | )              |  |                  | 4.59-5.41  |  |  |   | 4.63  | 
|Forfeited                        |  |               | (411,722  | )              |  |                  | 5.41-34.41 |  |  |   | 16.42 | 
|                                 |  |               |           |                |  |                  |            |  |  |   |       | 
|Outstanding at March 31, 2003    |  |               | 4,081,882 |                |  | $                | 4.59-34.41 |  |  | $ | 8.75  | 
|                                 |  |               |           |                |  |                  |            |  |  |   |       | 
|Exercisable at March 31, 2003    |  |               | 4,081,882 |                |  | $                | 4.59-34.41 |  |  | $ | 8.75  | 
|                                 |  |               |           |                |  |                  |            |  |  |   |       | 

All of our stock option plans define a change in control as including a
sale of all or substantially all of our assets, and all of our stock option
plans provide for the automatic acceleration of the exercisability of stock
options in the event of a change in control with the exception of our 2001
Stock Option and Incentive Plan (the 2001 Plan). The 2001 Plan provides for
the acceleration of the exercisability of stock options in such circumstances
as the stock option committee of our Board of Directors determines to be
appropriate. On October 3, 2002, the Board of Directors authorized such
acceleration. As of March 31, 2003, the acceleration of the exercisability of
stock options resulting from the change in control for all other plans had an
insignificant impact on our consolidated financial statements.

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Bay View Capital Corporation and Subsidiaries
Notes to Consolidated Financial Statements
March 31, 2003
(Unaudited)

Our stock options generally cancel automatically 90 days after termination
of employment and, notwithstanding any other provisions of our stock option
plans, all outstanding stock options will automatically cancel on the final
record date. A substantial number of our employees have terminated their
employment with us to become employees of U.S. Bank and a number of other
employees have and will be terminated as part of our downsizing and cost
reduction program. To prevent our employees from losing the value in their
stock options as a result of the termination of their employment and to
motivate our remaining employees throughout the dissolution process, our Board
of Directors has amended our stock option plans, to the extent necessary, to
permit the exercise of the options on a net issuance basis. This right
entitles the holder to elect to receive from us, in exchange for the shares
subject to the stock option, that number of shares of our common stock that has
a value equal to the total amount by which the market price of the shares on
the date the option is exercised exceeds the total exercise price of the shares
subject to the option.

The Stock Option
Agreement of all holders of options under the 2001 Plan whose
employment with the Company terminated or terminates on or after
November 15, 2002 were amended to provide that the optionee
shall have the right to exercise options under the 2001 Plan within
a period of 18 months following termination.

Stock-Based Compensation

In December 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 148, Accounting for
Stock-Based Compensation  Transition and Disclosure, which amends Statement
of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation. This Statement provides alternative methods of transition for a
voluntary change to the fair value based method of accounting for stock-based
employee compensation. It also amends the disclosure requirements to require
prominent disclosure in both annual and interim financial statements about the
method of accounting for stock-based employee compensation and the effect of
the method used on reported results. The disclosure requirements under this
Statement are required for financial statements issued after December 15, 2002.

Statement No. 123 establishes financial accounting and reporting standards
for stock-based compensation plans, including employee stock purchase plans,
stock options and restricted stock. Statement No. 123 encourages all entities
to adopt a fair value method of accounting for stock-based compensation plans,
whereby compensation cost is measured at the grant date based upon the fair
value of the award and is realized as an expense over the service or vesting
period. However, Statement No. 123 also allows an entity to continue to
measure compensation cost for these plans using the intrinsic value method of
accounting prescribed by Accounting Principles Board Opinion No. 25,
Accounting for Stock Issued to Employees.

We account for our stock-based awards to employees and directors using the
intrinsic value method of accounting in accordance with Accounting Principles
Board Opinion No. 25. Under the intrinsic value method, compensation cost is
generally the excess, if any, of the quoted market price of the stock at the
grant or other measurement date over the exercise price.

Had compensation cost related to our stock option awards to employees and
directors been determined under the fair value method prescribed under
Statement No. 123, our net assets in liquidation and net assets in liquidation
per share and our net loss and loss per share would have been the pro forma
amounts illustrated in the table below for the periods indicated:

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Bay View Capital Corporation and Subsidiaries
Notes to Consolidated Financial Statements
March 31, 2003
(Unaudited)

| |                                                                                              |             |   |                                                 |       |  
| | -------------------------------------------------------------------------------------------- | ----------- | - | ----------------------------------------------- | ----- | -
| |                                                                                              |             |   | For the
ThreeMonths Ended
March 31, 2002       
| |                                                                                              |             |   |                                                
| |                                                                                              |             |   | (Dollars
in thousands,except per share amounts)
| | As
reported net loss in Consolidated
Statement of Operations and Comprehensive Loss          |             | $ | (12,006                                         | )    
| | Stock-based employee compensation expense (determined
under fair value method, net of taxes) |             |   | (670                                            | )    
| |                                                                                              |             |   |                                                 |       |  
| | Pro
forma net loss, after stock-based
employee compensation expense                          |             | $ | (12,676                                         | )    
| |                                                                                              |             |   |                                                 |       |  
| | Net
loss per share  basic:                                                                  |             |   |                                                 |      
| |                                                                                              | As reported |   | $                                               | (0.19 | )
| |                                                                                              | Pro
forma   |   | $                                               | (0.20 | )
| | Net
loss per share  diluted:                                                                |             |   |                                                 |      
| |                                                                                              | As reported |   | $                                               | (0.19 | )
| |                                                                                              | Pro
forma   |   | $                                               | (0.20 | )

Note 5. Agreements with Regulatory Agencies

During the third quarter of 2000, we entered into formal agreements with
the Office of the Comptroller of the Currency (OCC) and the Federal Reserve
Bank of San Francisco.

The agreement between the Bank and the OCC was dated September 6, 2000.
A provision of the agreement states that the Bank may not declare or
distribute any dividends without the prior written approval of the OCC.

The agreement between the Company and the Federal Reserve Bank of San
Francisco was dated September 28, 2000. The agreement states that we may not
declare or pay any cash or stock dividends or make any interest payments on
our Capital Securities without the prior written approval of the Federal
Reserve Bank of San Francisco. The agreement further requires the prior
written approval of the Federal Reserve Bank of San Francisco to increase the
principal balance of any category of debt above the levels outstanding as of
June 30, 2000. Finally, we may not repurchase any stock without the prior
written approval of the Federal Reserve Bank of San Francisco.

At March 31, 2003, the Companys regulatory capital levels exceeded
minimum regulatory capital requirements while the Banks regulatory capital
levels exceeded the requirements necessary to be considered well-capitalized.

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Bay View Capital Corporation and Subsidiaries
Notes to Consolidated Financial Statements
March 31, 2003
(Unaudited)

Note 6. Investment in Operating Lease Assets

Leasing expense represents expenses related to our auto leasing
activities. Because the leases are accounted for as operating leases, the
corresponding assets are capitalized and depreciated to their estimated
residual values over their lease terms. This depreciation expense is included
in leasing expenses, along with the amortization of capitalized initial direct
lease costs and impairment charges. Leasing expenses were $9.5 million for the
first quarter of 2003.

The Company performs a quarterly impairment analysis of its automobile
operating lease portfolio in accordance with Statement of Financial Accounting
Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, which we adopted effective January 1, 2002. Statement No. 144, which
supersedes Statement No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of, retains the fundamental
provisions of Statement No. 121 related to the recognition and measurement of
the impairment of long-lived assets to be held and used and the measurement of
long-lived assets to be disposed of by sale. There was no financial statement
impact upon adoption of Statement No. 144. A lease is considered impaired if
its gross future undiscounted cash flows are less than the net book value of
the lease. The net book value of the lease is defined as the original
capitalized cost of the automobile, including initial direct capitalized costs,
less the cumulative amount of depreciation recorded against the automobile and
the cumulative amount of amortization of the initial direct capitalized costs
recorded since the inception of the lease and less any impairment charges
recorded-to-date on that lease.

In determining gross future undiscounted cash flows, the Company contracts
with Automotive Lease Guide, commonly referred to as ALG, to provide estimates
of the residual value of the underlying automobiles at the end of their lease
terms assuming that the vehicles are in average condition. The Company then
estimates the probability that i.) the automobiles will be purchased by the
lessee prior to the end of the lease term, ii.) the automobile will be
purchased by the lessee at the end of the lease term, either at a discount or
at the full contractual residual amount, or iii.) the automobile will be
returned to the lessor at the end of the lease term. These probabilities are
estimated using a number of factors, including the Companys experience-to-date
and industry experience.

Using the projected ALG residual values, the Companys experience-to-date
relative to the projected ALG residual values (for example, for vehicle classes
where actual amounts realized were less than what ALG had projected, the
Company reduced the projected ALG residual values to equal the Companys
experience-to-date), and the probabilities of each of the three disposition
scenarios discussed above occurring, the Company determines a
probability-weighted gross future undiscounted cash flow for each automobile
lease. For those leases where the gross future undiscounted cash flows are
less than net book value, the lease is considered impaired.

For those leases considered impaired, the Company then estimates the fair
value of the lease. The fair value is determined by calculating the present
value of the future estimated cash flows, again assuming the probabilities of
each of the three disposition scenarios. The present value is calculated using
current market rates which are similar to the original contract lease rate.
For those impaired leases where the estimated fair value is less than the net
book value, an impairment charge is recorded for the difference. Since the
inception of the lease portfolio in June 1998, the Company has recorded
additional monthly depreciation charges, also included in leasing expense, to
provide for losses that may be incurred at the end of the lease terms. During
the first quarter of 2003, we recorded $4.1 million of additional
mark-to-market writedowns on the auto lease portfolio.

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Bay View Capital Corporation and Subsidiaries
Notes to Consolidated Financial Statements
March 31, 2003
(Unaudited)

Note 7. Income Taxes

The Company recorded a tax benefit of $0.8 million for the three months
ended March 31, 2003. The effective tax rate used in computing the tax
benefit for the first three months of 2003 was 32.1%. This expected 2003
effective tax rate is lower than the federal statutory rate due primarily to
state income and franchise taxes.

For the first quarter of 2002, the Company recorded a tax benefit of $1.9
million. This tax benefit included tax expense of $2.1 million on pre-tax
earnings of $7.6 million offset by a tax benefit of $4.0 million related to the
impact of a change in U.S. Treasury regulations in 2002 with respect to a loss
on the sale of a subsidiary in 2001. The effective tax rate used in computing
the $2.1 million tax expense for the first quarter of 2002 was 41.5%.

As a result of the Companys Plan, a valuation allowance of $21.5 million
was established as of December 31, 2002 based on the realizability of deferred
tax assets in years after 2002. The computation of deferred tax assets, net of
the valuation allowance, is based on the projection of future operating income,
primarily from the Companys auto finance business, available to absorb
existing deferred tax benefits. The amount of the valuation allowance remained
unchanged at March 31, 2003.

Note 8. Commitments and Contingencies

We are involved as plaintiff or defendant in various legal actions and are
occasionally exposed to unasserted claims arising in the normal course of
business. In the opinion of management, after consultation with counsel, the
resolution of these legal actions will not have a material adverse effect on
our consolidated financial condition or results of operations.

Note 9. Reserve for Estimated Costs during the Period of Liquidation

The reserve for estimated costs during the period of liquidation includes
accruals for severance payments and costs related to facility closures,
investment banking and other professional fees and estimated litigation expense
and settlements. These expense accruals are reviewed for adequacy on a
quarterly basis. Changes to the accruals, if necessary, are recorded as
adjustments in liquidation basis in future periods.

At March 31, 2003, the reserve for estimated costs during the period of
liquidation was $20.4 million, including accruals for severance and facilities
of $7.2 million and $8.8 million, respectively.

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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations

Strategic Overview

Bay View Capital Corporation (the Company) is a commercial bank holding
company headquartered in San Mateo, California. Our principal subsidiary is
Bay View Bank, N.A. (the Bank).

Plan of Dissolution and Stockholder Liquidity

On August 6, 2002, our Board of Directors approved a plan of dissolution
and stockholder liquidity (the Plan). Under the Plan, we intend to dispose
of our remaining assets in an orderly manner and to collect all additional
monies owed to us. We have made and will continue to make adequate reserves
for the payment of all of our liabilities and obligations, including all
expenses related to the sale of our assets and the Plan. Our Board of
Directors, at its discretion, may also set aside a contingency reserve to pay
any claims that may arise against us, whether known or unknown. We intend to
make one or more liquidating distributions to our stockholders, representing
the net proceeds of our asset sales. Any liquidating distributions will be
made to our stockholders based on their pro rata ownership of our common stock
as of the record date to be established for each distribution.

It is not possible at this time to indicate an exact amount for the
distributions we intend to make to our stockholders for a number of reasons,
including: the need to obtain the Board of Governors of the Federal Reserve
System (FRB) and Office of the Comptroller of the Currency (OCC) approval
to make any distributions; the proceeds that we in fact receive
from the disposition of other assets that are not yet subject to purchase
commitments could be less than we currently anticipate; and our expenses and
other obligations prior to liquidation could be greater than we currently
anticipate. As a result, no assurance can be given as to the amount of the
distributions that will be made to our stockholders, either in cash or in the
stock of operating companies.

On October 3, 2002, our stockholders approved the Plan and the sale of the
Banks retail banking assets to U.S. Bank, N.A. (U.S.
Bank). Also on October 3, 2002, holders of
the Capital Securities of Bay View Capital I approved a waiver of those
provisions of the legal instruments governing the Capital Securities and the
Companys 9.76% Junior Subordinated Deferrable Interest Debentures that would,
absent the waiver, prevent us from disposing of all of our assets pursuant to
the Plan.

As a result of the stockholders approval of the Plan and the close of the
U.S. Bank transaction on November 1, 2002, we adopted liquidation basis
accounting, effective September 30, 2002, in accordance with accounting
principles generally accepted in the United States of America (GAAP).

Segments

Prior to September 30, 2002, we operated two distinct business platforms
representing the two basic distribution channels of our primary businesses,
retail and commercial banking. As a result of our dissolution and adoption of
liquidation basis accounting effective September 30, 2002, we currently operate
in a single segment focused on liquidating the Companys assets and
liabilities. Accordingly, the results for the three-month period ended March
31, 2002 have been reclassified to conform to the current period presentation.

Critical Accounting Policies

We have identified the most critical accounting policies upon which our
financial status depends. We determined the critical policies by considering
accounting principles that involve the most complex or subjective decisions or
assessments. We have identified our most critical accounting policies to be
those related to our investment in operating lease assets, income taxes and the
valuation of assets and liabilities in liquidation and the reserve for
estimated costs during the period of liquidation.

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Investment in Operating Lease Assets

The Company performs a quarterly impairment analysis of its automobile
operating lease portfolio in accordance with Statement of Financial Accounting
Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets, which we adopted effective January 1, 2002. Statement No. 144, which
supersedes Statement No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of, retains the fundamental
provisions of Statement No. 121 related to the recognition and measurement of
the impairment of long-lived assets to be held and used and the measurement of
long-lived assets to be disposed of by sale. There was no financial statement
impact upon adoption of Statement No. 144. A lease is considered impaired if
its gross future undiscounted cash flows are less than the net book value of
the lease. The net book value of the lease is defined as the original
capitalized cost of the automobile, including initial direct capitalized costs,
less the cumulative amount of depreciation recorded against the automobile and
the cumulative amount of amortization of the initial direct capitalized costs
recorded since the inception of the lease and less any impairment charges
recorded-to-date on that lease.

In determining gross future undiscounted cash flows, the Company contracts
with Automotive Lease Guide, commonly referred to as ALG, to provide estimates
of the residual value of the underlying automobiles at the end of their lease
terms assuming that the vehicles are in average condition. The Company then
estimates the probability that i.) the automobiles will be purchased by the
lessee prior to the end of the lease term, ii.) the automobile will be
purchased by the lessee at the end of the lease term, either at a discount or
at the full contractual residual amount, or iii.) the automobile will be
returned to the lessor at the end of the lease term. These probabilities are
estimated using a number of factors, including the Companys experience-to-date
and industry experience.

Using the projected ALG residual values, the Companys experience-to-date
relative to the projected ALG residual values (for example, for vehicle classes
where actual amounts realized were less than what ALG had projected, the
Company reduced the projected ALG residual values to equal the Companys
experience-to-date), and the probabilities of each of the three disposition
scenarios discussed above occurring, the Company determines a
probability-weighted gross future undiscounted cash flow for each automobile
lease. For those leases where the gross future undiscounted cash flows are
less than net book value, the lease is considered impaired.

For those leases considered impaired, the Company then estimates the fair
value of the lease. The fair value is determined by calculating the present
value of the future estimated cash flows, again assuming the probabilities of
each of the three disposition scenarios. The present value is calculated using
current market rates which are similar to the original contract lease rate.
For those impaired leases where the estimated fair value is less than the net
book value, an impairment charge is recorded for the difference. Since the
inception of the lease portfolio in June 1998, the Company has recorded
additional monthly depreciation charges, also included in leasing expense, to
provide for losses that may be incurred at the end of the lease terms.

Income Taxes

As a result of the Plan, a valuation allowance of $21.5 million was
established as of December 31, 2002 based on the realizability of deferred tax
assets in years after 2002. The computation of deferred tax assets, net of the
valuation allowance, is based on the projection of future operating income,
primarily from our auto finance company, available to absorb existing deferred
tax benefits. The amount of the valuation allowance remained unchanged at
March 31, 2003.

Liquidation Basis Accounting

We adopted liquidation basis accounting effective September 30, 2002 in
accordance with GAAP. Accordingly, assets have been valued at their estimated
net realizable values and liabilities include accruals for estimated costs
associated with carrying out the Plan. In accordance with liquidation basis
accounting, our stockholders equity was transferred to net assets in
liquidation.

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Under liquidation basis accounting, we have estimated future liabilities
associated with carrying out the Plan. We have not reflected any future
revenues and expenses of an operating nature, as such revenues and expenses
will be recognized when realized.

The reserve for estimated costs during the period of liquidation includes
accruals for severance payments and facility closures, investment banking and
other professional fees and estimated litigation expense. These expense
accruals are reviewed for adequacy on a quarterly basis. Changes to the
accruals are recorded as adjustments in liquidation basis in future periods.

Results of Operations

Under the liquidation basis of accounting, we are reporting the value of,
and the changes in, net assets available for distribution to stockholders (net
assets in liquidation) instead of results from continuing operations.
Accordingly, the Companys consolidated financial statements as of and for the
quarters ended March 31, 2003 and December 31, 2002 have been prepared under
the liquidation basis of accounting including the replacement of the
Consolidated Statement of Operations and Comprehensive Loss with the
Consolidated Statement of Changes in Net Assets in Liquidation. The Companys
consolidated financial statements presented for periods prior to September 30,
2002, (i.e., for the quarter ended March 31, 2002) are presented on a going
concern basis of accounting. The Company is providing, herein, (1)
Consolidated Statements of Net Assets (Liquidation Basis) as of March 31, 2003
and December 31, 2002, (2) Consolidated Statement of Changes in Net Assets in
Liquidation (Liquidation Basis) for the quarter ended March 31, 2003 and (3)
Consolidated Statement of Operations and Comprehensive Loss for the quarter
ended March 31, 2002 (Going Concern Basis).

Liquidation Basis

Changes in Net Assets in Liquidation  March 31, 2003 vs. December 31, 2002

Our net assets in liquidation at March 31, 2003 totaled $411.0 million, or
$6.41 in net assets in liquidation per outstanding shares as compared to
$410.1 million, or $6.43 in net assets in liquidation per
outstanding share at December 31, 2002. The first quarter increase in net
assets in liquidation was primarily due to net income from operations of $0.6
million and $2.6 million of proceeds from stock options and warrants exercised
during the quarter partially offset by $2.3 million of dividend payments on our
Capital Securities. The decrease in net assets in liquidation per outstanding
share was primarily due to an increase of 374,000 diluted common shares
outstanding resulting from exercises of stock options and warrants during the
quarter.

The net income from operations consisted of $1.4 million of pre-tax income
from operations and a tax benefit of $0.8 million partially offset by $1.6
million of net charges for additional liquidation valuation adjustments.

The additional liquidation valuation adjustments consisted primarily of
$4.1 million of additional mark-to-market writedowns on the auto lease
portfolio as the residual values on these autos declined on continued weakness
in used car values. This was partially offset by a $1.3 million gain
associated with the financing secured by our auto lease cash flows resulting
from favorable experience with the underlying cash flows and a $1.0 million
reduction of an accrual related to the settlement of litigation that was
negotiated during the quarter.

Leasing Expenses

Leasing expense represents expenses related to our auto leasing
activities. Because the leases are accounted for as operating leases, the
corresponding assets are capitalized and depreciated to their estimated
residual values over their lease terms. This depreciation expense is included
in leasing expenses, along with the amortization of capitalized initial direct
lease costs and impairment charges. Leasing expenses were $9.5 million for the
first quarter of 2003 as compared to $15.0 million for the first quarter of
2002. The decrease in leasing expenses was

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primarily due to lower
depreciation expense associated with the declining balance of our auto-related
operating lease portfolio. We ceased purchasing auto leases in June 2000.

At March 31, 2003, approximately 4,401 of the 10,374 vehicles in our
automobile lease portfolio, or 42%, were considered impaired under Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. However, this impairment is subject to a
number of significant assumptions that could change in the near term, and
adversely affect the valuation of the automobile lease portfolio. These
assumptions were previously described under Critical Accounting Policies,
Investment in Operating Lease Assets. Two of these assumptions - including the
residual values of individual leases that are projected by ALG and the relative
probabilities of the three alternatives for disposing of vehicles - are
particularly susceptible to changes in market conditions. As an illustration
of the sensitivity of these assumptions - if the market values of the
individual vehicles declined by $250, an additional 14% of the leases would be
deemed to be impaired and, therefore, potentially subject to an impairment
charge. Furthermore, if the percentage of vehicles returned to the Company
were greater than was projected at year-end, the impairment charge could
increase because the value realized under this scenario is normally less than
if the lessee purchased the automobile prior to the end of the lease term.

Income Taxes

We recorded a tax benefit of $0.8 million for the three months ended March
31, 2003. The effective tax rate used in computing the tax benefit for the
first three months of 2003 was 32.1%. This expected 2003 effective tax rate is
lower than the federal statutory rate due primarily to state income and
franchise taxes.

For the first quarter of 2002, we recorded a tax benefit of $1.9 million.
This tax benefit included tax expense of $2.1 million on pre-tax earnings of
$7.6 million offset by a tax benefit of $4.0 million related to the impact of a
change in U.S. Treasury regulations in 2002 with respect to a loss on the sale
of a subsidiary in 2001. The effective tax rate used in computing the $2.1
million of tax expense for the first quarter of 2002 was 41.5%.

Going Concern Basis

Results of Operations  Three Months Ended March 31, 2002

Our net loss for the first quarter of 2002 was $12.0 million, or $0.19 per
diluted share. First quarter results were restated to include $18.9 million in
goodwill impairment charges, net of taxes, that was recorded during the third
quarter of 2002 but was recognized as the cumulative effect of a change in
accounting principle as of January 1, 2002. First quarter earnings before the
cumulative effect of a change in accounting principle were $6.9 million, or
$0.11 per diluted shares.

Net Interest Income and Net Interest Margin

Our net interest income and net interest margin for the first quarter of
2002 were $33.1 million and 4.16%, respectively. Our interest-earning assets,
excluding our auto-related operating lease assets, totaled $3.2 billion at
March 31, 2002. The average interest-earning assets, excluding our
auto-related operating lease assets, for the three months ended March 31, 2002
was $3.2 billion.

Average Balance Sheet

The following table illustrates average yields on our interest-earning
assets and average rates on our interest-bearing liabilities for the
three-month period ended March 31, 2002. These average yields and rates were
calculated by dividing interest income by the average balance of
interest-earning assets and by dividing interest expense by the average balance
of interest-bearing liabilities, for the period indicated. Average balances of
interest-earning assets and interest-bearing liabilities were calculated by
averaging the relevant month-end amounts for the period.

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AVERAGE BALANCES, YIELDS AND RATES

|                                           |                                |   |                            |           |          |   |            |        |         |  |      |      |  
|------------------------------------------ | ------------------------------ | - | -------------------------- | --------- | -------- | - | ---------- | ------ | ------- |  | ---- | ---- | -
|                                           |                                |   | For the Three Months Ended
|                                           |                                |   | March 31, 2002            
|                                           |                                |   |                           
|                                           |                                |   | Average                    |           |          |   |            |        | Average
|                                           |                                |   | Balance                    |           | Interest |   | Yield/Rate
|                                           |                                |   |                            |           |          |   |           
|                                           |                                |   | (Dollars in thousands)    
|Assets                                     |                                |   |                            |           |          |   |            |        |         |  |      |     
|Interest-earning assets:                   |                                |   |                            |           |          |   |            |        |         |  |      |     
|                                           | Loans and leases               |   | $                          | 2,424,823 |          |   | $          | 46,471 |         |  |      | 7.72 | %
|                                           | Mortgage-backed securities (1) |   |                            | 283,853   |          |   |            | 3,551  |         |  |      | 5.00 |  
|                                           | Investments (1)                |   |                            | 487,026   |          |   |            | 3,671  |         |  |      | 3.03 |  
|                                           |                                |   |                            |           |          |   |            |        |         |  |      |     
|Total interest-earning assets              |                                |   | 3,195,702                  |           |          |   | 53,693     |        |         |  | 6.76 | %   
|                                           |                                |   |                            |           |          |   |            |        |         |  |      |     
|Other assets                               |                                |   | 678,503                    |           |          |   |            |        |         |  |      |     
|                                           |                                |   |                            |           |          |   |            |        |         |  |      |     
|Total assets                               |                                | $ | 3,874,205                  |           |          |   |            |        |         |  |      |     
|                                           |                                |   |                            |           |          |   |            |        |         |  |      |     
|Liabilities and Stockholders Equity       |                                |   |                            |           |          |   |            |        |         |  |      |     
|Interest-bearing liabilities:              |                                |   |                            |           |          |   |            |        |         |  |      |     
|                                           | Deposits                       |   | $                          | 3,127,324 |          |   | $          | 15,002 |         |  |      | 1.95 | %
|                                           | Borrowings (2)                 |   |                            | 279,422   |          |   |            | 5,547  |         |  |      | 7.98 |  
|                                           |                                |   |                            |           |          |   |            |        |         |  |      |     
|Total interest-bearing liabilities         |                                |   | 3,406,746                  |           |          |   | 20,549     |        |         |  | 2.44 | %   
|                                           |                                |   |                            |           |          |   |            |        |         |  |      |     
|Other liabilities                          |                                |   | 128,014                    |           |          |   |            |        |         |  |      |     
|                                           |                                |   |                            |           |          |   |            |        |         |  |      |     
|Total liabilities                          |                                |   | 3,534,760                  |           |          |   |            |        |         |  |      |     
|Stockholders equity                       |                                |   | 339,445                    |           |          |   |            |        |         |  |      |     
|                                           |                                |   |                            |           |          |   |            |        |         |  |      |     
|Total liabilities and stockholders equity |                                | $ | 3,874,205                  |           |          |   |            |        |         |  |      |     
|                                           |                                |   |                            |           |          |   |            |        |         |  |      |     
|Net interest income/net interest spread    |                                |   |                            |           |          | $ | 33,144     |        |         |  | 4.32 | %   
|                                           |                                |   |                            |           |          |   |            |        |         |  |      |     
|Net interest-bearing liabilities           |                                | $ | (211,044                   | )         |          |   |            |        |         |  |      |     
|                                           |                                |   |                            |           |          |   |            |        |         |  |      |     
|Net interest margin (3)                    |                                |   |                            |           |          |   |            |        |         |  | 4.16 | %   
|                                           |                                |   |                            |           |          |   |            |        |         |  |      |     



|(1) |  | Average balances and yields for securities and other
investments classified as available-for-sale are based on
historical amortized cost.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Interest expense for borrowings excludes expenses related to
our Capital Securities.                                                     
|   
|(3) |  | Annualized net interest income divided by average
interest-earning assets.                                                               

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Interest Income

Interest income was $53.7 million for the first quarter of 2002. The
average yield on interest-earning assets was 6.76% for the first quarter of
2002. The following table illustrates interest income, by type of
interest-earning assets, for the quarter ended March 31, 2002:

|                         |                            |   |                            |           |          |   |                        |        |  |  |      |      |  
|------------------------ | -------------------------- | - | -------------------------- | --------- | -------- | - | ---------------------- | ------ |  |  | ---- | ---- | -
|                         |                            |   | For the Three Months Ended
|                         |                            |   | March 31, 2002            
|                         |                            |   |                           
|                         |                            |   | Average                    |           | Interest |   | Average               
|                         |                            |   | Balance                    |           | Income   |   | Yield                 
|                         |                            |   |                            |           |          |   |                       
|                         |                            |   |                            |           |          |   | (Dollars
in thousands) |        |  |  |      |     
|Interest-earning assets: |                            |   |                            |           |          |   |                        |        |  |  |      |     
|                         | Loans                      |   | $                          | 2,424,823 |          |   | $                      | 46,471 |  |  |      | 7.72 | %
|                         | Mortgage-backed securities |   |                            | 283,853   |          |   |                        | 3,551  |  |  |      | 5.00 |  
|                         | Investments                |   |                            | 487,026   |          |   |                        | 3,671  |  |  |      | 3.03 |  
|                         |                            |   |                            |           |          |   |                        |        |  |  |      |     
|Total                    |                            | $ | 3,195,702                  |           |          | $ | 53,693                 |        |  |  | 6.76 | %   
|                         |                            |   |                            |           |          |   |                        |        |  |  |      |     

Interest Expense

Deposits

Interest expense on our deposits was $15.0 million for the first quarter
of 2002. The average cost of deposits was 1.95% for the first quarter of 2002.
The following table summarizes our deposit costs by type for the period ended
March 31, 2002:

|                               |  |                        |           |         |  |  |      |  
|------------------------------ |  | ---------------------- | --------- | ------- |  |  | ---- | -
|                               |  | For the Three Months  
|                               |  | Ended March 31, 2002  
|                               |  |                       
|                               |  | Average                |           | Average
|                               |  | Balance                |           | Rate   
|                               |  |                        |           |        
|                               |  | (Dollars in thousands)
|Savings                        |  | $                      | 161,722   |         |  |  | 0.40 | %
|Money Market                   |  |                        | 1,106,950 |         |  |  | 1.77 |  
|Checking accounts              |  |                        | 690,949   |         |  |  | 0.79 |  
|                               |  |                        |           |         |  |  |      |  
|Total transaction accounts     |  |                        | 1,959,621 |         |  |  | 1.31 |  
|Retail certificates of deposit |  |                        | 1,167,703 |         |  |  | 3.01 |  
|                               |  |                        |           |         |  |  |      |  
|Total deposits                 |  | $                      | 3,127,324 |         |  |  | 1.95 | %
|                               |  |                        |           |         |  |  |      |  

Borrowings

Interest expense on our borrowings was $5.5 million for the first quarter
of 2002. The average cost of borrowings was 7.98% for the first quarter of
2002. In accordance with GAAP, these amounts exclude the expense associated
with our Capital Securities.

Provision for Losses on Loans and Leases

The provision for losses on loans and leases for the first quarter of 2002
was $4.9 million. Our provision reflects the impact of the $2.6 million
recovery on the sale of charged-off high loan-to-value home equity loans during
the fourth quarter of 2001.

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Noninterest Income and Noninterest Expense

Noninterest income totaled $26.2 million for the first quarter of 2002.

General and Administrative Expenses

General and administrative expenses for the first quarter of 2002 were
$30.8 million. The following table illustrates the ratio of general and
administrative expenses to average total assets, including auto-related
securitized assets, on an annualized basis for the period indicated:

|                                                                                                                  |  |                |           |  
|----------------------------------------------------------------------------------------------------------------- |  | -------------- | --------- | -
|                                                                                                                  |  | For the Three 
|                                                                                                                  |  | Months Ended  
|                                                                                                                  |  |               
|                                                                                                                  |  | March 31, 2002
|                                                                                                                  |  |               
|                                                                                                                  |  | (Dollars in   
|                                                                                                                  |  | thousands)    
|General and administrative expenses                                                                               |  | $              | 30,792    |  
|Average total assets, including auto-related
securitized assets                                                   |  | $              | 4,064,974 |  
|                                                                                                                  |  |                |           |  
|Annualized general and administrative expenses to
average total assets, including auto-related
securitized assets |  |                | 3.03      | %
|                                                                                                                  |  |                |           |  

Another measure that management uses to monitor our level of general and
administrative expenses is the efficiency ratio. The efficiency ratio is
calculated by dividing the amount of general and administrative expenses by
operating revenues, defined as net interest income, as adjusted to include
expenses associated with our Capital Securities, the excess of our
leasing-related rental income over leasing-related depreciation expense, and
other noninterest income. This ratio reflects the level of general and
administrative expenses required to generate $1 of operating revenue.

The following table illustrates the efficiency ratio for the periods
indicated:

|                                    |  |                |        |  
|----------------------------------- |  | -------------- | ------ | -
|                                    |  | For the Three 
|                                    |  | Months Ended  
|                                    |  |               
|                                    |  | March 31, 2002
|                                    |  |               
|                                    |  | (Dollars in   
|                                    |  | thousands)    
|General and administrative
expenses |  | $              | 30,792 |  
|Operating revenues, as defined      |  | $              | 44,038 |  
|                                    |  |                |        |  
|Efficiency ratio                    |  |                | 69.9   | %
|                                    |  |                |        |  

Leasing Expenses

Leasing expense is attributable to our auto leasing activities. Because
the leases are accounted for as operating leases, the corresponding assets are
capitalized and depreciated to their estimated residual values over their lease
terms. This depreciation is included in leasing expenses, along with the
amortization of capitalized initial direct lease costs and impairment charges.
Leasing expenses were $15.0 million for the first quarter of 2002. We ceased
purchasing auto leases in June 2000.

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##### Table of Contents



Real Estate Owned

The net expense related to our real estate owned was $0.5 million for the
first quarter of 2002. Additionally, we recorded $0.2 million of provision for
losses on real estate owned during the quarter.

Amortization of Intangible Assets

As of January 1, 2002, we adopted Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets, which requires that
certain goodwill and intangible assets with indefinite useful lives no longer
be amortized but instead be tested for impairment at least annually.
Amortization expense related to intangible assets was $0.3 million for the
first quarter of 2002. We would have recorded $2.8 million of amortization
expense for the first quarter of 2002 under the prior accounting rule.

We completed the first and second steps of the transitional goodwill
impairment test as of June 30, 2002 and September 30, 2002, respectively. We
recorded $18.9 million in impairment charges, net of taxes, for goodwill not
expected to be realized upon the disposition of our Asset-based lending,
Factored Receivables and Commercial leasing businesses. As required by the
transitional provisions of Statement of Financial Accounting Standards No. 142,
the impairment loss is measured and recorded as of the date of adoption and
recognized as the cumulative effect of a change in accounting principle as of
January 1, 2002.

Income Taxes

We recorded a tax benefit of $1.9 million for the first quarter of 2002.
This tax benefit included tax expense of $2.1 million on pre-tax earnings of
$7.6 million offset by a tax benefit of $4.0 million related to the loss
incurred on the 2001 stock sale by Bay View Bank of the legal entity BVFMAC.
The $4.0 million tax benefit was a result of a change in federal tax law that
occurred in the first quarter of 2002 allowing us to deduct a portion of the
loss associated with the sale of BVFMAC. The effective tax rate used in
computing the $2.1 million of tax expense for the first quarter of 2002 was
41.5%. This effective tax rate differs from the statutory rate primarily due
to the impact of state taxes.

Capital Securities

On December 21, 1998, we issued $90 million of Capital Securities through
Bay View Capital I, a business trust formed to issue the securities. The
Capital Securities, which were sold in an underwritten public offering, accrue
quarterly cumulative distributions at an annual rate of 9.76% of the
liquidation value of $25 per share. Dividend expense on the Capital Securities
was $2.6 million for the first quarter of 2002.

In September of 2000, we entered into an agreement with the FRB which
requires that we obtain their approval prior to disbursing any dividends
associated with our Capital Securities. Beginning with the third quarter of
2000, we began deferring distributions quarterly in accordance with the terms
of the Capital Securities. During this period, deferred distributions were
accrued at an annual rate of 9.76% of the liquidation amount of $25 per Capital
Security, plus accumulated additional distributions at the same rate,
compounded quarterly, on any unpaid distributions. Deferred distributions and
interest, which were fully accrued, were $16.6 million at March 31, 2002.

26



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##### Table of Contents



Balance Sheet Analysis

Our total assets were $595.2 million at March 31, 2003 as compared to
$875.5 million at December 31, 2002. The decrease in total assets was
primarily a result of the utilization of cash and cash equivalents to repay
maturing brokered CDs, loan sales and prepayments, and the continued runoff of
the auto lease portfolio.

Securities

The following table illustrates our securities portfolio as of the dates
indicated:

|                                           |                                     |   |                        |        |              |   |        |        | 
|------------------------------------------ | ----------------------------------- | - | ---------------------- | ------ | ------------ | - | ------ | ------ | 
|                                           |                                     |   | March 31,              |        | December 31,
|                                           |                                     |   | 2003                   |        | 2002        
|                                           |                                     |   |                        |        |             
|                                           |                                     |   | (Dollars in thousands)
|Available-for-sale                         |                                     |   |                        |        |              |   |        |       
|Asset-backed securities                    |                                     | $ | 747                    |        |              | $ | 6,267  |       
|Retained interests in auto securitizations |                                     |   | 32,413                 |        |              |   | 31,870 |       
|                                           |                                     |   |                        |        |              |   |        |       
|Total investment securities                |                                     |   | 33,160                 |        |              |   | 38,137 |       
|                                           |                                     |   |                        |        |              |   |        |       
|Mortgage-backed securities:                |                                     |   |                        |        |              |   |        |       
|                                           | Fannie Mae                          |   |                        | 15,546 |              |   |        | 18,096 | 
|                                           | Freddie Mac                         |   |                        | 11,843 |              |   |        | 13,335 | 
|                                           | Collateralized mortgage obligations |   |                        | 674    |              |   |        | 1,085  | 
|                                           |                                     |   |                        |        |              |   |        |       
|Total mortgage-backed securities           |                                     |   | 28,063                 |        |              |   | 32,516 |       
|                                           |                                     |   |                        |        |              |   |        |       
|Total securities available-for-sale        |                                     | $ | 61,223                 |        |              | $ | 70,653 |       
|                                           |                                     |   |                        |        |              |   |        |       

In accordance with liquidation basis accounting, our investment securities
are classified as available-for-sale and recorded at their net realizable
value. Adjustments to net realizable value, if any, are recorded on a
quarterly basis in earnings through the adjustment for liquidation basis.

We sold $2.7 million of asset-backed securities and $0.1 million of
mortgage-backed securities during the first quarter of 2003. Gross losses of
$33,000 were realized on the sales. There were no purchases of investment
securities during the first quarter of 2003.

Loans and Leases

The following table illustrates our loan and lease portfolio as of the
dates indicated:

|                                   |                |                                                                                 |         |                        |        |              |         |         |         | 
|---------------------------------- | -------------- | ------------------------------------------------------------------------------- | ------- | ---------------------- | ------ | ------------ | ------- | ------- | ------- | 
|                                   |                |                                                                                 |         | March 31,              |        | December 31,
|                                   |                |                                                                                 |         | 2003                   |        | 2002        
|                                   |                |                                                                                 |         |                        |        |             
|                                   |                |                                                                                 |         | (Dollars in thousands)
|Loans and leases receivable:       |                |                                                                                 |         |                        |        |              |         |        
|                                   | Auto loans (1) |                                                                                 | $       | 157,701                |        |              | $       | 142,357 |        
|                                   | Other loans:   |                                                                                 |         |                        |        |              |         |         |        
|                                   |                | Multi-family mortgage loans                                                     |         |                        | 1,417  |              |         |         | 2,443   | 
|                                   |                | Commercial mortgage loans                                                       |         |                        | 3,061  |              |         |         | 7,712   | 
|                                   |                | Franchise loans                                                                 |         |                        | 37,849 |              |         |         | 46,928  | 
|                                   |                | Asset-based loans, syndicated loans, factored receivables
and commercial leases |         |                        | 24,261 |              |         |         | 104,362 | 
|                                   |                | Business loans                                                                  |         |                        | 7,206  |              |         |         | 7,212   | 
|                                   |                |                                                                                 |         |                        |        |              |         |        
|                                   |                | Total other loans                                                               |         |                        | 73,794 |              |         |         | 168,657 | 
|                                   |                |                                                                                 |         |                        |        |              |         |        
|Loans and leases receivable (2)(3) |                | $                                                                               | 231,495 |                        |        | $            | 311,014 |        
|                                   |                |                                                                                 |         |                        |        |              |         |        

|    |  |                                                                                                                                                                                 
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | Amounts exclude auto-related operating lease assets reported separately
from loans and leases totaling $154.0 million at
March 31, 2003 and $191.0 million at December 31, 2002.
|    |  |                                                                                                                                                                                 
|(2) |  | All loans and leases are classified as held-for-sale at March 31, 2003 and
December 31, 2002.                                                                                   
|    |  |                                                                                                                                                                                 
|(3) |  | Includes mark-to-market valuation reserves of $24.1 million and $35.1
million at March 31, 2003 and December 31, 2002,
respectively.                                            

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##### Table of Contents



The decrease in loans and leases receivable at March 31, 2003, as compared
to December 31, 2002 was primarily due to the impact of loan sales and
repayments during the first quarter of 2003 pursuant to the Plan. During the
quarter, we completed the sale of approximately $115.4 million of loans and
received an additional $35.8 million in loan repayments. These loan sales and
repayments, totaling $151.2 million, were comprised of $74.0 million of
asset-based loans, $57.8 million of auto loans, $7.0 million of franchise
loans, $5.1 million of syndicated loans, $4.2 million of commercial real estate
loans, $2.4 million of multi-family mortgage loans and $0.7 million of factored
receivables and commercial leases. At March 31, 2003, our remaining investment
in loans to be liquidated was reduced to approximately $74 million from $169
million at December 31, 2002 and $664 million at September 30, 2002. In
connection with the Plan, our loans and leases receivable is classified as
held-for-sale at March 31, 2003.

We continue to originate auto loans through Bay View Acceptance
Corporation (BVAC), our auto finance company, but ceased all other loan
production activities during the fourth quarter of 2002. BVAC originated $71.6
million of auto loans for the quarter compared to $69.4 million for the fourth
quarter of 2002. First quarter auto loan production consisted of 2,533 loan
fundings representing the $71.6 million. Weighted average coupon interest
rates originated during the quarter were 8.70%; FICO credit scores originated
in the quarter averaged 728. At March 31, 2003, BVAC was servicing 35,200
loans representing $601 million.

The following table illustrates our loan and lease originations for the
periods indicated:

|                             |                    |                                                                                 |   |                            |        |           |   |         |         | 
|---------------------------- | ------------------ | ------------------------------------------------------------------------------- | - | -------------------------- | ------ | --------- | - | ------- | ------- | 
|                             |                    |                                                                                 |   | For the Three Months Ended
|                             |                    |                                                                                 |   |                           
|                             |                    |                                                                                 |   | March 31,                  |        | March 31,
|                             |                    |                                                                                 |   | 2003                       |        | 2002     
|                             |                    |                                                                                 |   |                            |        |          
|                             |                    |                                                                                 |   | (Dollars in thousands)    
|Loan and lease originations: |                    |                                                                                 |   |                            |        |           |   |        
|                             |                    | Auto loans                                                                      |   | $                          | 71,635 |           |   | $       | 82,402  | 
|                             |                    | Home equity loans and lines of credit                                           |   |                            |       |           |   |         | 23,878  | 
|                             |                    | Multi-family and commercial mortgage loans                                      |   |                            |       |           |   |         | 113,179 | 
|                             |                    | Asset-based loans, syndicated loans, factored receivables and
commercial leases |   |                            |       |           |   |         | 8,252   | 
|                             |                    | Business loans                                                                  |   |                            |       |           |   |         | 6,831   | 
|                             |                    |                                                                                 |   |                            |        |           |   |         |         | 
|                             | Total originations |                                                                                 | $ | 71,635                     |        |           | $ | 234,542 |        
|                             |                    |                                                                                 |   |                            |        |           |   |        

Credit Quality

We define nonperforming assets as nonaccrual loans and leases, real estate
owned, defaulted mortgage-backed securities and other repossessed assets. We
define nonaccrual loans and leases as loans and leases 90 days or more
delinquent as to principal and interest payments (unless the principal and
interest are well secured and in the process of collection) and loans and
leases less than 90 days delinquent designated as nonperforming when we
determine that the full collection of principal and/or interest is doubtful.
We do not record interest on nonaccrual loans and leases.

The following table illustrates our nonperforming assets as of the dates
indicated:

|                            |  |                        |        |              |  |   |        | 
|--------------------------- |  | ---------------------- | ------ | ------------ |  | - | ------ | 
|                            |  | March 31,              |        | December 31,
|                            |  | 2003                   |        | 2002        
|                            |  |                        |        |             
|                            |  | (Dollars in thousands)
|Nonaccrual loans and leases |  | $                      | 18,695 |              |  | $ | 24,683 | 
|Real estate owned           |  |                        | 3,104  |              |  |   | 2,402  | 
|Other repossessed assets    |  |                        | 209    |              |  |   | 183    | 
|                            |  |                        |        |              |  |   |        | 
|Nonperforming assets        |  | $                      | 22,008 |              |  | $ | 27,268 | 
|                            |  |                        |        |              |  |   |        | 

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The decrease in total nonperforming assets at March 31, 2003, as compared
to December 31, 2002, was primarily due to decreases in nonaccruing franchise
loans and syndicated loans, resulting from loan sales and
prepayments. Our nonperforming assets include mark-to-market valuation
reserves of $9.9 million and $16.4 million at March 31, 2003 and December 31,
2002, respectively. Nonperforming assets excluding franchise-related assets
were $4.6 million at March 31, 2003, as compared to $6.3 million at December
31, 2002, while non-franchise nonaccrual loans and leases were $4.1 million at
March 31, 2003 as compared to $5.9 million at December 31, 2002.

The following table illustrates, by loans and leases category,
nonperforming assets and nonperforming assets as a percentage of consolidated
total assets:

|                  |                                                                                 |   |                                              |        |                   |  |                        |      |   |   |        |        |  |  |      |      |  
|----------------- | ------------------------------------------------------------------------------- | - | -------------------------------------------- | ------ | ----------------- |  | ---------------------- | ---- | - | - | ------ | ------ |  |  | ---- | ---- | -
|                  |                                                                                 |   | Nonperforming Assets                        
|                  |                                                                                 |   | as a Percentage of Consolidated Total Assets
|                  |                                                                                 |   |                                             
|                  |                                                                                 |   | March 31, 2003                               |        | December 31, 2002
|                  |                                                                                 |   |                                              |        |                  
|                  |                                                                                 |   |                                              |        |                   |  | (Dollars in thousands) |      |   |   |       
|Loans and leases: |                                                                                 |   |                                              |        |                   |  |                        |      |   |   |        |        |  |  |      |     
|                  | Auto loans                                                                      |   | $                                            | 248    |                   |  |                        | 0.04 | % |   | $      | 284    |  |  |      | 0.03 | %
|                  | Multi-family mortgage loans                                                     |   |                                              | 9      |                   |  |                        | 0.00 |   |   |        | 84     |  |  |      | 0.01 |  
|                  | Commercial real estate loans                                                    |   |                                              | 936    |                   |  |                        | 0.16 |   |   |        | 948    |  |  |      | 0.11 |  
|                  | Franchise loans                                                                 |   |                                              | 17,451 |                   |  |                        | 2.93 |   |   |        | 21,005 |  |  |      | 2.40 |  
|                  | Asset-based loans,
syndicated loans, factored
receivables
and commercial leases |   |                                              | 3,261  |                   |  |                        | 0.55 |   |   |        | 4,850  |  |  |      | 0.55 |  
|                  | Business loans                                                                  |   |                                              | 103    |                   |  |                        | 0.02 |   |   |        | 97     |  |  |      | 0.01 |  
|                  |                                                                                 |   |                                              |        |                   |  |                        |      |   |   |        |        |  |  |      |     
|Total             |                                                                                 | $ | 22,008                                       |        |                   |  | 3.70                   | %    |   | $ | 27,268 |        |  |  | 3.11 | %   
|                  |                                                                                 |   |                                              |        |                   |  |                        |      |   |   |        |        |  |  |      |     

Total loans and leases delinquent 60 days or more at March 31, 2003 were
$8.5 million as compared to $17.8 million at December 31, 2002. Delinquent
franchise related loans were $6.4 million at March 31, 2003 as compared to
$15.5 million at December 31, 2002. Total loans and leases delinquent 60 days
or more as a percentage of loans and leases receivable was 3.68% at March 31,
2003 as compared to 5.71% at December 31, 2002.

Deposits

The following table illustrates deposits as of the dates indicated:

|                                 |  |                |   |                   |  |                        |   |       |  |   |         |  |  |  |      |  
|-------------------------------- |  | -------------- | - | ----------------- |  | ---------------------- | - | ----- |  | - | ------- |  |  |  | ---- | -
|                                 |  | March 31, 2003 |   | December 31, 2002
|                                 |  |                |   |                  
|                                 |  | Amount         |   | Rates             |  | Amount                 |   | Rates
|                                 |  |                |   |                   |  |                        |   |      
|                                 |  |                |   |                   |  | (Dollars in thousands) |   |       |  |  
|Brokered certificates of deposit |  | $              |  |                   |  |                        |  | %     |  | $ | 224,189 |  |  |  | 2.35 | %
|                                 |  |                |   |                   |  |                        |   |       |  |   |         |  |  |  |      |  
|Total                            |  | $              |  |                   |  |                        |  | %     |  | $ | 224,189 |  |  |  | 2.35 | %
|                                 |  |                |   |                   |  |                        |   |       |  |   |         |  |  |  |      |  

We repaid the $224.2 million of brokered CDs which had been outstanding
at December 31, 2002 and matured during the quarter.

Borrowings

At March 31, 2003, our remaining borrowings totaled $46.3 million and
consisted solely of the financing secured by our auto lease contractual cash
flows.

Capital Securities

As announced in 2002, the holders of the Capital Securities approved an
early redemption of the Capital Securities at the option of individual security
holders. We originally intended to complete this early redemption offer during
the first quarter of 2003. However, to date, we have received limited
expressions of interest in the
29Table of Contents

optional redemption from the holders of the
Capital Securities. The optional redemption offer will be reconsidered at the
end of the second quarter.

Liquidity

The objective of our liquidity management program is to ensure that funds
are available in a timely manner to meet the loan demand of our auto finance
company, BVAC, and to service other liabilities as they come due, without
causing an undue amount of cost or risk, and without causing a disruption to
normal operating conditions. Liquid assets, as defined by us, include cash and
cash equivalents in excess of the minimum levels necessary to carry out normal
business operations, federal funds sold, commercial paper and other short-term
investments.

Prior to the assumption of our retail deposits by U.S. Bank on November 1,
2002, our retail deposits and ability to borrow from the Federal Home Loan Bank
of San Francisco had been our principal source of liquidity. With our
stockholders authorization of the Plan and the completion of the U.S. Bank
transaction, our sources of liquidity have been limited. Since the U.S. Bank
transaction, we have relied upon the proceeds from our liquidation and the
disposition of our assets to fund the loan demand of BVAC; repay maturing
brokered certificates of deposit and other liabilities; and to meet other
working capital needs.

On September 6, 2000, the Bank entered into an agreement with the OCC, in
which the Bank may not declare or distribute dividends without the prior
consent of the Office of the Comptroller of the Currency. On September 29,
2000, the Company entered into an agreement with the FRB of San Francisco in
which the Company is required to obtain the prior consent of the FRB of San
Francisco in order to pay common stock dividends and disburse distributions
associated with our Capital Securities.

On December 31, 2002, following approval by the FRB of San Francisco, we
paid cumulative deferred distributions, interest on the deferred distributions
and the current quarterly distribution on our Capital Securities. We continue
to be required to obtain approval from the FRB of San Francisco for future
quarterly distributions until such time as the agreement is terminated.

At March 31, 2003, we had cash and cash equivalents of $80.9 million. At
this same date, we had $184 million of obligations for borrowings, the Capital
Securities, and other liabilities. The funding to repay these obligations will
be generated from proceeds from additional loan repayments, asset dispositions
and an anticipated auto loan securitization during the second quarter.
Additionally, we are in the process of negotiating a revolving line of credit
facility to finance BVACs current portfolio of auto loans and its future
originations of auto loans. It is anticipated that this credit facility will
be in place by the latter part of the second quarter. BVAC intends to
periodically securitize and sell its production of auto loans in order to repay
the line of credit. There can be no assurances that the Company will be
successful in obtaining this financing.

Capital Resources

Management seeks to maintain adequate capital to support anticipated
credit risks and to ensure that Bay View Capital Corporation and Bay View Bank
are in compliance with all regulatory capital guidelines.

With our adoption of liquidation basis accounting effective September 30,
2002, our stockholders equity was transferred to net assets in liquidation.
Our net assets in liquidation totaled $411.0 million at March 31, 2003 or $6.41
in net assets in liquidation per outstanding share based on 64,120,863 diluted
common shares in liquidation. At December 31, 2002, our net assets in
liquidation totaled $410.1 million, or $6.43 in net assets in liquidation per
outstanding share at December 31, 2002 based on 63,747,157 diluted common
shares in liquidation.

Bay View Bank is subject to various regulatory capital guidelines
administered by the OCC. Under these capital guidelines, the minimum total
risk-based capital ratio and Tier 1 risk-based capital ratio requirements are
8.00% and 4.00%, respectively, of risk-weighted assets and certain off-balance
sheet items. The minimum Tier 1 leverage ratio requirement is 4.00% of
quarterly average assets, as adjusted.

30



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##### Table of Contents



Additionally, the Federal Deposit Insurance Corporation Improvement Act of
1991 defines five capital tiers: well-capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized, depending upon the capital level of the institution. Each
federal banking agency, including the Office of the
Comptroller of the Currency, is required to implement prompt corrective
actions for undercapitalized institutions that it regulates.

Bay View Banks regulatory capital levels at March 31, 2003 exceeded the
requirements necessary to be considered well-capitalized as illustrated in the
following table:

|                  |  |                        |         |             |  |             |       |       |  |         |        |                  |  |  |      |   |  |   |        |  |  |  |       |  
|----------------- |  | ---------------------- | ------- | ----------- |  | ----------- | ----- | ----- |  | ------- | ------ | ---------------- |  |  | ---- | - |  | - | ------ |  |  |  | ----- | -
|                  |  |                        |         |             |  |             |       |       |  | Minimum |        | Well-Capitalized
|                  |  | Actual                 |         | Requirement |  | Requirement
|                  |  |                        |         |             |  |            
|                  |  | Amount                 |         | Ratio       |  | Amount      |       | Ratio |  | Amount  |        | Ratio           
|                  |  |                        |         |             |  |             |       |       |  |         |        |                 
|                  |  | (Dollars in thousands)
|Tier 1 leverage   |  | $                      | 487,110 |             |  |             | 69.49 | %     |  | $       | 28,041 |                  |  |  | 4.00 | % |  | $ | 35,051 |  |  |  | 5.00  | %
|Tier 1 risk-based |  | $                      | 487,110 |             |  |             | 99.80 | %     |  | $       | 19,524 |                  |  |  | 4.00 | % |  | $ | 29,286 |  |  |  | 6.00  | %
|Total risk-based  |  | $                      | 487,110 |             |  |             | 99.80 | %     |  | $       | 39,049 |                  |  |  | 8.00 | % |  | $ | 48,811 |  |  |  | 10.00 | %

Similarly, Bay View Capital Corporation is subject to various regulatory
capital guidelines administered by the Board of Governors of the Federal
Reserve. The capital guidelines provide definitions of regulatory capital
ratios and the methods of calculating capital and each ratio for bank holding
companies. The federal banking agencies require a minimum ratio of qualifying
total risk-based capital to risk-adjusted assets of 8% and a minimum ratio of
Tier 1 capital to risk-adjusted assets of 4%. In addition to the risk-based
guidelines, federal banking regulators require banking organizations to
maintain a minimum amount of Tier 1 capital to total average assets, referred
to as the leverage ratio. For a banking organization rated in the highest of
the five categories used by regulators to rate banking organizations, the
minimum leverage ratio of Tier 1 capital to total average assets is 3%. For
organizations not rated in the highest of the five categories, the regulations
advise an additional cushion of at least 100 basis points. In addition to
these uniform risk-based capital guidelines and leverage ratios that apply
across the industry, the regulators have the discretion to set individual
minimum capital requirements for specific institutions at rates significantly
above the minimum guidelines and ratios.

At March 31, 2003, Bay View Capital Corporations regulatory capital
levels exceeded the requirements necessary to be considered adequately
capitalized as illustrated in the following table:

|                  |  |                        |         |             |  |        |       |       |  |         |        |  |  |  |      |  
|----------------- |  | ---------------------- | ------- | ----------- |  | ------ | ----- | ----- |  | ------- | ------ |  |  |  | ---- | -
|                  |  |                        |         |             |  |        |       |       |  | Minimum
|                  |  | Actual                 |         | Requirement
|                  |  |                        |         |            
|                  |  | Amount                 |         | Ratio       |  | Amount |       | Ratio
|                  |  |                        |         |             |  |        |       |      
|                  |  | (Dollars in thousands)
|Tier 1 leverage   |  | $                      | 500,914 |             |  |        | 68.37 | %     |  | $       | 29,308 |  |  |  | 4.00 | %
|Tier 1 risk-based |  | $                      | 500,914 |             |  |        | 97.90 | %     |  | $       | 20,467 |  |  |  | 4.00 | %
|Total risk-based  |  | $                      | 500,914 |             |  |        | 97.90 | %     |  | $       | 40,934 |  |  |  | 8.00 | %

Share Repurchase Program

Our outstanding shares of common stock were 63,537,590 at March 31, 2003
and 62,947,396 at December 31, 2002. The outstanding shares in liquidation
(including potential dilutive common shares) used for computing net assets in
liquidation per outstanding share at March 31, 2003 and December 31, 2002 were
64,120,863 and 63,747,157 shares, respectively.

In August 1998, our Board of Directors authorized the repurchase of up to
$50 million in shares of our common stock. At March 31, 2003, we had
approximately $17.6 million in remaining authorization available for future
share repurchases. Pursuant to our agreement with the FRB of San Francisco, we
must obtain prior written approval before repurchasing shares.

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Recent Accounting Pronouncements

In November 2002, the FASB issued FASB Interpretation No. 45 (FIN 45),
Guarantors Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others. FIN 45 expands on the
accounting guidance of Statements No. 5, 57, and 107 and incorporates without
change the provisions of FASB Interpretation No. 34 which was superseded. FIN
45 elaborates on the existing disclosure requirements for most guarantees and
requires that guarantors recognize a liability for the fair value of guarantees
at inception. The disclosure requirements of this Interpretation are required
for financial statement periods ended after December 15, 2002. The initial
recognition and measurement provisions of FIN 45 are applied on a prospective
basis to guarantees issued or modified after December 31, 2002.
The adoption of the measurement provisions of FIN 45 does not have a
material impact on the Companys net assets in liquidation.

In January 2003, the FASB issued FIN 46, Consolidation of Variable Interest
Entities. The purpose of this interpretation is to provide guidance on how to
identify a variable interest entity (VIE) and determine when the assets,
liabilities, noncontrolling interests, and results of operations of a VIE need
to be included in a companys consolidated financial statements. A company
that holds variable interests in an entity will be required to consolidate that
entity if the companys interest in the VIE is such that the company will
absorb a majority of the VIEs expected losses and /or receive a majority of
the VIEs expected residual returns, if they occur. New disclosure
requirements are also prescribed by FIN 46. FIN 46 became effective upon its
issuance. As of March 31, 2003, the Company did not have any VIEs for which
this interpretation would be applicable.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Asset and Liability Management

The objective of our asset and
liability management has historically been to measure interest rate
and liquidity risks in order to manage the type and mix of our
interest-earning assets and interest-bearing liabilities within safe
and sound parametersthereby optimizing net interest income and
the market value of equity. To measure interest rate risk, we used
simulation analysis as well as asset and liability repricing or gap
analysis.

As a result of the decision to proceed
with the Plan, the Company and the Bank have been primarily engaged
in asset disposition activities. Since November 1, 2002, the
Bank has not operated any branches, accepted any deposits, nor
otherwise conducted traditional banking activities. With the
liquidation that has been accomplished through
March 31, 2003in which we have sold our retail banking
assets and repaid all depositsthe Bank substantively no longer
operates as a financial institution. By March 31, 2003,
approximately 69% of consolidated assets were funded by equity
capital.

BVAC, our auto finance company, is the
only significant subsidiary of the Company that is currently
conducting on-going operations. As a result of the liquidation, it is
now operating as an independent finance company rather than a
portfolio-lending unit of the Bank. BVAC is originating auto loans
for sale or securitization and anticipates completing such sales or
securitizations not less than semi-annually. Prior to sale or
securitization, we anticipate funding these loans through a
combination of a revolving line of credit facility and equity
capital, and hedging our market value risk in these loans between the
origination and sale or securitization dates.

The Company is proceeding with the
liquidation of all other assets and liabilities. With the exception of
our investment in operating lease assets, we anticipate that this
liquidation process will be substantially completed by the end of
2003. The operating lease assets are fixed rate auto leases, which
are funded by a combination of fixed rate debt and equity capital.
The liquidation of these assets will be completed by the end of the
third quarter of 2005.

For these reasons, management believes
that the Companys remaining sensitivity to interest rates has
been minimized. Accordingly, management no longer considers our
historical asset and liability management process to be a relevant
element of our current financial management process. Furthermore, the
Company no longer retains the capacity to actively manage the
composition of interest-earning assets and interest-bearing
liabilities, beyond the liquidation of existing assets and repayment
of existing liabilities, because of the limitations of the liquidation
process. Accordingly, our previous disclosures of interest rate
sensitivity, including the results of our simulation and gap
analyses, are no longer being provided.




Item 4. Controls and Procedures



| | (a) |  | Evaluation of disclosure controls and procedures. The Companys
principal executive officer and its principal financial officer, after
evaluating the effectiveness of the Companys disclosure controls and
procedures (as defined in Exchange Act Rules 12(a)  and
15(d)  14(c))
as of a date within 90 days of the filing of this quarterly report, have
concluded that, as of such date, the Companys disclosure controls and
procedures were adequate and effective to ensure that material
information relating to the Company and its consolidated subsidiaries
would be made known to them by others within those entities.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | Changes in internal controls. There have been no changes
in the Companys internal controls or in the other factors that could
significantly affect the Companys disclosure controls and procedures
subsequent to the date of their evaluation, nor were there any
significant deficiencies or material weaknesses in the Companys
internal controls. As a result, no corrective actions were required or
undertaken.                                                                                                                                                                                                               

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PART II. OTHER INFORMATION

|        |  |                                                                                                                                                                                                                                                                                                                                                                              
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 1. |  | Legal Proceedings                                                                                                                                                                                                                                                                                                                                                            
|        |  |                                                                                                                                                                                                                                                                                                                                                                              
|        |  | We are involved as plaintiff or defendant in various legal actions and
are occasionally exposed to unasserted claims arising in the normal
course of business. In the opinion of management, after consultation
with counsel, the resolution of these legal actions will not have a
material adverse effect on our consolidated financial condition or
results of operations.
|        |  |                                                                                                                                                                                                                                                                                                                                                                              
|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(i)    |  | None                                                                                                                                                                                                                                                                                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                                              
|b(i)    |  | The Registrant filed the following report on Form 8-K dated
January 31, 2003 during the three months ended March 31, 2003:                                                                                                                                                                                                                                                   
|        |  |                                                                                                                                                                                                                                                                                                                                                                              
|        |  | On January 31, 2003, the Registrant filed Exhibit 99.1 a copy of its
earnings release for the quarter ended December 31, 2002.                                                                                                                                                                                                                                               
|        |  |                                                                                                                                                                                                                                                                                                                                                                              
|b(ii)   |  | The Registrant filed the following report on Form 8-K dated February
24, 2003 during the three months ended September 30, 2002:                                                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                                                                                              
|        |  | The Board of Directors established April 24, 2003 as the date of the
Annual Meeting of Stockholders.                                                                                                                                                                                                                                                                         
|        |  |                                                                                                                                                                                                                                                                                                                                                                              
|b(iii)  |  | The Registrant filed the following report on Form 8-K dated March
25, 2003 during the three months ended March 31, 2003:                                                                                                                                                                                                                                                     
|        |  |                                                                                                                                                                                                                                                                                                                                                                              
|        |  | On March 25, 2003, the Registrant filed as Exhibit 99.1 a copy of the
Companys letter to stockholders from its Chairman and Chief Executive
Officer, which was included in the package sent to stockholders for
the Annual meeting on April 24, 2003.                                                                                                                       

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

|                   |  |                                         |  |                                                     
|------------------ |  | --------------------------------------- |  | ----------------------------------------------------
|                   |  | BAY VIEW CAPITAL CORPORATION
Registrant
|                   |  |                                         |  |                                                     
|DATE: May 15, 2003 |  | BY:                                     |  | /s/ John Okubo                                      
|                   |  |                                         |  |                                                     
|                   |  |                                         |  | John Okubo                                          
|                   |  |                                         |  | Executive Vice President and Chief Financial Officer
|                   |  |                                         |  | (Principal Financial and Accounting Officer)        

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OF BAY
VIEW CAPITAL CORPORATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

We certify that, to the best of our knowledge and belief, the Quarterly
Report on Form 10-Q of Bay View Capital Corporation for the period ending March
31, 2003:



|(1) |  | complies with the requirements of Section 13 (a) or 15 (d) of the
Securities Exchange Act of 1934; and                                                               
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | the information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Bay View
Capital Corporation.

|    |  |                                       |  |     |  |                                                     
|--- |  | ------------------------------------- |  | --- |  | ----------------------------------------------------
|BY: |  | /s/ Charles G. Cooper                 |  | BY: |  | /s/ John Okubo                                      
|    |  |                                       |  |     |  |                                                     
|    |  | Charles G. Cooper                     |  |     |  | John Okubo                                          
|    |  | President and Chief Executive Officer |  |     |  | Executive Vice
President
and Chief Financial Officer

DATE: May 15, 2003

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CERTIFICATIONS

I, Charles G. Cooper, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Bay View Capital
Corporation;

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this quarter
report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 15, 2003

| |                      
| | ---------------------
| | /s/ Charles G. Cooper
| |                      
| | Charles G. Cooper    
| | President and Chief  
| | Executive Officer    

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CERTIFICATIONS

I, John Okubo, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Bay View Capital
Corporation;

2.     Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3.     Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.     The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrants disclosure controls and
procedures as of a date within 90 days prior to the filing date of this quarter
report (the Evaluation Date); and

c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5.     The registrants other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent function):

a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record,
process, summarize and report financial data and have identified for the
registrants auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrants internal controls;
and

6.     The registrants other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.

Date: May 15, 2003

| |                             
| | ----------------------------
| | /s/ John Okubo              
| |                             
| | John Okubo                  
| | Executive Vice President and
| | Chief Financial Officer     

37