UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

For the transition period from                    to                    

BAY VIEW CAPITAL CORPORATION

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

Registrant’s telephone number, including area code (650) 312-7300

     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 þ No o

     Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes þ No o

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

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FORM 10-Q
INDEX

BAY VIEW CAPITAL CORPORATION

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Forward-Looking Statements

     This Form 10-Q Quarterly Report of Bay View Capital Corporation (the “Company,” “we,” “us,” or “our”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that describe our plans for our automobile finance company, Bay View Acceptance Corporation (“BVAC”), our strategy to maximize stockholder value through use of our net operating loss carryforwards and the continuing disposition of assets and satisfaction of liabilities we assumed upon the dissolution of Bay View Bank, N.A. (the “Bank”) effective September 30, 2003. These forward-looking statements are identified by use of terms and phrases such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will,” and similar terms and phrases, including references to assumptions. These forward-looking statements are necessarily based on assumptions as of the date of this Form 10-Q Quarterly Report and involve risks and uncertainties. Accordingly, our actual results from the ongoing operations of BVAC and the continuing disposition of assets and satisfaction of liabilities we assumed from the Bank may differ materially from those that we currently anticipate.

     A number of factors may affect our forward-looking statements regarding our ongoing operations in the future including the following:

	•	Our efforts to expand BVAC’s operations could be unsuccessful;
	•	Our ability to obtain and maintain financing to fund the ongoing operations of BVAC, including securitizing and selling automobile installment contracts in order to repay borrowings;
	•	Changes in general economic and business conditions;
	•	Interest rate fluctuations, including the results from our hedging activities;
	•	Our financial condition and liquidity, including our ability to generate future cash flows and earnings;
	•	Our degree of success in utilizing our net operating loss carryforwards;
	•	Competition;
	•	Our ability to control our operating expenses;
	•	The effect of new laws, regulations and court decisions affecting consumer finance transactions and net operating loss carryforwards;
	•	The condition of the market for the sale of new and used automobiles, including pricing options by automobile manufacturers;
	•	The level of chargeoffs on the contracts that BVAC purchases; and
	•	The outcome of pending litigation against us.

Cash Distributions

     On March 10, 2005, we announced that we would not make a first quarter cash distribution to stockholders. Our Board of Directors is evaluating whether an acquisition would better maximize stockholder value. Pending the conclusion of that analysis, our Board of Directors has decided to retain surplus cash for possible use in connection with a potential acquisition rather than distributing such surplus to stockholders. If we determine we will not seek an acquisition or if we are unable to locate a suitable acquisition over the next several months, our Board of Directors would then consider future cash distributions depending on a number of factors, including our financial condition and results of operations and other strategic alternatives.

     As a result of the foregoing factors, no stockholder should place undue reliance on any forward-looking statements. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements and all forward-looking statements speak only as of the date made.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Bay View Capital Corporation and Subsidiaries

Condensed Consolidated Statements of Financial Condition

See notes to condensed consolidated financial statements.

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Bay View Capital Corporation and Subsidiaries

See notes to condensed consolidated financial statements.

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Bay View Capital Corporation and Subsidiaries

See notes to condensed consolidated financial statements.

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Bay View Capital Corporation and Subsidiaries

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

See notes to condensed consolidated financial statements.

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Bay View Capital Corporation and Subsidiaries

Note 1. Summary of Significant Accounting Policies

Basis of Presentation

     Bay View Capital Corporation (the “Company,” “we,” “us,” or “our”) is a financial services company headquartered in San Mateo, California.

     The condensed consolidated financial statements include the accounts of the Company, a Delaware corporation, and its wholly owned subsidiaries: Bay View Acceptance Corporation (“BVAC”), a Nevada corporation, along with its subsidiaries, Bay View Receivables Corporation, a Delaware corporation and Bay View Transaction Corporation, a Delaware corporation; and the Company’s subsidiaries, Bay View Securitization Corporation, a Delaware corporation; FMAC Insurance Services, a Delaware corporation; FMAC 2000-A Holding Company, a California corporation; FMAC Franchise Receivables Corporation, a California 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 intercompany accounts and transactions have been eliminated.

     The interim period consolidated financial statements, including the notes thereto, are condensed and do not include all disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). These interim period financial statements should be read in conjunction with the Company’s consolidated financial statements that are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004. The information provided in these interim financial statements reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the Company’s financial condition as of March 31, 2005 and December 31, 2004, the results of its operations for the three-month periods ended March 31, 2005 and 2004, and its cash flows for the three-month periods ended March 31, 2005 and 2004. These adjustments are of a normal, recurring nature unless otherwise disclosed in this Quarterly Report on Form 10-Q (“Form 10-Q”). These interim financial statements have been prepared in accordance with the instructions to Form 10-Q.

     On June 30, 2004, the Company effected a 1-for-10 reverse stock split of the issued and outstanding shares of the Company’s common stock. Accordingly, all shares outstanding and per share amounts are presented on a post-reverse stock split basis for all periods reported. The Company’s issued common stock totaled 6,597,303 shares at March 31, 2005 and December 31, 2004.

Stock-based Employee Compensation

     The Company accounts for its stock-based awards to employees and directors using the intrinsic value method of accounting in accordance with Accounting Principles Board Opinion (“APB”) 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. There was no compensation expense recorded under APB 25 for the three-month periods ended March 31, 2005 and 2004. Had compensation expense related to the Company’s stock option awards to employees and directors been determined under the fair value method prescribed under Statement of Financial Accounting Standards No. 123, the Company’s net loss and loss per share would have been the pro forma amounts set forth in the table below for the periods indicated:

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Bay View Capital Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
March 31, 2005
(Unaudited)

     The fair value of options determined above for the three months ended March 31, 2005 and 2004 was estimated using an option-pricing model with the following weighted average assumptions:

Reclassifications

     Certain reclassifications have been made to prior year balances in order to conform to the current year presentation.

Note 2.	Restatement of the Condensed Consolidated Financial Statements as of and for the Three Months Ended March 31, 2004

     As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004 (“Form 10-K”) which was filed with the Securities and Exchange Commission on April 18, 2005, the Company is restating its consolidated financial statements for the first, second and third quarters of 2004 to correct its accounting for derivatives (interest rate cap contracts) maintained by an affiliated special purpose owners trust entity in connection with BVAC’s $350 million revolving receivables warehouse credit facility.

     The effect of the restatement is to increase the Company’s net loss for the three months ended March 31, 2004 by $58 thousand and decrease total assets as of March 31, 2004 by the same amount. Revised financial information for the periods presented reflecting these restatements was previously disclosed in the Company’s Form 10-K for the year ended December 31, 2004.

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Bay View Capital Corporation and Subsidiaries
Notes to Condensed Consolidated Financial Statements
March 31, 2005
(Unaudited)

     Except as set forth above, the Company has not updated the disclosures contained herein to reflect any events that have occurred after the original filing. The following table sets forth the impact of the restatement on net loss and basic and diluted loss per share for the three months ended March 31, 2004:

Note 3. Loss per Share

     Basic loss per share is calculated by dividing net loss for the period by the weighted-average common shares outstanding for the period; there is no adjustment to the number of outstanding shares for potential dilutive instruments, such as stock options. Diluted loss 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. For the three-month periods ended March 31, 2005 and 2004, there were potential common shares of 77,100 and 81,430, respectively, related to shares issuable upon the exercise of options that could potentially dilute bas