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As filed with the Securities and Exchange Commission on September 8, 2005
Registration No. 333-126401
SECURITIES AND EXCHANGE COMMISSION
Pre-Effective Amendment
No. 3 to
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FCB BANCORP
California | 20-3074387 | |
(State or Other Jurisdiction of | (I.R.S. Employer | |
Incorporation or Organization) | Identification Number) |
1100 Paseo Camarillo
Camarillo, California 93010
(805) 484-0534
(Address, including Zip Code, and Telephone Number,
including Area Code, of Registrant’s Principal Executive Offices)
C. G. Kum
President and Chief Executive Officer
FCB Bancorp
1100 Paseo Camarillo
Camarillo, California 93010
(805) 484-0534
(Address, including Zip Code, and Telephone Number,
including Area Code, of Agent for Service)
Copies to:
Gary M. Horgan, Esq.
Young H. Park, Esq.
Horgan, Rosen, Beckham & Coren, L.L.P.
23975 Park Sorrento, Suite 200
Calabasas, California 91302
Phone (818) 591-2121
Fax (818) 591-3838
Approximate date of commencement of proposed sale to the public: September 8, 2005
If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.o
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of earlier effective registration statement for the same offering.o
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering.o
CALCULATION OF REGISTRATION FEE
Proposed | Proposed | |||||||||||||||
Title of Each Class | Maximum | Maximum | ||||||||||||||
of Securities to be | Amount to be | Offering Price | Aggregate | Amount of | ||||||||||||
Registered | Registered | Per Share | Offering Price | Registration Fee | ||||||||||||
Common Stock, no par value | 2,241,057 | 1 | $ | 20.07 | 2 | $ | 44,978,013.99 | $ | 5,293.91 |
1 | The estimated maximum number of shares to be issued includes approximately 78,250 shares anticipated to be issued pursuant to the exercise of outstanding stock options. | |
2 | Calculated in accordance with Rule 457(f)(1) under the Securities Act of 1933, as amended, based on the market value as of June 20, 2005, the date of the most recent trade in shares of First California Bank common stock. |
The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance withSection 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.
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Sincerely yours, | |
C. G. Kum | |
President and Chief Executive Officer | |
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1. Approval of Bank Holding Company Reorganization. Considering and voting on a Plan of Reorganization and Merger Agreement dated May 19, 2005 (the “Merger Agreement”), which provides for the merger of the Bank with a wholly-owned subsidiary of the newly-formed holding company, FCB Bancorp, as a result of which shareholders of the Bank will receive for their shares of the Bank’s Common Stock an equal number of shares of FCB Bancorp’s Common Stock. These transactions are more fully described in the enclosed Proxy Statement and in the Merger Agreement attached as Exhibit A to the Proxy Statement. | |
2. Approval of Stock Option Plan. Approving, as prospective shareholders of FCB Bancorp, the FCB Bancorp 2005 Stock Option Plan, which is intended to replace the Bank’s stock option plan, as described in the enclosed Proxy Statement. | |
3. Adjournments. Approving, if necessary, to adjourn the Meeting to solicit additional proxies in favor of the Merger Agreement and/or the Stock Option Plan. | |
4. Other Business. Transacting such other business as may properly come before the Meeting and any adjournment or adjournments thereof. |
By Order of the Board of Directors |
Thomas E. Anthony, | |
Secretary |
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PLAN OF REORGANIZATION AND MERGER AGREEMENT | Exhibit A | |||||||
EXHIBIT 8 | ||||||||
EXHIBIT 99 |
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1. Approval of Bank Holding Company Reorganization. Considering and voting on a Plan of Reorganization and Merger Agreement dated May 19, 2005 (the “Merger Agreement”), which provides for the merger of the Bank with a wholly-owned subsidiary of the newly-formed holding company, FCB Bancorp (the “Holding Company”), as a result of which shareholders of the Bank will receive for their shares of the Bank’s Common Stock an equal number of shares of FCB Bancorp’s Common Stock. These transactions are more fully described herein and in the Merger Agreement attached as Exhibit A hereto. | |
2. Approval of Stock Option Plan. Approving, as prospective shareholders of FCB Bancorp, the FCB Bancorp 2005 Stock Option Plan, which is intended to replace the Bank’s stock option plan, as described more fully herein. | |
3. Adjournments. Approving, if necessary, to adjourn the Meeting to solicit additional proxies in favor of the Merger Agreement and/or the Stock Option Plan. | |
4. Other Business. Transacting such other business as may properly come before the Meeting and any adjournment or adjournments thereof. |
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As of or for the | As of or for the | |||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||
RESULTS OF OPERATIONS | ||||||||||||||||||
Net interest income | $ | 3,359 | $ | 2,828 | $ | 6,461 | $ | 5,837 | ||||||||||
Provision for loan losses | 122 | 104 | 244 | 208 | ||||||||||||||
Noninterest income | 427 | 472 | 943 | 884 | ||||||||||||||
Noninterest expense | 2,650 | 2,290 | 5,215 | 4,706 | ||||||||||||||
Net income | $ | 629 | $ | 589 | $ | 1,206 | $ | 1,166 | ||||||||||
PER SHARE DATA | ||||||||||||||||||
Earnings per share: | ||||||||||||||||||
Basic | $ | 0.29 | $ | 0.27 | $ | 0.56 | $ | 0.58 | ||||||||||
Diluted | $ | 0.29 | $ | 0.26 | $ | 0.55 | $ | 0.56 | ||||||||||
Book value per share | $ | 10.94 | $ | 10.44 | $ | 10.94 | $ | 9.54 | ||||||||||
FINANCIAL POSITION | ||||||||||||||||||
Assets | $ | 298,294 | $ | 275,730 | $ | 298,294 | $ | 275,730 | ||||||||||
Loans | 199,631 | 171,513 | 199,631 | 171,513 | ||||||||||||||
Allowance for loan losses | 2,593 | 2,533 | 2,593 | 2,533 | ||||||||||||||
Deposits | 238,468 | 216,151 | 238,468 | 216,151 | ||||||||||||||
Shareholders’ equity | $ | 23,664 | $ | 20,625 | $ | 23,664 | $ | 20,625 | ||||||||||
SELECTED RATIOS(1) | ||||||||||||||||||
Return on average equity | 10.60 | % | 10.09 | % | 10.33 | % | 12.11 | % | ||||||||||
Return on average assets | 0.86 | % | 0.83 | % | 0.85 | % | 0.90 | % | ||||||||||
Efficiency ratio(2) | 70.03 | % | 70.90 | % | 70.46 | % | 70.14 | % | ||||||||||
Net interest margin (tax equivalent)(3) | 5.02 | % | 4.84 | % | 4.93 | % | 4.93 | % | ||||||||||
Nonaccrual loans to loans | 1.08 | % | 1.38 | % | 1.08 | % | 1.38 | % | ||||||||||
Net charges-offs (recoveries) to average loans | 0.03 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
Allowance for loan losses to loans | 1.30 | % | 1.30 | % | 1.30 | % | 1.30 | % | ||||||||||
Allowance for loan losses to nonaccrual loans | 120.16 | % | 107.24 | % | 120.16 | % | 107.24 | % | ||||||||||
Total capital ratio | 11.63 | % | 12.36 | % | 11.63 | % | 12.36 | % | ||||||||||
Tier 1 capital ratio | 10.44 | % | 11.11 | % | 10.44 | % | 11.11 | % | ||||||||||
Tier 1 leverage ratio | 8.20 | % | 8.09 | % | 8.20 | % | 8.09 | % |
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As of or for the Year Ended December 31, | ||||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | ||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||
RESULTS OF OPERATIONS | ||||||||||||||||||||||
Net interest income | $ | 11,656 | $ | 10,898 | $ | 9,141 | $ | 7,488 | $ | 6,804 | ||||||||||||
Provision for loan losses | 418 | 510 | 510 | 576 | 115 | |||||||||||||||||
Noninterest income | 1,925 | 1,899 | 1,240 | 1,071 | 814 | |||||||||||||||||
Noninterest expense | 9,409 | 8,836 | 7,222 | 5,724 | 5,241 | |||||||||||||||||
Net income | $ | 2,435 | $ | 2,207 | $ | 1,614 | $ | 1,355 | $ | 1,407 | ||||||||||||
PER SHARE DATA | ||||||||||||||||||||||
Earnings per share: | ||||||||||||||||||||||
Basic | $ | 1.17 | $ | 1.12 | $ | 0.91 | $ | 0.86 | $ | 0.88 | ||||||||||||
Diluted | $ | 1.14 | $ | 1.10 | $ | 0.86 | $ | 0.86 | $ | 0.88 | ||||||||||||
Book value per share | $ | 10.42 | $ | 9.26 | $ | 8.38 | $ | 7.20 | $ | 6.57 | ||||||||||||
FINANCIAL POSITION | ||||||||||||||||||||||
Assets | $ | 283,745 | $ | 256,285 | $ | 203,907 | $ | 151,447 | $ | 129,408 | ||||||||||||
Loans | 182,873 | 157,952 | 142,379 | 121,699 | 92,024 | |||||||||||||||||
Allowance for loan losses | 2,346 | 2,325 | 1,970 | 1,680 | 1,114 | |||||||||||||||||
Deposits | 277,190 | 211,929 | 186,661 | 139,356 | 118,319 | |||||||||||||||||
Shareholders’ equity | $ | 22,545 | $ | 18,365 | $ | 16,448 | $ | 11,248 | $ | 10,450 | ||||||||||||
SELECTED RATIOS | ||||||||||||||||||||||
Return on average equity | 11.97 | % | 12.67 | % | 11.24 | % | 12.64 | % | 14.33 | % | ||||||||||||
Return on average assets | 0.91 | % | 0.99 | % | 0.88 | % | 0.97 | % | 1.25 | % | ||||||||||||
Efficiency ratio(2) | 69.76 | % | 68.92 | % | 69.78 | % | 67.55 | % | 68.80 | % | ||||||||||||
Net interest margin (tax equivalent)(3) | 4.78 | % | 5.45 | % | 5.47 | % | 5.96 | % | 6.75 | % | ||||||||||||
Nonaccrual loans to loans | 1.19 | % | 1.55 | % | 0.27 | % | 0.66 | % | 1.04 | % | ||||||||||||
Net charges-offs (recoveries) to average loans | 0.21 | % | 0.04 | % | 0.17 | % | 0.01 | % | 0.01 | % | ||||||||||||
Allowance for loan losses to loans | 1.28 | % | 1.47 | % | 1.38 | % | 1.38 | % | 1.21 | % | ||||||||||||
Allowance for loan losses to nonaccrual loans | 107.61 | % | 95.17 | % | 591.59 | % | 208.44 | % | 742.67 | % | ||||||||||||
Total capital ratio | 12.25 | % | 11.57 | % | 11.51 | % | 10.06 | % | 11.57 | % | ||||||||||||
Tier 1 capital ratio | 11.04 | % | 10.32 | % | 10.26 | % | 8.81 | % | 10.46 | % | ||||||||||||
Tier 1 leverage ratio | 8.61 | % | 7.54 | % | 8.14 | % | 7.47 | % | 8.27 | % |
(1) | Selected ratios for the three and six months ended June 30, 2005 and 2004 have been annualized. |
(2) | Computed by dividing noninterest expense by net interest income and noninterest income. The ratio is a measurement of the amount of revenue that is utilized to meet overhead expenses. |
(3) | Computed by dividing net income on a tax equivalent basis by average earning assets. |
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Number of Shares of | |||||||||
Common Stock | Percent of Class | ||||||||
Name and Position Held | Beneficially Owned(2),(3) | Beneficially Owned(2) | |||||||
Richard D. Aldridge, | |||||||||
Director | 195,888 | 9.06% | |||||||
Thomas E. Anthony, | |||||||||
Executive Vice President and Chief Credit Officer | 14,222 | 0.66% | |||||||
James O. Birchfield, | |||||||||
Chairman of the Board | 460,270 | 21.28% | |||||||
John W. Birchfield, | |||||||||
Vice Chairman | 290,911 | 13.45% | |||||||
Tenisha M. Fitzgerald, | |||||||||
Director | 38,641 | 1.79% | |||||||
C. G. Kum, | |||||||||
Director, President and Chief Executive Officer | 26,948 | 1.25% | |||||||
Syble R. Roberts, | |||||||||
Director | 231,754 | 10.72% | |||||||
Romolo Santarosa, | |||||||||
Executive Vice President and Chief Financial Officer | 500 | 0.02% | |||||||
All Directors and Executive Officers as a Group (8 in number) | 1,259,134 | 58.22% |
(1) | As used throughout this Proxy Statement, the term “executive officer” means our President and Chief Executive Officer, our Executive Vice President and Chief Credit Officer, and our Executive Vice President and Chief Financial Officer. Our Chairman of the Board, Corporate Secretary, and other vice presidents are not deemed to be executive officers. |
(2) | No stock options held by any director or executive officer were exercisable within 60 days after August 18, 2005. |
(3) | Includes shares held by or with such person’s spouse (except where legally separated) and minor children; shares held by any other relative of such person who has the same home; shares held by a family trust as to which such person is a trustee with sole voting and investment power (or shares power with a spouse); shares held as custodian for minor children; or shares held in an Individual Retirement Account or pension plan as to which such person has pass-through voting rights and investment power. Does not include shares which may be acquired upon exercise of stock options, which are identified separately in this table. |
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1. Each outstanding share of the Bank’s Common Stock shall be converted into one share of the Holding Company’s Common Stock. Shareholders of the Bank will be entitled to exchange their present share certificates for new certificates evidencing shares of the Common Stock of the Holding Company. If no request is made, new certificates will be issued whenever old certificates are surrendered for transfer. Until so exchanged, the certificates for the Bank’s shares will represent the Holding Company’s shares into which the Bank’s shares have been converted. | |
2. FCB Merger Corp. will disappear and all the outstanding shares of the Bank’s Common Stock will be owned by the Holding Company. | |
3. The shareholders of the Bank will be the shareholders of the Holding Company. As shareholders of the Holding Company, they will have essentially the same rights to govern that corporation’s activities as they have with respect to the Bank; however, as shareholders of the Holding Company, they will not be entitled to vote on matters requiring the approval of the Bank’s shareholder. A discussion of those rights is contained in the section entitled “BANK HOLDING COMPANY REORGANIZATION — Comparison of First California Bank and FCB Bancorp Corporate Structures” herein. |
(1) | FCB Bancorp and FCB Merger Corp. were incorporated on January 25, 2005 and February 25, 2005, respectively, and organized at the direction of the Bank’s Board of Directors for the purpose of facilitating the merger. |
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Name | Position with the Bank | Position with the Holding Company | ||
James O. Birchfield | Chairman of the Board | Chairman of the Board | ||
John W. Birchfield | Vice Chairman | Vice Chairman | ||
C. G. Kum | President and Chief Executive Officer | President and Chief Executive Officer | ||
Thomas E. Anthony | Executive Vice President and Chief Credit Officer | Executive Vice President and Chief Credit Officer | ||
Romolo Santarosa | Executive Vice President and Chief Financial Officer | Executive Vice President and Chief Financial Officer |
Name | Age | Position | ||||
Richard D. Aldridge | 57 | Director | ||||
James O. Birchfield | 77 | Chairman of the Board | ||||
John W. Birchfield | 53 | Vice Chairman | ||||
Tenisha M. Fitzgerald | 30 | Director | ||||
C. G. Kum | 51 | President and Chief Executive Officer | ||||
Thomas E. Anthony | 57 | Executive Vice President and Chief Credit Officer | ||||
Syble R. Roberts | 68 | Director | ||||
Romolo Santarosa | 48 | Executive Vice President and Chief Financial Officer |
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• | Section 301 establishes certain oversight, independence, funding and other requirements for the audit committees of public companies, and requires the SEC to issue rules that prohibit any national securities exchange or national securities association from listing the securities of a company that doesn’t comply with these audit committee requirements. |
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• | Section 302 mandates that the SEC adopt rules that require the principal executive officer(s) and principal financial officer(s) of public companies to include certain certifications in the company’s annual and quarterly reports filed under the Exchange Act. | |
• | Section 906 includes another certification requirement that is separate from the certification requirements of Section 302. Section 906 provides that all periodic reports that contain financial statements and that are filed by public companies under Sections 13(a) or 15(d) of the Exchange Act must include a written certification by the CEO and CFO (or equivalent) that (1) the report complies with the requirements of Section 13(a) or 15(d) of the Exchange Act; and (2) the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the issuer. Section 906 became effective on July 30, 2002, and persons who knowingly or willfully violate Section 906 are subject to specified criminal penalties. | |
• | Section 303 which requires the SEC to issue rules prohibiting the officers and directors of public companies, and persons acting under their direction, from fraudulently influencing, coercing, manipulating, or misleading the company’s independent auditor in order to render the financial statements materially misleading. | |
• | Section 304 requires the CEO and CFO of public companies to reimburse the company for certain compensation and profits received if the company is required to restate its financial reports due to material noncompliance resulting from misconduct, with the Federal securities laws. | |
• | Section 306(a) prohibits the directors and executive officers of any public company from purchasing, selling or transferring any equity security acquired by the director or executive officer in connection with his or her service as a director or executive officer during any “blackout period” with respect to the company’s securities. Blackout periods refer to periods when most public company employees are not permitted to sell shares in their 401(k) plans. | |
• | Section 401(b) requires the SEC to issue rules that prohibit issuers from including misleading pro forma financial information in their filings with the SEC or in any public release, and that requires issuers to reconcile any pro forma financial information included in such filings or public releases with their financial statements prepared in accordance with generally accepted accounting principles. | |
• | Section 404 mandates that the SEC issue rules that require all annual reports filed under Sections 13(a) or 15(d) of the Exchange Act to include certain statements and assessments related to the issuer’s internal control structures and procedures for financial reporting. | |
• | Section 406 mandates that the SEC adopt rules that require public companies to (1) disclose in their periodic reports filed under the Exchange Act whether the company has adopted a code of ethics for its senior financial officers and, if not, the reasons why; and (2) promptly disclose on Form 8-K any change to, or waiver of, the company’s code of ethics. | |
• | Section 407 mandates that the SEC adopt rules that require public companies to disclose in their periodic reports filed under the Exchange Act whether the audit committee of the company includes at least one financial expert and, if not, the reasons why. |
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• | The name of the independent auditor for the publicly traded company, a description of the services rendered by the auditor during the previous 24 months, the date of the last audit and a copy of the report; | |
• | The annual compensation paid to each director and executive officer, including options or shares granted to them that were not available to other employees of the company; | |
• | A statement indicating whether any bankruptcy has been filed by the company’s executive officers or directors during the past 10 years; and | |
• | A statement indicating whether any of the company’s executive officers or directors were convicted of fraud during the past 10 years. |
(1) Making or acquiring loans or other extensions of credit for its own account or for the account of others. | |
(2) Servicing loans and other extensions of credit for any person. | |
(3) Operating an industrial bank, Morris Plan bank, or industrial loan company, as authorized under state law, so long as the institution is not a bank. | |
(4) Operating a trust company in the manner authorized by federal or state law, so long as the institution is not a bank and does not make loans or investments or accept deposits, except as permitted under the FRB’s Regulation Y. | |
(5) Subject to certain limitations, acting as an investment or financial adviser to investment companies and other persons. | |
(6) Leasing personal and real property or acting as agent, broker, or adviser in leasing such property in accordance with various restrictions imposed by Regulation Y, including a restriction that it is reasonably anticipated that each lease will compensate the lessor for not less than the lessor’s full investment in the property. | |
(7) Making equity and debt investments in corporations or projects designed primarily to promote community welfare. | |
(8) Providing financial, banking, or economic data processing and data transmission services, facilities, data bases, or providing access to such services, facilities, or data bases. |
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(9) Acting as principal, agent, or broker for insurance directly related to extensions of credit which are limited to assuring the repayment of debts in the event of death, disability, or involuntary unemployment of the debtor. | |
(10) Acting as agent or broker for insurance directly related to extensions of credit by a finance company subsidiary. | |
(11) Owning, controlling, or operating a savings association provided that the savings association engages only in activities permitted for bank holding companies under Regulation Y. | |
(12) Providing courier services of limited character. | |
(13) Providing management consulting advice to non-affiliated bank and nonbank depository institutions, subject to the limitations imposed by Regulation Y. | |
(14) Selling money orders, travelers’ checks and U.S. Savings Bonds. | |
(15) Appraisal of real estate and personal property. | |
(16) Acting as an intermediary for the financing of commercial or industrial income-producing real estate. | |
(17) Providing securities brokerage services, related securities credit activities pursuant to Regulation T, and other incidental activities. | |
(18) Underwriting and dealing in obligations of the U.S., general obligations of states and their political subdivisions, and other obligations authorized for state member banks under federal law. | |
(19) Providing general information and statistical forecasting, advisory and transactional services with respect to foreign exchange through a separately incorporated subsidiary. | |
(20) Acting as a futures commission merchant for non-affiliated persons in the execution and clearance on major commodity exchanges of futures contracts and options on futures contracts through a separately incorporated subsidiary. | |
(21) Providing investment advice, including counsel, publications, written analysis and reports, as a futures commission merchant with respect to the purchase and sale of futures contracts and options on futures contracts. | |
(22) Providing advice, educational courses, and instructional materials to consumers on individual financial management matters. | |
(23) Providing individuals, businesses, and nonprofit organizations and tax planning and tax preparation services. | |
(24) Providing check guaranty services. | |
(25) Operating an agency for the collection of overdue accounts. | |
(26) Operating a consumer credit bureau for the collection and reporting of consumer credit information. |
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• | The merger will constitute a “reorganization” within the meaning of section 368(a) of the Code, and Bank, FCB Merger Corp., and Holding Company will each be a party to the reorganization within the meaning of section 368 (b) of the Code. | |
• | Neither FCB Merger Corp. nor Holding Company will recognize any gain or loss as a result of the merger. | |
• | The Bank will not recognize any gain or loss as a result of the merger. | |
• | Holders of Bank Common Stock exchanged in the merger for Holding Company Common Stock will not recognize any gain or loss as a result of the merger. | |
• | The adjusted basis of the assets of the Bank after the merger will be the same as the adjusted basis of the assets held by the Bank and (if any) by FCB Merger Corp. immediately before the merger. | |
• | With regard to shareholders who held their shares of Bank’s Common Stock as capital assets, the period for which they have held such Common Stock will be included in their holding period for the Holding Company’s Common Stock received in the exchange. | |
• | The tax basis of the shares of Holding Company Common Stock received by a shareholder of the Bank will equal the tax basis of such shareholder’s shares of Bank Common Stock exchanged in the merger. |
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Three Months | Six Month | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In thousands, except per share) | ||||||||||||||||
Net income | $ | 629 | $ | 589 | $ | 1,206 | $ | 1,166 | ||||||||
Basic earnings per share | $ | 0.29 | $ | 0.29 | $ | 0.56 | $ | 0.58 | ||||||||
Diluted earnings per share | $ | 0.29 | $ | 0.28 | $ | 0.55 | $ | 0.56 |
For the Years Ended | ||||||||||||
December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In thousands, except | ||||||||||||
per share data) | ||||||||||||
Net income | $ | 2,435 | $ | 2,207 | $ | 1,614 | ||||||
Basic earnings per share | $ | 1.17 | $ | 1.12 | $ | 0.91 | ||||||
Diluted earnings per share | $ | 1.14 | $ | 1.10 | $ | 0.86 |
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• | The opening of four de novo branches since 1999, | |
• | Our focus on services and technology to meet the needs of the small business banking market, | |
• | An expanded customer base in Ventura and surrounding counties, and | |
• | The successful issuance in 2002 of 400,000 shares of common stock, with 200,000 warrants attached, for a total of $5.5 million in capital to support our growth strategy. |
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Six Months Ended June 30, | ||||||||||||||||||||||||||
2005 | 2004 | |||||||||||||||||||||||||
Average | Income/ | Average | Average | Income/ | Average | |||||||||||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||
Commercial | $ | 79,955 | $ | 3,058 | 7.71 | % | $ | 67,179 | $ | 2,602 | 7.79 | % | ||||||||||||||
Real estate | 98,197 | 3,046 | 6.26 | % | 91,046 | 2,749 | 6.07 | % | ||||||||||||||||||
Consumer | 7,102 | 220 | 6.26 | % | 5,558 | 228 | 8.27 | % | ||||||||||||||||||
Total loans | 185,255 | 6,325 | 6.88 | % | 163,783 | 5,580 | 6.85 | % | ||||||||||||||||||
Securities: | ||||||||||||||||||||||||||
Taxable | 69,148 | 1,168 | 3.38 | % | 60,523 | 871 | 2.88 | % | ||||||||||||||||||
Nontaxable | 7,572 | 148 | 5.92 | % | 7,569 | 152 | 6.07 | % | ||||||||||||||||||
Total securities | 76,720 | 1,316 | 3.63 | % | 68,092 | 1,023 | 3.23 | % | ||||||||||||||||||
Federal funds sold and deposits with banks | 4,909 | 68 | 2.82 | % | 8,480 | 44 | 1.05 | % | ||||||||||||||||||
Total earning assets | 266,885 | 7,709 | 5.87 | % | 240,355 | 6,647 | 5.61 | % | ||||||||||||||||||
Nonearning assets | 20,993 | 31,268 | ||||||||||||||||||||||||
Total assets | $ | 287,878 | $ | 271,623 | ||||||||||||||||||||||
Liabilities and Shareholder’s Equity | ||||||||||||||||||||||||||
Interest bearing deposits | ||||||||||||||||||||||||||
Interest bearing demand deposits | $ | 20,563 | $ | 11 | 0.10 | % | $ | 19,622 | $ | 11 | 0.11 | % | ||||||||||||||
Savings | 63,273 | 230 | 0.73 | % | 60,916 | 244 | 0.81 | % | ||||||||||||||||||
Certificates of deposit | 55,033 | 616 | 2.26 | % | 51,501 | 353 | 1.38 | % | ||||||||||||||||||
Total interest bearing deposits | 138,868 | 857 | 1.24 | % | 132,040 | 609 | 0.93 | % | ||||||||||||||||||
Borrowed funds: | ||||||||||||||||||||||||||
Federal funds purchased | — | — | — | — | — | — | ||||||||||||||||||||
FHLB advances | 32,091 | 391 | 2.46 | % | 24,780 | 201 | 1.63 | % | ||||||||||||||||||
Total borrowed funds | 32,091 | 391 | 2.46 | % | 24,780 | 201 | 1.63 | % | ||||||||||||||||||
Total interest bearing funds | 170,959 | 1,248 | 1.47 | % | 156,820 | 810 | 1.04 | % | ||||||||||||||||||
Noninterest bearing demand deposits | 92,242 | 95,358 | ||||||||||||||||||||||||
Other liabilities | 1,185 | 163 | ||||||||||||||||||||||||
Shareholders’ equity | 23,492 | 19,283 | ||||||||||||||||||||||||
Total liabilities and shareholder’s equity | $ | 287,878 | $ | 271,623 | ||||||||||||||||||||||
Net interest income | $ | 6,461 | $ | 5,837 | ||||||||||||||||||||||
Net interest margin (tax equivalent) | 4.93 | % | 4.93 | % | ||||||||||||||||||||||
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For the Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||
2004 | 2003 | 2002 | ||||||||||||||||||||||||||||||||||||
Average | Income/ | Average | Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||||||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||||
Loans: | ||||||||||||||||||||||||||||||||||||||
Commercial | $ | 69,317 | $ | 5,046 | 7.28 | % | $ | 60,022 | $ | 4,370 | 7.28 | % | $ | 49,936 | $ | 3,627 | 7.26 | % | ||||||||||||||||||||
Real estate | 94,088 | 5,758 | 6.12 | % | 81,573 | 5,926 | 7.26 | % | 75,218 | 5,951 | 7.91 | % | ||||||||||||||||||||||||||
Consumer | 5,209 | 405 | 7.78 | % | 7,591 | 642 | 8.46 | % | 7,081 | 548 | 7.74 | % | ||||||||||||||||||||||||||
Total loans | 168,614 | 11,209 | 6.65 | % | 149,186 | 10,938 | 7.33 | % | 132,235 | 10,126 | 7.66 | % | ||||||||||||||||||||||||||
Securities: | ||||||||||||||||||||||||||||||||||||||
Taxable | 65,584 | 1,970 | 3.00 | % | 40,128 | 1,194 | 2.98 | % | 17,569 | 643 | 3.66 | % | ||||||||||||||||||||||||||
Nontaxable | 7,308 | 299 | 6.20 | % | 4,752 | 212 | 6.76 | % | 4,206 | 199 | 7.17 | % | ||||||||||||||||||||||||||
Total securities | 72,892 | 2,269 | 3.11 | % | 44,880 | 1,406 | 3.13 | % | 21,775 | 842 | 3.87 | % | ||||||||||||||||||||||||||
Federal funds sold and deposits with banks | 5,777 | 74 | 1.28 | % | 8,025 | 85 | 1.06 | % | 14,881 | 232 | 1.56 | % | ||||||||||||||||||||||||||
Total earning assets | 247,283 | 13,552 | 5.48 | % | 202,091 | 12,429 | 6.15 | % | 168,891 | 11,200 | 6.63 | % | ||||||||||||||||||||||||||
Nonearning assets | 19,220 | 20,430 | 13,901 | |||||||||||||||||||||||||||||||||||
Total assets | $ | 266,503 | $ | 222,521 | $ | 182,792 | ||||||||||||||||||||||||||||||||
Liabilities and Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||
Interest bearing deposits: | ||||||||||||||||||||||||||||||||||||||
Interest bearing demand deposits | $ | 19,776 | $ | 21 | 0.11 | % | $ | 17,946 | $ | 19 | 0.11 | % | $ | 16,303 | $ | 21 | 0.13 | % | ||||||||||||||||||||
Savings | 61,697 | 487 | 0.79 | % | 51,807 | 372 | 0.72 | % | 35,414 | 277 | 0.78 | % | ||||||||||||||||||||||||||
Certificates of deposit | 52,138 | 807 | 1.55 | % | 54,804 | 949 | 1.73 | % | 62,216 | 1,761 | 2.83 | % | ||||||||||||||||||||||||||
Total interest bearing deposits | 133,611 | 1,315 | 0.98 | % | 124,557 | 1,340 | 1.08 | % | 113,933 | 2,059 | 1.81 | % | ||||||||||||||||||||||||||
Borrowed funds: | ||||||||||||||||||||||||||||||||||||||
Federal funds purchased | 70 | 2 | 2.86 | % | — | — | — | — | — | — | ||||||||||||||||||||||||||||
FHLB advances | 29,706 | 579 | 1.95 | % | 12,405 | 191 | 1.54 | % | — | — | — | |||||||||||||||||||||||||||
Total borrowed funds | 29,776 | 581 | 1.95 | % | 12,405 | 191 | 1.54 | % | — | — | — | |||||||||||||||||||||||||||
Total interest bearing funds | 163,387 | 1,896 | 1.16 | % | 136,962 | 1,531 | 1.12 | % | 113,933 | 2,059 | 1.81 | % | ||||||||||||||||||||||||||
Noninterest bearing demand deposits | 81,455 | 67,400 | 53,472 | |||||||||||||||||||||||||||||||||||
Other liabilities | 1,315 | 746 | 1,022 | |||||||||||||||||||||||||||||||||||
Shareholders’ equity | 20,346 | 17,413 | 14,365 | |||||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 266,503 | $ | 222,521 | $ | 182,792 | ||||||||||||||||||||||||||||||||
Net interest income | $ | 11,656 | $ | 10,898 | $ | 9,141 | ||||||||||||||||||||||||||||||||
Net interest margin (tax equivalent) | 4.78 | % | 5.45 | % | 5.47 | % | ||||||||||||||||||||||||||||||||
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35
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2005 to 2004 Due To: | |||||||||||||
Rate | Volume | Total | |||||||||||
(Dollars in thousands) | |||||||||||||
Interest income | |||||||||||||
Interest on loans | $ | 14 | $ | 731 | $ | 745 | |||||||
Interest on securities | 164 | 130 | 294 | ||||||||||
Interest on Federal funds sold | 42 | (19 | ) | 23 | |||||||||
Interest on deposits with banks | — | — | — | ||||||||||
Total interest income | 220 | 842 | 1,062 | ||||||||||
Interest expense | |||||||||||||
Interest bearing demand deposits | (1 | ) | 1 | — | |||||||||
Savings | (25 | ) | 10 | (15 | ) | ||||||||
Certificates of deposit | 238 | 24 | 262 | ||||||||||
Total interest on deposits | 212 | 35 | 247 | ||||||||||
Interest on borrowings | 134 | 59 | 192 | ||||||||||
Total interest expense | 346 | 93 | 439 | ||||||||||
Net interest income | $ | (125 | ) | $ | 748 | $ | 624 | ||||||
2004 to 2003 Due To: | 2003 to 2002 Due To: | ||||||||||||||||||||||||
Rate | Volume | Total | Rate | Volume | Total | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Interest income | |||||||||||||||||||||||||
Interest on loans | $ | (1,153 | ) | $ | 1,424 | $ | 271 | $ | (486 | ) | $ | 1,298 | $ | 812 | |||||||||||
Interest on securities | (15 | ) | 878 | 863 | 375 | 189 | 564 | ||||||||||||||||||
Interest on Federal funds sold | 14 | (25 | ) | (11 | ) | (40 | ) | (107 | ) | (147 | ) | ||||||||||||||
Total interest income | (1,154 | ) | 2,277 | 1,123 | (151 | ) | 1,380 | 1,229 | |||||||||||||||||
Interest expense | |||||||||||||||||||||||||
Interest bearing demand deposits | 1 | 2 | 3 | (4 | ) | 2 | (2 | ) | |||||||||||||||||
Savings | 44 | 72 | 116 | (41 | ) | 136 | 95 | ||||||||||||||||||
Certificates of deposit | (98 | ) | (46 | ) | (144 | ) | (602 | ) | (210 | ) | (812 | ) | |||||||||||||
Total interest on deposits | (53 | ) | 28 | (25 | ) | (647 | ) | (72 | ) | (719 | ) | ||||||||||||||
Interest on borrowings | 122 | 268 | 390 | — | 191 | 191 | |||||||||||||||||||
Total interest expense | 69 | 296 | 365 | (647 | ) | 119 | (528 | ) | |||||||||||||||||
Net interest income | $ | (1,223 | ) | $ | 1,981 | $ | 758 | $ | 496 | $ | 1,261 | $ | 1,757 | ||||||||||||
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For the Three | For the Six | |||||||||||||||
Months Ended | Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Service charges on deposit accounts | $ | 256 | $ | 238 | $ | 549 | $ | 487 | ||||||||
Earnings on cash value of life insurance | 56 | 55 | 111 | 111 | ||||||||||||
Commissions on brokered loans | 35 | 10 | 90 | 14 | ||||||||||||
Net gain on loan sales | 31 | 61 | 78 | 75 | ||||||||||||
Net servicing fees | 11 | 9 | 21 | 20 | ||||||||||||
Other income | 36 | 99 | 92 | 165 | ||||||||||||
Subtotal service charges, fees and other | 425 | 472 | 941 | 872 | ||||||||||||
Net gain (loss) on sales of securities | 2 | — | 2 | 12 | ||||||||||||
Total noninterest income | $ | 427 | $ | 472 | $ | 943 | $ | 884 | ||||||||
Year Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(Dollars in thousands) | ||||||||||||
Service charges on deposit accounts | $ | 1,056 | $ | 965 | $ | 744 | ||||||
Earnings on cash value of life insurance | 224 | 260 | — | |||||||||
Commissions on brokered loans | 132 | 307 | 43 | |||||||||
Net gain on loan sales | 87 | 75 | 119 | |||||||||
Net servicing fees | 42 | 34 | 32 | |||||||||
Other income | 290 | 280 | 271 | |||||||||
Subtotal service charges, fees and other | 1,831 | 1,921 | 1,209 | |||||||||
Net gain (loss) on sales of securities | 94 | (22 | ) | 31 | ||||||||
Total noninterest income | $ | 1,925 | $ | 1,899 | $ | 1,240 | ||||||
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For the Three | For the Six | |||||||||||||||
Months Ended | Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Salaries and benefits | $ | 1,491 | $ | 1,161 | $ | 3,020 | $ | 2,701 | ||||||||
Premises and equipment | 389 | 305 | 775 | 592 | ||||||||||||
Data processing | 138 | 215 | 273 | 410 | ||||||||||||
Legal, audit and other professional | 153 | 73 | 261 | 160 | ||||||||||||
Printing, stationary and supplies | 48 | 42 | 94 | 64 | ||||||||||||
Telephone | 36 | 35 | 72 | 73 | ||||||||||||
Directors’ fees | 33 | 33 | 66 | 62 | ||||||||||||
Advertising and marketing | 122 | 106 | 209 | 169 | ||||||||||||
Postage | 10 | 26 | 28 | 45 | ||||||||||||
Other expense | 230 | 294 | 417 | 430 | ||||||||||||
Total noninterest expenses | $ | 2,650 | $ | 2,290 | $ | 5,215 | $ | 4,706 | ||||||||
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For the Years Ended | ||||||||||||
December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(Dollars in thousands) | ||||||||||||
Salaries and benefits | $ | 5,373 | $ | 5,220 | $ | 4,131 | ||||||
Premises and equipment | 1,301 | 972 | 693 | |||||||||
Data processing | 758 | 836 | 743 | |||||||||
Legal, audit and other professional | 418 | 328 | 326 | |||||||||
Printing, stationary and supplies | 141 | 166 | 199 | |||||||||
Telephone | 163 | 161 | 92 | |||||||||
Directors’ fees | 128 | 106 | 103 | |||||||||
Advertising and marketing | 299 | 298 | 289 | |||||||||
Postage | 81 | 84 | 86 | |||||||||
Other expense | 747 | 665 | 560 | |||||||||
Total noninterest expenses | $ | 9,409 | $ | 8,836 | $ | 7,222 | ||||||
Financial Position |
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The Six Months Ended June 30, 2005 | |||||||||||||||||||||
After One | After Five | ||||||||||||||||||||
One Year | Year to Five | Years to Ten | Over Ten | ||||||||||||||||||
or Less | Years | Years | Years | Total | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Maturity distribution | |||||||||||||||||||||
Mortgage-backed securities | $ | — | $ | 39,411 | $ | 8,290 | $ | 4,157 | $ | 51,858 | |||||||||||
Collateralized mortgage obligations | — | — | 3,617 | — | 3,617 | ||||||||||||||||
U.S. Treasury Obligations | 2,995 | — | — | — | 2,995 | ||||||||||||||||
State and municipal securities | 102 | 558 | 2,214 | 5,383 | 8,257 | ||||||||||||||||
U.S. Agency securities | 746 | 7,049 | — | — | 7,795 | ||||||||||||||||
Total | $ | 3,843 | $ | 47,018 | $ | 14,121 | $ | 9,540 | $ | 74,522 | |||||||||||
Weighted average yield | |||||||||||||||||||||
Mortgage-backed securities | — | 3.16 | % | 4.36 | % | 4.66 | % | 3.74 | % | ||||||||||||
Collateralized mortgage obligations | — | — | 4.89 | % | — | 4.89 | % | ||||||||||||||
U.S. Treasury obligations | 2.75 | % | — | — | — | 2.75 | % | ||||||||||||||
State and municipal securities | 6.49 | % | 6.49 | % | 6.17 | % | 6.17 | % | 5.98 | % | |||||||||||
U.S. Agency securities | 3.32 | % | 3.13 | % | — | — | 3.08 | % | |||||||||||||
Total | 3.18 | % | 3.17 | % | 3.57 | % | 5.08 | % | 3.63 | % | |||||||||||
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December 31, 2004 | |||||||||||||||||||||
After One | After Five | ||||||||||||||||||||
One Year | Year to | Years to | Over Ten | ||||||||||||||||||
or Less | Five Years | Ten Years | Years | Total | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Maturity distribution | |||||||||||||||||||||
Mortgage-backed securities | $ | 1,226 | $ | 36,848 | $ | 10,314 | $ | 7,960 | $ | 56,348 | |||||||||||
Collateralized mortgage obligations | — | — | 1,568 | 3,347 | 4,915 | ||||||||||||||||
U.S. Treasury Obligations | 2,993 | — | — | — | 2,993 | ||||||||||||||||
State and municipal securities | 100 | 295 | 2,723 | 3,615 | 6,733 | ||||||||||||||||
U.S. agency securities | 3,746 | 3,050 | — | — | 6,796 | ||||||||||||||||
Total | $ | 8,065 | $ | 40,193 | $ | 14,605 | $ | 14,922 | $ | 77,785 | |||||||||||
Weighted average yield | |||||||||||||||||||||
Mortgage-backed securities | 3.75 | % | 3.26 | % | 4.10 | % | 4.50 | % | 3.60 | % | |||||||||||
Collateralized mortgage obligations | — | — | 4.91 | % | 4.72 | % | 4.78 | % | |||||||||||||
U.S. Treasury obligations | 2.75 | % | — | — | — | 2.75 | % | ||||||||||||||
State and municipal securities | 7.12 | % | 7.96 | % | 5.47 | % | 6.03 | % | 5.90 | % | |||||||||||
U.S. Agency securities | 2.69 | % | 2.62 | % | — | — | 2.66 | % | |||||||||||||
Total | 2.93 | % | 3.25 | % | 4.44 | % | 4.92 | % | 3.76 | % | |||||||||||
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June 30, | December 31, | |||||||||||||||||||
2005 | 2004 | 2004 | 2003 | 2002 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial real estate | $ | 104,057 | $ | 92,210 | $ | 83,457 | $ | 87,638 | $ | 80,020 | ||||||||||
Commercial loans and lines | 52,380 | 45,171 | 68,996 | 42,076 | 31,876 | |||||||||||||||
Construction | 20,464 | 11,636 | 12,330 | 16,540 | 16,842 | |||||||||||||||
Home equity loans and lines | 7,053 | 6,930 | 2,114 | 5,808 | 7,036 | |||||||||||||||
Home mortgage | 11,528 | 13,380 | 11,558 | 2,898 | 2,756 | |||||||||||||||
Installment and credit card | 4,149 | 2,186 | 4,418 | 2,992 | 3,849 | |||||||||||||||
Total loans | 199,631 | 171,513 | 182,873 | 157,952 | 142,379 | |||||||||||||||
Allowance for loan losses | (2,593 | ) | (2,533 | ) | (2,346 | ) | (2,325 | ) | (1,970 | ) | ||||||||||
Loans, net | $ | 197,038 | $ | 168,980 | $ | 180,527 | $ | 155,627 | $ | 140,409 | ||||||||||
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43
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44
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As of June 30, 2005 | ||||||||||||||||||
After One | ||||||||||||||||||
One Year | Year to | After Five | ||||||||||||||||
or Less | Five Years | Years | Total | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Fixed rate loan maturities | ||||||||||||||||||
Commercial real estate | $ | 1,671 | $ | 1,195 | $ | 8,427 | $ | 11,293 | ||||||||||
Commercial loans and lines | 655 | 3,293 | 540 | 4,488 | ||||||||||||||
Construction | — | — | — | — | ||||||||||||||
Consumer | 136 | 303 | 37 | 476 | ||||||||||||||
Other | 9,766 | 364 | 4,960 | 15,090 | ||||||||||||||
Total fixed rate loan maturities | 12,228 | 5,155 | 13,964 | 31,347 | ||||||||||||||
Adjustable rate loan | ||||||||||||||||||
Commercial real estate | $ | 39,019 | $ | 47,347 | $ | — | $ | 86,366 | ||||||||||
Commercial loans and lines | 50,807 | 5,252 | — | 56,059 | ||||||||||||||
Construction | 18,845 | — | — | 18,845 | ||||||||||||||
Consumer | 3,151 | — | — | 3,151 | ||||||||||||||
Other | 3,863 | — | — | 3,863 | ||||||||||||||
Total adjustable rate loan maturities | 115,685 | 52,599 | — | 168,284 | ||||||||||||||
Total maturities | $ | 127,913 | $ | 57,754 | $ | 13,964 | $ | 199,631 | ||||||||||
December 31, 2004 | ||||||||||||||||||
One Year | One Year to | After Five | ||||||||||||||||
or Less | Five Years | Years | Total | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||
Fixed rate loan maturities | ||||||||||||||||||
Commercial real estate | $ | 669 | $ | 3,394 | $ | 3,484 | $ | 7,547 | ||||||||||
Commercial loans and lines | 476 | 3,955 | 685 | 5,116 | ||||||||||||||
Consumer | 84 | 582 | 22 | 688 | ||||||||||||||
Other | 7,275 | — | 5,653 | 12,928 | ||||||||||||||
Total fixed rate loan maturities | 8,504 | 7,931 | 9,844 | 26,279 | ||||||||||||||
�� | ||||||||||||||||||
Adjustable rate loan | ||||||||||||||||||
Commercial real estate | 38,728 | 42,389 | — | 81,117 | ||||||||||||||
Commercial loans and lines | 50,677 | 4,388 | 1,950 | 57,015 | ||||||||||||||
Construction | 12,609 | — | — | 12,609 | ||||||||||||||
Consumer | 3,308 | — | — | 3,308 | ||||||||||||||
Other | 2,545 | — | — | 2,545 | ||||||||||||||
Total adjustable rate loan maturities | 107,867 | 46,777 | 1,950 | 156,594 | ||||||||||||||
Total maturities | $ | 116,371 | $ | 54,708 | $ | 11,794 | $ | 182,873 | ||||||||||
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Three Months | Six Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Beginning balance | $ | 2,537 | $ | 2,436 | $ | 2,346 | $ | 2,325 | ||||||||
Provision for loan losses | 122 | 104 | 244 | 208 | ||||||||||||
Loans charged-off | (74 | ) | (36 | ) | (74 | ) | (36 | ) | ||||||||
Recoveries on loans charged-off | 8 | 29 | 77 | 36 | ||||||||||||
Ending balance | $ | 2,593 | $ | 2,533 | $ | 2,593 | $ | 2,533 | ||||||||
Ratio of net charge-offs to average loans | 0.03 | % | 0.00 | % | 0.00 | % | 0.00 | % |
December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(Dollars in thousands) | ||||||||||||
Beginning balance | $ | 2,325 | $ | 1,970 | $ | 1,680 | ||||||
Provision for loan losses | 418 | 510 | 510 | |||||||||
Loans charged-off | (359 | ) | (124 | ) | (336 | ) | ||||||
Recoveries on loans charged-off | 12 | 69 | 116 | |||||||||
Transfers to undisbursed commitment liability | (50 | ) | (100 | ) | — | |||||||
Ending balance | $ | 2,346 | $ | 2,325 | $ | 1,970 | ||||||
Ratio of net charge-offs to average loans | 0.21 | % | 0.04 | % | 0.17 | % |
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December 31, | ||||||||||||||||||||||||||||||||
June 30, 2005 | 2004 | 2003 | 2002 | |||||||||||||||||||||||||||||
Percent of | Percent of | Percent of | Percent of | |||||||||||||||||||||||||||||
Loans in | Loans in | Loans in | Loans in | |||||||||||||||||||||||||||||
Category | Category | Category | Category | |||||||||||||||||||||||||||||
to Total | to Total | to Total | to Total | |||||||||||||||||||||||||||||
Amount | Loans | Amount | Loans | Amount | Loans | Amount | Loans | |||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||
Commercial real estate | $ | 946 | 52 | % | $ | 880 | 49 | % | $ | 899 | 55 | % | $ | 470 | 56 | % | ||||||||||||||||
Commercial loans | 832 | 26 | % | 821 | 34 | % | 421 | 27 | % | 570 | 23 | % | ||||||||||||||||||||
Construction loans | 102 | 10 | % | 62 | 7 | % | 83 | 10 | % | 84 | 12 | % | ||||||||||||||||||||
Home equity loans | 35 | 4 | % | 13 | 1 | % | 39 | 4 | % | 35 | 5 | % | ||||||||||||||||||||
Home mortgage | 58 | 6 | % | 60 | 7 | % | 14 | 2 | % | 14 | 2 | % | ||||||||||||||||||||
Installment and credit card | 43 | 2 | % | 45 | 2 | % | 26 | 2 | % | 31 | 3 | % | ||||||||||||||||||||
Subtotal | $ | 2,016 | $ | 1,881 | $ | 1,482 | $ | 1,204 | ||||||||||||||||||||||||
Unallocated | 577 | 465 | 843 | 766 | ||||||||||||||||||||||||||||
Total | $ | 2,593 | 100 | % | $ | 2,346 | 100 | % | $ | 2,325 | 100 | % | $ | 1,970 | 100 | % | ||||||||||||||||
June 30, | December 31, | |||||||||||||||||||
2005 | 2004 | 2004 | 2003 | 2002 | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Accruing loans past due 90 days or more | $ | 116 | — | $ | — | $ | 132 | $ | 18 | |||||||||||
Nonaccrual loans | $ | 2,158 | $ | 2,362 | $ | 2,180 | $ | 2,443 | $ | 333 | ||||||||||
Ratios: | ||||||||||||||||||||
Accruing loans past due 90 days or more to average loans | 0.06 | % | 0.00 | % | 0.00 | % | 0.09 | % | 0.01 | % | ||||||||||
Nonaccrual loans to average loans | 1.14 | % | 1.44 | % | 1.29 | % | 1.45 | % | 0.25 | % | ||||||||||
Interest income on nonaccrual loans: | ||||||||||||||||||||
Contractually due | $ | 50 | $ | 58 | $ | 197 | $ | 254 | $ | 47 | ||||||||||
Collected | $ | 50 | $ | 58 | $ | 69 | $ | 14 | $ | 52 |
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For the Six Months Ended June 30, | |||||||||||||||||
2005 | 2004 | ||||||||||||||||
Average | Average | ||||||||||||||||
Balance | Rate | Balance | Rate | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Core deposits | |||||||||||||||||
Noninterest bearing demand deposits | $ | 92,242 | — | $ | 95,358 | — | |||||||||||
Interest checking | 20,563 | 0.10 | % | 19,622 | 0.11 | % | |||||||||||
Savings accounts | 63,273 | 0.73 | % | 60,916 | 0.81 | % | |||||||||||
Time deposits less than $100,000 | 30,023 | 2.17 | % | 23,987 | 1.58 | % | |||||||||||
Total core deposits | $ | 206,101 | $ | 199,884 | |||||||||||||
Noncore deposits | |||||||||||||||||
Time deposits of $100,000 or more | 25,009 | 2.36 | % | 27,514 | 1.21 | % | |||||||||||
Total deposits | $ | 231,110 | $ | 227,398 | |||||||||||||
Total interest bearing deposits | $ | 138,868 | 1.24 | % | $ | 132,040 | 0.93 | % | |||||||||
For the Years Ended December 31, | |||||||||||||||||||||||||
2004 | 2003 | 2002 | |||||||||||||||||||||||
Average | Average | Average | Average | Average | Average | ||||||||||||||||||||
Balance | Rate | Balance | Rate | Balance | Rate | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Core deposits | |||||||||||||||||||||||||
Noninterest bearing demand deposits | $ | 81,455 | — | $ | 67,400 | — | $ | 53,472 | — | ||||||||||||||||
Interest checking | 19,776 | 0.11 | % | 17,946 | 0.11 | % | 16,303 | 0.13 | % | ||||||||||||||||
Savings accounts | 61,697 | 0.79 | % | 51,807 | 0.72 | % | 35,414 | 0.78 | % | ||||||||||||||||
Time deposits less than $100,000 | 24,783 | 1.79 | % | 26,724 | 1.93 | % | 33,505 | 3.05 | % | ||||||||||||||||
Total core deposits | 190,283 | 165,233 | 138,694 | ||||||||||||||||||||||
Noncore deposits | |||||||||||||||||||||||||
Time deposits of $100,000 or more | 27,355 | 1.33 | % | 28,080 | 1.54 | % | 28,712 | 2.58 | % | ||||||||||||||||
Total deposits | $ | 215,066 | $ | 191,957 | $ | 167,405 | |||||||||||||||||||
Total interest bearing deposits | $ | 133,611 | 0.98 | % | $ | 124,557 | 1.08 | % | $ | 113,933 | 1.81 | % | |||||||||||||
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June 30, 2005 | December 31, 2004 | |||||||||||||||
Amount | Percentage | Amount | Percentage | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Three months or less | $ | 9,090 | 29 | % | $ | 17,394 | 54 | % | ||||||||
Over three months through six months | 14,404 | 46 | % | 7,571 | 23 | % | ||||||||||
Over six months through one year | 6,723 | 22 | % | 2,086 | 6 | % | ||||||||||
Over one year | 1,026 | 3 | % | 5,200 | 16 | % | ||||||||||
Total | $ | 31,243 | 100 | % | $ | 32,251 | 100 | % | ||||||||
As of or for the Six Months | ||||||||
Ended June 30, 2005 | ||||||||
Federal Home | Weighted | |||||||
Loan Bank | Average | |||||||
Advances | Interest Rate | |||||||
(Dollars in thousands) | ||||||||
Amount outstanding at end of period | $ | 34,940 | 2.85 | % | ||||
Maximum amount outstanding at any month-end during the period | $ | 34,940 | 2.85 | % | ||||
Average amount outstanding during the period | $ | 32,080 | 2.67 | % |
Amount | Maturity Year | |||||
$ | 18,140 | 2005 | ||||
11,550 | 2006 | |||||
5,250 | 2007 | |||||
$ | 34,940 | |||||
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As of or for the Year Ended December 31, | ||||||||||||||||||||||||
2004 | 2003 | 2002 | ||||||||||||||||||||||
Federal | Weighted | Federal | Weighted | Federal | Weighted | |||||||||||||||||||
Home | Average | Home | Average | Home | Average | |||||||||||||||||||
Loan Bank | Interest | Loan Bank | Interest | Loan Bank | Interest | |||||||||||||||||||
Advances | Rate | Advances | Rate | Advances | Rate | |||||||||||||||||||
�� | ||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Amount outstanding at end of period | $ | 32,850 | 2.39 | % | $ | 25,000 | 1.63 | % | — | — | ||||||||||||||
Maximum amount outstanding at any month-end during the period | $ | 32,850 | 2.39 | % | $ | 25,000 | 1.63 | % | — | — | ||||||||||||||
Average amount outstanding during the period | $ | 29,706 | 1.95 | % | $ | 12,405 | 1.54 | % | — | — |
Amount | Maturity Year | |||||
$ | 16,050 | 2005 | ||||
11,550 | 2006 | |||||
5,250 | 2007 | |||||
$ | 32,850 | |||||
June 30, 2005 | ||||||||||||||||||||
One to | Three to | Greater | ||||||||||||||||||
Less Than | Three | Five | Than Five | |||||||||||||||||
One Year | Years | Years | Years | Total | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
FHLB term advances | $ | 18,890 | $ | 16,050 | $ | — | $ | — | $ | 34,940 | ||||||||||
Salary continuation benefits | — | — | — | 235 | 235 | |||||||||||||||
Operating lease obligations | 553 | 1,188 | 2,760 | 1,880 | 6,381 | |||||||||||||||
Total | $ | 19,443 | $ | 17,238 | $ | 2,760 | $ | 2,115 | $ | 41,556 | ||||||||||
December 31, 2004 | ||||||||||||||||||||
One to | Three to | Greater | ||||||||||||||||||
Less Than | Three | Five | Than Five | |||||||||||||||||
One Year | Years | Years | Years | Total | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
FHLB term advances | $ | 16,050 | $ | 11,550 | $ | 5,250 | $ | — | $ | 32,850 | ||||||||||
Salary continuation benefits | — | — | — | 180 | 180 | |||||||||||||||
Operating lease obligations | 332 | 846 | 276 | 960 | 2,414 | |||||||||||||||
Total | $ | 16,382 | $ | 12,396 | $ | 5,526 | $ | 1,140 | $ | 35,444 | ||||||||||
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June 30, 2005 | |||||||||||||||||||||
By Repricing Interval | |||||||||||||||||||||
4-12 | |||||||||||||||||||||
0-3 Months | Months | 1-5 Years | >5 Years | Total | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Earning assets | |||||||||||||||||||||
Loans | $ | 116,574 | $ | 9,601 | $ | 57,242 | $ | 13,964 | $ | 197,381 | |||||||||||
Securities | 4,537 | 13,276 | 37,456 | 18,665 | 73,934 | ||||||||||||||||
Federal funds sold | 3,715 | 3,715 | |||||||||||||||||||
Total earning assets | 124,826 | 22,877 | 94,698 | 32,629 | 275,030 | ||||||||||||||||
Interest bearing funds | |||||||||||||||||||||
Deposits | 49,458 | 75,379 | 17,224 | — | 142,061 | ||||||||||||||||
Borrowings | 16,890 | 8,500 | 9,550 | — | 34,940 | ||||||||||||||||
Total interest bearing funds | 66,348 | 83,879 | 26,774 | — | 177,001 | ||||||||||||||||
Period gap | $ | 58,478 | $ | (61,002 | ) | $ | 67,924 | $ | 32,629 | $ | 98,029 | ||||||||||
Cumulative gap | $ | 58,478 | $ | (2,524 | ) | $ | 65,400 | $ | 98,029 | ||||||||||||
Cumulative gap as a percentage of earning assets | 19.60 | % | -0.85 | % | 21.92 | % | 32.86 | % | |||||||||||||
December 31, 2004 | |||||||||||||||||||||
By Repricing Interval | |||||||||||||||||||||
4-12 | |||||||||||||||||||||
0-3 Months | Months | 1-5 Years | >5 Years | Total | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Earning assets | |||||||||||||||||||||
Loans | $ | 96,499 | $ | 3,659 | $ | 69,888 | $ | 10,481 | $ | 180,527 | |||||||||||
Securities | 4,755 | 9,569 | 38,308 | 24,713 | 77,345 | ||||||||||||||||
Federal funds sold | 4,055 | — | — | — | 4,055 | ||||||||||||||||
Total interest earning assets | 105,309 | 13,228 | 108,196 | 35,194 | 261,927 | ||||||||||||||||
Interest bearing funds | |||||||||||||||||||||
Deposits | 35,669 | 57,048 | 49,773 | — | 142,490 | ||||||||||||||||
Borrowings | 2,500 | 13,550 | 16,800 | — | 32,850 | ||||||||||||||||
Total interest bearing funds | 38,169 | 70,598 | 66,573 | — | 175,340 | ||||||||||||||||
Period gap | $ | 67,140 | $ | (57,370 | ) | $ | 41,623 | $ | 35,194 | $ | 86,587 | ||||||||||
Cumulative gap | $ | 67,140 | $ | 9,770 | $ | 51,393 | $ | 86,578 | |||||||||||||
Cumulative gap as a percentage of interest earning assets | 25.63 | % | 3.73 | % | 19.62 | % | 33.06 | % | |||||||||||||
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To be Well | |||||||||||||||||||||||||
For Capital | Capitalized Under | ||||||||||||||||||||||||
Adequacy | Prompt Corrective | ||||||||||||||||||||||||
Actual | Purposes | Action Provision | |||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
June 30, 2005 | |||||||||||||||||||||||||
Total capital | $ | 26,753 | 11.63 | % | $ | 18,403 | 8.00 | % | $ | 23,003 | 10.00 | % | |||||||||||||
(to risk weighted assets) | |||||||||||||||||||||||||
Tier I capital | $ | 24,010 | 10.44 | % | $ | 9,199 | 4.00 | % | $ | 13,799 | 6.00 | % | |||||||||||||
(to risk weighted assets) | |||||||||||||||||||||||||
Tier I capital | $ | 24,010 | 8.20 | % | $ | 11,712 | 4.00 | % | $ | 14,640 | 5.00 | % | |||||||||||||
(to average assets) |
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To be Well | |||||||||||||||||||||||||
For Capital | Capitalized Under | ||||||||||||||||||||||||
Adequacy | Prompt Corrective | ||||||||||||||||||||||||
Actual | Purposes | Action Provision | |||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
December 31, 2004 | |||||||||||||||||||||||||
Total capital | $ | 25,300 | 12.25 | % | $ | 16,518 | 8.00 | % | $ | 20,647 | 10.00 | % | |||||||||||||
(to risk weighted assets) | |||||||||||||||||||||||||
Tier I capital | $ | 22,804 | 11.04 | % | $ | 8,259 | 4.00 | % | $ | 12,388 | 6.00 | % | |||||||||||||
(to risk weighted assets) | |||||||||||||||||||||||||
Tier I capital | $ | 22,804 | 8.61 | % | $ | 10,974 | 4.00 | % | $ | 13,718 | 5.00 | % | |||||||||||||
(to average assets) |
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• | common stockholders’ equity; | |
• | qualifying noncumulative perpetual preferred stock (including related surplus); and | |
• | minority interests in the equity accounts of consolidated subsidiaries. |
• | a portion of the allowance for loan and lease losses; | |
• | certain types of perpetual preferred stock and related surplus; | |
• | certain types of hybrid capital instruments and mandatory convertible debt securities; and | |
• | a portion of term subordinated debt and intermediate-term preferred stock, including related surplus. |
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To be Well | |||||||||||||||||||||||||
For Capital | Capitalized Under | ||||||||||||||||||||||||
Adequacy | Prompt Corrective | ||||||||||||||||||||||||
Actual | Purposes | Action Provision | |||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
June 30, 2005 | |||||||||||||||||||||||||
Total capital | $ | 26,753 | 11.63 | % | $ | 18,403 | 8.00 | % | $ | 23,003 | 10.00 | % | |||||||||||||
(to risk weighted assets) | |||||||||||||||||||||||||
Tier I capital | $ | 24,010 | 10.44 | % | $ | 9,199 | 4.00 | % | $ | 13,799 | 6.00 | % | |||||||||||||
(to risk weighted assets) | |||||||||||||||||||||||||
Tier I capital | $ | 24,010 | 8.20 | % | $ | 11,712 | 4.00 | % | $ | 14,640 | 5.00 | % | |||||||||||||
(to average assets) |
• | 100% of assets classified loss; | |
• | 50% of assets classified doubtful; | |
• | 15% of assets classified substandard; and | |
• | estimated credit losses on other assets over the upcoming twelve months. |
• | the amount of the deferred tax assets that can be realized within one year of the quarter-end report date; or | |
• | 10% of Tier 1 capital. |
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• | “well capitalized” if it has a total risk-based capital ratio of 10.0% or more, has a Tier 1 risk-based capital ratio of 6.0% or more, has a leverage capital ratio of 5.0% or more, and is not subject to specified requirements to meet and maintain a specific capital level for any capital measure; | |
• | “adequately capitalized” if it has a total risk-based capital ratio of 8.0% or more, a Tier 1 risk-based capital ratio of 4.0% or more, and a leverage capital ratio of 4.0% or more (3.0% under certain circumstances) and does not meet the definition of “well capitalized”; | |
• | “undercapitalized” if it has a total risk-based capital ratio that is less than 8.0%, a Tier 1 risk-based capital ratio that is less than 4.0%, or a leverage capital ratio that is less than 4.0% (3.0% under certain circumstances); | |
• | “significantly undercapitalized” if it has a total risk-based capital ratio that is less than 6.0%, a Tier 1 risk-based capital ratio that is less than 3.0% or a leverage capital ratio that is less than 3.0%; and | |
• | “critically undercapitalized” if it has a ratio of tangible equity to total assets that is equal to or less than 2.0%. |
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• | Group A — financially sound with only a few minor weaknesses; | |
• | Group B — demonstrates weaknesses that could result in significant deterioration; and | |
• | Group C — poses a substantial probability of loss. |
Assessment Rates | ||||||||||||
Supervisory Group | ||||||||||||
Capital Group | Group A | Group B | Group C | |||||||||
Well capitalized | 0 | 3 | 17 | |||||||||
Adequately capitalized | 3 | 10 | 24 | |||||||||
Undercapitalized | 10 | 24 | 27 |
• | the appointment of a conservator or receiver for the bank; | |
• | the issuance of a cease and desist order that can be judicially enforced; | |
• | the termination of the bank’s deposit insurance; |
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• | the imposition of civil monetary penalties; | |
• | the issuance of directives to increase capital; | |
• | the issuance of formal and informal agreements; | |
• | the issuance of removal and prohibition orders against officers, directors and other institution-affiliated parties; and | |
• | the enforcement of such actions through injunctions or restraining orders based upon a judicial determination that the deposit insurance fund or the bank would be harmed if such equitable relief was not granted. |
• | insolvency; | |
• | substantial dissipation of assets or earnings due to any violation of law or regulation or any unsafe or unsound practice; | |
• | an unsafe or unsound condition to transact business, including substantially insufficient capital or otherwise; | |
• | any willful violation of a cease and desist order which has become final; | |
• | any concealment of books, papers, records or assets of the institution; | |
• | the likelihood that the institution will not be able to meet the demands of its depositors or pay its obligations in the normal course of business; | |
• | the incurrence or likely incurrence of losses by the institution that will deplete all or substantially all of its capital with no reasonable prospect for the replenishment of the capital without federal assistance; or | |
• | any violation of any law or regulation, or an unsafe or unsound practice or condition which is likely to cause insolvency or substantial dissipation of assets or earnings, or is likely to weaken the condition of the institution or otherwise seriously prejudice the interests of its depositors. |
• | internal controls, information systems and internal audit systems; | |
• | loan documentation; |
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• | credit underwriting; | |
• | asset growth; and | |
• | compensation, fees and benefits. |
• | the Community Reinvestment Act, or the CRA; |
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• | the Truth in Lending Act, or the TILA; | |
• | the Fair Housing Act, or the FH Act; | |
• | the Equal Credit Opportunity Act, or the ECOA; | |
• | the Home Mortgage Disclosure Act, or the HMDA; and | |
• | the Real Estate Settlement Procedures Act, or the RESPA. |
• | overt evidence of discrimination; | |
• | evidence of disparate treatment; and | |
• | evidence of disparate impact. |
• | declining a loan for the purposes of racial discrimination; | |
• | making excessively low appraisals of property based on racial considerations; | |
• | pressuring, discouraging, or denying applications for credit on a prohibited basis; | |
• | using excessively burdensome qualifications standards for the purpose or with the effect of denying housing to minority applicants; | |
• | imposing on minority loan applicants more onerous interest rates or other terms, conditions or requirements; and | |
• | racial steering, or deliberately guiding potential purchasers to or away from certain areas because of race. |
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• | its open-market dealings in United States government securities; | |
• | adjusting the required level of reserves for financial institutions subject to reserve requirements; | |
• | placing limitations upon savings and time deposit interest rates; and | |
• | adjustments to the discount rate applicable to borrowings by banks which are members of the Federal Reserve System. |
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Sales Prices | Approximate | |||||||||||
Number of | ||||||||||||
Quarter Ended | High | Low | Shares Traded | |||||||||
March 31, 2003 | $ | 10.87 | $ | 10.50 | 13,700 | |||||||
June 30, 2003 | $ | 12.00 | $ | 11.00 | 15,600 | |||||||
September 30, 2003 | $ | 13.00 | $ | 11.75 | 4,300 | |||||||
December 31, 2003 | $ | 15.75 | $ | 13.10 | 11,488 | |||||||
March 31, 2004 | $ | 22.00 | $ | 15.80 | 32,387 | |||||||
June 30, 2004 | $ | 20.80 | $ | 17.95 | 13,559 | |||||||
September 30, 2004 | $ | 19.75 | $ | 17.75 | 24,272 | |||||||
December 31, 2004 | $ | 23.00 | $ | 19.25 | 14,693 | |||||||
March 31, 2005 | $ | 23.00 | $ | 22.50 | 190,970 | |||||||
June 30, 2005 | $ | 22.33 | $ | 19.25 | 10,660 | |||||||
Period Ended (July 1, 2005 through August 31, 2005) | $ | 20.45 | $ | 19.80 | 9,494 |
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Pro Forma | ||||||||||||||||||
First California | FCB Merger | FCB Bancorp, | ||||||||||||||||
Bank | Corp.(1) | FCB Bancorp(2) | Consolidated | |||||||||||||||
(Unaudited) | ||||||||||||||||||
Shareholders’ Equity: | ||||||||||||||||||
Common Stock | $ | 11,965,000 | $ | 500 | $ | 2,000 | $ | 11,965,000 | ||||||||||
Retained earnings | 12,045,000 | $ | 0 | $ | 0 | 12,045,000 | ||||||||||||
Accumulated other comprehensive loss | (346,000 | ) | $ | 0 | $ | 0 | (346,000 | ) | ||||||||||
Total Shareholders’ Equity | $ | 23,664,000 | $ | 500 | $ | 2,000 | $ | 23,664,000 | ||||||||||
Common Stock Data: | ||||||||||||||||||
Authorized | 2,500,000 | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||||
Outstanding | 2,162,807 | 100 | 200 | 2,162,807 | ||||||||||||||
Preferred Stock Data: | ||||||||||||||||||
Authorized | 0 | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||||
Outstanding | 0 | 0 | 0 | 0 |
(1) | Funds to capitalize FCB Merger Corp. were obtained by issuing 100 shares to the Holding Company for $500. At the time of the merger the shares will be cancelled. |
(2) | Funds to capitalize the Holding Company were obtained by issuing 200 shares to Mr. James O. Birchfield, the Bank’s Chairman of the Board, for $2,000. At the time of the merger and pursuant to a written agreement, these shares will be repurchased for $2,000 and cancelled by the Holding Company. |
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• | corporate organization and existence; | |
• | capitalization; | |
• | the corporate organization and existence of subsidiaries of FCB Bancorp and SCB; | |
• | corporate power and authority; | |
• | governmental and third-party approvals required to complete the Acquisition; | |
• | timely filing of required regulatory reports and absence of regulatory investigations or restrictive agreements with regulators; | |
• | environmental matters; | |
• | that no action has been taken that would give rise to a claim by any party for a broker or finder’s fee or other like payment; | |
• | absence of litigation; | |
• | and insurance coverage |
• | employee benefit matters; | |
• | validity of, and the absence of material defaults under, certain contracts; | |
• | interest rate risk management instruments, such as swaps and options; | |
• | title to real and personal property; |
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• | transactions with affiliates; | |
• | compliance with laws; | |
• | the absence of a trust business; | |
• | tax matters; | |
• | books and records have been properly and accurately maintained; | |
• | labor matters; | |
• | and its allowance for loan losses is adequate under established governmental standards. |
• | conduct its business in the ordinary course; | |
• | not take any action that would adversely affect or delay the ability of the parties to perform any of their obligations in a timely manner. |
• | incur any indebtedness for borrowed money (other than deposits, federal funds borrowings or borrowings from the Federal Home Loan Bank of San Francisco), or assume, guarantee, endorse or otherwise become responsible for the obligations of any other individual or entity; | |
• | make any loan, loan commitment, renewal or extension to any person or immediate family member of such person exceeding $100,000 without submitting a complete loan package to FCB Bancorp for a review and comment; | |
• | from January 2, 2005 until the closing, (i) make, declare or pay any dividend in excess of (A) Five Hundred and Eighty-Five Thousand Dollars ($585,000) plus (B) the amount of retained cash in SCB accounts as of January 2, 2005, and any interest as may be earned thereon (constituting a portion of previously taxed but undistributed income), but not to exceed Two Hundred Seventy Thousand Dollars ($270,000.00) or (ii) directly or indirectly adjust, split, combine, redeem, reclassify, purchase or otherwise acquire, any shares of its capital stock; | |
• | issue, sell or otherwise permit to become outstanding any additional shares or rights to acquire shares; | |
• | permit additional shares of stock to become subject to grants of employee or director options; | |
• | enter into, amend or renew any employment, consulting severance or similar agreements or increase in any manner the compensation or fringe benefits of any of its employees or directors, except for: (i) normal increases for employees made in the ordinary course of business consistent with past practice provided that no increase shall result in an annual adjustment of more than 5%, (ii) other changes that are required by applicable law, (iii) satisfy contractual obligations existing as of the date of the Acquisition Agreement and set forth in a disclosure schedule, or (iv) grants of awards to newly hired employees consistent with past practice; | |
• | enter into or amend any of its benefit plans; | |
• | hire any person as employee of SCB or SCCB or promote any employee except (i) to satisfy contractual obligations, (ii) persons hired to fill any vacancies arising after the date of the Acquisition Agreement and whose employment is terminable at the will of SCB or of SCCBank, or (iii) a new employee whose annual base salary and bonus do not exceed $70,000; | |
• | establish, adopt or amend any pension, retirement, stock option, stock purchase, savings, profit sharing, deferred compensation, consulting, bonus, group insurance or other employee benefit, incentive or welfare contract, plan or arrangement or any related trust agreement, in respect of any current or |
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former director, officer or employee of SCB or SCCB or take any action to accelerate the vesting or exerciseability of stock options, restricted stock or other compensation or benefits payable thereunder; | ||
• | sell, transfer, mortgage, encumber or otherwise dispose of or discontinue or any of its business, properties, assets or deposits that together with all other such transactions other than in the ordinary course of business, are not material to SCB or SCCB; | |
• | acquire, other than by way of foreclosures or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in the ordinary course of business consistent with past practice, all or any portion of the assets, business, deposits or property of any entity except in the ordinary course of business consistent with past practice that is not material to SCB and SCCB; | |
• | make payment not then required under any contract that calls for aggregate annual payments of $25,000 or more which is not terminable at will or with 60 days or less notice, without payment of a premium or penalty other than loans or other transactions made in the ordinary course of the banking business; | |
• | except as required by law or regulation, implement or adopt any material change interest rate or other risk management policies, fail to follow existing policies, or fail to use commercially reasonable means to avoid any material increase in its aggregate exposure to interest rate risk; | |
• | enter into any settlement or similar agreement with respect to, or take any other significant action with respect to conduct of any action, suit, proceeding or investigation that SCB or SCCB becomes a party to after the date of the Acquisition Agreement which settlement, individually or for all such settlements that exceed $25,000, are material to SCB or SCCB or would impose any material restriction on the business of SCB or SCCB or create precedent for claims reasonably likely to be material to SCB or SCCB; | |
• | except as may be required by applicable law or specifically permitted by the Acquisition Agreement, knowingly take any action that is intended or would reasonably be expected to result in (i) any of SCB’s and SCCB’s representations or warranties set forth in the Acquisition Agreement being or becoming untrue in any material respect, (ii) any of the conditions to the merger set forth in the Acquisition Agreement not being satisfied, or (iii) in a material violation of any provision of the Acquisition Agreement except as may be required by applicable law or regulation; | |
• | make any capital expenditures other than in the ordinary course of business and not to exceed $10,000 individually or $25,000 in the aggregate; | |
• | amend its articles of incorporation or its bylaws; | |
• | make any direct investment either by contributions to capital, property transfers or purchase of any property or assets of any person other than in the ordinary course of business not to exceed $100,000 or purchases of direct obligations of the United States of America or obligations of U.S. government agencies which are entitled to the full faith and credit of the United States, in any case with a remaining maturity at the time of purchase of two years or less; | |
• | implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP or regulatory guidelines; | |
• | settle any material audit, make or change any material tax election, file any amended tax return, take any action which could materially adversely affect the tax position of SCB or SCCB, or of FCB Bancorp after the Acquisition or take any action with respect to taxes that is outside the ordinary course of business or inconsistent with past practice; | |
• | agree to take or make any commitment to take any of these prohibited actions. |
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• | take any action reasonably likely to have an adverse effect on FCB’s ability to perform any of its material obligations under the Acquisition Agreement; | |
• | except as may be required by applicable law, take any action that is intended or would reasonably be expected to result in (i) any of FCB’s representations or warranties set forth in the Acquisition Agreement being or becoming untrue in any material respect, (ii)any of the conditions to the Acquisition set forth in the Acquisition Agreement not being satisfied, (iii) a violation of any provision of the Acquisition Agreement, or (iv) a material violation of any provision of the Acquisition Agreement; | |
• | agree to take or make any commitment to take any of these prohibited actions. |
• | use their reasonable best efforts to take all actions necessary to consummate the Acquisition; | |
• | consult each other before issuing any press releases with respect to the Acquisition or the Acquisition Agreement; provided, however, that a party may, without the prior consent of the other party (but after such consultation, to the extent practicable in the circumstances), issue such press release or make such public statements as may upon the advice of outside counsel be required by law or the rules or regulations of NASDAQ; | |
• | obtain all governmental consents necessary to consummate the transactions contemplated in the Acquisition Agreement; | |
• | notify each other of any circumstance that is reasonably likely to result in a material adverse effect on them or would cause a material breach of their respective obligations under the Acquisition Agreement; | |
• | use reasonable efforts to have the Acquisition qualify as taxable purchase of all of the outstanding stock of SCB by FCB Bancorp, followed by the liquidation of SCB pursuant to Section 322 of the Internal Revenue Code; and |
• | afford FCB Bancorp access to certain information and personnel; | |
• | use its reasonable best efforts to maintain and preserve intact its business organization, employees and advantageous business relationships; | |
• | convene a shareholders meeting to vote on the merger as soon as practicable after the delivery of this proxy statement-prospectus and recommend to its shareholders that they approve the Acquisition; | |
• | refrain from soliciting any offers with respect to a merger or other similar transaction involving all or substantially all of its assets or more than 10% of its outstanding equity securities;provided, however, that SCB and SCCB and its board may take actions required of them by law or directors’ fiduciary duties; | |
• | allow FCB Bancorp to participate in any meetings or interviews with employees called by SCB or SCCB to discuss the Acquisition; | |
• | assist FCB Bancorp in obtaining any required comments by third-party vendors in order to ensure a smooth transition after the Acquisition; | |
• | cause to be delivered to FCB Bancorp, shareholder agreements executed by each shareholder of SCB; | |
• | modify its accounting and certain other policies and practices to match those of FCB Bancorp; |
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• | keep FCB Bancorp reasonably informed as to the status of certain transactions being negotiated as of the date of the Acquisition Agreement; | |
• | provide audited consolidated financial statements of SCB for the year ended December 31, 2004 within ten business days after receiving them |
• | following the effective time of the Acquisition, indemnify present and former directors and officers of SCB and SCCB in connection with any claim arising out of actions or omissions occurring at or prior to the effective time to the fullest extent that SCB and SCCB is permitted to indemnify its directors and officers; | |
• | In addition, FCB Bancorp is obligated for three years from the effective time, to provide the portion of directors and officers liability insurance that serves to reimburse the present and former directors and officers of SCB on terms and conditions comparable to those provided by SCB;provided, however, that FCB Bancorp is not required to spend on an annual basis more than 150% of the current amount spent by SCB to procure such insurance coverage;provided further, that if FCB Bancorp is unable to maintain or obtain such insurance coverage, FCB Bancorp shall use its commercially reasonable efforts to obtain as much comparable insurance as is available for such insurance coverage; and | |
• | provide former employees of SCB and SCCB who continue as employees of FCB Bancorp with employee benefit plans no less favorable, in the aggregate, than those provided to similarly situated employees of FCB Bancorp; |
• | approval of the Acquisition Agreement by SCB shareholders; | |
• | receipt of all regulatory approvals required to complete the Acquisition and all those approvals remaining in effect and all statutory waiting periods with respect to those approvals having expired; | |
• | effectiveness of the registration statement, of which this proxy statement-prospectus forms a part, under the Securities Act, and no stop order suspending the effectiveness of the registration statement having been issued and no proceedings for that purpose having been initiated and not withdrawn by the SEC; | |
• | absence of any order, injunction, decree, statute, rule, regulation or judgment issued or enacted by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the completion of the Acquisition or any of the other transactions contemplated by the Acquisition Agreement; | |
• | accuracy of the representations and warranties of the other party in all material respects as of the closing date of the Acquisition as though made on the closing date; | |
• | performance by each party all material respects of all obligations required to be performed by it under the Acquisition Agreement at or prior to the closing date; and | |
• | FCB Bancorp’s obligation to effect the Acquisition is subject to satisfaction, or waiver, of the following additional conditions: (i) FCB Bancorp shall have received executed Non-Competition Agreements from all the directors of SCB; SCB has delivered to FCB Bancorp a summary of all professional service fees to SCB and SCCB incurred in connection with the Acquisition; (ii) SCB and SCCB shall have obtained any third-party consents necessary to transfer so as not to be in default under any contract as a result of the Acquisition; (iii) performance by SCB shareholders who have signed shareholder agreements of all material obligations under such agreements; (iv) SCB’s net income, on a consolidated basis and excluding payments, costs and accruals as described in the merger agreement, shall not be less than $1,300,000; (v) the adjusted shareholders’ equity shall not be less than $14,000,000; and |
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• | SCB shall have provided FCB consolidated financial statements presenting the financial condition of SCB as of the end of the last day of the last month prior to effective time of the Acquisition. |
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As of or for the Three | As of or for the Six | |||||||||||||||
Months Ended June 30, | Months Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
Results of Operations | ||||||||||||||||
Net interest income | $ | 1,491 | $ | 1,493 | $ | 2,927 | $ | 3,027 | ||||||||
Provision (credit) for loan losses | 1 | (6 | ) | (9 | ) | (50 | ) | |||||||||
Noninterest income | 140 | 130 | 291 | 384 | ||||||||||||
Noninterest expense | 836 | 903 | 1,780 | 1,859 | ||||||||||||
Net income | $ | 766 | $ | 701 | $ | 1,396 | $ | 1,546 | ||||||||
Financial Position | ||||||||||||||||
Assets | $ | 147,497 | $ | 140,022 | $ | 147,497 | $ | 140,022 | ||||||||
Loans | 121,003 | 115,094 | 121,003 | 115,094 | ||||||||||||
Allowance for loan losses | 1,174 | 1,189 | 1,174 | 1,189 | ||||||||||||
Deposits | 129,473 | 122,918 | 129,473 | 122,918 | ||||||||||||
Shareholders’ equity | $ | 17,429 | $ | 16,044 | $ | 17,429 | $ | 16,044 | ||||||||
Selected Ratios | ||||||||||||||||
Return on average equity(1) | 17.84 | % | 17.57 | % | 16.57 | % | 19.62 | % | ||||||||
Return on average assets(2) | 2.09 | % | 2.01 | % | 1.92 | % | 2.23 | % | ||||||||
Efficiency ratio(3) | 51.26 | % | 55.64 | % | 55.31 | % | 54.50 | % | ||||||||
Net interest margin | 4.14 | % | 4.35 | % | 4.09 | % | 4.43 | % | ||||||||
Nonaccrual loans to loans | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||
Net charge-offs (recoveries) to loans | 0.00 | % | 0.02 | % | 0.01 | % | 0.02 | % | ||||||||
Allowance for loan losses to loans | 0.97 | % | 1.03 | % | 0.97 | % | 1.03 | % | ||||||||
Allowance for loan losses to nonaccrual loans(4) | ||||||||||||||||
Total capital ratio | 14.61 | % | 15.55 | % | 14.61 | % | 15.55 | % | ||||||||
Tier 1 capital ratio | 13.69 | % | 14.48 | % | 13.69 | % | 14.48 | % | ||||||||
Tier 1 leverage ratio | 11.84 | % | 11.46 | % | 11.84 | % | 11.46 | % |
(1) | Computed by dividing net income by average equity. Average equity is the average of beginning equity and ending equity for the period. |
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(2) | Computed by dividing net income by average assets. Average assets is the average beginning assets and ending assets for the period. |
(3) | Computed by dividing noninterest expense by net interest income and noninterest income. The ratio is a measurement of the amount of revenue that is utilized to meet overhead expenses. |
(4) | There were no nonaccrual loans for the periods presented. |
C Corporation | ||||||||||||||||||||
As of or for the Year Ended December 31, | ||||||||||||||||||||
2004 | 2003 | 2002 | 2001(1) | 2000(1) | ||||||||||||||||
Results of Operations | ||||||||||||||||||||
Net interest income | $ | 5,809 | $ | 6,255 | $ | 6,262 | $ | 5,663 | $ | 5,499 | ||||||||||
Provision (credit) for loan losses | (55 | ) | (4 | ) | (81 | ) | 66 | 89 | ||||||||||||
Noninterest income | 715 | 1,271 | 895 | 536 | 386 | |||||||||||||||
Noninterest expense | 3,558 | 3,888 | 3,486 | 3,229 | 3,050 | |||||||||||||||
Net income | $ | 2,915 | $ | 3,515 | $ | 3,620 | $ | 1,682 | $ | 1,592 | ||||||||||
Financial Position | ||||||||||||||||||||
Assets | $ | 146,725 | $ | 142,679 | $ | 133,805 | $ | 130,499 | $ | 121,968 | ||||||||||
Loans | 120,719 | 115,646 | 104,714 | 103,705 | 100,438 | |||||||||||||||
Allowance for loan losses | 1,183 | 1,211 | 1,199 | 1,273 | 1,216 | |||||||||||||||
Deposits | 128,799 | 125,485 | 117,260 | 115,357 | 108,496 | |||||||||||||||
Shareholders’ equity | $ | 16,767 | $ | 15,781 | $ | 15,037 | $ | 13,571 | $ | 12,379 | ||||||||||
Selected Ratios | ||||||||||||||||||||
Return on average equity(2) | 17.91 | % | 22.81 | % | 25.31 | % | 12.96 | % | 13.62 | % | ||||||||||
Return on average assets(3) | 2.01 | % | 2.54 | % | 2.74 | % | 1.33 | % | 1.35 | % | ||||||||||
Efficiency ratio(4) | 54.54 | % | 51.66 | % | 48.71 | % | 52.09 | % | 51.83 | % | ||||||||||
Net interest margin | 4.12 | % | 4.71 | % | 4.92 | % | 4.63 | % | 4.85 | % | ||||||||||
Nonaccrual loans to loans | 0.00 | % | 0.07 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
Net charge-offs (recoveries) to loans | -0.02 | % | -0.01 | % | -0.01 | % | 0.00 | % | 0.06 | % | ||||||||||
Allowance for loan losses to loans | 0.98 | % | 1.05 | % | 1.15 | % | 1.23 | % | 1.21 | % | ||||||||||
Allowance for loan losses to nonaccrual loans(5) | 155.26 | % | ||||||||||||||||||
Total capital ratio | 14.01 | % | 15.23 | % | 14.92 | % | 14.12 | % | 13.49 | % | ||||||||||
Tier 1 capital ratio | 13.07 | % | 14.13 | % | 13.80 | % | 12.88 | % | 12.27 | % | ||||||||||
Tier 1 leverage ratio | 11.24 | % | 11.25 | % | 11.13 | % | 10.40 | % | 10.13 | % |
(1) | SCB was a C corporation for Federal income tax purposes for the years ended December 31, 2001 and 2000. |
(2) | Computed by dividing net income by average equity. Average equity is the average of beginning equity and ending equity for the period. |
(3) | Computed by dividing net income by average assets. Average assets is the average beginning assets and ending assets for the period. |
(4) | Computed by dividing noninterest expense by net interest income and noninterest income. The ratio is a measurement of the amount of revenue that is utilized to meet overhead expenses. |
(5) | Except at December 31, 2003, there were no nonaccrual loans for the periods presented. |
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For the | For the | For the | ||||||||||||||||||||||
Three Months | Six Months | Years Ended | ||||||||||||||||||||||
Ended June 30, | Ended June 30, | December 31, | ||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2004 | 2003 | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Net income | $ | 766 | $ | 701 | $ | 1,396 | $ | 1,546 | $ | 2,915 | $ | 3,515 |
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For the Six Months Ended June 30, | ||||||||||||||||||||||||
2005 | 2004 | |||||||||||||||||||||||
Average | Income/ | Average | Average | Income/ | Average | |||||||||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||
Loans | $ | 122,285 | $ | 4,736 | 7.75% | $ | 113,732 | $ | 4,594 | 8.08% | ||||||||||||||
U.S. Treasury securities | 4,518 | 59 | 2.61% | 4,032 | 48 | 2.38% | ||||||||||||||||||
Federal Funds Sold | 7,400 | 92 | 2.49% | 8,929 | 40 | 0.90% | ||||||||||||||||||
Interest-bearing balances due from interest bearing institutions | 10,013 | 152 | 3.04% | 11,221 | 138 | 2.46% | ||||||||||||||||||
Total earning assets | $ | 144,216 | $ | 5,039 | 6.99% | $ | 137,914 | $ | 4,820 | 6.99% | ||||||||||||||
Interest bearing transaction accounts | $ | 16,496 | $ | 157 | 1.90% | $ | 18,417 | $ | 144 | 1.56% | ||||||||||||||
Savings deposits | 13,024 | 126 | 1.93% | 15,529 | 123 | 1.58% | ||||||||||||||||||
Time deposits | 99,265 | 1,829 | 3.69% | 93,116 | 1,526 | 3.28% | ||||||||||||||||||
Total interest bearing funds | $ | 128,785 | $ | 2,112 | 3.28% | $ | 127,062 | $ | 1,793 | 2.82% | ||||||||||||||
Net interest income(1) | $ | 2,927 | $ | 3,027 | ||||||||||||||||||||
Net yield on interest earning assets | 4.06% | 4.39% | ||||||||||||||||||||||
(1) | Net interest income before provision for credit losses |
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For the Years Ended December 31, | |||||||||||||||||||||||||
2004 | 2003 | ||||||||||||||||||||||||
Average | Income/ | Average | Average | Income/ | Average | ||||||||||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
ASSETS | |||||||||||||||||||||||||
Interest-bearing balances due from depository institutions | $ | 11,915 | $ | 308 | 2.58% | $ | 11,665 | $ | 308 | 2.64% | |||||||||||||||
U.S. Treasury securities | 4,203 | 94 | 2.24% | 4,010 | 123 | 3.07% | |||||||||||||||||||
Federal funds sold | 8,358 | 105 | 1.26% | 9,467 | 92 | 0.97% | |||||||||||||||||||
Loans | 116,349 | 9,075 | 7.80% | 107,690 | 9,445 | 8.77% | |||||||||||||||||||
Total earning assets | $ | 140,825 | $ | 9,582 | 6.80% | $ | 132,832 | $ | 9,968 | 7.50% | |||||||||||||||
LIABILITIES | |||||||||||||||||||||||||
Interest bearing transaction accounts | $ | 18,416 | $ | 24 | 0.13% | $ | 20,662 | $ | 52 | 0.25% | |||||||||||||||
Savings Deposits | 15,367 | 773 | 5.03% | 17,636 | 793 | 4.50% | |||||||||||||||||||
Time Deposits | 91,579 | 2,976 | 3.25% | 82,051 | 2,868 | 3.50% | |||||||||||||||||||
Total interest bearing funds | $ | 125,362 | $ | 3,773 | 3.01% | $ | 120,349 | $ | 3,713 | 3.09% | |||||||||||||||
Net interest income(1) | $ | 5,809 | $ | 6,255 | |||||||||||||||||||||
Net yield on interest earnings assets | 4.12% | 4.71% | |||||||||||||||||||||||
(1) | Net interest income before provision for credit losses. |
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2005 to 2004 | |||||||||||||
Due To: | |||||||||||||
Volume | Rate | Total | |||||||||||
(Dollars in thousands) | |||||||||||||
Interest income | |||||||||||||
Interest on loans | $ | 334 | $ | (191 | ) | $ | 143 | ||||||
Interest on securities | 6 | 5 | 11 | ||||||||||
Interest on Federal funds sold | (8 | ) | 59 | 52 | |||||||||
Interest on deposits with banks | (16 | ) | 30 | 14 | |||||||||
Total | 316 | (97 | ) | 219 | |||||||||
Interest expense | |||||||||||||
Interest bearing demand deposits | (16 | ) | 29 | 13 | |||||||||
Savings | (22 | ) | 24 | 3 | |||||||||
Certificates of Deposit | 104 | 199 | 304 | ||||||||||
Total | 67 | 253 | 319 | ||||||||||
Net interest income | $ | 249 | $ | (349 | ) | $ | (100 | ) | |||||
2004 to 2003 | |||||||||||||
Due To: | |||||||||||||
Rate | Volume | Total | |||||||||||
(Dollars in thousands) | |||||||||||||
Interest income | |||||||||||||
Interest on loans | $ | (1,094 | ) | $ | 724 | $ | (370 | ) | |||||
Interest on securities | (35 | ) | 6 | (29 | ) | ||||||||
Interest on Federal funds sold | 25 | (12 | ) | 13 | |||||||||
Interest on deposits with banks | (7 | ) | 7 | — | |||||||||
Total | (1,111 | ) | 725 | (386 | ) | ||||||||
Interest expense | |||||||||||||
Interest bearing demand deposits | (23 | ) | (5 | ) | (28 | ) | |||||||
Savings | 88 | (108 | ) | (20 | ) | ||||||||
Certificates of deposit | (210 | ) | 318 | 108 | |||||||||
Total | (145 | ) | 205 | 60 | |||||||||
Net interest income | $ | (966 | ) | $ | 520 | $ | (446 | ) | |||||
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For the | For the | For the | |||||||||||||||||||||||
Three Months | Six Months | Years Ended | |||||||||||||||||||||||
Ended June 30, | Ended June 30, | December 31, | |||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2004 | 2003 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Delinquency charges | $ | 3 | $ | 6 | $ | 8 | $ | 17 | $ | 37 | $ | 34 | |||||||||||||
Rental income | 55 | 35 | 107 | 99 | 194 | 264 | |||||||||||||||||||
Fee income | 80 | 85 | 172 | 262 | 481 | 409 | |||||||||||||||||||
(Loss) gain on sale of assets | 0 | 0 | — | — | (9 | ) | 38 | ||||||||||||||||||
Net gain on sales of loans held for sale | 0 | 0 | — | — | — | 516 | |||||||||||||||||||
Deposit account fees | 2 | 4 | 4 | 6 | 2 | 3 | |||||||||||||||||||
Other income | — | — | 10 | 7 | |||||||||||||||||||||
Total noninterest income | $ | 140 | $ | 130 | $ | 291 | $ | 384 | $ | 715 | $ | 1,271 | |||||||||||||
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For the | For the | For the | |||||||||||||||||||||||
Three Months | Six Months | Years Ended | |||||||||||||||||||||||
Ended June 30, | Ended June 30, | December 31, | |||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2004 | 2003 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Salaries and wages | $ | 530 | $ | 605 | $ | 1,107 | $ | 1,272 | $ | 2,394 | $ | 2,582 | |||||||||||||
Occupancy | 100 | 85 | 199 | 167 | 372 | 380 | |||||||||||||||||||
Promotion & advertising | 32 | 36 | 57 | 82 | 120 | 174 | |||||||||||||||||||
Postage & supplies | 18 | 26 | 36 | 55 | 94 | 119 | |||||||||||||||||||
Data processing | 25 | 22 | 45 | 44 | 83 | 73 | |||||||||||||||||||
Insurance and fidelity bonds | 25 | 21 | 46 | 42 | 97 | 87 | |||||||||||||||||||
Accounting & auditing services | 34 | 28 | 89 | 50 | 100 | 114 | |||||||||||||||||||
Equipment maintenance | 14 | 10 | 31 | 22 | 44 | 36 | |||||||||||||||||||
Board meetings & directors’ fees | 24 | 13 | 35 | 24 | 48 | 49 | |||||||||||||||||||
Other expense | 34 | 58 | 135 | 101 | 206 | 274 | |||||||||||||||||||
Total noninterest expenses | $ | 836 | $ | 903 | $ | 1,780 | $ | 1,859 | $ | 3,558 | $ | 3,888 | |||||||||||||
For the Six Months | For the Years Ended | |||||||||||||||
Ended June 30, | December 31, | |||||||||||||||
2005 | 2004 | 2004 | 2003 | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Earnings before income taxes | $ | 1,447 | $ | 1,602 | $ | 3,021 | $ | 3,642 | ||||||||
Income taxes | 51 | 56 | 106 | 127 | ||||||||||||
Net income | $ | 1,396 | $ | 1,546 | $ | 2,915 | $ | 3,515 | ||||||||
Effective tax rate | 3.52 | % | 3.50 | % | 3.51 | % | 3.49 | % |
As of June 30, 2005 | |||||||||||||||||
Less than | |||||||||||||||||
1 Year | 1 - 5 Year | 5 - 10 Years | Total | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Maturity Distribution | |||||||||||||||||
US Treasury Obligations | $ | 1,490 | $ | 3,019 | — | $ | 4,509 | ||||||||||
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As of December 31, 2004 | |||||||||||||||||
Less than | |||||||||||||||||
1 Year | 1 - 5 Year | 5 - 10 Years | Total | ||||||||||||||
Maturity Distribution | |||||||||||||||||
US Treasury Obligations | $ | 1,500 | $ | 3,028 | — | $ | 4,528 | ||||||||||
As of June 30, 2005 | ||||||||||||||||
One Year | One - Five | Over Five | ||||||||||||||
or Less | Years | Years | Total | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Commercial Real Estate — Fixed Rate | $ | 221 | $ | — | $ | 96 | $ | 317 | ||||||||
Commercial Real Estate — Adjustable Rate | 95,734 | 24,862 | 778 | 121,374 | ||||||||||||
Total maturities and repricings | $ | 95,955 | $ | 24,862 | $ | 874 | $ | 121,691 | ||||||||
As of December 31, 2004 | ||||||||||||||||
One Year | One - Five | Over Five | ||||||||||||||
or Less | Years | Years | Total | |||||||||||||
Commercial Real Estate — Fixed Rate | $ | — | $ | — | $ | 99 | $ | 99 | ||||||||
Commercial Real Estate — Adjustable Rate | 96,937 | 22,907 | 820 | 120,664 | ||||||||||||
Total maturities and repricings | $ | 96,937 | $ | 22,907 | $ | 919 | $ | 120,763 | ||||||||
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For the Three Months | For the Six Months | For the Year Ended | |||||||||||||||||||||||
Ended June 30, | Ended June 30, | December 31, | |||||||||||||||||||||||
2005 | 2004 | 2005 | 2004 | 2005 | 2004 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Beginning balance | $ | 1,173 | $ | 1,167 | $ | 1,183 | $ | 1,211 | $ | 1,211 | $ | 1,199 | |||||||||||||
Provision (credit) for loan losses | 1 | (6 | ) | (9 | ) | (50 | ) | (55 | ) | (4 | ) | ||||||||||||||
Recoveries on loans charged-off | — | 28 | — | 28 | 27 | 16 | |||||||||||||||||||
Ending balance | $ | 1,174 | $ | 1,189 | $ | 1,174 | $ | 1,189 | $ | 1,183 | $ | 1,211 | |||||||||||||
For the Six Months Ended June 30, | ||||||||||||||||
2005 | 2004 | |||||||||||||||
Average | Average | |||||||||||||||
Balance | Rate | Balance | Rate | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Noninterest bearing demand deposits | $ | 301 | $ | 689 | ||||||||||||
Interest checking | 16,496 | 1.90 | % | 18,417 | 1.56 | % | ||||||||||
Savings accounts | 13,024 | 1.93 | % | 15,529 | 1.58 | % | ||||||||||
Time deposits less than $100,000 | 60,674 | 3.11 | % | 59,372 | 2.94 | % | ||||||||||
90,495 | 94,006 | |||||||||||||||
Time deposits of $100,000 or more | 38,591 | 4.60 | % | 33,744 | 3.86 | % | ||||||||||
Total | $ | 129,085 | 3.48 | % | $ | 127,752 | 3.16 | % | ||||||||
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For the Years Ended December 31, | ||||||||||||||||
2004 | 2003 | |||||||||||||||
Average | Average | |||||||||||||||
Balance | Rate | Balance | Rate | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Noninterest bearing demand deposits | $ | 936 | $ | 906 | ||||||||||||
Interest checking | 18,416 | 1.27 | % | 20,662 | 1.33 | % | ||||||||||
Savings accounts | 15,367 | 1.75 | % | 17,636 | 1.97 | % | ||||||||||
Time deposits less than $100,000 | 60,966 | 3.88 | % | 54,699 | 4.28 | % | ||||||||||
95,685 | 93,903 | |||||||||||||||
Time deposits of $100,000 or more | 30,697 | 3.95 | % | 27,352 | 4.35 | % | ||||||||||
Total | $ | 126,382 | 3.28 | % | $ | 121,255 | 3.55 | % | ||||||||
For the Six Months | For the Year Ended | |||||||||||||||
Ended June 30, 2005 | December 31, 2004 | |||||||||||||||
Amount | Percentage | Amount | Percentage | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Three months or less | $ | 405 | 1 | % | $ | 151 | 0 | % | ||||||||
Over three months through six months | 9,424 | 23 | % | 5,708 | 15 | % | ||||||||||
Over six months through one year | 10,814 | 27 | % | 8,398 | 23 | % | ||||||||||
Over one year | 19,859 | 49 | % | 22,602 | 62 | % | ||||||||||
Total | $ | 40,502 | 100 | % | $ | 36,859 | 100 | % | ||||||||
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0-3 | 3-6 | 6-12 | 1-2 | 2-3 | 3-5 | 5-10 | Non-Rate | ||||||||||||||||||||||||||||||||||
Months | Months | Months | Years | Years | Years | Years | >10 | Sensitive | Total | ||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||
Certificates of Deposit | 2,502 | 2,970 | 3,069 | 1,089 | 198 | 594 | — | — | — | 10,422 | |||||||||||||||||||||||||||||||
US Government Securities | 500 | — | 992 | 1,027 | 1,498 | 499 | — | — | — | 4,516 | |||||||||||||||||||||||||||||||
Fed Funds Sold | 7,500 | — | — | — | — | — | — | — | — | 7,500 | |||||||||||||||||||||||||||||||
Fixed Real Estate | (3 | ) | (3 | ) | (7 | ) | (14 | ) | (30 | ) | (101 | ) | 100 | 772 | — | 714 | |||||||||||||||||||||||||
Variable Real Estate | 120,588 | — | — | — | — | — | — | — | — | 120,588 | |||||||||||||||||||||||||||||||
Non-Earning Assets | — | — | — | — | — | — | — | — | 4,222 | 4,222 | |||||||||||||||||||||||||||||||
Total Assets | 131,087 | 2,967 | 4,054 | 2,102 | 1,666 | 992 | 100 | 772 | 4,222 | 147,962 | |||||||||||||||||||||||||||||||
Non-Interest Bearing | — | — | — | — | — | — | — | — | 1,068 | 1,068 | |||||||||||||||||||||||||||||||
Interest Checking | 67 | 67 | 133 | 267 | 267 | 533 | 955 | — | — | �� | 2,289 | ||||||||||||||||||||||||||||||
Money Maket Accounts | 1,306 | 1,306 | 2,612 | 5,225 | 3,483 | — | — | — | — | 13,932 | |||||||||||||||||||||||||||||||
Savings Accounts | 458 | 458 | 916 | 1,831 | 1,831 | 3,663 | 3,815 | — | — | 12,972 | |||||||||||||||||||||||||||||||
CDs/ IRAs Under $100,000 | 11,765 | 13,130 | 15,485 | 6,198 | 8,416 | 6,323 | — | — | — | 61,317 | |||||||||||||||||||||||||||||||
CDs/ IRAs Over $100,000 | 7,752 | 8,354 | 7,377 | 2,669 | 7,434 | 5,264 | — | — | — | 38,850 | |||||||||||||||||||||||||||||||
Non-Fundins Liabilities | — | — | — | — | — | — | — | — | 374 | 374 | |||||||||||||||||||||||||||||||
Capital | — | — | — | — | — | — | — | — | 17,160 | 17,160 | |||||||||||||||||||||||||||||||
Total Liabilities and Capital | 21,348 | 23,315 | 26,523 | 16,190 | 21,431 | 15,783 | 4,770 | — | 18,602 | 147,962 | |||||||||||||||||||||||||||||||
Periodic Gap | 109,738 | (20,348 | ) | (22,469 | ) | (14,088 | ) | (19,765 | ) | (14,791 | ) | (4,670 | ) | 773 | (14,380 | ) | — | ||||||||||||||||||||||||
Cumulative Gap | 109,738 | 89,390 | 66,921 | 52,833 | 33,068 | 18,277 | 13,607 | 14,380 | — | — | |||||||||||||||||||||||||||||||
Periodic Gap (% Total Assets) | 74.17 | % | (13.75 | )% | (15.19 | )% | (9.52 | )% | (13.36 | )% | (10.00 | )% | (3.16 | )% | 0.52 | % | (9.72 | )% | 0.00 | % | |||||||||||||||||||||
Cum Gap (% Total Assets) | 74.17 | % | 60.41 | % | 45.23 | % | 35.71 | % | 22.35 | % | 12.35 | % | 9.20 | % | 9.72 | % | 0.00 | % | 0.00 | % | |||||||||||||||||||||
Periodic Assets/ Total Assets | 88.60 | % | 2.01 | % | 2.74 | % | 1.42 | % | 1.13 | % | 0.67 | % | 0.07 | % | 0.52 | % | 2.85 | % | 100 | % | |||||||||||||||||||||
Periodic Liab/ Total Liab | 14.43 | % | 15.76 | % | 17.93 | % | 10.94 | % | 14.48 | % | 10.67 | % | 3.22 | % | 0.00 | % | 12.57 | % | 100 | % |
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To be Well | |||||||||||||||||||||||||
Capitalized Under | |||||||||||||||||||||||||
For Capital | Prompt Corrective | ||||||||||||||||||||||||
Actual | Adequacy Purposes | Action Provision | |||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
June 30, 2005 | |||||||||||||||||||||||||
Total capital | $ | 18,603 | 14.61% | $ | 10,186 | 8.00% | $ | 12,733 | 10.00% | ||||||||||||||||
(to risk weighted assets) | |||||||||||||||||||||||||
Tier I capital | $ | 17,429 | 13.69% | $ | 5,092 | 4.00% | $ | 7,639 | 6.00% | ||||||||||||||||
(to risk weighted assets) | |||||||||||||||||||||||||
Tier I capital | $ | 17,429 | 11.84% | $ | 5,888 | 4.00% | $ | 7,360 | 5.00% | ||||||||||||||||
(to average assets) |
To be Well | |||||||||||||||||||||||||
Capitalized Under | |||||||||||||||||||||||||
For Capital | Prompt Corrective | ||||||||||||||||||||||||
Actual | Adequacy Purposes | Action Provision | |||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
December 31, 2004 | |||||||||||||||||||||||||
Total capital | $ | 17,691 | 14.01% | $ | 10,100 | 8.00% | $ | 12,625 | 10.00% | ||||||||||||||||
(to risk weighted assets) | |||||||||||||||||||||||||
Tier I capital | $ | 16,508 | 13.07% | $ | 5,051 | 4.00% | $ | 7,577 | 6.00% | ||||||||||||||||
(to risk weighted assets) | |||||||||||||||||||||||||
Tier I capital | $ | 16,508 | 11.24% | $ | 5,874 | 4.00% | $ | 7,342 | 5.00% | ||||||||||||||||
(to average assets) |
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As of or for the Three | As of or for the Six | ||||||||||||||||
Months Ended June 30, | Months Ended June 30, | ||||||||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||
Results of Operations | |||||||||||||||||
Net interest income | $ | 3,359 | $ | 2,828 | $ | 6,461 | $ | 5,837 | |||||||||
Provision for loan losses | 122 | 104 | 244 | 208 | |||||||||||||
Noninterest income | 427 | 472 | 943 | 884 | |||||||||||||
Noninterest expense | 2,650 | 2,290 | 5,215 | 4,706 | |||||||||||||
Net income | $ | 629 | $ | 589 | $ | 1,206 | $ | 1,166 | |||||||||
Per Share Data | |||||||||||||||||
Earnings per share: | |||||||||||||||||
Basic | $ | 0.29 | $ | 0.27 | $ | 0.56 | $ | 0.58 | |||||||||
Diluted | $ | 0.29 | $ | 0.26 | $ | 0.55 | $ | 0.56 | |||||||||
Book value per share | $ | 10.94 | $ | 10.44 | $ | 10.94 | $ | 9.54 | |||||||||
Financial Position | |||||||||||||||||
Assets | $ | 298,294 | $ | 275,730 | $ | 298,294 | $ | 275,730 | |||||||||
Loans | 199,631 | 171,513 | 199,631 | 171,513 | |||||||||||||
Allowance for loan losses | 2,593 | 2,533 | 2,593 | 2,533 | |||||||||||||
Deposits | 238,468 | 216,151 | 238,468 | 216,151 | |||||||||||||
Shareholders’ equity | $ | 23,664 | $ | 20,625 | $ | 23,664 | $ | 20,625 |
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As of or for the Three | As of or for the Six | |||||||||||||||
Months Ended June 30, | Months Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
Selected Ratios(1) | ||||||||||||||||
Return on average equity | 10.60 | % | 10.09 | % | 10.33 | % | 12.11 | % | ||||||||
Return on average assets | 0.86 | % | 0.83 | % | 0.85 | % | 0.90 | % | ||||||||
Efficiency ratio(2) | 70.03 | % | 70.90 | % | 70.46 | % | 70.14 | % | ||||||||
Net interest margin (tax equivalent)(3) | 5.02 | % | 4.84 | % | 4.93 | % | 4.93 | % | ||||||||
Nonaccrual loans to loans | 1.08 | % | 1.38 | % | 1.08 | % | 1.38 | % | ||||||||
Net charge-offs (recoveries) to average loans | 0.03 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||
Allowance for loan losses to loans | 1.30 | % | 1.30 | % | 1.30 | % | 1.30 | % | ||||||||
Allowance for loan losses to nonaccrual loans | 120.16 | % | 107.24 | % | 120.16 | % | 107.24 | % | ||||||||
Total capital ratio | 11.63 | % | 12.36 | % | 11.63 | % | 12.36 | % | ||||||||
Tier 1 capital ratio | 10.44 | % | 11.11 | % | 10.44 | % | 11.11 | % | ||||||||
Tier 1 leverage ratio | 8.20 | % | 8.09 | % | 8.20 | % | 8.09 | % |
(1) | Selected ratios for the three and six months ended June 30, 2005 and 2004 have been annualized. |
(2) | Computed by dividing noninterest expense by net interest income and noninterest income. The ratio is a measurement of the amount of revenue that is utilized to meet overhead expenses. |
(3) | Computed by dividing net income on a tax equivalent basis by average earning assets. |
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As of or for the Year Ended December 31, | |||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | 2000 | |||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||
Results of Operations | |||||||||||||||||||||
Net interest income | $ | 11,656 | $ | 10,898 | $ | 9,141 | $ | 7,488 | $ | 6,804 | |||||||||||
Provision for loan losses | 418 | 510 | 510 | 576 | 115 | ||||||||||||||||
Noninterest income | 1,925 | 1,899 | 1,240 | 1,071 | 814 | ||||||||||||||||
Noninterest expense | 9,409 | 8,836 | 7,222 | 5,724 | 5,241 | ||||||||||||||||
Net income | $ | 2,435 | $ | 2,207 | $ | 1,614 | $ | 1,355 | $ | 1,407 | |||||||||||
Per Share Data | |||||||||||||||||||||
Earnings per share: | |||||||||||||||||||||
Basic | $ | 1.17 | $ | 1.12 | $ | 0.91 | $ | 0.86 | $ | 0.88 | |||||||||||
Diluted | $ | 1.14 | $ | 1.10 | $ | 0.86 | $ | 0.86 | $ | 0.88 | |||||||||||
Book value per share | $ | 10.42 | $ | 9.26 | $ | 8.38 | $ | 7.20 | $ | 6.57 | |||||||||||
Financial Position | |||||||||||||||||||||
Assets | $ | 283,745 | $ | 256,285 | $ | 203,907 | $ | 151,447 | $ | 129,408 | |||||||||||
Loans | 182,873 | 157,952 | 142,379 | 121,699 | 92,024 | ||||||||||||||||
Allowance for loan losses | 2,346 | 2,325 | 1,970 | 1,680 | 1,114 | ||||||||||||||||
Deposits | 277,190 | 211,929 | 186,661 | 139,356 | 118,319 | ||||||||||||||||
Shareholders’ equity | $ | 22,545 | $ | 18,365 | $ | 16,448 | $ | 11,248 | $ | 10,450 | |||||||||||
Selected Ratios | |||||||||||||||||||||
Return on average equity | 11.97 | % | 12.67 | % | 11.24 | % | 12.64 | % | 14.33 | % | |||||||||||
Return on average assets | 0.91 | % | 0.99 | % | 0.88 | % | 0.97 | % | 1.25 | % | |||||||||||
Efficiency ratio(1) | 69.76 | % | 68.92 | % | 69.78 | % | 67.55 | % | 68.80 | % | |||||||||||
Net interest margin (tax equivalent)(2) | 4.78 | % | 5.45 | % | 5.47 | % | 5.96 | % | 6.75 | % | |||||||||||
Nonaccrual loans to loans | 1.19 | % | 1.55 | % | 0.27 | % | 0.66 | % | 1.04 | % | |||||||||||
Net charge-offs (recoveries) to average loans | 0.21 | % | 0.04 | % | 0.17 | % | 0.01 | % | 0.01 | % | |||||||||||
Allowance for loan losses to loans | 1.28 | % | 1.47 | % | 1.38 | % | 1.38 | % | 1.21 | % | |||||||||||
Allowance for loan losses to nonaccrual loans | 107.61 | % | 95.17 | % | 591.59 | % | 208.44 | % | 742.67 | % | |||||||||||
Total capital ratio | 12.25 | % | 11.57 | % | 11.51 | % | 10.06 | % | 11.57 | % | |||||||||||
Tier 1 capital ratio | 11.04 | % | 10.32 | % | 10.26 | % | 8.81 | % | 10.46 | % | |||||||||||
Tier 1 leverage ratio | 8.61 | % | 7.54 | % | 8.14 | % | 7.47 | % | 8.27 | % |
(1) | Computed by dividing noninterest expense by net interest income and noninterest income. The ratio is a measurement of the amount of revenue that is utilized to meet overhead expenses. |
(2) | Computed by dividing net income on a tax equivalent basis by average earning assets. |
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As of or for the Three | As of or for the Six | |||||||||||||||
Months Ended June 30, | Months Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||
Results of Operations | ||||||||||||||||
Net interest income | $ | 1,491 | $ | 1,493 | $ | 2,927 | $ | 3,027 | ||||||||
Provision for loan losses | 1 | (6 | ) | (9 | ) | (50 | ) | |||||||||
Noninterest income | 140 | 130 | 291 | 384 | ||||||||||||
Noninterest expense | 836 | 903 | 1,780 | 1,859 | ||||||||||||
Net income | $ | 766 | $ | 701 | $ | 1,396 | $ | 1,546 | ||||||||
Financial Position | ||||||||||||||||
Assets | $ | 147,497 | $ | 140,022 | $ | 147,497 | $ | 140,022 | ||||||||
Loans | 121,003 | 115,094 | $ | 121,003 | $ | 115,094 | ||||||||||
Allowance for loan losses | 1,174 | 1,189 | $ | 1,174 | $ | 1,189 | ||||||||||
Deposits | 129,473 | 122,918 | $ | 129,473 | $ | 122,918 | ||||||||||
Shareholders’ equity | 17,429 | 16,044 | $ | 17,429 | $ | 16,044 | ||||||||||
Selected Ratios | ||||||||||||||||
Return on average equity(2) | 17.84 | % | 17.57 | % | 16.57 | % | 19.62 | % | ||||||||
Return on average assets(3) | 2.09 | % | 2.01 | % | 1.92 | % | 2.23 | % | ||||||||
Efficiency ratio(4) | 51.26 | % | 55.64 | % | 55.31 | % | 54.50 | % | ||||||||
Net interest margin | 4.14 | % | 4.35 | % | 4.09 | % | 4.43 | % | ||||||||
Nonaccrual loans to loans | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||
Net charge-offs (recoveries) to loans | 0.00 | % | 0.02 | % | 0.01 | % | 0.02 | % | ||||||||
Allowance for loan losses to loans | 0.97 | % | 1.03 | % | 0.97 | % | 1.03 | % | ||||||||
Allowance for loan losses to nonaccrual loans(5) | ||||||||||||||||
Total capital ratio | 14.62 | % | 15.55 | % | 14.61 | % | 15.55 | % | ||||||||
Tier 1 capital ratio | 13.69 | % | 14.48 | % | 13.69 | % | 14.48 | % | ||||||||
Tier 1 leverage ratio | 11.84 | % | 11.46 | % | 11.84 | % | 11.46 | % |
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C Corporation | ||||||||||||||||||||
As of or for the Year Ended December 31, | ||||||||||||||||||||
2004 | 2003 | 2002 | 2001(1) | 2000(1) | ||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||
Results of Operations | ||||||||||||||||||||
Net interest income | $ | 5,809 | $ | 6,255 | $ | 6,262 | $ | 5,663 | $ | 5,499 | ||||||||||
Provision for loan losses | (55 | ) | (4 | ) | (81 | ) | 66 | 89 | ||||||||||||
Noninterest income | 715 | 1,271 | 895 | 536 | 386 | |||||||||||||||
Noninterest expense | 3,558 | 3,888 | 3,486 | 3,229 | 3,050 | |||||||||||||||
Net income | $ | 2,915 | $ | 3,515 | $ | 3,620 | $ | 1,682 | $ | 1,592 | ||||||||||
Financial Position | ||||||||||||||||||||
Assets | $ | 146,725 | $ | 142,679 | $ | 133,805 | $ | 130,499 | $ | 121,968 | ||||||||||
Loans | 120,719 | 115,646 | 104,714 | 103,705 | 100,438 | |||||||||||||||
Allowance for loan losses | 1,183 | 1,211 | 1,199 | 1,273 | 1,216 | |||||||||||||||
Deposits | 128,799 | 125,485 | 117,260 | 115,357 | 108,496 | |||||||||||||||
Shareholders’ equity | 16,767 | 15,781 | 15,037 | 13,571 | 12,379 | |||||||||||||||
Selected Ratios | ||||||||||||||||||||
Return on average equity(2) | 17.91 | % | 22.81 | % | 25.31 | % | 12.96 | % | 13.62 | % | ||||||||||
Return on average assets(3) | 2.01 | % | 2.54 | % | 2.74 | % | 1.33 | % | 1.35 | % | ||||||||||
Efficiency ratio(4) | 54.54 | % | 51.66 | % | 48.71 | % | 52.09 | % | 51.83 | % | ||||||||||
Net interest margin | 4.12 | % | 4.71 | % | 4.92 | % | 4.63 | % | 4.85 | % | ||||||||||
Nonaccrual loans to loans | 0.00 | % | 0.07 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
Net charge-offs (recoveries) to loans | -0.02 | % | -0.01 | % | -0.01 | % | 0.00 | % | 0.06 | % | ||||||||||
Allowance for loan losses to loans | 0.98 | % | 1.05 | % | 1.15 | % | 1.23 | % | 1.21 | % | ||||||||||
Allowance for loan losses to nonaccrual loans(5) | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
Total capital ratio | 14.01 | % | 15.23 | % | 14.92 | % | 14.12 | % | 13.49 | % | ||||||||||
Tier 1 capital ratio | 13.07 | % | 14.13 | % | 13.80 | % | 12.88 | % | 12.27 | % | ||||||||||
Tier 1 leverage ratio | 11.24 | % | 11.25 | % | 11.13 | % | 10.40 | % | 10.13 | % |
1. | SCB was a C corporation for Federal income tax purposes for the years ended December 31, 2001 and 2000. |
2. | Computed by dividing net income by average equity. Average equity is the average of beginning equity and ending equity for the period. |
3. | Computed by dividing net income by average assets. Average assets is the average beginning assets and ending assets for the period. |
4. | Computed by dividing noninterest expense by net interest income and noninterest income. The ratio is a measurement of the amount of revenue that is utilized to meet overhead expenses. |
5. | Except at December 31, 2003, there were no nonaccrual loans for the periods presented. |
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a) assumptions used in preparing the pro forma financial data may be revised in the future due to changes in values of assets or liabilities, including finalization of the calculation of a core deposit intangible, and changes in operating results between the dates of the unaudited pro forma financial data and the date on which the acquisition takes place; and | |
b) adjustments may need to be made to the unaudited historical financial data upon which such pro forma data are based. |
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Six Months | Year Ended | |||||||
Ended June 30, | December 31, | |||||||
2005 | 2004 | |||||||
(In thousands, except share and | ||||||||
per share amounts and ratios) | ||||||||
STATEMENT OF OPERATIONS DATA: | ||||||||
Net interest income | $ | 8,631 | $ | 15,951 | ||||
Provision for loan losses | $ | 235 | $ | 363 | ||||
Noninterest income | $ | 1,234 | $ | 2,640 | ||||
Noninterest expense | $ | 7,018 | $ | 13,012 | ||||
Income before income taxes | $ | 2,612 | $ | 5,216 | ||||
Income taxes | $ | 494 | $ | 833 | ||||
Net income | $ | 2,118 | $ | 4,383 | ||||
PER SHARE DATA: | ||||||||
Earnings per share — basic | $ | 0.65 | $ | 1.37 | ||||
Earnings per share — diluted | $ | 0.64 | $ | 1.35 | ||||
Cash dividends per share | $ | — | ||||||
Book value per share | $ | 13.51 | ||||||
Tangible book value per share | $ | 8.64 | ||||||
Common shares outstanding — basic | 3,277,807 | 3,195,142 | ||||||
Common shares outstanding — diluted | 3,299,062 | 3,250,634 | ||||||
Common shares outstanding — actual | 3,277,807 | |||||||
BALANCE SHEET DATA: | ||||||||
Assets | $ | 463,509 | ||||||
Loans | $ | 326,313 | ||||||
Allowance for loan losses | $ | 3,767 | ||||||
Deposits | $ | 369,292 | ||||||
Shareholders’ equity | $ | 44,294 | ||||||
SELECTED RATIOS:(1) | ||||||||
Return on average equity | 10.44 | % | 12.03 | % | ||||
Return on average tangible equity | 17.21 | % | 22.15 | % | ||||
Return on average assets | 0.96 | % | 1.07 | % | ||||
Net interest margin (tax equivalent) | 4.28 | % | 4.17 | % | ||||
Efficiency ratio (noninterest expense to net interest income and noninterest income) | 71.14 | % | 69.99 | % | ||||
Total capital ratio | 11.92 | % | ||||||
Tier 1 capital ratio | 10.67 | % | ||||||
Tier 1 leverage ratio | 8.66 | % | ||||||
Nonaccrual loans to total loans | 0.70 | % | ||||||
Net chargeoffs (recoveries) to average loans | 0.00 | % | ||||||
Allowance for loan losses to total loans | 1.15 | % | ||||||
Allowance for loan losses to nonaccrual loans | 165.66 | % |
(1) | Selected ratios for the six months ended June 30, 2005 have been annualized. |
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Adjusted | Final | Final | ||||||||||||||||||||||||
Pro Forma | Proceeds | Pro Forma | Pro Forma | Pro Forma | ||||||||||||||||||||||
FCB Bancorp | from | FCB Bancorp | South Coast | Purchase | FCB Bancorp | |||||||||||||||||||||
Consolidated(1) | Offerings(2) | Consolidated | Bancorp, Inc. | Adjustments(3) | Consolidated | |||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Cash and due from banks | $ | 9,155 | $ | 30,630 | $ | 39,785 | $ | 9,171 | $ | (35,674 | )(a) | $ | 13,282 | |||||||||||||
Federal funds sold | 3,715 | — | 3,715 | 11,000 | — | 14,715 | ||||||||||||||||||||
Securities | 73,934 | — | 73,934 | 4,509 | (42 | )(b) | 78,401 | |||||||||||||||||||
Loans | 199,630 | — | 199,630 | 121,691 | 4,992 | (b) | 326,313 | |||||||||||||||||||
Allowance for loan losses | (2,593 | ) | — | (2,593 | ) | (1,174 | ) | — | (3,767 | ) | ||||||||||||||||
Premises and equipment, net | 4,981 | — | 4,981 | 1,685 | 1,800 | (b) | 8,466 | |||||||||||||||||||
Goodwill | — | — | — | — | 15,977 | (b) | 15,977 | |||||||||||||||||||
Other assets | 9,472 | — | 9,472 | 650 | — | 10,122 | ||||||||||||||||||||
Total Assets | $ | 298,294 | $ | 30,630 | $ | 328,924 | $ | 147,532 | $ | (12,947 | ) | $ | 463,509 | |||||||||||||
Liabilities | ||||||||||||||||||||||||||
Deposits | $ | 238,468 | $ | — | $ | 238,468 | $ | 129,473 | $ | 1,351 | (b) | $ | 369,292 | |||||||||||||
FHLB Borrowings | 34,940 | — | 34,940 | — | — | 34,940 | ||||||||||||||||||||
Junior subordinated debt | — | 10,000 | 10,000 | — | — | 10,000 | ||||||||||||||||||||
Other liabilities | 1,222 | — | 1,222 | 631 | 3,130 | (b) | 4,983 | |||||||||||||||||||
Total Liabilities | 274,630 | 10,000 | 284,630 | 130,104 | 4,481 | 419,215 | ||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||
Common stock | 11,965 | 20,630 | 32,595 | 2,265 | (2,265 | )(a) | 32,595 | |||||||||||||||||||
Retained earnings | 11,699 | — | 11,699 | 15,163 | (15,163 | )(a) | 11,699 | |||||||||||||||||||
Total Shareholders’ Equity | 23,664 | 20,630 | 44,294 | 17,428 | (17,428 | ) | 44,294 | |||||||||||||||||||
Total Liabilities and Shareholders’ Equity | $ | 298,294 | $ | 30,630 | $ | 328,924 | $ | 147,532 | $ | (12,947 | ) | $ | 463,509 |
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Pro Forma | Pro Forma | Pro Forma | |||||||||||||||
FCB Bancorp | South Coast | Purchase | FCB Bancorp | ||||||||||||||
Consolidated(1) | Bancorp, Inc. | Adjustments(3) | Consolidated | ||||||||||||||
(In thousands, except per share data) | |||||||||||||||||
Interest income | |||||||||||||||||
Interest and fees on loans | $ | 6,325 | $ | 4,736 | $ | (624 | )(g) | $ | 10,437 | ||||||||
Taxable interest on securities | 1,168 | 59 | 7 | (g) | 1,234 | ||||||||||||
Nontaxable interest on securities | 148 | — | — | 148 | |||||||||||||
Interest on federal funds sold and other | 68 | 244 | (25 | )(c) | 287 | ||||||||||||
Total interest income | 7,709 | 5,039 | (642 | ) | 12,106 | ||||||||||||
Interest expense | |||||||||||||||||
Interest on deposits | 857 | 2,112 | (135 | )(g) | 2,834 | ||||||||||||
Interest on borrowings | 391 | — | 250 | (d) | 641 | ||||||||||||
Total interest expense | 1,248 | 2,112 | 115 | 3,475 | |||||||||||||
Net interest income | 6,461 | 2,927 | (757 | ) | 8,631 | ||||||||||||
Provision (credit) for loan losses | 244 | (9 | ) | — | 235 | ||||||||||||
Net interest income after provision (credit) for loan losses | 6,217 | 2,936 | (757 | ) | 8,396 | ||||||||||||
Noninterest income | |||||||||||||||||
Service charges on deposit accounts | 549 | 180 | — | 729 | |||||||||||||
Other income | 394 | 111 | — | 505 | |||||||||||||
Total noninterest income | 943 | 291 | — | 1,234 | |||||||||||||
Noninterest expense | |||||||||||||||||
Salaries and employee benefits | 3,020 | 1,107 | — | 4,127 | |||||||||||||
Premises and equipment | 775 | 199 | 23 | (g) | 997 | ||||||||||||
Other expenses | 1,420 | 474 | — | (e) | 1,894 | ||||||||||||
Total noninterest expense | 5,215 | 1,780 | 23 | 7,018 | |||||||||||||
Income before provision for income taxes | 1,945 | 1,447 | (780 | ) | 2,612 | ||||||||||||
Provision for income taxes | 739 | 51 | (296 | )(f) | 494 | ||||||||||||
Net income | $ | 1,206 | $ | 1,396 | $ | (484 | ) | $ | 2,118 | ||||||||
Earnings per share:(i) | |||||||||||||||||
Basic | $ | 0.56 | $ | 0.65 | |||||||||||||
Diluted | $ | 0.55 | $ | 0.64 | |||||||||||||
Average shares outstanding: | |||||||||||||||||
Basic | 2,162,807 | 1,115,000 | 3,277,807 | ||||||||||||||
Diluted | 2,184,062 | 1,115,000 | 3,299,062 |
(i) | South Coast Bancorp, Inc. is an S-corporation with a limited number of Shareholders. As such, earnings per share has historically not been calculated or disclosed. |
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Pro Forma | Pro Forma | Pro Forma | |||||||||||||||
FCB Bancorp | South Coast | Purchase | FCB Bancorp | ||||||||||||||
Consolidated(1) | Bancorp, Inc.(1) | Adjustments(3) | Consolidated | ||||||||||||||
(In thousands, except per share data) | |||||||||||||||||
Interest income | |||||||||||||||||
Interest and fees on loans | $ | 11,209 | $ | 9,075 | $ | (1,248 | )(g) | $ | 19,036 | ||||||||
Taxable interest on securities | 1,970 | 94 | 14 | (g) | 2,078 | ||||||||||||
Nontaxable interest on securities | 299 | — | — | 299 | |||||||||||||
Interest on federal funds sold and other | 74 | 413 | (50 | )(c) | 437 | ||||||||||||
Total interest income | 13,552 | 9,582 | (1,284 | ) | 21,850 | ||||||||||||
Interest expense | |||||||||||||||||
Interest on deposits | 1,315 | 3,773 | (270 | )(g) | 4,818 | ||||||||||||
Interest on borrowings | 581 | — | 500 | (d) | 1,081 | ||||||||||||
Total interest expense | 1,896 | 3,773 | 230 | 5,899 | |||||||||||||
Net interest income | 11,656 | 5,809 | (1,514 | ) | 15,951 | ||||||||||||
Provision (credit) for loan losses | 418 | (55 | ) | — | 363 | ||||||||||||
Net interest income after provision (credit) for loan losses | 11,238 | 5,864 | (1,514 | ) | 15,588 | ||||||||||||
Noninterest income | |||||||||||||||||
Service charges on deposit accounts | 1,056 | 518 | — | 1,574 | |||||||||||||
Other income | 869 | 197 | — | 1,066 | |||||||||||||
Total noninterest income | 1,925 | 715 | — | 2,640 | |||||||||||||
Noninterest expense | |||||||||||||||||
Salaries and employee benefits | 5,373 | 2,394 | — | 7,767 | |||||||||||||
Premises and equipment | 1,301 | 372 | 45 | (g) | 1,718 | ||||||||||||
Other expenses | 2,735 | 792 | — | (e) | 3,527 | ||||||||||||
Total noninterest expense | 9,409 | 3,558 | 45 | 13,012 | |||||||||||||
Income before provision for income taxes | 3,754 | 3,021 | (1,559 | ) | 5,216 | ||||||||||||
Provision for income taxes | 1,319 | 106 | (592 | )(f) | 833 | ||||||||||||
Net income | $ | 2,435 | $ | 2,915 | $ | (967 | ) | $ | 4,383 | ||||||||
Earnings per share:(i) | |||||||||||||||||
Basic | $ | 1.17 | $ | 1.37 | |||||||||||||
Diluted | $ | 1.14 | $ | 1.35 | |||||||||||||
Shares: | |||||||||||||||||
Basic | 2,080,142 | 1,115,000 | 3,195,142 | ||||||||||||||
Diluted | 2,135,634 | 1,115,000 | 3,250,634 |
(i) | South Coast Bancorp, Inc. is an S-corporation with a limited number of Shareholders. As such, earnings per share has historically not been calculated or disclosed. |
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NOTE 1 — | BASIS OF PRESENTATION |
NOTE 2 — | PROCEEDS RECEIVED BY FCB BANCORP FOR THE ACQUISITION OF SOUTH COAST BANCORP, INC. |
Common stock issued in Private Placement offering | $ | 22,000 | ||
Less investment banking, legal and accounting fees | (1,370 | ) | ||
Net equity from issuance of common stock | 20,630 | |||
Issuance of junior subordinated debt | 10,000 | |||
Total cash acquired by FCB Bancorp | $ | 30,630 | ||
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NOTE 3 — | PRO FORMA ADJUSTMENTS, INCLUDING MERGER RELATED COSTS |
(a) FCB Bancorp will acquire all of the outstanding stock of South Coast Bancorp, Inc. for a purchase price that is not to exceed $36,000,000. The purchase price will be reduced if the consolidated equity of South Coast Bancorp, Inc. is less than $16,500,000, based upon calculations set forth in the closing financial statements of South Coast Bancorp. For purposes of the pro forma balance sheet presentation, the following summarizes the assumed computation of the South Coast Bancorp, Inc. acquisition price (in thousands): |
South Coast Bancorp, Inc. consolidated shareholders’ equity | $ | 17,428 | ||||||||
Less transaction costs of South Coast Bancorp, Inc.: | ||||||||||
Legal and accounting fees | $ | (200 | ) | |||||||
Severance and employment contract expenses | (1,465 | ) | ||||||||
Transfer of bank-owned automobile | (37 | ) | ||||||||
Total transaction costs | (1,702 | ) | ||||||||
Adjusted consolidated shareholders’ equity | 15,726 | |||||||||
Shareholders’ equity required | 16,500 | |||||||||
Purchase price adjustment | (774 | ) | ||||||||
Base purchase price | 36,000 | |||||||||
Adjusted purchase price | 35,226 | |||||||||
Plus direct transaction costs of FCB Bancorp: | ||||||||||
Investment banking, legal and accounting fees | 310 | |||||||||
Estimated restructuring charges | 138 | |||||||||
Calculated purchase price | $ | 35,674 | ||||||||
(b) FCB Bancorp will account for its acquisition of South Coast Bancorp, Inc. using the purchase method of accounting for business combinations. Accordingly, the total estimated purchase price as shown in the above table is allocated to South Coast Bancorp’s net tangible and intangible assets based on their estimated fair values as of the date of the completion of the merger. The difference between the adjusted purchase price and the net assets acquired will be recorded as goodwill by FCB Bancorp and will be periodically evaluated in the future for impairment. The following summarizes the preliminary estimated purchase price that is allocated based on preliminary estimates of fair value (in thousands). |
South Coast Bancorp, Inc. assets acquired | $ | 147,532 | ||||||
South Coast Bancorp, Inc. liabilities assumed | 130,104 | |||||||
Net assets acquired | 17,428 | |||||||
Less transaction costs of South Coast Bancorp, Inc. | (1,702 | ) |
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Fair value adjustments: | ||||||||||
Securities | $ | (42 | ) | |||||||
Loans | 4,992 | |||||||||
Premises and equipment | 1,800 | |||||||||
Deposits | (1,351 | ) | ||||||||
Fair value adjustments | 5,399 | |||||||||
Deferred taxes related to adjustments | (1,428 | ) | ||||||||
Fair value of net assets acquired | 19,697 | |||||||||
Calculated purchase price | 35,674 | |||||||||
Excess of calculated purchase price over net assets acquired, recorded as goodwill | $ | 15,977 | ||||||||
Deferred Tax | ||||||||||||
Gross | Tax | (Asset) | ||||||||||
Amount | Effect | Liability | ||||||||||
Severance and employment contract expenses | $ | (1,465 | ) | 38 | % | $ | (557 | ) | ||||
Transfer of bank-owned automobile | (37 | ) | 38 | % | (14 | ) | ||||||
Gross fair value adjustments | 5,399 | 38 | % | 2,052 | ||||||||
Estimated restructuring charges | (138 | ) | 38 | % | (52 | ) | ||||||
Deferred tax liability | $ | 1,428 | ||||||||||
(c) Opportunity costs of the cash dividend paid to FCB Bancorp and distributed for the purchase of the South Coast Bancorp, Inc. (assumed interest rate of 1.00%). | |
(d) Interest expense related to trust preferred securities issuance (assumed rate of 5.00%). | |
(e) Amortization expense related to the estimated core deposit intangible asset is not considered significant. | |
(f) The provision for income taxes related to pro forma adjustments is computed using a combined federal and state effective tax rate of 38%. The pro forma combined provision for income taxes does not necessarily reflect the amounts that would have resulted had FCB Bancorp and South Coast Bancorp filed consolidated income tax returns during the periods presented. | |
(g) For purposes of the proforma consolidated and combined income statements, interest income, interest expense, and noninterest expense are impacted by the respective impact to yield, cost of funds, or expense FCB Bancorp will realize on assets and liabilities acquired from South Coast Bancorp, Inc., |
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based on their estimated fair values at the date of acquisition. The increase or decrease in related accounts for assets and liabilities acquired is summarized as follows (in thousands): |
Estimated | |||||||||||||||||
Average | Adjustment for Period | ||||||||||||||||
Term to | |||||||||||||||||
Fair Value | Maturity | June 30, | December 31, | ||||||||||||||
Adjustments | (Years) | 2005 | 2004 | ||||||||||||||
Interest income | |||||||||||||||||
Securities | (42 | ) | 3 | $ | 7 | $ | 14 | ||||||||||
Loans | 4,992 | 4 | (624 | ) | (1,248 | ) | |||||||||||
Interest expense | |||||||||||||||||
Deposits | (1,351 | ) | 5 | 135 | 270 | ||||||||||||
Noninterest expense | |||||||||||||||||
Premises and equipment | 1,800 | 40 | (23 | ) | (45 | ) | |||||||||||
Total adjustments to income before income taxes | $ | (505 | ) | $ | (1,009 | ) | |||||||||||
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Six Months | Year Ended | ||||||||
Ended June 30, | December 31, | ||||||||
2005 | 2004 | ||||||||
Book value per share | |||||||||
First California Bank | $ | 10.94 | $ | 10.42 | |||||
South Coast Bancorp, Inc. | $ | 5.72 | $ | 5.50 | |||||
Pro forma combined | $ | 13.51 | $ | 13.17 | |||||
Tangible book Value per share | |||||||||
First California Bank | $ | 10.94 | $ | 10.42 | |||||
South Coast Bancorp, Inc. | $ | 5.72 | $ | 5.50 | |||||
Pro forma combined | $ | 8.64 | $ | 8.10 | |||||
Dividends declared per share | |||||||||
First California Bank | $ | — | $ | — | |||||
Pro forma combined | $ | — | $ | — | |||||
Basic earnings per share | |||||||||
First California Bank | $ | 0.56 | $ | 1.17 | |||||
Pro forma combined | $ | 0.65 | $ | 1.37 | |||||
Diluted earnings per share | |||||||||
First California Bank | $ | 0.55 | $ | 1.14 | |||||
Pro forma combined | $ | 0.64 | $ | 1.35 |
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Long-Term | |||||||||||||||||||||||||
Annual Compensation | Compensation Awards | ||||||||||||||||||||||||
Other Annual | Securities | All Other | |||||||||||||||||||||||
Name and Title | Year | Salary | Bonus | Compensation(1) | Underlying Options | Compensation | |||||||||||||||||||
C. G. Kum, | 2004 | $ | 210,047 | $ | 65,759 | — | 9,000 | $ | 0 | ||||||||||||||||
President and Chief | 2003 | $ | 195,000 | $ | 75,000 | — | 10,000 | $ | 0 | ||||||||||||||||
Executive Officer | 2002 | $ | 180,000 | $ | 50,058 | — | 0 | $ | 0 | ||||||||||||||||
Thomas E. Anthony, | 2004 | $ | 134,000 | $ | 28,765 | — | 4,500 | $ | 0 | ||||||||||||||||
Executive Vice | 2003 | $ | 120,721 | $ | 39,396 | — | 5,000 | $ | 0 | ||||||||||||||||
President and Chief | 2002 | $ | 114,243 | $ | 30,617 | — | 0 | $ | 0 | ||||||||||||||||
Credit Officer | |||||||||||||||||||||||||
Romolo Santarosa, | 2004 | $ | 133,951 | $ | 34,587 | — | 4,500 | $ | 0 | ||||||||||||||||
Executive Vice | 2003 | $ | 120,000 | $ | 39,396 | — | 1,000 | $ | 0 | ||||||||||||||||
President and Chief | 2002 | $ | 15,000 | $ | 0 | — | 0 | $ | 0 | ||||||||||||||||
Financial Officer |
(1) | Perquisites paid to an executive officer that total less than the lesser of $50,000 or 10% of salary and bonus are omitted. |
Incentive Stock Options | Nonstatutory Stock Options | |||||||||||||||||||
Weighted Average | Weighted Average | |||||||||||||||||||
Remaining | Remaining | |||||||||||||||||||
Number | Contractual Life | Number | Contractual Life | |||||||||||||||||
Exercise Price | Outstanding | (in years) | Exercise Price | Outstanding | (in years) | |||||||||||||||
$11.25 | 31,750 | 6.47 | $ | 11.25 | 10,000 | 6.47 | ||||||||||||||
$20.25 | 26,500 | 7.31 | $ | 20.25 | 10,000 | 7.31 | ||||||||||||||
58,250 | 20,000 | |||||||||||||||||||
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All Executive | All Directors | ||||||||||||||||||||
Officers as a | as a Group | ||||||||||||||||||||
Romolo | Group (3 in | (6 in | |||||||||||||||||||
C. G. Kum | Thomas E. Anthony | Santarosa | Number) | Number) | |||||||||||||||||
Options granted during 2004: | |||||||||||||||||||||
Number of shares | 9,000 | 4,500 | 4,500 | 18,000 | 19,000 | ||||||||||||||||
Average exercise price per share | $ | 20.25 | $ | 20.25 | $ | 20.25 | $ | 20.25 | $ | 20.25 |
Number of | Value of Unexercised | |||||||||||||||
Unexercised Options | in-the-Money Options at | |||||||||||||||
at December 31, 2004 | December 31, 2004(1) | |||||||||||||||
Name | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||
C. G. Kum | 0 | 19,000 | N/A | $ | 52,500 | |||||||||||
Thomas E. Anthony | 0 | 9,500 | N/A | $ | 26,250 | |||||||||||
Romolo Santarosa | 0 | 5,500 | N/A | $ | 5,250 |
(1) | Assuming a market value of $16.50 per share on December 31, 2004. |
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PERSONNEL COMMITTEE | |
Syble Roberts (Chair) James O. Birchfield John W. Birchfield C. G. Kum |
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Number of | ||||
Name or Identification Group | Shares | |||
C. G. Kum | 29,000 | |||
Thomas E. Anthony | 14,500 | |||
Romolo Santarosa | 10,500 | |||
All Executive Officers as a Group (3 in number) | 54,000 | |||
All Non-Officer Directors as a Group (5 in number) | 30,000 | |||
All Directors (6 in number) | 59,000 | |||
All Other Optionees (18 in number) | 35,500 | |||
All Optionees as a Group (26 in number) | 119,500 |
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FIRST CALIFORNIA BANK | |
Thomas E. Anthony, | |
Secretary |
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Page | ||
Unaudited Financial Statements of First California Bank | ||
F-4 | ||
F-5 | ||
F-6 | ||
F-7 | ||
F-8 | ||
F-9 | ||
Audited Financial Statements of First California Bank | ||
F-15 | ||
F-16 | ||
F-17 | ||
F-18 | ||
F-19 | ||
F-20 | ||
F-21 | ||
Unaudited Financial Statements of South Coast Bancorp, Inc. | ||
F-37 | ||
F-38 | ||
F-39 | ||
F-40 | ||
F-42 | ||
Audited Financial Statements of South Coast Bancorp, Inc. | ||
F-45 | ||
F-46 | ||
F-47 | ||
F-48 | ||
F-49 | ||
F-50 |
F-1
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Page | ||
UNAUDITED FINANCIAL STATEMENTS | ||
Balance sheets | F-4 | |
Statements of income | F-5 | |
Statements of comprehensive income | F-6 | |
Statements of changes in shareholders’ equity | F-7 | |
Statements of cash flows | F-8 | |
Notes to financial statements | F-9-12 |
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June 30, | December 31, | |||||||||
2005 | 2004 | |||||||||
(In thousands, except | ||||||||||
per share data) | ||||||||||
ASSETS | ||||||||||
Cash and due from banks | $ | 9,155 | $ | 7,194 | ||||||
Federal funds sold | 3,715 | 4,055 | ||||||||
Securities available-for-sale | 73,934 | 77,345 | ||||||||
Federal Home Loan Bank stock | 1,886 | 1,992 | ||||||||
Loans, net | 197,037 | 180,527 | ||||||||
Premises and equipment, net | 4,981 | 4,696 | ||||||||
Cash surrender value of life insurance | 5,075 | 4,982 | ||||||||
Accrued interest receivable and other assets | 2,511 | 2,954 | ||||||||
TOTAL ASSETS | $ | 298,294 | $ | 283,745 | ||||||
LIABILITIES | ||||||||||
Checking | $ | 96,407 | $ | 84,699 | ||||||
Interest checking | 20,262 | 21,424 | ||||||||
Regular savings | 14,425 | 14,639 | ||||||||
Money market savings | 51,753 | 52,900 | ||||||||
Certificates of deposit, under $100,000 | 24,378 | 21,277 | ||||||||
Certificates of deposit, $100,000 and over | 31,243 | 32,251 | ||||||||
Total deposits | 238,468 | 227,190 | ||||||||
Federal Home Loan Bank advances | 34,940 | 32,850 | ||||||||
Accrued interest payable and other liabilities | 1,222 | 1,160 | ||||||||
TOTAL LIABILITIES | 274,630 | 261,200 | ||||||||
SHAREHOLDERS’ EQUITY | ||||||||||
Common stock, no par value, 2,500,000 authorized; 2,162,807 shares issued and outstanding at June 30, 2005 and at December 31, 2004 | 11,965 | 11,965 | ||||||||
Retained earnings | 12,045 | 10,839 | ||||||||
Accumulated other comprehensive loss | (346 | ) | (259 | ) | ||||||
Total shareholders’ equity | 23,664 | 22,545 | ||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 298,294 | $ | 283,745 | ||||||
F-4
Table of Contents
Three Months | Six Months | |||||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||
INTEREST INCOME | ||||||||||||||||||
Interest and fees on loans | $ | 3,323 | $ | 2,697 | $ | 6,325 | $ | 5,579 | ||||||||||
Taxable interest on securities | 573 | 445 | 1,168 | 871 | ||||||||||||||
Nontaxable interest on securities | 77 | 76 | 148 | 152 | ||||||||||||||
Interest on federal funds sold | 40 | 27 | 68 | 44 | ||||||||||||||
Total interest income | 4,013 | 3,245 | 7,709 | 6,646 | ||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||
Interest on deposits | 458 | 313 | 857 | 609 | ||||||||||||||
Interest on borrowings | 196 | 104 | 391 | 200 | ||||||||||||||
Total interest expense | 654 | 417 | 1,248 | 809 | ||||||||||||||
NET INTEREST INCOME | 3,359 | 2,828 | 6,461 | 5,837 | ||||||||||||||
PROVISION FOR LOAN LOSSES | 122 | 104 | 244 | 208 | ||||||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 3,237 | 2,724 | 6,217 | 5,629 | ||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||
Service charges on deposit accounts | 256 | 238 | 549 | 487 | ||||||||||||||
Earnings on cash surrender value of life insurance | 56 | 55 | 111 | 111 | ||||||||||||||
Commissions on brokered loans | 35 | 61 | 90 | 14 | ||||||||||||||
Net gain on sales of loans | 31 | 10 | 78 | 75 | ||||||||||||||
Net servicing fees | 11 | 9 | 21 | 20 | ||||||||||||||
Net gain (loss) on sales of securities | 2 | 0 | 2 | 12 | ||||||||||||||
Other income | 36 | 99 | 92 | 165 | ||||||||||||||
Total noninterest income | 427 | 472 | 943 | 884 | ||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||
Salaries and employee benefits | 1,491 | 1,161 | 3,020 | 2,701 | ||||||||||||||
Premises and equipment | 389 | 305 | 775 | 592 | ||||||||||||||
Data processing | 138 | 215 | 273 | 410 | ||||||||||||||
Legal, audit, and other professional services | 153 | 73 | 261 | 160 | ||||||||||||||
Printing, stationary, and supplies | 48 | 42 | 94 | 64 | ||||||||||||||
Telephone | 36 | 35 | 72 | 73 | ||||||||||||||
Directors’ fees | 33 | 33 | 66 | 62 | ||||||||||||||
Advertising and marketing | 122 | 106 | 209 | 169 | ||||||||||||||
Postage | 10 | 26 | 28 | 45 | ||||||||||||||
Other expenses | 230 | 294 | 417 | 430 | ||||||||||||||
Total noninterest expense | 2,650 | 2,290 | 5,215 | 4,706 | ||||||||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 1,014 | 906 | 1,945 | 1,807 | ||||||||||||||
PROVISION FOR INCOME TAXES | 385 | 317 | 739 | 641 | ||||||||||||||
NET INCOME | $ | 629 | $ | 589 | $ | 1,206 | $ | 1,166 | ||||||||||
EARNINGS PER SHARE | ||||||||||||||||||
Basic | $ | 0.29 | $ | 0.29 | $ | 0.56 | $ | 0.58 | ||||||||||
Diluted | $ | 0.29 | $ | 0.28 | $ | 0.55 | $ | 0.56 |
F-5
Table of Contents
Three Months | Six Months | |||||||||||||||
Ended June 30, | Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In thousands) | ||||||||||||||||
Unrealized holding gains (losses) on securities available-for-sale arising during the period | $ | 761 | $ | 1,102 | $ | (149 | ) | $ | 1,866 | |||||||
Reclassification adjustments for (gains) losses included in net income | (2 | ) | — | (2 | ) | (12 | ) | |||||||||
OTHER COMPREHENSIVE INCOME (LOSS), BEFORE TAX | 759 | 1,102 | (147 | ) | 1,854 | |||||||||||
Income tax (expense) benefit related to items of other comprehensive income | (311 | ) | (452 | ) | 60 | (760 | ) | |||||||||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | 448 | 650 | (87 | ) | 1,094 | |||||||||||
NET INCOME | 629 | 589 | 1,206 | 1,166 | ||||||||||||
COMPREHENSIVE INCOME | $ | 1,077 | $ | 1,239 | $ | 1,119 | $ | 2,260 | ||||||||
F-6
Table of Contents
Common Stock | Accumulated | |||||||||||||||||||
Other | Total | |||||||||||||||||||
Shares | Retained | Comprehensive | Shareholders’ | |||||||||||||||||
Outstanding | Amount | Earnings | Income (Loss) | Equity | ||||||||||||||||
(Dollars in thousands, except share data) | ||||||||||||||||||||
Balance, December 31, 2004 | 2,162,807 | $ | 11,965 | $ | 10,839 | $ | (259 | ) | $ | 22,545 | ||||||||||
Comprehensive income | — | — | 1,206 | (87 | ) | 1,119 | ||||||||||||||
Balance, June 30, 2005 | 2,162,807 | $ | 11,965 | $ | 12,045 | $ | (346 | ) | $ | 23,664 | ||||||||||
Balance, December 31, 2003 | 1,983,508 | $ | 10,262 | $ | 8,404 | $ | (301 | ) | $ | 18,365 | ||||||||||
Comprehensive income | — | — | 1,166 | 1,094 | 2,260 | |||||||||||||||
Exercise of warrants | 26,120 | 1,703 | — | — | — | |||||||||||||||
Balance, June 30, 2004 | 2,009,628 | $ | 11,965 | $ | 9,570 | $ | 793 | $ | 20,625 | |||||||||||
F-7
Table of Contents
Six Months Ended | ||||||||||
June 30, | ||||||||||
2005 | 2004 | |||||||||
(In thousands) | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
Net income | $ | 1,206 | $ | 1,166 | ||||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||||
Realized gains on sale of securities, loans, and premises and equipment | (78 | ) | (12 | ) | ||||||
Net amortization of premiums on securities available-for-sale | 201 | 302 | ||||||||
Federal Home Loan Bank stock dividends | (21 | ) | (45 | ) | ||||||
Provision for loan losses | 244 | 208 | ||||||||
Deferred income taxes | (4 | ) | 1 | |||||||
Depreciation and amortization | 240 | 204 | ||||||||
Net appreciation in cash surrender value of life insurance | (93 | ) | (96 | ) | ||||||
Change in accrued interest receivable and other assets | 508 | (396 | ) | |||||||
Change in accrued interest payable and other liabilities | 62 | (37 | ) | |||||||
Net cash from operating activities | 2,265 | 1,295 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
Net change in federal funds sold | 340 | 15,540 | ||||||||
Proceeds from maturities, calls, and paydowns of securities available-for-sale | 7,786 | 7,038 | ||||||||
Proceeds from sales of securities available-for-sale | (776 | ) | 537 | |||||||
Purchases of securities available-for-sale | (3,947 | ) | (26,822 | ) | ||||||
Purchase of Federal Home Loan Bank stock | 127 | (259 | ) | |||||||
Net increase in loans | (16,676 | ) | (13,561 | ) | ||||||
Purchases of premises and equipment, net | (525 | ) | (339 | ) | ||||||
Net cash from investing activities | (13,671 | ) | (17,866 | ) | ||||||
CASH FLOW FROM FINANCING ACTIVITIES | ||||||||||
Net increase in deposits | 11,278 | 4,222 | ||||||||
Increase in Federal Home Loan Bank advances | 2,090 | 13,000 | ||||||||
Proceeds from exercise of warrants | — | 1,703 | ||||||||
Net cash from financing activities | 13,368 | 18,925 | ||||||||
CHANGE IN CASH AND DUE FROM BANKS | $ | 1,961 | $ | 2,354 | ||||||
CASH AND DUE FROM BANKS, beginning of period | 7,194 | 7,770 | ||||||||
CASH AND DUE FROM BANKS, end of period | $ | 9,155 | $ | 10,124 | ||||||
Supplemental Disclosure of Cash Flow Information | ||||||||||
Cash paid during the period for: | ||||||||||
Interest | $ | 1,028 | $ | 287 | ||||||
Income taxes | $ | 708 | $ | 324 | ||||||
Supplemental Disclosure of Noncash Investing Activities | ||||||||||
Change in fair value of securities available-for-sale, net of taxes | $ | (87 | ) | $ | 1,094 |
F-8
Table of Contents
Three Months | ||||||||||||||||
Ended June 30, | Six Months | |||||||||||||||
2005 | Ended June 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(In thousands, except per share) | ||||||||||||||||
Net income | $ | 629 | $ | 589 | $ | 1,206 | $ | 1,166 | ||||||||
Basic earnings per share | $ | 0.29 | $ | 0.29 | $ | 0.56 | $ | 0.58 | ||||||||
Diluted earnings per share | $ | 0.29 | $ | 0.28 | $ | 0.55 | $ | 0.56 | ||||||||
Basic weighted average shares | 2,163 | 2,010 | 2,163 | 1,997 | ||||||||||||
Diluted weighted average shares | 2,178 | 2,102 | 2,184 | 2,093 |
Gross | Gross | Estimated | ||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||
Cost | Gains | Losses | Value | |||||||||||||
(In thousands) | ||||||||||||||||
Mortgage-backed securities | $ | 51,878 | $ | 51 | $ | (642 | ) | $ | 51,287 | |||||||
Collateralized mortgage obligations | 3,617 | 47 | (37 | ) | 3,627 | |||||||||||
U.S. Treasury securities | 2,995 | 0 | (21 | ) | 2,974 | |||||||||||
Municipal securities | 8,217 | 128 | (11 | ) | 8,334 | |||||||||||
U.S. agency securities | 7,795 | 1 | (84 | ) | 7,712 | |||||||||||
$ | 74,502 | $ | 227 | $ | (795 | ) | $ | 73,934 | ||||||||
F-9
Table of Contents
Gross | Gross | Estimated | |||||||||||||||
Amortized | Unrealized | Unrealized | Fair | ||||||||||||||
Cost | Gains | Losses | Value | ||||||||||||||
(In thousands) | |||||||||||||||||
Mortgage-backed securities | $ | 56,348 | $ | 126 | $ | (622 | ) | $ | 55,852 | ||||||||
Collateralized mortgage obligations | 4,915 | 57 | (8 | ) | 4,964 | ||||||||||||
U.S. Treasury securities | 2,993 | — | (10 | ) | 2,983 | ||||||||||||
Municipal securities | 6,733 | 90 | (16 | ) | 6,807 | ||||||||||||
U.S. agency securities | 6,796 | — | (57 | ) | 6,739 | ||||||||||||
Securities available-for-sale | $ | 77,785 | $ | 273 | $ | (713 | ) | $ | 77,345 | ||||||||
June 30, | December 31, | |||||||
2005 | 2004 | |||||||
(In thousands) | ||||||||
Commercial real estate | $ | 104,057 | $ | 83,457 | ||||
Commercial loans and lines | 52,380 | 68,996 | ||||||
Construction | 20,464 | 12,330 | ||||||
Home equity loans and lines | 7,053 | 2,114 | ||||||
Home mortgage | 11,528 | 11,558 | ||||||
Installment and credit card | 4,149 | 4,418 | ||||||
Total loans | 199,631 | 182,873 | ||||||
Allowance for loan losses | (2,593 | ) | (2,346 | ) | ||||
Loans, net | $ | 197,038 | $ | 180,527 | ||||
Six Months Ended | |||||||||
June 30, | |||||||||
2005 | 2004 | ||||||||
(In thousands) | |||||||||
Beginning balance | $ | 2,346 | $ | 2,325 | |||||
Provision for loan losses | 244 | 208 | |||||||
Loans charged-off | (74 | ) | (36 | ) | |||||
Recoveries on loans charged-off | 77 | 36 | |||||||
Ending balance | $ | 2,593 | $ | 2,533 | |||||
F-10
Table of Contents
2005 | 2004 | ||||||||
Net income, as reported | $ | 1,206 | $ | 1,166 | |||||
Total stock-based employee compensation expense determined under fair value-based methods for all awards, net of related tax effects | (8 | ) | (2 | ) | |||||
Pro forma net income | $ | 1,198 | $ | 1,164 | |||||
Earnings per share: | |||||||||
Diluted — as reported | $ | 0.55 | $ | 0.56 | |||||
Diluted — pro forma | $ | 0.55 | $ | 0.56 | |||||
Basic — as reported | $ | 0.56 | $ | 0.58 | |||||
Basic — pro forma | $ | 0.56 | $ | 0.58 |
2005 | 2004 | |||||||
Dividend yield | None | None | ||||||
Expected life | 5 years | 6 years | ||||||
Expected volatility | Nil | Nil | ||||||
Risk-free rate | 3.95 | % | 2.87 | % |
F-11
Table of Contents
F-12
Table of Contents
F-13
Table of Contents
Page | ||||
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | F-15 | |||
FINANCIAL STATEMENTS | ||||
Balance sheets | F-16 | |||
Statements of income | F-17 | |||
Statements of comprehensive income | F-18 | |||
Statements of changes in shareholders’ equity | F-19 | |||
Statements of cash flows | F-20 | |||
Notes to financial statements | F-21-35 |
F-14
Table of Contents
/s/ Moss Adams LLP |
F-15
Table of Contents
December 31, | ||||||||||
2004 | 2003 | |||||||||
(Dollars in thousands) | ||||||||||
ASSETS | ||||||||||
Cash and due from banks | $ | 7,194 | $ | 7,770 | ||||||
Federal funds sold | 4,055 | 15,780 | ||||||||
Securities available-for-sale | 77,345 | 64,774 | ||||||||
Federal Home Loan Bank stock | 1,992 | 1,512 | ||||||||
Loans, net | 180,527 | 155,627 | ||||||||
Premises and equipment, net | 4,696 | 3,748 | ||||||||
Cash surrender value of life insurance | 4,982 | 4,792 | ||||||||
Accrued interest receivable and other assets | 2,954 | 2,282 | ||||||||
TOTAL ASSETS | $ | 283,745 | $ | 256,285 | ||||||
LIABILITIES | ||||||||||
Checking | $ | 84,699 | $ | 76,182 | ||||||
Interest checking | 21,424 | 25,710 | ||||||||
Regular savings | 14,639 | 12,172 | ||||||||
Money market savings | 52,900 | 48,145 | ||||||||
Certificates of deposit, under $100,000 | 21,277 | 22,223 | ||||||||
Certificates of deposit, $100,000 and over | 32,251 | 27,497 | ||||||||
Total deposits | 227,190 | 211,929 | ||||||||
Federal Home Loan Bank advances | 32,850 | 25,000 | ||||||||
Accrued interest payable and other liabilities | 1,160 | 991 | ||||||||
TOTAL LIABILITIES | 261,200 | 237,920 | ||||||||
COMMITMENTS AND CONTINGENCIES (Notes 14 and 15) | ||||||||||
SHAREHOLDERS’ EQUITY | ||||||||||
Common stock, no par value, 2,500,000 authorized; 2,162,807 and 1,983,508 shares issued and outstanding at December 31, 2004 and 2003, respectively | 11,965 | 10,262 | ||||||||
Retained earnings | 10,839 | 8,404 | ||||||||
Accumulated other comprehensive loss | (259 | ) | (301 | ) | ||||||
Total shareholders’ equity | 22,545 | 18,365 | ||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 283,745 | $ | 256,285 | ||||||
F-16
Table of Contents
Years Ended December 31, | ||||||||||||||
2004 | 2003 | 2002 | ||||||||||||
(In thousands, except per share data) | ||||||||||||||
INTEREST INCOME | ||||||||||||||
Interest and fees on loans | $ | 11,209 | $ | 10,938 | $ | 10,126 | ||||||||
Taxable interest on securities | 1,970 | 1,194 | 643 | |||||||||||
Nontaxable interest on securities | 299 | 212 | 199 | |||||||||||
Interest on federal funds sold | 74 | 85 | 232 | |||||||||||
�� | Total interest income | 13,552 | 12,429 | 11,200 | ||||||||||
INTEREST EXPENSE | ||||||||||||||
Interest on deposits | 1,315 | 1,340 | 2,059 | |||||||||||
Interest on borrowings | 581 | 191 | — | |||||||||||
Total interest expense | 1,896 | 1,531 | 2,059 | |||||||||||
NET INTEREST INCOME | 11,656 | 10,898 | 9,141 | |||||||||||
PROVISION FOR LOAN LOSSES | 418 | 510 | 510 | |||||||||||
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 11,238 | 10,388 | 8,631 | |||||||||||
NONINTEREST INCOME | ||||||||||||||
Service charges on deposit accounts | 1,056 | 965 | 744 | |||||||||||
Earnings on cash surrender value of life Insurance | 224 | 260 | — | |||||||||||
Commissions on brokered loans | 132 | 307 | 43 | |||||||||||
Net gain on sales of loans | 87 | 75 | 119 | |||||||||||
Net servicing fees | 42 | 34 | 32 | |||||||||||
Net gain (loss) on sales of securities | 94 | (22 | ) | 31 | ||||||||||
Other income | 290 | 280 | 271 | |||||||||||
Total noninterest income | 1,925 | 1,899 | 1,240 | |||||||||||
NONINTEREST EXPENSE | ||||||||||||||
Salaries and employee benefits | 5,373 | 5,220 | 4,131 | |||||||||||
Premises and equipment | 1,301 | 972 | 693 | |||||||||||
Data processing | 758 | 836 | 743 | |||||||||||
Legal, audit, and other professional services | 418 | 328 | 326 | |||||||||||
Printing, stationary, and supplies | 141 | 166 | 199 | |||||||||||
Telephone | 163 | 161 | 92 | |||||||||||
Directors’ fees | 128 | 106 | 103 | |||||||||||
Advertising and marketing | 299 | 298 | 289 | |||||||||||
Postage | 81 | 84 | 86 | |||||||||||
Other expenses | 747 | 665 | 560 | |||||||||||
Total noninterest expense | 9,409 | 8,836 | 7,222 | |||||||||||
INCOME BEFORE PROVISION FOR INCOME TAXES | 3,754 | 3,451 | 2,649 | |||||||||||
PROVISION FOR INCOME TAXES | 1,319 | 1,244 | 1,035 | |||||||||||
NET INCOME | $ | 2,435 | $ | 2,207 | $ | 1,614 | ||||||||
EARNINGS PER SHARE | ||||||||||||||
Diluted | $ | 1.14 | $ | 1.10 | $ | 0.86 | ||||||||
Basic | $ | 1.17 | $ | 1.12 | $ | 0.91 |
F-17
Table of Contents
Years Ended December 31, | ||||||||||||
2004 | 2003 | 2002 | ||||||||||
(In thousands) | ||||||||||||
Unrealized holding gains (losses) on securities available-for-sale arising during the period | $ | 165 | $ | (834 | ) | $ | 58 | |||||
Reclassification adjustments for (gains) losses included in net income | (94 | ) | 22 | (31 | ) | |||||||
OTHER COMPREHENSIVE INCOME (LOSS), BEFORE TAX | 71 | (812 | ) | 27 | ||||||||
Income tax (expense) benefit related to items of other comprehensive income | (29 | ) | 330 | (11 | ) | |||||||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | 42 | (482 | ) | 16 | ||||||||
NET INCOME | 2,435 | 2,207 | 1,614 | |||||||||
COMPREHENSIVE INCOME | $ | 2,477 | $ | 1,725 | $ | 1,630 | ||||||
F-18
Table of Contents
Common Stock | Accumulated | |||||||||||||||||||
Other | Total | |||||||||||||||||||
Shares | Retained | Comprehensive | Shareholders’ | |||||||||||||||||
Outstanding | Amount | Earnings | Income (Loss) | Equity | ||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Balance, December 31, 2001 | 1,562,808 | $ | 6,500 | $ | 4,583 | $ | 165 | $ | 11,248 | |||||||||||
Comprehensive income | — | — | 1,614 | 16 | 1,630 | |||||||||||||||
Issuance of stock, net of issuance costs | 400,000 | 3,570 | — | — | 3,570 | |||||||||||||||
Balance, December 31, 2002 | 1,962,808 | 10,070 | 6,197 | 181 | 16,448 | |||||||||||||||
Comprehensive income | — | — | 2,207 | (482 | ) | 1,725 | ||||||||||||||
Exercise of warrants | 20,700 | 192 | — | — | 192 | |||||||||||||||
Balance, December 31, 2003 | 1,983,508 | 10,262 | 8,404 | (301 | ) | 18,365 | ||||||||||||||
Comprehensive income | — | — | 2,435 | 42 | 2,477 | |||||||||||||||
Exercise of warrants | 179,299 | 1,703 | — | — | 1,703 | |||||||||||||||
Balance, December 31, 2004 | 2,162,807 | $ | 11,965 | $ | 10,839 | $ | (259 | ) | $ | 22,545 | ||||||||||
F-19
Table of Contents
Years Ended December 31, | ||||||||||||||
2004 | 2003 | 2002 | ||||||||||||
(In thousands) | ||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||
Net income | $ | 2,435 | $ | 2,207 | $ | 1,614 | ||||||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||||||||
Realized gains on sale of securities, loans, and premises and equipment | (181 | ) | (53 | ) | (150 | ) | ||||||||
Net amortization of premiums on securities available-for-sale | 567 | 327 | 105 | |||||||||||
Federal Home Loan Bank stock dividends | (82 | ) | (21 | ) | (7 | ) | ||||||||
Provision for loan losses | 418 | 510 | 510 | |||||||||||
Deferred income taxes | 188 | (39 | ) | (89 | ) | |||||||||
Depreciation and amortization | 460 | 383 | 299 | |||||||||||
Net appreciation in cash surrender value of life Insurance | (190 | ) | (234 | ) | — | |||||||||
Change in accrued interest receivable and other assets | (889 | ) | (315 | ) | (80 | ) | ||||||||
Change in accrued interest payable and other liabilities | 169 | 313 | (55 | ) | ||||||||||
Net cash from operating activities | 2,895 | 3,078 | 2,147 | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||
Net change in federal funds sold | 11,725 | (4,780 | ) | (11,000 | ) | |||||||||
Proceeds from maturities, calls, and paydowns of securities available-for-sale | 16,830 | 14,577 | 15,696 | |||||||||||
Proceeds from sales of securities available-for-sale | 6,098 | 7,541 | 5,008 | |||||||||||
Purchases of securities available-for-sale | (35,901 | ) | (60,744 | ) | (32,128 | ) | ||||||||
Purchase of Federal Home Loan Bank stock | (398 | ) | (1,331 | ) | — | |||||||||
Net increase in loans | (25,231 | ) | (15,653 | ) | (21,280 | ) | ||||||||
Purchases of premises and equipment, net | (1,408 | ) | (906 | ) | (1,723 | ) | ||||||||
Purchase of life insurance | — | (58 | ) | (4,500 | ) | |||||||||
Net cash from investing activities | (28,285 | ) | (61,354 | ) | (49,927 | ) | ||||||||
CASH FLOW FROM FINANCING ACTIVITIES | ||||||||||||||
Net increase in deposits | 15,261 | 25,268 | 47,305 | |||||||||||
Increase in Federal Home Loan Bank advances | 7,850 | 25,000 | — | |||||||||||
Issuance of common stock, net of issuance costs | — | — | 3,570 | |||||||||||
Proceeds from exercise of warrants | 1,703 | 192 | — | |||||||||||
Net cash from financing activities | 24,814 | 50,460 | 50,875 | |||||||||||
CHANGE IN CASH AND DUE FROM BANKS | $ | (576 | ) | $ | (7,816 | ) | $ | 3,095 | ||||||
CASH AND DUE FROM BANKS, beginning of year | 7,770 | 15,586 | 12,491 | |||||||||||
CASH AND DUE FROM BANKS, end of year | $ | 7,194 | $ | 7,770 | $ | 15,586 | ||||||||
Supplemental Disclosure of Cash Flow Information | ||||||||||||||
Cash paid during the year for: | ||||||||||||||
Interest | $ | 1,519 | $ | 1,603 | $ | 2,123 | ||||||||
Income taxes | $ | 1,154 | $ | 1,177 | $ | 1,073 | ||||||||
Supplemental Disclosure of Noncash Investing Activities | ||||||||||||||
Change in fair value of securities available-for-sale, net of taxes | $ | 42 | $ | (482 | ) | $ | 16 | |||||||
F-20
Table of Contents
NOTE 1 — | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
F-21
Table of Contents
F-22
Table of Contents
2004 | 2003 | ||||||||
Net income, as reported | $ | 2,435 | $ | 2,207 | |||||
Total stock-based employee compensation | |||||||||
Expense determined under fair value-based methods for all awards, net of related tax effects | (14 | ) | (3 | ) | |||||
Pro forma net income | $ | 2,421 | $ | 2,204 | |||||
Earnings per share: | |||||||||
Diluted — as reported | $ | 1.14 | $ | 1.10 | |||||
Diluted — pro forma | $ | 1.13 | $ | 1.10 | |||||
Basic — as reported | $ | 1.17 | $ | 1.12 | |||||
Basic — pro forma | $ | 1.16 | $ | 1.12 |
2004 | 2003 | |||||||
Dividend yield | None | None | ||||||
Expected life | 6 years | 6 years | ||||||
Expected volatility | Nil | Nil | ||||||
Risk-free rate | 3.95 | % | 2.87 | % |
Cash and Cash Equivalents —The carrying amounts of cash and short-term instruments approximate their fair value. | |
Available-for-Sale and Restricted Equity Securities —Fair values for securities, excluding restricted equity securities, are based on quoted market prices. The carrying values of restricted equity securities, including Federal Home Loan Bank stock, approximate fair values. | |
Loans —For variable rate loans that reprice frequently and have no significant change in credit risk, fair values are based on carrying values. Fair values for certain mortgage loans (for example, one-to-four |
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family residential), credit card loans, and other consumer loans are based on quoted market prices of similar loans sold in conjunction with securitization transactions, adjusted for differences in loan characteristics. Fair values for commercial real estate and commercial loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality. Fair values for impaired loans are estimated using a discounted cash flow analysis or underlying collateral values, where applicable. | |
Deposits —The fair values disclosed for demand deposits are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts). The carrying amounts of variable-rate money market accounts and fixed-term certificates of deposit (CDs) approximate their fair values at the reporting date. Fair values for fixed-rate CDs are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits. | |
Federal Home Loan Bank (FHLB) Advances —The fair value of the Bank’s FHLB advances is estimated using a discounted cash flow analysis based on the Bank’s current incremental borrowing rates for similar types of borrowing arrangements. | |
Off-Balance Sheet Instruments — The Bank’s off-balance sheet instruments include unfunded commitments to extend credit and standby letters of credit. The fair value of these instruments is not considered practicable to estimate because of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs. |
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NOTE 2 — | SECURITIES |
Gross | Gross | Estimated | ||||||||||||||||
Amortized | Unrealized | Unrealized | Fair | |||||||||||||||
Cost | Gains | Losses | Value | |||||||||||||||
(In thousands) | ||||||||||||||||||
December 31, 2004: | ||||||||||||||||||
Mortgage-backed securities | $ | 56,348 | $ | 126 | $ | (622 | ) | $ | 55,852 | |||||||||
Collateralized mortgage Obligations | 4,915 | 57 | (8 | ) | 4,964 | |||||||||||||
U.S. Treasury securities | 2,993 | — | (10 | ) | 2,983 | |||||||||||||
Municipal securities | 6,733 | 90 | (16 | ) | 6,807 | |||||||||||||
U.S. agency securities | 6,796 | — | (57 | ) | 6,739 | |||||||||||||
Securities available-for-sale | $ | 77,785 | $ | 273 | $ | (713 | ) | $ | 77,345 | |||||||||
December 31, 2003: | ||||||||||||||||||
Mortgage-backed securities | $ | 50,066 | $ | 140 | $ | (866 | ) | $ | 49,340 | |||||||||
Municipal securities | 7,195 | 240 | (11 | ) | 7,424 | |||||||||||||
U.S. agency securities | 8,025 | 34 | (49 | ) | 8,010 | |||||||||||||
Securities available-for-sale | $ | 65,286 | $ | 414 | $ | (926 | ) | $ | 64,774 | |||||||||
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Less than 12 Months | Greater than 12 Months | |||||||||||||||
Unrealized | Unrealized | |||||||||||||||
Fair Value | Losses | Fair Value | Losses | |||||||||||||
(In thousands) | ||||||||||||||||
Mortgage-backed securities | $ | 7,362 | $ | (69 | ) | $ | 24,048 | $ | (553 | ) | ||||||
Municipal securities | 1,338 | (8 | ) | 294 | (8 | ) | ||||||||||
Collateralized mortgage Obligations | 1,004 | (8 | ) | — | — | |||||||||||
U.S. Treasury securities | 2,983 | (10 | ) | — | — | |||||||||||
U.S. agency securities | 5,688 | (57 | ) | — | — | |||||||||||
$ | 18,375 | $ | (152 | ) | $ | 24,342 | $ | (561 | ) | |||||||
Amortized | Fair | |||||||
Cost | Value | |||||||
(In thousands) | ||||||||
Due in one year or less | $ | 8,065 | $ | 8,039 | ||||
Due after one year through five years | 40,193 | 39,692 | ||||||
Due after five years through ten years | 14,605 | 14,724 | ||||||
Due after ten years | 14,922 | 14,890 | ||||||
$ | 77,785 | $ | 77,345 | |||||
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NOTE 3 — | LOANS AND ALLOWANCE FOR LOAN LOSSES |
2004 | 2003 | ||||||||
(In thousands) | |||||||||
Commercial real estate | $ | 83,457 | $ | 87,638 | |||||
Commercial loans and lines | 68,996 | 42,076 | |||||||
Construction | 12,330 | 16,540 | |||||||
Home equity loans and lines | 2,114 | 5,808 | |||||||
Home mortgage | 11,558 | 2,898 | |||||||
Installment and credit card | 4,418 | 2,992 | |||||||
Total loans | 182,873 | 157,952 | |||||||
Less allowance for loan losses | (2,346 | ) | (2,325 | ) | |||||
Loans, net | $ | 180,527 | $ | 155,627 | |||||
2004 | 2003 | 2002 | ||||||||||
(In thousands) | ||||||||||||
BALANCE, beginning of year | $ | 2,325 | $ | 1,970 | $ | 1,680 | ||||||
Provision for loan losses charged to expense | 418 | 510 | 510 | |||||||||
Loans charged off | (359 | ) | (124 | ) | (336 | ) | ||||||
Transfer to undisbursed commitment liability | (50 | ) | (100 | ) | — | |||||||
Recoveries on loans previously charged off | 12 | 69 | 116 | |||||||||
BALANCE, end of year | $ | 2,346 | $ | 2,325 | $ | 1,970 | ||||||
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NOTE 4 — | PREMISES AND EQUIPMENT |
2004 | 2003 | ||||||||
(In thousands) | |||||||||
Land | $ | 894 | $ | 894 | |||||
Building | 1,419 | 1,415 | |||||||
Furniture and equipment | 3,300 | 2,422 | |||||||
Leasehold improvements | 1,668 | 1,345 | |||||||
Work in progress | 228 | 25 | |||||||
Total premises and equipment | 7,509 | 6,101 | |||||||
Less accumulated depreciation and amortization | (2,813 | ) | (2,353 | ) | |||||
Premises and equipment, net | $ | 4,696 | $ | 3,748 | |||||
NOTE 5 — | CERTIFICATES OF DEPOSIT |
Under | $100,000 | |||||||||||
$100,000 | and Over | Total | ||||||||||
Years ending December 31, 2005 | $ | 15,217 | $ | 27,051 | $ | 42,268 | ||||||
2006 | 4,664 | 4,283 | 8,947 | |||||||||
2007 | 1,257 | 917 | 2,174 | |||||||||
2008 | 52 | — | 52 | |||||||||
2009 | 87 | — | 87 | |||||||||
$ | 21,277 | $ | 32,251 | $ | 53,528 | |||||||
NOTE 6 — | LINES OF CREDIT AND BORROWED FUNDS |
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Maturity | Weighted Average | |||||||||||
Amount | Year | Interest Rate | ||||||||||
$ | 16,050 | 2005 | 1.95 | % | ||||||||
11,550 | 2006 | 2.49 | % | |||||||||
5,250 | 2007 | 3.51 | % | |||||||||
$ | 32,850 | 2.39 | % | |||||||||
NOTE 7 — | INCOME TAXES |
2004 | 2003 | 2002 | ||||||||||||
(In thousands) | ||||||||||||||
Current: | ||||||||||||||
Federal | $ | 796 | $ | 924 | $ | 860 | ||||||||
State | 335 | 359 | 264 | |||||||||||
1,131 | 1,283 | 1,124 | ||||||||||||
Deferred: | ||||||||||||||
Federal | 143 | (30 | ) | (55 | ) | |||||||||
State | 45 | (9 | ) | (34 | ) | |||||||||
188 | (39 | ) | (89 | ) | ||||||||||
Provision for income taxes | $ | 1,319 | $ | 1,244 | $ | 1,035 | ||||||||
2004 | 2003 | |||||||||
(In thousands) | ||||||||||
Deferred tax assets: | ||||||||||
Allowance for loan losses | $ | 864 | $ | 867 | ||||||
Net benefit for state taxes | 115 | 123 | ||||||||
979 | 990 | |||||||||
Deferred tax liabilities: | ||||||||||
Depreciation and amortization | (293 | ) | (203 | ) | ||||||
Certain prepaid assets | (170 | ) | (136 | ) | ||||||
Other | (68 | ) | (15 | ) | ||||||
(531 | ) | (354 | ) | |||||||
Net deferred tax assets | $ | 448 | $ | 636 | ||||||
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2004 | 2003 | 2002 | |||||||||||
Tax provision at federal statutory rate | 34.0 | % | 34.0 | % | 34.0 | % | |||||||
State franchise tax, net of federal income tax benefit | 6.9 | 6.6 | 7.2 | ||||||||||
Tax-exempt interest | (3.3 | ) | (2.0 | ) | (2.4 | ) | |||||||
Increase in cash surrender value of life insurance | (1.7 | ) | (2.6 | ) | — | ||||||||
Other | (0.8 | ) | — | 0.3 | |||||||||
Effective tax rate | 35.1 | % | 36.0 | % | 39.1 | % | |||||||
NOTE 8 — | SHAREHOLDER TRANSACTIONS |
NOTE 9 — | EARNINGS PER SHARE |
2004 | 2003 | 2002 | ||||||||||||||||||||||
Diluted | Basic | Diluted | Basic | Diluted | Basic | |||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||
Income available to common shareholders | $ | 2,435 | $ | 2,435 | $ | 2,207 | $ | 2,207 | $ | 1,614 | $ | 1,614 | ||||||||||||
Weighted average common shares outstanding | 2,080,142 | 2,080,142 | 1,974,286 | 1,974,286 | 1,765,548 | 1,765,548 | ||||||||||||||||||
Net effect of dilutive warrants and options — based on the treasury stock method using average market price | 55,492 | — | 37,682 | — | 101,370 | — | ||||||||||||||||||
2,135,634 | 2,080,142 | 2,011,968 | 1,974,286 | 1,866,918 | 1,765,548 | |||||||||||||||||||
Earnings per share | $ | 1.14 | $ | 1.17 | $ | 1.10 | $ | 1.12 | $ | 0.86 | $ | 0.91 | ||||||||||||
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NOTE 10 — | STOCK OPTION PLAN |
Weighted | Weighted | ||||||||||||||||||||
Non- | Average | Average | |||||||||||||||||||
Total | Incentive | statutory | Exercise | Fair | |||||||||||||||||
Options | Options | Options | Price | Value | |||||||||||||||||
Options granted in 2003: | |||||||||||||||||||||
Incentive stock options | 34,250 | 34,250 | — | $ | 11.25 | $ | 1.77 | ||||||||||||||
Nonstatutory stock options | 10,000 | — | 10,000 | $ | 11.25 | $ | 1.77 | ||||||||||||||
Options under grant — December 31, 2003 | 44,250 | 34,250 | 10,000 | ||||||||||||||||||
Options granted in 2004: | |||||||||||||||||||||
Incentive stock options | 28,400 | 28,400 | — | $ | 20.25 | $ | 4.24 | ||||||||||||||
Nonstatutory stock options | 10,000 | — | 10,000 | $ | 20.25 | $ | 4.24 | ||||||||||||||
Options forfeited | (4,400 | ) | (4,400 | ) | — | $ | 13.09 | ||||||||||||||
Options under grant — December 31, 2004 | 78,250 | 58,250 | 20,000 | $ | 16.56 | ||||||||||||||||
Options under grant and exercisable — December 31, 2004 | — | — | — | $ | — | ||||||||||||||||
Options reserved and available for grant — December 31, 2004 | 121,750 | ||||||||||||||||||||
Incentive Stock Options | Nonstatutory Stock Options | |||||||||||||||||||
Weighted | Weighted | |||||||||||||||||||
Average | Average | |||||||||||||||||||
Remaining | Remaining | |||||||||||||||||||
Contractual | Contractual | |||||||||||||||||||
Exercise | Number | Life | Exercise | Number | Life | |||||||||||||||
Price | Outstanding | (in years) | Price | Outstanding | (in years) | |||||||||||||||
$11.25 | 31,750 | 6.47 | $ | 11.25 | 10,000 | 6.47 | ||||||||||||||
$20.25 | 26,500 | 7.31 | $ | 20.25 | 10,000 | 7.31 | ||||||||||||||
58,250 | 20,000 | |||||||||||||||||||
NOTE 11 — | EMPLOYEE BENEFITS |
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NOTE 12 — | TRANSACTIONS WITH RELATED PARTIES |
NOTE 13 — | CONCENTRATIONS OF CREDIT RISK |
NOTE 14 — | FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK |
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2004 | 2003 | ||||||||
(In thousands) | |||||||||
Financial instruments whose contract amounts contain credit risk: | |||||||||
Commitments to extend credit | $ | 63,604 | $ | 45,291 | |||||
Commercial and standby letters of credit | 914 | 1,337 | |||||||
$ | 64,518 | $ | 46,628 | ||||||
NOTE 15 — | COMMITMENTS AND CONTINGENCIES |
Years ending December 31, 2005 | $ | 332 | |||
2006 | 314 | ||||
2007 | 261 | ||||
2008 | 271 | ||||
2009 | 276 | ||||
Thereafter | 960 | ||||
$ | 2,414 | ||||
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NOTE 16 — | REGULATORY MATTERS |
To be Well-Capitalized | |||||||||||||||||||||||||
For Capital | Under Prompt | ||||||||||||||||||||||||
Adequacy | Corrective Action | ||||||||||||||||||||||||
Actual | Purposes | Provisions | |||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
December 31, 2004: | |||||||||||||||||||||||||
Total capital to risk-weighted Assets | $ | 25,300 | 12.25% | $ | 16,518 | ³8.00% | $ | 20,647 | ³10.00% | ||||||||||||||||
Tier 1 capital to risk-weighted Assets | $ | 22,804 | 11.04% | $ | 8,259 | ³4.00% | $ | 12,388 | ³6.00% | ||||||||||||||||
Tier 1 capital to average Assets | $ | 22,804 | 8.61% | $ | 10,974 | ³4.00% | $ | 13,718 | ³5.00% | ||||||||||||||||
December 31, 2003: | |||||||||||||||||||||||||
Total capital to risk-weighted Assets | $ | 20,927 | 11.57% | $ | 14,467 | ³8.00% | $ | 18,084 | ³10.00% | ||||||||||||||||
Tier 1 capital to risk-weighted Assets | $ | 18,666 | 10.32% | $ | 7,234 | ³4.00% | $ | 10,850 | ³6.00% | ||||||||||||||||
Tier 1 capital to average Assets | $ | 18,666 | 7.54% | $ | 9,898 | ³4.00% | $ | 12,372 | ³5.00% |
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NOTE 17 — | FAIR VALUES OF FINANCIAL INSTRUMENTS |
2004 | 2003 | ||||||||||||||||
Carrying | Estimated | Carrying | Estimated | ||||||||||||||
Amount | Fair Value | Amount | Fair Value | ||||||||||||||
(In thousands) | |||||||||||||||||
Financial assets: | |||||||||||||||||
Cash and due from banks | $ | 7,194 | $ | 7,194 | $ | 7,770 | $ | 7,770 | |||||||||
Federal funds sold | 4,055 | 4,055 | 15,780 | 15,780 | |||||||||||||
Securities available-for-sale | 77,345 | 77,345 | 64,774 | 64,774 | |||||||||||||
Loans | 182,873 | 182,492 | 157,952 | 160,367 | |||||||||||||
FHLB stock | 1,992 | 1,992 | 1,512 | 1,512 | |||||||||||||
Financial liabilities: | |||||||||||||||||
Deposits | $ | 227,190 | $ | 227,065 | $ | 211,929 | $ | 211,847 | |||||||||
FHLB advances | 32,850 | 33,301 | 25,000 | 24,949 |
NOTE 18 — | SUBSEQUENT EVENTS |
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June 30, | December 31, | |||||||||
2005 | 2004 | |||||||||
Cash and due from banks | $ | 1,251,000 | $ | 1,285,000 | ||||||
Federal funds sold | 11,000,000 | 7,000,000 | ||||||||
Cash and cash equivalents | 12,251,000 | 8,285,000 | ||||||||
Interest earning deposits | 7,920,000 | 12,006,000 | ||||||||
Investment securities held to maturity | 4,509,000 | 4,528,000 | ||||||||
24,680,000 | 24,819,000 | |||||||||
Loans receivable | 121,691,000 | 120,763,000 | ||||||||
Deferred loan fees | — | (44,000 | ) | |||||||
Allowance for loan losses | (1,174,000 | ) | (1,183,000 | ) | ||||||
Net loans receivable | 120,517,000 | 119,536,000 | ||||||||
Accrued interest receivable | 557,000 | 481,000 | ||||||||
Property and equipment, net | 1,685,000 | 1,774,000 | ||||||||
Other assets | 93,000 | 115,000 | ||||||||
Total Assets | $ | 147,532,000 | $ | 146,725,000 | ||||||
Demand deposits | $ | 3,671,000 | $ | 2,811,000 | ||||||
Statement savings | 24,928,000 | 28,572,000 | ||||||||
Certificates of deposits | 100,874,000 | 97,416,000 | ||||||||
Total deposits | 129,473,000 | 128,799,000 | ||||||||
Accounts payable and accrued expenses | 550,000 | 1,035,000 | ||||||||
Deferred income taxes | 2,000 | 2,000 | ||||||||
Dividends payable | 79,000 | 122,000 | ||||||||
Total liabilities | 130,104,000 | 129,958,000 | ||||||||
Stockholders’ equity | ||||||||||
Common stock, no par value-authorized, 8,000,000 shares | 2,265,000 | 2,265,000 | ||||||||
Retained earnings | 15,163,000 | 14,502,000 | ||||||||
Total stockholders’ equity | 17,428,000 | 16,767,000 | ||||||||
Total liabilities and stockholders’ equity | $ | 147,532,000 | $ | 146,725,000 | ||||||
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Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||||
INTEREST INCOME | ||||||||||||||||||
Loans | $ | 2,414,000 | $ | 2,271,000 | $ | 4,736,000 | $ | 4,594,000 | ||||||||||
Interest earning deposits | 69,000 | 76,000 | 152,000 | 138,000 | ||||||||||||||
Investment securities | 31,000 | 23,000 | 59,000 | 48,000 | ||||||||||||||
Federal funds sold | 56,000 | 17,000 | 92,000 | 40,000 | ||||||||||||||
Total interest income | 2,570,000 | 2,387,000 | 5,039,000 | 4,820,000 | ||||||||||||||
INTEREST EXPENSE | ||||||||||||||||||
Demand deposits | 8,000 | 6,000 | 14,000 | 12,000 | ||||||||||||||
Statement savings | 213,000 | 185,000 | 415,000 | 362,000 | ||||||||||||||
Certificates of deposit | 858,000 | 703,000 | 1,683,000 | 1,419,000 | ||||||||||||||
Total interest expense | 1,079,000 | 894,000 | 2,112,000 | 1,793,000 | ||||||||||||||
NET INTEREST INCOME | 1,491,000 | 1,493,000 | 2,927,000 | 3,027,000 | ||||||||||||||
PROVISION (CREDIT) FOR LOAN LOSSES | 1,000 | (6,000 | ) | (9,000 | ) | (50,000 | ) | |||||||||||
NET INTEREST INCOME AFTER CREDIT FOR LOAN LOSSES | 1,490,000 | 1,499,000 | 2,936,000 | 3,077,000 | ||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||
Delinquency charges | 3,000 | 6,000 | 8,000 | 17,000 | ||||||||||||||
Rental income | 55,000 | 35,000 | 107,000 | 99,000 | ||||||||||||||
Fee income | 80,000 | 85,000 | 172,000 | 262,000 | ||||||||||||||
Other | 2,000 | 4,000 | 4,000 | 6,000 | ||||||||||||||
Total noninterest income | 140,000 | 130,000 | 291,000 | 384,000 | ||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||
Salaries and wages | 530,000 | 605,000 | 1,107,000 | 1,272,000 | ||||||||||||||
General and administrative | 206,000 | 213,000 | 474,000 | 420,000 | ||||||||||||||
Occupancy | 100,000 | 85,000 | 199,000 | 167,000 | ||||||||||||||
Total noninterest expense | 836,000 | 903,000 | 1,780,000 | 1,859,000 | ||||||||||||||
EARNINGS BEFORE INCOME TAXES | 794,000 | 726,000 | 1,447,000 | 1,602,000 | ||||||||||||||
INCOME TAXES | 28,000 | 25,000 | 51,000 | 56,000 | ||||||||||||||
NET EARNINGS | $ | 766,000 | $ | 701,000 | $ | 1,396,000 | $ | 1,546,000 | ||||||||||
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Common | Retained | |||||||||||||||
Shares | Stock | Earnings | Total | |||||||||||||
Balance at December 31, 2004 | 3,049,504 | $ | 2,265,000 | $ | 14,502,000 | $ | 16,767,000 | |||||||||
Net earnings | 1,396,000 | 1,396,000 | ||||||||||||||
Dividend paid | (476,000 | ) | (476,000 | ) | ||||||||||||
Distribution | (259,000 | ) | (259,000 | ) | ||||||||||||
Balance at June 30, 2005 | 3,049,504 | $ | 2,265,000 | $ | 15,163,000 | $ | 17,428,000 | |||||||||
Balance at December 31, 2003 | 3,043,650 | 2,181,000 | 13,600,000 | 15,781,000 | ||||||||||||
Net earnings | 1,546,000 | 1,546,000 | ||||||||||||||
Stock Grant | 4,000 | 4,000 | ||||||||||||||
Dividend paid | (986,000 | ) | (986,000 | ) | ||||||||||||
Balance at June 30, 2004 | 3,043,650 | 2,185,000 | 14,160,000 | 16,345,000 | ||||||||||||
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6/30/2005 | 6/30/2004 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
Net earnings | $ | 1,396,000 | $ | 1,546,000 | ||||||
Adjustments to reconcile net earnings to net cash provided by operating activities | ||||||||||
Depreciation | 89,000 | 63,000 | ||||||||
Credit for loan losses | (9,000 | ) | (22,000 | ) | ||||||
Amortization of premiums and discount investments | 19,000 | (40,000 | ) | |||||||
Stock compensation expense | — | 4,000 | ||||||||
Decrease in unearned finance charges | (44,000 | ) | 6,000 | |||||||
(Increase) Decrease in accrued interest receivable | (76,000 | ) | 36,000 | |||||||
Increase in other assets | 22,000 | (8,000 | ) | |||||||
Decrease in accounts payable and accrued expenses | (528,000 | ) | (327,000 | ) | ||||||
Net cash provided by operating activities | 869,000 | 1,258,000 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
Redemption of U.S. Treasury Notes | — | — | ||||||||
(Increase) decrease in interest deposits | 4,086,000 | (2,871,000 | ) | |||||||
Loan originations and principal collections, net | (928,000 | ) | (235,000 | ) | ||||||
Increase (Decrease) in property and equipment | — | (169,000 | ) | |||||||
Net cash used in investing activities | 3,158,000 | (3,275,000 | ) | |||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||
Decrease (Increase) in demand deposits | $ | 860,000 | $ | (1,166,000 | ) | |||||
(Decrease) increase in statement savings | (3,644,000 | ) | 1,001,000 | |||||||
Increase in certificates of deposit | 3,458,000 | (2,402,000 | ) | |||||||
Stock Buy Out Transactions | — | — | ||||||||
Distribution | (259,000 | ) | — | |||||||
Dividends paid | (476,000 | ) | (986,000 | ) | ||||||
Net cash provided by financing activities | (61,000 | ) | (3,553,000 | ) | ||||||
Net (decrease) increase in cash and cash equivalents | 3,966,000 | (5,570,000 | ) | |||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 8,285,000 | 12,672,000 | ||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ | 12,251,000 | $ | 7,102,000 | ||||||
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Six Months Ended June 30, | ||||||||||
2005 | 2004 | |||||||||
Supplemental Disclosures of Cash Flow Information | ||||||||||
Cash paid during the period | ||||||||||
Interest | $ | 2,112,000 | $ | 1,793,000 | ||||||
Taxes | 58,000 | 80,000 | ||||||||
Supplemental Schedule of Noncash Investing and Financing Activities | ||||||||||
Dividends declared and not paid | $ | 72,000 | $ | 172,000 |
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June 30, | December 31, | |||||||
2005 | 2004 | |||||||
(In thousands) | ||||||||
Beginning balance | $ | 1,183 | $ | 1,211 | ||||
Credit for loan losses | (9 | ) | (55 | ) | ||||
Loans charged-off | — | — | ||||||
Recoveries on loans charged-off | — | 27 | ||||||
Ending balance | $ | 1,174 | $ | 1,183 | ||||
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F-43
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Page | |||||
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS | F-45 | ||||
CONSOLIDATED FINANCIAL STATEMENTS | |||||
CONSOLIDATED BALANCE SHEETS | F-46 | ||||
CONSOLIDATED STATEMENTS OF EARNINGS | F-47 | ||||
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY | F-48 | ||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | F-49 | ||||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | F-50-61 |
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/s/ Grant Thornton LLP | |
Grant Thornton LLP |
F-45
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December 31, | ||||||||||
2004 | 2003 | |||||||||
ASSETS | ||||||||||
Cash and due from banks | $ | 1,285,000 | $ | 2,672,000 | ||||||
Federal funds sold | 7,000,000 | 10,000,000 | ||||||||
Cash and cash equivalents | 8,285,000 | 12,672,000 | ||||||||
Interest earning deposits | 12,006,000 | 9,226,000 | ||||||||
Investment securities held to maturity | 4,528,000 | 4,005,000 | ||||||||
24,819,000 | 25,903,000 | |||||||||
Loans receivable | 120,763,000 | 115,968,000 | ||||||||
Deferred loan fees | (44,000 | ) | (322,000 | ) | ||||||
Allowance for loan losses | (1,183,000 | ) | (1,211,000 | ) | ||||||
Net loans receivable | 119,536,000 | 114,435,000 | ||||||||
Accrued interest receivable | 481,000 | 498,000 | ||||||||
Property and equipment, net | 1,774,000 | 1,726,000 | ||||||||
Other assets | 115,000 | 117,000 | ||||||||
TOTAL ASSETS | $ | 146,725,000 | $ | 142,679,000 | ||||||
Demand deposits | $ | 2,811,000 | $ | 4,018,000 | ||||||
Statement savings | 28,572,000 | 31,769,000 | ||||||||
Certificates of deposits | 97,416,000 | 89,698,000 | ||||||||
Total deposits | 128,799,000 | 125,485,000 | ||||||||
Accounts payable and accrued expenses | 1,035,000 | 1,224,000 | ||||||||
Deferred income taxes | 2,000 | 25,000 | ||||||||
Dividends payable | 122,000 | 164,000 | ||||||||
Total liabilities | 129,958,000 | 126,898,000 | ||||||||
COMMITMENTS AND CONTINGENCIES | — | — | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||||
Common stock, no par value — authorized, 8,000,000 shares; issued and outstanding, 3,049,504 and 3,043,650 shares at December 31, 2004 and 2003, respectively | 2,265,000 | 2,181,000 | ||||||||
Retained earnings | 14,502,000 | 13,600,000 | ||||||||
Total stockholders’ equity | 16,767,000 | 15,781,000 | ||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 146,725,000 | $ | 142,679,000 | ||||||
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Year Ended December 31, | ||||||||||
2004 | 2003 | |||||||||
INTEREST INCOME | ||||||||||
Loans | $ | 9,075,000 | $ | 9,445,000 | ||||||
Interest earning deposits | 308,000 | 308,000 | ||||||||
Investment securities | 94,000 | 123,000 | ||||||||
Federal funds sold | 105,000 | 92,000 | ||||||||
Total interest income | 9,582,000 | 9,968,000 | ||||||||
INTEREST EXPENSE | ||||||||||
Demand deposits | 24,000 | 52,000 | ||||||||
Statement savings | 773,000 | 793,000 | ||||||||
Certificates of deposit | 2,976,000 | 2,868,000 | ||||||||
Total interest expense | 3,773,000 | 3,713,000 | ||||||||
NET INTEREST INCOME | 5,809,000 | 6,255,000 | ||||||||
Credit for loan losses | (55,000 | ) | (4,000 | ) | ||||||
NET INTEREST INCOME AFTER CREDIT FOR LOAN LOSSES | 5,864,000 | 6,259,000 | ||||||||
Noninterest income | ||||||||||
Delinquency charges | 37,000 | 34,000 | ||||||||
Rental income | 194,000 | 264,000 | ||||||||
Fee income | 481,000 | 409,000 | ||||||||
(Loss) gain on sale of assets | (9,000 | ) | 38,000 | |||||||
Net gain on sales of loans held for sale | — | 516,000 | ||||||||
Other | 12,000 | 10,000 | ||||||||
Total noninterest income | 715,000 | 1,271,000 | ||||||||
NONINTEREST EXPENSE | ||||||||||
Salaries and wages | 2,394,000 | 2,582,000 | ||||||||
General and administrative | 792,000 | 926,000 | ||||||||
Occupancy | 372,000 | 380,000 | ||||||||
Total noninterest expense | 3,558,000 | 3,888,000 | ||||||||
EARNINGS BEFORE INCOME TAXES | 3,021,000 | 3,642,000 | ||||||||
Income taxes | 106,000 | 127,000 | ||||||||
NET EARNINGS | $ | 2,915,000 | $ | 3,515,000 | ||||||
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Common | Retained | |||||||||||||||
Shares | Stock | Earnings | Total | |||||||||||||
Balance at December 31, 2002 | 3,166,400 | $ | 2,234,000 | $ | 12,803,000 | $ | 15,037,000 | |||||||||
Net earnings | — | — | 3,515,000 | 3,515,000 | ||||||||||||
Stock grants | 2,250 | 11,000 | — | 11,000 | ||||||||||||
Stock buyout | (125,000 | ) | (64,000 | ) | (592,000 | ) | (656,000 | ) | ||||||||
Dividend paid | — | — | (2,126,000 | ) | (2,126,000 | ) | ||||||||||
Balance at December 31, 2003 | 3,043,650 | 2,181,000 | 13,600,000 | 15,781,000 | ||||||||||||
Net earnings | — | — | 2,915,000 | 2,915,000 | ||||||||||||
Stock grants | 15,854 | 89,000 | — | 89,000 | ||||||||||||
Stock buyout | (10,000 | ) | (5,000 | ) | (80,000 | ) | (85,000 | ) | ||||||||
Dividend paid | — | — | (1,933,000 | ) | (1,933,000 | ) | ||||||||||
Balance at December 31, 2004 | 3,049,504 | $ | 2,265,000 | $ | 14,502,000 | $ | 16,767,000 | |||||||||
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Year Ended December 31, | ||||||||||
2004 | 2003 | |||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||
Net earnings | $ | 2,915,000 | $ | 3,515,000 | ||||||
Adjustments to reconcile net earnings to net cash provided by operating activities | ||||||||||
Depreciation | 151,000 | 162,000 | ||||||||
Credit for loan losses | (55,000 | ) | (4,000 | ) | ||||||
Amortization of premiums and discount investments | (13,000 | ) | 3,000 | |||||||
Loss (gain) on sale of property and equipment | 9,000 | (38,000 | ) | |||||||
Stock compensation expense | 89,000 | 11,000 | ||||||||
Loans held for sale, net | — | 2,536,000 | ||||||||
Decrease in unearned finance charges | (278,000 | ) | (16,000 | ) | ||||||
Provision (credit) for deferred income taxes | (23,000 | ) | (89,000 | ) | ||||||
Decrease in accrued interest receivable | 17,000 | 26,000 | ||||||||
Decrease in other assets | 2,000 | 15,000 | ||||||||
Decrease in accounts payable and accrued expenses | (189,000 | ) | (5,000 | ) | ||||||
Net cash provided by operating activities | 2,625,000 | 6,116,000 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||
Redemption of U.S. Treasury Notes | 2,500,000 | 2,000,000 | ||||||||
Purchase of U.S. Treasury Notes | (3,010,000 | ) | (2,000,000 | ) | ||||||
(Increase) decrease in interest deposits | (2,780,000 | ) | 2,597,000 | |||||||
Loan originations and principal collections, net | (4,768,000 | ) | (10,900,000 | ) | ||||||
Purchase of property and equipment | (222,000 | ) | (96,000 | ) | ||||||
Proceeds from sale of property and equipment | 14,000 | 84,000 | ||||||||
Net cash used in investing activities | (8,266,000 | ) | (8,315,000 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||
Decrease in demand deposits | $ | (1,207,000 | ) | $ | (782,000 | ) | ||||
(Decrease) increase in statement savings | (3,197,000 | ) | (1,305,000 | ) | ||||||
Increase in certificates of deposit | 7,718,000 | 10,312,000 | ||||||||
Stock buyouts | (85,000 | ) | (656,000 | ) | ||||||
Dividends paid | (1,975,000 | ) | (2,127,000 | ) | ||||||
Net cash provided by financing activities | 1,254,000 | 5,442,000 | ||||||||
Net (decrease) increase in cash and cash equivalents | (4,387,000 | ) | 3,243,000 | |||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 12,672,000 | 9,429,000 | ||||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR | $ | 8,285,000 | $ | 12,672,000 | ||||||
Supplemental disclosures of cash flow information | ||||||||||
Cash paid during the year | ||||||||||
Interest | $ | 3,768,000 | $ | 3,731,000 | ||||||
Income taxes | $ | 108,000 | $ | 104,000 | ||||||
Supplemental schedule of noncash investing and finance activities | ||||||||||
Dividends declared and not paid | $ | 122,000 | $ | 164,000 | ||||||
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NOTE 1 — | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
A. | General |
B. | Use of Estimates |
C. | Investments |
D. | Cash Equivalents |
E. | Loans Receivable |
F-50
Table of Contents
F. | Allowance for Loan Losses |
H. | Property and Equipment |
I. | Stock Grants |
F-51
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J. | Income Taxes |
K. | Related Party Transactions |
L. | Recent Accounting Pronouncements |
M. | Recent Accounting Pronouncements |
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N. | Reclassifications |
NOTE 2 — | INVESTMENT SECURITIES |
2004 | ||||||||||||||||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||||
Cost | Gain | Loss | Fair Value | |||||||||||||
U.S. Treasury Notes | $ | 4,528,000 | $ | 1,000 | $ | 24,000 | $ | 4,505,000 | ||||||||
2003 | ||||||||||||||||
Gross | Gross | |||||||||||||||
Amortized | Unrealized | Unrealized | ||||||||||||||
Cost | Gain | Loss | Fair Value | |||||||||||||
U.S. Treasury Notes | $ | 4,005,000 | $ | 28,000 | $ | 1,000 | $ | 4,032,000 | ||||||||
Amortized | ||||||||
Cost | Fair Value | |||||||
One year or less | $ | 1,500,000 | $ | 1,494,000 | ||||
One to five years | 3,028,000 | 3,011,000 | ||||||
$ | 4,528,000 | $ | 4,505,000 | |||||
NOTE 3 — | LOANS RECEIVABLE |
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2004 | 2003 | |||||||
Balance at beginning of year | $ | 1,211,000 | $ | 1,199,000 | ||||
Credit for loan losses | (55,000 | ) | (4,000 | ) | ||||
Recoveries on amounts charged off | 27,000 | 16,000 | ||||||
Balance at end of year | $ | 1,183,000 | $ | 1,211,000 | ||||
NOTE 4 — | PROPERTY AND EQUIPMENT |
2004 | 2003 | |||||||
Land | $ | 637,000 | $ | 637,000 | ||||
Building | 1,288,000 | 1,277,000 | ||||||
Furniture and fixtures | 1,040,000 | 1,065,000 | ||||||
Leasehold improvements | 341,000 | 180,000 | ||||||
3,306,000 | 3,159,000 | |||||||
Less accumulated depreciation | (1,532,000 | ) | (1,433,000 | ) | ||||
Balance at end of year | $ | 1,774,000 | $ | 1,726,000 | ||||
NOTE 5 — | DEPOSITS |
2004 | 2003 | |||||||
Certificates of deposit | ||||||||
Consumer | $ | 77,718,000 | $ | 69,789,000 | ||||
IRA | 9,069,000 | 8,420,000 | ||||||
Business | 10,629,000 | 11,489,000 | ||||||
$ | 97,416,000 | $ | 89,698,000 | |||||
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Year Ending December 31: | ||||
2005 | $ | 59,686,000 | ||
2006 | 9,572,000 | |||
2007 | 12,823,000 | |||
2008 | 6,468,000 | |||
2009 | 8,867,000 | |||
$ | 97,416,000 | |||
NOTE 6 — | INCOME TAXES |
2004 | ||||||||||||
Current | Deferred | Total | ||||||||||
Federal | $ | — | $ | — | $ | — | ||||||
State | 129,000 | (23,000 | ) | 106,000 | ||||||||
$ | 129,000 | $ | (23,000 | ) | $ | 106,000 | ||||||
2003 | ||||||||||||
Current | Deferred | Total | ||||||||||
Federal | $ | 60,000 | $ | (65,000 | ) | $ | (5,000 | ) | ||||
State | 156,000 | (24,000 | ) | 132,000 | ||||||||
$ | 216,000 | $ | (89,000 | ) | $ | 127,000 | ||||||
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2004 | 2003 | |||||||||
Deferred tax assets: | ||||||||||
Allowance for loan losses | $ | 41,000 | $ | 42,000 | ||||||
Property and equipment | — | 1,000 | ||||||||
Total gross deferred tax assets | 41,000 | 43,000 | ||||||||
Deferred tax liabilities: | ||||||||||
Property and equipment | 1,000 | — | ||||||||
Bad debt recapture | 23,000 | 22,000 | ||||||||
Deferred loan origination fees and costs | 19,000 | 46,000 | ||||||||
Total gross deferred tax liabilities | 43,000 | 68,000 | ||||||||
Net deferred tax liabilities | $ | 2,000 | $ | 25,000 | ||||||
NOTE 7 — | STOCKHOLDERS’ EQUITY |
A. Stock Grants |
B. Dividends Paid |
NOTE 8 — | COMMITMENTS AND CONTINGENCIES |
Year Ending December 31: | ||||
2005 | $ | 92,000 | ||
2006 | 49,000 | |||
2007 | 32,000 | |||
2008 | 8,000 | |||
$ | 181,000 | |||
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Year Ending December 31: | ||||
2005 | $ | 196,000 | ||
2006 | 82,000 | |||
$ | 278,000 | |||
NOTE 9 — | CAPITAL RESTRICTION AND REGULATORY MATTERS |
To be Well | ||||||||||||||||||||||||
Capitalized Under | ||||||||||||||||||||||||
For Capital | Prompt Corrective | |||||||||||||||||||||||
Actual | Adequacy Purposes | Action Provision | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
December 31, 2004: | ||||||||||||||||||||||||
Total capital (to risk weighted assets) | $ | 17,691 | 14.01% | $ | 10,100 | 8.00% | $ | 12,625 | 10.00% | |||||||||||||||
Tier I capital (to risk weighted assets) | 16,508 | 13.07% | 5,051 | 4.00% | 7,577 | 6.00% | ||||||||||||||||||
Tier I capital (to average assets) | 16,508 | 11.24% | 5,874 | 4.00% | 7,342 | 5.00% |
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To be Well | ||||||||||||||||||||||||
Capitalized Under | ||||||||||||||||||||||||
For Capital | Prompt Corrective | |||||||||||||||||||||||
Actual | Adequacy Purposes | Action Provision | ||||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||||||
December 31, 2003: | ||||||||||||||||||||||||
Total capital (to risk weighted assets) | $ | 16,741 | 15.23% | $ | 8,794 | 8.00% | $ | 10,992 | 10.00% | |||||||||||||||
Tier I capital (to risk weighted assets) | 15,530 | 14.13% | 4,396 | 4.00% | 6,594 | 6.00% | ||||||||||||||||||
Tier I capital (to average assets) | 15,530 | 11.25% | 5,522 | 4.00% | 6,902 | 5.00% |
NOTE 10 — | 401(k) PLAN |
2004 | 2003 | |||||||
Postage and supplies | $ | 94,000 | $ | 119,000 | ||||
FDIC assessment | 18,000 | 19,000 | ||||||
Data processing | 83,000 | 73,000 | ||||||
Insurance and fidelity bonds | 97,000 | 87,000 | ||||||
Accounting and audit services | 69,000 | 88,000 | ||||||
State supervision and examination | 31,000 | 26,000 | ||||||
Appraisal costs | 30,000 | 31,000 | ||||||
Equipment maintenance | 44,000 | 36,000 | ||||||
Automobile | 22,000 | 18,000 | ||||||
Board meetings and directors’ fees | 48,000 | 49,000 | ||||||
Dues and subscriptions | 24,000 | 29,000 | ||||||
Promotion and advertising | 120,000 | 174,000 | ||||||
Credit reports | 15,000 | 13,000 | ||||||
Other | 97,000 | 164,000 | ||||||
$ | 792,000 | $ | 926,000 | |||||
NOTE 12 — | DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS |
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2004 | 2003 | |||||||||||||||
Book Value | Fair Value | Book Value | Fair Value | |||||||||||||
Cash and cash equivalents | $ | 8,285,000 | $ | 8,285,000 | $ | 12,672,000 | $ | 12,672,000 | ||||||||
Interest earning deposits | 12,006,000 | 12,006,000 | 9,226,000 | 9,226,000 | ||||||||||||
Investment securities held to maturity | 4,528,000 | 4,505,000 | 4,005,000 | 4,032,000 | ||||||||||||
Loans receivable | 120,763,000 | 125,755,000 | 115,968,000 | 124,718,000 | ||||||||||||
Accrued interest receivable | 481,000 | 481,000 | 498,000 | 498,000 | ||||||||||||
Demand deposits | 17,112,000 | 17,112,000 | 19,409,000 | 19,409,000 | ||||||||||||
Statement savings | 14,271,000 | 14,271,000 | 16,378,000 | 16,378,000 | ||||||||||||
Certificates of deposit | 97,416,000 | 98,765,000 | 89,698,000 | 91,636,000 | ||||||||||||
Accrued interest payable | 152,000 | 152,000 | 147,000 | 147,000 |
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NOTE 13 — | PARENT ONLY FINANCIAL INFORMATION |
December 31, | ||||||||||
2004 | 2003 | |||||||||
Assets | ||||||||||
Cash | $ | 31,000 | $ | 16,000 | ||||||
Certificates of deposit | 225,000 | 225,000 | ||||||||
Investment in subsidiaries | 16,511,000 | 15,530,000 | ||||||||
Dividends receivable from Bank | 122,000 | 174,000 | ||||||||
Total assets | $ | 16,889,000 | $ | 15,945,000 | ||||||
2004 | 2003 | |||||||||
Liabilities and Stockholders’ Equity | ||||||||||
Liabilities | $ | 122,000 | $ | 164,000 | ||||||
Stockholders’ equity: | ||||||||||
Common stock | 2,265,000 | 2,181,000 | ||||||||
Retained earnings | 14,502,000 | 13,600,000 | ||||||||
Total liabilities and stockholders’ equity | $ | 16,889,000 | $ | 15,945,000 | ||||||
Year Ended December 31, | ||||||||||
2004 | 2003 | |||||||||
Earnings | ||||||||||
Equity in undistributed earnings of subsidiaries | $ | 892,000 | $ | 752,000 | ||||||
Dividend income | 2,018,000 | 2,756,000 | ||||||||
Interest income | 5,000 | 7,000 | ||||||||
Net earnings | $ | 2,915,000 | $ | 3,515,000 | ||||||
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Year Ended December 31, | |||||||||||
2004 | 2003 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net earnings | $ | 2,915,000 | $ | 3,515,000 | |||||||
Adjustments to reconcile net earnings to net Cash provided by operating activities: | |||||||||||
Equity in undistributed earnings of subsidiaries | (892,000 | ) | (752,000 | ) | |||||||
Net decrease (increase) in dividends receivable | 52,000 | (3,000 | ) | ||||||||
Net cash provided by operating activities | 2,033,000 | 2,760,000 | |||||||||
Cash flows from investing activities: | |||||||||||
Purchase of investment | — | (75,000 | ) | ||||||||
Net cash used in investing activities | — | (75,000 | ) | ||||||||
Cash flows from financing activities: | |||||||||||
Stock buyout | (85,000 | ) | (656,000 | ) | |||||||
Dividends paid | (1,975,000 | ) | (2,127,000 | ) | |||||||
Net cash used in financing activities | (2,060,000 | ) | (2,783,000 | ) | |||||||
Net increase (decrease) in cash | 15,000 | (98,000 | ) | ||||||||
Cash and cash equivalents at beginning of year | 16,000 | 114,000 | |||||||||
Cash and cash equivalents at end of year | $ | 31,000 | $ | 16,000 | |||||||
NOTE 14 — | SUBSEQUENT EVENTS |
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A-1
Table of Contents
(a) The shareholders of Bank of record at the time the merger becomes effective, for each share of common stock of Bank then held by them, shall be allocated and entitled to receive one share of the common stock of Holding Company; | |
(b) Holding Company shall issue the shares of its common stock which the shareholders of Bank shall be entitled to receive; and |
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(c) Outstanding certificates representing shares of the common stock of Bank shall thereafter represent shares of the common stock of Holding Company, and such certificates may, but need not, be exchanged by the holders thereof, after the merger becomes effective, for new certificates for the appropriate number of shares bearing the name of Holding Company. |
(a) The options to purchase shares of common stock of Bank which have been granted by Bank pursuant to its Stock Option Plan shall be deemed to be options granted by Holding Company with the same terms and conditions and for the same number of shares of common stock of Holding Company. Holding Company shall issue replacement stock options for shares of its common stock so that appropriate adjustments to reflect this merger may be made to (i) the class and number of shares of common stock available for options under the Stock Option Plan and (ii) the class and number of shares and the price per share of the common stock subject to options outstanding under Bank’s Stock Option Plan. | |
(b) From time to time, as and when required by the provisions of any agreement to which Bank or Holding Company shall become a party after the date hereof providing for the issuance of shares of common stock or other equity securities of Bank or Holding Company in connection with a merger into Bank or any other banking institution or other corporation, Holding Company will issue in accordance with the terms of any such agreement shares of its common stock or other equity securities as required by such agreement or in substitution for the shares of common stock or other equity securities of Bank required to be issued by such agreement, as the case may be, which the shareholders of any other such banking institution or other corporation shall be entitled to receive by virtue of any such agreement. |
Section 4. | Conditions Precedent, Termination and Payment of Expenses |
(a) Approval of this Merger Agreement by the shareholders of Bank and Subsidiary, as required by law; | |
(b) Obtaining all other consents and approvals, and the satisfaction of all other requirements prescribed by law which are necessary for consummation of the merger, including, but not limited to, approval of the FDIC, the Commissioner and the Board of Governors of the Federal Reserve System; | |
(c) Obtaining all consents or approvals, governmental or otherwise, which are, or in the opinion of counsel for Bank may be, necessary to permit or enable the Surviving Corporation, upon and after the merger, to conduct all or any part of the business and activities of Bank up to the time of the merger, in the manner in which such activities and business are then conducted; | |
(d) Bank’s obtaining for Holding Company, prior to the Effective Date, a letter, in form and substance satisfactory to Holding Company’s counsel, signed by each person who is an “affiliate” of Bank for purposes of Rule 145 of the Securities and Exchange Commission to the effect that: (i) such person |
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will not dispose of any shares of Holding Company’s common stock to be received pursuant to the merger, in violation of the Securities Act or the rules and regulations of the SEC promulgated thereunder, or in any event prior to such time as financial results covering at least 30 days of post-merger combined operations have been published; and (ii) such person consents to the placing of a legend on the certificate(s) evidencing such shares referring to the issuance of such shares in a transaction to which Rule 145 is applicable and to giving of stop-transfer instructions to Holding Company’s transfer agent with respect to such certificate(s); and | |
(e) Performance by each party hereto of all of its obligations hereunder to be performed prior to the merger becoming effective. |
(a) any action, suit, proceeding or claim has been instituted, made or threatened relating to the proposed merger which makes consummation of the merger inadvisable; or | |
(b) for any other reason consummation of the merger is deemed inadvisable; then this Merger Agreement may be terminated at any time before the merger becomes effective. Upon termination, this Merger Agreement shall be void and of no further effect, and there shall be no liability by reason of this Merger Agreement or the termination thereof on the part of the parties or their respective directors, officers, employees, agents or stockholders. |
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FIRST CALIFORNIA BANK |
By | /s/ C. G. Kum |
C. G. Kum, | |
President and Chief Executive Officer |
By | /s/ Thomas E. Anthony |
Thomas E. Anthony, | |
Secretary | |
FCB MERGER CORP. |
By | /s/ C. G. Kum |
C. G. Kum, | |
President and Chief Executive Officer |
By | /s/ Thomas E. Anthony |
Thomas E. Anthony, | |
Secretary | |
FCB BANCORP |
By | /s/ C. G. Kum |
C. G. Kum, | |
President and Chief Executive Officer |
By | /s/ Thomas E. Anthony |
Thomas E. Anthony, | |
Secretary |
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Part II — Information Not Required in Prospectus
Item 20. Indemnification of Officers and Directors
The Registrant’s Bylaws provide that the Registrant shall, to the maximum extent and in the manner permitted by the California Corporations Code (the “Code”), indemnify each of its directors against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact that such person is or was a director of the Registrant. Furthermore, pursuant to Registrant’s Articles of Incorporation and Bylaws, the Registrant has power to, to the maximum extent and in the manner permitted by the Code, indemnify its employees, officers and agents (other than directors) against expenses, judgments, fines, settlements, and other amounts actually and reasonably incurred in connection with any proceeding arising by reason of the fact that such person is or was an employee, officer or agent of Registrant.
Under Section 317 of the Code, a corporation may indemnify a director, officer, employee or agent of the corporation against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him or her if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. In the case of an action brought by or in the right of a corporation, the corporation may indemnify a director, officer, employee or agent of the corporation against expenses (including attorneys’ fees) actually and reasonably incurred by him or her if he or she acted in good faith and in a manner he or she acted in good faith and in a manner he or she reasonably believed to be in the best interests of the corporation, except that no indemnification shall be made: (1) in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless a court finds that, in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnify for such expenses as the court shall deem proper, (2) of amounts paid in settling or otherwise disposing of a pending action without court approval, and (3) of expenses incurred in defending a pending action which is settled or otherwise disposed of without court approval.
The Registrant’s Articles of Incorporation provides that to the fullest extent permitted by the Code as the same exists or may hereafter be amended, a director of the Registrant shall not be liable to the Registrant or its shareholders for monetary damages for breach of fiduciary duty as a director. The Code permits California corporations to include in their articles of incorporation a provision eliminating or limiting director liability for monetary damages arising from breaches of their fiduciary duty. The only imitations imposed under the statute are that the provision may not eliminate or limit a director’s liability (i) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (ii) for acts or omissions that a director believes to be contrary to the best interests of the corporation or its shareholders or that involve the absence of good faith on the part of the director, (iii) for any transaction from which a director derived an improper personal benefit, (iv) for acts or omissions that show a reckless disregard for the director’s duty to the corporation or its shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director’s duties, of a risk of serious injury to the corporation or its shareholders, (v) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director’s duty to the corporation or its shareholders, (vi) under a contract or transaction between the corporation and a director or between the corporation and any corporation in which one more of its directors has a material financial interest, or (vii) for approving any of the following corporate actions: (1) the making of any distribution to its shareholders that would cause the corporation to be unable to meet its liabilities, (2) the making of any distribution to the corporation’s shareholders on any shares of its stock of any class or series that are junior to outstanding shares of any other class or series with respect to distribution of assets on liquidation if, after giving effect thereto, the excess of its assets (exclusive of goodwill, capitalized research and development expenses and deferred charges) over its liabilities (not including deferred taxes, deferred income and other deferred credits) would be less than the liquidation preference of all shares having a preference on liquidation over the class or series to which the distribution is made; provided, however, that for the purpose of applying the aforementioned to a distribution by a corporation of cash or property
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in payment by the corporation in connection with the purchase of its shares, there shall be deducted from liabilities all amounts that had been previously added thereto with respect to obligations incurred in connection with the corporation’s repurchase of its shares and reflected on the corporation’s balance sheet, but not in excess of the principal of the obligations that will remain unpaid after the distribution; provided, further, that no deduction from liabilities shall occur on account of any obligation that is a distribution to the corporation’s shareholders at the time the obligation is incurred, (3)the distribution of assets to shareholders after institution of dissolution proceeding of the corporation, without paying or adequately providing for all known liabilities of the corporation, excluding any claims not filed by creditors within the time limit set by the court in a notice given to creditors under Chapters 18, 19 and 20, (4) the making of any loan to or guarantee the obligation of any director or officer, unless the transaction is approved by a majority of the shareholders to act thereon, or (5) the making of any loan to or guarantee the obligation of, any person upon the security of shares of the corporation or of its parent if the corporation’s recourse in the event of default is limited to the security for the loan or guaranty y, unless the loan or guarantee is adequately secured without considering these shares, or the loan or guaranty is approved by a majority of the shareholders entitled to act thereon.
Registrant is insured against liabilities which it may incur by reason of its indemnification of officers and directors in accordance with its Bylaws and it is anticipated that the Registrant will assume that policy on its and Registrant’s behalf.
In May 2005, Registrant entered into Indemnification Agreements with each of its executive officers and directors pursuant to which Registrant agreed to indemnify each executive officer and director for expenses, judgments, fines, settlements and other amounts incurred in connection with any proceeding arising by reason of the fact that such director was an “agent” of Registrant to the fullest extent permissible under California law, subject to the terms and conditions of the Indemnification Agreements. The indemnification provisions also apply to liability under the Federal Securities Laws. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling Registrant pursuant to the foregoing provisions, Registrant has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
At present, Registrant is not aware of any pending or threatened litigation or proceeding involving its directors, officers, employees or agents in which indemnification would be required or permitted. Registrant believes that its Articles of Incorporation and Bylaw provisions and indemnification agreements with its directors are necessary to attract and retain qualified persons as directors and officers.
The foregoing summaries are necessarily subject to the complete text of the statute, Articles of Incorporation, Bylaws and agreements referred to above and are qualified in their entirety by reference thereto.
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibit Index
Designation | Exhibit | |
2* | Plan of Reorganization and Merger Agreement, dated May 19, 2005, by and between First California Bank, FCB Merger Corp. and FCB Bancorp, filed as Exhibit A to the Proxy Statement/Prospectus included in this Registration Statement. | |
3.1* | Articles of Incorporation, as amended, of FCB Bancorp | |
3.2* | Bylaws of FCB Bancorp | |
5* | Opinion of Horgan, Rosen, Beckham & Coren, L.L.P., regarding the legality the securities being registered and consent |
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Designation | Exhibit | |
8** | Tax Opinion of Horgan, Rosen, Beckham & Coren, L.L.P. | |
10.1* | FCB Bancorp 2005 Stock Option Plan | |
10.2* | Form of FCB Bancorp Stock Option Agreement | |
10.3* | Form of FCB Bancorp Indemnity Agreement | |
10.4* | Salary Continuation Agreement dated March 27, 2003 with C. G. Kum | |
10.5* | Split Dollar Life Agreement dated March 27, 2003 with C. G. Kum | |
10.6* | Salary Continuation Agreement dated March 27, 2003 with Thomas E. Anthony | |
10.7* | Split Dollar Life Agreement dated March 27, 2003 with Thomas E. Anthony | |
10.8* | Agreement and Plan of Reorganization by and among FCB Bancorp, SCB Merger Corp., First California Bank, South Coast Bancorp, Inc. and South Coast Commercial Bank dated February 2, 2005, as amended | |
10.9* | Form of Subscription Agreement | |
10.10* | Private Placement Agency Agreement | |
10.11* | Form of Registration Rights Agreement | |
23.1* | Consent of Horgan, Rosen, Beckham & Coren, L.L.P. (included as part of Exhibit 5) | |
23.2* | Consent of Moss Adams, LLP | |
23.3* | Consent of Grant Thornton LLP | |
23.4** | Consent of Horgan, Rosen, Beckham & Coren, L.L.P. (included as part of Exhibit 8) | |
24 | Power of Attorney (included with Signatures) | |
99** | Form of Proxy of First California Bank |
* | This document was previously filed as an exhibit to the Form S-4. | |
** | Filed herewith as part of this Pre-Effective Amendment No. 3 to Registration Statement on Form S-4. |
Item 22. Undertakings
(a) Item 512 of Regulation S-K.
(1) The undersigned Registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this Registration Statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.
(2) The Registrant undertakes that every prospectus: (i) that is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the Registration Statement and will not be used until such amendment is effective, and that, for purposes of determining liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(b) The undersigned Registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, 13 of this form, within one business day of receipt of
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such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request.
(c) The undersigned Registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective.
(h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Pre-Effective Amendment No. 3 to Registration Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Camarillo, State of California, on September 7, 2005.
FCB BANCORP | ||||
By: | /s/ C. G. Kum * | |||
C. G. Kum | ||||
President and Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this Pre-Effective Amendment No. 3 to Registration Statement on Form S-4 has been signed by the following persons in the capacities and on the dates indicated.
Signature | Title | Date | ||
/s/ Richard D. Aldridge* | Director | September 7, 2005 | ||
/s/ Thomas E. Anthony* | Executive Vice President and Chief Credit Officer | September 7, 2005 | ||
/s/ James O. Birchfield* | Chairman of the Board | September 7, 2005 | ||
/s/ John W. Birchfield* | Vice Chairman | September 7, 2005 | ||
/s/ Tenisha M. Fitzgerald* | Director | September 7, 2005 | ||
/s/ C. G. Kum* | Director, President and Chief Executive Officer | September 7, 2005 | ||
(Principal Executive Officer) | ||||
/s/ Syble R. Roberts* | Director | September 7, 2005 | ||
/s/ Romolo Santarosa* | Executive Vice President and Chief Financial Officer | September 7, 2005 | ||
(Principal Financial Officer and Principal Accounting Officer) | ||||
*By Gary M. Horgan, Attorney in fact. |
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EXHIBIT INDEX
Designation | Exhibit | |
2* | Plan of Reorganization and Merger Agreement, dated May 19, 2005, by and between First California Bank, FCB Merger Corp. and FCB Bancorp, filed as Exhibit A to the Proxy Statement/Prospectus included in this Registration Statement. | |
3.1* | Articles of Incorporation, as amended, of FCB Bancorp | |
3.2* | Bylaws of FCB Bancorp | |
5* | Opinion of Horgan, Rosen, Beckham & Coren, L.L.P., regarding the legality the securities being registered and consent | |
8** | Tax Opinion of Horgan, Rosen, Beckham & Coren, L.L.P. | |
10.1* | FCB Bancorp 2005 Stock Option Plan | |
10.2* | Form of FCB Bancorp Stock Option Agreement | |
10.3* | Form of FCB Bancorp Indemnity Agreement | |
10.4* | Salary Continuation Agreement dated March 27, 2003 with C. G. Kum | |
10.5* | Split Dollar Life Agreement dated March 27, 2003 with C. G. Kum | |
10.6* | Salary Continuation Agreement dated March 27, 2003 with Thomas E. Anthony | |
10.7* | Split Dollar Life Agreement dated March 27, 2003 with Thomas E. Anthony | |
10.8* | Agreement and Plan of Reorganization by and among FCB Bancorp, SCB Merger Corp., First California Bank, South Coast Bancorp, Inc. and South Coast Commercial Bank dated February 2, 2005, as amended | |
10.9* | Form of Subscription Agreement | |
10.10* | Private Placement Agency Agreement | |
10.11* | Form of Registration Rights Agreement | |
23.1* | Consent of Horgan, Rosen, Beckham & Coren, L.L.P. (included as part of Exhibit 5) | |
23.2* | Consent of Moss Adams, LLP | |
23.3* | Consent of Grant Thornton LLP | |
23.4** | Consent of Horgan, Rosen, Beckham & Coren, L.L.P. (included as part of Exhibit 8) | |
24 | Power of Attorney (included with Signatures) | |
99** | Form of Proxy of First California Bank |
* | This document was previously filed as an exhibit to the Form S-4. | |
** | Filed herewith as part of this Pre-Effective Amendment No. 3 to Registration Statement on Form S-4. |