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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: April 18, 2001
REDWOOD EMPIRE BANCORP
(Exact number of Registrant as specified in its charter)
California File No. 0-19231 68-0166366
(State or other jurisdiction of (Commission File Number) (IRS Employer)
Incorporated or organization) Identification No.)
111 Santa Rosa Avenue, Santa Rosa, California 95404-4905
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (707) 573-4800
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Item 5. Other Events
Press release for the following (article attached):
Redwood Empire Bancorp announces first quarter 2001 results.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
04-18-01
Date: ___________________ REDWOOD EMPIRE BANCORP
(Registrant)
/s/ James E. Beckwith
By: _____________________________
James E. Beckwith
Executive Vice President and
Chief Operating Officer
FOR: REDWOOD EMPIRE BANCORP
APPROVED BY: James Beckwith
EVP/Chief Operating Officer
(707) 522-5215
For Immediate Release
REDWOOD EMPIRE BANCORP REPORTS
AN INCREASE OF 26% IN NET INCOME FOR THE FIRST QUARTER 2001
SANTA ROSA, Calif. (April 18, 2001) -- Redwood Empire Bancorp (NASDAQ: REBC)
today reported record income of $1,787,000, or $0.64 per diluted share, for the
quarter ended March 31, 2001 as compared to $1,420,000, or $0.43 per diluted
share, one year ago. Return on equity was 22.45% in the first quarter as
compared with 14.86% in the same quarter a year ago. Return on assets was 1.63%
in the first quarter as compared to 1.33% one year ago. "We are extremely
pleased with bottom line results," noted James Beckwith, Chief Operating
Officer. "Growing earning assets, reducing overhead costs, managing capital and
maintaining asset quality continue to be our key objectives," said Beckwith.
Total average loans amounted to $318,639,000 as of March 31, 2001 as
compared to $313,405,000 one year ago, which represents a $5,234,000 or 2%
increase. In the fourth quarter of 2000 the Company sold $21,205,000 in single
family residential loans and securitized another $17,949,000 as part of an
assets repositioning strategy. Without the impact of the single family
residential loan sale and securitization, average loans grew $44,388,000 or 14%.
Total deposits averaged to $395,042,000 for the quarter as compared to
$375,154,000 one year ago which amounts to a $19,888,000 or 5% increase.
Net interest income amounted to $5,301,000 in the first quarter,
compared to $4,939,000 in the same period in 2000 which represents a 7%
increase. The increase in net interest income is attributable to an increase in
average earning assets of $15,800,000 from $400,724,000 for the quarter ended
March 31, 2000 to $416,524,000 for the quarter ended March 31, 2001 and an
improvement in net interest margin from 4.96% in first quarter of 2000 to 5.16%
in the first quarter of 2001.
There was no loan loss provision for the quarter ended March 31, 2001
as compared to $100,000 one year ago. Net recoveries were $22,000 or .03% of
average portfolio loans for the quarter as compared to net charge-offs of
$51,000 or .07% one year ago. Non-performing assets at March 31, 2001 were
$1,775,000 or .4% of total assets, as compared to non-performing assets of
$1,960,000, or .4% of total assets, as of December 31, 2000. Non-performing
assets have declined $185,000 or 9% during the three months of 2001. The ratio
of the allowance for loan losses to nonperforming assets was 434% as of March
31, 2001 as compared to 392% as of December 31, 2000. "Maintaining excellent
asset quality continues to be a high priority for management and staff," said
Beckwith.
Noninterest income amounted to $1,365,000 for the quarter ended March
31, 2001 as compared to $1,411,000 in the same period in 2000 or a 3% decrease.
The decline is attributable to a decrease in merchant card processing revenues
from $897,000 in the first quarter of 2000 to $813,000 in the first quarter of
2001. In the fourth quarter of 2000, a large merchant card processing contract
with an independent sales organization expired. To help offset the decline in
merchant bankcard processing revenue brought about by the expiration of the
contract referenced above, the Company has been building its overall merchant
card processing business through direct marketing efforts and new ISO business.
Excluding net revenue from merchant bankcard processing, non interest income
grew $38,000 or 7% in the first quarter of 2001 when compared to the same
quarter one year ago.
Noninterest expense amounted to $3,650,000 for the quarter ended 2001
as compared to $3,858,000 in the same period one year ago which represents a
decrease of $208,000 or 5.4%. The decline in noninterest expense is directly
attributable to the Company's focus on improving efficiency. The Company's
efficiency ratio for the first quarter of 2001 amounted to 54.76% as compared to
60.76% one year ago.
For the three months ended March 31, 2001 the Company's community
banking segment earned $1,447,000 on revenues of $5,545,000 as compared to net
income of $979,000 and revenues of $5,158,000 one year ago. The segment's 48%
improvement in earnings is attributable to earning asset growth, margin
improvement and expense control. The Company's bankcard segment earned $340,000
in the quarter ended March 31, 2001 versus $441,000 in the first quarter of
2000. The decline in the unit's net income is due to a decline in processing
revenue and an increase in salary and benefits expenses. The decline in the
segment's revenue is directly attributable to the expiration of a large merchant
bankcard processing contract as mentioned above. The merchant bankcard segment
net income comprised 19% of the Company's consolidated net income for the first
quarter of 2001.
In January and February 2001 the Board of Directors authorized the
repurchase of up to 10% of the Company's total shares outstanding or 285,000
shares in January 2001 and 257,000 shares in February 2001, of which 426,200
shares have been repurchased through March 31, 2001. Under the repurchase
program, the Company plans to purchase shares from time to time on the open
market and/or in privately negotiated transactions. The repurchase was funded in
part with proceeds received from a $10,000,000 pooled trust preferred securities
offering concluded on February 22, 2001. The financing, which qualifies for tier
1 capital treatment, bears an interest rate of 10.2% and is due in 30 years.
Debt issuance costs amounted to approximately $300,000 and will be amortized
over the life of the offering.
Total assets were $450,065,000 at quarter end. Common book value per
share was $10.65. The Company's Tier 1 capital to average assets ratio was 7.59%
as of March 31, 2001.
Redwood Empire Bancorp is the holding company for National Bank of the
Redwoods, a commercial bank. The Company operates through branches in Sonoma,
Mendocino and Lake Counties.
The statements contained in this release, which are not historical
facts, are forward-looking statements that are subject to risks and
uncertainties. Actual results may differ materially from those set forth in or
implied by forward-looking statements. These risks are described in the
Company's Securities and Exchange Commission filings.
(Tables to follow)
REDWOOD EMPIRE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except for earnings per share and share data)
Three Months Ended
March 31,
2001 2000
Interest income $9,053 $8,159
Interest expense 3,752 3,220
Net interest income 5,301 4,939
Provision for loan losses - 100
Net interest income after provision for loan losses 5,301 4,839
Service charge on deposit accounts 269 277
Merchant draft processing, net 813 897
Loan servicing income 77 40
Net realized (losses)/gains on sale of investment
securities available for sale - (1)
Other income 206 198
Total noninterest income 1,365 1,411
Salaries and employee benefits 2,232 2,150
Occupancy and equipment expense 489 501
Other 929 1,207
Total noninterest expense 3,650 3,858
Income before tax 3,016 2,392
Income tax expense 1,229 972
Net income $1,787 $1,420
Basic earnings per share:
Net income available for common stock shareholders $0.66 $0.44
Weighted average shares 2,720,000 3,252,000
Diluted earnings per share:
Net income available for common stock shareholders $0.64 $0.43
Weighted average shares 2,794,000 3,269,000
Selected Ratios
Annualized Return on Average Total Equity 22.45% 14.86%
Annualized Return on Average Assets 1.63% 1.33%
Selected Balance Sheet Data
(In Thousands)
March 31, March 31,
2001 2000
Total Loans, excluding mortgage loans held for sale $319,464 $321,591
Allowance for Loan Losses 7,696 7,980
Total Assets 450,065 435,130
Total Deposits 406,457 383,638
Equity Capital 26,360 39,125
Nonperforming Assets 1,775 4,882
REDWOOD EMPIRE BANCORP AND SUBSIDIARIES
BUSINESS SEGMENTS
Three Months Ended
March 31, 2001
(in thousands)
Community
Banking Bankcard
Total interest income $9,053 $ ---
Total interest expense 3,749 3
Interest income (expense) allocation (311) 311
Net interest income 4,993 308
Provision for loan losses --- ---
Service charge on deposit accounts 269 ---
Merchant draft processing, net --- 813
Loan servicing income 77 ---
Other income 206 ---
Total noninterest income 552 813
Salaries and employee benefits 1,849 383
Occupancy and equipment expense 453 36
Other 801 128
Total noninterest expense 3,103 547
Income before income taxes 2,442 574
Provision for income taxes 995 234
Net Income $1,447 $340
Three Months Ended
March 31, 2000
(in thousands)
Community
Banking Bankcard
Total interest income $8,159 $ ---
Total interest expense 3,220 ---
Interest income (expense) allocation (295) 295
Net interest income 4,644 295
Provision for loan losses 100 ---
Service charge on deposit accounts 277 ---
Merchant draft processing, net --- 897
Loan servicing income 40 ---
Net realized (losses)/gains on sale of investment
securities available for sale (1) ---
Other income 198 ---
Total noninterest income 514 897
Salaries and employee benefits 1,869 281
Occupancy and equipment expense 461 40
Other 1,079 128
Total noninterest expense 3,409 449
Income before income taxes 1,649 743
Provision for income taxes 670 302
Net Income $979 $441