===========================================================================
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: July 17, 2002
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
--------------
===========================================================================
Item 5. Other Events
Press release for the following (article attached):
Redwood Empire Bancorp reports second quarter 2002 net income.
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.
Date: 07-17-02 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
RECORD SECOND QUARTER 2002 NET INCOME
SANTA ROSA, Calif. (July 17, 2002) -- Redwood Empire Bancorp (NASDAQ: REBC)
today reported record net income of $2,025,000 or $.56 per diluted share for the
quarter ended June 30, 2002. This compares with net income of $1,768,000 or $.47
per diluted share for the quarter a year ago. Return on common equity was 29.93%
in the second quarter as compared with 28.00% in the same quarter a year ago.
Return on assets was 1.68% in the second quarter as compared to 1.60% one year
ago. For the six months ended June 30, 2002, net income was $3,972,000 or $1.10
per diluted share. This compares with $3,555,000 or $.90 per diluted share for
the first six months of 2001. On September 20, 2001, the Company announced a
three-for-two stock split of its outstanding shares of common stock. Earnings
per share information for all periods presented give effect to the stock split.
"We are extremely pleased with bottom line results," noted James Beckwith, Chief
Operating Officer. "The Company's 15% increase in net income for the second
quarter of 2002 as compared to the second quarter of 2001 was driven by earning
asset growth," said Beckwith.
Total loans amounted to $357,862,000 as of June 30, 2002 as compared to
$325,782,000 at June 30, 2001, which amounts to a $32,080,000 or a 10% increase.
Total deposits amounted to $445,151,000 as of June 30, 2002 as compared to
$396,800,000 at June 30, 2001, or a 12% increase. Total assets amounted to
$500,559,000 as of June 30, 2002 as compared to $446,390,000 one year ago, a 12%
increase.
Net interest income amounted to $5,323,000 in the second quarter of
2002, compared to $4,826,000 in the same period in 2001, which represents a
$497,000 increase. The increase in net interest income is primarily attributable
to an increase in average earning assets of $38,282,000 from $415,645,000 for
the quarter ended June 30, 2001 to $453,927,000 for the quarter ended June 30,
2002. Net interest margin for the second quarter of 2002 also improved to 4.70%
from 4.66% one year ago. Net interest income amounted to $10,312,000 for the six
months ended June 30, 2002 as compared to $10,127,000 one year ago, an increase
of $185,000.
There was no loan loss provision for the three and six months ended
June 30, 2002 and June 30, 2001. Net recoveries were $37,000 or .04% of average
portfolio loans for the quarter, on an annualized basis, and $6,000 or .01% of
average portfolio loans for the first six months of 2002, on an annualized
basis. This compares to net recoveries of $8,000 or .01% of average portfolio
loans for the quarter ended June 30, 2001, on an annualized basis, and $30,000
or .02% of average portfolio loans for the first six months of 2001, on an
annualized basis. Non-performing assets at June 30, 2002 were $2,661,000 or .5%
of total assets, as compared to non-performing assets of $3,176,000, or .7% of
total assets, as of December 31, 2001. The allowance
for loan losses to nonperforming assets was 285% as of June 30, 2002 as
compared to 239% as of December 31, 2001.
Non-interest income amounted to $1,793,000 for the quarter ended June
30, 2002 as compared to $1,552,000 in the same period in 2001 or a 16% increase.
Non-interest income amounted to $3,611,000 for the first six months ended June
30, 2002 as compared to $2,917,000 one year ago. Merchant draft processing
revenues increased from $1,019,000 in the second quarter of 2001 to $1,197,000
in the second quarter of 2002. For the six month period ended June 30, 2002,
merchant draft processing revenues amounted to $2,376,000, an increase of
$544,000 from $1,832,000 at June 30, 2001.
Non-interest expense amounted to $3,904,000 for the quarter ended June
30, 2002 as compared to $3,432,000 in the same period one year ago, which
represents an increase of $472,000 or 14%. The Company's efficiency ratio for
the second quarter of 2002 amounted to 54.86% as compared to 53.81% one year
ago. Non-interest expense amounted to $7,642,000 for the six months ended June
30, 2002 as compared to $7,082,000 in the same period one year ago. This
represents an increase of $560,000 or 8%. The efficiency ratio for the Company's
subsidiary, National Bank of the Redwoods was 49.68% for the quarter ended June
30, 2002 as compared to 50.02% one year ago. For the six months ended June 30,
2002, National Bank of the Redwood's efficiency ratio was 50.42% as compared to
50.90% for the same period one year ago.
For the three and six months ended June 30, 2002 the net income of the
Company's community banking segment was $1,575,000 and $3,087,000 on revenues of
$5,759,000 and $11,233,000. This compares to net income of $1,322,000 and
$2,769,000 and revenues of $5,098,000 and $10,643,000 for the same periods one
year ago. The net income of the Company's bankcard segment was $450,000 and
$885,000 for the three and six months ended June 30, 2002 versus $446,000 and
$786,000 for the three and six months ended June 30, 2001. The merchant bankcard
segment's net income comprised 22% of the Company's consolidated net income for
the three and six months ended June 30, 2002, as compared to 25% and 22% for the
three and six months ended June 30, 2001.
As previously disclosed in the Company's quarterly report on Form 10-Q
for the quarter ended March 31, 2002, on January 15, 2002 National Bank of the
Redwoods formed NBR Real Estate Investment Trust, a Maryland Real Estate
Investment Trust. The entity was formed to hold the Bank's real estate secured
loans and to better organize the Bank's marketing and origination of real estate
secured loans. As a result of the formation and funding of this entity, the
Company's effective tax rate was reduced to 37% for the quarter ended June 30,
2002 from 40% for the quarter ended June 30, 2001.
In August 2001, the Company announced a common stock repurchase
authorization to repurchase up to 355,500 shares, as adjusted for the
three-for-two stock split announced September 20, 2001. To date, 97,686 shares
have been repurchased, as adjusted for the three-for-two stock split announced
September 20, 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.
Total assets were $500,559,000 at June 30, 2002. Common book value per
share was $8.17. The Company's Tier 1 capital to average assets ratio was 7.40%
as of June 30, 2002.
Redwood Empire Bancorp, through its principal operating subsidiary,
National Bank of the Redwoods, provides diverse financial products and services.
The Company offers commercial banking services primarily to businesses and
professionals in the North Coast counties of California. The Company's business
strategy includes the development of fee-based products and services which will
provide insulation to the Company's results from changes in interest rates.
Except for historical information contained herein, the statements
contained in this press release, including statements concerning future
increases in the value of Redwood Empire Bancorp stock, are forward-looking
statements within the meaning of the "safe harbor" provisions of Section 27A of
the Securities Act of 1933, as amended, and section 21E of the Securities
Exchange Act or 1934, as amended. These forward-looking statements 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
from time to time in Redwood Empire Bancorp's Securities and Exchange Commission
filings, including its Annual Reports on Form 10-K and quarterly reports on Form
10-Q. Redwood Empire Bancorp disclaims any intent or obligation to update these
forward-looking statements.
(Tables to follow)
REDWOOD EMPIRE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands except for earnings per share and share data)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
---- ---- ---- ----
Total interest income $7,734 $8,442 $15,143 $17,495
Total interest expense 2,411 3,616 4,831 7,368
------ ------ ------ ------
Net interest income 5,323 4,826 10,312 10,127
Provision for loan losses - - - -
------ ------ ------ ------
Net interest income after provision for loan losses 5,323 4,826 10,312 10,127
------ ------ ------ ------
Service charges on deposit accounts 308 266 622 535
Merchant draft processing, net 1,197 1,019 2,376 1,832
Loan servicing income 81 80 135 157
Other income 207 187 478 393
------ ------ ------ ------
Total noninterest income 1,793 1,552 3,611 2,917
------ ------ ------ ------
Salaries and employee benefits 2,302 1,989 4,348 4,221
Occupancy and equipment expense 533 503 1,057 992
Other 1,069 940 2,237 1,869
------ ------ ------ ------
Total noninterest expense 3,904 3,432 7,642 7,082
------ ------ ------ ------
Income before income tax expense 3,212 2,946 6,281 5,962
Income tax expense 1,187 1,178 2,309 2,407
------ ------ ------ ------
Net income $2,025 $1,768 $3,972 $3,555
====== ====== ====== ======
Basic earnings per share:
Net income available for common stock shareholders $0.58 $0.49 $1.14 $0.92
Weighted average shares (1) 3,491,000 3,621,000 3,495,000 3,850,500
Diluted earnings per share:
Net income available for common stock shareholders $0.56 $0.47 $1.10 $0.90
Weighted average shares (1) 3,617,000 3,733,500 3,624,000 3,967,500
Selected Ratios
Annualized Return on Average Total Equity 29.93 % 28.05% 30.04 % 24.61%
Annualized Return on Average Total Assets 1.68 % 1.60% 1.68 % 1.61%
(1) Adjusted for three-for-two stock split announced September 20, 2001.
Selected Balance Sheet Data
(In Thousands)
(Unaudited)
June 30, June 30,
2002 2001
-------- --------
Total Loans, excluding mortgage loans held for sale $357,862 $325,782
Allowance for Loan Losses 7,586 7,704
Total Assets 500,559 446,390
Total Deposits 445,151 396,800
Trust Preferred Securities 10,000 10,000
Total Shareholders' Equity 28,547 24,232
Nonperforming Assets 2,661 1,846
REDWOOD EMPIRE BANCORP AND SUBSIDIARIES
BUSINESS SEGMENTS
(Unaudited)
Three Months Ended Six Months Ended
June 30, 2002 June 30, 2002
--------------------- ---------------------
(in thousands) (in thousands)
Community Community
Banking Bankcard Banking Bankcard
--------- -------- --------- --------
Total interest income $7,734 $ --- $15,143 $ ---
Total interest expense 2,395 16 4,813 18
Interest income (expense) allocation (176) 176 (332) 332
------ ------ ------ ------
Net interest income 5,163 160 9,998 314
------ ------ ------ ------
Provision for loan losses --- --- --- ---
Service charges on deposit accounts 308 --- 622 ---
Merchant draft processing, net --- 1,197 --- 2,376
Loan servicing income 81 --- 135 ---
Other income 207 --- 478 ---
------ ------ ------ ------
Total noninterest income 596 1,197 1,235 2,376
------ ------ ------ ------
Salaries and employee benefits 1,873 429 3,512 836
Occupancy and equipment expense 488 45 966 91
Other 900 169 1,871 366
------ ------ ------ ------
Total noninterest expense 3,261 643 6,349 1,293
------ ------ ------ ------
Income before income tax expense 2,498 714 4,884 1,397
Income tax expense 923 264 1,797 512
------ ------ ------ ------
Net income $1,575 $450 $3,087 $885
====== ====== ====== ======
Three Months Ended Six Months Ended
June 30, 2001 June 30, 2001
--------------------- ---------------------
(in thousands) (in thousands)
Community Community
Banking Bankcard Banking Bankcard
--------- -------- --------- --------
Total interest income $8,442 $ --- $17,495 $ ---
Total interest expense 3,614 2 7,363 5
Interest income (expense) allocation (263) 263 (574) 574
------ ------ ------ ------
Net interest income 4,565 261 9,558 569
------ ------ ------ ------
Provision for loan losses --- --- --- ---
Service charges on deposit accounts 266 --- 535 ---
Merchant draft processing, net --- 1,019 --- 1,832
Loan servicing income 80 --- 157 ---
Other income 187 --- 393 ---
------ ------ ------ ------
Total noninterest income 533 1,019 1,085 1,832
------ ------ ------ ------
Salaries and employee benefits 1,629 360 3,478 743
Occupancy and equipment expense 461 42 914 78
Other 806 134 1,607 262
------ ------ ------ ------
Total noninterest expense 2,896 536 5,999 1,083
------ ------ ------ ------
Income before income tax expense 2,202 744 4,644 1,318
Income tax expense 880 298 1,875 532
------ ------ ------ ------
Net income $1,322 $446 $2,769 $786
====== ====== ====== ======