EXHIBIT 99.12
QUARTERLY REPORT OF
CAPITOLBANK SACRAMENTO
PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1994
FDIC CERTIFICATE #22260-7
CAPITOLBANK SACRAMENTO
AND SUBSIDIARIES
300 CAPITOL MALL
SACRAMENTO, CALIFORNIA 95814
IRS EMPLOYER IDENTIFICATION NUMBER: 94-2319513
TELEPHONE NUMBER: (916) 449-8300
HAS THE BANK (1) FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OF THE
SECURITIES AND EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS; AND (2) BEEN
SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS?
YES X NO
------------ -----------
AS OF JUNE 30, 1994, THE BANK HAD 4,080,302 SHARES OF COMMON STOCK WHICH IS ALL
ONE CLASS.
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
PAGE
1. Consolidated Statements of Condition
2. Consolidated Statement of Income (Y-T-D)
3. Consolidated Statement of Income (Quarter)
4. Consolidated Statement of Cash Flows
5. Consolidated Statement of Changes in Stockholders' Equity
6. Analysis of Reserve for Loan Losses
7. Computation of Per Share Earnings
ITEM 2. 8. & 9. Management's Discussion and Analysis
ITEM 3. 10. Statements
CAPITOLBANK SACRAMENTO AND SUBSIDIARIES
Consolidated Statement of Condition
(000's Omitted)
June 30, December 31,
1994 1993
-------- ------------
ASSETS
- - ------
Cash and due from banks $ 9,368 $ 6,456
Interest-bearing deposits in banks 0 398
Investment securities 30,278 34,342
Federal funds sold 2,535 4,820
Loans, net of reserve for loan losses 78,806 74,503
Premises and equipment, net 1,322 1,484
Interest receivable and other assets 1,387 1,390
-------- --------
TOTAL ASSETS $123,696 $123,393
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LIABILITIES
- - -----------
Deposits:
Demand accounts $ 29,910 $ 28,439
Money market accounts 62,924 63,219
Time and savings accounts 18,879 19,405
-------- --------
Total deposits 111,713 111,063
Short-term borrowings 2,390 2,734
Other liabilities 505 378
-------- --------
Total liabilities 114,608 114,175
STOCKHOLDERS' EQUITY
- - --------------------
Common stock, par value $1.5625
Authorized--10,000,000 shares
Issued and outstanding--4,080,302 shares
in 1994 and 4,080,302 in 1993 6,375 6,375
Paid in surplus 5,745 5,745
FASB 115 Adjustment (193) 0
Undivided Profits (2,839) (2,902)
-------- --------
Total shareholders' equity 9,088 9,218
-------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $123,696 $123,393
======== ========
CAPITOLBANK SACRAMENTO AND SUBSIDIARIES
Consolidated Statement of Income (Loss)
For Six Months Ended June 30, 1994 and 1993
(000's Omitted)
1994 1993
------ ------
INTEREST INCOME:
Interest and fees on loans $3,780 $3,013
Interest on federal funds sold 30 81
Interest on investment securities 977 1,171
------ ------
Total interest income 4,787 4,266
------ ------
INTEREST EXPENSE:
Interest on deposits 1,167 1,381
Interest on short-term borrowings 28 20
------ ------
Total interest income 1,195 1,401
------ ------
NET INTEREST INCOME 3,592 2,865
Provision for loan losses 230 161
------ ------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 3,362 2,704
------ ------
NON-INTEREST INCOME:
Income from fiduciary activity 364 338
Service charges on deposit accounts 55 65
Other revenue 52 25
------ ------
Total non-interest income 471 429
------ ------
Gains on securities transactions 82 243
NON-INTEREST EXPENSE:
Salaries and related expenses 2,096 1,714
Net occupancy 737 698
Other expense 980 915
------ ------
Total non-interest expense 3,813 3,327
INCOME (LOSS) BEFORE INCOME TAXES 103 48
Income tax expense (benefit) 40 7
------ ------
NET INCOME (LOSS) $ 63 $ 42
====== ======
NET INCOME (LOSS) PER SHARE $0.02 $0.01
====== ======
CAPITOLBANK SACRAMENTO AND SUBSIDIARIES
Consolidated Statement of Income (Loss)
For Quarter Ended June 30, 1994 and 1993
(000's Omitted)
1994 1993
-------- ------
INTEREST INCOME:
Interest and fees on loans $1,979 $1,559
Interest on federal funds sold 20 38
Interest on investment securities 451 581
------ ------
Total interest income 2,450 2,178
------ ------
INTEREST EXPENSE:
Interest on deposits 585 704
Interest on short-term borrowings 15 9
------ ------
Total interest income 600 713
------ ------
NET INTEREST INCOME 1,850 1,465
Provision for loan losses 160 100
------ ------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 1,690 1,365
------ ------
NON-INTEREST INCOME:
Income from fiduciary activity 179 163
Service charges on deposit accounts 25 32
Other revenue 31 14
------ ------
Total non-interest income 235 209
------ ------
Gains on securities transactions 82 243
NON-INTEREST EXPENSE:
Salaries and related expenses 1,241 867
Net occupancy 399 348
Other expense 580 481
------ ------
Total non-interest expense 2,220 1,696
------ ------
INCOME (LOSS) BEFORE INCOME TAXES (213) 120
Income tax expense 25 8
------ ------
NET INCOME (LOSS) $ (238) $ 112
====== ======
NET INCOME (LOSS) PER SHARE $ (0.06) $0.03
====== ======
CAPITOLBANK SACRAMENTO AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(000's omitted)
For the periods ended June 30, 1994 1993
- - -------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Reconciliation of net income to net cash
provided by operating activities:
Net income $ 63 $ 42
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for possible loan losses 230 161
Depreciation and amortization 196 179
Net change in operating assets
and liabilities:
Interest receivable and other assets 65 194
Interest payable and other
liabilities 128 (12)
------- ------
Total adjustments 619 522
Net cash provided by operating activities 682 564
CASH FLOWS FROM INVESTING ACTIVITIES:
FASB 115 Adjustment (193) 0
Purchase of investment securities 4,064 (14,966)
Proceeds from sale or maturity of
investment securities 398 17,605
Loans originated and principal collected, net (4,533) (7,106)
Additions to premises and equipment (34) (15)
Net change in other real estate owned (63) (714)
------- ------
Net cash provided by investing activities (361) (5,196)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits 650 7,113
Net increase (decrease) in short-term
borrowings (344) (327)
------- ------
Net cash provided by financing activities 306 6,786
------- ------
Increase (decrease) in cash and
cash equivalents 627 2,154
Cash and cash equivalents, at
beginning of year 11,276 5,943
------- ------
Cash and cash equivalents, at end of year $11,903 $8,096
======= ======
- - -------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest $ 1,176 $1,378
Cash paid for taxes $ 45 $ 8
Total gross additions to other real estate $ 64 $ 794
- - -------------------------------------------------------------------
CAPITOLBANK SACRAMENTO AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
As of June 30, 1994 and 1993
(000's omitted)
# of Common Paid-in FASB 115 Undivided
Shares Stock Surplus Adjustment Profits Totals
-------------------------------------------------------
Balance, December 31, 1992 4,080 $6,375 $5,745 $0 $(3,218) $8,902
Net Income 42 42
FASB 115 Adjustment 0 0
-------------------------------------------------------
Balance, June 30, 1993 4,080 $6,375 $5,745 $0 $(3,176) $8,944
=======================================================
# of Common Paid-in FASB 115 Undivided
Shares Stock Surplus Adjustment Profits Total
--------------------------------------------------------
Balance, December 31, 1993 4,080 $6,375 $5,745 $0 $(2,902) $9,218
Net Income 63 63
FASB 115 Adjustment (193) (193)
--------------------------------------------------------
Balance, June 30, 1994 4,080 $6,375 $5,745 (193) $(2,839) $9,088
========================================================
CAPITOLBANK SACRAMENTO AND SUBSIDIARIES
LOAN LOSSES AND RECOVERIES
For Six Months Ended June 30, 1994 and 1993
(000'S OMITTED)
1994 1993
------ ------
Balance end of previous year $1,406 $1,170
Recoveries credited to allowance 23 124
Provision for possible loan losses 230 161
Less: losses charged to allowance 10 91
------ ------
Balance end of current period $1,649 $1,364
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CAPITOLBANK SACRAMENTO AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
For Periods Ended June 30, 1994 and 1993
(000's Omitted)
SIX MONTHS
-----------
1994 1993
---- ----
Net Income (Loss) $ 63 $ 42
====== ======
Weighted Average Common Shares 4,080 4,080
Weighted Average Common Stock Equivalents 0 0
Maximum potential shares included in
per share computation 4,080 4,080
====== ======
Net Income (loss) Per Share $ 0.02 $ 0.01
====== ======
MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
EARNINGS
Income for the month of June, 1994 was $103,000. This brought the year to date
income to $63,000. This compares favorably to 1993 net income of $42,000. In
both 1994 and 1993 there was a gain on the sale of investment securities of
$82,000 and $243,000, respectively. Net income per share increased from $0.01
for the first half of 1993 to $0.02 for the same period in 1994.
The net loss for the quarter ended June 30, 1994 was $238,578 compared to net
income of $112,000 for the same period in 1993. The loss for the second quarter
of 1994 is primarily due to the reorganization of the Bank's senior management
team. Severance monies paid out totaled approximately $320,000. Legal fees and
outplacement service fees totaled approximately $80,000.
Net interest income for the quarter ended June 30, 1994 was $1,850,000 compared
to $1,465,000 for the same period in 1993. The average loan balance for the
second quarter of 1994 was $78,829,000 compared to $68,613,000 in 1993, an
increase of 15%. Year to date net interest income for the period ended June 30,
1994 was $3,592,000 compared to $2,865,000 for the same period in 1993. The
average loan balance for 1994 was $77,584,000 compared to $66,180,000 for 1993.
The increase in net interest income is due primarily to the increase in loan
volume and the higher prime rate.
Non-interest expense increased from $1,696,000 for the second quarter in 1993 to
$2,220,000 for the second quarter in 1994. The majority of this increase was
attributable to the increase in salaries expense due to the reorganization of
the Bank's senior management team. A detailed schedule of the major other non-
interest expenses is outlined as follows:
Y-T-D Y-T-D
Description June 1994 June 1993 $ Variance
- - ----------- --------- --------- -----------
Legal Fees $117,283 $ 96,031 $21,252
FDIC Assessment 137,516 138,311 (795)
Professional Services 116,236 75,989 40,247
Supplies 56,624 44,592 12,032
Insurance 54,542 44,356 10,186
Data Processing 36,668 39,880 (3,212)
BALANCE SHEET
Total consolidated assets remained stable for the first six months of 1994.
Loans increased by $4,000,000 causing a decrease of $4,000,000 in investment
securities. Due to a large cash letter at the end of the quarter Cash and Due
From Banks increased by $3,000,000 causing Federal funds sold to decrease.
Stockholders' equity was decreased by $130,000 for the period ended June 30,
1994 which represents year to date net income ($63,000) and the FASB 115
adjustment ($193,000 loss).
The loan loss reserve was $1,649,000 at June 30, 1994. This represents a 2.0%
reserve to outstanding loans. The loan to deposit ratio was 73% at June 30,
1994. The Bank's primary capital was $10,736,000 or 8.68% at June 30, 1994.
The Bank's core capital ratio was 7.35% at June 30, 1994.
STATEMENTS
ALL NECESSARY ADJUSTMENTS FOR A FAIR STATEMENT OF RESULTS FOR THE QUARTER ENDED
JUNE 30, 1994 HAVE BEEN REFLECTED ON THE FINANCIAL STATEMENTS.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE BANK
HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED
THEREUNTO DULY AUTHORIZED.
CAPITOLBANK SACRAMENTO
BY /s/ Lawrence D. McGovern
--------------------------------------
Lawrence D. McGovern, Senior Vice
President and Chief Financial Officer
BY /s/ William J. Martin
--------------------------------------
William J. Martin, President and Chief
Operating Officer