1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________ to __________
Commission file number 0-25135
REDDING BANCORP
(Exact name of Registrant as specified in its charter)
CALIFORNIA 94-2823865
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
1951 CHURN CREEK ROAD
REDDING, CALIFORNIA 96002
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (530) 224-3333
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value per share
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's class of
common stock, as of the latest practicable date. June 30, 2000: 2,615,923
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REDDING BANCORP & SUBSIDIARIES
INDEX TO FORM 10-Q
================================================================================
PART I. Financial Information Page:
Item 1. Financial Statements
Consolidated Condensed Balance Sheets
June 30, 2000 and December 31, 1999 ................................ 3
Consolidated Condensed Statements of Income
Three and six months ended June 30, 2000 and 1999................... 4
Consolidated Condensed Statements of Cash Flows
Six months ended June 30, 2000 and 1999............................. 5
Notes to Consolidated Condensed Financial Statements................ 6
Item 2. Management's Discussion and Analysis Of Financial
Condition and Results of Operations......................... 8
Item 3. Quantitative and Qualitative Disclosure about Market Risk... 18
PART II. Other Information
Item 1. Legal proceedings........................................... 20
Item 2. Changes in Securities and use of proceeds................... 20
Item 3. Defaults Upon Senior Securities............................. 20
Item 4. Submission of Matters to a Vote of Security Holders......... 20
Item 5. Other Information........................................... 21
Item 6. Exhibits and Report on Form 8-K............................. 21
SIGNATURES.................................................................. 21
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REDDING BANCORP & SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(DOLLAR AMOUNTS IN THOUSANDS)
June 30, 2000 December 31, 1999
------------- -----------------
(unaudited)
Assets:
Cash & Due From Banks $ 12,606 $ 11,605
Federal Funds Sold 12,120 7,560
--------- ---------
Cash and cash equivalents 24,726 19,165
Investment Securities:
Available for sale (amortized cost $20,180 and
$25,767) 19,857 25,375
Held to maturity (market value of $5,555 and
$6,722) 5,907 6,769
--------- ---------
25,764 32,144
Loans:
Real Estate - Construction 33,834 37,859
Real Estate - Commercial 86,498 78,842
Commercial & Financial 61,351 53,383
Installment Loans 397 294
Other Loans 2,231 2,812
--------- ---------
Total Loans 184,311 173,190
Deferred loan fees (319) (372)
Less allowance for loan losses (3,034) (2,972)
--------- ---------
Net Loans 180,958 169,846
Premise & Equipment 5,424 5,474
Other Assets 5,822 5,890
--------- ---------
Total Assets $ 242,694 $ 232,519
========= =========
Liabilities:
Demand Accounts $ 34,575 $ 40,381
NOW & Money Market 40,218 43,176
Savings Accounts 12,166 11,577
Time Accounts 119,368 103,189
--------- ---------
Total Deposits 206,327 198,323
Borrowed Funds 4,800 4,800
Other Liabilities 3,906 3,337
--------- ---------
Total Liabilities 215,033 206,460
Stockholders' Equity:
Common Stock 5,154 4,809
Retained Earnings 22,709 21,491
Accumulated other comprehensive income (202) (241)
--------- ---------
27,661 26,059
--------- ---------
Total Liabilities & Stockholders' Equity $ 242,694 $ 232,519
========= =========
See notes to unaudited consolidated condensed financial statements.
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REDDING BANCORP & SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
Three months ended Six months ended
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
------------- ------------- ------------- -------------
Interest Income:
Interest & Fees on Loans $ 4,404 $ 3,526 $ 8,540 $ 6,907
Interest on Investments 377 528 783 1,037
Interest on Federal Funds Sold 221 122 366 311
------- ------- ------- -------
Total Interest income 5,002 4,176 9,689 8,255
------- ------- ------- -------
Interest Expense:
Interest on Checking 252 226 444 345
Interest on Savings 103 81 209 181
Interest on Time Deposits 1,748 1,160 3,180 2,419
Interest on Borrowed Funds 80 0 159 0
------- ------- ------- -------
Total Interest Expense 2,183 1,467 3,992 2,945
------- ------- ------- -------
Net Interest Income 2,819 2,709 5,697 5,310
Provision for Loan Losses 56 15 56 40
------- ------- ------- -------
Net Interest Income After Provision for loan
losses 2,763 2,694 5,641 5,270
------- ------- ------- -------
Noninterest Income:
Service Charges 57 72 110 145
Credit Card Income, net 454 471 924 886
Other Income 204 225 416 418
Gain (Loss) on sale of Investment Securities
available for sale 0 0 (59) 0
------- ------- ------- -------
Total Other Income: 715 768 1,391 1,449
------- ------- ------- -------
Noninterest Expense:
Salaries & Benefits 922 892 1,822 1,855
Occupancy & Equipment 221 219 489 448
Data Processing & Other Professional 134 142 268 365
Other Expense 263 405 613 758
------- ------- ------- -------
Total Other Expense 1,540 1,658 3,192 3,426
------- ------- ------- -------
Income before Income Taxes 1,938 1,804 3,840 3,293
Provision for Income Tax 698 670 1,435 1,260
------- ------- ------- -------
Net Income $ 1,240 $ 1,134 $ 2,405 $ 2,033
======= ======= ======= =======
Basic Earnings per Share $ 0.47 $ 0.43 $ 0.92 $ 0.77
Weighted Average Shares 2,617 2,651 2,624 2,656
Diluted Earnings per Share $ 0.45 $ 0.40 $ 0.86 $ 0.71
Weighted Average Shares 2,767 2,856 2,809 2,875
See notes to unaudited consolidated condensed financial statements.
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REDDING BANCORP & SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(DOLLARS IN THOUSANDS)
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
Six Months Ended
June 30, 2000 June 30,1999
------------- ------------
Cash flows from operating activities:
Net Income $ 2,405 $ 2,033
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 56 40
Provision for depreciation 249 226
Compensation associated with stock options 34 --
Amortization of investment premiums and
Accretion of discounts, net 62 (63)
(Gain) loss on sale of loans (83) (113)
Proceeds from sales of loans 4,339 3,752
Loans originated for sale (4,402) (3,639)
Decrease in other assets 69 624
Increase in deferred loan fees (52) (55)
Increase in other liabilities 569 458
-------- --------
Net cash provided by operating activities 841 1,230
-------- --------
Cash flows from investing activities:
Proceeds from maturities of available for sale
investment securities 1,876 13,023
Proceeds from sale of available for sale
investment securities 4,420 --
Loss on sale of available for sale investment
securities 59 --
Purchases of available for sale investment
securities 0 (18,301)
Loan origination's, net of principal repayments (10,970) (12,203)
Purchases of premises and equipment (212) (241)
Proceeds from sales of equipment 12 16
-------- --------
Net cash provided (used) by investing
activities (4,815) (17,706)
-------- --------
Cash flows from financing activities:
Net change in deposits 8,004 7,275
Common stock repurchase transactions (1,187) (832)
Common stock options exercised 313 36
-------- --------
Net cash provided by financing activities 7,130 6,479
-------- --------
Net increase (decrease) in cash and cash equivalents 5,561 (7,964)
Cash and cash equivalents at beginning of year 19,165 26,800
-------- --------
Cash and cash equivalents at end of period $ 24,726 $ 18,836
======== ========
Supplemental disclosures:
Cash paid during the period for:
Income taxes 1,399 925
Interest 3,853 2,964
See notes to unaudited consolidated condensed financial statements.
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REDDING BANCORP & SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements should be read in
conjunction with the financial statements and related notes contained in Redding
Bancorp's 1999 Annual Report to Shareholders. The statements include the
accounts of Redding Bancorp ("the Company"), and its wholly owned subsidiaries,
Redding Bank of Commerce ("RBC") and Redding Service Corporation. All
significant inter-company balances and transactions have been eliminated. The
financial information contained in this report reflects all adjustments that in
the opinion of management are necessary for a fair presentation of the results
of the interim periods. All such adjustments are of a normal recurring nature.
The results of operations and cash flows for the three and six months ended June
30, 2000 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2000.
For purposes of reporting cash flows, cash and cash equivalents include cash on
hand, amounts due from banks, federal funds sold and repurchase agreements.
Federal funds sold and repurchase agreements are generally for one day periods.
2. EARNINGS PER SHARE
Basic earnings per share excludes dilution and is computed by dividing net
income by the weighted-average number of common shares outstanding for the
period. Diluted earnings per share reflects the potential dilution that could
occur if securities or other contracts to issue common stock were exercised or
converted into common stock or resulted in the issuance of common stock that
then shared in the earnings of the entity. The following table displays the
computation of earnings per share for the three and six months ended June 30,
2000 and 1999.
(Dollars in thousands, except earnings per share data)
Three Months Ended Six Months Ended
- ---------------------------------------------------------------------------------------------------------
Basic EPS Calculation: June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
- ---------------------------------------------------------------------------------------------------------
Numerator (net income) $1,240 $1,134 $2,405 $2,033
Denominator (average common shares
outstanding) 2,617 2,651 2,624 2,656
Basic earnings per Share $ 0.47 $ 0.43 $ 0.92 $ 0.77
Diluted EPS Calculation:
Numerator (net income) $1,240 $1,134 $2,405 $2,033
Denominator:
Average common shares outstanding 2,617 2,651 2,624 2,656
Options 150 205 185 219
------ ------ ------ ------
2,767 2,856 2,809 2,875
Diluted earnings per Share $ 0.45 $ 0.40 $ 0.86 $ 0.71
- ---------------------------------------------------------------------------------------------------------
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3. COMPREHENSIVE INCOME
The Company's total comprehensive income was as follows:
Three Months Ended Six Months Ended
- ----------------------------------------------------------------------------------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
- ----------------------------------------------------------------------------------------------------------
Net Income as reported $ 1,240 $ 1,134 $ 2,405 $ 2,033
Other comprehensive income
(net of tax):
Change in unrealized holding
gain (loss) on available for sale
securities 36 (88) 4 (301)
Reclassification adjustment -- -- 35 --
------- ------- ------- -------
Total comprehensive income $ 1,276 $ 1,046 $ 2,444 $ 1,732
- ----------------------------------------------------------------------------------------------------------
4. COMMON STOCK DIVIDEND
No dividends were declared in the second quarter of 2000. The last dividend the
Board of Directors declared was on September 21, 1999. An annual cash dividend
of 60 cents per share on the Company's Common Stock was paid to shareholders of
record as of October 1, 1999.
5. SEGMENT REPORTING
The Company has two reportable segments: commercial banking and credit card
services. The Company conducts a general commercial banking business in the
counties of El Dorado, Placer, Shasta, and Sacramento, California. The principal
commercial banking activities include a full-array of deposit accounts and
related services and commercial lending for businesses and their interests.
Credit card services are limited to those revenues and data processing costs
associated with its agreement with an Independent Sales Organization (ISO),
pursuant to which the Bank provides credit and debit card processing services
for merchants solicited by the ISO or the Bank who accept credit and debit cards
as payments for goods and services.
The following table presents financial information about the
Company's reportable segments:
Three Months Ended Six Months Ended
- ----------------------------------------------------------------------------------------------------------
Net income before taxes allocated to: June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
- ----------------------------------------------------------------------------------------------------------
Commercial Banking $1,484 $1,333 $2,916 $2,407
Credit card services 454 471 924 886
------ ------ ------ ------
$1,938 $1,804 $3,840 $3,293
- ----------------------------------------------------------------------------------------------------------
In April 1993, the Bank entered into an agreement (the "Merchant Services
Agreement") with Cardservice International, Inc. ("CSI"), an independent sales
organization ("ISO") and nonbank merchant credit card processor, pursuant to
which the Bank has agreed to provide credit and debit card processing services
for merchants solicited by CSI who accept credit and debit cards as payment for
goods and services. Pursuant to the Merchant Services Agreement, the Bank acts
as a clearing bank for CSI and processes credit or debit card transactions into
the Visa(R) or MasterCard(R) system for presentment to the card issuer. As a
result of the Merchant Services Agreement, the Bank has acquired electronic
credit and debit card processing relationships with merchants in various
industries on a nationwide basis.
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The Merchant Services Agreement with CSI was renewed in 1997 for a period of
four years, which expires on April 1, 2001. During the course of negotiations
the Company has determined that the continuation of the contract will be at a
substantially reduced revenues and CSI and the Company have not come to an
agreement on renewal terms of the contract. If the Company and CSI cannot come
to an agreement on pricing of the service, the Company expects that CSI will
terminate the Merchant Services Agreement at the end of the contract period.
Either new pricing or termination of the Merchant Services Agreement will result
in a significant decline in revenues from merchant credit card processing and
have a material adverse affect on the Company results of operations. The Company
is pursuing various strategies including relationships with additional ISO's,
evaluation of purchase of bankcard portfolio's from the open market, and
enhancing the sales team in the Roseville market area.
Refer to management's discussion and analysis of financial condition and results
of operations.
6. NEW ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
Accounting for Derivative Instruments and hedging activities. The statement
establishes accounting and reporting standards for derivative instruments and
hedging activities. The effective date for the statement has been postponed
until the year 2001. The Company is in the process of determining the impact of
SFAS No. 133 on the Company's financial statements.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS PRIVATE SECURITIES LITIGATION REFORM ACT SAFE
HARBOR STATEMENT.
This quarterly report on Form 10-Q includes forward-looking information, which
is subject to the "safe harbor" created by the Securities Act of 1933, and
Securities Act of 1934. These forward-looking statements (which involve the
Company's plans, beliefs and goals, refer to estimates or use similar terms)
involve certain risks and uncertainties that could cause actual results to
differ materially from those in the forward-looking statements. Such risks and
uncertainties include, but are not limited to, the following factors:
- - Competitive pressure in the banking industry and changes in the
regulatory environment.
- - Changes in the interest rate environment and volatility of rate
sensitive deposits.
- - The health of the economy declines nationally or regionally which could
reduce the demand for loans or reduce the value of real estate
collateral securing most of the Company's loans.
- - Credit quality deteriorates which could cause an increase in the
provision for loan losses.
- - Losses in the Company's merchant credit card processing business.
- - Loss of the merchant credit card processing business.
- - Asset/Liability matching risks and liquidity risks.
- - Changes in the securities markets.
For additional information concerning risks and uncertainties related to the
Company and its operations please refer to the Company's Annual Report on Form
10-K for the year ended December 31, 1999 under the heading "Risk factors that
may affect results". Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The Company
undertakes no obligation to revise or publicly release the results of any
revision to these forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
The following sections discuss significant changes and trends in financial
condition, capital resources and liquidity of the Company from December 31, 1999
to June 30, 2000. Also discussed are significant trends and changes in the
Company's results of operations for the three and six months ended June 30,
2000, compared to the same period in 1999. The consolidated financial statements
and related notes appearing elsewhere in this report are condensed and
unaudited.
GENERAL
The Company is a bank holding company with its principal offices in
Redding, California. The Company engages in a general commercial banking
business in Redding and the counties of El Dorado, Placer, Shasta, and
Sacramento, California. The Company considers Northern California to be the
Company's major market area. The Company conducts its business through the Bank,
its principal subsidiary. The services offered by the Company include those
traditionally offered by commercial banks of similar size and character in
California, such as checking, interest-bearing checking ("NOW") and savings
accounts, money market deposit accounts, commercial, construction, real estate,
personal, home improvement, automobile and other installment and term loans,
travelers checks, safe deposit boxes, collection services, and telephone
banking. The Company introduced an Online Internet Banking product in April
2000, under the brand name of RBC Connection(TM). The Basic Internet banking
product allows customers to obtain account information online, including
statement requests, check image views, transfers, stop payments, and direct
email to the bank. The Executive Internet banking products allows all of the
basic features plus ACH origination, wire transfer, tax deposits, and funds
orders. Both products include on online bill payment feature hosted by Princeton
E-com.
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On June 21, 2000, the Company received it's certificate of operations to
convert the Roseville loan production office to a full service banking facility,
under the name of Roseville Banking Center, a division of RBC.
The primary focus of the Company is to provide financial services to the
business and professional community of its major market area including Small
Business Administration ("SBA") loans, Commercial building financing, payroll
and benefit accounting packages and merchant credit card acquisition. The
Company does not offer trust services or international banking services and does
not plan to do so in the near future.
On November 12, 1999 President Clinton signed into law the
Gramm-Leach-Bliley Act, or the Financial Services Act of 1999 (the "FSA") which
became effective on March 11, 2000. The FSA repeals provisions of the
Glass-Steagall Act, which had prohibited commercial banks and securities firms
from affiliating with each other and engaging in each other's businesses. Thus,
many of the barriers prohibiting affiliations between commercial banks and
securities firms have been eliminated.
The BHCA is also amended by the FSA, to allow new "financial holding
companies" ("FHC") to offer banking, insurance, securities and other financial
products to consumers. Specifically, the FSA amends section 4 of the BHCA in
order to provide for a framework for the engagement in new financial activities.
Bank holding companies ("BHC") may elect to become a financial holding company
if all its subsidiary depository institutions are well-capitalized and
well-managed. If these requirements are met, a BHC may file a certification to
that effect with the FRB and declare that it chooses to become a FHC. After the
certification and declaration is filed, the FHC may engage either de novo or
though an acquisition in any activity that has been determined by the FRB to be
financial in nature or incidental to such financial activity. The Company
received notification from the Federal Reserve Board approving the election to a
financial holding company on April 22, 2000.
The Company derives its income from two principal sources: (i) net
interest income, which is the difference between the interest income it receives
on interest-earning assets and the interest expense it pays on interest-bearing
liabilities, and (ii) fee income, which includes fees earned on deposit
services, income from SBA lending, electronic-based cash management services and
merchant credit card processing services. Management considers the business of
the Company to be divided into two segments: (i) commercial banking and (ii)
credit card services. Credit card services are limited to those revenues, net of
related data processing costs, associated with the Merchant Services Agreement
and the Bank's agreement to provide credit and debit card processing services
for merchants solicited by the Bank who accept credit and debit cards as
payments for goods and services.
In April 1993, the Bank entered into an agreement (the "Merchant
Services Agreement") with Cardservice International, Inc. ("CSI"), an
independent sales organization ("ISO") and nonbank merchant credit card
processor, pursuant to which the Bank has agreed to provide credit and debit
card processing services for merchants solicited by CSI who accept credit and
debit cards as payment for goods and services. Pursuant to the Merchant Services
Agreement, the Bank acts as a clearing bank for CSI and processes credit or
debit card transactions into the Visa(R) or MasterCard(R) system for presentment
to the card issuer. As a result of the Merchant Services Agreement, the Bank has
acquired electronic credit and debit card processing relationships with
merchants in various industries on a nationwide basis. The Merchant Services
Agreement with CSI was renewed in 1997 for a period of four years, which expires
on April 1, 2001. During the course of negotiations the Company has determined
that the continuation of the contract will be at a substantially reduced
revenues, and CSI and the Company have not come to agreement on the renewal of
the contract. If the Company and CSI cannot come to an agreement on pricing of
the service, the Company expects that CSI will terminate the Merchant Services
Agreement at the end of the contract period. Either the new pricing or
termination of the Merchant Services Agreement will result in a significant
decline in revenues from merchant credit card processing and have a material
adverse affect on the Company results of operations. The Company is pursuing
various strategies including relationships with additional ISO's, evaluation of
purchase of bankcard portfolio's from the open market and enhancing the sales
team in the Roseville market.
Merchant bankcard processing services are highly regulated by credit
card associations such as Visa. In order to participate in the credit card
program, Redding Bank of Commerce must comply with the credit card association's
rules and regulations that may change from time to time. During November 1999,
Visa adopted several rule changes to reduce the risk profile in high-risk
acquiring programs and these rule changes affect Redding Bank of Commerce's
Merchant Services business segment. These changes include a requirement that an
acquiring processor's reported fraud ratios be no greater than three times the
national average.
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Redding Bank of Commerce's overall fraud ratio was below the Visa
requirement. Other Visa changes announced included the requirement that total
processing volume in certain high-risk categories (as defined by Visa) be less
than 20% of total processing volume. At March 31, 2000 (the most recent
information available from Visa) Redding Bank of Commerce's total Visa
transactions within these certain high-risk categories were 18% of Visa total
processing volume. Although these merchants are categorized as high-risk,
precautions have been taken such as requiring higher deposit reserves, daily
monitoring and aggressive fraud control, and to date has not seen extraordinary
losses in these categories.
Additionally Visa announced a requirement that weekly average Visa
volumes in the be less than 60% of an institutions tangible equity capital, and
a requirement that the aggregate charge-backs for the previous six months be
less than 5% of the institutions tangible equity capital. Previous guidelines
allowed for weekly average Visa volumes were four times equity capital.
At March 31, 2000 (the most recent information available from Visa)
Redding Bank of Commerce's average weekly Visa volume was 105% of tangible
equity capital, slightly above the prior guidelines, and aggregate charge-backs
for the previous six months were 10.5% of tangible equity capital. A written
plan has been submitted and approved by Visa to allow for attrition to bring the
processing volumes into line with the new guidelines.
Participants in the merchant bankcard acquiring program, such as Redding
Bank of Commerce, must comply with these new Visa rules by filing a compliance
plan with Visa by February 12, 2000. Redding Bank of Commerce met the deadline
of February 12, 2000, and Visa has accepted the plan to gradually reduce the
concentration of high-risk merchant processing.
RESULTS OF OPERATIONS
The Company reported earnings of $1,240,000, for the three months ended
June 30, 2000. ($0.45 per share diluted) compared to $1,134,000, ($0.40 per
share diluted) for the same period in 1999. Earnings for the six months ended
June 30, 2000, was $2,405,000 ($0.86 per share, diluted), compared to $2,033,000
($0.71 per share, diluted) for the six months ended June 30, 1999. The quarterly
earnings represent a 18.3% increase over the same period of 1999.
Factors contributing to the increase in operating results include an
increase in the volume of earning assets, an increase in net interest rate
spread and margin, coupled with a decrease in other non-interest expense.
Assets at the six months ended June 30, 2000 totaled $242,694,000, a
$10,175,000 (4.4%) increase over total assets at December 31, 1999. The growth
is centered in the loan portfolio, totaling $184,311,000 at June 30, 2000
compared to $173,190,000 at December 31, 1999, a 6.4% increase. The growth has
been funded in part by an increase in time deposits of 15.7% over December 31,
1999, and maturities of investment securities. The reduction of demand deposits
of 16.8% over December 31, 1999 is a result of sweep account transactions that
have moved from demand deposits to a money market fund with Goldman Sachs
through an alliance program.
NET INTEREST INCOME
Net interest income is the primary source of income for the Bank. Net
interest income represents the excess of interest and fees earned on
interest-earning assets (loans, investments and Federal Funds sold) over the
interest paid on deposits and borrowed funds. Net interest margin is net
interest income expressed as a percentage of average earning assets. For the
three months ended June 30, 2000, interest income increased $826,000 (19.8%)
over the same period in 1999. Interest expense on deposit accounts and
borrowings increased $716,000 (48.8%) over the same three-month period in 1999.
For the six months ended June 30, 2000, interest income increased $1,434,000 or
17.4% over the same six month period in 1999. For the six months ended June 30,
2000, interest expense on deposit accounts and borrowings increased $1,047,000
or 35.5% over the same period in 1999.
During the first quarter 2000, the Company contracted with Countrywide
Securities Corporation, a capital markets company, to obtain deposits from
investors in the marketplace at specific terms and maturity. These "brokered
deposits" totaled $4,700,000 due in March 2002, at a yield of 7.03% . The
purchase of these deposits are intended to stabilize liquidity and assist in the
growth and development of the Roseville Banking Center. The strategy is to
replace the brokered deposits with core deposits developed at the new full
service location.
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The combined effect of the increase in volume of earning assets and
increase in yield on earning assets, coupled with increases in cost of funding
sources resulted in an increase of $387,000 (7.3%) in net interest income for
the six month period ended June 30, 2000 over the same period in 1999. Net
interest margin increased 02 basis points to 5.20% from 5.18% for the same
period a year ago. The moderate net interest margin increase is attributed to a
rising rate environment, average earning assets yielding 8.85% versus 8.05% a
year ago, coupled with an increased cost of funding where the average cost of
funding has increased to 4.65% from 3.86% a year ago.
The following table sets forth the Company's daily average
balance sheet, related interest income or expense and yield or rate paid for the
periods indicated. Tax-exempt investment yields have not been adjusted to a
tax-equivalent yield basis.
AVERAGE BALANCES, INTEREST INCOME/EXPENSE AND YIELDS/RATES PAID
(UNAUDITED, DOLLARS IN THOUSANDS)
Six Months Ended
June 30, 2000 June 30, 1999
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
Earning Assets
Portfolio Loans $ 178,813 $ 8,540 9.55% $ 152,603 $ 6,907 9.05%
Tax Exempt Securities 3,410 75 4.40% 5,751 123 4.28%
US Government 17,802 484 5.44% 24,257 648 5.34%
Federal Funds Sold 12,583 366 5.82% 13,526 311 4.60%
Other Securities 6,476 224 6.92% 8,944 266 5.95%
--------- --------- --------- --------- --------- ----
Average Earning Assets $ 219,084 $ 9,689 8.85% $ 205,081 $ 8,255 8.05%
--------- --------- ----
Cash & Due From Banks $ 10,578 $ 9,588
Bank Premises 5,451 5,651
Allowance for Loan Losses (2,985) (3,248)
Other Assets 4,950 4,870
--------- ---------
Average Total Assets $ 237,078 $ 221,942
========= =========
Interest Bearing Liabilities
Demand Interest Bearing $ 41,293 $ 444 2.15% $ 40,494 $ 345 1.70%
Savings Deposits 14,187 209 2.95% 13,464 181 2.69%
Certificates of Deposit 111,265 3,180 5.72% 98,474 2,419 4.91%
Borrowings 4,803 159 6.62% 0 --
--------- --------- --------- --------- --------- ----
171,548 $ 3,992 4.65% 152,432 2,945 3.86%
--------- ---------
Non interest Demand 36,082 42,340
Other Liabilities 3,026 2,624
Shareholder Equity 26,422 24,546
--------- ---------
Average Liabilities and
Shareholders Equity $ 237,078 $ 221,942
========= =========
Net Income and Net Interest
Margin $ 5,697 5.20% $ 5,310 5.18%
========= =========
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The following tables set forth changes in interest income and expense for each
major category of earning assets and interest-bearing liabilities, and the
amount of change attributable to volume and rate changes for the periods
indicated. Changes attributable to rate/volume have been allocated to volume
changes.
ANALYSIS OF CHANGES IN NET INTEREST INCOME
Six months ended Six months ended
(Dollars in thousands) June 30, 2000 over June 30, 1999
Volume Rate Total
-------- ------- -------
Increase(Decrease) In Interest
Income
Portfolio loans $ 1,252 $ 381 $ 1,633
Tax exempt securities (51) 3 (48)
US Government securities (175) 11 (164)
Federal Funds Sold (27) 99 72
Other Securities (85) 26 (59)
------- ------- -------
Total Increase $ 914 $ 520 $ 1,434
------- ------- -------
Increase(Decrease) In
Interest Expense
Interest Bearing Demand $ 9 $ 90 $ 99
Savings Deposits 11 17 28
Certificates of Deposit 366 395 761
Borrowings 159 0 159
------- ------- -------
Total Increase $ 545 $ 502 $ 1,047
------- ------- -------
Net Increase $ 369 $ 18 $ 387
======= ======= =======
NONINTEREST INCOME
The Company's noninterest income consists of processing fees for
merchants who accept credit card payments for goods and services, service
charges on deposit accounts, and other service fees.
For the three months ended June 30, 2000, noninterest income decreased
$53,000 over the same period in 1999. Credit card processing income decreased
$17,000 (4%) while service income declined $15,000 (26%) over the same period
1999. For the six months ended June 30, 2000, noninterest income decreased
$58,000 (4%) over the same period 1999. Contributing to the decrease in
noninterest income are reductions in the volume of overdraft processing
resulting in a reduction of fee income collected, and a reduction in mortgage
premium fees due to reduced volume of sales.
Refer to footnote five, Segment reporting, and Management's discussion
and analysis for further information on credit card processing.
The following table sets forth a summary of noninterest income for the periods
indicated.
(Dollars in Thousands) Three Months Ended Six Months Ended
Noninterest Income June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
- -----------------------------------------------------------------------------------------------------------------
Service Charges $ 57 $ 72 $ 110 $ 145
Credit Card Income, net 454 471 924 886
Other Income 204 225 416 418
Gain(loss) sale of investment securities 0 0 -59 0
------ ------ ------ ------
Total noninterest income $ 715 $ 768 $1,391 $1,449
- -----------------------------------------------------------------------------------------------------------------
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NONINTEREST EXPENSE
Noninterest expenses consist of salaries and related employee benefits,
occupancy and equipment expenses, data processing fees, professional fees,
directors' fees and other operating expenses.
For the three months ended June 30, 2000, noninterest expense decreased
$118,000 (7.1%) over the same period in 1999. For the six months ended June 30,
2000, noninterest expense decreased $234,000 (6.8%) over the same six months
ended 1999. Salary and benefit expenses have decreased $33,000(1.8%) over the
prior year and are attributable to reduced benefit costs, Data processing and
professional fees have decreased $97,000 (26.6%), and insurance coverage costs
decreased $24,000 or 33% over the prior year.
The following table sets forth a summary of noninterest expense for the
periods indicated.
(Dollars in Thousands)
Three Months Ended Six Months Ended
Noninterest Expense June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
- -------------------------------------------------------------------------------------------------
Salaries and Benefits $ 922 $ 892 $1,822 $1,855
Occupancy & Equipment 221 219 489 448
D.P. & Other professional 134 142 268 365
Other Expenses 263 405 613 758
------ ------ ------ ------
Total Noninterest expense $1,540 $1,658 $3,192 $3,426
- -------------------------------------------------------------------------------------------------
INCOME TAXES
The Company's provision for income taxes includes both federal and state
income taxes and reflects the application of federal and state statutory rates
to the Company's net income before taxes. The principal difference between
statutory tax rates and the Company's effective tax rate is the benefit derived
from investing in tax-exempt securities. Increases and decreases in the
provision for taxes reflect changes in the Company's net income before tax.
The following table reflects the Company's tax provision and the related
effective tax rate for the periods indicated.
(Dollars in thousands) Three Months Ended Six Months Ended
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
- ---------------------------------------------------------------------------------------------
Tax provision $ 698 $ 670 $ 1,435 $ 1,260
Effective tax rate 36.0% 37.1% 37.4% 38.2%
- ---------------------------------------------------------------------------------------------
The Company's effective tax rate varies with changes in the relative
amounts of its non-taxable income and non-deductible expenses. The increase in
the Company's tax provision is attributable to increases in the Company's
pre-tax income.
ASSET QUALITY
The Company concentrates its lending activities primarily within Shasta,
El Dorado, Placer and Sacramento Counties, California, and the location of the
Bank's three full service branches.
The Company manages its credit risk through diversification of its loan
portfolio and the application of underwriting policies and procedures and credit
monitoring practices. Although the Company has a diversified loan portfolio, a
significant portion of its borrowers' ability to repay the loans is dependent
upon the professional services and residential real estate development industry
sectors. Generally, the loans are secured by real estate or other assets and are
expected to be repaid from the cash flows of the borrower or proceeds from the
sale of collateral.
14
15
The following table sets forth the amounts of loans outstanding by
category as of the dates indicated:
(Dollars in thousands) June 30, 2000 December 31, 1999
- ------------------------------------------------------------------
Loans
Commercial & Financial $ 61,351 $ 53,383
Real Estate-Construction 33,834 37,859
Real Estate-Commercial 86,498 78,842
Installment 397 294
Other Loans 2,231 2,812
Less:
Deferred Loan Fees and Costs (319) (372)
Allowance for Loan Losses (3,034) (2,972)
--------- ---------
Total Net Loans $ 180,958 $ 169,846
- ------------------------------------------------------------------
The Company's practice is to place an asset on nonaccrual status when
one of the following events occurs: (i) any installment of principal or interest
is 90 days or more past due (unless in management's opinion the loan is well
secured and in the process of collection). (ii) Management determines the
ultimate collection of principal or interest to be unlikely or (iii) the terms
of the loan have been renegotiated due to a serious weakening of the borrower's
financial condition. Nonperforming loans are loans that are on nonaccrual, are
90 days past due and still accruing or have been restructured.
Net portfolio loans increased $11,112,000 or 6.5% at June 30, 2000 over
$169.8 million at December 31, 1999. The portfolio mix remains stable with the
mix at December 31, 1999, with commercial and financial loans of approximately
33%, real estate construction of 18% and commercial real estate at 47%.
Impaired loans are loans for which it is probable that the Bank will not
be able to collect all amounts due. The Bank had outstanding balances of
$375,000 and $394,000 in impaired loans that had impairment allowances of
$271,000 and $315,000 as of June 30, 2000 and December 31, 1999, respectively.
The following table sets forth a summary of the Company's nonperforming
assets as of the dates indicated:
(Dollars in thousands) June 30, 2000 December 31, 1999
- ------------------------------------------------------------------
Non performing assets
Nonaccrual loans $376 $394
Other Real Estate Owned 0 40
- ------------------------------------------------------------------
The Company's nonaccrual loans decreased from $394,000 to $376,000 in
the first six months of 2000. OREO properties were sold during the second
quarter 2000.
ALLOWANCE FOR LOAN AND LEASE LOSSES (ALLL)
The Company makes provisions to the ALLL on a regular basis through
charges to operations that are reflected in the Company's statements of income
as a provision for loan losses. When a loan is deemed uncollectible, it is
charged against the allowance. Any recoveries of previously charged-off loans
are credited back to the allowance. There is no precise method of predicting
specific losses or amounts that ultimately may be charged-off on particular
categories of the loan portfolio.
15
16
Similarly, the adequacy of the ALLL and the level of the related
provision for possible loan losses is determined on a judgment basis by
management based on consideration of (i) economic conditions, (ii) borrowers'
financial condition, (iii) loan impairment, (iv) evaluation of industry trends,
(v) industry and other concentrations, (vi) loans which are contractually
current as to payment terms but demonstrate a higher degree of risk as
identified by management, (vii) continuing evaluation of the performing loan
portfolio, (viii) monthly review and evaluation of problem loans identified as
having loss potential, (ix) quarterly review by the Board of Directors, (x) off
balance sheet risks and (xi) assessments by regulators and other third parties.
Management and the Board of Directors evaluate the allowance and determine its
desired level considering objective and subjective measures, such as knowledge
of the borrowers' business, valuation of collateral, the determination of
impaired loans and exposure to potential losses.
The ALLL is a general reserve available against the total loan portfolio
and off balance sheet credit exposure. It is maintained without any
interallocation to the categories of the loan portfolio, and the entire
allowance is available to cover loan losses. While management uses available
information to recognize losses on loans, future additions to the allowance may
be necessary based on changes in economic conditions. In addition, various
regulatory agencies, as an integral part of their examination process,
periodically review the Bank's ALLL. Such agencies may require the Bank to
provide additions to the allowance based on their judgment of information
available to them at the time of their examination. There is uncertainty
concerning future economic trends. Accordingly, it is not possible to predict
the effect future economic trends may have on the level of the provision for
possible loan losses in future periods.
The ALLL should not be interpreted as an indication that charge-offs in
future periods will occur in the stated amounts or proportions.
The adequacy of the ALLL is calculated upon three components. First is
the dollar weighted risk rating of the loan portfolio, including all outstanding
loans and leases, off balance sheet items, and commitments to lend. Every
extension of credit is assigned a risk rating based upon a comprehensive
definition intended to measure the inherent risk of lending money. Each rating
has an assigned a risk factor expressed as a reserve percentage. Central to this
assigned risk (reserve) factor is the five-year historical loss record of the
bank.
Secondly, established specific reserves are available for individual
loans currently on management watch and high-grade loan lists. These are the
estimated potential losses associated with specific borrowers based upon the
collateral and event(s) causing the risk rating.
The third component is unallocated. This reserve is for qualitative
factors that may effect the portfolio as a whole, such as those factors
described above.
Management believes the assigned risk grades and our methods for
managing changes are satisfactory. Management believes the loan portfolio
performance has improved as reflected by the stable and low delinquency ratio.
Watch list and high-grade loans have increased somewhat o ver the past year,
primarily due to a greater acceptance to move more susceptible although
performing accounts to attention. This minimal increase does not suggest a
trend.
The following table summarizes the activity in the ALLL reserves for the
periods indicated.
(Dollars in thousands) Three Months Ended Six Months Ended
- ------------------------------------------------------------------------------------------------------------
Allowance for Loan & Lease Losses June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999
- ------------------------------------------------------------------------------------------------------------
Beginning balance for Loan Losses $ 2,975 $ 3,210 $ 2,972 $ 3,235
Provision for Loan Losses 56 15 56 40
Charge offs:
Commercial (0) (0) (0) (0)
Real Estate (0) (0) (0) (33)
Other (0) (0) (0) (22)
------- ------- ------- -------
Total Charge offs (0) (0) (0) (55)
- ------------------------------------------------------------------------------------------------------------
16
17
- ------------------------------------------------------------------------------------------------------------
Recoveries:
Commercial 3 0 5 5
Real Estate 0 40 1 40
Other 0 11 0 11
------- ------- ------- -------
Total Recoveries 3 51 6 56
Ending Balance $ 3,034 $ 3,276 $ 3,034 $ 3,276
ALLL to total loans 1.65% 2.04% 1.65% 2.04%
Net Charge offs to average loans 0.00% 0.00% 0.00% 0.00%
- ------------------------------------------------------------------------------------------------------------
INVESTMENT PORTFOLIO
Total investment securities decreased $6,380,000 in the first six months
of 2000 or 19.8%. The decrease represents maturities of $1,876,000 and sales of
$4,420,000. Proceeds from the sales of investment securities were used to fund
loan commitments.
LIQUIDITY
With respect to assets, liquidity is provided by cash and money market
investments such as interest-bearing time deposits, federal-funds sold,
investment securities available-for-sale and principal and interest payments on
loans. With respect to liabilities, the Company's core deposits, shareholders'
equity and the ability of the Bank to borrow funds and to generate deposits,
provide asset funding.
Because estimates of the liquidity need of the Bank may vary from actual
needs, the Bank maintains a substantial amount of liquid assets to absorb short
term increases in loans or reductions in deposits.
The Company's liquid assets (cash and due from banks, federal funds sold
and available-for-sale investment securities) totaled $44,583,000, or 18.4% of
total assets, at June 30, 2000 compared to $44,540,000 or 19.2% of total assets
at December 31, 1999.
In April 1993, the Bank entered into an agreement (the "Merchant
Services Agreement") with Cardservice International, In. ("CSI"), and
independent sales organization ("ISO") and nonbank merchant credit card
processor, pursuant to which the Bank has agreed to provide credit and debit
card processing services for merchants solicited by CSI who accept credit cards
for payment of goods and services. Pursuant to the Merchant Services Agreement,
Cardservice International, Inc. maintains demand deposit accounts of
approximately $12,000,000 or 43.4% of the Company's capital at June 30, 2000.
The Company is currently negotiating with CSI for an extension of the processing
agreement which expires on April 1, 2001. The contract terms allow for the
demand deposit accounts to remain on deposit for a period of six months at the
termination of the contract. Should the Company and CSI be unable to reach
agreement on extension of the contract, the loss of these demand deposits will
have an adverse affect on the liquidity position of the Company. The Company
anticipates replacing this funding source primarily through the growth in the
new Roseville Banking Center, borrowing lines at the Federal Home Loan Bank and
Correspondent borrowing lines as necessary.
CAPITAL ADEQUACY
Overall capital adequacy is monitored on a day-to-day basis by the
Company's management and reported to the Company's Board of Directors on a
monthly basis. The Bank's regulators measure capital adequacy by using a
risk-based capital framework and by monitoring compliance with minimum leverage
ratio guidelines. Under the risk-based capital standard, assets reported on the
Company's balance sheet and certain off-balance sheet items are assigned to risk
categories, each of which is assigned a risk weight.
17
18
This standard characterizes an institution's capital as being "Tier 1" capital
(defined as principally comprising shareholders' equity) and "Tier 2" capital
(defined as principally comprising the qualifying portion of the ALLL).
The minimum ratio of total risk-based capital to risk-adjusted assets,
including certain off-balance sheet items, is 8%. At least one-half (4%) of the
total risk-based capital (Tier 1) is to be comprised of common equity; the
balance may consist of debt securities and a limited portion of the ALLL.
The following table sets forth the Company's capital ratio as of the
dates indicated.
June 30, 2000 December 31, 1999
- -------------------------------------------------------------------------------------------------
Capital Ratio's Bank Company Bank Company
- -------------------------------------------------------------------------------------------------
Total Risk-Based Capital 15.31% 15.47% 14.85% 15.58%
Tier 1 Capital to Risk-Based Assets 14.06% 14.22% 13.59% 14.33%
Tier 1 Capital to Average Assets 11.46% 11.56% 10.44% 11.31%
(Leverage ratio)
- -------------------------------------------------------------------------------------------------
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company's primary component of market risk is interest rate
volatility. Fluctuation in interest rates will ultimately impact both the level
of interest income and interest expense recorded on a large portion of the
Company's assets and liabilities, and the fair market value of interest earning
assets and interest-bearing liabilities, other than those which possess a short
term to maturity. Because the Company's interest-bearing liabilities and
interest-earning assets are with the Bank, the Company's interest rate risk
exposure is in connection with the operations of the Bank. Consequently, all
significant interest rate risk management procedures are performed at the Bank
level.
Based upon the nature of its operations, the Bank is not subject to
foreign currency exchange or commodity price risk. The fundamental objective of
the Company's management of its assets and liabilities is to enhance the
economic value of the Company while maintaining adequate liquidity and an
exposure to interest rate risk deemed acceptable by the Company's management.
The Company manages its exposure to interest rate risk through
adherence to maturity, pricing and asset mix policies and procedures designed to
mitigate the impact of changes in market interest rates. The Bank's
profitability is dependent to a large extent upon its net interest income, which
is the difference between its interest income on interest-earning assets, such
as loans and securities, and its interest expense on interest-bearing
liabilities, such as deposits and borrowings.
The formal policies and practices adopted by the Bank to monitor
and manage interest rate risk exposure measure risk in two ways: (i) repricing
opportunities for earning assets and interest-bearing liabilities and (ii)
changes in net interest income for declining interest rate shocks of 100 and 200
basis points.
Because of the Bank's capital position and noninterest-bearing demand
deposit accounts, the Bank is asset sensitive. As a result, management
anticipates that, in a declining interest rate environment, the Company's net
interest income and margin would be expected to decline, and, in an increasing
interest rate environment, the Company's net interest income and margin would be
expected to increase. However, no assurance can be given that under such
circumstances the Company would experience the described relationships to
declining or increasing interest rates.
Because the Bank is asset sensitive, the Company is adversely affected
by declining rates rather than rising rates. This effect is partially offset in
the short-term by the fact that the Company is liability sensitive through the
cumulative GAP period of one year or less.
18
19
During a period of declining rates, such liabilities may be repriced to
provide a short-term advantage to the Company; however, this benefit may not be
sustainable over the long-term.
To estimate the effect of interest rate shocks on the Company's net
interest income, management uses a model to prepare an analysis of interest rate
risk. Such analysis calculates the change in net interest income given a change
in the federal funds rate of 100 basis points up or down. All changes are
measured in dollars and are compared to projected net interest income.
At June 30, 2000, the estimated annualized reduction in net interest
income attributable to a 100 and 200 basis point decline in the federal funds
rate was $370,000 and $740,000, respectively. A similar and opposite result
attributable to a 100 basis point increase in the federal funds rate. At
December 31, 1999, the estimated annualized reduction in net interest income
attributable to a 100 and 200 basis point decline in the federal funds rate was
$359,000 and $718,000, respectively, with a similar and opposite result
attributable to a 100 basis point increase in the federal funds rate. Management
does not believe that the change from year end is significant or represents a
known trend toward more interest rate risk sensitivity in the Company's
financial position.
The model utilized by management to create the analysis described in the
preceding paragraph uses balance sheet simulation to estimate the impact of
changing rates on the annual net interest income of the Bank. The model
considers a number of factors, including (i) change in customer and management
behavior in response to the assumed rate shock, (ii) the ratio of the amount of
rate change for each interest-bearing asset or liability to assumed changes in
the federal funds rate based on local market conditions for loans and core
deposits and national market conditions for other assets and liabilities and
(iii) timing factors related to the lag between the rate shock and its effect on
other interest-bearing assets and liabilities. Actual results will differ when
actual customer and management behavior and ratios differ from the assumptions
utilized by management in its model. In addition, the model has limited
usefulness for the measurement of the effect on annual net interest income
resulting from rate changes other than 100 basis points. Management believes
that the short duration of its rate-sensitive assets and liabilities contributes
to its ability to reprice a significant amount of its rate-sensitive assets and
liabilities and mitigates the impact of rate changes more than 100 basis points.
The model's primary benefit to management is its assistance in evaluating the
impact that future strategies with respect to the Bank's mix and level of
rate-sensitive assets and liabilities will have on the Company's net interest
income.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company and its subsidiaries are involved in various legal actions arising
in the ordinary course of business. The Company believes that the ultimate
disposition of all currently pending matters will not have a material adverse
effect on the Company's financial condition or results of operations.
ITEM #2. CHANGES IN SECURITIES AND USE OF PROCEEDS
N/A
ITEM #3. DEFAULTS UPON SENIOR SECURITIES
N/A.
ITEM #4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual shareholders meeting of Redding Bancorp was held on Tuesday, April
11, 2000. The proxy statement outlines the business conducted at the meeting,
which included the election of directors and the ratification of Deloitte &
Touche LLP as the Company's independent auditors. The definitive proxy materials
were filed on March 15, 2000.
19
20
ITEM #5. OTHER INFORMATION
N/A.
ITEM #6A. EXHIBITS
Ex-27.1. Financial Data table for the period ended June 30, 2000.
ITEM #6B. REPORTS ON FORM 8-K
Form 8-K dated May 8.2000 announcing appointment of Chief Operating Officer
Form 8-K dated May 25, 2000 announcing appointment of Chief Credit Officer
Form 8-K dated July 11, 2000 announcing opening of Roseville Banking Center.
Form 8-K dated July 14, 2000 announcing second quarter 2000 earnings.
SIGNATURES
Following 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, thereunto duly authorized.
REDDING BANCORP
(Registrant)
Date: August 1, 2000 /s/ Linda J. Miles
Linda J. Miles
Executive Vice President &
Chief Financial Officer
20