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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
Commission File number: 000-24215
PBOC Holdings, Inc.
Delaware 33-0220233
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
5900 Wilshire Boulevard
Los Angeles, California 90036
(213) 938-6300
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(b) 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 classes
of common stock, as of the latest possible date:
Class Shares Outstanding at July 31, 1998
----- ------------------------------------
Common Stock, $.01 par value 21,876,205
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PBOC Holdings, Inc.
FORM 10-Q
TABLE OF CONTENTS
PART I -- FINANCIAL INFORMATION
Page
----
Item 1. Financial Statements
-------------------
Consolidated Statements of Financial Condition - June 30, 1998
and December 31, 1997................................................................. 3
Consolidated Statements of Operations - Three and Six months ended
June 30, 1998 and 1997................................................................ 4
Consolidated Statements of Comprehensive (Loss) Earnings - Three and Six months ended
June 30, 1998 and 1997................................................................ 5
Consolidated Statements of Cash Flows - Six months ended June 30, 1998 and 1997....... 6
Notes to Consolidated Financial Statements............................................ 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.................................................................... 9
Item 3. Quantitative and Qualitative Disclosures about Market Risk............................... 19
PART II -- OTHER INFORMATION
Items 1-5 Not Applicable........................................................................... 20
Item 6. Exhibits and Reports on Form 8-K
Signatures............................................................................... 21
2
PBOC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
JUNE 30, 1998 AND DECEMBER 31, 1997
(Dollars in thousands, except share data)
June 30, December 31,
1998 1997
----------- -----------
ASSETS
Cash and cash equivalents ........................................ $ 15,712 $ 14,113
Federal funds sold ............................................... 2,200 7,004
Securities available-for-sale, at estimated market values ........ 964,001 571,160
Mortgage-backed securities held-to-maturity, market
values $7,833 and $9,743 at, June 30, 1998 and
December 31, 1997 ............................................. 7,761 9,671
Loans receivable, net ............................................ 2,096,693 1,533,212
Real estate held for investment and sale, net .................... 8,898 15,191
Premises and equipment, net ...................................... 7,198 6,676
Federal Home Loan Bank stock, at cost ............................ 46,000 23,634
Accrued interest receivable ...................................... 17,998 13,216
Other assets ..................................................... 35,052 19,177
----------- -----------
Total assets ................................................ $ 3,201,513 $ 2,213,054
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits ......................................................... $ 1,391,704 $ 1,266,615
Securities sold under agreements to repurchase ................... 658,409 340,788
Advances from Federal Home Loan Bank ............................. 920,000 472,000
Senior debt ...................................................... -- 11,113
Accrued expenses and other liabilities ........................... 13,841 9,686
----------- -----------
Total liabilities ............................................. 2,983,954 2,100,202
----------- -----------
Minority interest ................................................ 33,250 33,250
Stockholders' equity:
Preferred stock, $.01 par value. Authorized 1,000,000 shares:
Preferred stock Series C, voting issued and outstanding
85,000 shares; liquidation value $8,500 ................... -- 1
Preferred stock Series D, voting issued and outstanding
68,000 shares; liquidation value $6,800 ................... -- 1
Preferred stock Series E, nonvoting issued and outstanding
332,000 shares; liquidation value $33,200 ................. -- 3
Common stock, par value $.01 per share. Authorized
75,000,000 and 500,000 shares; issued and outstanding
21,876,205 and 98,502 shares; ............................. 219 1
Additional paid-in capital .................................... 259,207 129,814
Unrealized losses on securities available-for-sale ............ (3,019) (1,974)
Minimum pension liability, net of tax ......................... (293) (293)
Accumulated deficit ........................................... (71,805) (47,951)
----------- -----------
Total stockholders' equity .............................. 184,309 79,602
----------- -----------
Total liabilities and stockholders' equity .............. $ 3,201,513 $ 2,213,054
----------- -----------
----------- -----------
See accompanying notes to consolidated financial statements.
3
PBOC HOLDINGS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Dollars in thousands, except per share data)
Three Months Ended June 30, Six Months Ended June 30,
------------------------------ -----------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
Interest, fees and dividend income:
Short term investments ......................... $ 721 $ 257 $ 1,076 $ 524
Securities purchased under agreements to
resell ........................................ 519 803 519 1,551
Investment securities .......................... 3,077 702 5,225 1,335
Mortgage-backed securities ..................... 6,745 8,352 14,534 16,197
Loans receivable ............................... 25,637 20,385 53,915 41,353
Federal Home Loan Bank stock ................... 450 218 824 458
------------ ------------ ------------ ------------
Total interest, fees and dividend income .. 37,149 30,717 76,093 61,418
------------ ------------ ------------ ------------
Interest expense:
Deposits ....................................... 17,508 16,920 33,636 33,957
Advances from the Federal Home Loan Bank ....... 8,756 2,378 16,387 2,378
Securities sold under agreements to repurchase . 4,322 3,145 8,980 8,093
Senior debt .................................... 146 310 445 617
Hedging costs, net ............................. 55 70 110 150
------------ ------------ ------------ ------------
Total interest expense .................... 30,787 22,823 59,558 45,195
------------ ------------ ------------ ------------
Net interest income ............................... 6,362 7,894 16,535 16,223
Provision for loan losses ...................... 450 233 900 655
------------ ------------ ------------ ------------
Net interest income after provision for
loan losses .............................. 5,912 7,661 15,635 15,568
------------ ------------ ------------ ------------
Other income:
Loan service and loan related fees ............. 20 89 25 402
Gain on mortgage-backed securities sales, net . -- 82 323 122
Gain on loan and loan servicing sales, net ..... -- 22 -- 3,413
(Loss) income from real estate operations, net 1,933 (109) 1,785 112
Other income ................................... 458 423 1,136 795
------------ ------------ ------------ ------------
Total other income ........................ 2,411 507 3,269 4,844
Operating expenses
Personnel and benefits ......................... 13,994 2,740 16,901 5,546
Occupancy ...................................... 2,001 1,647 4,031 3,387
FDIC insurance ................................. 5,599 1,243 6,715 2,499
Professional services .......................... 153 109 493 300
Office related expenses ........................ 1,025 1,050 2,038 1,912
Other ....................................... 519 181 793 482
------------ ------------ ------------ ------------
Total operating expenses .................. 23,291 6,970 30,971 14,126
------------ ------------ ------------ ------------
(Loss) earnings before income taxes and minority
interest.......................................... (14,968) 1,198 (12,067) 6,286
Income taxes (Benefit) ............................ (9,391) -- (9,391) --
------------ ------------ ------------ ------------
(Loss) earnings before minority interest .......... (5,577) 1,198 (2,676) 6,286
Minority interest ................................. 869 -- 1,738 --
------------ ------------ ------------ ------------
Net (Loss) earnings ....................... (6,446) 1,198 (4,414) 6,286
Dividends on preferred stock ...................... 709 2,987 2,160 4,438
------------ ---------- ---------- ------------
Net (Loss) earnings available to common ... $ (7,155) $ (1,789) $ (6,574) $ 1,848
------------ ---------- ---------- ------------
------------ ---------- ---------- ------------
(Loss) Earnings per share basic and diluted ....... $ (0.57) $ (0.57) $ 0.84 $ (0.59)
Weighted averages shares outstanding .............. 12,529,322 3,152,064 7,849,182 3,152,064
See accompanying notes to consolidated financial statements.
4
PBOC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) EARNINGS
THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(Dollars in thousands)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
1998 1997 1998 1997
------- ------- ------- -------
Net (loss) earnings $(6,446) $ 1,198 $(4,414) $ 6,286
Other comprehensive earnings (loss):
Unrealized (loss) gain on securities held-
for-sale 72 7,526 (1,368) 1,560
Reclassification of realized gains
included in earnings -- 82 323 122
Minimum pension liability, net of tax -- (293) -- (293)
------- ------- ------- -------
Other comprehensive earnings (loss) 72 7,315 (1,045) 1,389
------- ------- ------- -------
Comprehensive (loss) earnings $(6,374) $ 8,513 $(5,459) $ 7,675
------- ------- ------- -------
------- ------- ------- -------
See accompanying notes to consolidated financial statements.
5
PBOC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
Six Months Ended June 30,
-------------------------
1998 1997
--------- ---------
(Dollars in thousands)
Cash flows from operating activities:
Net (loss) earnings $ (4,414) $ 6,286
Adjustments to reconcile net income to net cash provided by (used in)
operating activities:
Provision for loan and real estate losses 900 900
Depreciation 455 617
Decrease in valuation in net deferred tax assets 9,512 280
Amortization/accretion of premiums discounts, and deferred fees (9,856) 655
Amortization of purchase accounting intangibles 90 110
Gain on sale of mortgage-backed securities available-for-sale -- (122)
Gain on sale of real estate owned (2,364) (1,022)
FHLB stock dividend (403) (477)
Increase in accrued interest receivable (4,782) (218)
Increase (decrease) in accrued interest payable 1,998 (2,961)
Increase in other assets (25,410) (1,165)
Amortization for discontinued lease operations 30 (57)
Increase (decrease) in accrued expenses 2,127 (15,388)
Gain on sale of loans and servicing rights -- (3,413)
Amortization of goodwill 23 --
--------- ---------
Net cash used in operating activities (32,094) (15,975)
--------- ---------
Cash flows from investing activities:
Proceeds from sales of mortgage-backed securities available-for-sale -- 41,883
Proceeds from sale of loans and servicing rights 357 85,213
Investment and mortgage-backed securities principal repayments and maturities 244,321 43,968
Loan originations, net of repayments 121,056 5,411
Purchases of investments and mortgage-backed securities available-for-sale (622,376) (199,409)
Purchases of loans (690,798) (68,801)
Cost capitalized on real estate (80) (546)
Proceeds from the sale of real estate 9,676 19,602
Purchases of premises and equipment (1,067) (406)
Purchases of FHLB stock (21,963) 1,171
--------- ---------
Net cash used in investing activities (960,874) (71,914)
--------- ---------
Cash flows from financing activities:
Proceeds from sale of common stock 129,611 11
Redemption of preferred stock (5) --
Net increase (decrease) in deposits 125,089 (57,207)
Net increase in securities sold under agreements to repurchase 317,621 138,925
Issuance of FHLB advances 766,400 --
Redemption (purchase) of FHLB advances (318,400) --
Repayment of senior debt (11,113) 1,010
Cash dividend paid on preferred stock (19,440) --
--------- ---------
Net cash provided by financing activities 989,763 82,739
--------- ---------
Net change in cash (3,205) (5,150)
Cash and cash equivalents at beginning of period 21,117 21,873
--------- ---------
--------- ---------
Cash and cash equivalents at end of period $ 17,912 $ 16,723
--------- ---------
--------- ---------
Supplemental disclosures of cash flow information: Cash paid during the period
for:
Interest $ 57,282 $ 46,995
Supplemental schedule of non cash investing and financing activities:
Foreclosed real estate 5,968 20,455
Loans originated in connection with sale of foreclosed real estate 5,029 5,078
--------- ---------
--------- ---------
See accompanying notes to consolidated financial statements.
6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Consolidation
The consolidated financial statements include all the accounts of PBOC
Holdings, Inc. (the "Company") and its subsidiaries, all of which are wholly
owned, except for People's Preferred Capital Corporation ("PPCC") in which
People's Bank of California (the "Bank") owns all of the common stock. All
significant intercompany accounts and transactions have been eliminated in
consolidation.
2. Basis of Presentation
The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. Operating
results for the six months ended June 30, 1998 are not necessarily indicative of
the results that may be expected for the year ended December 31, 1998
In preparing the consolidated financial statements, management is required
to make estimates and assumptions that affect the reported amounts of assets and
liabilities as of the dates of the balance sheets and revenues and expenses for
the periods presented. Actual results could differ significantly from those
estimates. Prior year's consolidated financial statements have been reclassified
to conform to the 1998 presentation.
3. Earnings per share
During the year ended December 31, 1997, the Company adopted SFAS No.128,
"Earnings Per Share" (SFAS 128). Under SFAS 128 basic earnings per share
excludes dilution and is computed by dividing income available to common
stockholders 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 from issuance of common stock that then
shared in earnings.
On March 20, 1998 and April 20, 1998, the Board of Directors of the Company
approved an amendment to the Company's Certificate of Incorporation to (i)
increase the number of authorized shares of common stock from 500,000 to
75,000,000 and (ii) effect a 32 for 1 stock split of the issued common stock of
the Company prior to the commencement of the initial public offering referenced
in Note 5, respectively.
The earnings per share data is calculated by taking the net earnings
available to the common stockholders and dividing by the weighted average number
of shares of common stock outstanding. The weighted average numbers of shares of
common stock for the three months ended June 30, 1998 and 1997 were 12,529,322
and 3,152,064, respectively, for both basic and diluted earnings per share. The
weighted average numbers of shares of common stock for the six months ended June
30, 1998 and 1997 were 7,849,182 and 3,152,064, respectively, for both basic and
diluted earnings per share. The weighted average number of shares of common
stock outstanding reflects the exchange of all of the Company's outstanding
classes of preferred stock into common stock and the subsequent 32 to 1 stock
split referenced above on all then outstanding shares of common stock, both of
which actions took place immediately prior to the public offering referenced in
Note 5 hereto.
4. Recent Accounting Pronouncements
In June 1997, the FASB issued SFAS No. 131 (SFAS 131), "Disclosures about
Segments of an Enterprise and Related Information." SFAS 131 establishes
standards for the way that public enterprises report information about operating
segments in annual financial statements and requires that selected information
about those operating segments be reported in interim financial statements. This
Statement supersedes Statement of Financial
7
Accounting Standards No. 14, "Financial Reporting for Segment of a Business
Enterprise." SFAS 131 requires that all public enterprises report financial and
descriptive information about its reportable operating segments. Operating
segments are defined as components of an enterprise about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in assessing
performance. This Statement is effective for fiscal years beginning after
December 15, 1997. In the initial year of application, comparative information
for earlier years should be restated. This statement need not be applied to
interim financial statements in the year of application, but comparative
information for interim periods in the initial year of the application shall be
reported in financial statements for interim periods in the second year of
application. Early application is encouraged. Management believes that the
adoption of SFAS 131 will not have a material impact on the Company's
disclosures.
In February 1998, the FASB issued Statement of the Financial Accounting
Standards No. 132 (SFAS 132), "Employers' Disclosures about Pension and Other
Post-retirement Benefits." SFAS 132 amends the disclosure requirements of SFAS
No. 87, "Employer's Accounting for Pensions, SFAS No. 88, "Employer's Accounting
for Settlements and Curtailments of Defined Benefit Pension Plans and for
Termination Benefits," and SFAS 106, "Employer's Accounting for Retirement
Benefits Other than Pensions." SFAS 132 standardizes the disclosure requirements
of SFAS Nos. 87 and 106 to the extent practicable and recommends a parallel
format for presenting information about pensions and other retirement benefits.
SFAS 132 is effective for fiscal years beginning after December 15, 1997. SFAS
132 will result in disclosure changes only.
In June 1998, the FASB issued Statement of the Financial Accounting
Standards No. 133 (SFAS 133), "Accounting for Derivative Instruments and Hedging
Activities." SFAS 133 amends SFAS No. 52 "Foreign Currency Translation" to
permit special accounting for a hedge of a foreign currency forecasted
transaction with a derivative. It supersedes SFAS No. 80, "Accounting for Future
Contracts", SFAS No. 105, "Disclosure of Information about Financial Instruments
with Off-Balance-Sheet Risk and Financial Instruments with Concentrations of
Credit Risk", and SFAS No. 119, "Disclosure about Derivative Financial
Instruments". It ammends SFAS No.107, "Disclosure about Fair Value of Financial
Instruments, to include in Statement 107 disclosure provisions about
concentrations of credit risk from Statement 105. SFAS 133 established
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts, (collectively referred to as
derivatives) and for hedging activities. It requires that an entity recognize
all derivatives as either assets or liabilities in the statement of financial
position and measure those instruments at fair value. If certain conditions are
met , a derivative may be specifically designated as (a) a hedge of the exposure
to changes in the fair value of a recognized asset or liability or an
unrecognized firm commitment, (b) a hedge of the exposure to variable cash flows
of a forecasted transaction, or (c) a hedge of the foreign currency exposure of
a net investment in a foreign operation, an unrecognized firm commitment, an
available-for-sale security, or a foreign-currency-denominated forecasted
transaction. This Statement is effective for all fiscal quarters of fiscal years
begining after June 15, 1999. Management is in the process of determining the
impact of SFAS 133 on the Company's financial position and results of
operations.
5. Initial Public Offering
On May 15, 1998, the Company completed its initial publicly underwritten
offering of its Common Stock. An aggregate of 12,666,667 shares of Common Stock
were sold to the public at an initial public offering price of $13.75 per share,
of which 8,866,667 shares were issued and sold by the Company and 3,800,000
shares were sold by the existing stockholders of the Company. In connection with
the underwriting agreement executed by the Company with the underwriters of the
public offering, the Company granted the underwriters an option to purchase up
to an additional 1,900,000 shares of Common Stock, on the same terms and
conditions as in the public offering, solely to cover over-allotments, if any.
Such over-allotment option was exercised in full, and on May 21, 1998, the
Company and the original stockholders sold an additional 1,330,000 shares and
570,000 shares, respectively. The Company did not receive any proceeds from the
sale of shares by the existing stockholders.
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Financial Condition
The Company had consolidated total assets of $3.2 billion at June 30, 1998,
an increase of $988.5 million or 44.7% from December 31, 1997, reflecting the
Company's growth strategy. The increase is primarily attributable to a $563.5
million increase in loans receivable, net, due to loan originations of $241.2
million and a purchase of $691.0 million of one-year adjustable-rate
single-family residential mortgage loans, which were partially offset by
principal repayments of $360.4 million. Securities-available-for-sale also
increased by $392.8 million mainly due to purchases. Increases in the Company's
loan and securities portfolios were primarily funded by FHLB advances,
securities sold under agreements to repurchase and, to a lesser extent,
deposits, which increased by $448.0 million, or 94.9%, $317.6 million, or 93.2%,
and $125.1 million, or 9.9%, respectively. The Company's stockholders' equity
increased by $104.7 million to $184.3 million at June 30, 1998, as a result of
the Company's initial public offering.
Results of Operations
The Company earned $2.7 million for the second quarter ended June 30, 1998,
compared to net earnings of $1.2 million for the second quarter ended June 30,
1997, without giving effect to one-time payments which were incurred in
connection with the Company's initial public offering of common stock. After the
effect of such one-time payments, which totaled $15.6 million ($9.2 million net
of applicable tax benefits), the Company reported a net loss of $6.4 million for
the second quarter ended June 30, 1998 compared to net earnings of $1.2 million
for the second quarter ended June 30, 1997. Without giving effect to such
one-time payments, the Company's basic and diluted earnings per common share
amounted to $0.16 and ($0.57) during the quarters ended June 30, 1998 and
1997, respectively, and amounted to ($0.57) per common share during the 1998
quarter after giving effect to such one-time payments.
For the six months ended June 30, 1998, the Company's reported income was
$4.8 million compared to net earnings of $6.3 million for six months ended June
30, 1997 without giving effect to one-time payments which were incurred in
connection with the Company's initial public offering of common stock. After the
effect of such one-time payments, which totaled $15.6 million ($9.2 million net
of applicable tax benefits), the Company reported a net loss of $4.4 million for
the second quarter ended June 30, 1998 compared to net earnings of $6.3 million
for the six months ended June 30, 1997. Without giving effect to such one-time
payments, the Company's basic and diluted earnings per common share amounted to
$0.34 and $0.59 during the six months ended June 30, 1998 and 1997,
respectively, and amounted to ($0.84) per common share during the 1998 six month
period after giving effect to such one-time payments. During the first six
months of 1997, the Company sold the servicing rights with respect to
substantially all of its residential mortgage loans and recognized a gain of
$3.4 million on that portion of the servicing of loans held for other parties.
Without giving effect to such one-time sale, the Company would have earned $2.9
million for the six months ended June 30, 1997. The sale of servicing rights
associated with residential mortgage loans held in the Company's loan portfolio
contributed to a reduction in the Company's interest rate spread, which resulted
in the decline in the Company's earnings during the six months ended June 30,
1998 as compared to the same period in the prior year. The Company's return on
assets excluding one-time expenses amounted to 0.41% for the six months ended
June 30, 1998, as compared to 0.70% for the six months ended June 30, 1997.
Net Interest Income
Net interest income decreased by $1.5 million or 19.4% during the quarter
ended June 30, 1998 over the comparable 1997 quarter. During the third and
fourth quarters of 1997, to leverage its balance sheet, the Company purchased
$481 million of adjustable rate single family residential loans at premiums
totaling $9.4 million. Due to a lower than forecasted interest rate environment
and higher than anticipated refinancing activities in these portfolios, the
Company accelerated its premium amortization related to these loans in the
amount of $3.5 million in the second quarter of 1998, which reduced net interest
income. Under the Company's growth strategy in 1998, which increased earning
assets by approximately $1 billion, there were no additional purchases of that
type of loan nor of any loan product with significant purchase premiums. For the
six months ended June 30, 1998 net interest income increased by $312,000 as
compared to the six months ended June 30, 1997, which is attributable to a $14.7
million or 23.8% increase in total interest, fee and dividend income, which was
offset by a $14.3 million
9
or 32% increase in total interest expense from funding sources and the
accelerated premium amortization of $3.5 million.
The following tables set forth, for the periods indicated, information
regarding (a) the total dollar amount of interest income of the Company from
interest-earning assets and the resultant average yields; (b) the total dollar
amount of interest expense on interest-bearing liabilities and resultant average
rate; (c) net interest income; (d) interest rate spread; and (e) net interest
margin. Information is based on average daily balances during the indicated
periods:
Three months ended June 30,
1998 1997
----------------------------------- -----------------------------------
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
---------- --------- ---------- ---------- -------- ----------
(Dollars in thousands)
Interest-earning assets:
Loans receivable(1) ............................... $1,550,526 $ 25,637 6.61% $1,119,351 $20,385 7.28%
Mortgage-backed securities (2) .................... 540,408 6,745 4.99 487,223 8,352 6.86
Other interest-earning assets (3) ................. 178,419 4,767 10.69 126,809 1,980 6.25
---------- --------- ---- ---------- ------- ----
Total interest-earning assets ..................... 2,269,353 37,149 6.55% 1,733,383 30,717 7.09%
--------- -------
Non-interest-earning assets ......................... 70,996 72,162
---------- ----------
Total assets .................................. $2,340,349 $1,805,545
---------- ----------
---------- ----------
Interest-bearing liabilities:
Deposits:
Transaction accounts(4) ......................... $ 348,929 3,066 3.52% $ 363,131 3,221 3.56%
Term certificates of deposit .................... 957,661 14,442 6.05 985,416 13,699 5.58
---------- --------- ---------- -------
Total deposits .............................. 1,306,590 17,508 5.37 1,348,547 16,920 5.03
Senior debt ....................................... 8,687 146 6.74 11,570 310 10.75
Other borrowings .................................. 883,154 13,078 5.94 361,723 5,443 6.04
Hedging costs ..................................... -- 55 -- 150
---------- --------- ---------- -------
Total interest-bearing liabilities ........... 2,198,431 30,787 5.62% 1,721,840 22,823 5.32%
--------- -------
Non-interest-bearing liabilities .................... 45,937 17,425
---------- ----------
Total liabilities ............................ 2,244,368 1,739,265
Stockholders'equity ................................ 95,981 66,280
---------- ----------
Total liabilities and stockholders' equity ... $2,340,349 $1,805,545
---------- ----------
---------- ----------
Net interest-earning assets ......................... $ 70,922 $ 11,543
---------- ----------
---------- ----------
Net interest income/interest rate spread ............ $ 6,362 0.93% $ 7,894 1.77%
--------- ---- ------- ----
--------- ---- ------- ----
Net interest margin ................................. 1.12% 1.82%
---- ----
---- ----
Ratio of average interest-earning
assets to average interest-
bearing liabilities ............................... 103.23% 100.67%
---- ----
---- ----
(1) The average balance of loans receivable includes nonperforming loans,
interest on which is recognized on a cash basis.
(2) Includes mortgage-backed securities classified as held-to-maturity and
available-for-sale.
(3) Includes short-term investments, securities purchased under agreements to
resell, investment securities and FHLB stock.
(4) Includes passbook, NOW and money market accounts.
10
Six months ended June 30,
-------------------------------------------------------------------------------
1998 1997
---------------------------------------------- -----------------------------
Average Average Average Average
Balance Interest Yield/Cost Balance Interest Yield/Cost
---------- ---------- ---------- ---------- ---------- ----------
(Dollars in thousands)
Interest-earning assets:
Loans receivable(1) ......... $1,565,453 $ 53,915 6.89% $1,112,787 $ 41,353 7.43%
Mortgage-backed securities(2) 556,725 14,534 5.22 493,941 16,197 6.56
Other interest-earning
assets (3) .................... 179,311 7,644 8.53 127,111 3,868 6.09
---------- ---------- ---- ---------- ---------- ----
Total interest-earning
assets ........................ 2,301,489 76,093 6.61% 1,733,839 61,418 7.09%
---------- ----------
Non-interest-earning assets.. 72,030 73,682
---------- ----------
Total assets........... $2,373,519 $1,807,521
---------- ----------
---------- ----------
Interest-bearing liabilities:
Deposits:
Transaction accounts(4).. $ 350,584 6,166 3.55% $ 363,717 6,603 3.66%
Term certificates of
deposit...................... 969,361 27,470 5.71 982,564 27,354 5.61
---------- ---------- ---------- ----------
Total deposits....... 1,319,945 33,636 5.14 1,346,281 33,957 5.09
Senior debt................ 7,446 445 12.05 11,773 617 10.57
Other borrowings........... 892,155 25,367 5.73 366,403 10,471 5.76
Hedging costs.............. -- 110 -- 150
---------- ---------- ---------- ----------
Total interest-bearing
liabilities......... 2,219,546 59,558 5.41% 1,724,457 45,195 5.29%
---------- ----------
Non-interest-bearing
liabilities................ 49,629 16,081
---------- ----------
Total liabilities..... 2,269,175 1,740,538
Stockholders' equity......... 104,344 66,983
---------- ----------
Total liabilities and
stockholders' equity $2,373,519 $1,807,521
---------- ----------
---------- ----------
Net interest-earning assets $ 81,943 $ 9,382
---------- ----------
---------- ----------
Net interest income/interest
rate spread.................. $ 16,535 1.20% $ 16,223 1.80%
---------- ------- ---------- -------
---------- ------- ---------- -------
Net interest margin.......... 1.44% 1.87%
------- -------
------- -------
Ratio of average interest-earning
assets to average interest-
bearing liabilities..... 103.69 100.54%
------- -------
------- -------
(1) The average balance of loans receivable includes nonperforming loans,
interest on which is recognized on a cash basis.
(2) Includes mortgage-backed securities classified as held-to-maturity and
available-for-sale.
(3) Includes short-term investments, securities purchased under agreements to
resell, investment securities and FHLB stock.
(4) Includes passbook, NOW and money market accounts.
The Company's interest rate spread was 0.93% for the second quarter of
1998, a decrease of 84 basis points as compared to 1.77% for the same period
in 1997. For the six months ended June 30, 1998, the interest rate spread was
1.20%, a decrease of 60 basis points as compared to 1.80% for the same period
in 1997. The decrease in interest rate spread is mainly due to a decrease in
the Bank's yield on mortgage-backed securities and loans receivable, which
caused by a decline in mortgage rates and an increase in refinancing
activities.
The Company's net interest margin was 1.12% for the second quarter of 1998,
a decrease of 60 basis points as compared to 1.82% for the same period in 1997.
For the six months ended June 30, 1998 net interest margin was 1.44%, a decrease
of 43 basis points as compared to 1.87% for the same period in 1997. This
decrease was primarily due to growth of balance sheet during the latter part of
1997 and second quarter of 1998 at a lower marginal spread and the accelerated
premium amortization noted previously.
The following table sets forth the effects of changing rates and volumes on
net interest income of the Company. Information is provided with respect to (a)
effects on interest income attributable to changes in rate (changes in rate
multiplied by prior volume); (b) effects on interest income attributable to
changes in volume
11
(changes in volume multiplied by prior rate); and (c) changes in rate/volume
(change in rate multiplied by change in volume).
Three months ended June 30, 1998
compared to June 30, 1997
(In thousands)
-------------------------------------------------------
Increase (decrease) due to
----------------------------------
Total Net
Rate Volume Rate/Volume Increase/(Decrease)
---- ------ ----------- -------------------
Interest-earning assets:
Loans receivable ..................... (1,898) 7,939 (789) 5,252
Mortgage-backed securities ........... (2,296) 922 (233) (1,607)
Other interest-earning assets ........ 1,424 815 548 2,787
----- ----- --- -----
Total net change in income on interest-
earning assets ..................... (2,770) 9,676 (474) 6,432
----- ----- --- -----
Interest-bearing liabilities:
Deposits:
Transaction accounts ............ (31) (126) 1 (156)
Term certificates of deposit ... 1,178 (386) (48) 744
----- ----- --- -----
Total deposits ................ 1,147 (512) (47) 588
Senior debt ........................ (115) (77) 28 (164)
Other borrowings ................... (87) 7,846 (124) 7,635
Hedging costs ....................... -- -- (95) (95)
----- ----- --- -----
Total net change in expense on interest-
bearing liabilities ................ 945 7,257 (238) 7,964
----- ----- --- -----
Change in net interest income .......... (3,715) 2,419 (236) (1,532)
----- ----- --- -----
----- ----- --- -----
Six months ended June 30, 1998
compared to June 30, 1997
(In thousands)
-------------------------------------------------------
Increase (decrease) due to
----------------------------------
Total Net
Rate Volume Rate/Volume Increase/(Decrease)
---- ------ ----------- -------------------
Interest-earning assets:
Loans receivable ..................... (3,045) 16,915 (1,308) 12,562
Mortgage-backed securities ........... (3,320) 2,070 (413) (1,663)
Other interest-earning assets ........ 1,658 1,588 530 3,776
------ ------ ------ ------
Total net change in income on interest-
earning assets ..................... (4,707) 20,573 (1,191) 14,675
------ ------ ------ ------
Interest-bearing liabilities:
Deposits:
Transaction accounts ............ (209) (239) 11 (437)
Term certificates of deposit ... 497 (367) (14) 116
------ ------ ------ ------
Total deposits ................ 288 (606) (3) (321)
Senior debt ........................ 87 (227) (32) (172)
Other borrowings ................... (53) 15,025 (76) 14,896
Hedging costs ....................... -- -- (40) (40)
------ ------ ------ ------
Total net change in expense on interest-
bearing liabilities ................ 322 14,192 (151) 14,363
------ ------ ------ ------
Change in net interest income .......... (5,029) 6,381 (1,040) 312
------ ------ ------ ------
------ ------ ------ ------
12
Provision for Loan Losses
The Company's provision for loan losses increased by $217,000 to $450,000
during the quarter ended June 30, 1998, when compared to the prior comparable
period in 1997. At June 30, 1998, the Company's allowance for loan losses
amounted to $18.4 million or 0.88% of total loans and 175.13% of total
non-performing loans.
Non Interest Income
The Company's total non-interest income increased by $1.9 million or 375.5%
during the quarter ended June 30, 1998 compared to the same period in 1997,
primarily due to increased income from real estate operations. The Company's
non-interest income was decreased by $1.6 million during the six months ended
June 30, 1998 versus the 1997 period, primarily due to the absence of the 1997
gain on sale of servicing. The decrease during the six month period in 1998 was
partially offset by $201,000 increase in gain on mortgage-backed securities
sales, net and by $1.7 million increased income from real estate operations.
Operating Expenses
The Company's total operating expenses increased by $16.3 million or 234.2%
during the June 30, 1998 quarter over the comparable quarter in 1997. The
increase was primarily a result of a $11.3 million increase in personnel and
benefits expense (due to a one-time $11.1 million payment of benefits to certain
senior executives), a $4.4 million increase in FDIC insurance premiums (due to a
one-time payment of the FDIC special assessment, which the Company had
previously received permission to defer) and a $400,000 increase in occupancy
expense (due to the installation and operation of new automated teller and loan
machines and increased security measures in the Bank's branch offices). The
Company's total operating expenses were $31.0 million in the six months ended
June 30, 1998, an increase of $16.9 million compared to $14.1 million for the
same period last year.
Income Taxes
During the June 1998 quarter, the Company's operating results were
favorably impacted by income tax benefits of $9.4 million, which resulted from
an increase in its net deferred tax assets based upon the amount of such
deferred tax assets realizable in future periods.
Asset and Liability Management
Asset and liability management is concerned with the timing and magnitude
of the repricing of assets and liabilities. It is the objective of the Company
to attempt to control risk associated with interest rate movements. In general,
management's strategy is to match asset and liability balances within maturity
categories to limit the Bank's exposure to earnings variations and variations in
the value of assets and liabilities as interest rates change over time. The
Company's asset and liability management strategy is formulated and monitored by
the Bank's Asset/Liability Management Committee, which is comprised of senior
officers of the Bank, in accordance with policies approved by the Board of
Directors of the Bank.
The Asset/Liability Management Committee's methods for evaluating interest
rate risk include an analysis of the Bank's interest rate sensitivity "gap,"
which is defined as the difference between interest-earning assets and
interest-bearing liabilities maturing or repricing within a given time period. A
gap is considered positive when the amount of interest-rate sensitive assets
exceeds the amount of interest-rate sensitive liabilities. A gap is considered
negative when the amount of interest-rate sensitive liabilities exceeds
interest-rate sensitive assets. During a period of falling interest rates, a
negative gap would tend to result in an increase in net interest income, while a
positive gap would tend to affect interest income adversely.
13
The following table summarizes the anticipated maturities or repricing of
the Company's interest-earning assets and interest-bearing liabilities as of
June 30, 1998, based on the information and assumptions set forth in notes
below.
More Than More Than
Three to One Year Three Years
Within Three Twelve To To Five Over Five
Months Months Three Years Years Years Total
---------- ---------- ----------- ----------- ----------- ----------
(Dollars in thousands)
Interest-earning assets: (1)
Loans receivable(2)
Single-family residential loans:
Fixed ............................ $ 31,412 $ 132,976 $ 217,056 $ 126,739 $ 169,837 $ 678,020
Adjustable ....................... 391,840 326,516 86,205 15,738 2,694 822,993
Multi-family residential:
Fixed ............................ 2,172 6,774 10,975 6,704 7,190 33,815
Adjustable ....................... 363,345 -- -- -- -- 363,345
Commercial, industrial and land:
Fixed ............................ 3,151 13,620 22,169 15,366 13,523 67,829
Adjustable ....................... 92,692 3,584 -- -- -- 96,276
Other loans(3) : .................... 19,305 6,866 8,779 4,994 2,330 42,274
Mortgage-backed and other securities (4) 236,828 161,855 26,084 21,069 528,945 974,781
Other interest-earning assets (5) ...... 2,200 -- -- -- 46,000 48,200
---------- ---------- ---------- ---------- ---------- ----------
Total ....................... $1,142,945 $ 652,191 $ 371,268 $ 190,610 $ 770,519 $3,127,533
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Interest-bearing liabilities:
Deposits:
NOW accounts ....................... $ 117,717 -- -- -- -- $ 117,717
Passbook accounts .................. 150,589 -- -- -- -- 150,589
Money market accounts .............. 91,821 -- -- -- -- 91,821
Term certificates of deposit ....... 125,105 839,342 56,315 10,758 56 1,031,576
Senior debt ............................ -- -- -- -- -- --
Other borrowings ....................... 591,409 103,000 289,000 455,000 140,000 1,578,409
---------- ---------- ---------- ---------- ---------- ----------
Total ....................... $1,076,641 $ 942,342 $ 345,315 $ 465,758 $ 140,056 $2,970,112
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Excess (deficiency) of
interest-earning
assets over
interest-bearing liabilities......... $ 66,304 $ (290,151) $ 25,953 $ (275,148) $ 630,463 $ 157,421
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Excess (deficiency) of interest-earning
assets over interest-bearing
liabilities as a percent of
total assets.......................... 2.07% (9.06)% 0.81% (8.59)% 19.69% 4.92%
---------- ---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ---------- ----------
Cumulative excess (deficiency) of
interest-earning assets over interest
-bearing liabilities ................. $ 66,304 $ (223,847) $ (197,894) $ (473,042) $ 157,421
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Cumulative excess (deficiency) of
interest-earning assets over interest-
bearing liabilities as a percentage of
total assets ......................... 2.07% (6.99)% (6.18)% (14.78)% 4.92%
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
(1) Adjustable-rate loans are included in the period in which interest rates
are next scheduled to adjust rather than in the period in which they are
due, and fixed rate loans are included in the periods in which they are
scheduled to be repaid, based on scheduled amortization, in each case as
adjusted to take into account estimated prepayments based on assumptions
used by the OTS in assessing the interest rate sensitivity of savings
associations in the Company's region.
(2) Balances have been reduced for non-performing loans, which amounted to
$10.5 million at June 30, 1998.
(3) Comprised of commercial and consumer loans and loans secured by deposits.
(4) Does not include an unrealized loss on securities available for sale of
$3.0 million.
(5) Comprised of short-term investments, securities purchased under agreements
to resell, investment securities and FHLB stock
14
Liquidity and Capital Resources
Liquidity
Liquidity refers to a company's ability to generate sufficient cash to meet
the funding needs of current loan demand, savings deposit withdrawals, principal
and interest payments with respect to outstanding borrowings and pay operating
expenses. The Bank monitors its liquidity in accordance with guidelines
established by the Bank and applicable regulatory requirements. The Bank's need
for liquidity is affected by loan demand, net changes in deposit levels and the
scheduled maturities of its borrowings. The Bank can minimize the cash required
during the times of heavy loan demand by modifying its credit policies or
reducing its marketing effort. Liquidity demand caused by net reductions in
deposits are usually caused by factors over which the Bank has limited control.
The Bank derives its liquidity from both its assets and liabilities. Liquidity
derived from assets by receipt of interest and principal payments and
prepayments, by the ability to sell assets at market prices and by utilizing
unpledged assets as collateral for borrowings. Liquidity is derived from
liabilities by maintaining a variety of funding sources, including deposits,
advances from FHLB of San Francisco and other short and long-term borrowings.
At June 30, 1998, the Bank had $1.6 billion in borrowing capacity under a
collateralized line of credit with the FHLB of San Francisco. At June 30, 1998,
the Bank had total FHLB advances of $920 million at a weighted average interest
rate of 5.64%, $400 million of which matures in 1998 and the remaining $520
million of which matures between 2002 and 2008. Additionally, at June 30, 1998,
the Bank had securities sold under agreements to repurchase totaling $658.4
million at a weighted average interest rate of 5.69%, $294.4 million of which
matures in 1998 and the remaining $364 million matures between 2000 and 2008.
At June 30, 1998, the Bank had outstanding commitments (including unused
lines of credit) to originate and/or purchase mortgage and non-mortgage loans of
$133 million. Certificates of deposit which are scheduled to mature within one
year totaled $964.4 million at June 30, 1998, and borrowings that are scheduled
to mature within the same period amounted to $694.4 million. Management
anticipates that it will have sufficient funds available to meet its current
loan commitments.
Capital Resources
The OTS capital regulations include three separate minimum capital
requirements for the savings institution industry - a "tangible capital
requirement," a "leverage limit" and a "risk based capital requirement." These
capital standards must be no less stringent than the capital standards
applicable to national banks.
As of June 30, 1998 the Bank was deemed to be "well capitalized" under
applicable requirements. To be categorized as "well capitalized", the Bank must
maintain minimum core capital, core risk-based capital and risk-based capital
ratios as set forth in the table below.
The following table reflects the Bank's actual levels of regulatory capital
and applicable regulatory capital requirements at June 30, 1998:
Required Actual Excess
-------- ------ ------
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
(Dollars in thousands)
Tangible capital...................... $47,836 1.50% $201,147 6.31% $153,311 4.81%
Tier 1 leverage capital .............. 127,562 4.00 201,147 6.31 73,585 2.31
Tier 1 risk-based capital ............ 70,424 4.00 201,147 11.42 130,723 7.42
Risk-based capital ................... 140,848 8.00 216,748 12.31 75,900 4.31
15
Loan Portfolio Composition
The following table sets forth the composition of the Bank's loan portfolio
at the dates indicated.
June 30, 1998 December 31, 1997
-------------------------------------- --------------------------------------
Amount Percent of Amount Percent of Total
Total
----------------- ---------------- ---------------- -----------------
(Dollars in thousands)
Mortgage loans:
Single-family residential................ $1,507,285 71% $ 953,701 62%
Multi-family residential................. 398,536 19 426,254 27
Commercial............................... 160,548 8 135,407 9
Land and other .......................... 5,890 -- 5,896 --
----------------- ---------------- ---------------- -----------------
Total mortgage loans ................. 2,072,259 98 1,521,258 98
----------------- ---------------- ---------------- -----------------
Other loans:
Commercial business...................... 44,390 2 22,484 1
Consumer................................. 7,987 -- 8,485 1
Secured by deposits...................... 4,896 -- 2,287 --
----------------- ---------------- ---------------- -----------------
Total loans receivable................ 2,129,532 100% 1,554,514 100%
----------------- ---------------- ---------------- -----------------
---------------- -----------------
Less:
Undistributed loan proceeds ............. 14,476 6,206
Unamortized net loan discounts and
deferred originations fees............ (3,367) (6,859)
Deferred gain on servicing sold.......... 3,337 4,131
Allowance for loan losses ............... 18,393 17,824
----------------- ----------------
Loans receivable, net........................ $2,096,693 $1,533,212
----------------- ----------------
----------------- ----------------
16
Asset Quality
The following table sets forth information with respect to non-performing
assets identified by the Bank, including non-accrual loans, real estate owned
and troubled debt restructurings at the dates indicated:
June 30, 1998 December 31, 1997
------------- -----------------
(Dollars in thousands)
-------------------------------------------------------
Non-performing loans, net:
Mortgage loans:
Single-family residential......................... $ 7,398 $ 8,435
Multi-family residential.......................... 1,061 405
Commercial........................................ 1,678 1,064
Non-Mortgage Loans: Commercial................... 366 --
---------------------- -----------------------
Total non-performing loans, net....................... 10,503 9,904
---------------------- -----------------------
Real estate owned, net:
Single-family residential......................... 2,512 678
Multi-family residential.......................... 714 6,482
Commercial........................................ 5,470 5,921
Land.............................................. 202 202
---------------------- -----------------------
Total real estate owned, net.......................... 8,898 13,283
---------------------- -----------------------
Total non-performing assets........................... $ 19,401 $ 23,187
---------------------- -----------------------
---------------------- -----------------------
Troubled debt restructurings.......................... $ 9,218 $ 9,936
---------------------- -----------------------
---------------------- -----------------------
Total non-performing assets and troubled debt
restructurings.................................... $ 28,619 $ 33,123
---------------------- -----------------------
---------------------- -----------------------
Non-performing loans to total loans, net.............. 0.50% 0.65%
Non-performing loans to total assets.................. 0.33 0.45
Non-performing assets to total assets................. 0.61 1.05
Total non-performing assets and troubled debt
restructurings to total assets.................... 0.89 1.50
17
Non-performing assets as of June 30, 1998 and December 31, 1997 were
$19.4 million and $23.2 million, respectively. The decrease in non-performing
assets was due primarily to a decrease in real estate owned properties. The
following table sets forth the activity in the Bank's allowance for loan losses
during the periods indicated:
For the Six months Ended
June 30,
-----------------------------------------
1998 1997
------------------- -------------------
(Dollars in thousands)
-----------------------------------------
Beginning balance....................................................... $ 17,824 $ 23,280
------------------- -------------------
Provision for loan losses............................................... 900 655
------------------- -------------------
Charge offs:
Mortgage loans:
Single-family residential............................................... (355) (1,252)
Multi-family residential................................................ (43) (3,908)
Commercial.............................................................. -- (216)
Non Mortgage Loans: Commercial......................................... (16) --
------------------- -------------------
Total charge-offs.................................................... (414) (5,376)
------------------- -------------------
Recoveries:
Mortgage loans:
Single-family residential............................................... 83 124
------------------- -------------------
Total recoveries..................................................... 83 124
------------------- -------------------
Net charge-offs......................................................... (331) (5,252)
------------------- -------------------
Ending balance as of June 30, 1998 and 1997............................. $ 18,393 $ 18,683
------------------- -------------------
------------------- -------------------
Allowance for loan losses to total non performing loans at end of
period............................................................... 175.13% 133.12%
Allowance for loan losses to total non performing loans and
troubled debt restructurings at the end of period.................. 93.27% 86.64%
Allowance for loan losses to total loans, net at the end of period.. 0.88% 1.69%
Net loan charge-offs were $331,000 for the six months ended June 30, 1998,
a decrease of $4.9 million as compared to $5.2 million for six months ended June
30, 1997. The decrease in charge-offs was mainly due to improving real estate
values in California. As a result of improving conditions, the allowance for
loan losses to total non-performing loans increased to 175.13% at June 30, 1998
as compared to 133.12% at June 30, 1997. The allowance for loan losses to total
loans was .88% at June 30, 1998, a decrease of 81 basis points, as compared to
1.69% for June 30, 1997, which is mainly due to loan portfolio growth through
purchases of single family residential fixed rate loans, for which the Company
maintains lesser reserve amounts.
On an ongoing basis, management monitors the loan portfolio and evaluates
the adequacy of the allowance for loan and lease losses. In determining the
adequacy of the allowance for loan and lease losses, Management considers such
factors as historical loan loss experience, underlying collateral values,
evaluations made by bank regulatory authorities, assessment of economic
conditions and other appropriate data to identify the risks in the loan
portfolio.
Loans deemed by management to be uncollectible are charged to the allowance
for loan and lease losses. Recoveries on loans previously charged off are
credited to the allowance. Provisions for loan and lease losses are charged to
expense and credited to the allowance in amounts deemed appropriate by
management based upon its evaluation of the known and inherent risks in the loan
portfolio.
18
Item 3. Quantitative and Qualitative Disclosures about Market Risk
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations."
19
PART II OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) The following exhibit is included herein:
(27) Financial Data Schedule
(b) Reports on form 8-K:
No reports on form 8-K have been filed during the quarter
ended June 30, 1998.
20
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 thereunto duly authorized.
PBOC Holdings, Inc.
Date: August 10, 1998 By:/s/ Rudolf P. Guenzel
---------------------
Rudolf P. Guenzel
President and Chief Executive Officer
By: /s/ J. Michael Holmes
---------------------
J. Michael Holmes
Executive Vice President and Chief Financial Officer
21