-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QOw/JGVm0Gsn3RrTQQA9kZMQGpaaJZohzMl84EtO/W7825rz7NYCd4PqlxwUUJJC ZD/flyqSzWkx1/WrEhlnIw== 0000310979-98-000009.txt : 19981118 0000310979-98-000009.hdr.sgml : 19981118 ACCESSION NUMBER: 0000310979-98-000009 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST BANKS AMERICA INC CENTRAL INDEX KEY: 0000310979 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 751604965 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 001-08230 FILM NUMBER: 98751174 BUSINESS ADDRESS: STREET 1: 135 N MERAMEC STREET 2: PO BOX 802527 CITY: CLAYTON STATE: MO ZIP: 77263-0369 BUSINESS PHONE: 7137817171 MAIL ADDRESS: STREET 1: BANCTEXAS GROUP INC STREET 2: 9605 ABRAMS ROAD CITY: DALLAS STATE: TX ZIP: 75243 FORMER COMPANY: FORMER CONFORMED NAME: BANCTEXAS GROUP INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: COMMERCE SOUTHWEST INC DATE OF NAME CHANGE: 19820831 10-Q/A 1 FORM 10 Q/A SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q/A [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1998 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 0-8937 FIRST BANKS AMERICA, INC. ------------------------- (Exact name of registrant as specified in its charter) DELAWARE 75-1604965 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 135 North Meramec, St. Louis, Missouri 63105 -------------------------------------------- (Address of principal executive offices) (Zip code) (314) 854-4600 -------------- (Registrant's telephone number, including area code) (Former name, former address, and former fiscal year, if changed since last report) 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 classes of common stock, as of the latest practicable date. Outstanding at Class October 31, 1998 ----- ---------------- Common Stock, $.15 par value 2,607,773 Class B Common Stock, $.15 par value 2,500,000 The registrant is filing this amendment solely for the purpose of correcting an error which appears on the filed version of the Consolidated Balance Sheets in the original Form 10-Q. PART I - FINANCIAL INFORMATION Item 1. Financial Statements FIRST BANKS AMERICA, INC. Consolidated Balance Sheets (dollars expressed in thousands, except per share data)
September 30, December 31, 1998 1997 ---- ---- (unaudited) ASSETS ------ Cash and cash equivalents: Cash and due from banks................................................... $ 26,077 32,257 Interest-bearing deposits with other financial institutions - with maturities of three months or less................................. 26,902 690 Federal funds sold........................................................ 6,000 2,215 ----------- --------- Total cash and cash equivalents....................................... 58,979 35,162 ----------- --------- Investment securities: Available for sale, at fair value......................................... 128,577 148,181 Held to maturity, at amortized cost (estimated fair value of $2,032 at September 30, 1998)........................................... 2,032 -- ----------- --------- Total investment securities........................................... 130,609 148,181 ----------- --------- Loans: Real estate construction and development.................................. 134,884 93,454 Commercial and financial.................................................. 134,373 109,763 Real estate mortgage...................................................... 156,392 149,951 Consumer and installment.................................................. 68,241 75,023 Loans held for sale....................................................... -- 5,708 ----------- --------- Total loans........................................................... 493,890 433,899 Unearned discount......................................................... (2,494) (2,444) Allowance for possible loan losses........................................ (12,449) (11,407) ----------- --------- Net loans............................................................. 478,947 420,048 ----------- --------- Bank premises and equipment, net of accumulated depreciation.................................................. 11,622 10,697 Intangibles associated with the purchase of subsidiaries....................... 8,559 7,189 Accrued interest receivable.................................................. 4,209 4,819 Other real estate............................................................ 270 601 Deferred tax assets.......................................................... 12,270 14,164 Other assets................................................................. 16,734 2,803 ----------- --------- Total assets.......................................................... $ 722,199 643,664 =========== =========
FIRST BANKS AMERICA, INC. Consolidated Balance Sheets (dollars expressed in thousands, except per share data) (continued)
September 30, December 31, 1998 1997 ---- ---- (unaudited) LIABILITIES ----------- Deposits: Demand: Non-interest-bearing.................................................... $ 104,150 97,393 Interest-bearing........................................................ 70,335 73,199 Savings.................................................................. 171,974 147,623 Time deposits: Time deposits of $100 or more........................................... 53,382 52,472 Other time deposits..................................................... 196,253 185,840 ----------- --------- Total deposits........................................................ 596,094 556,527 Short-term borrowings........................................................ 9,513 3,687 Promissory note payable...................................................... -- 14,900 Accrued interest payable..................................................... 3,143 4,185 Deferred tax liabilities..................................................... 1,401 1,092 Payable to former shareholders of Surety Bank................................ -- 3,829 Accrued expenses and other liabilities....................................... 4,623 5,058 12% convertible debentures................................................... 6,500 6,500 Minority interest in subsidiary.............................................. -- 2,795 ----------- --------- Total liabilities..................................................... 621,274 598,573 ----------- --------- Guaranteed preferred beneficial interest in First Banks America Inc.'s subordinated debenture.................................... 44,140 -- ----------- --------- STOCKHOLDERS' EQUITY -------------------- Common Stock: Common stock, $.15 par value; 6,666,666 shares authorized; 3,243,140 and 2,144,865 shares issued at September 30, 1998 and December 31, 1997, respectively............... 486 322 Class B common stock, $.15 par value; 4,000,000 shares authorized; 2,500,000 shares issued and outstanding..................... 375 375 Capital surplus.............................................................. 60,165 47,329 Retained earnings since elimination of accumulated deficit of $259,117, effective December 31, 1994................................. 4,724 1,083 Common treasury stock, at cost; 631,167 shares and 386,458 shares at September 30, 1998 and December 31, 1997, respectively............................................................. (9,718) (4,350) Accumulated other comprehensive income....................................... 753 332 ----------- --------- Total stockholders' equity............................................ 56,785 45,091 ----------- --------- Total liabilities and stockholders' equity............................ $ 722,199 643,664 =========== =========
See accompanying notes to consolidated financial statements. FIRST BANKS AMERICA, INC. Consolidated Statements of Income (unaudited) (dollars expressed in thousands, except per share data)
Three months ended Nine months ended September 30, September 30, ------------------ ----------------- 1998 1997 1998 1997 ---- ---- ---- ---- Interest income: Interest and fees on loans................................................ $ 11,923 8,751 33,493 24,085 Investment securities..................................................... 2,012 1,899 6,167 5,698 Federal funds sold and other.............................................. 307 317 979 1,004 -------- ------- -------- -------- Total interest income................................................. 14,242 10,967 40,639 30,787 -------- ------- -------- -------- Interest expense: Deposits: Interest-bearing demand................................................. 311 349 994 1,050 Savings................................................................. 1,638 894 4,587 2,447 Time deposits of $100 or more........................................... 717 541 2,278 1,581 Other time deposits..................................................... 2,762 2,372 8,437 6,958 Promissory note payable and other borrowings.............................. 319 636 1,385 1,824 -------- ------- -------- -------- Total interest expense................................................ 5,747 4,792 17,681 13,860 -------- ------- -------- -------- Net interest income................................................... 8,495 6,175 22,958 16,927 Provision for possible loan losses........................................... 225 465 725 1,750 -------- ------- -------- -------- Net interest income after provision for possible loan losses.......... 8,270 5,710 22,233 15,177 -------- ------- -------- -------- Noninterest income: Service charges on deposit accounts and customer service fees............. 771 526 2,114 1,675 Gain on sales of securities, net.......................................... 240 -- 341 -- Other income.............................................................. 296 129 881 873 -------- ------- -------- -------- Total noninterest income.............................................. 1,307 655 3,336 2,548 -------- ------- -------- -------- Noninterest expense: Salaries and employee benefits............................................ 2,076 1,446 6,367 4,565 Occupancy, net of rental income........................................... 551 442 1,617 1,537 Furniture and equipment................................................... 424 269 1,251 825 Postage, printing and supplies............................................ 201 91 607 363 Data processing........................................................... 520 233 1,426 800 Legal, examination and professional fees.................................. 1,122 573 3,191 1,734 Communications............................................................ 157 181 584 473 (Gain) loss on sale of other real estate, net of expenses................. (89) 6 (2) (213) Guaranteed preferred debenture expense.................................... 765 -- 765 -- Other..................................................................... 1,205 975 3,524 2,733 -------- ------- -------- -------- Total noninterest expense............................................. 6,932 4,216 19,330 12,817 -------- ------- -------- -------- Income before provision for income taxes and minority interest in income of subsidiary............................................ 2,645 2,149 6,239 4,908 Provision for income taxes................................................... 1,125 1,023 2,598 2,093 -------- ------- -------- -------- Income before minority interest in income of subsidiary............... 1,520 1,126 3,641 2,815 Minority interest in income of subsidiary.................................... -- 83 -- 303 -------- ------- -------- -------- Net income............................................................ $ 1,520 1,043 3,641 2,512 ======== ======= ======== ======== Earnings per common share: Basic................................................................. $ 0.30 .26 0.72 .62 Diluted............................................................... 0.29 .26 0.71 .61 ======== ======= ======== ======== Weighted average shares of common stock outstanding (in thousands)........... 5,151 4,039 5,090 4,059 ======== ======= ======== ========
See accompanying notes to consolidated financial statements. FIRST BANKS AMERICA, INC. Consolidated Statements of Changes in Stockholders' Equity (unaudited) Nine months ended September 30, 1998 and 1997, and three months ended December 31, 1997 (dollars expressed in thousands, except per share data)
Accu- mulated other Total Class B Compre- Retained Common compre- stock- Common common Capital hensive earnings treasury hensive holders' stock stock surplus income (deficit) stock income equity ----- ----- ------ ------- --------- ----- ------ ------ Consolidated balances, January 1, 1997........... $ 282 375 42,862 -- (2,450) (2,838) (36) 38,195 Nine months ended September 30, 1997: Comprehensive income: Net income.................................. -- -- -- $ 2,512 2,512 -- -- 2,512 Other comprehensive income, net of tax (1) - Unrealized gains on securities, net of reclassification adjustment (2)......... -- -- -- 271 -- -- 271 271 ------- Comprehensive income........................ $ 2,783 ======= Exercise of stock options..................... -- -- 9 -- -- -- 9 Compensation paid in common stock............. -- -- 13 -- -- -- 13 Repurchases of common stock................... -- -- -- -- (979) -- (979) Redemption of stock options................... -- -- (290) -- -- -- (290) ------- ---- -------- ----- ----- ---- ------- Consolidated balances, September 30, 1997........ 282 375 42,594 62 (3,817) 235 39,731 Three months ended December 31, 1997: Comprehensive income: Net income.................................. -- -- -- $ 1,021 1,021 -- -- 1,021 Other comprehensive income, net of tax (1) - Unrealized gains on securities net of reclassification adjustment (2)......... -- -- -- 97 -- -- 97 97 ------- Comprehensive income........................ $ 1,118 ======= Issuance of common stock for purchase accounting acquisition...................... 40 -- 4,723 -- -- -- 4,763 Exercise of stock options..................... -- -- 6 -- -- -- 6 Repurchases of common stock................... -- -- -- -- (533) -- (533) Pre-merger transactions of FCB................ -- -- 6 -- -- -- 6 ------- ---- ------- ----- ----- ---- ------- Consolidated balances, December 31, 1997......... 322 375 47,329 1,083 (4,350) 332 45,091 Nine months ended September 30, 1998: Comprehensive income: Net income.................................. -- -- -- $ 3,641 3,641 -- -- 3,641 Other comprehensive income, net of tax (1) - Unrealized gains on securities, net of reclassification adjustment (2)...... -- -- -- 421 -- -- 421 421 ------- Comprehensive income........................ $ 4,062 ======= Issuance of common stock for acquisition of entity under common control.............. 43 -- 2,965 -- -- -- 3,008 Exercise of stock options..................... -- -- 13 -- -- -- 13 Compensation paid in stock.................... -- -- 27 -- -- -- 27 Redemption of stock options................... -- -- (48) -- -- -- (48) Conversion of promissory note payable......... 121 -- 9,879 -- -- -- 10,000 Repurchases of common stock................... -- -- -- -- (5,368) -- (5,368) ------- ---- ------- ----- ------ ---- ------- Consolidated balances, September 30, 1998........ $ 486 375 60,165 4,724 (9,718) 753 56,785 ======= ==== ======= ===== ====== ==== =======
- --------- (1) Components of other comprehensive income are shown net of tax. (2) Disclosure of reclassification adjustment:
Nine months Three months ended September 30, ended 1998 1997 December 31, 1997 ---- ---- ----------------- Unrealized gains arising during the period................................ $199 271 21 Less: reclassification adjustment for gains included in net income........ 222 -- 76 ---- ----- --- Unrealized gains on securities............................................ $421 271 97 ==== ===== ===
See accompanying notes to consolidated financial statements. FIRST BANKS AMERICA, INC. Consolidated Statements of Cash Flows (unaudited) (dollars expressed in thousands)
Nine months ended September 30, ------------------ 1998 1997 ---- ---- Cash flows from operating activities: Net income......................................................................... $ 3,641 2,512 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and accretion, net.................................... 1,326 593 Provision for possible loan losses............................................... 725 1,750 Decrease in accrued interest receivable.......................................... 709 (79) Interest accrued on liabilities.................................................. 17,681 13,860 Payments of interest on liabilities.............................................. (18,787) (12,351) Provision for income taxes....................................................... 2,598 2,093 Payments of income taxes......................................................... (226) (888) Gain on sales of securities, net................................................. (341) -- Other operating activities, net.................................................. 466 (1,962) --------- ---------- Net cash provided by operating activities...................................... 7,281 5,528 --------- ---------- Cash flows from investing activities: Cash received from acquired entities, net of cash paid............................. 3,241 -- Sales of investment securities..................................................... 23,306 -- Maturities of investment securities................................................ 51,968 69,181 Purchases of investment securities................................................. (56,373) (76,245) Net increase in loans.............................................................. (33,433) (20,915) Recoveries of loans previously charged off......................................... 1,930 1,653 Purchases of bank premises and equipment........................................... (1,576) (341) Other investing activities, net.................................................... (13,289) 833 --------- ---------- Net cash provided by (used in) investing activities............................ (23,715) (25,834) --------- ---------- Cash flows from financing activities: Increase (decrease) in deposits.................................................... 4,406 17,278 Increase (decrease) in borrowed funds.............................................. (2,903) 6,904 Repurchases of common stock for treasury........................................... (5,368) (979) Proceeds from issuance of guaranteed preferred subordinated debenture................................................. 44,124 -- Other financing activities, net ................................................... (8) (276) --------- ---------- Net cash provided by (used in) financing activities............................ 40,251 22,927 --------- ---------- Net increase (decrease) in cash and cash equivalents........................... 23,817 2,621 Cash and cash equivalents, beginning of period........................................ 35,162 42,874 --------- ---------- Cash and cash equivalents, end of period.............................................. $ 58,979 45,495 ========= ========== Noncash investing and financing activities: Issuance of common stock in purchase accounting acquisition........................ $ 3,008 -- Conversion of promissory note payable to common stock.............................. 10,000 -- ========= ==========
See accompanying notes to consolidated financial statements. FIRST BANKS AMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Basis of Presentation The accompanying consolidated financial statements of First Banks America, Inc. and subsidiaries (FBA or the Company) are unaudited and should be read in conjunction with the consolidated financial statements contained in the 1997 annual report on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation of the results of operations for the interim periods presented herein, have been included. Operating results for the three and nine month periods ended September 30, 1998 are not necessarily indicative of the results that may be expected for the year ending December 31, 1998. In connection with FBA's acquisition of First Commercial Bancorp, Inc. (FCB) and its wholly owned subsidiary, First Commercial Bank (First Commercial), as of February 2, 1998, FBA's financial information for the periods prior to the acquisition has been restated to include the 61.48% ownership interest of First Banks, Inc. (First Banks), FBA's majority shareholder, in FCB consistent with the accounting treatment applicable to entities under common control. The remaining interest in FCB acquired by FBA, or 38.52%, is reflected in the consolidated financial statements as minority interest for the periods prior to the acquisition. First Banks owned 73.7% of FBA as of September 30, 1998. The consolidated financial statements include the accounts of FBA and its subsidiaries, all of which are wholly owned. All significant intercompany accounts and transactions have been eliminated. In addition to the aforementioned restatement of 1997 financial information, certain reclassifications of 1997 amounts have been made to conform with the 1998 presentation. FBA operates through two banking subsidiaries, BankTEXAS N.A., headquartered in Houston, Texas (BankTEXAS) and First Bank of California, headquartered in Roseville, California (FB California), collectively referred to as the Subsidiary Banks. (2) Transactions with Related Party FBA purchases certain services and supplies from or through its majority shareholder, First Banks. FBA's financial position and operating results could significantly differ from those that would be obtained if FBA's relationship with First Banks did not exist. Fees payable to First Banks, as discussed in the following paragraphs, generally increase as FBA expands through acquisitions and internal growth, reflecting the higher levels of service required to operate the Subsidiary Banks. First Banks provides management services to FBA and the Subsidiary Banks. Management services are provided under a management fee agreement whereby FBA compensates First Banks on an hourly basis for its use of personnel for various functions including internal auditing, loan review, income tax preparation and assistance, accounting, asset/liability management and investment services, loan servicing and other management and administrative services. Fees paid under this agreement were $528,000 and $1.5 million for the three and nine months ended September 30, 1998, compared to $388,000 and $1.1 million for the three and nine months ended September 30, 1997, respectively. Because of its affiliation through First Banks and the geographic proximity of certain of their banking offices, FB California and First Bank & Trust (FB&T), a wholly owned subsidiary of First Banks, share the cost of certain personnel and services used by the banks. This includes the salaries and benefits of certain loan and administrative personnel. The allocation of the shared costs are charged and/or credited among the banks under the terms of a cost sharing agreement. Expenses associated with loan origination personnel are allocated based on the relative loan volume between the banks. Costs of most other personnel are allocated on an hourly basis. Because this involves distributing essentially fixed costs over a larger asset base, it allows each bank to receive the benefit of personnel and services at a reduced cost. Fees paid under the cost sharing agreement were $288,000 and $811,000 for the three and nine month periods ended September 30, 1998, and $183,000 and $515,000 for the same periods in 1997, respectively. First Services L.P., a limited partnership indirectly owned by First Banks' Chairman and his children through its General Partners and Limited Partners, provides data processing and various related services to FBA under the terms of data processing agreements. Fees paid under these agreements were $515,000 and $1.3 million for the three and nine months ended September 30, 1998, compared to $230,000 and $461,000 for the same periods in 1997, respectively. The Subsidiary Banks had $84.8 million and $66.9 million in whole loans and loan participations outstanding at September 30, 1998 and December 31, 1997, respectively, that were purchased from banks affiliated with First Banks. In addition, the Subsidiary Banks had sold $141.8 million and $54.7 million in whole loans and loan participations to affiliates of First Banks at September 30, 1998 and December 31, 1997, respectively. These loans and loan participations were acquired and sold at interest rates and terms prevailing at the dates of their purchase or sale and under standards and policies followed by the Subsidiary Banks. FBA borrowed $14.9 million from First Banks at December 31, 1997 under a $20.0 million promissory note payable. The borrowings under the note bear interest at an annual rate of one-quarter percent less than the "Prime Rate" as reported in the Wall Street Journal. The interest expense was $53,000 and $302,000 for the three months ended September 30, 1998 and 1997, respectively, and $599,000 and $874,000 for the nine months ended September 30, 1998 and 1997, respectively. Future borrowings under the promissory note payable are available with any principal and accrued interest due and payable on October 31, 2001. The accrued and unpaid interest under the note was $1.4 million at December 31, 1997. As more fully discussed in Note 4, on February 2, 1998, FBA exchanged 804,000 shares of its common stock for $10.0 million outstanding under the promissory note payable. In addition, during July 1998, the remaining balance of $11.3 million under the $20.0 million promissory note payable was repaid from the proceeds of the sale of 8.50% Cumulative Trust Preferred Securities (Preferred Securities). See Note 5 for further discussion of the Preferred Securities. In connection with FBA's acquisition of FCB, FBA issued convertible debentures to First Banks of $6.5 million. These debentures replaced similar FCB debentures previously owned by First Banks. The related interest for these debentures was $604,000 and $647,000 for the nine months ended September 30, 1998 and 1997, respectively. FBA is not required to pay interest on the debentures prior to maturity. At maturity in 2000, principal and accrued interest are payable in FBA common stock (at a conversion rate of $14.06 per share), unless FBA elects to pay cash and First Banks does not exercise its right to convert principal and interest into FBA common stock. The accrued interest payable for these debentures was $2.2 million and $1.6 million at September 30, 1998 and December 31, 1997, respectively. (3) Regulatory Capital FBA and the Subsidiary Banks are subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on FBA and the Subsidiary Banks' financial statements. Under capital adequacy guidelines and the regulatory framework for Prompt Corrective Action, the Subsidiary Banks must meet specific capital guidelines that involve quantitative measures of the Subsidiary Banks' assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Subsidiary Banks' capital amounts and regulatory classification are also subject to qualitative judgments by the regulators about components, risk weighting and other factors which may affect possible regulatory actions. Quantitative measures established by regulations to ensure capital adequacy require the Subsidiary Banks to maintain certain minimum capital ratios. The Subsidiary Banks are required to maintain a minimum risk-based capital to risk-weighted assets ratio of 8.00%, with at least 4.00% being "Tier 1" capital (as defined in the regulations). In addition, a minimum leverage ratio (Tier 1 capital to average assets) of 3.00% plus an additional cushion of 100 to 200 basis points is expected. In order to be considered well capitalized under Prompt Corrective Action provisions, a bank is required to maintain a risk weighted asset ratio of at least 10%, a Tier 1 to risk weighted assets ratio of at least 6%, and a leverage ratio of at least 5%. As of December 31, 1997, the date of the most recent notification from FBA's primary regulator, each of the Subsidiary Banks was categorized as well capitalized under the regulatory framework for Prompt Corrective Action. At September 30, 1998 and December 31, 1997, FBA's and the Subsidiary Banks' capital ratios were as follows:
Risk-based capital ratios ------------------------- Total Tier 1 Leverage Ratio ----- ------ -------------- 1998 1997 1998 1997 1998 1997 ---- ---- ---- ---- ---- ---- FBA.......................................... 16.03% 6.88% 10.13% 5.62% 8.64% 4.96% BankTEXAS.................................... 12.33 12.26 11.07 11.00 9.15 8.90 FB California................................ 10.93 13.03 9.67 11.77 8.47 13.80
(4) Acquisitions As previously announced, FBA and Redwood Bancorp executed an agreement on September 3, 1998 providing for the acquisition of Redwood Bancorp, and its wholly-owned subsidiary, Redwood Bank, for cash consideration of $26.0 million. Redwood Bank is headquartered in San Francisco, California and operates four banking locations in the San Francisco Bay area. Redwood Bank had $168.5 million in total assets, $126.4 million in loans, net of unearned discount, and $148.6 million in deposits at September 30, 1998. FBA anticipates that the transaction, which is subject to regulatory approval, will be completed on or about December 31, 1998. On February 2, 1998, FBA completed its acquisition of FCB and its wholly owned subsidiary, First Commercial. In the transaction, the FCB shareholders received .8888 shares of FBA common stock for each share of FCB common stock. Cash was paid in lieu of issuing fractional shares. In total, FCB shareholders received approximately 752,000 shares of FBA common stock in the transaction, including 462,176 shares received by First Banks in exchange for its 61.48% ownership interest in FCB. The transaction also provided for First Banks to receive 804,000 shares of FBA common stock in exchange for $10.0 million of FBA's promissory note payable to First Banks, and for the exchange of FCB convertible debentures of $6.5 million, which were owned by First Banks, for comparable debentures of FBA. The Agreement was negotiated and approved by special committees of the Boards of Directors of FCB and FBA. These special committees were comprised solely of independent directors of the two respective Boards of Directors. First Commercial had six banking offices located in Sacramento, Roseville (2), San Francisco, Concord and Campbell, California. At February 2, 1998, FCB had total assets of $192.5 million, investment securities of $64.4 million, loans, net of unearned discount of $118.9 million and deposits of $173.1 million. The transaction was accounted for as a business combination of entities under common control. Accordingly, FBA assumed First Banks' 61.48% interest in FCB at its historical cost basis. The remaining 38.52%, or minority interest, owned by unaffiliated parties was recorded at fair value. The excess of the cost over the fair value of the minority interest's share in the fair value of the net assets acquired was $1.6 million and is being amortized over 15 years. First Commercial was merged into FB California. On February 2, 1998, FBA also completed its acquisition of Pacific Bay Bank, San Pablo, California (Pacific Bay). Under the terms of the Pacific Bay Agreement, Pacific Bay shareholders received $14.00 per share in cash for their stock, an aggregate of $4.2 million. The transaction was accounted for using the purchase method of accounting. The excess of the cost over the fair value of the net assets acquired was $1.5 million and is being amortized over 15 years. This transaction was funded from an advance under the promissory note payable to First Banks. Pacific Bay operated a banking office in San Pablo, California and a loan production office in Lafayette, California. At February 2, 1998, Pacific Bay had total assets of $38.3 million, investment securities of $232,000, loans, net of unearned discount, of $29.7 million and deposits of $35.2 million. Pacific Bay was merged into FB California. (5) Cumulative Trust Preferred Securities of First America Capital Trust During July 1998, First America Capital Trust (First Capital), a newly-formed Delaware business trust subsidiary of FBA, issued 1.84 million shares of Preferred Securities at $25.00 per share in an underwritten public offering. FBA made certain guarantees and commitments relating to the Preferred Securities. FBA's proceeds from the issuance of the Preferred Securities, net of underwriting fees and offering expenses, were approximately $44.0 million. Distributions payable on the Preferred Securities are payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year commencing on September 30, 1998. Distributions payable on the Preferred Securities were $765,000 for the three months ended September 30, 1998 and are recorded as noninterest expense in the accompanying consolidated financial statements. Proceeds from the offering were used to repay outstanding indebtedness to First Banks under the terms of the $20.0 million promissory note payable, support possible repurchases of common stock from time to time and for general corporate purposes. The remaining proceeds have been temporarily invested in interest-bearing deposits and will be used to fund the pending acquisition of Redwood Bancorp. SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. FIRST BANKS AMERICA, INC. Registrant Date: November 16, 1998 By: /s/Allen H. Blake --- ------------------ Allen H. Blake Vice President, Chief Financial Officer and Secretary (Principal Financial Officer) -----END PRIVACY-ENHANCED MESSAGE-----