-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, REh95hn+y0X5Phhr99gAxAC9jbaXCjvMrykcZCq6xRevhVuf2ZwHA2ryckG2w3df hyVkgVRqcDtib7YjFcjnrw== 0000940401-95-000008.txt : 19950517 0000940401-95-000008.hdr.sgml : 19950516 ACCESSION NUMBER: 0000940401-95-000008 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950512 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BAY AREA BANCSHARES CENTRAL INDEX KEY: 0000701153 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 942779021 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 002-76003 FILM NUMBER: 95537818 BUSINESS ADDRESS: STREET 1: 900 VETERANS BLVD CITY: REDWOOD CITY STATE: CA ZIP: 94063 BUSINESS PHONE: 4153671600 MAIL ADDRESS: STREET 1: 900 VETERANS BLVD CITY: REDWOOD CITY STATE: CA ZIP: 94063 FORMER COMPANY: FORMER CONFORMED NAME: AREA FINANCIAL CORP DATE OF NAME CHANGE: 19890612 10QSB 1 FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED March 31, 1995 Commission File Number 2-76003 BAY AREA BANCSHARES California #94-2779021 900 Veterans Blvd., Redwood City, CA 94063 Telephone (415) 367-1600 The registrant (1) has filed all reports required by Section 13 or 15(d) of the Securities Exchange Act during the preceding 12 months, and x Yes No (2) has been subject to such filing requirements for the past 90 days. x Yes No 792,255 Shares of Common Stock Outstanding as of March 31, 1995 Part 1 Item 1
BAY AREA BANCSHARES & SUBSIDIARIES CONSOLIDATED BALANCE SHEET (UNAUDITED) ASSETS 3/31/95 12/31/94 Cash and due from banks $11,968,347 $8,406,265 Federal Funds Sold 6,612,000 6,355,000 ----------- -------------- Cash and cash equivalents 18,580,347 14,761,265 Time deposits with other financial institutions 102,647 197,585 Investment securities available for sale (market value approximates book value) 1,469,688 1,439,872 Investment securities held to maturity (market value of $8,407,000 in 1995 and $8,122,000 in 1994) 8,530,276 8,426,348 Loans, net of reserve for possible loan losses of $1,553,555 in 1995 and $1,505,355 in 1994 50,965,361 52,016,341 Loans held for sale 712,321 327,586 Premises and equipment, net 961,057 1,023,060 Real estate owned 0 0 Interest receivable and other assets 1,326,235 1,344,825 ------------- -------------- Total assets $82,647,932 $79,536,882 LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand $19,938,702 $20,818,159 Interest-bearing transaction 36,088,218 32,884,654 Savings 4,602,499 4,439,217 Time 14,244,364 13,871,559 ------------- -------------- Total Deposits 74,873,783 72,013,589 Interest payable and other liabilities 561,105 552,649 Notes payable 0 0 ------------- -------------- Total liabilities 75,434,888 72,566,238 Shareholders' equity: Preferred stock, $10 stated value; 6% Series A, convertible and redeemable: Authorized - 10,000,000 shares; issued & outstanding 10,300 in 1995 and 1994 103,000 103,000 Common stock, no par value: Authorized - 20,000,000 shares; issued & outstanding 3,921,584 3,908,616 792,255 in 1995 and 789,525 in 1994 Unrealized loss on securities held for sale (43,000) (76,000) Retained earnings 3,231,460 3,035,028 ------------- -------------- Total shareholders' equity 7,213,044 6,970,644 ------------- -------------- Total liabilities and shareholders' equity $82,647,932 $79,536,882
Part 1 Item 1
BAY AREA BANCSHARES & SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Three Months Ended Ended 3/31/95 3/31/94 Interest Income: Interest and fees on loans $1,532,225 $1,324,713 Interest on investment securities 141,103 131,722 Interest on federal funds sold 66,566 57,325 Interest on time deposits with other financial institutions 1,675 2,130 ------------- -------------- Total Interest Income 1,741,569 1,515,890 Interest Expense: Interest on interest-bearing transaction accounts 263,505 204,042 Interest on savings deposits 51,969 16,940 Interest on time deposits 156,704 147,984 Interest on short-term borrowing 0 0 Interest on notes payable and redeemable debentures 0 2,976 ------------- -------------- Total Interest Expense 472,178 371,942 Net interest income 1,269,391 1,143,948 Provision for possible loan losses 45,000 120,000 ______________ _______________ Net interest income after provision for possible loan losses 1,224,391 1,023,948 Noninterest income: Service charges on deposit accounts 66,340 75,033 Net gain (loss) on sales of securities 0 0 Net gain on disposal of assets 0 20,434 Net gain on sale of loans held for sale 98,625 116,847 Other mortgage banking revenue 55,228 34,940 ATM network revenue 303,703 98,252 Other 12,263 11,369 ------------- -------------- Total noninterest income 536,159 356,875 Noninterest expense: Salaries and related benefits 629,366 543,911 Occupancy 94,648 87,580 Equipment 140,988 62,246 Professional fees 56,725 57,695 Stationery and supplies 36,928 23,242 Other 367,827 263,015 ------------- -------------- Total noninterest expense 1,326,482 1,037,689 Income before provision for income taxes 434,068 343,134 Provision for income taxes 176,000 141,000 ------------- -------------- Net Income $258,068 $202,134 Earnings per share: Average common and common equivalent shares outstanding 875,000 865,000 Net income per share $0.29 $0.23
Part 1 Item 1
BAY AREA BANCSHARES CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) Three Months Three Months Ended Ended 3/31/95 3/31/94 Cash flows from operating activities: ------------- -------------- Net Income $258,068 $202,134 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of premises and equipment 104,387 41,765 Provision for possible loan losses 45,000 120,000 Net gain on sale of assets 0 (20,434) Funding of loans held for sale (7,661,350) (4,524,153) Proceeds from the sale of loans held for sale 7,375,240 4,641,000 Net gain on sale of loans held for sale (98,625) (116,847) Net loss on sale of investment securities 0 0 Net amortization and accretion of investment premiums and discounts 9,224 16,080 Net decrease (increase) in interest receivable and other assets 18,590 (13,648) Net increase in interest payable and other liabilities 8,456 74,614 Net decrease in deferred loan fees (69,285) (11,204) ------------- -------------- Total adjustments (268,363) 207,173 ------------- -------------- Net cash provided by operating activities (10,295) 409,307 Cash flows from investing activities: Net decrease in time deposits with other financial institutions 94,938 0 Proceeds from sale of investment securities 0 0 Proceeds from the maturity of investment securities held to maturity 1,000,000 0 Mortgage backed securities principal payments 59,113 357,652 Purchase of investment securities held to maturity (1,169,081) (1,032,578) Purchase of investment securities held for sale 0 0 Net decrease in gross loans 1,013,630 2,158,951 Capital expenditures (42,384) (323,575) ------------- -------------- Net cash provided by investing activities 956,216 1,160,450 Cash flows from financing activities: Net increase in demand deposits, transaction and savings 2,487,389 852,652 Net increase in time deposits 372,805 1,133,134 Proceeds from stock warrants and options exercised 12,967 0 ------------- -------------- Net cash provided by financing activities 2,873,161 1,985,786 ------------- -------------- Net increase in cash and cash equivalents 3,819,082 3,555,543 Cash and cash equivalents, beginning of period 14,761,265 11,980,321 ------------- -------------- Cash and cash equivalents, end of period $18,580,347 $15,535,864 There were no Loans transferred to Real Estate Owned in the first quarter of 1995 or 1994.
BAY AREA BANCSHARES & SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS All adjustments, which in the opinion of management are necessary for a fair statement of the Company's financial condition at March 31, 1995, results of operations for the three month period ended March 31, 1995 and the statement of cash flows for the three month period ended March 31, 1995 have been included. These adjustments are of a normal and recurring nature. The results of operations and statement of cash flows are not necessarily indicative of the results for a full year's activity. The accompanying unaudited financial statements have been prepared on a basis consistent with the accounting principles and policies reflected in the Company's Annual Report for the year ended December 31, 1994. BAY AREA BANCSHARES & SUBSIDIARIES ITEM 2 Management's Discussion and Analysis of Financial Condition and Results of Operations Item 2A Financial Condition Liquidity Liquid assets (cash, federal funds sold, time deposits with other financial Institutions and investments) increased $3.9 million to $28.7 million over the three month period from December 31, 1994 to March 31, 1995. At year-end, total liquid assets as a percentage of total assets was 31.2% whereas on March 31, 1995 it had increased to 34.7%. Cash & due from banks increased $3.6 million over the first three months of 1995 to $12.0 million at March 31, 1995. However, during the first quarter of 1995, cash and due from banks averaged $9.1 million. The increase in liquid assets at quarter-end was a result of a buildup of deposits which occurred primarily during the last two weeks of March. The portion of the total cash & due from banks representing ATM network cash inventory at March 31, 1995 was approximately $2.2 million. At December 31, 1994, there was approximately $3.0 in ATM network cash inventory. The reduction in ATM cash was a result of more aggressive cash management and the closing of unproductive sites. The increase in total liquid investments was a result of a decline in total net loans outstanding of $666,000 or 1% to $51.7 million and an increase in deposits of $2.9 million (4.0%) to $74.9 million during the first three months of 1995. Deposits have averaged $70.2 million thus far in 1995, a 4.3% decrease over average deposits of $73.4 million throughout 1994. Average gross loans outstanding have averaged $54.1 million thus far in 1995 as compared to an average of $54.2 million averaged in 1994. Management feels the decline in demand for loans is primarily a result of the rise in interest rates, which began in the third quarter of 1993, and the resulting increase in the cost of borrowing for potential lending customers of the Bank. Management has embarked on other lending areas to stimulate loan demand, and continues to explore new avenues for lending. Management feels current liquid assets and current available credit lines are adequate to cover the working capital requirements of the Company and any reasonable needs arising from deposit withdrawals. Capital Consolidated equity capital plus reserves increased $291,000 in the first three months of 1995 from $8.5 million or 10.46% of total gross assets at December 31, 1994 to $8.8 million or 10.41% of total gross assets at March 31, 1995. Bank capital plus reserves totaled $8.8 million on March 31, 1995 or 10.39% of total adjusted assets as compared to capital plus reserves of $8.5 million or 10.45% of total adjusted assets at December 31, 1994. At March 31, 1995 the Bank maintained a tier one capital ratio of 12.44% and a tier two capital ratio of 13.69%. The Bank's capital level continues to exceed State and Federal Deposit Insurance Corporation requirements and satisfies the Federal Reserve Board's current risk-based capital guidelines. The Bank declared $75,000 in dividends to the Parent company in the first quarter of 1995. The Parent company also declared a cash dividend of 6% to preferred shareholders and a dividend to common shareholders of $.07 per share. This represents the fourteenth consecutive cash dividend declared by the Bank's parent company to common shareholders and an increase over the prior dividend of $.06 per share. Item 2B Results of Operations Results of Operations Consolidated operating profits were $258,100 for the first quarter of 1995, the highest first quarter in the Company's history. The first quarter operating profits were comprised of Bank earnings of $275,700, and a Parent company loss of $17,600. Consolidated earnings increased $55,900 or 27.7% and earnings per share increased $.06 to $.29 for the first quarter of 1995 as compared to the same period in 1994. The increase in first quarter earnings in 1995 versus 1994 is primarily a result of an increase in net interest income of $125,000, a reduction in loan loss provisions of $75,000, and an increase in non interest income of $179,000 offset in part by an increase of $289,000 in non interest expense. Net interest income grew $125,000 in the first quarter of 1995 as a result of rising interest rates. This increase was comprised of a $226,000 increase in interest income offset in part by a $100,000 increase in interest expense. The year to date net interest income to total average assets has been 6.63% in the first three months of 1995 as compared to 5.95% in the first three months of 1994. The decline in loan loss provisions in the first quarter of 1995 as compared to the first quarter of 1994 is primarily a result of loan recoveries of $203,000 in 1994, and improved delinquency ratios in the loan portfolio. The increase in non interest expense in the first quarter of 1995 can be substantially attributed to the Bank's Electronic Funds Transfer (EFT) department which operates approximately 42 ATM's throughout the state. EFT department revenues grew from $98,000 in the first quarter of 1994 to $304,000 in the first quarter of 1995. The increase in non interest expense of $289,000 in the first quarter of 1995 was driven by an increase of $85,000 in salary expense, a $79,000 increase in equipment expenses and a $105,000 increase in other expenses. These expenses were primarily attributable to growth in the EFT and Mortgage departments. After allocation of certain indirect expenses the EFT department contributed $3,300 to pre-tax profits and the Mortgage department contributed $9,700 in the first quarter as opposed to a loss of $17,100 in the EFT department and a loss of $12,000 in the Mortgage department in the first quarter of 1994. Total nonearning assets, comprised solely of nonaccrual loans, at March 31, 1995 were $250,000 or 16.1% of loan loss reserves, and .3% of total assets. Total nonearning assets at December 31, 1994 were $200,000 or 13.3% of loan loss reserves and .3% of total assets. PART II- Item 6 Exhibits and Reports on Form 8-K (a) Exhibits 27 Financial Data Schedule 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. BAY AREA BANCSHARES Registrant Dated: May 9, 1995 /s/ Robert R. Haight President and Chief Executive Officer /s/ Anthony J. Gould Chief Accounting Officer EX-27 2
9 This schedule contains summary financial information extracted from the Balance Sheet, and Statement of Income, and is qualified in its entirety by reference to such financial statements. 3-MOS DEC-31-1994 MAR-31-1995 11,968,347 102,647 6,612,000 0 1,469,688 8,530,276 8,407,000 53,231,237 (1,553,555) 82,647,932 74,873,783 0 561,105 0 3,921,584 0 103,000 3,188,460 82,647,932 1,532,225 141,103 68,241 1,741,569 472,178 472,178 1,269,391 45,000 0 1,326,482 434,068 258,068 0 0 258,068 .29 .29 7.43 250,006 0 0 0 1,505,355 0 3,200 1,553,555 1,553,555 0 0
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