-----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, GEA7q3927fR/n4iXv02xGiQrDqUkV4rF/rXkYJfwSz2M7JhRC8qqGHU+qHhlPOfN ZaChHbobrcYDJEGIppeIWA== 0000729502-95-000018.txt : 19951208 0000729502-95-000018.hdr.sgml : 19951208 ACCESSION NUMBER: 0000729502-95-000018 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951127 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST FINANCIAL BANCORP /CA/ CENTRAL INDEX KEY: 0000729502 STANDARD INDUSTRIAL CLASSIFICATION: 6022 IRS NUMBER: 942822858 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-12499 FILM NUMBER: 95596267 BUSINESS ADDRESS: STREET 1: 701 S HAM LN CITY: LODI STATE: CA ZIP: 95242 BUSINESS PHONE: 2093672000 MAIL ADDRESS: STREET 1: 701 S HAM LANE CITY: LODI STATE: CA ZIP: 95242 10-Q/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended September 30, 1995 Commission File Number : 0-12499 First Financial Bancorp (Exact name of registrant as specified in its charter) California (State or other jurisdiction of incorporation or organization) 94-28222858 (I.R.S. Employer Identification No.) 701 South Ham Lane, Lodi, California 95242 (Address of principal executive offices) (209)-367-2000 (Registrant's telephone number, including area code) NA (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. [ X ] Yes [ ] No As of September 30, 1995, there were 1,306,996 shares of Common Stock, no par value, outstanding. FIRST FINANCIAL BANCORP FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1995 TABLE OF CONTENTS
Page PART I Item 1. Financial Statements 1 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 3 PART II Item 1. Legal Proceedings 7 Item 2. Changes in Securities 7 Item 3. Defaults Upon Senior Securities 7 Item 4. Submission of Matters to a Vote of Security Holders 7 Item 5. Other Information 8 Item 6. Exhibits and Reports on Form 8-K 8
ITEM 1. FINANCIAL STATEMENTS FIRST FINANCIAL BANCORP AND SUBSIDIARY Consolidated Balance Sheets (in thousands)
9/30/95 12/31/94 ASSETS Cash and due from banks $ 4,649 $ 5,199 Federal funds sold 1,000 2,000 Investment securities: Held-to-maturity securities (at amortized cost, market value of $2,186 and $2,118 at 9/30/95 and 12/31/94) 2,037 2,038 Available-for-sale securities, at fair value 31,348 31,062 Total Investments 33,385 33,100 Loans 54,365 56,939 Less: Allowance for loan losses 924 1,127 Net loans 53,441 55,812 Bank premises and equipment, net 6,434 6,640 Accrued interest receivable 1,201 1,103 Other assets 1,103 1,313 Total Assets $101,213 $105,167 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits Noninterest bearing $ 7,694 $ 8,415 Interest bearing 78,897 81,564 Total deposits 86,591 89,979 Accrued interest payable 367 300 Other liabilities 207 1,660 Note payable 2,595 2,618 Total liabilities 89,760 94,557 Stockholders' equity: Common stock - no par value; authorized 9,000,000 shares, issued and outstanding in 1995 and 1994, 1,306,996 and, 1,306,296 shares 7,314 7,310 Retained earnings 3,980 3,412 Net unrealized holding gains on available-for sale securities 159 (112) Total stockholders' equity 11,453 10,610 Total Liabilities and Stockholders' Equity $101,213 $105,167
Page 1 FIRST FINANCIAL BANCORP AND SUBSIDIARY Consolidated Statements of Income (in thousands except per share amounts)
Three months ended Sept 30 Nine months ended Sept 30 1995 1994 1995 1994 Interest income: Loans, including fee $1,560 $1,522 $4,653 $4,375 Investment securities: Taxable 343 268 1,006 693 Exempt from Federal taxes 85 92 268 277 Federal funds sold 48 35 123 94 Deposits in banks and other interest income 0 1 0 3 Total interest income 2,036 1,918 6,050 5,442 Interest expense: Deposit accounts 745 625 2,102 1,826 Other 69 71 209 212 Total interest expense 814 696 2,311 2,038 Net interest income 1,222 1,222 3,739 3,404 Provision for loan losses 51 61 86 135 Net interest income after provision for loan losses 1,171 1,161 3,653 3,269 Noninterest income: Service charges 122 139 383 424 Premiums and fees from SBA and mortgage operations 142 113 312 361 Miscellaneous 7 12 28 39 Total noninterest income 271 264 723 824 Noninterest expense: Salaries and employee benefits 579 556 1,661 1,675 Occupancy 114 115 313 308 Equipment 93 91 284 280 Other 316 735 1,071 1,509 Total noninterest expense 1,102 1,497 3,329 3,772 Income before provision for income taxes 340 (72) 1,047 321 Provision for income taxes 119 (37) 348 67 Net income $ 221 $ (35) 699 254 Earnings per share: Primary $ 0.17 $ (0.03) $0.54 $ 0.19 Fully diluted $ 0.17 $ (0.03) $0.53 $ 0.19
Page 2 FIRST FINANCIAL BANCORP AND SUBSIDIARY Consolidated Statements of Cash Flows (in thousands) Nine Months Ended Sept 30
1995 1994 Cash flows from operating activities: Net income $ 699 $ 254 Adjustments to reconcile net income to net cash provided by operating activities: (Decrease) increase in loans held for sale 229 198 Increase in deferred loan income 17 48 Loss on sale of other real estate owned 0 3 Depreciation and amortization 320 324 Provision for loan losses 86 135 Provision for deferred taxes 447 (43) Increase in accrued interest receivable (98) (163) Increase (decrease) in accrued interest payable 67 (23) Decrease in other liabilities (453) 323 (Increase) decrease in other assets (338) (16) Net cash provided by operating activities 976 1,040 Cash flows from investing activities: Proceeds from maturity of held-to- maturity securities 1 46 Proceeds from maturity of available- for-sale securities 17,639 24,258 Purchases of available-for-sale securities (18,461) (26,449) Increase in loans made to customers 1,947 1,052 Proceeds from sale of other real estate 0 370 Purchase of bank premises and equipment ( 114) ( 60) Net cash provided by investing activities 1,012 (783) Cash flows from financing activities: Net decrease in deposits (3,388) 3,172 Payments on note payable ( 23) ( 22) Dividends paid (131) ( 131) Proceeds from issuance of common stock 4 4 Net cash used in financing activities (3,538) 3,023 Net (decrease) increase in cash and cash equivalents ( 1,550) 3,280 Cash and cash equivalents at beginning of period 7,199 6,424 Cash and cash equivalents at end of period $5,649 $9,704
Page 3 Management's Discussion and Analysis Changes in Financial Position Consolidated total assets at September 30, 1995 were $101.2 million, representing a decline of $4.0 million, or 3.8%, from December 31, 1994 The decline was the result of a decrease of $1.4 million in other liabilities and a decrease in deposits of $3.4 million, or 3.8%. The decrease in other liabilities represents the settlement of a securities purchase obligation outstanding at December 31, 1994 and the settlement of litigation pending as of December 31, 1994. The deposit outflow and reduction in other liabilities were funded by decreases in cash and federal funds sold balances as well as a net decrease of $2.6 million, or 4.5%, in loans outstanding. The decline in deposits is principally seasonal in nature. Deposits generally experience a seasonal peak during the fourth quarter of each year in connection with the culmination of local agricultural harvests. Those seasonal inflows reverse during the first quarter when the agricultural cycle begins again. Noninterest bearing and interest bearing deposits declined by 8.6% and 3.3%, respectively, from December 31, 1994 to September 30, 1995. The loan portfolio declined by $2.6 million, or 4.5%, from December 31,1994 to September 30, 1995. The decline was centered principally in the construction and commercial segments of the portfolio, reflecting continued soft economic conditions in the local market area. The allowance for loan losses declined by $203 thousand, or 18%, from December 31, 1994 to September 30, 1995. Net charge-off for the period were $289 thousand, while the provision for loan losses charged against income was $86 thousand. Charge-off activity exceeded that of the comparable prior year period and represented the resolution of several credits that had been reserved for in previous periods. Portfolio delinquency at September 30, 1995 was 2.95% compared to 2.71% at December 31, 1994. Nonaccrual loans at September 30, 1995 were $1.2 million compared to $765 thousand at December 31, 1994. The increase in nonaccrual loans reflects a small number of loans with identifiable weaknesses that developed during 1995. The following table depicts activity in the allowance for loan losses and allocation of reserves for and at the nine and twelve months ended September, 30, 1995 and December 31, 1994, respectively. Page 4 ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES 9/30/95 12/31/94 Balance at beginning of period 1,127 924 Charge-offs: Commercial 322 98 Consumer 79 77 Real estate 30 77 Total charge-offs 431 175 Recoveries: Commercial 118 37 Consumer 24 18 Total recoveries 142 55 Net charge-offs 290 120 Additions charged to operations 86 323 Balance at end of period 924 1,127 Ratio of net charge-offs to average loans outstanding .50% .20% Allocation of the Allowance for Loan Losses 9/30/95 9/30/95 12/31/94 12/31/94 Loan Category Amount % of Loans Amount % of Loans Commercial 251 58.60% 376 78.25% Real estate 31 36.64% 121 17.12% Consumer 6 4.76% 4 4.63% Unallocated 636 N/A 626 N/A Totals 924 100% 1,127 100% The adoption and application of the Financial Accounting Standards Board's Statement of Financial Accounting Standard (SFAS) No. 114, Accounting by Creditors for Impairment of a Loan, as amended by Statement No. 118, Accounting by Creditors for Impairment of a Loan-Income Recognition and Disclosures (SFAS 114), does not have a material impact on the basis of presentation for the aforementioned tables. Consolidated capital was $11.5 million at September 30, 1995, an increase of $840 thousand, or 7.9%, over consolidated capital at December 31, 1994. The principal components of the increase in capital were net income of $699 thousand and an increase of $271 thousand in net unrealized gains on investment securities available for sale. Dividends of $130 thousand have been paid as of September 30, 1995 and since December 31, 1994. In addition, the Board of Directors of First Financial Bancorp have declared a $.05 per share dividend payable November 30, 1995 to shareholders of record on November 15, 1995. Total risk-based and leverage capital of the company's subsidiary, Bank of Lodi, were 14.4% and 9.0%, respectively. Page 5 Results of Operation Three Months Ended September 30, 1995 Earnings for the three months ended September 30, 1995 were $221 thousand, or $256 thousand more than the $35 thousand loss for the comparable year ago quarter. Return on average assets and average equity were .88% and 7.8%, respectively. The increase in earnings was driven by an increase in SBA and mortgage income combined with lower operating expenses and a reduction in the provision for loan losses. Net interest income was equal to the prior year quarter. While average earning assets declined by approximately $1.3 million, or 1.4%, net interest margin increased by 8 basis points, to 5.53%, and offset the impact of the decline in earning asset volume. The yield on earning assets exceeded the prior year yield by 66 basis points, while the cost of deposits rose by 63 basis points. Net interest income would have exceeded that of the prior year quarter by $42 thousand if the mix of earnings assets would have been constant. Loans as a percentage of average earning assets declined to 65% from 67%, while certificates of deposit as a percentage of average deposits increased to 37% from 34%. SBA and mortgage income increased by $29 thousand, or 26%, over the prior year quarter. The increase was attributable principally to an increase in the sales volume of the guaranteed portion of SBA loan origination's and growth in loan servicing income. Mortgage origination's continue to be weaker than in recent years as a result of the level of interest rates and weakness in the local economy. Noninterest expenses declined by $395 thousand, or 26%, from the prior year quarter. The prior year quarter contained charges accrued to provide for costs associated with the management transition that took place in the latter half of 1994. Excluding those charges, noninterest expenses increased by 2.4% over the prior year quarter. Salaries and benefit expenses rose by $23 thousand, or 4.1%, reflecting full staffing levels in the current year and, to a lesser extent, general increases in wage levels. The company's subsidiary, Bank of Lodi, received a $46 thousand refund of deposit insurance premiums from the FDIC during the quarter. The refund was the result of an 82.6% decrease in the deposit insurance rate that was retroactive to May 1, 1995 and included the subsequent period through September 30, 1995. The refund reduced other noninterest expenses. Page 6 Nine Months Ended September 30, 1995 Earnings for the nine months ended September 30, 1995 were $699 thousand, or $445 thousand more than the $254 thousand for the comparable year ago period. Return on average assets and average equity were .93% and 8.4%, respectively, compared to .34% and 3.16% for the prior year period. The increase in earnings of 175% was driven by growth in net interest income, a lower provision for loan losses, and a significant reduction in noninterest expenses. Noninterest income declined relative to the previous year. Net interest income increased by $335 thousand, or 9.8%. Net interest margin increased by 53 basis points to 5.66%, while average earning assets declined by $340 thousand or .4%. The yield on average earning assets increased by 96 basis points while the cost of deposits and other funding increased by 48 basis points. Average loans outstanding as a percentage of average earning assets declined to 65% from 69%, while average certificates of deposit as a percentage of average deposits increased to 37% from 34%. Without the foregoing mix changes, net interest income would have been approximately $151 thousand higher. The provision for loan losses declined by $49 thousand, or 36%. The decline reflects general improvement in the credit quality of the loan portfolio relative to the prior year period. Asset quality and changes in the allowance for loan losses are discussed under Changes in Financial Condition. Noninterest income declined by $101 thousand, or 12%. Service charge income declined by $41 thousand due to lower returned item volumes. SBA and mortgage income declined by $49 thousand due to lower SBA volume in the first six months of the year. Although SBA volumes are generally down in 1995 due to increased competition in that sector of the lending environment and changes in the SBA program that delayed activity, some of the decline is attributed to a reorganization of the SBA lending function at the company's subsidiary, Bank of Lodi, that took place in early 1995. Noninterest expenses declined by $443 thousand, or 11.7%. The prior year period contained charges accrued to provide for costs associated with the management transition that took place in the latter half of 1994. Excluding those charges, noninterest expenses declined by 1.1% over the prior year period. The general decline in noninterest expenses exclusive of the change related to the prior year transition reflects lower staffing levels in the first part of 1995 relative to the previous year as well as widespread efforts to control other noninterest expenses. The disparity in staffing levels was principally related to the management transition, and nearly all open positions have now been filled. The company's subsidiary, Bank of Lodi, received a $46 thousand refund of deposit insurance premiums from the FDIC during the third quarter. The refund reflects an 82.6% decrease in the deposit insurance premium rate that was retroactive to May 1, 1995 and included the subsequent period through September 30, 1995. The refund reduced other noninterest expenses. Page 7 Basis of Presentation First Financial Bancorp is the holding company for the Bank of Lodi, N. A.. In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of financial position as of the dates indicated and results of operations for the periods shown. All material intercompany accounts and transactions have been eliminated in consolidation. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts. The results for the nine months ended September 30, 1995 are not necessarily indicative of the results which may be expected for the year ended December 31, 1995. The unaudited consolidated financial statements presented herein should be read in conjunction with the consolidated financial statements and notes included in the 1994 Annual Report to Shareholders. PART II -- OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS Not Applicable. ITEM 2. CHANGES IN SECURITIES Not Applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES Not Applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS The Company's Annual Meeting of Shareholders was held on April 25, 1995. The purpose of the meeting was to elect the Company's board of directors and approve an amendment to the 1991 Director Stock Option Plan. The following directors were elected based upon the votes cast as indicated:
Votes Votes Votes Director "for" "against" "withheld" Bozant Katzakian 769,857 0 26,494 Angelo J. Anagnos 769,416 0 26,935 Daniel R. Anderson 769,725 0 26,626 Raymond H. Coldani 769,725 0 26,626 Benjamin R. Goehring 769,593 0 26,758 Michael D. Ramsey 769,725 0 26,626 Frank M. Sasaki 769,857 0 26,494 Weldon D. Schumacher 769,593 0 26,758 Dennis R. Swanson 769,196 0 27,155
The amendment to the 1991 Director Stock Option Plan was approved based upon the following votes cast as indicated: For: 716,512 Against: 29,889 Abstain: 49,950 There were 1,306,446 shares issued and outstanding as of the record date, March 1, 1995. Page 8 ITEM 5. OTHER INFORMATION Not applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) EXHIBITS
Exhibit Number 2 Not applicable. 4 Registrant's current Bylaws. 10 Post Effective Amendment No. 1 to Form S8 Registration Statement (File Number 3340954). 11 Primary and fully diluted earnings per common and common equivalent share are calculated by dividing net income by the weighted-average number of common and common share equivalents outstanding during the period. Stock options are considered common share equivalents for this calculation. Weighted average shares used in the computation of primary and fully diluted earnings per share were 1,319,631 and 1,330,756, respectively for the quarter ended September 30, 1995. Weighted average shares used in the computation of both primary and fully diluted earnings per share were 1,307,133 for the quarter ended September 30, 1994. Weighted average shares used in the computation of primary and fully diluted earnings per share were 1,313,824 and 1,317,936, respectively for nine months ended September 30, 1995. Weighted average shares used in the computation of both primary and fully diluted earnings per share were 1,307,133 for the nine months ended September 30, 1994. 15 Not applicable. 16 Not applicable. 18 Not applicable. 19 Not applicable. 20 Not applicable. 23 Not applicable. 24 Not applicable. 25 Not applicable. 27 Financial Data Schedule (filed electronically). 28 Not applicable.
(b) REPORTS ON FORM 8-K On November 3, 1995, the company filed a Form 8-K dated November 3, 1995 regarding earnings for the third quarter of 1995 and the declaration of a cash dividend. Page 9 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. FIRST FINANCIAL BANCORP /s/ David M. Philipp David M. Philipp Senior Vice-President Chief Financial Officer Corporate Secretary Dated November 14, 1995 EX-27 2
9 9-MOS DEC-31-1995 SEP-30-1995 4,649,000 78,897,000 1,000,000 0 0 33,113,000 33,521,000 54,365,000 924,000 101,213,000 86,591,000 367,000 207,000 2,595,000 7,314,000 0 0 0 101,213,000 4,653,000 1,334,000 123,000 6,050,000 2,102,000 2,311,000 3,739,000 86,000 0 3,329,000 1,047,000 0 0 0 699,000 .54 .53 .059 1,172,000 93,000 0 0 1,127,000 431,000 142,000 923,000 923,000 0 0
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