-----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, LW+2sn1e5IwtYmzehzhjuTZTD1cY8UzUnSrv/12q8YJd7lD+IK20JRra1lOBATqt c/XODSZet501YDTFEyY9Nw== 0001104659-03-023630.txt : 20031024 0001104659-03-023630.hdr.sgml : 20031024 20031023182900 ACCESSION NUMBER: 0001104659-03-023630 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20031023 ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20031024 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REDWOOD EMPIRE BANCORP CENTRAL INDEX KEY: 0000840007 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 680166366 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10868 FILM NUMBER: 03954958 BUSINESS ADDRESS: STREET 1: 111 SANTA ROSA AVENUE STREET 2: PO BOX 402 CITY: SANTA ROSA STATE: CA ZIP: 95404-4905 BUSINESS PHONE: 7075734800 MAIL ADDRESS: STREET 1: 111 SANTA ROSA AVENUE CITY: SANTA ROSA STATE: CA ZIP: 95404-4905 8-K 1 a03-4326_18k.htm 8-K

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C.  20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report:  October 23, 2003

 

REDWOOD EMPIRE BANCORP

(Exact number of Registrant as specified in its charter)

 

California

 

File No. 0-19231

 

68-0166366

(State or other jurisdiction of
incorporation)

 

(Commission File Number)

 

(IRS Employer)
Identification No.)

 

 

 

 

 

111 Santa Rosa Avenue, Santa Rosa, California

 

95404-4905

(Address of principal executive offices)

 

(Zip Code)

 

 

 

 

 

Registrant’s telephone number, including area code:  (707) 573-4800

 

 



 

Item 7.  Financial Statements and Exhibits

 

Exhibit 99.1

 

Press release dated October 22, 2003 concerning Redwood Empire Bancorp’s financial results for the third quarter of 2003.

 

 

Item 9.  Regulation FD Disclosure

 

On October 22, 2003, Redwood Empire Bancorp issued a press release concerning financial results for the third quarter of 2003, a copy of which is included as Exhibit 99.1 and incorporated herein by reference.  The information included in this section is also intended to be included under “Item 12. Results of Operations and Financial Condition” and is included under this Item 9 in accordance with SEC Release No. 33-8216.  The information included herein and in Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

 

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 hereunto duly authorized.

 

 

Date:

10-23-03

 

 

REDWOOD EMPIRE BANCORP

 

 

 

 

 

(Registrant)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Kim C. McClaran

 

 

 

 

 

 

Kim C. McClaran

 

 

 

 

 

Vice President and

 

 

 

 

 

Interim Chief Financial Officer

 

2


EX-99.1 3 a03-4326_1ex99d1.htm EX-99.1

Exhibit 99.1

 

FOR:

 

REDWOOD EMPIRE BANCORP

APPROVED BY:

 

Patrick Kilkenny

 

 

President and CEO

 

 

(707) 573-4911

 

For Immediate Release

 

REDWOOD EMPIRE BANCORP REPORTS

THIRD QUARTER 2003 NET INCOME

 

SANTA ROSA, Calif. (October 22, 2003) — Redwood Empire Bancorp (NASDAQ: REBC) today reported net income of $2,085,000 or $.41 per diluted share for the quarter ended September 30, 2003.  This compares with net income of $1,958,000 or $.36 per diluted share for the same quarter a year ago.  Annualized return on common equity was 29.90% in the third quarter of 2003 as compared with 27.29% in the same quarter a year ago.  Annualized return on assets was 1.60% in the third quarter of 2003 as compared to 1.54% one year ago.  For the nine months ended September 30, 2003, net income was $6,282,000 or $1.21 per diluted share.  This compares with $5,930,000 or $1.09 per diluted share for the nine months ended September 30, 2002.  On July 15, 2003, the Company’s Board of Directors declared a three-for-two stock split of its outstanding shares of common stock.  Earnings per share information for all prior periods presented give effect to the stock split.  The stock split was effected in the form of a stock dividend and entitled each stockholder of record at the close of business on July 28, 2003 three shares for every two shares of Redwood Empire Bancorp common stock held on that date.  “We are extremely pleased with bottom line results,” noted Patrick Kilkenny, President and Chief Executive Officer.  “Growing our franchise, providing excellent service to customers and delivering outstanding returns to our shareholders are our key objectives,” said Kilkenny.

 

On July 24, 2003, the Company announced the completion of its second $10,000,000 trust preferred securities financing.  The financing, which is due in 30 years, currently qualifies for Tier II regulatory capital treatment and bears an interest rate of 6.35% for five years and then resets to the three month LIBOR plus 3.1% for the next 25 years.  Interest expense associated with this financing is approximately $52,000 per month.  Debt issuance costs amounted to approximately $215,000 and will be amortized over the life of the offering. The funds qualify as regulatory capital, subject to certain limitations, and are being used for stock repurchase and other corporate matters.

 

On August 25, 2003, the Company announced the resignation of James Beckwith, EVP and Chief Financial Officer.  Mr. Beckwith’s resigned his position with the Company effective September 5, 2003 to become President and CEO of a Sacramento area commercial banking company in organization.  The Company further announced that long-time Controller, Ms. Kim McClaran has assumed the role of Chief Financial Officer of the bank and holding company on an interim basis.  Ms. McClaran has been working in the finance area of the Company for 15 years.

 

Total deposits amounted to $454,887,000 as of September 30, 2003 as compared to $452,014,000 at September 30, 2002, which amounts to a $2,873,000 or .6% increase.  Total assets amounted to $515,302,000 as of September 30, 2003 as compared to $509,863,000 at September 30, 2002, which amounts to a $5,439,000 or a 1% increase.  Total loans, excluding mortgage loans held for sale amounted to $411,925,000 as of September 30, 2003 as compared to $367,874,000 one year ago, or a 12% increase.

 



 

Net interest income amounted to $5,783,000 in the third quarter of 2003, compared to $5,271,000 in the same period in 2002, which represents a $512,000 or 10% increase.  The increase in net interest income is attributable to an increase in earning assets and a higher net interest margin.  Average earning assets amounted to $488,727,000 for the three months ended September 30, 2003 as compared to $476,552,000 for the same period one year ago.  Earning asset growth was bolstered by strong loan demand. The net interest margin was 4.69% for the quarter ended September 30, 2003 as compared to 4.39% one year ago.  Net interest income amounted to $16,991,000 for the nine months ended September 30, 2003 as compared to $15,583,000 one year ago, an increase of $1,408,000 or 9%.

 

There was no loan loss provision for the three and nine months ended September 30, 2003 and September 30, 2002.  Net recoveries were $53,000 or .05% (annualized) and $145,000 or .05% (annualized) of average portfolio loans for the three and nine months ended September 30, 2003.  This compares to net charge-offs of $8,000 or .01% (annualized) and $2,000 or .00% (annualized) one year ago.  Non-performing assets at September 30, 2003 were $2,682,000 or .5% of total assets, as compared to non-performing assets of $1,419,000, or .3% of total assets, as of September 30, 2002.  The allowance for loan losses to nonperforming loans was 281% as of September 30, 2003 as compared to 534% as of September 30, 2002.

 

Non-interest income amounted to $1,666,000 for the quarter ended September 30, 2003 as compared to $2,155,000 in the same period in 2002 or a 23% decrease.  Non-interest income amounted to $4,944,000 for the first nine months ended September 30, 2003 as compared to $5,766,000 one year ago.  Merchant draft processing revenues decreased $135,000 from $1,322,000 in the third quarter of 2002 to $1,187,000 in the third quarter of 2003.  For the nine-month period ended September 30, 2003, merchant draft processing revenues amounted to $3,404,000, a decrease of $294,000 from $3,698,000 for the same period in 2002.  Merchant draft processing revenues decreased in the three and nine months ended September 30, 2003 as compared to the same periods one year ago.  During the third quarter of 2002, the Company recognized approximately $120,000 in income associated with the renegotiation of the Company’s processing contract with FDR.  Additionally, in the first and second quarters of 2002, the Company recorded an additional $160,000 in revenue associated with a portfolio sale.  Excluding net revenue from merchant draft processing, non-interest income amounted to $479,000 and $1,540,000 for the three and nine months ended September 30, 2003 as compared to $833,000 and $2,068,000 for the same periods one year ago.  The decrease in non-interest income during the three and nine months ended September 30, 2003 as compared to the same periods one year ago was primarily due to $259,000 in net realized gains on investment securities available for sale recorded in the third quarter of 2002.

 

Non-interest expense amounted to $4,139,000 for the quarter ended September 30, 2003 as compared to $4,303,000 in the same period one year ago.  The Company’s efficiency ratio for the third quarter of 2003 amounted to 55.56% as compared to 57.95% one year ago.  Non-interest expense amounted to $12,126,000 for the nine month period ended September 30, 2003 as compared to $11,945,000 one year ago.  This represents an increase of $181,000 or 2%.  The efficiency ratio for the Company’s subsidiary, National Bank of the Redwoods was 51.29% for the quarter ended September 30, 2003 as compared to 50.33% one year ago.  For the nine months ended September 30, 2003, National Bank of the Redwood’s efficiency ratio was 51.59% as compared to 50.38% for the same period one year ago.  Salaries and employee benefits increased $120,000 and $314,000 for the three and nine months ended September 30, 2003 as compared to the same periods one year ago due to third quarter 2003 expenses associated with the Company’s executive search process and the impact of normal annual salary increases.  Occupancy expense decreased $56,000 and $21,000 for the three and nine months ended September 30, 2003 as compared to the same periods one year ago due the February 2003 move of the Company’s operations center.  Such move resulted in a decrease in the Company’s monthly rent expense by approximately $11,000.  Other expenses decreased $228,000 and

 

2



 

$112,000 for the three and nine months ended September 30, 2003 as compared to the same periods one year ago, primarily due to the third quarter 2002 costs incurred for legal and consulting fees associated with certain corporate activities, which included exploring strategic options for the Company and its Merchant Bankcard segment.

 

For the three and nine months ended September 30, 2003, the net income of the Company’s community banking segment was $1,688,000 and $5,103,000 on revenues of $6,087,000 and $17,963,000.  This compares to net income of $1,490,000 and $4,577,000 and revenues of $5,963,000 and $17,196,000 for the same periods one year ago.  The segment’s 13% and 11% improvement in net income for the three and nine months ended September 30, 2003, as compared to the same periods in 2002, is primarily attributable to an increase in net interest income.  The net income of the Company’s bankcard segment was $397,000 and $1,179,000 for the three and nine months ended September 30, 2003 versus $468,000 and $1,353,000 in 2002.  The decrease in the segment’s net income for the three and nine months ended September 30, 2003 is primarily due to a decrease in merchant draft processing revenue and an increase in salaries and employee benefits expenses.  The increase in the unit’s salaries and employee benefits expense is due to a build-up in sales development personnel.  The merchant bankcard segment’s net income comprised 19% of the Company’s consolidated net income for the three and nine months ended September 30, 2003, compared to 24% and 23% of the Company’s consolidated net income for the three and nine months ended September 30, 2002.

 

In August 2001, the Company announced an authorization to repurchase 533,250 shares, as adjusted for the three-for-two stock split declared July 15, 2003.  To date, 525,900 shares have been repurchased under the current authorization, as adjusted for the three-for-two stock split declared July 15, 2003. Under the repurchase program, the Company plans to purchase shares from time to time on the open market and/or in privately negotiated transactions.

 

Total assets were $515,302,000 at September 30, 2003.  Common book value per share was $5.47.  The Company’s Tier 1 capital to average assets ratio was 6.58% as of September 30, 2003.

 

Redwood Empire Bancorp, through its principal operating subsidiary, National Bank of the Redwoods, provides diverse financial products and services.  The Company offers commercial banking services primarily to businesses and professionals in the North Coast counties of California.  The Company’s business strategy includes the development of fee-based products and services which will provide insulation to the Company’s results from changes in interest rates.

 

Except for historical information contained herein, the statements contained in this press release, including statements concerning future increases in the value of Redwood Empire Bancorp stock, are forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act or 1934, as amended.  These forward-looking statements are subject to risks and uncertainties. Actual results may differ materially from those set forth in or implied by forward-looking statements. These risks are described from time to time in Redwood Empire Bancorp’s Securities and Exchange Commission filings, including its Annual Reports on Form 10-K and quarterly reports on Form 10-Q. Redwood Empire Bancorp disclaims any intent or obligation to update these forward-looking statements.

 

 

(Tables to follow)

 

3



 

REDWOOD EMPIRE BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands except for earnings per share and share data)

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2003

 

2002

 

2003

 

2002

 

 

 

 

 

 

 

 

 

 

 

Total interest income

 

$

7,538

 

$

7,806

 

$

22,688

 

$

22,949

 

Total interest expense

 

1,755

 

2,535

 

5,697

 

7,366

 

Net interest income

 

5,783

 

5,271

 

16,991

 

15,583

 

Provision for loan losses

 

 

 

 

 

Net interest income after provision for loan losses

 

5,783

 

5,271

 

16,991

 

15,583

 

Service charges on deposit accounts

 

260

 

288

 

782

 

910

 

Merchant draft processing, net

 

1,187

 

1,322

 

3,404

 

3,698

 

Loan servicing income

 

32

 

66

 

110

 

201

 

Net realized gains on investment securities available for sale

 

 

259

 

86

 

294

 

Other income

 

187

 

220

 

562

 

663

 

Total noninterest income

 

1,666

 

2,155

 

4,944

 

5,766

 

Salaries and employee benefits

 

2,466

 

2,346

 

7,008

 

6,694

 

Occupancy and equipment expense

 

475

 

531

 

1,567

 

1,588

 

Other

 

1,198

 

1,426

 

3,551

 

3,663

 

Total noninterest expense

 

4,139

 

4,303

 

12,126

 

11,945

 

Income before income tax expense

 

3,310

 

3,123

 

9,809

 

9,404

 

Income tax expense

 

1,225

 

1,165

 

3,527

 

3,474

 

Net income

 

$

2,085

 

$

1,958

 

$

6,282

 

$

5,930

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share:

 

 

 

 

 

 

 

 

 

Net income available for common stock shareholders

 

$

0.42

 

$

0.37

 

$

1.24

 

$

1.13

 

Weighted average shares

 

4,987,000

 

5,214,000

 

5,049,000

 

5,234,000

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share:

 

 

 

 

 

 

 

 

 

Net income available for common stock shareholders

 

$

0.41

 

$

0.36

 

$

1.21

 

$

1.09

 

Weighted average shares

 

5,141,000

 

5,400,000

 

5,171,000

 

5,424,000

 

 

 

 

 

 

 

 

 

 

 

Selected Ratios

 

 

 

 

 

 

 

 

 

Annualized Return on Average Total Equity

 

29.90

%

27.29

%

29.73

%

29.16

%

Annualized Return on Average Total Assets

 

1.60

%

1.54

%

1.62

%

1.63

%

 

Selected Balance Sheet Data

(In Thousands)

(Unaudited)

 

 

 

September 30,
2003

 

December 31,
2002

 

September 30,
2002

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Loans, Excluding Mortgage Loans Held for Sale

 

$

411,925

 

$

365,076

 

$

367,874

 

 

 

Allowance for Loan Losses

 

7,545

 

7,400

 

7,578

 

 

 

Total Assets

 

515,302

 

513,181

 

509,863

 

 

 

Total Deposits

 

454,887

 

453,093

 

452,014

 

 

 

Trust Preferred Debt

 

20,000

 

10,000

 

10,000

 

 

 

Total Shareholders’ Equity

 

27,062

 

28,807

 

28,811

 

 

 

Nonperforming Assets

 

2,682

 

2,794

 

1,419

 

 

 

 

4



 

REDWOOD EMPIRE BANCORP AND SUBSIDIARIES

BUSINESS SEGMENTS

(Unaudited)

(Dollars in thousands)

 

 

 

Three Months Ended
September 30, 2003

 

Three Months Ended
September 30, 2002

 

 

 

Community
Banking

 

Bankcard

 

Community
Banking

 

Bankcard

 

 

 

 

 

 

 

 

 

 

 

Total interest income

 

$

7,538

 

$

 

$

7,806

 

$

 

Total interest expense

 

1,747

 

8

 

2,529

 

6

 

Interest income (expense) allocation

 

(183

)

183

 

(147

)

147

 

Net interest income

 

5,608

 

175

 

5,130

 

141

 

Provision for loan losses

 

 

 

 

 

Service charges on deposit accounts

 

260

 

 

288

 

 

Merchant draft processing, net

 

 

1,187

 

 

1,322

 

Loan servicing income

 

32

 

 

66

 

 

Net realized gains on investment securities available for sale

 

 

 

259

 

 

Other income

 

187

 

 

220

 

 

Total noninterest income

 

479

 

1,187

 

833

 

1,322

 

Salaries and employee benefits

 

1,975

 

491

 

1,885

 

461

 

Occupancy and equipment expense

 

430

 

45

 

485

 

46

 

Other

 

1,004

 

194

 

1,217

 

209

 

Total noninterest expense

 

3,409

 

730

 

3,587

 

716

 

Income before income tax expense

 

2,678

 

632

 

2,376

 

747

 

Income tax expense

 

990

 

235

 

886

 

279

 

Net income

 

$

1,688

 

$

397

 

$

1,490

 

$

468

 

 

 

 

 

Nine Months Ended
September 30, 2003

 

Nine Months Ended
September 30, 2002

 

 

 

Community
Banking

 

Bankcard

 

Community
Banking

 

Bankcard

 

 

 

 

 

 

 

 

 

 

 

Total interest income

 

$

22,688

 

$

 

$

22,949

 

$

 

Total interest expense

 

5,667

 

30

 

7,342

 

24

 

Interest income (expense) allocation

 

(598

)

598

 

(479

)

479

 

Net interest income

 

16,423

 

568

 

15,128

 

455

 

Provision for loan losses

 

 

 

 

 

Service charges on deposit accounts

 

782

 

 

910

 

 

Merchant draft processing, net

 

 

3,404

 

 

3,698

 

Loan servicing income

 

110

 

 

201

 

 

Net realized gains on investment securities available for sale

 

86

 

 

294

 

 

Other income

 

562

 

 

663

 

 

Total noninterest income

 

1,540

 

3,404

 

2,068

 

3,698

 

Salaries and employee benefits

 

5,605

 

1,403

 

5,397

 

1,297

 

Occupancy and equipment expense

 

1,431

 

136

 

1,451

 

137

 

Other

 

2,958

 

593

 

3,088

 

575

 

Total noninterest expense

 

9,994

 

2,132

 

9,936

 

2,009

 

Income before income tax expense

 

7,969

 

1,840

 

7,260

 

2,144

 

Income tax expense

 

2,866

 

661

 

2,683

 

791

 

Net income

 

$

5,103

 

$

1,179

 

$

4,577

 

$

1,353

 

 

5


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