-----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, HHh/QFKilYSsCoZDCAuMvED1NubIDHxJ++icqfk1F92yMOaDDCICrLBMYeRt23DM Kc8HwTUuwSugLikvB6SgBw== 0001047469-97-005047.txt : 19971117 0001047469-97-005047.hdr.sgml : 19971117 ACCESSION NUMBER: 0001047469-97-005047 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CALIFORNIA INDEPENDENT BANCORP CENTRAL INDEX KEY: 0000948976 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 680349947 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-26552 FILM NUMBER: 97721902 BUSINESS ADDRESS: STREET 1: 1005 STAFFORD WAY STREET 2: P O BOX 1575 CITY: YUBA CITY STATE: CA ZIP: 95992 BUSINESS PHONE: 9166744444 MAIL ADDRESS: STREET 1: P O BOX 1575 STREET 2: 1005 STAFFORD WAY CITY: YUBA CITY STATE: CA ZIP: 95992 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC. 20549 (Mark One) ( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1997 ------------------ 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 0-265520 -------- CALIFORNIA INDEPENDENT BANCORP ------------------------------ (Exact name of registrant as specified in its charter) CALIFORNIA 68-0349947 ---------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1227 BRIDGE ST., SUITE C, YUBA CITY, CALIFORNIA 95991 ----------------------------------------------------- (Address of principal executive offices) (Zip Code) (916) 674-4444 -------------- (Registrant's telephone number, including area code) N/A --- (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 ---------------- ------------------ APPLICABLE ONLY TO CORPORATE ISSUERS: 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 September 30, 1997 ----- ------------------ Common stock, no par value 1,634,621 Shares This report contains a total of 23 pages -------- 1 PART I- FINANCIAL INFORMATION
ITEM 1 PAGE CALIFORNIA INDEPENDENT BANCORP AND SUBSIDIARIES FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS 3 CONSOLIDATED STATEMENTS OF INCOME FOR THREE MONTHS 4 CONSOLIDATED STATEMENTS OF INCOME FOR NINE MONTHS 5 CONSOLIDATED STATEMENTS OF CASH FLOWS 6 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7-8 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9-21 PART II- OTHER INFORMATION ITEM 6 Exhibits and Reports on Form 8K 22 SIGNATURES 23
2 PART I FINANCIAL INFORMATION ITEM 1 FINANCIAL STATEMENTS CALIFORNIA INDEPENDENT BANCORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AMOUNTS)
SEPTEMBER 30, DECEMBER 31, 1997 1996 ------------- ------------ ASSETS Cash and due from banks $ 18,521 $ 22,928 Federal funds sold 29,700 41,300 ------------- ---------- Total Cash and Equivalents 48,221 64,228 Investment securities: Available-for-sale securities, at fair value 14,256 11,374 Held-to-maturity securities, at amortized cost (fair value of $23,963 and $23,511 respectively) 23,839 23,289 Loans: Commercial 98,612 73,620 Consumer 2,237 2,984 Real Estate-mortgage 14,801 28,564 Real Estate-construction & land development 34,832 29,916 Leases and Other 32,752 16,016 ------------- ---------- Total loans 183,234 151,100 Less allowance for possible loan losses (4,146) (4,053) ------------- ---------- Net Loans 179,088 147,047 Premises and equipment, net 8,091 7,420 Accrued interest receivable and other assets 9,242 9,244 ------------- ---------- Total other assets 17,333 16,664 ------------- ---------- TOTAL ASSETS $ 282,737 $ 262,602 ------------- ---------- ------------- ---------- LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand, non-interest bearing $ 55,348 $ 55,117 Demand, interest bearing 36,573 33,659 Savings and Money Market 67,278 67,756 Time certificates 97,795 81,360 ------------- ---------- Total deposits 256,994 237,892 Accrued interest payable and other liabilities 3,660 2,824 ------------- ---------- TOTAL LIABILITIES 260,654 240,716 Shareholders' equity: Common stock, no par value; 20,000,000 shares authorized; 1,634,621 and 1,546,032 shares issued and outstanding at September 30, 1997 and at December 31, 1996, respectively 12,116 11,088 Retained earnings 9,974 10,816 Net unrealized gains (losses) on available-for-sale securities (7) (18) ------------- ---------- Total shareholders' equity 22,083 21,886 ------------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 282,737 $ 262,602 ------------- ---------- ------------- ----------
See accompanying notes to consolidated financial statements 3 CALIFORNIA INDEPENDENT BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
THREE MONTHS THREE MONTHS ENDED ENDED SEPTEMBER 30, 1997 SEPTEMBER 30, 1996 ------------------------------------------ Interest income: Interest and fees on loans $ 5,395 $ 4,805 Interest on investment securities 573 404 Interest on federal funds sold 194 103 ------------------- ------------------ Total interest income 6,162 5,312 ------------------- ------------------ Interest expense: Demand, interest bearing 326 280 Savings 627 596 Time certificates 1,447 993 Other 6 15 ------------------- ------------------ Total interest expense 2,406 1,884 ------------------- ------------------ Net interest income 3,756 3,428 Provision for possible loan losses - (80) ------------------- ------------------ Net interest income after provision for possible loan losses 3,756 3,348 ------------------- ------------------ Other income: Service charges 274 190 Net gain (loss) on securities transactions - 1 Other 1,184 485 ------------------- ------------------ Total other income 1,458 676 ------------------- ------------------ Other expenses: Salaries and benefits 1,988 1,336 Occupancy 203 137 Equipment 331 250 Advertising and promotion 85 56 Stationery and supplies 63 54 Legal and professional fees 95 83 Other operating expenses 811 667 ------------------- ------------------ Total other expenses 3,576 2,583 Earnings before income taxes 1,638 1,441 Income taxes 650 537 ------------------- ------------------ Net Income $ 988 $ 904 ------------------- ------------------ ------------------- ------------------ Primary earnings per share $ 0.63 $ 0.62 ------------------- ------------------ ------------------- ------------------ Weighted average shares outstanding 1,571,498 1,461,760 ------------------- ------------------ Fully Diluted: Earnings per share $ 0.55 $ 0.54 ------------------- ------------------ ------------------- ------------------ Weighted average shares outstanding 1,809,409 1,683,448 ------------------- ------------------ Cash dividend paid per share of common stock $ 0.11 $ 0.11 ------------------- ------------------ ------------------- ------------------
See accompanying notes to consolidated financial statements 4 CALIFORNIA INDEPENDENT BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
NINE MONTHS NINE MONTHS ENDED ENDED SEPTEMBER 30, 1997 SEPTEMBER 30, 1996 ---------------------------------------- Interest income: Interest and fees on loans $ 14,646 $ 12,753 Interest on investment securities 1,867 1,325 Interest on federal funds sold 1,026 924 ------------------- ------------------- Total interest income 17,539 15,002 ------------------- ------------------- Interest expense: Demand, interest bearing 1,038 775 Savings 1,945 1,799 Time certificates 3,975 2,772 Other 18 27 ------------------- ------------------- Total interest expense 6,976 5,373 ------------------- ------------------- Net interest income 10,563 9,629 Provision for possible loan losses (3,336) (180) ------------------- ------------------- Net interest income after provision for possible loan losses 7,227 9,449 ------------------- ------------------- Other income: Service charges 760 673 Net gain (loss) on securities transactions - 5 Other 2,853 1,226 ------------------- ------------------- Total other income 3,613 1,904 ------------------- ------------------- Other expenses: Salaries and benefits 5,585 3,758 Occupancy 527 415 Equipment 941 716 Advertising and promotion 309 270 Stationery and supplies 242 191 Legal and professional fees 232 189 Other operating expenses 2,081 1,751 ------------------- ------------------- Total other expenses 9,917 7,290 Earnings before income taxes 923 4,063 Income taxes 311 1,585 ------------------- ------------------- Net Income $ 612 $ 2,478 ------------------- ------------------- ------------------- ------------------- Primary earnings per share $ 0.39 $ 1.70 ------------------- ------------------- ------------------- ------------------- Weighted average shares outstanding 1,556,873 1,453,404 ------------------- ------------------- Fully Diluted: Earnings per share $ 0.34 $ 1.47 ------------------- ------------------- ------------------- ------------------- Weighted average shares outstanding 1,798,145 1,688,438 ------------------- ------------------- Cash dividend paid per share of common stock $ 0.33 $ 0.33 ------------------- ------------------- ------------------- -------------------
See accompanying notes to consolidated financial statements 5 CALIFORNIA INDEPENDENT BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996 (UNAUDITED) (IN THOUSANDS)
SEPTEMBER 30, SEPTEMBER 30, 1997 1996 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 612 $ 2,187 Adjustments to reconcile net income to net cash provided by operating activities- Depreciation and amortization 718 513 Provision for possible loan losses 3,336 775 Provision for deferred taxes 9 (1,023) (Increase) decrease in assets- Interest receivable (455) (616) Other assets 336 1,050 Increase (decrease) in liabilities- Interest payable 329 638 Other liabilities 507 (60) ------------- ------------- Net cash provided by operating activities 5,392 3,464 CASH FLOWS FROM INVESTING ACTIVITIES: Net (increase) decrease in loans (35,444) (9,015) Purchase of investments (18,100) (11,660) Proceeds from maturity of HTM Securities 11,406 5,965 Proceeds from sales/maturity of AFS Securities 3,273 14,605 Proceeds from sales of other real estate owned 178 543 Purchases of premises and equipment (1,388) (791) ------------- ------------- Net cash used for investing activities (40,075) (353) CASH FLOWS FROM FINANCING ACTIVITIES: Net increase in noninterest bearing deposits 231 (7,734) Net increase in interest bearing deposits 18,871 12,334 Cash dividends (512) (457) Stock options exercised 101 122 Cash paid in lieu of fractional shares (15) (9) ------------- ------------- Net cash provided by financing activities 18,676 4,256 NET INCREASE (DECREASE) (16,007) 7,367 ------------- ------------- CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 64,228 22,579 ------------- ------------- CASH AND CASH EQUIVALENTS, END OF PERIOD 48,221 29,946 ------------- ------------- ------------- -------------
6 CALIFORNIA INDEPENDENT BANCORP AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - BASIS OF PRESENTATION In the opinion of the Company, the unaudited consolidated financial statements, prepared on the accrual basis of accounting, contain all adjustments (consisting of only normal recurring adjustments) which are necessary to present fairly the financial position of the Company and its subsidiaries at September 30, 1997 and December 31, 1996, and the results of its operations for the periods ended September 30, 1997 and 1996, respectively. Certain information and footnote disclosures normally presented in financial statements prepared in accordance with generally accepted accounting principles have been omitted. The results of operations for the period ended September 30, 1997 are not necessarily indicative of the operating results for the full year ending December 31, 1997. NOTE 2 - CONSOLIDATION The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary Feather River State Bank, and EPI Leasing Company Inc., a subsidiary of Feather River State Bank. All material intercompany accounts and transactions have been eliminated in consolidation. . NOTE 3 - LOANS TO DIRECTORS In the ordinary course of business, the Company makes loans to directors of the Company, which on September 30, 1997, amounted to a total of approximately $7,419,636. NOTE 4 - COMMITMENTS & CONTINGENT LIABILITIES In the normal course of business, there are outstanding various commitments and contingent liabilities, such as commitments to extend credit and letters of credit, which are not reflected in the financial statements. Management does not anticipate any material loss as a result of these transactions. NOTE 5 - NET INCOME PER SHARE Net Income per share is computed using the weighted average number of shares of common stock outstanding (as adjusted retroactively to reflect the 5% stock dividends paid on August 16, 1996 and September 12, 1997). 7 NOTE 6 - CASH DIVIDENDS The Company paid an eleven cent per share dividend in February 1997, May 1997 and August 1997, respectively. NOTE 7- EARNINGS PER SHARE Effective December 31, 1997, the Bank is required to adopt Financial Accounting Standards Board No. 128, Earnings Per Share (EPS). Among other things, the new standard requires replacement of primary EPS with basic EPS. Basic EPS is computed by dividing reported earnings available to common stockholders by weighted average shares outstanding. No dilution for any potentially dilutive securities is included. Fully diluted EPS, now called diluted EPS, is still required. The Bank has not quantified the effect of applying the new standard. 8 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW OF CHANGES IN THE FINANCIAL STATEMENTS Net income for the third quarter was $988,000 for fully-diluted earnings of $.55 per share, representing an increase of 9.3% over the third quarter 1996, which saw net income of $904,000, or $.54 per share on a fully-diluted basis. Year-to-date, the nine months ending September 30, 1997, saw net income of $612,000, or $.34 per share on a fully-diluted basis as compared to the same period in 1996, at which time the Company reported net year-to-date earnings of $2,478,000, or $1.47 per share on a fully-diluted basis. During the second quarter of 1997, the Company determined that additional contributions to Loan Loss Reserves were required in order to recognize the increased risk exposure for a small number of sizable loans in its portfolio. Management's action resulted in a one -time $3,200,000 contribution to Loan Loss Reserves. As a result, the second quarter operating results showed a loss and year-to-date net income for 1997 over 1996 shows a decline. Total assets at September 30,1997, were $282,737,000, an increase of 7.7% over December 31, 1996, total assets of $262,602,000. Outstanding net loans were $179,088,000 at September 30, 1997, compared to $147,047,000 at December 31, 1996, an increase of $32,041,000 or 21.8%. The Company's investment portfolio at September 30, 1997, was $38,095,000, or 13.5% of total assets, an increase from $34,663,000 or 13.2% of total assets at December 31, 1996, as the Company shifted assets from overnight Federal Funds to longer term, higher yielding investments. At September 30, 1997, Federal Funds Sold were $29,700,000 as compared to $41,300,000 at December 31, 1996. Total deposits at September 30, 1997, were $256,994,000 compared to $237,892,000 at December 31, 1996, an increase of 8.0%. At September 30, 1997, interest-bearing deposits were $201,646,000, as compared to $182,775,000 at December 31, 1996, an increase of 10.3%. This increase was primarily due to an increase of $16,435,000 or 20.2% from December 31, 1996, to September 30, 1997, in Time Certificates of Deposit. This growth is attributed to the opening of the new Wheatland Branch and the Bank's aggressive marketing efforts and competitive rates. The total loan-to-deposit ratio was 71.3% at September 30, 1997, compared to 63.5% at December 31, 1996. This increase is the result of normal lending cycles of agricultural loans, real estate loans and the purchase of leases. 9 LOANS Total gross loans outstanding as of September 30, 1997 were $183,234,000 representing an increase of $32,134,000 or 21.27% over December 31, 1996. The increase is attributable to three principal events. 1. The Company's lease portfolio increased from $16,016,000 on December 31, 1996 to $32,752,000 on September 30, 1997 representing growth of 104.5%. The Company originates commercial and industrial equipment leases through its subsidiary EPI Leasing Company (EPI) located in Sacramento. EPI was acquired by the Company during the fourth quarter of 1996 and lease origination volume has increased substantially during the first nine months of 1997. One of the Company's loan portfolio management strategies has been to increase the lease portfolio in order to increase net interest margin and diversify the portfolio. 2. Agricultural and Commercial loans have increased $24,992,000 or 33.9% as of September 30, 1997, over December 31 1996. The Company provides a wide range of loan products to farmers and agri-businesses throughout its trade area. Agricultural loans are reported under the "Commercial Loans" category in the consolidated balance sheet. The increase is ascribed to increased market penetration in the Sacramento and San Joaquin Valleys. Agricultural and Commercial loan volume increased in concentration between September 30, 1997 and December 31, 1996. Agricultural loans as a percent of the Company's total loan portfolio increased from 49% to 62% between these two time periods. These two periods however, represent the highest point of the agricultural loans outstanding which occurs in September, and the lowest point of agricultural loans outstanding typically occurring in December. The fourth quarter is customarily the time when revenue for numerous crops are received and applied to loans outstanding. Despite the reflected increase due to timing, Management has made a conscious effort to minimize portfolio risk concentrations. 3. Real estate construction loans increased by $4,916,000 or 16.4% from December 31, 1996, nine months prior. The Company extends construction loans primarily to builders of single family houses. Loans are made to individual borrowers and to real estate developers. As a strategy to increase loan volume, the Company has attempted to diversify its construction loan activity into several new market areas. The Company originates construction loans from its Real Estate Department in Yuba City and its loan production offices in Chico, Roseville and Madera. The Company's efforts have resulted in increased market share in the Davis, Chico and greater Sacramento area markets. Construction loan growth has occurred primarily in these regions. 10 The Company lends primarily to small and medium sized businesses, small to large sized farmers and consumers within its market area, which is comprised principally of Sutter, Yuba, Colusa and Yolo counties and secondarily Butte, Glenn, Sacramento, Placer, Madera and Fresno counties. LOAN QUALITY The Company places loans on nonaccrual status if (1) principal or interest has been in default for 90 days or more, unless the loan is both well secured and in the process of collection; (2) payment in full of principal or interest is not expected; or (3) the financial condition of the borrower has significantly deteriorated. The table set forth below summarizes the composition of nonperforming loans as of September 30, 1997, December 31, 1996 and September 30, 1996.
-------------------------------------------------------------------------------------------------- ACCRUING LOANS PAST $ Amt. Change % of $ Amt. Change % of $ Amt. % of DUE 90 DAYS 9/30/97 Prior Per. Class 12/31/96 Prior Per. Class 9/30/96 Class OR MORE: -------------------------------------------------------------------------------------------------- Commercial 428.0 (57.5%) 1.5% 1,006 100.0% 3.9% 62 .2% Agricultural (-0-) (100.0%) 0.0% 981 509.3% 2.0% -0- 0.0% Real Estate 379.0 100.0% .7% (-0-) 220 .4% Leases 260.0 23.8% .8% 210 500.0% 1.3% 116 .6% Consumer 54.0 +100.0% 2.2% -------------------------------------------------------------------------------------------------- TOTAL 1,121 (49%) .6% 2,197 1020.9% 1.5% 399 .3% -------------------------------------------------------------------------------------------------- NONACCRUAL LOANS -------------------------------------------------------------------------------------------------- Commercial 1,221 692.8% 4.1% 154 340.0% 0.5% 192 .7% Agricultural 3,480 9842.9% 5.6% 35 (96.3%) 0.0% 417 .7% Real Estate 2,258 243.7% 4.0% 657 731.6% 1.2% 773 1.5% Leases (-0-) 0.0% 0.0% (-0-) 0.0% 0.0% -0- 0.0% Consumer (-0-) 0.0% 0.0% (-0-) 0.0% 0.0% -0- 0.0% -------------------------------------------------------------------------------------------------- TOTAL 6,959 722.6% 3.8% 846 (20.9%) 0.6% 1382 .9% -------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------- TOTAL NON- PERFORMING 8,080 165.5% 4.4% 3,043 140.6% 2.1% 1781 1.1% --------------------------------------------------------------------------------------------------
The trend in nonperforming loans has clearly escalated over the past year as nonperforming loans increased from 1.1% of the portfolio on September 30, 1996 to 4.4% of the portfolio on September 30, 1997. This trend is attributable to increased risk exposure present in five loan relationships. During the second quarter of 1997, the Company identified increased credit risk exposure in four large loan relationships and thirteen leases. Management elected to entirely charge off twenty assets with a book value of $1,144,077 and write-down four other assets in the aggregate 11 amount of $1,980,435. The partially charged-off loans have been written down to an estimate of the remaining collateral value. For the nine months ending September 30, 1997, the Company charged off $3,200,000 while the total charge-offs for all of 1996 were $327,000. As a result, Management believes that a low loss exposure rests in the remaining nonperforming loans. Progress has been made during the first nine months of 1997. Many of the nonperforming loans are now operating under either Workout Agreements, Restructure Agreements or Liquidation Agreements. All of these loans are in the process of collection. Management projects some progress toward the reduction of nonperforming assets by year end 1997. However, the Company is posed with lengthy solutions with a number of their larger workout loans due to the complex nature of the credits. The overall duration of these workouts is therefore difficult to predict. As a result, Management projects a higher level of nonperforming loans (compared to historical amounts) in the forthcoming two to three quarters. Management's decision to charge down nonperforming loans, during the second quarter, significantly reduced the Company's Allowance for Loan Loss Reserves. Instead of rebuilding the reserve account over a period of time, Management elected to make a contribution to Loan Loss Reserves of $3,200,000 during the second quarter of 1997. As a result, the Company posted second quarter 1997 losses of $1,193,000 and six month year to date net loss of $375,000. Third quarter profitability of $988,000 has restored the nine month year to date net income to $612,000. The Company uses the allowance method in providing for possible loan losses. Loan losses are charged to the allowance for possible loan losses and recoveries are credited to it. The allowance for loan losses at September 30, 1997 was $4,146,000, an increase of $93,000 from December 31, 1996. The allowance equates to 2.3% of the Bank's outstanding loans at September 30, 1997. Management believes that the total allowance for loan losses is adequate to cover potential losses in the loan portfolio. While Management uses available information to provide for loan losses, future additions to the allowance may be necessary based on changes in economic conditions and other factors. The allowances and loss estimates are reviewed constantly, and adjustments, as necessary, are charged to operations in the period in which they become known. Additions to the allowance for loan losses are made by provisions for possible loan losses. The provision for possible loan losses is charged to operating expense and is based upon past loan loss experience and estimates of potential loan losses which, in Management's judgment, deserve current recognition. Other factors considered by Management include growth, composition and overall quality of the loan portfolio, review of specific problem loans and current economic conditions that may affect the borrower's ability to repay the loan. Actual losses may vary from current estimates. The estimates are reviewed constantly, and 12 adjustments, as necessary, are charged to operations in the period in which they become known. In addition to the above, the Company holds real estate properties as "Other Real Estate Owned" (OREO) recorded at $927,000 at September 30, 1997. In all cases, the amount recorded on the books is the lesser of the loan balance or the fair market value obtained from a current appraisal. Therefore, any identified losses have already been recognized. The Bank is in the process of marketing the OREO properties. 13 RESULTS OF OPERATIONS Three months ended September 30, 1997 compared with Three months ended September 30, 1996 During the three-month period ending September 30, 1997, the Company showed a net income of $988,000, an increase of $84,000 over the same period in 1996. Net interest income before provisions for loan losses increased from $3,428,000 for the three months ended September 30, 1996, to $3,756,000 for the same period in 1997, an increase of $328,000 or 9.6%. This additional income is partially due to an increase of 15.3% in average outstanding loans during the third quarter of 1997 over the same period in 1996. In addition, the average prime rate was .25% higher in the third quarter of 1997 over the same period in 1996. Other income increased by $782,000 over the same period in 1996, mostly as the result of increased commission and fees on leases earned by the Bank's subsidiary, EPI Leasing Company. In addition the Company recognized an increase in loan servicing fee income, brokered loan fee income and fee income generated from the bank's alternative financial investment services. Other expenses for the three months ended September 30, 1997, were $3,576,000, an increase of $993,000 over the same period in 1996, mostly due to increases in salaries and benefits. A major contributor to this increase was the purchase of EPI Leasing Company and the opening of a new branch in Wheatland, California, in March 1997. In addition, the Bank opened a new loan production office in Madera, California, in March 1997. The yield on average earning assets for the three-month period ended September 30, 1997, compared to the same period in 1996, is set forth in the following table (in thousands except for percentages):
Three months ended Three months ended September 30, 1997 September 30, 1996 Average loans outstanding $ 195,101 $ 169,271 Average yields 11.06% 11.35% Amount of interest & fees earned $ 5,395 $ 4,805 Average prime rate 8.50% 8.25%
14 A large portion of the Company's loan portfolio is based upon the Bank's reference rate, adjusted on a daily basis so that rate changes have an immediate effect on the loan interest yield. The Bank's reference rate closely tracks the prime rate. Rates and amounts paid on average deposits, including noninterest-bearing deposits for the three-month period ended September 30, 1997, compared to the same period in 1996, are set forth in the following table (in thousands except for percentages):
Three months ended Three months ended September 30, 1997 September 30,1996 Average deposits outstanding $ 250,167 $ 199,898 Average rates paid 3.84% 3.74% Amount of interest paid or accrued $ 2,400 $ 1,869
The following table summarizes the principal elements of operating expenses and discloses the increases (decreases) and percent of increases (decreases) for the three-month period ended September 30, 1997 and 1996 (in thousands except for percentages):
Three months ended September 30, 1997 Increase (Decrease) 1997 over 1996 1997 1996 ------------------------------------------------------------- Salaries and benefits $ 1,988 $ 1,336 $ 652 48.8% Occupancy 203 137 66 48.2% Equipment 331 250 81 32.4% Advertising and promotion 85 56 29 51.8% Stationery & supplies 63 54 9 16.7% Legal and professional fees 95 83 12 14.5% Other operating expenses 811 667 144 21.6% ------------------------------------------------------------- Total other expenses $ 3,576 $ 2,583 $ 993 38.4% ------------------------------------------------------------- -------------------------------------------------------------
Applicable income taxes for the three-month period ended September 30, 1997, were $650,000, as compared to the September 30, 1996 amount of $537,000. 15 RESULTS OF OPERATIONS Nine months ended September 30, 1997 compared with Nine months ended September 30, 1996 Year-to-date, the nine months ending September 30, 1997, saw net income of $612,000, or $.34 per share on a fully-diluted basis as compared to the same period in 1996, at which time the Company reported net year-to-date earnings of $2,478,000, or $1.47 per share on a fully-diluted basis. During the second quarter, the Bank determined that additional contributions to loan loss reserves were required to recognize the increased risk exposure for a small number of sizable loans in its portfolio. This action resulted in a second quarter loss of ($1,193,440), which, despite improved first and third quarter earnings, depressed earnings for the nine months ending September 30, 1997. Net interest income before provisions for loan losses increased from $9,629,000 for the nine months ended September 30, 1996 to $10,563,000 for the same period in 1997, an increase of $934,000. This additional income is partially due to an increase of 19.3% in average outstanding loans during the third quarter of 1997 over the same period in 1996. In addition, the average prime rate was .17% higher at the end of the third quarter of 1997 over the same period in 1996. Other income increased by $1,709,000 over the same period in 1996, mostly as the result of increased commission and fees on leases earned by the Bank's subsidiary, EPI Leasing Company. In addition the Company recognized an increase in loan servicing fee income, brokered loan fee income and fee income generated from the bank's alternative financial investment services. Other expenses for the nine months ended September 30, 1997, were $9,917,000, an increase of $2,627,000 over the same period in 1996, mostly due to increases in salaries and benefits and occupancy and equipment. A major contributor to this increase was the purchase of EPI Leasing Company and the opening of a new branch in Wheatland, California, in March 1997. In addition, the Bank opened a new loan production office in Madera, California in March 1997. 16 The yield on average earning assets for the nine-month period ended September 30, 1997, compared to the same period in 1996, is set forth in the following table (in thousands except for percentages):
Nine months ended Nine months ended September 30, 1997 September 30, 1996 Average loans outstanding $ 175,596 $ 147,214 Average yields 11.12% 11.55% Amount of interest & fees earned $ 14,646 $ 12,753 Average prime rate 8.42% 8.25%
A large portion of the Company's loan portfolio is based upon the Bank's reference rate, adjusted on a daily basis so that rate changes have an immediate effect on the loan interest yield. The Bank's reference rate closely tracks the prime rate. Rates and amounts paid on average deposits, including noninterest bearing deposits for the nine-month period ended September 30, 1997, compared to the same period in 1996, are set forth in the following table (in thousands except for percentages):
Nine months ended Nine months ended September 30, 1997 September 30,1996 Average deposits outstanding $ 243,566 $ 194,702 Average rates paid 3.82% 3.66% Amount of interest paid or accrued $ 6,976 $ 5,346
17 The following table summarizes the principal elements of operating expenses and discloses the increases (decreases) and percent of increases (decreases) for the nine- month periods ended September 30, 1997 and 1996, respectively (in thousands except for percentages):
Nine months ended September 30, Increase (Decrease) 1997 over 1996 1997 1996 --------------------------------------------------- Salaries and benefits $ 5,585 $ 3,758 $ 1,827 48.6% Occupancy 527 415 112 27.0% Equipment 941 716 225 31.4% Advertising and promotion 309 270 39 14.4% Stationery & supplies 242 191 51 26.7% Legal and professional fees 232 189 43 22.8% Other operating expenses 2,081 1,751 330 18.8% --------------------------------------------------- Total other expenses $ 9,917 $ 7,290 $ 2,627 36.0% --------------------------------------------------- ---------------------------------------------------
The increases in salaries and benefits resulted from normal salary increases and increased staffing for the opening of the new Wheatland Branch and the addition of the employees at EPI Leasing Company, the Bank's subsidiary. Additional staff has also been added to the new office location in Marysville, California and new loan production office in Madera, California. The Company employed 191 full-time equivalent employees on September 30, 1997, compared to 179 on December 31, 1996, and 153 on September 30, 1996. The increase in occupancy and equipment expense over 1996 is attributable to the purchase, relocation and remodeling of a new building for the Bank's Marysville Branch which opened in the second quarter of 1996, the opening of the Bank's new Wheatland Branch, and the addition of the Bank's subsidiary, EPI Leasing Company. In addition, the Company purchased Automated Teller Machines (ATM's) for each of its seven branches. The Bank also purchased a bank building in Yuba City to provide much needed space for its Residential and Ag Real Estate Departments and also installed walk-up and drive-up ATM's at the new Real Estate Loan Center. In addition, during the second quarter of 1997, the Company remodeled and relocated its Administrative Office to a complex owned by the Company. Applicable income taxes for the nine-month period ended September 30, 1997, were $311,000 as compared to the September 30, 1996, amount of $1,585,000. The decrease of $1,274,000 was attributed to a tax credit during the second quarter of 1997 as a result of a loss recognized during that quarter. 18 LIQUIDITY During the first two quarters and in to the third quarter of each year, the Bank tends to have excess liquidity. The Bank's seasonal agricultural loan demand tends to challenge the Bank's liquidity position beginning in the second quarter and continuing into the third quarter of each year. The Bank's liquid assets consist of cash and due from banks, federal funds sold and investment securities with maturities of one year or less (exclusive of pledged securities). The Bank has formal and informal borrowing arrangements with the Federal Reserve Bank and its correspondent bank to meet unforeseen deposit outflows or seasonal loan funding demands. As of September 30, 1997, and December 31, 1996, respectively, the Bank had no balances outstanding on these lines. The Bank has also entered into an agreement with Lehman Brothers for a standby short-term loan secured by U.S. Government and Agency Obligations in the Bank's investment portfolio, in order to fund any liquidity needs not met by other sources of funding as warranted by loan demand. RATE SENSITIVITY On a monthly basis, the Bank tracks its RSA's (Rate Sensitive Assets) and RSL's (Rate Sensitive Liabilities) and calculates the difference between the two (GAP) as a percentage of total assets for various time horizons. The Bank's goal is to maintain a cumulative one year GAP of between -10% and +10%. The September 30, 1997 one-year GAP was -3.8%. Since this figure is negative, it means that when interest rates change, more RSL's will reprice than RSA's over a one-year period. If interest rates go up, the Bank's net interest margin will decrease, if interest rates go down, it will increase. On September 30, 1997, the Bank's cumulative 90-day GAP was +5.7% which means that an increase in rates would have a positive effect on earnings and a decrease in interest rates in the next 90 days would have a negative effect on earnings. 19 CAPITAL RESOURCES Total shareholders' equity on September 30, 1997, increased by $197,000 over December 31, 1996, total shareholders' equity of $21,886,000. The Company is subject to capital adequacy guidelines issued by federal regulators. These guidelines are intended to reflect the degree of risk associated with both on and off-balance sheet items. Financial institutions are expected to comply with a minimum ratio of qualifying total capital to risk-weighted assets of 8%, at least half of which must be in Tier 1 Capital. In addition, federal agencies have adopted a minimum leverage ratio of Tier 1 Capital to total assets of 4%, which is intended to supplement risk-based capital requirements and to ensure that all financial institutions continue to maintain a minimum level of core capital. As can be seen by the following tables, the Company exceeded all regulatory capital ratios on September 30, 1997, and on December 31, 1996:
RISK-BASED CAPITAL RATIO AS OF SEPTEMBER 30, 1997 - ------------------------------------------------------------------------------- Company Bank (Dollars in thousands) Amount Ratio Amount Ratio - ------------------------------------------------------------------------------- Tier 1 Capital $ 21,866 8.90% $ 21,736 8.85% Tier 1 Capital minimum requirement 9,823 4.00% 9,820 4.00% ----------------------------------------------- Excess $ 12,043 4.90% $ 11,916 4.85% ----------------------------------------------- ----------------------------------------------- Total Capital 24,949 10.16% 24,818 10.11% Total Capital minimum requirement 19,647 8.00% 19,639 8.00% ----------------------------------------------- Excess $ 5,302 2.16% $ 5,179 2.11% ----------------------------------------------- Risk-adjusted assets $245,586 $245,488 ----------------------------------------------- ----------------------------------------------- LEVERAGE CAPITAL RATIO Tier 1 Capital to quarterly $ 21,866 7.91% $ 21,736 7.87% average total assets Minimum leverage requirement 11,060 4.00% 11,051 4.00% ----------------------------------------------- Excess $ 10,806 3.91% $ 10,685 3.87% ----------------------------------------------- ----------------------------------------------- Total quarterly average assets $276,509 $276,269 -------- -------- -------- --------
20
RISK BASED CAPITAL RATIO AS OF DECEMBER 31, 1996 - ------------------------------------------------------------------------------- Company Bank (Dollars in thousands) Amount Ratio Amount Ratio - ------------------------------------------------------------------------------- Tier 1 Capital $ 21,813 11.31% $ 21,804 11.32% Tier 1 Capital minimum requirement 7,713 4.00% 7,708 4.00% ----------------------------------------------- Excess $ 14,100 7.31% $ 14,096 7.32% ----------------------------------------------- ----------------------------------------------- Total Capital 22,918 11.89% 24,225 12.57% Total Capital minimum requirement 15,426 8.00% 15,415 8.00% ----------------------------------------------- Excess $ 7,492 3.89% $ 8,810 4.57% ----------------------------------------------- Risk-adjusted assets $192,825 $192,693 ----------------------------------------------- ----------------------------------------------- LEVERAGE CAPITAL RATIO Tier 1 Capital to quarterly $ 21,813 8.82% $ 21,804 8.82% average total assets Minimum leverage requirement 9,891 4.00% 9,890 4.00% ----------------------------------------------- Excess $ 11,922 4.82% $ 11,914 4.82% ----------------------------------------------- ----------------------------------------------- Total quarterly average assets $247,274 $247,255 -------- -------- -------- --------
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 The future results of the Company's operations, the necessity of further provisions for its loan loss reserves, quality of its loan portfolio, and ability to pay future dividends constitute "forward-looking" information as defined by: (1) the Private Litigation Reform Act of 1995 ("Act"); and (2) releases made by the Securities and Exchange Commission ("SEC"). This cautionary statement is being made pursuant to the provisions of the Act with the express intention of obtaining the benefits of the "safe harbor" provisions of the Act. Investors are cautioned that any forward-looking statements made by the Company and its Management are not guarantees of future performance and that actual results may differ materially from those in the forward-looking statements as a result of, but not limited to, the following factors: the economic environment, particularly in the region in which the Company operates; competitive products and pricing; fiscal and monetary policies of the federal government; changes in government regulations affecting financial institutions, including regulatory fees and capital requirements; changes in prevailing interest rates; acquisitions and the integration of acquired businesses; credit risk management and asset/liability management; the financial and securities markets; and the availability of and costs associated with sources of liquidity. 21 PART II OTHER INFORMATION ITEM 6 EXHIBITS AND REPORTS ON FORM 8K (a) Exhibits 10.1 Change in control compensation agreement. (b) Reports on Form 8K No reports on Form 8K were filed during the quarter. 22 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. California Independent Bancorp Date November 2, 1997 /S/ Robert J. Mulder --------------------- -------------------------- Robert J. Mulder President/CEO Date November 2, 1997 /S/ Annette Bertolini --------------------- -------------------------- Annette Bertolini Chief Financial Officer 23 EX-10.1 2 EXHIBIT 10.1 CHANGE IN CONTROL COMPENSATION AGREEMENT This Change in Control Compensation Agreement ("Agreement") is entered into as of the first day of July 1, 1997 by and between FEATHER RIVER STATE BANK, a California banking corporation ("Bank"), CALIFORNIA INDEPENDENT BANCORP, a California corporation ("CIB") (collectively referred to herein as "Employer"), and ROBERT J. MULDER ("Executive"). Whereas, Executive has been employed by the Bank since March 1, 1980, and CIB since May 2, 1995. Executive currently serves as president and chief executive officer of the Bank and CIB; and Whereas, the Board of Directors of the Bank and CIB recognize Executive's contribution to both entities along with his experience, training and ability in the financial institution industry; and Whereas the Board of Directors of the Bank and CIB consider it to be in the best interest of the Bank and CIB to assure the continuation of Executive's employment in an executive capacity and to compensate Executive therefor; and Whereas, Executive is desirous of committing to serve Employer on the terms provided herein: NOW, THEREFORE, Employer and Executive agree as follows: 1. TERM AND OPERATION OF AGREEMENT. Subject to the provisions for termination as hereinafter provided, the term of this Agreement shall commence on the date hereof and shall continue in effect through July 2, 1998; PROVIDED, HOWEVER, that commencing on July 3, 1998 and each July 1 thereafter, the term of this Agreement shall automatically be extended for one additional year unless not later than March 30 of the preceding year, either party shall have given written notice that it does not wish to extend this Agreement; and PROVIDED, FURTHER, that notwithstanding any such notice by Employer not to extend, this Agreement shall continue in effect for a period of thirty (30) months beyond the term provided herein if a "Change in Control" of the Company (as hereinafter defined) shall have occurred during such term. 2. POSITION; SCOPE OF EMPLOYMENT. Executive is employed as the President and Chief Executive Officer of Bank and Bancorp and shall perform the customary duties of a person in that position with a California financial institution and such other duties as may, from time to time, be reasonably requested of him by the boards of directors of either Employer. 2.1. ENTIRE TIME AND EFFORT. Executive shall devote Executive's best efforts and such time and attention to the business of Employer as shall be necessary to perform Executive's duties and advance the best interest of Employer, and shall not, during the term of this Agreement, directly or indirectly, alone or as a member of a partnership, or as an officer, director or shareholder of any corporation (other than any which are owned by or affiliated with Employer) be engaged in any other business activity, whether or not such business activity is pursued for gaining profit or other pecuniary advantage, without the approval of Employer; but this shall not be construed as preventing Executive from (i) investing Executive's assets in such form or manner as will not require any services on the part of Executive in the operation of the affairs of the companies in which such investments are made, (ii) serving on the boards of directors of companies other than Employer and its affiliates, and/or (iii) engaging in public service and volunteer activities as long as they do not unreasonably interfere -1- with the performance of Executive's duties as set forth in this Agreement. In addition, Employer shall provide Executive with such executive perquisites as shall be determined from time to time by the Board or the proper committee of the Board. 2.2. RULES AND REGULATIONS. Executive agrees to observe and comply with Employer's rules and regulations as may be amended from time to time by Employer, and will carry out and faithfully perform such orders, directions and policies of Employer. 2.3. PLACE OF PERFORMANCE. In connection with Executive's employment by Employer, Executive shall be based at Employer's principal executive offices and shall not be required to be absent therefrom on travel status or otherwise an excessive or unreasonable amount of time in the aggregate in any calendar year. Employer shall not, without the written consent of Executive, relocate or transfer its principal executive offices to a location other than at the headquarters of a major segment of Employer's business. Employer will promptly pay (or reimburse Executive for) all reasonable moving expenses incurred by Executive relating to a change of Executive's principal residence in connection with any such relocation of Employer's principal executive offices, and will indemnify Executive against any loss realized (a) in the sale of Executive's principal residence in connection with any such change of residence (including, without limitation, (i) the difference, if any, between the fair market value of such residence, as determined by a licensed real estate appraiser, and the amount actually realized in the sale thereof, and (ii) the difference, if any, between the amount realized from the sale of the residence and the cost (including financing costs) of comparable housing at the new location), or (b) in the termination of lease pertaining to Executive's principal residence (including the difference, if any, between the amount of rent paid pursuant to the lease so terminated and that which would be paid for comparable housing at the new location). In no event shall the amount payable to Executive for moving expenses and loss realized in connection with a change in Executive's principal residence relating to a relocation of Employer's principal executive offices be less than the amount Executive would otherwise be entitled to receive under Employer's then existing policy relating to executive relocations. 3. FRINGE BENEFITS. The compensation provided for under this Agreement due to the change in control of Employer is granted as a fringe benefit to Executive and does not affect, amend, or modify any of Executive's rights or obligations under any benefit, pension or compensation plan, Executive stock ownership plan, savings and profit sharing plan, stock option plan, life insurance plan, medical insurance plan or health-and-accident plan in which Executive is participating, or in which Executive is entitled to participate, at the effective date hereof (or plans providing Executive with substantially similar benefits), including but not limited to his Executive Salary Continuation Plan with the Bank dated April 28, 1993, his Executive Salary Continuation Plan with the Bank dated February 4, 1997 (collectively, the "Salary Continuation Plans"), the 1996 and 1997 Bonus Plans (collectively, the "Incentive Compensation Plans"), the 1988 Feather River State Bank Employee Stock Ownership Plan, California Independent Bancorp 1989 Amended and Restated Stock Option Plan and the California Independent Bancorp 1996 Stock Option Plan (collectively, the "Stock Option Plans" and, together with the Salary Continuation Plans and Incentive Compensation Plans, the "Employer Plans"). 4. TERMINATION. 4.1. Executive's employment with Employer may be terminated prior to the expiration of the term of this Agreement, upon any of the following events: -2- 4.1.1. The written agreement of Employer and Executive; 4.1.2. Executive's death or disability; 4.1.3. By Employer for cause; 4.1.4. By Executive for good reason; 4.1.5. By Executive without good reason; 4.1.6. By Executive upon a change in control of Employer; 4.1.7. By either party at the option of either party and without prejudice to any other remedy to which either party may be entitled at law, in equity or under this Agreement, if either party: (a) Files a petition in bankruptcy court or is adjudicated a bankrupt; (b) Institutes or suffers to be instituted against him any procedure in bankruptcy court for reorganization or rearrangement of his financial affairs; (c) Has a receiver of his assets or property appointed because of insolvency; or (d) Makes a general assignment for the benefit of creditors. 4.2. TERMINATION BASED ON STATUTORY GROUNDS. This Agreement shall terminate immediately upon the occurrence of any of the following events, which events are described in sections 2290 and 2921 of the California Labor Code: (a) The occurrence of circumstances that make it impossible or impractical for the business of Employer to be continued; (b) The death of Executive; (c) The loss of Executive of legal capacity. This does not affect Executive's rights under Paragraph 6.3 of this Agreement; (d) The loss by Employer of legal capacity to contract; (e) The continued incapacity on the part of Executive under this Agreement, unless waived by Employer; or (f) The willful or permanent breach by Executive of the obligations owed to Employer. 4.3. DEFINITION OF DISABILITY. Termination by this Agreement based on Executive's "Disability" shall mean termination because of Executive's inability, either for a period exceeding sixty (60) consecutive days or for ninety (90) days accumulated during one (1) year, as determined by a qualified physician, and which qualifies Executive for benefits under Employer's long-term disability -3- policy, to perform in the usual manner the material duties usually and customarily pertaining to Executive's long-term employment, unless within thirty (30) days after Notice of Termination (as hereinafter defined) is given following such absence Executive shall have returned to the full time performance of Executive's duties. 4.4. DEFINITION OF CAUSE. Any of the following shall constitute "Cause" to terminate this Agreement: (i) willful or habitual breach of Executive's duties; (ii) fraud, including intentional material misrepresentation or concealment, by Executive to Employer or any others; (iii) theft or conversion by Executive; (iv) unauthorized disclosure or other use of Employer's trade secrets, customer lists or confidential information; (v) habitual misuse of alcohol or any nonprescribed drug or intoxicant; (vi) the willful engaging by Executive in conduct which is demonstrably and materially injurious to Employer, monetarily or otherwise; (vii) willful violation of any other standards of conduct as set forth in Employer's Executive Manual; (viii) incompetence; (ix) breach of fiduciary duty involving personal profit; (x) material breach of any of the terms of this Agreement; (xi) willful or negligent violation of any law (other than minor traffic violations or similar offenses), rule, regulation, cease-and-desist order or any other regulatory order or agreement Employer enters into with their banking regulatory agencies. In addition, Employer reserves the right to terminate this Agreement "for cause" in the event that any formal or informal actions are brought by any regulatory agency having jurisdiction to remove or suspend Executive from office, whether or not such actions have become final. Termination by Employer of Executive's employment for "Cause" shall mean termination upon any of the events constituting "Cause" as defined above (other than any such events resulting from Executive's incapacity due to physical or mental illness or from Executive's termination for Good Reason), after a demand for substantial performance is delivered to Executive by the Board which specifically identifies the manner in which the Board believes that Executive has not substantially performed Executive's duties. For purposes of this paragraph, no act, or failure to act, on Executive's part shall be considered "willful" unless done, or omitted to be done, by Executive not in good faith and without reasonable belief that Executive's action or omission was in the best interest of Employer. 4.5. DEFINITION OF GOOD REASON. "Good Reason" shall mean, without Executive's express written consent, any of the following: 4.5.1. The assignment to Executive of any duties inconsistent with Executive's position, duties and status with Employer immediately prior to a Change in Control of Employer; a substantial alteration in the nature or status of Executive's authority or responsibilities from those in effect immediately prior to a Change in Control of Employer; the failure to provide Executive with substantially the same perquisites which Executive had immediately prior to a Change in Control of Employer, including but not limited to an office and appropriate support services; or a change in Executive's titles or offices as in effect immediately prior to a Change in Control of Employer, or any removal of Executive from or any failure to re-elect Executive to any of such positions; 4.5.2. A reduction by Employer in Executive's Base Salary as in effect on the effective date of this Agreement or as the same may be increased from time to time; 4.5.3. Employer's requiring Executive to be based anywhere other than the metropolitan area in which Executive's office is located at the effective date of this Agreement, except -4- for required travel on Employer's business to an extent substantially consistent with Executive's present business travel obligation; 4.5.4. The failure by Employer to continue in effect any Employer Plan; the taking of any action by Employer which would adversely affect Executive's participation in or materially reduce Executive's benefit under any of such plans or deprive Executive of any material fringe benefit enjoyed by Executive, or to which Executive is entitled, at the effective date of this Agreement; or the failure by Employer to provide Executive with the number of paid vacation days to which Executive is entitled on the basis of years of service with Employer in accordance with Employer's normal vacation policy in effect on the date hereof; or 4.5.5. The failure by Employer to obtain the assumption of the agreement to perform this Agreement by any successor as contemplated in Section 6 hereof 4.6. DEFINITION OF CHANGE IN CONTROL. For purposes of this Agreement, a "Change in Control of Employer" shall mean (i) the sale, transfer or other exchange of the voting securities of either the Bank or CIB which would result in the ownership or control by any individual or entity of 40% or more of any class of voting security of the Bank or CIB; (ii) any transaction which results in the Bank or CIB being merged or consolidated with another financial institution or corporation that results in less than 60% of resultant bank or corporation's outstanding voting securities being owned in the aggregate by the former shareholders of the Bank or CIB; (iii) any transaction which results in the Bank or CIB substantially selling all of its assets to another financial institution or corporation which is not a wholly owned subsidiary or corporate affiliate of the Bank or CIB; or (iv) during any period of twenty-four (24) consecutive months, at least a majority of the board of directors of either the Bank or CIB ceases to consist of the same individuals who have served continuously on the respective Board since the beginning of such period or whose election, or nomination for election by the respective shareholders, were approved by a vote of at least two-thirds of the directors then still in office who have served continuously on the respective Board since the beginning of the period. 4.7. NOTICE OF TERMINATION. Any purported termination by Employer or by Executive for Good Reason, shall be communicated by written Notice of Termination to Employer hereto in accordance with Section 7 hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive's employment under the provision so indicated. 4.8. DATE OF TERMINATION. "Date of Termination" shall mean (i) if Executive's employment is terminated as a result of Executive's death, the date of death; (ii) if Executive's employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that Executive shall not have returned to the performance of Executive's duties on a full-time basis during such thirty (30) day period); and (iii) if Executive's employment is terminated for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by Employer for Cause shall not be less than thirty (30) days, and in the case of a termination by Executive for Good Reason shall not be more than sixty (60) days, from the date such Notice of Termination is given); provided that if within thirty (30) days after any Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties, by a binding and final arbitration award or by a final -5- judgment, order or decree of a court of competent jurisdiction (the time for appeal therefrom having expired and no appeal having been perfected); and provided further that the Date of Termination shall be extended by a notice of dispute only if such notice is given in good faith and the party giving such notice pursues the resolution of such dispute with reasonable diligence. 5. COMPENSATION UPON TERMINATION. 5.1. COMPENSATION FOLLOWING TERMINATION BASED ON EXECUTIVE'S DEATH, EXECUTIVE'S DISABILITY, EXECUTIVE'S RESIGNATION OTHER THAN FOR GOOD REASON, BY EMPLOYER FOR CAUSE, OR UPON AGREEMENT OF THE PARTIES. If this Agreement is terminated due to Executive's Death, or Executive's Disability, or Executive's resignation during the term of this Agreement for other than Good Reason, or Employer terminated this Agreement for Cause, or by written agreement between the parties, Employer shall have no further obligation to Executive to pay any compensation under this Agreement, except as may otherwise be provided by such written agreement. 5.2. TERMINATION FOLLOWING EXECUTIVE'S RESIGNATION FOR GOOD REASON PRIOR TO A CHANGE IN CONTROL. Executive shall be entitled to terminate Executive's employment for Good Reason, and in the event that such a termination occurs prior to a Change in Control, Employer shall have no further obligation to Executive to pay any compensation under this Agreement. Executive's right to terminate Executive's employment pursuant to this paragraph shall not be affected by Executive's incapacity due to physical or mental illness. 5.3. TERMINATION FOLLOWING EXECUTIVE'S RESIGNATION FOR GOOD REASON FOLLOWING A CHANGE IN CONTROL. Executive shall be entitled to terminate Executive's employment for Good Reason, and in the event that such a termination occurs following a Change in Control, Executive shall be entitled to the benefits provided in Section 5.4 below. Executive's right to terminate Executive's employment pursuant to this paragraph shall not be affected by Executive's incapacity due to physical or mental illness. 5.4. TERMINATION FOLLOWING A CHANGE IN CONTROL. If any of the events described in Paragraph 4.6 hereof constituting a Change in Control of Employer shall have occurred, Executive shall be entitled to the benefits provided in this Section 5.4 upon the subsequent termination of Executive's employment during the term of this Agreement unless such termination is (i) because of Executive's death or Disability, (ii) by Employer for Cause, or (iii) by Executive other than for Good Reason. 5.4.1. Employer shall pay Executive's full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given; 5.4.2. In lieu of any further salary payments to Executive for periods subsequent to the Date of Termination, Employer shall pay as severance pay to Executive, not later than the fifth day following the Date of Termination, a lump sum severance payment (together with the payments provided in Paragraphs 5.4.3 and 5.4.4, the "Severance Payments") equal to two and one-half (21/2) times the sum of (a) Executive's annual base salary at the highest rate in effect during the year immediately preceding the occurrence of the circumstances giving rise to the Notice of Termination given in respect thereof, and (b) the amount of any bonus paid to Executive and the amount paid to Executive pursuant to the Incentive Compensation Plans during the year immediately preceding that in which the Date of Termination occurs; -6- 5.4.3. Notwithstanding any provision of the Incentive Compensation Plans, Employer shall pay to Executive in one lump sum in cash not later than the fifth day following the Date of Termination, an amount equal to the sum of (A) any incentive compensation which has been allocated for the fiscal year preceding that in which the Date of Termination occurs but has not yet been paid, and (B) any award under the Incentive Compensation Plans which has not yet been paid for any period which has closed prior to the Date of Termination, and (C) a pro rata portion of the aggregate value of all contingent awards to Executive for all uncompleted periods under the Incentive Compensation Plans calculated by multiplying for each such award, (1) a fraction the numerator of which shall be the number of full months elapsed during the period for such award prior to the Date of Termination, and the denominator of which shall be the total number of months contained in such period, by (2) the amount of the award which would have been payable to Executive following completion of such period at the "fully competent" (or comparable) level of performance as described in the plan documents and the individual objective development worksheets. 5.4.4. In lieu of shares of common stock of CIB (the "Shares") issuable upon the exercise of options ("Options"), if any, granted to Executive under the Stock Option plans (which Options shall be canceled upon the making of the payment referred to below in this section 5.4.4), Executive shall receive in one lump sum in cash not later than the fifth day following the Date of Termination an amount equal to the difference between the cumulative exercise price of the Options and the higher of (a) the NASDAQ closing price of CIB stock on the Date of Termination; and (b) the actual price per share paid in connection with a change of control. 5.4.5. In the event that any payment or benefit received or to be received by Executive in connection with a Change in Control of Employer or the termination of Executive's employment, whether payable pursuant to the terms of this Agreement or any other plan, arrangement or agreement with Employer, its successors, any person whose actions result in a Change in Control or any corporation ("Affiliate") affiliated (or which as a result of the completion of the transactions causing a Change in Control will become affiliated) with the Employer within the meaning of section 1504 of the Internal Revenue Code of 1986, as amended (the "Code") (collectively with the Severance Payments, "Total Payments") would not be deductible (in whole or part) by Employer, an Affiliate or other person making such payment or providing such benefit, as a result of section 280G of the Code, the Severance Payments shall be reduced until no portion of the Total Payments is not deductible as a result of section 280G of the Code, or the Severance Payments are reduced to zero. For purposes of this limitation (A) no portion of the Total Payments the receipt or enjoyment of which Executive shall have effectively waived in writing prior to the date of payment of the Severance Payments shall be taken into account; (B) no portion of the Total Payments shall be taken into account which in the opinion of tax counsel selected by Employer's independent auditors and acceptable to Executive does not constitute a "parachute payment" within the meaning of section 280G(b)(2) of the Code; (C) the Severance Payments shall be reduced only to the extent necessary so that the Total Payments (other than those referred to in clauses (A) or (B)) in their entirety constitute reasonable compensation for services actually rendered within the meaning of section 280G(b)(4) of the Code, in the opinion of the tax counsel referred to in clause (B); and (D) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by Employer's independent auditors in accordance with the principles of sections 280G(d)(3) and (4) of the Code; and 5.4.6. Unless Executive is terminated for Cause, Employer shall maintain or cause to be maintained in full force and effect, for Executive's continued benefit, for a period of thirty (30) months, all health and welfare benefit plans to include life insurance, health insurance and dental -7- insurance, in which Executive participated or was entitled to participate immediately prior to the Date of Termination, provided that Executive's continued participation is possible under the general terms and provisions of such plans and programs. In the event that Executive's participation in any such plan or program is barred, Employer shall arrange to provide Executive with benefits substantially similar to those which Executive is entitled to receive under such plans and programs. At the end of such thirty (30) month period, Executive will be entitled to take advantage of any conversion privileges applicable to the benefits available under any such plans or programs. 5.5. In the event that Executive is terminated due to a Change in Control, the Executive shall not be required to mitigate the amount of any payment provided for in this Section 5 by seeking other employment or otherwise, nor shall the amount of any payment provided for in this Section 5 be reduced by any compensation earned by Executive as the result of employment by another employer after the Date of Termination. 5.6. The allocation between Bank and CIB for their respective share of Executive's compensation under this Agreement shall be determined by the Bank's board of directors, in its sole discretion. 6. SUCCESSORS: BINDING AGREEMENT. 6.1. Employer will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of Employer, by agreement in form and substance satisfactory to Executive, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that Employer would be required to perform it if no succession had taken place. Failure of Employer to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle Executive to compensation from Employer in the same amount and on the same terms as Executive would be entitled to hereunder if Executive terminated Executive's employment for Good Reason, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, the "Employer" shall mean Employer as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this section 6 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law, or otherwise. 6.2. This Agreement and all rights of Executive hereunder shall inure to the benefit of and be enforceable by Executive's personal or legal representatives, executors, administrators, successors, heirs, distributes, devises and legatees. If Executive should die while any amounts would still be payable to Executive hereunder if Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Executive's devisee, legatee, or other designee or, if there be no such designee, to Executive's estate. 7. NOTICES. Any notice under this Agreement shall be in writing, and any written notice or other document shall be deemed to have been duly given (i) on the date of personal service on the parties, (ii) on the third business day after mailing, if the document is mailed by registered or certified mail, (iii) one day after being sent by professional or overnight courier or messenger service guaranteeing one-day delivery, with receipt confirmed by the courier, or (iv) on the date of transmission if sent by telegram, telex, telecopy or other means of electronic transmission resulting -8- in written copies, with receipt confirmed. Any such notice shall be delivered or addressed to the parties at the addresses set forth below or at the most recent address specified by the addressee through written notice under this provision. Failure to give notice in accordance with any of the foregoing methods shall not defeat the effectiveness of notice actually received by the addressee. 8. RESOLUTION OF DISPUTES AND WAIVER OF JURY TRIAL. 8.1. DEFINITION OF DISPUTES. Any and all claims or controversies arising out of, relating to, or pertaining to this Agreement, Employer Plans, or the breach thereof ("dispute") shall be resolved as provided in this paragraph. The parties agree that no party shall have the right to sue any other party regarding a dispute except as provided in this paragraph. The parties further agree, to the fullest extent permitted by law, that each party waives any right to a trial by jury in any action, proceeding or counterclaim of any kind arising out of, relating to, or pertaining to this Agreement or the Employer Plans. 8.2. BINDING ARBITRATION. Any dispute between the parties shall be submitted to, and be conclusively determined by, binding arbitration in accordance with this paragraph. The provisions of this paragraph shall not preclude any party from seeking injunctive or other provisional or equitable relief in order to preserve the status quo of the parties pending resolution of the dispute, and the filing of an action seeking injunctive or other provisional relief shall not be construed as a waiver of that party's arbitration rights. Any party seeking such relief, must immediately file a motion for preliminary injunction and following a determination of the motion, the action shall be stayed pending completion of the arbitration. 8.3. SELECTION OF ARBITRATOR(S). The parties shall endeavor in good faith to select a single arbitrator. If they fail to do so within ten (10) days of the notice demanding arbitration, each party shall have an additional period of ten (10) days in which to appoint an arbitrator and those arbitrators within ten (10 ) days shall select an additional arbitrator. If any party fails to appoint an arbitrator or if the arbitrators initially selected by the parties fail to appoint an additional arbitrator within the time specified herein, any party may apply to have an arbitrator appointed for the party who has failed to appoint, or to have the additional arbitrator appointed in accordance with California Code of Civil Procedure section 1281.6. 8.4. LOCATION OF ARBITRATION. Any arbitration hearing shall be conducted in Sacramento County, California. 8.5. APPLICABLE LAW. The law applicable to the arbitration of any dispute shall be the law of the State of California, excluding its conflicts of law rules, its rules of civil procedure (unless otherwise incorporated in this paragraph) and its laws of evidence. 8.6. ARBITRATION PROCEDURES. Except as otherwise provided in this paragraph, the arbitration shall be governed by the following: (a) The parties shall submit to the arbitration all written, documentary or other evidence and oral testimony as is reasonably necessary for a proper resolution of the dispute. Copies of all written submittals shall be provided to the arbitrator(s) and all parties. Neither party shall be entitled to conduct discovery, and the discovery provisions in California Civil Code of Procedure sections 1283.1 and 1283.05 are waived. The arbitrator(s) shall conduct such hearings as they -9- consider necessary, may require the submission of briefs or points and authorities and may submit written questions to the parties. The parties shall respond to such questions in writing. If a question is addressed to an individual or fewer than all parties, copies of the question and the answer thereto shall be served on the other parties. (b) At the hearing, any relevant evidence may be presented by any party, and the formal rules of evidence applicable to judicial proceedings shall not govern. Evidence may be admitted or excluded in the sole discretion of the arbitrator(s). Except as provided above, the arbitration procedures set forth in the California Arbitration Act (Code Civ. Proc., Section 1282 et seq.) shall apply to the arbitration. (c) The arbitration shall proceed with due dispatch and a decision shall be rendered within sixty (60 ) days after the appointment of the final arbitrator. Such decision shall be in such written form that a judgment may be entered on it in any court of competent jurisdiction in the State of California. Any decision of the arbitrators shall be subject to the limitations set forth in paragraph 8.7. 8.7. LIMITATION ON SCOPE OF ARBITRATORS' AWARD OR DECISION. The arbitrators' decision shall pertain and be limited to the claims submitted to the arbitrators in the demand for arbitration. The arbitrators award may be reviewed by the appropriate superior and appellate courts for errors in law. Such errors in law would not include the arbitrator(s)' rulings concerning procedural or evidentiary matters, but may only be a review of errors in application of the substantive law at issue in the dispute. 8.8. COSTS OF ARBITRATION. Each party shall pay the costs of the arbitrator chosen by it and the losing party shall bear all other costs of arbitration. 8.9. ACKNOWLEDGMENT OF CONSENT TO ARBITRATION. NOTICE: BY EXECUTING THIS AGREEMENT YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION" PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY EXECUTING THIS AGREEMENT, YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR EXECUTION OF THIS AGREEMENT INDICATING YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY. BY INITIALING IN THE SPACE BELOW, YOU ARE INDICATING THAT YOU HAVE READ AND UNDERSTOOD THE FOREGOING AND UNDERSTAND THAT BY EXECUTING THIS AGREEMENT YOU AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THIS ARBITRATION PROVISION TO NEUTRAL ARBITRATION. -10- INITIALS OF CIB'S AUTHORIZED REPRESENTATIVE: --------- INITIALS OF THE BANK'S AUTHORIZED REPRESENTATIVE: --------- INITIALS OF EXECUTIVE: --------- 9. ACTIONS CONTRARY TO LAW. Nothing contained in this Agreement shall be construed to require the commission of any act contrary to law, and whenever there is any conflict between any provision of this Agreement and any statute, law, ordinance, or regulation, contrary to which the parties have no legal right to contract, then the latter shall prevail; but in such event, the provisions of this Agreement so affected shall be curtailed and limited only to the extent necessary to bring it within legal requirements. 10. ATTORNEYS' FEES; PREJUDGMENT INTEREST. If the services of an attorney are required by any party to secure the performance of this Agreement or otherwise upon the breach or default of another party to this Agreement, or if any judicial remedy or arbitration is necessary to enforce or interpret any provision of this Agreement or the rights and duties of any person in relation thereto, the prevailing party shall be entitled to reasonable attorneys' fees, costs and other expenses, in addition to any other relief to which such party may be entitled. Any award of damages following judicial remedy or arbitration as a result of the breach of this Agreement or any of its provisions shall include an award of prejudgment interest from the date of the breach at the maximum amount of interest allowed by law. If the services of an attorney are required by any party to secure the performance of this Agreement or otherwise upon the breach or default of another party to this Agreement, or if any judicial remedy or arbitration is necessary to enforce or interpret any provision of this Agreement or the rights and duties of any person in relation thereto, the prevailing party shall be entitled to reasonable attorneys' fees, costs and other expenses, in addition to any other relief to which such party may be entitled. Any award of damages following judicial remedy or arbitration as a result of the breach of this Agreement or any of its provisions shall include an award of prejudgment interest from the date of the breach at the maximum amount of interest allowed by law. 11. CHOICE OF LAW, JURISDICTION, VENUE. This Agreement is drawn to be effective in the State of California, and shall be construed in accordance with California law, excluding its conflict of laws rules. The exclusive jurisdiction and venue of any legal action by either party or arbitration under this Agreement shall be the County of Sacramento, California. 12. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. 13. AMENDMENT. The provisions of this Agreement may be modified at any time by agreement of the parties. Any such agreement hereafter made shall be ineffective to modify this Agreement in any respect unless in writing and signed by the parties against whom enforcement of the modification or discharge is sought. 14. WAIVER. Any of the terms or conditions of this Agreement may be waived at any time by the party entitled to the benefit thereof, but no such waiver shall affect or impair the right of the waiving party to require observance, performance or satisfaction either of that term or condition as it applies on a subsequent occasion or of any other term or condition. -11- 15. NONASSIGNABILITY. This Agreement shall not be assigned by any party without the prior written consent of the other parties. Any assignment contrary to the provisions of this Agreement shall be deemed a default under the Agreement, allowing the nondefaulting parties to exercise all remedies available under law. 16. NO ATTACHMENT. Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge or hypothecation or to execution, attachment, levy or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void and of no effect. 17. INDEPENDENT COVENANTS. All provisions herein concerning unfair competition and confidentiality shall be deemed independent covenants and shall be enforceable without regard to any breach by Employer unless such breach by Employer is willful and reckless. 18. ENTIRE AGREEMENT. This Agreement supersedes any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Employee by Employer and contains all of the covenants and agreements between the parties with respect to such employment in any manner whatsoever. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement or promise not contained in this Agreement shall be valid and binding. Any modification of this Agreement will be effective only if it is in writing signed by the party to be charged. 19. SUCCESSION. Subject to the provisions otherwise contained in this Agreement, this Agreement shall inure to the benefit of and be binding on the successors and assigns of Employer. 20. SEVERABILITY. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of the Agreement which can be given effect without the invalid provision shall continue in full force and effect and shall in no way be impaired or invalidated. 21. CAPTIONS. All paragraph captions are for reference only and shall not be considered in construing this Agreement. 22. AMBIGUITIES. The Agreement has been negotiated at arm's length between persons sophisticated and knowledgeable in the matters dealt with herein. Each party has cooperated and participated in the drafting and preparation of this Agreement. Any rule of law, including, without limitation, Civil Code Section 1654, or legal decision that would require interpretation of any ambiguities in this Agreement against the drafting party is not applicable and is waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the purpose of the parties. In the interpretation of this Agreement or any of its terms, both parties shall be construed to be equally responsible for the drafting and preparation of the same. 23. ADVICE OF LEGAL COUNSEL. Each party to this Agreement has consulted with, or had the opportunity to consult with, legal counsel concerning all paragraphs of this Agreement. Each party has read this Agreement, and has been fully advised by legal counsel with respect to the rights and -12- obligations under the Agreement, or has had the opportunity to obtain such advice. Each party is fully aware of the intent and legal effect of the Agreement, and has not been influenced to any extent whatsoever by any representation or consideration other than as stated herein. After consultation with and advice from, or the opportunity for consultation with and advice from, legal counsel, each and every party voluntarily enters into this Agreement. 24. NOT A CONTRACT OF EMPLOYMENT. This Agreement shall not be deemed to be a contract of employment between the parties, nor shall any provision restrict the right of Employer to discharge Executive,or restrict the right of Executive to terminate his employment. 25. BANKING REGULATORY AGENCIES. The obligations and rights of the parties hereunder are expressly conditioned upon the approval or non-disapproval of (i) this Agreement, and/or (ii) Executive, in the event such approvals are required, by those banking regulatory agencies which have jurisdiction over Employer. FEATHER RIVER STATE BANK: ------------------------------------------------- (By:___________________________) Address:________________________ _______________________________ CALIFORNIA INDEPENDENT BANCORP: ------------------------------------------------- (By:___________________________) Address:________________________ _______________________________ Executive: ------------------------------------------------- (Robert J. Mulder) Address:________________________ _______________________________ -13- EX-27 3 EXHIBIT 27 FDS
9 0000948976 CALIFORNIA INDEPENDENT BANCORP 1,000 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 18,521 0 29,700 0 14,256 23,839 23,963 183,234 4,146 282,737 256,994 433 3,107 120 0 0 12,116 9,967 282,737 14,646 1,867 1,026 17,539 6,958 6,976 10,563 3,336 0 9,917 923 923 0 0 612 0.39 0.34 8.38 6,329 1,121 500 6,696 4,053 3,260 17 4,146 4,146 0 0
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