SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2000
Commission File Number: 0-27784
HUMBOLDT BANCORP
(Exact name of small business issuer as specified in its charter)
California 93-1175446
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
701 Fifth Street
Eureka, California
(Address of principal executive offices)
95501
(Zip Code)
(707) 445-3233
(Issuer's telephone number, including area code)
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 twelve months (or for such shorter period that the
registrant was required to file such reports); and (2) has been subject to such
filing requirements for the past 90 days.
X Yes No
- -------- -------
Number of shares of common stock outstanding at March 31, 2000 is: 5,859,725
<PAGE>2
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements
The information required by Rule 10-01 of Regulation S-X is attached hereto as
Exhibit A.
Item 2 - Management's Discussion and Analysis of Financial Condition and Results
of Operation
The business operation of the Company is conducted through its wholly owned
subsidiaries, Humboldt Bank and Capitol Valley Bank, and a 50% interest with
Tehema Bancorp in Bancorp Financial Services, a company making consumer
automobile loans, and commercial equipment leases of less than $100,000 to small
businesses. The following discussion, presented on a consolidated basis,
analyzes the financial condition and results of operations of the Company for
the three month period ended March 31, 2000.
Changes in Financial Condition
During the three month period ended March 31, 2000, deposits increased $6.6
million or 1.7% to $385.2 million compared with $378.6 million at December 31
1999. The increase in deposits is the result of increases in non-interest
bearing demand deposits, and time certificates of deposit $100,000 and over,
offset by decreases in interest bearing demand deposits, other time deposits and
savings deposits. During the same period, total loans, excluding loans held for
sale, increased $15.7 million or 6.9% to $242.0 million compared with $226.3
million at December 31 1999. The increase in loans is the result of increases in
real estate loans, commercial, industrial and agricultural loans, and other
loans, offset by decreases in lease financing loans and consumer loans. The
increase in deposits and loans is attributable to internal growth and is not the
result of acquisitions. Loans held for sale decreased $1,897,000 or 88.4% to
$250,000 compared with $2,147,000 at December 31 1999.
At March 31, 2000, deposits had increased $95.6 million or 33.0% to $385.3
million from $289.7 million at March 31, 1999. Total loans, excluding loans held
for sale, had increased $53.3 million or 28.3% to $242.0 million from $188.7
million at March 31, 1999. The increase in deposits is attributable to internal
growth ($9.4 million), the opening of Capitol Valley Bank ($24.5 million) and
the retention of deposits acquired from two branches of California Federal Bank
($61.7 million). The increase in loans is attributable to internal growth ($37.0
million), and the opening of Capitol Valley Bank ($16.3 million) in March 1999.
Loans held for sale decreased $4,263,000 or 94.5% to $250,000 compared with
$4,513,000 at March 31, 1999
Investment securities decreased $12.5 million or 10.8% to $102.9 million
compared with $115.4 million at December 31, 1999, and federal funds sold
increased $19.7 million or 92.1% to $41.1 million compared with $21.4 million at
December 31 1999. The decrease in investment securities is mainly attributable
to an increase in loan funding. The increase in federal funds sold was in
anticipation of the cash purchase of Capitol Thrift and Loan and of deposit
withdrawals related to IRS taxes due in April 2000.
<PAGE>3
At March 31, 2000, investment securities had increased $26.4 million or 34.5% to
$102.9 million from $76.5 million at March 31, 1999. Federal funds sold had
increased $32.0 million or 351.6% to $41.1 million from $9.1 million at March
31, 1999. The increase in investment securities and federal funds sold is
attributable to the internal growth, the opening of Capitol Valley Bank, and the
retention of the deposits acquired from the two branches of California Federal
Bank offset by the increase in loans attributable to internal growth and the
opening of Capitol Valley Bank in March 1999.
During the three month period ending March 31, 2000, past due and non-accrual
loans increased 0.4 million or 13.3% to $3.4 million (0.8% of total assets),
compared with $3.0 million (0.7% of total assets) at December 31, 1999.
At March 31, 2000, past due and non-accrual loans had increased $.5 million or
17.2% to $3.4 million (0.8% of total assets) from $2.9 million (0.9% of total
assets) at March 31, 1999.
The Company's allowance for loan losses at March 31, 2000, was 1.6% of loans and
leases compared with 1.5% at December 31, 1999, and 1.6% at March 31, 1999.
Earnings Summary
During the quarter ended March 31, 2000, net income increased $167,000 to
$1,164,000 or $0.22 per share (diluted $0.20), compared with net income of
$997,000 or $0.20 per share (diluted $0.19) in the same quarter a year ago. This
increase is attributed to an increase in interest income of $2,081,000 or 36.4%,
an increase in non-interest income of $2,730,000 or 71.5%, an increase in
Bancorp Financial Services income of $10,000 or 12.7%, offset by an increase in
interest expense of $1,001,000 or 55.9%, an increase in provision for loan
losses of $239,000 or 75.2%, an increase in non-interest expense of $3,377,000
or 56.4%, an increase in income taxes of $17,000 or 3.2%, and a loss on sale of
securities of $20,000 or 333.3%.
Net Interest Income
During the quarter ended March 31, 2000, total interest income increased
$2,081,000 or 36.4% to $7,804,000 compared with $5,723,000 the prior year.
During the same period, total interest expense increased $1,001,000 or 55.9% to
$2,793,000 compared with $1,792,000 the prior year. Net interest income for the
quarter ended March 31, 2000, was $5.0 million compared with $3.9 million the
prior year. Average loans and leases as a percentage of average earning assets
was 64.2% during the quarter ended March 31, 2000, compared to 64.3% at December
31, 1999, and 68.0% at March 31, 1999. The average balance of other earning
assets as a percentage of average earning assets was 35.8% during the quarter
ended March 31, 2000, compared to 35.7% at December 31, 1999, and 32.0% at March
31, 1999.
<PAGE>4
Provision for Loan Losses
The Company maintains its allowance for loan losses at a level considered
appropriate by management to provide for known and inherent risks in the loan
portfolio. This consideration includes an evaluation of various factors
affecting the collectability of loans, including current and projected economic
conditions, past credit experience and a periodic review of the Company's loan
portfolio. The Company recorded a provision to the allowance for loan losses for
the three month period ended March 31, 2000, of $557,000 compared to $318,000
for the same period in 1999. Loans charged-off for the three-month period ended
March 31, 2000, were $129,000 compared to $310,000 for the same period in 1999.
Recoveries for the three-month period ended March 31, 2000 and 1999, were
$20,000 and $32,000 each.
Non-Interest Income
Non-interest income consists of gain/loss on sale of loans and fixed assets,
service charges on deposit accounts and other service charges, commissions and
fees including Lease Department, Merchant BankCard Department and Issuing
BankCard Department income. During the quarter ended March 31, 2000, income from
these sources increased $2.7 million or 71.1% to $6.5 million compared with $3.8
million in 1999. The increase was primarily attributable to an increase in
Merchant BankCard Department income of $2,798,000, and a gain in service charges
on deposit accounts of $78,000, offset by a decrease in Lease Department income
of $104,000.
Non-Interest Expense
During the quarter ended March 31, 2000, non-interest expenses increased $3.4
million or 56.7% to $9.4 million compared with $6.0 million in 1999. The
increase was due in part to increased personnel expenses of $833,000, Premises
and Fixed asset expense of $220,000, core deposit intangible expense of $96,000,
outside consulting expense of $58,000, legal expense of $57,000, and merchant
bankcard department expense of $2,204,000. These increases were partially offset
by a decrease in office supply expense of $52,000.
Number of Employees
At the quarter ended March 31, 2000, the Company had a total of 321 full-time
equivalent employees, compared to 318 and 257 full-time equivalent employees at
December 31, 1999, and March 31, 1999, respectively.
Capital Resources
Management seeks to maintain adequate capital to support anticipated asset
growth and credit risks and to ensure that the Company meets all regulatory
capital requirements.
The Company is required to maintain certain regulatory minimum capital ratios.
The following table outlines these ratios at March 31, 2000:
<PAGE>5
REQUIRED COMPANY'S
MINIMUM ACTUAL
-------- ---------
TIER 1 6.00 14.51
TOTAL CAPITAL 10.00 15.74
LEVERAGE 5.00 10.76
Future growth and earnings retention, as currently projected by management, is
expected to provide for the maintenance of capital ratios in conformity with the
requirements.
Income Taxes
The provision for income taxes was $553,000 for the quarter ended March 31,
2000, compared to $536,000 in the same quarter a year earlier. The provision is
classified as current tax liability for interim reporting purposes. The
effective tax rate was 34.0% for the quarter ended March 31, 2000, compared to
36.9% for the same quarter in 1999.
Liquidity
The Company manages its liquidity to ensure that sufficient funds are available
to meet loan commitments and deposit fluctuations. Primary sources of liquidity
include cash and due from bank deposits, unpledged short-term U.S. Government
securities and federal funds sold. The Company's primary liquidity ratio, which
is the ratio of liquid assets to total assets, was 33.2% at March 31, 2000,
compared with 33.2% at December 31, 1999, and 28.7% at March 31, 1999.
Asset/Liability Management
The Company's Asset and Liability Committee ("ALCO") meets on a quarterly basis
and monitors the impact of interest rate changes on the Company's earnings and
economic value. The Company uses a simulation model to estimate the change in
the Company's net interest margin (NIM) for various rate scenarios. The Company
uses a combined net present value and going-concern model to calculate economic
risk.
Interest Rate Risk. The table below shows the potential change in NIM (before
taxes) if rates change as of March 31, 2000. These estimates are based on the
existing repricing schedule (see repricing table) as well as consideration of
convexity when rates change (e.g., mortgage-backed securities cash flow
changes). The Company's NIM increases if rates rise, and declines if rates fall.
The cause of this slight exposure to declining rates is due to the Company's
concentration of short-term and rate sensitive loans as of March 31, 2000.
Economic Risk. The Company also measures the potential change in the net present
value of the Company's net existing assets and liabilities if rates change (the
"economic value of equity" or "EVE"). The table below also shows the EVE. The
EVE is determined by valuing the Company assets and liabilities as of March 31,
2000, using a present value cash flow calculation as if the Company is
liquidated. The EVE declines when rates increase because there are more fixed
<PAGE>6
rate assets than liabilities. However, the Company's NIM earnings would also
increase as rates increased (from the interest rate risk) and this benefit would
offset the decline in EVE.
% Change in NIM
Change in NIM to Shareholder
(In thousands Equity
pre-tax) (pre-tax) % of EVE
------------- -------------- --------
+2% $1,077 3.2% (11.5%)
+1% $ 536 1.5% (5.7%)
% Change in NIM
Change in NIM to Shareholder
(In thousands Equity
pre-tax) (pre-tax) % of EVE
------------- -------------- --------
-1% $ (548) (1.6%) 5.7%
-2% ($1,132) (3.3%) 11.5%
The following table sets forth the repricing opportunities for the assets and
liabilities of the Company at March 31, 2000. Assets and Liabilities are
classified by the earliest possible repricing date or maturity, whichever comes
first.
<TABLE>
<CAPTION>
REPRICING IN
Less Three One Three Five
Than Through Through Through Through Over
Three Twelve Three Five Fifteen Fifteen Non-Interest
(In thousands) Months Months Years Years Years Years Bearing Total
------ ------ ----- ----- ----- ----- ----------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Net Loans & Loans held for sale $ 97,313 $ 15,721 $ 40,384 $ 42,250 $ 32,286 $ 14,272 $ 242,226
Investment Securities 2,639 11,053 44,780 14,365 24,789 4,228 101,854
Federal Funds Sold 41,100 41,100
FHLB Stock $ 1,013 1,013
Interest-bearing deposits 119
with banks 20 99
Non-interest earning assets 57,578 57,578
--------- --------- --------- -------- -------- --------- ---------- ---------
TOTAL ASSETS $ 141,072 $ 26,873 $ 85,164 $ 56,615 $ 57,075 $ 18,500 $ 58,591 $ 443,890
========= ========= ========= ======== ======== ========= ========== =========
LIABILITIES:
Non-interest-bearing deposits $ 117,771 $ 117,771
<PAGE>7
REPRICING IN
Less Three One Three Five
Than Through Through Through Through Over
Three Twelve Three Five Fifteen Fifteen Non-Interest
(In thousands) Months Months Years Years Years Years Bearing Total
------ ------ ----- ----- ----- ----- ----------- -----
Interest-bearing deposits $ 146,363 $ 98,358 $ 20,983 $ 1,777 267,481
Borrowings 23 71 210 2,989 5,310 8,603
Other liabilities 7,352 7,352
Stockholders' equity 42,683 42,683
--------- --------- --------- -------- -------- --------- ---------- ---------
Total liabilities and
stockholders' equity $ 146,386 $ 98,429 $ 21,193 $ 4,766 0 5,310 $ 167,806 $ 443,890
========= ========= ========= ======== ======== ========= ========== =========
Interest rate sensitivity gap $ -5,314 $ -71,556 $ 63,971 $ 51,849 $ 57,075 $ 13,190 $ -109,215
Cumulative interest rate
sensitivity gap $ -5,314 $ -76,870 $ -12,899 $ 38,950 $ 96,025 $ 109,215
</TABLE>
Year 2000 Issue
The Company completed all phases of the year 2000 compliance project on time and
as of March 31, 2000, has not encountered any material year 2000 problems.
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
Refer to item 2 above
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings
On December 7, 1998, the case of Freeman, et al. v. Citibank (South Dakota),
N.A., et al., Civil Action No. CV-98-RRA-3029-S, was filed in the United States
District Court, Northern District of Alabama, Northern Division. This case is a
purported class action brought on behalf of Mr. Freeman and others similarly
situated (VISA credit cardholders issued by Citibank (South Dakota), hereinafter
"Citibank"), against Citibank and VISA International (hereinafter "VISA") to (i)
enjoin the collection of debts charged to Citibank VISA cards for gambling at
Internet casino websites; (ii) have Internet casino gambling declared unlawful;
and (iii) recover all payments including principal, interest and penalties
received by Citibank and VISA related to such debts. Mr. Freeman is alleging
that Citibank and VISA were facilitating, participating in and profiting from
gambling by allowing Mr. Freeman to use his Citibank VISA card to purchase
<PAGE>8
"e-cash" at a website owned and operated by a provider of such "virtual"
commodity (hereinafter the "Merchant Provider"), which he accessed from an
on-line casino operation. Mr. Freeman proceeded to play the game of blackjack
with his e-cash and lost $30. The action alleges violation of the federal Wire
Act and the federal Racketeering Influenced and Corrupt Organizations Act
("RICO"). Mr. Freeman is seeking treble damages pursuant to RICO, punitive
damages and attorney's fees, in addition to compensatory damages and declaratory
relief. Citibank has pending a motion to compel arbitration in the case; the
plaintiff has moved to consolidate this action with others, which have been
filed against VISA across the country. The court to date has heard neither
motion.
Humboldt Bank is not a defendant in the Freeman case. However, Humboldt Bank
provides merchant processing for the Merchant Provider used by Mr. Freeman, and
on April 21, 1999, Citibank sent a letter to Humboldt Bank seeking indemnity for
the Freeman action pursuant to VISA regulations. Humboldt Bank and Citibank have
had preliminary discussions regarding this matter, but Humboldt Bank at this
time has neither acknowledged nor disputed the applicability of the VISA
regulation cited by Citibank. The Freeman action is in its preliminary stages
and the outcome at this time cannot be determined. A similar lawsuit in a United
States District Court in Wisconsin (not involving Humboldt Bank insofar as is
known) was recently dismissed; however, that decision is not binding on the
Freeman Court. Until the Freeman action is ultimately determined, any potential
action against Humboldt Bank by Citibank would be premature. In the event it is
ultimately determined that Humboldt Bank is obligated to indemnify Citibank,
Humboldt Bank intends to seek indemnity against both the Merchant Provider and
the company which through its independent marketing efforts presented the
Merchant Provider's application for merchant services to Humboldt Bank.
On January 20, 1998, Shinergy Diversified, Inc. filed suit (Shinergy
Diversified, Inc. et al. v. Electronic Card Systems, Inc., Humboldt Bank, Inc.
et al., Los Angeles Superior Court Case No. BC 184 522) against Humboldt Bank
and creditcards.com, formerly known as Electronic Card Systems, Inc. The
complaint alleges fraud, conversion and intentional infliction of mental
distress. Shinergy alleged that its credit card processing by Electronic Card
Systems, Inc. and Humboldt Bank was not carried out as represented. In addition,
Shinergy alleged that a document that would have allowed Electronic Card
Systems, Inc. and Humboldt Bank to do certain things in connection with the
credit card processing for Shinergy was forged. The complaint seeks lost profits
of approximately $200,000 plus other damages, damages for emotional distress and
punitive damages.
We are also involved in other litigation; the outcome of which, we believe will
not have a material effect on our operations or financial condition.
ITEM 2 - Changes in Securities - NONE
ITEM 3 - Defaults upon Senior Securities - NONE
ITEM 4 - Submission of Matters to a Vote of Security Holders - NONE
<PAGE>9
ITEM 5 - Other Information
On June 22, 1999, Humboldt Bancorp entered into a merger agreement to acquire
Global Bancorp, and its wholly-owned operating subsidiary Capitol Thrift and
Loan, a California industrial loan corporation. Capitol Thrift has 10 branches
located within California and focuses primarily on consumer mortgage and
commercial real estate lending. The acquisition of Global Bancorp was subject to
several conditions, including approval of the merger by the shareholders of
Global Bancorp, regulatory approval, and sale of common stock through a public
offering. The acquisition of Global Bancorp was consummated on April 7, 2000 and
Capitol Thrift and Loan became a subsidiary of Humboldt Bancorp.
On March 23, 2000, Humboldt Bancorp completed the placement of $5,310,000.00 of
10.875% junior subordinated debt securities due 2030 through Salomon Smith
Barney Inc. This placement was made to enhance the capital structure of Humboldt
Bancorp.
On March 29, 2000, Humboldt Bancorp completed the private placement of 640,000
shares of common stock at $12.50 per share, totaling $8,000,000.00 less expenses
of approximately $519,000.00. This placement was made to enhance the capital
structure of Humboldt Bancorp.
On March 29, 2000, Humboldt Bancorp common stock (HBEK) was listed on the NASDAQ
National Market, having been previously listed on the OTC bulletin board.
ITEM 6 - Exhibits and Reports on Form 8-K
Exhibit (27) - Financial Data Schedule
<PAGE>10
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: May 11, 2000 HUMBOLDT BANCORP
/s/ Alan J. Smyth
Alan J. Smyth
Senior Vice President and Chief Financial Officer
/s/ Theodore S. Mason
Theodore S. Mason
President and Chief Executive Officer
<PAGE>11
Humboldt Bancorp and Subsidiaries
Notes to Consolidated Financial Statements
March 31, 2000
(Unaudited)
Note 1 - Basis of Presentation
In the opinion of Management, the unaudited interim consolidated financial
statements contain all adjustments of a normal recurring nature, which are
necessary to present fairly the financial condition of Humboldt Bancorp and
Subsidiaries at March 31, 2000, and results of operations for the three months
ended March 31, 2000, and March 31, 1999.
Certain information and footnote disclosures presented in the Company's annual
financial statements are not included in these interim financial statements.
Accordingly, the accompanying unaudited interim consolidated financial
statements should be read in conjunction with the financial statements and notes
thereto included in the Company's 1999 Annual Report on Form 10-K. The results
of operations for the three months ended March 31, 2000, are not necessarily
indicative of the operating results through December 31, 2000.
Note 2 - Consolidation
The consolidated financial statements include the accounts of Humboldt Bancorp
and its wholly-owned subsidiaries, Humboldt Bank and Capitol Valley Bank and a
50% interest in Bancorp Financial Services. All material intercompany accounts
and transactions have been eliminated in consolidation.
Note 3 - Commitments
The company has outstanding performance letters of credit of $4.0 million at
March 31, 2000, compared to $4.6 million at March 31, 1999.
Note 4 - Net Income Per Common Share
Net income per share (basic) is calculated by using the weighted-average common
shares outstanding. The weighted-average number of common shares used in
computing the net income per common share for the period ending March 31, 2000,
was 5,255,259 and for the period ending March 31, 1999, was 4,941,256.
Net income per share (diluted) is calculated by using the weighted-average
common shares (diluted) outstanding. The weighted average number of common
<PAGE>12
shares (diluted) used in computing the net income per common share (diluted) for
the period ending March 31, 2000, was 5,731,840 and for the period ending March
31, 1999, was 5,386,426.
Note 5 - Subsequent Events
See item 5 on page 8 for a discussion of the acquisition of Global Bancorp
effective April 7, 2000. The purchase price was $16.5 million, $11.8 million of
which was in cash and $4.7 million of which was a contingent payment in the form
of a promissory note. The merger will be accounted for as a purchase and, due to
the contingent payment, will cause negative goodwill which will be accounted for
as a deferred credit and amortized using the straight-line method over 15 years.
<PAGE>13
<TABLE>
<CAPTION>
HUMBOLDT BANCORP AND SUBSIDIARIES CONSOLIDATED CONSOLIDATED
CONSOLIDATED BALANCE SHEETS UNAUDITED AUDITED
(IN THOUSANDS OF DOLLARS) 03-31-00 12-31-99
<S> <C> <C>
ASSETS:
Cash and Due From Banks 28,809 31,339
Interest Bearing Deposits in Banks 119 20
Federal Funds Sold 41,100 21,375
Investment Securities (At fair value of $102,867 and
$115,360 respectively) 102,867 115,360
Loans Held For Sale 250 2,147
LOANS
Real Estate-Construction and Land Development 24,510 22,118
Real Estate-Commercial and Agriculture 105,932 99,053
Real Estate-Family and Multifamily Residential 44,624 43,038
Commercial, Industrial and Agriculture 45,170 39,295
Lease Financing 16,112 17,202
Consumer Loans 5,084 5,394
State and Political Subdivisions 707 707
Other 886 509
243,025 227,316
Less: Deferred Loan Fees (1,049) (987)
TOTAL LOANS 241,976 226,329
Less: Allowance for Credit Losses (3,802) (3,354)
NET LOANS 238,174 222,975
Premises and Equipment (net) 10,057 9,750
OREO 369 120
Investment in Associated Companies 5,193 4,104
Intangible Assets 3,804 3,812
Other Assets 13,148 12,647
TOTAL ASSETS 443,890 423,649
LIABILITIES
Deposits:
Demand 117,771 110,523
Demand-Interest Bearing 59,242 63,547
Time - $100,000 and over 77,394 68,061
Other Time 98,699 103,966
Savings 32,146 32,533
385,252 378,630
Borrowed Funds 8,603 5,316
Other Liabilities 7,352 5,564
401,207 389,510
SHAREHOLDERS' EQUITY
Common stock, no par value; 50,000,000 shares authorized,
5,859,725 shares in 2000 and 1,792,584 in 1999, issued and
outstanding 41,962 28,405
Retained Earnings 1,227 6,088
Unrealized Gain/Loss (506) (354)
TOTAL SHAREHOLDERS' EQUITY 42,683 34,139
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 443,890 423,649
</TABLE>
See notes to consolidated financial statements.
<PAGE>14
<TABLE>
<CAPTION>
HUMBOLDT BANCORP AND SUBSIDIARIES CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For The Three Months Ended March 31, 2000 and 1999 UNAUDITED UNAUDITED
(In Thousands of Dollars except for per share data) March 31, 2000 March 31, 1999
<S> <C> <C>
INTEREST INCOME
Interest and Fees on Loans 5,725 4,637
Interest on Deposits in Banks 18 39
Interest and Dividends on Securities 1,720 934
Interest on Federal Funds Sold 341 113
Total Interest Income 7,804 5,723
INTEREST EXPENSE
Interest on Demand Deposits 54 40
Interest on Other Savings Deposits 406 259
Interest on Time Deposits $100,000+ 943 600
Interest on all Other Time Deposits 1,297 828
Interest on Other Borrowings 93 65
Total Interest Expense 2,793 1,792
Net Interest Income 5,011 3,931
Provision for Loan Losses 557 318
NON INTEREST INCOME
Service Charges on Deposit Accounts 620 542
Other Fee Income 5,448 2,797
All Other Non-Interest Income 482 481
Total Non-Interest Income 6,550 3,820
Realized Gain/Loss on Securities (14) 6
NON INTEREST EXPENSE
Salaries and Employee Benefits 3,486 2,653
Premises and Fixed Asset Expense 830 610
Other Non-Interest Expense 5,046 2,722
Total Non-Interest Expense 9,362 5,985
INCOME BEFORE TAXES 1,628 1,454
Applicable Income Taxes 553 536
Bancorp Financial Services Income 89 79
NET INCOME 1,164 997
COMPREHENSIVE INCOME.
CHANGE IN UNREALIZED HOLDING GAINS FOR PERIOD (154) 69
COMPREHENSIVE INCOME 1,010 1,066
NET INCOME PER SHARE $0.22 $0.20
NET INCOME PER SHARE ASSUMING DILUTION $0.20 $0.19
</TABLE>
<PAGE>15
<TABLE>
<CAPTION>
HUMBOLDT BANCORP AND SUBSIDIARIES STATEMENT OF CASH FLOWS CONSOLIDATED CONSOLIDATED
For the Three Months Ended March 31, 2000 and 1999 UNAUDITED UNAUDITED
(In Thousands of Dollars) March 31, 2000 March 31, 1999
<S> <C> <C>
OPERATING ACTIVITIES
Net Income - Adjustments to reconcile net income to net
cash provided by operating activities: 1,164 997
Provision for Loan Loss 557 318
Depreciation 343 335
Amortization and Other 188 404
(Gain)/Loss on Sale of Securities 14 (6)
Equity in Income of Associated Company (89) (79)
Net Change in Other Assets (641) (683)
Net Change in Other Liabilities 1,788 990
Net Change in Loans Held for Sale 1,897 3,164
NET CASH PROVIDED BY OPERATING ACTIVITIES 5,221 5,440
INVESTING ACTIVITIES
Net Change in Interest-bearing Deposits in Banks (99) 0
Federal Funds Sold (Net) (19,725) (6,860)
Securities Held to Maturity
Investment Purchases (160) 0
Proceeds from Maturities of Investments 0 0
Proceeds from Sale of Investments 0 0
Securities Available For Sale
Investment Purchases (4,569) (6,905)
Proceeds From Maturities of Investments 5,446 7,953
Proceeds From Sale of Investments 11,570 0
Net Change in Loans (16,005) (7,526)
Purchase of Premises and Equipment (650) (621)
Investment in Associated Company (1,000) 0
NET CASH USED FOR INVESTING ACTIVITIES
FINANCING ACTIVITIES (25,192) (13,959)
Net Change in Deposits 6,622 5,712
Payments on Borrowed Funds (2,023) (21)
Proceeds from Borrowed Funds 5,310 1,300
Stock Sale & Options Exercised 7,532 54
NET CASH PROVIDED BY FINANCING ACTIVITIES 17,441 7,045
NET CHANGE IN CASH AND CASH EQUIVALENTS (2,530) (1,474)
Cash and Due From Banks at Beginning of Period 31,339 28,626
CASH AND DUE FROM BANKS AT END OF PERIOD 28,809 27,152
SUPPLEMENTAL DISCLOSURES
Cash Paid During the Period For: Interest 2,862 1,828
Income Taxes 95 235
NON-CASH TRANSACTIONS
Unrealized Holding (Gains) losses on Securities (167) (112)
Deferred Income Taxes on Unrealized Holding Losses on Securities (15) (43)
Deposit Liabilities Assumed in Exchange for Assets Acquired
in Connection with Purchase of Branches 0 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED
CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER
INTERNALLY GENERATED REPORTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-2000
<CASH> 28,809
<INT-BEARING-DEPOSITS> 119
<FED-FUNDS-SOLD> 41,100
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 102,867
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 241,976
<ALLOWANCE> (3,802)
<TOTAL-ASSETS> 443,890
<DEPOSITS> 385,252
<SHORT-TERM> 0
<LIABILITIES-OTHER> 7,352
<LONG-TERM> 8,603
0
0
<COMMON> 41,962
<OTHER-SE> 721
<TOTAL-LIABILITIES-AND-EQUITY> 443,890
<INTEREST-LOAN> 5,725
<INTEREST-INVEST> 1,720
<INTEREST-OTHER> 341
<INTEREST-TOTAL> 7,786
<INTEREST-DEPOSIT> 18
<INTEREST-EXPENSE> 2,793
<INTEREST-INCOME-NET> 5,011
<LOAN-LOSSES> 557
<SECURITIES-GAINS> (14)
<EXPENSE-OTHER> 9,362
<INCOME-PRETAX> 1,628
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,164
<EPS-BASIC> 0.22
<EPS-DILUTED> 0.20
<YIELD-ACTUAL> 1.22
<LOANS-NON> 880
<LOANS-PAST> 1,219
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,354
<CHARGE-OFFS> (129)
<RECOVERIES> 20
<ALLOWANCE-CLOSE> 3,802
<ALLOWANCE-DOMESTIC> 1,329
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,473
</TABLE>
