<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from..........................
Commission file number 333-16951
BSM BANCORP
(Exact name of registrant as specified in its charter)
CALIFORNIA NO. 77-0442667
(State or other jurisdiction (IRS Employer
of incorporation) Identification No.)
2739 Santa Maria Way, Santa Maria, California 93455
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (805) 937-8551
Not applicable
(Former name or former address, 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(c) of the Securities Exchange Act of 1934 during
the preceding 12 months (of shorter period that the registrant was required to
file such reports) Yes /X/ and (2) has been subject to such filing requirements
for the past 90 days. Yes/ / No/X/
APPLICABLE ONLY TO CORPORATE ISSUERS
On July 10, 1998, there were 3,062,339 shares of BSM Bancorp Common Stock
outstanding.
1
<PAGE>
BSM BANCORP
June 30, 1998
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheets as of June 30, 1998 and December 31, 1997 3
Consolidated Statements of Income for the six months ended
June 30, 1998 and 1997............................................. 4
Consolidated Statements of Changes in Financial Position for the six
months ended June 30, 1998 and 1997................................ 5
Notes to Consolidated Financial Statements........................... 6
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations.......................................... 8
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Bote of Security Holders............. 10
Item 5 - Other Information............................................... 10
Item 6 - Exhibits and Reports on Form 8-K................................ 11
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
BSM BANCORP AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
JUNE 30, 1998 DECEMBER 31, 1997
------------- -----------------
<S> <C> <C>
Cash and due from banks $ 21,511,762 $ 18,472,719
Federal funds sold 20,245,000 7,461,000
------------ ------------
Cash and cash equivalents 41,756,762 25,933,719
Investments:
Securities available-for-sale 36,062,016 46,143,134
Securities held-to-maturity (market value of 58,303,217 62,767,464
$58,673,164 and $63,074,004, respectively)
Loans, net of unearned income 185,907,427 191,345,824
Allowance for loan losses (2,258,374) (2,114,684)
------------ ------------
Net loans 183,649,053 189,231,140
Premises and equipment 12,166,487 12,709,127
Accrued interest receivable and other assets 6,554,631 7,261,032
------------ ------------
Total Assets $338,492,166 $344,045,616
------------ ------------
------------ ------------
LIABILITIES
Deposits:
Noninterest-bearing demand $ 74,601,102 $ 74,450,817
Interest-bearing demand and savings 108,037,163 114,900,337
Time deposits under $100,000 76,731,828 78,951,276
Time deposits $100,000 or more 40,125,565 37,989,170
------------ ------------
Total deposits 299,495,658 306,291,600
Accrued interest payable and other liabilities 429,919 1,691,788
------------ ------------
Total liabilities 299,925,577 307,983,388
------------ ------------
Shareholders' equity:
Common stock, 50,000,000 authorized;
Issued and outstanding
3,061,839 as of June 30, 1998
2,975,139 as of December 31, 1997 12,679,014 11,636,514
Undivided profits 25,744,617 24,339,778
Valuation of securities available-for-sale, net of tax 142,958 85,936
------------ ------------
Total capital 38,566,589 36,062,228
------------ ------------
Total Liabilities & Capital $338,492,166 $344,045,616
------------ ------------
------------ ------------
</TABLE>
3
<PAGE>
BSM BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTH PERIOD SIX MONTH PERIOD
ENDED JUNE 30, ENDED JUNE 30,
------------------------- ---------------------------
1998 1997 1998 1997
---------- ---------- ----------- ------------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $4,994,077 $4,548,060 $ 9,849,598 $ 9,157,101
Interest on investment securities-taxable 957,511 1,147,064 2,055,962 2,280,650
Interest on investment securities-nontaxable 357,754 206,224 690,831 370,258
Other interest income 171,192 136,975 270,941 271,514
---------- ---------- ----------- -----------
TOTAL INTEREST INCOME 6,480,534 6,038,323 12,867,332 12,079,523
---------- ---------- ----------- -----------
INTEREST EXPENSE:
Interest on demand and savings deposits 575,108 597,278 1,182,156 1,179,356
Interest on time deposits 1,563,613 1,480,101 3,129,017 2,910,271
---------- ---------- ----------- -----------
TOTAL INTEREST EXPENSE 2,138,721 2,077,379 4,311,173 4,089,627
NET INTEREST INCOME BEFORE PROVISION 4,341,813 3,960,944 8,556,159 7,989,896
---------- ---------- ----------- -----------
Less: Provision for loan losses 150,000 0 300,000 30,000
---------- ---------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION 4,191,813 3,960,944 8,256,159 7,959,896
OTHER OPERATING INCOME:
Service charges and fees 485,906 511,624 973,083 992,799
Other noninterest income 408,788 364,617 880,630 719,564
---------- ---------- ----------- -----------
TOTAL OTHER OPERATING INCOME 894,694 876,241 1,853,713 1,712,363
---------- ---------- ----------- -----------
OTHER OPERATING EXPENSES:
Salaries and employee benefits 1,718,336 1,797,672 3,629,934 3,639,114
Occupancy expenses 231,527 245,943 487,131 485,457
Furniture and equipment 303,135 362,435 649,299 722,741
Advertising and promotion 131,673 201,451 300,624 353,907
Professional expenses 56,654 88,319 129,061 168,949
Office expenses 171,220 236,693 371,763 501,708
Merchant processing costs 170,347 137,904 312,145 256,492
Other expenses 278,354 239,665 632,045 549,025
---------- ---------- ----------- -----------
TOTAL OTHER OPERATING EXPENSES 3,061,246 3,310,082 6,512,002 6,677,393
---------- ---------- ----------- -----------
Income before taxes 2,025,261 1,527,103 3,597,870 2,994,866
Provision for income taxes 730,000 592,000 1,292,000 1,144,800
---------- ---------- ----------- -----------
NET INCOME $1,295,261 $ 935,103 $ 2,305,870 $ 1,850,066
---------- ---------- ----------- -----------
---------- ---------- ----------- -----------
EARNING PER SHARE - BASIC $ 0.44 $ 0.32 $ 0.77 $ 0.62
EARNING PER SHARE - DILUTED $ 0.43 $ 0.31 $ 0.75 $ 0.61
</TABLE>
4
<PAGE>
BSM BANCORP AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTH PERIOD SIX MONTH PERIOD
ENDED JUNE 30, ENDED JUNE 30,
------------------------------ ------------------------------
1998 1997 1998 1997
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 1,295,261 $ 935,103 $ 2,305,870 $ 1,850,066
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 283,620 317,979 577,563 612,803
Provision for credit losses 150,000 0 300,000 30,000
Net amortization of premium/discounts-
investments 48,608 112,750 93,662 211,640
Net loss (gain) from sale of fixed assets 0 (355) (80) (45,937)
Net loss (gain) from sale other real estate loans 229,633 (12,802) 248,062 35,385
Net change in accrued interest, other assets and
other liabilities (1,318,017) (261,350) (664,329) (224,278)
----------- ----------- ------------ -----------
Net cash provided by operating activities 689,105 1,091,325 2,860,748 2,469,679
INVESTING ACTIVITIES
Proceeds from maturities of securities held to maturity 4,028,440 3,401,999 8,868,902 9,860,077
Proceeds from maturities of securities available for sale 2,000,000 5,000,000 10,500,000 7,173,000
Purchases of held-to-maturity securities (2,595,955) (3,739,235) (4,523,287) (8,181,594)
Purchases of available-for-sale securities 0 (4,181,623) (300,000) (9,158,586)
Net decrease in loans 3,615,539 (3,880,560) 4,246,749 1,675,100
Purchases of premises and equipment (2,401) (116,226) (36,666) (1,159,498)
Proceeds from the sale of other real estate owned 741,834 327,381 860,990 702,596
Proceeds for the sale of equipment 0 355 80 49,740
Net cash provided (used) by investing activities 7,787,457 (3,187,909) 19,616,768 960,835
FINANCING ACTIVITIES
Net decrease in demand and savings deposits (7,000,592) 6,203,775 (16,085,699) (4,647,798)
Net increase in time deposits 8,091,601 1,921,212 9,289,757 3,119,368
Payments for dividends/distributions 0 0 (901,031) (446,002)
Proceeds from the exercise of stock options 925,150 13,449 1,042,500 45,650
----------- ----------- ------------ -----------
Net cash provided (used) by financing activities 2,016,159 8,138,436 (6,654,473) (1,928,782)
----------- ----------- ------------ -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS 10,492,721 6,041,852 15,823,043 1,501,732
----------- ----------- ------------ -----------
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 31,264,041 27,023,433 25,933,719 31,563,554
----------- ----------- ------------ -----------
CASH AND CASH EQUIVALENTS, MARCH 31, $41,756,762 $33,065,285 $ 41,756,762 $33,065,286
----------- ----------- ------------ -----------
----------- ----------- ------------ -----------
Cash paid during the year for interest 2,432,475 2,529,823 4,503,162 4,568,471
Cash paid during the year for income taxes 906,103 1,115,134 906,103 1,116,077
</TABLE>
5
<PAGE>
BSM BANCORP AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION AND MANAGEMENT REPRESENTATION
BSM Bancorp (the "Company") was incorporated on November 12, 1996, for the
sole purpose of becoming a bank holding company for Bank of Santa Maria (the
"Bank"). Following regulatory consent and with the approval of the Bank's
shareholders, the Bank merged with BSM Merger Company (a wholly-owned
subsidiary of the Company) (the "Merger"), as of the close of business on
March 11, 1997, and thereby became a wholly-owned subsidiary of the Company.
As of December 31, 1996, the Company had only one shareholder and it had no
SEC nor Federal Reserve Bank reporting requirements. Following completion of
the Merger, the Company is required to file periodic reports under section
15(d) of the Exchange Act. A quarterly report on Form 10Q was filed on March
31, 1997, for the first time. As the Merger was recorded using the pooling of
interest method, restatement of prior balances was necessary to meet
accounting standards. Accordingly, the financial statements herein contain
balances prior to the actual existence of the Company which reflect what the
"consolidated" entity would have reported as restated for all acquisitions,
either recorded by pooling or purchase accounting.
The unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles and with the
instructions to Form 10-Q. On March 18, 1998, the Company filed a Form 8-A to
register the Company Common Stock pursuant to 12(g) of the Exchange Act of
1934, thereby becoming subject to its requirements.
The accompanying consolidated balance sheets, consolidated statements of
income, and consolidated statements of changes in financial position (as
restated subsequent to Merger of the Bank of Santa Maria by the Company),
reflect all material adjustments necessary for fair presentation of the
Company's financial position as of June 30, 1998, and December 31, 1997, and
the results of operations for the six months ended June 30, 1998 and 1997.
All such adjustments were of a normal recurring nature.
NOTE 2 - EARNINGS PER SHARE
The following is a reconciliation of net income and shares outstanding to the
income and number of shares used to compute Earnings Per Share (EPS).
<TABLE>
<CAPTION>
Three Month Period Ended Three Month Period Ended
June 30, 1998 June 30, 1997
Income Shares Income Shares
---------- --------- -------- ---------
<S> <C> <C> <C> <C>
Net income as reported $1,295,261 $935,103
Shares outstanding at period end 3,061,839 2,978,139
Impact of weighted shares purchased
during three month period (50,293) (2,505)
---------- --------- -------- ---------
Used in basis EPS 1,295,261 3,011,546 935,103 2,975,634
Dilutive effect of stock options 35,450 48,659
---------- --------- -------- ---------
Used in dilutive EPS $1,295,261 3,046,996 $935,103 3,024,293
---------- --------- -------- ---------
---------- --------- -------- ---------
</TABLE>
6
<PAGE>
NOTE 3 - NEW ACCOUNTING PRONOUNCEMENT
In 1998, the Company adopted Statement of Financial Accounting Standards
("SFAS") No. 130, "Reporting Comprehensive Income," which requires companies
to report all changes in equity during a period, except those resulting from
investment by owners and distribution to owners, in a financial statement for
the period in which they are recognized. Comprehensive Income, which
encompasses net income and unrealized gains (losses) on available for sale
securities adjustments, is presented below.
<TABLE>
Three Month Period Ended,
June 30, 1998 June 30, 1997
------------- -------------
<S> <C> <C>
Net Income $1,295,261 $ 935,103
Othe Comprehensive Income -
unrealized gain (loss) on available for sale
securities, net of tax expense of $27,374
and $74,270 for the three monthsended June 30,
1998 and 1997, respectively 41,061 111,405
--------- ----------
Comprehensive Income $1,336,322 $1,046,508
--------- ----------
--------- ----------
<CAPTION>
Six Month Period Ended,
June 30, 1998 June 30, 1997
------------- -------------
<S> <C> <C>
Net Income $2,305,870 $1,850,066
Othe Comprehensive Income -
unrealized gain (loss) on available for sale
securities, net of tax expense (credit)
of $38,015 and (3,664) for the threemonths
ended June 30, 1998 and 1997, respectively 57,022 (5,496)
--------- ----------
Comprehensive Income $2,362,892 $1,844,570
--------- ----------
--------- ----------
</TABLE>
NOTE 4 - SUBSEQUENT EVENT - MERGER WITH MID-STATE BANK
As reported in the Company's most recent Reports on Form 10-K and Form 8-K, the
Company entered into an Agreement to Merge and Plan of Reorganization (the
"agreement") dated January 29, 1998 and amended on March 27, 1998 by and among
the Company, Bank of Santa Maria and Mid-State Bank. This matter was submitted
to a vote of the shareholders at its Annual Meeting on June 18, 1998. The matter
was also submitted to a vote of the shareholders of Mid-State Bank on June 17,
1998. The shareholders of both organizations approved the merger. A pro forma
statement of financial position of the combined organization is shown in Part
II, Item 5, "Other Information", as of June 30, 1998.
7
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
For the six months ended June 30, 1998, the Company reported net income of
$2,305,870, or $.77 per share compared to a net income of $1,850,066, or $.62
per share for the same six month period in 1997. The annualized return on
average assets was 1.39% for the first half of 1998, compared to 1.20% for
the first half of 1997. Annualized return on average shareholders' equity for
1998 and 1997, was 12.82% and 10.92% respectively.
On January 30, 1998, the Company and Mid-State Bank announced the signing of
an Agreement to Merge and Plan of Reorganization on January 29, 1998 (as
amended on March 18, 1998), pursuant to which the Bank of Santa Maria, the
Company's wholly-owned subsidiary, would be merged with and into Mid-State
Bank and become the subsidiary of the Company. Upon consummation of the
merger, Mid-State will become the surviving bank and the name of the Company
will be changed from BSM Bancorp to Mid-State Bancshares. As part of the
Agreement, three of the existing directors of the Company/Bank, including the
Company's Chairman and President, will continue as directors of the Company
and have been appointed as directors of Mid-State Bank. The remaining
directors of the Company have resigned with the vacancies to be filled by the
seven existing directors of Mid-State Bank. The Company President has been
named as an Executive Vice President of the merged bank as well as an
Executive Vice President of the Company. The Executive Officers of Mid-State
have been appointed as the Executive Officers of both the Company and the
Bank following the resignation of the Company/Bank's current executive
officers. The signing of this Agreement, along with the Agreement itself,
were reported to the SEC on February 4, 1998, on a Form 8-K. On March 18,
1998, the Company filed (with the SEC) a registration statement on Form S-4,
which was declared effective on May 14, 1998. The Company held its 1998
Annual Shareholders Meeting on June 18,1998. The merger is intended to close
during the third quarter of 1998 and has been approved by the government
regulatory agencies and the shareholders of both the Company and Mid-State
Bank.
FINANCIAL CONDITION
Total assets for the first half of 1998, increased 5.6% to $338.5 million in
comparison to total assets of $320.5 million for the first half of 1997. Cash
and cash equivalents increased by $8.6 million with funds provided primarily
by the maturation of investment securities. Total investment dollars
decreased by 16.0% to $94.3 million as of June 30, 1998. Loans declined by
$5.6 million during the first six months of 1998, compared to a $2.5 million
decline during the same period in 1997. The percentage of decline was 3.0%
for 1998, versus a decline of 1.5% for 1997.
There were no material purchases of fixed assets during the first half of
1998. The Bank's cash flow continues to benefit from several sales of other
real estate owned properties during the first and second quarters.
Deposits decreased by $6.8 million during the first six months of 1998, in
comparison to a $1.5 million decline during the same period in 1997. The
percentage of decrease was 2.3% for 1998, versus .5% decline in 1997. The
larger 1998 decline appears to be attributable to the runoff of deposit
dollars associated with the acquisition of El Camino National Bank in January
of 1997. A certain level of runoff was anticipated by Company management.
The Bank, prior to its acquisition by the Company, paid semi-annual
dividends, a policy which was first implemented in mid 1996. During the first
quarter of 1996, the Directors of the Bank paid a $.20 per share annual cash
dividend which was augmented in August of 1996, with the first semi-annual
dividend of $.15 per share. In January of 1997, the Bank again paid a $.15
per share cash dividend. The Company was the beneficiary of two
organizational dividends from the Bank during 1997. A dividend in the amount
of $150,000 payable in March, 1997, and a dividend in the amount of $700,000
payable in August, 1997. With the Company now fully organized, a $.20 per
share cash dividend was declared in July, 1997, payable on August 15, 1997.
In January 1998, the Company declared a $.30 per share cash dividend, payable
in February of 1998. The Bank declared a $800,000 cash dividend to provide
cash for the Company's dividend as well as operating capital. In addition,
the exercise of stock options by Bank employees, provided approximately
$767,500 in cash to the Company. Both the Bank and the Company maintain
strong liquidity positions.
A provision of the merger Agreement limits the amount of any mid-year
dividend, if any, by the Company to $.10 per share. Due to the consummation
of the merger on July 14, 1998, a mid-year dividend will not be declared.
8
<PAGE>
RESULTS OF OPERATIONS
Interest income on loans was up by $692,000 in the first half of 1998,
compared with the same period during 1997. The increase in interest income
was primarily attributable to the increase in average outstanding loans,
which were up by $15.2 million. The effective yield on the loan portfolio
declined by approximately .18 basis points.
Interest income on investments, including Federal funds transactions,
increased by $95,000 during the first half of 1998, over the comparable
period in 1997. This increase, as with loans, was primarily attributable to
the increase in funds available for investment, which was up by $9.4 million.
The effective yield decreased .25 basis points.
Interest expense on interest-bearing deposits was up by $222,000 in the first
half of 1998, compared with the first half of 1997. The increase in interest
expense was attributable to the increase in average interest-bearing deposits
which were up by $9.0 million. The effective rate decreased by 5 basis points.
Net interest margin declined from 5.83% for the first half of 1997, to 5.75%
for the same period in 1998. The decline in interest income to earning
assets, by 7 basis points, against a modest 5 basis point decline in interest
expense to earning assets, tighten the company's overall spread. The
provision for loan losses of $300,000 is sufficient to bring the allowance
for loan losses to a balance considered to be adequate to absorb potential
losses in the portfolio. Management's determination of the adequacy of the
allowance is based upon a detailed evaluation of the portfolio, current
economic conditions and trends, historical loan loss experience and other
risk factors.
Noninterest income increased $141,000 or 8.3% to $1,854,000 as of June 30,
1998. This increase is primarily the results of increased activity in the
mortgage banking functions of the Bank. Non interest expenses decreased
$165,000 or 2.5% to $6,512,000 as of June 30, 1998. While there are some
fluctuations in operating expenses due to the El Camino merger and the
opening of the Atascadero Branch in the first half of 1997, the primarily
reason for the decrease in 1998 is due to recurring expenses no longer paid
by the Company due to the merger with Mid-State Bank.
CAPITAL RESOURCES
The Company and its bank subsidiary are subject to risk-based capital
regulations adopted by the federal banking regulators. These guidelines are
used to evaluate capital adequacy and are based upon an institution's asset
risk profile and off-balance sheet exposures, such as unused loan commitments
and letters of credit. The following table sets forth the Company's and the
Bank's leverage and risk-based capital ratios at June 30, 1998:
<TABLE>
<CAPTION>
(In thousands) COMPANY BANK
----------------- -----------------
Amount % Amount %
------- ------ ------- ------
<S> <C> <C> <C> <C>
LEVERAGE RATIO $36,678 10.96% $35,628 10.70%
Regulatory minimum $13,381 4.00% $13,315 4.00%
Excess $23,297 6.96% $22,313 6.70%
RISKED-BASED RATIOS
Tier 1 capital $36,678 16.10% $35,628 15.67%
Tier 1 minimum $ 9,111 4.00% $ 9,097 4.00%
Excess $27,567 12.10% $26,531 11.67%
Total capital $38,936 17.09% $37,886 16.66%
Total capital minimum $18,223 8.00% $18,194 8.00%
Excess $20,713 9.09% $19,692 8.66%
</TABLE>
The management of the Company is not aware of any trends, events, uncertainties
or recommendations by regulatory authorities that will have or that are
reasonably likely to have material effect on the liquidity, capital resources or
operations of the Company with the exception of the proposed merger with
Mid-State Bank. The effects of this merger will be accretive to earnings in
1999, and should have positive effects to both capital resources and liquidity
during 1998.
9
<PAGE>
PART II - OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The following is a summary of matters submitted to vote at the Annual Meeting of
Shareholders of BSM Bancorp:
a) The Annual Meeting of Shareholders was held on June 18, 1998.
b) The meeting involved the approval of merger agreement, election of
directors and approval of proposed amendments to 1996 stock option plan.
With shares represented totaling 2,300,669 of the 3,008,639 outstanding,
the merger was approved by a vote of 2,238,853 in favor to 61,816 against.
The proposed amendments to the 1996 stock option plan were approved with
2,159,207 votes in favor to 141,462 against.
Proxies were solicited by BSM Bancorp's management pursuant to
Regulation 14A under the Securities Exchange Act of 1934. There was no
solicitation in opposition to management's nominees as listed in the proxy
statement and all such nominees were elected pursuant to the vote of the
shareholders as indicated in the proxy statement. The name of each director
elected is listed in item (c) below.
c) The results of the election of the directors were as follows:
<TABLE>
<CAPTION>
For Authority Withheld
--------- ------------------
<S> <C> <C>
Armand Acosta 2,566,432 28,682
Richard E. Adam 2,565,232 29,882
Fred L. Crandall, Jr. 2,566,432 28,682
A. J. Diani 2,566,432 28,682
William A. Hares 2,565,232 29,882
Roger A. Ikola 2,566,432 28,682
Toshiharu Nishino 2,566,432 28,682
Joseph Sesto, Jr. 2,566,432 28,682
William A. Snelling 2,565,472 29,642
Mitsuo Taniguchi 2,566,432 28,682
Joseph Ziemba 2,566,432 28,682
</TABLE>
d) The above directors, with the exeption of A. J. Diani, William A.
Hares and William A. Snelling, have resigned their positions as directors
of the Company.
ITEM 5 - OTHER INFORMATION
The proposed merger, referenced in item 4 above, received all requisite
approvals from the Company's regulatory agencies and from the shareholders of
BSM Bancorp. Presented below is a pro forma (unaudited) Statement of Financial
Position for the consolidated entity as of June 30, 1998. The merger became
effective July 10, 1998.
<TABLE>
<CAPTION>
(in thousands) BSM Bancorp Mid-State Bank Consolidated
----------- -------------- ------------
<S> <C> <C> <C>
Cash and Due From Banks $ 21,512 $ 60,941 $ 82,453
Fed Funds Sold 20,245 14,000 34,245
Investment Securities
Available for Sale 36,062 397,993 434,055
Held to Maturity 58,303 0 58,303
Net Loans 183,649 344,839 528,488
Other Assets 18,721 50,003 68,724
-------- -------- ----------
TOTAL ASSETS $338,492 $867,776 $1,206,268
-------- -------- ----------
-------- -------- ----------
Non-interest bearing demand $ 74,601 $139,223 $ 213,824
Interest bearing NOW, Savings and Money Market 108,037 411,057 519,094
Time Deposits 116,857 216,254 333,111
-------- -------- ----------
Total Deposits 299,495 766,534 1,066,029
Other Liabilities 430 16,841 17,271
Total Equity Capital 38,567 84,401 122,968
-------- -------- ----------
------------------------------------------
TOTAL LIABILITIES AND EQUITY $338,492 $867,776 $1,206,268
-------- -------- ----------
-------- -------- ----------
</TABLE>
10
<PAGE>
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
A) Exhibits
<TABLE>
<CAPTION>
Exhibit No. Exhibit
--------------------------------------------------------------------------
<S> <C>
2.1 Plan of Reorganization and Merger Agreement dated November
20, 1996 - Annex 1 of Written Consent Statement/Prospectus*
2.2 Plan of Reorganization and Merger Agreement dated January
29, 1997 and amended on March 18, 1998, by and between
Company, The Bank and Mid-State Bank***
3.1 Articles of Incorporation of Registrant*
3.2 Amendment to Articles of Incorporation of Registrant*
3.3 Amendment to Articles of Incorporation of Registrant*
3.4 Bylaws of the Registrant*
10.1 Form of Indemnification Agreement*
10.2 BSM Bancorp 1996 Stock Option agreement as approved by
California Department of Corporations**
10.4 Nipomo Branch Land Lease*
10.5 Lompoc Branch Lease*
10.6 Form of "Change in Control" Employment Contract**
27 Financial Data Schedule (for SEC use only)
</TABLE>
*All documents listed are incorporated by reference and can be
found in the Registration Statement of the Company filed on Form
S-4 (Commission File No 333-16951). The effective date was
January 29, 1997
**This exhibit is contained in BSM Bancorp's Quarterly Report on
Form 10-Q for the period ended March 31, 1997, filed with the
Commission on May 15, 1997 (Commission File No. 333-16951), and
incorporated by reference.
***Document listed is incorporated by reference and can be found
in the BSM Bancorp's Registration Statement on Form S-4 (File
No. 333-48181)
B) Reports on Form 8-K
During the first quarter of 1998, the Company filed two Current
Reports on Form 8-K, one as of January 16, 1998, and the second as
of February 3, 1998. Both reports were filed pursuant to Item 5 and
related to the Agreement to Merge and Plan of Reorganization by and
among the Company, Mid-State Bank and Bank of Santa Maria.
On July 20, 1998, the Company filed an additional report related to
the Agreement to Merge and Plan of Reorganization by an among the
Company, Mid-State Bank and Bank of Santa Maria. That report
indicated that the merger transaction contemplated by this Agreement
had been completed as of close of business on July 10, 1998.
11
<PAGE>
SIGNATURES
Pursuant to the requirement of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BSM Bancorp
(Registrant)
/s/ William A. Hares
----------------------
Date: July 10, 1998 William A. Hares
President and
Chief Executive Officer
/s/ Susan Forgnone
----------------------
Date: July 10, 1998 Susan Forgnone
Executive Vice President
and Loan Administrator
12
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