<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-Q
<TABLE>
<C> <S>
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
OR
<TABLE>
<C> <S>
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
</TABLE>
FOR THE TRANSITION PERIOD FROM ______________ TO ______________
COMMISSION FILE NUMBER: 00-30747
------------------------
FIRST COMMUNITY BANCORP
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
CALIFORNIA 33-0885320
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
</TABLE>
6110 EL TORDO
RANCHO SANTA FE, CALIFORNIA 92067
(Address of principal executive offices)
Registrant's telephone number: (858) 756-3023
------------------------
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, as ammended 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 / /
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of August 10, 2000: 3,894,517 shares of common stock, no par
value.
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<C> <S> <C>
PART I--FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements (unaudited)............... 3
Unaudited Condensed Consolidated Balance Sheets............. 3
Unaudited Condensed Consolidated Statements of Operations... 4
Unaudited Condensed Consolidated Statements of Comprehensive
Income (Loss)............................................. 5
Unaudited Condensed Consolidated Statements of Cash Flows... 6
Notes to Unaudited Condensed Consolidated Financial
Statements................................................ 7
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................. 10
ITEM 3. Quantitative and Qualitative Disclosure About Market Risk... 18
PART II--OTHER INFORMATION
ITEM 1. Legal Proceedings........................................... 19
ITEM 2. Changes in Securities and use of Proceeds................... 19
ITEM 3. Defaults Upon Senior Securities............................. 19
ITEM 4. Submission of Matters to a Vote of Security Holders......... 19
ITEM 5. Other Information........................................... 19
ITEM 6. Exhibits and Reports on Form 8-K............................ 19
SIGNATURES....................................................................... 20
</TABLE>
2
<PAGE>
PART I--FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
--------- -------------
(IN THOUSANDS, EXCEPT PER
SHARE DATA)
<S> <C> <C>
ASSETS:
Cash and due from banks..................................... $ 28,899 $ 21,148
Federal funds sold.......................................... 30,093 10,889
-------- --------
Total cash and cash equivalents......................... 58,992 32,037
Interest-bearing deposits in financial institutions......... 3,948 7,502
Federal Reserve Bank and Federal Home Loan Bank stock, at
cost...................................................... 1,076 1,235
Securities held-to-maturity (fair value of $12,820,000 at
June 30, 2000 and $14,775,000 at December 31, 1999)....... 12,866 14,868
Securities available-for-sale (amortized cost of $32,822,000
at June 30, 2000 and $35,435,000 at December 31, 1999).... 31,794 34,460
-------- --------
Total securities........................................ 45,736 50,563
Gross loans................................................. 224,412 206,650
Deferred fees and costs..................................... (572) (548)
-------- --------
Loans, net of deferred fees and costs................... 223,840 206,102
Allowance for loan losses................................... (3,987) (4,025)
-------- --------
Net loans............................................... 219,853 202,077
Premises and equipment...................................... 5,184 5,480
Other real estate owned, net................................ 1,315 1,315
Other assets................................................ 6,650 5,388
-------- --------
Total Assets............................................ $341,678 $304,362
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY:
LIABILITIES:
Non-interest bearing deposits............................... $106,061 $ 93,763
Interest bearing deposits................................... 204,282 180,469
-------- --------
Total deposits.......................................... 310,343 274,232
Accrued interest payable and other liabilities.............. 3,572 2,618
Short-term borrowings....................................... 2,472 1,657
-------- --------
Total Liabilities....................................... 316,387 278,507
SHAREHOLDERS' EQUITY:
Common stock, no par value; authorized 15,000,000 shares,
issued and outstanding 3,891,517 and 3,878,259 shares as
of June 30, 2000 and December 31, 1999, respectively...... 19,849 19,394
Preferred stock; authorized 5,000,000 shares, no shares
issued and outstanding.................................... -- --
Retained earnings........................................... 6,038 7,026
Accumulated other comprehensive loss:
Net unrealized losses on securities available-for-sale,
net....................................................... (596) (565)
-------- --------
Total Shareholders' Equity.............................. 25,291 25,855
-------- --------
Total Liabilities and Shareholders' Equity............ $341,678 $304,362
======== ========
Shares outstanding.......................................... 3,891.6 3,878.3
Book value per share........................................ $ 6.50 $ 6.67
</TABLE>
See "Notes to Unaudited Condensed Consolidated Financial Statements."
3
<PAGE>
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
6 MONTHS ENDED 3 MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -------------------
2000 1999 2000 1999
-------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans................................ $ 11,553 $ 9,140 $ 5,978 $ 4,859
Interest on interest-bearing deposits in financial
institutions............................................ 167 160 62 96
Interest on investment securities......................... 1,439 1,201 703 630
Interest on federal funds sold............................ 676 827 525 361
-------- -------- -------- --------
Total interest income................................... 13,835 11,328 7,268 5,946
INTEREST EXPENSE:
Interest expense on deposits.............................. 3,495 2,779 1,930 1,352
Interest expense on short-term borrowings................. 53 19 15 13
-------- -------- -------- --------
Total interest expense.................................. 3,548 2,798 1,945 1,365
-------- -------- -------- --------
NET INTEREST INCOME......................................... 10,287 8,530 5,323 4,581
Provision for loan losses................................. -- 240 -- 105
-------- -------- -------- --------
Net interest income after provision for loan losses..... 10,287 8,290 5,323 4,476
NON-INTEREST INCOME:
Service charges and fees on deposit accounts.............. 595 583 285 301
Merchant discount fees.................................... 507 387 258 227
Other commissions and fees................................ 312 265 157 148
Gain on sale of loans..................................... 179 167 124 75
Other income.............................................. 136 96 92 46
-------- -------- -------- --------
Total non-interest income............................... 1,729 1,498 916 797
NON-INTEREST EXPENSE:
Salaries and employee benefits............................ 3,329 2,853 1,668 1,435
Occupancy................................................. 773 684 377 363
Furniture and equipment................................... 478 332 236 179
Legal expenses............................................ 159 107 75 52
Other professional services............................... 913 675 510 372
Stationery, supplies and printing......................... 135 117 90 60
FDIC assessment........................................... 32 22 17 11
Merchant card processing.................................. 456 340 224 196
Cost of other real estate owned........................... 33 160 33 159
Advertising............................................... 196 196 95 101
Insurance................................................. 63 53 32 27
Loss on sale of securities................................ 11 2 -- 2
Merger costs.............................................. 3,561 -- 3,561 --
Other..................................................... 951 870 605 459
-------- -------- -------- --------
Total non-interest expense.............................. 11,090 6,411 7,523 3,416
-------- -------- -------- --------
Income (loss) before income taxes........................... 926 3,377 (1,284) 1,857
Income taxes................................................ 1,125 1,439 207 804
-------- -------- -------- --------
Net income (loss)....................................... $ (199) $ 1,938 $ (1,491) $ 1,053
======== ======== ======== ========
PER SHARE INFORMATION:
Number of shares (weighted average):
Basic................................................. 3,880.9 3,857.0 3,883.7 3,859.6
Diluted............................................... 4,093.5 4,059.0 4,082.6 4,058.4
Income (loss) per share:
Basic................................................. $ (0.05) $ 0.50 $ (0.38) $ 0.27
Diluted............................................... $ (0.05) $ 0.48 $ (0.38) $ 0.26
</TABLE>
See "Notes to Unaudited Condensed Consolidated Financial Statements."
4
<PAGE>
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>
SIX MONTHS THREE MONTHS
ENDED ENDED
JUNE 30, JUNE 30,
------------------- -------------------
2000 1999 2000 1999
-------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net income (loss)........................................... $(199) $1,938 $(1,491) $1,053
Other comprehensive income (loss), net of related income
taxes:
Unrealized gains (losses) on securities:
Unrealized holding gains (losses) arising during the
period................................................ (28) (375) 85 (299)
Less reclassifications of realized losses included in
income................................................ (3) -- -- (2)
----- ------ ------- ------
(31) (375) 85 (301)
----- ------ ------- ------
Comprehensive income (loss)................................. $(230) $1,563 $(1,406) $ 752
===== ====== ======= ======
</TABLE>
5
<PAGE>
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
6 MONTHS ENDED
JUNE 30,
-------------------
2000 1999
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)......................................... $ (199) $ 1,938
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization........................... 492 368
Provision for loan losses............................... -- 240
Real estate valuation adjustment........................ -- 159
Gain on sale of loans................................... (179) (167)
Loss on sale of securities available-for-sale........... 11 2
Increase in other assets................................ (1,240) (398)
Increase (decrease) in accrued interest payable and
other liabilities....................................... 954 (1,070)
-------- --------
Net cash (used in) provided by operating activities... (161) 1,072
Cash flows from investing activities:
Net increase in loans outstanding......................... (17,597) (16,761)
Net decrease (increase) in interest-bearing deposits in
financial institutions.................................. 3,554 (984)
Securities held-to-maturity:
Maturities.............................................. 4,002 2,388
Purchases............................................... (2,000) (9,500)
Securities available-for-sale:
Proceeds from sale...................................... 1,489 1,499
Maturities.............................................. 1,624 11,439
Purchases............................................... (501) (14,646)
Net change in FRB and FHLB stock.......................... 159 (112)
Proceeds from sale of property held for sale.............. -- 1,176
Increase in property held for sale........................ -- (128)
Purchases of premises and equipment....................... (206) (770)
-------- --------
Net cash used in investing activities................. (9,476) (26,399)
Cash flows from financing activities:
Net increase in deposits:
Non-interest bearing.................................... 12,298 8,455
Interest bearing........................................ 23,813 11,616
Proceeds from exercise of stock options................... 114 20
Net increase in short-term borrowings..................... 815 1,135
Cash dividends paid....................................... (448) (296)
-------- --------
Net cash provided by financing activities............. 36,592 20,930
-------- --------
Net increase (decrease) in cash and cash
equivalents............................................ 26,955 (4,397)
Cash and cash equivalents at beginning of period............ 32,037 54,966
-------- --------
Cash and cash equivalents at end of period.................. $ 58,992 $ 50,569
======== ========
Supplemental disclosure of cash flow information:
Cash paid during period for:
Interest................................................ $ 3,511 $ 2,779
Income taxes............................................ $ 1,145 $ 1,255
Supplemental disclosure of noncash investing and financing
activities:
Transfers from retained earnings to common stock.......... $ 341 $ 264
</TABLE>
See "Notes to Unaudited Condensed Consolidated Financial Statements."
6
<PAGE>
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2000
NOTE 1--BASIS OF PRESENTATION
First Community Bancorp (the "Company") is the holding company for Rancho
Santa Fe National Bank ("Rancho") and First Community Bank of the Desert ("First
Community" and together with Rancho, the "Banks"). The unaudited condensed
consolidated financial statements of the Company included herein reflect all
adjustments, consisting only of normal recurring adjustments, which are, in the
opinion of management, necessary to present a fair statement of the results for
the interim periods indicated. Certain reclassifications have been made to the
unaudited condensed consolidated financial statements for 1999 to conform to the
2000 presentation. Certain information and note disclosures normally included in
consolidated financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission (the "Commission"). The
results of operations for the three and six months ended June 30, 2000 are not
necessarily indicative of the results of operations to be expected for the
remainder of the year.
The preparation of unaudited condensed consolidated financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Material estimates subject to change include the allowance for loan losses, the
carrying value of other real estate owned and the deferred tax asset.
The accompanying unaudited condensed consolidated financial statements
should be read in conjunction with the consolidated financial statements and
notes thereto included in Rancho's and First Community's Annual Reports filed on
Form S-4/A on May 5, 2000 for the year ended December 31, 1999.
NOTE 2--ACQUISITIONS
FIRST COMMUNITY ACQUISITION
On May 31, 2000, a subsidiary of the Company merged with and into First
Community pursuant to an Agreement and Plan of Merger, dated as of October 22,
1999, as amended (the "Merger Agreement"), by and between the Company, Rancho
and First Community, (the "Merger"). As a result of the Merger, First Community
became a wholly-owned subsidiary of the Company.
Pursuant to the Merger Agreement, each issued and outstanding share of
common stock of First Community ("First Community Common Stock") prior to the
Merger (other than as provided in the Merger Agreement) was converted into the
right to receive 0.3 shares (the "Conversion Number") of common stock of the
Company ("Company Common Stock"). In addition, each option and each warrant to
acquire shares of First Community Common Stock outstanding immediately prior to
the Effective Time (as defined in the Merger Agreement) was converted into an
option and warrant, respectively, to acquire 0.3 shares of Company Common Stock.
Upon consummation of the Merger, the Company issued approximately 1,392,799
shares of Company Common Stock to former holders of First Community Common
Stock, and as a result, the former shareholders of First Community Common Stock
own shares of Company Common Stock representing approximately 35.9% of the
outstanding shares of Company Common Stock.
7
<PAGE>
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
NOTE 2--ACQUISITIONS (CONTINUED)
The financial information as of all dates and for all periods prior to the
First Community Merger presented herein has been restated to present the
combined consolidated financial condition and results of operations of the
Company and First Community as if the First Community Merger had been in effect
as of all dates and for all periods presented.
PROFESSIONAL BANCORP INC. ACQUISITION
The Company announced on August 7, 2000 that it had signed a definitive
agreement to acquire Professional Bancorp Inc. ("Professional") and its
wholly-owned subsidiary, First Professional Bank ("First Professional"). Under
terms of the agreement, shareholders of Professional will receive either $8.00
in cash or 0.55 shares of Company common stock for each share of Professional
common stock. Professional shareholders will have the option to choose either
cash or stock consideration. In the event that more than 50% of Professional
shareholders choose common stock or cash, the consideration will be prorated to
the Professional shareholders such that half the shares will receive cash and
half will receive Company common stock. For Professional shareholders receiving
stock, 0.55 shares of Company common stock will be received for each share of
Professional common stock (within a range of Company stock prices). The Company
anticipates issuing approximately 559,000 shares of Company common stock in this
transaction.
The acquisition will use purchase accounting and is expected to close late
in the fourth quarter of the year. Both companies have completed their due
diligence. Completion of the transaction is conditional upon the receipt of
shareholder and regulatory approvals.
NOTE 3--NET INCOME (LOSS) PER SHARE
The following is a summary of the calculation of basic and diluted net
income (loss) per share for the six and three month periods ended June 30, 2000
and 1999:
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -------------------
2000 1999 2000 1999
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net income (loss)..................................... $ (199) $ 1,938 $ (1,491) $ 1,053
======== ======== ======== ========
Weighted average shares outstanding................... 3,880.9 3,857.0 3,883.7 3,859.6
======== ======== ======== ========
Basic net income (loss) per share..................... $ (0.05) $ 0.50 $ (0.38) $ 0.27
======== ======== ======== ========
Weighted average shares outstanding................... 3,880.9 3,857.0 3,883.7 3,859.6
Effect of dilutive stock options and warrants (1)..... 212.6 202.0 198.9 198.8
-------- -------- -------- --------
Diluted shares outstanding............................ 4,093.5 4,059.0 4,082.6 4,058.4
======== ======== ======== ========
Diluted net income (loss) per share (1)............... $ (0.05) $ 0.48 $ (0.38) $ 0.26
======== ======== ======== ========
</TABLE>
------------------------
(1) The effect of stock options and warrants is antidilutive in the 2000 periods
and therefore are not used for the computation of diluted net loss per
share.
8
<PAGE>
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2000
NOTE 4--NEW ACCOUNTING STANDARDS
In March 2000, the FASB issued Interpretation No. 44, "Accounting for
Certain Transactions Involving Stock Compensation," an interpretation of
Accounting Principles Board ("APB") Opinion No. 25. FASB Interpretation No. 44
clarifies certain issues related to the application of APB Opinion 25 and is
effective July 1, 2000, with certain conclusions covering specific events that
occurred either December 15, 1998 or January 12, 2000. FASB Interpretation No.
44 is not expected to have a material effect on the Company's financial position
or results of operations.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
The following tables and data set forth certain statistical information
relating to the Company as of June 30, 2000, and for the six and three month
periods ended June 30, 2000, and June 30, 1999. This discussion should be read
in conjunction with the unaudited condensed consolidated financial statements
and notes thereto as of June 30, 2000, included herein, and the consolidated
financial statements and notes thereto included in Rancho's and First
Community's Annual Reports filed on Form S-4/A for the year ended December 31,
1999.
When the Company uses or incorporates by reference in this Quarterly Report
on Form 10-Q (the "Quarterly Report") the words "anticipate," "estimate,"
"expect," "project," "intend," "commit," "believe" and similar expressions, the
Company intends to identify certain forward-looking statements. Such statements
are subject to certain risks, uncertainties and assumptions, including those
described in this Quarterly Report. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated, expected,
projected, intended, committed or believed.
Since December 31, 1999, the Company's total assets have increased by
approximately $37.3 million. The major components of this increase in assets are
an increase of approximately $19.2 million in federal funds sold and an increase
of approximately $17.8 million in net loans. The increase in loans is a result
of the overall increase in economic activity in Southern California and the
Company's success in developing new business.
Since December 31, 1999, the Company's total deposits have increased by
approximately $36.1 million including an increase of approximately $12.3 million
in noninterest-bearing deposits and an increase in interest-bearing deposits of
approximately $23.8 million. This increase resulted primarily from the overall
increase in economic activity in Southern California, the Company's success in
obtaining new business and an increase in rates paid on some deposits.
Operating earnings (net income before one-time after-tax merger costs) for
the six months ended June 30, 2000 were $2,599,000 or $0.63 per diluted share.
This compares with consolidated operating earnings of $1,938,000 or $0.48 per
diluted share, for the six months ended June 30, 1999, a growth of approximately
31%. Consolidated operating earnings (net income before one-time after-tax
merger costs) for the three months ended June 30, 2000 were $1,307,000 or $0.32
per diluted share. This compares with consolidated operating earnings of
$1,053,000 or $0.26 per diluted share, for the three months ended June 30, 1999,
a growth of approximately 23%.
Consolidated earnings, including one-time after-tax merger costs of
$2,798,000, for the six months ended June 30, 2000 were a loss of $199,000 or
($0.05) per diluted share. This compares with earnings of $1,938,000 or $0.48
per diluted share for the six months ended June 30, 1999. Consolidated earnings
for the three months ended June 30, 2000, including one-time after-tax merger
costs, were a loss of $1,491,000 or ($0.38) per diluted share. This compares
with consolidated earnings of $1,053,000 or $0.26 per diluted share for the
three months ended June 30, 1999.
On July 27, 2000 the Company's Board of Directors approved a quarterly
dividend of $0.09 per common share which is payable on August 31, 2000 to
shareholders of record on August 15, 2000.
RESULTS OF OPERATIONS
OPERATING INCOME. The Company defines operating income as net income before
after-tax merger costs. The Company's operating return on average assets was
1.54% in the second quarter of 2000 versus 1.45% in the second quarter of 1999.
The operating efficiency ratio improved from 63.9% in the
10
<PAGE>
first half of 1999 to 62.7% in the first half of 2000. The Company is working on
various efficiency and revenue initiatives that are now available as a result of
the acquisition of First Community.
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
--------------------- --------------------
2000 1999 2000 1999
--------- --------- --------- --------
<S> <C> <C> <C> <C>
PER SHARE INFORMATION:
Number of shares (weighted average, in
thousands)....................................... 3,880.9 3,857.0 3,883.7 3,859.6
Diluted shares (weighted average, in thousands).... 4,093.5 4,059.0 4,082.6 4,058.4
Basic income (loss) per share...................... $ (0.05) $ 0.50 $ (0.38) $ 0.27
Diluted income (loss) per share.................... $ (0.05) $ 0.48 $ (0.38) $ 0.26
PER SHARE INFORMATION BEFORE MERGER COSTS:
Basic income per share............................. $ 0.67 $ 0.50 $ 0.34 $ 0.27
Diluted income per share........................... $ 0.63 $ 0.48 $ 0.32 $ 0.26
PROFITABILITY MEASURES BEFORE MERGER COSTS:
Return on average assets........................... 1.59% 1.36% 1.54% 1.45%
Return on average equity........................... 18.8% 16.4% 18.0% 17.4%
Efficiency ratio................................... 62.7% 63.9% 63.5% 63.5%
ADJUSTMENTS TO NET INCOME (LOSS) (IN THOUSANDS):
Net income (loss).................................. $ (199) $ 1,938 $ (1,491) $ 1,053
Merger costs....................................... 3,561 -- 3,561 --
Tax benefits..................................... 763 -- 763 --
--------- --------- --------- --------
After tax merger costs............................. 2,798 -- 2,798 --
--------- --------- --------- --------
Adjusted net income.............................. $ 2,599 $ 1,938 $ 1,307 $ 1,053
========= ========= ========= ========
ADJUSTMENTS TO REVENUES (IN THOUSANDS):
Net interest income................................ $ 10,287 $ 8,530 $ 5,323 $ 4,581
Non-interest income................................ 1,729 1,498 916 797
--------- --------- --------- --------
Operating revenues............................... $ 12,016 $ 10,028 $ 6,239 $ 5,378
========= ========= ========= ========
ADJUSTMENTS TO EXPENSES (IN THOUSANDS):
Non-interest expense............................... $ 11,090 $ 6,411 $ 7,523 $ 3,416
Merger costs....................................... (3,561) -- (3,561) --
--------- --------- --------- --------
Adjusted operating expenses...................... $ 7,529 $ 6,411 $ 3,962 $ 3,416
========= ========= ========= ========
</TABLE>
Profits for the Company are dependent on loan growth, controlling costs and
continual efforts to prevent any unexpected loan losses that would require
additions to the allowance for loan losses ("ALL"). The Company believes that
the demand for loans has increased in the Company's primary market areas due to
the growth in the Southern California economy along with the ability of the
Company's customers to participate in that growth. However, the perceived
increase in the demand for loans is tempered by the highly competitive banking
marketplace and the Company's desire to maintain strong credit quality
standards. These factors contributed to the Company's loan growth of
approximately 8.6% since December 31, 1999. As a result of the increase in loans
and the approximate 13.2% increase in deposits, the Company's loan-to-deposit
ratio, has decreased from 75.4% as of December 31, 1999, to 72.3% as of
June 30, 2000.
11
<PAGE>
NET INTEREST INCOME. Net interest income is the difference between interest
earned on assets and interest paid on liabilities. Net interest margin is net
interest income expressed as a percentage of average interest-earning assets.
The following tables provide information concerning average interest-earning
assets and interest-bearing liabilities and yields and rates thereon for the six
and three months ended June 30, 2000 and June 30, 1999, respectively. Nonaccrual
loans are included in the average earning assets amounts.
UNAUDITED AVERAGE BALANCE SHEETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -------------------
2000 1999 2000 1999
-------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
AVERAGE ASSETS:
Loans, net of deferred fees and costs............... $219,892 $178,490 $222,041 $182,552
Investment securities............................... 48,035 42,314 46,795 44,494
Federal funds sold.................................. 22,524 35,774 34,492 31,148
Interest-bearing deposits in financial
institutions...................................... 6,125 5,772 5,107 6,349
-------- -------- -------- --------
Average earning assets............................ 296,576 262,350 308,435 264,543
Other assets........................................ 31,643 25,914 33,445 26,209
-------- -------- -------- --------
Average total assets............................ $328,219 $288,264 $341,880 $290,752
======== ======== ======== ========
AVERAGE LIABILITIES AND SHAREHOLDERS' EQUITY:
AVERAGE LIABILITIES:
Noninterest-bearing deposits........................ $101,337 $ 83,580 $104,102 $ 86,403
Time deposits of $100,000 or more................... 25,483 22,154 19,727 21,945
Interest-bearing deposits........................... 169,836 156,443 186,141 155,351
-------- -------- -------- --------
Average deposits.................................. 296,656 262,177 309,970 263,699
Other interest-bearing liabilities.................. 1,991 752 1,288 1,063
Other liabilities................................... 1,734 1,529 1,486 1,654
-------- -------- -------- --------
Average liabilities............................... 300,381 264,458 312,744 266,416
Average equity...................................... 27,838 23,806 29,136 24,336
-------- -------- -------- --------
Average liabilities and shareholders' equity.... $328,219 $288,264 $341,880 $290,752
======== ======== ======== ========
YIELD ANALYSIS:
(Dollars in thousands)
Average earning assets.............................. $296,576 $262,350 $308,435 $264,543
Yield............................................. 9.38% 8.71% 9.48% 9.02%
Average interest-bearing deposits................... $195,319 $178,597 $205,868 $177,296
Cost.............................................. 3.60% 3.14% 3.77% 3.06%
Average deposits.................................... $296,656 $262,177 $309,970 $263,699
Cost.............................................. 2.37% 2.14% 2.50% 2.06%
Average interest-bearing liabilities................ $197,310 $179,349 $207,156 $178,359
Cost.............................................. 3.62% 3.15% 3.78% 3.07%
Interest spread..................................... 5.76% 5.56% 5.70% 5.95%
Net interest margin................................. 6.98% 6.56% 6.94% 6.95%
</TABLE>
Interest income increased by approximately $1.3 million from $5.9 million
for the second quarter of 1999 to $7.3 million for the same period of 2000. The
increase was due to an increase of approximately $43.9 million in average
earning assets, mostly in loans, and an increase in the yield on earning assets
from 9.02% to 9.48% due to the higher percentage of loans to earning assets and
the higher interest rate environment in the 2000 period versus the 1999 period.
12
<PAGE>
Interest income increased by approximately $2.5 million from $11.3 million
for the first six months of 1999 to $13.8 million for the same period of 2000.
The increase was due to an increase in the yield on earnings assets from 8.71%
to 9.38% due to the higher percentage of loans to earning assets and the higher
interest rate environment in the 2000 period versus the 1999 period. Average
earning assets also increased over the same period by approximately $34.2
million as a result of the increased level of economic activity.
Interest expense increased by approximately $580,000 from $1.4 million for
the second quarter of 1999 to $1.9 million for the same period of 2000. This
increase is due both to the increase in average interest-bearing liabilities
from $178.4 million to $207.2 million and the increase in the cost of interest-
bearing liabilities from 3.07% to 3.78% over the same periods of time as a
result of the previously mentioned increase in the general level of interest
rates. The growth in average deposits is a result of the increased level of
interest rates and the ability of the Company to capture new business.
Interest expense increased by approximately $750,000 from $2.8 million for
the first six months of 1999 to $3.5 million for the same period of 2000. This
increase is due both to the increase in average interest-bearing liabilities
from $179.3 million to $197.3 million and the increase in the cost of interest-
bearing liabilities from 3.15% to 3.62% over the same periods of time as a
result of the previously mentioned increase in the general level of interest
rates. The growth in average deposits is a result of the increased level of
interest rates and the ability of the Company to capture new business.
NON-INTEREST INCOME. The following table sets forth the details of
noninterest income for the six months ended June 30, 2000 and June 30, 1999:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
------------------- INCREASE
2000 1999 (DECREASE)
-------- -------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
NON-INTEREST INCOME:
Service charges and fees on deposit accounts.............. $ 595 $ 583 $ 12
Merchant discount fees.................................... 507 387 120
Other commissions and fees................................ 312 265 47
Gain on sale of loans..................................... 179 167 12
Other income.............................................. 136 96 40
------ ------ ----
Total non-interest income............................... $1,729 $1,498 $231
====== ====== ====
</TABLE>
Total noninterest income increased by approximately $231,000 from $1,498,000
to $1,729,000, or approximately 15.4%, from the six months ended June 30, 1999
to the six months ended June 30, 2000. Most of this increase resulted from an
increase of $120,000 in merchant discount fees. This increase was due mainly to
an increase in sales activities of the Company's customer base. The largest
increase in other income was due to a recovery on an old litigation. Other items
making up other income were relatively small.
The following table sets forth the details of noninterest income for the
three months ended June 30, 2000 and June 30, 1999:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
JUNE 30,
------------------- INCREASE
2000 1999 (DECREASE)
-------- -------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
NON-INTEREST INCOME:
Service charges and fees on deposit accounts.............. $285 $301 $(16)
Merchant discount fees.................................... 258 227 31
Other commissions and fees................................ 157 148 9
Gain on sale of loans..................................... 124 75 49
Other income.............................................. 92 46 46
---- ---- ----
Total non-interest income............................... $916 $797 $119
==== ==== ====
</TABLE>
13
<PAGE>
Total noninterest income increased by approximately $119,000 from $797,000
to $916,000, or approximately 14.9 percent, from the three months ended
June 30, 1999 to the three months ended June 30, 2000. The increase in merchant
discount fees of $31,000 was due mainly to an increase in sales activities of
the Company's customer base. Gain on sale of loans increased due to a higher
level of SBA loan sale activity. The increase of $46,000 in other income
consisted of several small items.
NON-INTEREST EXPENSE. The following table sets forth the details of
noninterest expense for the six months ended June 30, 2000 and June 30, 1999:
<TABLE>
<CAPTION>
6 MONTHS ENDED
JUNE 30,
------------------- INCREASE
2000 1999 (DECREASE)
-------- -------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
NON-INTEREST EXPENSE:
Salaries and employee benefits................. $ 3,329 $2,853 $ 476
Occupancy...................................... 773 684 89
Furniture and equipment........................ 478 332 146
Legal expenses................................. 159 107 52
Other professional services.................... 913 675 238
Stationery, supplies and printing.............. 135 117 18
FDIC assessment................................ 32 22 10
Merchant card processing....................... 456 340 116
Cost of other real estate owned................ 33 160 (127)
Advertising.................................... 196 196 --
Insurance...................................... 63 53 10
Loss on sale of securities..................... 11 2 9
Other.......................................... 951 870 81
------- ------ ------
Non-interest expense before merger costs......... 7,529 6,411 1,118
Merger costs................................... 3,561 -- 3,561
------- ------ ------
Total non-interest expense....................... $11,090 $6,411 $4,679
======= ====== ======
</TABLE>
Total operating noninterest expense increased approximately $1,118,000 from
$6,411,000 to $7,529,000, or 17.4%, from the six months ended June 30, 1999 to
the six months ended June 30, 2000. The increase in operating expenses in almost
all categories is primarily a result of the increased level of economic activity
in the Company's markets and the Company's response to this increased level of
customers and customer activity. Average loans grew by approximately 23.3%
during the same period and average noninterest-bearing deposits grew by
approximately 21.2% between the two periods. The growth in these activities
bears directly on the variable costs of the Company. The Company is also making
various technology investments and upgrades. Merchant card processing grew as a
result of the previously mentioned growth in customer sales activity. The
decline in cost of other real estate owned is a result of the lower level of
other real estate of the Company. Merger costs of $3,561,000 are one-time costs
relating to the acquisition of First Community.
The efficiency ratio (operating expense before merger costs divided by net
interest income plus noninterest income) is a measure of how effective the
Company is at using its expense dollars. A lower or declining ratio indicates
improving efficiency. The Company's efficiency ratio improved from 63.9% in the
first six months of 1999 to 62.7% in the first six months of 2000.
14
<PAGE>
The following table sets forth the details of noninterest expense for the
three months ended June 30, 2000 and June 30, 1999:
<TABLE>
<CAPTION>
3 MONTHS ENDED
JUNE 30,
------------------- INCREASE
2000 1999 (DECREASE)
-------- -------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
NON-INTEREST EXPENSE:
Salaries and employee benefits.................. 1,668 1,435 $ 233
Occupancy....................................... 377 363 14
Furniture and equipment......................... 236 179 57
Legal expenses.................................. 75 52 23
Other professional services..................... 510 372 138
Stationery, supplies and printing............... 90 60 30
FDIC assessment................................. 17 11 6
Merchant card processing........................ 224 196 28
Cost of other real estate owned................. 33 159 (126)
Advertising..................................... 95 101 (6)
Insurance....................................... 32 27 5
Loss on sale of securities...................... -- 2 (2)
Other........................................... 605 459 146
------ ------ ------
Non-interest expense before merger costs.......... 3,962 3,416 546
Merger costs.................................... 3,561 -- 3,561
------ ------ ------
Total non-interest expense........................ $7,523 $3,416 4,107
====== ====== ======
</TABLE>
Total operating non-interest expense increased approximately $546,000 from
$3,416,000 to $3,962,000, or 16.0%, from the three months ended June 30, 1999 to
the three months ended June 30, 2000. The increase in operating expenses in
almost all categories is primarily a result of the increased level of economic
activity in the Company's markets and the Company's response to this increased
level of customers and customer activity. Average loans grew by approximately
21.6% during the same period and average noninterest-bearing deposits grew by
approximately 20.5% between the two periods. The Company is also making various
technology investments and upgrades. Merchant card processing grew as a result
of the previously mentioned growth in customer sales activity. The decline in
cost of other real estate owned is a result of the lower level of other real
estate of the Company. Merger costs of $3,561,000 are one-time costs relating to
the acquisition of First Community.
The efficiency ratio (operating expense before merger costs divided by net
interest income plus noninterest income) is a measure of how effective the
Company is at using its expense dollars. A lower or declining ratio indicates
improving efficiency. The Company's operating efficiency ratio remained flat at
63.5% for both three month periods.
INCOME TAXES. The Company's normal effective income tax rate is
approximately 42.0%, representing a blend of the statutory Federal income tax
rate of 35.0% and the California income tax rate of 10.84%. The Company's actual
effective income tax rates were 121.5% and 42.6% for the six months ended
June 30, 2000 and 1999, respectively. The Company's actual effective income tax
rates were (16.1%) and 43.3% for the three months ended June 30, 2000 and 1999,
respectively. The actual effective tax rates vary from the normal effective tax
rate in the 2000 periods largely as a result of nondeductible merger costs.
Adjusting for the nondeductible merger costs, the effective tax rates in the six
month periods of 2000 and 1999 were 42.1% and 42.6%, respectively and 42.6% and
43.3% in the three month periods in 2000 and 1999, respectively.
15
<PAGE>
BALANCE SHEET ANALYSIS
CREDIT QUALITY. The Company defines nonperforming assets to include
(i) loans past due 90 days or more and still accruing; (ii) loans on which it
has ceased to accrue interest ("Nonaccrual Loans") and (iii) assets acquired
through foreclosure including other real estate owned. "Impaired loans" are
commercial, commercial real estate, and individually significant mortgage and
consumer loans for which it is probable that the Company will not be able to
collect all amounts due according to the original contractual terms of the loan
agreement. The category of "impaired loans" is not coextensive with the category
of "nonaccrual loans," although the two categories overlap. "Nonaccrual loans"
include impaired loans and are those on which the accrual of interest is
discontinued when collectibility of principal or interest is uncertain or
payments of principal or interest have become contractually past due 90 days.
The Company may choose to place a loan on nonaccrual status due to payment
delinquency or uncertain collectibility, while not classifying the loan
impaired, if (i) it is probable that the Company will collect all amounts due in
accordance with the original contractual terms of the loan or (ii) the loan is
not a commercial, commercial real estate or an individually significant mortgage
or consumer loan.
Planned workout arrangements are currently in place or in negotiation for
all nonperforming assets. Management is not aware of any additional significant
loss potential that has not already been included in the estimation of the
allowance for loan losses ("ALL").
The following table shows the historical trends in nonperforming assets and
key credit quality statistics for the Company:
CREDIT QUALITY MEASURES
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
AS OF AND FOR THE PERIODS ENDING
---------------------------------------------------------------
3 MONTHS 6 MONTHS 9 MONTHS YEAR 3 MONTHS 6 MONTHS
3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00
-------- -------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Loans past due 90 days or more and still
accruing................................ $1,441 $ 139 $ 209 $ 75 $ -- $ 218
Nonaccrual loans.......................... 1,608 858 821 1,845 442 2,268
Other real estate owned................... 1,392 1,466 1,315 1,315 1,315 1,315
------ ------ ------ ------ ------ ------
Nonperforming assets.................... $4,441 $2,463 $2,345 $3,235 $1,757 $3,801
====== ====== ====== ====== ====== ======
Impaired loans, gross..................... $1,489 $ 802 $2,136 $1,833 $ 434 $2,268
Allocated allowance for loan losses....... (64) (47) (277) (159) (201) (574)
------ ------ ------ ------ ------ ------
Net investment in impaired loans........ $1,425 $ 755 $1,859 $1,674 $ 233 $1,694
====== ====== ====== ====== ====== ======
Charged off loans year-to-date............ $ 46 $ 452 $ 540 $ 592 $ 15 $ 92
Recoveries year-to-date................... (52) (85) (110) (314) (42) (54)
------ ------ ------ ------ ------ ------
Net charge-offs (recoveries)............ $ (6) $ 367 $ 430 $ 278 $ (27) $ 38
====== ====== ====== ====== ====== ======
Allowance for loan losses to loans, net of
deferred fees and costs................. 2.15% 1.95% 1.89% 1.95% 1.82% 1.78%
Allowance for loan losses to nonaccrual
loans and leases........................ 244.2% 426.3% 459.0% 218.2% 916.7% 175.8%
Nonperforming assets to loans and OREO.... 2.41% 1.30% 1.17% 1.56% 0.79% 1.69%
Annualized net charge offs to average
loans................................... (0.01%) 0.41% 0.31% 0.15% (0.05%) 0.03%
Nonaccrual loans to loans, net of deferred
fees and costs.......................... 0.88% 0.46% 0.41% 0.90% 0.20% 1.01%
Allowance for loan losses to nonperforming
assets.................................. 88.4% 148.5% 160.7% 124.4% 230.6% 104.9%
</TABLE>
16
<PAGE>
Loans past due 90 days and still accruing represent loans which are past due
90 days or more as to interest or principal, but not included in the nonaccrual
or restructured categories. All loans in this category are well-secured and in
the process of collection or renewal.
On June 30, 2000, the Company had approximately $2,268,000 of loans which
were considered impaired, all of which were on nonaccrual status, compared to
$442,000 at March 31, 2000 and $1,833,000 of impaired loans at December 31,
1999. The ALL at June 30, 2000, includes allocated allowances of approximately
$574,000 established for certain impaired loans. Nonperforming assets increased
approximately $566,000 from $3,235,000 at December 31, 1999, to $3,801,000 at
June 30, 2000. This increase is a result of nonaccrual loans increasing $423,000
to $2,268,000 as a result of improvements in most nonaccrual loans in the period
and one large loan being put on nonaccrual in the second quarter.
ALLOWANCE FOR LOAN LOSSES. The Company has established a monitoring system
for its loans in order to identify impaired loans and potential problem loans
and to permit periodic evaluation of impairment and the adequacy of the ALL in a
timely manner. The monitoring system and ALL methodology have evolved over a
period of years, and loan classifications have been incorporated into the
determination of the ALL. This monitoring system and allowance methodology
include a loan-by-loan analysis for all classified loans as well as loss factors
for the balance of the portfolio that are based on migration analysis relative
to the Company's unclassified portfolio. This analysis includes such factors as
historical loss experience, current portfolio delinquency and trends, and other
inherent risk factors such as economic conditions, concentrations in the
portfolio risk levels of particular loan categories, internal loan review and
management oversight.
The percentage of ALL to gross loans was 1.78% at June 30, 2000, a decrease
from 1.95% at December 31, 1999. This decrease in the percentage is almost
entirely a result of the growth in loans and not due to a decrease in the
allowance for loan losses. Nonaccrual loans increased by $1,826,000 during the
quarter ended June 30, 2000, from 0.20% to 1.01% of loans, net of deferred fees
and costs, due mainly to one loan. Net OREO remained flat at $1,315,000 during
the quarter. Total nonperforming assets increased by $2,044,000 during the
second quarter of 2000, increasing from 0.79% to 1.69% of total loans and OREO
at March 31, 2000 and June 30, 2000, respectively. The Company had net
charge-offs of $38,000 in the six months ended June 30, 2000 represented by net
recoveries during the first quarter of $27,000 and net charge-offs of $65,000
during the second quarter of 2000. With no provision for loan losses and net
charge-offs of $38,000, the allowance for loan losses declined slightly by
$38,000 from $4,025,000 at December 31, 1999 to $3,987,000 at June 30, 2000. The
allowance as a percentage of nonperforming assets decreased from 124.4% at
December 31, 1999 to 104.9% at June 30, 2000 due to the increase in
nonperforming assets. Management believes that the allowance for loan losses at
June 30, 2000 is adequate based on the Company's quarterly migration analysis of
loan losses, improved economic conditions and continued adherence to established
credit policies.
REGULATORY MATTERS. The regulatory capital guidelines as well as the actual
regulatory capital ratios for Rancho, First Community and the Company on a
consolidated basis as of June 30, 2000, are as follows:
<TABLE>
<CAPTION>
REGULATORY REQUIREMENTS ACTUAL
------------------------- -----------------------------------
ADEQUATELY WELL FIRST
CAPITALIZED CAPITALIZED RANCHO COMMUNITY CONSOLIDATED
----------- ----------- -------- --------- ------------
(GREATER THAN OR EQUAL TO
STATED PERCENTAGE)
<S> <C> <C> <C> <C> <C>
Detailed computations of
Tier 1 leverage capital ratio.......... 4.00% 5.00% 8.43% 6.93% 7.57%
Tier 1 risk-based capital ratio........ 4.00% 6.00% 10.16% 9.17% 9.49%
Total risk-based capital................. 8.00% 10.00% 11.42% 10.43% 10.74%
</TABLE>
17
<PAGE>
LIQUIDITY, INTEREST RATE SENSITIVITY AND MARKET RISK. On a stand-alone
basis, the Company's sources of liquidity include dividends from the Banks and
outside borrowings. The amount of dividends that the Banks can pay to the
Company is restricted by regulatory guidelines.
The primary function of asset/liability management is to ensure adequate
liquidity and maintain an appropriate balance between interest-sensitive earning
assets and interest-bearing liabilities at the Banks. Liquidity management
involves the ability to meet the cash flow requirements of customers who may be
either depositors wanting to withdraw funds or borrowers who may need assurance
that sufficient funds will be available to meet their credit needs. Interest
rate sensitivity management seeks to avoid fluctuating interest margins and to
enhance consistent growth of net interest income through periods of changing
interest rates.
Historically, the overall liquidity of the Banks is based on the core
deposit base of the Banks. The Banks have not relied on large denomination time
deposits. To meet short-term liquidity needs, the Company has maintained at the
Banks what it believes are adequate balances in federal funds sold,
interest-bearing deposits in financial institutions and investment securities
having maturities of five years or less. On a consolidated basis, liquid assets
(cash, federal funds sold and investment securities available-for-sale) as a
percent of total deposits were 29.3% and 24.2% as of June 30, 2000 and
December 31, 1999, respectively.
Market risk sensitive instruments are generally defined as on and off
balance sheet derivatives and other financial instruments. At December 31, 1999
and June 30, 2000, the Company had no material on or off balance sheet
derivatives. The Company's financial instruments include interest sensitive
loans receivable, federal funds sold, interest-bearing deposits in financial
institutions, FRB and FHLB stock, investment securities, deposits and
borrowings. At December 31, 1999, the Company had approximately $275 million in
interest sensitive assets and approximately $276 million in interest sensitive
liabilities (deposits and borrowings). At June 30, 2000, the Company's interest
sensitive assets and interest sensitive liabilities totaled approximately $304
million and $313 million, respectively.
The yield on interest sensitive assets and the cost of interest sensitive
liabilities for the second quarter of 2000 was 9.48% and 2.51%, respectively,
compared to 8.42% and 2.10%, respectively, at December 31, 1999. The increase in
the yield on interest sensitive assets is primarily a result of the percentage
of average loans to average interest sensitive assets increasing from
approximately 70.7% at December 31, 1999 to 72.0% for the quarter ended
June 30, 2000 and the general increase in the level of interest rates. The
increase in the cost of interest sensitive liabilities is primarily a result of
the increase in the level of interest rates over the same period of time.
The Company's interest sensitive assets and interest sensitive liabilities
were reported to have estimated fair values of $271 million and $274 million,
respectively, at December 31, 1999. Because of the floating and short-term
nature of its interest sensitive assets and liabilities, management believes
that there has been no material change in the difference between the book value
of the interest sensitive assets and liabilities and their estimated fair
values.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
See the section titled "Liquidity, Interest Rate Sensitivity and Market
Risk" in the Management's Discussion and Analysis of Financial Condition and
Results of Operations.
18
<PAGE>
PART II--OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
--------------------- -----------
<C> <S>
3.1 Articles of Incorporation of First Community Bancorp
(Exhibit 3.1 of a Registration Statement filed on June 2,
2000 on Form 8-A and incorporated herein by this reference).
3.2 Bylaws of First Community Bancorp (Exhibit 3.2 of a
Registration Statement filed on June 2, 2000 on Form 8-A
and incorporated herein by this reference).
10.1 First Community Bancorp 2000 Stock Incentive Plan; Form of
Incentive Stock Option Agreement, Form of Nonstatutory Stock
Option Agreement for directors and Form of Nonstatutory
Stock Option agreement for consultants.
10.2 Revolving Credit Agreement and Pledge Agreement and Waiver,
dated June 26, 2000.
10.3 Directors' Deferred Compensation Plan
11.0 Computation of Earnings Per Common Share (See Note 5 of the
Notes to Unaudited Consolidated Financial Statements
contained in "Item 1. Consolidated Financial Statements
(unaudited)" of this Quarterly Report on Form 10-Q.)
27.1 Financial Data Schedule for six months ended June 30, 2000
and three months ended March 31, 2000.
27.2 Financial Data Schedules for three months ended March 31,
1999, six months ended June 30, 1999, nine months ended
September 30, 1999 and year ended December 31, 1999.
</TABLE>
REPORTS ON FORM 8-K
On June 9, 2000 the Company filed a Current Report on Form 8-K a press
release announcing, under Item 2, the acquisition of First Community Bank of the
Desert and the required audited and pro forma financial information.
19
<PAGE>
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.
<TABLE>
<S> <C> <C>
FIRST COMMUNITY BANCORP
/s/ JAMES A. BOYCE
-----------------------------------------
James A. Boyce
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
Date: August 10, 2000 /s/ ARNOLD C. HAHN
-----------------------------------------
Arnold C. Hahn
EXECUTIVE VICE PRESIDENT,
CHIEF FINANCIAL OFFICER AND
ASSISTANT SECRETARY
</TABLE>
20
