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 March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-10198
The San Francisco Company
(Exact name of Registrant as specified in its charter)
Delaware 94-3071255
(State or other jurisdiction
of incorporation or organization) (I.R.S. Employer Identification No.)
550 Montgomery Street, San Francisco, California 94111
(Address of principal executive office) (Zip Code)
(415) 781-7810
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year, if changed
since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
The Registrant had 29,320,725 shares of Class A Common Stock
outstanding on May 1, 2000.
page
The San Francisco Company and Subsidiaries
Quarterly Report on Form 10-Q
Table of Contents
Page
Part I - Financial Information
Item 1. Consolidated Statements of Financial Condition
At March 31, 2000 and December 31, 1999 . . . . . . . . 1
Consolidated Statements of Operations
For the Three Months Ended March 31, 2000 and 1999. . . 2
Consolidated Statements of Changes in Shareholders'
Equity
and Comprehensive Income For the Three Months Ended
March 31, 2000 and 1999 . . . . . . . . . . . . . . . . 3
Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2000 and 1999. . . 4
Notes to Consolidated Financial Statements . . . . . . . 5
Item 2. Management's Discussion and Analysis of Financial
Condition
and Results of Operations . . . . . . . . . . . . . . . 6
Item 3. Quantitative and Qualitative Disclosures About Market
Risk . . . . . . . . . . . . . . . . . . . . . . . . . 11
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
page
Item. 1 - Consolidated Financial Statements
The San Francisco Company and Subsidiaries
Consolidated Statements of Financial Condition
March 31, 2000 (unaudited) and December 31, 1999
March 31, December 31,
(Dollars in Thousands Except Per Share Data) 2000 1999
Assets:
Cash and due from banks $6,576 $5,265
Federal funds sold 60,673 34,224
Cash and cash equivalents 67,249 39,489
Investment securities held-to-maturity
(Market value: 2000 $726; 1999 $1,904) 740 1,953
Investment securities available-for-sale 31,606 32,236
Federal Home Loan Bank stock, at par 2,106 2,077
Loans and leases 100,367 94,612
Deferred fees (202) (140)
Allowance for loan and lease losses (1,600) (1,525)
Loans and leases, net 98,565 92,947
Premises and equipment, net 7,077 7,151
Operating lease equipment 4,035 4,306
Interest receivable 897 867
Other assets 4,007 3,900
Total Assets $216,282 $184,926
Liabilities and Shareholders' Equity:
Non-interest bearing deposits $48,810 $32,676
Interest bearing deposits 122,048 106,235
Total deposits 170,858 138,911
Other borrowings 18,000 20,000
Other liabilities and interest payable 2,180 2,061
Total liabilities 191,038 160,972
Shareholders' Equity:
Preferred stock (par value $0.01 per share)
Series B - Authorized - 437,500 shares
Issued and outstanding - 2000 and 1999 - 15,869 111 111
Common stock (par value $0.01 per share)
Class A - Authorized - 100,000,000 shares
Issued and outstanding - 2000 and 1999 - 29,317,558 293 293
Additional paid-in capital 76,963 76,963
Retained deficit (51,467) (52,766)
Accumulated other comprehensive loss (656) (647)
Total shareholders' equity 25,244 23,954
Total Liabilities and Shareholders' Equity $216,282 $184,926
See accompanying notes to unaudited consolidated financial statements.
page 1
The San Francisco Company and Subsidiaries
Consolidated Statements of Operations
Three Months Ended March 31, 2000 and 1999
(Unaudited)
March 31,
(Dollars in Thousands Except Per Share Data) 2000 1999
Interest income:
Loans $2,337 $1,753
Investments 1,105 689
Dividends 29 26
Total interest income 3,471 2,468
Interest expense:
Deposits 928 652
Other borrowings 266 272
Total interest expense 1,194 924
Net interest income 2,277 1,544
Provision for loan and lease losses 75 --
Net interest income after provision
for loan and lease losses 2,202 1,544
Non-interest income:
Stock option commissions and brokerage fees 1,056 437
Real estate rental income 309 306
Service charges and fees 269 174
Operating lease revenue 300 120
Other income 236 49
Total non-interest income 2,170 1,086
Non-interest expense:
Salaries and related benefits 1,759 1,223
Occupancy expense 337 290
Depreciation of operating lease equipment 271 67
Data processing 127 109
Professional fees 142 85
Corporate insurance premiums 78 63
Equipment expense 52 51
Other operating expenses 231 182
Total non-interest expense 2,997 2,070
Income before income taxes 1,375 560
Provision for income taxes 76 3
Net Income $1,299 $557
Income per common share:
Basic: Net income $0.04 $0.02
Weighted average shares outstanding 29,317,558 31,728,782
Diluted: Net income $0.04 $0.02
Weighted average shares outstanding 31,108,246 33,254,168
See accompanying notes to unaudited consolidated financial statements.
page 2
The San Francisco Company and Subsidiaries
Consolidated Statements of Changes in Shareholders' Equity and
Comprehensive Income
Three Months Ended March 31, 2000 and 1999
(Unaudited)
Accumulated
Other Total
Additional Compre- Retained Compre- Share-
(Dollars in Preferred Common Paid-in hensive Earnings hensive holders'
Thousands) Stock Stock Capital Income (Deficit) Income Equity
Balances at
January 1, 1999 $111 $317 $78,816 $(56,619) $79 $22,704
Dividend on
Preferred Stock -- -- -- (5) -- (5)
Net income
(three months) -- -- -- $557 557 -- 557
Other comprehensive
loss, net of tax
Unrealized losses
on securities, net -- -- (133) -- (133) (133)
Total other
comprehensive loss -- -- -- (133) -- -- --
Comprehensive income $424
Balances at
March 31, 1999 111 317 78,816 (56,067) (54) 23,123
Net proceeds from
the exercise of
stock options -- 4 128 -- -- 132
Dividend on
Preferred Stock -- -- -- (7) -- (7)
Redemption of
Common Stock -- (28) (1,981) -- -- (2,009)
Net income
(nine months) -- -- -- $3,308 3,308 -- 3,308
Other comprehensive
income, net of tax
Unrealized gain on
securities, net -- -- -- (593) -- (593) (593)
Total other
comprehensive income (593)
Comprehensive income $2,715
Balances at
December 31, 1999 111 293 76,963 (52,766) (647) 23,954
Net income
(three months) -- -- -- $1,299 1,299 -- 1,299
Other comprehensive
loss, net of tax
Unrealized loss
on securities, net -- -- -- (9) -- (9) (9)
Total other
comprehensive loss (9)
Comprehensive income $1,290
Balances at
March 31, 2000 $111 $293 $76,963 $(51,467) $(656) $25,244
See accompanying notes to unaudited consolidated financial statements.
page 3
The San Francisco Company and Subsidiaries
Consolidated Statements of Cash Flows
Three Months Ended March 31, 2000 and 1999
(Unaudited)
(Dollars in Thousands) 2000 1999
Cash Flows from Operating Activities:
Net income $1,299 $557
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 75 --
Depreciation and amortization expense 417 209
(Increase) decrease in interest receivable and
other assets (137) 7
Increase (decrease) in interest payable and
other liabilities 119 (422)
Increase in deferred loan fees 62 14
Net cash flows provided by operating activities 1,835 298
Cash Flows from Investing Activities:
Proceeds from maturities of investment
securities held-to-maturity 1,213 548
Proceeds from maturities of investment
securities available-for-sale 821 10,013
Purchase of investment securities available-for-sale (229) (4,093)
Net increase in loans (5,755) (7,477)
Purchases of premises and equipment (72) (27)
Increase in investment in operating leases -- (2,943)
Net cash used in investing activities (4,022) (3,979)
Cash Flows from Financing Activities:
Net decrease in other borrowings (2,000) --
Net increase (decrease) in deposits 31,947 (2,450)
Dividends on Series B Preferred Stock -- (5)
Net cash provided by (used in) financing activities 29,947 (2,455)
Increase (decrease) in cash and cash equivalents 27,760 (6,136)
Cash and cash equivalents at beginning of period 39,489 14,908
Cash and cash equivalents at end of period $67,249 $8,772
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest $1,022 $747
Income taxes 36 6
See accompanying notes to unaudited consolidated financial statements.
page 4
The San Francisco Company and Subsidiaries
Notes to Consolidated Financial Statements
(March 31, 2000 Unaudited)
Note 1 - Organization
The San Francisco Company (the "Company") is a Delaware corporation and
a bank holding company registered under the Bank Holding Company Act of 1956.
Bank of San Francisco (the "Bank") is a California state chartered banking
corporation and a wholly owned subsidiary of the Company.
Note 2 - Principles of Consolidation and Presentation
The accompanying unaudited consolidated financial statements of the
Company have been prepared in accordance with the instructions pursuant to
Form 10-Q Quarterly Report and Articles 9 and 10 of Regulation S-X, and
therefore do not include all the information and footnotes necessary to
present the consolidated financial condition, results of operations and cash
flows of the Company in conformity with generally accepted accounting
principles.
The data as of March 31, 2000, and for the three months ended March 31,
2000 and 1999 are unaudited, but in the opinion of management, reflect all
accruals and adjustments of a normally recurring nature necessary for fair
presentation of the Company's financial condition and results of operations.
The results of operations for the three months ended March 31, 2000 are not
necessarily indicative of the results to be expected for the entire year of
2000. This report should be read in conjunction with the Company's 1999
Annual Report on Form 10-K.
The accompanying financial statements include the accounts of the
Company, the Bank, and the Bank's wholly owned subsidiary, Bank of San
Francisco Realty Investors (the "BSFRI"). All material intercompany
transactions have been eliminated in consolidation.
Certain reclassifications have been made in the prior years'
consolidated financial statements to conform to the present year
presentation.
Note 3 - Earnings Per Share (the "EPS")
Basic EPS is calculated by dividing net income by the weighted average
number of Class A Common Shares (the "Common Stock"). The dilutive EPS is
calculated giving effect to all potentially dilutive Common Shares, such as
certain
page 6
stock options, that were outstanding during the period. The
following tables present a reconciliation of the amounts used in calculating
basic and diluted EPS for each of the periods shown.
(dollars in thousands except per-share amounts)
Per-share
March 31, 2000 Income Shares amount
Basic EPS $1,297 29,317,558 $0.04
Effect of dilutive securities:
Series B Preferred Stock -
convertible 2 793
Stock Options -- 1,789,895
Diluted EPS $1,299 31,108,246 $0.04
Per-share
March 31, 1999 Income Shares amount
Basic EPS $555 31,728,782 $0.02
Effect of dilutive securities:
Series B Preferred Stock -
convertible 2 793
Stock Options -- 1,524,593
Diluted EPS $557 33,254,168 $0.02
Note 4 - Recent Accounting Pronouncements
During the first quarter of 2000, there were no new pronouncements that
are applicable to the Company or the Bank.
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations
This document contains forward-looking statements that are subject to
risks and uncertainties, including, but not limited to, the Company's and
Bank's ability to implement their respective long-term business plans, the
economy in general and the condition of stock markets upon which the
Company's stock brokerage business and fee income is dependent, the continued
services of the Company's and Bank's key executives and managers, any future
change-of-control, the real estate market in California and other factors
beyond the Company's and Bank's control. Such risks, uncertainties and
factors, including those discussed herein, could cause actual results to
differ materially from those indicated. Readers should not place undue
reliance on forward-looking statements, which reflect management's views only
as of the date hereof. The Company and the Bank undertake no obligation to
revise these forward-looking statements to reflect subsequent events or
circumstances. Readers are also encouraged to review the Company's publicly
available filings with the Securities and Exchange Commission.
Overview
The Company is a one-bank holding company registered in Delaware under
the Bank Holding Company Act of 1956. The principal activity of the Company
is to serve as the holding company for Bank of San Francisco, a California
chartered bank, with deposits insured by the Federal Deposit Insurance
Corporation's Bank Insurance Fund. The information set forth in this report,
including unaudited interim financial statements and related data, relates
primarily to the Bank.
The Company's Common Stock is not listed on any exchange. First
Security Van Kasper of San Francisco California is the sole market maker in
the Company's Common Stock.
page 6
The Company recorded net income of $1,299,000 for the three months ended
March 31, 2000, compared to net income of $557,000 for the same period in
1999. The increase in the Company's net income of $742,000 was primarily
from an increase in net interest income and non-interest income, partially
offset by an increase in non-interest expenses in first quarter 2000 compared
to the same period in 1999.
At March 31, 2000, total assets were $216.3 million, an increase of
$31.4 million, or 17% from $184.9 million at December 31, 1999. As of March
31, 2000, total loans were $100.4 million, an increase of $5.8 million, or
6%, compared to $94.6 million at December 31, 1999. Total deposits were
$170.9 million at March 31, 2000, an increase of $32.0 million, or 23%,
compared to $138.9 million at December 31, 1999.
Results of Operations
Net Interest Income
The Company's net interest income was $2.3 million in the quarter ended
March 31, 2000 compared to $1.5 million for the same period in 1999, or an
increase of 47%. Average earning assets increased by $49.2 million, or 37%,
to $181.6 million for the first quarter of 2000 compared to $132.4 million
for the same period in 1999. The yield on earning assets increased 30 basis
points to 5.03% for the first quarter 2000 compared to 4.73% for the same
period in 1999 primarily as a result of a lower average cost of deposits and
higher yield on the investment portfolio.
Provision for Loan and Lease Losses
The Company recorded a provision for loan and lease losses of $75,000
for the first quarter of 2000 compared to none in the same period in 1999.
The provision for loan and lease losses in 2000 reflects the amount necessary
to increase the allowance for loan and lease losses to a level that
management believed was adequate based on the factors that are more fully
discussed under "Loans and Leases - Allowance for Loan and Lease Losses".
Non-Interest Income
Non-interest income was $2.2 million at March 31, 2000 compared to $1.1
million at March 31, 1999. The increase in non-interest income of $1.1
million, or 100%, was primarily the result of an increase in stock option and
brokerage commission income, operating lease revenue, other income, and
service charges and fees.
The increase in stock option and brokerage revenue totaled $871,000, or
154%, for the first quarter in 2000 compared to the same period in 1999. The
increase was the result of a higher volume of trading activity which the
overall equity markets experienced. This level of trading volume is not
expected to continue.
Operating lease revenue increased $180,000, or 150%, in 2000 compared to
1999 as a result in an increase in total equipment owned and leased under
operating leases. In addition, all other types of non-interest income
improved primarily as a result of on-going marketing efforts.
Non-Interest Expense
The Company's non-interest expenses increased to $3.0 million from $2.1
million for the three month period ended March 31, 2000 and 1999,
respectively. The increase of $927,000, or 45%, was primarily related to
compensation related expenses including incentive programs, higher operating
lease depreciation expense, higher occupancy expenses, higher data process
and other expenses.
The increase in salaries and related benefits of $536,000, or 44%, is
primarily related to higher incentive accruals by $358,000, or 130%, based on
performance; higher salaries by $105,000, or 14%, from an increase in
personnel and salary adjustments; and higher temporary personnel by $73,000,
or 304%, as a result of an increase in the number of
page 7
temporary personnel necessary to process the higher volume of stock option
and brokerage transactions.
Financial Condition
Liquidity and Capital Resources
Liquidity
The Bank's liquid assets, which include cash and short term investments
totaled $67.2 million, or 31% of total assets, at March 31, 2000, an increase
of $27.7 million, from $39.5 million, or 21% of total assets, at December 31,
1999. The increase in liquidity was the result of an increase in deposits by
$32.0 million, cash flow provided by operating activities totaling $1.8
million, and net proceeds from investment securities totaling $1.8 million,
partially offset by a decrease in borrowings of $2.0 million and an increase
in net loans of $5.8 million.
As of March 31, 2000, the Bank had pledged securities totaling $21.5
million to the Federal Home Loan Bank of San Francisco (the "FHLB") as
collateral for other borrowings totaling $18.0 million. As of March 31,
2000, the Bank has the ability to borrow an additional $4.5 million to a
maximum of $22.5 million from the FHLB upon the pledge of sufficient
collateral. In the future, long and short-term borrowings from the FHLB may
be used as an on-going source of liquidity and funding. As of March 31,
2000, the Bank had other securities totaling $600,000 pledged as collateral
for public funds and trusts.
The Bank has access to the discount window at the Federal Reserve Bank
(the "FRB") for a total borrowing facility of $1.8 million upon the pledge of
securities. At March 31, 2000 and December 31, 1999, no such borrowings were
outstanding and no securities were pledged as collateral for the FRB
facility.
Capital
At March 31, 2000, shareholders' equity was $25.2 million compared to
$24.0 million at December 31, 1999.
The Company and the Bank are subject to general capital regulations
issued by the FRB, Federal Deposit Insurance Corporation, and California
Department of Financial Institutions which require maintenance of a certain
level of capital. As of March 31, 2000, the Company and the Bank are in
compliance with all minimum capital ratio requirements.
The following table reflects both the Company's and the Bank's capital
ratios with respect to minimum capital requirements in effect as of March 31,
2000:
Minimum
Capital
Company Bank Requirement
Leverage ratio 12.2% 12.1% 4.0%
Tier 1 risk-based capital 16.3 16.2 4.0
Total risk-based capital1 7.4 17.3 8.0
Investment Activities
At March 31, 2000, the Company's investment securities totaled $34.5
million, or 16.0% of total assets, compared to $36.3 million, or 19.6% of
total assets, at December 31, 1999. The change in investment securities
resulted primarily from principal amortization on mortgage related
securities. The Company's investment portfolio may from time to time include
treasury and agency securities, fixed and adjustable rate mortgage backed
securities, and to a limited
page 8
extent collateralized mortgage backed securities. Generally, the Bank's
investment securities held-to-maturity and available-for-sale have
maturities or principal amortization of seven years or less.
At March 31, 2000, investment securities held-to-maturity totaled
$740,000, compared to $1,953,000 at December 31, 1999, and are carried at
amortized cost. At March 31, 2000, the Company held $31.6 million in
securities available-for-sale, compared to $32.2 million at December 31,
1999. Investment securities available-for-sale are accounted for at fair
value. Unrealized gains and losses are recorded as an adjustment to equity
and are not reflected in the current earnings of the Company. As of March
31, 2000, the investment securities available-for-sale have an unrealized
loss of $1.1 million, that was included as a component of accumulated other
comprehensive income under shareholder's equity to reflect the current market
value of the securities available-for-sale.
The decline in the market value of the investment securities was the
result of increasing market interest rates during 1999 and the first three
months of 2000. The market value of the investment portfolio will fluctuate
with changes in market rates. Management believes the decline in market
value is temporary and does not represent a permanent impairment in the
market value of the investment portfolio.
Loans and Leases
During the first quarter of 2000, total loans and leases increased, from
$94.6 million at December 31, 1999 to $100.4 million at March 31, 2000. The
increase resulted primarily from the funding of new loans. The composition
of the Bank's loan and lease portfolio at March 31, 2000 and December 31,
1999 is summarized as follows:
March 31, December 31,
(Dollars in Thousands) 2000 1999
Real estate mortgage $72,674 $67,914
Secured commercial and financial 9,837 9,386
Unsecured 13,892 13,344
Other loans and leases 3,964 3,968
Subtotal 100,367 94,612
Deferred fees and costs, net (202) (140)
Allowance for loan and lease losses (1,600) (1,525)
Total loans and leases, net $98,565 $92,947
Impaired Loans and Leases
On March 31, 2000, the Bank had loans outstanding totaling $125,000 that
were past due more than 31 days.
The Company identifies loans with weak credit quality characteristics
for review in accordance with SFAS No. 114 "Accounting by Creditors for
Impairment of a Loan" as amended by SFAS No. 118 "Accounting by Creditors for
Impairment of a Loan-Income Recognition and Disclosures" (the "SFAS No.
114"). As of March 31, 2000 and December 31, 1999, the Company had no
impaired loans. No interest income was recognized on impaired loans during
the first quarter of 2000 and 1999, respectively.
There can be no assurance that the Bank will not experience losses in
attempting to collect or otherwise liquidate the performing assets which are
presently reflected on the Company's statement of financial condition.
Allowance for Loan and Lease Losses
Generally, the Bank charges current earnings with a provision for
estimated losses on loan and lease receivables. The Bank will provide an
adjustment if the total allowance for loan and lease losses exceeds the
amount of estimated loan
page 9
and lease losses. The provisions or adjustments take into consideration
specifically identified problem loans, the financial condition of the
borrowers, the fair value of the collateral, recourse to guarantors and
other factors.
Specific loss allowances are established based on asset characteristics
and credit quality. Specific loss allowances are utilized to ensure that the
allowance is allocated based on the credit quality including the present
value of expected cash flows, the terms and structure of the loan, the
financial condition of the borrower, and the fair value of underlying
collateral. As of March 31, 2000, none of the allowance for loan losses was
allocable to impaired loans, as identified in accordance with SFAS No. 114.
In addition, the Bank carries an "unallocated" loan and lease loss allowance
to provide for losses that may occur on loans and leases that may not
presently have credit quality weaknesses, based on present economic
conditions, trends, and related uncertainties. The following table
summarizes the loan and lease loss experience of the Bank for the quarter
ended March 31, 2000:
March 31,
(Dollars in Thousands) 2000
Beginning balance of allowance for
loan and lease losses at December 31, 1999 $1,525
Charge-offs --
Recoveries --
Provision 75
Ending balance of allowance for loan and lease losses $1,600
Operating Lease Equipment
As of March 31, 2000, other assets included investments in operating
leases totaling $4.0 million compared to $4.3 million at December 31, 1999.
Generally, the operating leases are comprised of computer and electronic test
equipment leased under short-term rental agreements.
Deposits
The Company had total deposits of $170.9 million at March 31, 2000
compared to $138.9 million at December 31, 1999, an increase of $31.9 million
or 23%. The increase was attributed to increases in Escrow related deposits
of approximately $2.2 million, private and business banking related deposits
of $16.0 million, homeowners' association related customer's deposits of $1.6
million, and an increase in stock option service related deposits of $13.5
million, partially offset by a reduction in money desk related deposits
totaling $1.4 million. A summary of deposits at March 31, 2000 and December
31, 1999 is as follows:
March 31, December 31,
(Dollars in Thousands) 2000 1999
Demand deposits $48,810 $32,676
NOW 26,323 38,354
Money market and savings 57,694 27,555
Total deposits with no stated maturity 132,827 98,585
Time deposits:
Less than $100,000 13,863 14,819
$100,000 and greater 24,168 25,507
Total time deposits 38,031 40,326
Total deposits $170,858 $138,911
page 10
The Bank's deposits from private and business banking customers totaled
$77.0 million, or 46% of total deposits, at March 31, 2000, compared to $60.7
million, or 44% of total deposits, at December 31, 1999. Deposits from
Association Bank Services customers totaled $29.5 million, or 17% of total
deposits at March 31, 2000, compared to $28.2 million, or 20% of total
deposits at December 31, 1999. Deposits from Escrow customers totaled $28.0
million, or 16% of total deposits at March 31, 2000, compared to $25.7
million, or 19% of total deposits at December 31, 1999. Deposits from Stock
Option Services activities totaled $28.1 million, or 16% of total deposits at
March 31, 2000, compared to $14.6 million, or 10% of total deposits at
December 31, 1999. Deposits acquired through the money desk operations
totaled $8.3 million, or 5% of total deposits at March 31, 2000, compared to
$9.7 million, or 7% of total deposits at December 31, 1999.
Other Borrowings
As of March 31, 2000, the Bank had long-term FHLB borrowings outstanding
totaling $15.0 million and short-term FHLB borrowings outstanding of $3.0
million secured by pledged securities totaling $21.5 million.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market Risk Management
Market risk includes risks that arise from changes in interest rates,
foreign currency, exchange rates, commodity prices, equity prices and other
market changes that affect market sensitive instruments. The Company's
primary market rate risk, interest rate risk, has not changed significantly
since December 31, 1999. The Company does not have any significant risk
related to foreign currency, exchange rates, commodity prices, equity prices,
and other changes that affect market sensitive instruments.
page 11
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
The San Francisco Company
(Registrant)
Date: May 3, 2000 /s/ James E. Gilleran
James E. Gilleran
Chairman of the Board and
Chief Executive Officer
Date: May 3, 2000 /s/ Keary L. Colwell
Keary L. Colwell
Chief Financial Officer and
Executive Vice President
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<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 6,576
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<INCOME-PRETAX> 1,375
<INCOME-PRE-EXTRAORDINARY> 1,375
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,299
<EPS-BASIC> 0.04
<EPS-DILUTED> 0.04
<YIELD-ACTUAL> 5.0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,525
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 1,600
<ALLOWANCE-DOMESTIC> 1,600
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
