SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report (Date of earliest event report) July 18, 1996
Professional Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Pennsylvania 0-11223 95-3701137
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
606 Broadway, Santa Monica, CA 90401
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (310) 458-1521
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Item 5. Other Events
A press release, dated July 18, 1996, reports information that the
Registrant deems of importance to security holders. The press release, which is
attached as Exhibit 1, is hereby incorporated by reference.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Professional Bancorp, Inc.
Dated: July 23, 1996 By: /s/ John S. Buchanan
John S. Buchanan, President and
Chief Executive Officer
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Exhibit 1
Contact: Sitrick And Company
Michael Kolbenschlag
James Bourne
(310) 788-2850
For Immediate Release
PROFESSIONAL BANCORP ANNOUNCES PLANS FOLLOWING
RECENT PROXY CONTEXT;
ANNOUNCES SECOND QUARTER RESULTS
Santa Monica, Calif. -- July 18, 1996 -- Julie P. Thompson, Chairman of
the Board of Professional Bancorp, Inc. (AMEX:MDB) and its wholly owned
subsidiary, First Professional Bank, N.A., announced, following the first
regularly scheduled Board meeting Tuesday evening, that the new Board of
Directors is working well together and that current and new depositors,
borrowers, clients and stockholders of the Company should rest assured that the
bank is focused on committing its resources to a high level of service to its
clients. "The Board of Directors has put the proxy contest behind it and is
focused on improving bank earnings, and client satisfaction, and further
developing its niche as California's health care bank and insuring that the loan
portfolio has been adequately reviewed," said Miss Thompson. Miss Thompson
added, "I am extremely gratified to see the Board pull together and unanimously
agree to work with our clients and owners." Lynn Poulson advised the Board that
while he was remaining a director, he was resigning as Co-chair of the Board.
Miss Thompson noted that, in its first steps to demonstrate its
commitment, the Board has streamlined its committee structure and has
unanimously decided to reduce directors fees by approximately fifty percent. Ms.
Thompson also praised the bank's employees. "The Board values the commitment and
hard work of our 100 employees and recognizes the difficult role that they have
played especially during the past few months," she said. "Other members of the
Board and I expect to meet in the near future with our employees to thank them
personally."
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Professional Bancorp, Inc. also announced today a loss of $3,726,000, or
$2.23 per primary and fully diluted share, for the second quarter of 1996 ended
June 30. This compares with net income of $604,000, or $.36 per primary and $.33
per fully diluted share, for the same period in calendar 1995. For the six
months ended June 30, 1996, the Company reported a loss of $3,450,000, or $2.04
per primary and fully diluted share. This compares with net income of
$1,107,000, or $.67 per primary and $.62 per fully diluted share, for the first
six months of the prior year. Total assets for the Company as of June 30 were
$271 million, down from $335 million at the same point in the prior year.
The Company attributed the loss for the quarter to a combination of an
addition to loan loss reserves, as well as to settlement, legal and other costs
related to the recent proxy battle between shareholders and former management.
According to the Company, $3,240,000 was added to the bank's loan loss reserve.
Of this amount, $2,950,000 related to specific loans which had deteriorated
during the second quarter and that management determined required additional
reserves to protect against potential losses; one loan constituted $1,915,000 of
the specific provision. "New management believes that all significant credits
have been examined for quality and adequate reserves established," said John
Buchanan, interim bank president and chief executive officer who joined the
Company in early July. "The Board wants to position the Company for a positive
and profitable future, and adding to the reserve is a necessary building block."
Mr. Buchanan also said that, even with this addition, the Company remains well
capitalized. Mr. Buchanan added that "at the Board's direction I am conducting
serious discussions concerning a strategic alliance with Melinda McIntyre, the
former president of the bank, and her company, Network Health Financial." Ms.
McIntyre served the bank as its president until January.
The remaining components of the loss included one time charges of
$1,006,000 in settlement costs with prior management and $1,640,000 in legal and
other costs related to the proxy contest begun in mid-May.
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"We anticipate a return of profitability in the third and fourth
quarters," said Mr. Buchanan. "Shareholders have elected a new board," said Mr.
Buchanan, a former chief of staff of the Federal Home Loan Bank Board and a
consultant specializing in bank management problems. "But the remediation
process will take time. The good news is that we believe the original charter of
the bank in focusing on serving health care professionals is sound." Mr.
Buchanan added that, while it is too early to spell out a strategic plan in
detail, he intends to focus on generating more income from banking and less from
securities transactions than previous management. "Banking is our business and
that's where we will find profitability and enhance shareholder value," said Mr.
Buchanan.
Professional Bancorp, Inc. is a Santa Monica-based bank holding company
whose only subsidiary, First Professional Bank, N.A., is a commercial bank
specializing in providing financial services to professionals in the health care
industry. The bank has five full service branches in Southern California,
including Tarzana, Pasadena, Redlands and Beverly Hills in addition to Santa
Monica, and a limited service office at Cedars-Sinai Hospital.
(Financial Table to Follow)
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Professional Bancorp, Inc.
Financial Highlights
(amounts in thousands except share data)
(unaudited)
<S> <C> <C> <C> <C>
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
Statement of Earnings (Loss) Data:
Net interest income $ 3,175 $ 3,726 $ 6,450 $ 7,329
Provision for loan losses 3,240 125 3,420 187
Securities transactions, net --- 97 --- 123
Noninterest income 393 369 756 697
Noninterest expense 6,035 3,055 9,037 6,131
Income (loss) before taxes (5,707) 1,012 (5,251) 1,831
Income (loss) after taxes (3,726) 604 (3,450) 1,107
Share Data
Earnings (loss) per share
Primary $ (2.23) $ 0.36 $ (2.04) $ 0.67
Fully diluted (2.23) 0.33 (2.04) 0.62
Book value per common share 10.24 13.15
Shares outstanding 1,365,988 1,247,248 1,365,988 1,247,248
Weighted average primary shares 1,653,244 1,720,460 1,653,244 1,806,061
Weighted average fully
diluted shares 2,095,584 2,151,710 2,095,584 2,151,710
Balance Sheet Data:
Total assets $ 270,820 $ 334,823
Securities, held-to-maturity 45,258 130,597
Securities, available-for-sale 84,329 37,189
Total loans (gross) 97,905 104,788
Allowance for loan losses 4,484 835
Total deposits 231,184 310,602
Total shareholders' equity 13,994 17,024
Valuation allowance for securities
available-for-sale (1,027) 23
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