<PAGE>
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
Annual Report
PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1998
A. Full title of the plan and address of the plan, if different from that of the
issuer named below:
FIRST PROFESSIONAL BANK 401(k) SAVINGS PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
PROFESSIONAL BANCORP, INC.
606 Broadway
Santa Monica, California
90401
<PAGE>
ITEM 1. Changes in Plan
During the past fiscal year, there have been no material changes in First
Professional Bank's 401(k) Savings Plan (the "Plan").
ITEM 2. Changes in Investment Policy
During the past fiscal year, there have been no material changes in First
Professional Bank's 401(k) Savings Plan with respect to the kind of securities
or other investments in which funds held under the plan may be invested.
ITEM 3. Contributions Under the Plan
First Professional Bank, N.A., wholly-owned subsidiary of Professional
Bancorp, Inc. (the "Company"), at its discretion matches contributions up to a
maximum amount of 100% of the first 3% of eligible compensation, as defined.
These contributions may be invested at the participant's direction.
ITEM 4. Participating Employees
At December 31, 1998, the First Professional Bank 401(k) Savings Plan
had approximately 85 participants.
ITEM 5. Administration of the Plan
The following table sets forth certain information concerning the
persons who administer the Plan, the capacity in which they act, positions or
offices held with the Company and compensation received from the Plan.
<TABLE>
<CAPTION>
Compensation
Name and Address Capacity within Plan Capacity within Company Paid by Plan
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Eric Woodstrom Plan Administrator Executive Vice President, $ -0-
First Professional Bank, N.A. First Professional Bank, N.A.
606 Broadway
Santa Monica, CA 90401
Delaware Charter Trustee None. -0-
Guarantee & Trust Company
1013 Sentre Road
Wilmington, DE 19805
</TABLE>
<PAGE>
ITEM 6. Custodian of Investments
The following table sets forth certain information concerning the persons
who acts as custodian of the Plan's investments and securities, compensation
received from the Plan, and bond coverage furnished in connections with the
custody of the security or other assets of the plan.
Compensation
Name and Address Paid by Plan Bond Coverage
- --------------------------------------------------------------------------------
Delaware Charter $ -0- Financial Institution Bond
Guarantee & Trust Company
1013 Sentre Road
Wilmington, DE 19805
ITEM 7. Reports to Participating Employees
The participants of the plan receive quarterly reports providing them
information regarding their assets within the plan and a summary plan
description at the end of the calendar year.
ITEM 8. Investment of Funds
In addition to securities of the Company, the participant has the option
of investing in the following Principal Life Insurance Company, Principal
Financial Group annuity investment accounts: Guaranteed Interest Account, Money
Market Account, Bond & Mortgage Account, Stock Emphasis Balanced Account, Stock
Index 500 Account, Medium Company Blend Account, and the International Stock
Account. The above mentioned accounts are traded in units, or shares, and priced
accordingly. Therefore, there are no additional commissions paid by the Plan.
ITEM 9. Financial Statements and Exhibits
(a) Financial Statements: See Index to Financial Statements and Schedules of
First Professional Bank 401(K) Savings Plan which is part of this Form 11-
K.
(b) Exhibits: Exhibit No. 23.1 - Independent Auditors' Consent - Hutchinson and
Bloodgood LLP
Exhibit No. 23.2 - Independent Auditors' Consent - KPMG LLP
<PAGE>
Pursuant to the requirements of Securities Exchange Act of 1934, the trustees
(or other persons who administer the plan) have duly caused this annual report
to be signed by the undersigned thereunto duly authorized.
First Professional Bank 401(k) Savings Plan
Date: June 30, 1999 By: /s/ ERIC J. WOODSTROM
----------------------------------------
Eric J. Woodstrom
Executive Vice President
First Professional Bank, N.A.
<PAGE>
FIRST PROFESSIONAL BANK 401(k)
SAVINGS PLAN
FINANCIAL REPORT
YEARS ENDED DECEMBER 31, 1998 AND 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
INDEPENDENT AUDITORS' REPORT F-1
INDEPENDENT AUDITORS' REPORT F-2
FINANCIAL STATEMENTS
Statements of net assets available for benefits F-3
Statements of changes in net assets available for benefits F-4
Notes to financial statements F-5 - F-12
SUPPLEMENTAL SCHEDULES
Item 27a - Schedule of assets held for investment purposes
as of December 31, 1998 F-14
Item 27b - Schedule of reportable transactions for the
year ended December 31, 1998 F-15
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Profit Sharing Committee of the
First Professional Bank 401(k) Savings Plan
Santa Monica, California
We have audited the accompanying statements of net assets available for benefits
of First Professional Bank 401(k) Savings Plan (the Plan) as of December 31,
1998 and the related statements of changes in net assets available for benefits
for the year then ended. These financial statements are the responsibility of
the Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audit. The financial statements of the Plan as
of December 31, 1997 were audited by other auditors whose report dated June 30,
1998 expressed an unqualified opinion on those statements.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 1998, and the changes in net assets available for benefits for the
year then ended, in conformity with generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedules of assets held for
investment purposes as of December 31, 1998 and reportable transactions for the
year ended December 31, 1998 is presented for the purpose of complying with the
Department of Labor Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 and are not a required part of
the basic financial statements. The supplemental schedules have been subjected
to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, are fairly stated, in all material respects, in
relation to the basic financial statements taken as a whole.
Hutchinson and Bloodgood LLP
June 4, 1999
Glendale, California
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Profit Sharing Committee of the
First Professional Bank 401(k) Savings Plan:
We have audited the accompanying statements of net assets available for Plan
benefits of the First Professional Bank 401(k) Savings Plan (the "Plan") as of
December 31, 1997 and the related statement of changes in net assets available
for Plan benefits for the year ended December 31, 1997. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for Plan benefits of the Plan as
of December 31, 1997 and the changes in net assets available for Plan benefits
for the year ended December 31, 1997 in conformity with generally accepted
accounting principles.
KPMG LLP
Los Angeles, California
June 30, 1998
F-2
<PAGE>
FIRST PROFESSIONAL BANK 401(k)
SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1998 and 1997
<TABLE>
<CAPTION>
ASSETS 1998 1997
<S> <C> <C>
Investments, at fair value:
Principal Financial Group Annuity Contracts:
Guaranteed Interest Accounts $ 140,322 $ - -
Money Market Account 16,922 - -
Bond & Mortgage Account 76,489 - -
Stock Emphasis Balanced Account 135,507 - -
Stock Index 500 Account 315,814 - -
Medium Company Blend Account 157,857 - -
Small Company Blend Account 143,860 - -
International Stock Account 86,721 - -
John Hancock Mutual Funds:
Money Market Fund - - 137,522
Sovereign Balanced Fund - - 154,957
Independence Equity Fund - - 295,590
Special Opportunities Fund - - 131,926
Global Fund - - 90,445
Global RX Fund - - 77,656
First Bancorp, Inc. Common Stock 213,375 280,925
Participant Loans 80,476 71,991
---------- ----------
Total investments 1,367,343 1,241,012
---------- ----------
Employer contribution receivable 11,373 - -
---------- ----------
Cash - - 1,029
---------- ----------
Total assets 1,378,716 1,242,041
---------- ----------
LIABILITIES - - - -
---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $1,378,716 $1,242,041
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
F-3
<PAGE>
FIRST PROFESSIONAL BANK 401(k)
SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
Years Ended December 31, 1998 and 1997
<TABLE>
<CAPTION>
ADDITIONS 1998 1997
<S> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value of investments $ 51,633 $ 215,766
Dividends and interest 12,864 5,670
---------- ----------
64,497 221,436
---------- ----------
Contributions:
Employer contributions 106,480 81,003
Employee contributions 217,939 173,873
Rollovers - - 5,402
---------- ----------
324,419 260,278
---------- ----------
Total additions 388,916 481,714
---------- ----------
DEDUCTIONS
Deductions from net assets attributed to:
Benefit distributions 247,639 242,623
Administrative expenses 5,029 - -
Forfeitures (427) - -
---------- ----------
Total deductions 252,241 242,633
---------- ----------
Net increase 136,675 239,091
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 1,242,041 1,002,950
---------- ----------
End of year $1,378,716 $1,242,041
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
FIRST PROFESSIONAL BANK 401(k)
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 1. DESCRIPTION OF THE PLAN
The following brief description of the 401(k) Savings Plan is provided
for general information purposes only. Participants should refer to the
401(k) Savings Plan Agreement for more complete information.
Plan Organization and Administration
The Plan is a defined contribution plan which provides retirement
benefits for eligible employees of First Professional Bank, N.A. and
its subsidiaries (the "Company"). The Plan is administered by the
First Professional Bank Benefits Committee (the Plan Administrator),
which is presently comprised of four officers of First Professional
Bank, N.A. The Plan has been amended periodically to conform with
various requirements of the Employee Retirement Income Security Act
of 1974 ("ERISA").
Participant Eligibility
All employees of the Company are eligible to participate in the Plan
after completion of one year of employment consisting of at least
1,000 hours. Employees of the Company are eligible to participate in
the Plan on the first day of each quarter following the completion
of one year of employment. However, the employee may make a rollover
contribution before completing the one-year eligibility requirement.
Contributions
Effective January 1, 1996, the Board of Directors of the Company
authorized an amendment to the Plan to allow participants to
contribute, under a salary reduction agreement, up to 15% of their
eligible compensation, as defined, but not to exceed the dollar
amount allowed by law, $10,000 for 1998. The Company at its
discretion matches contributions up to a maximum amount of 100% of
the first 3% of eligible compensation, as defined.
Investment Options
Participants salary deferral contributions and Company matching
contributions may be invested at the participant's direction in the
Professional Bancorp, Inc. common stock and the following Principal
Life Insurance Company, Principal Financial Group annuity investment
accounts: Guaranteed Interest Account, Money Market Account, Bond &
Mortgage Account, Stock Emphasis Balanced Account, Stock Index 500
Account, Medium Company Blend Account, and the International Stock
Account.
F-5
<PAGE>
FIRST PROFESSIONAL BANK 401(k)
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 1. DESCRIPTION OF THE PLAN (Continued)
Participant Accounts
Each participant's account is credited with the participant's
contributions and allocations of the Company's matching contribution
and the Plan's earnings or losses. Earnings of the various funds are
allocated to the participant balances according to the ratio that a
participant's weighted average account balance or shares held in a
given fund bears to the total of all account balances or shares held in
the fund. Forfeitures reduce the amount of matching employer
contributions. For the year ended December 31, 1998, forfeited non-
vested accounts totaled $427.
Vesting
The participant shall always have a non-forfeitable right to the
portion of his account attributable to Salary Reduction Contributions,
After-Tax Employee Contributions, and Rollover Contributions. The
Company's matching contributions vest 100% for all participants with
five or more years of service provided that they are credited with an
hour of service in any Plan year beginning after December 31, 1988. The
following is the participant's vesting schedule for matching employer
contributions:
<TABLE>
<CAPTION>
Years of Service Percentage Vested
<S> <C>
Less than 1 0
1 20
2 40
3 60
4 80
5 or more 100
</TABLE>
Notwithstanding the above, if a participant (1) attains the age of 65, (2)
dies or (3) terminates employment by reason of permanent disability, the
employer match amounts become 100% vested without regard to years of service.
F-6
<PAGE>
FIRST PROFESSIONAL BANK 401(k)
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 1. DESCRIPTION OF THE PLAN (Continued)
Benefits Payments
Upon severance of employment by the Company due to permanent
disability (as defined by the Plan), retirement (as defined by the
Plan) or death, the participant's share of the Company's contributions
become fully vested.
For distributions other than for financial hardship, the method of
payment is based on the participant's election and may be made by one
or more of the following options: (a) a single lump sum payment in
cash, (b) a series of installments (as defined by the Plan) or (c) a
direct transfer to either an Individual Retirement Account or a
qualified retirement plan.
Participants who are 100% vested and 59 1/2 years of age may take an
in-service withdrawal of all or a portion of the value of their vested
accounts once each plan year. The distribution is taxable to the
participant, but is not subject to the 10% penalty tax. Distributions
may be rolled over to a qualified IRA program without a tax penalty.
Administrative Fees
All Plan administrative expenses are paid by the Company.
Participant Loans
Loans to participants may be made, at the discretion of the Plan's
Administrator, in an amount not less than $1,000 and not to exceed the
lesser of $50,000 reduced by the highest outstanding balance of all
other loans made to participant during the prior 12 months or one-half
of the participant's vested account. Such loans are collateralized by
the present value of the participant's vested balance in the Plan and
carry interest at a rate established by the Plan Administrator. The
terms of these loans shall not exceed five years or extend beyond the
participant's normal retirement date.
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared using the
accrual basis of accounting.
F-7
<PAGE>
FIRST PROFESSIONAL BANK 401(k)
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Investments
Investments in group annuity contracts are priced at contract value.
The fair value of Professional Bancorp, Inc. common stock is based on
quoted market prices. Purchases and sales of investments are recorded
on a trade-date basis. Participant loans are valued at cost, which
approximates fair market value.
Realized and Unrealized Appreciation (Depreciation)
Realized and unrealized appreciation (depreciation) is based on the
contract and market values of the assets at the end of the Plan year
compared to the contract and market values of the assets at the
beginning of the Plan year, or at the time of purchase for assets
purchased/exchanged during the Plan year.
Estimates
The Plan's financial statements have been prepared in conformity with
generally accepted accounting principles. In preparing the financial
statements, the Plan Administrator is required to make estimates and
assumptions that affect the reported amounts of net assets available
for plan benefits and changes in net assets available for plan
benefits as of the dates of the financial statements for the periods
presented. Actual results could differ significantly from these
estimates. Material estimates that are particularly susceptible to
significant change in the near term relate to the fair value
estimation of investment securities held by the Plan.
Note 3. TAX-EXEMPT STATUS
The Plan obtained its latest determination letter on April 28, 1993,
in which the Internal Service stated that the Plan, as then designed,
was in compliance with the applicable requirements of the Internal
Revenue Code. However, the Company believes that although the Plan has
been amended since the issuance of the determination letter, the Plan
is currently designed and being operated in compliance with the
applicable requirements of the Internal Revenue Code, and therefore
exempt from Federal income taxes.
F-8
<PAGE>
FIRST PROFESSIONAL BANK 401(k)
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 4. DEPOSIT WITH INSURANCE COMPANY
The Plan maintained deposit contracts with Principal Life Insurance
Company in 1998. The contracts maintained the contributions in pooled
separate accounts. The accounts were credited with actual earnings on
the underlying investments (principally mutual funds) and charged for
plan withdrawals and administrative expenses. The contracts are
included in the financial statements at contract value, which
approximates fair value.
Note 5. PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA. In the event
of the Plan's termination, participants will become 100% vested in
their accounts.
Note 6. PARTY-IN-INTEREST TRANSACTIONS
Parties in interest by definition include a plan sponsor or employer,
fiduciaries (including those who provide investment advice or who have
discretionary control over plan assets), and those who provide
services to the Plan. The Plan Sponsor pays to parties in interest, at
its expense, various plan administrative, trustee, legal and
accounting fees. None of these transactions are prohibited
transactions.
Note 7. PLAN AMENDMENTS
Effective January 1, 1998, the Plan removed Bank Boston, N.A. (First
National Bank of Boston) as the Trustee and John Hancock Signature
Services as custodian and appointed Delaware Charter Guarantee & Trust
Company as the new Trustee of the Plan. In December 1997, the Company
chose an investment manager and the assets of the Plan were
transferred to the Principal Life Insurance Company, Principal
Financial Group on January 30, 1998.
F-9
<PAGE>
FIRST PROFESSIONAL BANCORP 401(K)
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 8. DETAIL OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
The detail of changes in net assets available for benefits for the
year ended December 31, 1998 by type of fund is as follows:
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
------------------------------------------------------------------------------------------------
*Principal Principal *Principal *Principal *Principal *Principal *Principal
Guaranteed Money Bond & Stock Emphasis Index Medium Co. Small Co.
Interest Market Mortgage Balanced 500 Blend Blend
Accounts Account Account Account Account Account Account
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Additions to net assets
attributed to:
Investment income
Net appreciation in fair
value of investments $ - - $ - - $ - - $ 7,470 $ 41,052 $ (4,073) $(20,863)
Dividends and interest 7,922 (8,503) 5,211 - - - - - - - -
-------- -------- ------- -------- -------- -------- --------
7,922 (8,503) 5,211 7,470 41,052 (4,073) (20,863)
-------- -------- ------- -------- -------- -------- --------
Contributions:
Employer contributions 4,789 476 5,754 9,990 31,305 12,949 12,693
Employee contributions 15,549 1,266 16,083 30,380 60,867 34,489 35,376
-------- -------- ------- -------- -------- -------- --------
20,338 1,742 21,837 40,370 92,172 47,438 48,069
-------- -------- ------- -------- -------- -------- --------
Total additions 28,260 (6,761) 27,048 47,840 133,224 43,365 27,206
-------- -------- ------- -------- -------- -------- --------
DEDUCTIONS
Deductions from net assets
attributed to:
Benefits paid 13,679 8,632 1,124 1,665 31,574 14,763 12,808
Administrative expenses 1,027 - - 286 183 1,090 817 489
Forfeitures (88) - - (44) (44) (101) (40) (69)
-------- -------- ------- -------- -------- -------- --------
Total deductions 14,618 8,632 1,366 1,804 32,563 15,540 13,228
-------- -------- ------- -------- -------- -------- --------
Net increase (decrease) prior
to interfund transfers 13,642 (15,393) 25,682 46,036 100,661 27,825 13,978
Interfund transfers 126,680 32,315 50,807 89,471 215,153 130,032 129,882
-------- -------- ------- -------- -------- -------- --------
Net increase (decrease) 140,322 16,922 76,489 135,507 315,814 157,857 143,860
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year - - - - - - - - - - - - - -
-------- -------- ------- -------- -------- -------- --------
End of year $140,322 $ 16,922 $76,489 $135,507 $315,814 $157,857 $143,860
======== ======== ======= ======== ======== ======== ========
<CAPTION>
PARTICIPANT DIRECTED
----------------------------------
*Principal *Professional
International Bancorp, Inc.
Stock Common
Account Stock
<S> <C> <C>
ADDITIONS
Additions to net assets
attributed to:
Investment income
Net appreciation in fair
value of investments $ (777) $ 49,957
Dividends and interest - - 2,409
------- --------
(777) 52,366
------- --------
Contributions:
Employer contributions 7,395 9,756
Employee contributions 14,343 9,586
------- --------
21,738 19,342
------- --------
Total additions 20,961 71,708
------- --------
DEDUCTIONS
Deductions from net assets
attributed to:
Benefits paid 807 160,789
Administrative expenses 217 - -
Forfeitures (41) - -
------- --------
Total deductions 983 160,789
------- --------
Net increase (decrease) prior
to interfund transfers 19,978 (89,081)
Interfund transfers 66,743 21,531
------- --------
Net increase (decrease) 86,721 (67,550)
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year - - 280,925
------- --------
End of year $86,721 $213,375
======= ========
</TABLE>
* Investment represents 5% or more of plan assets at December 31, 1998.
F-10
<PAGE>
FIRST PROFESSIONAL BANCORP 401 (K)
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 8. DETAIL OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (Continued)
The detail of changes in net assets available for benefits for the
year ended December 31, 1998 by type of fund is as follows:
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
--------------------------------------------------------------------------------------------------
John John John John
Hancock Hancock Hancock Hancock John John
Money Sovereign Independence Special Hancock Hancock
Market Balanced Equity Opportunities Global Global RX *Participant
Fund Fund Fund Fund Fund Fund Loans
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Additions to net assets
attributed to:
Investment income
Net appreciation in fair
value of investments $ (21,521) $ (1,997) $ 3,373 $ (3,392) $(10,945) $ 13,349 $ - -
Dividends and interest - - - - - - - - - - - - 5,825
----------- --------- ------------ ------------- -------- ------- -------
(21,521) (1,997) 3,373 (3,392) (10,945) 13,349 5,825
----------- --------- ------------ ------------- -------- ------- -------
Contributions:
Employer contributions - - - - - - - - - - - - - -
Employee contributions - - - - - - - - - - - - - -
----------- --------- ------------ ------------- -------- ------- -------
- - - - - - - - - - - - - -
----------- --------- ------------ ------------- -------- ------- -------
Total additions (21,521) (1,997) 3,373 (3,392) (10,945) 13,349 5,825
----------- --------- ------------ ------------- -------- ------- -------
DEDUCTIONS
Deductions from net assets
attributed to:
Benefits paid - - - - - - - - - - - - 1,798
Administrative expenses - - - - - - - - - - - - 920
Forfeitures - - - - - - - - - - - - - -
----------- --------- ------------ ------------- -------- ------- -------
Total deductions - - - - - - - - - - - - 2,718
----------- --------- ------------ ------------- -------- ------- -------
Net increase (decrease)
prior to interfund
transfers (21,521) (1,997) 3,373 (3,392) (10,945) 13,349 3,107
Interfund transfers (116,001) (152,960) (298,963) (128,534) (79,500) (91,005) 5,378
----------- --------- ------------ ------------- -------- ------- -------
Net increase (decrease) (137,522) (154,957) (295,590) (131,926) (90,445) (77,656) 8,485
NET ASSETS AVAILABLE FOR
BENEFITS
Beginning of year 137,522 154,957 295,590 131,926 90,445 77,656 71,991
----------- --------- ------------ ------------- -------- ------- -------
End of year $ - - $ - - $ - - $ - - $ - - $ - - $80,476
=========== ========= ============ ============= ======== ======= =======
</TABLE>
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
------------------------
Other Total
<S> <C> <C>
ADDITIONS
Additions to net assets
attributed to:
Investment income
Net appreciation in fair
value of investments $ - - $ 51,633
Dividends and interest - - 12,864
------- ----------
- - 64,497
------- ----------
Contributions:
Employer contributions 11,373 106,480
Employee contributions - - 217,939
------- ----------
11,373 324,419
------- ----------
Total additions 11,373 388,916
------- ----------
DEDUCTIONS
Deductions from net assets
attributed to:
Benefits paid - - 247,639
Administrative expenses - - 5,029
Forfeitures - - (427)
------- ----------
Total deductions - - 252,241
------- ----------
Net increase (decrease)
prior to interfund
transfers 11,373 136,675
Interfund transfers (1,029) - -
------- ----------
Net increase (decrease) 10,344 136,675
NET ASSETS AVAILABLE FOR
BENEFITS
Beginning of year 1,029 1,242,041
------- ----------
End of year $11,373 $1,378,716
======= ==========
</TABLE>
F-11
<PAGE>
FIRST PROFESSIONAL BANCORP 401 (K)
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 and 1997
Note 8. DETAIL OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (Continued)
The detail of changes in net assets available for benefits for the
year ended December 31, 1997 by type of fund is as follows:
<TABLE>
<CAPTION>
PARTICIPANT DIRECTED
----------------------------------------------------------------------------------------------------
*John *John *John *John
*Professional Hancock Hancock Hancock Hancock *John *John
Bancorp, Inc. Money Sovereign Independence Special Hancock Hancock
Common Market Balanced Equity Opportunities Global Global RX
Stock Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Additions to net assets
attributed to:
Investment income
Net appreciation in fair
value of investments $ 96,065 $ 395 $ 29,636 $ 61,880 $ 4,389 $ 5,985 $ 17,416
Interest and dividends - - 68 - - - - - - - - - -
-------- -------- -------- -------- -------- -------- --------
96,065 463 29,636 61,880 4,389 5,985 17,416
-------- -------- -------- -------- -------- -------- --------
Contributions:
Employer contributions 11,373 6,698 11,940 19,468 14,318 9,472 7,734
Employee contributions 23,764 23,495 24,739 43,121 31,666 15,310 11,778
Rollovers - - 194 1,042 - - 2,083 2,083 - -
-------- -------- -------- -------- -------- -------- --------
35,137 30,387 37,721 62,589 48,067 26,865 19,512
-------- -------- -------- -------- -------- -------- --------
Total additions 131,202 30,850 67,357 124,469 52,456 32,850 36,928
-------- -------- -------- -------- -------- -------- --------
DEDUCTIONS
Deductions from net assets
attributed to:
Benefits paid (43,867) (19,077) (48,119) (52,289) (31,281) (25,902) (12,864)
-------- -------- -------- -------- -------- -------- --------
Total deductions (43,867) (19,077) (48,119) (52,289) (31,281) (25,902) (12,864)
-------- -------- -------- -------- -------- -------- --------
Net increase (decrease)
prior to interfund transfers 87,335 11,773 19,238 72,180 21,175 6,948 24,064
Interfund transfers (1,304) 4,874 (7,104) (3,245) (3,599) (14,709) (2,325)
-------- -------- -------- -------- -------- -------- --------
Net increase (decrease) 86,031 16,647 12,134 68,935 17,576 (7,761) 21,739
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 195,923 120,875 142,823 226,655 114,350 98,206 55,917
-------- -------- -------- -------- -------- -------- --------
End of year $281,954 $137,522 $154,957 $295,590 $131,926 $ 90,445 $ 77,656
======== ======== ======== ======== ======== ======== ========
<CAPTION>
PARTICIPANT DIRECTED
-------------------------
*Participant
Loans Total
<S> <C> <C>
ADDITIONS
Additions to net assets
attributed to:
Investment income
Net appreciation in fair
value of investments $ - - $ 215,766
Interest and dividends 5,602 5,670
-------- ----------
5,602 221,436
-------- ----------
Contributions:
Employer contributions - - 81,003
Employee contributions - - 173,873
Rollovers - - 5,402
-------- ----------
- - 260,278
-------- ----------
Total additions 5,602 481,714
-------- ----------
DEDUCTIONS
Deductions from net assets
attributed to:
Benefits paid (9,224) (242,623)
-------- ----------
Total deductions (9,224) (242,623)
-------- ----------
Net increase (decrease)
prior to interfund transfers (3,622) 239,091
Interfund transfers 27,412 - -
-------- ----------
Net increase (decrease) 23,790 239,091
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 48,201 1,002,950
-------- ----------
End of year $ 71,991 $1,242,041
======== ==========
</TABLE>
* Investment represents 5% or more of plan assets at December 31, 1997.
F-12
<PAGE>
SUPPLEMENTAL SCHEDULES
F-13
<PAGE>
FIRST PROFESSIONAL BANK 401(k)
SAVINGS PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1998
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Description of Investment,
Identity of Issue, Including Maturity Date,
Borrower, Lessor Rate of Interest, Collateral, Current
or Similar Party Par or Maturity Cost Value
<S> <C> <C> <C> <C>
* Principal Life Insurance Company
Pooled Separate Accounts:
Guaranteed Interest Accounts $140,322 $140,322
Money Market Account 16,475 16,922
Bond & Mortgage Account 72,803 76,489
Stock Emphasis Balanced Account 129,974 135,507
Stock Index 500 Account 280,785 315,814
Medium Company Blend Account 163,326 157,857
Small Company Blend Account 165,050 143,860
International Stock Account 88,674 86,721
-------- --------
$1,057,409 $1,073,492
========== ==========
* Professional Bancorp, Inc. Common stock $ 199,567 $ 213,375
========== ==========
Participant loans Interest rate at 7.75% to 10.50% $ - - $ 80,476
========== ==========
</TABLE>
* Party-in-interest
F-14
<PAGE>
FIRST PROFESSIONAL BANK 401(k)
SAVINGS PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
Year Ended December 31, 1998
<TABLE>
<CAPTION>
(a) (b) (c) (d) (g) (i)
<S> <C> <C> <C> <C> <C>
Identity
of Party Description Purchase Selling Cost of Net Gain
Involved of Asset Price Price Asset (Loss)
Principal Life
Insurance Co. Guaranteed Interest $154,466 $ 18,960 $ 18,960 $ - -
Principal Life
Insurance Co. Money Market 909,872 900,668 893,397 7,271
Principal Life
Insurance Co. Bond and Mortgage 82,064 9,555 9,261 294
Principal Life Stock Emphasis
Insurance Co. Balanced 143,505 13,264 13,531 (267)
Principal Life
Insurance Co. Stock Index 500 327,330 47,351 46,546 805
Principal Life Medium Company
Insurance Co. Blend 191,044 26,010 27,718 (1,708)
Principal Life
Insurance Co. Small Company Blend 187,835 20,091 22,786 (2,695)
Principal Life
Insurance Co. International Stock 93,283 4,260 4,609 (349)
Professional
Bancorp, Inc. Common Stock 350,602 177,107 151,035 26,072
</TABLE>
F-15
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Professional Bancorp, Inc.:
We consent to incorporation by reference in the Registration Statement (No. 33-
63379) on Form S-8, of Professional Bancorp, Inc. of our report dated June 4,
1999, relating to the statements of net assets available for Plan benefits of
First Professional Bank 401(k) Savings Plan as of December 31, 1998, and the
related statement of changes in net assets available for Plan benefits for the
year ended December 31, 1998, and all related schedules, which report appears in
the December 31, 1998 annual report on Form 11-K of Professional Bancorp, Inc.
/s/ Hutchinson and Bloodgood LLP
Glendale, California
June 28, 1999
<PAGE>
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Professional Bancorp, Inc.:
We consent to incorporation by reference in the Registration Statement (No. 33-
63379) on Form S-8, of Professional Bancorp, Inc. of our report dated June 30,
1998, relating to the statements of net assets available for Plan benefits of
First Professional Bank 401(k) Savings Plan as of December 31, 1997, and the
related statement of changes in net assets available for Plan benefits for the
year ended December 31, 1997, which report appears in the December 31, 1998
annual report on Form 11-K of Professional Bancorp, Inc.
KPMG LLP
Los Angeles, California
June 30, 1999
