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, 1999
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, 1999, the First Professional Bank 401(k) Savings Plan
had approximately 86 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>
NAME AND ADDRESS CAPACITY WITHIN PLAN CAPACITY WITHIN COMPENSATION
COMPANY PAID BY PLAN
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Larry Patapoff 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
--------------------------------------------------------------------------------
Bear, Stearns Securities Corp. $ -0- Member of Securities Investor
1999 Avenue of the Stars Protection Corporation (SIPC).
Los Angeles, California 90067 SIPC provides $500,000 (of
which $100,000 may be in
cash). Bear Stearns Companies
Inc. has a Financial
Institution Bond totaling
$400 million.
National Union -0- Financial Institution Bond
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
<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/ LARRY PATAPOFF
------------------
Larry Patapoff
Executive Vice President
First Professional Bank, N.A.
<PAGE>
FIRST PROFESSIONAL BANK 401(K)
SAVINGS PLAN
FINANCIAL REPORT
YEARS ENDED DECEMBER 31, 1999 AND 1998
<PAGE>
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Statements of net assets available for benefits 2
Statements of changes in net assets available for benefits 3
Notes to financial statements 4-9
SUPPLEMENTAL SCHEDULES
Schedule of assets held for investment purposes
at end of year, December 31, 1999 11
Schedule of reportable transactions
for the year ended December 31, 1999 12
<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,
1999 and 1998, and the related statements of changes in net assets available for
benefits for the years 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 audits.
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 provide 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, 1999 and 1998, and the changes in net assets available for benefits
for the years then ended in conformity with generally accepted accounting
principles.
Our audits were conducted 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 at the end of the year and the reportable transactions
for the year ended December 31, 1999, referred to as "supplementary
information", is presented for the purpose of additional analysis and is not a
required part of the basic financial statements but is supplementary information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplementary information is the responsibility of the Plan's management. The
supplemental information has been subjected to the auditing procedures applied
in the audits 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.
June 13, 2000
Glendale, California
- 1 -
<PAGE>
<TABLE>
<CAPTION>
FIRST PROFESSIONAL BANK 401(k)
SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1999 and 1998
1999 1998
ASSETS
<S> <C> <C>
Investments, at fair value:
Principal Financial Group Annuity Contracts:
Guaranteed Interest Accounts $ 204,704 $ 140,322
Money Market Account 23,844 16,922
Bond & Mortgage Account 92,237 76,489
Stock Emphasis Balanced Account 177,980 135,507
Large Cap Stock Index Account
(formerly known as Stock Index 500 Account) 420,296 315,814
Medium Company Blend Account 159,603 157,857
Small Company Blend Account 170,987 143,860
International Stock Account 125,222 86,721
Professional Bancorp, Inc., Common Stock 78,784 213,375
Participant Loans 135,948 80,476
---------- ------------
Total investments 1,589,605 1,367,343
---------- ------------
Receivables:
Employer contribution 3,869 11,373
Employee contribution 7608 0
---------- ------------
Total receivables 11,477 11,373
---------- ------------
Total assets 1,601,082 1,378,716
LIABILITIES 0 0
---------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 1,601,082 $ 1,378,716
=========== ============
The Notes to Financial Statements are an integral part of these statements.
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
FIRST PROFESSIONAL BANK 401(k)
SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
Years ended December 31, 1999 and 1998
1999 1998
ADDITIONS
<S> <C> <C>
Additions to net assets attributed to:
Investment income:
Net appreciation in
fair value of investments $ 21,856 $ 51,633
Interest and other income 14,485 13,291
---------- ---------
36,341 64,924
---------- ---------
Contributions:
Employer contributions 103,437 106,480
Participants' contributions 221,730 217,939
Rollovers 8,706 0
---------- ---------
333,873 324,419
---------- ---------
Total additions 370,214 389,343
---------- ---------
DEDUCTIONS
Deductions from net assets attributed to:
Benefit distributions 139,427 247,639
Administrative expenses 8,421 5,029
---------- ---------
Total deductions 147,848 252,668
---------- ---------
Increase in net assets available for benefits 222,366 136,675
NET ASSETS AVAILABLE FOR BENEFITS
Beginning of year 1,378,716 1,242,041
---------- ---------
End of year $1,601,082 $1,378,716
========== ==========
The Notes to Financial Statements are an integral part of these statements.
</TABLE>
-3-
<PAGE>
FIRST PROFESSIONAL BANK 401(K)
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
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").
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.
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 1999. The Company at
its discretion matches contributions up to a maximum amount of
100% of the first 3% of eligible compensation, as defined.
- 4 -
<PAGE>
FIRST PROFESSIONAL BANK 401(K)
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1. DESCRIPTION OF THE PLAN (CONTINUED)
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, Large Cap Stock Index Account (formerly known as Stock
Index 500 Account), Medium Company Blend Account, and the
International Stock Account.
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. Forfeited non-vested accounts totaled $876 and
$6,088 for the years ended December 31, 1999 and 1998,
respectively.
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.
- 5 -
<PAGE>
FIRST PROFESSIONAL BANK 401(K)
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1. DESCRIPTION OF THE PLAN (CONTINUED)
VESTING (CONTINUED)
The following is the participant's vesting schedule for matching
employer contributions:
Years of Service Percentage Vested
Less than 1 0
1 20
2 40
3 60
4 80
5 or more 100
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.
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.
- 6 -
<PAGE>
FIRST PROFESSIONAL BANK 401(K)
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1. DESCRIPTION OF THE PLAN (CONTINUED)
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.
INVESTMENTS
Investments in group annuity contracts are priced at contract
value which approximates fair market 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.
- 7 -
<PAGE>
FIRST PROFESSIONAL BANK 401(K)
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
RECLASSIFICATIONS AND ELIMINATION
The requirement to disclose in the financial statements each
participant-directed investment option in columnar form has been
eliminated by the Statement of Position 99-3, Accounting for and
Reporting of Certain Defined Contribution Plan Investment and
Other Disclosure Matters. Certain presentation in the 1998
financial statements were amended to conform with the new
Statement of Position.
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.
NOTE 4. DEPOSIT WITH INSURANCE COMPANY
The Plan maintained deposit contracts with Principal Life Insurance
Company. 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.
- 8 -
<PAGE>
FIRST PROFESSIONAL BANK 401(K)
SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
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.
- 9 -
<PAGE>
SUPPLEMENTAL SCHEDULES
- 10 -
<PAGE>
FIRST PROFESSIONAL BANK 401(K)
SAVINGS PLAN
EIN: 95-3701137
PLAN NUMBER 002
SCHEDULE OF ASSETS HELD
FOR INVESTMENT PURPOSES AT END OF YEAR
DECEMBER 31, 1999
<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>
* Principal Life Insurance Company
Pooled Separate Accounts:
Guaranteed Interest Accounts $ 207,298 $ 204,704
Money Market Account 23,264 23,844
Bond & Mortgage Account 89,609 92,237
Stock Emphasis Balanced Account 162,439 177,980
Large Cap Stock Index Account 336,187 420,296
Medium Company Blend Account 146,250 159,603
Small Company Blend Account 165,375 170,987
International Stock Account 105,404 125,222
------------- ----------
$1,235,826 $1,374,873
=========================
* Professional Bancorp, Inc. Common stock $ 179,650 $ 78,784
=========================
Participant loans Interest rates at 7.75% to 10.5% $ - - $ 135,948
=========================
<FN>
* Party-in-interest
</FN>
</TABLE>
- 11 -
<PAGE>
FIRST PROFESSIONAL BANK 401(K)
SAVINGS PLAN
EIN: 95-3701137
PLAN NUMBER 002
SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<CAPTION>
(A) (B) (C) (D) (G) (I)
IDENTITY
OF PARTY DESCRIPTION PURCHASE SELLING COST OF NET GAIN
INVOLVED OF ASSET PRICE PRICE ASSET (LOSS)
<S> <C> <C> <C> <C> <C>
Principal Life Guaranteed Interest
Insurance Co. Accounts $ 83,855 $ 25,246 $ 25,246 $ --
Principal Life Money Market
Insurance Co. Account 42,457 36,445 35,667 778
Principal Life Stock Emphasis
Insurance Co. Balanced Account 58,611 27,716 26,146 1,570
Principal Life Large Cap
Insurance Co. Stock Index Account 193,078 156,925 137,675 19,250
Principal Life Medium Company
Insurance Co. Blend Account 62,177 79,958 79,253 705
Principal Life Small Company
Insurance Co. Blend Account 80,833 72,546 80,507 (7,961)
Principal Life International Stock
Insurance Co. Account 51,982 36,202 35,252 950
Professional
Bancorp, Inc. Common Stock 109,384 127,349 129,302 (1,953)
</TABLE>
- 12 -
