<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10Q
(Mark One)
X Quarterly Report Under Section 13 Or 15(d) Of The Securities Exchange Act
of 1934 For the quarterly period ended June 30, 1996
OR
___Transition Report Pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934 For the transition period from ___________ to_________
Commission file number 0-10794
STERLING WEST BANCORP
(Exact name of registrant as specified in its charter)
California 95-3712404
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3287 Wilshire Boulevard, Los Angeles, California 90010
(Address of principal executive offices)
(213) 384-4444
(Registrant's telephone number, including area code)
Indicate by check 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 _________
1,710,214
(Number of shares of common stock outstanding August 13, 1996)
This Form 10Q contains ___ pages.
Exhibit Index None
<PAGE> 2
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENT
Sterling West Bancorp and Subsidiaries
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30,
1996 December 31,
(Unaudited) 1995
------------ -----------
<S> <C> <C>
ASSETS
Cash and cash equivalents $21,143,000 $36,072,000
Investment securities held to maturity
(fair value of $7,032,000 in 1996 and
$7,664,000 in 1995) 7,147,000 7,614,000
Trading account assets 881,000 --
Loans receivable, net 71,788,000 70,896,000
Real estate held for sale 1,337,000 4,409,000
Fixed assets
Land and building 227,000 227,000
Furniture and equipment 3,106,000 2,972,000
Leasehold improvements 1,408,000 1,411,000
------------ ------------
4,741,000 4,610,000
Less accumulated depreciation (3,509,000) (3,395,000)
------------ ------------
1,232,000 1,215,000
Accrued interest receivable 660,000 725,000
Other assets 1,630,000 1,488,000
------------ ------------
$105,818,000 $122,419,000
============ ============
LIABILITIES
Deposits
Demand $29,187,000 $37,598,000
Savings and NOW 52,134,000 61,316,000
Money market 5,873,000 6,990,000
Time deposits $100,000 or greater 6,170,000 3,281,000
Other time deposits 3,140,000 3,191,000
------------ ------------
96,504,000 112,376,000
Notes payable 367,000 1,372,000
Other liabilities 1,754,000 1,753,000
------------ ------------
98,625,000 115,501,000
Commitments and contingencies
STOCKHOLDERS' EQUITY
Common stock - authorized 5,000,000
shares without par value; issued and 8,686,000 8,686,000
outstanding 1,710,214 shares in 1996 and 1995 (1,493,000) (1,768,000)
------------ ------------
Accumulated deficit, restricted 7,193,000 6,918,000
------------ ------------
$105,818,000 $122,419,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 3
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
Sterling West Bancorp and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For three months ended June 30, For six months ended June 30,
1996 1995 1996 1995
--------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Interest income
Loans $1,925,000 $3,238,000 $3,889,000 $6,325,000
Federal funds sold 203,000 147,000 378,000 299,000
Investment securities held to maturity 111,000 150,000 226,000 247,000
Trading account assets 10,000 -- 10,000 --
---------- ---------- ---------- ----------
2,249,000 3,535,000 4,503,000 6,871,000
Interest expense
Savings and NOW 512,000 656,000 1,051,000 1,314,000
Money Market 30,000 34,000 40,000 77,000
Time deposits $100,000 or greater 56,000 44,000 121,000 70,000
Other time deposits 43,000 41,000 60,000 85,000
Notes payable 10,000 419,000 36,000 793,000
---------- ---------- ---------- ----------
651,000 1,194,000 1,308,000 2,339,000
---------- ---------- ---------- ----------
Net interest income 1,598,000 2,341,000 3,195,000 4,532,000
Provision for loan losses 120,000 --- 181,000 200,000
---------- ---------- ---------- ----------
Net interest income after provision for loan losses 1,478,000 2,341,000 3,014,000 4,332,000
Non-interest income
Service charges on deposit accounts 200,000 88,000 295,000 162,000
Gain on sale of SBA loans 11,000 82,000 11,000 103,000
Other 448,000 143,000 549,000 291,000
---------- ---------- ---------- ----------
659,000 313,000 855,000 556,000
Non-interest expenses
Salaries, wages and employee benefits 740,000 1,177,000 1,525,000 2,286,000
Occupancy 206,000 216,000 427,000 411,000
Furniture and equipment 75,000 86,000 132,000 172,000
Real estate operations, net 135,000 187,000 269,000 272,000
Other 562,000 1,154,000 1,031,000 1,702,000
---------- ---------- ---------- ----------
1,718,000 2,820,000 3,384,000 4,843,000
Income before income taxes 419,000 (166,000) 485,000 45,000
Income taxes provision 180,000 116,000 210,000 200,000
---------- ---------- ---------- ----------
Net Income (loss) 239,000 (282,000) 275,000 (155,000)
========== ========= ========= =========
Net income (loss) per share $0.14 $ (0.16) $0.16 $(0.09)
========== ========= ========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
Sterling West Bancorp and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the six months ended June 30,
1996 1995
--------- ------------
<S> <C> <C>
Cash flows from operating activities
Net income $275,000 $ (155,000)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation 115,000 176,000
Provision for loan losses 181,000 200,000
Provision for deferred taxes -- 514,000
Real estate valuation adjustments, net 800,000 347,000
Increase in trading securities, net (881,000) --
Decrease in accrued interest receivable 64,000 49,000
(Increase) decrease in other assets (142,000) 943,000
Increase in other liabilities 22,000 575,000
----------- -----------
Total adjustments 159,000 2,804,000
----------- -----------
Net cash provided by operating activities 434,000 2,649,000
Cash flows from investing activities
Proceeds from maturities of investment securities 448,000 1,096,000
Purchase of investment securities -- (1,186,000)
Net (increase) decrease in loans (90,000) 1,182,000
Proceeds from sale of real estate 1,288,000 1,080,000
Purchase of furniture and equipment (132,000) (245,000)
----------- -----------
Net cash provided by investing activities 1,514,000 1,927,000
Cash flows from financing activities
Net decrease in demand deposits,
savings and other money market accounts (18,709,000) (9,324,000)
Net decrease in certificates of deposit 2,838,000 17,000
Net increase (decrease) in note payable to
financial institution (1,006,000) 1,662,000
Payments on maturing promissory notes -- (54,000)
----------- -----------
Net cash used in financial activities (16,877,000) (7,699,000)
----------- -----------
Net decrease in cash and cash equivalents (14,929,000) (3,123,000)
Cash and cash equivalents at beginning of period 36,072,000 20,399,000
----------- -----------
Cash and cash equivalents at end of period 21,143,000 17,276,000
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
PART I: FINANCIAL INFORMATION
Notes to consolidated financial statements
June 30, 1996
1. The consolidated financial statements for the six months ended June 30, 1996
and 1995 of Sterling West Bancorp (the Company) are unaudited and reflect all
adjustments and reclassifications which are, in the opinion of management,
necessary for a fair presentation of the results of operations for the interim
period. The Company is the holding company for Sterling Bank (the Bank). The
results of operations and cash flows for the interim period ended June 30, 1996
are not necessarily indicative of results which may be expected for any interim
period or the year as a whole. Certain reclassifications have been made in the
1995 consolidated financial statements to conform to the June 30, 1996
presentation.
2. In the ordinary course of business the Company enters into commitments to
extend credit to its customers. These commitments are not reflected in the
accompanying consolidated financial statements and Management does not expect
any loss to result from such commitments. As of June 30, 1996 and December 31,
1995 the Company had entered into the following commitments:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-----------------------------------------
<S> <C> <C>
Letters of Credit $431,000 $840,000
Undisbursed Loan Commitments $8,021,000 $10,391,000
</TABLE>
3. Earnings per share amount have been computed using the weighted average
number of common shares and dilutive common equivalent shares outstanding. The
number of such primary shares are 1,710,214 at June 30, 1996 and December 31,
1995.
4. The cash and cash equivalents in June 30, 1996 and December 31, 1995 are
as follows:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---------------------------------------
<S> <C> <C>
Cash & Non interest bearing deposits $5,662,000 $12,072,000
Federal funds sold $15,481,000 $24,000,000
</TABLE>
5
<PAGE> 6
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of
Operations is intended to provide a better understanding of the material
changes in trends relating to the financial condition, results of operations,
and liquidity of the Company. The discussion and analysis for the second
quarter and six months ended June 30, 1996 primarily reflect the operations of
the Bank. The financial results of the second quarter and six months ended
June 30, 1995 included income earned by the formerly active subsidiary,
Sterling Business Credit, Inc. ("Business Credit"). The few remaining assets
of Business Credit made no contribution to results in the second quarter and
six months of 1996. The Bank and Business Credit are wholly-owned subsidiaries
of the Company. Unless otherwise specified, the discussion below relates to the
Company's consolidated financial condition and operations.
During the second quarter of 1996, the Company had net income of $239,000 as
compared to a net loss of $282,000 in the second quarter of 1995. For the six
months ended June 30, 1996 the Company had net income of $275,000 as compared
to a net loss of $155,000 for the period of 1995. The improved results during
the 1996 period relates primarily to an increase in non-interest income,
attributable to a nonrecurring event. The results of operations during 1996
also reflect a continued reduction in non-interest expenses. In addition, the
Bank continues to liquidate its real estate held for sale, and eliminate
certain costs associated with maintaining those assets.
FINANCIAL CONDITION
Assets
At June 30, 1996, assets of the Company were $105,818,000, a decrease of
$16,601,000 or 13.6% from $122,419,000 at December 31, 1995. The significant
change in assets was primarily attributable to a decrease in cash and cash
equivalents and a reduction in real estate held for sale. Cash and cash
equivalents decreased $15 million to $21.1 million at June 30, 1996 compared
to $36.1 million at December 31, 1995. The reduction is primarily the result of
the asset-liability management process at the Bank , which is used to
accommodate changes in loan demand and core deposit levels.
At June 30, 1996, the Company had $1.3 million of real estate held for sale, a
70% reduction from December 31, 1995, and a 78% reduction from the same period
in 1995. With the continued liquidation of real estate held for sale, comes the
elimination of certain costs associated with maintaining those assets, which in
the past have been substantial. All real estate held for sale, comprised of 8
properties, at June 30, 1996, are stated at the estimated fair value less
estimated selling costs. Management expects that further foreclosures may
occur and no assurance can be given that additional losses will not occur in
excess of existing allowances.
Nonperforming assets, consisting of nonaccrual loans and real estate held for
sale, amounted to $3.6 million at June 30, 1996 compared to $7.0 million at
December 31, 1995 and $7.9 million at June 30, 1995. Nonaccrual loans amounted
to $2.2 million at June 30, 1996 as compared to $2.6 million at December 31,
1995 and $1.8 million at June 30, 1995. Real estate held for sale decreased
from $6.1 million at June 30, 1995 and $4.4 million at December 31, 1995, to
$1.3 million at June 30, 1996.
6
<PAGE> 7
Sources of Funds
Total deposits decreased 14.1% to $96.5 million at June 30, 1996 from $112.4
million at December 31, 1995. The decrease was primarily the result of lower
demand deposits and Savings and NOW deposits, which reflect what management
believes to be normal fluctuations in these accounts and the effect of the
Banks asset-liability management process which serves to accommodate the
reduced funding needs of the Bank.
There are statutory and regulatory limitations on the amount of dividends which
may be paid to the Company by the Bank. At June 30, 1996 the Bank is prohibited
from paying dividends under these provisions. The Bank is also prohibited from
paying cash dividends to the Company under the terms of a memorandum of
understanding with the FDIC (the "FDIC Memorandum") and the SBD (the "SBD
Memorandum") unless the payment is approved in advance by the Regional Director
of the FDIC and the State Superintendent of Banks. Please see "CAPITAL
RESOURCES" below for a discussion of the terms of the FDIC Memorandum and the
SBD Memorandum.
RESULTS OF OPERATIONS
Net Income (Loss)
During the second quarter of 1996, the Company had net income of $239,000 as
compared to a net loss of $282,000 for the second quarter 1995. For the six
months ended June 30, 1996 the Company had net income of $275,000 as compared
to a net loss of $155,000 for the period of 1995. The improved results during
the 1996 period relates primarily to an increase in non-interest income,
attributable to a nonrecurring event. The results of operations during 1996
also reflect a continued reduction in non-interest expense.
Net Interest Income
Net interest income is the difference between interest and fees earned on
earning assets and interest paid on deposits and other sources of funds. Net
interest income decreased 32% for the second quarter of 1996 as compared to the
second quarter of 1995. The decrease was due primarily to a $1.4 million
reduction in interest income from loans offset by a $0.4 million reduction in
interest expense on notes payable, for the second quarter of 1996 as compared
to the same period in 1995. Net interest income for the second quarter of 1995
included $0.9 million of net interest income from Business Credit loans, most
of which were sold during the third quarter of 1995. Net interest income
remained relatively unchanged when the Business Credit net interest income is
excluded from the second quarter of 1995.
Net interest income decreased 30% for the six months ended June 30, 1996 as
compared to the same period in 1995. The decrease relates primarily to lower
loan volume in 1996 and lower interest expense on Notes payable, all of which
related to Business Credit assets included in the 1995 net interest income.
7
<PAGE> 8
Allowance and Provision for Loan Losses
The provision for loan losses is determined by management based upon the
Company's loan loss experience, the performance of loans in the Company's
portfolio, the quality of loans in the Company's portfolio, evaluation of
collateral for such loans, the economic conditions affecting collectibility of
loans, the prospects and financial condition of the respective borrowers or
guarantors and such other factors which in management's judgment deserve
recognition in the estimation of probable loan losses. In addition, regulatory
agencies, as an integral part of their examination process, periodically review
the Bank's allowance for loan losses. Such agencies may require the Bank to
recognize additions to the allowance or to take charge-offs (reductions in the
allowance) in anticipation of losses.
A substantial portion of the Company's loan portfolio, including its commercial
and industrial loans, is secured by real estate collateral, substantially all
of which is located in Southern California. While in most cases the amount of
the loan is less than 75% of the appraised value of the property or the cost of
the project, the Company has suffered from the recent effects of the downturn
in the real estate market and continues to be vulnerable to further downturns.
At June 30, 1996, the allowance for loan losses was $1.5 million or 2.07% of
total loans, as compared to $1.5 million or 2.09% of total loans at December
31, 1995 and $1.7 million or 1.87% of total loans at June 30, 1995. The
allowance for loan losses was 68% of nonaccrual loans at June 30, 1996 as
compared to 59% at December 31, 1995 and 94% at June 30, 1995. The Company
generally maintains a 15% allocation in its allowance for loan losses for
nonaccrual loans based on its historical loss ratio. During the three months
ending June 30, 1996, the Company made additions to the allowance of $120,000
compared to no additions during the same period in 1995. For the first six
months of 1996 the Company made additions to the allowance of $181,000 compared
to $200,000 for the same period in 1995. Reductions from the allowance in the
form of net charge-offs amounted to $172,000 for the six months ending June 30,
1996 as compared to $222,000 for the same period in 1995.
The Company has established a separate allowance for losses on real estate held
for sale which amounted to $0.1 million, $1.1 million, and $0.1 million, at
June 30, 1996, December 31, 1995 and June 30, 1995, respectively. This
allowance is not included in the allowance for loan losses but is carried as a
reduction of real estate held for sale.
Further, the Company maintains an allowance for losses on loan repurchases
which amounted to $0.4 million at June 30, 1996, $0.8 million at December 31,
1995 and $1.8 million at June 30, 1995. This allowance is carried in other
liabilities on the balance sheet. In determining the amount of this allowance,
the Company considered the exposure of the Company to repurchases which takes
into account the Company's past experience with repurchases, the potential for
future repurchases and any losses thereon. Management believes that the
allowance for losses on loan repurchases at June 30, 1996 was adequate to
absorb future losses on loan repurchases. However, no assurance can be given
that the Company will not incur additional losses on such repurchases.
8
<PAGE> 9
Taking into account economic trends in and the condition of the loan portfolio
management believes that the allowance for loan losses at June 30, 1996 was
adequate to absorb known and inherent risks in the loan portfolio. However, no
assurance can be given that the Company will not incur additional losses on
these loans or that additional provisions for loan losses will not be
required.
Noninterest Income
Noninterest income for the second quarter of 1996 was $0.7 million compared to
$0.3 million for the same period in 1995. For the first six months of 1996
Noninterest income increased to $0.9 million from $0.6 million in 1995. The
increases primarily relate to a nonrecurring event. In addition, the Bank
benefited from increases in service charges on deposit accounts.
Noninterest Expense
Noninterest expense decreased 39% for the second quarter of 1996 to $1.7
million compared to $2.8 million for the same period in 1995. For the first six
months of 1996 Noninterest expense decreased to $3.4 million from $4.8 million
for the same period in 1995. Salaries, wages and employee benefits decreased to
$0.7 million from $1.2 million for the second quarter of 1996 as compared to
the same quarter in 1995. This reduction is a direct benefit of the Company's
continued downsizing in order to satisfy regulatory capital ratio requirements
applicable to the Company and the Bank. Included in the second quarter of 1995
was a $0.4 million charge from discontinued operations.
Income taxes
The provision for income taxes for the six month period ended June 30, 1996 is
as follows:
<TABLE>
<CAPTION>
Federal State Total
------------------------------------------------------------------
<S> <C> <C> <C>
Current $147,000 $63,000 $210,000
Deferred -- -- --
------------------------------------------------------------------
$147,000 $63,000 $210,000
==================================================================
</TABLE>
The provision for income taxes reflects an effective tax rate of 43% on income
before income taxes. The components of income taxes causing the variation
from the expected statutory federal tax rate are not significantly different
than the amounts disclosed in the prior year.
9
<PAGE> 10
CAPITAL RESOURCES
Management seeks to maintain a level of capital adequate to support asset
growth and credit risks and to ensure that the Company is within established
regulatory guidelines and industry standards. The Company and the Bank are
required to achieve certain risk-based capital standards and leverage capital
standards. The risk-based capital standards establish capital requirements
that are more sensitive to risk differences between various assets, consider
off balance sheet activities in assessing capital adequacy and minimize the
disincentive to holding liquid, low risk assets.
The following table sets forth the capital regulatory ratios of the
Company and the Bank at June 30, 1996 (dollars in thousands):
<TABLE>
<CAPTION>
Company Bank
------------------------------ -----------------------------
Amount Ratio Amount Ratio
----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tier 1 Capital 7,193 9.62% 7,444 10.14%
Tier 1 Capital
minimum requirement 2,991 4.00% 2,935 4.00%
----- ----- ----- -----
Excess 4,202 5.62% 4,509 6.14%
Total capital 8,135 10.88% 8,369 11.41%
Total capital
minimum requirement 5,981 8.00% 5,870 8.00%
------ ------ ----- ------
Excess 2,154 2.88% 2,499 3.41%
Risk-weighted assets $74,767 $73,376
Tier 1 capital $7,193 6.68% $7,444 7.07%
Tier 1 capital
minimum requirement 4,293 4.00%
------ -----
Memorandum
requirement $7,110 6.75%
------ ------
Excess 2,900 2.68% 334 0.32%
Total average assets $107,638 $105,335
</TABLE>
The leverage ratio consists of tangible Tier 1 capital divided by total average
assets. As of June 30, 1996, the Company and the Bank had leverage ratios of
6.68% and 7.07%, respectively. Regulators have established a minimum leverage
ratio of 3.00% for the highest rated banks. However, institutions experiencing
or anticipating significant growth, or those with other than minimum risk
profiles, will be expected to maintain capital well above the minimum.
10
<PAGE> 11
In November 1995, the Federal Reserve Bank and the Board of Directors of the
Company entered into a memorandum of understanding ("the FRB Memorandum").
Under the FRB Memorandum, the Company is required, among other things, to
comply with the FDIC memorandum; submit a written plan designed to enhance the
board's supervision of the operations and management of the consolidated
organization, to ensure that the Company has sufficient cash to pay its
expenses and to service its debt; the Company may not, directly or indirectly,
acquire or sell any interest in any entity, line of business, problem loans or
other assets, without the prior written approval of the Federal Reserve Bank;
and to not pay cash dividends without the prior written consent of the Federal
Reserve Bank.
In March 1995, the FDIC and the Board of Directors of the Bank entered into a
memorandum of understanding ("FDIC Memorandum"). Under the FDIC Memorandum, the
Bank is required, among other things, to achieve and maintain Tier 1 capital
equal to or above 6.75% of total assets; charge off all assets classified
"Loss" as of September 26, 1994; reduce assets classified as "Substandard" as
of September 26, 1994 to not more than $7,500,000 by June 13, 1995, not more
than $6,500,000 by September 11, 1995 and not more than $4,500,000 by March 10,
1996; establish and maintain an adequate allowance for loan losses; develop a
plan to control overhead and other expenses; install procedures to correct
internal routine and control deficiencies; and not pay cash dividends without
the prior written consent of the FDIC and the California Superintendent of
Banks.
In September 1995, the State Banking Department and the Board of Directors of
the Bank entered into a memorandum of understanding ("SBD Memorandum"). Under
the SBD Memorandum, the Bank is required, among other things, to achieve and
maintain Tier 1 capital equal to or above 6.75% of total assets; charge off all
assets classified "Loss" as of the December 31, 1994 examination; reduce
assets classified as "Substandard" as of the December 31, 1994 examination to
not more than $7,500,000 by December 31, 1995, not more than $6,500,000 by
March 31, 1996 and not more than $4,500,000 by September 30, 1996; establish
and maintain an adequate allowance for loan losses; develop a plan to control
overhead and other expenses; install procedures to correct internal routine and
control deficiencies; and not pay cash dividends without the prior written
consent of the FDIC and the California Superintendent of Banks.
Management believes the Company and the Bank are currently in full compliance,
and management believes that it can continue to comply with the terms of the
FRB Memorandum, the FDIC Memorandum and the SBD Memorandum, and otherwise meet
regulatory capital requirements, and that any actions taken to so comply in the
future will not have a material adverse effect on the Company's future
financial condition or results of operations. However, failure to comply with
any Memorandum could result in further regulatory action.
The Company suspended its quarterly cash dividends in the third quarter of
1993. The Company expects that future dividends will depend on a return to
profitability and the maintenance of acceptable financial results in the
future.
11
<PAGE> 12
Liquidity and Asset/Liability Management
The Company relies on asset/liability management to accommodate changes in loan
demand and core deposit levels. A key aspect of asset/liability management is
liquidity, and the Company's ability to manage possible deposit withdrawals, to
provide for the credit needs of its customers and to take advantage of
investment opportunities as they arise. The liquidity needs of the Company,
primarily relate to the Bank. The liquidity needs of the Company at this time
are minimal.
The Bank relies primarily on deposits for its source of funds. It also had
available $15.5 million of federal funds sold and a $7.0 million investment
portfolio at June 30, 1996, both of which could be used as immediate sources
of funds. In addition, the Bank has access to a $3.5 million federal funds
purchase line of credit from Community Bank, subject to cancellation, which the
Bank can use to meet short term needs. The Bank also has access to funds
through the Federal Reserve Bank discount window. The Bank maintained at June
30, 1996, approximately 28% of its total assets in liquid assets.
12
<PAGE> 13
PART II: OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Securities Holders.
The following matters were submitted to a vote of the security holders of the
Registrant, by the solicitation of proxies for Registrant's Annual Meeting:
(A) Annual Meeting of Shareholders held on May 22, 1996.
(B) The following seven persons were elected as directors at
the Meeting and constitute all of the members of the Board
of Directors:
Timothy Behunin
Howard M. Borris
Allan E. Dalshaug
Audrey J. Fimpler
Hassan Izad
Robert J. Schiller
Michael Wagner
ITEM 6. Exhibits and Reports on 8-K.
(A) Exhibits: Exhibit 27 - Financial Data Schedule
(B) Report on Form 8-K: None.
SIGNATURES
Pursuant to the requirement 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.
STERLING WEST BANCORP
(Registrant)
DATED: August 14, 1996 By /s/ Joseph C. Carona
----------------------
Joseph C. Carona
Chief Financial and
Accounting officer)
13
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (STERLING
WEST BANCORP AND SUBSIDIARIES) CONSOLIDATED FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 21,143
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 15,481
<TRADING-ASSETS> 881
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 7,147
<INVESTMENTS-MARKET> 7,032
<LOANS> 73,307
<ALLOWANCE> 1,519
<TOTAL-ASSETS> 105,818
<DEPOSITS> 96,504
<SHORT-TERM> 367
<LIABILITIES-OTHER> 1,754
<LONG-TERM> 0
0
0
<COMMON> 8,686
<OTHER-SE> (1,493)
<TOTAL-LIABILITIES-AND-EQUITY> 105,818
<INTEREST-LOAN> 3,813
<INTEREST-INVEST> 378
<INTEREST-OTHER> 236
<INTEREST-TOTAL> 4,427
<INTEREST-DEPOSIT> 1,272
<INTEREST-EXPENSE> 1,308
<INTEREST-INCOME-NET> 3,119
<LOAN-LOSSES> 181
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 3,380
<INCOME-PRETAX> 485
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 275
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.16
<YIELD-ACTUAL> 6.55
<LOANS-NON> 2,217
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,510
<CHARGE-OFFS> 194
<RECOVERIES> 22
<ALLOWANCE-CLOSE> 1,519
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
