<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
________________________________________________________________
FORM 10 - Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OF 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934.
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1995
--------------
COMMISSION FILE NUMBER 2-78788
-------
CALIFORNIA COMMERCIAL BANKSHARES
--------------------------------
CALIFORNIA 95-3819471
- ---------------------------------- -----------------------
(STATE OF OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
4100 NEWPORT PLACE, NEWPORT BEACH, CA 92660
--------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER (714) 863-2300
--------------
- --------------------------------------------------------------------------------
FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR IF
CHANGED FROM LAST REPORT
INDICATE BY CHECK (X) WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OF 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 [_]
APPLICABLE ONLY TO CORPORATE ISSUERS: INDICATE THE NUMBER OF SHARES OUTSTANDING
OF EACH OF THE ISSUER'S CLASSES OF COMMON STOCK, AS OF THE LATEST PRACTICABLE
DATE 2,425,000.
---------
1
<PAGE>
CALIFORNIA COMMERCIAL BANKSHARES
INDEX
PART I. FINANCIAL INFORMATION
- -------------------------------
Item 1. Financial Statements.
Consolidated Condensed Statements of Income
for three months ended March 31, 1995 and
March 31, 1994.
Consolidated Condensed Balance Sheets
March 31, 1995 and December 31, 1994.
Consolidated Statement of Cash Flow for the
three months ended March 31, 1995 and March 31,
1994.
Notes to Consolidated Financial Statements,
March 31, 1995.
Item 2. Management Discussion and Analysis of the Financial Condition and
Results of Operations.
2
<PAGE>
CALIFORNIA COMMERCIAL BANKSHARES AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(000's Omitted)
(Unaudited)
Three Months Ended March 31,
1995 1994
------ ------
INTEREST AND FEE INCOME:
Loans and Leases 5,068 4,440
Investment Securities 810 732
Federal Funds Sold 78 120
------ ------
Total Interest and Fee Income 5,956 5,252
------ ------
INTEREST EXPENSE:
Deposits 1,626 1,456
Securities Sold Under Agreement
to Repurchase 8
Note Payable 43 57
------ ------
Total Interest Expense 1,677 1,513
NET INTEREST INCOME 4,279 3,739
PROVISION FOR LOAN/LEASE LOSSES 775 600
NET INTEREST INCOME AFTER PROVISION
FOR LOAN/LEASE LOSSES 3,504 3,139
OTHER INCOME:
Escrow Fees 27 95
Service Charges 253 239
Securities gains or (losses) (72)
Other Income 201 185
------ ------
Total Other Income 409 519
OTHER EXPENSES:
Salaries and Employee Benefits 1,828 1,750
Occupancy, Furniture and Equipment 523 481
Data Processing 71 78
Supplies 94 63
Legal Fees 118 155
Regulatory Assessments 208 231
Losses on OREO 212 146
Other 508 451
------ ------
Total Other Expenses 3,562 3,355
INCOME BEFORE INCOME TAXES 351 303
INCOME TAXES 141 102
NET INCOME 210 201
EARNINGS PER COMMON SHARE $ 0.08 $ 0.08
3
<PAGE>
CALIFORNIA COMMERCIAL BANKSHARES
CONSOLIDATED CONDENSED BALANCE SHEETS
(000's Omitted)
ASSETS
March 31 December 31
1995 1994
-------- -----------
Cash and Due From Banks
Non Interest-bearing $ 24,375 $ 21,069
Interest-bearing 154 246
Investment Securities--Available for Sale 51,843 72,075
Federal Funds Sold 13,000 2,000
Loans, net of unearned interest:
Commercial 75,995 82,600
Real Estate--Construction 34,418 29,791
Real Estate--Equity Line 8,222 8,691
Real Estate--Mortgage 71,537 66,102
Installment and Other 10,487 10,845
Lease Contracts Receivable 3,476 3,615
-------- -----------
204,135 201,645
Less: Deferred Loan Fees & Costs (905) (782)
-------- -----------
203,230 200,863
Less: Reserve for Loan Loss (5,880) (5,660)
-------- -----------
Total Loans, net 197,350 195,203
-------- -----------
Real Estate Owned 3,646 2,676
Bank Premises, Furniture & Equipment 953 988
Accrued Interest Receivable 2,280 2,846
Deferred Income Taxes 1,400 1,400
Prepaid Expenses and Other Assets 1,416 2,162
-------- -----------
Total Assets $296,417 $300,665
======== ===========
LIABILITIES AND SHAREHOLDERS EQUITY
Deposits:
Demand Deposit
Non Interest Bearing $ 78,034 $ 98,733
Interest Bearing 95,153 79,695
Savings Deposits 38,161 40,504
Time Certificates $100,000 and over 29,860 28,896
Other Time Deposits 30,510 29,561
-------- -----------
Total Deposits 271,718 277,389
Note Payable 2,351 2,351
Interest Payable 155 149
Other Liabilities 1,536 1,048
Shareholders Equity:
Capital Stock--Authorized 10,000,000 shares;
Issued and outstanding 2,425,000 in 1995 and
2,423,000 in 1994 10,790 10,782
Paid in Capital 475 475
Retained Earnings 10,000 9,789
Unrealized Gain (Loss) on investment
securities available for sale
(net of tax) (608) (1,318)
-------- -----------
Total Liabilities and Shareholders Equity 296,417 300,665
4
<PAGE>
CALIFORNIA COMMERCIAL BANKSHARES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE THREE MONTHS ENDED MARCH 31
(000's Omitted)
(Unaudited)
1995 1994
------- -------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (loss) 210 201
Adjustments to reconcile net income (loss) to net
cash from operating activities:
Depreciation and Amortization 131 150
Amortization of discounts and premiums on
investment securities available for sale 218 212
Provision for loan and lease losses 775 600
Provision for losses on other real estate owned 57 96
Loss (gain) on sale of investment securities
available for sale 72
Loss (gain) on sale of other real estate owned 50 (19)
(Gain) loss on sale of property (1)
(Increase) decrease in accrued interest receivable 567 277
Increase (decrease) in deferred loan fees 123 (57)
(Decrease) increase in unearned lease income (38) 11
Decrease (increase) in other assets 364 208
Net (decrease) increase in interest payable and
other liabilities 492 7
------- -------
Net cash from operating activities 3,021 1,685
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturity of investment securities
available for sale 40 18,341
Proceeds from sale of investment securities
available for sale 21,012 19,978
Purchase of investment securities available
for sale (17) (24,967)
Net increase (decrease) in loans and investment
in leases (4,548) 4,546
Recoveries of loans and investment in leases 65 266
Purchase of property (96) (86)
Proceeds from sale of property 3
Proceeds from sale of other real estate owned 398 967
------- -------
Net cash from investing activities 16,854 19,048
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (decrease) increase in deposits (5,670) (4,708)
(Decrease) increase in securities sold under
agreements to repurchase
Proceeds from exercise of common stock options 8
------- -------
Net cash from financing activities (5,662) (4,708)
NET (DECREASE) INCREASE IN CASH AND
CASH EQUIVALENTS 14,213 16,025
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 23,315 26,781
------- -------
CASH AND CASH EQUIVALENTS AT MARCH 31 37,528 42,806
======= =======
5
<PAGE>
CALIFORNIA COMMERCIAL BANKSHARES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS:
NOTE 1 - BASIS OF PRESENTATION
THE ACCOMPANYING UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS HAVE
BEEN PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
FOR INTERIM FINANCIAL INFORMATION AND WITH THE INSTRUCTIONS TO FORM 10-Q
AND RULE 10-01 OF REGULATION S-X. ACCORDINGLY, THEY DO NOT INCLUDE ALL OF
THE INFORMATION AND FOOTNOTES REQUIRED BY GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES FOR COMPLETE FINANCIAL STATEMENTS. IN THE OPINION OF MANAGEMENT,
ALL ADJUSTMENTS (CONSISTING OF NORMAL RECURRING ACCRUALS) CONSIDERED
NECESSARY FOR A FAIR PRESENTATION HAVE BEEN INCLUDED. OPERATING RESULTS FOR
THE THREE MONTHS ENDED MARCH 31, 1995 ARE NOT NECESSARILY INDICATIVE OF THE
RESULTS THAT MAY BE EXPECTED FOR THE YEAR ENDED DECEMBER 31, 1995.
NOTE 2 - EARNINGS PER SHARE WERE COMPUTED BASED ON THE FOLLOWING WEIGHTED
AVERAGE OUTSTANDING SHARES:
THREE MONTHS ENDED MARCH 31, 1995..........2,455,000
THREE MONTHS ENDED MARCH 31, 1994..........2,423,000
6
<PAGE>
CALIFORNIA COMMERCIAL BANKSHARES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
THE PURPOSE OF THIS DISCUSSION IS TO PROVIDE ADDITIONAL INFORMATION ABOUT THE
COMPANY'S FINANCIAL CONDITION AND RESULTS OF OPERATIONS WHICH IS NOT OTHERWISE
APPARENT FROM THE CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN THIS INTERIM
REPORT. SINCE THE BANKING SUBSIDIARY REPRESENTS MOST OF THE COMPANY'S ACTIVITY
AND INVESTMENT, THE FOLLOWING DISCUSSION RELATES PRIMARILY TO THE FINANCIAL
CONDITION AND OPERATIONS OF THE BANK. IT SHOULD BE READ IN CONJUNCTION WITH THE
CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY AND THE NOTES THERETO.
THE FOLLOWING CHART SHOWS COMPARATIVE DATA FOR SELECTED ITEMS OF THE FINANCIAL
STATEMENTS:
AVERAGES FOR THE THREE MONTHS ENDED:
<TABLE>
<CAPTION>
PERCENT
MARCH 31 MARCH 31 INCREASE/
1995 1994 (DECREASE)
-------- -------- ----------
<S> <C> <C> <C>
(IN THOUSANDS)
TOTAL ASSETS: $292,957 $315,635 ( 7.18)
INVESTMENT SECURITIES: 61,322 63,628 ( 3.62)
FED FUNDS SOLD: 5,472 17,285 (68.34)
GROSS LOANS: 202,096 210,447 ( 3.97)
TOTAL DEPOSITS: 267,209 290,000 ( 7.86)
INTEREST BEARING DEPOSITS 177,646 198,378 (10.45)
OTHER INTEREST BEARING
LIABILITIES: 2,851 2,351 21.27
</TABLE>
THE DECREASE IN AVERAGE ASSETS, AVERAGE LOANS AND AVERAGE DEPOSITS FROM THE
FIRST QUARTER OF 1994 TO THE FIRST QUARTER OF 1995 REFLECTS THE RECESSIONARY
ECONOMY IN ORANGE COUNTY, INCREASED COMPETITION BY MONEY MARKET MUTUAL FUNDS AND
OTHER FINANCIAL INSTITUTIONS FOR DEPOSIT BALANCES, INTENTIONAL RUNOFF OF HIGHER
COST TIME DEPOSITS AND AN EMPHASIS BY THE BANK ON IMPROVING ASSET QUALITY AND
COLLECTING LOANS RATHER THAN ON GENERATING NEW BUSINESS.
7
<PAGE>
THE FOLLOWING TABLE SHOWS AVERAGE EARNING ASSETS AND INTEREST BEARING
LIABILITIES AND THEIR RELATIVE COST AND YIELD WITHOUT LOAN FEES AND LOAN COSTS.
FOR THE THREE MONTHS ENDED MARCH 31,
<TABLE>
<CAPTION>
1995 1994 PERCENT
---- ----
INCREASE/
(DECREASE) YIELD
AMT YLD AMT YLD DIFF
--- --- --- --- ----
<S> <C> <C> <C> <C> <C> <C>
(IN THOUSANDS)
AVERAGE EARNING
ASSETS $268,757 8.72 $291,360 7.06 (7.76) .96
AVERAGE INTEREST
BEARING
LIABILITIES $180,457 3.77 $198,378 3.09 (9.03) .68
</TABLE>
ACCORDING TO COMPANY POLICY LOANS PAST DUE 90 DAYS OR MORE AS TO INTEREST OR
PRINCIPAL PAYMENTS ARE PLACED ON NON-ACCRUAL. LOANS ACCOUNTED FOR ON A NON-
ACCRUAL BASIS AMOUNTED TO $15,588,000 ON MARCH 31, 1995 AS COMPARED TO
$20,273,000 ON MARCH 31, 1994. OTHER REAL ESTATE OWNED TOTALLED $3,647,000 ON
MARCH 31, 1995 AS COMPARED TO $1,904,000 ON MARCH 31, 1994.
THE FOLLOWING TABLE SHOWS THE TOTAL CHARGE OFFS, RECOVERIES AND THE NET RESULT
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994.
THREE MONTHS ENDED:
MARCH 31
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
(IN THOUSANDS)
CHARGE OFFS 619 344
RECOVERIES 65 265
NET CHARGE OFFS 554 79
</TABLE>
IN VIEW OF CONTINUED UNCERTAINTIES IN THE SOUTHERN CALIFORNIA ECONOMY IN GENERAL
AND THE REAL ESTATE MARKET IN SOUTHERN CALIFORNIA IN PARTICULAR, THE COMPANY HAS
CONTINUED CONTRIBUTING A SUBSTANTIAL AMOUNT TO ITS RESERVE FOR LOAN LOSSES. FOR
THE THREE MONTHS ENDED MARCH 31, 1995 THE COMPANY ADDED $775,000 TO ITS RESERVE
WHICH COMPARES WITH $600,000 FOR THE SAME PERIOD IN 1994. THE RESERVE BALANCE
AS OF MARCH 31, 1995 WAS $5,880,000 WHICH WAS 2.89% OF TOTAL LOANS AND LEASES
WHICH COMPARES WITH $7,744,000 AND 3.72%, RESPECTIVELY, ON MARCH 31, 1994.
8
<PAGE>
RESULTS OF OPERATIONS
INTEREST INCOME AND INTEREST EXPENSE
- ------------------------------------
THE COMPANY'S PRIMARY SOURCE OF REVENUE IS INTEREST INCOME. THE NET YIELD
WITHOUT THE LOAN FEES ON INTEREST EARNING ASSETS INCREASED TO 6.19% DURING THE
FIRST QUARTER OF 1995 FROM 4.96% FOR THE SAME PERIOD OF 1994. THE NET INTEREST
INCOME WITHOUT THE LOAN FEES INCREASED FROM $3,562,000 FOR THE PERIOD ENDING
MARCH 31, 1994 TO $4,101,000 FOR THE PERIOD ENDING MARCH 31, 1995. THIS WAS
LARGELY DUE TO IMPROVED SPREADS IN INTEREST EARNINGS. THE AVERAGE YIELD ON
EARNING ASSETS INCREASED BY 1.66% FROM 7.06% IN THE FIRST QUARTER OF 1994 TO
8.72% IN 1995. THE AVERAGE INTEREST RATE PAID ON INTEREST BEARING LIABILITIES
INCREASED BY .72% FROM 3.05% IN THE FIRST QUARTER OF 1994 TO 3.77% IN 1995. THIS
WAS PARTLY OFFSET BY CONTINUED DECLINE IN AVERAGE OUTSTANDING LOANS AND OTHER
EARNING ASSETS AS THE COMPANY FOCUSED ON MONITORING THE PERFORMANCE OF THE
OUTSTANDING LOANS, IDENTIFYING POTENTIAL PROBLEMS AND COLLECTING IDENTIFIED
PROBLEM LOANS AND REAL ESTATE OWNED. AT THE SAME TIME, THE COMPANY HAS
MAINTAINED ITS REFINED LOAN UNDERWRITING AND APPROVAL PROCESS, SEEKING HIGHER
QUALITY CREDITS WHICH REDUCED THE VOLUME OF LOANS MEETING THE TIGHTENED
CRITERIA.
THE FOLLOWING TABLE SHOWS THE AVERAGE BALANCES OF INTEREST EARNING ASSETS AND
INTEREST BEARING LIABILITIES AND INTEREST EARNED AND PAID ON THOSE BALANCES.
1ST QUARTER 1995 1ST QUARTER 1994
---------------- ----------------
AVERAGE INTEREST AVERAGE INTEREST
ASSETS BALANCE INTEREST RATE BALANCE INTEREST RATE
------- -------- -------- ------- -------- --------
SECURITIES 61,354 810 5.35 63,628 732 4.67
FED FUNDS 5,314 78 5.94 17,285 120 2.82
LOANS 202,089 4,890 9.81 210,447 4,223 8.14
------- ----- ----- ------- ------ ----
TOTAL 268,757 5,778 8.72 291,360 5,075 7.06
------- ----- ---- ------- ------ ----
LIABILITIES
SAVINGS 120,009 842 2.85 118,867 714 2.44
TIME 57,581 784 5.52 79,511 741 3.78
OTHER 2,867 51 7.13 2,351 57 9.83
------- ----- ---- ------- ----- ----
TOTAL 180,457 1,677 3.77 200,729 1,512 3.05
------- ----- ---- ------- ----- ----
NET INTEREST
INCOME 4,101 3,563
YIELD ON EARNING
ASSETS 6.19 4.96
9
<PAGE>
OTHER INCOME AND OTHER EXPENSES - NON-INTEREST INCOME DECREASED BY $110,000
- -------------------------------
TO $409,000 IN THE FIRST QUARTER OF 1995 COMPARED TO $519,000 FOR THE SAME
PERIOD A YEAR AGO. THE DECLINE WAS LARGELY IN TWO CATEGORIES:
1. ESCROW FEES DECREASED BY $70,000 FROM $95,000 IN THE FIRST QUARTER OF 1994
TO $27,000 IN 1995. THE DECLINE WAS DUE TO CONTINUED SLOW ESCROW ACTIVITY AND
REORGANIZING THE ESCROW DIVISION.
2. DURING FIRST QUARTER OF 1995 THE COMPANY SOLD SOME SECURITIES IN THE AMOUNT
OF APPROXIMATELY $21,000,000 AT A LOSS OF $72,000. THESE SECURITIES WERE
ORIGINALLY PURCHASED WITH VERY SHORT MATURITIES TO MEET A PROJECTED CASH OUTFLOW
DURING THE FIRST QUARTER OF 1995.
NON-INTEREST EXPENSE INCREASED BY $207,000 TO $3,562,000 IN THE FIRST QUARTER OF
1995 FROM $3,355,000 IN 1994. A MAJOR PORTION OF IT WAS IN SALARIES WHICH
INCREASED BY $78,000 AND OCCUPANCY EXPENSE WHICH INCREASED BY $42,000. THE
INCREASES WERE DUE TO INCREASED PAYROLL TAXES AND GROUP INSURANCE AND SOME
ADDITION TO THE STAFF TO MEET THE PROJECTED FUTURE GROWTH.
ACCOUNTING PRONOUNCEMENTS
- -------------------------
IN MAY 1993, THE FINANCIAL ACCOUNTING STANDARDS BOARD ("FASB") ISSUED STATEMENT
ON FINANCIAL ACCOUNTING STANDARDS NO. 114 ("SFAS 114"), "ACCOUNTING BY CREDITORS
FOR IMPAIRMENT OF A LOAN" AS AMENDED BY SFAS 118, "ACCOUNTING BY CREDITORS FOR
IMPAIRMENT OF A LOAN-INCOME RECOGNITION AND DISCLOSURES". UNDER THE PROVISIONS
OF SFAS 114, A LOAN IS CONSIDERED IMPAIRED WHEN, BASED ON CURRENT INFORMATION
AND EVENTS, IT IS PROBABLE THAT A CREDITOR WILL BE UNABLE TO COLLECT ALL AMOUNTS
DUE ACCORDING TO THE CONTRACTUAL TERMS OF THE LOAN AGREEMENT. SFAS 114, AS
AMENDED, REQUIRES CREDITORS TO MEASURE IMPAIRMENT OF A LOAN BASED ON THE PRESENT
VALUE OF EXPECTED FUTURE CASH FLOWS DISCOUNTED AT THE LOAN'S EFFECTIVE INTEREST
RATE. IF THE MEASURE OF THE IMPAIRED LOAN IS LESS THAN THE RECORDED INVESTMENT
IN THE LOAN, A CREDITOR WILL RECOGNIZE AN IMPAIRMENT BY CREATING A VALUATION
ALLOWANCE WITH A CORRESPONDING CHARGE TO BAD DEBT EXPENSE. THIS STATEMENT ALSO
APPLIES TO RESTRUCTURED LOANS AND ELIMINATES THE REQUIREMENT TO CLASSIFY LOANS
THAT ARE IN-SUBSTANCE FORECLOSURES AS FORECLOSED ASSETS EXCEPT FOR LOANS WHERE
THE CREDITOR HAS PHYSICAL POSSESSION OF THE UNDERLYING COLLATERAL, BUT NOT LEGAL
TITLE. THE COMPANY ADOPTED SFAS 114 EFFECTIVE JANUARY 1, 1995. THE COMPANY
DOES NOT BELIEVE ADOPTION OF THIS STATEMENT WILL HAVE A MATERIAL IMPACT ON ITS
RESULTS OF OPERATIONS OR FINANCIAL POSITION.
10
<PAGE>
CAPITAL RESOURCES
- -----------------
IT IS THE COMPANY'S POLICY TO ALWAYS MAINTAIN ADEQUATE LIQUIDITY IN CASH,
FEDERAL FUNDS AND IN READILY MARKETABLE GOVERNMENT SECURITIES. THE COMPANY'S
TOTAL LIQUID ASSETS ON MARCH 31, 1995 WERE: CASH AND DUE FROM BANKS
$24,529,000, FEDERAL FUNDS SOLD $13,000,000, AND INVESTMENT SECURITIES FREE OF
COLLATERAL $48,433,000; TOTALING $85,962,000 OR 29% OF TOTAL ASSETS.
ADDITIONALLY, THE MAJORITY OF THE COMPANY'S LOANS ARE ON A SHORT TERM BASIS,
MATURING IN APPROXIMATELY ONE YEAR, WHICH, COMBINED WITH LINES OF CREDIT WITH
CORRESPONDENT BANKS, PROVIDES ADDITIONAL LIQUIDITY.
IN DECEMBER 1988, THE COMPANY OBTAINED A $3,000,000 TERM LOAN FROM ANOTHER
FINANCIAL INSTITUTION FOR THE PURPOSE OF PROVIDING ADDITIONAL CAPITAL TO THE
BANK. THE CREDIT AGREEMENT FOR THIS LOAN WAS AMENDED PURSUANT TO A SECOND
AMENDMENT TO THE CREDIT AGREEMENT DATED AUGUST 25, 1994. THE LOAN, AS AMENDED,
BEARS INTEREST AT A FLUCTUATING RATE PER ANNUM EQUAL TO .75% IN EXCESS OF THE
LENDER'S REFERENCE RATE (9.00% AT MARCH 31, 1995). INTEREST IS PAYABLE MONTHLY
ON THE UNPAID PRINCIPAL BALANCE OF THE LOAN. PRINCIPAL IS TO BE REPAID ON
JANUARY 1, 1997. THE SECOND AMENDMENT WAIVES ALL FINANCIAL COVENANTS RELATING
TO THE TERM LOAN. AT MARCH 31, 1995 AND 1994, $2,351,000 REMAINED OUTSTANDING
ON THE LOAN.
THE SECOND AMENDMENT IS SUPPORTED BY A SUPPORT AGREEMENT BETWEEN A SHAREHOLDER
OF THE COMPANY AND THE COMPANY, WHEREBY THE SHAREHOLDER HAS GUARANTEED THE
PAYMENT OF THE LOAN.
TO COMPENSATE THE SHAREHOLDER FOR SIGNING THE SUPPORT AGREEMENT, THE COMPANY
SIGNED A HOLDING COMPANY SUPPORT AGREEMENT WHEREBY THE COMPANY: (1) HAS PAID
THE SHAREHOLDER A STANDBY FEE OF $23,500, (2) WILL PAY A STANDBY FEE EQUAL TO
ONE PERCENT OF THE UNPAID PRINCIPAL AMOUNT OF THE TERM LOAN ON EACH ANNIVERSARY
DATE OF THE CLOSING DATE OF THE HOLDING COMPANY SUPPORT AGREEMENT (3) WILL ISSUE
TO THE SHAREHOLDER ON OR PRIOR TO MARCH 31, 1997 WARRANTS TO PURCHASE 25,000
SHARES OF COMMON STOCK OF THE COMPANY AT AN EXERCISE PRICE PER SHARE EQUAL TO
80% OF THE BOOK VALUE PER SHARE OF THE COMPANY ON DECEMBER 31, 1996.
ON DECEMBER 31, 1990, NEW RISK BASED CAPITAL REQUIREMENTS BECAME EFFECTIVE.
UNDER THE REQUIREMENTS, HOLDING COMPANIES AND BANKS ARE REQUIRED CURRENTLY TO
MAINTAIN MINIMUM RATIOS OF TOTAL CAPITAL AND "CORE" (TIER 1) CAPITAL TO RISK-
WEIGHTED ASSETS; HOWEVER, UNDER THE TERMS OF ITS FORMAL AGREEMENT WITH THE
COMPTROLLER, THE BANK IS REQUIRED TO MAINTAIN CAPITAL IN EXCESS OF THIS MINIMUM
REQUIREMENT. THE REGULATORY CAPITAL REQUIREMENTS, CAPITAL REQUIREMENTS UNDER
THE FORMAL AGREEMENT AND THE BANK AND COMPANY'S ACTUAL CAPITAL RATIOS ARE SHOWN
IN THE FOLLOWING TABLE AS OF THE DATES INDICATED:
11
<PAGE>
<TABLE>
<CAPTION>
AT MARCH 31,
1995 1994
- ---------------------------------------------------------------- -----------------------------------------
EXCESS EXCESS
PER EXCESS TO PER EXCESS TO
MINIMUM FORMAL TO FORMAL MINIMUM FORMAL TO FORMAL
STATU- AGREE- STATU- AGREE- STATU- AGREE- STATU- AGREE-
TORY MENT ACTUAL TORY MENT TORY MENT ACTUAL TORY MENT
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FOR THE BANK
RISK-BASED CAPITAL:
TIER 1 4.00% N/A 10.47% 6.47% N/A 4.00% N/A 9.77% 5.77% N/A
TOTAL RISK-BASED 8.00% 9.00% 11.72% 3.72% 2.72% 8.00% 9.00% 11.02% 3.02% 2.02%
TIER 1 LEVERAGE
RATIO(1) 4.00% 6.00% 7.69% 3.69% 1.69% 4.00% 6.00% 6.78% 2.78% .78%
FOR THE COMPANY
RISK-BASED CAPITAL:
TIER 1 4.00% N/A 9.68% 5.68% N/A 4.00% N/A 9.18% 5.18% N/A
TOTAL RISK-BASED 8.00% N/A 10.92% 2.92% N/A 8.00% N/A 10.43% 2.43% N/A
TIER 1 LEVERAGE
RATIO 4.00% N/A 7.16% 3.16% N/A 4.00% N/A 6.38% 2.38% N/A
</TABLE>
_______________
(1) IN SOME CIRCUMSTANCES THIS MINIMUM RATIO MAY BE 3%.
AS OF MARCH 31, 1995 AND 1994, THE BANK AND THE COMPANY WERE IN COMPLIANCE WITH
STATUTORY RISK-BASED CAPITAL REQUIREMENTS AND THE BANK WAS IN COMPLIANCE WITH
THE MORE STRINGENT CAPITAL REQUIREMENTS IMPOSED BY THE FORMAL AGREEMENT.
12
<PAGE>
CALIFORNIA COMMERCIAL BANKSHARES
INDEX
PART II. OTHER INFORMATION
- ---------------------------
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security-Holders.
Not applicable.
Item 5. Other Information.
Not applicable.
Item 6. Exhibit and Reports on Form 8-K.
Not applicable.
13
<PAGE>
CALIFORNIA COMMERCIAL BANKSHARES
SIGNATURES:
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES AND EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
CALIFORNIA COMMERCIAL BANKSHARES
(REGISTRANT)
DATE: MAY 11, 1995 /s/ WILLIAM H. JACOBY
------------------ ---------------------------
WILLIAM H. JACOBY
PRESIDENT
DATE: MAY 11, 1995 /s/ ABDUL S. MEMON
------------------ ---------------------------
ABDUL S. MEMON
CHIEF FINANCIAL OFFICER
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 24,375
<INT-BEARING-DEPOSITS> 154
<FED-FUNDS-SOLD> 13,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 51,843
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 203,230
<ALLOWANCE> 5,880
<TOTAL-ASSETS> 296,417
<DEPOSITS> 271,718
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,691
<LONG-TERM> 2,351
<COMMON> 10,790
0
0
<OTHER-SE> 9,867
<TOTAL-LIABILITIES-AND-EQUITY> 296,417
<INTEREST-LOAN> 5,068
<INTEREST-INVEST> 810
<INTEREST-OTHER> 78
<INTEREST-TOTAL> 5,956
<INTEREST-DEPOSIT> 1,626
<INTEREST-EXPENSE> 1,677
<INTEREST-INCOME-NET> 4,279
<LOAN-LOSSES> 775
<SECURITIES-GAINS> (72)
<EXPENSE-OTHER> 3,562
<INCOME-PRETAX> 351
<INCOME-PRE-EXTRAORDINARY> 351
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 210
<EPS-PRIMARY> 0.08
<EPS-DILUTED> 0.08
<YIELD-ACTUAL> 6.45
<LOANS-NON> 15,583
<LOANS-PAST> 0
<LOANS-TROUBLED> 9,657
<LOANS-PROBLEM> 1,505
<ALLOWANCE-OPEN> 5,660
<CHARGE-OFFS> 619
<RECOVERIES> 64
<ALLOWANCE-CLOSE> 5,880
<ALLOWANCE-DOMESTIC> 3,365
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 2,515
</TABLE>
