FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
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 0-18440
BURLINGAME BANCORP
(Exact name of registrant as specified in its charter)
California 94-2921417
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
350 Primrose Road
Burlingame, California
(Address of principal executive offices)
94010
(Zip Code)
(415) 348-2500
(Registrant's telephone number, including area code)
Indicate by check mark 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
Number of shares of common stock outstanding at May 12, 1995 is
576,974.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements
The information required by Rule 10-01 of Regulation S-X is
attached hereto as Exhibit A.
ITEM 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations
The sole business operation of Burlingame Bancorp (the "Company")
is conducted through its wholly owned subsidiary, Burlingame Bank
& Trust Co. (the "Bank"). This discussion, therefore, although
presented on a consolidated basis, analyzes primarily the
financial condition and results of operations of the Bank for the
3 month period ended March 31, 1995.
Changes in Financial Condition
During the three month period ended March 31, 1995, deposits
increased $4.1 million or 7.0% to $62.3 million. During the same
period, loans and loans held for sale decreased $.5 million or
1.4% to $39.6 million, primarily as a result of a partial
repayment of a non-performing loan. Investment securities
decreased $3.2 million or 16.3%, to $16.4 million. Excess
liquidity during the period was invested in federal funds and
money market funds.
During the three month period ending March 31, 1995, non-
performing assets decreased to $1.7 million (2.4% of total
assets), which compares with $2.1 million (3.3% of total assets)
at December 31, 1994. The Bank's allowance for credit losses at
March 31, 1995 was 4.1% of total loans compared with 4.0% at
December 31, 1994.
Earnings Summary
Net income for the quarter ended March 31, 1995 was $22,000, or
$0.04 per common and common equivalent share, compared with net
income of $ 6,000, or $0.01 per share in the same quarter a year
ago.
Net Interest Income
Total interest income increased $215,000 or 19.2% for the quarter
ended March 31, 1995, as compared to the prior year. During the
same period, interest expense increased $114,000 or 37.1%. Net
<PAGE>
interest income for the quarter ended March 31 was $916,000 in
1995 and $815,000 in 1994. Average loans as a percentage of
average earning assets was 65.4% during the quarter ended March
31, 1995, compared to 63.5% a year earlier. The average balance
of lower yielding other earning assets as a percentage of average
total earning assets was 34.6% during the quarter ended March 31,
1995, compared to 36.5% a year earlier.
Provision for Credit Losses
The Bank maintains its allowance for credit losses at a level
considered appropriate by management to provide for known and
inherent risks in the loan portfolio. This consideration
includes an evaluation of various factors affecting the
collectability of loans, including current and projected economic
conditions, past credit experience and a periodic review of the
Bank's loan portfolio. Because of the decrease in non-performing
assets and the general improvement in asset quality, the Bank
recorded no additional provision to the allowance for credit
losses for the three month period ended March 31, 1995 or 1994.
Loans charged off during the three month period totalled $0 in
1995 and $243,000 in 1994. Recoveries in the same period were
$21,000 in 1995 and $89,000 in 1994.
On January 1, 1995, the Company adopted SFAS No. 114, "Accounting
by Creditors for Impairment of a Loan" and SFAS No. 118,
"Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosure". The effect of adoption on the
Company's financial statements was not material.
Other Income
Other Income consists of gain on sale of assets, service fees and
other fees related to deposit accounts, escrow fees, letter of
credit fees, referral fees and safe deposit box rentals. In the
quarter ended March 31, 1995, income from these sources was
$76,000, a decrease of $84,000 from the same period in 1994. The
decrease was attributable primarily to the Bank's decision during
the quarter ended March 31, 1995, not to sell the guaranteed
portion of certain SBA loans.
Other Expenses
Other Expenses decreased $12,000, or 1.2%, to $954,000 for the
quarter ended March 31, 1995, compared to the same period in
1994. The decrease was due in part to reduced personnel costs.
During the quarter ended March 31, 1995, the Bank had 33 full-
time officers and employees and 2 part-time officers and
employees for a total of 34 full-time equivalents, compared to 36
full-time equivalents during the same quarter a year earlier.
The reduction in personnel costs was partially offset by
increased expenses due to collection efforts for certain non-
performing assets.
Capital Resources
Management seeks to maintain adequate capital to support
anticipated asset growth and credit risks and to ensure that the
Company meets all regulatory capital requirements.
<PAGE>
The Bank is subject to requirements issued by the FDIC including
the maintenance of a minimum risk-based capital ratio of 9.0% and
a minimum tier 1 leverage ratio of 6.5%. As of March 31, 1995,
the Bank was in compliance, with a risk-based capital ratio of
12.1% and a leverage ratio of 8.4%.
Future growth and earnings retention, as currently projected by
management, are expected to provide for the maintenance of
capital ratios in conformance with the requirements.
Income Taxes
The provision for income taxes was $16,000 for the quarter ended
March 31, 1995, compared to $3,000 in the same quarter a year
earlier. The provision is classified as a current tax liability
for interim reporting purposes. The effective tax rate was 42%
for the quarter ended March 31, 1995, compared to 33% for the
same quarter in 1994.
Liquidity
The Bank manages its liquidity to ensure that sufficient funds
are available to meet loan commitments and deposit fluctuations.
Primary sources of liquidity include cash and deposits due from
banks, unpledged short-term U.S. Government securities,
adjustable rate government securities funds, money market funds,
and federal funds sold. The Bank's primary liquidity ratio,
which is the ratio of liquid assets to total deposits, was 34% at
March 31, 1995, and 27% at December 31, 1994.
Other Matters
As of March 31, 1995, management of the Company and Bank believe
that they remain in full compliance with the requirements of all
regulatory agreements entered into with the Federal Reserve Bank
and the Federal Deposit Insurance Corporation.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1 - Legal Proceedings
None
ITEM 2 - Changes in Securities
None
ITEM 3 - Defaults upon Senior Securities
None
ITEM 4 - Submission of Matters to a Vote of
Security Holders
None
ITEM 5 - Other Information
None
ITEM 6 - Exhibits and Reports on Form 8-K
None
There are no other applicable items.
>PAGE>
SIGNATURES
Pursuant to the requirements 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.
BURLINGAME BANCORP
Registrant
Date: May 12, 1995
Theodore H. Kruttschnitt
Chairman and C.E.O.
(Principal Executive Officer)
Date: May 12, 1995
Susann Trevena
Chief Accounting Officer
<PAGE>
<TABLE>
Exhibit A
Part I - Financial Statements
Burlingame Bancorp and Subsidiary
Consolidated Balance Sheets
<CAPTION>
March 31
1995 December 31
(Unaudited) 1994
------------ ------------
<S> <C> <C>
ASSETS
Cash and due from banks $4,022,000 $3,512,000
Federal funds sold 7,550,000 400,000
Short-term investments 0 0
------------ -----------
Total cash and equivalents 11,572,000 3,912,000
Investment securities:
Held to Maturity 14,345,000 17,609,000
Available for Sale 2,096,000 2,030,000
Loans Held for Sale 1,714,000 1,098,000
Loans 37,913,000 39,078,000
Allowance for credit losses (1,626,000) (1,605,000)
Premises and equipment, net 1,061,000 1,132,000
Other real estate owned 407,000 32,000
Accrued interest receivable
and other assets 1,590,000 1,395,000
------------ ------------
Total Assets $69,072,000 $64,681,000
============ ============
LIABILITIES & SHAREHOLDERS' EQUITY
Deposits:
Interest-bearing $49,833,000 $46,151,000
Noninterest-bearing 12,456,000 12,058,000
------------ -----------
Total deposits 62,289,000 58,209,000
Accrued interest payable
and other liabilities 802,000 537,000
------------ -----------
Total Liabilities 63,091,000 58,746,000
------------ -----------
Shareholders' Equity
Preferred stock - no par value
Authorized 20,000,000 shares;
Issued, none
Common stock - no par value
Authorized 20,000,000 shares;
Issued, 576,974 shares 4,567,000 4,567,000
Unrealized loss on investment
securities available for sale (77,000) (101,000)
Retained earnings 1,491,000 1,469,000
------------ -----------
Total Shareholders' Equity 5,981,000 5,935,000
------------ -----------
Total Liabilities and
Shareholders' Equity
$69,072,000 $64,681,000
============ ===========
</TABLE>
See notes to consolidated financial statements
<PAGE>
<TABLE>
Burlingame Bancorp and Subsidiary
Consolidated Statements of Income
(Unaudited)
<CAPTION>
For the Three Months Ended
March 31,
1995 1994
------------ -----------
<S> <C> <C>
Interest Income:
Loans (including fees) $1,012,000 $905,000
Federal funds sold 269,000 62,000
Investment securities 56,000 155,000
------------ -----------
Total Interest Income 1,337,000 1,122,000
Interest Expense on Deposits 421,000 307,000
------------ -----------
Net Interest Income 916,000 815,000
Provision for credit losses 0 0
------------ ----------
Net Interest Income
after provision for credit
losses 916,000 815,000
Other Income 76,000 160,000
Other Expenses:
Salaries & benefits 469,000 522,000
Occupancy 60,000 67,000
Furniture & equipment 77,000 69,000
Data processing 31,000 35,000
Professional services 109,000 92,000
Other 208,000 181,000
------------ -----------
Total Other Expenses 954,000 966,000
------------ -----------
Income before income taxes 38,000 9,000
Income taxes 16,000 3,000
------------ -----------
Net Income $22,000 $6,000
============ ===========
Income per common share and
common share equivalent $0.04 $0.01
============ ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
Burlingame Bancorp and Subsidiary
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
For the Three Months Ended
March 31,
1995 1994
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income 22,000 $6,000
Reconciliation to net cash provided by
(used in) operating activities:
Depreciation and amortization
of premises and equipment 81,000 77,000
Amortization deferred loan fees (51,000) (27,000)
Amortization of investment
security premiums (discounts) (38,000) 19,000
Origination of loans held for sale (1,962,000) (1,361,000)
Sales of loans held for sale 262,000 1,361,000
(Increase) decrease in interest
receivable and other assets (206,000) 91,000
Increase (decrease) in interest
payable and other liabilities 265,000 (82,000)
------------ -----------
(1,627,000) 84,000
------------ -----------
INVESTING ACTIVITIES:
Activities in securities held-to-maturity:
Purchases (198,000) (8,533,000)
Maturities 3,500,000 4,100,000
Activities in securities available-for-
sale:
Purchases (31,000) 0
Net loan originations, collections
and principal repayments 1,946,000 2,592,000
Purchases of premises and equipment (10,000) (48,000)
------------ -----------
5,207,000 (1,889,000)
------------ -----------
FINANCING ACTIVITIES:
Net increase in interest-bearing deposits 3,682,000 1,305,000
Net increase (decrease) in noninterest-
bearing deposits 398,000 (882,000)
------------ -----------
4,080,000 423,000
------------ -----------
NET INCREASE (DECREASE) IN CASH AND
EQUIVALENTS 7,660,000 (1,382,000)
CASH AND EQUIVALENTS:
Beginning of period 3,912,000 17,788,000
------------ -----------
End of period $11,572,000 $16,406,000
============ ===========
OTHER CASH FLOW INFORMATION:
Interest paid $418,000 $313,000
------------ -----------
Taxes paid $19,000 $0
------------ -----------
</TABLE>
See notes to consolidated financial statements.
<PAGE>
Burlingame Bancorp and Subsidiary
Notes to Consolidated Financial Statements
March 31, 1995
(Unaudited)
Note 1 - Basis of Presentation
In the opinion of Management, the unaudited interim consolidated
financial statements contain all adjustments of a normal recurring
nature, which are necessary to present fairly the financial
condition of Burlingame Bancorp and Subsidiary at March 31, 1995
and the results of operations for the three months then ended.
Certain information and footnote disclosures presented in the
Company's annual consolidated financial statements are not
included in these interim financial statements. Accordingly, the
accompanying unaudited interim consolidated financial statements
should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's 1994 Annual
Report on Form 10-K. The results of operations for the three
months ended March 31, 1995 are not necessarily indicative of the
operating results through December 31, 1995.
Note 2 - New Accounting Policies
On January 1, 1995, the Company adopted SFAS No. 114, "Accounting
by Creditors for Impairment of a Loan" and SFAS No. 118,
"Accounting by Creditors for Impairment of a Loan - Income
Recognition and Disclosure". These statements address the
accounting and reporting by creditors for impairment of certain
loans. A loan is impaired when, based upon 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. These statements are applicable to all loans,
uncollaterialized as well as collateralized, except large groups
of smaller-balance homogeneous loans that are collectively
evaluated for impairment such as consumer installment loans and
loans held for sale which are measured at fair value or at the
lower of cost or fair value. Impairment is measured based on the
present value of expected future cash flows discounted at the
loan's effective interest rate, except that as a practical
expedient, the Company measures impairment based on a loan's
observable market price or the fair value of the collateral if the
loan is collateral dependent. Loans are measured for impairment
as part of the Company's normal internal asset review process.
Interest income is recognized on impaired loans in a manner
similar to that of all loans. It is the Company's policy to place
loans that are delinquent 90 days or more as to principal or
interest on a nonaccrual of interest basis unless secured and in
the process of collection, and to reverse from current income
accrued but uncollected interest. Cash payments subsequently
received on nonaccrual loans are recognized as income only where
the future collection of principal is considered by management to
be probable.
At March 31, 1995, the Company's total recorded investment in the
impaired loans was $1,445,000 for which there is a related
allowance for credit losses of $357,000 determined in accordance
with these Statements.
The average recorded investment in the impaired loans during the
three months ended March 31, 1995 was $1,445,000. The related
amount of interest income recognized during the period that such
loans were impaired was $1,000 and the amount of interest income
recognized using a cash-basis method of accounting during the time
within the period that the loans were impaired was $1,000.
Note 3 - Consolidation
The consolidated financial statements include the accounts of
Burlingame Bancorp and its wholly-owned subsidiary, Burlingame
Bank & Trust Co and its wholly-owned subsidiary, Burlingame
Development Corporation. All material intercompany accounts and
transactions have been eliminated in consolidation.
<PAGE>
Note 4 - Commitments
The Bank has outstanding standby letters of credit of $480,000 at
March 31, 1995.
Note 5 - Net Income Per Common Share
Net income per share is calculated by using the weighted average
common shares outstanding plus common stock equivalents resulting
from stock options. The difference between primary and fully
diluted net income per share is not significant. The weighted
average number of common and common equivalent shares used in
computing the net income per common share for the periods ending
March 31, 1995 and 1994 was 576,974.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM UNAUDITED
CONSOLIDATED BALANCE SHEETS, CONSOLIDATED STATEMENTS OF INCOME AND OTHER
INTERNALLY GENERATED REPORTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000737269
<NAME> BURLINGAME BANCORP
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994
<PERIOD-END> MAR-31-1995 MAR-31-1994
<CASH> 4,022,000 5,184,000
<INT-BEARING-DEPOSITS> 0 500,000
<FED-FUNDS-SOLD> 7,550,000 7,200,000
<TRADING-ASSETS> 0 0
<INVESTMENTS-HELD-FOR-SALE> 2,096,000 6,082,000
<INVESTMENTS-CARRYING> 14,345,000 13,903,000
<INVESTMENTS-MARKET> 14,208,000 13,796,000
<LOANS> 39,627,000 42,094,000
<ALLOWANCE> (1,626,000) (1,743,000)
<TOTAL-ASSETS> 69,072,000 75,936,000
<DEPOSITS> 62,289,000 69,708,000
<SHORT-TERM> 0 0
<LIABILITIES-OTHER> 802,000 377,000
<LONG-TERM> 0 0
<COMMON> 4,567,000 4,567,000
0 0
0 0
<OTHER-SE> 1,414,000 1,284,000
<TOTAL-LIABILITIES-AND-EQUITY> 5,981,000 5,851,000
<INTEREST-LOAN> 1,012,000 905,000
<INTEREST-INVEST> 325,000 217,000
<INTEREST-OTHER> 0 0
<INTEREST-TOTAL> 1,337,000 1,122,000
<INTEREST-DEPOSIT> 421,000 307,000
<INTEREST-EXPENSE> 0 0
<INTEREST-INCOME-NET> 916,000 815,000
<LOAN-LOSSES> 0 0
<SECURITIES-GAINS> 0 0
<EXPENSE-OTHER> 954,000 966,000
<INCOME-PRETAX> 38,000 9,000
<INCOME-PRE-EXTRAORDINARY> 38,000 9,000
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 22,000 6,000
<EPS-PRIMARY> $0.04 $.01
<EPS-DILUTED> $0.04 $.01
<YIELD-ACTUAL> 9.10 8.36
<LOANS-NON> 1,072,000 2,385,000
<LOANS-PAST> 191,000 0
<LOANS-TROUBLED> 0 0
<LOANS-PROBLEM> 0 0
<ALLOWANCE-OPEN> 1,605,000 1,749,000
<CHARGE-OFFS> 0 9,000
<RECOVERIES> 21,000 3,000
<ALLOWANCE-CLOSE> 1,626,000 1,743,000
<ALLOWANCE-DOMESTIC> 1,241,000 1,476,000
<ALLOWANCE-FOREIGN> 0 0
<ALLOWANCE-UNALLOCATED> 385,000 267,000
</TABLE>
