<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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 33-16366
SUMMIT BANK CORPORATION
(Exact name of Registrant as specified in its charter)
GEORGIA 58-1722476
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4360 Chamblee-Dunwoody Road
Atlanta, Georgia 30341
(Address of principal executive offices, including Zip Code)
(770) 454-0400
(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
------ ------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of capital stock, as of the latest practicable date.
Class Outstanding at August 7, 1997
----- -----------------------------
Common Stock. $.0l par value 1,447,053
The Exhibit Index Appears on Page 13
PAGE 1 OF 15
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SUMMIT BANK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
(In thousands) 1997 1996
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Cash and due from banks $ 8,510 $ 7,443
Federal funds sold 0 15,900
Interest-bearing deposits in other banks 72 74
Investment securities available for sale, at fair value 52,085 37,903
Other investments 934 681
Loans, net of unearned income 85,472 82,778
Loans held for sale 5,527 3,030
Less: allowance for loan losses (1,760) (1,931)
- ----------------------------------------------------------------------------------------------------------
Net loans 89,239 83,877
- ----------------------------------------------------------------------------------------------------------
Premises and equipment, net 4,449 4,574
Customers' acceptance liability 1,405 1,184
Other real estate -- --
Deferred income taxes 436 392
Other assets 4,837 2,220
- ----------------------------------------------------------------------------------------------------------
Total assets $ 161,967 $ 154,248
==========================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing demand $ 29,276 $ 27,381
Interest-bearing:
Demand 32,063 39,487
Savings 6,449 6,288
Time, $100,000 and over 24,730 23,109
Other time 38,964 36,634
- ----------------------------------------------------------------------------------------------------------
Total deposits 131,482 132,899
- ----------------------------------------------------------------------------------------------------------
Obligation under capital lease 100 118
Other borrowed funds 9,728 1,657
Acceptances outstanding 1,405 1,184
Other liabilities 1,479 1,454
- ----------------------------------------------------------------------------------------------------------
Total liabilities 144,194 137,312
- ----------------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY:
Common stock 14 14
Additional paid-in capital 12,158 12,123
Retained earnings 5,540 4,710
Net unrealized holding gains on investment securities
available for sale, net of income taxes 61 89
- ----------------------------------------------------------------------------------------------------------
Total stockholders equity 17,773 16,936
- ----------------------------------------------------------------------------------------------------------
Total liabilities and stockholders equity $ 161,967 $ 154,248
==========================================================================================================
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
PAGE 2 OF 15
<PAGE> 3
SUMMIT BANK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
Three months Six months
ended June 30, ended June 30,
(Dollars in thousands, except share and per share amounts) 1997 1996 1997 1996
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income
Loans, including fees $ 2,387 $ 2,110 $ 4,727 $ 4,240
Interest-bearing deposits in other banks 1 1 2 2
Federal funds sold 23 34 152 90
Investment securities-taxable 345 180 571 292
Mortgage-backed securities 556 471 1,060 934
- ------------------------------------------------------------------------------------------------------------------
Total interest income 3,312 2,796 6,512 5,558
- ------------------------------------------------------------------------------------------------------------------
Interest expense
Time deposits, $100,000 and over 361 318 657 693
Other deposits 875 783 1,773 1,485
Short-term borrowings and obligation
under capital lease 97 20 118 28
- ------------------------------------------------------------------------------------------------------------------
Total interest expense 1,333 1,121 2,548 2,206
- ------------------------------------------------------------------------------------------------------------------
Net interest income 1,979 1,675 3,964 3,352
Provision for loan losses 135 146 260 287
- ------------------------------------------------------------------------------------------------------------------
Net interest income after provision
for loan losses 1,844 1,529 3,704 3,065
- ------------------------------------------------------------------------------------------------------------------
Non-interest income
Fees for international banking services 321 283 568 558
SBA loan servicing fees 111 123 222 234
Service charge income 68 43 126 95
Overdraft and NSF charges 100 92 210 172
Gains on sales of loans 208 184 208 351
Net gains on sales of investment securities 19 -- 19 116
Other 95 70 174 162
- ------------------------------------------------------------------------------------------------------------------
Total non-interest income 922 795 1,527 1,688
- ------------------------------------------------------------------------------------------------------------------
Non-interest expenses
Salaries and employee benefits 896 836 1,812 1,665
Equipment 153 106 307 221
Net occupancy 128 102 250 199
Other operating expenses 617 541 1,242 955
- ------------------------------------------------------------------------------------------------------------------
Total non-interest expenses 1,794 1,585 3,611 3,040
- ------------------------------------------------------------------------------------------------------------------
Income before income taxes 972 739 1,620 1,713
- ------------------------------------------------------------------------------------------------------------------
Income tax expense 314 273 551 646
- ------------------------------------------------------------------------------------------------------------------
Net income $ 658 $ 466 $ 1,069 $ 1,067
- ------------------------------------------------------------------------------------------------------------------
Net income per common share and common share equivalents $ .40 $ .29 $ .65 $ .67
- ------------------------------------------------------------------------------------------------------------------
Weighted-average common shares outstanding and
common share equivalents 1,631,272 1,630,610 1,638,526 1,630,610
- ------------------------------------------------------------------------------------------------------------------
Dividends declared per common share $ .09 $ .08 $ .17 $ .15
==================================================================================================================
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
PAGE 3 OF 15
<PAGE> 4
SUMMIT BANK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six months
ended June 30,
(In thousands) 1997 1996
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,069 $ 1,067
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of leasehold improvements 159 130
Deferred tax benefit (28) (142)
Net amortization of premiums/discounts on
investment securities 41 39
Amortization of negative goodwill (55) (55)
Provision for loan losses 260 287
Gains on sales of loans (208) (351)
Proceeds from sales of loans -- 3,281
Net gains on sales of investment securities (19) (116)
Changes in other assets and liabilities:
(Increase) decrease in other assets (620) 3,064
Increase (decrease) in other liabilities 80 (881)
- ----------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 679 6,323
- ----------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from maturities of investment securities available for sale 1,000 1,350
Principal collections on investment securities available for sale 2,543 2,740
Proceeds from sales of investment securities available for sale 13,966 1,920
Purchases of investment securities available for sale (32,010) (13,004)
Loans made to customers, net of principal collected on loans (7,411) (9,219)
Purchases of premises and equipment (34) (823)
- ----------------------------------------------------------------------------------------------------------
Net cash used in investing activities (21,946) (17,036)
- ----------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net (decrease) increase in demand and savings deposits (5,368) 1,403
Net increase in time deposits 3,951 8,478
Principal payments for obligation under capital lease (18) (16)
Proceeds from issuance of common stock 35 --
Dividends paid (239) (211)
Net increase in borrowed funds 8,071 1,000
- ----------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 6,432 10,654
- ----------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents (14,835) (59)
Cash and cash equivalents at beginning of period 23,417 10,805
- ----------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 8,582 $ 10,746
==========================================================================================================
Supplemental disclosures of cash paid during the period:
Interest $ 2,245 $ 2,803
Income taxes $ 357 $ 775
==========================================================================================================
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
PAGE 4 OF 15
<PAGE> 5
SUMMIT BANK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The financial statements included herein have been prepared by Summit Bank
Corporation and Subsidiaries (the "Company"), without audit, pursuant to
the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in
consolidated financial statements prepared in accordance with generally
accepted accounting principles have been omitted, although the Company
believes that the disclosures are adequate to make the information
presented not misleading. In the opinion of management, the information
furnished in the condensed consolidated financial statements reflects all
adjustments necessary to present fairly the Company's financial position,
results of operations and cash flows for such interim periods. Management
believes that all interim period adjustments are of a normal recurring
nature. These consolidated financial statements should be read in
conjunction with the Company's audited financial statements and the notes
thereto as of December 31, 1996, included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1996.
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries, The Summit National Bank (the "Bank")
and The Summit Merchant Banking Corporation. All intercompany accounts
and transactions have been eliminated in consolidation.
2. ACCOUNTING POLICIES
Reference is made to the accounting policies of the Company described in
the notes to consolidated financial statements contained in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996.
3. DERIVATIVES DISCLOSURES
In January 1997, the Securities and Exchange Commission approved rule
amendments (the Release) regarding disclosures about derivative financial
instruments, other financial instruments and derivative commodity
instruments. The Release requires inclusion in the footnotes to the
financial statements of extensive detail about the accounting policies
followed by a registrant in connection with its accounting for derivative
financial instruments and derivative commodity instruments. The
accounting policy requirements become effective for all registrants for
filings that include financial statements for periods ending after June
15, 1997. The Company does not presently have any derivative financial
instruments or derivative commodity instruments as defined in the Release.
4. OTHER BORROWINGS
The Company has a $16 million credit line with the Federal Home Loan Bank
on which it drew $5 million in April 1997 for a three month term. This
advance bore an interest rate of 5.82% and was fully collateralized by
investment securities owned by the Bank.
5. RECLASSIFICATIONS
Certain 1996 amounts have been reclassified for comparative purposes in
order to conform the prior period to the 1997 presentation.
PAGE 5 OF 15
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
For the three-month and six-month periods ended June 30, 1997 and 1996
Performance Overview
Summit Bank Corporation and Subsidiaries (the "Company") reported net income of
$658,000 for the second quarter of 1997, representing a 41% increase over
earnings for the same period last year. The strong earnings improvement for
the quarter is attributed to the continued increase in interest income
resulting primarily from a higher volume of earning assets. Since June 30,
1996, the Company's earning assets have grown $18 million, or 14.2%. Net
earnings per share for second quarter 1997 were $.40 as compared to $.29 for
second quarter 1996. Six-month earnings for 1997 were $1,069,000 compared to
$1,067,000 last year. While earnings were flat for the comparable six-month
periods, a significant factor to note is that core earnings have absorbed over
$400,000 in additional costs this year associated with the two new branch
locations opened in mid-to-late 1996. The annualized return on average
stockholders' equity for 1997 was 12.4% compared to 13.7% for the 1996
six-month period due to continued equity growth. The return on average assets
for the six month period was 1.3% compared to 1.6% in 1996. Book value per
share increased to $12.59 at June 30, 1997, from $12.03 at December 31, 1996.
Net interest income increased 18% in second quarter 1997 to $2 million compared
to the same period last year due to the Company's growth in earning assets.
For the six month comparable periods, 1997 net interest income also reflected a
sharp increase of 18% to $4 million from $3.4 million. The Company's net
interest margin through June 30, 1997 remained constant at 5.6% compared to
last year.
Provision for loan losses declined to $135,000 compared to $146,000 for the
respective second quarters of 1997 and 1996 as loan growth was somewhat slower
in second quarter of this year. Gross charged-off loans for the six-months
ended June 30, 1997 were $546,000, offset by recoveries of $115,000, resulting
in an annualized net charge-off rate of .96% of total loans. While higher than
1996 net charge-offs of .02% for the same period, charge-offs in 1997 include
$108,000 of fully guaranteed Small Business Administration ("SBA") loans, on
which management expects full recovery during the last half of 1997.
Non-interest income increased sharply by 16% to $922,000 in second quarter 1997
from $795,000 last year. Improvement in service charges on deposits accounted
for $25,000 of this increase as the Company's average non-interest bearing
checking deposits grew 18% compared to the second quarter of last year. Net
gains from sales of loans accounted for $24,000 of the increase in non-interest
income, increasing to $208,000 during the quarter, up from $184,000 for second
quarter last year. This improvement was the result of slightly higher premiums
on the sale of SBA loans since approximately the same volume of loans, $2
million, was sold during both periods. For the six-month comparable periods,
non-interest income reflected a decline of 9.5%, to $1,527,000 in 1997 from
$1,688,000 in 1996. This decrease was attributed to fewer sales of loans and
investments. Net gains from loan sales and investment securities declined to
$208,000 and $19,000, respectively, from $351,000 and $116,000, respectively,
for the six-month period last year. Fees for international banking services
also reflected improvement to $568,000 through June 30, 1997 compared to last
year's total to date of $558,000.
Non-interest expenses increased 13% in the second quarter of 1997 as compared
to the same period last year. This increase was mostly attributed to higher
personnel and operating costs resulting from recent branch expansion. Total
personnel costs increased $60,000 in 1997 over the comparable 1996 three month
period and $147,000 over the comparable 1996 six-month period. The Bank has
added eight staff positions, primarily branch related, in the last twelve
months, bringing total full-time staff positions to 88 as compared to 80 at
June 30, 1996. Equipment expenses increased $47,000, or 44%, to $153,000 in
second quarter 1997 as compared to the same period last year. Occupancy
expenses increased $26,000, or 25%, for the same periods. For the 1997
six-month period, equipment expenses and occupancy costs increased $86,000, and
$51,000, respectively, over 1996. Branch expansion accounted for $33,000 of
year-to-date equipment increases and $20,400 of the occupancy increases this
year. Other operating expenses increased 14% for the three-month period ended
June 30, 1997 as compared to second quarter 1996 as a result of normal growth.
For the six month period, other operating expenses increased $287,000 in 1997
to $1,242,000. Marketing expenses were $20,000 higher this year compared to
last year. Promotions for the new branches and regular advertising of bank
products and services have continued. Data processing and telephone
PAGE 6 OF 15
<PAGE> 7
expenses have increased approximately $20,000 and $30,000, respectively, for
the six month period of 1997 over 1996 also due in large part to the
requirements of the additional branches. Other operating losses this year were
$110,000 compared to last year of $65,000 due to certain fraud losses
recognized in April 1997. The Company's efficiency ratio for the six-month
period of 1997 was 66% compared to 60% for the same period last year.
Total assets at June 30, 1997 increased to $162 million, an increase of 15%
during the last twelve months and 5% since year end 1996. Deposits reflected a
$12 million increase since June 30, 1996, or 10%, yet remain relatively
unchanged at $131 million compared to year-end 1996. This was due to
approximately $7 million in temporary customer deposits held on December 31,
1996 that were withdrawn during first quarter 1997. The Bank's newest branch,
since opening in December 1996, has brought in $7.5 million of deposits which
offset the outflow of the temporary funds. Net loans increased $5.4 million to
$89 million at June 30, 1997, representing a 6% increase since December 31,
1996. During the last twelve months net loans have increased 9%, or $7
million, from $82 million at June 30, 1996. In second quarter 1997, the
Company had $5 million borrowed under an advance from the Federal Home Loan
Bank. Other assets increased to $4.8 million at June 30, 1997 from $2.2
million at year-end 1996 reflecting a receivable from the sale of $2 million in
SBA loans.
Asset Quality
Non-performing assets increased to $1,770,000 at June 30, 1997 compared to
$922,000 at year end 1996. Non-performing assets represented 1.95% of total
loans as of June 30, 1997 compared to 1.07% at December 31, 1996. While higher
than year-end, total non-accrual loans at June 30, 1997 included $551,000 of
loans that are fully guaranteed by the SBA, and one conventional loan of
$758,000 that is fully secured by commercial real estate. The Company had
$1,012,000 of loans 90 days or more past due at June 30, 1997, all of which
were on non-accrual status.
NON-PERFORMING ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
(Dollars in thousands) 1997 1996
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Loans on nonaccrual $ 1,770 $ 922
Other real estate -- --
Restructured loans -- --
- ---------------------------------------------------------------------------------------------------
Total non-performing assets $ 1,770 $ 922
===================================================================================================
Loans 90 days past due and still accruing interest $ -- $ --
Total non-performing assets as a
percentage of total loans and ORE 1.95% 1.07%
Loans ninety days past due and still accruing
interest as a percentage of total loans --% --%
</TABLE>
The allowance for loan losses was $1,760,000 at June 30, 1997 compared to
$1,931,000 at year end 1996, a decrease of 8.8%. This was a result of the
recognition of higher net charge-offs which the Bank had previously fully
reserved. Included in this year's charge-offs are $108,000 of fully guaranteed
SBA loans which management expects full reimbursement from the SBA before
year-end 1997. The allowance for loan losses represented 1.89% of total loans
outstanding at June 30, 1997 compared to 2.33% in 1997. Gross charge-offs of
$546,000 offset by recoveries of $115,000, resulted in a net annualized
charge-off rate of .96% of average total loans compared to .19% for the entire
year of 1996.
PAGE 7 OF 15
<PAGE> 8
ANALYSIS OF ALLOWANCE FOR LOAN LOSSES AT JUNE 30, 1997
<TABLE>
<CAPTION>
(In thousands)
----------------------------------------------------------------------------------
<S> <C>
Allowance for loan losses at December 31, 1996 $1,931
----------------------------------------------------------------------------------
Charge-offs:
Commercial, financial, and agricultural 519
Real estate --
Installment loans to individuals 27
----------------------------------------------------------------------------------
Total 546
----------------------------------------------------------------------------------
Recoveries:
Commercial, financial, and agricultural 92
Real estate --
Installment loans to individuals 23
----------------------------------------------------------------------------------
Total 115
----------------------------------------------------------------------------------
Net charge-offs 431
----------------------------------------------------------------------------------
Provision for loan losses charged to income 260
----------------------------------------------------------------------------------
Allowance for loan losses at June 30, 1997 $1,760
----------------------------------------------------------------------------------
</TABLE>
The loan portfolio is periodically reviewed to evaluate the outstanding loans
and to measure both the performance of the portfolio and the adequacy of the
allowance for loan losses. This analysis includes a review of delinquency
trends, actual losses and internal credit ratings. Based on this analysis,
management considers the allowance for loan losses at June 30, 1997 to be
adequate to cover possible loan losses in the portfolio as of that date.
However, because of the inherent uncertainty of assumptions made during the
evaluation process, there can be no assurance that loan losses in future
periods will not exceed the allowance for loan losses or that additional
allocations to the allowance will not be required.
Liquidity and Capital Adequacy
The liquidity of the Company is primarily dependent on the Bank. Because the
Company's principal operations are conducted through the Bank, it generates
cash to pay dividends on the Common Stock primarily through dividends paid to
it by the Bank. The Company is also dependent on dividends from the Bank to
service its any debt and to conduct other activities. At June 30 ,1997, the
Parent Company had no outstanding debt. The Bank's ability to pay dividends to
the Company is limited by certain legal and regulatory restrictions. The
Boards of Directors of the Company and the Bank presently intend that earnings
of the Bank will be retained by the Bank during the foreseeable future for the
purpose of enhancing the Bank's capital to support future growth, except to the
extent dividends must be paid to the Company to service any debt and pay its
operating expenses. As of June 30, 1997, and for the six month period ended on
such date, the Company was principally dependent upon the Bank for its
liquidity.
The Bank's liquidity has fluctuated during 1997 with changes in deposits
balances, due in part to the movement of temporary funds, yet loan growth has
been steady. At June 30, 1997, the Company's net loan to deposit ratio was
67.9%, up from 63.1% at year end. The Bank's liquid assets as a percent of
total deposits were 51% at June 30, 1997. Management also analyzes the level
of off-balance sheet assets such as unfunded loan commitments and outstanding
letters of credit as they relate to the levels of cash, cash equivalents,
liquid investments, available federal funds lines and short-term borrowings to
ensure that no potential shortfall exists. Additionally, the Bank has $11
million of borrowing capacity under a secured line of credit available from the
Federal Home Loan Bank of Atlanta. Based on this analysis, management believes
that the Company has adequate liquidity to meet short-term operational
requirements.
PAGE 8 OF 15
<PAGE> 9
Stockholders' equity of the Company increased $837,000, or 4.9%, to $17.8
million at June 30, 1997, compared to the balance at December 31, 1996 and
increased 13.2% since June 30, 1996. The capital level of the Bank exceeds all
prescribed regulatory capital guidelines. Regulations require that most highly
rated national banks maintain a minimum Tier 1 leverage ratio of 3%, and
require other banks to maintain a minimum Tier 1 leverage ratio of 3% plus an
additional cushion of at least 1 to 2 percentage points. Tier 1 capital
consists of stockholders' equity less certain intangible assets. The Bank's
Tier 1 leverage ratio was 11.0 % at June 30, 1997 compared to 10.2% at year end
1996 as a result of asset growth. Regulations require that the Bank maintain a
minimum total risk weighted capital ratio of 8% with 50%, or 4%, of this amount
made up of Tier 1 capital. Risk-weighted assets consist of balance sheet
assets adjusted by risk category and off-balance sheet asset equivalents
similarly adjusted. At June 30, 1997, the Bank had a risk-weighted total
capital ratio of 16.4% and a Tier 1 risk-weighted capital ratio of 15.2% which
compared favorably to year-end ratios of 15.6% and 14.2%, respectively.
PAGE 9 OF 15
<PAGE> 10
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
The 1997 Annual Meeting of the Shareholders (the "Meeting") of
the Company was held on May 10, 1997. Proxies were solicited
prior to the meeting from shareholders of record at the close
of business on March 25, 1997, for the purpose of electing
eight members to the Board of Directors.
Article Fourteen of the Company's Amended and Restated
Articles of Incorporation provides that the Board of Directors
shall be divided into three classes with each class to be as
nearly equal in number as possible. Article Fourteen also
provides that the three classes of directors are to have
staggered terms, so that the terms of only approximately
one-third of the Board will expire at each annual meeting of
shareholders and each director serves a three-year term.
Eight Class II Directors were nominated at the meeting to
serve until the Annual Shareholders Meeting in 2000: Peter M.
Cohen, Donald R. Harkleroad, Daniel T. Huang, Shafik H. Ladha,
Paul C. Y. Chu, Cecil M. Phillips, Howard H. L. Tai, and P.
Carl Unger. All eight nominees were elected.
Proxies for 78.6%, or 1,106,735 of the 1,407,688 outstanding
common shares, were received prior to the meeting. A quorum
was present by proxy. Votes were cast as follows:
<TABLE>
<CAPTION>
Director For Against Abstain
-------- --- ------- -------
<S> <C> <C> <C>
Peter M. Cohen 1,104,685 2,050
Donald R. Harkleroad 1,100,182 6,553
Daniel T. Huang 1,106,685 50
Shafik H. Ladha 1,100,182 6,553
Paul C. Y. Chu 1,104,685 2,050
Cecil M. Phillips 1,098,182 8,553
Howard H. L. Tai 1,106,685 50
P. Carl Unger 1,106,685 50
</TABLE>
The following Class I and Class III directors, whose terms did
not expire at the Annual Shareholders Meeting, continued to
serve as directors following the meeting: Gerald L. Allison,
James S. Lai, Roger C.C. Lin, Nack Y. Paek, Carl L. Patrick,
Jr., David Yu, Aaron I. Alembik, Jack N. Halpern, Sion Nyen
(Francis) Lai, Shih Chien (Raymond) Lo, W. Clayton Sparrow,
Jr., and Pin Pin Chau.
Item 5. Other Information - Not Applicable
PAGE 10 OF 15
<PAGE> 11
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
Exhibit 11.1
Statement Regarding Computation of Per Share Earnings
Exhibit 27.1
Financial Data Schedule (for SEC use only)
b) Reports on Form 8-K - none
PAGE 11 OF 15
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed by the undersigned,
thereunto duly authorized.
SUMMIT BANK CORPORATION
BY: /S/ David Yu
-------------------------------------
David Yu
President and Chief Executive Officer
BY: /S/ Gary K. McClung
-------------------------------------
Gary K. McClung
Executive Vice President
(Principal Financial Officer
and Principal Accounting Officer)
DATE: August 11, 1997
--------------------------------
PAGE 12 OF 15
<PAGE> 13
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Page
- ------- ----
<S> <C> <C>
11.1 Statement Regarding Computation of Per Share Earnings 14
27.1 Financial Data Schedule (for SEC use only) 15
</TABLE>
PAGE 13 OF 15
<PAGE> 1
EXHIBIT 11.1
STATEMENT REGARDING COMPUTATION
OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Statement Regarding Computation of Three months Six months
Per Share Earnings ended June 30, ended June 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Earnings per share:
Weighted average shares outstanding 1,408,126 1,407,688 1,407,908 1,407,688
Net income per share $ .47 $ .33 $ .76 $ .76
Primary earnings per share:
Weighted average shares outstanding 1,408,126 1,407,688 1,407,908 1,407,688
Dilutive warrants 462,797 463,235 463,015 463,235
Dilutive stock options 41,225 41,225 41,225 41,225
Repurchased under treasury stock
method(1) (282,876) (281,538) (273,622) (281,538)
--------- --------- --------- ---------
Weighted average common shares
outstanding and common share
equivalents 1,631,272 1,630,610 1,638,526 1,630,610
--------- --------- --------- ---------
Net income $ 658,000 $ 466,000 $1,069,000 $1,067,000
Imputed interest income under the
treasury stock method (net of tax) -- 12,000 -- 30,000
--------- --------- --------- ---------
Imputed net income 658,000 478,000 1,069,000 1,097,000
========= ========= ========= =========
Net income per share $ .40 $ .29 $ .65 $ .67
========= ========= ========= =========
</TABLE>
(1) Dilutive warrants and options calculated up to 20% of total shares
outstanding in the applicable periods.
PAGE 14 OF 15
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE JUNE 30,
1997 10-Q FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 8,510
<INT-BEARING-DEPOSITS> 72
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 52,085
<INVESTMENTS-CARRYING> 934
<INVESTMENTS-MARKET> 934
<LOANS> 90,999
<ALLOWANCE> 1,760
<TOTAL-ASSETS> 161,967
<DEPOSITS> 131,482
<SHORT-TERM> 9,728
<LIABILITIES-OTHER> 2,984
<LONG-TERM> 0
0
0
<COMMON> 14
<OTHER-SE> 17,759
<TOTAL-LIABILITIES-AND-EQUITY> 161,967
<INTEREST-LOAN> 4,727
<INTEREST-INVEST> 1,631
<INTEREST-OTHER> 154
<INTEREST-TOTAL> 6,512
<INTEREST-DEPOSIT> 2,430
<INTEREST-EXPENSE> 2,548
<INTEREST-INCOME-NET> 3,964
<LOAN-LOSSES> 260
<SECURITIES-GAINS> 19
<EXPENSE-OTHER> 3,612
<INCOME-PRETAX> 1,620
<INCOME-PRE-EXTRAORDINARY> 1,620
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,069
<EPS-PRIMARY> .65
<EPS-DILUTED> .65
<YIELD-ACTUAL> 5.57
<LOANS-NON> 1,770
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,931
<CHARGE-OFFS> 546
<RECOVERIES> 115
<ALLOWANCE-CLOSE> 1,760
<ALLOWANCE-DOMESTIC> 1,760
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
