<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 March 31, 1998
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 000-21267
SUMMIT BANK CORPORATION
(Exact name of Registrant as specified in its charter)
GEORGIA 58-1722476
(State or other jurisdiction of (IRS 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 May 1, 1998
Common Stock. $.0l par value 1,815,363
The Exhibit Index Appears on Page 13
PAGE 1 OF 17
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SUMMIT BANK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
(In thousands) 1998 1997
- ---------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Cash and due from banks $ 10,212 $ 8,091
Federal funds sold 8,250 1,200
Interest-bearing deposits in other banks 224 69
Investment securities available for sale, at fair value 61,654 61,396
Other investments 1,310 1,566
Loans, net of unearned income 98,616 95,473
Loans held for sale 2,156 3,419
Less: allowance for loan losses (1,634) (1,468)
- ---------------------------------------------------------------------------------------
Net loans 99,138 97,424
- ---------------------------------------------------------------------------------------
Premises and equipment, net 4,440 4,461
Customers' acceptance liability 2,002 1,397
Deferred income taxes 146 134
Other assets 4,511 4,558
- ---------------------------------------------------------------------------------------
Total assets $191,887 $180,296
=======================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing demand $ 35,396 $ 35,193
Interest-bearing:
Demand 38,195 34,348
Savings 7,051 6,681
Time, $100,000 and over 26,585 23,595
Other time 44,974 44,978
- ---------------------------------------------------------------------------------------
Total deposits 152,201 144,795
- ---------------------------------------------------------------------------------------
Obligation under capital lease 71 81
Federal Home Loan Bank advance 10,000 10,000
Other borrowed funds 2,400 2,756
Acceptances outstanding 2,002 1,397
Other liabilities 1,728 1,489
- ---------------------------------------------------------------------------------------
Total liabilities 168,402 160,518
- ---------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY:
Common stock 18 15
Additional paid-in capital 16,167 12,933
Retained earnings 7,131 6,658
Accumulated other comprehensive income 169 172
- ---------------------------------------------------------------------------------------
Total stockholders' equity 23,485 19,778
- ---------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $191,887 $180,296
=======================================================================================
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
PAGE 2 OF 17
<PAGE> 3
SUMMIT BANK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
<TABLE>
<CAPTION>
Three months
ended March 31,
(Dollars in thousands, except share and per share amounts) 1998 1997
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Interest income
Loans, including fees $ 2,589 $ 2,340
Interest-bearing deposits in other banks 2 1
Federal funds sold 82 129
Investment securities-taxable 409 226
Mortgage-backed securities 604 504
- ------------------------------------------------------------------------------------------------
Total interest income 3,686 3,200
- ------------------------------------------------------------------------------------------------
Interest expense
Time deposits, $100,000 and over 373 296
Other deposits 960 898
Federal Home Loan Bank advance 126 6
Short-term borrowings and obligation under capital lease 34 15
- ------------------------------------------------------------------------------------------------
Total interest expense 1,493 1,215
- ------------------------------------------------------------------------------------------------
Net interest income 2,193 1,985
Provision for loan losses 160 125
- ------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses 2,033 1,860
- ------------------------------------------------------------------------------------------------
Non-interest income
Fees for international banking services 284 247
SBA loan servicing fees 76 111
Service charge income 73 58
Overdraft and NSF charges 131 110
Gains on sales of loans 157 --
Net gains on sales of investment securities 17 --
Other 113 79
- ------------------------------------------------------------------------------------------------
Total non-interest income 851 605
- ------------------------------------------------------------------------------------------------
Non-interest expenses
Salaries and employee benefits 984 916
Equipment 147 154
Net occupancy 139 122
Other operating expenses 647 625
- ------------------------------------------------------------------------------------------------
Total non-interest expenses 1,917 1,817
- ------------------------------------------------------------------------------------------------
Income before income taxes 967 648
- ------------------------------------------------------------------------------------------------
Income tax expense 342 237
- ------------------------------------------------------------------------------------------------
Net income $ 625 $ 411
- ------------------------------------------------------------------------------------------------
Basic net income per common share $ .38 $ .29
Diluted net income per common share and common share equivalents $ .38 $ .25
- ------------------------------------------------------------------------------------------------
Weighted-average common shares outstanding - basic 1,653,917 1,407,688
- ------------------------------------------------------------------------------------------------
Weighted-average common shares outstanding - diluted 1,658,634 1,644,955
- ------------------------------------------------------------------------------------------------
Dividends declared per common share $ .09 $ .08
================================================================================================
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
PAGE 3 OF 17
<PAGE> 4
SUMMIT BANK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months
ended March 31,
-----------------------
(In thousands) 1998 1997
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 625 $ 411
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of premises and equipment 105 82
Net amortization of premiums/discounts on
investment securities 11 18
Amortization of negative goodwill (28) (28)
Provision for loan losses 160 125
Gains on sales of loans (157) --
Net gains on sales of investment securities (17) --
Changes in other assets and liabilities:
Decrease (increase) in other assets 1,699 (159)
Increase in other liabilities 267 45
- -------------------------------------------------------------------------------------------------
Net cash provided by operating activities 2,665 494
- -------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Proceeds from maturities of investment securities available for sale 6,260 1,000
Principal collections on investment securities available for sale 1,858 1,148
Proceeds from sales of investment securities available for sale 1,835 --
Purchases of investment securities available for sale (9,955) (16,474)
Loans made to customers, net of principal collected on loans (3,378) (3,643)
Purchases of premises and equipment (84) (34)
- -------------------------------------------------------------------------------------------------
Net cash used in investing activities (3,464) (18,003)
- -------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net increase in demand and savings deposits 4,420 1,451
Net increase in time deposits 2,986 6,253
Principal payments for obligation under capital lease (10) (9)
Dividends paid (152) (112)
Issuance of common stock upon exercise of warrants and options 3,237 --
Net (decrease) increase in borrowed funds (356) 100
- -------------------------------------------------------------------------------------------------
Net cash provided by financing activities 10,125 7,683
- -------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 9,326 (9,826)
Cash and cash equivalents at beginning of period 9,360 23,417
- -------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 18,686 $ 13,591
=================================================================================================
Supplemental disclosures of cash paid during the period:
Interest $ 1,430 $ 1,187
Income taxes $ 72 $ --
Supplemental disclosures of non-cash items:
Loans held for sale transferred to other assets pending receipt
of cash proceeds $ 1,661 $ --
=================================================================================================
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
PAGE 4 OF 17
<PAGE> 5
SUMMIT BANK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The consolidated 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, 1997, included in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1997.
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 (inactive.) 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, 1997.
3. STATEMENT NO. 128 "EARNINGS PER SHARE"
On December 31, 1997, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS 128").
SFAS 128 supercedes Accounting Principles Board Opinion No. 15, "Earnings
Per Share" and specifies the computation, presentation, and disclosure
requirements for earnings per share ("EPS"). SFAS 128 replaces the
presentation of primary EPS and fully diluted EPS with a presentation of
basic EPS and diluted EPS, respectively. All prior period EPS data has
been restated to conform with the provisions of SFAS 128.
Basic EPS excludes dilution and is computed by dividing net income by the
weighted average shares outstanding. Diluted EPS is computed by dividing
net income by the weighted average shares outstanding plus potential
common shares resulting from dilutive stock options and warrants assuming
the exercise proceeds would be used to repurchase shares pursuant to the
treasury stock method.
4. STATEMENT NO. 130 "REPORTING COMPREHENSIVE INCOME"
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
("SFAS 130"). This statement establishes standards for reporting and
displaying of comprehensive income and its components in a full set of
general purpose financial statements. SFAS 130 requires all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in an annual financial statement that is
displayed in equal prominence with the other annual financial statements.
For interim period financial statements, enterprises are required to
disclose a total for comprehensive income in those financial statements.
The term "comprehensive income" is used in SFAS 130 to describe the total
of all components of comprehensive income including net income. "Other
comprehensive income" refers to revenues, expenses, gains, and losses that
are included in comprehensive income but excluded from earnings under
current accounting standards. Currently, "other comprehensive income" for
the Company consists solely of items previously recorded as a component of
stockholders' equity under SFAS 115, "Accounting for Certain Investments
in Debt and Equity Securities". The Company has adopted the interim-period
disclosure requirements of SFAS 130 effective March 31, 1998 and will
adopt the annual financial statement reporting and disclosure requirements
of SFAS 130 effective December 31, 1998.
PAGE 5 OF 17
<PAGE> 6
Total comprehensive income for the three months ended March 31, 1998 was
$620,000 compared to $215,000 for the three months ended March 31, 1997.
5. RECLASSIFICATIONS
Certain 1997 amounts have been reclassified for comparative purposes in
order to conform the prior period to the 1998 presentation.
PAGE 6 OF 17
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
For the three-month period ended March 31, 1998
Performance Overview
Summit Bank Corporation and Subsidiaries (collectively, the "Company") reported
net income of $625,000 for the first quarter of 1998, representing a 52%
increase compared to earnings for the same period last year. The earnings
increase is attributable to an increase in net interest income resulting from a
higher level of net interest earning assets as well as gains recognized in first
quarter 1998 on sales of government guaranteed Small Business Administration
("SBA") loans. During first quarter 1997 the Company chose not to sell loans to
the secondary market. Net earnings per share for first quarter 1998 were $.38
(diluted) as compared to $.25 (diluted) for first quarter 1997 (diluted). Basic
earnings per share for the respective first quarters of 1998 and 1997 were $.38
and $.29. The annualized return on average stockholders' equity for the 1998
three-month period was 11.8% versus 9.7% for the 1997 three-month period, while
the return on average assets was 1.34% compared to 1.06% in 1997. Book value per
share was $12.95 at March 31, 1998 compared to $13.28 at December 31, 1997 and
$12.10 at March 31, 1997. The decline in the first quarter 1998 from year-end
1997 was due to the issuance of an additional 293,693 shares resulting from the
exercise of organizers' warrants issued in 1988. Additionally, options issued
during the Company's first ten years of operations were exercised. In first
quarter 1998, the Company approved a dividend increase to $.10 per share per
quarter beginning in the second quarter. This follows a trend of consistent
annual increases since the Company began paying dividends to shareholders in
1995.
Total assets at March 31, 1998 were $192 million, an increase of 19% during the
last twelve months and 6% since year end 1997. Total deposits have grown $12
million, or 8%, during the last twelve months and $7 million, or 5%, since
December 31, 1997. Non-interest bearing deposits as a percent of total deposits
have increased in the past twelve months from 20% to 23%. Another source of
funds used to increase net interest income was the increase of Federal Home Loan
Bank borrowings from $1 million at March 31, 1997 to $10 million at March 31,
1998. Net loans increased $1.7 million, or 2%, to $99 million, since December
31, 1997. During the last twelve months net loans grew 13%, or $12 million.
Net interest income increased 9.3% to $2 million during first quarter 1998
compared to the same period in 1997, primarily due to a higher volume of
interest earning assets. The Company's net interest margin through March 31,
1998 declined to 5.19% from 5.41% for the comparable period in 1997 due to lower
rates and a $26 million increase in average earning assets from first quarter
1997 to first quarter 1998.
The provision for loan losses increased to $160,000 from $125,000 for the
respective first quarters of 1998 and 1997 due to loan volume growth. Gross
charged off loans for the quarter ended March 31, 1998 were $185,000 while
recoveries for the period were $191,000, thus resulting in an annualized net
charge-off rate of -.03% of total loans. The recoveries recorded in first
quarter included $184,000 of guaranteed portions of SBA loans previously
charged-off. Due to temporary delays of payments by the SBA, management took a
more agressive position at year-end 1997 and charged off most of the deliquent
SBA guaranteed non-performing loans. Net loan charge-offs were .80% for the
first quarter of 1997 and 1.08% for the year ended December 31, 1997. Additional
government guaranteed portions of some of the charge-offs are expected to be
recovered later in 1998.
Non-interest income increased 41% to $851,000 for first quarter 1998 from
$605,000 for the same period in 1997, primarily due to $157,000 of net gains
from sales of SBA loans recognized in 1998. There were no gains recognized in
first quarter 1997. During the year ended December 31, 1997, the Company
recognized $616,000 in gains on sales of SBA loans. These gains were primarily
recognized in the latter half of 1997. Service charges on deposit accounts,
coupled with overdraft and insufficient funds charges, increased $36,000 to
$204,000 in first quarter 1998 from $168,000 in the comparable quarter 1997 as a
result of higher demand deposit volumes and an increase in service charge rates
in May, 1997. International fee income for first quarter 1998 was $284,000, an
increase of $37,000 compared to the comparable quarter 1997 of $247,000.
This increase was due to growth in the Bank's trade finance business volume.
PAGE 7 OF 17
<PAGE> 8
Non-interest expenses increased $100000, or 6%, in the first quarter of 1998 as
compared to the same period last year. The majority of this increase was related
to general growth of the Bank resulting in first quarter 1998 personnel costs of
$984,000 compared to first quarter 1997 personnel costs of $916,000. Other
operating expenses increased only 4% to $649,000 for first quarter 1998 compared
to the same quarter last year. Although branch operations losses were $84,000
less to date in 1998 compared to first quarter 1997, this variance was offset by
increases in legal fees, miscellaneous expenses, and postage costs of $65,000,
$15,000, and $10,000, respectively. The largest portion of the increase in legal
fees this year, $40,000, was related to the final resolution of a previously
charged-off loan. The Company's efficiency ratio for the three-month period of
1998 was 63% which compares favorably to 70% for the same period last year
primarily due to the increase in non-interest income from the sale of SBA loans.
Asset Quality
Non-performing assets decreased to $1,760,000 at March 31, 1998 compared to
$1,777,000 at year end 1997. Non-performing assets represented 1.75% of total
loans as of March 31, 1998 compared to 1.80% at December 31, 1997. The total of
non-performing loans at March 31, 1998 represents four fully guaranteed SBA
credits and one real estate credit of $731,000 for which the Bank believes it is
well secured. One of the SBA credits included in non-accrual loans at December
31, 1997 was reclassified in January 1998 as a restructured loan because of
interest rate, term, and collateral modifications. Management believes the
restructuring of the loan has enhanced its collectibility even though the loan
will remain non-performing. Additionally, the loan is fully guaranteed by the
SBA. The Company had one loan 90 days or more past due and still accruing at
March 31, 1998. Although the Company's policy dictates that if a loan is more
than 90 days past due, it should be placed on non-accrual, management had reason
to believe that this loan was going to be brought current soon after March 31,
1998, and it was, in fact, brought current as to principal and interest in
April.
NON-PERFORMING ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
(Dollars in thousands) 1998 1997
- -------------------------------------------------------------------------------
<S> <C> <C>
Loans on non-accrual
SBA guaranteed $ 614 $1,018
Non-SBA guaranteed 731 759
Other real estate -- --
Restructured loans - SBA guaranteed 415 --
- -------------------------------------------------------------------------------
Total non-performing assets $1,760 $1,777
===============================================================================
Loans 90 days past due and still accruing interest $ 156 --
Total non-performing assets as a
percentage of total loans and ORE 1.75% 1.80%
Loans ninety days past due and still accruing
interest as a percentage of total loans --% --%
</TABLE>
The allowance for loan losses increased to $1,634,000 at March 31, 1998 from
$1,468,000 at year end 1997, an increase of 11%. Loan losses have declined this
year to date with gross charge-offs of $185,000 offset by recoveries of
$191,000, resulting in a net annualized charge-off rate of -.03% of average
total loans compared to 1.08% for the entire year of 1997. The allowance for
loan losses represented 1.62% and 1.58%, respectively, of total loans
outstanding at March 31, 1998 and December 31, 1997.
PAGE 8 OF 17
<PAGE> 9
ANALYSIS OF ALLOWANCE FOR LOAN LOSSES AT MARCH 31, 1998
<TABLE>
<CAPTION>
(In thousands)
-----------------------------------------------------------
<S> <C>
Allowance for loan losses at December 31, 1997 $ 1,468
-----------------------------------------------------------
Charge-offs:
Commercial, financial, and agricultural 156
SBA 17
Real estate --
Installment loans to individuals 22
-----------------------------------------------------------
Total 185
-----------------------------------------------------------
Recoveries:
Commercial, financial, and agricultural 5
SBA 183
Real estate --
Installment loans to individuals 3
-----------------------------------------------------------
Total 191
-----------------------------------------------------------
Net recoveries (6)
-----------------------------------------------------------
Provision for loan losses charged to income 160
-----------------------------------------------------------
Allowance for loan losses at March 31, 1998 $ 1,634
-----------------------------------------------------------
</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 March 31, 1998 to be
adequate to cover 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
Liquidity has remained fairly stable since the end of 1997. At March 31, 1998,
the Company's average net loan to deposit ratio was 66%, down slightly from 67%
at year end. 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, and available federal
funds lines to ensure that no potential shortfall exists. Additionally, the Bank
has $16 million of borrowing capacity under a secured line of credit available
from the Federal Home Loan Bank of Atlanta, of which $10 million was being
utilized at March 31, 1998. Based on this analysis, management believes that the
Company has adequate liquidity to meet short-term operational requirements.
Stockholders' equity of the Company increased $3.7 million to $23.5 million at
March 31, 1998, an increase of 19% from December 31, 1997, and 38% from March
31, 1997. In addition to normal earnings growth, stockholders' equity increased
$3.3 million since December 31, 1997 due to the issuance of common stock from
the exercise of warrants and options. The capital level of the subsidiary Bank
exceeds all prescribed regulatory capital guidelines. Regulations require that
the most highly rated 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 remained stable at 9.6% at March 31, 1998 compared to 9.6% at
year end 1997. Regulations require
PAGE 9 OF 17
<PAGE> 10
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 March 31, 1998, the Bank had a
risk-weighted total capital ratio of 16.4% and a Tier 1 risk-weighted capital
ratio of 15.1% which compares favorably to year end 1997 ratios of 15.6% and
14.3%, respectively.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has not provided quantitative and qualitative disclosures about
market risk as required by Item 305 of Regulation S-K because it met the
requirements of a small business issuer. The Company will be required to provide
this disclosure for the year ended December 31, 1999.
PAGE 10 OF 17
<PAGE> 11
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
The Summit National Bank ("Summit"), a wholly owned subsidiary of
Summit Bank Corporation, announced on March 27, 1998 that it has
entered into an agreement on March 27, 1998 to acquire California
Security Bank, ("CSB"), a San Jose, California community bank formed in
1973, pursuant to which CSB will be merged with and into Summit. The
purchase is subject to various conditions including shareholder and
regulatory approvals.
PAGE 11 OF 17
<PAGE> 12
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)
Exhibit 27.2
Restated Financial Data Schedule (for SEC use only)
b) Reports on Form 8-K - none
PAGE 12 OF 17
<PAGE> 13
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: May 13, 1998
--------------------------------------
PAGE 13 OF 17
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Page
- ------- ----
<S> <C> <C>
11.1 Statement Regarding Computation of Per Share Earnings 15
27.1 Financial Data Schedule (for SEC use only) 16
27.2 Restated Financial Data Schedule (for SEC use only) 17
</TABLE>
PAGE 14 OF 17
<PAGE> 1
EXHIBIT 11.1
STATEMENT REGARDING COMPUTATION
OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Statement Regarding Computation of Year to Date
Per Share Earnings ended March 31,
---------------------------
1998 1997
---------- ----------
<S> <C> <C>
Basic earnings per share:
Weighted-average shares outstanding 1,653,917 1,407,688
Net income per share $ .38 $ .29
Diluted earnings per share:
Weighted average shares outstanding 1,653,917 1,407,688
Dilutive warrants -- 463,235
Dilutive stock options 20,000 41,225
Assumed repurchased under treasury
stock method (15,283) (267,193)
---------- ----------
Weighted-average common shares
outstanding and common share
equivalents 1,658,634 1,644,955
---------- ----------
Net income $ 625,000 $ 411,000
========== ==========
Diluted net income per share $ .38 $ .25
========== ==========
</TABLE>
PAGE 15 OF 17
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1998 10-Q FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 10,212
<INT-BEARING-DEPOSITS> 224
<FED-FUNDS-SOLD> 8,250
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 61,654
<INVESTMENTS-CARRYING> 1,310
<INVESTMENTS-MARKET> 1,310
<LOANS> 100,772
<ALLOWANCE> 1,634
<TOTAL-ASSETS> 191,887
<DEPOSITS> 152,201
<SHORT-TERM> 12,471
<LIABILITIES-OTHER> 3,730
<LONG-TERM> 0
18
0
<COMMON> 0
<OTHER-SE> 23,463
<TOTAL-LIABILITIES-AND-EQUITY> 191,887
<INTEREST-LOAN> 2,589
<INTEREST-INVEST> 1,013
<INTEREST-OTHER> 84
<INTEREST-TOTAL> 3,686
<INTEREST-DEPOSIT> 1,333
<INTEREST-EXPENSE> 1,493
<INTEREST-INCOME-NET> 2,193
<LOAN-LOSSES> 160
<SECURITIES-GAINS> 17
<EXPENSE-OTHER> 1,917
<INCOME-PRETAX> 967
<INCOME-PRE-EXTRAORDINARY> 967
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 625
<EPS-PRIMARY> .38
<EPS-DILUTED> .38
<YIELD-ACTUAL> 5.19
<LOANS-NON> 1,760
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,468
<CHARGE-OFFS> 185
<RECOVERIES> 191
<ALLOWANCE-CLOSE> 1,634
<ALLOWANCE-DOMESTIC> 1,634
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH
31, 1997 10-Q FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS, EXCEPT FOR LINE 9-04(21) WHICH HAS BEEN RESTATED
TO CONFORM WITH THE ADOPTION OF FINANCIAL ACCOUNTING STANDARDS NO. 128.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 7,465
<INT-BEARING-DEPOSITS> 26
<FED-FUNDS-SOLD> 6,100
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 51,819
<INVESTMENTS-CARRYING> 758
<INVESTMENTS-MARKET> 758
<LOANS> 89,273
<ALLOWANCE> 1,878
<TOTAL-ASSETS> 161,704
<DEPOSITS> 140,603
<SHORT-TERM> 1,757
<LIABILITIES-OTHER> 2,305
<LONG-TERM> 0
14
0
<COMMON> 0
<OTHER-SE> 17,025
<TOTAL-LIABILITIES-AND-EQUITY> 161,704
<INTEREST-LOAN> 2,340
<INTEREST-INVEST> 730
<INTEREST-OTHER> 130
<INTEREST-TOTAL> 3,200
<INTEREST-DEPOSIT> 1,194
<INTEREST-EXPENSE> 1,215
<INTEREST-INCOME-NET> 1,985
<LOAN-LOSSES> 125
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,817
<INCOME-PRETAX> 648
<INCOME-PRE-EXTRAORDINARY> 648
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 411
<EPS-PRIMARY> .29
<EPS-DILUTED> .25
<YIELD-ACTUAL> 5.65
<LOANS-NON> 767
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,931
<CHARGE-OFFS> 234
<RECOVERIES> 56
<ALLOWANCE-CLOSE> 1,878
<ALLOWANCE-DOMESTIC> 1,878
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
