<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ...........
Commission file number: 033-18392
AMERICORP
CALIFORNIA NO. 77-0164985
(State or other jurisdiction of incorporation) (IRS Employer Identification No.)
304 East Main Street, Ventura, California 93001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (805) 658-6633
Not Applicable
(Former name or former address, if changed since last report)
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 (of 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
On July 31, 1999, there were 2,088,678 shares of Americorp Common Stock
outstanding.
1
<PAGE>
AMERICORP AND SUBSIDIARY
JUNE 30, 1999
INDEX
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Item 1 - Financial Statements
Consolidated Condensed Balance Sheet at June 30, 1999 and
December 31, 1998...................................................... 3
Consolidated Condensed Statement of Income for the three
months and six months ended June 30, 1999 and 1998..................... 4
Consolidated Condensed Statement of Changes in Shareholders' Equity from
January 1, 1997 through June 30, 1999.................................. 5
Consolidated Condensed Statement of Cash Flows for the six months ended
June 30, 1999 and 1998................................................. 6
Notes to Consolidated Financial Statements...................................... 7
Item 2 - Management's Discussion and Analysis of Financial Condition and
Results of Operations........................................................ 9 - 13
Item 3 - Quantitative and Qualitative Disclosure About Market Risk....................... 13 - 14
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings............................................................... 15
Item 2 - Changes in Securities........................................................... 15
Item 3 - Defaults upon Senior Securities................................................. 15
Item 4 - Submission of Matters to a Vote of Security Holders............................. 15
Item 5 - Other Information............................................................... 15
Item 6 - Exhibits and Reports on Form 8-K................................................ 15
Signatures .............................................................................. 16
Exhibit Index ........................................................................... 17
</TABLE>
2
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
AMERICORP AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
------------ ------------
<S> <C> <C>
Cash and Due From Bank $ 24,766 $ 20,511
Federal Funds Sold 10,700 27,700
------------ ------------
Total Cash and Cash Equivalents 35,466 48,211
Interest-Bearing Deposits 398 595
Investment Securities 29,345 32,388
Loans 169,270 154,591
Allowance for Loan Losses ( 1,900) ( 1,953)
------------ ------------
NET LOANS 167,370 152,638
Premises and Equipment 1,983 2,202
Other Real Estate Owned 695 -
Cash Surrender Value of Life Insurance 2,582 2,492
Accrued Interest and Other Assets 3,126 3,199
------------ ------------
$ 240,965 $ 241,725
------------ ------------
------------ ------------
Noninterest-Bearing Deposits $ 70,375 $ 63,482
Interest-Bearing Deposits 146,425 154,239
------------ ------------
TOTAL DEPOSITS 216,800 217,721
Accrued Interest and Other Liabilities 2,958 3,608
------------ ------------
TOTAL LIABILITIES 219,758 221,329
Common Stock 1,043 1,026
Surplus 9,250 8,771
Retained Earnings 10,942 10,453
Accumulated Other Comprehensive Income ( 28) 146
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 21,207 20,396
------------ ------------
$ 240,965 $ 241,725
------------ ------------
------------ ------------
</TABLE>
3
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - CONTINUED
AMERICORP AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
---------------------------- -----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest Income $ 4,681 $ 4,548 $ 9,196 $ 8,842
Interest Expense 1,175 1,223 2,393 2,433
------------ ------------ ------------ ------------
Net Interest Income 3,506 3,325 6,803 6,409
Provision for Loan Losses 180 98 360 323
------------ ------------ ------------ ------------
Net Interest Income after
Provision for Loan Losses 3,326 3,227 6,443 6,086
Noninterest Income 631 608 1,291 1,124
Noninterest Expense 3,043 2,954 6,013 5,868
------------ ------------ ------------ ------------
Income Before Taxes 914 881 1,721 1,342
Income Taxes 337 326 644 482
------------ ------------ ------------ ------------
Net Income $ 577 $ 555 $ 1,077 $ 860
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Per Share Data:
Net Income - Basic $ 0.28 $ 0.28 $ 0.52 $ 0.44
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net Income - Diluted $ 0.26 $ 0.26 $ 0.49 $ 0.40
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
4
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - CONTINUED
AMERICORP AND SUBSIDIARY
UNAUDITED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
Common Stock Accumulated
--------------------- Other
Number of Comprehensive Retained Comprehensive
Shares Amount Surplus Income Earnings Income
--------- -------- -------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1997 1,811,156 $ 906 $ 6,451 $ 8,712 $ 1
Issuance of Stock 61,162 30 502
Retirement of Stock (3,824) (2) (7) (49)
Dividends (581)
COMPREHENSIVE INCOME
Net Income $ 1,903 1,903
Unrealized Loss on Securities Available
for Sale, net of Taxes of $6 9 9
Reclassification Adjustment for Loss on
Sale of Investment Securities Included in
net Income, net of Taxes of $22 32 32
========
TOTAL COMPREHENSIVE INCOME $ 1,944
========
--------- ------- ------- -------- --------
BALANCE AT DECEMBER 31, 1997 1,868,494 934 6,946 9,985 42
Issuance of Stock 188,946 95 1,837
Retirement of Stock (5,446) (3) (12) (79)
Dividends (615)
Cash Paid for Fractional Shares (2)
COMPREHENSIVE INCOME
Net Income $ 1,164 1,164
Unrealized Gain on Securities Available
for Sale, net of Taxes of $67 95 95
Reclassification Adjustment for Gain on
Sale of Investment Securities Included in
net Income, net of Taxes of $9 9 9
========
TOTAL COMPREHENSIVE INCOME $ 1,268
========
------- ------- ------- -------- --------
BALANCE AT DECEMBER 31, 1998 2,051,994 1,026 8,771 10,453 146
Issuance of Stock 43,140 22 521
Retirement of Stock (9,656) (5) (42) (143)
Dividends (445)
COMPREHENSIVE INCOME
Net Income $ 1,077 1,077
Unrealized Gain on Securities Available
for Sale, net of Taxes of $121 (174) (174)
========
TOTAL COMPREHENSIVE INCOME $ 903
========
--------- ------- ------- -------- --------
BALANCE AT JUNE 30, 1999 2,085,478 $ 1,043 $ 9,250 $ 10,942 $ (28)
========= ======= ======= ======== ========
</TABLE>
5
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - CONTINUED
AMERICORP AND SUBSIDIARY
UNAUDITED CONDENSED STATEMENT OF CASH FLOWS
(DOLLAR AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
For the Six Months Ended
June 30,
-----------------------------
1999 1998
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 1,077 $ 860
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation and Amortization 302 322
Provision for Loan Losses 360 323
Other Items - Net (1,072) (879)
------------ ------------
NET CASH PROVIDED
OPERATING ACTIVITIES 667 626
INVESTING ACTIVITIES
Change in Interest-Bearing Deposits 197 399
Purchases of Investment Securities (4,906) (1,502)
Maturities and Sales of Investment Securities 8,167 5,430
Net Change in Loans (16,381) (6,731)
Purchase of Premises and Equipment (99) (300)
Distribution from Partnership - 2,549
Proceeds from OREO Sales 624 344
------------ ------------
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES (12,398) 189
FINANCING ACTIVITIES
Net Change in Deposits (921) 2,465
Proceeds from Exercise of Options 352 841
Dividends (445) (302)
------------ ------------
NET CASH PROVIDED (USED)
BY FINANCING ACTIVITIES (1,014) 3,004
------------ ------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (12,745) 3,819
Cash and Cash Equivalents at Beginning of Period 48,211 37,971
------------ ------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 35,466 $ 41,790
------------ ------------
------------ ------------
</TABLE>
6
<PAGE>
ITEM 1. FINANCIAL STATEMENTS - CONTINUED
AMERICORP AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial information has been prepared in accordance with
the Securities and Exchange Commission rules and regulations for quarterly
reporting and therefore does not necessarily include all information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles. This information
should be read in conjunction with Americorp's Form 10K filed on April 14,
1999 (file number -033-18392) and Form S-4 filed on November 2, 1998 (file
number - 333-63844).
The consolidated financial statements include Americorp (the "Company") and
its wholly owned subsidiary, American Commercial Bank (the "Bank"). The
consolidated financial statements also give retroactive effect to the merger
of the Bank, with Channel Islands Bank on December 31, 1998.
Operating results for interim periods are not necessarily indicative of
operating results for an entire fiscal year. In the opinion of management,
the unaudited financial information for the three month and six month periods
ended June 30, 1999 and 1998, reflect all adjustments, consisting only of
normal recurring accruals and provisions, necessary for a fair presentation
thereof.
Some matters discussed in this Form 10-Q may be "forward-looking statements"
within the meaning of the Private Litigation Reform Act of 1995 and therefore
may involve risks, uncertainties and other factors which may cause our actual
results to be materially different from the results expressed or implied by
our forward-looking statements. These statements generally appear with words
such as "anticipate," "believe," "estimate," "may," "intend," and "expect."
NOTE 2 - MERGER OF BANK AND CHANNEL ISLANDS BANK
The consolidated financial statements give retroactive effect to the merger
of the Company's subsidiary, American Commercial Bank, with Channel Islands
Bank on December 31, 1998. This merger was accounted for by the pooling of
interest method, whereby the Company's Financial Statements have been
restated as if the two companies were historically one unit. A total of
405,505 common shares were issued to the shareholders of Channel Islands Bank
in connection with this merger.
7
<PAGE>
NOTE 2 - MERGER OF BANK AND CHANNEL ISLANDS BANK - CONTINUED
The following table summarizes the separate revenue and net income of the
Company and Channel Islands Bank for the reported periods:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ---------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Interest and Noninterest Income:
The Company - Pre-merger $ - $ 3,034 $ - $ 5,910
Channel Islands Bank - 2,122 - 4,056
The Company - Post-merger 5,312 - 10,487 -
------------ ------------ ------------ ------------
Total $ 5,312 $ 5,156 $ 10,487 $ 9,966
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Net Income:
The Company - Pre-merger $ - $ 417 $ - $ 562
Channel Islands Bank - 138 - 298
The Company - Post-merger 577 - 1,077 -
------------ ------------ ------------ ------------
Total $ 577 $ 555 $ 1,077 $ 860
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
NOTE 3 - EARNINGS PER SHARE
Effective December 31, 1997, the Company adopted SFAS No. 128, "Earnings per
Share." Accordingly, basic earnings per share are computed by dividing income
available to common shareholders by the weighted average number of common
shares outstanding during each period. The computation of diluted earnings
per share also considers the number of shares issuable upon the assumed
exercise of outstanding common stock options.
NOTE 4 - STOCK SPLIT
On March 18, 1999, the Board of Directors of the Company declared a
two-for-one stock split of its outstanding shares of common stock. The
effective date for the split was April 15, 1999 and the additional shares
issued pursuant to the stock split were distributed on May 8, 1999.
All per share data has been retroactively adjusted to reflect this split.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
INCOME SUMMARY
The Company reported net earnings of $1,077,000 or $0.52 basic income per
share for the first half of 1999. This represents a 25.2% increase over the
same period during 1998 when net earnings were $860,000 or $0.44 basic income
per share. For the quarter ended June 30, 1999, net earnings were $577,000,
up slightly from the $555,000 reported for the same quarter in 1998.
Annualized return on average assets for the three months and six months ended
June 30, 1999 was 0.95% and 0.88%, respectively, compared with 1.00% and
0.78% for the same periods in 1998. Return on average assets for the year
ended December 31, 1998 was 0.51%.
Annualized return on average equity for the three months and six months ended
June 30, 1999 was 10.94% and 10.31%, respectively, compared with 11.54% and
9.17% for the same periods in 1998. Return on average equity for the year
ended December 31, 1998 was 6.00%.
Cash dividends of $0.21 per share were declared in the first and second
quarter of 1999 and 1998.
NET INTEREST INCOME
Net interest income is the amount by which the interest and amortization of
fees generated from loans and other earning assets exceeds the cost of
funding those assets, usually deposit account interest expense. Net interest
income depends on the difference (the "interest rate spread") between gross
interest and fees earned on the loans and investment portfolios and the
interest rates paid on deposits and borrowings. Net interest income was $3.5
million for the quarter ended June 30, 1999, compared to $3.3 million for the
quarter ended June 30, 1998 and $6.8 million for the six months ended June
30, 1999, compared to $6.4 million for the six months ended June 30, 1998.
The following table sets forth the components of net interest income, average
earning assets and net interest margin:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30, Year Ended
------------------------------- ------------------------------- December 31,
1999 1998 1999 1998 1998
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Interest Income $ 4,681 $ 4,548 $ 9,196 $ 8,842 $ 18,054
Interest Expense 1,175 1,223 2,393 2,433 4,972
-------------- -------------- -------------- -------------- --------------
Net Interest Income $ 3,506 $ 3,325 $ 6,803 $ 6,409 $ 13,082
-------------- -------------- -------------- -------------- --------------
-------------- -------------- -------------- -------------- --------------
Average Earning Assets $ 214,538 $ 193,163 $ 215,932 $ 191,447 $ 199,436
Net Interest Margin 6.54% 6.89% 6.30% 6.70% 6.56%
</TABLE>
9
<PAGE>
NET INTEREST INCOME - CONTINUED
The net interest margin declined in 1999 compared to the same periods in 1998
due to the 75 basis point decline in the prime rate during the fourth quarter
of 1998. The majority of the Bank's loans and its investments in federal
funds sold reprice daily with changes in the prime rate. The Bank's deposits
generally reprice at a slower pace, therefore reducing the net interest
margin.
On July 1, 1999, the prime rate was increased 25 basis points to 8.00%. This
increase will partially offset the declines discussed in the prior paragraph
and the Company expects its net interest margin to increase in the third
quarter of 1999 as compared to the first half of 1999.
PROVISION FOR LOAN LOSSES
Americorp made a $180,000 contribution to the allowance for loan losses in the
first and second quarters of 1999 compared to $225,000 and $98,000 for the same
periods in 1998. Management believes that the allowance, which equals 1.12% of
total loans at June 30, 1999, is adequate to cover future losses.
Changes in the allowance for loan losses for the quarter and six months ended
June 30, 1999 and 1998 are as follows (dollar amounts in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ----------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Allowance, Beginning of Period $ 1,787 $ 1,992 $ 1,953 $ 1,966
Provision for Loan Losses 180 98 360 323
Loans Charged Off - net of Recoveries (67) (48) (413) (247)
------------ ------------ ------------ ------------
Allowance, End of Period $ 1,900 $ 2,042 $ 1,900 $ 2,042
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
NONINTEREST INCOME
Noninterest Income represents deposit account services charges and other
types of non-loan related fee income. Noninterest income for the quarter
ended June 30, 1999 totaled $631,000 which is comparable to the $608,000
reported for the same period ended 1998. Noninterest income for the six
months ended June 30, 1999 totaled $1,291,000 compared to $1,124,000 for the
same period ended 1998. This increase was primarily the result of growth in
noninterest-bearing deposits, the primary source of service charge income,
which increased 17.1% from $61.0 million at June 30, 1998 to $70.4 million at
June 30, 1999.
10
<PAGE>
NONINTEREST EXPENSE
Noninterest expense include salaries, occupancy expenses, professional
expenses, outside services and other miscellaneous expenses necessary to
conduct business. Noninterest expense for the quarter ended June 30, 1999
totaled $3.0 million, the same as the first quarter of 1998. The quarter
ended June 30, 1999 included $110,000 for various compensation programs not
present in the second quarter of 1998. This additional cost was offset by
various cost savings as a result of the Bank's recent merger.
Noninterest expense for the six months ended June 30, 1999 totaled $6.0
million compared to $5.9 million for the same period during 1998. As an
annualized percent of average assets, noninterest expense was 4.92% in the
first half of 1999 compared to 5.35% for the first half in 1998.
INCOME TAXES
The Company's income tax provision for the first half of 1999 was $644,000,
resulting in an effective rate of 37.4% on income before taxes. This rate
compares to the 36.8% and the 33.8% reported for the years ending December
31, 1998 and 1997, respectively. The Company's effective tax has increased in
the last several years as total income has increased at a faster pace than
the income earned on the Company's tax-free investments.
BALANCE SHEET ANALYSIS
Total assets at June 30, 1999 totaled $241 million, up 6.2% from the same
date in 1998. Deposits have increased during this time period by $12.5
million or 6.1%. During 1999, total assets and total deposits have not
changed dramatically. The Company has, however, increased total loans from
$154.6 million at December 31, 1998 to $169.3 million at June 30, 1999. This
increase was funded primarily by federal funds sold, which decreased from
$27.8 million at December 31, 1998 to $10.7 million at June 30, 1999.
11
<PAGE>
ASSET QUALITY
The following table sets forth the components of non-performing assets and
related ratios: (dollar amounts in thousands)
<TABLE>
<CAPTION>
June 30,
--------------------------- December 31,
1999 1998 1998
------------ ------------ ------------
<S> <C> <C> <C>
Loans 90 day past due and still accruing $ 7 $ 45 $ 784
Loans on nonaccrual 952 1,836 1,780
------------ ------------ ------------
Nonperforming Loans 959 1,881 2,564
Other real estate owned (OREO) 695 - -
------------ ------------ ------------
Nonperforming Assets $ 1,654 $ 1,881 $ 2,564
------------ ------------ ------------
------------ ------------ ------------
Nonperforming Loans as a Percent
of Total Loans 0.57% 1.33% 1.66%
Allowance for Loan Losses as a Percent
of Nonperforming Loans 198.12% 109.57% 76.17%
Nonperforming Assets as a Percent
of Total Assets 0.69% 0.83% 1.06%
</TABLE>
The primary ratios of loan quality have improved in the first half of 1999.
Nonperforming loans as a percent of total loans declined to 0.57% at June 30,
1999, compared to 1.66% at December 31, 1998. Likewise, the allowance for
loan losses as a percent of nonperforming loans increased to 198.12% at June
30, 1999, up from 76.17% at December 31, 1998. A portion of this increase is
attributable to the conversion of several 1998 problem loans to OREO. At June
30, 1999, the Company had two properties of OREO with a total book value of
$695,000. All parcels are currently listed for sale with one property in
escrow. The Company believes all properties will be liquidated during 1999
without any significant losses.
CAPITAL
Total shareholders equity at June 30, 1999 totaled $21.2 million, which
represents a 3.9% increase from $20.4 million at December 31, 1998.
The Bank maintains capital ratios above the Federal regulatory guidelines for a
"well-capitalized" bank. The ratios are as follows:
<TABLE>
<CAPTION>
June 30, December 31,
Ratio 1999 1998
------------ ------------ ------------
<S> <C> <C> <C>
Tier 1 Capital (to Average Assets) 4.00% 8.71% 8.41%
Tier 1 Capital (to Risk Weighted Assets) 4.00% 10.33% 10.56%
Total Capital (to Risk Weighted Assets) 8.00% 11.25% 11.57%
</TABLE>
12
<PAGE>
LIQUIDITY
Management is not aware of any future capital expenditures or other significant
demands on commitments which would severely impair liquidity.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
MARKET RISK
In Management's opinion there has not been a material change in the Company's
market risk profile during the three months ended June 30, 1999. Market risk
is the risk of loss in a financial instrument arising from adverse changes in
market prices and rates, foreign currency exchange rates, commodity prices
and equity prices. Americorp's market risk arises primarily from interest
rate risk inherent in its lending and deposit taking activities. To that end,
management actively monitors and manages its inherent rate risk exposure.
Americorp does not have any market risk sensitive instruments acquired for
trading purposes. Americorp manages its interest rate sensitivity by matching
the repricing opportunities on its earning assets to those on its funding
liabilities. Management uses various asset/liability strategies to manage the
repricing characteristics of its assets and liabilities to ensure that
exposure to interest rate fluctuations is limited within Americorp's
guidelines of acceptable levels of risk-taking.
At June 30, 1999, the Company had $134 million of assets and $142 million of
liabilities repricing within one year. Therefore, $8 million more in interest
rate sensitive liabilities than interest rate sensitive assets will change to
the then current rate (changes occur due to the instruments being at a
variable rate or because the maturity of the instrument requires its
replacement at the then current rate). Theoretically, if rates were to fall
during this period, interest expense would decline by a greater amount than
interest income and net income would increase. Conversely, if rates were to
rise, the reverse would apply, and Americorp's net income would decrease.
However, in practice, asset rates generally reprice more quickly than
liability rates whenever there is a rate change. Accordingly, the Company's
net interest margin declined with the prime rate decreases in late 1998 and
the Company anticipates its net interest margin will rise in the near term as
a result of the recent prime increase.
YEAR 2000 RISK
The Company's operations are significantly dependent on a number of data
processing systems. Failure to anticipate and resolve potential problems
associated with the ability of these systems to process transactions and
information into the year 2000 could have a serious impact on Americorp's
operations. This could increase the level of operating losses and its
liability for improperly processed transactions.
In addition, a number of the Bank's customers have operations that are
dependent on their data processing systems. The potential that some or all of
these customers will not properly prepare their systems for the problems
associated with the year 2000 could affect their ability to repay their loans
with the Bank and as a consequence adversely affect the quality of the Bank's
loan portfolio. The Company's primary source of funds is from its customers'
deposits. Many of these customers' operations are dependent on their data
processing systems. Any adverse affects resulting from the year 2000 could
impact the level of these customers' deposits, which in turn could impact the
Company's liquidity.
13
<PAGE>
YEAR 2000 RISK - CONTINUED
The Company relies primarily on outside vendors to provide its data
processing. Management has obtained from each a written copy of their plans
to address solutions to potential problems resulting from the year 2000.
Americorp closely monitors each applicable vendor's progress toward those
solutions. In addition, management has conducted third party tests of all
mission critical software and hardware used by the Bank to ensure that these
systems will operate beyond the year 2000. Americorp's management has
corrected or replaced all data sensitive equipment and software that was
determined not to be Year 2000 ready. The Company is in the process of
finalizing a Year 2000 Contingency Plan. In the event the contingency plan is
invoked, contingency plan team members will participate in the execution of
the plan, to ensure business operations continue.
The Bank has identified all its borrowers for which the year 2000 may pose a
significant credit risk. Each of these borrowers has been contacted and their
operations analyzed in an effort to quantify the potential risks in the
Bank's loan portfolio that might arise as a result of year 2000. Management
has also developed liquidity contingency plans to provide for potential
decreases in funding sources that might arise as a result of the year 2000.
Management has projected that the total cost of preparing for the year 2000
will be $286,094, of which $221,833 had been incurred through June 30, 1999.
14
<PAGE>
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
Due to the nature of the banking business, the Bank is at times party
to various legal actions; all such actions are of a routine nature and
arise in the normal course of business.
Item 2 - Changes in Securities
None
Item 3 - Defaults upon Senior Securities
None
Item 4 - Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of AMERICORP, a California
corporation was held on the 18th day of May 1999.
At the annual meeting, the shareholders elected the following
directors:
<TABLE>
<CAPTION>
NAME SHARES VOTED FOR SHARES VOTED AGAINST ABSTAIN
---- ---------------- -------------------- -------
<S> <C> <C> <C>
Michael T. Hribar 811,144 3,000 2,103
Allen W. Jue 811,144 3,000 2,103
Robert J. Lagomarsino 810,144 4,000 2,103
Gerald J. Lukiewski 811,144 3,000 2,103
E. Thomas Martin 811,144 3,000 2,103
Harry L. Maynard 810,144 4,000 2,103
Edward F. Paul 811,144 3,000 2,103
Joseph L. Priske 811,144 3,000 2,103
Jacqueline S. Pruner 811,144 3,000 2,103
</TABLE>
Item 6 - Exhibits and Reports on Form 8-K
A) Exhibits
27 Financial Data Schedule (for SEC use only)
B) Reports on Form 8-K
None
15
<PAGE>
SIGNATURES
Pursuant to the requirement 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.
AMERICORP
Date: August 13, 1999 /s/ Gerald J. Lukiewski
----------------------------
Gerald J. Lukiewski
President and
Chief Executive Officer
Date: August 13, 1999 /s/ Keith J. Sciarillo
----------------------------
Keith J. Sciarillo
Vice President and CFO
16
<PAGE>
EXHIBIT INDEX
27 - Financial Data Schedule ( for SEC use only) ...................... 18
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
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0
0
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</TABLE>
