===========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: January 30, 1997
REDWOOD EMPIRE BANCORP
(Exact number of Registrant as specified in its charter)
California File No. 0-19231 68-0166366
(State or other jurisdiction of (Commision File Number) (IRS Employer)
Incorporated or organization) Identification No.)
111 Santa Rosa Avenue, Santa Rosa, California 95404-4905
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (707) 545-9611
===========================================================================
<PAGE>
Item 5. Other Events
Press release for the following (article attached):
Redwood Empire Bancorp announces fourth quarter and full year 1996
financial results.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
1-30-97
Date: ___________________ REDWOOD EMPIRE BANCORP
(Registrant)
By:__________________________
James E. Beckwith
Executive Vice President and
Chief Financial Officer
<PAGE>
FOR: REDWOOD EMPIRE BANCORP
APPROVED BY: James Beckwith
Chief Financial Officer
(707) 573-4988
CONTACT: Morgen-Walke Associates, Inc.
Doug Sherk, David Gennarelli
(415) 296-7383
For Immediate Release Emily Dupree, Joshua Passman
(212) 850-5600
REDWOOD EMPIRE BANCORP ANNOUNCES FOURTH QUARTER
AND FULL YEAR 1996 FINANCIAL RESULTS
SANTA ROSA, Calif. (January 29, 1997) -- Redwood Empire Bancorp (AMEX: REB)
today announced financial results for the fourth quarter and full year ended
December 31, 1996.
Consolidated net loss for the fourth quarter was $1,606,000, or $0.63
per share, on a fully-diluted basis. Included in the results were certain
non-recurring pre-tax restructuring charges totaling $2,357,000 relating to the
previously announced combination of Allied Bank and National Bank of the
Redwoods and a one-time gain from the sale of loan servicing rights of
$2,000,000. In recognition of an increase in non-performing loans, the Company
recorded a provision for loan losses of $2,887,000 in the fourth quarter of
1996. The provision for loan losses in the fourth quarter of 1995 amounted to
$535,000. Net income in the fourth quarter of 1995 was $1,025,000, or $0.32 per
share.
"The Board of Directors continues to recognize the importance to
shareholder value of asset quality and maintaining an adequate allowance for
loan losses," said Tom Whitaker, Chairman of Redwood Empire Bancorp. "In this
regard, the Company has taken a significant step to improve the asset quality of
the consolidated entity by hiring Deborah Kaufman as senior vice president and
chief credit officer in December 1996. Ms. Kaufman has considerable banking
experience and was most recently a portfolio manager at the San Francisco branch
of the Office of the Comptroller of the Currency. Ms. Kaufman was instrumental
in the process to assist the Board and Management in establishing our year-end
loan loss reserve." The Company's allowance for loan losses to portfolio loans
has improved from 1.37% at December 31, 1995 to 2.02% at December 31, 1996. "Our
allowance for loan losses is now comparable to our peer group," continued Mr.
Whitaker.
For the full year 1996, net loss totaled $1,486,000, or $0.,71 per
share. Included in the year-end results was a fourth quarter pre-tax
restructuring charge of $2,357,000 and a pre-tax gain on sale of servicing of
approximately $2,000,000, a one-time pre-tax charge totaling $2,241,000 taken in
the third quarter related to SAIF legislation, and a non-recurring pre-tax
charge taken in the second quarter totaling $1,200,000 related to the company's
financial obligation following the bankruptcy of one of its merchant credit card
customers. In 1995, the Company recorded net income of $3,313,000, or $1.04 per
share.
The restructuring of the Company, which involves both the elimination
of "A" paper wholesale mortgage banking and the consolidation of Allied Bank
into National Bank of the Redwoods, is expected to significantly improve the
operating performance of the Company. The new National Bank of the Redwoods will
be comprised of nine strategic business units, each of which has been evaluated
for return on investment, risk, growth potential and resource allocation. "Over
the course of the past year, Redwood has faced significant challenges, yet
maintained its financial strength," Mr. Whitaker continued. "With the regulatory
application process for consolidating Allied and National Bank of the Redwoods
underway, we are confident our restructuring will allow the Company to operate
more efficiently, maximize earnings, and be positioned for future growth.
Through year end, the restructuring process has resulted in a reduction in head
count of 72. Upon the actual merger of Allied into National Bank of the
Redwoods, we expect further reductions of staff," Mr. Whitaker concluded.
Consolidated net interest income grew 17.4% in 1996, compared to 1995,
largely due to increased loan volume, primarily mortgages, and a higher net
interest margin. The net interest margin increased 101 basis points to 4.64%,
compared to 3.63% in 1995.
The loan loss provision for the year totaled $6,262,000, compared with
$1,590,000 last year. Net chargeoffs were $4,258,000, or 1.22% of average
portfolio loans. Nonperforming assets were 2.64% of total assets at December 31,
1996.
<PAGE>
Total assets were $499.5 million at year-end. Common book value per
share was $8.73. Tier 1 capital to risk based assets was approximately 7.55% and
total capital to risk-based assets was approximately 12.32%.
Redwood Empire Bancorp is the holding company for two operating
subsidiaries: Allied Bank, F.S.B., a savings institution, and National Bank of
the Redwoods, a commercial bank. The Company operates through branches and loan
production offices in various California locations, as well as Portland, Oregon.
The statements contained in this release which are not historical facts
are forward-looking statements that are subject to risks and uncertainties that
could cause actual results to differ materially from those set forth in or
implied by forward-looking statements. These risks are described in the
Company's Securities and Exchange Commission filings.
(tables to follow)
<PAGE>
REDWOOD EMPIRE BANCORP AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in thousands except for earnings per share and share data)
<TABLE>
<CAPTION>
Three Months Ended Year Ended
December 31 December 31
1996 1995 1996 1995
----------------- ---------------- ------------------ -----------------
<S> <C> <C> <C> <C>
Interest income $10,989 $12,305 $45,784 $47,374
Interest expense 5,327 6,729 22,643 27,671
----------------- ---------------- ------------------ -----------------
Net interest income 5,662 5,576 23,141 19,703
Provision for loan losses 2,887 535 6,262 1,590
----------------- ---------------- ------------------ -----------------
Net interest income after loan loss provision 2,775 5,041 16,879 18,113
Other income 5,645 4,496 19,570 16,575
Other expense 11,107 7,785 38,946 29,016
----------------- ---------------- ------------------ -----------------
Income before taxes (2,687) 1,752 (2,497) 5,672
Income tax expense (1,081) 727 (1,011) 2,359
----------------- ---------------- ------------------ -----------------
Net income (1,606) 1,025 (1,486) 3,313
Preferred dividends 112 0 449 336
-----------------
================= ================ ================== =================
Net income (loss) available for common ($1,718) $1,025 ($1,935) $2,977
================= ================ ================== =================
Earnings per common and common equivalent share:
Primary:
Net income (loss) ($.63) $.38 ($.71) $1.11
Weighted average shares 2,747,000 2,692,000 2,721,000 2,680,000
Fully diluted:
Net income (loss) ($.63) $.32 ($.71) $1.04
Weighted average shares 2,747,000 3,191,000 2,721,000 3,179,000
Selected Ratios
Return on Average Common Equity (27.16%) 16.18 % (7.43%) 12.39 %
Return on Average Total Equity (20.69%) 13.19 % (4.67%) 11.13 %
Return on Average Assets (1.23%) .72 % (.28%) .57 %
</TABLE>
<TABLE>
Selected Balance Sheet Data
(In Thousands)
<CAPTION>
December 31
1996 1995
---------------- ------------------
<S> <C> <C>
Total Loans, including Mortgage Loans Held for Sale $376,901 $430,844
Allowance for Loan Loss 7,040 5,037
Total Assets 499,466 557,910
Total Deposits 436,450 458,393
Equity Capital 29,732 31,585
Nonperforming Assets 13,181 7,156
</TABLE>
