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UNITED STATES
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 27, 1999
REDWOOD EMPIRE BANCORP
(Exact number of Registrant as specified in its charter)
California File No. 0-19231 68-0166366
(State or other jurisdiction of (Commission 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) 573-4800
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Item 5. Other Events
Press releases for the following (article attached):
Redwood Empire Bancorp reports fourth quarter and full year 1998
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.
1/27/99
Date: ___________________ REDWOOD EMPIRE BANCORP
(Registrant)
/s/ James E. Beckwith
By:
James E. Beckwith
Executive Vice President and
Chief Financial Officer
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FOR: REDWOOD EMPIRE BANCORP
APPROVED BY: James Beckwith
Chief Financial Officer
(707) 522-5215
CONTACT: Morgen-Walke Associates, Inc.
John Swenson, Bruce Schoenfeld
(415) 296-7383
For Immediate Release Mark Owen
(212) 850-5600
REDWOOD EMPIRE BANCORP REPORTS FOURTH QUARTER
AND FULL YEAR 1998 FINANCIAL RESULTS
SANTA ROSA, Calif. (January 27, 1999) -- Redwood Empire Bancorp (Nasdaq: REBC)
today announced financial results for the fourth quarter and full year ended
December 31, 1998.
Net income for the fourth quarter increased 37% to $1,438,000, or $0.41
diluted per share. This compares with net income $1,052,000 or $0.31 per diluted
share for the fourth quarter a year ago and net income of $1,335,000, or $0.38
per diluted share in the third quarter of 1998. Return on equity was 15.02% in
the fourth quarter, compared with 12.84% a year ago and 14.58% in the third
quarter.
Net income for the full year ended December 31, 1998 was $5,091,000 or
$1.47 per diluted share. This compares with net income of $3,441,000 or $1.02
per diluted share for 1997. Return on equity was 14.17% in 1998 compared to
10.97% in 1997.
"We are pleased to report another year of significantly improved
financial performance," noted Tom Whitaker, Chairman of Redwood Empire Bancorp.
"Our full year performance reflects the achievement of key goals we established
at the beginning of the year for improved asset quality and fee revenue
enhancement. We enter 1999 with the goals of continued improvement in each of
these areas along with improved efficiency and earning asset growth. We are
confident that our efforts will translate into further earnings growth."
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Consolidated net interest income for the fourth quarter was $4,774,000
compared to $4,960,000 for the year ago period. On an annual basis, net interest
income totaled $18,880,000 in 1998 compared to $20,519,000 in 1997. Net interest
margin for the quarter was 4.98%, compared to 4.68% one year ago, and 5.13% for
the third quarter. Average earning assets totaled $383,382,000 for the fourth
quarter of 1998 compared to $423,986,000 in the same period of 1997 and
$383,168,000 in the third quarter of 1998.
The loan loss provision was $510,000 for the 1998 quarter compared to
$465,000 for the same quarter in 1997. For the full year, the loan loss
provision amounted to $2,040,000 compared to $2,100,000 for 1997. For the fourth
quarter, net chargeoffs were $695,000, or 0.92% of average total loans on an
annualized basis, compared to $809,000, or 1.04%, one year ago. On an annual
basis, net chargeoffs were $1,643,000, or 0.56% of average total loans in 1998
compared to $1,495,000, or 0.46% in 1997.
Non-performing assets at December 31, 1998 were $8,911,000, or 2.11%,
of total assets. This compares to $16,621,000 and 3.71% of total assets at
December 31, 1997. Non-performing assets declined by $7,710,000, or 46.4%,
during 1998. As of December 31, 1998 non-accrual loans amounted to $5,556,000.
Restructured loans totaled $1,045,000 and foreclosed real estate and other
assets totaled $2,310,000.
"We have achieved great progress in the reduction of non-performing
assets and this continues to be a high priority for management," said Whitaker.
Fee income was $4,190,000 for the fourth quarter compared to
$2,207,000 in the fourth quarter of 1997. Fee income for the year ended December
31, 1998 was $15,666,000, an increase of 54.45% from 1997's $10,143,000. The
increase is attributable to the strong performance of Valley Financial, the
Company's mortgage loan brokerage strategic business unit and Redwood Merchant
Services, the Company's merchant credit card processing strategic business unit.
Non-interest expense was $7,023,000 in the fourth quarter of 1998
compared to $5,548,000 in the same period last year. For the full year
non-interest expense was $25,313,000 compared to $22,855,000 for 1997. In the
fourth quarter the Company recorded a non-recurring $600,000 tax
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benefit as a result of a change in estimate associated with a deferred tax item.
As a result of the tax benefit, the Company's effective tax rate in 1998 was
29.2% as compared to 39.7% in 1997.
Total assets were $422,299,000 at year-end. Common book value per
share was $11.47. The Company's Tier 1 capital to average assets ratio was 8.84%
as of December 31, 1998.
Redwood Empire Bancorp is the holding company for National Bank of the
Redwoods, a commercial bank. The Company operates through branches and loan
production offices in various northern California locations.
The statements contained in this release, which are not historical
facts, are forward-looking statements that are subject to risks and
uncertainties. Actual results may 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)
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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 Twelve Months Ended
December 31 December 31 December 31 December 31
1998 1997 1998 1997
--------------- ---------------- --------------- ---------------
<S> <C> <C> <C> <C>
Interest income $8,881 $33,059 $37,306
8,084
Interest expense 3,310 3,921 14,179 16,787
--------------- ---------------- --------------- ---------------
Net interest income 4,774 4,960 18,880 20,519
Provision for loan losses 510 465 2,040 2,100
--------------- ---------------- --------------- ---------------
Net interest income after loan loss 4,264 4,495 16,840 18,419
provision
Other income 4,190 2,707 15,666 10,143
Other expense 7,023 5,548 25,313 22,855
--------------- ---------------- --------------- ---------------
Income before taxes 1,431 1,654 7,193 5,707
Income tax expense (7) 602 2,102 2,266
--------------- ---------------- --------------- ---------------
Net income 1,438 1,052 5,091 3,441
Preferred dividends 112 112 449
-
--------------- ---------------- ---------------
=============== ================ =============== ===============
Net income available for common $1,438 $940 $4,979 $2,992
=============== ================ =============== ===============
Basic earnings per share:
Net income $.43 $.32 $1.57 $1.08
Weighted average shares 3,379,000 2,920,000 3,170,000 2,776,000
Diluted:
Net income $.41 $.31 $1.47 $1.02
Weighted average shares 3,466,000 3,419,000 3,465,000 3,378,000
Selected Ratios
Return on Average Total Equity 15.02 % 12.84 % 14.17 % 10.97 %
Return on Average Assets 1.37 % .93 % 1.20 % .75 %
</TABLE>
<TABLE>
<CAPTION>
Selected Balance Sheet Data
(In Thousands)
December 31 December 31
1998 1997
---------------- ---------------
<S> <C> <C>
Total Loans, including Mortgage Loans Held for Sale $301,936 $299,325
Allowance for Loan Loss 8,041 7,645
Total Assets 422,299 446,719
Total Deposits 364,720 391,421
Equity Capital 38,640 33,243
Nonperforming Assets 8,911 16,621
</TABLE>
