<PAGE>
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 (Date of earliest event reported): May 14, 1999
COWLITZ BANCORPORATION
(Exact name of registrant as specified in its charter)
WASHINGTON 0-23881 91-152984
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
927 COMMERCE AVENUE, LONGVIEW, WASHINGTON 98632
(Address of principal executive office)
(360) 423-9800
(Registrant's telephone number including area code)
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
99.1 Press Release dated May 13, 1999 regarding transaction with Bay
Mortgage Company.
99.2 Press Release dated May 17, 1999 regarding creation of new bank
branch,
SIGNATURE
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.
COWLITZ BANCORPORATION
By: /s/ Charles Jarrett
Charles Jarrett
President,
<PAGE>
Exh 99.1
Len Cereghino & Co. CLIENT: COWLITZ
BANCORPORATION
CORPORATE INVESTOR RELATIONS
Pres. & COO (360) 423-9800 CONTACT: Charles W. Jarrett,
2605 Western Ave., Seattle, WA 98121 Don P. Kiser, CFO
(206) 448-1996 BAY MORTGAGE
(425) 990-5514 Scott Rerucha, President
NEWS RELEASE
- --------------------------------------------------------------------------------
COWLITZ BANCORPORATION TO ACQUIRE BAY MORTGAGE;
BELLEVUE COMPANY ORIGINATED $237 MILLION IN MORTAGES IN 1998
LONGVIEW and BELLEVUE, WA - May 13, 1999 - Cowlitz Bancorporation
(NASDAQ:CWLZ), the holding company for Cowlitz Bank and Business Finance
Corporation, today announced it has signed a definitive agreement to purchase
the name and assets of Bay Mortgage Company from Independent Financial Network
of Bellevue, WA, for $3.26 million in cash and stock. Bay Mortgage will operate
as a division of Cowlitz Bank. The deal is expected to close July 1, 1999.
Under terms of the agreement, Cowlitz will pay $1 million in cash plus $1
million in stock now, and the remaining $1.26 million in cash and stock through
an earn-out performance agreement over a three year period. The transaction has
been approved by the Boards of Directors of both companies.
Founded in 1992, Bay Mortgage originated approximately $237 million in
mortgages last year and has been profitable, with a return on average equity of
more than 25% in 1998. The privately-held company specializes in all facets of
residential lending from single family homes to small multi-plexes, including
FHA and VA loans, construction loans and bridge loans. It services customers
throughout the Greater Bellevue/Seattle market area.
"We anticipate exciting opportunities in the Bellevue/Puget Sound market
based on the high quality of this management team," said Charles W. Jarrett,
President and Chief Operating Officer of Cowlitz. "They are seasoned bankers
and mortgage lenders who also are aggressive entrepreneurs. While Bay
Mortgage's superb return on equity makes it immediately accretive to Cowlitz
Bancorporation earnings, we are exploring other potential services in the
Greater Bellevue market as a result of this acquisition which could carry some
early costs."
Harve Menkens, Executive Vice President of Bay Mortgage, was a founder and
senior officer of Enterprise Bank while Scott Rerucha, Bay Mortgage President,
joined Enterprise as a senior mortgage executive soon after its founding.
Enterprise Bank had approximately $165 million in assets when it was
<PAGE>
acquired by Washington Mutual Bank in August 1996. Rerucha will be
President of the Bay Mortgage division of Cowlitz Bank and Menkens will be
President of a new division of Cowlitz Bank.
The other three Bay Mortgage principals are senior loan production officers
David Baltzer, Steven Tedrow and Jeffrey Rice. They, and all of Bay Mortgage's
30 employees, will join the Cowlitz Bancorporation organization. Bay Mortgage's
office will remain in Bellevue.
"Our 13 loan officers have led Bay Mortgage's earnings and volumes to
record levels during early 1999," noted Bay President, Scott Rerucha. "First
quarter originations approximated $70 million, compared to $58 million a year
ago, and we're just entering our busy season. All our loan officers are
seasoned professionals with from 5 to 20
(more)
<PAGE>
Cowlitz Bancorporation Acquires Bay Mortgage
Page Two
May 13, 1999
years in the mortgage industry. They have built their clientele over time
through networking and referrals. We've known of Cowlitz management for years
and are excited by the potential growth opportunities this linkage offers."
"Bay's philosophy is to work closely with the executives of mid-size
companies (i.e., independently owned businesses, such as manufacturers,
distributors, wholesalers, contractors and professional service organizations),"
noted Bay Executive Vice President, Harve Menkens. "We have formalized this
process of networking and referrals, developing strong cross-over relationships
along the way. This new association will allow us to capitalize on our
strategy."
"Bay offers an excellent fit with Cowlitz' existing businesses," Jarrett
said. "Our strategy is to grow the Bancorporation beyond the Southwest
Washington focus of Cowlitz Bank where we currently hold a large share of the
market. We are confident our attention to quality service is applicable on a
broader basis."
"Bay Mortgage offers us great potential; we expect significant synergy
from this management team," said Benjamin Namatinia, Chairman and Chief
Executive Officer of Cowlitz Bancorporation. "Cowlitz' strategy is to offer a
combination of financial services (banking, mortgage, trust, brokerage,
insurance, factoring, and leasing) to the people of our area as opportunities to
expand become available. Bay will be an integral part of that expansion."
Cowlitz Bancorporation's assets were $175.5 million at March 31, 1999.
Shareholders' equity increased to $30.9 million, reflecting capital raised in
its March 1998 public offering, and tangible book value equaled $6.99.
Its wholly-owned subsidiary, Cowlitz Bank, is the only community bank
headquartered in Cowlitz County - which is 40 miles north of Portland, Oregon.
The bank offers commercial banking services primarily to small and medium-sized
businesses, professionals and retail customers through five branches. Cowlitz'
Business Finance Corporation subsidiary, based in Bellevue, WA, was acquired in
September 1998 and provides asset based financing to companies throughout the
Western US (California, Nevada, Hawaii, Oregon and Washington).
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: STATEMENTS IN THIS NEWS RELEASE LOOKING FORWARD IN TIME INVOLVE RISKS AND
UNCERTAINTIES, INCLUDING COMPLETION OF THE DUE
<PAGE>
DILIGENCE PROCESS, REGULATORY APPROVAL, RETENTION OF KEY PERSONNEL, SUCCESS
OF DEVELOPING NEW PRODUCTS AND EXPANDING EXISTING MARKETS, ABILITY TO
PENETRATE NEW MARKETS, ADDITIONAL EXPANSION OPPORTUNITIES, THE EFFECT OF
CHANGING ECONOMIC CONDITIONS, CHANGES IN THE REGULATORY ENVIRONMENT, AND
OTHER RISK FACTORS DETAILED IN THE COMPANY'S SECURITIES AND EXCHANGE
COMMISSION FILINGS.
- 0 -
NOTE: Transmitted on PR Newswire at ___ p.m. PDT, May 13, 1999.
<PAGE>
Exh 99.2
Len Cereghino & Co. CLIENT: COWLITZ
BANCORPORATION
CORPORATE INVESTOR RELATIONS CONTACT: Charles W. Jarrett,
Pres. & COO (360) 423-9800
2605 Western Ave., Seattle, WA 98121 Don P. Kiser, Cowlitz
Bancorporation CFO Harve Menkens, Bay Mortgage
(206) 448-1996
(425) 990-5560
NEWS RELEASE
- --------------------------------------------------------------------------------
COWLITZ BANCORPORATION FORMING BAY BANK IN BELLEVUE, WA;
TARGETING INDEPENDENT BUSINESS MARKET; HARVE MENKENS NAMED PRESIDENT
LONGVIEW and BELLEVUE, WA - May 17, 1999 - Cowlitz Bancorporation
(NASDAQ:CWLZ) today announced the pending formation of a new community banking
division - Bay Bank - to serve the greater Bellevue, Washington, independent
business community. Harve Menkens, a founding member of Enterprise Bank, will
be president of the new banking division. Subject to regulatory approval, Bay
Bank is expected to open in mid-summer 1999. It will be structured as a branch
of Cowlitz Bank, doing business as (dba) Bay Bank.
The formation of Bay Bank follows the announcement last week that Cowlitz
Bancorporation has agreed to acquire Bay Mortgage Company, which will be
operated as a division of Cowlitz Bank. Menkens has been Executive Vice
President of Bay Mortgage.
"The Bellevue/Puget Sound area is a thriving business market, home to many
fast-growing and expanding companies," noted Charles W. Jarrett, President and
Chief Operating Officer of Cowlitz. "Our market is the independent mid-sized
business with sales up to approximately $25 million. The founders and staffs
of these firms have specific banking needs. Harve has the credentials and
enthusiasm to quickly and profitably grow this new division of Cowlitz Bank into
an aggressive lender. While Bay Mortgage's superb return on equity would have
made it accretive at once to Cowlitz Bancorporation earnings, obviously the Bay
Bank start-up will carry some early costs.
"It's notable that several other highly regarded bankers are waiting to
join us in this venture as soon as Bay Bank receives regulatory approval,"
Jarrett added. "Because Bay Bank will operate as a branch of Cowlitz Bank
rather than as a separate subsidiary, we expect approval to come relatively
quickly."
"Bay Bank's strategy, like that of Bay Mortgage, will focus on cross-over
relationships through mid-sized companies," Menkens said. "We're especially
excited about the potential synergy between Bay Bank and the clients of Bay
Mortgage - as well as between Bay Bank and Cowlitz' Business Finance
<PAGE>
Corp. subsidiary. This synergy, coupled with Cowlitz' capital, provides the
resources to be very successful in serving individuals and commercial
businesses. With Cowlitz, we're excited to be part of a growing and vital
company that's moving forward. Charles and his team are great entrepreneurs.
"Bay Bank will provide 'high-touch' personal service to both individuals
and businesses," Menkens added. "Reception to our concept has been extremely
favorable. We have already been approached for loans totaling nearly $4
million, which we regard as an indication of significantly more to come. Our
primary market is independently owned businesses and mid-size companies such as
manufacturers, distributors, wholesalers, contractors and professional service
organizations in the Greater Bellevue and Greater Puget Sound market area.
"Bay Bank also will focus on all aspects of real estate lending;
commercial, individual, residential and construction," Menkens said. "The
individuals we serve also invest in owner-occupied commercial real estate as
well as projects held for investment. Our experience shows that, through
networking and referrals, we can develop strong relationships to build a
dynamic, high-quality clientele.
(more)
CWLZ Starting Up Bay Bank of Bellevue, WA
Page Two
May 17, 1999
"The need for Bay Bank is extremely high," he added. "Many individuals and
businesses want a close, high-service relationship with a bank that puts them
and their net worth first. My primary role as a banker is to help individuals
build their net worth. By constantly nurturing clients, understanding their
business and personal goals, and providing the resources to grow, we can build
client relationships for life. Bay Mortgage's motto is: "CUSTOMER FIRST
LENDING"; Bay Bank will adapt that to: "CUSTOMER FIRST BANKING".
Highly regarded in the Western Washington business banking community,
Menkens (age 40), began his banking career in 1984 as an officer in Wells Fargo
National Bank's commercial banking groups in San Francisco and Newport Beach.
He joined Rainier National Bank as a vice president and Manager-Commercial
Banking Group in 1986.
Menkens left Rainier Bank in 1989 to become a founding member of the senior
management team for Enterprise Bank - a highly successful business bank acquired
by Washington Mutual in 1996. At Enterprise, he was responsible for all
marketing, loan, and deposit activities during the company's growth from one
team with four lenders and four support staff in 1989 to four teams with 23
lenders and 21 support staff eight years later. During that period, Enterprise
total assets grew more than six-fold while total loans increased more than 25
times with minimal non-performers. He continued with Enterprise during its
first year of being assimilated into Washington Mutual, and then joined Bay
Mortgage in 1997.
<PAGE>
"The opportunity that Cowlitz brings to Bay Mortgage and the start-up of
Bay Bank is that we can kick-start this new company to the level Enterprise Bank
enjoyed just before it was sold to Washington Mutual," Menkens added. "This is
very exciting. The atmosphere and culture at Bay Mortgage, and the clientele we
serve, directly resemble that of Enterprise, and they will be part and parcel of
the success of our new venture."
"We are extremely enthused about the Bay Bank opportunity," Jarrett said.
"Our strategy all along has been to grow Cowlitz Bancorp beyond the Southwestern
Washington focus of Cowlitz Bank where we already hold a substantial market
share. We believe both Bay Bank and Bay Mortgage will make significant
contributions."
Bay Mortgage was founded in 1992. The company profitably originated
approximately $237 million in mortgages last year, with a return on average
equity exceeding 25% in 1998. Bay Mortgage specializes in all facets of
residential lending from single family homes to small multi-plexes, including
FHA and VA loans, construction loans and bridge loans. The acquisition of Bay
Mortgage by Cowlitz is expected to close July 1, 1999. Scott Rerucha will
continue as president of Bay Mortgage.
Cowlitz Bancorporation is the holding company for Cowlitz Bank and Business
Finance Corporation. Its Cowlitz Bank subsidiary is the only community bank
headquartered in Cowlitz County - which is 40 miles north of Portland, Oregon.
The bank offers commercial banking services primarily to small and medium-sized
businesses, professionals and retail customers through five branches. Cowlitz'
Business Finance Corporation subsidiary, based in Bellevue, WA, was acquired in
September 1998 and provides asset based financing to companies throughout the
Western US (California, Nevada, Hawaii, Oregon and Washington).
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995: STATEMENTS IN THIS NEWS RELEASE LOOKING FORWARD IN TIME INVOLVE RISKS AND
UNCERTAINTIES, INCLUDING REGULATORY APPROVAL, RETENTION OF KEY PERSONNEL, THE
ABILITY TO PENETRATE AND EXPAND MARKETS, COMPLETION OF THE DUE DILIGENCE
PROCESS, THE ABILITY TO EFFICIENTLY INCORPORATE NEW ACQUISITIONS, THE EFFECT OF
CHANGING ECONOMIC CONDITIONS, CHANGES IN THE REGULATORY ENVIRONMENT, AND OTHER
RISK FACTORS DETAILED IN THE COMPANY'S SECURITIES AND EXCHANGE COMMISSION
FILINGS.
- 0 -
NOTE: Transmitted on PR Newswire at ___ a.m. PDT, May 17, 1999.
