UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 September 30, 2003
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 0-21656
HUMBOLDT BANCORP
| California | 93-1175466 | |
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| (State of Incorporation) | (I.R.S. Employer Identification No.) |
| 2998 Douglas Boulevard, Suite 330 | ||
| Roseville, California | 95661 | |
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| Address of Principal Executive Offices | (Zip Code) |
(916)-677-1133
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 [ ]
Indicate by check mark whether the registrant is an accelerated filer (as defined under Rule 12b-2 of the Exchange Act).
YES [X] NO [ ]
Common stock, no par value: 12,151,739 shares
outstanding as of November 1, 2003
INDEX
PART I Financial Information |
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Item 1. Financial Statements |
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Consolidated Balance Sheets (unaudited) as of September 30, 2003 and
December 31, 2002 |
3 | |||||
Consolidated Statements of Income (unaudited) for the Three Months and
Nine Months Ended September 30, 2003 and 2002 |
4 | |||||
Consolidated Statements of Cash Flows (unaudited) for the Nine Months
Ended September 30, 2003 and 2002 |
5 | |||||
Consolidated Statements of Other Comprehensive Income (unaudited) for
the Three Months and Nine Months Ended September 30, 2003 and 2002 |
6 | |||||
Notes to Unaudited Consolidated Financial Statements |
7 | |||||
Item 2. Management’s Discussion and Analysis of Financial Condition
and Results of Operations |
12 | |||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
28 | |||||
Item 4. Controls and Procedures |
28 | |||||
PART II Other Information |
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Item 1. Legal Proceedings |
29 | |||||
Item 2. Changes in Securities |
29 | |||||
Item 3. Defaults Upon Senior Securities |
29 | |||||
Item 4. Submission of Matters to a Vote of Security Holders |
29 | |||||
Item 5. Other Information |
29 | |||||
Item 6. Exhibits and Reports on Form 8-K |
29 | |||||
Signatures |
30 | |||||
- 2 -
HUMBOLDT BANCORP AND SUBSIDIARIES
Consolidated Balance Sheets (unaudited)
As of September 30, 2003 and December 31, 2002
(in thousands)
| September 30, | December 31, | ||||||||||
| 2003 | 2002 | ||||||||||
ASSETS |
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Cash and due from banks |
$ | 35,949 | $ | 35,156 | |||||||
Federal funds sold and interest bearing deposits with banks |
34,105 | 202 | |||||||||
Investment securities available for sale, at fair value |
151,226 | 181,471 | |||||||||
Loans |
759,790 | 760,648 | |||||||||
Less: allowance for loan losses |
12,047 | 11,614 | |||||||||
Net loans |
747,743 | 749,034 | |||||||||
Premises and equipment, net |
19,937 | 16,593 | |||||||||
Accrued interest receivable and other assets |
49,354 | 49,094 | |||||||||
Total assets |
$ | 1,038,314 | $ | 1,031,550 | |||||||
LIABILITIES |
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Deposits |
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Noninterest-bearing |
$ | 182,296 | $ | 227,406 | |||||||
Interest-bearing |
634,272 | 613,021 | |||||||||
Total deposits |
816,568 | 840,427 | |||||||||
Accrued interest payable and other liabilities |
17,285 | 23,268 | |||||||||
Borrowed funds |
61,942 | 69,857 | |||||||||
Guaranteed Preferred Beneficial Interests in Company’s
Junior Subordinated Debentures (Trust Preferred Securities) |
47,150 | 20,150 | |||||||||
Total liabilities |
942,945 | 953,702 | |||||||||
STOCKHOLDERS’ EQUITY |
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Preferred stock, no par value; 20,000,000 authorized, no shares
issued and outstanding in 2003 and 2002 |
— | — | |||||||||
Common stock, no par value; 100,000,000 shares authorized,
12,135,398 shares in 2003 and 12,604,157 shares in 2002
issued and outstanding |
58,443 | 66,345 | |||||||||
Retained earnings |
34,370 | 8,103 | |||||||||
Accumulated other comprehensive income |
2,556 | 3,400 | |||||||||
Total stockholders’ equity |
95,369 | 77,848 | |||||||||
Total liabilities and stockholders’ equity |
$ | 1,038,314 | $ | 1,031,550 | |||||||
See accompanying notes to the consolidated financial statements
- 3 -
HUMBOLDT BANCORP AND SUBSIDIARIES
Consolidated Statements of Income (unaudited)
(in thousands, except per share data)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||
| 2003 | 2002 | 2003 | 2002 | ||||||||||||||||
Interest Income: |
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Interest and fees on loans |
$ | 13,734 | $ | 13,952 | $ | 40,973 | $ | 40,875 | |||||||||||
Interest and dividends on investment securities |
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Taxable |
1,183 | 2,117 | 4,124 | 5,668 | |||||||||||||||
Exempt from Federal income tax |
357 | 349 | 1,072 | 1,070 | |||||||||||||||
Other interest income |
57 | 4 | 146 | 18 | |||||||||||||||
Total interest income |
15,331 | 16,422 | 46,315 | 47,631 | |||||||||||||||
Interest Expense: |
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Interest on deposits |
2,379 | 3,394 | 7,793 | 10,552 | |||||||||||||||
Interest on borrowed funds and other |
912 | 1,080 | 2,875 | 2,975 | |||||||||||||||
Total interest expense |
3,291 | 4,474 | 10,668 | 13,527 | |||||||||||||||
Net interest income |
12,040 | 11,948 | 35,647 | 34,104 | |||||||||||||||
Provision for loan losses |
295 | 1,103 | 1,198 | 2,191 | |||||||||||||||
Net interest income after provision for loan losses |
11,745 | 10,845 | 34,449 | 31,913 | |||||||||||||||
Non-interest Income: |
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Fees and other income |
1,224 | 5,104 | 7,573 | 16,552 | |||||||||||||||
Service charges on deposit accounts |
1,010 | 653 | 2,421 | 1,823 | |||||||||||||||
Gain on sale of loans |
583 | 583 | 1,785 | 1,732 | |||||||||||||||
(Loss) gain on sale of investment securities |
(137 | ) | 532 | (137 | ) | 828 | |||||||||||||
Gain on sale of merchant processing unit |
— | — | 29,768 | — | |||||||||||||||
Total non-interest income |
2,680 | 6,872 | 41,410 | 20,935 | |||||||||||||||
Non-interest Expense: |
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Salaries and employee benefits |
5,269 | 6,115 | 17,698 | 19,493 | |||||||||||||||
Net occupancy and equipment expense |
1,723 | 1,578 | 4,640 | 4,749 | |||||||||||||||
Other expenses |
3,108 | 5,339 | 9,840 | 15,869 | |||||||||||||||
Total non-interest expense |
10,100 | 13,032 | 32,178 | 40,111 | |||||||||||||||
Income before income taxes |
4,325 | 4,685 | 43,681 | 12,737 | |||||||||||||||
Provision for income taxes |
1,638 | 1,108 | 16,372 | 3,485 | |||||||||||||||
Net income from continuing operations |
2,687 | 3,577 | 27,309 | 9,252 | |||||||||||||||
Discontinued operations: |
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(Loss) on wind-down of discontinued operations,
net of tax |
— | — | — | (276 | ) | ||||||||||||||
Net income |
$ | 2,687 | $ | 3,577 | $ | 27,309 | $ | 8,976 | |||||||||||
Earnings
(loss) per common share - basic: |
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Continuing operations |
$ | 0.22 | $ | 0.29 | $ | 2.22 | $ | 0.74 | |||||||||||
Discontinued operations: |
— | — | — | (0.02 | ) | ||||||||||||||
Net Income |
$ | 0.22 | $ | 0.29 | $ | 2.22 | $ | 0.72 | |||||||||||
Earnings
(loss) per common share - diluted: |
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Continuing operations |
$ | 0.21 | $ | 0.27 | $ | 2.14 | $ | 0.71 | |||||||||||
Discontinued operations: |
— | — | — | (0.02 | ) | ||||||||||||||
Net Income |
$ | 0.21 | $ | 0.27 | $ | 2.14 | $ | 0.69 | |||||||||||
Average common shares outstanding: |
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Basic |
12,118 | 12,543 | 12,293 | 12,476 | |||||||||||||||
Diluted |
12,587 | 13,182 | 12,779 | 13,026 | |||||||||||||||
Cash dividends declared per common share |
$ | 0.030 | $ | 0.025 | $ | 0.085 | $ | 0.046 | |||||||||||
See accompanying notes to the consolidated financial statements
- 4 -
HUMBOLDT BANCORP AND SUBSIDIARIES
Consolidated Statements of Cash Flows (unaudited)
For the nine months ended September 30, 2003 and 2002
(in thousands)
| 2003 | 2002 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
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Net income |
$ | 27,309 | $ | 8,976 | |||||||
Adjustments to reconcile net income
to net cash (used in) provided by operating activities: |
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Wind-down of discontinued operations |
— | 276 | |||||||||
Depreciation and amortization |
3,854 | 4,381 | |||||||||
Provision for loan losses |
1,198 | 2,191 | |||||||||
Net loss (gain) on sale of securities |
137 | (828 | ) | ||||||||
Stock-based compensation, net of tax |
279 | 39 | |||||||||
Net change in other assets |
(1,476 | ) | 3,813 | ||||||||
Net change in other liabilities |
(5,983 | ) | (136 | ) | |||||||
Net gain on sale of business unit |
(29,768 | ) | — | ||||||||
Net gain on sale of loans |
(1,785 | ) | (1,732 | ) | |||||||
Net cash (used in) provided by operating activities |
(6,235 | ) | 16,980 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
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Proceeds from sale/maturities of securities available for sale |
70,553 | 94,214 | |||||||||
Purchases of securities available for sale |
(43,542 | ) | (89,250 | ) | |||||||
Net change in loans |
1,878 | (89,430 | ) | ||||||||
Net change in federal funds sold and interest bearing bank deposits |
(33,903 | ) | 596 | ||||||||
Investing activities related to wind-down of discontinued operations |
— | 3,795 | |||||||||
Proceeds from sale of foreclosed real estate |
— | 698 | |||||||||
Proceeds from disposal of premises and equipment |
— | 846 | |||||||||
Proceeds from sale of business unit |
32,000 | — | |||||||||
Purchases of premises and equipment |
(5,298 | ) | (901 | ) | |||||||
Net cash provided by (used in) investing activities |
21,688 | (79,432 | ) | ||||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
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Net change in deposits |
(23,859 | ) | 6,152 | ||||||||
Net change in borrowed funds |
19,085 | 36,607 | |||||||||
Payment of cash dividends on common stock |
(1,042 | ) | (571 | ) | |||||||
Repurchase of common stock |
(11,037 | ) | (4,200 | ) | |||||||
Proceeds from issuance of stock for exercised options |
2,193 | 1,982 | |||||||||
Net cash provided by (used in) financing activities |
(14,660 | ) | 39,970 | ||||||||
Net change in cash and cash equivalents |
793 | (22,482 | ) | ||||||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD |
35,156 | 54,567 | |||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD |
$ | 35,949 | $ | 32,085 | |||||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: |
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Cash paid during the period for: |
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Interest |
$ | 11,645 | $ | 13,834 | |||||||
Income taxes |
13,050 | 1,500 | |||||||||
Non-cash transactions: |
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Unrealized holding (losses) gains on securities and swaps |
(1,562 | ) | 5,316 | ||||||||
Deferred income taxes on unrealized holding (losses)
gains on securities and swaps |
(718 | ) | 1,595 | ||||||||
Loans transferred to foreclosed property |
— | 620 | |||||||||
See accompanying notes to the consolidated financial statements
- 5 -
HUMBOLDT BANCORP AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (unaudited)
(in thousands)
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||
| 2003 | 2002 | 2003 | 2002 | ||||||||||||||||
Net income |
$ | 2,687 | $ | 3,577 | $ | 27,309 | $ | 8,976 | |||||||||||
Other comprehensive income: |
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