Business Bancorp Announces Record Earnings and Growth in the Second Quarter.Business Editors SAN BERNARDINO San Bernardino, city, United States San Bernardino (săn bûr'nədē`nō), city (1990 pop. 164,164), seat of San Bernardino co., S Calif., at the foot of the San Bernardino Mts.; inc. 1854. , Calif.--(BUSINESS WIRE)--July 19, 2000 Business Bancorp (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). BB:BZBC), the parent company of Business Bank of California The Bank of California was founded in San Francisco, California on July 5, 1864 by William Chapman Ralston. It was the first commercial bank in the Western United States, the second-richest bank in the nation, and considered instrumental in developing the American Old West. (www.businessbank.com), Wednesday reported net income of $551 thousand or $0.27 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. common share, compared with net income of $471 thousand, or $0.24 per diluted share for the second quarter ended June 30, 1999. Cash earnings of $601 thousand, which exclude the after tax impact of amortization of goodwill and identifiable intangibles, increased to $0.30 per diluted share for second quarter 2000 compared with $0.26 per diluted share for second quarter 1999. For the six months ended June 30, 2000, Business Bancorp reported net earnings of $1.1 million or $0.53 per diluted share compared with net earnings of $926 thousand or $0.46 per share, for the six months ended June 30, 1999. Cash earnings of $1.2 million, or $0.58 per diluted share for the six months ended June 30, 2000, compared with $0.52 per diluted share, for the six months ended June 30, 1999. "We are extremely pleased that we have been able to maintain record performance, given the cost to carry the $10 million trust preferred securities issued in March of this year, which will be used to consummate To carry into completion; to fulfill; to accomplish. A Common-Law Marriage is consummated when the parties live in a manner intended to bring about public recognition of their relationship as Husband and Wife. the acquisition of Valley Merchants Bank," said Alan J. Lane, President and Chief Executive Officer of Business Bancorp. On April 5, 2000, Business Bancorp announced a definitive agreement to merge with Valley Merchants Bank, N.A. of Hemet, Calif. Business Bank of California has received all regulatory approvals and is awaiting the approval of Valley Merchants shareholders. Business Bancorp will account for the acquisition under the purchase method of accounting; therefore, the results of operations will be included in the consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge from the date of acquisition, which is expected to occur Sept. 1, 2000. Financial Highlights Net interest income was $3.3 million for the quarter ended June 30, 2000, compared with $2.6 million for the same quarter last year. An increase of 34 percent in interest-earning assets to $223.1 million contributed to the growth in net interest income. Total assets increased 29% to a record high of $255.4 million, compared with total footings of $197.3 million one year earlier. Loan and deposit growth reported for the period strongly supports the institution's favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. performance trend. Loans increased to $134.3 million, reflecting an increase of 29% over the total reported as of June 30, 1999. Total deposits as of June 30, 2000 stood at $192.6 million. This represents an increase of 8% over deposits of $177.7 million reported at the end of the second quarter of 1999. Asset Quality The allowance for loan losses was $1.2 million for the period ended June 30, 2000, compared with $1.4 million at June 30, 1999. The June 30, 2000 allowance for loan losses as a percent of total non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. was 167%, compared with 50% at June 30, 1999. Non-performing loans as a percent of gross loans was 0.55% at June 30, 2000, compared with 2.59% for the year earlier period. The reduction in non-performing loans is the result of management's continuing dedication to improving balance sheet performance. Business Bancorp reports a Tier 1 capital Tier 1 Capital A term used to describe the capital adequacy of a bank. Tier I capital is core capital, this includes equity capital and disclosed reserves. Notes: Equity capital includes instruments that can't be redeemed at the option of the holder. ratio of 10.33% as of June 30, 2000. This is due, in part, to a strategic decision to issue $10 million of Fixed Rate Capital Trust Pass - through Securities to support expansion plans and add franchise value to the organization without diluting shareholder equity. It also helps to ensure that the organization will retain its "well capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. " designation under banking regulations. Business Bancorp is a bank holding company that owns 100% of the capital stock of Business Bank of California (the "Bank"), the company's principal operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. . The Bank is a California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). state chartered commercial bank whose primary business includes retail banking, commercial, construction, and SBA SBA abbr. Small Business Administration Noun 1. SBA - an independent agency of the United States government that protects the interests of small businesses and ensures that they receive a fair share of government lending activities. Business Bank of California has served the Inland Empire In·land Empire A region of the northwest United States between the Cascade Range and the Rocky Mountains, comprising eastern Washington, eastern Oregon, northern Idaho, and western Montana. Farming, lumbering, and mining are important to the area. since 1984. In addition to the proposed acquisition in Hemet, the Bank operates seven other branches in the cities of San Bernardino, Corona Corona, city, United States Corona (kərō`nə), city (1990 pop. 76,095), Riverside co., S Calif.; inc. 1896. The city developed as a primary citrus fruit producer and shipping center. There is also light manufacturing. , Ontario, Redlands, Hesperia and Phelan. The Bank is strongly focused on providing high quality, personalized per·son·al·ize tr.v. per·son·al·ized, per·son·al·iz·ing, per·son·al·iz·es 1. To take (a general remark or characterization) in a personal manner. 2. To attribute human or personal qualities to; personify. services to small businesses, professionals and consumers. Information regarding Business Bancorp stock can be obtained on the OTC bulletin board OTC Bulletin Board An electronic quotation listing of the bid and asked prices of OTC stocks that do not meet the requirements to be listed on the NASDAQ stock-listing system. utilizing the symbol (BZBC). Forward-Looking Comments The statements contained in this release that are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. based on management's current expectations and beliefs concerning future developments and their potential effects on the company. There can be no assurance that future developments affecting the company will be those anticipated by management. Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties. For information on the company or to obtain the company's quarterly financial supplement, e-mail your request to Jeff@businessbank.com or call Jeffrey L. Blake, Senior Vice President - Finance at 909/381-7133. Include your phone, facsimile and mailing address.
BUSINESS BANCORP
STATEMENT OF FINANCIAL CONDITION
(UNAUDITED)
June 30, 2000 June 30, 1999
Total Assets $255,443,000 $197,311,000
Total Deposits $192,554,000 $177,728,000
Total Loans $134,251,000 $104,118,000
Total Capital $ 19,987,000 $ 17,966,000
Loan Loss Reserve $ 1,234,000 $ 1,354,000
Non Performing Loans $ 209,000 $ 1,703,000
Other Real Estate Owned $ 528,000 $ 992,000
Total Non Performing Assets $ 737,000 $ 2,695,000
Non Perf Assets / Total Assets 0.29% 1.37%
Tier 1 Leverage Ratio (est.) 10.33% 8.57%
STATEMENT OF EARNINGS
(UNAUDITED)
For the Three Months Ended For the Six Months Ended
June 30, June 30, June 30, June 30,
2000 1999 (B) 2000 1999 (B)
Net Income $ 551,000 $ 471,000 $1,078,000 $ 926,000
Cash Earnings(A) $ 601,000 $ 524,000 $1,176,000 $1,030,000
Earnings Per Share:
Basic $ 0.28 $ 0.24 $ 0.55 $ 0.47
Diluted $ 0.27 $ 0.24 $ 0.53 $ 0.46
Cash Earnings(A) Per Share:
Basic $ 0.30 $ 0.27 $ 0.59 $ 0.53
Diluted $ 0.30 $ 0.26 $ 0.58 $ 0.52
YTD Shares Outstanding:
Basic 1,977,274 1,952,243 1,977,274 1,952,243
Diluted 2,019,302 1,993,738 2,019,302 1,993,738
(A) Net income before amortization of goodwill and identifiable
intangibles, net of taxes.
(B) Business Bank of California Only
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