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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(MARK ONE)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1999
Commission File Number 000-21267
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SUMMIT BANK CORPORATION
GEORGIA 58-1722476
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
4360 CHAMBLEE DUNWOODY ROAD, ATLANTA, GEORGIA 30341
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (770) 454-0400
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
None
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SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock par value $.01
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(Title of class)
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] or No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
As of March 15, 2000, the aggregate market value of the Common Stock held
by persons other than directors and executive officers of the registrant was
$12,112,355 as determined by the most recent trades of registrant's Common Stock
known to the registrant. The exclusion of all directors and executive officers
of the registrant for purposes of this calculation should not be construed as a
determination that any particular director or executive officer is an affiliate
of the registrant.
As of March 15, 2000, there were 1,655,263 shares of the Registrant's
common stock outstanding.
Documents Incorporated by Reference
Part III information is incorporated herein by reference, pursuant to
Instruction G to Form 10-K, from Summit's Proxy Statement for its 2000 Annual
Shareholders' Meeting. Certain Part II information required by Form 10-K is
incorporated by reference from the Summit Bank Corporation Annual Report to
Shareholders as indicated below, which is included as an exhibit hereto.
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SUMMIT BANK CORPORATION
FORM 10-K CROSS-REFERENCE INDEX
PAGE
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FORM ANNUAL PROXY
10-K REPORT STATEMENT
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PART 1.
ITEM 1. Business 3-14
(a) Overview 3-4
(b) Banking Services 4-5
(c) Locations and Service Areas 5
(d) Asian-and Latin-American Markets 5
(e) International Services Market 6
(f) New Company Subsidiary 6
(g) Supervision and Regulation 6-13
(h) Competition 13
(i) Fiscal and Monetary Policy 13
(j) Employees 13-14
ITEM 2. Properties 14-15
ITEM 3. Legal Proceedings 15
ITEM 4. Submission of Matters to a Vote of
Security Holders 15
PART II.
ITEM 5. Market for Registrant's Common Equity
and Related Stockholder Matters 16
ITEM 6. Selected Financial Data 17
ITEM 7. Management's Discussion and Analysis
of Financial Condition and Results
of
Operations 9-19
ITEM 8. Financial Statements and Supplementary
Data 20-35
ITEM 9. Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure 18
PART III.
ITEM 10. Directors and Executive Officers of the
Registrant 2-6
ITEM 11. Executive
Compensation 8-11
ITEM 12. Security Ownership of Certain
Beneficial Owners and Management 7,13-14
ITEM 13. Certain Relationships and Related
Transactions 6
PART IV.
ITEM 14. Exhibits, Financial Statement
Schedules, and Reports on Form 8-K 20-21
SIGNATURES 22-23
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CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS
Various matters discussed in this Annual Report on Form 10-K may constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act. Forward-looking statements may involve known and unknown
risks, uncertainties, and other factors which may cause the actual results,
performance or achievements of Summit Bank Corporation ("Summit" or the
"Company") to be materially different from the results described in such
forward-looking statements.
Actual results may differ materially from the results anticipated in
forward-looking statements in our 10-K due to a variety of factors including,
without limitation:
- The effects of future economic conditions;
- Government monetary and fiscal policies;
- Legislative and regulatory changes;
- The effects of changes in interest rates on the level and
composition of deposits, loan demand, the value of loan
collateral, and interest rate risks; and
- The effects of competition from commercial banks, thrifts,
consumer finance companies, and other financial institutions
operating in our market area and elsewhere.
All forward-looking statements attributable to the Company are expressly
qualified in their entirety by this cautionary notice. The Company disclaims any
intent or obligation to update these forward-looking statements, whether as a
result of new information, future events or otherwise.
PART 1.
ITEM 1. BUSINESS
OVERVIEW
Summit was organized as a Georgia corporation on October 15, 1986, primarily to
become a bank holding company by acquiring all of the common stock of The Summit
National Bank (the "Bank") upon its formation. The Bank commenced business on
March 10, 1988, and the Company's primary activity since then has been the
ownership and operation of the Bank.
The Bank is a banking association organized under the laws of the United States.
The Bank engages in commercial banking from its main office and five branch
offices, four of which are located in its primary service area of northern
metropolitan Atlanta, Georgia. The fifth branch office was added on June 30,
1998 with the Bank's acquisition of California Security Bank ("CSB") in San
Jose, California. This office is in an ethnic community of San Jose that is very
similar to part of the Bank's primary service area in Atlanta. The Bank seeks to
serve four principal markets:
- individuals, professionals, and small to medium-sized
businesses in the Bank's primary service areas;
- ethnic communities, principally Asian-Americans and Latin
Americans, located in the primary service areas, including
businesses operated by members of such communities;
- individuals, professionals, and businesses in the primary
service areas requiring the international financial
transaction services offered by the Bank; and
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- foreign corporations and individuals requiring specialized
banking services (international private banking) in the
Atlanta and San Jose metropolitan areas.
Management believes that the identified markets continue to provide significant
growth opportunities for the Bank. The Bank offers these markets a variety of
traditional and specialized banking services, and emphasizes personal service,
cultural sensitivity and accessibility of management.
BANKING SERVICES
The Bank offers the full range of deposit services typically offered by most
banks and other financial institutions, including checking accounts, NOW
accounts, savings accounts and other time deposits of various types, ranging
from daily money market accounts to longer-term certificates of deposits.
However, the Bank tailors its transaction accounts and time certificates to the
principal market areas at rates competitive to those offered in the area. In
addition, retirement accounts such as Individual Retirement Accounts ("IRAs")
are available. The Bank solicits these accounts from individuals, businesses,
associations, and government entities. All deposit accounts are insured by the
Federal Deposit Insurance Corporation (the "FDIC") up to the maximum amount
(generally $100,000 per depositor).
There are certain risks in making loans. A principal economic risk in making
loans is the creditworthiness of the borrower. Other lending risks include the
period of time over which loans may be repaid, changes in economic and industry
conditions and in the circumstances of individual borrowers, and uncertainties
about the future value of any collateral. The Bank's management maintains an
allowance for loan losses based on, among other things, an evaluation of
economic conditions and other lending risks, and its regular reviews of
delinquencies and loan portfolio quality. The Bank's allowance for loan losses
is based upon a percentage of the total outstanding loan portfolio and upon a
percentage of the balance of specific loans when their ultimate collectibility
is considered questionable.
The Bank offers a full range of short to medium-term commercial and personal
loans. Commercial loans include both secured and unsecured loans for working
capital (including inventory and receivables), business expansion (including
acquisition of real estate and improvements), and purchase of equipment and
machinery. The Bank offers government guaranteed loans under the Small Business
Administration ("SBA") loan program. After originating a guaranteed loan, the
Bank may sell the guaranteed portion (approximately 75%) resulting in a gain on
the sale of the portion of the loan sold. In addition, the Bank retains the
servicing rights to these loans, which generate servicing income on the portion
sold. Personal (or consumer) loans include secured and unsecured loans for
financing automobiles, home improvements, education, and personal investments.
The Bank also offers residential mortgages, through a brokering arrangement with
Century Mortgage Corporation.
In addition to deposit and loan services, the Bank's other domestic services
include 24-hour multi-lingual telephone banking, cash management services,
investment sweep accounts, safe deposit boxes, travelers checks, direct deposit
of payroll and social security checks, as well as automatic drafts for various
accounts. The Bank is a member of the STAR and CIRRUS ATM networks. These ATM
networks may be used by Bank customers in major cities throughout Georgia and
California, and in various other cities in the United States and worldwide. The
ATM located at the Asian Banking Center branch location also offers
multi-lingual screens for Asian patrons. The Bank also offers both VISA and
MasterCard credit cards to its customers through a third party vendor.
The Bank's international banking services include inbound and outbound
international funds transfers, foreign collections, and import and export
letters of credit. The Bank also issues bankers acceptances. The Bank issues
drafts or bills of exchange facilitate international trade and are available
only after it completes a diligent credit review process. In addition, the Bank
offers private banking services to qualified foreign individuals and
corporations establishing business operations in Atlanta. These specialized
private banking services include bill paying, statement and mail holding,
currency exchange, international funds transfers and personal lines of credit
(including credit card services).
In addition, the Bank's private banking group assists executives living in the
United States with personal banking services that support international business
objectives. These services include introductions to
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correspondent financial services as well as to the Company's general business
contacts in international trade markets. The Bank's customers also may to invest
in equity stocks and mutual funds through an arrangement with a third party
brokerage firm, giving customers more flexibility in their investment options.
The Bank does not offer personal or corporate trust services (other than
retirement custodial services for IRAs and similar plans).
LOCATIONS AND SERVICE AREAS
The Bank leases its main office at 4360 Chamblee Dunwoody Road, Atlanta, Georgia
30341. The main office is in a five-story office building near the intersection
of Interstate 285 and Chamblee Dunwoody Road, in DeKalb County. The Bank has a
6,000 square foot branch facility in its 18,000 square foot office building at
3490 Shallowford Road, Chamblee, DeKalb County, Georgia. The Bank also leases a
branch facility at One Paces West, Suite 150, 2727 Paces Ferry Road in Vinings.
The Bank owns a 4,560 square foot building on approximately 1.2 acres located at
595 Franklin Road, Marietta, Georgia which serves as its third branch office. In
February 2000, management decided to close this office and consolidate the East
Marietta customers with the Vinings location. The Bank plans to close the East
Marietta branch in June 2000. Until February 2000, the Bank owned a 7,700 square
foot building on approximately 1.3 acres at 3280 Holcomb Bridge Road, Norcross,
Georgia that serves as its fourth branch office. The Bank sold this building to
a third party. The Bank plans to leaseback approximately 2,500 square feet to
continue its Peachtree Corners branch operations upon completion of renovations
currently underway. In 1998, the Bank assumed a lease for the office acquired
through the purchase of CSB. This facility has 8,142 square feet at 1694 Tully
Road, San Jose, California and is the Bank's fifth branch location.
One of the Bank's two primary service areas covers a section of North Atlanta,
Georgia including portions of DeKalb, Fulton, Cobb, and Gwinnett Counties. This
area includes the city of Chamblee, portions of the cities of Doraville and
Norcross, the DeKalb-Peachtree Airport area, the Northlake and Perimeter Malls
in DeKalb County, Cumberland and Town Center Malls in Cobb County and the
Perimeter Business Park and the Peachtree Corners area including Technology
Park. This area is crossed by major thoroughfares such as Interstate 285 to the
North, Buford Highway and Peachtree Industrial Boulevard in the South, Clairmont
and Shallowford Roads in the East, and Interstate 75 in the West. The Bank's
second primary service area covers the city of San Jose, California. San Jose is
located in the south San Francisco bay area and is crossed by the major
thoroughfares of Highway 101 and Interstates 880, 680, and 280.
ASIAN- AND LATIN-AMERICAN MARKETS
One of the Bank's principal target markets is the Atlanta Asian-American
population, including members of the Korean, Chinese, Japanese, Indian, and
Southeast Asian communities. The 1990 United States census indicates that the
Atlanta Asian-American population exceeds 75,000 people, with the majority of
this population located in north Atlanta, including parts of DeKalb, Fulton, and
Cobb counties. The San Jose market consists largely of Vietnamese-American and
Latin-American individuals and businesses.
Management believes that the locations of the Bank's main office and Atlanta
branch offices are convenient to a large number of both Asian- and
Latin-Americans. The population of Latin-Americans in Atlanta has been growing
rapidly during the past few years and is also one of the Bank's target markets.
At year-end 1999, approximately 50% of the Bank's Atlanta customers were
Asian-American. Vietnamese and Latin-American individuals comprise the majority
of the Bank's San Jose branch customer base.
Management believes that the Asian-American community has a high savings rate,
low unemployment, and a commitment to economic advancement through education and
hard work. In addition, a significant percentage of Asian-Americans in the
Bank's market are first generation U.S. immigrants who may be constrained in
their current use of banking services at other financial institutions by
language and other cultural barriers.
The Bank has employed, and will continue to employ, personnel with Asian and
Spanish language skills and first-hand knowledge of the communities to be
served. Management believes that language ability and
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cultural sensitivity, combined with accessibility to senior management, enhances
the Bank's competitive position in its market.
INTERNATIONAL SERVICES MARKET
Management believes that a growing number of domestic businesses in the
metropolitan areas served by the Bank (and, in particular, a growing number of
small- to medium-sized businesses) require its international banking services.
While a number of financial institutions operating in the Bank's markets offer
such services, they are typically offered from international banking departments
located in downtown office facilities or from an out-of-state location;
personnel in branch facilities closer to smaller businesses generally are not
trained to address these specialized needs. Management believes that the Bank
has penetrated, and will be able to further penetrate, this market by providing
businesses with convenient access to personnel specially trained to provide
international services.
The Bank does not engage in offshore buyer financing or cross border lending.
Occasionally, the Bank discounts short-term letters of credit drafts for
selected correspondent banks under approved facilities. Management believes that
the commercial and political risks of these activities are acceptable based on
our assessment of available information on the correspondent banks and the
respective countries. As of December 31, 1999, there were no amounts outstanding
under such facilities.
In addition to domestic businesses requiring international banking services,
management believes that a growing number of foreign businesses in Atlanta and
San Jose, along with their executives and employees, frequently require the
international banking services provided by the Bank. Foreign nationals doing
business in the United States are often unfamiliar with our banking practices.
The Bank has personnel with the language and cultural skills suited to serve
this clientele. Management further believes the international banking experience
of management of the Bank, along with the contacts of the directors of the
Company and the Bank in the international and domestic business communities,
enhances the Bank's ability to compete in this target market.
NEW COMPANY SUBSIDIARY
In September 1999, the Company formed a subsidiary, CashMart, Inc., of which it
owns 80% of the outstanding common stock. The Federal Reserve Bank approved the
Company's notice of its intent to engage in check cashing services and the sale
of money orders and prepaid telephone cards prior to commencement of these
operations. The subsidiary plans to provide payroll check-cashing services and
the sale of money orders and prepaid telephone cards to individuals in Atlanta
who may not have the credit quality needed for accounts at financial
institutions. The primary types of checks cashed are payroll checks, and the
primary source of income for the business is a fee deducted from each check
processed. The subsidiary began business operations in March 2000. CashMart,
Inc. currently operates at one location, and has plans for a second location in
the Atlanta metro area in second quarter 2000.
SUPERVISION AND REGULATION
The following discussion sets forth the material elements of the regulatory
framework applicable to banks and bank holding companies and provides certain
specific information about the Company.
THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM
The Company is a bank holding company registered with the Board of Governors of
the Federal Reserve System (the "Federal Reserve") under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"). As such, the Company is subject
to the supervision, examination, and reporting requirements of the BHC Act and
the regulations of the Federal Reserve.
The BHC Act requires every bank holding company to obtain the prior approval of
the Federal Reserve before:
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- it may acquire direct or indirect ownership or control of any
voting shares of any bank if, after such acquisition, the bank
holding company will directly or indirectly own or control
more than 5% of the voting shares of the bank;
- it or any of its subsidiaries, other than a bank, may acquire
all or substantially all of the assets of any bank; or
- it may merge or consolidate with any other bank holding
company.
The BHC Act further provides that the Federal Reserve may not approve any
transaction that:
- would result in a monopoly, or
- would be in furtherance of any combination or conspiracy to
monopolize or attempt to monopolize the business of banking in
any section of the United States, or
- the effect of which may be substantially to lessen competition
or tend to create a monopoly in any section of the country, or
- that in any other manner would be in restraint of trade,
unless the anticompetitive effects of the proposed transaction are clearly
outweighed by the public interest in meeting the convenience and needs of the
community to be served. The Federal Reserve is also required to consider the
financial and managerial resources and future prospects of the bank holding
companies and banks concerned and the convenience and needs of the community to
be served. Consideration of financial resources generally focuses on capital
adequacy, which is discussed below.
Under the BHC Act, the Company may acquire a bank in another state, and any bank
holding company located outside Georgia may acquire a Georgia-based bank,
regardless of state law to the contrary, but subject to certain
deposit-percentage, aging, and other restrictions. Also, as of June 1, 1997,
national and state-chartered banks may branch interstate through acquisitions of
banks in other states. By adopting legislation prior to that date, a state had
the ability either to "opt in" and accelerate the date after which interstate
branching is permissible or "opt out" and prohibit interstate branching
altogether.
PERMITTED ACTIVITIES
Until recently, the BHC Act generally prohibited the Company from engaging in
activities other than banking or managing or controlling banks or other
permissible subsidiaries and from acquiring or retaining direct or indirect
control of any company engaged in any activities other than those activities
determined by the Federal Reserve to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto. In determining
whether a particular activity was permissible, the Federal Reserve considered
whether the performance of such an activity reasonably could be expected to
produce benefits to the public, that outweigh possible adverse effects. The
Federal Reserve has determined that the following are among activities
permissible for BHC's:
- factoring accounts receivable,
- acquiring or servicing loans,
- leasing personal property,
- conducting discount securities brokerage activities,
- performing certain data processing services,
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- acting as agent or broker in selling credit life insurance and
certain other types of insurance in connection with credit
transactions, and
- performing certain insurance underwriting activities.
Despite prior approval, the Federal Reserve has the power to order a holding
company or its subsidiaries to terminate any activity or to terminate its
ownership or control of any subsidiary when it has reasonable cause to believe
that continuation of such activity or such ownership or control constitutes a
serious risk to the financial safety, soundness, or stability of any bank
subsidiary of that bank holding company.
NEW LEGISLATION
On November 12, 1999, President Clinton signed the Gramm-Leach-Bliley Act, which
amends the BHC Act and greatly expands the activities in which bank holding
companies and affiliates of banks are permitted to engage. The Act eliminates
many federal and state law barriers to affiliations among banks and securities
firms, insurance companies, and other financial service providers. The
provisions of the Act relating to permitted activities of bank holding companies
and affiliates of banks became effective on March 11, 2000. The following
discussion describes the activities in which the Company will be permitted to
engage under the BHC Act, as amended by the Gramm-Leach-Bliley Act.
Generally, if the Company qualifies and elects to become a financial holding
company, which is described below, it may engage in activities that are:
- Financial in nature;
- Incidental to a financial activity; or
- Complementary to a financial activity and do not pose a
substantial risk to the safety or soundness of depository
institutions or the financial system generally.
In determining whether a particular activity is financial in nature or
incidental or complementary to a financial activity, the Federal Reserve must
consider (1) the purpose of the BHC and Gramm-Leach-Bliley Act, (2) changes or
reasonable expected changes in the marketplace in which financial holding
companies compete and in the technology for delivering financial services, and
(3) whether the activity is necessary or appropriate to allow financial holding
companies to effectively compete with other financial service providers and to
efficiently deliver information and services. The Act expressly lists the
following activities as financial in nature:
- Lending, trust and other banking activities;
- Insuring, guaranteeing, or indemnifying against loss or harm,
or providing and issuing annuities, and acting as principal,
agent, or broker for these purposes, in any state;
- Providing financial, investment, or advisory services;
- Issuing or selling instruments representing interests in pools
of assets permissible for a bank to hold directly;
- Underwriting, dealing in or making a market in securities;
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- Other activities that the Federal Reserve may determine to be
so closely related to banking or managing or controlling banks
as to be a proper incident to managing or controlling banks;
- Foreign activities permitted outside of the United States if
the Federal Reserve has determined them to be usual in
connection with banking operations abroad;
- Merchant banking through securities or insurance affiliates;
and
- Insurance company portfolio investments.
To qualify to become a financial holding company, any depository institution
subsidiaries of the Company must be well capitalized and will managed and must
have a Community Reinvestment Act rating of at least "satisfactory."
Additionally, we must file an election with the Federal Reserve to become a
financial holding company and provide the Federal Reserve with 30 days written
notice prior to engaging in a permitted financial activity. Although we do not
have any immediate plans to file an election with the Federal Reserve to become
a financial holding company, if deemed appropriate in the future, we may elect
to become a financial holding company.
The Act also contains provisions that directly impact the following activities
and operations of the Bank:
- Its insurance activities,
- The activities of and qualifications for any Bank financial
subsidiaries, and
- Its privacy policies and practices concerning disclosure of
consumer information.
OTHER BANKING REGULATORS
The Bank is a member of the Federal Deposit Insurance Corporation (the "FDIC"),
and as such, its deposits are insured by the FDIC to the maximum extent provided
by law. The Bank is also subject to numerous state and federal statutes and
regulations that affect its business, activities, and operations.
The Office of the Comptroller of the Currency (the "OCC") regularly examines the
Bank's operations and has authority to approve or disapprove any bank mergers,
consolidations, establishment of branches, and similar corporate actions. The
OCC also may prohibit unsafe or unsound banking practices or other violations of
law.
PAYMENT OF DIVIDENDS
The Company is a legal entity separate and distinct from its banking subsidiary.
The Company's principal sources of cash flow, including cash flow to pay
dividends to its shareholders, are dividends by the Bank. There are statutory
and regulatory limitations on the payment of dividends by the Bank to the
Company, as well as the payment of dividends by the Company to its shareholders.
If, in the opinion of the federal banking regulator, a depository institution
under its jurisdiction is engaged in or is about to engage in an unsafe or
unsound practice (which, depending on the financial condition of the depository
institution, could include the payment of dividends), such authority may
require, after notice and hearing, that such institution cease and desist from
such practice. The federal banking agencies have indicated that paying dividends
that deplete a depository institution's capital base to an inadequate level is
an unsafe and unsound banking practice. Under the Federal Deposit Insurance
Corporation Improvement Act
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of 1991 ("FDICIA"), a depository institution may not pay dividends if payment
would cause it to become undercapitalized or if it already is undercapitalized.
See "-- Prompt Corrective Action." Moreover, the federal agencies have policies
that provide that bank holding companies and insured banks should generally pay
dividends out of current operating earnings.
At December 31, 1999, under federal and state dividend rules, the Bank, without
obtaining regulatory approvals, could declare aggregate dividends to the Company
of up to approximately $4 million, plus net income of the Bank in 2000.
Dividend payments by the Company and the Bank may also be affected or limited by
other factors, such as the regulatory requirements to maintain adequate capital.
CAPITAL ADEQUACY
The Company and the Bank are required to comply with the capital adequacy
standards established by the Federal Reserve and by the appropriate federal
banking regulator in the case of the Bank. The Federal Reserve has two basic
measures of capital adequacy for bank holding companies: a risk-based measure
and a leverage measure.
The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profile among banks and bank
holding companies, to account for off-balance-sheet exposure, and to minimize
disincentives for holding liquid assets. Assets and off-balance-sheet items are
assigned to broad risk categories, each with appropriate weights. The resulting
capital ratios represent capital as a percentage of total risk-weighted assets
and off-balance-sheet items.
The minimum guideline for the ratio (the "Total Risk-Based Capital Ratio") of
total capital ("Total Capital") to risk-weighted assets (including certain
off-balance-sheet items, such as standby letters of credit) is 8%. At least half
of Total Capital must comprise common stock, minority interests in the equity
accounts of consolidated subsidiaries, noncumulative perpetual preferred stock,
and a limited amount of cumulative perpetual preferred stock, less goodwill and
certain other intangible assets ("Tier 1 Capital"). The remainder may consist of
subordinated debt, other preferred stock, and a limited amount of loan loss
reserves ("Tier 2 Capital"). At December 31, 1999, the Company's consolidated
Total Risk-Based Capital Ratio and its Tier 1 Risk-Based Capital Ratio (i.e.,
the ratio of Tier 1 Capital to risk-weighted assets) were 13.3% and 12.0%,
respectively.
In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio (the "Leverage Ratio") of Tier 1 Capital to average assets, less goodwill
and certain other intangible assets, of 3% for bank holding companies that meet
certain specified criteria, including having the highest regulatory rating. All
other bank holding companies generally are required to maintain a Leverage Ratio
of at least 3%, plus an additional cushion of 100 to 200 basis points. The
Company's Leverage Ratio at December 31, 1999 was 8.1%. The guidelines also
provide that bank holding companies experiencing internal growth or making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum supervisory levels without significant reliance on intangible
assets. Furthermore, the Federal Reserve has indicated that it will consider a
"tangible Tier 1 Capital Leverage Ratio" (deducting all intangibles) and other
indicia of capital strength in evaluating proposals for expansion or new
activities.
The Bank is subject to the risk-based and leverage capital requirements of the
OCC, which are substantially similar to those of the Federal Reserve for bank
holding companies.
The Bank exceeded applicable minimum capital requirements as of December 31,
1999. No federal banking agency has imposed any additional capital requirements
on the Company or the Bank. Failure to meet
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regulatory capital guidelines could subject a bank to a variety of enforcement
remedies, including issuance of a capital directive, the termination of deposit
insurance by the FDIC, a prohibition on the taking of brokered deposits, and
certain other restrictions on its business. As described below, substantial
additional restrictions can be imposed upon FDIC-insured depository institutions
that fail to meet applicable capital requirements. See "-- Prompt Corrective
Action."
In addition, Federal Reserve and FDIC regulations, which became mandatory on
January 1, 1998, require bank regulators to consider interest rate risk (when
the interest rate sensitivity of an institution's assets does not match the
sensitivity of its liabilities or its off-balance-sheet position) in the
evaluation of a bank's capital adequacy. The bank regulatory agencies'
methodology for evaluating interest rate risk requires banks with excessive
interest rate risk exposure to hold additional amounts of capital against such
exposures. The interest rate risk rules apply to any bank or bank holding
company whose trading activity equals 10% or more of its total assets, or whose
trading activity equals $1 billion or more.
SUPPORT OF THE BANK
Under Federal Reserve policy, the Company is expected to be a source of
financial strength for, and to commit resources to support the Bank. In
addition, any capital loans by a bank holding company to its banking subsidiary
are subordinate in right of payment to deposits and to certain other
indebtedness of the Bank. In the event of a bank holding company's bankruptcy,
any commitment by the bank holding company to a federal bank regulatory agency
to maintain the capital of a banking subsidiary will be assumed by the
bankruptcy trustee and entitled to a priority of payment.
Under the Federal Deposit Insurance Act ("FDIA"), a depository institution
insured by the FDIC may be liable for any loss incurred by, or reasonably
expected to be incurred by, the FDIC after August 9, 1989, in connection with:
- the default of a commonly controlled FDIC-insured depository
institution, or
- any assistance provided by the FDIC to any commonly controlled
FDIC-insured depository institution "in danger of default."
"Default" is defined generally as the appointment of a conservator or receiver,
and "in danger of default" is defined generally as the existence of certain
conditions indicating that a default is likely to occur in the absence of
regulatory assistance. The FDIC's claim for damages is superior to claims of
shareholders of the insured depository institution or its holding company, but
is subordinate to claims of depositors, secured creditors, and holders of
subordinated debt (other than affiliates) of the commonly controlled insured
depository institution. The subsidiary depository institution of the Company is
subject to these cross-guarantee provisions. As a result, any loss suffered by
the FDIC in respect of the subsidiary would likely result in assertion of the
cross-guarantee provisions, the assessment of such estimated losses against the
depository institution's banking affiliates, and a potential loss of the
Company's investment in such other subsidiary depository institutions.
PROMPT CORRECTIVE ACTION
FDICIA establishes a system of prompt corrective action to resolve the problems
of undercapitalized institutions. The Act, which was effective in December 1992,
requires the federal banking regulators to establish five capital categories
(well capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized, and critically undercapitalized) and to take certain mandatory
supervisory actions, and to consider other discretionary actions, with respect
to institutions in the three undercapitalized categories. The severity of the
regulatory actions depends upon the capital category in which the institution is
placed. Generally, subject to a narrow exception, FDICIA requires a banking
regulator to appoint a receiver or conservator for an institution that is
critically undercapitalized. The federal banking agencies have specified by
regulation the relevant capital level for each category.
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The capital levels established for each of the categories are as follows:
================================================================================================================
Total Tier 1 Risk-
Capital Category Tier 1 Capital Risk-Based Capital Based Capital Other
================================================================================================================
Well 5% or more 10% or more 6% or more Not subject to
Capitalized a capital
directive
- ----------------------------------------------------------------------------------------------------------------
Adequately 4% or more 8% or more 4% or more --
Capitalized
- ----------------------------------------------------------------------------------------------------------------
Undercapitalized less than 4% Less than 8% less than 4% --
- ----------------------------------------------------------------------------------------------------------------
Significantly less than 3% Less than 6% less than 3% --
Undercapitalized
- ----------------------------------------------------------------------------------------------------------------
Critically 2% or less -- -- --
Undercapitalized tangible equity
================================================================================================================
For purposes of the regulation, the term "tangible equity" includes core capital
elements counted as Tier 1 Capital for purposes of the risk-based capital
standards, plus the amount of outstanding cumulative perpetual preferred stock
(including related surplus), minus all intangible assets with certain
exceptions. A depository institution may be deemed to be in a capitalization
category that is lower than is indicated by its actual capital position if it
receives an unsatisfactory examination rating.
An institution that is categorized as undercapitalized, significantly
undercapitalized, or critically undercapitalized is required to submit an
acceptable capital restoration plan to its appropriate federal banking agency.
Under FDICIA, a bank holding company must guarantee that a subsidiary depository
institution meets its capital restoration plan, subject to certain limitations.
The obligation of a controlling holding company under FDICIA to fund a capital
restoration plan is limited to the lesser of 5% of an undercapitalized
subsidiary's assets or the amount required to meet regulatory capital
requirements. An undercapitalized institution is also generally prohibited from
increasing its average total assets, making acquisitions, establishing any
branches, or engaging in any new line of business, except in accordance with an
accepted capital restoration plan or with the approval of the FDIC. In addition,
the appropriate federal banking agency is given authority with respect to any
undercapitalized depository institution to take any of the actions it is
required to or may take with respect to a significantly undercapitalized
institution as described below if it determines "that those actions are
necessary to carry out the purpose" of FDICIA.
At December 31, 1999, the Bank met each of the capital levels to qualify as a
well-capitalized financial institution under regulatory standards.
FDIC INSURANCE ASSESSMENTS
Pursuant to FDICIA, the FDIC adopted a risk-based assessment system for insured
depository institutions that takes into account the risks attributable to
different categories and concentrations of assets and liabilities. The system
assigns an institution to one of three capital categories: (a) well capitalized;
(b) adequately capitalized; and (c) undercapitalized. These three categories are
substantially similar to the prompt corrective action categories described
above, with the "undercapitalized" category including institutions that are
undercapitalized, significantly undercapitalized, and critically
undercapitalized for prompt corrective action purposes. An institution is also
assigned by the FDIC to one of three supervisory subgroups within each capital
group. The supervisory subgroup to which an institution is assigned is based on
a supervisory evaluation provided to the FDIC by the institution's primary
federal regulator and
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information which the FDIC determines to be relevant to the institution's
financial condition and the risk posed to the deposit insurance funds (which may
include, if applicable, information provided by the institution's state
supervisor). An institution's insurance assessment rate is then determined based
on the capital category and supervisory category to which it is assigned.
Under the FDIA, the FDIC may terminate insurance of deposits upon a finding that
the institution has engaged in unsafe and unsound practices, is in an unsafe or
unsound condition to continue operations, or has violated any applicable law,
regulation, rule, order, or condition imposed by the FDIC.
Based on the Bank's risk classification, the Bank was not required to pay an
assessment for deposit insurance in 1999, nor will it be required to pay a
deposit insurance assessment in 2000. The Bank was required to pay the special
interim Bank Insurance Fund Financing Corporation ("FICO") assessments in 1999
and will also be required to pay this assessment in 2000. During fourth quarter
1999, the annualized rate for this assessment was 1.184 cents per $100 of Bank
deposits, and for first quarter 2000, the annualized rate will be 2.120 cents
per $100 of Bank deposits.
PROPOSED LEGISLATION AND REGULATORY ACTION
New regulations and statutes are regularly proposed that contain wide-ranging
proposals for altering the structures, regulations and competitive relationships
of the nation's financial institutions. It cannot be predicted whether or what
form any proposed regulation or statute will be adopted or the extent to which
the business of the Company may be affected by such regulation or statute.
COMPETITION
The banking business is highly competitive, particularly in the metropolitan
areas served by the Bank. In one or more aspects of their businesses, the
Company and the Bank compete with commercial banks, savings and loan
associations, credit unions, finance companies, mutual funds, insurance
companies, and brokerage and investment banking companies operating in the
metropolitan Atlanta area, the San Jose area and elsewhere. Many of these
competitors have substantially greater resources and lending limits than the
Bank and may offer services, such as trust services, that the Company and the
Bank do not provide. The Bank has employees fluent in foreign languages
including Mandarin, Cantonese, Korean, Vietnamese, German, French, Spanish, and
others, which enhances the Bank's ability to compete in its target markets.
FISCAL AND MONETARY POLICY
The business of banking depends on interest rate differentials. In general, the
difference between the interest paid by a bank on its deposits and its other
borrowings, and the interest received by a bank on its loans and securities
holdings, accounts for the major portion of a bank's earnings. Thus, the
earnings and growth of the Company and the Bank are subject to economic
conditions generally, both domestic and foreign, and also to the monetary and
fiscal policies of the United States and its agencies, particularly the Federal
Reserve. The Federal Reserve regulates the supply of money through various
means, including open market dealings in United States government securities,
the discount rate at which banks may borrow from the Federal Reserve, and the
reserve requirements on deposits.
The Federal Reserve's monetary policies historically have had a significant
effect on the operating results of commercial banks and will continue to do so
in the future. Management cannot predict the national and international economic
conditions and money markets, changes in policy by monetary and fiscal
authorities, and the effect of such factors on the Company and the Bank.
13
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EMPLOYEES
As of March 15, 2000, the Company and the Bank had 103 full-time equivalent
employees. Management does not anticipate additional hiring in 2000, except to
support normal growth of business. The employees are not part of any collective
bargaining agreement and employee relations with the Company are considered
good.
ITEM 2. PROPERTIES
MAIN OFFICE
The Bank's main office is at 4360 Chamblee Dunwoody Road, Atlanta, DeKalb
County, Georgia 30341, on the ground floor of a five-story, 100,000 square foot,
office building near the intersection of Interstate 285 and Chamblee Dunwoody
Road. The Bank has a lease for 19,403 square feet on the first and third floors
of the building. The lease provided base rental at $14.25 per square foot per
year during the term of the lease and rights to extend its occupancy of the
leased space twice, for one additional year each, at a base rate of $14.50 per
square foot per year. The initial term of the lease expired in December 1998,
and the lease was extended to December 2000. Including escalations, the rent per
square foot during 2000 is $16.92. A new lease was signed in March 2000 with an
initial base rate of $17.25 per square foot per year. The first floor space,
which includes the main branch, contains 8,941 square feet of space with six
teller stations, two customer service stations, the small business lending
department, the loan operations department, offices for loan officers, and the
main conference room. The Bank also has an ATM attached to the building. The
term under the new lease is from January 1, 2001 through December 31, 2010 for
the first floor space. The third floor space houses the international
department, personnel department, the operations department, and the
administration offices for a total of 10,462 square feet. The term under the new
lease is from January 1, 2001 through December 31, 2007 for the third floor
space.
ASIAN BANKING CENTER
The Bank owns an office building containing 16,639 square feet of leasable space
located on 2.77 acres of land in Atlanta's Asian-American business district on
Shallowford Road near Buford Highway. The Bank occupies 6,000 square feet of
space as a branch office. The Bank currently leases 10,639 square feet to other
tenants which leases provide base rental rates from $12.53 to $14.19 per square
foot per year. This building was built and owned by the Company until October
1999 when the Company transferred it to the Bank as a contribution to capital.
The Company's total cost was $2.2 million for the land and building including
improvements and tenant finishes. In addition, the branch has approximately
$200,000 in furniture, fixtures and equipment at this site. This branch office
has six teller stations, five customer service stations, and five offices for
lending officers and management. In addition, the Bank has installed a
drive-through ATM and drive-through teller window.
VININGS
The Bank's branch office in the Vinings area of Cobb County is located at One
Paces West, Suite 150, 2727 Paces Ferry Road, NW, Atlanta, Georgia 30339. The
office building has 246,515 square feet of leasable space near the intersection
of Interstate 285 and Paces Ferry Road. The Vinings branch office contains 5,266
square feet of space, which the Bank has leased at a base rate of $17.25 per
square foot per year. This space consists of four teller stations, two drive-in
windows, four customer service stations, five offices for management and lending
officers and a conference room. The Bank also has a walk-up ATM at this
location. The initial term of the lease expires in June 2002.
EAST MARIETTA
In January 1996, the Bank acquired a 4,560 square foot building situated on 1.2
acres located at 595 Franklin Road, Marietta, Georgia. This office, which opened
in May 1996, has six teller stations, one drive-up window, three drive-in lanes,
a walk-up ATM, and three offices for lending officers and management.
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Due to slower than anticipated growth results, this office will be closed in
June 2000. We have not finalized our plans for the disposition of the building.
PEACHTREE CORNERS
In August 1996, the Bank acquired a two-story 7,700 square foot building on 1.3
acres at 3280 Holcomb Bridge Road, Norcross, Georgia. The branch opened in
November 1996. In February 2000, the Bank sold the building and land housing
this branch to an unrelated party with a leaseback arrangement for approximately
2,500 square feet on the first floor. This branch office, when renovated, will
have six teller stations, one drive-up window, one drive-in lane, a
drive-through ATM, and two offices for a lending officer and branch management.
The term of the lease is five years at a base rent of $10.00 per square foot per
year and includes three options to extend the lease for five years each at the
same base rate.
SAN JOSE OFFICE
The Bank's San Jose branch office is in leased office space at 1694 Tully Road.
The branch, as anchor tenant in the building, occupies 8,142 square feet. This
branch has five teller stations, in addition to a merchant booth for large
commercial transactions, and two walk-up ATM machines. The base rent for this
office is $24.23 per square foot per year, and the term of the lease, which was
renewed in April 1999, is seven years.
ITEM 3. LEGAL PROCEEDINGS
There are no material legal proceedings, other than ordinary routine litigation
incidental to their business, pending against or involving assets of the Company
or the Bank.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
No matter was submitted during the fourth quarter of the fiscal year covered by
this report to a vote of security-holders, through the solicitation of proxies
or otherwise.
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16
PART II.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company currently has three market makers for shares of its common stock.
The Company's shares are listed on the Nasdaq National Market under the symbol
"SBGA". All sales and purchases of shares of the common stock known to the
Company were made through the three market makers. As of March 15, 2000, the
quoted purchase price for the Company's shares was $11.63 per share. There were
approximately 302 holders of record of the Company's common stock at March 15,
2000.
The Company began paying cash dividends in 1995 and paid $.28 per share in that
year. The Company paid $.39 and $.52 per share in cash dividends in 1998 and
1999, respectively. Although the Company currently plans to pay cash dividends
on a quarterly basis, Summit's dividend policy may change in the future. The
declaration and payment of dividends will depend upon business conditions,
operating results, capital and reserve requirements, and the Board of Directors'
consideration of other relevant factors. In addition, our ability to pay
dividends in the future will depend, in part, on the earnings of the Bank and
its ability to pay dividends to the Company.
For additional information concerning the Company's quarterly stock prices and
quarterly cash dividends see page 10, "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the Company's 1999 Annual
Report of Shareholders which is incorporated by reference herein.
The Bank may only pay dividends out of its net profits then on hand, after
deducting expenses, including losses and bad debts. In addition, the Bank is
prohibited from declaring a dividend on its shares of common stock until its
surplus equals its stated capital, unless there has been transferred to surplus
no less than one-tenth of the Bank's net profits of the preceding two
consecutive half-year periods (in the case of an annual dividend). The approval
of the OCC is required if the total of all dividends declared in any calendar
year by the Bank exceeds the Bank's net profits to date, as defined, for that
year combined with its retained net profits for the preceding two years less any
required transfers to surplus. The Bank declared and paid cash dividends of
$875,000 to the Company in 1999. As of December 31, 1999, the Bank had
cumulative net retained profits for 1998 and 1999 of $3,989,000, which is
entirely available for dividends to the Company in 2000, plus the Bank's 2000
net earnings, if any, provided that the necessary transfers of net profits to
surplus were made. The OCC also may to enjoin a national bank from engaging in
an unsafe or unsound practice, which can include the payment of a dividend under
certain circumstances.
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ITEM 6. SELECTED FINANCIAL DATA
The selected consolidated financial data presented below as of and for the years
ended December 31, 1999, 1998, 1997, 1996, and 1995 is unaudited and has been
derived from the Consolidated Financial Statements of the Company and its
subsidiaries, and from records of the Company. The information presented below
should be read in conjunction with the Consolidated Financial Statements, the
Notes to Consolidated Financial Statements and "Management's Discussion and
Analysis of Financial Condition and Results of Operations." Averages are derived
from daily balances.
(Dollars in thousands, except per share data) As of December 31,
Balance Sheet Data 1999 1998 1997 1996 1995
- ------------------ ----------------------------------------------------------------------------------
Total assets $ 281,268 $ 263,161 180,296 $ 154,248 $ 130,076
Investment securities 70,440 96,101 63,962 38,584 32,702
Loans 167,719 133,496 98,892 85,808 78,177
Allowance for loan losses 2,525 2,336 1,468 1,931 1,686
Deposits 232,941 218,647 144,795 132,899 109,816
Federal Home Loan Bank advances 10,000 10,000 10,000 1,000 --
Other borrowed funds 11,371 5,987 2,756 657 --
Stockholders' equity 22,786 24,505 19,778 16,936 15,413
Year Ended December 31,
Statement of Income Data 1999 1998 1997 1996 1995
- ------------------------ ----------------------------------------------------------------------------------
Interest income $ 19,744 $ 17,253 $ 13,475 $ 11,356 $ 10,101
Interest expense 7,742 7,309 5,470 4,520 4,070
Net interest income 12,002 9,944 8,005 6,836 6,031
Provision for loan losses 899 455 540 404 397
Net interest income after
provision for loan losses 11,103 9,489 7,465 6,432 5,634
Non-interest income 3,326 3,575 3,460 3,361 3,311
Non-interest expenses 10,215 8,792 7,156 6,411 5,802
Income tax expense 1,489 1,503 1,319 1,174 1,042
Net income $ 2,725 $ 2,769 $ 2,450 $ 2,208 $ 2,101
Per Share Data
Book value per share at year end $ 13.76 $ 13.68 $ 13.28 $ 12.03 $ 10.95
Basic earnings per share 1.59 1.56 1.71 1.57 1.49
Diluted earnings per share 1.59 1.53 1.50 1.43 1.49
Weighted-average shares outstanding - basic 1,713,318 1,773,010 1,436,023 1,407,688 1,407,688
Weighted-average shares outstanding - diluted 1,713,318 1,804,828 1,632,586 1,546,332 1,414,670
Dividends declared $ .52 $ .39 $ .35 $ .31 $ .28
Dividend payout ratio 32.70% 25.00% 20.47% 19.75% 18.79%
Ratios
Return on average assets 1.04% 1.24% 1.47% 1.59% 1.74%
Return on average equity 11.60% 11.89% 13.36% 13.80% 15.09%
Average equity/average assets 8.98% 10.47% 11.03% 11.53% 11.51%
Net interest margin 5.07% 4.90% 5.26% 5.44% 5.50%
Non-performing assets/total loans
and other real estate .77% 2.70% 1.80% 1.07% .14%
Allowance for loan losses/total loans 1.51% 1.75% 1.48% 2.25% 2.16%
Non-interest expense/net
interest income and non-interest income 66.65% 65.03% 62.42% 62.87% 62.11%
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Incorporated by reference to the 1999 Annual Shareholders' Report -- See Cross
Reference Index on page 2.
The Company has not provided quantitative and qualitative disclosures of market
risk as required by Item 305 of Regulation S-K because it meets the requirements
of a small business issuer.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by reference to the 1999 Annual Shareholders' Report -- See Cross
Reference Index on page 2.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
18
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated by reference to our Proxy Statement for the 2000 Annual
Shareholders' Meeting -- See Cross Reference Index on page 2.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference to our Proxy Statement for the 2000 Annual
Shareholders' Meeting -- See Cross Reference Index on page 2.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated by reference to our Proxy Statement for the 2000 Annual
Shareholders' Meeting -- See Cross Reference Index on page 2.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated by reference to our Proxy Statement for the 2000 Annual
Shareholders' Meeting -- See Cross Reference Index on page 2.
19
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(A) THE FOLLOWING DOCUMENTS ARE FILED AS PART OF THIS REPORT:
1. Financial Statements - The consolidated financial statements,
notes to consolidated financial statements, and independent
auditors' report thereon, are incorporated by reference to the
2000 Annual Shareholders' Report -- See Cross Reference Index
on page 2.
2. Financial Statement Schedules - These are omitted as they are
not required or are not applicable.
3. Exhibits (numbered in accordance with Item 601 of Regulation
S-K).
Exhibit
Number Exhibit
- ------ -------
2.1 Agreement and Plan of Merger by and between The Summit National Bank
and California Security Bank dated as of March 27, 1998 (incorporated
by reference to Exhibit 2.1 of Summit Bank Corporation's Current Report
on Form 8-K dated March 27, 1998.)
3.1 Amended and Restated Articles of Incorporation of Summit Bank
Corporation (incorporated by reference to Exhibit 3.2 of Summit Bank
Corporation's Registration Statement on Form S-1, Amendment No. 3
(Registration Number 33-16366)).
3.2 Bylaws of Summit Bank Corporation, as amended (incorporated by
reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1987.)
4.1 The rights of security holders are defined in (i) Articles Five, Six,
Nine, Ten, Eleven, Thirteen, Fourteen, and Sixteen of the Amended and
Restated Articles of Incorporation of Summit Bank Corporation and (ii)
Articles Two, Three, Eight, Ten, and Eleven of the amended Bylaws of
Summit Bank Corporation, (see Exhibits 3.1 and 3.2, respectively).
10.1* Summit Bank Corporation 1998 Stock Incentive Plan, as of February 23,
1998 (incorporated by reference to Appendix A to the Company's Proxy
Statement filed on March 18, 1998).
10.2 Lease Agreement dated December 3, 1993, between Baker Dennard Co.,
Lessor, and Summit National Bank, Lessee (incorporated by reference to
Exhibit 10.4 to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993) (Main office).
10.3 Lease Agreement dated June 16, 1995, between ZML-Paces Limited
Partnership, Lessor and Summit National Bank, Lessee (incorporated by
reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995) (Vinings office).
10.4* Change in Control Agreement dated August 25, 1995 by and between Pin Pin
Chau, President of the Summit National Bank, and the Summit National
Bank (incorporated by reference to Exhibit 10.7 to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995.)
10.5* Change in Control Agreement dated August 25, 1995 by and between David
Yu, Chairman of the Summit National Bank, and the Summit National Bank
(incorporated by reference to Exhibit 10.8 to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995.)
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21
10.6* Change in Control Agreement dated August 25, 1995 by and between Alec
Dudley, Executive Vice President of the Summit National Bank, and the
Summit National Bank (incorporated by reference to Exhibit 10.9 to the
Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995.)
10.7* Change in Control Agreement dated August 25, 1995 by and between Gary
McClung, Executive Vice President of the Summit National Bank, and the
Summit National Bank (incorporated by reference to Exhibit 10.9 to the
Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995.)
10.8 Lease agreement dated August 18, 1999, between Borrett, Inc., Lessor
and The Summit National Bank, Lessee (San Jose office).
10.9 Agreement to sell real estate dated November 17, 1999 between The
Summit National Bank and Three Rivers Land Development, L.L.C.
11.1 Statement Regarding Computation of Per Share Earnings
13.1 Annual Report to Shareholders
21.1 Subsidiaries of Summit Bank Corporation
23.1 Consent of Independent Public Accountants
27.1 Financial Data Schedule (for SEC use only)
* Denotes a management contract, compensatory plan or arrangement.
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the last quarter of 1999.
21
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
SUMMIT BANK CORPORATION
By /s/ Pin Pin Chau
--------------------------------------
Pin Pin Chau, Chief Executive Officer
Date March 23, 2000
-------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
/s/ Pin Pin Chau Director, Chief Executive Dated: March 23, 2000
- ------------------------------------- Officer
Pin Pin Chau
/s/ David Yu Director, President Dated: March 22, 2000
- ------------------------------------
David Yu
/s/ Gary K. McClung Executive Vice President Dated: March 27, 2000
- ------------------------------------- and Secretary; Principal Financial
Gary K. McClung and Accounting Officer
/s/ Jack N. Halpern Director, Chairman Dated: March 27, 2000
- ------------------------------------ of the Board
Jack N. Halpern
/s/ Gerald L. Allison Director, Dated: March 27, 2000
- ------------------------------------- Vice Chairman
Gerald L. Allison of the Board
/s/ Aaron I. Alembik Director Dated: March 22, 2000
- -------------------------------------
Aaron I. Alembik
- ------------------------------------- Director Dated:
Paul C.Y. Chu
/s/ Peter M. Cohen Director Dated: March 23, 2000
- ------------------------------------
Peter M. Cohen
/s/ Jose I. Gonzalez Director Dated: March 24, 2000
- ------------------------------------
Jose I. Gonzalez
/s/ Donald R. Harkleroad Director Dated: March 22, 2000
- -------------------------------------
Donald R. Harkleroad
/s/ Daniel T. Huang Director Dated: March 22, 2000
- ------------------------------------
Daniel T. Huang
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23
/s/ Shafik H. Ladha Director Dated: March 27, 2000
- -------------------------------------
Shafik H. Ladha
/s/ James S. Lai Director Dated: March 24, 2000
- -------------------------------------
James S. Lai
/s/ Sion Nyen (Francis) Lai Director Dated: March 23, 2000
- -------------------------------------
Sion Nyen (Francis) Lai
/s/ Shih Chien (Raymond) Lo Director Dated: March 21, 2000
- -------------------------------------
Shih Chien (Raymond) Lo
/s/ Nack Paek Director Dated: March 22, 2000
- -------------------------------------
Nack Paek
/s/ Carl L. Patrick, Jr. Director Dated: March 27, 2000
- -------------------------------------
Carl L. Patrick, Jr.
/s/ Cecil M. Phillips Director Dated: March 22, 2000
- -------------------------------------
Cecil M. Phillips
/s/ W. Clayton Sparrow, Jr. Director Dated: March 22, 2000
- -------------------------------------
W. Clayton Sparrow, Jr.
/s/ Howard H. L. Tai Director Dated: March 22, 2000
- -------------------------------------
Howard H. L. Tai
/s/ P. Carl Unger Director Dated: March 23, 2000
- -------------------------------------
P. Carl Unger
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INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Description Pages
2.1 Agreement and Plan of Merger by and between The Summit National Bank
and California Security Bank dated as of March 27, 1998 (incorporated
by reference to Exhibit 2.1 of Summit Bank Corporation's Current Report
on Form 8-K dated March 27, 1998.)
3.1 Amended and Restated Articles of Incorporation of Summit Bank
Corporation (incorporated by reference to Exhibit 3.2 of Summit Bank
Corporation's Registration Statement on Form S-1, Amendment No.
3(Registration Number 33-16366).
3.2 Bylaws of Summit Bank Corporation, as amended (incorporated by
reference to Exhibit 3.2 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1987.)
4.1 The rights of security holders are defined in (i) Articles Five, Six,
Nine, Ten, Eleven, Thirteen, Fourteen, and Sixteen of the Amended and
Restated Articles of Incorporation of Summit Bank Corporation and (ii)
Articles Two, Three, Eight, Ten, and Eleven of the amended Bylaws of
Summit Bank Corporation, as provided in Exhibits 3.1 and 3.2
respectively.
10.1 Summit Bank Corporation 1998 Stock Incentive Plan, as of February 23,
1998 (incorporated by reference to Appendix A to the Company's Proxy
Statement filed on March 18, 1998).
10.2 Lease Agreement dated December 3, 1993, between Baker Dennard Co.,
Lessor, and Summit National Bank, Lessee (incorporated by reference to
Exhibit 10.4 to the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1993).
10.3 Lease agreement dated June 16, 1995, between ZML-Paces Limited
Partnership, Lessor and Summit National Bank, Lessee (incorporated by
reference to Exhibit 10.6 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995.)
10.4 Change in Control Agreement dated August 25, 1995 by and between Pin
Pin Chau, President of the Summit National Bank, and the Summit
National Bank (incorporated by reference to Exhibit 10.7 to the
Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995.)
10.5 Change in Control Agreement dated August 25, 1995 by and between David
Yu, Chairman of the Summit National Bank, and the Summit National Bank
(incorporated by reference to Exhibit 10.8 to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995.)
10.6 Change in Control Agreement dated August 25, 1995 by and between Alec
Dudley, Executive Vice President of the Summit National Bank, and the
Summit National Bank (incorporated by reference to Exhibit 10.9 to the
Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995.)
10.7 Change in Control Agreement dated August 25, 1995 by and between Gary
McClung, Executive Vice President of the Summit National Bank, and the
Summit National Bank (incorporated by reference to Exhibit 10.9 to the
Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995.)
10.8 Lease agreement dated August 18, 1999, between Borrett, Inc., Lessor
and The Summit National Bank, Lessee.
10.9 Agreement to sell real estate dated November 17, 1999 between The
Summit National Bank and Three Rivers Land Development, L.L.C.
11.1 Statement Regarding Computation of Per Share Earnings
13.1 Annual Report to Shareholders
21.1 Subsidiaries of Summit Bank Corporation
23.1 Consent of Independent Public Accountants
27.1 Financial Data Schedule (for SEC use only)
24