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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, 2000
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
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, 2001, the aggregate market value of the Common Stock held
by persons other than directors and executive officers of the registrant was
$19,541,797, as determined by the most recent trades of registrant's Common
Stock known to the registrant, which were executed at a price of $15.75 per
share, the quoted purchase price for the Common Stock on the Nasdaq National
Stock Market on March 15, 2001. 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, 2001, there were 1,976,033 shares of the Registrant's
Common Stock outstanding.
Documents Incorporated by Reference
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. Part III information is
incorporated herein by reference, pursuant to Instruction G to Form 10-K, from
Summit's Proxy Statement for its 2001 Annual Shareholders' Meeting.
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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
(a)Overview 3
(b)Banking Services 4
(c)Locations and Service Areas 5
(d)Asian-American Market 5
(e)International Services Market 6
(f)New Company Subsidiary 6
(g)Supervision and Regulation 6
(h)Competition 13
(i)Fiscal and Monetary Policy 13
(j)Employees 13
ITEM 2. Properties 14
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 10
ITEM 7A. Quantitative and Qualitative Disclosures
About Market Risk 19
ITEM 8. Financial Statements and Supplementary
Data 21
ITEM 9. Not Applicable 18
PART III.
ITEM 10. Directors and Executive Officers of the
Registrant 2
ITEM 11. Executive Compensation 9
ITEM 12. Security Ownership of Certain
Beneficial Owners and Management 7,14
ITEM 13. Certain Relationships and Related
Transactions 6
PART IV.
ITEM 14. Exhibits, Financial Statement
Schedules, and Reports on Form 8-K 20
SIGNATURES 22
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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 Form 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 Bank Corporation was organized as a Georgia corporation on October 15,
1986, primarily to become a bank holding company by acquiring all 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 three branch
offices, all of which are located in its primary service area of northern
metropolitan Atlanta, Georgia. The fourth branch office was added on June 30,
1998 with the Bank's acquisition of California Security Bank ("CSB") in San
Jose, California. The Bank's fourth office is in an ethnic community of San Jose
that is very similar to part of the Bank's Atlanta primary service area. In
June, 2000, the Bank closed a location in Atlanta and consolidated its accounts
with another branch office. 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
- foreign corporations and individuals requiring specialized
banking services (international private banking) in the
Atlanta and San Jose metropolitan areas.
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Management believes 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
($100,000 per depositor).
There are certain risks in making all loans. A principal economic risk in making
loans is the creditworthiness of the borrower. Other risks in making loans
include the period of time over which loans may be repaid, changes in economic
and industry conditions, in dealing with 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 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, Internet 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 are 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-speaking patrons. The Bank
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 to facilitate international trade and funds are
available only after the Bank 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 correspondent financial
services as well as to the Company's general business contacts in international
trade markets. The Bank's customers also may 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).
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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 owns an
18,000 square foot office building which houses a 6,000 square foot branch
facility at 3490 Shallowford Road, Chamblee, DeKalb County, Georgia. The
remaining 12,000 square feet of office space is leased to unaffiliated parties.
The Bank 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 served as the East
Marietta branch office until June 2000. Management decided to close this office
and consolidate the East Marietta relationships with the Vinings location.
Efforts are currently under way to sell this property. The Bank owned a 7,700
square foot building on approximately 1.3 acres at 3280 Holcomb Bridge Road,
Norcross, Georgia. The building was sold in February 2000, and the Bank leased
back approximately 2,500 square feet as a branch facility. The Bank leases 8,142
square feet at 1694 Tully Road, San Jose, California which is the Bank's fourth
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, 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 to the East, and Interstate 75 to the West. A 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-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 the locations of 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 2000,
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 additional
language skills and first-hand knowledge of the communities to be served.
Management believes that language ability and cultural sensitivity, combined
with accessibility to senior management, enhances the Bank's competitive
position in its market.
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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 off-shore 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, 2000, there was $490,000 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 the
Company 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 provides payroll check-cashing services 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 three locations in the Atlanta metro area.
SUPERVISION AND REGULATION
Both the Company and the Bank are subject to extensive state and federal banking
regulations that impose restrictions on and provide for general regulatory
oversight of their operations. These laws are generally intended to protect
depositors and not shareholders. The following discussion describes the material
elements of the regulatory framework that applies to us.
THE COMPANY
Since the Company owns all of the capital stock of the Bank, it is a bank
holding company under the federal Bank Holding Company Act of 1956. As a result,
the Company is primarily subject to the supervision, examination, and reporting
requirements of the Bank Holding Company Act and the regulations of the Federal
Reserve.
ACQUISITIONS OF BANKS. The Bank Holding Company Act requires every bank holding
company to obtain the Federal Reserve's prior approval before:
- acquiring direct or indirect ownership or control of any
voting shares of any bank if, after the acquisition, the bank
holding company will directly or indirectly own or control
more than 5% of the bank's voting shares;
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- acquiring all or substantially all of the assets of any bank;
or
- merging or consolidating with any other bank holding company.
Additionally, the Bank Holding Company Act provides that the Federal Reserve may
not approve any of these transactions if it would result in or tend to create a
monopoly or, substantially lessen competition or otherwise function as a
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. The Federal Reserve's consideration of financial
resources generally focuses on capital adequacy, which is discussed below.
Under the Bank Holding Company Act, if adequately capitalized and adequately
managed, the Company or any other bank holding company located in Georgia may
purchase a bank located outside of Georgia. Conversely, an adequately
capitalized and adequately managed bank holding company located outside of
Georgia may purchase a bank located inside Georgia. In each case, however,
restrictions may be placed on the acquisition of a bank that has only been in
existence for a limited amount of time or will result in specified
concentrations of deposits. For example, Georgia law prohibits a bank holding
company from acquiring control of a financial institution until the target
financial institution has been incorporated for five years. As a result, no bank
holding company may acquire control of the Company until after the fifth
anniversary date of the Bank's incorporation.
CHANGE IN BANK CONTROL. Subject to various exceptions, the Bank Holding Company
Act and the Change in Bank Control Act, together with related regulations,
require Federal Reserve approval prior to any person or company acquiring
"control" of a bank holding company. Control is conclusively presumed to exist
if an individual or company acquires 25% or more of any class of voting
securities of the bank holding company. Control is refutably presumed to exist
if a person or company acquires 10% or more, but less than 25%, of any class of
voting securities and either:
- the bank holding company has registered securities under
Section 12 of the Securities Act of 1934; or
- no other person owns a greater percentage of that class of
voting securities immediately after the transaction.
Our common stock is registered under the Securities Exchange Act of 1934. The
regulations provide a procedure for challenge of the rebuttable control
presumption.
PERMITTED ACTIVITIES. Since we have not qualified or elected to become a
financial holding company, we are generally prohibited under the Bank Holding
Company Act, from engaging in or acquiring direct or indirect control of more
than 5% of the voting shares of any company engaged in any activity other than:
- Banking or managing or controlling banks; and
- An activity that the Federal Reserve determines to be so
closely related to banking as to be a proper incident to the
business of banking.
Activities that the Federal Reserve has found to be so closely related to
banking as to be a proper incident to the business of banking include:
- Factoring accounts receivable;
- Making, acquiring, brokering or servicing loans and usual
related activities;
- Leasing personal or real property;
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- Operating a non-bank depository institution, such as a savings
association;
- Trust company functions;
- Financial and investment advisory activities;
- Conducting discount securities brokerage activities;
- Underwriting and dealing in government obligations and money
market instruments;
- Providing specified management consulting and counseling
activities;
- Performing selected data processing services and support
services;
- Acting as agent or broker in selling credit life insurance and
other types of insurance in connection with credit
transactions; and
- Performing selected insurance underwriting activities.
Despite prior approval, the Federal Reserve may order a bank holding company or
its subsidiaries to terminate any of these activities or to terminate its
ownership or control of any subsidiary when it has reasonable cause to believe
that the bank holding company's continued ownership, activity or control
constitutes a serious risk to the financial safety, soundness, or stability of
it or any of its bank subsidiaries.
Generally, if the Company qualifies and elects to become a financial holding
company, it may engage in activities that are financial in nature or incidental
or complementary to financial activity. The Bank Holding Company 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;
- 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, the Bank and any other
depository institution subsidiary of the Company must be well capitalized and
well managed and must have a Community Reinvestment Act rating of at least
satisfactory. Additionally, the Company must file an election with the Federal
Reserve to become a financial holding company and must provide the Federal
Reserve with 30 days written notice prior to engaging in a permitted financial
activity. Although we are eligible to elect to become a financial holding
company, we currently have no plans to make such an election.
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SUPPORT OF SUBSIDIARY INSTITUTIONS. Under Federal Reserve policy, the Company is
expected to act as a source of financial strength for the Bank and to commit
resources to support the Bank. This support may be required at times when,
without this Federal Reserve policy, the Company might not be inclined to
provide it. In addition, any capital loans made by the Company to the Bank will
be repaid only after its deposits and various other obligations are repaid in
full. In the unlikely event of the Company's bankruptcy, any commitment by it to
a federal bank regulatory agency to maintain the capital of the Bank will be
assumed by the bankruptcy trustee and entitled to a priority of payment.
THE BANK
Since the Bank is chartered as a national bank, it is primarily subject to the
supervision, examination and reporting requirements of the National Bank Act and
the regulations of the Office of the Comptroller of the Currency. The Office of
the Comptroller of the Currency regularly examines the Bank's operations and has
the authority to approve or disapprove mergers, the establishment of branches
and similar corporate actions. The Office of the Comptroller of the Currency
also has the power to prevent the continuance or development of unsafe or
unsound banking practices or other violations of law. Additionally, the Bank's
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.
BRANCHING. National banks are required by the National Bank Act to adhere to
branching laws applicable to state banks in the states in which they are
located. Under current Georgia law, the Bank may open branch offices throughout
Georgia with the prior approval of the Office of the Comptroller of the Currency
and the Georgia Department of Banking and Finance. In addition, with prior
regulatory approval, the Bank may acquire branches of existing banks located in
Georgia. The Bank and any other national or state-chartered bank generally may
branch across state lines by merging with banks in other states if allowed by
the applicable states' laws. Georgia law, with limited exceptions, currently
permits branching across state lines through interstate mergers.
Under the Federal Deposit Insurance Act, states may "opt-in" and allow
out-of-state banks to branch into their state by establishing a new start-up
branch in the state. Currently, Georgia has not opted-in to this provision.
Therefore, interstate merger is the only method through which a bank located
outside of Georgia may branch into Georgia. This provides a limited barrier of
entry into the Georgia banking market, which protects us from an important
segment of potential competition. However, because Georgia has elected not to
opt-in, our ability to establish a new start-up branch in another state may be
limited. Many states that have elected to opt-in have done so on a reciprocal
basis, meaning that an out-of-state bank may establish a new start-up branch
only if their home state has also elected to opt-in. Consequently, until Georgia
changes its election, the only way we will be able to branch into states that
have elected to opt-in on a reciprocal basis will be through interstate merger.
PROMPT CORRECTIVE ACTION. The Federal Deposit Insurance Corporation Improvement
Act of 1991 establishes a system of prompt corrective action to resolve the
problems of undercapitalized financial institutions. Under this system, the
federal banking regulators have established five capital categories (well
capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized) in which all institutions are
placed. Federal banking regulators are required to take various mandatory
supervisory actions and are authorized to take other discretionary actions with
respect to institutions in the three undercapitalized categories. The severity
of the action depends upon the capital category in which the institution is
placed. Generally, subject to a narrow exception, the banking regulator must
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.
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. A
bank holding company must guarantee that a subsidiary depository institution
meets its capital restoration plan, subject to various limitations. The
controlling holding company's obligation to fund a capital restoration plan is
limited to the lesser of 5% of an undercapitalized subsidiary's assets at the
time it became undercapitalized or the amount required to meet regulatory
capital requirements. An undercapitalized institution is also generally
prohibited from increasing its average total assets, making
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acquisitions, establishing any branches or engaging in any new line of business,
except under an accepted capital restoration plan or with FDIC approval. The
regulations also establish procedures for downgrading an institution to a lower
capital category based on supervisory factors other than capital.
FDIC INSURANCE ASSESSMENTS. The FDIC has 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: (1) well capitalized; (2) adequately capitalized; and (3)
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. The FDIC also assigns an institution to one of three supervisory
subgroups based on a supervisory evaluation that the institution's primary
federal regulator provides to the FDIC and information that the FDIC determines
to be relevant to the institution's financial condition and the risk posed to
the deposit insurance funds. Assessments range from 0 to 27 cents per $100 of
deposits, depending on the institution's capital group and supervisory subgroup.
In addition, the FDIC imposes assessments to help pay off the $780 million in
annual interest payments on the $8 billion Financing Corporation bonds issued in
the late 1980s as part of the government rescue of the thrift industry. This
assessment rate is adjusted quarterly and is set at 1.96 cents per $100 of
deposits for the first quarter of 2001.
The FDIC may terminate its insurance of deposits if it finds 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.
COMMUNITY REINVESTMENT ACT. The Community Reinvestment Act requires that, in
connection with examinations of financial institutions within their respective
jurisdictions, the Federal Reserve, the FDIC, or the Office of the Comptroller
of the Currency, shall evaluate the record of each financial institution in
meeting the credit needs of its local community, including low and
moderate-income neighborhoods. These facts are also considered in evaluating
mergers, acquisitions, and applications to open a branch or facility. Failure to
adequately meet these criteria could impose additional requirements and
limitations on the Bank. Additionally, we must publicly disclose the terms of
various Community Reinvestment Act-related agreements.
OTHER REGULATIONS. Interest and other charges collected or contracted for by the
Bank are subject to state usury laws and federal laws concerning interest rates.
The Bank's loan operations are also subject to federal laws applicable to credit
transactions, such as:
- The federal Truth-In-Lending Act, governing disclosures of
credit terms to consumer borrowers;
- The Home Mortgage Disclosure Act of 1975, requiring financial
institutions to provide information to enable the public and
public officials to determine whether a financial institution
is fulfilling its obligation to help meet the housing needs of
the community it serves;
- The Equal Credit Opportunity Act, prohibiting discrimination
on the basis of race, creed or other prohibited factors in
extending credit;
- The Fair Credit Reporting Act of 1978, governing the use and
provision of information to credit reporting agencies;
- The Fair Debt Collection Act, governing the manner in which
consumer debts may be collected by collection agencies; and
- The rules and regulations of the various federal agencies
charged with the responsibility of implementing these federal
laws.
The deposit operations of the Bank are subject to:
- The Right to Financial Privacy Act, which imposes a duty to
maintain confidentiality of consumer
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financial records and prescribes procedures for complying with
administrative subpoenas of financial records; and
- The Electronic Funds Transfer Act and Regulation E issued by
the Federal Reserve to implement that act, which govern
automatic deposits to and withdrawals from deposit accounts
and customers' rights and liabilities arising from the use of
automated teller machines and other electronic banking
services.
CAPITAL ADEQUACY
The Company and the Bank are required to comply with the capital adequacy
standards established by the Federal Reserve, in the case of the Company, and
the Office of the Comptroller of the Currency, in the case of the Bank. The
Federal Reserve has established a risk-based and a leverage measure of capital
adequacy for bank holding companies. Since the Company's consolidated total
assets are greater than $150 million, under the Federal Reserve's capital
guidelines, our capital adequacy is measured on a consolidated basis. The Bank
is also subject to risk-based and leverage capital requirements adopted by the
Office of the Comptroller of the Currency, which are substantially similar to
those adopted by the Federal Reserve for bank holding companies.
The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profiles 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,
such as letters of credit and unfunded loan commitments, are assigned to broad
risk categories, each with appropriate risk 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 of total capital to risk-weighted assets is
8%. Total capital consists of two components, Tier 1 Capital and Tier 2 Capital.
Tier 1 Capital generally consists of common stock, minority interests in the
equity accounts of consolidated subsidiaries, noncumulative perpetual preferred
stock, and a limited amount of qualifying cumulative perpetual preferred stock,
less goodwill and other specified intangible assets. Tier 1 Capital must equal
at least 4% of risk-weighted assets. Tier 2 Capital generally consists of
subordinated debt, other preferred stock, and a limited amount of loan loss
reserves. The total amount of Tier 2 Capital is limited to 100% of Tier 1
Capital. At December 31, 2000 our ratio of total capital to risk-weighted assets
was 13.9% and our ratio of Tier 1 Capital to risk-weighted assets was 12.6%.
In addition, the Federal Reserve has established minimum leverage ratio
guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and other specified
intangible assets, of 3% for bank holding companies that meet specified
criteria, including having the highest regulatory rating and implementing the
Federal Reserve's risk-based capital measure for market risk. All other bank
holding companies generally are required to maintain a leverage ratio of at
least 4%. At December 31, 2000, our leverage ratio was 8.8%. 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 reliance on intangible assets. The
Federal Reserve considers the leverage ratio and other indicators of capital
strength in evaluating proposals for expansion or new activities.
Failure to meet capital guidelines could subject a bank or bank holding company
to a variety of enforcement remedies, including issuance of a capital directive,
the termination of deposit insurance by the FDIC, a prohibition on accepting
brokered deposits, and certain other restrictions on its business. As described
above, significant additional restrictions can be imposed on FDIC-insured
depository institutions that fail to meet applicable capital requirements. See
"--Prompt Corrective Action."
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PAYMENT OF DIVIDENDS
The Company is a legal entity separate and distinct from the Bank. The principal
sources of the Company's cash flow, including cash flow to pay dividends to its
shareholders, are dividends that the Bank pays to its sole shareholder, the
Company. Statutory and regulatory limitations apply to the Bank's payment of
dividends to the Company as well as to the Company's payment of dividends to its
shareholders.
The Bank is required by federal law to obtain prior approval of the Office of
the Comptroller of the Currency for payments of dividends is the total of all
dividends declared by our board of directors in any year will exceed (1) the
total of the Bank's net profits for that year, plus (2) the Bank's retained net
profits of the preceding two years, less any required transfers to surplus.
The payment of dividends by the Company and the Bank may also be affected by
other factors, such as the requirement to maintain adequate capital above
regulatory guidelines. If, in the opinion of the Office of the Comptroller of
the Currency, the Bank were engaged in or about to engage in an unsafe or
unsound practice, the Office of the Comptroller of the Currency could require,
after notice and a hearing, that the Bank stop or refrain engaging in the
practice. The federal banking agencies have indicated that paying dividends that
deplete a depository institution's capital base to an inadequate level would be
an unsafe and unsound banking practice. Under the Federal Deposit Insurance
Corporation Improvement Act of 1991, a depository institution may not pay any
dividend if payment would cause it to become undercapitalized or if it already
is undercapitalized. Moreover, the federal agencies have issued policy
statements that provide that bank holding companies and insured banks should
generally only pay dividends out of current operating earnings. See "--The
Bank--Prompt Corrective Action" above.
RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES
The Company and the Bank are subject to the provisions of Section 23A of the
Federal Reserve Act. Section 23A places limits on the amount of:
- a bank's loans or extensions of credit to affiliates;
- a bank's investment in affiliates;
- assets a bank may purchase from affiliates, except for real
and personal property exempted by the Federal Reserve;
- loans or extensions of credit to third parties collateralized
by the securities or obligations of affiliates; and
- a bank's guarantee, acceptance or letter of credit issued on
behalf of an affiliate.
The total amount of the above transactions is limited in amount, as to any one
affiliate, to 10% of a bank's capital and surplus and, as to all affiliates
combined, to 20% of a bank's capital and surplus. In addition to the limitation
on the amount of these transactions, each of the above transactions must also
meet specified collateral requirements. The Bank must also comply with other
provisions designed to avoid the taking of low-quality assets.
The Company and the Bank are also subject to the provisions of Section 23B of
the Federal Reserve Act which, among other things, prohibit an institution from
engaging in the above transactions with affiliates unless the transactions are
on terms substantially the same, or at least as favorable to the institution or
its subsidiaries, as those prevailing at the time for comparable transactions
with nonaffiliated companies.
The Bank is also subject to restrictions on extensions of credit to its
executive officers, directors, principal shareholders and their related
interests. These extensions of credit (1) must be made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with third parties, and (2) must not involve more
than the normal risk of repayment or present other unfavorable features.
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PRIVACY
Financial institutions are required to disclose their policies for collecting
and protecting confidential information. Customers generally may prevent
financial institutions from sharing nonpublic personal financial information
with nonaffiliated third parties except under narrow circumstances, such as the
processing of transactions requested by the consumer. Additionally, financial
institutions generally may not disclose consumer account numbers to any
nonaffiliated third party for use in telemarketing, direct mail marketing or
other marketing to consumers.
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. We cannot predict whether or in what
form any proposed regulation or statute will be adopted or the extent to which
our business may be affected by any new 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 over 20 foreign languages
including Mandarin, Cantonese, Korean, Vietnamese, German, French, and Spanish
which enhances the Bank's ability to compete in 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.
EMPLOYEES
As of March 15, 2001, the Company and the Bank had 108 full-time equivalent
employees. Management does not anticipate additional hiring in 2001, 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.
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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 25,801 square feet on the main and third floors
of the building. The lease provided base rental at $14.25 per square foot per
annum 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 annum. 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 was $16.92. An extension to the lease, effective January
1, 2001 has an initial base rate of $17.25 per square foot per year on 21,729
square feet. An additional 4,072 square feet has a base rate of $19.25 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
has an ATM attached to the building. The term under the new extension 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, information technology, training, check processing, and
the administration offices for a total of 16,860 square feet. The term under the
new extension is from January 1, 2001 through December 31, 2007 for the third
floor space.
ASIAN BANKING CENTER
The Bank owns an office building containing 18,000 square feet of space located
on 2.77 acres of land in Atlanta's Asian-American business district on
Shallowford Road near Buford Highway. The Bank currently utilizes 6,000 square
feet of space in the building for a branch office. The Bank currently has leased
approximately 12,000 square feet, including common areas, to other tenants which
leases provide base rental rates from $14.07 to $15.71 per square foot per
annum. 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, N.W., 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 annum. 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 June 2002.
PEACHTREE CORNERS
In February 2000, the Bank sold a two-story 7,700 square foot building, which it
had owned since August 1996, to an unaffiliated party and currently leases
approximately 2,500 square feet of this building for a branch office. The
building sits on 1.3 acres at 3280 Holcomb Bridge Road, Norcross, Georgia. This
office has six teller stations, one drive-up window, one drive-in lane, two
offices for a lending officer and branch management on the ground floor as well
as a drive-through ATM. 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.
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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.
EAST MARIETTA
The Bank also owns a 4,560 square foot building situated on 1.2 acres located at
595 Franklin Road, Marietta, Georgia. This building housed a branch office from
May 1996 until June 2000 when the branch was closed due to insufficient growth.
The building is currently listed on the market and is classified as Other Real
Estate on the Bank's balance sheet.
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, 2001, the
quoted purchase price for the Company's shares was $15.75 per share. There were
approximately 341 holders of record of the Company's Common Stock at March 15,
2001.
The Company began paying quarterly cash dividends in 1995 and paid a total of
$.28 per share in that year. The Company paid a total of $.52 and $.72 per share
in cash dividends in 1999 and 2000, respectively. Although the Company currently
plans to continue paying 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 2000 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. The OCC also may enjoin a
national bank from engaging in an unsafe or unsound practice, which may include
the payment of a dividend under certain circumstances. 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 $5.2
million to the Company in 2000. Of this amount, $4 million was a special
dividend paid in December 2000 in anticipation of a possible Bank acquisition.
Subsequent to 2000, the prospects for that acquisition ceased. The Board of the
Company approved returning up to $3.5 million of these funds to the Bank
subsidiary in the form of a capital injection. The Bank's 2001 net earnings are
entirely available for dividends to the Company.
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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, 2000, 1999, 1998, 1997, and 1996 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. Share and per share amounts for all years are adjusted for
a 20% stock dividend paid February 16, 2001.
(Dollars in thousands, except per share data) As of December 31,
Balance Sheet Data 2000 1999 1998 1997 1996
- ------------------ -------- -------- -------- -------- --------
Total assets $283,403 $281,267 263,161 $180,296 $154,248
Investment securities 59,402 70,440 96,101 63,962 38,584
Loans 190,354 167,719 133,496 98,892 85,808
Allowance for loan losses 3,141 2,525 2,336 1,468 1,931
Deposits 239,274 232,941 218,647 144,795 132,899
Federal Home Loan Bank advances 10,000 10,000 10,000 10,000 1,000
Other borrowed funds 4,809 11,371 5,987 2,756 657
Stockholders' equity 25,950 22,786 24,505 19,778 16,936
Year Ended December 31,
Statement of Income Data 1999 1998 1997 1996 1995
- ------------------------ ---------- ---------- ---------- ---------- ----------
Interest income $ 23,347 $ 19,744 $ 17,253 $ 13,475 $ 11,356
Interest expense 9,078 7,742 7,309 5,470 4,520
Net interest income 14,269 12,002 9,944 8,005 6,836
Provision for loan losses 1,250 899 455 540 404
Net interest income after
provision for loan losses 13,019 11,103 9,489 7,465 6,432
Non-interest income 3,530 3,326 3,575 3,460 3,361
Non-interest expenses 10,692 10,215 8,792 7,156 6,411
Income tax expense 2,070 1,489 1,503 1,319 1,174
Net income $ 3,787 $ 2,725 $ 2,769 $ 2,450 $ 2,208
Per Share Data
- --------------
Book value per share at year end $ 13.76 $ 13.76 $ 13.68 $ 13.28 $ 12.03
Basic earnings per share 1.91 1.33 1.30 1.42 1.31
Diluted earnings per share 1.91 1.33 1.28 1.25 1.19
Weighted-average shares outstanding - basic 1,983,611 2,055,982 2,127,612 1,723,228 1,689,226
Weighted-average shares outstanding - diluted 1,983,611 2,055,982 2,165,794 1,959,103 1,855,598
Dividends declared $ .72 $ .52 $ .39 $ .35 $ .31
Dividend payout ratio 32.70% 32.70% 25.00% 20.47% 19.75%
Ratios
- ------
Return on average assets 1.35% 1.04% 1.24% 1.47% 1.59%
Return on average equity 15.94% 11.60% 11.89% 13.36% 13.80%
Average equity/average assets 8.49% 8.98% 10.47% 11.03% 11.53%
Net interest margin 5.67% 5.07% 4.90% 5.26% 5.44%
Non-performing assets/total loans
and other real estate 1.06% .77% 2.70% 1.80% 1.07%
Allowance for loan losses/total loans 1.65% 1.51% 1.75% 1.48% 2.25%
Non-interest expense/net
interest income and non-interest income 60.07% 66.65% 65.03% 62.42% 62.87%
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Incorporated by reference to the 2000 Annual Shareholders' Report -- See Cross
Reference Index on page 2.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Incorporated by reference to the 2000 Annual Shareholders' Report -- See Cross
Reference Index on page 2.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Incorporated by reference to the 2000 Annual Shareholders' Report -- See Cross
Reference Index on page 2.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Incorporated by reference to the Definitive Proxy Statement for the 2001 Annual
Shareholders' Meeting -- See Cross Reference Index on page 2.
ITEM 11. EXECUTIVE COMPENSATION
Incorporated by reference to the Definitive Proxy Statement for the 2001 Annual
Shareholders' Meeting -- See Cross Reference Index on page 2.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Incorporated by reference to the Definitive Proxy Statement for the 2001 Annual
Shareholders' Meeting -- See Cross Reference Index on page 2.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Incorporated by reference to the Definitive Proxy Statement for the 2001 Annual
Shareholders' Meeting -- See Cross Reference Index on page 2.
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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). The Company's SEC file number for exhibits incorporated
by reference is C-21267.
Exhibit
Number Exhibit
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).
10.2a Fifth Amendent to Lease Agreement (referenced in Exhibit
10.2), dated March 13, 2000, between The Realty Associates
Fund IV, L.P., successor in interest to Baker Dennard Co.,
Lessor, and Summit National Bank, Lessee (Main office).
10.2b Sixth Amendent to Lease Agreement (referenced in Exhibit
10.2), dated January 4, 2001 between The Realty Associates
Fund IV, L.P., successor in interest to Baker Dennard Co,
Lessor, and Summit National Bank, Lessee (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.)
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21
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 (incorporated by
reference to Exhibit 10.8 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999.) (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. (incorporated by reference to Exhibit 10.9 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999.)
10.10 Lease agreement dated February 4, 2000, between Three Rivers
Land Development, L.L.C., Lessor and The Summit National Bank,
Lessee (Peachtree Corners office).
11.1 Statement Regarding Computation of Per Share Earnings
13.1 Annual Report to Shareholders
21.1 Subsidiaries of Summit Bank Corporation (incorporated by
reference to Exhibit 21.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999).
23.1 Consent of Independent Public Accountants
* 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 2000.
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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 28, 2001
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 Dated: March 28, 2001
- ----------------------------------- Executive Officer
Pin Pin Chau
/s/ David Yu Director, President Dated: March 28, 2001
- -----------------------------------
David Yu
/s/ Gary K. McClung Principal Financial Officer, Dated: March 24, 2001
- ----------------------------------- Principal Accounting
Gary K. McClung Officer, Secretary
/s/ James S. Lai Director, Chairman Dated: March 23, 2001
- ----------------------------------- of the Board
James S. Lai
/s/ P. Carl Unger Director, Vice Chairman Dated: March 24, 2001
- ----------------------------------- of the Board
P. Carl Unger
/s/ Gerald L. Allison Director Dated: March 23, 2001
- -----------------------------------
Gerald L. Allison
/s/ Aaron I. Alembik Director Dated: March 23, 2001
- -----------------------------------
Aaron I. Alembik
Director Dated:
- -----------------------------------
Paul C.Y. Chu
/s/ Peter M. Cohen Director Dated: March 26, 2001
- -----------------------------------
Peter M. Cohen
/s/ Jose I. Gonzalez Director Dated: March 26, 2001
- -----------------------------------
Jose I. Gonzalez
/s/ Jack N. Halpern Director Dated: March 23, 2001
- -----------------------------------
Jack N. Halpern
/s/ Donald R. Harkleroad Director Dated: March 26, 2001
- -----------------------------------
Donald R. Harkleroad
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23
/s/ Daniel T. Huang Director Dated: March 26, 2001
- -----------------------------------
Daniel T. Huang
/s/ Shafik H. Ladha Director Dated: March 27, 2001
- -----------------------------------
Shafik H. Ladha
/s/ Sion Nyen Lai Director Dated: March 26, 2001
- -----------------------------------
Sion Nyen (Francis) Lai
/s/ Shih Chien Lo Director Dated: March 26, 2001
- -----------------------------------
Shih Chien (Raymond) Lo
/s/ Nack Paek Director Dated: March 23, 2001
- -----------------------------------
Nack Paek
/s/ Carl L. Patrick, Jr. Director Dated: March 23, 2001
- -----------------------------------
Carl L. Patrick, Jr.
/s/ W. Clayton Sparrow, Jr. Director Dated: March 23, 2001
- -----------------------------------
W. Clayton Sparrow, Jr.
/s/ Howard H. L. Tai Director Dated: March 24, 2001
- -----------------------------------
Howard H. L. Tai
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INDEX TO EXHIBITS
Exhibit
Number Description
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) (Main
office).
10.2a Fifth Amendent to Lease Agreement (referenced in Exhibit
10.2), dated March 13, 2000, between The Realty Associates
Fund IV, L.P., successor in interest to Baker Dennard Co.,
Lessor, and Summit National Bank, Lessee (Main office).
10.2b Sixth Amendent to Lease Agreement (referenced in Exhibit
10.2), dated January 4, 2001 between The Realty Associates
Fund IV, L.P., successor in interest to Baker Dennard Co,
Lessor, and Summit National Bank, Lessee (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.)
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 (incorporated by
reference to Exhibit 10.8 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999.) (San
Jose office).
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10.9 Agreement to sell real estate dated November 17, 1999 between
The Summit National Bank and Three Rivers Land Development,
L.L.C. (incorporated by reference to Exhibit 10.9 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999.)
10.10 Lease agreement dated February 4, 2000, between Three Rivers
Land Development, L.L.C., Lessor and The Summit National Bank,
Lessee (Peachtree Corners office).
11.1 Statement Regarding Computation of Per Share Earnings 25
13.1 Annual Report to Shareholders 26
21.1 Subsidiaries of Summit Bank Corporation (incorporated by
reference to Exhibit 21.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1999).
23.1 Consent of Independent Public Accountants
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