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On August 23, 1995, the Bank's common stock was registered on the National Association of Securities Dealer's Automated Quotation System ("NASDAQ") National Market System, and began trading under the symbol "BCOM." The table below sets forth the high and low sales price as reported by NASDAQ, and the cash dividends declared on the Bank's common stock for each respective quarterly period. All market prices and dividends have been adjusted for the 5 for 2 stock split completed in May 1997, and the 2 for 1 stock split completed in December 1997.
On December 31, 1997, the Bank had approximately 3,980 common shareholders of record.
The volume of trades in the Bank's common stock for 1997, as reported by NASDAQ, was 8.3 million shares, an average monthly volume of 689 thousand shares. The closing price for the Bank's common stock on December 31, 1997 was $22.375.
Under the California Financial Code, a bank generally may not pay cash dividends in excess of the lesser of its retained earnings or the bank's net income for the last three years, less any distributions to shareholders made during this period. Exceptions to the Code require the express prior approval of the California State Department of Financial Institutions ("CFI").
The FDIC has issued policy statements indicating that the payment of cash dividends in excess of current earnings from continuing operations is inappropriate and may be cause for supervisory action. As a result of this policy, the Bank may find it difficult to pay dividends out of retained earnings from historical periods prior to the most recent fiscal or calendar year, or from earnings caused by nonrecurring transactions, such as the sale of a building.
If at any time the CFI or the FDIC were to find that the shareholders' equity of the Bank was not adequate, or that the payment of a dividend would be unsafe or unsound, they could prohibit the payment of a dividend.
At December 31, 1997, the Bank had 11,579,935 shares of common stock outstanding. Cash dividends declared for the year ending December 31, 1997, were $1.04 million.
The Bank's ability to pay dividends is not impaired by any of the regulatory restrictions discussed above. The Bank has declared a cash dividend on its common stock for 43 consecutive quarters. Although the payment of cash dividends cannot be guaranteed absolutely, the Bank anticipates sufficient liquidity and earnings to support the payment of cash dividends for the foreseeable future. However, a decline in the Bank's capital ratios, liquidity, or earnings could preclude it from paying cash dividends in the future.
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