1993-us bank of washington-exhibits

8/8/2019 1993-US Bank of Washington-Exhibits

1/23

Table A ( billions)

1979 1984 1989

Bank loans n.e.c.a 409.7 613.4 820.3

Commercial paper outstanding 110.9 231.7 519.2

Bank deposits 986.2 1551.2 2172.7

Money market mutual fund assets 45.2 233.6 428.1


2/23

1985 1986 1987 1988 1989

Interest-earning assets 86.05% 86.02% 86.62% 87.94% 87.84%

Loans 58.51 57.86 58.36 60.59 61.3

Commercial and industrial 22.26 20.96 20.04 19.55 19.2

Real estate 15.71 16.71 18.69 20.56 22.18

Construction 3.2 3.49 3.87 4.01 4.14Farmland 0.41 0.43 0.46 0.49 0.51

One- to four-family residential 7.2 7.31 8 9.03 9.94

Multifamily residential 0.44 0.49 0.56 0.58 0.59

Nonfarm nonresidential 4 4.43 5.21 5.77 6.29

Consumer 10.8 11.06 11.1 11.31 11.4

Credit card 2.48 2.75 2.97 3.13 3.26

Installment and other 8.32 8.31 8.13 8.18 8.14

Foreign government 1.56 1.43 1.34 1.23 1.03

Agricultural production 1.51 1.22 1.03 0.99 0.96

Security 0.83 0.79 0.63 0.53 0.54

Other 7.19 7.27 6.92 6.42 5.97

Securities 17.58 18.29 18.58 16.84 16.74U.S. government 9.5 9.26 10.03 10.35 10.78

State and local government 6.99 7.49 6.25 3.69 3.14

Other bonds and stocks 1.08 1.55 2.29 2.8 2.82

Trading account assets 1.24 1.55 1.32 1.26 1.25

Gross federal funds sold and reverse 4.43 4.72 4.43 4.26 4.2

repurchase agreements

Interest-bearing deposits 5.53 5.15 5.26 4.99 4.36

Deposit liabilities 77.3 76.72 76.43 76.22 76.01

In foreign offices 12.61 11.61 11.38 10.85 10.05

In domestic offices 64.69 65.11 65.06 65.37 65.96

Demand deposits 15.63 16.03 15.41 14.34 13.63Other checkable deposits 4.57 5.21 6.01 6.27 6.16

MMDAs 11.72 12.64 12.32 11.44 10.55

Other savings 4.64 4.79 5.76 6.08 5.81

Small time deposits 16.67 15.68 14.95 16.16 18.15

Large time deposits 11.46 10.76 10.6 11.08 11.66

Gross federal funds purchased and 7.68 8.25 8.06 7.72 7.95


Other liabilities for borrowed money 3.44 4.02 4.45 4.93 4.87

Other borrowings 5.7 5.17 4.9 3.49 3.39

Memo

Money market liabilities 35.19 34.63 34.49 34.58 34.53

Loss reserves 0.8 0.92 1.36 1.54 1.5

Total equity capital 6.17 6.21 6.06 6.1 6.27


3/23


4/23

Exhibit 3 Profit Rates, Insured Commercial Banks by Asset Size, 1985-1989 (percent)

Type of Return and Size of Banka 1985 1986 1987 1988 1989

Return on Assetsb

All banks 0.70% 0.62% 0.11% 0.84% 0.51%

Less than $300 million 0.74 0.58 0.63 0.74 0.88

$300 million to $5 billion 0.83 0.76 0.58 0.76 0.74

$5 billion or more:Money center banks 0.45 0.46 -0.86 1.06 -0.3

Other 0.74 0.68 -0.02 0.82 0.58

Return on Equityc

All banks 11.18 9.97 1.8 13.52 7.94

Less than $300 million 9.19 7.21 7.76 8.89 10.32

$300 million to $5 billion 12.83 11.52 8.79 11.39 10.93

$5 billion or more:

Money center banks 9.6 9.5 -19.46 23.4 -6.17

Other 13.56 12.18 -0.28 15.16 10.34

Source: Federal Reserve Bulletin, July 1991

aSize categories are based on year-end fully consolidated assets

bNet income as a percentage of average fully consolidated assets net of loss reserves

cNet income as a percentage of average equity capital


5/23

Consolidated Balance Sheet (in thousands)

December 31, 1987 1988 1989

Assets:

Interest-earning Assets:

Money market investments 1150894 623228 484095

Investment securities (market value 1989

$2,221,124; 1988$1,541,142) 1440600 1565867 2211898Trading account securities -- 79816 121800

Mortgages held for sale 42447 78363 214048

Loans (net of unearned income)a 8668730 9676101 11409464

Total interest-earning assets 11302671 12023375 14441305

Allowance for loan losses -113387 -126227 -153557

Cash and due from banks 1115091 1261763 1324717

Premises, furniture and equipment 270547 280596 283219

Other real estate owned 74881 64003 47892

Customers liability on acceptances 321966 371015 413039

Other assets 380917 508877 618767

Total Assets 13352686 14383402 16975382

Liabilities:

Interest-bearing Liabilities:

Deposits 7416651 7844640 9002799

Federal funds purchased and security 1470232 1603546 2570281


Commercial paper 284721 279989 406174

Other short-term borrowings 205134 195506 278635

Long-term debt 475545 624770 602975

Total interest-bearing liabilities 9852283 10548451 12860864

Noninterest-bearing deposits 2104894 2323090 2429387

Accrued income taxes 97573 56861 55645

Acceptances outstanding 321966 371015 413039Other liabilities 118452 140158 162706

Total Liabilities 12495168 13439575 15921641

Shareholders Equity:

Preferred stock -- -- --

Common stock 205888 206777 249475

Capital surplus 145826 148474 361447

Retained earnings 321966 590720 444922

Less treasury stock -2045 -2144 -2103

Total Shareholders Equity 857518 943827 1053741

Total Liabilities and Shareholders Equity 13352686 14383402 16975382

aU.S. Bancorps loan portfolio consists of the following loans:

Commercial 4653.1 5256.6 6371.2

Real estate construct 488.4 630.1 765.2

Real estate mortgage 1374.8 1563.2 1762.5

Consumer 1867 1944.4 2117.6

Foreign 16.6 22.6 37.5

Lease Financing 268.8 259.2 355.5


6/23

Statement of Consolidated Income and Operations Data (in thousands, except per share data)

Year Ended December 31, 1987 1988

Interest income 976782 1162964

Interest expense 529428 635483

Net interest income 447354 527481

Provision for loan losses 57430 69204

Net interest income after provision for loan losses 389924 458277Noninterest revenue 177074 217590

Noninterest expense 428739 503149

Income before income taxes and accounting changes 138259 172718

Provision for income taxes 38621 48805

Income before accounting changes 99638 123913

Cumulative effect of accounting changes 8834 --

Net income 108472 123913

Average number of shares outstanding 49064 49237

Earnings per share:

Before accounting changes 2.03 2.52

Net income 2.21 2.52Dividend per share 0.58 0.8


7/23

1989

1436516

832932

603584

83765

519819235517

544169

211167

60385

150782

--

150782

49498

3.05

3.050.89


8/23

As at Year-end December 31, 1985 1986 1987 1988 1989

Return on average assets 0.81% 0.69% 0.90% 0.92% 1.00%

Return on average equity 11.74 10.12 13.39 13.78 15.12

Equity/Assets 6.65 6.44 6.42 6.56 6.21

Net interest margin 4.8 4.7 4.78 4.87 4.96

Total nonperforming assets as a % of

loans outstanding and other realestate owned 3.5 2.6 2.5 2.3 1.7

Allowance for loan losses to year-end

loans outstanding 1.13 1.31 1.31 1.3 1.35

Net charge-offs to average loans

outstanding 0.56 1.22 0.71 0.64 0.55


9/23

Years Ended in December 31, 1989 1998

Average

Rates

Average Income/ Earned/ Average Income/

Balance Expense Paid Balance Expense

Interest-Earning Assets:

Money market investments 437.5 41.5 0.09 801.1 61.7Investments securities 1734.4 157.1 9.06 1436.5 123.8

Trading account securities 134.8 12.1 8.95 84.7 6.8

Mortgage loans held for sale 115.3 11.4 9.9 49.9 4.9

Loansnet of unearned income

Commercial 5696.5 656.1 11.52 4955.2 507

Real estate 2373.2 245.4 10.34 1979.3 193.1

Consumer 2062.4 265.4 12.87 1866 230.5

Foreign 24.5 3 12.41 22.7 2

Lease financing 276.9 25.4 9.16 252.5 20.3

Total loans 10433.5 1195.3 11.46 9075.7 952.9

Loan fees 52.9 42.4

Total loans including fees 10433.5 1248.2 11.96 9075.7 995.3Total interest-earning assets/interest

income 12855.5 1470.3 0.11 11447.9 1192.5

Interest-bearing Liabilities:

Deposits

Savings and interest checking 2197.8 99.7 0.05 2142 97.2

Money market accounts 1493 79.2 5.31 1774.7 87.4

Time, $100 thousand or more 1388.4 123.5 8.89 1047.6 76.2

Other time 3329.9 269.8 8.1 2616.9 186.7

Foreign

Total interest-bearing deposits 8409.1 572.2 6.8 7581.2 447.5Federal funds purchased and security

repurchase agreements 1642.5 149.3 9.09 1311.6 97.2

Commercial paper 361.2 33.8 9.35 312.3 24.4

Other short-term borrowings 252.6 22.6 8.96 200.8 15.5

Long-term debt 587.7 55 9.36 556.7 50.9

Total interest-bearing liabilities/interest

expense 11253.1 832.9 0.07 9962.6 635.5

Noninterest-bearing deposits 2157.6 2022.5

Average rate earned on interest-earning assets 0.11

Cost of funds supporting earning

assets 6.48

Net interest income and margin 637.4 0.05 557


10/23

Average

Rates

Earned/

Paid

0.088.62

8.06

9.75

10.23

9.76

12.35

8.95

8.04

10.5

10.97

0.1

0.05

4.92

7.27

7.14

5.9

7.41

7.81

7.72

9.14

0.06

0.1

5.55


11/23

8/31/89 8/31/90

Prime Rate 10.50% 10.00%

Federal Fundsa 8.88 8.02

3-Month T-Bills 8.12 7.46

7-Year Treasury Notes 8.29 8.79

3-Month Certificates of Deposita 8.79 8.04

3-Month Commercial Paper 8.69 7.96Merrill Lynch Money Market Fundb 7.96 7.59

aSecondary market.

bAverage rate of return after expenses for past 30-day peri


12/23

Summary of Credit Lines/Loans

Line #1 $6,500,000 New Request

Purpose To build a 100,000-barrel brewery in western Washington, and a 25,000-barrel brewery in

Northern California

Source of payment Profits/cash flow (see Exhibit A-2 for projections).

Fee/rate To be determined.

Terms of payment To be determined.Collateral (in thousands)

100,000-barrel brewery in western Washington

Brewhouse:

Plant

Installation

Filtration

Equipment:

Fermentation tanks (20 @ $50,000)

Malt system

Boiler

RefrigerationKeg system

Bottling line

Hot/Cold water tanks

Leasehold improvements

25,000-barrel brewery in northern California

Brewhouse:

Plant

Installation

Equipment:

Fermentation tanks (20 @ $50,000)Malt System

Boiler

Refrigeration

Keg system

Bottling line

Hot/Cold water tanks

Leasehold improvements

Existing equipment, net of depreciation

Less: existing loans

Total collateral


13/23

2,500

350

125

2,975

1,000

300

150

750

1,000

1,300100

350

4,950

1,250

250

1,500

350

11087

225

750

835

60

250

2,667

2,465

-800

13,757


14/23

Other costs to build, as estimated by Redhook Management, include:

100,000-barrel brewery in western Washington

Miscellaneous soft costs 300

Sales tax 650

Contingency 887

25,000-barrel brewery in northern CaliforniaMiscellaneous soft costs 200

Sales Tax 392

Contingency 476

Other Estimated timing of payments for the planned construction:

Brewing Furniture

Date Equipment and Fixtures

Jul-91 2730000

Jun-92 2077950

Sep-92 6660000

Nov-92 200000Dec-92 2030000

Jan-93

Apr-93 600000

14097950 200000

Line #2 $500,000

Purpose Operating line on a transaction basis to supplement cash flow requirements.

Source of payment Sale of inventory and collection of receivables.

Fee/rate .25% initiation fee ($250). Interest floating rate tied to U.S. Bank of Washington prime.

Terms of payment Revolving line note on demand.

Collateral Supported by perfected security interest in inventory and accounts receivable.

Explanation This line is expected to have limited usage; it was not used at all in 1989. It will be

nonformula-based and transactional, and used only for special purchases of hops, packaging, glass or

labels and would be short-term in nature (i.e. 30 to 90 days).

16


15/23

Lease

Trucks Improvements

200000

200000

200000

100000

100000 600000


16/23

Line #3 $805,000

Purpose Provided financing to build the Fremont brewing facility and brewpub.

Source of payment Profits and cash flow.

Fee/rate Interest floating rate based on U.S. Bank of Washington prime plus 1%, adjusted annuallyin January (currently 11.5%).

Terms of payment Interest payable monthly. Amortized over seven years, with balloon at

maturity on December 7, 1995. Payments currently $15,635 / month.

Collateral Supported by all of the companys equipment and leasehold improvements.

Other Requires a debt-to-worth ratio of 1.25:1


17/23

Profit and Loss

For the Year Ended December 31, 1982 1983 1984 1985 1986

Sales, net of beer taxes $59,345 $259,594 $318,093 $488,151 $702,690

Cost of goods soldb 67,644 86,962 7,322 250,335 362,766

GROSS PROFIT -8,299 72,632 130,771 237,816 339,924

Selling, general and administrative expenses 150,189 128,222 131,705 168,541 218,234Other income (expenses):

Interest income 9,062 0 18 1,953 505

Interest expense -699 -13,155 -18,526 -12,502 -9,054

Loss on sale of equipment

Other 36 -27

INCOME BEFORE TAXES -150,089 -68,772 -19,442 58,726 113,141

Income Taxes:

Current 0 0 0 0 0

Deferred credit 0 0 0 0 29,132

NET INCOME ($150,089) ($68,772) ($19,442) $58,726 $84,009

aRedhook commenced operations at the Fremont brewery in October 1988. Annual brewing capacity incr

bCost of goods sold includes direct costs, defined as beginning inventory, plus purchases, less ending invent

COGS generally increased at a slower rate. COGS can be broken down as follows for 1987-1989:

1987 1988 1989

Cost of Goods Sold:

Beginning inventories $28,141 $65,419 $160,125

Salaries, wages and taxes 159,084 165,843 282,520Employee benefits 7,027 13,770 22,700

Professional fees 5,000 5,000 3,903

Rent and common area expense 30,720 94,916 176,891

Real and personal property taxes 5,970 6,392 10,150

Utilities 19,160 39,765 66,746

Insurance 7,734 10,273 16,847

Depreciation 37,127 153,159 252,172

Repairs and maintenance 7,343 7,426 20,581

Purchases 257,795 448,589 717,952

Purchases-promotional items 20,491 29,402 41,029

Brewery supplies and expense 26,058 69,419 90,881

Pub salaries 22,982 112,220Pub operating expenses 29,950 102,496

611,650 1,162,305 2,077,213

Less ending inventories 65,419 160,125 269,695

$546,231 $1,002,180 $1,807,518


18/23

1987 1988a 1989

$1,082,589 $1,680,174 $2,676,109

546,231 1,002,180 1,807,518

536,358 677,994 868,591

286,567 520,079 607,148

24,250 14,032 1,724

-25,646 -53,863 -122,211

-9,824

-7,500

248,395 118,084 123,632

51,018 18,577 46,642

-6,151 -12,033 -27,000

$203,528 $111,540 $103,990

eased from 8,000 to 40,000 barrels.

ry, and an allocation of fixed expenses. Thus as production volumes neared capacity, total


19/23

Balance Sheet

December 31, 1982 1983 1984 1985 1986

Cash and equivalents $9,151 $35,018 $28,035 $34,583 $69,614

Receivables, net 10,866 14,698 14,410 25,781 33,361

Inventories 14,642 13,496 18,565 27,844 28,141

Prepaid expenses 0 0 0 0 1,107

Refundable taxes 0 0 0 0 0Employee advances 0 0 0 0 0

Current Assets $34,659 $63,212 $61,010 $88,208 $132,223

Equipment and leasehold improvements, net 248,127 305,412 324,061 348,458 552,873

Other assets 10,386 9,552 8,828 5,864 5,089

$293,172 $378,176 $393,899 $442,530 $690,185

Accounts payable $30,997 $8,693 $8,552 $2,334 $19,713

Accrued salaries, wages and payroll taxes 10,025 5,924 5,408 7,048 13,361

Accrued taxes 3,840 8,430 8,976 12,412 15,226

Deposits on kegs and neons 14,040 50,732 45,917 61,107 71,435

Other deposits 0 0 0 0 0

Accrued interest 330 260 375 765 974Taxes payable 0 0 0 0 0

Deferred revenue 0 0 0 0 0

Note payable to individual 0 0 0 0 0

Current portion of long-term debt 0 32,000 40,750 24,635 40,200

Current portion of capitalized leases 0 0 0 0 0

Other 1,208 2,025 2,700 3,375 4,049

Current Liabilities 60,440 108,064 112,678 111,676 164,958

Long term debt, less current portion 32,000 132,000 66,250 60,532 150,603

Capital lease obligation, less current portion 0 0 0 0 0

Deferred rent payable 0 0 0 0 0

Deferred taxes 10,870 10,123 7,424 4,049 29,132

Shareholders EquityCommon Stock, $1.00 par value authorized 50,000

shares, issued and outstanding, 34,904 shares 20,915 21,104 22,904 22,904 22,904

Paid-in capital 365,442 372,152 469,352 469,352 469,352

Retained earnings -196,495 -265,267 -284,709 -225,983 -146,764

189,862 127,989 207,547 266,273 345,492

$293,172 $378,176 $393,899 $442,530 $690,185

Note: Redhook currently has no contingent liabilities

aIncludes $547,768 restricted for equipment acquisitions

bRedhook commenced operations at the Fremont brewery in October 1988


20/23

1987 1988b 1989

$192,182 $95,220 $141,952

57,598 95,157 66,381

65,419 160,125 269,695

1,591 12,147 4,268

0 15,694 00 1,552 0

$316,790 $379,895 $482,296

1,018,673 2,568,011 2,465,374

565,576a 41,823 16,888

$1,901,039 $2,989,729 $2,964,858

$36,932 $249,233 $116,622

3,722 5,403 6,747

19,575 46,244 37,525

79,914 92,664 97,410

0 64,920 0

1,769 3,949 5,75351,018 0 22,917

1,666 3,067 2,976

0 0 7,500

177,624 93,924 104,785

0 0 5,950

372,220 559,404 408,185

35,932 852,519 849,873

0 0 19,561

0 37,260 53,351

74,829 10,948 0

34,904 34,904 34,904

1,326,390 1,326,390 1,326,390

56,764 168,304 272,294

1,418,058 1,529,598 1,633,588

$1,901,039 $2,989,729 $2,964,558


21/23

Income Statement:

For the nine months ended September 30, 1990

Sales, net of beer taxes 2867442

Cost of goods sold 1708961

GROSS PROFIT 1158481

Selling, general and administrative expense 637510

Net operating income 520970

Interest income 9052

Purchase discounts 2560

Interest expense 80406

Income before income taxes 452177

Income tax expense 153740

NET INCOME 298436

Balance Sheet Data:

At September 30, 1990

Current assets 782396

Other assets 106869

Net equipment and improvements 2349311

Total Assets 3238576

Current liabilities 490141

Long-term debt 781566

Other liabilities 69044

1340752Total Shareholders Equity 1897824

3238576


22/23

Profit and Loss

Year ended December 31, 1990 1991 1992 1993 1994

Revenues:

SalesBeer (draft ale) 1233000 1548900 1989200 2259500 2402750

SalesBeer (draft lager) 1205100 2166750

SalesBeer (bottled ale) 2087500 3193750 4759500 5678500 6577500SalesBeer (bottled lager) 7536000 16987400

SalesBeer (Trolleyman) 480000 480000 490000 490000 500000

Gross Sales 3800500 5222650 7238700 17169100 28634400

Less beer taxes 240793 336128 461380 1328007 2174617

Net Sales 3559707 4886522 6777320 15841093 26459783

Cost of Goods Sold:

Direct CGS 925524 1221630 1626557 3960273 6614946

Other 1336866 1477176 1667795 4870894 5545648

GROSS PROFIT 1297317 2187716 3482968 7009926 14299189

Selling and marketing expense 280157 381063 493250 1533086 2106150

General and administrative expense 522601 674360 834593 1371525 1863322

Total operating expenses 802758 1055423 1327843 2904611 3969472Net operating income 494559 1132293 2155125 4105315 10329717

Interest income 306138 663561 409549 4842 126742

Earnings before interest and taxes 800697 1795855 2564674 4110157 10456459

Interest expense 110934 95079 203982 771536 600332

Income before income taxes 689763 1700776 2360692 3338621 9856127

Income taxes 234519 578264 802635 1135131 3351083

NET INCOME 455243 1122512 1558057 2203490 6505044


23/23

Balance Sheet

At December 31, 1990 1991 1992 1993 1994

Assets:

Current Assets

Cash 50000 50000 3057 50000 50000Short term investments 4358209 3821464 0 726327 5609474

Accounts receivablenet 214229 306788 437371 1327492 2408266

Inventory 428457 613577 874742 2084912 3567349

Total Current Assets 5050895 4791830 1315169 4188730 11635090

Intangible assetsnet 132,159 102251 72,343 54,435 22985

Deposits 1000000 0

Equipment and leasehold

improvements 2989160 2989160 3789160 17987110 17987110

Less: accumulated depreciation 823126 1122466 1431568 2896826 4214737

Net equipment and leasehold

improvements 2166034 1866694 2357592 15090284 13772373Plus: construction in progress 0 2730000 13497950 0 0

Total equipment and leasehold

improvements 2166034 4596694 15855542 15090284 13772373

Total Assets 8349088 9490775 17243055 19333450 25430448

Current Liabilities:

Accounts payable 214229 306788 437371 1042456 1783675

Accrued liabilities 3880 4342 4430 8730 14330

Deposits on kegs and neon lights 128160 158880 201720 212940 294240

Federal income taxes payable 44799 67402 69734 134451 374027

Current portionlong-term debt 129669 146620 158418 175740 196557

Total Current Liabilities 520737 684031 871673 1574317 2662829

New term debt 0 0 6165000 5525000 4225000

Other long-term obligations 861689 732019 585400 426983 251243

Total long-term debt 861689 732019 6750400 5951983 44762437

Less: current portion 129669 146620 158418 175740 196557

Net long-term debt 732019 585400 6591981 5776243 4279686

Other liabilities 7500 10000 10000 10000 10000

Stockholders Equity:

Preferred stock 0 0 0 0 0Common stock 6361294 6361294 6361294 6361294 6361294

Retained earnings 727537 1850049 3408106 5611596 12116639

Total Equity 7088831 8211343 9769400 11972890 18477933

Total Liabilities and

Stockholders Equity 8349088 9490775 17243055 19333450 25430448

1993-us bank of washington-exhibits

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