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Bank of Santa Clarita won’t seek federal funds

Posted: November 24, 2008 8:34 p.m.
Updated: November 25, 2008 4:30 a.m.
 

Bank of Santa Clarita's Board of Directors said Monday it would not be in the best interest of the bank or its shareholders to apply for aid from the U.S. Treasury under the Treasury's capital assistance program.

The board is generally supportive of the U.S. government's innovative and far-reaching approach to managing and minimizing the effects of the current economic crisis. The conclusion was reached based on the bank's financial stability and restrictions on the use of the funds, according to a bank press release.

Risk-based capital ratios are one of the most commonly used indicators of a bank's overall health, and are a measure of capital based generally on the degree of risk associated with that bank's assets and certain off-balance-sheet items.

Bank of Santa Clarita had a total risk-based capital ratio of 16.52 percent in September, well in excess of the 10 percent level required to be classified "well-capitalized," the highest rating defined under FDIC and other regulatory guidelines.

"We recognize that these clearly are not normal times, and no one can predict the depth and duration of the current economic problems," said bank CEO James D. Hicken.

"But we have carefully reviewed our capital position and are confident that the bank will remain well-capitalized under these severe conditions without government assistance. We believe we can access traditional capital sources should we be required to raise capital to fund an acquisition or other business expansion."

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