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Earnings rise for local bank

The SCV's only commercial bank lifts profits by $883K

Posted: February 5, 2009 8:22 p.m.
Updated: February 6, 2009 4:55 a.m.

Bank of Santa Clarita, the only commercial bank headquartered in the Santa Clarita Valley, reported significantly improved earnings in 2008 over 2007 on Wednesday.

Net income for the fourth quarter of 2008 grew to $351,000 compared with $73,000 for the fourth quarter of 2007, and that net income for the full year of 2008 was $552,000, as compared with a net loss of $331,000 for 2007, the press release said.

The fourth quarter of 2008 included the recognition of a portion of the income tax benefits resulting (but not recognized) from the bank's net operating losses recorded during the initial four years of its operations; absent this benefit recognition, on a pro forma basis the bank's net earnings for 2008's fourth quarter and full year would have been approximately $60,000 and $179,000, respectively, and estimated 2007 results would have been fourth quarter earnings of approximately $43,000 and full-2007 results would have been a loss of approximately $194,000.

The bank reported net interest income increased to $1.41 million for the quarter ended December 31, 2008, as compared with the $1.23 million reported for the same quarter of 2007.

Year-to-date results also reflect strong growth, as the bank reported $5.30 million of net interest income for 2008, an increase of 16 percent over the $4.57 million reported for 2007.

"Executive management is very pleased with the bank's results for 2008," said James D. Hicken, president and chief executive officer. "Banks' are operating in a very difficult environment today and we believe as reflected through our results for 2008 that Bank of Santa Clarita is properly positioned to take advantage of opportunities as they occur.

The bank's loan portfolio continues to be performing very well, which is due to management's conservative underwriting standards, with minimal loans past due 90 or more days or classified as nonaccrual at the end of the year."

At Dec. 31, 2008, shareholders' equity was $19.22 million and the bank's total risk-based regulatory capital ratio was 15.89 percent, substantially exceeding the "well-capitalized" level of 10 percent prescribed under regulatory requirements. Moreover, the bank continues to maintain a strong liquidity position, retaining significant balances of on-balance sheet liquidity as well as available collateralized borrowings.

The bank's Executive Management and Board of Directors, while generally supportive of the U.S. Government's innovative and far-reaching approach to managing and minimizing the effects of the current economic crisis, determined that it would not be in the best interests of the bank or its shareholders to apply for aid from the U.S. Treasury under the Treasury's capital assistance program.

"We recognize that these are obviously not normal times and no one can predict the depth and duration of the current economic problems 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," Hicken said. "We believe that we can access traditional capital sources should we be required to raise capital in order to fund an acquisition or other business expansion."

The bank plans to open its third retail banking office in March 2009, which will be located in The Plaza at Golden Valley in the eastern Santa Clarita Valley.

The Bank of Santa Clarita was founded in 2004 and is the only independent, full-service commercial bank headquartered in Santa Clarita. Bank of Santa Clarita's Web site is www.bankofsantaclarita.


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