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SCVBank Reports Fourth Quarter and Year-end Results for 2010

  • Net Interest Margin above Peers
  • Strong Capital Ratios
  • Strong Liquidity

SANTA PAULA, CA. April 15, 2011- Santa Clara Valley Bank (SCVBank; OTC BB: SCVE.OB) today announced its 2010 fourth quarter and year-end financial results.

Core pre-tax operating income was $541,000 in 2010, offset by $900,000 in provisions to the loan loss reserve. Of the $900,000 in provisions, $800,000 was recorded during the first half of the year. Other real estate owned expense and write-downs totaled $833,000 impeding the Bank's 2010 operating results. The Bank posted a pre-tax loss for 2010 of $359,000 compared to a pre-tax loss of $3.3 million in 2009. After tax losses for 2010 and 2009 were ($568,000) and ($2,984,000) respectively, or ($0.35) and ($2.77) per share (basic) available to common shareholders.

During 2010, serious efforts were undertaken to reduce expenses. Salary expense was reduced by $267,000; promotional expense was reduced by $108,000. Total budget cuts exceeded $500,000. These cuts were offset by increased costs including expenses associated with the Bank's foreclosed properties ($295,000), and increased regulatory assessments ($107,000). Net interest income decreased by only 1% as deposit rates were reduced to correspond to weakness in loan demand.

The Bank remains very well capitalized. Year-ending Tier 1 Capital ratio was 9.01%, a 10.5% increase over year-end 2009 ratio of 8.15%. Total Risk-Based Capital was 15.51% as of 12/31/10.

SCVBank's net interest margin for 2010 remained above its peers at 4.09%. Costs of funds have been aggressively managed averaging 0.85% for 2010.
During the second half of the year, asset quality stabilized, and loan delinquencies declined to levels more closely associated with a stable economy. In fact, during the fourth quarter, two loan recoveries were experienced totaling over $290,000. There were $332,000 in recoveries for the entire year. The Bank's loan loss allowance at year-end was a very robust 3% of loans outstanding.

Bank assets at year-end were $136.4 million, a decrease of 2.4% over the 2009 year-end level of $139.7 million, as bank management consciously reduced deposits to coincide with reduced loan demand.

The Bank is very liquid, with over $48 million in cash and securities at year-end.

For the fourth quarter 2010, SCVBank experienced a pre-tax loss of $12,000 compared to a pre-tax loss of $1,116,000 for the period a year earlier. President and CEO Michael Hause reported, "Had it not been for large expenses relating to the Bank's Other Real Estate Owned (OREO), solid profitability would have been enjoyed for 2010."

In early January 2011, the Bank sold its largest OREO, reducing non-earning assets by $1.4 million. Another small property was sold In December.

CEO Hause continued, "The 'Great Recession' had a strong negative impact on the Bank's performance for the first six months of 2010. Lingering credit problems identified in 2009 required further write downs as new appraisals were ordered and collection efforts resulted in final collections on troubled loans. Positive trends in charge-offs and loan delinquencies were experienced in the last 6 months of the year".

Chairman Ralph De Leon stated, "We are very optimistic about 2011, based on the positive trends experienced in 2010, the improving economy, and our strong management team, which includes Chief Credit Officer Cheryl Knight and Chief Financial Officer Fred Antrim".

PDF 2010 Financial Results - (PDF)

Founded in 1998, Santa Clara Valley Bank has offices in Santa Paula, Fillmore, and Valencia. Under its stock symbol of SCVE.OB, Santa Clara Valley Bank's stock is traded through Wedbush Morgan Securities, and Howe Barnes Hofer & Arnett. The Bank's web site is

Santa Clara Valley Bank Corporate Headquarters
901 East Main Street
Santa Paula, California 93060

Statements concerning future performance, developments or events concerning expectations for growth and market forecasts, and any other guidance on future periods, constitute forward looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, the effect of interest rate changes, the ability to control costs and expenses, the impact of consolidation in the banking industry, financial policies of the United States government, and general economic conditions.

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