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Total assets ended September 30, 2009 at $130.2 million with net loans and deposits at $94.3 million and $96 million respectively. By comparison, total assets for 3rd quarter 2008 were $123.2 million with net loans and deposits of $103.9 million and $90 million respectively. The year over year decrease in loans of $9.6 million can be attributed to the Banks efforts to exit lending relationships where the full deposit relationship is not at Cal Oaks which also benefits the Banks increased liquidity.
On the deposit side, the Bank saw an increase of $6 million primarily due to a boost in core deposits of $8.2 million while certificate of deposits decreased $2.2 million. This shift has benefited the Bank's stable deposit costs. FHLB borrowings decreased, compared to a year ago, by $1.0 million. Subsequently, the Bank has paid off a $5 million FHLB advance at a rate of 3.89% due to mature in November 2009. The primary reason for early payoff was to use existing liquidity from core deposits to reduce wholesale funding which in turn will improve the net interest margin. The current focus for the Bank is to increase core deposits, fund loans to worthy loan relationships, improve its liquidity position and increase shareholder value.
The net interest margin as a percentage of average assets ended the 3rd quarter at 3.98% versus 4.03% in the 2nd quarter of 2009. The Bank's net interest margin has remained stable through the first 9 months of 2009 as the decrease in the prime lending rate (75 basis points), which occurred late in 2008 and carried into 2009, has been offset by the Bank's ability to reduce its dependence on wholesale funding during the first nine months of 2009 and the higher costs associated with this type of funding.
Currently, the Bank maintains a loan loss reserve of 2.01% of the total loans outstanding and believes it is adequately reserved based on the challenges that exist in the economy today and the quality of the loan portfolio. Total non-performing assets at September 30, 2009 were $993,000, a decrease of $2,119,000 from June 30, 2009. Included in the non-performing assets were SBA loans totaling $730,000 made by the Bank that have government guaranties of $411,000. Non-performing assets represent 0.80% of total assets at September 30, 2009 compared to 2.45% at the end of the prior quarter. The quarter's decline in nonperforming assets was due to the successful resolution of a number of problem loans and the sale of other real estate assets. Nonperforming assets at September 30, 2009 consisted of $993,000 of loans on nonaccrual status and $0 in other real estate owned. Nonperforming loans consist of four loans, two of which are SBA loans, one is the remnant of construction loan participation and one is a consumer loan. Past due loans over 30 days totaled $0 at September 30, 2009 compared to $1,286,000 at June 30, 2009.
John Nerland, the Bank's President and CEO noted, "Through the concerted effort and aggressive management of staff I am extremely pleased to report the progress we have made in the nonperforming loan category and in the lack of past due loans over 30 days. This was a big step for the Bank to work through a number of problem relationships and to emerge with a gain on the books."
Capital ratios remain strong with Tier 1 risk at 16.12%. California Oaks State Bank remains highly capitalized as far as the regulatory entities are concerned, with total risk based capital of 17.38%. In today's Banking environment, this is a highly positive position. As was previously reported, the Bank received capital funding in January for $3.3 million that the government made available under the U.S. Treasury Capital Purchase Plan (TARP). Upon approval, $3.3 million of preferred stock was sold to the U.S. Treasury to help fortress the balance sheet and enable the Bank to increase lending efforts. The government invests only in "healthy, viable banks."
Visit the California Oaks State Bank Web site at www.caloaks.com for more information and updates on new products as they become available.
About California Oaks State Bank
California Oaks State Bank (OTCBB: COSB), with $130 million in assets, is located in Ventura County with offices in Thousand Oaks and Simi Valley and a Loan Production Office located in Walnut Creek, Calif. California Oaks State Bank was founded in 1998 as a locally owned Community Business Bank. The bank provides a full range of products and services including Commercial and real estate loans as well as cash management products and deposit services. Its unique capability in diversified lending in addition to its customary community bank credit products help its customers meet their cash management goals.
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbors created by the act. These forward-looking statements refer to the Company's current expectations regarding future operating results, and growth in loans, deposits, and assets. These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results, performance, or achievements to differ materially from those expressed, suggested, or implied by the forward-looking statements. These risks and uncertainties include, but are not limited to (1) the impact of changes in interest rates, a decline in economic conditions, and increased competition by financial service providers on the Company's results of operation, (2) the Company's ability to continue its internal growth rate, (3) the Company's ability to build net interest spread, (4) the quality of the Company's earning assets, and (5) governmental regulations.
BALANCE SHEET
For the Quarters Ended September 30, 2009 and 2008
(Unaudited) (000)
9/30/2009 9/30/2008
-------------------- --------------------
ASSETS
Cash and Due from Banks $ 12,705 $ 5,624
CD's with Other Financial
Institutions 16,089 0
Federal Funds Sold 0 2,785
Investment Securities 1,638 5,108
Loans (net) 94,312 103,873
Other Assets 5,497 5,852
-------------------- --------------------
Total Assets $ 130,241 $ 123,242
==================== ====================
LIABILITIES & SHAREHOLDERS EQUITY
Demand Deposits $ 32,263 $ 31,877
Money Market and NOW Accounts 31,020 22,876
Savings Accounts 3,606 3,904
Time Deposits Under $100,000 14,430 22,036
Time Deposits $100,000 and Over 14,725 9,322
-------------------- --------------------
Total Deposits 96,044 90,015
FHLB Borrowings 16,000 17,000
Other Liabilities 624 838
-------------------- --------------------
Total Liabilities 112,668 107,853
Treasury Preferred Stock 3,307 0
Common Shareholders' Equity 14,266 15,389
-------------------- --------------------
Total Equity 17,573 15,389
-------------------- --------------------
Total Liabilities and Equity $ 130,241 $ 123,242
==================== ====================
STATEMENT OF EARNINGS
For Nine Months Ended September 30, 2009 and 2008
(Unaudited) (000)
9/30/2009 9/30/2008
----------- -----------
Interest Income $ 5,022 $ 6,062
Interest Expense 1,244 1,356
----------- -----------
Net Interest Income 3,778 4,706
Provision for Loan Loss 185 359
----------- -----------
Net Interest Income after Provision 3,593 4,347
Non Interest Income 968 632
----------- -----------
Total Operating Income 4,561 4,979
Total Non Interest Expense 4,432 4,728
----------- -----------
Net Income Before Tax & Extraordinary 129 251
Tax and Extraordinary Items 0 110
----------- -----------
Net Income (Loss) $ 129 $ 141
----------- -----------
RATIOS 9/30/2009 9/30/2008
----------- -----------
Earnings Per Share $ 0.09 $ 0.09
Book Value Per Share $ 9.54 $ 10.36
Return on Assets 0.14% 0.15%
Return on Equity 0.21% 1.23%
Media Contact: John Nerland President and CEO (805) 413-0111 Email Contact
SOURCE: California Oaks State Bank
http://www2.marketwire.com/mw/emailprcntct?id=96F74A24949142A7
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