SCVBank Reports Solid Earnings for 2008
Despite current economic activity, loans grew 25%.
Santa Clara Valley Bank announced its 2008 fourth quarter
and year-end financial results.
Total revenue for 2008 was $7,698,000, which was 3% higher
than the $7,478,000 for 2007. The small increase in revenue was affected
by the decreasing interest rate environment. Net interest income
increased 10% to $5,026,000. Operating expenses increased 8% over
2007. Much of the expense increase is attributable to the relocation of
the Fillmore Branch in late 2007; data processing and other professional
services; and promotion expense. Due to the stress of the economic
conditions on the Bank’s loan portfolio, the provision for loan loss increased
to $944,000 in 2008 compared to $224,000 in 2007.
The Bank’s net income for 2008 was $256,000 or $0.24 per
share, a 46% decrease, compared to $472,000 or $0.46 per share in 2007,
primarily the result of the large provision for loan loss. SCVBank’s
average net interest margin remained at a healthy level of 4.79% in December,
This is SCVBank’s first cash dividend.
In 2008, the Bank’s loans grew to $101.9 million, up from
$81.6 million at the previous year-end, an increase of approximately 25%.
The Bank has slightly less than $100 million in deposits, up from $91.6
million, or 9.2%, over year-end 2007.
The state of the economy began to adversely affect the
performance of the Bank’s loan portfolio in the fourth quarter.. The
economic contraction reduced revenues for many of our loan customers and
collateral values dropped significantly. Loan charge-offs were $19,000 in
the fourth quarter, the first quarterly charge-off recorded in thirteen
quarters. A provision for loan loss of $766,000 was recorded in the
fourth quarter to offset potential losses in three SBA loans and two
construction loans. President and CEO Michael D. Hause remarked, “While
we believe the provisions to be conservative, the extent of the economic
downturn has yet to be determined”.
Bank assets at year-end were $121.0 million, an increase of
13% over the 2007 year-end level of $107.3 million. The Bank remains very
Chairman Guy Cole remarked, “While the current economic
crisis has affected the Bank’s year-end results, we are proud that we operating
profitably during such a stressful period. While so many of our
competitors have experienced significant losses or have gone out of business,
we are looking to the future with optimism. Our 5 Star “Superior” rating
by BauerFinancial, Inc. has attracted scores of new customers looking for a
financially strong banking institution. ”
“As we head into 2009, SCVBank’s liquidity remains
strong. We have plenty of funds to lend, and are looking for
opportunities to help with the economic recovery,” remarked Hause.