Exhibit 99.1
October 30, 2009
NEWS RELEASE
FOR IMMEDIATE RELEASE
Contacts: | John C. Hansen | (805) 466-7087 |
| President and Chief Executive Officer |
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| James M. Cowan | (805) 466-7087 |
| Executive Vice President and Chief Financial Officer |
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| Santa Lucia Bancorp | (805) 466-7087 |
| www.santaluciabank.com |
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SANTA LUCIA BANCORP (ATASCADERO, CALIFORNIA)
(OTC Bulletin Board: SLBA.OB)
ANNOUNCES RESULTS FOR THE THIRD QUARTER AND THE NINE MONTHS ENDING SEPTEMBER 30, 2009 SHOWING A REDUCTION IN EARNINGS BUT GOOD GROWTH IN LOANS AND DEPOSITS
Financial Performance
Net income after tax for the 3rd quarter of 2009 was $143,000 compared to $349,000 reported for the 3rd quarter of 2008, a decrease of $206,000 or 59.0%. The decrease in earnings was mainly due to the 400 basis point drop in the prime lending rate during 2008 coupled with additions to the loan loss reserve and increased FDIC insurance fees. Earnings per common share (EPS) for the 3rd quarter of 2009 were $0.04 per diluted common share compared to $0.18 per diluted common share reported in the 3rd quarter of 2008, a decrease of 77.8%.
Net income after tax year to date in 2009 was $611,000 compared to $1,251,000 reported year to date in 2008, a decrease of $640,000 or 51.2%. Year to date EPS for 2009 were $0.23 per diluted common share compared to $0.64 per diluted common share reported in the same period in 2008, a decrease of 64.1%.
Growth
Total loans, net of unearned fees were up $13.3 million or 7.0% to $202.2 million at September 30, 2009 compared to $188.9 million at December 31, 2008. Total deposits at September 30, 2009 were up $18.7 million or 8.8% to $231.0 million compared to $212.3 million at December 31, 2008. Overall, total assets grew by $13.2 million or 5.2% to $265.1 million at September 30, 2009 compared to $251.9 million at December 31, 2008.
John C. Hansen, President and CEO said, “We are pleased with the Company’s growth for the first nine months of 2009. Although profits have been affected by the challenging economic climate, we continue our focus on healthy growth, strengthening liquidity and capital, maintaining credit quality, and providing superior customer service.”
Highlights for the nine months ending September 30, 2009:
· Loans, net of unearned fees – up 7.0% to $202.2 million
· Deposits – up 8.8% to $231.0 million
· Assets – up 13.2% to $265.1 million
· Shareholders’ Equity – up 0.38% to $25.6 million
· Non-Performing loans - increased 87.5% or $1.4 million to $3.0 million
· Net income – decreased 51.2% or $640,000 compared to the same period in 2008
Income Statement
Net interest income decreased from $2.9 million for the 3rd quarter of 2008 to $2.7 million for the 3rd quarter of 2009, a decrease of $169,000 or 5.9%. This decrease was due primarily to the 1.75% decrease in the prime lending rate during the 4th quarter of 2008. Year to date, net interest income decreased by $379,000, or 4.4%, to $8.2 million in 2009 from $8.6 million in 2008. Net interest margin decreased for the 3rd quarter period ending September 30, 2009 to 4.43% compared to 5.01% for the 3rd quarter of 2008. Net interest margin year to date in 2009 was 4.57% compared to 5.07% in 2008. Because the Company is asset sensitive, the decrease in both periods was primarily due to interest rates on earning assets declining at a faster rate than the interest rates paid on interest-bearing liabilities, which is common in a falling rate environment.
Non-interest income was $255,000 for the 3rd quarter of 2009 compared to $248,000 for the same period in 2008, an increase of $7,000 or 2.8%. Year to date, non-interest income was $820,000 in 2009 compared to $867,000 in 2008, a decrease of $47,000 or 5.4%. The decrease was due mainly to a $35,000 decrease in NSF fees and a $16,000 decrease in the gain on sale of investments.
Non-interest expense decreased for the 3rd quarter to $2.4 million in 2009 from $2.4 million in 2008, a decrease of approximately $67,000 or 2.8%. Non-interest expense year to date increased to $7.3 million in 2009 from $7.2 million in 2008, an increase of approximately $106,000 or 1.5%. The increase was primarily due to a special FDIC assessment of $120,000. The special FDIC assessment was levied against all financial institutions to replenish the FDIC’s Deposit Insurance Fund. The Company’s efficiency ratio, the measure of operating expense as a percentage of net interest income plus non-interest income, declined to 81.5% for the 3rd quarter of 2009 compared to 76.7% for the same period in 2008 due to the decrease in net income.
In the 3rd quarter of 2009, the provision for loan loss expense was $400,000 compared to $160,000 in 2008. Year to date, the provision for loan loss expense was $750,000 compared to $200,000 in 2008. The increase was due primarily to growth in the loan portfolio and non-performing loans.
Annualized return on average assets (ROAA) was 0.31% for the period ending September 30, 2009 compared to 0.67% in the same period in 2008. Annualized return on average equity (ROAE) was 3.17% for the period ending September 30, 2009 compared to 7.71% through September 30, 2008.
Asset Quality
For the 3rd quarter 2009, the Company had net charge offs of $98,000 compared to net charge offs of $25,000 in the 3rd quarter of 2008. Year to date 2009, there were net charge offs of $583,000 compared to net charge offs of $82,000 in 2008. The allowance for loan losses was $2.5 million or 1.22% of loans at September 30, 2009 compared to $2.3 million or 1.22% of loans at December 31, 2008. The adequacy of the allowance for loan losses is determined by management based on an analysis of a number of recognized factors such as historical loss, industry default rates, peer group comparisons, loan quality classifications, and various economic indicators. The allowance for loan losses is routinely reported to the Board of Directors and is subject to review by our outside credit review firm, external auditors and regulatory examiners. The provision for loan losses will be increased or decreased based on Management’s analysis of adequacy.
Total nonaccrual loans were $3.0 million at September 30, 2009 compared to $1.6 million at December 31, 2008, an increase of $1.4 million or 87.5%. Nonaccrual loans as a percent of gross loans at September 30, 2009 was 1.49% compared to 0.85% at December 31, 2008. The Company had no Other Real Estate Owned (OREO) property at September 30, 2009 or December 31, 2008.
Santa Lucia Bancorp assesses and manages credit risk on an ongoing basis through a formal 3rd party credit review program, internal monitoring and formal lending policies of its wholly-owned bank subsidiary, Santa Lucia Bank. The Company believes that the Bank’s ability to identify and assess risk and return characteristics of the loan portfolio is critical for profitability and growth of the consolidated group. The Company, through the Bank, emphasizes credit quality in the loan approval process, active credit administration and regular monitoring.
Capital
Total shareholders’ equity at September 30, 2009 increased $97,000 to $25.6 million compared to $25.6 million at December 31, 2008. Capital ratios for the Company remain above the well-capitalized guidelines established by bank regulatory agencies. Tier I Leverage Ratios decreased from 11.9% at December 31, 2008 to 11.3% at September 30, 2009. The Total Capital to Risk Weighted Assets decreased from 15.9% at December 31, 2008 to 15.1% at September 30, 2009.
Additional Information
Santa Lucia Bancorp, headquartered in Atascadero, California is a California corporation organized in 2006 to act as the holding company for Santa Lucia Bank (the Bank). Santa Lucia Bank has operated in the State of California since August 5, 1985.
The Bank engages in the commercial banking business principally in San Luis Obispo and northern Santa Barbara Counties from its banking offices located at 7480 El Camino Real, Atascadero, California, 1240 Spring Street, Paso Robles, California, 1530 East Grand Avenue, Arroyo Grande, California and 1825 South Broadway, Santa Maria, California.
The Company, through its subsidiary, Santa Lucia Bank, emphasizes personalized quality customer service to small and medium sized businesses in its markets. The main focus after 20 years of operation is to provide a consistent return to shareholders, quality personalized service to our customers and a challenging and rewarding environment for our employees. These guiding principals will continue to serve the Bank well in both the short term and long term.
FORWARD-LOOKING INFORMATION:
Statements concerning future performance, developments or events, expectations for growth and income 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 current financial crisis and recession in United States, continued weakness in the real estate markets within which we operate, and foreign financial markets and the response of government and bank regulators thereto, increased profitability, continued growth, the Bank’s beliefs as to the adequacy of its existing and anticipated allowances for loan losses, beliefs and expectations regarding actions that may be taken by regulatory authorities having oversight over the Company’s or Bank’s operations, interest rates and financial policies of the United States government, general economic conditions and California’s energy crisis. Additional information on these and other factors that could affect financial results are included in the Company’s Securities and Exchange Commission filings.
When used in this release, the words or phrases such as “will likely result in”, “management expects that”, “will continue”, “is anticipated”, “estimate”, “projected”, or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (PSLRA). Readers should not place undue reliance on the forward-looking statements, which reflect management’s view only as of the date hereof. Santa Lucia Bancorp undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. This statement is included for the express purpose of protecting Santa Lucia Bancorp under PSLRA’s safe harbor provisions.
SELECTED FINANCIAL INFORMATION
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| Unaudited |
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| Three Months Ended |
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| Nine Months Ended |
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| September 30, |
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| September 30, |
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| 2009 |
| 2008 |
| Change |
| 2009 |
| 2008 |
| Change |
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Summary of Operations: |
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Interest Income |
| $ | 3,465 |
| $ | 3,793 |
| -8.65 | % | $ | 10,500 |
| $ | 11,582 |
| -9.34 | % |
Interest Expense |
| 751 |
| 910 |
| -17.47 | % | 2,310 |
| 3,013 |
| -23.33 | % | ||||
Net Interest Income |
| 2,714 |
| 2,883 |
| -5.86 | % | 8,190 |
| 8,569 |
| -4.42 | % | ||||
Provision for Loan Loss |
| 400 |
| 160 |
| 150.00 | % | 750 |
| 200 |
| 275.00 | % | ||||
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Net Interest Income After Provision for Loan Losses |
| 2,314 |
| 2,723 |
| -15.02 | % | 7,440 |
| 8,369 |
| -11.10 | % | ||||
Noninterest Income |
| 255 |
| 248 |
| 2.82 | % | 820 |
| 867 |
| -5.42 | % | ||||
Noninterest Expense |
| 2,367 |
| 2,434 |
| -2.75 | % | 7,344 |
| 7,238 |
| 1.46 | % | ||||
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Income Before Income Taxes |
| 202 |
| 537 |
| -62.38 | % | 916 |
| 1,998 |
| -54.15 | % | ||||
Income Taxes |
| 59 |
| 188 |
| -68.62 | % | 305 |
| 747 |
| -59.17 | % | ||||
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Net Income |
| $ | 143 |
| $ | 349 |
| -59.03 | % | $ | 611 |
| $ | 1,251 |
| -51.16 | % |
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Cash Dividends Paid |
| $ | — |
| $ | 481 |
| -100.00 | % | $ | 481 |
| $ | 963 |
| -50.05 | % |
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Per Share Data: |
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Earnings Per Share - Basic |
| $ | 0.04 |
| $ | 0.18 |
| -77.78 | % | $ | 0.23 |
| $ | 0.65 |
| -64.62 | % |
Earnings Per Share - Diluted |
| $ | 0.04 |
| $ | 0.18 |
| -77.78 | % | $ | 0.23 |
| $ | 0.64 |
| -64.06 | % |
Dividends |
| $ | — |
| $ | 0.25 |
| -100.00 | % | $ | 0.25 |
| $ | 0.50 |
| -50.00 | % |
Book Value |
| $ | 11.26 |
| $ | 11.13 |
| 1.17 | % | $ | 11.26 |
| $ | 11.13 |
| 1.17 | % |
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Common Outstanding Shares: |
| 1,923,053 |
| 1,923,053 |
| 0.00 | % | 1,923,053 |
| 1,923,053 |
| 0.00 | % | ||||
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Statement of Financial Condition Summary: |
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Total Assets |
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| $ | 265,101 |
| $ | 253,911 |
| 4.41 | % | ||
Total Deposits |
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| 230,984 |
| 213,392 |
| 8.24 | % | ||||
Total Net Loans |
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| 199,760 |
| 184,787 |
| 8.10 | % | ||||
Allowance for Loan Losses |
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| 2,477 |
| 1,791 |
| 38.30 | % | ||||
Total Shareholders’ Equity |
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| 25,648 |
| 21,405 |
| 19.82 | % | ||||
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Selected Ratios: |
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Return on Average Assets |
| 0.21 | % | 0.55 | % | -61.10 | % | 0.31 | % | 0.67 | % | -53.52 | % | ||||
Return on Average Equity |
| 2.23 | % | 6.47 | % | -65.50 | % | 3.17 | % | 7.71 | % | -58.83 | % | ||||
Net interest margin |
| 4.43 | % | 5.01 | % | -11.58 | % | 4.57 | % | 5.07 | % | -9.86 | % | ||||
Average Loans as a Percentage of Average Deposits |
| 85.07 | % | 85.46 | % | -0.46 | % | 87.67 | % | 82.62 | % | 6.11 | % | ||||
Allowance for Loan Losses to Total Loans |
| 1.22 | % | 0.96 | % | 27.08 | % | 1.22 | % | 0.96 | % | 27.08 | % | ||||
Tier I Capital to Average Assets - “Bank Only” |
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| 10.75 | % | 9.68 | % | 11.05 | % | ||||
Tier I Capital to Risk-Weighted Assets - “Bank Only” |
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| 13.09 | % | 11.77 | % | 11.21 | % | ||||
Total Capital to Risk-Weighted Assets - “Bank Only” |
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| 14.36 | % | 13.04 | % | 10.12 | % | ||||
Tier I Capital to Average Assets - “Bancorp” |
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| 11.33 | % | 10.42 | % | 8.73 | % | ||||
Tier I Capital to Risk-Weighted Assets - “Bancorp” |
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| 13.82 | % | 12.66 | % | 9.16 | % | ||||
Total Capital to Risk-Weighted Assets - “Bancorp” |
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| 15.08 | % | 13.93 | % | 8.26 | % |