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2nd Quarter 2013 Shareholders Report (click here for full PDF version with Financial Supplement)
Each quarter we look forward to sharing our progress with friends, neighbors and shareholders as we continue to work diligently to build a thriving, reputable and caring financial institution. The bank remains strong, stable and growth remains positive.
Total assets were $146,369,000 as of June 30, 2013, up $11.9 million, or 8.9% from December 31, 2012. Total loans increased $11.7 million or 15% since December 31, 2012, ending at $86,114,000 as of June 30, 2013. These figures are an excellent sign of long- term growth and future earnings for the bank and its shareholders.
The dramatic loan growth for this quarter has, in large part, been due to strategies put in place late last year. These include hiring new key personnel, expanding into new markets and offering new services. While this record loan growth has validated these efforts, the additional income to be generated typically lags for a period when operational costs are disproportionate to income. We are now in the midst of this transition period and are greatly encouraged as we expect the momentum to continue to build. With our high level of liquidity invested at today’s minimal federal funds rate, we have significant capacity to continue to drive income through the generation of new market rate loans for some time to come.
However, partially offsetting this and because of our recent success, we have now fully utilized all of our remaining tax loss carry forward accounts, leaving current net income subject to corporate income tax. Net income for the first six months of 2013 was $125,000 after tax provisions. This is reduced from last year, but strongly influenced by the growth and tax issues mentioned above. As the new market rate loans continue to add meaningful income and additional loans are obtained in the current favorable economic climate, your Board continues to seek conservative growth through both additional key personnel and expanded markets.
Credit quality remains stable. We hold no foreclosed property at quarter-end and have had borrowers reporting improved financial results, which leads to fewer write downs, better loan quality, and less negative impact on the income statement. Our allowance for loan loss reserve is approximately $1.36 million, or 1.57% of total loans. This level is comparable to our peer banks and we believe, based on the internal qualitative factors, sufficient at this time.
The mortgage department is doing very well. Rates have increased in recent weeks, and volume has slowed. Once consumers re-acclimate, we feel confident volume will return to projected levels.
Santa Paula is steady, deposits remain solid, and loan volume is increasing slightly. Ventura continues on track as we expand in that market, and the community response is positive. The positive community response not only provides us with encouraging signs for the potential in this market, but also excellent opportunities to gain additional market share.
Shareholders approved the creation of a bank holding company in May of this year. We are in the process of completing the necessary applications to start regulatory approval for the holding company, arrange financing, and pay off TARP. We expect completion by the end of the year.
We believe community banking is strong and well valued. Daily, we receive positive feedback from our customers because we are able to make local decisions, offer comparable products and services, and provide real solutions to current needs.
Our shares continue to trade in the $6.00 to $6.50 range. Our book value continues to grow which helps market price overall. We continue to focus on improving the bank and ultimately our stock performance and return.
We thank you for your loyalty and we are always available to answer your questions. Contact Dave Brubaker, President/CEO, at the office located at 402 W. Ojai Ave, Ojai CA 93023, firstname.lastname@example.org or 805-646-9909.
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