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4th Quarter 2011 Shareholders Report (click here for full PDF version with Financial Supplement)
We are proud to update our shareholders and friends on another quarter of progress and a year of significant, positive activity. The Bank showed excellent improvement across all fronts. Capital is strong, liquidity stable and loan quality is much improved. We look back at the year with a sense of accomplishment, financial improvement and a strong base for 2012 and beyond.
The Bank reported record fourth quarter earnings of $245,000, and year-end net income of $546,000. This is compared to fourth quarter 2010 earnings of $1,000 and 2010 year-end net loss of $289,000. The largest contributor to our success is hard work which has led to improvement in the quality of our loan portfolio and the related benefit of a lower provision for loan loss reserves.
Overall, the Bank did not grow deposits significantly, which was the result of an intentionally managed strategy to limit our demand for capital. As a result of a very weak national economy, loans outstanding declined by approximately $8.6 million or 10% due to scheduled payoffs and a lower loan demand. This loan shrinkage had a slightly negative impact on earnings. We believe the Bank will see significant improvement in earnings as loan demand returns with an improving economy.
Our regulatory position improved significantly in 2011. We were able to eliminate an FDIC Consent Order imposed on March 31, 2011, in just 176 days. This was accomplished through diligent work to improve the Bank. This may appear ordinary to the average observer, but in fact it is quite remarkable and shows significant support, trust and confidence in the Bank and its management.
We also completed a private placement of common stock to accredited investors. The offering raised $1.5 million, bringing our capital ratio to 10%, which exceeds the FDIC requirement.
Major improvements in the 2011 year-end loan portfolio are exemplified by a reduction of substandard loans by 53% to $4.5 million. Non-accrual status loans were reduced by 33% to $2.3 million. Trends in this area continue to be very positive. Improvements in credit quality will significantly contribute toward creating better earnings and improved shareholder returns.
Our annual report will be prepared with full audited financials, in the next 90 days. Our shareholder meeting is scheduled for May 12, 2012 at 1:00 pm here in Ojai. We encourage everyone to attend. It is an excellent opportunity to get a complete update on the Bank, ask questions and enjoy the company of friends and shareholders. Please mark your calendars and join us.
We are always here to answer any 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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