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1st Quarter 2013 Shareholders Report (click here for full PDF version with Financial Supplement)
Each quarter we take pride in updating our shareholders on the status and performance of your Bank. As you know, 2012 was a banner year for us and as we look to the future, our vision of 2013 and beyond is strong. The Bank continues to have an excellent capital position, stable credit quality and excellent liquidity.
Total assets finished at $138,829,000 as of March 31, 2013, up $4.4 million, or 3.3% from December 31, 2012. Total loans increased $1.0 million or 1.3% for the same period. Much of the asset growth is the result of deposit growth in the amount of $4.3 million. Deposits not loaned out provided an increase in cash and investments of $3.1 million, or 5.82%. Additional loan growth is critical to the continued expansion of the Bank. The first quarter was slower than anticipated, but we have a number of loans in the pipeline.
Pretax net income for the Bank for the first quarter ending March 31, 2013 was $48,000, as compared to $250,000 for the quarter ending March 31, 2012. The decline is the result of delayed loan funding, declining interest income due to the extended length of the low rate environment, as higher yielding loans pay off and new loans board at lower rates, and increased salary expense as a result of higher health insurance, payroll taxes and staff changes executed for expansion.
Credit quality remains very stable with no significant migration of loans into problem status. Our allowance for loan loss reserve is approximately $1.36 million, or 1.80% of total loans. This level is comparable to our peer banks and, we believe, sufficient at this time.
Mortgage lending has made progress based on both our budgetary figures and on customer feedback. This department has contributed over $43,000 in fee income for the first three months of the year. Santa Paula is stable and deposits remain solid with little impact from the branch consolidation. Ventura continues on track as we enter this new market. We expect continued growth with significant contributions from the Ventura expansion in the future.
We have created a plan to pay off our TARP. It involves creating a Bank Holding Company as a vehicle to borrow the funds and then pay off the Treasury. Approximately 50% of banks in California have holding companies, so the idea is not necessarily unique. We have included summary information from our previously mailed proxy. Shareholders should read the entire proxy statement that was previously mailed concerning the formation of the holding company for complete details. Your vote and support are important. If you have questions, please call.
From a shareholder standpoint, there is no significant difference. Your share in the Bank will be exchanged tax free into a share of the Bank Holding Company. There will be no gain or loss in value, taxation or voting rights. It is more of a substitution of shares.
Community banking is alive and well. As larger banks cut back, opportunities for gaining market share is increasing, and for those who value relationship banking, we are the bank. We believe the long-term future of banking, is community banking.
Our annual shareholder’s meeting is scheduled for Thursday, May 9, 2013, at 5:30 pm here in Ojai. We encourage you to attend. This is an excellent opportunity to receive in-depth information about the Bank, ask questions and enjoy the company of friends and shareholders. Please mark your calendars and join us.
We thank you for your support 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, email@example.com or 805-646-9909.
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