Business & Finance
Thu, January 15, 2009Wed, January 14, 2009Tue, January 13, 2009Mon, January 12, 2009Sun, January 11, 2009Fri, January 9, 2009Thu, January 8, 2009Wed, January 7, 2009Tue, January 6, 2009California United Bank Opts Not to Participate in U.S. Treasury Capital Purchase Program
Published in Business and Finance on Monday, January 12th 2009 at 7:21 GMT, Last Modified on 2009-01-12 07:22:34 by Market Wire
ENCINO, Calif.--([ BUSINESS WIRE ])--California United Bank (OTCBB:CUNB) announced that it has decided not to accept an $8.3 million capital investment for which the Bank recently received preliminary approval as part of the U.S. Department of the Treasury's Capital Purchase Program (CPP).
"While California United Bank fully supports the overall purpose of the Capital Purchase Program, upon careful analysis our Board and management concluded that the CPP features and costs are not consistent with our strategic goals, and that participation in the CPP would not be in the best interests of the Company and its shareholders," said David I. Rainer, President and CEO of the Bank.
Rainer noted that given the short timeframe between the release of the CPP guidelines and agreements and the application deadline, the Bank felt that the prudent course of action was to submit its application to participate in order to preserve its options, and then take the opportunity to carefully consider all aspects of accepting funds awarded through the CPP. The Non-Public Bank terms to which the Bank would be subject according to the CPP provisions were released subsequent to the Bank's application.
In making its decision, the Board reviewed the cost of this capital, particularly in light of the current and expected near-term interest-rate environment, as well as the Bank's ability to effectively and profitably deploy the capital while still adhering to its conservative and prudent lending standards. In addition, statements by representatives of governmental and legislative bodies regarding the CPP were carefully weighed. After such consideration, the Board and management determined that the various restrictions, costs and possible uncertainties outweighed the potential benefits of the Bank's participation in the CPP.
"While we have decided not to participate in the capital augmentation offered by the CPP, we believe we presently have sufficient capital to meet our current and future anticipated capital needs," said Rainer. "It is worth noting that at September 30, 2008, all our capital ratios were more than double the regulatory minimums required for an institution to be considered 'well capitalized.'
"We intend to continue to use our significant existing capital strength to take advantage of opportunities for organic and acquisitive growth. Despite the economic difficulties over the past year, we have continued to lend to our core constituency in accordance with prudent lending practices, and in fact, for the nine months ended September 30, 2008 we reported solid loan growth," concluded Rainer.
The CPP is part of the $700 billion Troubled Asset Relief Program (TARP) established by the Emergency Economic Stabilization Act. The Bank applied to participate in the CPP prior to the original November 14, 2008 deadline, and was notified on December 19, 2008 that it had been approved for CPP funds.
About California United Bank
California United Bank provides a full range of financial services, including credit and deposit products, cash management, and internet banking for business and high net worth individuals. The Bank operates from its headquarters office at 15821 Ventura Boulevard, Suite 100, Encino, CA 91436; West Los Angeles Regional Office at 1640 South Sepulveda Boulevard, Suite 114, Los Angeles, CA 90025; Santa Clarita Valley Regional Office at 25350 Magic Mountain Parkway, Suite 100, Valencia CA 91355 and Conejo Valley Loan Production Office at 4333 Park Terrace Drive, Suite 215, Westlake Village, CA 91361. Information on products and services may be obtained by calling (818) 257-7700 or visiting the Bank's website at [ www.californiaunitedbank.com ].
{NOTE}:
This news release contains forward-looking statements about the Bank for which the Bank claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the Bank's possible or assumed future financial condition, and its results of operations, business, and earnings outlook. These forward-looking statements are subject to risks and uncertainties. A number of factors, some of which are beyond the Bank's ability to control or predict, could cause future results to differ materially from those contemplated by such forward-looking statements. These factors include (1) economic events and governmental activities; (2) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies, (3) changes in interest rates, (4) significant changes in banking laws or regulations, (5) increased competition in the Bank's markets, (6) other-than-expected credit losses due to real estate cycles or other economic events, (7) earthquake or other natural disasters affecting the condition of real estate collateral or the business environment, and (8) the impact of changes in regulatory, judicial, or legislative tax treatment of business transactions. Management cannot predict at this time the extent of the economic recovery, and a slowing or reversal could adversely affect our performance in a number of ways including decreased demand for our products and services and increased credit losses. Likewise, changes in deposit interest rates, among other things, could slow the rate of growth or put pressure on current deposit levels. Forward-looking statements speak only as of the date they are made, and the Bank does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the statements are made.
