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California Oaks State Bank: California Oaks State Bank Reports Year End Results

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^{Published in Business and Finance on Sunday, February 22nd 2009 at 22:28 GMT, Last Modified on 2009-02-22 22:30:12 by Market Wire}  

THOUSAND OAKS, CA--(Marketwire - February 22, 2009) - California Oaks State Bank (OTCBB: [ COSB ]), a community business bank with assets of $121.4 million, today reported a net loss for 2008 of $1,088,212 or $0.73 per diluted share, compared to income of $262,482 or $0.17 per diluted share in 2007.

Total assets ended 2008 at $121.4 million with loans and deposits at $107.6 million and $90.3 million respectively. Total assets by comparison from 2007 were $106.5 million with loans and deposits of $87.8 million and $76.8 million respectively. The growth totaled $19.8 million in loan growth and $13.5 million in deposit growth. During the fourth quarter of 2008, the Bank grew its loan portfolio from $105.1 million to $107.6 million. The growth in loans can be attributed to the increase in the commercial loan portfolio while we continue to see shrinking in the real estate and construction loan portfolios. There has been a concerted effort to reposition the portfolio from riskier construction lending to more typical commercial lending.

The Bank saw its net deposit base increase $13.5 million primarily in certificates of deposits while demand and other interest bearing deposits decreased over the last year. FHLB borrowings increased $2 million in 2008.

The Bank's net interest margin, as a percentage of total average assets for 2008, decreased 178 basis points to 4.89% versus 6.67% in 2007. The Bank's net interest income fell by $1,170,000 in 2008 as a result of a decrease in the prime lending rate of 400 basis points during the year.

The Bank allocated $1,648,000 to its loan loss reserves to accommodate the increased stress in the loan portfolio. During the fourth quarter the Bank saw an acceleration of past due loans based on continuing economic problems in the U.S. economy. One of the sectors facing increased stress is the construction industry. COSB has three construction loans remaining in its construction portfolio totaling $2.6 million. All three loans are on nonaccrual and are receiving extra management attention. John Nerland, COSB President & CEO, noted, "We are diligent about problem loan reports and making sure we are recognizing collateral values in this ever changing real estate market."

The Bank's capital ratios remain strong with Tier 1 risk based capital at 11.9%. The Bank remains highly capitalized as far as regulatory entities are concerned, with total risk based capital of 13.2%. In December 2007, the Board of Directors authorized a stock buyback of $500,000 of the Company's shares for the period of one year at the Bank's discretion. Due to the current economic situation, the Board has decided to conserve capital and not buyback shares. In December 2008, the Bank received preliminary approval for $3.3 million in TARP funding from the U.S. Treasury Capital Program and on January 23, 2009, the Bank received the TARP capital funding.

Nerland noted, "Over the past year the Bank has made numerous improvements and changes in the way we do business. We have downsized the number of employees of the Bank in an effort to become more efficient while increasing the asset size of the Bank. These two initiatives were not enough to counteract the dropping in rates and the deterioration of credit quality caused by the down turn in the economy. Overall our financial results for 2008 are below our expectations, but the underlying operations of the Bank and the capital that we maintain provide a solid foundation for which we will continue to grow."

Visit the California Oaks State Bank Web site at [ www.caloaks.com ] for more information

About California Oaks State Bank

California Oaks State Bank (OTCBB: [ COSB ]) with $122 million in assets is located in Ventura County with offices in Thousand Oaks and Simi Valley and a Loan Production Office located in Walnut Creek, Calif. California Oaks State Bank was founded in 1998 as a locally owned community business bank. The bank provides a full range of products and services including commercial and real estate loans as well as cash management products and deposit services. Its unique capability in diversified lending in addition to its customary community bank credit products help its customers meet their cash management goals.

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbors created by the act. These forward-looking statements refer to the Company's current expectations regarding future operating results, and growth in loans, deposits, and assets. These forward looking statements are subject to certain risks and uncertainties that could cause the actual results, performance, or achievements to differ materially from those expressed, suggested, or implied by the forward looking statements. These risks and uncertainties include, but are not limited to (1) the impact of changes in interest rates, a decline in economic conditions, and increased competition by financial service providers on the Company's results of operation, (2) the Company's ability to continue its internal growth rate, (3) the Company's ability to build net interest spread, (4) the quality of the Company's earning assets, and (5) governmental regulations.

 BALANCE SHEET December 31, 2008 (Audited) (000) 12/31/2008 12/31/2007 ----------- ----------- ASSETS Cash and Due from Banks $ 4,517 $ 4,833 Federal Funds Sold 1,280 5,775 Investment Securities 4,472 6,077 Loans (net) 105,251 86,677 Other Assets 5,847 3,160 ----------- ----------- Total Assets $ 121,366 $ 106,522 =========== =========== LIABILITIES & SHAREHOLDERS EQUITY Demand Deposits $ 29,983 $ 34,155 Money Market and NOW Accounts 22,876 26,391 Savings Accounts 3,594 4,056 Time Deposits Under $100,000 22,585 3,056 Time Deposits $100,000 and Over 11,274 9,170 ----------- ----------- Total Deposits 90,312 76,828 FHLB Borrowings 14,000 14,000 Other Liabilities 835 609 ----------- ----------- Total Liabilities 107,147 91,437 Total Equity 14,219 15,085 ----------- ----------- Total Liabilities and Equity $ 121,366 $ 106,522 =========== =========== STATEMENT OF EARNINGS December 31, 2008 (Audited) (000) 12/31/2008 12/31/2007 ---------- ---------- Interest Income $ 7,883 $ 8,804 Interest Expense 1,849 1,602 ---------- ---------- Net Interest Income 6,034 7,202 Provision for Loan Loss 1,648 664 ---------- ---------- Net Interest Income after Provision 4,386 6,538 Non Interest Income 873 926 ---------- ---------- Total Operating Income 5,234 7,464 Total Non Interest Expense 6,347 6,953 ---------- ---------- Income (Loss) Before Income Taxes (1,088) 511 Income Taxes 0 249 ---------- ---------- Net Income (Loss) $ (1,088) $ 262 ========== ========== RATIOS - Annualized 12/31/2008 12/31/2007 ---------- ---------- Earnings Per Share ($ 0.73) $ 0.18 Earnings Per Share - Diluted ($ 0.73) $ 0.17 Book Value Per Share $ 9.58 $ 10.20 Return on Assets (0.88%) 0.24% Return on Equity (7.24%) 1.78%