SCVBank Reports Second Quarter Results

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SCVBank Reports Second Quarter Results

"Several of the write-downs in the second quarter completely eliminated some of the Banka�s largest problem assets. Loan delinquencies, which are often the first sign of loan problems, have dropped dramatically. As of quarter end, delinquent loans between 30 and 90 days past due were down to $1.5 million"

SCVBank reported quarterly revenue of $1,929,000 compared to $2,102,00 for the second quarter 2009. Net interest income was $1,299,000, a decrease of 5.5% from the $1,374,000 of net interest income reported in the second quarter of 2009. The decrease in the net interest income is primarily a function of lower loan demand offset by reduced interest expense. Non-interest income of $316,000 was $59,000 or 23% higher than the period a year earlier. Non-interest expense is being impacted by higher FDIC premiums, insurance costs and costs related to collection of non-performing assets.

SCVBank recorded a net loss for the second quarter of 2010 of $225,000 compared to net income of $72,000 for the period a year earlier. The loss occurred primarily as a result of a $500,000 addition to the loan loss reserve, as a result of several nonperforming assets which were adversely affected by the recession and its effect on collateral values. Despite the loss provision, SCVBank continues to maintain a strong capital position with a Tier 1 Leverage ratio of 9.04% at quarter end, well above the requirement of 5% to be considered a well capitalized institution. Total risk-based capital is 14.19%, well above the 10% level needed to be considered well capitalized.

For the six month period ending 6/30/10, the Bank reported a loss of $406,000, compared to a loss of $394,000 for the same period a year earlier. On a pretax basis, this quartera�s loss is less than last yeara�s pre-tax loss of $700,000.

Michael D. Hause, President and CEO reported, aSeveral of the write-downs in the second quarter completely eliminated some of the Banka�s largest problem assets. Loan delinquencies, which are often the first sign of loan problems, have dropped dramatically. As of quarter end, delinquent loans between 30 and 90 days past due were down to $1.5 milliona.

During the quarter, deposits remained stable while the Banka�s liquidity increased significantly. Investments increased $10 million from $30.3 million at 2009 year-end to $40.4 million.

aThe Bank remains in a very strong capital position. Since the beginning of the recession, we have tightened underwriting standards and have improved internal processes to strengthen the Banka�s efficiency and effectiveness,a said Chairman Ralph De Leon.

Founded in 1998, SCVBank currently operates three branches in Santa Paula, Fillmore, and Valencia. Under its stock symbol of SCVE.OB, SCVBank's stock is traded through McAdams Wright Ragen, Howe Barnes Hofer & Arnett, and Monroe Securities. The Bank's web site is [ www.SCVBank.com ].

Statements concerning future performance, developments or events concerning expectations for growth and market forecasts, and any other guidance on future periods, constitute forward looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, the effect of interest rate changes, the ability to control costs and expenses, the impact of consolidation in the banking industry, financial policies of the United States government, and general economic conditions.


Santa Clara Valley Bank, N. A.

Balance Sheets	Unaudited			Audited
	June 30, 2010			December 31, 2009
Assets:

Cash and non-interest bearing due from banks	$	2,534,000		$	4,522,000
Investments		40,414,000			30,286,000
Loans		92,975,000			103,131,000
Allowance for loan losses		(2,661,000	)		(3,312,000	)
Other assets		6,656,000			5,070,000
Total Assets	$	139,918,000		$	139,697,000

Liabilities and Stockholders' Equity:

Deposits	$	119,676,000		$	121,248,000
Borrowed Funds		7,348,000			6,550,000
Other liabilities		467,000			493,000
Stockholders' equity		12,427,000			11,406,000
Total Liabilities and Stockholders' Equity	$	139,918,000		$	139,697,000

Tier 1 leverage ratio		9.04	%		8.15	%
Tier 1 risked-based capital ratio		12.92	%		11.04	%
Total risk-based capital ratio		14.19	%		12.31	%

Book value per common share	$	6.61		$	7.90
Common shares outstanding (end of period)		1,442,167			1,077,167


	For the Six Months Ended June 30,
Statements of Income (unaudited)		2010			2009

Interest income	$	3,306,000		$	3,551,000
Interest expense		661,000			956,000
Net interest income		2,645,000			2,595,000
Provision for loan losses		800,000			1,150,000
Noninterest income		347,000			423,000
Noninterest expense		2,598,000			2,568,000
Income (loss) before taxes		(406,000	)		(700,000	)
Income tax (benefit) provisional		-			(306,000	)
Net Income (Loss)	$	(406,000	)	$	(394,000	)
Preferred stock dividend		(40,000	)		(40,000	)
Net income (loss) applicable to common shares	$	(446,000	)	$	(434,000	)

Loss per common share, basic		($0.31	)		($0.40	)

Return on average assets		-0.59	%		-0.56	%
Return on average equity		-6.53	%		-5.78	%


	For the Three Months Ended June 30,
		2010			2009
Quarterly net income	$	(225,000	)	$	73,000
Preferred stock dividend		-			(40,000	)
Quarterly net income applicable to common shares	$	(225,000	)	$	33,000

Nonperforming assets	$	6,787,000		$	6,246,000

Contributing Sources

Market Wire

Santa Clara Valley Bank Corporate Headquarters

901 East Main Street

Santa Paula, California 93060