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Stellar Business Bank Announces 2010 Operating Results

^{Published on 2011-02-09 12:15:25 - Market Wire}
 

COVINA, Calif.--([ BUSINESS WIRE ])--Stellar Business Bank (OTCBB: SLRB) announced its year-end 2010 financial results. As of December 31, 2010, the Bank reported total assets of $98.1 million, a 3% increase from the prior year-end. Total deposits were $67.3 million, a 13% decrease from the prior year-end. As of December 31, 2010, gross loans totaled $54.5 million, an increase of 37% from the year-end 2009, with an additional $3.7 million in unfunded loan commitments. As of December 31, 2010, the Bank had no residential asub-primea mortgage loans, no OREO (foreclosed properties), and no non-performing loans or 90-day delinquent loans. However, in January 2011, two loans totaling $1,105,847 became past due 90 days and were placed on non-accrual status and the Bank charged off $408,346 of the balance of these loans in January 2011, retro-actively to December 31, 2010. The amount of the charge-off had been fully provided in the allowance for loan loss as of December 31, 2010. This is in addition to $24,177 that was charged off earlier in 2010 on an unrelated loan.

The Bank reported an unaudited year-to-date loss of $490,085 or ($0.21) basic loss per share, which includes a gain on sale of investment securities of $506,737, a gain on sale of SBA loans of $122,795, and a loan loss provision of $558,032. This is compared to a net loss of $1,258,789 at year-end 2009, which included a gain on sale of investment securities of $1,098,205, a gain on the sale of SBA loans of $395,130, and a loan loss reserve provision of $449,733.

For the six months ending December 31, 2010, the Bank reported a net profit of $149,905, compared to a net loss for the same six-month period last year of $548,937. The six months of profitability ended December 31, 2010 is the result of 3^rd quarter earnings of $65,475 and 4^th quarter earnings of $84,430. The improvement in operating performance from the years ended December 31, 2009 and December 31, 2010 was primarily the result of an increase in net interest income of $1,358,343 in 2010 compared to 2009. This improvement was due to a combination of increased interest and fee income as a result of our loan growth, and a reduction in interest expense as higher priced deposit liabilities were re-priced to market.

aWhile we are pleased with the improving trends in our operational performance, especiallythe3^rd and 4^th quarters of bottom-line profitability, 2011 will continue to be challenging for the economy, banking and financial institutions in general, and for newer or de novo banking institutions in particular, like Stellar Business Bank, in terms ofsustaining recurring operational profitability.

aTo address this challenge, we have deliberately focused on a number of areas.One, we continue to remain well-capitalized, liquid, and highly focused on maintaining superior asset quality.Two, we have focused on core deposit relationships, allowing price-driven only and unprofitable deposit relationships to run off of our balance sheet.Three, wehave focused on increasing our earning assets in the area of loans, improving our loan-to-deposit ratio and net interest margin.Four, we continue to actively manage our investment portfolio to maximize earnings.Five, we continue to see opportunities in our adjacent and surrounding market areas and, to this end, have added two (2) experienced employees.One is focused on core relationships in the Irwindale, Duarte, Monrovia and Acadia marketplaces.The second is an experienced SBA Business Development Officer with extensive experience as a commercial real estate broker.We have and continue to see growth and earnings potential in our SBA lending activities.

aWe continue to believe that we are strategically poised to take advantage of continuing opportunities in 2011 and beyond, with a mission to sustain profitable operations on an ongoing basis and to enhance shareholder value. We believe that we have the management and staff, Board of Directors, customers and opportunities to realize this vision and look forward to continuing to be your local community bank of choice,a stated Timothy P. Walbridge, President and Chief Executive Officer.

The numbers in this press release are unaudited as indicated. Certain statements in this press release, including statements regarding the anticipated development and expansion of Stellar Business Banka™s business, and the intent, belief or current expectations of the Bank, its directors or its officers, are aforward lookinga statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward looking statements. These risks and uncertainties include, but are not limited to, risks related to the local and national economy, the Banka™s performance, including its ability to generate loan and deposit growth, changes in interest rates, regulatory matters and those discussed in filings by the Bank with the Federal Deposit Insurance Corporation. Member FDIC