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SCVBank Reports Continued Profitability in Second Quarter

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^{Published in Business and Finance on Wednesday, July 13th 2011 at 20:01 GMT by Market Wire}  

SANTA PAULA, Calif.--([ BUSINESS WIRE ])--Santa Clara Valley Bank (SCVBank)(OTCBB:SCVE) today announced its 2011 second quarter and year-to-date financial results.

"The trends in the Banka™s key result areas are positive. The Board and management are working hard to maintain those positive trends"

SCVBank recorded a net profit of $113,000 for the second quarter of 2011, compared to a profit of $33,000 experienced a year earlier. For the six months ending June 30, 2011, the Bank experienced a $244,000 operating profit, which results in an income per common share, basic of $0.17, compared to a $446,000 loss in the prior yeara™s period. The 2011 profit reflects improved credit conditions, reduced interest expense and reduced operational expenses.

Interest expense has been reduced from $661,000 for the first six months of 2010 to $401,000 for the same period in 2011. This was the prime factor that allowed the Bank to increase its net interest income by 1.2%, from the six month period in 2011 compared to 2010. The Banka™s net interest margin for the first six months of 2011 is 4.26%, up from 3.99% for the same period a year earlier.

Non-performing assets are down from $6.8 million as of June 30, 2010 to $2.6 million as of June 30, 2011, a reduction of 62%.

Due to improved credit conditions, there was no loan loss provision taken in the second quarter 2011, compared to $800,000 in the same period in 2010. This change also reflects the current robust level of the Banka™s allowance for loan loss, at 2.73% of gross loans outstanding.

SCVBank continues to maintain a strong capital position with a Tier 1 leverage ratio of 10.81%, up from 9.04% a year ago. A Tier 1 leverage ratio of 5% is required to be considered a well-capitalized institution. Total risk-based capital is 18.19%, well above the 10% level needed to be considered well-capitalized.

Liquidity is very strong as cash and investments equal $48.4 million.

Total assets have dropped over the past twelve months, from $136.4 million to $126.4 million. This drop occurred as management strategically steered high priced deposits and liabilities from the balance sheet. Core deposits have remained stable.

CEO Michael Hause noted, aThe profitability in the first two quarters of the year would have been stronger, were it not for two write downs on foreclosed properties which were sold.a

aThe trends in the Banka™s key result areas are positive. The Board and management are working hard to maintain those positive trends,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 ].

Santa Clara Valley Bank Corporate Headquarters
901 East Main Street
Santa Paula, California 93060
805-525-7847

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.