Four local banks said recently that they delivered better results for 2011, compared with 2010, to their investors.
San Diego Trust Bank reported net income of $1.6 million for the past year, up 68 percent from 2010’s results. The $213 million-asset bank with three offices said things went so well last year, it is paying its shareholders a 3 percent stock dividend in April, repeating the same dividend in 2011.
The relationship model the bank uses enabled it to rack up even higher profits despite a reduced loan portfolio because of past astute investments it made, said CEO Mike Perry.
“The model that we have doesn’t mandate we put on loans to be profitable,” Perry said.
The bank purchased a variety of securities, including municipal bonds and debt, issued by the U.S. Small Business Administration several years ago when prices were advantageous, that are generating handsome returns, he said.
San Diego Trust’s loans as of Dec. 31 shrunk to $40 million, down 20 percent from the prior year. The reduction was a consequence of many customers deleveraging their holdings, paying off loans, and cutting back on the use of lines of credit, Perry said.
The bank said it carries zero nonperforming assets, and has capital ratios that are among the strongest in the nation, with its total risk-based capital at 26.85 percent, nearly three times the 10 percent ratio for well-capitalized banks.
Net Loss Declines
Security Business Bancorp, parent of Security Business Bank of San Diego, reported fourth-quarter net income of $99,000, compared with a net loss of $844,000 for the like period of 2010. For the full year, SBB reported a net loss of $71,000 compared with a net loss of $1 million in 2010.
Security Business CEO Paul Rodeno said the bank is benefiting from the U.S. Treasury Department’s Small Business Lending Program, to repay its $6 million in debt incurred through the Troubled Asset Relief Program and use an additional $3 million it’s deploying in the form of new small-business loans.
The new loan program reduced the bank’s cost for the federal funds from 5 to 1 percent if it exceeds 10 percent growth above prescribed lending benchmarks, Rodeno said.
Total loans at the bank rose 5 percent to $182 million, while total assets grew nearly 4 percent to $233.4 million. SBB opened a fourth office last year in Escondido. The new branch has attracted $23 million in deposits, and loaned about $7 million, Rodeno said.
A Profitable Year
Bank of Southern California, which is based in Carmel Valley and has six offices, including two in the Palm Springs area, reported net income for 2011 of $1.1 million, compared with a net loss of about $700,000 in 2010.
BSC, formerly called First Business Bank, bought two branches from the failed Bank of Palm Desert last year and acquired some $24 million in deposits from a Japanese bank. It also raised $3 million in a private stock placement.
Total loans at BSC decreased 3 percent during the year to $146.9 million. However, some of its past loans went bad. According to the bank’s call report, it has about $5 million in nonperforming assets, including $476,000 in foreclosed real estate. That put its nonperforming assets at 2.69 percent of its $187.9 million in total assets.
Torrey Pines Bank, a subsidiary of Phoenix-based Western Alliance Bancorporation, reported 2011 net income of $17.5 million, up from the prior year’s net income of $7.3 million.
Now the second largest bank in the county behind only California Bank & Trust, Torrey Pines had $1.7 billion in assets at Dec. 31. It increased its total loans by about $300 million last year to $1.3 billion, up 24 percent from the prior year. Deposits grew 10.5 percent during the year to $1.4 billion.
The Carmel Valley-based bank said it reduced its nonperforming assets from 1 percent to 0.5 percent in the past year. According to its 2011 call report, it holds $7.4 million in nonperforming assets.