News
San Diego Trust Bank Continues to Post Strong Earnings
Net Income After-tax Tops Half a Million Dollars
SAN DIEGO - In sharp contrast to what is being reported by many in the banking industry these days, San Diego Trust Bank posted increased earnings for the fourth quarter and net income after tax of $524 thousand for the year ended 12/31/08. The Bank marked its 5 th complete year of operations last month by posting its 17 th consecutive quarter of profitability, emerging as one of the most consistently profitable banks, not just in the county, but the entire nation. Just as impressive is the fact that the Bank reported zero non-performing or impaired loans as of 12/31/08, and has incurred no loan losses since its inception five years ago.
Highlights of the company's fourth quarter and full-year performance include:
- Fourth Quarter earnings climbed 5% compared to Q4 2007 results, and totaled $112 thousand.
- Net Interest Income, after provision, remained strong and totaled $4.82 million for the year compared to $4.85 million in the previous year.
- Full-year, net earnings after-tax totaled $524 thousand, significantly higher than projected.
- Zero non-performing, or impaired, loans as of 12/31/08.
- Not a single loan loss incurred since inception five years ago.
- Increased Loan Loss Reserve to 1.45% of gross loans, despite no problem loans.
- Capital Ratios are among the highest in the nation.
- Did not apply for, or need, any taxpayer-funded, bailout funds from the Troubled Asset Relief Program , or "TARP".
"The fact that we are able to report such strong results in the midst of the worst economic climate in decades, truly underscores the strength of our core earnings and the dedication of our entire team," commented Michael Perry, Chairman, President and CEO. "Our disciplined approach since day one and our ability to adapt to ever changing market conditions has enabled our Bank to succeed despite the unprecedented financial crisis gripping our industry and the overall economy," Perry added.
Net Interest Income after provision for the year totaled $4.82 million, just a fraction below the previous year's figure of $4.85 million despite the Federal Reserve's aggressive interest rate reductions. As expected, occupancy expenses increased from $637 thousand in 2007 to $953 thousand in 2008 with the opening of the Bank's new full-service office in Encinitas. Accordingly, year to date earnings were slightly below last years results, although substantially above plan.
"I'm thrilled to be able to report to our shareholders that our expansion into North County has been a huge success and that our office in Encinitas has turned profitable within a year of opening, significantly ahead of schedule," added Perry.
Total Assets stood at a record $112 million as of 12/31/08 representing an increase of 5.5% as compared to assets of $106 million a year ago. Total Deposits equaled $88.1 million as of 12/31/08 with "core deposits" (non-interest bearing and money market accounts) now representing 85% of all deposits. The Bank has no brokered deposits.
As of December 31, 2008 the Bank's Total Risk Based capital ratio of 18.3% was well in excess of the current regulatory definition of 10% for a well-capitalized institution. The Bank has never invested in preferred stock of any entity, including Freddie Mac or Fannie Mae, and as such its capital position is not impaired in any way.
As previously noted, the Bank opted not to apply for any Federal bailout funds under the much maligned Troubled Asset Relief Program, or "TARP", due to its strong capital position, consistent earnings, and exceptional asset quality.
The Bank's capital ratios are amongst the strongest in the nation and are summarized as follows:
| Well-Capitalized Regulatory Standards | San Diego Trust Bank As of 12/31/08 | |
| Leverage | 5.00% | 14.60% |
| Tier 1 Risk Based | 6.00% | 17.26% |
| Total Risk Based | 10.00% | 18.26% |
Total loans equaled $60.8 million as of 12/31/08 compared to $71.1 million in the same period last year as several construction loans paid off as scheduled. Loan demand has slowed considerably as economic conditions continue to deteriorate. The Bank has never purchased any syndicated loan pools in an attempt to bolster its loan totals, but rather, continues to focus its efforts on assisting local businesses and individuals. The Bank's loan to deposit ratio of 70% provides the institution with a significant amount of excess liquidity available to fund operations and lend to a cash-strapped market.
Asset quality continues to remain exceptional at the Bank. The Bank's Loan Loss Reserve now stands at 1.45% as of 12/31/08 vs. 1.25% as of 12/31/ 07. Management has systematically increased reserves in a pro-active fashion, given the lack of visibility and continued economic deterioration. The company has never engaged in the permanent residential mortgage market nor holds any sub-prime securities in its portfolio, and therefore has not been impacted directly by the continued turmoil in the residential real estate market.
Founded by several of San Diego's most respected banking veterans and business leaders, San Diego Trust Bank is dedicated to the timeless principles of superior local market knowledge, unparalleled service, and building exceptional shareholder value. With over four hundred years of experience in banking San Diegans, timely local decision making, and one of the most comprehensive product lines found in the market today, San Diego Trust Bank delivers "Performance You Can Trust."
San Diego Trust Bank common stock is traded on the Over-the-Counter Bulletin Board (OTCBB) under the symbol "SDBK". For information on acquiring the company's stock please contact Mr. Richard Levenson, President of Western Financial Corporation at (619) 544-0260.
For more information on the Bank please visit www.sandiegotrust.com or call (619) 525-1700.
CONTACT: Michael Perry
(619) 525-1727
mperry@sandiegotrust.com
FORWARD LOOKING STATEMENTS
Statements concerning future performance, developments or events, expectations for growth and income 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, loan production, balance sheet management, expanded net interest margin, the ability to control costs and expenses, interest rate changes and financial policies of the United States government and general economic conditions. The Bank disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any forward-looking statements contained herein to reflect future events or developments.
SAN DIEGO TRUST BANK
SELECTED FINANCIAL DATA
(All figures in thousands) As of,
| Balance Sheet | 12/31/08 | 12/31/07 |
| Total Deposits | $88,142 | $90,599 |
| Gross Loans | $60,827 | $71,152 |
| Total Investments | $37,904 | $17,769 |
| Total Assets | $112,196 | $106,393 |
| Total Shareholder’s Equity | $15,956 | $14,755 |
Statement of Operations
Twelve Months Ending December 31,
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(dollars in thousands) | 2008 |
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| 2007 | ||
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Interest Income | $ | 6,071 | $ | 6,761 | ||
Interest Expense | (1,260) | (1,878) | ||||
Net Interest Income | 4,811 | 4,883 | ||||
Net Interest Income After Provision | 4,816 | 4,845 | ||||
Noninterest Income | 321 | 227 | ||||
Noninterest Expense | ||||||
Salaries and Employee Benefits | (2,244) | (2,183) | ||||
Occupancy and Equipment Expense | (953) | (637) | ||||
Other Operating Expense | (1,091) | (918) | ||||
Income Before Income Taxes | 849 | 1,334 | ||||
Income Taxes | (325) | (566) | ||||
NET INCOME | $ | 524 | $ | 768 | ||
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