SCVBank Reports Solid Earnings for 2008
Despite Current Economic Activity Loans Grew 25%

Santa Clara Valley Bank (SCVBank; OTC BB: SCVE.OB) today announced its 2008 fourth quarter and year-end financial results.
Total revenue for 2008 was $7,698,000, which was 3% higher than the $7,478,000 for 2007. The small increase in revenue was affected by the decreasing interest rate environment. Net interest income increased 10% to $5,026,000. Operating expenses increased 8% over 2007. Much of the expense increase is attributable to the relocation of the Fillmore Branch in late 2007; data processing and other professional services; and promotion expense. Due to the stress of the economic conditions on the Bank’s loan portfolio, the provision for loan loss increased to $944,000 in 2008 compared to $224,000 in 2007.
The Bank’s net income for 2008 was $256,000 or $0.24 per share, a 46% decrease, compared to $472,000 or $0.46 per share in 2007, primarily the result of the large provision for loan loss. SCVBank’s average net interest margin remained at a healthy level of 4.79% in December, 2008.
On December 31, 2008, the Bank announced a $0.10 per share cash dividend. This is SCVBank’s first cash dividend.
In 2008, the Bank’s loans grew to $101.9 million, up from $81.6 million at the previous year-end, an increase of approximately 25%. The Bank has slightly less than $100 million in deposits, up from $91.6 million, or 9.2%, over year-end 2007.
The state of the economy began to adversely affect the performance of the Bank’s loan portfolio in the fourth quarter. The economic contraction reduced revenues for many of our loan customers and collateral values dropped significantly. Loan charge-offs were $19,000 in the fourth quarter, the first quarterly charge-off recorded in thirteen quarters. A provision for loan loss of $766,000 was recorded in the fourth quarter to offset potential losses in three SBA loans and two construction loans. President and CEO Michael D. Hause remarked, “While we believe the provisions to be conservative, the extent of the economic downturn has yet to be determined”.
Bank assets at year-end were $121.0 million, an increase of 13% over the 2007 year-end level of $107.3 million. The Bank remains very well capitalized.
Chairman Guy Cole remarked, “While the current economic crisis has affected the Bank’s year-end results, we are proud that we operating profitably during such a stressful period. While so many of our competitors have experienced significant losses or have gone out of business, we are looking to the future with optimism. Our 5 Star “Superior” rating by BauerFinancial, Inc. has attracted scores of new customers looking for a financially strong banking institution. ”
“As we head into 2009, SCVBank’s liquidity remains strong. We have plenty of funds to lend, and are looking for opportunities to help with the economic recovery,” remarked Hause.
Founded in 1998, Santa Clara Valley Bank has offices in Santa Paula, Fillmore, and Valencia. Under its stock symbol of SCVE.OB, Santa Clara Valley Bank's stock is traded through Wedbush Morgan Securities, and Howe Barnes Hofer & Arnett. The Bank's web site is
Santa Clara Valley Bank Corporate Headquarters
901 East Main Street
Santa Paula, California 93060
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.