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2012年2月22日星期三

Constitution Court OKs two executive decrees

Home » politics » Constitution Court OKs two executive decrees

February 22, 2012 2:59 pm
The Court spent about 50 minutes reading the verdict.
Opposition Democrat party list MP and former finance minister Korn Chatikavanij and Senator Kamnoon Sitthisamarn submitted the petition to the Court for the interpretation of the two decrees.
The first of the two executive decrees involves permission for the government to seek a Bt350 billion loan to finance water management and flood rehabilitation projects while the second is in regard to the transfer of the FIDF’s debt from the Finance Ministry to the Bank of Thailand.
The government has reiterated that the decrees were needed to restore confidence in Thailand after the flood crisis last year.
The opposition questioned the urgency of the decrees, saying the government had enough budget and time to propose the loan decree through the legislative process to the House of Representatives.
The transfer of FIDF’s debt was criticised as government interference with the Bank of Thailand.
The ruling left the government with several bullets to finance its post-flood investment. Economic stability and unavoidable urgency were cited as the reasons for the ruling.
The borrowing executive decree will allow the government to finance 32 long-term flood-protection plans, which require a total investment of about Bt360 billion. The decree empowers the Finance Ministry to borrow Bt350 billion in Baht or other currencies by June 30, 2013.
The second decree will give even more room for investment as the government need not to set aside a budget for principal and interest payment for the Financial Institutions Development Fund (FIDF), starting from the 2013 fiscal year.
In the 2012 fiscal year, Bt68.43 billion was set aside for the purpose. The amount accounted for 2.9 per cent of public expenditures in the year and 16.2 per cent of total investment budget.

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2012年2月21日星期二

Thai-ASEAN News Network – Bank Admits Impact of Thailand Blacklisting

The Islamic Bank of Thailand’s managing director admitted bank clients could experience more inconveniences in making international financial transactions after Thailand has been put on the watch list for money-laundering and terrorism financing. The bank also plans to adjust its business strategy this year after it has been slapped with the 0.47 percent premium contribution to the national development fund.
Managing Director of Islamic Bank of Thailand Teerasak Suwanyos played down the impact on overseas investments of the bank’s clients after Thailand’s name appeared on the money laundering and terrorism financing watch list.
Hot on the heels of the triple bomb blasts in Bangkok last week, Thailand was identified by intergovernmental organization, Financial Action Task Force, as uncooperative in the global efforts to combat money laundering and terrorism financing.
Islamic Bank MD said the bank has ten clients who invest heavily overseas with a combined investment value of hundreds of millions of baht. Teerasak noted that the bank will be more rigorous in checking documents and transactions to prevent any possibility of being linked with any money laundering or terrorism activities.
Teerasak also commented on the new 0.47 percent premium that was slapped on all banks by the Finance Ministry and the central bank. The banker said the premium, slated to go towards the National Development Fund, will cost the bank 500 million baht in operating revenue. That’s almost 50 percent of the net profit calculated from its current deposit base of 117 billion baht.
He said the bank may have to revise its strategic business plan for this year to take into consideration the new premium.
The Islamic Bank has set a loan target of 20 billion baht for this year, including six billion baht for SMEs, ten billion baht for retail borrowers and four billion baht for major clients.
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2012年2月2日星期四

Cornerstone Community Bank Reports Financial Results For the Fourth Quarter and Full Year Ended December 31, 2011

RED BLUFF, Calif.–(BUSINESS WIRE)– Cornerstone Community Bank, (OTCBB: CRSB), announced today its financial results for the fourth quarter and full year ended December 31, 2011.
The Bank reported net income of $208,000 for the three months ended December 31, 2011 representing an increase of $83,000, or 66%, compared to net income of $125,000 for the same period last year. Diluted earnings per share for the three months ended December 31, 2011 were $0.17 compared to $0.10 for the same period last year. Net income for the year ended December 31, 2011 was $703,000, or $0.57 per diluted share compared to net income of $323,000, or $0.26 per diluted share, for the year ended December 31, 2010.
The return on average assets for the three months ended December 31, 2011 was 0.95% compared to 0.65% for the same period last year. The return on average equity was 8.25% for the three months ended December 31, 2011 compared to 5.38% for the same period last year. For the year ended December 31, 2011, the return on average assets was 0.87% and the return on average equity was 7.34% compared to 0.43% and 3.54%, respectively, for the year ended December 31, 2010.
President and CEO, Jeffrey Finck stated, “We are pleased with our 2011 performance. We opened our new Redding office in the third quarter which contributed to the 20% growth in deposits during the year. We look forward to continued success in 2012.”
Net Interest Income
Net interest income of $975,000 for the quarter ended December 31, 2011 represented an increase of approximately $107,000, or 12%, from $868,000 for the same quarter one year earlier. The net interest margin decreased to 4.64% during the quarter ended December 31, 2011 compared to 4.66% during the same quarter last year. For the year ended December 31, 2011, net interest income was $3,758,000 compared to $3,133,000 for the year ended December 31, 2010, representing an increase of $625,000, or 20%. The net interest margin increased to 4.86% for the year ended December 31, 2011 compared to 4.42% for the year ended December 31, 2010.
Provision for credit losses
The provision for credit losses for the quarter ended December 31, 2011 was $110,000 compared to $160,000 for the quarter ended December 31, 2010. The provision for credit losses for the year ended December 31, 2011 was $259,000 compared to $461,000 for the year ended December 31, 2010.
Non-Interest Income
The Bank’s non-interest income for the quarter ended December 31, 2011 was $84,000 compared to $140,000 for the quarter ended December 31, 2010. For the year ended December 31, 2011, non-interest income was $318,000 compared to $454,000 for the year ended December 31, 2010.
Non-Interest Expense
Non-interest expense was $894,000 for the quarter ended December 31, 2011 compared to $723,000 for the same period one year earlier. For the year ended December 31, 2011, non-interest expense was $3,583,000 compared to $2,802,000 for the year ended December 31, 2010. In April 2011, the Bank decided to exit the indirect auto lending business. As a result of this decision, the Bank incurred $252,000 of incremental charges during the second quarter of 2011.
Income Taxes
During the year ended December 31, 2011, the Bank recognized $470,000 of deferred tax assets which added to the Bank’s net income. The Bank determined that the historical progress in earnings performance met the standards for recognition of these assets in 2011.
Balance Sheet
The Bank had total assets at December 31, 2011 of $91 million, compared to $76 million at December 31, 2010, representing growth of $15 million, or 20%.
Total loans outstanding at December 31, 2011, net of unearned income, were $65 million compared to $55 million at December 31, 2010, representing an increase of $9 million, or 17%.
Total deposits were $81 million at December 31, 2011 compared to total deposits of $67 million at December 31, 2010, representing an increase of $14 million, or 20%.
Credit Quality
The allowance for loan losses was $1,270,000, or 1.97% of total loans at December 31, 2011, compared to $1,104,000, or 2.00% of total loans, at December 31, 2010. Nonperforming assets at December 31, 2011 were $185,000 compared to $232,000 at December 31, 2010.
The bank recognized $93,000 in net loan charge-offs during the year ended December 31, 2011, representing 0.16% of average loans.
Capital Adequacy
At December 31, 2011, shareholders’ equity totaled $10.2 million compared to $9.0 million at December 31, 2010. At December 31, 2011, the total risk-based capital ratio, tier one capital ratio, and leverage ratio was 14.52%, 13.27% and 10.89%, respectively, all exceeding the regulatory standards for “well-capitalized” institutions of 10.00%, 6.00%, 5.00%, respectively.
About Cornerstone Community Bank
Cornerstone Community Bank is a California state-chartered bank with its headquarters office in Red Bluff and a branch office in Redding. The Bank provides commercial banking services, including a wide variety of deposit products and real estate, construction, commercial and consumer loans to small businesses, professionals and individuals. Additional information about the Bank is available on its website at www.bankcornerstone.com
Forward-Looking Statements
Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbors created by that Act. Forward-looking statements describe future plans, strategies and expectations. Forward-looking statements are based on currently available information, expectations, assumptions, projections, and management’s judgment about the Bank, the banking industry and general economic conditions. These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management’s views as of any subsequent date. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely.
Forward-looking statements involve significant risks and uncertainties and actual results may differ materially from those presented, either expressed or implied, in this press release. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.


CORNERSTONE COMMUNITY BANK
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands)



		12/31/11			09/30/11			06/30/11			03/31/11			12/31/10

ASSETS
Cash and due from banks	$	1,957		$	1,944		$	1,542		$	1,448		$	1,552
Federal funds sold		-			-			-			-			-
Interest-bearing deposits		445			3,790			1,945			4,381			1,535
Investment securities		22,173			13,652			14,496			14,677			16,465
Loans held for sale		-			-			-			-			-
Loans, net of unearned income		64,504			60,595			57,980			56,800			55,248
Allowance for loan losses		(1,270	)		(1,180	)		(1,140	)		(1,099	)		(1,104	)
Loans, net		63,234			59,415			56,840			55,701			54,144
Premises and equipment, net		1,226			1,105			1,067			1,042			777
Other assets		2,312			1,917			2,014			1,732			1,855
Total assets	$	91,347		$	81,823		$	77,904		$	78,981		$	76,328

LIABILITIES
Deposits:
Demand noninterest-bearing	$	11,833		$	9,995		$	8,256		$	8,075		$	10,169
Demand interest-bearing		12,928			9,013			7,145			6,558			7,416
Money market and savings		32,322			33,393			33,833			37,385			31,429
Time deposits of less than $100,000		8,841			8,376			9,088			9,377			7,717
Time deposits of $100,000 or more		14,718			10,449			9,433			8,158			10,309
Total deposits		80,642			71,226			67,755			69,553			67,040
Other liabilities		535			577			492			286			301
Total liabilities		81,177			71,803			68,247			69,839			67,341

SHAREHOLDERS’ EQUITY
Common stock		11,959			11,959			11,959			11,959			11,959
Additional paid-in capital		685			656			627			599			570
Accumulated deficit		(2,650	)		(2,858	)		(3,035	)		(3,224	)		(3,353	)
Accumulated other comprehensive income (loss)		176			263			106			(192	)		(189	)
Total shareholders’ equity		10,170			10,020			9,657			9,142			8,987
Total liabilities and shareholders’ equity	$	91,347		$	81,823		$	77,904		$	78,981		$	76,328

CAPITAL ADEQUACY
Tier I leverage ratio		10.89	%		11.87	%		11.65	%		12.06	%		11.85	%
Tier I risk-based capital ratio		13.27	%		14.11	%		14.23	%		14.69	%		14.80	%
Total risk-based capital ratio		14.52	%		15.36	%		15.49	%		15.95	%		16.05	%
Total equity / total assets		11.13	%		12.25	%		12.40	%		11.57	%		11.77	%
Book value per share	$	8.48		$	8.35		$	8.05		$	7.62		$	7.49


CORNERSTONE COMMUNITY BANK
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)




	Three months ended									Year ended
		12/31/11			09/30/11			12/31/10			12/31/11			12/31/10

INTEREST INCOME
Loans	$	1,014		$	1,006		$	944		$	3,920		$	3,507
Federal funds sold		-			-			-			-			-
Investment securities		126			117			92			487			361
Other		2			2			5			7			25
Total interest income		1,142			1,125			1,041			4,414			3,893

INTEREST EXPENSE
Deposits:
Interest-bearing demand		7			4			7			18			24
Money market and savings		91			92			91			380			341
Time deposits		69			64			75			257			394
Other		-			1			-			1			1
Total interest expense		167			161			173			656			760

Net interest income		975			964			868			3,758			3,133
Provision for credit losses		110			60			160			259			461
Net interest income after provision
for credit losses		865			904			708			3,499			2,672

NON-INTEREST INCOME
Service charges on deposit accounts		23			23			17			84			86
Gain on sale of SBA loans		-			-			-			37			11
Gain on sale of securities		-			37			97			37			254
Other non-interest income		61			50			26			160			103
Total non-interest income		84			110			140			318			454

OPERATING EXPENSES
Salaries and benefits		466			445			365			1,935			1,392
Premises and fixed assets		109			108			75			403			287
Other		319			317			283			1,245			1,123
Total operating expenses		894			870			723			3,583			2,802

Income before income taxes		55			144			125			234			324
Income taxes		(153	)		(33	)		-			(469	)		1

NET INCOME	$	208		$	177		$	125		$	703		$	323

EARNINGS PER SHARE
Basic earnings per share	$	0.17		$	0.15		$	0.10		$	0.59		$	0.27
Diluted earnings per share	$	0.17		$	0.15		$	0.10		$	0.57		$	0.26
Average common shares outstanding		1,200,000			1,200,000			1,200,000			1,200,000			1,200,000
Average common and equivalent
shares outstanding		1,200,000			1,218,056			1,280,289			1,224,701			1,258,183

PERFORMANCE MEASURES
Return on average assets		0.95	%		0.89	%		0.65	%		0.87	%		0.43	%
Return on average equity		8.25	%		7.20	%		5.38	%		7.34	%		3.54	%
Net interest margin		4.64	%		5.04	%		4.66	%		4.86	%		4.42	%
Efficiency ratio		84.42	%		81.01	%		71.73	%		87.90	%		78.12	%

2012年2月1日星期三

Cornerstone Community Bank Reports Financial Results For the Fourth Quarter and Full Year Ended December 31, 2011


CORNERSTONE COMMUNITY BANK
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands)



		12/31/11			09/30/11			06/30/11			03/31/11			12/31/10

ASSETS
Cash and due from banks	$	1,957		$	1,944		$	1,542		$	1,448		$	1,552
Federal funds sold		-			-			-			-			-
Interest-bearing deposits		445			3,790			1,945			4,381			1,535
Investment securities		22,173			13,652			14,496			14,677			16,465
Loans held for sale		-			-			-			-			-
Loans, net of unearned income		64,504			60,595			57,980			56,800			55,248
Allowance for loan losses		(1,270	)		(1,180	)		(1,140	)		(1,099	)		(1,104	)
Loans, net		63,234			59,415			56,840			55,701			54,144
Premises and equipment, net		1,226			1,105			1,067			1,042			777
Other assets		2,312			1,917			2,014			1,732			1,855
Total assets	$	91,347		$	81,823		$	77,904		$	78,981		$	76,328

LIABILITIES
Deposits:
Demand noninterest-bearing	$	11,833		$	9,995		$	8,256		$	8,075		$	10,169
Demand interest-bearing		12,928			9,013			7,145			6,558			7,416
Money market and savings		32,322			33,393			33,833			37,385			31,429
Time deposits of less than $100,000		8,841			8,376			9,088			9,377			7,717
Time deposits of $100,000 or more		14,718			10,449			9,433			8,158			10,309
Total deposits		80,642			71,226			67,755			69,553			67,040
Other liabilities		535			577			492			286			301
Total liabilities		81,177			71,803			68,247			69,839			67,341

SHAREHOLDERS’ EQUITY
Common stock		11,959			11,959			11,959			11,959			11,959
Additional paid-in capital		685			656			627			599			570
Accumulated deficit		(2,650	)		(2,858	)		(3,035	)		(3,224	)		(3,353	)
Accumulated other comprehensive income (loss)		176			263			106			(192	)		(189	)
Total shareholders’ equity		10,170			10,020			9,657			9,142			8,987
Total liabilities and shareholders’ equity	$	91,347		$	81,823		$	77,904		$	78,981		$	76,328

CAPITAL ADEQUACY
Tier I leverage ratio		10.89	%		11.87	%		11.65	%		12.06	%		11.85	%
Tier I risk-based capital ratio		13.27	%		14.11	%		14.23	%		14.69	%		14.80	%
Total risk-based capital ratio		14.52	%		15.36	%		15.49	%		15.95	%		16.05	%
Total equity / total assets		11.13	%		12.25	%		12.40	%		11.57	%		11.77	%
Book value per share	$	8.48		$	8.35		$	8.05		$	7.62		$	7.49


CORNERSTONE COMMUNITY BANK
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in Thousands)




	Three months ended									Year ended
		12/31/11			09/30/11			12/31/10			12/31/11			12/31/10

INTEREST INCOME
Loans	$	1,014		$	1,006		$	944		$	3,920		$	3,507
Federal funds sold		-			-			-			-			-
Investment securities		126			117			92			487			361
Other		2			2			5			7			25
Total interest income		1,142			1,125			1,041			4,414			3,893

INTEREST EXPENSE
Deposits:
Interest-bearing demand		7			4			7			18			24
Money market and savings		91			92			91			380			341
Time deposits		69			64			75			257			394
Other		-			1			-			1			1
Total interest expense		167			161			173			656			760

Net interest income		975			964			868			3,758			3,133
Provision for credit losses		110			60			160			259			461
Net interest income after provision
for credit losses		865			904			708			3,499			2,672

NON-INTEREST INCOME
Service charges on deposit accounts		23			23			17			84			86
Gain on sale of SBA loans		-			-			-			37			11
Gain on sale of securities		-			37			97			37			254
Other non-interest income		61			50			26			160			103
Total non-interest income		84			110			140			318			454

OPERATING EXPENSES
Salaries and benefits		466			445			365			1,935			1,392
Premises and fixed assets		109			108			75			403			287
Other		319			317			283			1,245			1,123
Total operating expenses		894			870			723			3,583			2,802

Income before income taxes		55			144			125			234			324
Income taxes		(153	)		(33	)		-			(469	)		1

NET INCOME	$	208		$	177		$	125		$	703		$	323

EARNINGS PER SHARE
Basic earnings per share	$	0.17		$	0.15		$	0.10		$	0.59		$	0.27
Diluted earnings per share	$	0.17		$	0.15		$	0.10		$	0.57		$	0.26
Average common shares outstanding		1,200,000			1,200,000			1,200,000			1,200,000			1,200,000
Average common and equivalent
shares outstanding		1,200,000			1,218,056			1,280,289			1,224,701			1,258,183

PERFORMANCE MEASURES
Return on average assets		0.95	%		0.89	%		0.65	%		0.87	%		0.43	%
Return on average equity		8.25	%		7.20	%		5.38	%		7.34	%		3.54	%
Net interest margin		4.64	%		5.04	%		4.66	%		4.86	%		4.42	%
Efficiency ratio		84.42	%		81.01	%		71.73	%		87.90	%		78.12	%

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Wells Fargo moving into investment banking arena

The sun was rising over San Francisco’s financial district in November 2009 when Richard Kovacevich picked up the phone in his 12th-floor office to call Omaha, Neb.
It was about a year after Wells Fargo and Kovacevich, the bank’s chairman at the time, had announced a plan to purchase Wachovia, and he was reaching out to Warren Buffett for help. Just days before, Buffett had heralded his own acquisition of railroad Burlington Northern Santa Fe Corp. for $26 billion.
The billionaire chairman and chief executive officer of Berkshire Hathaway had lined up JPMorgan Chase for financing, Kovacevich recalls. Berkshire also is Wells Fargo’s largest shareholder. The two men spoke for no more than 10 minutes, Kovacevich says, and the banker’s message was simple.

‘This is important’

“Here we are, our largest shareholder, and we had never done any meaningful investment banking for him,” said Kovacevich, who stepped down as chairman in 2009 but continues to consult with management and represent the company to customers. “I called him and said we’ve got some great bankers here now, this is important, and we’d really like to show you what we can do.”
The phone call marked a turning point for Wells Fargo, founded in 1852 to serve Gold Rush pioneers. Far from Wall Street, the bank had long rejected the more volatile and transaction-oriented culture of investment banking. In 2005, Kovacevich, then also CEO, said having superstar bankers focused on one-time deals was “incompatible” with his company.
Now, Wells Fargo is pushing into the business it once shunned, even as rivals facing fickle markets, meager revenue and new restrictions scale back. Financial firms worldwide announced plans last year to cut more than 230,000 jobs as global stock offerings plunged 29 percent and U.S. bond issuance fell 6.8 percent.
The move may help Wells Fargo, led since 2007 by CEO John Stumpf, weather head winds facing commercial banks. Firms are struggling to find growth as rules limit overdraft and debit card fees and lending remains sluggish.
“The government has really limited their ability to grow their operations, so I can understand why they are trying to move out of traditional banking, but it’s a tough thing to do,” said William Frels, CEO of money manager Mairs & Power, which held more than 3.6 million Wells Fargo shares at the end of September. “It’s not a positive. My take is that they are desperate to find new avenues of growth.”

Record profit

Still, the bank has been profitable for 12 consecutive quarters, through the three-month period that ended on Dec. 31, setting records in the past six. It reported net income of $15.9 billion in 2011.
After Kovacevich’s call, Buffett added Wells Fargo to the Burlington deal. The bank has gone on to manage Burlington bond issues and in January 2011 helped underwrite Berkshire’s $1.5 billion debt offering. Buffett declined, through a spokeswoman, to comment.
“Before the crisis, we would have had to compromise both our culture and ethics in order to compete,” said Kovacevich, who, during an almost 35-year banking career that began at Citicorp, pursued his own agenda in defiance of industry trends.
The collapse of Lehman Bros. Holdings and the sales of Bear Stearns and Merrill Lynch in 2008 led Kovacevich and Stumpf to rethink their stance.
Buffett’s imprimatur notwithstanding, Wells Fargo has a big hill to climb. The bank ranked 12th among U.S. debt underwriters in 2011, with 1,824 deals valued at $53.1 billion, behind London’s HSBC Holdings and France’s BNP Paribas SA. In U.S. mergers and acquisitions, Wells Fargo ranked 21st, advising on 31 deals last year valued at $27.6 billion.
Wells Fargo also will have to convince naysayers it won’t go the way of other commercial banks that have sought to enter the investment-banking business only to retreat, says Brian Foran, a New York analyst at Nomura Holdings Inc. Bank of America tried expanding into investment banking with limited success until it purchased Merrill Lynch, he said.
“Investors are nervous,” Foran said. “They feel like they’ve seen this movie before.”
This article appeared on page D – 4 of the San Francisco Chronicle
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2012年1月31日星期二

Premier Service Bank Announces Financial Results for the Quarter and Year Ended December 31, 2011

RIVERSIDE, Calif.–(BUSINESS WIRE)– Premier Service Bank (OTCBB:PSBK.OB – News) today announced its unaudited financial results for the quarter and year ended December 31, 2011.
For the year ended December 31, 2011, the Bank reported a net loss of $2.19 million, or ($1.77) per diluted share, compared to a net loss of $3.26 million, or ($2.66) per diluted share for the year ended December 31, 2010. The net loss for the fourth quarter of 2011 was $820 thousand, or ($0.66) per diluted share, compared to a net loss of $707 thousand, or ($0.57) per diluted share for the fourth quarter of 2010. The variance in earnings between the respective periods is primarily attributed to the provisions to the Bank’s allowance for loan losses, which, for the year ended December 31, 2011, totaled $2.79 million, compared to $4.01 million for the year ended December 31, 2010. The provision to the allowance for loan losses for the fourth quarter of 2010 totaled $910 thousand, compared to $960 thousand for the same period in 2010.
At December 31, 2011, the Bank had $8.93 million of non-performing loans, representing 8.61% of the Bank’s total loans, compared to $8.21 million of non-performing loans, or 6.98% of total loans, at December 31, 2010. Impairment analyses are performed on the Bank’s non-performing loans and impairment adjustments, if any, are written off as a part of this process. The Bank had foreclosed real estate of $2.92 million at December 31, 2011, compared to foreclosed real estate of $1.87 million at December 31, 2010. All non-performing loans were on non-accrual at December 31, 2011 and 2010. The allowance for loan losses totaled $2.36 million at December 31, 2011, or 2.28% of total loans as of that date, compared to $2.55 million at December 31, 2010, or 2.17% of total loans as of that date.
At December 31, 2011, the Bank had total assets of $141 million, representing a decrease of $14.7 million or 9.45% compared to total assets of $156 million at December 31, 2010. Total deposits at December 31, 2011 were $111.8 million, representing a 9.43% reduction compared to total deposits of $123.4 million at December 31, 2010. Non-interest bearing demand deposits totaled $41.1 million at December 31, 2011, representing 36.8% of total deposits at that date, compared to $37.6 million of non-interest bearing demand deposits at December 31, 2010, which represented 30.5% of total deposits at that date.
The Bank’s gross loan portfolio totaled $103.7 million at December 31, 2011, representing an 11.9% decrease compared to gross loans of $117.6 million at December 31, 2010. Unfunded credit commitments stood at $7.6 million at December 31, 2011, representing a 42.9% decrease when compared to unfunded commitments of $13.3 million at December 31, 2010.
The Bank’s net interest margin for the year ended December 31, 2011 was 4.82%, a decrease of 0.14% compared to the net interest margin of 4.96% for the year ended December 31, 2010. The Bank’s net interest margin for the quarter ended December 31, 2011 was 4.64%, a decrease of 0.09% compared to the net interest margin of 4.73% for the fourth quarter of 2010.
At December 31, 2011, the Bank was adequately capitalized under applicable regulatory guidelines. Total shareholders’ equity at December 31, 2011 was $10.7 million, representing a decrease of $2.2 million, or 17%, compared to total shareholders’ equity of $12.9 million at December 31, 2010. On December 1, 2010, the Bank entered into a Consent Order with the Federal Deposit Insurance Corporation and the California Department of Financial Institutions. Among the provisions of the Consent Order is the requirement that within 90 days from the effective date of the Order (by February 28, 2011), the Bank shall increase and thereafter maintain its Tier I capital in such an amount to ensure that the Bank’s leverage ratio equals or exceeds 9.50 percent and its total risk-based capital ratio equals or exceeds 12 percent. The Bank was not in compliance with this requirement as of February 28, 2011 as required by the Order. As of December 31, 2011, these capital ratios were 7.21% and 10.78%, respectively. As a result, the Bank had not achieved compliance, as of December 31, 2011, with the capital ratios required by the Order. The Bank attempted to comply with the capital requirements of the Order during 2011, but its private placement offering during 2011 of up to $10 million of common stock to accredited investors was not successful. The stock permit issued by the DFI for that offering expired on December 23, 2011, and the Bank did not request an extension of the permit in view of the stale financial statements included in the offering and other factors. Because the Bank did not sell the minimum amount required by the offering, all subscriptions were returned when the offering expired. Before the Bank may commence a new offering, it must receive audited financial statements for its year ended December 31, 2011, and a new stock permit must be issued. Audited financial statements are anticipated to be issued in early February. At that time, if the Bank has not satisfied the capital ratios required by the Order, the Bank intends to seek a new stock permit from the Department of Financial Institutions for the sale of up to $10 million of common stock to accredited investors in another nonpublic offering. While the Bank continues to be adequately capitalized under applicable regulatory guidelines, in order to comply with the capital requirements of the Consent Order the Bank will need to complete the proposed capital offering in 2012 or find another solution which improves its capital ratios, including the possible sale of the Bank or a transfer of control of the Bank, or taking steps to decrease the asset size of the Bank until the ratios are in compliance with the Consent Order.
The Bank’s President and Chief Executive Officer, Kerry L. Pendergast, stated, “While 2011, in most respects, was a continuum of 2010, there are anecdotal signs suggesting that, perhaps, the local marketplace is beginning to shows some signs of stabilization. While it is too early to state that we’ve turned the corner, I would suggest that our customers appear to be more optimistic about the future.”
Pendergast went on to say, “Throughout 2011 Premier Service Bank focused its efforts on managing the credit portfolio; while this message has been embedded in our releases for quite some time, it is central to returning the Bank to consistent profitability. Recognizing that delinquency is generally a precursor to more serious issues developing in a relationship, management and staff intensified their collection efforts throughout the year; as a result, overall delinquency within the institution has been trending downward over the last 2 quarters. In 2011 the Bank contributed $2.79 million to its Allowance for Loan Losses as compared to a contribution of $4.01 million in 2010; this serves to support the belief that the pace of problem loans is beginning to decline and that appraisal valuations, tied to Classified Commercial Real Estate Loans, are also beginning to stabilize.”
Pendergast said in closing, “While improving the overall asset quality of the Bank continues to be the primary focus of the executive management team and our Board of Directors, our entire team works tirelessly to ensure that our “customer first” mindset does not get lost in the process. Throughout the year, all of the Bank’s front line officers participated in a structured calling program that focused on the Bank’s existing customer base; at a minimum, each client assigned to an account officer was called on at least twice within the calendar year. The importance of retention calling cannot be overstated and is critical in an environment where large, money center banks are entering the region with the dollars and the resources to buy market share.”
Premier Service Bank is a California state-chartered bank with two offices, its headquarters office in Riverside and a full-service banking office in Corona. The Bank provides commercial banking services, including a wide variety of checking accounts, investment services with competitive deposit rates, on-line banking products, and real estate, construction, commercial and consumer loans, to small and medium-sized businesses, professionals and individuals. Additional information about Premier Service Bank is available at its website at www.premierservicebank.com.
Forward-looking Statements
This news release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about Premier Service Bank’s business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and in the following: Premier Service Bank’s ability to increase its assets, deposits and total loans, control expenses, retain critical personnel, manage interest rate risk, manage technological changes, address regulatory requirements, and other risks discussed from time to time in Premier Service Bank’s filings and reports with the Federal Deposit Insurance Corporation. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and Premier Service Bank does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.
For a more complete discussion of risks and uncertainties, investors and security holders are urged to read Premier Service Bank’s annual report on Form 10-K, quarterly reports on Form 10-Q and other reports filed by Premier Service Bank with the FDIC.
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Financial Data – Premier Service Bank
(Unaudited)

	Quarter Ended
(In Thousands)	Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			Mar. 31, 2011			Dec. 31, 2010

Interest income(not taxable equivalent)	$	1,750		$	1,843		$	1,959		$	1,938		$	2,063
Interest expense		222			232			245			291			329
Net interest income		1,528			1,611			1,714			1,647			1,734
Provision for loan losses		910			275			884			725			960
Net interest income after provision for loan losses		618			1,336			830			922			774
Non-interest income		129			148			261			178			163
Non-interest expense		1,566			1,625			1,722			1,694			1,644
Income before income taxes		(819	)		(141	)		(631	)		(594	)		(707	)
(Benefit)/Provision for income taxes		1			-			-			-			-
Net income	$	(820	)	$	(141	)	$	(631	)	$	(594	)	$	(707	)

	Quarter Ended
(In Thousands)	Dec. 31, 2011			Sept. 30, 2011			June 30, 2011			Mar. 31, 2011			Dec. 31, 2010
Per share:
Net income – basic	$	(0.66	)	$	(0.12	)	$	(0.51	)	$	(0.48	)	$	(0.57	)
Weighted average shares used in basic		1,261			1,261			1,261			1,261			1,261
Net income – diluted	$	(0.66	)	$	(0.12	)	$	(0.51	)	$	(0.48	)	$	(0.57	)
Weighted average shares used in diluted		1,261			1,261			1,261			1,261			1,261
Book value at period end	$	5.22		$	5.89		$	6.00		$	6.49		$	6.97
Ending shares		1,261			1,261			1,261			1,261			1,261


Balance Sheet – At Period-End
Cash and due from banks	$	22,867		$	21,875		$	17,947		$	22,636		$	24,060
Investments and Fed fund sold		8,446			7,724			9,766			10,250			8,476
Gross Loans		103,668			109,429			111,500			113,645			117,624
Deferred fees		(198	)		(211	)		(233	)		(254	)		(263	)
Allowance for loan losses		(2,359	)		(3,130	)		(2,803	)		(2,561	)		(2,549	)
Net Loans		101,111			106,088			108,464			110,830			114,812
Other assets		8,832			9,398			10,559			10,592			8,644
Total Assets	$	141,256		$	145,085		$	146,736		$	154,308		$	155,992

Non-interest-bearing deposits	$	41,130		$	43,246		$	43,762		$	44,947		$	37,588
Interest-bearing deposits		70,629			69,499			70,519			77,347			85,809
Other liabilities		18,812			20,818			20,797			19,749			19,737
Shareholders’ equity		10,685			11,522			11,658			12,265			12,858

Total Liabilities and Shareholders’ equity	$	141,256		$	145,085		$	146,736		$	154,308		$	155,992

Asset Quality & Capital – At Period-End
Non-accrual loans	$	8,926		$	9,591		$	6,309		$	8,047		$	8,209
Loans past due 90 days or more		-			-			-			-			-
Other real estate owned		2,927			3,194			4,036			3,927			1,865
Other bank owned assets		-			-			-			-			-
Total non-performing assets	$	11,853		$	12,785		$	10,345		$	11,974		$	10,074

Allowance for losses to loans, gross		2.28	%		2.86	%		2.51	%		2.25	%		2.17	%
Non-accrual loans to total loans, gross		8.61	%		8.76	%		5.66	%		7.08	%		6.98	%
Non-performing loans to total loans, gross		8.61	%		8.76	%		5.66	%		7.08	%		6.98	%
Non-performing asset to total assets		8.39	%		8.81	%		7.05	%		7.76	%		6.46	%
Allowance for losses to non-performing loans		26.43	%		32.63	%		44.43	%		31.83	%		31.05	%

Total risk-based capital ratio		10.78	%		11.15	%		10.92	%		11.27	%		11.64	%
Tier 1 risk-based capital ratio		9.52	%		9.88	%		9.66	%		10.00	%		10.38	%
Tier 1 leverage ratio		7.21	%		7.86	%		7.73	%		7.87	%		8.05	%

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