E-Mail Express

Name:

Company:

E-mail:

Phone:

North Bay banks remain strong in statewide ratings

FIVE BANKS GET TOP RANK; FIRST COMMUNITY NAMED AMONG ‘EXCEPTIONAL’ FOR ’08

NORTH BAY – Despite lower overall performance in the broad banking industry last year, North Bay community banks continued to perform well compared with other California institutions, according to ratings released by the authoritative Findley Reports on Financial Institutions.

Since 1965, Anaheim-based bank adviser and newsletter publisher Findley Companies has been rating the performance of California banks using criteria such as loan and deposit growth, profitability ratios and credit quality.

In 2007, the number of California-headquartered banks receiving the top Findley rating, known as “super premier,” dropped 35 percent to 55, down from 84 banks in 2006. Less than 20 percent of California banks received the top rating in 2007, compared with 31 percent in 2006 and 35 percent in 2005.

“Sometimes the environment does not cooperate, and in 2007 that was the case,” Gary Findley, editor of the Findley Reports and a banking industry consultant, wrote in a newsletter announcing the new ratings.

Despite the statewide decline, the number of North Bay banks receiving the top rating – five – remained level year over year. The top-rated local banks were Bank of Marin (Nasdaq: BMRC), First Community Bank, Napa Community Bank, Sonoma Valley Bank (OTC: SBNK) and Tamalpais Bank (Nasdaq: EPIK).

Sean Cutting, president of Sonoma Valley Bank, said much of the North Bay’s success comes from the ability of local banks to recruit high-quality employees.

“It is a good place to live, so the banking sector is able to attract some high-quality management that want to live up in Northern California,” Mr. Cutting said.

Exchange Bank (OTC: EXSR) and Vintage Bank, both top performers in 2006, were not on the super premier list in 2007. Vintage was acquired by Oregon-based Umpqua Bank, and thus not eligible.

But Tamalpais Bank returned to the list in 2007 after a two-plus year absence, and First Community Bank made its first appearance since its doors opened in 2005.

Santa Rosa-based First Community Bank received special recognition as one of “five exceptional banks for 2008,” based on its growth and early profitability. Out of 26 new California banks launched in 2005, First Community was the largest with $460 million in assets at December 31, making it 77 percent larger than the second-biggest new bank, Encino-based California United Bank. First Community also ranked top in profits among the new banks with $3.8 million in net income in 2007.

“We believe First Community will continue to be a strong player in the market place for a number of years,” Mr. Findley wrote of the bank.

Despite fears of a potential recession and weak national economic indicators, First Community President and CEO Kathy Pinkard said there is still strong loan demand among qualified business borrowers in the North Bay.

“With the economy the way it is, things could slow down, but we really haven’t seen it yet,” she said.

Ms. Pinkard said fast growth is a part of her bank’s early strategy, but she expects to reach a size plateau.

“Our business model is to get to a size where we really enjoy some economies of scale in our areas of service,” Ms. Pinkard said. “In our projections, it’s probably around the $1 billion mark.”