Press Releases

Security Business Bancorp Reports Positive Earnings Core Deposits Grew over 11% and Net Interest Margin Expanded to 4.64%


SAN DIEGO, May 10, 2010 (BUSINESS WIRE) -- Security Business Bancorp (OTCBB: SBBC) and its operating subsidiary, Security Business Bank of San Diego, today reported its unaudited 2010 first-quarter results with core deposits growth of $14.9 million (an 11.2 percent annual growth rate). Also among the March 31 results is a strong 4.64 percent net interest margin compared to peers.

"Our core deposits growth, which is now at 93 percent of total deposits, and solid net interest margin display our ability to operate successfully despite the difficult economic environment. We had positive earnings, provided for a healthy credit loss provision and lowered our efficiency ratio year over year," said Paul Rodeno, president and CEO of Security Business Bancorp. "Our liquidity position remains strong and we are 'well-capitalized,' which is the highest regulatory standard," he continued.

Independent ratings firm BauerFinancial recently awarded Security Business Bank five stars, its top ranking, based on capital ratios, profitability-loss trends and liquidity, among other criteria. Ratings reflect data collected in the fourth quarter of 2009.

As a progressive organization, Security Business Bancorp has been exploring raising additional capital to take advantage of opportunities in the marketplace. In this regard, the company may incur costs related to the capital raise activities.

"There is a window of opportunity for well-capitalized banks to look at a number of evolving market opportunities and lay foundations for future growth. Capital is key to realizing these opportunities. And as such, we continue to explore ways to pursue capital and increase shareholder value," said Rodeno.

First-quarter financial highlights include: -- Total assets of $201.8 million, a slight decrease over $205.1 million at March 31, 2009.

-- Total core deposits for March 31, 2010 were $149.0 million compared to $134.0 at March 31, 2009; demand deposit accounts amount to 39.6 percent of total deposits compared to 35.5 percent at March 31, 2009.

-- Allowance for loan loss maintained at a healthy 1.88 percent, higher than many of the bank's peer group.

-- Quarterly net income decreased to $170,000 from $202,000 for the same period in 2009 primarily due to an increase in provision for loan loss.

-- Loans of $160.4 million show a decrease of 4.3 percent from March 31, 2009 of $167.6 million.

-- Our risk-based capital ratio is at 15.6 percent compared to 15.1 percent at March 31, 2009.

Since its founding in 2002, Security Business Bank ( has built a reputation for providing its small and mid-sized business customers with financial innovation, access to management and superior client service. The bank has redefined the business banking experience through its "Executive at Every Level" program, which fosters local decision-making, employee empowerment and community specialization. Security Business Bank is an operating subsidiary of Security Business Bancorp, a bank holding company established in 2008 to support the bank's continued growth.

Security Business Bank operates three San Diego locations including Downtown, Carmel Valley and Carlsbad offices.

Certain statements in this release, including statements regarding the anticipated development and expansion of the bank's business, and the intent, belief or current expectations of the bank, its directors or its officers, are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.

Security Business Bancorp

Financial Highlights (Unaudited)

March 31, 2010

(Amounts in thousands)

As of March 31,


2010 2009

--------- --------- Balance Sheet Results:

Total Assets $201,754 $205,064 Loans Held for Investment $143,553 $150,849 Loans Held for Sale $16,896 $16,735

--------- --------- Total Loans $160,449 $167,584 Allowance for Loan Loss (2,699) (2,418) Core Deposits $148,955 $134,014 Total Shareholders' Equity $26,884 $26,447

Loans to Deposits 100.6% 102.1% Core Deposits to Total Deposits 93.4% 81.7% Allowance for Loan Losses to Loans 1.88% 1.60% Equity to Assets 13.3% 12.9% Total risk-based capital ratio 15.6% 15.1% Ending Book Value per Share $15.08 $14.85 Ending Tangible Book Value per Share $11.82 $11.59

1st Quarter GAAP Results

Net Interest Income $2,113 $2,057 Provision for Loan Loss 200 0 Non-interest Income 218 214 Non-interest Expense 1,843 1,927

--------- --------- Income (Loss) Before Taxes $288 $344 Income Tax Expense (Benefit) 118 142

--------- --------- Net Income (Loss) $170 $202

========= ========= Preferred Stock Dividends 79 32

--------- --------- Net Income (Loss) Applicable to Common Shareholders $91 $170

========= =========

Return on Average Assets 0.35% 0.40% Return on Average Equity 2.58% 3.18% Return on Average Common Equity 3.29% 3.94% Net Interest Margin 4.64% 4.28% Efficiency Ratio 79.1% 84.8% Net Income per Share - Basic $0.05 $0.10 Net Income per Share - Diluted $0.05 $0.10 Ending Shares Outstanding 1,783,343 1,780,918 SOURCE: Security Business Bancorp CONTACT: Security Business Bancorp Paul Rodeno, 619-237-4801 or Melissa Dennis, 760-930-8973 Copyright Business Wire 2010 -0- KEYWORD: United States

North America

California INDUSTRY KEYWORD: Professional Services


Finance SUBJECT CODE: Earnings