Higher interest rates, improved loan market boost profits of banks serving Sacramento region

Published: Tuesday, Apr. 29, 2014 - 9:38 am

Banks serving the Sacramento region are seeing a decidedly rosier environment compared with the dismal days of the recession, as higher interest rates and an improving loan market have boosted profits.

That was particularly true for Placerville-based El Dorado Savings Bank, which saw an 87 percent year-over-year gain in first-quarter net income. The bank reported a profit of $3.11 million in this year’s first quarter, compared with $1.66 million in the first three months of 2013.

“The improvement in earnings is the result of the increase in interest rates that began in the last half of 2013,” said CEO George L. Cook Jr. “The higher rates on new loans and investments improved the bank’s profit margin while the strong performance of the loan portfolio allowed for a reduction in reserves for potential losses.”

El Dorado closed out the first quarter with $1.87 billion in total assets and savings deposits of $1.67 billion.

The bank operates 32 branches in California and three in Northern Nevada.

Other quarterly financial results for banks serving the Sacramento region include:

• Auburn-based Community 1st Bank, which also has a Roseville branch and a loan office in Sacramento, reported net income of $111,000 for the quarter ended March 31. That was down from a profit of $414,000 in the year-ago period.

The bank’s allowance for loan losses was $2.3 million, compared with $2.1 million the previous year. Nonperforming loans at the quarter’s close totaled $4.7 million, or more than double the year-ago period, as a result of one sizable commercial real estate loan.

Despite the year-over-year decline in profits, bank President and CEO Robert Haydon noted that 2014 started out with 36 percent growth in overall loans and 19 percent growth in deposits over a year’s time.

• Folsom-based Sierra Vista Bank reported quarterly net income of $176,000, or 4 cents a share, compared with $52,000, or 2 cents a share, in 2013.

Sierra Vista’s total assets of $104.8 million represented an annual increase of 23 percent. During that time, loans increased 19 percent to $76.1 million, and deposits surged $12.5 million, or 17 percent.

Sierra Vista Bank has branches in Folsom and Cameron Park and recently announced its intention of opening a third full-service branch in Fair Oaks this summer.

• Portland, Ore.-based Umpqua Holdings Corp., which oversees more than 20 Umpqua Bank branches in the Sacramento region, reported net income available to common shareholders of $18.7 million, or 17 cents a share, compared with $23.2 million, or 21 cents a share, for the opening quarter of 2013.

Umpqua completed its merger with Sterling Financial Corp. on April 18, creating what Umpqua is calling the West Coast’s largest community bank, with 5,000 employees in nearly 400 sites in California, Nevada, Oregon, Washington and Idaho.

• Yuba City-based Bank of Feather River recorded its 18th consecutive quarterly profit with net income of $132,000. That was down just slightly from net income of $140,000 in last year’s opening quarter.

Assets grew from $4.6 million to nearly $62.9 million year-over-year. The bank reported annual gains in both loans and deposits.

• Fresno-based Central Valley Community Bancorp, parent of Central Valley Community Bank, amassed quarterly net income of $2.6 million, or 24 cents a share, up from nearly $1.8 million, or 18 cents a share, in the year-ago period.

The bank said the net income surge was “primarily driven by an increase in net interest income in 2014 compared to 2013.” The banking firm has 21 branches, including one in Sacramento.

Call The Bee’s Mark Glover, (916) 321-1184.

Read more articles by Mark Glover

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