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The little banks that could

Posted: October 8, 2008 9:07 p.m.
Updated: December 10, 2008 5:00 a.m.

While some national banks crash and others hoard their money, the current economic climate is sunny and bright for three local banks that serve the Santa Clarita Valley.

"Main Street community banks that are conservative and traditional are doing fine in today's market," said James D. Hicken, president and chief executive officer of Bank of Santa Clarita.

In fact, Hicken and others in the local banking business view the current economy is a time of great opportunity.

The banks that face difficulties are the ones that became involved in risky and subprime loans, Hicken said.

"We have not participated nor been involved in those activities that have created the banking crisis," he said.

Bank of Santa Clarita, which has been in operation for four years, stayed focused on taking in deposits, lending money and providing banking services through technology, he said.

Of the current market, he said: "It's a growth period, a controlled growth.

"We have money to lend. We're very focused on attracting new clients. We've really seen this as a period of opportunity for us."

The Bank of Santa Clarita plans to open its third branch at The Plaza at Golden Valley in Canyon Country during the first quarter of 2009.

At Santa Clara Valley Bank, which has a branch in Valencia, "We're doing very well," said Michael Hause, president and chief executive officer.

SCV Bank's third quarter was one of the strongest growth periods for the Santa Paula-based bank, he said.

The bank avoided the current mortgage crisis because it did not deal in individual personal mortgages, Hause said.

Unlike Washington Mutual and Merill-Lynch, SCV Bank and other community banks have different business models.

Like Hicken, Hause believes community banks can grow despite the current economy.

"It can be an opportunity if you're a strong community bank," Hause said.

At Mission Valley Bank, which has two branches in Santa Clarita, "It's business as usual here," said Tamara Gurney, president and chief executive officer of the Sun Valley-based business.

The bank is primarily a business lender and doesn't handle residential mortgage lending, she said.
Mission Valley Bank specializes in small- and middle-market businesses in the San Fernando and Santa Clarita valleys.

Earlier in the year, Mission Valley Bancorp, the parent company of Mission Valley Bank, reported a record net income for 2007 of $1,366,000, marking a 49-percent increase from the $917,000 reported in 2006.

The other two local banks have similar success stories.

At Bank of Santa Clarita, net income for the second quarter grew to $102,000, a strong change from the net loss of $202,000 in the second quarter of 2007.

The opportunity will give the bank, traditionally focused on serving small- and medium-sized businesses, the ability to serve "a much larger side" of retail banking, Hicken said.

But he believes a major obstacle during the tough economy is communicating to clients that not all banks are failing.

"We're a solid community bank," he said.

SCV Bank reported that net income was $170,000 in the second quarter of 2008.

The number represents a 97 percent increase compared to the $86,000 net income reported during the first quarter.


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