SAN LUIS OBISPO, Calif., Oct. 23, 2007 (PRIME NEWSWIRE) -- San Luis Trust Bank (OTCBB:SNLS) earned $1.05 million during the third quarter of 2007, as compared to $1.18 million in the third quarter of 2006. 2007 year-to-date net income is $3.2 million, compared to $4.0 million in 2006. The slight drop is primarily due to lower margins over the past 12 months. While margins are lower, loan growth has been stable, increasing $2.3 million over the previous 12 months. According to the Bank's CEO, Brad Lyon, "in this environment, with real estate values down and the current credit crunch making it difficult to obtain secondary financing, being able to maintain our loan base, while strengthening credit quality, has been a significant achievement."
The Bank's return on assets (ROA) and return on equity (ROE) should continue well above peer groups, at 1.60% and 16%, respectively. Total assets as of September 30, 2007 were $268.5 million, compared to $261 million as of September 30, 2006.
The Board of Directors has authorized the Bank's ESOP to purchase $100,000 of San Luis Trust Bank stock. Additional ESOP contributions will be sought later in the fourth quarter. Senior management and the Board continue to believe that the stock is undervalued and have taken the opportunity to purchase just over 10,000 shares for the bank ESOP plan.
The Bank has positioned its deposit base to take advantage of the recent FOMC rate cuts. The previously shrinking interest margins are beginning to increase and should continue increasing for the remainder of 2007 and into 2008. While lower interest margins reduced year-to-date 2007 earnings, increasing margins will be a strength heading into 2008.
The Bank continues to generate strong earnings and has a sound loan portfolio with appropriate reserves. These positive elements allow for the Bank to pay a strong cash dividend to its shareholders. The Board of Directors will discuss the year-end cash dividend at the upcoming Board meeting.
For more information on San Luis Trust Bank, visit www.sanluistrustbank.com.
Statements concerning future performance, developments or events concerning expectations for growth and market forecasts, and any other guidance on future periods, constitute forward looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, the effect of interest rate changes, the ability to control costs and expenses, the impact of consolidation in the banking industry, financial policies of the United States government and general economic conditions.