SAN LUIS OBISPO, Calif., June 12, 2008 (PRIME NEWSWIRE) -- San Luis Trust Bank (OTCBB:SNLS) announced that its Board of Directors voted not to pay a mid-year cash dividend at this time. The year-end cash dividend is the only regularly scheduled dividend. During the past several years, the Bank has paid a supplemental mid-year dividend as a "bonus" to its shareholders. However, in 2008, as the local real estate market has created an economic slowdown, the Board felt that it was prudent to postpone the dividend until the real estate market improves. In uncertain times, capital is vital and voluntarily reducing capital would appear to be an unwise practice.
San Luis Trust Bank is unique amongst the San Luis County local community banks in that senior management holds a large portion of the common stock. This has been an advantage for the Bank in that the shareholders and senior management have the same interests. The business plan has always been to secure the long-term stability and the continued financial strength of the Bank. The Bank's interests match the shareholder's interests.
The Bank continues to be one of the most profitable small community banks in the country. From 2001 through the first quarter of 2008, the Bank had cumulative earnings of over $20 million. Additionally, its lending practices continue to be sound. The Bank continues to be deemed "well-capitalized" by its regulators, the highest such designation and earned just over $1.5 million (unaudited) through the first five months of fiscal year 2008. The Bank has over $30 million in equity capital, or a 9.66% capital ratio.
The Board of Directors and senior management will continue paying cash dividends as soon as prudent practices will allow. Their responsibilities are not only to maximize shareholder's value, but also to safeguard the Bank's financial condition. Subsequently, the Board of Directors feels it is in the interests of the shareholders to forego special cash dividends in order to build capital and reserves during the current economic environment and to prepare for possible growth opportunities in the future.
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.