Santa Lucia Bank sees its numbers improve

Six months after making a deal with federal regulators, Santa Lucia Bancorp, parent company of Santa Lucia Bank, continues to take steps toward improving its financial health.

The Atascadero-based company posted a net loss of $1.2 million for the fourth quarter last year, compared to a net loss of $4.6 million for the third quarter of 2010 and a net loss of $2.4 million for the same quarter a year ago.

The company reported a net loss of $14.8 million for the year ended Dec. 31, 2009, compared to a net loss of $1.8 million for the same period a year earlier.

The bank primarily attributed the fourth quarter loss to a $1.7 million provision for loan losses, recorded in conjunction with $467,000 of net charge-offs.

The provision for loan losses was $15.2 million for the year ended Dec. 31, 2010.

Margaret Torres, Santa Lucia’s executive vice president and chief financial officer, blamed the losses on bad loans caused by the slow local economy and real estate market.

The bank is actively pursuing ways to deal with its financial challenges, including “identifying credit weaknesses earlier in the collection cycle, increasing oversight frequency of identified credits and devoting additional internal resources to monitoring credits with inherent weaknesses,” said Torres, noting that the bank remains “adequately capitalized and very liquid.”

In December, regulators with the Federal Reserve Bank of San Francisco requested the bank address, among other things, its operations, management, lending, asset quality and increased capital.

In addition to making several changes at the executive level, including appointing a new chief credit officer, Claudya Ross, and re-assigning a seasoned loan officer, Robert Covarrubias, to work exclusively with the chief credit officer, the bank is making an effort comply with regulator requests in strengthening its capital ratios.

The bank is reducing its total assets and taking steps to improve its core operating earnings, Torres said.

It is also exploring strategies to raise additional capital and is “contemplating a rights offering to its existing shareholders,” Torres said.

The company filed a registration statement with the Securities and Exchange Commission as “an initial step in that process,” she said. The statement, filed in March, would be for the right to purchase $7.5 million shares of common stock.

“At this point, no offering has been made to our shareholders,” Torres said.

The bank, which celebrated its 25th anniversary in August 2010, had nearly $250 million in assets as of the fourth quarter and deposits of $234 million.

The bank has locations in Atascadero, Paso Robles, Arroyo Grande and Santa Maria.