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Team Financial

In 2003, banking veterans James Hicken, Frank D. Di Tomaso and Kimberly Altobello saw an opportunity in the Santa Clarita Valley marketplace. Union Bank had recently acquired Valencia Bank & Trust. And the purchase effectively did away with one of the only community banks in the area. Tired of working for big banks, the trio pooled their personal financial resources, raised $13.7 million in a stock offering, and in late 2004 opened the first branch of Bank of Santa Clarita. “We did it because at that point in time people didn’t have a community bank,” said Altobello, chief administrative officer. “Large bank decision makers are not always there. And people know we make all of our decisions in-house.” Since 2004, Bank of Santa Clarita has grown to three branches, more than 30 employees, $154 million in assets and $119 million in deposits. It recently announced the purchase of a new headquarters building in Santa Clarita and plans to open a fourth branch. But expanding at a time when regulators are shutting down many smaller banks is no small undertaking, they said. “When we opened, our focus was to build a solid infrastructure versus just making a profit as soon as possible,” said Hicken, president and CEO and a long-time Santa Clarita Valley resident. “The idea was to stand the test of time.” The bank specializes in business banking such as providing commercial real estate loans, equipment loans and “bread and butter”-type business loans, said Hicken. And it’s making efforts to appeal to non-business customers. From the end of fiscal year 2004 to the second quarter of 2005, assets increased 75 percent to $39.1 million, deposits increased nearly three-fold to $26.6 million and loans increased from $6.4 million to $24.3 million. Bank of Santa Clarita did a $7.7 million secondary public offering in the second half of 2005. By the end of 2006 assets were up to $108.6 million and deposits were $88 million. The company proceeded to open its second branch in Feb. 2007 near Soledad Canyon and Valley Center Drive. And a third branch, located at Plaza Golden Valley, opened in March 2009. “We are a very conservative institution,” said Hicken, “but we have all the technology and bells and whistles of big banks.” The bank has been able to consistently grow because it has maintained a low percentage of problem loans, avoided doing some of the riskier real estate development and acquisition loans, and focused on the long-term, he added. But Bank of Santa Clarita has hit a few bumps along the way, especially over the past year and a half or so. No TARP funds As the financial crisis heated up, there was a lot of pressure on small banks to accept funds from the Troubled Asset Relief Program (TARP), said Hicken. From the point the federal government announced the program, what some refer to as the “Bank Bail Out,” financial institutions only had a couple of weeks to decide. “We did not accept TARP funds,” said Hicken. “We looked at it, but the fact is we were not stressed and had a clean loan portfolio. We did not need the money and we didn’t want it.” Hicken and Altobello said one of the toughest parts of not accepting federal assistance was dealing with the public perception. Some might have viewed the move as irresponsible, because many of the larger financial institutions accepted TARP funds. So the bank launched its own PR campaign telling customers and the community it was proud to not participate in the program. In fact, only three Valley-based state chartered banks accepted TARP assistance, including First California Bank, Mission Valley Bank and California Oaks State Bank. “This is our bank,” said Altobello. “The three of us have everything invested in it. So when we make decisions (such as not accepting TARP funds) we take it seriously.” Another recent blip happened at the beginning of 2009 when the bank was preparing to open its third branch. Shortly before the March opening, the FDIC announced that banks would have to pay higher premiums for the year. Some cuts Bank of Santa Clarita hadn’t budgeted for the increase, so it made cuts such as temporarily withdrawing its 401K matching program. The bank was able to open the branch. And as revenues increase, it’s restoring some of the programs that were cut. Looking ahead, Bank of Santa Clarita recently closed escrow on a 15,240 square foot office building at 26350 Citrus Street in Santa Clarita, located at the intersection of Citrus and Magic Mountain Parkway and across from the regional mall. The bank plans on renovating the building’s interior and converting it for use as administrative and executive offices and a new branch – the company’s fourth. The latter is pending regulatory approval. Hicken said the new building will give the bank more public exposure than where its headquarters is currently located on Tourney Road. The purchase is also part of a long-term facilities plan. He said Bank of Santa Clarita hopes to continue to expand in the region by focusing on providing banking services in smaller communities. And acquiring other financial institutions is certainly not out of the question. “The new building will have a positive financial impact on the bank and give us more presence in the city,” said Hicken, adding “Doing what we’re doing in this tough economic time definitely sends a message.” Bank of Santa Clarita Year Founded: 2004 Assets and Deposits Q3 2009: $154 million, $119 million Assets and Deposits Q3 2008: $134 million, $115 million Number of Branches: three with a fourth proposed

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