Citizens Bank turns a profit in Q3 |

Citizens Bank turns a profit in Q3

While Citizens Bank of Northern California continues to shed some risky loans – a result of still-depressed real estate market – the Nevada-City-based institution reported a net income for the third quarter ending Sept. 30.

“The third quarter was a black number,” said an optimistic Citizens’ President and CEO Gary Gall. “We were able to cover some write-downs and foreclosed loans to put $400,000 to the bottom line.”

Net interest income was $3.4 million for the quarter, which saw the company increase its net interest margin from 4.17 percent to 4.34 percent.

Citizens has an estimated 17,000 account holders, according to bank officials.

Established in 1994, Citizens Bank includes six branches and 78 employees.

The company reported losses of $10.7 million in 2008 and $13.5 million last year.

In July, bank officials filed paperwork with the Securities and Exchange Commission to go public, with hope of raising $20 million in capital through an initial offering of 6.6 million shares at $3 per share.

“We have had had a lot of back-and-forth communication with the SEC,” said Gall. “They have asked a lot of questions, and we’ve answered them.”

Gall remains bullish on the bank’s future, despite what he describes as a slow improvement to the bank’s “asset quality” and the low demand for loans. “We continue to maintain a net interest margin that ranks in the top quartile of banks in the state and nation,” he said. “We are also seeing some positive effects of our cost reduction measures implemented earlier in the year.”

The quarterly financial report indicated Citizens “continues to maintain strong liquidity, with $42.9 million in cash and cash equivalents and $17.3 million in time deposits at other banks.”

Much of the optimism from bank officials comes from evidence the local real estate market may be near the bottom, more diligent loan (or risk) management, strong leadership and customer loyalty, gained through years of community service by bank employees.

“We take great pride in giving back to the community, as evidenced by the commitment of our board of directors and valued employees who continue to make a real difference by volunteering in 81 local organizations, serving on 31 boards of directors and contributing to 66 organizations,” said Gall.

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