Scott Valley Bank announced today that it will not apply for participation in the U.S. Treasury Department's Troubled Assets Relief Program Capital Purchase Program.

The Board of Directors of Learner Financial Corporation, parent company of Scott Valley Bank announced its decision not to apply for participation in the U.S. Treasury Department's Troubled Assets Relief Program ("TARP") Capital Purchase Program ("CPP") as authorized by the recently enacted Emergency Economic Stabilization Act of 2008.

Timothy S. Avery, President and CEO, stated, “Scott Valley Bank’s Board and that of our Holding Company, together with senior management have thoroughly analyzed the merits of the opportunity presented by the Treasury’s TARP Program and have concluded that there is no financial or strategic advantage to be gained by Scott Valley Bank participating in the Capital Purchase Program.”

In a Letter to Treasury Secretary Paulson, Avery stated the bank’s capital levels “remains significantly above the regulatory guidelines for ‘well-capitalized’ financial institutions."  Avery went on to say; “The bank continues to be profitable despite the challenging economic and interest rate environment and its strong capital position and surplus liquidity create a favorable position for growth.”

"The stated objective of TARP is to facilitate lending activity for troubled banks or banks holding troubled assets. Scott Valley Bank has never stopped actively lending.  We certainly appreciate being in the favorable position of not needing government assistance to lend to our customers. We attribute this to our strong history of adherence to the fundamentals of safety and soundness, sound underwriting standards, and due diligence which greatly limits the impact of credit risk in our loan portfolio.  The Bank maintains a high level of liquidity and has experienced strong loan growth as evidenced by our record loan balances achieved in the third quarter.  While we have seen some increase to our historically very low percentage of non-performing loans, that increase is attributable to the impact of current economic conditions on a few clients who are directly affected by the current challenges in the housing market. We believe we are well-positioned to continue to serve our clients, and to build upon the bank’s deep 150-year heritage without the need for U.S. Treasury capital under the Capital Purchase Program.

"Scott Valley Bank has achieved record performances in recent years and, despite the current challenges in the economy, financial performance in 2008 remains strong.”