1st Centennial terminates two top-tier executives

     1st Centennial Bancorp announced Monday that it gave the boot to two top executives last week.

     On the heels of the Redlands-based financial company’s second loss in 16 years, its board of director’s fired Tom Vessey, president and CEO, and John Lang, chief credit officer, on Friday.

     Chief Financial Officer Beth Sanders wouldn’t comment. She deferred to a company statement that says Suzanne Dondanville, chief operating officer, is now the interim president and CEO.

     1st Centennial’s second-quarter financial filings say the company has enlisted D.A. Davidson & Company — a Great Falls, Mont. financial advisor — to evaluate “capital and other strategic alternatives.”

     Its losses stem from home builders who can’t repay what they borrowed from the bank.

     The company lost $4.2 million over the first six months of this year compared to earnings of $4.1 million over the same period last year.

     Total deposits at 1st Centennial’s six bank branches jumped 13 percent from December to June. Stock shares closed Tuesday at $2.15, down from a peak of $30 in March 2007.

     The $760 million asset bank has branches in Redlands, Palm Desert, Temecula, Escondido, Brea and Irwindale.

–matthew.wrye@inlandnewspapers.com

July home sales continue rising as prices keep falling

     Home buyers and investors are scooping up deals as real-estate prices continue their quick journey downward.
 

     That’s what a report released today by La Jolla-based real-estate data company DataQuick Information Systems says.

     The median price for a home fell about 35 percent in the two-county region from July 2007 to July 2008.  In San Bernardino County, it now stands at $230,000, or $260,000 in Riverside County.

     More than 20,000 new and resale single-family homes and condominiums sold across San Bernardino, Riverside, Los Angeles, Orange, San Diego, and Ventura counties in July – almost a 17-percent jump from the previous month and 14-percent increase from one year ago.

     About 43 percent of those resales were foreclosures – up from 8 percent in July 2007.

     “Before the credit crunch hit in August 2007, nearly 40 percent of Southland sales were financed with jumbo loans,” the report states. “Jumbos last month accounted for 15.8 percent of Southland sales.”

     The report went on to explain: “The typical monthly mortgage payment that Southland buyers committed themselves to paying was $1,632 last month, down from a $1,671 the previous month, and down from $2,447 a year ago. Adjusted for inflation, the current payment is at its lowest level in five years.

     It’s 36.9 percent below its year-ago level and 24.2 percent lower than the spring of 1989, the peak of the prior real-estate cycle.”

     –matthew.wrye@inlandnewspapers.com

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Silver-barite drilling coming to High Desert

     A silver rush might blaze into the High Desert by year’s end.
     International Silver, Inc. (OTCBB: ISLV), based in Tuscon, Ariz., hopes to start drilling in a few months on the Laviathan Property — a 1,300-acre piece of land owned by the Bureau of Land Management and located in the Calico Mining District, near Barstow.
     Silver is only the half of it, though.
     The company estimates there’s about 1 million tons of barite-silver ore entrenched throughout 60 mining claims on Laviathan. Barite is a heavy material used in manufacturing oil drills.
     While International Silver goes through its environmental review process to eventually lease the bureau’s land, the company is also in escrow with a private owner on an adjacent parcel, the Langtry Property.
     Langtry comprises about 400 acres, and it’s estimated to have 72 million ounces of silver and almost 3 million tons of barite.
     Harold Shipes, president and CEO, said that after selling the barite, operating costs for mining the silver will be near zero.
     “When silver started increasing in price, we went back and reviewed several silver properties,” Shipes said. “These two caught our fancy.”
     Silver fetched about $5 an ounce in late 2003. Silver futures closed at $12.72 per ounce on Friday.
     Shipes, a 35-year industry veteran, says his company’s drilling operations will eventually create about 150 jobs.
     International Silver was founded in 1992 and went public in March. It has about 100 shareholders and a market capitalization of $5 million. The stock closed at 32 cents a share on Friday.
     –matthew.wrye@inlandnewspapers.com

I.E. unemployment rate inches to almost 9 percent

     The unemployment rate is inching even higher in the San Bernardino-Ontario-Riverside region, clocking in at almost 9 percent for the month of July.
     That’s according to a Friday report published by the state’s Employment Development Department.
     It stood at 5 percent in late 2006.
     Several job losses came from state government and the education sector, where summer recess is giving several teachers a three-month break.
     The leisure-hospitality industry shed 2,000 employees. More than half of them worked at restaurants and bars.
     Between July 2007 and July 2008, nonfarm employment shrunk by 26,000 jobs.
     The region is suffering from the consequences of a badly-bruised housing market. Residential and commercial construction workers are baring the brunt of this downturn.
     Throughout the mid- to late-1990s and during the early 2000s housing boom, the area’s construction employment soared to more than 127,000 jobs by 2006, according to a quarterly economic report released in July by Redlands-based regional economist John Husing.
     But within two years, San Bernardino and Riverside counties lost more than 28,000 of these jobs — about 22 percent of the construction hiring peak in 2006.
     –matthew.wrye@inlandnewspapers.com

Soyo Group Inc. reports less-than-stellar earnings

     As Soyo Group Inc. (OTCBB: SOYO.OB) strives to increase its share price to $2, the consumer electronics manufacturer-distributor announced on Thursday that it netted a mere $30,000 in second-quarter earnings — substantially lower than the $1 million projected.
     The stock closed at 70 cents on Thursday.
     Higher fuel and shipping costs are eating away at the Ontario company’s profits, the company said in a statement. Shipping expenses were $1.3 million more than expected.
     Soyo had projected $1.5 million in earnings over the first six months of this year, but only $235,000 of that has materialized so far.
     Sales jumped 33 percent to $32 million from April to June. It was the company’s 10th consecutive quarter of year-over-year sales increases.
     If Soyo’s stock reaches $2 a share, the company might get listed on the American Stock Exchange. Shareholders recently approved issuing 125 million more shares, which would more than double the number of outstanding shares.
     While Soyo is looking to acquire financially-troubled electronics companies, it’s trying to market computer, telecommunications and electronics products in an economy that’s forcing similar companies to go bankrupt.
     Last year, Soyo signed a deal with Honeywell International Inc. to supply the electrical industry giant with LCD and plasma flat-panel televisions.
     After the company went public in mid-2005, its stock reached a record peak of $1.48 in October.
     –matthew.wrye@inlandnewspapers.com

Stater Bros. reports big drop in year-over-year earnings

     The sluggish economy has handed Stater Bros. Holdings Inc., the Inland Empire’s largest private employer, a 40-percent drop in earnings from one year ago.
     The San Bernardino-based grocery chain said its third-quarter financial results were “affected by the downturn in the economy” and the strain it’s putting on family budgets.
     Stater Bros. grocery stores have always competed with national grocery giants, but niche supermarkets like Fresh and Easy Neighborhood Market, Trader Joe’s, Henry’s Farmers Market and Sprouts Farmers Market are increasingly taking a bite out of the competition.
     Higher gas prices are forcing consumers to trim back monthly budgets. For some, that means food.
     Total sales at Stater Bros. stores between September and June jumped
4.5 percent compared to the same period a year ago.
     “Our plan was to hold our customer counts, and that was accomplished,” said president and CEO Jack Brown in a news release.
     Stores saw an increase of 324,000 customers during the last 10 weeks, a sign that Staters is holding its own in the Inland Empire grocery industry.
     The company’s new refrigerated distribution operation will come online by next year.
     Staters is ending a $300 million consolidation project that took months to complete. Multiple distribution hubs have been combined into one large facility in San Bernardino.
     –matthew.wrye@inlandnewspapers.com

One in every 91 I.E. households received foreclosure filing in July

     Nationwide foreclosure activity jumped 8 percent in July, and the San Bernardino-Riverside-Ontario metropolitan area ranked No. 6 in the country on the foreclosure filing totem pole, according to a report released today.
     One in every 91 local households received a foreclosure filing during July, according to Irvine-based real-estate company RealtyTrac Inc.
     Last month, it was one out of every 95 households.
     The “filings” include default notices, auction sale notices and bank repossessions.
     The two-county region’s No. 6 rank comes after being No. 5 from May to June, and No. 4 in April.
     In July, the Merced metro area was No. 2, and Cape Coral-Fort Myers, Fla. was No. 1.
     Six out of the top 10 cities in the report are in California, a sign that bank-owned properties are still hammering away at the state’s downtrodden real-estate market.
     Statewide, foreclosure filings increased to almost 72,300 on California properties — 5 percent more than the previous month, and up 85 percent from July 2007.
     In fact, one out of every 182 households in California received a foreclosure filing.
     Bank repossessions throughout the state have skyrocketed to about 23,400 — more than five times what they were in July 2007. Defalt notices clocked in at about 36,300 and auctions at about 12,500.
     On a quarterly basis, one in every 32 homeowners in the two-county area either gave up the keys to their house, saw it auctioned off or couldn’t pay their mortgages on time, a second-quarter RealtyTrac report says.
     Over the last two quarters, the region ranked No. 2 nationwide for foreclosure filings.
     –matthew.wrye@inlandnewspapers.com

     Look below to read RealtyTrac’s July report on foreclosure filings:

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I.E. Longs Drugs stores to become CVS Pharmacy branches

     Almost 30 Longs Drugs stores do business in the Inland Empire, but starting next year, new signs will be posted above those locations.
     CVS Caremark Corp. (NYSE: CVS), parent of CVS Pharmacy, announced Tuesday evening that it is acquiring Longs Drug Stores Inc. (NYSE: LDG) for $2.7 billion.
     Longs, a 70-year-old pharmacy chain based in Walnut Creek, was founded by brothers Joe and Tom Long.
     The merger will have a “minimal” impact on Longs locations, but store closures aren’t being fully ruled out, according to CVS spokesman Mike DeAngelis.
     “We haven’t made any final decisions regarding that,” he said.
     CVS will start converting and remolding Longs stores in early 2009.
     –matthew.wrye@inlandnewspapers.com

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More losses hit local bank’s bottom lines

     More losses are gouging the bottom lines of two Inland Empire financial companies that are already under close watch by federal regulators.

     Vineyard National Bancorp — the Corona-based parent of Vineyard Bank — said its second-quarter losses are actually $5 million more than it reported last week, according to a financial statement filed Monday afternoon.

     Vineyard’s overall losses total almost $140 million since the end of 2007.

     Official election results for Vineyard’s board of directors were released Tuesday, ending a bitter proxy battle. The company’s ousted CEO, Norman Morales, managed to get five out of seven candidates elected by shareholders, while Vineyard’s candidates filled the other two spots.

     Customers made a “run-off” with about $227 million from April to June due to “negative publicity relating to our financial results… (and) the seizure of IndyMac Bank by federal regulators,” the statement says.

     Luckily, Vineyard Bank branches received significant deposit inflows around the same time, possibly because new customers are looking to stash their cash somewhere they think is safe.

     On the same day, Rancho Cucamonga-based PFF Bancorp — parent of PFF Bank & Trust — reported a second-quarter loss of $18 million. It’s far less than the combined $225 million hit taken in the two previous quarters.

     PFF is facing class-action lawsuits and investigations alleging it abandoned its responsibility to shareholders and employees, and it’s buttressing its takeover bid by FBOP Corp., a private Illinois-based bank holding company.

     PFF said that customers collectively pulled out almost $600 million between March and June.

     Like Vineyard, PFF has ramped up its borrowing from the Federal Home Loan Bank, a program that several cash-needy institutions are drawing from these days. PFF borrowed $555 million between June 2007 and June 2008.

     Vineyard borrowed $126 million in July from the same program.

     Vineyard attracted substantial brokered deposits to offset the run-off in customer deposits.

     However, federal regulators recently ordered Vineyard to stop accepting and renewing brokered deposits, which are much riskier than deposits from customers.

     –matthew.wrye@inlandnewspapers.com

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Gas prices nationwide drop for 25 days in a row

     Gas prices nationwide fell for the 25th day in a row on Monday, bucking their usual mid-summer trend of rising steadily.
     It’s welcome news for penny-pinching consumers bemoaning the high price of oil and making life-style changes to accommodate having less money in their piggy-banks every month.
     The average price of a gallon of gasoline in San Bernardino and Riverside counties was $4.08 on Monday.
     That’s down from a peak of $4.61 on June 22, but higher than the now-envied $2.90 locals paid one year ago.
     “Usually, summer travel kicks (prices) up a little more,” said Jeffrey Spring, spokesman for the Automobile Cub of Southern California. “We usually put on a few more miles for summer travel.”
     Not this summer.
     Monthly Federal Highway Administration data shows that vehicle travel dropped almost 4 percent when comparing May 2007 to May 2008.
     Also, the state’s Board of Equalization recently said that Californians purchased 2.2 percent less gas in April of this year versus one year ago — about 28 million gallons less.
     –matthew.wrye@inlandnewspapers.com

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