Despite tumbling stock prices and shrinking confidence in the banking sector, Ventura-based County Commerce Bank this week reported solid profits and continued growth for the first half of the year, partly because it has no bad debt, Chief Executive Officer Joseph D. Kreutz said.

The locally owned independent bank opened in 2003 and has never had a loan default or a loan payment 30 days past due, Kreutz said.

Its 2008 net income totaled $501,000 for the six months that ended June 30, he said. Capital increased from $10.1 million to $11.7 million, adding 15.7 percent to investors' equity. The bank's assets were up 14.34 percent, from $104.5 million to $119.5 million.

Because the bank rarely lends on residential properties and was not in the subprime loan market, County Commerce is not having to absorb the heavy losses of some of its competitors, he said.

"We're a business bank, and we work with businesses. We do commercial real estate loans. We do equipment loans, accounts receivable. We do asset-based lending basically," Kreutz said. "We don't do many things outside the box."

The bank, which has branches in Ventura and Oxnard, added $15.7 million to its loan portfolio in the 12-month period that ended June 30, increasing its total 24.4 percent, to $80.2 million.

Bank officials critically analyze loan applications, Kreutz said, and mostly avoid lending on single homes and multiple housing developments of only one to four units. The bank does not provide financing for housing tract developments, strictly limiting construction lending to borrowers with secondary loan repayment sources, such as substantial income or net worth, he said.

Reacting to the good numbers, County Commerce Bank's board recently declared a 5 percent stock dividend payable Aug. 15 to shareholders of record July 31. Under the plan, the bank's approximately 150 shareholders will each receive five additional shares for every 100 they own. Paying dividends in stock instead of cash allows the bank to reward shareholders while preserving capital to continue growth, Kreutz said.

County Commerce Bank's capitalization is about 10 percent of its assets, which is more than the law requires, he added.

Sold on the over-the-counter market, County Commerce Bank shares are not traded often because investors tend to hold them. In the most recent sale, the share price was $14.10. That's down from a little more than $20 two years ago, but Kreutz said virtually all bank stocks have declined sharply during the credit crunch.

County Commerce Bank was named a "Super Premier Performing Bank" and "Premier Performing Bank" by the Findley Reports bank rating service for the past four years, and was Western regional winner of the Small Business of the Year Award in 2006 from the U.S. Chamber of Commerce and 2006 mid-sized business of the year by the Ventura Chamber of Commerce. It was named the Pacific Coast Business Times' 2008 public company of the year and has won BauerFinancial Inc.'s "Five-Star Superior" award for more than 10 consecutive quarters.

On the Net:

http://www.countycommercebank.com