Jeff Pelline's Sierra Foothills Report

Nevada City-based Citizens Bank, our community’s “hometown” bank, is still trying to raise needed capital to meet a financial goal required by federal regulators back on July 2010, according to a Feb. 11 public regulatory filing I found on the SEC’s online database. The filing is here.

Citizens concedes it must come into compliance “as quickly as possible.”

Citizens has not issued any press releases since its last earnings announcement on Oct. 27, though the latest SEC filing — which includes updated some financial information though December 2010 — fulfills all regulatory requirements. I would expect an earnings press release any day now.

Citizens’ plan is to offer up to 10 million units at a price of $3 per unit and warrants (or rights) to buy additional shares — stating a new timeframe of June 30. The proceeds will be “needed in order for us to return to ‘well capitalized’ status under the bank regulatory guidelines to which we are subject,” the filing (an amended S-1 document) said.

Citizens’ stock recently has been trading at about $1.60 per share. Citizens previously had said it would seek to raise new capital “beginning” in the fourth quarter of last year, so the clock keeps ticking.

“Our capital has been significantly reduced as a result of the losses in 2008 and 2009 and a $5.8 million loss for 2010,” according to the filing with the Securities and Exchange Commission. “We must now recapitalize the Company and the Bank. We entered into an agreement with our regulators to raise the Bank’s leverage capital ratio to 9% by the middle of July 2010. Although we have not met this deadline, we are continuing our efforts to raise the capital needed to reach the capital ratio required in the agreement.

“As of December 31, 2010, we needed to achieve a combination of new equity capital and earnings of approximately $12.0 million in order to satisfy the capital requirement.”

The filing goes on to warn: “If we do not achieve all these goals, we will not be able to satisfy the capital requirement of the consent order which would have a material adverse effect on the Company and the Bank and the value of your investment and our ability to continue as a going concern.

“These effects could include additional regulatory enforcement actions including the imposition of civil monetary penalties against the Company, the Bank or both, the termination of insurance of the Bank’s deposits by the FDIC or the closing of the Bank with the imposition of a conservator or receiver.”

According to the filing:

•Shareholders’ equity at Dec. 31, 2010, decreased to $3.7 million from $5.1 million at Sept 2010 “primarily due to a net loss of $1.4 million for the three months ended Dec. 31.”

•The primary contributor to the company’s loss for the three months ended Dec. 31 was a $2.35 million addition to the allowance for credit losses.

•”Non-performing assets, which include nonaccrual loans, loans past due 90 days and still accruing, and other real estate owned totaled $45.1 million as of December 31, 2010. Reducing the level of non-performing assets will take a significant effort and will continue through 2011 and beyond.”

•”The Company’s recurring losses have resulted in significant deterioration to shareholders’ equity and regulatory capital. These recurring losses raise concern about the Company’s ability to continue as a going concern.

“Management is actively pursuing new ventures to increase revenues. In addition, the Company is currently seeking additional sources of capital, including the Offering. The Company is dependent upon its ability to secure sufficient equity and there are no assurances that the Company will be successful.”

•”In the first quarter of 2011, the Company is closing its mortgage broker services and the related broker fee income is not expected to continue; however, salaries and other related expenses will also decrease by a similar amount as a result of this closure.”

Citizens listed strengths that included a “well-seasoned” management team and core operating strengths, including a strong net interest margin and a “very loyal” customer base.

On Feb. 8th, 1995, Citizens said it opened its doors with one branch, twelve employees, and a mission to make a real difference in this community. “About 100 local citizens took money out of their personal savings, pooled those resources, and gave of their time, expertise and determination because they believed in the advantages that a real community bank could provide,” according to its history.

A caution to readers: Like you, I’m rooting for Citizens Bank. Please be sensitive about the comments you post here.

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President Obama’s dinner with Silicon Valley honchos brought back fun memories for me. I wrote and edited stories from the Valley for more than a decade — including at the peak of the internet boom — and have interviewed most of the execs who were present.

Here’s one of my favorite stories, involving venture capitalist John Doerr, who hosted the Obama dinner from his home in Woodside.

This is the story we reported at CNET way back in 1998 — showing the “trickle down” effect from the internet boom, at least as it pertained to the school that Doerr’s daughter attended.

“Call it an elementary lesson in economics.

“A Silicon Valley grade school is about to make a mini-killing on the stock market as its fund-raising arm prepares to sell shares in Amazon.com.

“The Woodside School Foundation, via an anonymous donation, plans to sell 290 shares in the online bookseller, according to documents filed with the Securities and Exchange Commission. The shares carry a value of $25,447, according to the filing.

“Laurie Livingston, past president of the foundation, said the nonprofit receives a couple of stock donations a year.

“Among those attending the school include the daughter of John Doerr, a partner with venture capital firm Kleiner Perkins Caufield Byers. KPCB served as a venture firm for Amazon.com.

“Although Amazon’s share price has more than doubled since its initial public offering 13 months ago, the Woodside Foundation is playing it safe: It will take the money and run.

“‘Generally, when the foundation gets stock donations, it doesn’t hold them as an investment,’ said Bruce Thompson, district superintendent of the Woodside School.

The full article by Dawn Kawamoto is here.

It shows how you can glean “scooplets” from SEC filings. More important, wouldn’t this kind of donation come in handy nowadays? But Facebook and Twitter haven’t gone public yet.

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The Grass Valley Planning Commission will meet next Wednesday to consider a final environmental impact report and project applications for the Loma Rica Ranch housing project.

The proposed project for Loma Rica Ranch is for a mixed-use development on 452 acres.

The proposed plan includes development of 700 low, medium and high density primary residential dwelling units; 54,000 square feet of commercial, mixed-use, and retail uses; and 364,161 square feet of business and light industrial uses in four neighborhoods.

About 314 acres are proposed as open space, including improved parks, farm land and natural open space. In addition, the project includes the prezoning and annexation of a 3.2 acre lot, known as the McCarthy property, located at the intersection of Sutton Way and Idaho-Maryland Road.

The agenda and staff report is here.

“Staff recommends the Commission consider the following format:
1. Review the documents related to the Final EIR and recommend the City Council certify the Final EIR;
2. If time allows, review the Annexation, General Plan Amendment, and Prezone applications and recommend the City Council approve those applications;
3. Continue the public hearing to a specific date to review, and provide a recommendation on the Loma Rica Ranch Specific Plan; and
4. Direct staff to prepare a resolution confirming the above actions for the next meeting.”

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Social media is changing the way we communicate, including weather reporting. Thursday’s big snowstorm in the Sierra and foothills is being captured by “citizen journalists” on Facebook, complete with up-to-date weather reports, ski reports and road closures. As regular readers here know, Caltrans, PG&E and the California Highway Patrol provide real-time information too (see “weather and outage” links to right). All told, it’s a real-time digital newspaper with limitless correspondents. No wonder newspapers are nervous.

Here’s some examples from my Facebook friends:

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Air Force One took off at 12:20 p.m. PST Thursday headed for California and a meeting with Silicon Valley executives. The jetliner is set to land in San Francisco at 5:45 p.m., passing over the Sierra and our foothills along the way.

What does Obama do on the long, boring cross-country flights? As Deputy Press Secretary Bill Burton told The Washington Post, here’s how he fills it:

“• Receiving briefings from staff about events that he will participate in when he lands. (There are actually a couple of conference rooms, complete with swivel chairs, in the plane.)

• Reading issue briefings and other various materials. (No word from Burton on whether those “other various materials” might include People Magazine.)

• Reading newspapers or surfing the web for news. (Meanwhile, the small tail section of the plane reserved for the press has no Internet access. How fair is that?)

• Calls staff and world leaders. (The president’s BlackBerry doesn’t work up in the air, but the plane has several old-fashioned-looking phones that do. Burton recalls the recent phone call to Chinese President Hu that took an extra half hour to complete after Obama landed.)

• Occasionally watching movies or television shows. (Air Force One has a decent library of the latest movies, and a satellite dish to watch live television. Burton says the president has been known to switch on “Treme,” a new HBO show about the rebuilding of New Orleans after Hurricane Katrina.)

• Has lately been playing cards (spades) on long or late flights. (Spades. Right. Good thing Burton clarified that, since the president is known as a pretty good poker player as well.)”

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I listened to Stan Meckler (the father of tea party patriots co-founder Mark Meckler) on KVMR this afternoon. It was a crashing bore. Some highlights:
•”We don’t keep figures” on how many Democrats, Republicans and Independents belong to the local tea party — but Stan did quote figures from a Rasmussan poll (which has been criticized for its right-wing bias).
•The red t-shirts worn by the tea party have “nothing to do with politics.” They are just the “most visible color.” He mentioned county Supervisor’s meeting as a venue to wear them.
•When questioned about supporting a plan to close the corporate tax loopholes and “offshoring” among corporations, Stan replied: “There’s only so much we can do.”
•Stan mentioned The Union numerous times as a place where people could read “his columns,” as well as mentioning tea party paid ads that ran in the Union to “get out the vote.”

Marc Cuniberti of KVMR did not ask any probing questions, such as the Mother Jones articles or anything else controversial for that matter.

I did, however, find this banner interesting on the local tea party website — a place Stan said we should all check out: The tea party’s “freedom” ride to a Tax Day rally in Sacramento, including a stop at TDS Guns in Rocklin of all places.

“We will ride from Renegade, Grass Valley and TDS Guns then end by THUNDERING into CalExpo and opening the Tea party rally!” it reads.

To be clear, I suspect this speaks more to demographics than anything else.

I’ve never been to TDS Guns, but I like the Mexican restaurant next door, Adalberto’s, for a quick bite. It’s a Southern California “mini-chain.” I guess it’s time to teach my son more about guns — and gun safety. It definitely is part of the “culture” here. I went skeet shooting as a youth, but I’m much more interested in stream fishing.

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The Peace Center of Nevada County presents nationally known peace activist Cindy Sheehan, who will speak at a Peace Rally and March on March 19, which marks the ninth year of U.S. occupation in the Middle East.

“Citizens of Nevada County join peace groups from around the country, and the world, to say, Stop the U.S. occupation in Iraq, Afghanistan, and Pakistan! Stop spending our money on endless wars! Americans want Jobs, Not War! Americans want Education Not War! Americans want Healthcare, Not War!,” according to a statement.

The Peace Rally takes place at The Union, 464 Sutton Way, Brunswick Basin, Grass Valley at 1 p.m.

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Sunset’s list of the “West’s best places to live” is here. I noted that Tahoe and Truckee were runner-ups but not our western county. I also noticed that the trends we write about here — sustainability, local food, outdoor living, entrepreneurs, artists, raising a family, a more progressive mindset — are what interested the editors. Perhaps it’s time for our western county to rethink how it’s perceived beyond being a conservative retirement community to help us grow.

I’d argue that being home to the tea party’s founder, being represented by a hard-right, vocal Congressman (who’s targeted by progressives, in fact), some vocal local “wingnuts” is a liability, more than an asset. It’s just not much of a draw to the rest of the world. Some of our residents fight, rather than embrace, some of the ideas that Sunset is embracing. I’m not sure we’re putting our best foot forward.

Salt Spring Island, B.C.
Salt Lake City, Utah
Taos, N.M.
Portland, Ore.
Bellingham, Wa.
Eureka, Ca.
San Diego, Ca.
Sonoma County
Scottsdale, Ariz.
Crestone, Co.

Runners-up: Humboldt County, CA; San Luis Obispo, CA; Willamette Valley, OR
Runners-up: Boise; Denver; Albuquerque
“Own a second home” Runners-up: Laguna Beach, CA; Truckee, CA; Telluride, CO
Runners-up: San Francisco; Pasadena
“Play year-round” — Runners-up: Bend, OR; Boulder, CO; Lake Tahoe, CA/NV
Runners-up: Santa Fe; Victoria, B.C.; Pa‘ia, Maui, HI
Runners-up: Palo Alto, CA; Seattle; Los Angeles
Runners-up: Napa County; Vancouver, B.C.
Runners-up: Irvine, CA; Spokane; Missoula, MT
Runners-up: Mendocino, CA; Tucson

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This from the county Democratic Party Newsletter about our Congressman’s recent town hall meeting in Grass Valley:

“Since we assumed that many of you didn’t go to Tom’s Town Hall February 4, we thought that you might like to read this excerpt from a first-hand report written by a reporter for Daily Koz who did attend.

“…He did assure the audience, to great applause, that not only would ‘Obamacare’ not be funded, but it was a priority because of their mandate from the American right-wing that the EPA, the Forest Service (giving the public lands back to the public), ‘Carter’s’ Department of Education, National Endowment for the Humanities, NPR and just about every other government agency you can think of, including the Pentagon (don’t hold your breath) will be cut or de-funded. He sits on the House Budget Committee, so it can and probably will happen.

“He went on to rail against the EPA (curbing CO2 pollution), Endangered Species Act (removing dams on the Klamath to help salmon populations) and “anchor babies”. I would have liked to have added that he and … others …. should keep their hands off the 14th amendment and any other part of the constitution and Bill of Rights, but I only had one question, and I was being polite and on my best behavior.

“Among other things he had to say was that Paul Ryan was ‘the smartest man I had ever met’ and that his ‘roadmap’ was going to save the country.

“He didn’t say a thing about H.R.3, which he co-sponsored and is an abomination taking away American women’s reproductive rights.

“All in all it was an interesting and educational evening. I can say that for all the bluster and media attention to the Tea Party and their supposed agenda, they are just too stupid to be a real threat, and if the Republican Party wants to go there, then more power to them. In the immortal words of George Bush, ‘Bring it on!’

“I left after an hour and a half, just as one the many octogenarians in attendance was asking about why we needed all those federal employees (Yeah, let’s put more people out of work). It garnered the expected round of applause. I didn’t stick around for the response. …Republican leadership doesn’t change their ways. The Tea Party will become the Republican Party very soon. We can only hope.”

“Though Tom isn’t mentioning H.R. 3, it increasingly is generating attention. “Since the beginning of the year the Republicans haven’t put a single bill on the floor that would create a single job,” said U.S. Congresswomen Nita Lowey (D-NY), at a press conference in White Plains Monday. “Instead, Republicans, the majority in the house, have prioritized an extremist agenda that seeks to roll back women’s reproductive rights.”

A new ad campaign has been launched in opposition of the bill:

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We’re big dog fans, so we like to watch the Westminster Dog Show each year from New York. This year’s winner was a relatively unknown breed — a Scottish Deerhound named Hickory. It was the first time a dog of her breed won. The dog “possesses a quiet and dignified personality in the home” and was first bred for the pursuit and killing of deer, according to the American Kennel Club.

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