Saturday January 24, 2009
Navivest

Yesterday evening, the FDIC announced that the California Department of Financial Institutions had shut down 1st Centennial Bank of Redlands, California and that the FDIC had been named as receiver.

The FDIC has entered into a purchase and assumption agreement with First California Bank of Westlake Village, California, which will assume the insured deposits of 1st Centennial at a 5.29% premium.
First California Bank will also purchase approximately $293 million of the failed bank’s assets. The assets are comprised mainly of cash, cash equivalents and marketable securities. The FDIC is retaining the remaining assets for later disposition.

As a result of that purchase and assumption agreement, the six branches of 1st Centennial will reopen on Monday as branches of First California Bank. Depositors of the failed bank will automatically become depositors of First California and their deposits will continue to be insured by the FDIC.

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We maintain a Hold rating on the shares of ValueClick, Inc. (VCLK), a Westlake Village, California-based online marketing services company.

VCLK is currently trading at a P/E multiple of 13.5x our 2008 earnings per share estimate of $0.71, a discount to the industry median. Although over the long-term we are very positive on online advertising growth, current economic conditions are creating significant headwinds for ValueClick and others in the industry.

Rising energy prices and falling housing prices have caused consumer confidence to drop, and consumer spending has fallen as a result. With decreased consumer spending, advertisers are cutting back budgets. This has caused what we consider a cyclical decline in Internet advertising dollars.

Although there is likely upside to VCLK shares over the longer-term, we believe it is too early to get involved with the stock for our six month time frame. We lower our target price to $10.00, a multiple