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Santa Cruz County Bank posts Q1 profit

April 19, 2013

By Jondi Gumz - Santa Cruz Sentinel

Santa Cruz County Bank posted a profit of $799,000 for the quarter ending March 31, down 6 percent from the prior quarter but up 39 percent from a year ago.

Loans totaled $230.5 million, growing $4.8 million from the prior quarter and $30.7 million from a year ago.

"One of the bank's strategic initiatives is to stimulate our local economy through lending to small business owners," said David Heald, Santa Cruz County Bank president and chief executive officer. "We have achieved growth in our loan portfolio, while most peer banks have had little or no loan growth."

Loans grew despite $10 million in payoffs, he said, with ag clients making $5.2 million in pay-downs on their lines of credit.

Loans were made in hospitality, along with two construction loans and a number of home equity lines of credit.

"Of 80 notes, 11 were home equity lines," Heald said.

The bank is making more small business loans, startups as well as established ones, he said.

According to data released by the Small Business Administration for the first six months of fiscal 2013, Santa Cruz County Bank ranked 30th of 199 California lenders for 7a and 504 loans.

Businesses are feeling confident enough to expand their lines of credit, Heald added, citing a Watsonville transportation company as an example.

Deposits grew to $331.7 million, up 3 percent during the quarter and up 12 percent from a year ago.

Assets grew to $366.9 million, up 3 percent during the quarter and up 13 percent from a year ago.

Shareholders' equity grew to $30.6 million, up 2 percent during the quarter and up 12 percent from a year ago.

The 9-year-old locally owned bank reported earnings of 41 cents per share, down from 44 cents in the last quarter but up from 30 cents a year ago.

Non-interest income totaled $821,000, down 16 percent from the prior quarter, factoring into net income, though it was up 56 percent from a year ago.

The allowance for loan loss totaled $5.3 million, up 5 percent from the prior quarter and up 20 percent from a year ago, increases that exceeded the growth rate for loans, 2 percent and 15 percent respectively.

Heald said it's important to main healthy reserves "because we have economic cycles. If you're not prepared, it will affect earnings."

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