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Deposits up 20 percent at Santa Cruz County Bank

April 19, 2008

By Jondi Gumz - Santa Cruz Sentinel


Santa Cruz County Bank reported double-digit growth in deposits and assets and a downturn in income in the first quarter of 2008, compared to the previous quarter. The four-year-old locally owned bank reported deposits grew 20 percent to $166.3 million compared to the previous quarter. Assets grew 17 percent to $187.9 million; loans grew 4 percent to $124.4 million. The growth came in face of competition from Lighthouse Bank, a locally owned bank that opened in October. David Heald, Santa Cruz County Bank president and chief executive officer, said the growth "shows the community's continued support of its local community bank and its commitment to local reinvestment." He cited the bank's strategic locations in Santa Cruz, Capitola, Scotts Valley and Watsonville and a business lending office in Capitola. Pre-tax net income was $323,580, down 36 percent from the prior quarter, and net interest income was $1.99 million, down 10 percent. The reason is the decline in interest rates resulting from rate cuts by the Federal Reserve, Heald said. The year-to-year picture shows an upward trend with net interest income for this quarter up 15 percent in the same quarter a year ago and pre-tax income up 8 percent. The provision for loan losses was reduced by 53 percent to $77,900 this quarter compared to the prior quarter. Spokeswoman Mary Anne Carson said the change was made after an analysis of the loan portfolio. The first-quarter loan growth was 4 percent compared to 14 percent in the fourth quarter of 2007. The bank, which hit the four-year mark in February, earned a five-star rating from Bauer Financial Reports, the highest award made by the rating service. Bank officials expect to move their main office in the summer to 720 Front St., Santa Cruz. Renovations are under way, with Bogard Construction of Santa Cruz the general contractor and L. Kershner Design overseeing interior improvements. The goal is to earn "silver" certification under the U.S. Green Building Council's Leadership in Energy and Environmental Design program. Santa Cruz County Bank would be the first bank in the county to meet LEED-certified standards for commercial interiors, Heald said. Only one bank in California has a LEED-certified building, according to Carson. Contact Jondi Gumz at 706-3253 or jgumz@santacruzsentinel.com.

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