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Santa Cruz County Bank posts small profit as loans decline

May 2, 2009

By Jondi Gumz - Santa Cruz Sentinel

Santa Cruz County Bank stayed in the black for the first quarter, but the recession cut into profit.

Net income before taxes was $38,773, down 90 percent from the fourth quarter, when it was $376,000

Net interest income was $2.3 million, down 6 percent from the fourth quarter. Bank officials said higher interest-earning assets declined due to a decline in loans.

"Given the economy, people are not borrowing as much," said bank spokeswoman Mary Anne Carson. "New projects are being delayed or not moving forward due to economic constraints on the developers' side."

Comparing this quarter to the fourth quarter:

Loans at $139.9 million were off 4 percent;

Deposits at $214.5 million were up 4 percent;

Assets at $236.4 million were up 3 percent.

"We experienced $9 million in loan payoffs during the quarter, which were across the board," Carson said.

That included $3.2 million in construction loans, $3 million in Small Business Administration loans and $3.3 million in ag-related loans.

This was partially offset by increases in home equity lines of credit, $1.8 million; owner-occupied commercial real estate, $1.4 million and SBA loans, $1 million.

"We do have a strong loan pipeline," said Carson. "And we have money to lend -- as demonstrated by our recent advance to New Leaf Markets as the lead bank."

The five-year-old locally owned bank exceeds requirements to be well-capitalized, which is the highest possible rating by regulators.

Non-performing loans went up slightly, Carson said, but the bank has no foreclosed properties, one of the factors the independent analyst Gary Findley cited in rating Santa Cruz County Bank's 2008 performance as exceptional.

The bank opened its fifth office in February, adding a branch in Aptos, and received green certification for three offices. All seven locations now are certified by the Monterey Bay Green Business program.

The annual shareholder meeting will be 3 p.m. May 20 at the Inn at Pasatiempo.

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