West Coast Community Bancorp (“Bancorp”, OTCQX: SCZC), the parent company of Santa Cruz County Bank (the “Bank”), announced unaudited earnings for the quarter ended September 30, 2023 of $9.1 million, an increase of 10% from $8.3 million in the prior quarter and a decrease of 1% from $9.2 million in the third quarter of 2022. Basic and diluted earnings per share in the third quarter of 2023 were $1.09 and $1.08, respectively, and both improved over the prior quarter by $0.10. Basic and diluted earnings per share in the third quarter of 2023 improved over the prior year comparative quarter by $0.01 and $0.04, respectively.
Year-to-date earnings for the nine-month period ended September 30, 2023 were $26.3 million, an increase of 26% from $20.9 million over 2022. Basic and diluted earnings for the nine-month period of 2023 improved over 2022 by $0.68 and $0.73, respectively, to $3.13 and $3.11.
President and CEO Krista Snelling commented: “We are pleased to report record gross loans and growth in deposits in the third quarter. The Bank’s total FDIC deposit market share for the County of Santa Cruz increased to 15.5% as of June 30, 2023 as compared to over 15.3% a year ago. Market share improvements over prior year were also recorded in Monterey County due to the opening of our Salinas branch in January. Also during the quarter, we successfully completed the formation of the Bank’s holding company which positions us to take advantage of future strategic opportunities for growth and diversification.”
Financial Highlights
Performance highlights as of and for the quarter ended September 30, 2023, included the following:
Quarterly net income of $9.1 million increased 10% from $8.3 million in the prior quarter and decreased 1% from $9.2 million in the third quarter ended September 30, 2022. Net income for the nine-month period ended September 30, 2023 was $26.3 million, an increase of 26% from $20.9 million over the nine-month period of the prior year.
Total assets of $1.77 billion as of September 30, 2023, increased $26.9 million or 2%, compared to $1.75 billion as of June 30, 2023.
Liquidity position remains healthy. Primary liquidity ratio, defined as cash and equivalents, deposits held in other banks and unpledged available-for-sale (“AFS”) securities as a percentage of total assets was 15.2% and 15.3% at September 30 and June 30, 2023, respectively.
Deposits totaled $1.53 billion at September 30, 2023, an increase of $61.5 million or 4%, compared to June 30, 2023. Relationship deposits, i.e. deposits gathered outside of wholesale channels, increased $69.6 million compared to June 30, 2023. Total uninsured deposits, excluding collateralized deposits, represented approximately 45% and 43% of total deposits as of September 30 and June 30, 2023, respectively. The increases reflected several significant new commercial deposit relationships and cyclical fluctuation from our large depositors influenced by tourism and the agricultural harvest cycle.
Record gross loans (excluding PPP) of $1.37 billion, an increase of $37.6 million or 3%, compared to June 30, 2023, and an increase of $140.6 million or 11%, compared to September 30, 2022. The Bank continues to capitalize on lending opportunities in both the core Santa Cruz market and its expanded markets with a strong mix of loans serving our business community and the development of multifamily housing.
Nonaccrual loans totaled $10.7 million, or 0.78% of gross loans, as of September 30, 2023, compared to $8.0 million, or 0.60% of total loans as of June 30, 2023. The increase during the third quarter is primarily due to the addition of a $3.0 million commercial real estate loan that is well-secured without loss expected.
Current Expected Credit Loss (“CECL”) methodology was adopted January 1, 2023. The allowance for credit losses (“ACL”), which is based on estimating credit losses for the life of the loans in the portfolio, totaled $25.1 million, or 1.83% of total loans at September 30, 2023, compared to 1.85% at June 30, 2023. The slight decline in ACL as a percentage of total outstanding loans was due to adjustments to the qualitative factors, as well as slight declines in historical loss rates. In addition, the allowance on unfunded credit commitments, presented as part of other liabilities, increased $556 thousand in the third quarter of 2023 due to higher reserve level on unfunded multi-year construction commitments.
Provision for credit losses, including funded and unfunded credit commitments, was $858 thousand in the third quarter, compared to $486 thousand for the second quarter of 2023 and a reversal of $317 thousand for the same period in 2022. The provision was driven by growth in the portfolio, particularly the large and longer-term credit commitments mentioned above.
Net interest margin was 4.92% in the third quarter of 2023, compared to 4.93% in the prior quarter and 4.22% for the corresponding quarter in 2022. In the third quarter of 2023, higher yields on interest-earning assets were more than offset by increased funding costs. Net interest margin was 4.98% for the nine months ended September 2023, compared to 3.97% for the nine months ended September of 2022. The Bank’s large proportion of adjustable-rate loans benefited from the rising prime index rate in 2022. However, the Bank experienced pressure from the rising cost of funds, particularly in 2023 following the failures of several high-profile banks which accelerated a trend of bank depositors shifting to higher rate deposit networks for increased FDIC insurance coverage and to higher yielding investment opportunities, increasing funding pressure across the banking industry.
For the quarters ended September 30, 2023 and June 30, 2023, return on average assets was 2.05% and 1.94%, respectively, return on average equity was 16.85% and 15.98%, respectively, and the return on average tangible equity was 19.33% and 18.42%, respectively. For the nine months ended September 30, 2023, return on average assets was 2.02%, compared to 1.60% for the nine months ended September 30, 2022, return on average equity was 16.90% and 14.89% for the nine months ended September 30, 2023 and 2022, respectively, and return on average tangible equity was 19.50% and 17.51% for the nine months ended September 30, 2023 and 2022, respectively.
The efficiency ratio was 38.23% for the third quarter of 2023, as compared to 41.52% in the prior quarter and 36.17% in the third quarter of 2022. The efficiency ratio was 39.83% and 42.41% for the nine months ended September 2023 and 2022, respectively.
All capital ratios were above regulatory requirements for a well-capitalized institution with a total risk-based capital ratio of 14.83% at September 30, 2023 compared to 14.57% at June 30, 2023. Tangible common equity to tangible asset ratio increased from 10.51% at June 30, 2023 to 10.89% at September 30, 2023.
Tangible book value per share increased to $22.65 at September 30, 2023 from $21.54 at June 30, 2023 and $18.77 at September 30, 2022.
To view the entire press release and for more financial information, please visit our Investor Relations page.
On October 19, 2023, the Board of Directors of West Coast Community Bancorp declared a quarterly cash dividend of $0.16 per common share, an increase of $0.01 per share from the prior quarter, payable on November 13, 2023 to shareholders of record at the close of business on November 7, 2023.
“We are pleased to raise our quarterly cash dividend for the third consecutive year,” said Stephen Pahl, Chairman of the Board of Directors. “This increase reflects the Board’s confidence in our franchise and the management team, our strong capital position, and 2023 year-to-date financial results.”
Santa Cruz County Bank announced two national recognitions by American Banker Magazine. Krista Snelling was named in American Banker Magazine’s 25 Most Powerful Women in Banking and Finance - Watch List for 2023. Four members of the Bank’s executive team received American Banker Magazine’s Women in Banking Top Teams Award: Krista Snelling, President & Chief Executive Officer, Cecilia Situ, Chief Financial Officer, Mary Anne Carson, Chief Marketing Officer, and Shamara van der Voort, Chief Operations Officer.
American Banker Magazine has been recognizing women in banking and finance for 21 years. The 2023 Women to Watch list includes influential leaders at the top of banks and financial institutions in the United States and Canada. The 2023 Top Teams honor is awarded to five women banking teams from banks and financial institutions across the U.S.
Chana Schoenberger, Editor-in-Chief at American Banker, says of the honorees, “These women represent so much more than world-class business acumen and inspirational leadership skills. They symbolize the perseverance it takes to create meaningful change, the commitment needed to build stronger communities, and the creativity that’s essential to drive the industry into a new age.”
Santa Cruz County Bank Board Chairman Stephen Pahl remarked, “It is an honor to receive recognition within our industry from American Banker. Our leadership team is key to the Bank’s success and strong performance. The recognition of our CEO and Executive team underscores the Bank’s exemplary leadership and commitment to excellence, innovation, and growth.”
On August 28, 2023, the Bank announced the completion of the formation of its holding company, West Coast Community Bancorp ("WCCB"). WCCB is a registered bank holding company for its wholly-owned subsidiary, Santa Cruz County Bank. The holding company formation was approved by shareholders in May 2023 and subsequently approved by the Bank's regulators.
The Board of Directors for West Coast Community Bancorp and Santa Cruz County Bank are identical.
West Coast Community Bancorp stock is publicly traded on the OTCQX U.S. Premier Market under the symbol SCZC. Each share of Santa Cruz County Bank stock has been converted into West Coast Community Bancorp stock.
We are pleased to announce Shawn Lipman, who has worked for the Bank since 2011, will succeed Susan Just as Executive Vice President and Chief Credit Officer. Ms. Just has served in the Chief Credit Officer role for the past two years and is leaving the Bank in late August.
In his 12-year career at Santa Cruz County Bank, Mr. Lipman was promoted multiple times and served for the past two years as Senior Vice President and Director of Credit Administration. Under his leadership, the Bank’s credit portfolio has grown substantially in size and complexity, with privately placed muni bond purchases, loans issued under the New Market Tax Credit program, and structured credits originated by the recently formed Asset-Based Lending Division. In addition, Mr. Lipman led the department through systems conversions, the merger with Lighthouse Bank, and the Paycheck Protection Program.
Earlier in his career Mr. Lipman served as Senior Vice President and Regional Portfolio Manager at GMAC Commercial Finance where he was responsible for managing new business for the western region. In addition, he served as Senior Relationship Manager and Team Leader at Union Bank where he managed a growing portfolio of loans throughout California. He obtained his Bachelor of Science degree in Business Administration and Finance from San Diego State University.
Krista Snelling, President and CEO, commented, “We are excited for Shawn to step into the role of Chief Credit Officer. He has been a key employee of the Bank for 12 years and has progressively advanced to a leadership position, making him the logical successor to the role of Chief Credit Officer. His promotion is a natural next step in his career given his background, expertise, and detailed knowledge of the Bank’s clients and policies, and we are excited to work with Shawn as he takes the top credit role at the Bank.
Susan has been a valued member of the Bank and our executive team for the past two years and we wish her well in her future endeavors.”
We are pleased to announce unaudited earnings for the second quarter ended June 30, 2023. Net income for the Bank for the second quarter of 2023 was $8.3 million, an increase of 31% from $6.4 million over the second quarter in the prior year and down 6% from $8.9 million in the prior quarter. Basic and diluted earnings per share in the second quarter of 2023 both improved over the prior year comparative quarter by $0.24. Basic and diluted earnings per share in the second quarter of 2023 decreased over the prior quarter by $0.06 and $0.07, respectively. Decreases from the prior quarter primarily reflected pressure from the rising cost of funds.
Net income for the first half of 2023 was $17.2 million, an increase of 46% from $11.8 million over the first half of the prior year. Basic and diluted earnings per share in the first half of 2023 both improved over 2022 by $0.66.
Santa Cruz County Bank President and CEO, Krista Snelling, commented, “For the second quarter, the Bank’s gross loans (excluding PPP) once again set a quarterly record. Our return on average assets of 1.94% and net interest margin of 4.93% remain strong, despite market interest rate pressure which drove the Bank’s cost of funds higher by 40 basis points during the second quarter to 78 basis points. We remain focused on balancing profitability with credit quality and enterprise risk management while providing an exceptional and efficient client experience.
As the result of the ongoing strength of the Bank and its financial performance, in June we were again listed in American Banker Magazine’s Top 200 Community Banks & Thrifts in the United States, based upon 3-year return on average equity for institutions under $2 billion in assets.”
Financial Highlights
Performance highlights as of and for the quarter ended June 30, 2023, included the following:
To view the entire press release and for more information on Santa Cruz County Bank's performance, please visit our Investor Relations page.
Santa Cruz County Bank announced the appointment of Caroline D. Chapin to the Bank’s Board of Directors.
Caroline D. Chapin is Executive Vice President of the Don Chapin Company, Inc., a General Engineering Contractor based in Salinas. As a member of the company’s Leadership Team, Ms. Chapin works with the CEO on all corporate acquisitions and business expansion efforts, serves as Chief contract administrator for public works and private contracts, and ensures regulatory compliance with public agencies, including the State Water Resources Control Board, local and state government entities, OSHA, and CalEPA. Ms. Chapin also serves as General Manager of Landset Engineers, Inc., a Civil Engineering Firm based in Salinas. In this role Ms. Chapin oversees all business operations, including personnel, recruitment, financial oversight, facility management, and business development. Ms. Chapin managed design and construction of the company’s new corporate headquarters.
Ms. Chapin serves on the board of the Salinas Valley Basin Groundwater Sustainability Agency, as Committee Chair of the Langley Subbasin Committee, and as Treasurer of the Don and Barbara Chapin Foundation. She is a graduate of Leadership Salinas Valley and of Santa Cruz County’s Focus Agriculture program.
Chairman Stephen D. Pahl stated, “We are pleased to announce the appointment of Ms. Chapin to the Bank’s Board of Directors. Her years of leadership experience with municipalities, finance, development and construction, and contract administration bring value to our Board, and to the interests of our shareholders. Our recent expansion into Monterey County increases the Bank’s sphere of influence geographically and within the vibrant and diverse industries across the region. Ms. Chapin’s wealth of experience in this community will benefit new business development as well as our longtime relationships.”
On her appointment, Ms. Chapin stated, “I am thrilled to join the Board of Directors, particularly as the Bank expands its relationships in Monterey and Salinas. As a native to Monterey County, I'm excited to join a team who are unwavering in their pledge to community-driven solutions and fostering new business relationships throughout the tri-County area. The Bank has a tremendous reputation in the community as a financially strong, high performing bank. Its professional stature combined with its attention to local relationships and community is a perfect match with my own professional and personal values.”
Congratulations to Mary Anne Carson, Executive Vice President Chief Marketing Officer, for being selected as a 2023 Woman of Influence by the Silicon Valley Business Journal, celebrating the 100 most influential women in Silicon Valley. Thank you, Mary Anne, for your leadership of the Bank since its founding, and your commitment to the community.
The Bank's Board of Directors declared a quarterly cash dividend of $0.15 per share. The dividend is payable on July 13, 2023 to shareholders of record as of the close of business on July 7, 2023.
For the quarter ended March 31, 2023, Santa Cruz County Bank reported $8.9 million in net income, a 65% increase over the first quarter in 2022. Return on average tangible equity was 20.90% for the quarter ended March 31, 2023.
The Bank’s capital position significantly exceeds regulatory levels for being considered “well-capitalized” at 10.99% tier 1 capital and 14.71% total risk-based capital ratio as of March 31, 2023. Shareholders' equity grew to $204.2 million as of March 31, 2023, and improvement of $3 million due to a decrease in the amount of after-tax unrealized losses on available for sale securities portfolio during the quarter. The adoption of the Current Expected Credit Loss (“CECL”) methodology related to our allowance for credit losses on January 1, 2023 resulted in a decrease in retained earnings by $3.3 million. The tangible book value per share of Santa Cruz County Bank's common stock at March 31, 2023 was $20.91, an increase of $2.78 compared to March 31, 2022.
The Bank’s strong liquidity position includes $277.8 million in cash and unpledged marketable securities and $422.9 million in unused borrowing capacity at the Federal Home Loan Bank, the Federal Reserve Bank and other correspondent banks as of March 31, 2023.
Santa Cruz County Bank is ranked 89th in the Top Performing 200 Community Banks and Thrifts in the United States, and ranked 13th out of a total of 21 California banks. Performance data and rankings released in American Banker Magazine’s June announcement included a total of 200 publicly traded institutions with less than $2 billion in assets. Ranking is based upon 3-year average return on equity for the years ending December 31, 2020, 2021, and 2022.
The median return on average equity for the top 200 banks under $2 billion of assets in 2022 was 14.16%, compared with 11.67% for the broader group of banks of similar size.
Krista Snelling, President and CEO, commented, “We are honored to be ranked among the Top 200 banks in the nation for a ninth year, based upon our financial performance. Our position in the top performance ratings year after year, in both California and the nation, is the result of strategic focus and discipline by our entire team. We continue to expand and excel within our industry while maintaining exceptional credit quality and high performance.”
Santa Cruz County Bank announced the election by its Board of Directors of Stephen D. Pahl as Chairman, following the annual meeting of shareholders held on May 24, 2023.
Stephen Pahl is Senior Partner and Chairman of Pahl & McCay, a professional law corporation, based in San Jose. His practice focuses on real estate transactions and litigation, employment matters and commercial litigation. During his tenure on the Board of Santa Cruz County Bank, he has chaired the Director’s Loan Committee, providing him broad credit experience in this aspect of banking operations. He also has served the Bank as its Corporate Secretary since January 2021.
The Board of Directors also reappointed John Burroughs as Vice Chairman. Mr. Burroughs will assume the additional responsibilities of serving as Corporate Secretary following the Annual Meeting.
Chairman Stephen D. Pahl stated, “It is an honor to continue serving on the Board in the role of Chairman of one of the highest rated community banks in the nation. Our strong financial performance is consistently above that of our banking peers and has allowed the Bank to expand its geographic reach into both Monterey County and Santa Clara County with the long-term goal and focus on building shareholder returns and providing safe and sound community banking for our clients. We have been very sensitive to the problems which have plagued some of the larger banks in our area. Our management and Board have taken proactive measures to avoid these issues and protect shareholder value.”
Santa Cruz County Bank is rated as a 5-Star “Superior” bank by Bauer Financial, Inc. based upon its financial performance for the quarter ending September 30, 2022. 5-Star is the highest rating determined by Bauer Financial, which has been reporting on and analyzing the performance of U.S. banks and credit unions since 1983. For more information on Bauer Financial, Inc. visit www.bauerfinancial.com. Santa Cruz County Bank has been rated as a 4-Star “Excellent” and 5-Star “Superior” bank every quarter in the history of our ratings from Bauer Financial.
The Bank announced the planned retirement of William J. Hansen, Founding Director and Chairman of the Board, from its Board of Directors, effective May 24, 2023 upon conclusion of the Annual Shareholder's Meeting at which point the new Chairman will be elected and announced.
Chairman William J. Hansen stated, “I have truly enjoyed the past twenty-five years with Santa Cruz County Bank. The initial five years to organize and the last twenty years operating has provided many experiences, successes, challenges and lifelong memories. I will now enjoy my time with my family and focus my talents on our other businesses requiring my undivided attention. I have enjoyed working with the directors and employees of Santa Cruz County Bank and I look forward to their continued success.”
During Mr. Hansen’s tenure the Bank grew assets from the beginning on February 3, 2004 at $13.2 million to today over $1.7 billion. Several milestones for the Bank took place under Mr. Hansen’s leadership including the successful merger with Lighthouse Bank in 2019, expansion into growing markets in 2021 and 2022, the Bank’s first stock split in March of 2022 as well as continual dividend growth over the past several years. Mr. Hansen’s successor will be named following the conclusion of the 2023 Annual Shareholder’s Meeting.
Santa Cruz County Bank was voted Best Bank by Good Times readers in the annual Good Times Best of Santa Cruz County poll. This is our 11th consecutive year receiving this honor and we’re so grateful to be selected as the bank of choice. Our employees continue to put our clients first, and it shows! We're thrilled to be included on this list of outstanding local businesses and we will continue to provide the best local banking for our community.
The Bank announced unaudited earnings for the first quarter ended March 31, 2023.
Net income for the quarter was $8.9 million, an increase of 65% from $5.4 million over the prior year and down 11% from $10.0 million in the prior quarter. Basic and diluted earnings per share in the first quarter of 2023 both improved over the same quarter in 2022 by $0.42. Basic and diluted earnings per share decreased over the prior quarter by $0.13.
Santa Cruz County Bank President and CEO Krista Snelling commented, “As a community bank, we make a positive impact on the communities we serve. The Bank’s liquidity position remains strong, and the funds entrusted to us by depositors are reinvested through loans to individuals and businesses for expansion and enterprise growth. We reported a milestone in gross loans for the quarter, which grew by $51 million and by $176 million over the prior year, while maintaining strong credit quality. The Bank’s overall decrease in deposits of 4% compared to last year-end largely reflected our large depositors’ business cycle for their planned activities.
During the quarter, we announced our rank as the #6 best performing community bank in the nation for banks under $3 billion in asset size by S&P Global Market Intelligence. This achievement marks our 6th year in the Top 100 Banks in the nation and is credit to the diligence of our entire team on the oversight and execution of our strong financial performance.”
Financial Highlights
Performance highlights as of and for the quarter ended March 31, 2022 included the following:
We are pleased to welcome Michael Davis Luong as Vice President and Senior Relationship Manager for the Bank’s Silicon Valley region. He is based out of the Bank’s Cupertino office where he will be responsible for new business acquisition, lending, and business development in Silicon Valley and the Greater Bay Area.
Mr. Luong has an 18-year history in the banking industry with extensive experience in business development, credit underwriting, commercial real estate, SBA lending, and loan portfolio management for major financial institutions in Northern California and the Bay Area. Mr. Luong served as Commercial Real Estate Relationship Manager for Meriwest Credit Union and as First Vice President and Regional Sales Manager of Northern California for CTBC Bank Corporation. Most recently, he served as Vice President and Commercial Real Estate Relationship Manager for Silicon Valley Bank where he managed a portfolio of commercial real estate of over $500 million.
Jon Sisk, Executive Vice President and Chief Banking Officer, remarked, “We are thrilled to welcome Michael to the Bank’s Silicon Valley team. His vast experience in commercial lending combined with business development experience and an extensive knowledge of credit are beneficial assets to serve our growing client base and attract new business in the Greater Bay Area. We look forward to further growth in the region as a result of Michael’s contributions.”
Congratulations to Jaime Manriquez, EVP Chief Information Officer, for being recognized by the Silicon Valley Business Journal with a 2023 Latinx Business Leadership Award!
Jaime joined Santa Cruz County Bank in 2004, at its founding. He developed, implemented, and has managed the Bank’s IT infrastructure throughout our years of steady growth. Jaime’s leadership, skills and vision played pivotal roles in transforming a start-up bank into a top-rated financial institution serving Santa Cruz, Monterey and Santa Clara Counties.
Congratulations to Shelly Medina, SVP Asset-Based Lending Operations Manager, for being recognized by ABF Journal as one of the 2023 Top 50 Women in Asset-Based Lending!
Shelly has played a critical role in the establishment and operation of Asset-Based Lending divisions in Silicon Valley. Her experience and expertise speak to her strengths and the distinctive role she plays in Asset-Based lending.
The Bank has earned the #6 ranking on the S&P Global Market Intelligence annual rankings of 2022’s best performing community banks in the nation with assets under $3 billion.
Eight California banks earned a spot on the Top 100 best performing community banks list. Rankings are based on financials for the year ended December 31, 2022. This is the sixth year Santa Cruz County Bank has ranked in the Top 100 Community Banks in the United States. The Bank also has a Bauer Financial Superior Rating (5 out of 5 stars), IDC Superior Rating, and is a Super Premier Performing Bank with the Findley Reports.
Krista Snelling, President and CEO remarked, "Our rank of 6th in the nation, among 3,782 community banks under $3 billion, is a testament to the hard work, vision and focus of our entire team. Ranking 2nd among the eight California banks places us firmly in the top tier within the state. Our industry rankings and financial strength provide confidence and security to our shareholders, clients and community."
To our Valued Clients, Community and Shareholders:
We want to take a moment to reinforce the safety and soundness of Santa Cruz County Bank in light of recent industry events, particularly the failure of Silicon Valley Bank (SVB). SVB’s failure was primarily due to their heavy concentration in banking high-tech, venture-based companies, combined with significant unrealized losses in their securities portfolio caused by rapidly rising interest rates.
Our business model is fundamentally different.
Our client base is diverse and stable. We do not have any significant industry concentrations nor concentrations with individual clients.
Our capital position significantly exceeds the regulatory levels for being considered “well-capitalized” and any changes to our securities portfolio would not have a material impact on our capital.
Our liquidity position is very strong and includes $320 million in liquid marketable securities and $461 million in unused borrowing capacity at the Federal Home Loan Bank, Federal Reserve Bank and other correspondent banks.
Santa Cruz County Bank’s historical financial performance ratings and earnings releases are publicly available through our website: Investor Relations.
As a community bank, we take pride in our relationship-based business model focused on building long-term trust with our clients. We look forward to continuing to serve our community through our traditional community banking model as we have for the past 19 years.
We are grateful for your business and support.
Krista Snelling, President and CEO
The Bank’s Board of Directors declared a quarterly cash dividend of $0.15 per share. The dividend is payable on April 11, 2023 to shareholders of record as of the close of business on April 5, 2023.
For the year ended December 31, 2022, Santa Cruz County Bank reported a record $30.9 million in net income, a 45% increase over 2021.
Return on average tangible equity was 19.19% and 24.04% for the year and quarter ended December 31, 2022, respectively.
The Bank’s capital position significantly exceeds regulatory levels for being considered “well-capitalized” at 13.69% tier 1 capital and 14.94% total capital as of December 31, 2022. Shareholders' equity grew to $197.7 million as of December 31, 2022, net of unrealized losses on our available for sale securities portfolio of $16.9 million, included in accumulated other comprehensive income. The book value per share of Santa Cruz County Bank's common stock at December 31, 2022 was $23.32, an increase of $1.52 compared to December 31, 2021.
The Bank’s strong liquidity position includes $251 million in unpledged marketable securities and $376 million in unused borrowing capacity at the Federal Home Loan Bank, the Federal Reserve Bank and other correspondent banks as of March 20, 2023.
Safety and soundness are paramount for any banking relationship, especially in challenging economic times. Santa Cruz County Bank’s capital position far exceeds the regulatory guidelines to be considered “well capitalized” as shown in the tables linked here. As of December 31, 2022, the Bank’s 14.94% in total capital to risk weighted assets well surpasses 10.50%, which is considered adequate and is required by the FDIC.
Our strong capital position ensures that the funds you deposit with us are safe. Further, your deposits at Santa Cruz County Bank are reinvested in the communities we serve, deployed through loans to individuals and businesses. During the pandemic, the Bank helped save 50,000 local and regional jobs through the Paycheck Protection Program (PPP).
In addition to being well capitalized, Santa Cruz County Bank continues to rank at the top of performance standards and has been recognized annually for its financial performance. Read more about our Financial Strength.
We want to ensure that our clients, community and shareholders are secure in their understanding of coverage provided by the FDIC, and how that coverage protects your accounts with Santa Cruz County Bank. The Bank is an insured member of the FDIC. FDIC coverage protects depositors if an FDIC-insured bank or savings association fails. The FDIC Standard Maximum Deposit Insurance Amount (SMDIA) for deposits is $250,000 per depositor, per insured financial institution.
We invite you to visit our Education Center for resources on coverage, limits set by the FDIC, and the different categories of accounts and account ownership as they may apply to you. You’ll find two educational FDIC videos, and more information can be found at fdic.gov.
Santa Cruz County Bank continues to hold a strong capital position, ensuring that the funds you deposit with us are safe. We’re proud to be your community bank.
Thank you for voting Santa Cruz County Bank your favorite bank in the Santa Cruz Sentinel’s 2022 Readers' Choice poll! We’re celebrating our 19th year as your community bank and appreciate the community's vote of confidence! We love serving our clients, partners, and neighbors!
We're excited to announce the selection of Krista Snelling, President and CEO of Santa Cruz County Bank, for the Silicon Valley Business Journal’s inaugural Power 100 List. The List represents a unique group of leaders making the biggest impact in our region, selected from Silicon Valley’s diverse industries, significant stakeholders, and investors. Thank you, Krista, for your impactful leadership and significant contributions.
We are excited to announce the opening of our eighth full-service banking office! Visit our newly remodeled branch located at 480 S. Main Street, Salinas.
We've continued our successful expansion into Monterey County, led by Rich Aiello, SVP, Relationship Manager. The new branch has been staffed with a team of well-known bankers who will serve existing clients and support the development of new relationships in Salinas and throughout Monterey County.
Santa Cruz County Bank President and CEO, Krista Snelling, commented, “We are excited for the opportunity to serve the Salinas Valley following our successful expansion into Monterey County in 2021. The opening of a second branch within Monterey County allows us to deliver our unique style of relationship-focused banking and to provide our clients direct access to decision-makers. We see great opportunity to develop new relationships and look forward to growing our client base in the Salinas Valley.”
Rich Aiello, who leads the Bank’s Salinas/Monterey region as Senior Vice President and Regional Manager, stated, “Our Salinas team is comprised of experienced and highly-skilled bankers who are very familiar with the community. Each team member has a long history of serving clients in the greater Monterey Bay region, as well as serving the community at large. We look forward to welcoming and serving the Salinas Valley community at our eighth full-service banking office.”
Visit our Monterey Office and meet the team!
Santa Cruz County Bank announced unaudited earnings for the fourth quarter and year ended December 31, 2022. Net income for the quarter was $10.0 million, an increase of 9% compared to $9.2 million in the prior quarter, and 114% compared to $4.7 million in the same quarter in 2021. Net income for the year ended December 31, 2022 was a record $30.9 million, $9.7 million or 45% over 2021. This marks the Bank’s twelfth successive year of record earnings.
Financial Highlights
Performance highlights as of and for the quarter ended December 31, 2022 included the following:
Santa Cruz County Bank President and CEO Krista Snelling commented, “I am honored to announce our 2022 financial results and to congratulate our team. For the twelfth consecutive year, the Bank reported record net income. In addition, we achieved record gross loans and record quarterly net income.
The Bank’s outstanding performance is the result of the ongoing discipline and focus of our team of dedicated employees, management team, and directors, who work daily to align operations to achieve strategic goals. Our record loan level indicates that we continue to be regarded as a reliable lender with a demonstrated ability to facilitate requests and successfully deliver borrowing solutions to our clients. The Bank’s well-regarded SBA Department continues to contribute to our loan growth and ranks in the Top 100 lenders for SBA 7a loan volume in the nation for the SBA’s 2022 fiscal year.
We begin the new year well-positioned for growth and opportunity with a broader geographic reach resulting from the opening of our Salinas branch, our second full-service banking office serving Monterey County. We look forward to continued development of new and existing business relationships and increased community partnerships and employee engagement activities in the communities we serve.”
To view the entire earnings release or for more information about Santa Cruz County Bank stock and financial performance, please visit our Investor Relations page.
Please be aware of potential fraudulent activity and phishing scams. Phishing attempts can come through email, over the phone, or via text message. Learn to recognize red flags and be safe. Santa Cruz County Bank will never text or email you to ask for personal information. If you receive a call from someone purporting to be from the Bank, never give out your password. If something seems suspicious, hang up and verify the validity of the call by contacting us directly. Contact us immediately if you suspect fraud or identity theft on your accounts.
We encourage you to view the educational videos and read all the information and links provided in our Education Center regarding identity protection.
In an effort to protect your identity and your accounts:
This informational video from Zelle® is a good reminder to heighten your awareness of cybersecurity. It's important for both individuals and businesses to learn how to recognize red flags and be safe! Santa Cruz County Bank will never text or email you to ask for personal information, and we will never call you to request that you send money to yourself. As always, if something seems suspicious, give us a call at 831.457.5000.
We are pleased to welcome Cecilia Situ as Executive Vice President and Chief Financial Officer.
Ms. Situ brings more than 20 years of well-rounded financial management experience, including financial accounting and SEC reporting, interest rate risk and investment portfolio management, business combination, financial planning, Sarbanes-Oxley internal control and procedures, and team development. Most recently, she was Senior Vice President and Treasurer at Bank of Marin, a publicly traded bank with $4.3 billion in assets, where she was influential in strategizing and managing more than $1.8 billion of investment portfolio, funding and liquidity management, with an appreciation of the capital markets and economic outlook. During her 14-year tenure at Bank of Marin, she played a critical role in their four successful bank acquisitions, with strong project management skills and experience in due diligence and cross-functional collaboration. She was also previously Controller and Principal Accounting Officer at Bank of Marin and had been instrumental in directing and overseeing essential financial accounting activities, including financial book closing, SEC reporting, budgeting, tax planning and regulatory compliance. She started her career in public accounting at Deloitte & Touche with a specialty in auditing community banks, real estate firms, not-for-profit organizations and other financial service companies. During her career, Ms. Situ has obtained well-regarded professional designations such as Chartered Financial Analyst (CFA) and California Certified Public Accountant (CPA).
Krista Snelling, President and CEO, commented, “We are excited to welcome Cecilia as Chief Financial Officer and look forward to her contributions as a valued member of our executive team. Cecilia’s proven financial acumen, demonstrated leadership, and level of experience in financial accounting for a NASDAQ-listed, over $4 billion in asset sized financial institution are an excellent fit for the growth and future of Santa Cruz County Bank.”
Read more: PR Newswire
Santa Cruz County Bank announced unaudited earnings for the third quarter ended September 30, 2022. Net income for the quarter was $9.2 million, 44% over prior quarter, and 67% or $3.7 million more than the same quarter in 2021. Year-to-date earnings for the nine-month period ended September 30, 2022 were a record $20.9 million, $4.3 million or 26% over 2021. All share data for prior periods have been adjusted to reflect stock dividends and stock splits.
Santa Cruz County Bank President and CEO, Krista Snelling commented, “We had an excellent quarter, in which we set new records for the Bank’s assets, gross loans (excluding PPP), deposits and quarterly net income. In addition to these milestones, we are pleased to report return on average assets over 2% and a record efficiency ratio under 37%. These results reflect the impact of the higher rate environment on earning assets and our focus on the implementation of cost-saving, digital transformation solutions designed to minimize resources while enhancing the client experience.
For the quarter, gross loans (excluding PPP) were up by $40.5 million. New loan originations surpassed $101.4 million and were offset by over $62.1 million in non-PPP payoffs, primarily in construction loans, as expected, due to the easing of supply chain constraints which has allowed for the completion of backlogged projects.
We are pleased to report new production by the Bank’s new Asset-Based Lending Division within our record quarterly non-PPP gross loan totals for the first time. We enter the fourth quarter looking forward to celebrating the opening of our new Salinas branch and welcoming the community to our 8th full-service banking office.”
Financial Highlights
Performance highlights as of and for the quarter ended September 30, 2022 included the following:
To view the entire press release and for more information on Santa Cruz County Bank's performance, please visit our Investor Relations page.
We are pleased to announce the launch of a $5 million Share Repurchase Program. The Bank’s Board of Directors authorized the Share Repurchase Program and received the required approvals from the California Department of Financial Protection and Innovation as well as the Federal Deposit Insurance Corporation.
This is the first share buyback program in the history of the Bank. In March 2022, the Bank completed a previously announced 2-for-1 stock split.
“Since our founding, we have continuously aligned the Bank’s strategic initiatives with increasing shareholder value,” stated Chairman William J. Hansen. “The Board’s authorization of this Program is based upon the strength of our balance sheet, our financial performance and continued growth. This Program further demonstrates our commitment to enhancing the value for all stockholders investing in Santa Cruz County Bank.”
The Board’s authorization for the Program permits the repurchase of up to $5 million of Santa Cruz County Bank common shares in open market and privately-negotiated transactions. Additionally, the Bank entered into contract with Janney Montgomery Scott LLC, a nationally recognized broker dealer, to facilitate repurchases. The Bank intends that all share repurchases will be made in compliance with the Securities Exchange Act of 1934 under rules 10b-18 and 10b5-1. The Stock Repurchase Program, which will expire on May 20, 2023, may be suspended, terminated, or modified at any time without notice. Shares purchased under the program will reduce the number of shares outstanding and will be returned to authorized but unissued status.
The timing and amount of common stock repurchases made pursuant to the Santa Cruz County Bank Share Repurchase Program are subject to various factors, including the Bank’s capital position, liquidity, financial performance, alternative uses of capital, stock trading price, regulatory requirements and general market conditions. The repurchase program does not obligate the Bank to acquire any particular number of shares, and the repurchase program may be suspended or discontinued at any time at the Bank’s discretion.
We are pleased to announce the launch of our Asset-Based Lending Division led by Lee Shodiss and Shelly Medina. The Bank’s new Asset-Based Lending Division specializes in serving business clients and emerging growth companies requiring asset liquidity and flexible lines of credit in addition to full banking services. The addition of an Asset-Based Lending Division showcases the Bank’s commitment to supporting small business. The Division is based at the Bank’s Cupertino office at 19240 Stevens Creek Boulevard, to serve clients in Silicon Valley, the Greater Bay Area and throughout California.
The Bank’s Asset-Based Lending Division is directed by Lee Shodiss, an industry veteran with 30 years of experience in asset-based and innovation markets serving Silicon Valley and technology centers throughout the country. Shelly Medina leads the Asset-Based Lending Division as Operations Manager.
Krista Snelling, President and CEO commented, “We experienced firsthand the pandemic’s profound impact on working capital needs of many businesses. Our new Asset-Based Lending Division complements the Bank’s significant growth and ability to provide capital to businesses through specialty financing solutions. We see great opportunity, particularly in serving the high concentration of businesses centered in technology and innovation in Silicon Valley. The hiring of Lee and Shelly, both well-known experts in ABL, expands our team at the Bank’s Cupertino branch and positions us advantageously to serve the market, grow our portfolio, and support our existing client relationships.”
Santa Cruz County Bank was named Business of the Year by the Santa Cruz County Chamber of Commerce, alongside 1st Capital Bank, Bay Federal Credit Union, and Santa Cruz Community Credit Union. All four financial institutions were recognized for supporting the local community by securing Payroll Protection Program (PPP) loans during the pandemic.
Of the over $857 million in PPP loans secured, Santa Cruz County Bank alone processed 4,204 PPP loan applications totaling $573.7 million, saving approximately 50,000 jobs and ensuring businesses were able to keep their doors open and their employees on the payroll. The Bank extended resources beyond its business clients in order to support the entire community. For round one alone, Santa Cruz County Bank funded over 1,600 PPP loans, while across the country the average number of PPP loans processed per bank was 222. Santa Cruz County Bank continues to work with businesses by processing PPP forgiveness applications.
Krista Snelling, President and CEO of Santa Cruz County Bank, says, “Thank you to the Santa Cruz County Chamber of Commerce for this meaningful recognition. As a community bank, we felt a responsibility to do whatever it took to help our customers and community. We jumped in feet first on the Paycheck Protection Program, and I give full credit to our amazing employees from all departments who worked around the clock, nights and weekends, to accomplish this Herculean task. This is community banking at its best, caring for and supporting our business community and our neighbors. It is a great pleasure to share this award with our fellow community bank partners: 1st Capital Bank, Bay Federal Credit Union, and Santa Cruz Community Credit Union. We’re in good company, doing good, impactful work.”
Santa Cruz County Bank was also honored as Business of the Year in 2018 by the Santa Cruz Chamber of Commerce.
The Bank announced that its Board of Directors declared a quarterly cash dividend of $0.09 per share. The dividend is payable on April 4, 2022 to shareholders of record as of the close of business on March 29, 2022.
Chairman William J. Hansen stated, “The Board of Directors of Santa Cruz County Bank are pleased to announce an increase to the quarterly cash dividend paid to our shareholders. The new increased dividend will be $0.09 per share and will be payable on April 4, 2022. This cash payment follows the recent 2-for-1 stock split declared by the Board, whereby our shareholders will receive one share of stock for every share held as of the record date.”
The Bank’s most recent quarterly cash dividend was $0.125 per share, based on the pre-split shares, and was paid on January 10, 2022. On February 15, 2022, the Bank’s Board of Directors declared a 2-for-1 stock split, which will double the number of shares held by shareholders from approximately 4.27 million shares to over 8.5 million shares.
The Bank also announced its Board of Directors approved changing the payment date of its 2-for-1 stock split to March 16, 2022 after the market closes. The 2-for-1 stock split was previously scheduled to be paid on March 14, 2022 to shareholders of record as of March 3, 2022.
Santa Cruz County Bank's Board of Directors declared a 10% stock dividend payable on November 8, 2021 to shareholders of record as of the close of business on October 26, 2021. Cash will be paid in lieu of fractional shares based on the closing price on the record date.
Chairman William J. Hansen stated, “We are pleased to provide our shareholders with a 10% stock dividend. The Board of Directors continue to manage stock liquidity while increasing shareholder value through exceptional financial performance.”
The Bank reported record performance for the nine months ended September 30, 2021. Net income for the nine months ended September 30, 2021 was $16.6 million compared to $13.5 million, a 23% increase, over the same period in 2020.
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Santa Cruz County Bank has no control over information at any site hyperlinked to or from this site. Santa Cruz County Bank makes no representation concerning and is not responsible for the quality, content, nature, or reliability of any hyperlinked site and is providing this hyperlink to you only as a convenience. The inclusion of any hyperlink does not imply any endorsement, investigation, verification or monitoring by Santa Cruz County Bank of any information in any hyperlinked site. In no event shall Santa Cruz County Bank be responsible for your use of a hyperlinked site.
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