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Santa Cruz County Bank posts profitable quarter

April 19, 2012

By Jondi Gumz - Sentinel

Santa Cruz County Bank posted a profit of $573,000 for the quarter ending March 31, down 15 percent from the previous quarter but up 26 percent from a year ago.

Loans totaled $199.8 million, growing by $8.5 million from the previous quarter.

"Overall, we are ahead of where we were in the first quarter of last year," said David Heald, Santa Cruz County Bank president and chief executive officer. "We are pleased with our first quarter and the 26 percent increase in net income after tax compared to the first quarter of 2011."

Borrowers are more diverse than a year ago, when doctors and dentists were taking out loans to invest in new offices and equipment.

"We are seeing a mix," said Heald, citing these examples.

• Six loans to health, medical or veterinary businesses totaling $3.6 million.

• Two loans to gas stations for improvements and to build convenience stores, $3.2 million.

• One municipal loan to Capitola, $2.3 million, for the cost of closing Pacific Cove Mobile Home Park and relocating residents.

• Three loans to the visitor-serving industry, $225,000.

New loans for the quarter totaled $18.2 million, with 10 loans totaling $8.7 million being guaranteed by the U.S. Small Business Administration, Heald added.

Deposits grew to $295 million, up 2 percent during the quarter and up 17 percent from a year ago.

Assets grew to $325.7 million, up 2 percent during the quarter and up 16 percent from a year ago.

Shareholders' equity grew to $27 million, up 3 percent during the quarter and up 12 percent from a year ago.

The 8-year-old locally owned bank reported 30 cents earnings per share, down from 35 cents in the last quarter but up from 24 cents a year ago.

Non-interest income totaled $500,000, down 37 percent from the prior quarter. A good portion of non-interest income is generated from selling government-guaranteed loans, Heald said, and the bank decided to retain those loans in the first quarter.

Provision for loan loss totaled $300,000, down 48 percent from a year ago, which Heald said was related to reduced loan losses.

When Capitola looked for a loan, Santa Cruz County Bank "offered the best rate and best terms," Capitola Mayor Michael Termini said, noting Wells Fargo informed the city it was not interested.

"We're looking at changing our day-to-day banking," Termini added. "It looks like we can do just as well with a local bank."

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