Santa Cruz County Bank In The News

By Jondi Gumz - Sentinel

Santa Cruz County Bank is pushing for business in South County, moving Executive Vice President and Regional Credit Manager Fred Caiocca to Watsonville.

The move this month came in the wake of the disappearance of First National Bank, which was rebranded Santa Barbara Bank, then acquired in March by San Francisco-based Union Bank.

Santa Cruz County Bank President and Chief Executive Officer David Heald announced the shift Tuesday during the ninth annual shareholders meeting attended by 90 people at Cafe Bittersweet.

Ag stood strong during the downturn, resulting in loans from South County clients such as C&N Tractor, H.A. Rider and Watsonville Coast Produce.

"We'd been looking for a long time to expand down there," Heald said, noting that when he asked South County residents about their banker, they couldn't produce a name.

Gary Steven Findlay of the Findlay Group, which tracks the banking sector, conducted the meeting, noting he is not only the bank's counsel and consultant, but also an investor.

Of 220 banks Findlay ranks, 35 got the top rating of "Super Premier. Santa Cruz County Bank was among 16 to get that rating two years in a row.

Of the 11 banks that opened in 2004, two have failed and one has been acquired.

Santa Cruz County Bank is one of three with positive retained earnings. Its undivided profits totaled $4.6 million as of Dec. 31.

Heald pointed out Bay Commercial Bank's profits of $8.2 million came after making an acquisition.

"We have a lot of room for (loan) growth," said Heald, noting the ratio of gross loans to deposits is 66 percent.

Santa Cruz County Bank ranked 10th in northern California in first-quarter loan production, according to SNL Financial. Its nonperforming asset ratio at 2 percent is less than the average.

Heald said the bank had made five "municipal loans" with Capitola and the Scotts Valley fire district as clients. Other clients include Watsonville, which is putting up solar panels to lower operating costs, and Barry Swenson Builder, borrowing money to put up solar canopies on parking lots for the city of Santa Cruz.

Investor Peter Boutell of Santa Cruz Home Finance was impressed when Heald said an investment in Santa Cruz County Bank in 2004 has returned 45 percent, compared to a 17 percent return by the S&P500.

"I like being part of a local bank," said Boutell, also a Sentinel columnist.

One shareholder asked if the bank would issue a dividend such as Lighthouse Bank did but Heald was cool on the idea, saying "capital is very precious."

Gary Reece submitted his resignation from the bank board for personal reasons.

"We regret losing him," said board chairman George Gallucci.