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Santa Cruz County Bank posts profit of $825,000

July 24, 2013


By Jondi Gumz - Sentinel

Santa Cruz County Bank posted a profit of $825,000 for the quarter ending June 30, up 3 percent from the prior quarter and up 30 percent from a year ago.

Loans at the 9-year-old locally owned bank totaled $237.8 million, growing $7.3 million from the prior quarter, a 3 percent increase, and up 17 percent from a year ago.

The sector taking out the most loans during the quarter was agriculture and ag-related businesses.

"That's a sector we've been focusing on," said Mary Anne Carson, Santa Cruz County Bank senior vice president, a member of this year's Focus Agriculture class, noting the new "BOB" series of talks on sustainable food systems.

She said the bank is seeing a return of the import-export trade business, noting some loans relate to the import of organic produce.

Loan payoffs during the quarter totaled $7.5 million, which Carson said is "a lot," and loan commitments totaled $30.4 million, "a good number," Carson said.

The increase in earnings resulted from the bank shifting into higher yielding loans, she said, noting $10.8 million in refinancing into lower interest rates during the quarter.

The biggest loan was $5.9 million for Walnut Commons, a three-story co-housing complex at 190 Walnut Ave., where 14 of the 19 condos are spoken for.

Carson said the bank has $13.2 million in loans approved by the Small Business Administration that are not yet booked. Borrowers include brewing companies -- "that seems to be the rage right now," Carson said along with agriculture, automotive, hospitality and visitor-serving businesses.

Reflecting the new loans, the loan loss allowance grew to $5.4 million, up 3 percent from the prior quarter and up 18 percent from a year ago.

Deposits grew to $334.9 million, up 4 percent during the quarter and up 11 percent from a year ago. Non-interest-bearing deposits jumped 13 percent for the quarter, up 24 percent from a year ago.

"We are seeing a summertime impact," Carson said, referring to customers in agriculture and visitor-serving businesses and adding. "We've had consistent new account growth."

Assets grew to $381.2 million, up 4 percent during the quarter and up 11 percent from a year ago.

Shareholders' equity totaled $30.7 million, flat during the quarter but up 11 percent from a year ago. Carson cited two factors, the payout of a 5-cent cash dividend in July, and unrealized loss in investments with the rise of the yield curve.

Earnings were 42 cents per share, up from 33 cents per share a year ago.

In May. Santa Cruz County Bank ranked 103rd of 851 banks in the nation by American Banker for its return on equity in 2010, 2011 and 2012.

"It was a huge milestone for us," Carson said.

Bauer Financial gave Santa Cruz County Bank four stars, next to the top ranking, for the first quarter.

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