Santa Cruz County Bank posts record profits
October 29, 2015
By Jondi Gumz – Santa Cruz Sentinel
SANTA CRUZ – Locally owned Santa Cruz County Bank posted a record profit of $1.38 million for the third quarter and record year-to-date profits of $3.98 million.
David Heald, president and CEO of the 11-year-old bank, attributed the record performance to initiatives such maintaining a high quality loan portfolio while keeping on an eye on expenses.
Return on average equity was 12.94 percent. The efficiency ratio was 55.2 percent; 50 percent is considered optimum.
Profit for the quarter ending Sept. 30 climbed 2 percent from the prior quarter and up 14 percent from a year ago. Year-to-date earnings are up 29 percent from a year ago.
Non-interest income for the quarter totaled $570,000, down 46 percent from the last quarter and down 39 percent from a year ago, as the bank retained high-yielding variable-rate assets and refrained from SBA loan sales.
The bank reported $524 million in assets, up 5 percent for the quarter and up 15 percent from a year ago.
Deposits totaled $474 million, up 5 percent for the quarter and up 14 percent from a year ago.
Noninterest-bearing deposits grew to $194 million, up 18 percent for the quarter, keeping the bank’s cost of funds low.
Gross loans totaled $343 million, up $6 million from the prior quarter, a 2 percent increase, and up 16 percent from a year ago.
The quarterly growth reflected $10.6 million in loan payoffs; there were no nonperforming loans.
Loan commitments totaled $25.3 million.
Reflecting the new loans, the loan loss allowance totaled $7 million, up 3 percent from the prior quarter and up 13 percent from a year ago.
About two-thirds of the loans made during the quarter were in the variable rate category. They include lines of credit for business operation, home equity lines of credit, construction loans and commercial loans.
Heald said loan growth is balanced, with particular demand for real estate and construction loans.
Salud Para La Gente, a nonprofit, obtained a $2 million construction line of credit from the bank for its $10 million expansion of the clinic at 204 E. Beach St. in Watsonville, which serves 26,000 people a year.
“We are very grateful,” said Dori Rose Inda, Salud’s CEO. “With private practices closing and expanded MediCal, we are scrambling to keep up.”
She said Salud has reached 53 percent of its goal to raise $2.9 million for the capital project, which is supported by a $5 million federal grant and $1.8 million in tax credits. The campaign asks for five-year pledges and the nonprofit can tap the line of credit rather than operational funds while awaiting pledges.
Bogard Construction is building the new wing with 14 new exam rooms; services for women and children are expected to be ready in February with the rest available in August.
On Oct. 9, Gov. Brown signed Senate Bill 4, makingall children younger than age 19, regardless of immigration status, eligible for Medi-Cal health care coverage by May 1.
Santa Cruz County Bank has 85 employees with one position open in risk management and compliance.
Shareholders’ equity totaled $42.6 million, up 3 percent for the quarter and up 15 percent from a year ago. Earnings were 64 cents per share for the quarter vs. 57 cents a year ago.
Book value of the bank stock was $19.81 as of Sept. 30, up from $17.37 a year ago.
Bauer Financial rated Santa Cruz County Bank four stars, next to the top rating.