Santa Cruz County Bank posts record profitJanuary 27, 2011
By Jondi Gumz - Santa Cruz Sentinel
Santa Cruz County Bank reported a record year-end after-tax profit of $1.79 million for the period ending Dec. 31, up from $203,000 the previous year.
The previous record profit for the nearly 7-year-old locally owned bank was $480,000 in 2006.
"And that was before we paid taxes," said David Heald, president and chief executive officer.
The bank increased net income by $1.6 million to $1.8 million over the year.
Heald said there was a sharp focus on controlling costs and cutting interest expenses while building the loan portfolio.
Early in the year, the bank laid off two employees and shuttered a lending office; Sandi Eason, who had been executive vice president and chief operating officer, resigned.
Late in the year, the bank cut back deposits held by local and state agencies, ending with $253.4 million, down $11.7 million from the previous quarter. The bank also lowered rates on certificates of deposit at renewal.
"We were paying higher interest," Heald said, explaining how the change cut expenses. "We did shrink our balance sheet a bit."
Over the year, though, deposits increased by 6 percent.
There was a big jump at the start of the year, with the push by the Move Your Money Internet campaign.
It's since fallen back, but about 100 new accounts a month are started by people who want a local bank, Heald said.
Loans totaled $181.5 million as of Dec. 31, increasing by 9 percent during the quarter and 16 percent over the year.
There was more activity in health services, with loans taken out by Dr. George Yellich, an oral surgeon, to expand into dental implants; Dr. Nicholas Abidi, an orthopedic surgeon, and his partners to finance a move into a building they bought; Monterey Bay Urology Associates to move into a new space; and North Coast Orthodontists to buy a building for their practice.Bank assets totaled $284.8 million at year end, down 3 percent from the previous quarter but up 7 percent from a year ago.
The bank raised $2.5 million in capital through a local private offering of stock.
For the past nine consecutive quarters, the bank has been rated four stars, signifying excellent, by Bauer Financial, the independent rating service based in Florida.
The bank's annual meeting is planned for 3 p.m. May 17 at Bittersweet Bistro in Aptos.