Santa Cruz County Bank Reports 24% Increase in Net Income for the Year Ended December 31, 2015

Record Earnings with Solid Growth in Assets, Loans and Deposits

Jan 25, 2016, 16:30 ET from Santa Cruz County Bank

SANTA CRUZ, Calif., Jan. 25, 2016 /PRNewswire/ -- Santa Cruz County Bank (OTCQX: SCZC), a top rated, locally owned and operated full-service community bank headquartered in Santa Cruz County, today announced unaudited net income for the fourth quarter and year ended December 31, 2015.

President and CEO David V. Heald commented, "We are pleased to report another consecutive year of record earnings and continued growth in all areas of our balance sheet. Our growth has been driven by a healthy economic environment for the businesses and customers we serve as well as our reputation and commitment to serving as a financial partner to our community for the past twelve years. We look forward to continued success in 2016 and serving the needs of our community."  

Selected financial information is presented in the following table: 


Year Ended December 31,

Change


2015

2014


Balance Sheet




Total assets

$        513,336,864

$        459,794,882

12%

Gross loans

357,908,503

315,621,461

13%

Allowance for loan losses

7,362,210

6,402,752

15%

Non-interest-bearing deposits

208,935,959

191,789,387

9%

Total deposits

461,234,677

413,986,333

11%

Shareholders' equity

44,095,023

38,629,400

14%





Net Income

$            5,433,780

$             4,371,187

24%





Ratios




Net interest margin

4.05%

4.11%


Tier 1 leverage ratio

8.42%

8.39%


Return on average assets

1.09%

1.00%


Return on average equity

13.06%

12.04%


Efficiency ratio

56.55%

61.54%






Share and Per Share Data




Basic earnings per common share

$2.53

$2.05


Book value per common share

$20.47

$18.04


Total common shares outstanding

2,154,451

2,141,253


 

Fourth Quarter Earnings
Net income of $1.5 million for the quarter ended December 31, 2015 increased 5% compared to the prior quarter and increased 14% comparing this quarter with the same quarter in 2014. Basic earnings per share increased $0.48 to $2.53, a 23% increase over the prior year.  

Pretax income for the year ended December 31, 2015 was $8.9 million, an increase of $1.7 million, 24%, compared to $7.2 million for the prior year.

Basic earnings per share for the fourth quarter ended December 31, 2015 increased to $0.68 compared to $0.60 the fourth quarter of the prior year.

Financial Highlights:

  • Fourth Quarter Return on Average Assets and Equity of 1.09% and 13.29%, respectively
  • Year ended December 31, 2015 Net Interest Margin of 4.05%
  • 13% growth in loans, $42 million increase over the last twelve months
  • 11% growth in deposits, $47 million increase over the last twelve months
  • Well capitalized with a total risk based capital ratio of 13.56%
  • Continued exceptional credit quality with no loans past due or on non-accrual
  • Full year basic earnings per share increased to $2.53, up from $2.05 for the prior year
  • Book value per share after dividends increased by $2.43 to $20.47 for the year

2015 Highlights:

  • The Bank declared four quarterly $0.05 cash dividends to shareholders.
  • The Bank ranked in the "Top Performing 200 Community Banks and Thrifts in the United States" out of 750 institutions with less than $2 billion in assets, based upon three year average return on equity for the years ending 2012, 2013 and 2014.    
  • The Bank received 4-Star "Excellent" ratings by Bauer Financial, Inc. for its financial performance each quarter in 2015.
  • Financial Management Consulting Group ranked Santa Cruz County Bank 4th out of all California banks in overall performance for the quarter ended September 30, 2015 and 1st for loan quality.
  • Santa Cruz County Bank is the top USDA lender in the state of California.
  • The Bank remained as the top SBA lender in Santa Cruz County and ranked 6th in the Silicon Valley for the 2015 fiscal year.

Loans, Asset Quality & Deposits
Total assets grew by $54 million to $513 million in 2015, which follows a $61 million increase in 2014. The Bank's asset quality remained exceptional with zero nonperforming loans. For the fourth quarter, gross loans increased by $15 million, and year over year increased $42 million, 13% to $358 million. Allowance for loan losses of $7.4 million at year end 2015 represents a 15% increase over year end 2014.

Deposits grew by 11%, $47 million since December 31, 2014.  Approximately $17 million of this growth occurred in the non-interest bearing deposit category, furthering the bank's core strength of generating low cost of funds, which remains among the best in the nation.  

Non-Interest Income / Expense and Net Interest Margin
Comparing the twelve-month period ended December 31, 2015 to the same period in 2014, non-interest income declined by $204 thousand due to forgoing immediate gains typically generated from  loan sales in the third and fourth quarter of the year. This is the second consecutive quarter in which the Bank elected to retain high yielding earning assets generated by its highly recognized SBA Department for future earnings.  Non-interest expense for the twelve month period ended December 31, 2015, increased only 0.8% or $107 thousand, due to Management's commitment and ability to control expenses. Expressed as a percentage, the ratio of expenses to average assets has improved to 2.56% year to date 2015 from 2.89% year to date 2014.

Net interest income of $5.0 million for the quarter ended December 31, 2015 exceeded the prior quarter by $59 thousand or 1%. Net interest income for the year ended 2015 exceeded prior year by $2.2 million or 13%.  

Net interest margin was 3.90% and 3.95% for the quarters ended December 31, 2015 and 2014, respectively and 4.05% and 4.11% comparing the year ended December 31, 2015 and 2014, respectively. The Bank's non-interest bearing deposits decreased in the fourth quarter due to the seasonality of customers in the agriculture sector which is typical for this time of year.

Shareholders' Equity
Total shareholders' equity was $44 million at December 31, 2015, a $5.5 million, 14% increase over December 31, 2014. The value added to our shareholders was due to continued strong earnings. This increase was reduced by the payout of previous cash dividends. Common stock cash dividends totaled $430 thousand or $0.20 per share for the year ended December 31, 2015. A cash dividend of $0.05 was declared in December 2015 to shareholders of record as of December 21, 2015, which was paid on January 11, 2016. Historically, the Bank has paid eleven $0.05 cash dividends totaling over $1.0 million to shareholders since July 2013.

For the twelve month period ended December 31, 2015, the Bank's return on average equity was 13.06% and return on average assets was 1.09%. The book value per share of Santa Cruz County Bank's common stock at December 31, 2015 was $20.47, up from $18.04 for the same period in 2014.

ABOUT SANTA CRUZ COUNTY BANK
Santa Cruz County Bank, founded in 2004, is a locally owned and operated community bank with offices located in Aptos, Capitola, Santa Cruz, Scotts Valley and Watsonville. The bank offers a variety of competitive deposit and lending solutions for businesses and individuals; including business loans, lines of credit, commercial real estate financing, agricultural loans, SBA and USDA government guaranteed loans, credit cards, merchant services, remote deposit capture, mobile and online banking, bill payment, and cash management. For the past nine years, the Bank's SBA Department has been recognized as a top SBA lender in Santa Cruz County. Santa Cruz County Bank is the top USDA lender in the state of California.

Santa Cruz County Bank stock is publicly traded on the OTCQX marketplace under the stock symbol SCZC. Stock purchase orders may be placed through a brokerage firm or one of the Market Makers listed in the Investor Relations section of the bank's website. For more information about Santa Cruz County Bank, please visit our website www.sccountybank.com.

This release may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, and competition within the business areas in which the Bank is conducting its operations, including the real estate market in California and other factors beyond the Bank's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.



Selected Financial Data (unaudited)










Change



Change







Quarter ended 12/31/15

Quarter ended 12/31/14

$

%


Quarter ended 9/30/15

$

%




















Balance Sheet




























Total assets

$ 513,336,864

$ 459,794,882

$ 53,541,982

12%


$ 523,665,738

$ (10,328,874)

-2%






Gross loans

357,908,503

315,621,461

42,287,042

13%


343,091,423

14,817,080

4%






Allowance for loan losses

7,362,210

6,402,752

959,458

15%


7,003,638

358,572

5%






Non interest-bearing deposits

208,935,959

191,789,387

17,146,572

9%


228,422,322

(19,486,363)

-9%






Total deposits

461,234,677

413,986,333

47,248,344

11%


473,897,222

(12,662,545)

-3%






Shareholders' equity

44,095,023

38,629,400

5,465,623

14%


42,591,628

1,503,395

4%




















Income Statement












Change











Year ended 12/31/15

Year ended 12/31/14

$

%

Interest income

5,117,338

4,546,180

571,158

13%


5,057,717

59,621

1%


19,929,666

17,670,588

$ 2,259,078

13%

Interest expense

116,595

107,262

9,333

9%


116,119

476

0%


457,965

416,296

41,669

10%

Net interest income

5,000,743

4,438,918

561,825

13%


4,941,598

59,145

1%


19,471,701

17,254,292

2,217,409

13%















Provision for loan losses

357,500

187,500

170,000

91%


187,500

170,000

91%


920,000

750,000

170,000

23%

Non-interest income

577,887

682,418

(104,531)

-15%


570,876

7,011

1%


3,107,477

3,311,446

(203,969)

-6%

Non-interest expense

2,906,848

2,819,782

87,066

3%


3,045,384

(138,536)

-5%


12,768,415

12,661,064

107,351

0.8%

Net income before taxes

2,314,282

2,114,054

200,228

9%


2,279,590

34,692

1.5%


8,890,763

7,154,674

1,736,089

24%

Income tax expense

860,850

838,387

22,463

3%


900,017

(39,167)

-4%


3,456,983

2,783,487

673,496

24%

Net income after taxes

$     1,453,432

$     1,275,667

177,765

14%


$     1,379,573

73,859

5%


$ 5,433,780

$ 4,371,187

1,062,593

24%















BASIC EARNINGS PER SHARE

$              0.68

$              0.60




$              0.64




$          2.53

$          2.05



Book value per share

$            20.47

$            18.04




$            19.81




$        20.47

$        18.04

















Ratios














Net interest margin

3.90%

3.95%




3.91%




4.05%

4.11%



Tier 1 leverage ratio

8.42%

8.39%




8.23%








Return on average assets

1.09%

1.09%




1.05%








Return on average equity

13.29%

13.31%




12.94%








Efficiency ratio

52.12%

55.05%




55.20%








 

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SOURCE Santa Cruz County Bank



RELATED LINKS

http://www.sccountybank.com