Santa Cruz County Bank Reports Second Quarter 2010 Results

Assets Surpass $280 Million

Quarterly Net Income Increases by 38%

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Jul 26, 2010, 08:27 ET

SANTA CRUZ, Calif., July 26 /PRNewswire-FirstCall/ -- Santa Cruz County Bank, (OTC Bulletin Board: SCZC), a locally owned and operated full-service community bank headquartered in Santa Cruz County, today announced earnings for the second quarter of 2010. For the quarter ended June 30, 2010, the bank reported net income of $369,149 compared to net income of $66,243 for the comparable period in 2009 and $267,980 for the first quarter of 2010.

JUNE 30, 2010 COMPARED TO MARCH 31, 2010

Total deposits increased $10.1 million, 4%, to $253.3 million

Gross loans increased $11.8 million, 8%, to $166.7 million

Total assets increased $13.6 million, 5%, to $280.3 million

Net income increased $101.2 thousand, 38%, to $369.1 thousand

SIX-MONTHS ENDED JUNE 30, 2010 COMPARED TO SIX-MONTHS ENDED JUNE 30, 2009

Total deposits increased $34.6 million, 16%, to $253.3 million

Gross loans increased $13.6 million, 9%, to $166.7 million

Total assets increased $39.1 million, 16%, to $280.3 million

Net income increased $548.4 thousand, 618%, to $637.1 thousand

Comparing the quarter ended June 30, 2010 to June 30, 2009, the Bank's non-interest bearing deposits grew 35% and as of June 30, 2010, the Bank's non-interest bearing deposits represented 34% of its total deposits.

The Bank continues to demonstrate improvement in non-interest income, which increased 17% over the prior year and in non-interest expense which decreased 4% during the same period.

The Bank remains highly liquid due to community deposits growing at a more rapid pace than loan demand. The Bank's loan delinquencies and non-performing assets are negligible and its loan loss reserve is well funded. This places the Bank in an advantageous position for growth in loans and earnings in an improving economy.

David V. Heald, President and CEO, stated, "As planned, our focus on asset quality combined with controlled expenses and a well maintained loan loss reserve resulted in improved earnings. In the second quarter, our SBA and B & I department was recognized by the USDA Department of Rural Development for ranking 3 in California and 11 in the Nation for its production of Business and Industrial loans."

About Santa Cruz County Bank

Headquartered in Santa Cruz, Santa Cruz County Bank is a full service bank serving the banking needs of individuals and businesses throughout Santa Cruz County. The Bank operates five full-service banking offices and two self-serve banking centers, all of which have received a Green Business Certification Award by the Monterey Bay Area Green Business Program. The Bank's full-service banking offices are located in Aptos, Capitola, Santa Cruz, Scotts Valley and Watsonville. The Bank commenced operations on February 3, 2004 in Santa Cruz.

Santa Cruz County Bank's common stock is listed on the Over the Counter (OTC) Bulletin Board under the stock symbol SCZC. More information on the Bank may be obtained through its website: www.sccountybank.com or by calling 831.457.5000.

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)

					June 30, 2010




	Quarter ended 6/30/10	Quarter ended 3/31/10	Change		Quarter ended 6/30/09	Change		Quarter ended 12/31/09			Change
	Quarter ended 6/30/10	Quarter ended 3/31/10	$	%	Quarter ended 6/30/09	$	%			$		%

Balance Sheet

Total assets	$ 280,305,318	$ 266,682,688	$ 13,622,630	5%	$ 241,166,471	$ 39,138,847	16%	$ 265,105,193		$ 15,200,125			6%
Gross loans	166,675,976	154,909,333	11,766,643	8%	153,125,700	13,550,276	9%	156,525,733		10,150,243			6%
Allowance for loan losses	3,296,516	3,101,973	194,543	6%	2,573,712	722,804	28%	2,898,478		398,038			14%
Non interest-bearing deposits	85,476,928	78,205,969	7,270,959	9%	63,345,521	22,131,407	35%	75,895,196		9,581,732			13%
Total deposits	253,314,190	243,217,097	10,097,093	4%	218,706,526	34,607,664	16%	239,303,637		14,010,553			6%
Shareholders' equity	20,464,265	19,940,150	524,115	3%	19,052,975	1,411,290	7%	19,592,977		871,288			4%

Income Statement
								Six-months ended 6/30/10	Six-months ended 6/30/09	Change
								Six-months ended 6/30/10	Six-months ended 6/30/09	$		%
Interest income	3,200,952	3,040,709	160,243	5%	$ 2,870,110	330,842	12%	$ 6,241,661	$ 5,637,439	$ 604,222		11%
Interest expense	259,269	299,831	(40,562)	-14%	385,148	(125,879)	-33%	559,100	851,166	(292,066)		-34%
Net interest income	2,941,683	2,740,878	200,805	7%	2,484,962	456,721	18%	5,682,561	4,786,273	896,288		19%

Provision for loan losses	305,000	246,099	58,901	24%	178,142	126,858	71%	551,099	298,142	252,957		85%
Non-interest income	604,881	475,682	129,199	27%	518,866	86,015	17%	1,080,563	852,490	228,073		27%
Non-interest expense	2,605,050	2,507,037	98,013	4%	2,718,055	(113,005)	-4%	5,112,087	5,194,217	(82,130)		-2%
Net income before taxes	636,514	463,424	173,090	37%	107,631	528,883	491%	1,099,938	146,404	953,534		651%
Income tax expense	267,365	195,444	71,921	37%	41,388	225,977	546%	462,809	57,652	405,157		703%
Net income after taxes	$ 369,149	$ 267,980	101,169	38%	$ 66,243	302,906	457%	$ 637,129	$ 88,752	548,377		618%


Ratios
Net interest margin	4.61%	4.49%			4.58%			4.55%	4.46%
Equity capital-to-total assets	7.3%	7.5%			7.9%			7.4%	7.9%