Santa Cruz County Bank Reports Continued Strong Earnings for the Second Quarter Ended June 30, 2015, $500 Million in Assets

Jul 16, 2015, 17:30 ET from Santa Cruz County Bank

SANTA CRUZ, Calif., July 16, 2015 /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 quarter ended June 30, 2015 of $1.35 million or $0.63 basic earnings per share.

President and CEO David V. Heald commented, "Reaching a half billion dollars in asset size marks the achievement of a long term strategic vision for our company. Our mission is to build shareholder value through consistent growth in assets and earnings."

Selected financial information is presented in the following table:


Six- months ended June 30,

Year ended


2015

2014

12/31/14

Balance Sheet




Total assets

$        500,494,009

$        439,992,414

$   459,246,504

Gross loans

336,999,353

293,033,660

315,621,461

Allowance for loan losses

6,812,866

6,025,201

6,402,752

Non interest-bearing deposits

193,775,744

181,035,204

191,789,387

Total deposits

452,438,802

398,369,869

413,986,333

Shareholders' equity

41,225,768

35,869,952

38,629,400





Net Income

$            2,600,776

$             1,889,207

$        4,371,187

Ratios




Net interest margin

4.26%

4.31%

4.11%

Tier 1 leverage ratio

8.61%

8.62%

8.39%

Return on average assets

1.12%

0.97%

1.00%

Return on average equity

13.22%

11.48%

12.04%

Efficiency ratio

58.92%

63.97%

61.54%





Share and Per Share Data




Basic earnings per common share

$1.21

$0.89

$2.05

Book value per common share

$19.18

$16.79

$18.04

Total common shares outstanding

2,149,283

2,136,230

2,141,253

Second Quarter Earnings
Net income of $1.35 million for the quarter ended June 30, 2015 increased 8% compared to the prior quarter and increased 38% comparing the first six-months of 2015 to the same six-month period in 2014. Basic earnings per share increased $0.32, a 36% increase over the prior year. Improvement in net income and earnings per share resulted from:

  • Non-interest income growth exceeded an increase in non-interest expense, primarily attributable to gains generated from SBA loan sales, which is an integral component of the bank's business plan.
  • Increased interest income resulting from the successful deployment of deposit growth into high quality loans that provide a higher return than investments.

Pretax income for the six-months ended June 30, 2015 was $4.3 million, an increase of $1.2 million or 40% over $3.1 million for the prior year six-month period.

Basic earnings per share for the second quarter increased to $0.63 compared to $0.48 the prior year.

Key Highlights:

  • Total Assets exceeded $500 million
  • Return on Average Assets and Equity of 1.12% and 13.22%, respectively
  • Net Interest Margin of 4.26%
  • Growth in loans of $44 million over the last twelve months
  • Growth in deposits of $54 million over the last twelve months
  • Well capitalized with a total risk based capital ratio of 13.14%
  • Continued exceptional credit quality with no loans past due 30 days or more 
  • Increase in earnings per share to $0.63, up from $0.58 for the prior quarter
  • Paid ninth cash dividend of $0.05 on July 14, 2015

Loans, Asset Quality & Deposits
Total asset growth of $60 million to $500 million follows a $58 million increase for the same six-month period a year ago. The bank's asset quality remained exceptional with zero nonperforming loans. The bank's reputation as a leading lender with responsive decision making has continued to drive its loan production. For the second quarter, gross loans increased 2%, and year over year increased 15% or $44 million to $337 million.

Deposits grew by more than 14% or $54 million since June 30, 2014.  Approximately $34 million of this growth was within the demand deposit category, furthering the bank's core strength of generating lower cost funding for deployment into the community as loans.  Cost of funds year-to-date remains among the best in the bank's national peer group.  

Non-interest income and Net Interest Margin 
Comparing the six-month period ended June 30, 2015 to the same period in 2014, growth in non-interest income more than offset an increase in non-interest expense.  This was primarily attributable to gains generated from SBA loan sales and the servicing income derived from those sales, which is an integral component of the bank's business plan.  Although non-interest expense totals have grown, when expressed as a percentage of average assets the ratio has improved to 2.9% year to date 2015 from 3.3% year to date 2014, demonstrating Management's commitment to control expenses.

Second quarter 2015 net interest income at $4.9 million exceeded the same period last year by $581 thousand or 13% and also exceeded first quarter 2015 by $338 thousand or 7%.  Year-to-date 2015 net interest income exceeded the same period last year by $1.1 million or 13%.  

Net interest margin was 4.26% and 4.31% for the quarters ended June 30, 2015 and 2014, respectively and 4.22% and 4.30% for the six-month periods ended June 30, 2015 and 2014, respectively. Since the beginning of the economic crisis, economic conditions have pushed loan and interest rates downward, resulting in declining margins for the banking industry. Santa Cruz County Bank has mitigated this downward trend with a shift of earning assets from lower yielding investments into higher yielding loans.

Shareholders' Equity 
Total shareholders' equity was $41.2 million at June 30, 2015, a $5.4 million, 15% increase over June 30, 2014. The increase was due to continued strong earnings. This increase was offset by cash dividends paid. During the six-months ended June 30, 2015 the bank paid cash dividends totaling $214 thousand or $0.05 per share.  Common stock cash dividends totaled $418 thousand or $0.20 per share for the year ended December 31, 2014. A cash dividend of $0.05 was declared in June to shareholders of record as of July 1, 2015, which was paid on July 14, 2015.

For the period ended June 30, 2015, the Bank's return on average equity was 13.22% and return on average assets was 1.12%. The book value per share of Santa Cruz County Bank's common stock at June 30, 2015 was $19.18, up from $16.79 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 for 7a and 504 loans. 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 6/30/15

Quarter ended 6/30/14

$

%


Quarter ended 3/31/15

$

%




















Balance Sheet




























Total assets

$ 500,494,009

$ 439,992,414

$ 60,501,595

14%


$ 474,535,002

$ 25,959,007

5%






Gross loans

336,999,353

293,033,660

43,965,693

15%


329,220,953

7,778,400

2%






Allowance for loan losses

6,812,866

6,025,201

787,665

13%


6,560,060

252,806

4%






Non interest-bearing deposits

193,775,744

181,035,204

12,740,540

7%


173,573,733

20,202,011

12%






Total deposits

452,438,802

398,369,869

54,068,933

14%


428,119,862

24,318,940

6%






Shareholders' equity

41,225,768

35,869,952

5,355,816

15%


40,012,363

1,213,405

3%




















Income Statement












Change











Six-months ended 6/30/15

Six-months ended 6/30/14

$

%

Interest income

5,047,939

4,453,668

594,271

13%


4,706,672

341,267

7%


9,754,611

8,666,941

$ 1,087,670

13%

Interest expense

114,424

101,092

13,332

13%


110,826

3,598

3%


225,250

201,666

23,584

12%

Net interest income

4,933,515

4,352,576

580,939

13%


4,595,846

337,669

7%


9,529,361

8,465,275

1,064,086

13%















Provision for loan losses

187,500

187,500

-

0%


187,500

-

0%


375,000

375,000

-

0%

Non-interest income

1,050,029

779,301

270,728

35%


908,685

141,344

16%


1,958,714

1,690,584

268,130

16%

Non-interest expense

3,525,802

3,282,676

243,126

7%


3,290,381

235,421

7%


6,816,183

6,715,072

101,111

2%

Net income before taxes

2,270,242

1,661,701

608,541

37%


2,026,650

243,592

12%


4,296,892

3,065,787

1,231,105

40%

Income tax expense

919,618

641,013

278,605

43%


776,498

143,120

18%


1,696,116

1,176,580

519,536

44%

Net income after taxes

$     1,350,624

$     1,020,688

329,936

32%


$     1,250,152

100,472

8%


$   2,600,776

$   1,889,207

711,569

38%















Basic earnings per share

$              0.63

$              0.48




$              0.58




$            1.21

$            0.89



Book value per share

$            19.18

$            16.79




$            18.62




$          19.18

$          16.79

















Ratios














Net interest margin

4.26%

4.31%




4.17%




4.22%

4.30%



Tier 1 leverage ratio

8.61%

8.62%




8.68%








Return on average assets

1.12%

0.97%




1.09%








Return on average equity

13.22%

11.48%




12.78%








Efficiency ratio

58.92%

63.97%




59.78%








 

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SOURCE Santa Cruz County Bank



RELATED LINKS

http://www.sccountybank.com