Santa Cruz County Bank Reports Earnings for the First Quarter Ended March 31, 2015

Net income increases 44% over prior year

Loans increase 18%, Assets increase 17%, Deposits increase 17% over prior year

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Apr 23, 2015, 04:30 ET

SANTA CRUZ, Calif., April 23, 2015 /PRNewswire/ -- Santa Cruz County Bank (OTCQX: SCZC), a top rated and locally owned and operated full-service community bank headquartered in Santa Cruz County, today announced unaudited net income for the first quarter ended March 31, 2015 of $1.25 million, a 44% increase over the prior year. Earnings per share for the first quarter increased to $0.58 compared to $0.41 the prior year.

For the period ended March 31, 2015, the Bank's return on average equity was 12.78% and return on average assets was 1.09%. The book value per share of Santa Cruz County Bank's common stock at March 31, 2015 was $18.62 up from $16.35 for the same period in 2014. Shareholders' equity increased by $5.1 million, 15% to $40.0 million as of March 31, 2015 over the prior year.

FIRST QUARTER: MARCH 31, 2015 COMPARED TO DECEMBER 31, 2014
Total deposits increased $14.1 million or 3% to $428.1 million
Gross loans increased $13.6 million or 4% to $329.2 million
Total assets increased $15.3 million or 3% to $474.5 million
Net income decreased $25.5 thousand or -2% to $1.25 million

YEAR TO YEAR: MARCH 31, 2015 COMPARED TO MARCH 31, 2014
Total deposits increased $61.8 million or 17% to $428.1 million
Gross loans increased $51.1 million or 18% to $329.2 million
Total assets increased $67.3 million or 17% to $474.5 million
Net income increased $381.6 thousand or 44% to $1.25 million

The Bank's reputation as a leading lender with responsive decision making has continued to drive its loan production. For the first quarter, gross loans increased 4%, and year over year increased 18% or $51.1 million. The Bank had zero loans on non-accrual and no OREO at March 31, 2015.

David V. Heald commented, "We are very pleased to report a 44% increase in earnings over our prior year. Our superior earnings have resulted from a $51 million in growth in loans over the past 12 months. Deposits have increased 17% or $62 million, which represents a further strengthening of our market share, and pushes us over the $474 million mark in total assets."

"During the first quarter, our stock began trading on the OTCQX market. We believe this upgrade will have a positive long term impact for our stock, improving market visibility and liquidity, thus creating greater value for our shareholders."

"As the result of our continued delivery of exceptional service, strong financial performance and commitment to building value for our shareholders, our Bank was recognized locally, statewide and nationally with top rankings and awards during the first quarter. We're pleased to share the highlights of these accomplishments in this release."

FIRST QUARTER HIGHLIGHTS:

The Bank declared a $0.05 quarterly cash dividend to shareholders of record as of March 27, 2015, which was payable on April 10, 2015.

The Bank's stock commenced trading on the OTCQX, the top securities market for U.S. over-the-counter equities.

The Bank ranked 4^th in overall performance among 202 California banks in 2014 by Financial Management Consulting Group and ranked 1^st (lowest) in nonperforming assets.

For a fifth consecutive year, the Bank was named a "Super Premier" performing bank by The Findley Reports, Inc. for its financial performance.

The Bank received a 4-Star "Excellent" rating by Bauer Financial, Inc. for its fourth quarter 2014 performance.

For a third consecutive year, the Bank was voted #1 "Best Bank" in Santa Cruz County in the 2015 Good Times Readers' poll.

ANNUAL MEETING NOTICE
The Bank will hold its Annual Meeting of Shareholders on May 21, 2015 at Seascape Resort at 4:00 p.m. Pacific Daylight Time.

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, and online banking bill payment and cash management. For the past seven years, the Bank's SBA Department has been recognized as a top SBA lender in Santa Cruz County for 7a and 504 loans.

NATIONAL, STATE, AND LOCAL RATINGS & AWARDS

American Banker Magazine
2014, 2013: Santa Cruz County Bank ranked 115^th out of 851 institutions in American Banker Magazine's "Top Performing 200 Community Banks and Thrifts in the United States" based upon three-year average return on equity.

Financial Management Consulting Group
2014: Santa Cruz County Bank ranked 4^th out of 202 California banks in overall performance and ranked 1^st (lowest) in non-performing assets.

Bauer Financial Reports, Inc.
Santa Cruz County Bank has received the distinction of 4-Star "Excellent" and 5-Star "Superior" by Bauer Financial Reports, Inc., for its financial performance every quarter since 2007.

The Findley Reports, Inc.
2012: One of eleven "Exceptional" Banks in California
2014, 2013, 2012, 2011, 2010: "Super Premier" Performing Bank

COMMUNITY AWARDS AND RECOGNITION
2013: Volunteer Center of Santa Cruz County "Be the Difference" Business Award for leadership and volunteerism.

2015, 2014, 2013: Voted "Best Bank' by the readers of Good Times, a weekly publication with distribution throughout Santa Cruz County.

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)
		April 23, 2015

			Change			Change
	Quarter ended 3/31/15	Quarter ended 3/31/14	$	%	Quarter ended 12/31/14	$	%

Balance Sheet

Total assets	$ 474,535,002	$ 407,261,570	$ 67,273,432	17%	$ 459,246,504	$ 15,288,498	3%
Gross loans	329,220,953	278,164,942	51,056,011	18%	315,621,461	13,599,492	4%
Allowance for loan losses	6,560,060	5,827,129	732,931	13%	6,402,752	157,308	2%
Non interest-bearing deposits	173,573,733	164,354,466	9,219,267	6%	191,789,387	(18,215,654)	-9%
Total deposits	428,119,862	366,294,411	61,825,451	17%	413,986,333	14,133,529	3%
Shareholders' equity	40,012,363	34,931,507	5,080,856	15%	38,629,400	1,382,963	4%

BOOK VALUE PER SHARE	$ 18.62	$ 16.35			$ 18.04

Income Statement

Interest income	4,706,672	4,213,273	493,399	12%	4,546,180	160,492	4%
Interest expense	110,826	100,574	10,252	10%	107,262	3,564	3%
Net interest income	4,595,846	4,112,699	483,147	12%	4,438,918	156,928	4%

Provision for loan losses	187,500	187,500	-	0%	187,500	-	0%
Non-interest income	908,685	911,283	(2,598)	-0.3%	682,418	226,267	33%
Non-interest expense	3,290,381	3,432,396	(142,015)	-4%	2,819,782	470,599	17%
Net income before taxes	2,026,650	1,404,086	622,564	44%	2,114,054	(87,404)	-4%
Income tax expense	776,498	535,567	240,931	45%	838,387	(61,889)	-7%
Net income after taxes	$ 1,250,152	$ 868,519	381,633	44%	$ 1,275,667	(25,515)	-2%

BASIC EARNINGS PER SHARE	$ 0.58	$ 0.41			$ 0.60


Ratios
Net interest margin	4.17%	4.28%			3.95%
Tier 1 leverage ratio	8.68%	8.70%			8.39%
Return on average equity	12.78%	10.17%			13.31%
Return on average assets	1.09%	0.86%			1.09%
Efficiency ratio	59.78%	68.32%			55.05%