Santa Cruz County Bank Reports Record Earnings for the Third Quarter Ended September 30, 2014

Net income growth of 26% over prior year to date

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Oct 21, 2014, 07:57 ET

SANTA CRUZ, Calif., Oct. 21, 2014 /PRNewswire/ -- Santa Cruz County Bank (OTCQB: SCZC), a locally owned and operated full-service community bank headquartered in Santa Cruz County, today announced unaudited earnings for the third quarter ended September 30, 2014. The Bank's net income increased by 18% over the prior quarter to a record of $1.2 million and increased by 26% to a record of $3.1 million for the nine-month period compared to the same nine-month period the prior year.

THIRD QUARTER: SEPTEMBER 30, 2014 COMPARED TO JUNE 30, 2014
Net income increased $185.6 thousand, 18%, to $1.2 million
Total deposits increased $15.6 million, 4%, to $413.9 million
Gross loans increased $3.6 million, 1%, to $296.7 million
Total assets increased $17.2 million, 4%, to $457.2 million

NINE-MONTHS ENDED: SEPTEMBER 30, 2014 COMPARED TO SEPTEMBER 30, 2013
Net income increased $641.1thousand, 26%, to $3.1 million
Total deposits increased $47.8 million, 13%, to $413.9 million
Gross loans increased $56.7 million, 24%, to $296.7 million
Total assets increased $54.1 million, 13%, to $457.2 million

David V. Heald, President and CEO, commented, "We are pleased to announce a significant increase in our earnings for the quarter and year over year. The Bank's Board of Directors and Management have built sustainable growth in earnings, assets, loans and deposits while controlling expenses, resulting in greater value for our shareholders. We look forward to reporting another solid year of growth."

The Bank's non-interest bearing deposits, as of September 30, 2014 were 47% of total deposits as compared to 45% as of June 30, 2014.

THIRD QUARTER HIGHLIGHTS:

The Bank declared a $0.05 quarterly cash dividend to shareholders of record as of September 25, 2014 and payable on October 10, 2014.

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

As of June 30, 2014 FDIC data, the Bank ranked 5^th in overall county wide deposit market share out of a total of 13 banks operating in Santa Cruz County.

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.

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

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.

American Banker Magazine
2013, 2014: Santa Cruz County Bank ranked in the "Top Performing 200 Community Banks and Thrifts in the United States" based upon three-year average return on equity.

Community Awards
Santa Cruz County Bank received the 2013 Volunteer Center of Santa Cruz County "Be the Difference" Business Award for its leadership and volunteer efforts.

2013, 2014: Santa Cruz County Bank was voted "Best Bank' in Santa Cruz County in the Good Times Readers poll.

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 9/30/14	Quarter ended 9/30/13	$	%	Quarter ended 6/30/14	$	%

Balance Sheet

Total assets	$ 457,158,173	$ 403,100,870	$ 54,057,303	13%	$ 439,992,414	$ 17,165,759	4%
Gross loans	296,683,465	239,981,790	56,701,675	24%	293,033,660	3,649,805	1%
Allowance for loan losses	6,213,113	5,484,181	728,932	13%	6,025,201	187,912	3%
Non interest-bearing deposits	193,884,773	174,943,138	18,941,635	11%	181,035,204	12,849,569	7%
Total deposits	413,930,091	366,084,545	47,845,546	13%	398,369,869	15,560,222	4%
Shareholders' equity	37,147,917	31,597,089	5,550,828	18%	35,869,952	1,277,965	4%

BOOK VALUE PER SHARE	$ 17.38	$ 15.94			$ 16.79

Income Statement										Change
								Nine-months ended 9/30/14	Nine-months ended 9/30/13	$	%
Interest income	4,457,467	3,823,746	633,721	17%	4,453,668	3,799	0%	13,124,408	11,131,180	$ 1,993,228	18%
Interest expense	107,368	101,119	6,249	6%	101,092	6,276	6%	309,034	315,152	(6,118)	-2%
Net interest income	4,350,099	3,722,627	627,472	17%	4,352,576	(2,477)	0%	12,815,374	10,816,028	1,999,346	18%

Provision for loan losses	187,500	62,500	125,000	200%	187,500	-	0%	562,500	362,500	200,000	55%
Non-interest income	938,444	742,264	196,180	26%	779,301	159,143	20%	2,629,028	2,386,192	242,836	10%
Non-interest expense	3,126,210	3,068,670	57,540	2%	3,282,676	(156,466)	-5%	9,841,282	8,895,220	946,062	11%
Net income before taxes	1,974,833	1,333,721	641,112	48%	1,661,701	313,132	19%	5,040,620	3,944,500	1,096,120	28%
Income tax expense	768,520	503,434	265,086	53%	641,013	127,507	20%	1,945,100	1,490,093	455,007	31%
Net income after taxes	$ 1,206,313	$ 830,287	376,026	45%	$ 1,020,688	185,625	18%	$ 3,095,520	$ 2,454,407	641,113	26%

BASIC EARNINGS PER SHARE	$ 0.57	$ 0.42			$ 0.48			$ 1.46	$ 1.25

Ratios
Net interest margin	3.93%	3.94%			4.31%			4.17%	4.09%
Tier 1 leverage ratio	8.26%	8.15%			8.62%