Santa Cruz County Bank Reports Unaudited Results for Second Quarter 2011 Ended June 30, 2011

Net income in second quarter 2011 improves by 45% over second quarter 2010

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Jul 11, 2011, 06:00 ET

SANTA CRUZ, Calif., July 11, 2011 /PRNewswire/ -- Santa Cruz County Bank, (SCZC.OB), a locally owned and operated full-service community bank headquartered in Santa Cruz County, today announced earnings for the second quarter ended June 30, 2011. For the period, the bank reported net income of $534,966 after taxes compared to $369,149 for the same period ended June 30, 2010, an improvement of 45%. Pretax income improved by $242,858 to $879,372 comparing June 30, 2011 to June 30, 2010. Net interest income for the six-month period ended June 30, 2011 improved by $414,950 over the same six month period of the prior year.

Basic earnings per share for the quarter ended June 30, 2011 were $0.28 compared to $0.22 for the second quarter of the prior year. Net interest margin for the second quarter ended June 30, 2011 was 4.64% as compared to 4.61% for the second quarter of 2010.

David Heald, President and CEO commented, "We reached milestone numbers in total assets and deposits this quarter. Historically we have seen a boost in second quarter deposits and over the past three years that growth has steadily increased. Our ongoing focus on strategic initiatives to build upon our solid franchise has resulted in the continued recognition of our bank's performance and an excellent reputation in the communities we serve."

Shareholders' equity for the quarter ended June 30, 2011 increased by $834,269 over the prior quarter ended March 31, 2011 and has increased by $4.5 million comparing June 30, 2011 to June 30, 2010.

QUARTER TO QUARTER: JUNE 30, 2011 COMPARED TO MARCH 31, 2011

Total deposits increased $18.7 million, 7% to $270.9 million

Gross loans increased $5.3 million, 3% to $172.3 million

Total assets increased $19.0 million, 7%, to $299.1 million

Net income increased $81,429, 18%, to $534,966

SIX-MONTHS ENDED: JUNE 30, 2011 COMPARED TO JUNE 30, 2010

Total deposits increased $17.6 million, 7% to $270.9 million

Gross loans increased $5.7 million, 3% to $172.3 million

Total assets increased $18.8 million, 7%, to $299.1 million

Net income increased $351,375, 55%, to $988,504

The bank's non-interest income increased $161,395 to $766,276 as of June 30, 2011 compared to the second quarter of the prior year.

Non-interest bearing deposits represented 36% of total deposits as of June 30, 2011, one of the strongest ratios in the industry.

For the past eleven consecutive quarters Santa Cruz County Bank has been rated a 4-Star "excellent" bank by Bauer Financial Services for its financial performance.

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, 2011


			Change			Change				Change
	Quarter ended 6/30/11	Quarter ended 3/31/11	$	%	Quarter ended 6/30/10	$	%	Year ended 12/31/10		$	%

Balance Sheet

Total assets	$ 299,105,147	$ 280,088,758	$ 19,016,389	7%	$ 280,305,318	$ 18,799,829	7%	$ 284,906,203		$ 14,198,944	5%
Gross loans	172,349,451	167,010,330	5,339,121	3%	166,675,976	5,673,475	3%	181,450,788		(9,101,337)	-5%
Allowance for loan losses	3,815,266	3,581,729	233,537	7%	3,296,516	518,750	16%	3,558,521		256,745	7%
Non interest-bearing deposits	97,628,052	89,057,968	8,570,084	10%	85,476,928	12,151,124	14%	94,326,653		3,301,399	3%
Total deposits	270,885,162	252,172,712	18,712,450	7%	253,314,190	17,570,972	7%	253,416,044		17,469,118	7%
Shareholders' equity	25,011,061	24,176,792	834,269	3%	20,464,265	4,546,796	22%	23,570,352		1,440,709	6%

Income Statement										Change
								Six-months ended 6/30/11	Six-months ended 6/30/10	$	%
Interest income	3,227,189	$ 3,172,337	54,852	2%	3,200,952	26,237	1%	$ 6,399,526	$ 6,241,661	$ 157,865	3%
Interest expense	147,329	154,686	(7,357)	-5%	259,269	(111,940)	-43%	302,015	559,100	(257,085)	-46%
Net interest income	3,079,860	3,017,651	62,209	2%	2,941,683	138,177	5%	6,097,511	5,682,561	414,950	7%

Provision for loan losses	300,000	582,500	(282,500)	-48%	305,000	(5,000)	-2%	882,500	551,099	331,401	60%
Non-interest income	766,276	882,225	(115,949)	-13%	604,881	161,395	27%	1,648,501	1,080,563	567,938	53%
Non-interest expense	2,666,764	2,590,056	76,708	3%	2,605,050	61,714	2%	5,256,819	5,112,087	144,732	3%
Net income before taxes	879,372	727,320	152,052	21%	636,514	242,858	38%	1,606,693	1,099,938	506,755	46%
Income tax expense	344,406	273,783	70,623	26%	267,365	77,041	29%	618,189	462,809	155,380	34%
Net income after taxes	$ 534,966	$ 453,537	81,429	18%	$ 369,149	165,817	45%	$ 988,504	$ 637,129	351,375	55%

BASIC EARNINGS PER SHARE	$ 0.28	$ 0.24			$ 0.22			$ 0.52	$ 0.38

BOOK VALUE PER SHARE	$ 13.10	$ 12.67			$ 12.27

Ratios
Net interest margin	4.64%	4.65%			4.61%			4.67%	4.55%
Equity capital-to-total assets	8.4%	8.6%			7.3%			8.3%	7.3%