Santa Cruz County Bank (OTC: SCZC) Reports Earnings for the 1st Quarter Finished March 31, 2K19


Santa Cruz County Bank (OTC: SCZC), a top-rated, locally owned and operated full-service community bank headquartered in Santa Cruz County, recently declared unaudited net income for the 1st quarter finished March 31, 2K19 of $2.96M.

This represents a boost of 17 percent comparing this quarter with the similar quarter in 2K18. For the quarter, basic earnings per share raised $0.16 to $1.21, a 15 percent raise over the 1st quarter in 2K18.

Pretax income for the quarter finished March 31, 2K19 was $4.16M, a boost of $592 thousand, 17 percent, a difference to $3.57M for the quarter finished March 31, 2K18.

President and C-E-O David V. Heald commented, “We achieved greater returns Y-o-Y for our 1st quarter, with $2.96M in net income and 17 percent development over the 1st quarter of last year. We continue to receive recognition highlighting the strength of our bank’s sustained financial performance as evidenced by our ninth designation as a Super Premier performing bank by the Findley Reports, Inc. for 2K18.”

1st Quarter Financial Highlights:

  • Net interest margin of 4.92 percent
  • 1st quarter return on average assets and equity of 1.80 percent and 17.07 percent, respectively
  • Well capitalized with a whole risk-based capital ratio of 15.36 percent
  • Continued exceptional credit quality with no loans on non-accrual
  • 3 percent development in loans, $15.7M raise over the 1st quarter of 2K18
  • 1 percent development in deposits, $5.4M raise over the 1st quarter of 2K18
  • Basic earnings per share raised to $1.21 from $1.05 over the 1st quarter of 2K18
  • Book value per share after dividends raised by $4.61 or 19 percent, to $29.14 over the 1st quarter of 2K18

Loans, Asset Quality & Deposits

Whole assets grew by $5.7M to $668M in the 1st quarter and by $22.7M over the last twelve months. The Bank’s asset quality remained exceptional. For the 1st quarter, gross loans declined by $2.9M, but Y-o-Y raised $15.7M, 3 percent to $484.9M. Allowance for loan losses of $9.8M at March 31, 2K19 represents a 5 percent raise over the similar period last year. No provisions for loan and lease losses were recorded for the current reporting quarter because of portfolio quality and decline in outstanding loans, partially the result of loan sales. Deposits declined by less than 1 percent, $2.4M since December 31, 2K18. Y-o-Y, non-interest bearing deposits grew by 7 percent.

Non-Interest Income / Cost and Net Interest Margin

A component of the Bank’s core business is the origination and sale of loans generated by its top producing SBA Department which results in gains that are included in non-interest income.  For the 1st quarter of 2K19, the non-interest income whole was $864 thousand which included $268 thousand of benefits on loans sold.  There were no gains taken on loans sold in the fourth quarter of 2K18, which represents the variance between the two quarters.

Non-interest cost for the three months finished March 31, 2K19, raised 13 percent or $513 thousand difference to the prior quarter and raised 12 percent or $494 thousand difference to the similar period last year.  The more recent variance is because of the general raise in budgeted cost accruals for the 1st quarter.

Net interest income of $7.8M for the quarter finished March 31, 2K19 was equivalent to the prior quarter but exceeded the 1st quarter of 2K18 by $1.0M or 14 percent. The Y-o-Y improvement is driven by a continued focus on building high quality earning assets through loan production and the benefit from rate raises implemented by the Federal Open Market Committee. As A Result, net interest margin at 4.92 percent improved 45 basis points over the prior year.

Stockholders’ Equity

Whole stockholders’ equity was $71.5M at March 31, 2K19, an $11.6M, 19 percent raise over March 31, 2K18. The value added to our stockholders was because of continued strong earnings. This raise was declined by the payout of quarterly cash dividends. Ordinary stock cash dividends totaled $183 thousand or $0.075 per share for the quarter finished March 31, 2K19. Historically, the Bank has paid twenty-four successive cash dividends and issued one 10 percent stock dividend to stockholders.

For the three months finished March 31, 2K19, the Bank’s return on average equity was 17.07 percent and returned on average assets was 1.80 percent. The book value per share of Santa Cruz County Bank’s common stock at March 31, 2K19 was $29.14, up from $24.53 for the similar period in 2K18.


The Bank’s Annual Meeting of Stockholders will be held May 29, 2K19 at the Sesnon House at Cabrillo College, 4:00 p.m. Pacific Daylight Time.


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