Santa Cruz County Bank shareholders celebrate Q1 gain

David-HealdAPTOS—Santa Cruz County Bank shareholders celebrated a record profit last year and a 15 percent jump in shareholder value in the first quarter of this year at the company’s annual shareholder meeting Thursday.

As of just two months ago, shareholder value climbed 23.9 percent in the previous 12 months.

“This year was fantastic,” said David Heald, president and CEO of the company. “Everything we’ve been working hard on has been coming together and paying off. The years of planning and executing the plan is showing up in our numbers.”

Bank executives pointed at an overall improving economy that is reflected in increasing number of business loans, including construction, real estate and Small Business Administration backed loans. Heald was particularly happy to report that the loan/deposit ratio had climbed to more than 80 percent.

The company, which has seen double-digit growth in profits in the past four years, reported more than $4.37 million in net income for 2014 and a record loan production of $134 million in 2014. In the first quarter, the bank booked $38.76 million in loans, $10 million more than in the first quarter a year ago.

“We are well on our way to achieving our goals for 2015,” said Angelo DeBernardo Jr., senior vice president and senior loan officer. In addition to strong loan production and credit quality, business loans increa sed 43 percent in 2014. “We continue to see strong growth in agriculture segment, particularly in South County.”

Local agriculture-related businesses seem to be doing well despite the drought, DeBernardo said, noting that the bank has integrated greater due diligence in well testing, water quality and well capacity. The bank has also focused on niche businesses such as wineries, craft breweries and truck owners who are mandated to refit their vehicles.

As of June 30, the bank had 8.42 percent of a $4.7 billion commercial market, an increase from 7.77 percent in 2013 when the market was just $4.4 billion. For the bank it translated to a $54 million increase.

“Even though the market grew, we still had a bigger share of it,” Heald said.

Santa Cruz County Bank ranked fifth in Santa Cruz County market share behind much larger banks — Wells Fargo, Bank of America, Comerica and JP Morgan/Chase. Comerica was the only higherranking bank to gain market share last year.

Santa Cruz County Bank was the top SBA lender in Santa Cruz County, the sixth largest in Silicon Valley/ San Francisco district and the 37th largest in California out of 200 lenders.

“We’ve grown each year, even in the most difficult economies,” DeBernardo said.

Executives said they planned to grow loans from about $315.6 million in 2014 to $358.4 million by the end of 2015. They planned to increase efficiencies in processes this year and focus on relationship banking practices.

Next month selected customers will be able to send a picture of their checks to deposit. The bank is also planning to introduce chip-secured debit and credit cards this year and, in the next 12 months, ATM deposits without envelopes and new mobile business feature are planned.

“The Santa Cruz County bank is consistently being recognized for its performance,” said Gary Findley, a shareholder and producer of the Findley Report, which has rated the bank a “Super Premier Performing Bank” for five consecutive years. “We see an institution that’s in the top 5 percent of all the banking institutions in the west. What you see is what you get. It’s basically core earnings.”



What: Santa Cruz County Bank provides commercial and personal banking services in Santa Cruz County. It operates offices in Aptos, Capitola, Santa Cruz, Scotts Valley and Watsonville and has two free-standing ATM and night depositories in Santa Cruz and Aptos.

History: Incorporated in 2003. 

Employess: The company employs 82full-time people and has seven open positions.

Stock: Shares trading over the counter as SCZC held steady Thursday to close at $25.25. The 52-week range is $19.31to $26.75.

Financials: The company reported a profit of $1.25million for the first quarter, up 44percent from a year ago. Earnings per share were 58cents compared to 41cents a year ago. Shareholders’ equity was $40million, up 15percent from a year ago.

Guidance: The company forecast loan totals of $358.4 million for 2015.

This article first appeared in the Santa Cruz Sentinel.


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