Santa Cruz County Bank Reports Earnings for the First Quarter Ended March 31, 2014

Gross loans increase 21% over prior year

Strong first quarter earnings follow eight consecutive years of annual profits

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Apr 17, 2014, 04:30 ET

SANTA CRUZ, Calif., April 17, 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 first quarter ended March 31, 2014.

FIRST QUARTER: MARCH 31, 2014 COMPARED TO DECEMBER 31, 2013
Net income increased $10.9 thousand or 1% to $868.5 thousand
Total deposits increased $6.1 million or 2% to $366.3 million
Gross loans increased $20.0 million or 8% to $278.2 million
Total assets increased $8.7 million or 2% to $407.3 million

YEAR TO YEAR: MARCH 31, 2014 COMPARED TO MARCH 31, 2013
Net income increased $69.5 thousand or 9% to $868.5 thousand
Total deposits increased $34.6 million or 10% to $366.3 million
Gross loans increased $47.7 million or 21% to $278.2 million
Total assets increased $40.4 million or 11% to $407.3 million

David V. Heald commented, "During the quarter we celebrated the tenth anniversary of providing financial services to our community. In the past decade we have established our mission to be the local community bank of choice and lender of choice. Our reputation as a leading lender with responsive decision making has fueled loan production and contributed to the Bank's solid quarterly earnings and continued growth in the first quarter of 2014."

Non-interest bearing deposits increased to 45% of total deposits as of March 31, 2014 compared to 41% as of March 31, 2013.

FIRST QUARTER HIGHLIGHTS:

The Bank celebrated its tenth anniversary in February.

The Bank's Board of Directors declared a special cash dividend in the amount of $0.05 per share.

The Bank was approved as a direct lender with Farmer Mac.

The Bank was named a "Super Premier" performing bank by The Findley Reports, Inc. for its 2013 financial performance.

The Bank received a 4-Star "Excellent" rating by Bauer Financial, Inc. for its fourth quarter 2013 performance.

Voted Best Bank in Santa Cruz County in the 2014 Good Times Readers Poll.

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: Santa Cruz County Bank ranked 103^rd 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.

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)
	April 17, 2014

			Change			Change
	Quarter ended 3/31/14	Quarter ended 3/31/13	$	%	Quarter ended 12/31/13	$	%

Balance Sheet

Total assets	$ 407,261,570	$ 366,909,124	$ 40,352,446	11%	$ 398,578,084	$ 8,683,486	2%
Gross loans	278,164,941	230,510,408	47,654,533	21%	258,128,446	20,036,495	8%
Allowance for loan losses	5,827,129	5,292,101	535,028	10%	5,705,862	121,267	2%
Non interest-bearing deposits	164,354,466	135,533,519	28,820,947	21%	166,021,518	(1,667,052)	-1%
Total deposits	366,294,411	331,655,396	34,639,015	10%	360,239,748	6,054,663	2%
Shareholders' equity	34,931,507	30,581,461	4,350,046	14%	32,776,304	2,155,203	7%
Book value per share	$ 16.35	$ 15.55			$ 16.40

Income Statement

Interest income	4,213,273	3,584,716	628,557	18%	3,975,576	237,697	6%
Interest expense	100,574	108,221	(7,647)	-7%	98,614	1,960	2%
Net interest income	4,112,699	3,476,495	636,204	18%	3,876,962	235,737	6%

Provision for loan losses	187,500	150,000	37,500	25%	125,000	62,500	50%
Non-interest income	911,283	821,240	90,043	11%	943,758	(32,475)	-3%
Non-interest expense	3,432,396	2,860,480	571,916	20%	3,591,711	(159,315)	-4%
Net income before taxes	1,404,086	1,287,255	116,831	9%	1,104,009	300,077	27%
Income tax expense/(credit)	535,567	488,187	47,380	10%	246,419	289,148	117%
Net income after taxes	$ 868,519	$ 799,068	69,451	9%	$ 857,590	10,929	1%

BASIC EARNINGS PER SHARE	$ 0.41	$ 0.41			$ 0.43

Ratios
Net interest margin	4.28%	4.16%			4.08%
Tier 1 leverage ratio	8.70%	8.59%			8.21%