Santa Cruz County Bank Reports Earnings for the Second Quarter Ended June 30, 2013

Net Income Up 35% over Prior Year to Date

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Jul 18, 2013, 05:31 ET

SANTA CRUZ, Calif., July 18, 2013 /PRNewswire/ -- Santa Cruz County Bank (SCZC), a locally owned and operated full-service community bank headquartered in Santa Cruz County, today announced unaudited earnings for the second quarter ended June 30, 2013.

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SECOND QUARTER: JUNE 30, 2013 COMPARED TO MARCH 31, 2013
Net income increased $25.9 thousand, 3%, to $825.1 thousand
Total deposits increased $13.3 million, 4%, to $344.9 million
Gross loans increased $7.3 million, 3%, to $237.8 million
Total assets increased $14.2 million, 4%, to $381.2 million

SIX-MONTHS ENDED: JUNE 30, 2013 COMPARED TO JUNE 30, 2012
Net income increased $417.4 thousand, 35%, to $1.6 million
Total deposits increased $34.8 million, 11%, to $344.9 million
Gross loans increased $34.4 million, 17%, to $237.8 million
Total assets increased $39.8 million, 12%, to $381.2 million

David V. Heald commented, "Our strong second quarter results demonstrate successful implementation of key strategic initiatives to grow earning assets. Our capacity to increase earnings while experiencing an overall decline in yield on earning assets is primarily the result of shifting more earning assets into higher yielding loans. Our ability to increase loans by 17% over the prior year also demonstrates the Bank's commitment to support small business owners and the economic vitality of our community. We are proud to be an important economic partner in the success of our clients."

Non-interest bearing deposits continue to increase and represent 45% of total deposits as of June 30, 2013 compared to 40% as of June 30, 2012.

SECOND QUARTER HIGHLIGHTS:
The Bank declared a $0.05 cash dividend to shareholders of record as of June 28, 2013 and payable July 10, 2013.

The Bank ranked 103^rd in American Banker Magazine's "Top Performing 200 Community Banks and Thrifts in the United States" based upon 3-year average return on equity for the years ending December 31, 2010, 2011 and 2012. A total of 851 institutions were included in this rating.

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

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
2012, 2011 – "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
May 2013 - Santa Cruz County Bank ranked 103^rd in American Banker Magazine's "Top 200 Community Banks and Thrifts in the United States" based upon 3-year average return on equity.

Santa Cruz County Bank's common stock is listed Over the Counter (OTCQB) under the stock symbol SCZC.

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, 2013




			Change				Change
	Quarter ended 6/30/13	Quarter ended 6/30/12	$	%	Quarter ended 6/30/13	Quarter ended 3/31/13	$	%

BALANCE SHEET

Total assets	$ 381,152,211	$ 341,348,260	$ 39,803,951	12%	$ 381,152,211	$ 366,909,124	$ 14,243,087	4%
Gross loans	237,841,603	203,427,244	34,414,359	17%	237,841,603	230,510,408	7,331,195	3%
Allowance for loan losses	5,430,183	4,599,602	830,581	18%	5,430,183	5,292,101	138,082	3%
Non interest-bearing deposits	153,643,037	123,890,923	29,752,114	24%	153,643,037	135,533,519	18,109,518	13%
Total deposits	344,930,572	310,083,603	34,846,969	11%	344,930,572	331,655,396	13,275,176	4%
Shareholders' equity	30,724,547	27,769,566	2,954,981	11%	30,724,547	30,581,461	143,086	0%

BOOK VALUE PER SHARE	$ 15.61	$ 14.43			$ 15.61	$ 15.55

INCOME STATEMENT							Change
					Six-months ended 6/30/13	Six-months ended 6/30/12	$	%
Interest income	3,722,718	3,409,862	312,856	9%	7,307,434	6,776,978	$ 530,456	8%
Interest expense	105,812	120,303	(14,491)	-12%	214,033	241,199	(27,166)	-11%
Net interest income	3,616,906	3,289,559	327,347	10%	7,093,401	6,535,779	557,622	9%

Provision for loan losses	150,000	300,000	(150,000)	-50%	300,000	600,000	(300,000)	-50%
Non-interest income	822,688	572,654	250,034	44%	1,643,928	1,099,523	544,405	50%
Non-interest expense	2,966,070	2,566,367	399,703	16%	5,826,550	5,127,850	698,700	14%
Net income before taxes	1,323,524	995,846	327,678	33%	2,610,779	1,907,452	703,327	37%
Income tax expense	498,472	362,643	135,829	37%	986,659	700,765	285,894	41%
Net income after taxes	$ 825,052	$ 633,203	191,849	30%	$ 1,624,120	$ 1,206,687	417,433	35%

BASIC EARNINGS PER SHARE	$ 0.42	$ 0.33			$ 0.83	$ 0.63

RATIOS
Net interest margin	4.17%	4.28%
Tier 1 leverage ratio	8.57%	8.42%