July 15--SANTA CRUZ -- Santa Cruz County Bank posted a profit of $1 million for the quarter ending June 30, up 18 percent from the prior quarter and up 24 percent from a year ago.
Loans at the 10-year-old locally owned bank totaled $293 million, growing 5 percent -- $14.9 million -- from the prior quarter and up 23 percent from a year ago.
David Heald, bank president and chief executive officer, said loan production for the quarter totaled $25.5 million and loan payoffs of $9 million.
There were seven commercial real estate loans for $8.6 million, 17 commercial loans for $4.6 million and four construction loans for $2 million, Heald said.
He noted the bank extended seven home equity lines of credit, a type of borrowing that dried up after the housing market crashed.
Home equity loans are back countywide, with homeowners and condo owners tapping the equity restored as values rebound.
The 177 home equity lines originated in Santa Cruz County in the first quarter represented the highest for any first quarter since precrash 2008, when there were 561, according to DataQuick.
Loans guaranteed by the U.S. Small Business Administration are back, with Santa Cruz County Bank making six SBA loans totaling $8.6 million in the second quarter. That represents an increase in activity considering the bank's 16 SBA loans in 2013 totaled $7.6 million.
Heald said joining the Farmer Mac program eight months ago has paid off, with Santa Cruz County Bank financing the purchase of Pajaro Valley ag land.
The bank also is financing expansion of Wonderfully Raw in Watsonville, started by chef Sequoia Cheney and her husband Jack, which makes snacks such as Coco-Roons and Brussel Bytes from original recipes.
Deposits at Santa Cruz County Bank grew to $398 million, up 9 percent during the quarter and up 15 percent from a year ago, which Heald attributed to new ag accounts and existing customers seeing revenues grow.
"The economy is getting better," he said.
Noninterest-bearing deposits grew 10 percent for the quarter, up 18 percent from a year ago.
Heald said he saw an opportunity two years ago in Watsonville after First National Bank of Central California under ownership of Santa Barbara Bank & Trust was renamed and then acquired by Union Bank, whose parent company is Bank of Tokyo-Mitsubishi. Santa Cruz County Bank's net interest margin rose to 4.31 percent from 4.17 percent the previous quarter, with Heald explaining lower-yielding assets were converted to higher-yielding loans.
Assets grew to $440 million, up 8 percent during the quarter and up 15 percent from a year ago.
Shareholders' equity totaled $35.9 million, up 3 percent during the quarter and up 17 percent from a year ago.
Earnings were 48 cents per share, up from 42 cents per share a year ago. Heald said about a dozen bank employees participated in the American Cancer Society Relay for Life fundraiser last weekend at Cabrillo College.
This year's event hit close to home because Chris Maffia, a vice president at Santa Cruz Cruz Bank, is recovering from recent surgery.
(c)2014 the Santa Cruz Sentinel (Scotts Valley, Calif.)
Visit the Santa Cruz Sentinel (Scotts Valley, Calif.) at www.santacruzsentinel.com
Distributed by MCT Information Services