Santa Cruz County Bank Reports First Quarter Results

Deposits increase by $27.3 million Assets surpass $187 million

SANTA CRUZ, Calif., April 17 /PRNewswire-FirstCall/ -- Santa Cruz County Bank, a locally owned and operated full-service community bank headquartered in Santa Cruz County, today announced financial results for the quarter ended March 31, 2008.

For the Bank's quarter ended March 31, 2008 compared to the previous quarter ended December 31, 2007:

-- Total deposits increased by $27.3 million, 20%, to $166.3 million

-- Gross loans increased by $5.1 million, 4%, to $124.4 million.

-- Total assets increased by $27.6 million, 17%, to $187.9 million

The Bank reported pre-tax net income of $323,580 for the quarter-ended March 31, 2008 compared to $505,842 reported for the quarter-ended December 31, 2007. On a year to year basis, comparing March 31, 2007 to March 31, 2008, the Bank's pre-tax net income increased by $11,952 or 4%.

Net interest income was $1,987,660 for the quarter-ended March 31, 2008 compared to $2,220,152 reported for the quarter-ended December 31, 2007. The decrease in the Bank's net interest income, the largest contributor to pre-tax income, is due to the decline in interest rates as a result of rate cuts by the Federal Reserve during the past six months. On a year to year basis, comparing March 31, 2007 to March 31, 2008, the Bank's net interest income increased by $255,718 or 15%.

David V. Heald, President and Chief Executive Officer stated, "Our considerable first quarter core deposit growth shows the community's continued support of its local community bank and its commitment to local reinvestment. We positioned ourselves for this tremendous growth in our first quarter through establishment of strategic banking locations and providing exceptional service. To further our commitment to the community we are setting a new standard in building by creating the first bank facility in the County designated to U.S. Green Building Council certification standards for LEED Commercial Interiors which is not a requirement, but a conscious choice on our part."

Highlights of recent activities:

Santa Cruz County Bank received Bauer Financial Reports' 5-Star rating, its highest award, for its fourth quarter 2007 results.

Renovation on the Bank's new facility at 720 Front Street in downtown Santa Cruz is underway. The Bank expects to relocate its main office in Santa Cruz to the new facility in summertime 2008. The Bank is renovating the facility to environmentally friendly standards certified by the U.S. Green Building Council. When completed, the new facility will apply to become certified under the U.S. Green Building Council's LEED(R) (Leadership in Energy and Environmental Design) program. Once certified, the project will represent the County's first LEED for Commercial Interiors Certified building and bank designed to LEED Silver Certification standards of the U.S. Green Building Council. The LEED Green Building Rating System is the nationally accepted benchmark for the design, construction, and operation of high performance green buildings. Currently there is only one Bank in California with a LEED certified building.

About Santa Cruz County Bank

Headquartered in Santa Cruz, Santa Cruz County Bank is a full service bank serving the banking needs of individuals and businesses throughout Santa Cruz County. The Bank operates four full-service banking offices, a Business Lending Office, and two stand alone ATM & Night Depository kiosks. The Bank's full-service banking offices are located in Capitola, Santa Cruz, Scotts Valley and Watsonville. The Bank first commenced operations on February 3, 2004 in Santa Cruz.

Santa Cruz County Bank's common stock is listed on the Over the Counter (OTC) Bulletin Board under the stock symbol SCZC. More information on the Bank may be obtained through its website: http://www.sccountybank.com/ or by calling (831) 457-5000.

Forward-looking Statements

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)

March 31, 2008

Quarter ended Quarter ended Change
3/31/08 12/31/07 $ %
Balance Sheet

Total assets $187,861,217 $160,239,027 $27,622,190 17%
Gross loans 124,363,503 119,226,597 5,136,906 4%
Allowance for loan losses 1,865,960 1,788,000 77,960 4%
Non interest-bearing
deposits 49,237,405 44,200,648 5,036,757 11%
Total deposits 166,307,430 139,008,868 27,298,562 20%
Shareholders' equity 19,430,476 18,971,750 458,726 2%

Income Statement

Interest income 2,787,355 2,914,581 (127,226) -4%
Interest expense 799,695 694,429 105,266 15%
Net interest income 1,987,660 2,220,152 (232,492) -10%

Provision for loan losses 77,960 166,000 (88,040) -53%
Non-interest income 312,725 321,659 (8,934) -3%
Non-interest expense 1,898,845 1,869,987 28,858 2%
Net income before taxes 323,580 505,824 (182,244) -36%
Income tax expense/(credit) 138,973 217,361 (78,388) -36%
Net income after taxes $184,607 $288,463 (103,856) -36%

Ratios
Net interest margin 5.05% 6.13%
Equity capital-to-total
assets 10.3% 11.8%

Selected Financial Data (unaudited)

March 31, 2008

Quarter ended Change
3/31/07 $ %

Balance Sheet

Total assets $140,315,869 $47,545,348 34%
Gross loans 80,381,355 43,982,148 55%
Allowance for loan losses 1,276,204 589,756 46%
Non interest-bearing deposits 32,486,840 16,750,565 52%
Total deposits 120,504,616 45,802,814 38%
Shareholders' equity 17,822,304 1,608,172 9%

Income Statement

Interest income 2,421,139 366,216 15%
Interest expense 689,197 110,498 16%
Net interest income 1,731,942 255,718 15%

Provision for loan losses 72,000 5,960 8%
Non-interest income 249,222 63,503 25%
Non-interest expense 1,597,536 301,309 19%
Net income before taxes 311,628 11,952 4%
Income tax expense/(credit) 140,233 (1,260) -1%
Net income after taxes $171,395 13,212 8%

Ratios
Net interest margin 5.66%
Equity capital-to-total assets 12.7%

First Call Analyst:
FCMN Contact:

Source: Santa Cruz County Bank

CONTACT: David V. Heald, President & CEO of Santa Cruz County Bank,
+1-831-457-5003, ext. 2116, cell, +1-831-359-0316

Web site: http://www.scountybank.com/

2008-04-17 18:43:03 0339272 PRNEWSWIRE