Sat. Jan 18th, 2020

SCZC: Santa Cruz County Bank (OTC Pink: SCZC)

26 min read

Santa Cruz County Bank (OTC Pink: SCZC), a top-rated, locally owned and operated full-service community bank headquartered in Santa Cruz County, newly stated unaudited net income of $3.00M. Apart From merger-related costs, net income would have been a record $3.30M for the 3rd-quarter finished September 30, 2k19. This represents a 13.00 percent incline comparing this quarter with the similar quarter in 2k18. For the quarter, basic earnings for each common share raised $0.030 to $1.240, a 2.0 percent incline over the 3rd-quarter in 2k18.  Unaudited net income for the nine-month duration finished September 30, 2k19 was $9.60M before merger cost and $9.30M after merger cost, contrast to $8.20M over a similar duration in 2k18.

Pretax income for the quarter finished September 30, 2k19 was $4.40M, a boost of $240.00k, 14.00 percent, contrast to $4.10M for the quarter finished September 30, 2k18.

3rd-Quarter Financial Highlights:

  • Net interest margin of 4.760 percent
  • Return on average assets and equity of 1.670 percent and 15.64 percent, respectively
  • Well capitalized with a total risk-based capital ratio of 16.15 percent
  • 7.0 percent growth in loans, $34.00M incline over the 3rd-quarter of 2k18
  • 7.0 percent growth in deposits, $42.00M incline over the 3rd-quarter of 2k18
  • Basic earnings for each share raised to $1.240 from $1.210 over the 3rd-quarter of 2k18
  • Book value for each common share after dividends raised by $4.970 or 19.00 percent, to $31.690 over the 3rd-quarter of 2k18

Loans, Asset Quality & Deposits
Total assets grew by $20.00M to $723.00M in the 3rd-quarter and by $58.00M over the last twelve months. For the 3rd-quarter, gross loans reduced by $5.00M, but year over year raised $34.00M, 7.0 percent to $506.00M. Allowance for loan losses of $10.00M at September 30, 2k19 represents a 5.0 percent incline over the similar duration last yearBecause of portfolio growth year over year, $150.00k was offered for loan and lease losses during the current reporting quarter. Deposits raised by 3.0 percent, $16.00M since June 30, 2k19 and by 7.0 percent since September 30, 2k18. Year over year, non-interest bearing deposits grew by 10.00 percent.

Non-Interest Income / Cost and Net Interest Margin
A component of the Bank’s core business is the origination and sale of loans generated by its top producing SBA Department which results in gains that are included in non-interest income.  For the 3rd-quarter of 2k19, the non-interest income total was $869.00k which included $212.00k of gains on loans sold.  These gains are taken planned rally and represent the primary variant within non-interest income comparisons to 2nd-quarter 2k19 and 3rd-quarter 2k18.

Non-interest cost for the three-month duration finished September 30, 2k19, raised 10.00 percent or $440.00k contrast to the previous quarter and raised 14.00 percent or $571.00k in contrast to the similar duration last year.  Both inclines are due mainly to the aforementioned $307.00k of merger related costs recognized in the 3rd-quarter of 2k19.

Net interest income of $8.30M for the quarter finished September 30, 2k19 exceeded the previous quarter by 4.0 percent or $313.00k and improved over the 2k18 3rd-quarter by 11.00 percent or $798.00k.  The year over year improvement is driven by a continued focus on building high quality earning assets through loan production and the benefit from past rate inclines implemented by the Federal Open Market Committee. As A Result, net interest margin at 4.760 percent improved 11 basis points over the previous year.

Shareholders’ Equity
Total shareholders’ equity was $78.00M at September 30, 2k19, a $12.00M, 19.00 percent incline over September 30, 2k18. The value added to our shareholders was because of continued strong earnings. This incline was reduced by the payout of quarterly cash dividends. Common stock cash dividends totaled $184.00k or $0.075 for each share for the quarter finished September 30, 2k19. Historically, the Bank has paid twenty-six successive cash dividends and issued one 10.00 percent stock dividend to shareholders.

For the three month duration finished September 30, 2k19, the Bank’s return on average equity was 15.64 percent and return on average assets was 1.670 percent. The book value for each common share of Santa Cruz County Bank’s common stock at September 30, 2k19 was $31.690, up $4.970 from a similar duration in 2k18.


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