LAKEWOOD, Colo., April 21, 2016 (GLOBE NEWSWIRE) -- Solera National Bancorp, Inc. (OTC:SLRK), the holding company for Solera National Bank, a business-focused bank primarily serving the Denver metropolitan area, today reported financial results for the three months ended March 31, 2016.
Highlights for the quarter ended March 31, 2016 include:
- Six consecutive profitable quarters
- Net income of $454,000 or $0.17 per share
- Return on average assets and return on average equity of 1.27% and 8.93%, respectively
- Efficiency ratio of 67.4%
- No non-performing assets
For the three months ended March 31, 2016, the Company reported net income of $454,000 compared to net income of $319,000 in the fourth quarter of 2015 and net income of $475,000 in the first quarter of 2015. Earnings per common share were $0.17 for the first quarter of 2016, compared to $0.12 for the linked quarter and $0.17 for the prior year quarter. First quarter 2016 results included a gain on loans sold of $125,000, or $0.05 per share. First quarter 2015 results included a $106,000 benefit, or $0.04 per share, from the reversal of a deferred rent obligation associated with the purchase of the Company’s main office, which had previously been on a long-term lease.
Martin P. May, President and CEO, commented: “The Company began 2016 well, delivering our sixth consecutive quarterly profit. We have a considerable amount of capital available to leverage and are competing aggressively for high-quality customer relationships. Additionally, we are making investments in our leading edge technology platform to better serve our customers and become more efficient.”
Operational Highlights
Net interest income after provision for loan and lease losses was $1.05 million for the quarter ended March 31, 2016, essentially unchanged compared to both the quarter ended December 31, 2015 and the quarter ended March 31, 2015.
The Company's net interest margin in first quarter 2016 was 3.09% compared to 3.10% in the linked quarter and 3.14% in the first quarter 2015. The Company’s balance sheet continues to be positioned to benefit from rising interest rates.
Total noninterest income in first quarter 2016 was $242,000 compared to $75,000 in fourth quarter 2015 and $163,000 in first quarter 2015. The increase versus the linked quarter and first quarter 2015 is due to a $125,000 gain in first quarter 2016 on the sale of the guaranteed portion of an SBA 7(a) loan. Additionally, the first quarter 2016 includes gains on sale of investment securities of $51,000 compared to $6,000 in fourth quarter 2015 and $100,000 in first quarter 2015.
Total noninterest expense in first quarter 2016 of $834,000 increased compared to fourth quarter 2015 primarily due to higher professional fees associated with the Company’s 2015 year-end audit. The increase from first quarter 2015 was due largely to a $106,000 benefit recorded last year from the reversal of a deferred rent obligation associated with the purchase of its main office, which had previously been on a long-term lease. The Company’s efficiency ratio of 67.4% for the first quarter of 2016 reflects continued success in aligning non-interest expense growth with top line revenue growth.
The Company continued to record no income tax expense due to the utilization of available net operating loss carryforwards.
Balance Sheet Review and Asset Quality Strength
Total assets of $140.56 million at March 31, 2016 declined compared to $146.07 million at December 31, 2015.
Net loans, after allowance for loan and lease losses, were $78.42 million at March 31, 2016 compared to $80.59 million at December 31, 2015. Lending activity in first quarter 2016 was strong with $8.4 million in new originations. However, the sale of the guaranteed portion of an SBA loan, sales of properties by loan customers and intense competition for high-quality loans resulted in a net decrease in loans outstanding. The allowance for loan and lease losses at March 31, 2016 was $1.56 million, or 1.95% of gross loans, compared to $1.52 million, or 1.85% of gross loans, at December 31, 2015. The Company had no loans held for sale at March 31, 2016.
Total investment securities available-for-sale were $43.75 million at March 31, 2016 compared to $48.37 million at December 31, 2015. The Company capitalized on the bond market rally in first quarter 2016 to reduce interest rate risk and sold longer-maturity investment securities resulting in a gain on sale of $51,000. Investment securities held-to-maturity of $4.5 million remained unchanged compared to fourth quarter 2015.
Total deposits at March 31, 2016 were $114.30 million compared to $120.84 million at December 31, 2015. The decline was due primarily to two larger institutional relationships and, to a lesser extent, balances associated with loan payoffs. Time deposits increased $9.11 million versus the prior year as a result of the Company’s efforts to attract longer-term, relatively low cost deposits.
The Company continues to experience sound asset quality metrics from improved underwriting and the success of certain exit strategies, including payoffs and pay downs. At March 31, 2016, the Company had no non-performing loans, non-performing assets or other real estate owned. However, total criticized assets increased to $7.25 million at March 31, 2016 from $4.91 million at December 31, 2015 but remains well below first quarter 2015 of $10.45 million.
Capital Strength
The Company’s earnings continue to generate capital, and its capital ratios are in excess of the highest required regulatory benchmark levels. As of March 31, 2016, the Bank’s Tier 1 leverage ratio was 13.5%, Tier 1 risk-based capital was 19.4%, and total risk-based capital was 20.7%.
Tangible book value per share, including accumulated other comprehensive income, was $7.54 at March 31, 2016, compared to $7.18 at December 31, 2015 and $6.95 at March 31, 2015. Total stockholders' equity was $20.82 million at March 31, 2016 compared to $19.84 million at December 31, 2015 and $19.26 million at March 31, 2015. Total stockholders' equity at March 31, 2016 included an accumulated other comprehensive gain of $17,000 compared to a loss of $501,000 at December 31, 2015 as a result of an increase in the fair value of the Bank's available-for-sale investment portfolio due to a decrease in longer-term interest rates.
May concluded: "Our focus continues to be on growing in a controlled and profitable manner. In accordance with that objective, we invested $5 million this month in a pool of rehabilitated federal student loans which are guaranteed by the full faith and credit of the U.S. Treasury. This initiative diversifies our loan portfolio and increases net interest income while adding an insignificant level of credit and interest rate risk to our balance sheet. We continue to evaluate additional opportunities to leverage our capital and increase franchise value."
About Solera National Bancorp, Inc.
Solera National Bancorp, Inc. was incorporated in 2006 to organize and serve as the holding company for Solera National Bank, which opened for business in September 2007. Solera National Bank is a community bank serving emerging businesses primarily in the Front Range of Colorado. At the core of Solera National Bank is welcoming, inclusive and respectful customer service, a focus on supporting a growing and diverse Colorado economy, and a passion to serve our community through service, education and volunteerism. For more information, please visit http://www.SoleraBank.com.
This press release contains statements that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The statements contained in this release, which are not historical facts and that relate to future plans or projected results of Solera National Bancorp, Inc. ("Company") and its wholly-owned subsidiary, Solera National Bank ("Bank"), are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. We undertake no obligation to update or revise any forward-looking statement. Readers of this release are cautioned not to put undue reliance on forward-looking statements.
FINANCIAL TABLES FOLLOW
| SOLERA NATIONAL BANCORP, INC. | |||||||||||||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||
| ($000s) | 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | ||||||||||||||||
| ASSETS | |||||||||||||||||||||
| Cash and due from banks | $ | 521 | $ | 749 | $ | 644 | $ | 562 | $ | 908 | |||||||||||
| Federal funds sold | 3,130 | 1,740 | 365 | — | 4,300 | ||||||||||||||||
| Interest-bearing deposits with banks | 751 | 750 | 750 | 750 | 2,757 | ||||||||||||||||
| Investment securities, available-for-sale | 43,752 | 48,374 | 42,733 | 47,326 | 47,806 | ||||||||||||||||
| Investment securities, held-to-maturity | 4,500 | 4,500 | 3,750 | 1,000 | — | ||||||||||||||||
| FHLB and Federal Reserve Bank stocks, at cost | 860 | 874 | 941 | 1,091 | 871 | ||||||||||||||||
| Gross loans | 80,029 | 82,124 | 83,768 | 83,178 | 81,886 | ||||||||||||||||
| Net deferred (fees)/expenses | -54 | (15 | ) | (6 | ) | 28 | 10 | ||||||||||||||
| Allowance for loan and lease losses | (1,557 | ) | (1,518 | ) | (1,609 | ) | (1,626 | ) | (1,613 | ) | |||||||||||
| Net loans | 78,418 | 80,591 | 82,153 | 81,580 | 80,283 | ||||||||||||||||
| Loans held for sale | — | 1,039 | — | — | — | ||||||||||||||||
| Premises and equipment, net | 1,902 | 1,918 | 1,955 | 1,999 | 663 | ||||||||||||||||
| Accrued interest receivable | 531 | 570 | 542 | 563 | 540 | ||||||||||||||||
| Bank-owned life insurance | 4,401 | 4,369 | 4,565 | 4,531 | 4,497 | ||||||||||||||||
| Other assets | 1,793 | 599 | 1,047 | 765 | 894 | ||||||||||||||||
| TOTAL ASSETS | $ | 140,559 | $ | 146,073 | $ | 139,445 | $ | 140,167 | $ | 143,519 | |||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||||
| Noninterest-bearing demand deposits | 4,069 | 3,954 | 4,362 | 4,034 | 4,503 | ||||||||||||||||
| Interest-bearing demand deposits | 7,644 | 8,405 | 6,524 | 6,604 | 9,781 | ||||||||||||||||
| Savings and money market deposits | 38,151 | 42,320 | 42,706 | 43,405 | 47,722 | ||||||||||||||||
| Time deposits | 64,435 | 66,160 | 59,594 | 55,169 | 55,329 | ||||||||||||||||
| Total deposits | 114,299 | 120,839 | 113,186 | 109,212 | 117,335 | ||||||||||||||||
| Accrued interest payable | 112 | 88 | 102 | 79 | 72 | ||||||||||||||||
| Short-term FHLB borrowings | — | — | 450 | 5,846 | — | ||||||||||||||||
| Long-term FHLB borrowings | 5,000 | 5,000 | 5,500 | 5,500 | 6,500 | ||||||||||||||||
| Accounts payable and other liabilities | 333 | 309 | 370 | 449 | 352 | ||||||||||||||||
| TOTAL LIABILITIES | 119,744 | 126,236 | 119,608 | 121,086 | 124,259 | ||||||||||||||||
| Common stock | 27 | 27 | 27 | 27 | 27 | ||||||||||||||||
| Additional paid-in capital | 27,143 | 27,137 | 27,130 | 27,126 | 27,121 | ||||||||||||||||
| Accumulated deficit | (6,216 | ) | (6,670 | ) | (6,989 | ) | (7,638 | ) | (7,973 | ) | |||||||||||
| Accumulated other comprehensive gain (loss) | 17 | (501 | ) | (175 | ) | (278 | ) | 241 | |||||||||||||
| Treasury stock, at cost | (156 | ) | (156 | ) | (156 | ) | (156 | ) | (156 | ) | |||||||||||
| TOTAL STOCKHOLDERS' EQUITY | 20,815 | 19,837 | 19,837 | 19,081 | 19,260 | ||||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 140,559 | $ | 146,073 | $ | 139,445 | $ | 140,167 | $ | 143,519 | |||||||||||
| SOLERA NATIONAL BANCORP, INC. | ||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | ||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||
| ($000s, except per share data) | 3/31/2016 | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | |||||||||||||||||
| Interest and dividend income | ||||||||||||||||||||||
| Interest and fees on loans | $ | 1,054 | $ | 1,060 | $ | 1,106 | $ | 1,042 | $ | 1,029 | ||||||||||||
| Investment securities | 292 | 278 | 231 | 242 | 293 | |||||||||||||||||
| Dividends on bank stocks | 10 | 11 | 12 | 12 | 11 | |||||||||||||||||
| Other | 4 | 8 | 3 | 3 | 1 | |||||||||||||||||
| Total interest income | 1,360 | 1,357 | 1,352 | 1,299 | 1,334 | |||||||||||||||||
| Interest expense | ||||||||||||||||||||||
| Deposits | 294 | 284 | 263 | 246 | 246 | |||||||||||||||||
| FHLB borrowings | 20 | 21 | 23 | 27 | 25 | |||||||||||||||||
| Total interest expense | 314 | 305 | 286 | 273 | 271 | |||||||||||||||||
| Net interest income | 1,046 | 1,052 | 1,066 | 1,026 | 1,063 | |||||||||||||||||
| Provision for loan and lease losses | — | — | (50 | ) | — | — | ||||||||||||||||
| Net interest income after provision for loan and lease losses | 1,046 | 1,052 | 1,116 | 1,026 | 1,063 | |||||||||||||||||
| Noninterest income | ||||||||||||||||||||||
| Customer service and other fees | 24 | 25 | 28 | 30 | 27 | |||||||||||||||||
| Other income | 42 | 44 | 334 | 35 | 36 | |||||||||||||||||
| Gain on loans sold | 125 | — | — | — | — | |||||||||||||||||
| Gain on sale of available-for-sale securities | 51 | 6 | 45 | 35 | 100 | |||||||||||||||||
| Total noninterest income | 242 | 75 | 407 | 100 | 163 | |||||||||||||||||
| Noninterest expense | ||||||||||||||||||||||
| Employee compensation and benefits | 406 | 410 | 422 | 373 | 376 | |||||||||||||||||
| Occupancy | 65 | 52 | 82 | 69 | — | |||||||||||||||||
| Professional fees | 71 | 39 | 49 | 32 | 85 | |||||||||||||||||
| Other general and administrative | 292 | 307 | 321 | 317 | 290 | |||||||||||||||||
| Total noninterest expense | 834 | 808 | 874 | 791 | 751 | |||||||||||||||||
| Net income | $ | 454 | $ | 319 | $ | 649 | $ | 335 | $ | 475 | ||||||||||||
| Income per share | $ | 0.17 | $ | 0.12 | $ | 0.24 | $ | 0.12 | $ | 0.17 | ||||||||||||
| Tangible book value per share | $ | 7.54 | $ | 7.18 | $ | 7.17 | $ | 6.89 | $ | 6.95 | ||||||||||||
| Net interest margin | 3.09 | % | 3.10 | % | 3.19 | % | 3.10 | % | 3.14 | % | ||||||||||||
| Efficiency Ratio | 67.42 | % | 72.08 | % | 59.13 | % | 72.50 | % | 66.70 | % | ||||||||||||
| Return on Average Assets | 1.27 | % | 0.89 | % | 1.86 | % | 0.94 | % | 1.32 | % | ||||||||||||
| Return on Average Equity | 8.93 | % | 6.43 | % | 13.34 | % | 6.99 | % | 10.08 | % | ||||||||||||
| Asset Quality: | ||||||||||||||||||||||
| Non-performing loans to gross loans | —% | 0.16 | % | 0.30 | % | 0.18 | % | 0.19 | % | |||||||||||||
| Non-performing assets to total assets | —% | 0.09 | % | 0.18 | % | 0.10 | % | 0.11 | % | |||||||||||||
| Allowance for loan losses to gross loans | 1.95 | % | 1.85 | % | 1.92 | % | 1.95 | % | 1.97 | % | ||||||||||||
| Criticized loans/assets: | ||||||||||||||||||||||
| Special mention | $ | 3,137 | $ | 1,242 | $ | 638 | $ | 3,544 | $ | 5,260 | ||||||||||||
| Substandard: Accruing | 2,975 | 2,400 | 3,589 | 3,788 | 4,483 | |||||||||||||||||
| Substandard: Nonaccrual | — | 131 | 139 | 146 | 154 | |||||||||||||||||
| Doubtful | — | — | 116 | — | — | |||||||||||||||||
| Total criticized loans | $ | 6,112 | $ | 3,773 | $ | 4,482 | $ | 7,478 | $ | 9,897 | ||||||||||||
| Other real estate owned | — | — | — | — | — | |||||||||||||||||
| Investment securities | 1,136 | 1,140 | 1,144 | 1,147 | 548 | |||||||||||||||||
| Total criticized assets | $ | 7,248 | $ | 4,913 | $ | 5,626 | $ | 8,625 | $ | 10,445 | ||||||||||||
| Criticized assets to total assets | 5.16 | % | 3.36 | % | 4.03 | % | 6.15 | % | 7.28 | % | ||||||||||||
| Selected Financial Ratios: (Solera National Bank Only) | ||||||||||||||||||||||
| Tier 1 leverage ratio | 13.5 | % | 13.2 | % | 13.1 | % | 12.6 | % | 12.1 | % | ||||||||||||
| Tier 1 risk-based capital ratio | 19.4 | % | 18.8 | % | 17.3 | % | 17.3 | % | 17.0 | % | ||||||||||||
| Total risk-based capital ratio | 20.7 | % | 20.0 | % | 18.5 | % | 18.6 | % | 18.2 | % | ||||||||||||