LAKEWOOD, Colo., Jan. 26, 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 and twelve months ended December 31, 2015.
Highlights for the quarter and full year ended December 31, 2015 include:
- Fifth consecutive quarter of profitability
- Record net income of $1.78 million in 2015 compared to a net loss of $433,000 in 2014
- Return on average assets and return on average equity of 1.25% and 9.12%, respectively, for full year 2015
- Efficiency ratio of 66.9% for full year 2015 compared to 109.1% for full year 2014
- Solid asset quality; minimal non-performing loans at December 31, 2015
For the three months ended December 31, 2015, the Company reported net income of $319,000 compared to net income of $649,000 in the third quarter of 2015 and net income of $401,000 in the fourth quarter of 2014. Earnings per common share were $0.12 for the fourth quarter of 2015, compared to $0.24 for the linked quarter and $0.15 for the prior year quarter. Third quarter 2015 results included a one-time bank owned life insurance benefit of $293,000, or $0.11 per share.
The Company’s net income for the year ended December 31, 2015 was a record $1.78 million or $0.65 per share compared to a net loss of $433,000 or $(0.16) per share for the twelve months ended December 31, 2014.
Martin P. May, President and CEO, commented: “We continue to deliver consistent, high-quality core earnings recording our fifth consecutive quarterly profit. For the full year, the Solera team, under the direction of the new board of directors appointed in mid-2014, executed extremely well resulting in record earnings of $1.78 million. With the turnaround of the Company progressing, we have a strong balance sheet and ample liquidity to compete aggressively for high-quality customer relationships.”
Operational Highlights
Net interest income after provision for loan and lease losses was $1.05 million for the quarter ended December 31, 2015, compared to $1.07 million for the quarter ended December 31, 2014. For the twelve months of 2015, net interest income after provision for loan and lease losses was $4.26 million compared to $4.42 million for the twelve months of 2014.
The Company's net interest margin in fourth quarter 2015 was 3.10% compared to 3.14% a year ago, and the net interest margin for the twelve months of 2015 was 3.13% compared to 3.20% for the twelve months of 2014. The Company’s balance sheet is positioned to benefit from rising interest rates; as such, net interest income is forecast to increase modestly during 2016.
Total noninterest income in fourth quarter 2015 was $75,000 compared to $150,000 in fourth quarter 2014, primarily reflecting a decrease in gains on the sale of investment securities. For the twelve months ended December 31, 2015, total noninterest income was $745,000 compared with $3.39 million for the twelve months ended December 31, 2014, with the difference reflecting an absence of income from residential loans sold to the secondary market as the Company exited this business in the third quarter of 2014. This decline was partially offset by a one-time bank owned life insurance benefit of $293,000 recorded in the third quarter of 2015.
Total noninterest expense in fourth quarter 2015 of $808,000 declined slightly from fourth quarter 2014. Higher employee compensation and benefits in the fourth quarter of 2015 were offset by lower occupancy expense as a result of the Company’s purchase of its main office, which had previously been on a long-term lease. Total noninterest expense for the twelve months ended December 31, 2015 was $3.22 million compared to $8.24 million in 2014. The significant decline reflects the Company’s exit from the residential mortgage business in the third quarter of 2014 along with decisive actions taken to right-size the organization and the implementation of on-going cost saving measures.
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 $146.07 million at December 31, 2015 increased marginally compared to $144.67 million at December 31, 2014.
Net loans, after allowance for loan and lease losses, were $80.59 million at December 31, 2015 compared to $79.29 million at December 31, 2014. The allowance for loan and lease losses was $1.52 million, or 1.85% of gross loans, at December 31, 2015 compared to $1.60 million, or 1.98% of gross loans, at December 31, 2014. Loans held for sale were $1.04 million at December 31, 2015 representing one lending relationship which the Company is actively marketing for sale.
Total investment securities were $52.87 million at December 31, 2015 essentially unchanged compared to $52.90 million at December 31, 2014. During 2015, the Company purchased $4.5 million of longer duration, higher yielding fixed-to-float investment securities for its held-to-maturity portfolio to protect stockholders’ equity from rising interest rates.
Total deposits at December 31, 2015 were $120.84 million compared to $119.11 million at December 31, 2014. Time deposits increased $8.77 million versus the prior year as a result of the Company’s efforts to attract longer-term, relatively low cost deposits in advance of the expected action by the Federal Reserve to begin raising the federal funds rate.
Management continues to believe asset quality is a source of strength that differentiates the Company from many of its peers. At December 31, 2015, the Company had only 0.16% non-performing loans to gross loans and 0.09% non-performing assets to total assets. Total criticized assets declined significantly to $4.91 million at December 31, 2015 from $10.11 million at December 31, 2014. The ratio of criticized assets to total assets declined to 3.36% compared to 6.99% a year ago. The Company had no other real estate owned assets at December 31, 2015.
Capital Strength
Solera National Bank continued to exceed accepted regulatory standards for a well-capitalized institution and improved all capital ratios as of December 31, 2015 compared to both the prior quarter and the prior year. As of December 31, 2015 the Bank’s Tier 1 leverage ratio was 13.2%, Tier 1 risk-based capital was 18.8%, and total risk-based capital was 20.0%.
Tangible book value per share, including accumulated other comprehensive income, was $7.18 at December 31, 2015, compared to $6.67 at December 31, 2014. Total stockholders' equity was $19.84 million at December 31, 2015 compared to $18.44 million at December 31, 2014. Total stockholders' equity at December 31, 2015 included an accumulated other comprehensive loss of $501,000 compared to a loss of $102,000 at December 31, 2014 as a result of a decrease in the fair value of the Bank's available-for-sale investment portfolio due to the increase in interest rates.
May concluded: "Generating record profitability and implementing best practices to meet or exceed regulatory and operational standards was a major accomplishment in 2015 that we are extremely proud of. As we enter 2016, the Company remains focused on maintaining operational efficiency and growing the franchise in a controlled and disciplined manner. We look forward to increasing franchise value for all of our stakeholders."
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.
| SOLERA NATIONAL BANCORP, INC. | |||||||||||||||||||||
| CONSOLIDATED BALANCE SHEETS | |||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||
| ($000s) | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | 12/31/2014 | ||||||||||||||||
| ASSETS | |||||||||||||||||||||
| Cash and due from banks | $ | 749 | $ | 644 | $ | 562 | $ | 908 | $ | 602 | |||||||||||
| Federal funds sold | 1,740 | 365 | — | 4,300 | 2,830 | ||||||||||||||||
| Interest-bearing deposits with banks | 750 | 750 | 750 | 2,757 | 257 | ||||||||||||||||
| Investment securities, available-for-sale | 48,374 | 42,733 | 47,326 | 47,806 | 52,900 | ||||||||||||||||
| Investment securities, held-to-maturity | 4,500 | 3,750 | 1,000 | — | — | ||||||||||||||||
| FHLB and Federal Reserve Bank stocks, at cost | 874 | 941 | 1,091 | 871 | 780 | ||||||||||||||||
| Gross loans | 82,124 | 83,768 | 83,178 | 81,886 | 80,864 | ||||||||||||||||
| Net deferred (fees)/expenses | (15 | ) | (6 | ) | 28 | 10 | 24 | ||||||||||||||
| Allowance for loan and lease losses | (1,518 | ) | (1,609 | ) | (1,626 | ) | (1,613 | ) | (1,600 | ) | |||||||||||
| Net loans | 80,591 | 82,153 | 81,580 | 80,283 | 79,288 | ||||||||||||||||
| Loans held for sale | 1,039 | — | — | — | — | ||||||||||||||||
| Premises and equipment, net | 1,918 | 1,955 | 1,999 | 663 | 670 | ||||||||||||||||
| Other real estate owned | — | — | — | — | 657 | ||||||||||||||||
| Accrued interest receivable | 570 | 542 | 563 | 540 | 616 | ||||||||||||||||
| Bank-owned life insurance | 4,369 | 4,565 | 4,531 | 4,497 | 4,462 | ||||||||||||||||
| Other assets | 599 | 1,047 | 765 | 894 | 1,610 | ||||||||||||||||
| TOTAL ASSETS | $ | 146,073 | $ | 139,445 | $ | 140,167 | $ | 143,519 | $ | 144,672 | |||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||||||
| Noninterest-bearing demand deposits | 3,954 | 4,362 | 4,034 | 4,503 | 5,853 | ||||||||||||||||
| Interest-bearing demand deposits | 8,405 | 6,524 | 6,604 | 9,781 | 7,866 | ||||||||||||||||
| Savings and money market deposits | 42,320 | 42,706 | 43,405 | 47,722 | 48,007 | ||||||||||||||||
| Time deposits | 66,160 | 59,594 | 55,169 | 55,329 | 57,387 | ||||||||||||||||
| Total deposits | 120,839 | 113,186 | 109,212 | 117,335 | 119,113 | ||||||||||||||||
| Accrued interest payable | 88 | 102 | 79 | 72 | 62 | ||||||||||||||||
| Short-term FHLB borrowings | — | 450 | 5,846 | — | — | ||||||||||||||||
| Long-term FHLB borrowings | 5,000 | 5,500 | 5,500 | 6,500 | 6,500 | ||||||||||||||||
| Accounts payable and other liabilities | 309 | 370 | 449 | 352 | 556 | ||||||||||||||||
| TOTAL LIABILITIES | 126,236 | 119,608 | 121,086 | 124,259 | 126,231 | ||||||||||||||||
| Common stock | 27 | 27 | 27 | 27 | 27 | ||||||||||||||||
| Additional paid-in capital | 27,137 | 27,130 | 27,126 | 27,121 | 27,120 | ||||||||||||||||
| Accumulated deficit | (6,670 | ) | (6,989 | ) | (7,638 | ) | (7,973 | ) | (8,448 | ) | |||||||||||
| Accumulated other comprehensive (loss) gain | (501 | ) | (175 | ) | (278 | ) | 241 | (102 | ) | ||||||||||||
| Treasury stock, at cost | (156 | ) | (156 | ) | (156 | ) | (156 | ) | (156 | ) | |||||||||||
| TOTAL STOCKHOLDERS' EQUITY | 19,837 | 19,837 | 19,081 | 19,260 | 18,441 | ||||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 146,073 | $ | 139,445 | $ | 140,167 | $ | 143,519 | $ | 144,672 | |||||||||||
| SOLERA NATIONAL BANCORP, INC. | ||||||||||||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | ||||||||||||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||||
| ($000s, except per share data) | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | 12/31/2014 | 12/31/2015 | 12/31/2014 | |||||||||||||||||||||||
| Interest and dividend income | ||||||||||||||||||||||||||||||
| Interest and fees on loans | $ | 1,060 | $ | 1,106 | $ | 1,042 | $ | 1,029 | $ | 1,079 | $ | 4,237 | $ | 4,338 | ||||||||||||||||
| Interest on loans held for sale | — | — | — | — | — | — | 202 | |||||||||||||||||||||||
| Investment securities | 278 | 231 | 242 | 293 | 291 | 1,044 | 1,445 | |||||||||||||||||||||||
| Dividends on bank stocks | 11 | 12 | 12 | 11 | 10 | 46 | 54 | |||||||||||||||||||||||
| Other | 8 | 3 | 3 | 1 | 3 | 15 | 11 | |||||||||||||||||||||||
| Total interest income | 1,357 | 1,352 | 1,299 | 1,334 | 1,383 | 5,342 | 6,050 | |||||||||||||||||||||||
| Interest expense | ||||||||||||||||||||||||||||||
| Deposits | 284 | 263 | 246 | 246 | 259 | 1,039 | 1,065 | |||||||||||||||||||||||
| FHLB borrowings | 21 | 23 | 27 | 25 | 28 | 96 | 144 | |||||||||||||||||||||||
| Total interest expense | 305 | 286 | 273 | 271 | 287 | 1,135 | 1,209 | |||||||||||||||||||||||
| Net interest income | 1,052 | 1,066 | 1,026 | 1,063 | 1,096 | 4,207 | 4,841 | |||||||||||||||||||||||
| Provision for loan and lease losses | — | (50 | ) | — | — | 26 | (50 | ) | 426 | |||||||||||||||||||||
| Net interest income after provision for loan and lease losses | 1,052 | 1,116 | 1,026 | 1,063 | 1,070 | 4,257 | 4,415 | |||||||||||||||||||||||
| Noninterest income | ||||||||||||||||||||||||||||||
| Customer service and other fees | 25 | 28 | 30 | 27 | 28 | 110 | 111 | |||||||||||||||||||||||
| Other income | 44 | 334 | 35 | 36 | 36 | 449 | 149 | |||||||||||||||||||||||
| Gain on loans sold | — | — | — | — | — | — | 2,878 | |||||||||||||||||||||||
| Gain on sale of available-for-sale securities | 6 | 45 | 35 | 100 | 86 | 186 | 254 | |||||||||||||||||||||||
| Total noninterest income | 75 | 407 | 100 | 163 | 150 | 745 | 3,392 | |||||||||||||||||||||||
| Noninterest expense | ||||||||||||||||||||||||||||||
| Employee compensation and benefits | 410 | 422 | 373 | 376 | 257 | 1,581 | 4,280 | |||||||||||||||||||||||
| Occupancy | 52 | 82 | 69 | — | 182 | 203 | 949 | |||||||||||||||||||||||
| Professional fees | 39 | 49 | 32 | 85 | 101 | 205 | 784 | |||||||||||||||||||||||
| Other general and administrative | 307 | 321 | 317 | 290 | 279 | 1,235 | 2,227 | |||||||||||||||||||||||
| Total noninterest expense | 808 | 874 | 791 | 751 | 819 | 3,224 | 8,240 | |||||||||||||||||||||||
| Net income (loss) | $ | 319 | $ | 649 | $ | 335 | $ | 475 | $ | 401 | $ | 1,778 | $ | (433 | ) | |||||||||||||||
| Income (loss) per share | $ | 0.12 | $ | 0.24 | $ | 0.12 | $ | 0.17 | $ | 0.15 | $ | 0.65 | $ | (0.16 | ) | |||||||||||||||
| Tangible book value per share | $ | 7.18 | $ | 7.17 | $ | 6.89 | $ | 6.95 | $ | 6.67 | $ | 7.18 | $ | 6.81 | ||||||||||||||||
| Net interest margin | 3.10 | % | 3.19 | % | 3.10 | % | 3.14 | % | 3.14 | % | 3.13 | % | 3.20 | % | ||||||||||||||||
| Efficiency Ratio | 72.08 | % | 59.13 | % | 72.50 | % | 66.70 | % | 72.22 | % | 66.94 | % | 109.10 | % | ||||||||||||||||
| Return on Average Assets | 0.89 | % | 1.86 | % | 0.94 | % | 1.32 | % | 1.10 | % | 1.25 | % | (0.28 | )% | ||||||||||||||||
| Return on Average Equity | 6.43 | % | 13.34 | % | 6.99 | % | 10.08 | % | 8.83 | % | 9.12 | % | (2.40 | )% | ||||||||||||||||
| Asset Quality: | ||||||||||||||||||||||||||||||
| Non-performing loans to gross loans | 0.16 | % | 0.30 | % | 0.18 | % | 0.19 | % | 0.19 | % | ||||||||||||||||||||
| Non-performing assets to total assets | 0.09 | % | 0.18 | % | 0.10 | % | 0.11 | % | 0.56 | % | ||||||||||||||||||||
| Allowance for loan losses (ALLL) to gross loans | 1.85 | % | 1.92 | % | 1.95 | % | 1.97 | % | 1.98 | % | ||||||||||||||||||||
| Criticized loans/assets: | ||||||||||||||||||||||||||||||
| Special mention | $ | 1,242 | $ | 638 | $ | 3,544 | $ | 5,260 | $ | 5,448 | ||||||||||||||||||||
| Substandard: Accruing | 2,400 | 3,589 | 3,788 | 4,483 | 2,759 | |||||||||||||||||||||||||
| Substandard: Nonaccrual | 131 | 139 | 146 | 154 | 158 | |||||||||||||||||||||||||
| Doubtful | — | 116 | — | — | — | |||||||||||||||||||||||||
| Total criticized loans | $ | 3,773 | $ | 4,482 | $ | 7,478 | $ | 9,897 | $ | 8,365 | ||||||||||||||||||||
| Other real estate owned | — | — | — | — | 657 | |||||||||||||||||||||||||
| Investment securities | 1,140 | 1,144 | 1,147 | 548 | 1,088 | |||||||||||||||||||||||||
| Total criticized assets | $ | 4,913 | $ | 5,626 | $ | 8,625 | $ | 10,445 | $ | 10,110 | ||||||||||||||||||||
| Criticized assets to total assets | 3.36 | % | 4.03 | % | 6.15 | % | 7.28 | % | 6.99 | % | ||||||||||||||||||||
| Selected Financial Ratios: (Solera National Bank Only) | ||||||||||||||||||||||||||||||
| Tier 1 leverage ratio | 13.2 | % | 13.1 | % | 12.6 | % | 12.1 | % | 11.3 | % | ||||||||||||||||||||
| Tier 1 risk-based capital ratio | 18.8 | % | 17.3 | % | 17.3 | % | 17.0 | % | 15.9 | % | ||||||||||||||||||||
| Total risk-based capital ratio | 20.0 | % | 18.5 | % | 18.6 | % | 18.2 | % | 17.1 | % | ||||||||||||||||||||