LAKEWOOD, Colo., Jan. 26, 2015 (GLOBE NEWSWIRE) -- Solera National Bancorp, Inc. (OTCQB:SLRK), the holding company for Solera National Bank, today reported financial results for the three and twelve months ended December 31, 2014.
For the three months ended December 31, 2014, the Company reported net income of $401,000 or $0.15 per share compared to a net loss of $638,000 or $(0.25) per share for the three months ended December 31, 2013, and compared to a net loss of $442,000, or $(0.17) per share for the three months ended September 30, 2014. For the twelve months ended December 31, 2014, the Company reported a net loss of $433,000 or $(0.16) per share compared to a net loss of $655,000 or $(0.25) per share for the twelve months ended December 31, 2013. The 2014 results were negatively impacted by approximately $370,000 in write downs and other charges related to two OREO properties, both of which have been sold as of early January 2015, in addition to approximately $290,000 of expenses associated with the Company's proxy contest.
Robert J. Fenton, President and CEO, commented: "The Company's return to profitability in the fourth quarter was an exciting accomplishment following our initiatives during the third quarter to eliminate inefficiencies in the core commercial banking business and to wind down the residential mortgage division. We were very encouraged by the positive results generated by our core commercial banking business, which included nearly $3 million in net loan growth in the fourth quarter of 2014. Inclusive of residential mortgage loan pay offs, net loan growth for the fourth quarter 2014 was $1.5 million.
"2014 was a challenging year for Solera but we ended the year on a firm foundation. As we enter 2015, the Company is a lean and efficient organization, supported by a strong balance sheet, solid asset quality, and the capital to fund loan growth."
Review of Operations
Interest and fees on loans were $1.08 million in fourth quarter 2014 compared to $970,000 in fourth quarter 2013, reflecting positive contributions from commercial lending. For the twelve months of 2014, interest and fees on loans was $4.34 million compared to $3.58 million for the twelve months of 2013. Total interest income was $1.38 million for the three months ended December 31, 2014 compared to $1.54 million for the three months ended December 31, 2013. For the twelve months of 2014, total interest income increased to $6.05 million compared to $5.82 million for the twelve months of 2013.
The Company's net interest margin in fourth quarter 2014 was 3.14%, up from 3.00% a year ago, and the net interest margin for the twelve months of 2014 rose to 3.20% compared to 2.88% for the twelve months of 2013.
Total interest expense was $287,000 in fourth quarter 2014 compared to $314,000 in fourth quarter 2013. For the twelve months ended December 31, 2014, total interest expense was $1.21 million compared to $1.22 million for the twelve months ended December 31, 2013.
In fourth quarter 2014, the Company's net interest income, including a $26,000 provision for loan and lease losses, was $1.07 million compared to $1.22 million in fourth quarter 2013, which had no recorded loss provision. For the twelve months ended December 31, 2014, net interest income after a $426,000 provision for loan and lease losses was $4.42 million compared to $4.60 million for the twelve months ended December 31, 2013 which had no recorded loss provision.
Total noninterest income in fourth quarter 2014 was $150,000 compared to $1.36 million in fourth quarter 2013, primarily reflecting no gain on sale of loans compared with a $1.17 million gain on loans sold in fourth quarter 2013. For the twelve months ended December 31, 2014, total noninterest income was $3.39 million compared with $7.40 million for the twelve months ended December 31, 2013, with the decline reflecting significantly lower gain on the sale of loans as the Company exited the residential mortgage lending business.
Total noninterest expense in fourth quarter 2014 declined sharply to $819,000 compared to $3.23 million in fourth quarter 2013, primarily reflecting lower ongoing salary and compensation expenses, including lower commission payments related to mortgage lending. Total noninterest expense in 2014, which included charges related to the mortgage division closure, was $8.24 million compared to $12.66 million in 2013.
Balance Sheet Review, Credit Quality and Shareholder Value
Net loans, after allowance for loan and lease losses, were $79.29 million at December 31, 2014 compared to $78.17 million at December 31, 2013. The Company's allowance for loan and lease losses was $1.60 million, or 1.98% of gross loans, at December 31, 2014 compared to $1.12 million, or 1.41% of gross loans, at December 31, 2013. The balance sheet reflected no loans held for sale as of December 31, 2014, compared to $7.95 million a year ago.
Total deposits at December 31, 2014 were $119.11 million compared to $132.84 million at December 31, 2013, with $10.53 million of the $13.73 million decline pertaining to certificates of deposits that were not renewed as the Company's funding needs declined with the exit of the residential mortgage division.
Total assets were $144.67 million at December 31, 2014 compared to $169.68 million at December 31, 2013, primarily reflecting an increase in net loans partially offset by a decrease in loans held for sale and a decrease in investment securities, which had the benefit of reducing the Company's interest rate risk profile.
The Bank's asset and loan quality measurements continued to demonstrate soundness and stability. At December 31, 2014, the ratio of non-performing loans to gross loans was 0.19% and non-performing assets to total assets was 0.56%. At year-end, other real estate owned consisting of one asset was $657,000, which was sold in January 2015.
The Bank continued to exceed accepted regulatory standards for a well-capitalized institution and improved all capital ratios as of December 31, 2014 compared to both the prior quarter and the prior year. Tier 1 leverage ratio was 11.3%, a tier 1 risk-based capital ratio of 15.9%, and a total risk-based capital ratio of 17.1%.
Tangible book value per share, excluding accumulated other comprehensive income, was $6.71 at December 31, 2014, compared to $6.96 at December 31, 2013. Total stockholders' equity was $18.44 million at December 31, 2014 compared to $16.98 million at December 31, 2013. The year-over-year total stockholders' equity comparison included an improvement in accumulated other comprehensive loss as a result of an increase in the fair value of the Bank's available-for-sale investment portfolio.
Fenton concluded: "Returning the Bank to a profitable condition in fourth quarter 2014 was an important accomplishment. We have taken decisive actions to correct past management practices that will enable us to meet or exceed regulatory and operational standards.
"We plan to continue to maintain the focus on our commercial banking business, which has continued to demonstrate its value throughout a period of significant change. We have set a clear path for the coming year, with a continued emphasis on operational efficiency, growing loans and deposits, and generating new sources of noninterest income. We look forward to continuing to build a re-energized franchise with the ability to drive value for all 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.
Cautions Concerning Forward-Looking Statements:
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) | 12/31/2014 | 9/30/2014 | 12/31/2013 |
| ASSETS | |||
| Cash and due from banks | $ 602 | $ 1,545 | $ 742 |
| Federal funds sold | 2,830 | 1,055 | 1,600 |
| Interest-bearing deposits with banks | 257 | 257 | 257 |
| Investment securities, available-for-sale | 52,900 | 58,489 | 69,839 |
| FHLB and Federal Reserve Bank stocks, at cost | 780 | 849 | 2,346 |
| Gross loans | 80,864 | 79,290 | 79,240 |
| Net deferred (fees)/expenses | 24 | 53 | 46 |
| Allowance for loan and lease losses | (1,600) | (1,563) | (1,116) |
| Net loans | 79,288 | 77,780 | 78,170 |
| Loans held for sale | — | — | 7,951 |
| Premises and equipment, net | 670 | 714 | 888 |
| Other real estate owned | 657 | 1,392 | 1,746 |
| Accrued interest receivable | 616 | 659 | 705 |
| Bank-owned life insurance | 4,462 | 4,425 | 4,316 |
| Other assets | 1,610 | 831 | 1,117 |
| TOTAL ASSETS | $ 144,672 | $ 147,996 | $ 169,677 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||
| Noninterest-bearing demand deposits | $ 5,853 | $ 5,012 | $ 6,362 |
| Interest-bearing demand deposits | 7,866 | 7,755 | 10,559 |
| Savings and money market deposits | 48,007 | 49,593 | 51,185 |
| Time deposits | 57,387 | 60,529 | 64,738 |
| Total deposits | 119,113 | 122,889 | 132,844 |
| Accrued interest payable | 62 | 78 | 63 |
| Short-term FHLB borrowings | 2,000 | — | 9,808 |
| Long-term FHLB borrowings | 4,500 | 6,500 | 8,500 |
| Accounts payable and other liabilities | 556 | 619 | 1,487 |
| TOTAL LIABILITIES | 126,231 | 130,086 | 152,702 |
| Common stock | 27 | 27 | 26 |
| Additional paid-in capital | 27,120 | 27,101 | 26,558 |
| Accumulated deficit | (8,448) | (8,849) | (8,015) |
| Accumulated other comprehensive loss | (102) | (213) | (1,492) |
| Treasury stock, at cost, 25,776 shares | (156) | (156) | (102) |
| TOTAL STOCKHOLDERS' EQUITY | 18,441 | 17,910 | 16,975 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 144,672 | $ 147,996 | $ 169,677 |
| SOLERA NATIONAL BANCORP, INC. | |||||
| CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | |||||
| Three Months Ended | Twelve Months Ended | ||||
| ($000s, except per share data) | 12/31/2014 | 9/30/2014 | 12/31/2013 | 12/31/2014 | 12/31/2013 |
| Interest and dividend income | |||||
| Interest and fees on loans | $ 1,079 | $ 1,038 | $ 970 | $ 4,338 | $ 3,577 |
| Interest on loans held for sale | — | 45 | 75 | 202 | 402 |
| Investment securities | 291 | 341 | 473 | 1,445 | 1,762 |
| Dividends on bank stocks | 10 | 13 | 16 | 54 | 67 |
| Other | 3 | 3 | 3 | 11 | 9 |
| Total interest income | 1,383 | 1,440 | 1,537 | 6,050 | 5,817 |
| Interest expense | |||||
| Deposits | 259 | 263 | 273 | 1,065 | 1,058 |
| FHLB borrowings | 28 | 35 | 41 | 144 | 160 |
| Total interest expense | 287 | 298 | 314 | 1,209 | 1,218 |
| Net interest income | 1,096 | 1,142 | 1,223 | 4,841 | 4,599 |
| Provision for loan and lease losses | 26 | 250 | — | 426 | — |
| Net interest income after provision for loan and lease losses | 1,070 | 892 | 1,223 | 4,415 | 4,599 |
| Noninterest income | |||||
| Customer service and other fees | 28 | 29 | 32 | 111 | 106 |
| Other income | 36 | 37 | 65 | 149 | 160 |
| Gain on loans sold | — | 446 | 1,174 | 2,878 | 6,750 |
| Gain on sale of available-for-sale securities | 86 | 59 | 93 | 254 | 387 |
| Total noninterest income | 150 | 571 | 1,364 | 3,392 | 7,403 |
| Noninterest expense | |||||
| Employee compensation and benefits | 257 | 820 | 1,917 | 4,280 | 8,426 |
| Occupancy | 182 | 275 | 256 | 949 | 1,033 |
| Professional fees | 101 | 176 | 109 | 784 | 503 |
| Other general and administrative | 279 | 634 | 943 | 2,227 | 2,695 |
| Total noninterest expense | 819 | 1,905 | 3,225 | 8,240 | 12,657 |
| Net income (loss) | $ 401 | $ (442) | $ (638) | $ (433) | $ (655) |
| Income (loss) per share | $ 0.15 | $ (0.17) | $ (0.25) | $ (0.16) | $ (0.25) |
| Tangible book value per share | $ 6.71 | $ 6.64 | $ 6.96 | $ 6.85 | $ 6.96 |
| Net interest margin | 3.14% | 3.08% | 3.00% | 3.20% | 2.88% |
| Asset Quality: | |||||
| Non-performing loans to gross loans | 0.19% | 0.20% | —% | ||
| Non-performing assets to total assets | 0.56% | 1.05% | 1.03% | ||
| Allowance for loan losses to gross loans | 1.98% | 1.97% | 1.41% | ||
| Allowance for loan losses to non-performing loans | 1,019.11% | 976.88% | NM* | ||
| Other real estate owned | $ 657 | $ 1,392 | $ 1,746 | ||
| * Not meaningful due to the insignificant amount of non-performing loans. | |||||
| Selected Financial Ratios: (Solera National Bank Only) | |||||
| Tier 1 leverage ratio | 11.3% | 10.3% | 9.6% | ||
| Tier 1 risk-based capital ratio | 15.9% | 15.6% | 14.4% | ||
| Total risk-based capital ratio | 17.1% | 16.9% | 15.4% | ||