Advertisement

Topics

Solera National Bancorp Announces 2Q, First Half 2015 Financial Results

20:00 EDT 22 Jul 2015 | Globe Newswire

LAKEWOOD, Colo., July 23, 2015 (GLOBE NEWSWIRE) -- Solera National Bancorp, Inc. (OTCQB:SLRK), the holding company for Solera National Bank, a business-focused bank primarily serving the Denver metropolitan area, today reported financial results for the second quarter and first half of 2015.

For the three months ended June 30, 2015, the Company reported net income of $335,000 or $0.12 per share compared to a net loss of $23,000 or $(0.01) per share for the three months ended June 30, 2014.  For the six months ended June 30, 2015, Solera reported net income of $810,000 or $0.30 per share compared with a net loss of $392,000 or $(0.15) per share for the six months ended June 30, 2014.

Robert J. Fenton, President and CEO, commented: “Recording the Company’s third consecutive profitable quarter was a rewarding accomplishment, reflecting steady contributions from interest income with sound asset quality and no provision for loan losses in the first half of the year. Following significant operational changes in 2014 and a re-focusing on our core capabilities as a business-oriented bank, our goal has been strong credit quality, stability and measurable profitability.

“It was gratifying that the actions taken last year to strengthen the Company have generated consistent growth of Solera’s tangible book value and tangible equity. Since becoming CEO in 2014, I have been proud to work with our entire Solera team to re-energize the Company and establish a strong foundation to continue to deliver solid results into the future.”

Operational Highlights

Total interest income was $1.30 million for the three months ended June 30, 2015, consistent on a consecutive quarter basis with $1.33 million in first quarter 2015 and $1.38 million in fourth quarter 2014. Total interest income for the six months of 2015 was $2.63 million, compared to $3.23 million in the six months of 2014. The decline in total interest income in 2015 was primarily due to a leaner investment securities portfolio and no loans held for sale compared to a $9.8 million average balance in loans held for sale during the first half of 2014.

The Company's net interest margin was 3.10%, relatively stable compared with the prior two quarters and down from 3.27% in second quarter 2014. The modest year-over-year decline continued to reflect ongoing margin pressure in a competitive, low-interest rate environment.

Total interest expense was $273,000 in second quarter 2015, consistent with $271,000 in first quarter 2015 and down from $314,000 in second quarter 2014. For the six months ended June 30, 2015, total interest expense was $544,000 compared to $623,000 for the six months ended June 30, 2014.

In second quarter 2015, the Company's net interest income was $1.03 million compared to $1.30 million in second quarter 2014. The Company recorded no provision for loan and lease losses during the first half of 2015 compared to $150,000 in the first half of 2014. For the six months ended June 30, 2015, Solera’s net interest income after provision for loan and lease losses was $2.09 million, compared to $2.45 million for the six months of 2014.

Total noninterest income in second quarter 2015 was $100,000, compared to $1.67 million in second quarter 2014, reflecting no gain on loans sold compared to $1.54 million in gains in second quarter 2014, as the Company’s business model no longer includes generating residential mortgages for sale on the secondary market.  Noninterest income was $263,000 for the six months ended June 30, 2015, which included gains of $135,000 from the sale of investment securities as the Company trimmed its investment portfolio. Fenton noted the Company’s Investment Services Division, launched in first quarter 2015, is building momentum and is expected to bolster noninterest income in the coming quarters.

Total noninterest expense in second quarter 2015 was $791,000 compared with $2.84 million in second quarter 2014, reflecting lower ongoing salary and compensation expenses following the exit of the Company’s residential mortgage division and decisive actions taken to right-size the organization. 

In first half 2015, noninterest expense was $1.54 million, which included a $106,000 benefit in the first quarter 2015 from the reversal of a deferred rent obligation associated with the purchase of the Bank’s main office, which had previously been on a long-term lease. The transaction closed in second quarter 2015.  “The purchase of our building will generate significant ongoing cost reductions," noted Melissa K. Larkin, CFO. "This, coupled with the substantial cost savings from having de-registered as a SEC reporting company will continue to be accretive to our bottom line.”

Balance Sheet Review, Credit Quality and Shareholder Value

Total assets were $140.17 million at June 30, 2015, compared to $167.97 million at June 30, 2014 and $143.52 million at March 31, 2015. The year-over-year decline was primarily driven by a decrease in loans held for sale due to the exit of the residential mortgage division, as well as the sale of two OREO properties and the sale of investment securities that had the benefit of reducing the Company's interest rate risk profile. Gross loans held for investment at June 30, 2015, were $83.18 million, nearly identical to gross loans a year earlier.

Net loans, after allowance for loan and lease losses, were $81.58 million at June 30, 2015 compared with $82.20 million at June 30, 2014. Lending activity in second quarter 2015 reflected double-digit growth, but the overall growth was impacted by payoffs. 

Fenton commented: “Our continued focus on growing our C&I portfolio has generated positive results in recent months. We ended the quarter with a number of approved commercial and real estate loans closing in July. We were pleased that in the second quarter we were able to support our area’s Hispanic community by closing a significant multi-family real estate loan in Aurora, Colorado.”

The Company's allowance for loan and lease losses (ALLL) was $1.63 million, or 1.95% of gross loans, at June 30, 2015, compared to $1.30 million or 1.56% at June 30, 2014. The Company’s ALLL to non-performing loans exceeded 1,000%, while the ratio of non-performing loans to gross loans remained relatively unchanged at only 0.18% for the quarter ended June 30, 2015.  Total non-performing loans were $146,000 and the Company had no OREO at June 30, 2015.

Total deposits at June 30, 2015 were $109.21 million, compared to $128.09 million at June 30, 2014. The Company trimmed certificates of deposits from the previous year. Transaction accounts continued to comprise approximately 49% of the Company's total deposits at both June 30, 2015 and 2014.  Larkin noted that the improvement in the Colorado economy has led to increased loan demand but also to a decline in balances from larger deposit customers who have identified other investment opportunities.

The Bank continues to exceed accepted regulatory standards for a well-capitalized institution and improved all capital ratios as of June 30, 2015 compared to both March 31, 2015 and June 30, 2014 with a tier 1 leverage ratio of 12.6%, a tier 1 risk-based capital ratio of 17.3%, and a total risk-based capital ratio of 18.6%.

Tangible book value per share, excluding accumulated other comprehensive income, was $6.99 per share for the three months ended June 30, 2015, up from $6.86 at March 31, 2015 and $6.71 at December 31, 2014. Total stockholders' equity rose to $19.08 million at June 30, 2015, compared to $18.44 million at December 31, 2014 and $18.28 at June 30, 2014.

Fenton concluded: “With economic conditions continuing to trend positively in Colorado and the solid infrastructure we have established, we believe Solera National Bank is well-positioned to continue to build value for 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.

Financial Tables Follow



SOLERA NATIONAL BANCORP, INC. 
CONSOLIDATED BALANCE SHEETS 
(unaudited) 
($000s) 6/30/2015 3/31/2015 6/30/2014 
ASSETS       
Cash and due from banks $  562  $  908  $  868  
Federal funds sold  —     4,300   —   
Interest-bearing deposits with banks   750    2,757    257  
Investment securities, available-for-sale   48,326    47,806    59,652  
FHLB and Federal Reserve Bank stocks, at cost   1,091    871    1,403  
Gross loans   83,178    81,886    83,423  
Net deferred (fees)/expenses   28    10    73  
Allowance for loan and lease losses   (1,626)   (1,613)   (1,300) 
Net loans   81,580    80,283    82,196  
Loans held for sale  —    —     14,383  
Premises and equipment, net   1,999    663    798  
Other real estate owned  —    —     1,485  
Accrued interest receivable   563    540    652  
Bank-owned life insurance   4,531    4,497    4,389  
Other assets   765    894    1,887  
TOTAL ASSETS $  140,167  $  143,519  $  167,970  
        
LIABILITIES AND STOCKHOLDERS' EQUITY     
Noninterest-bearing demand deposits $  4,034  $  4,503  $  4,747  
Interest-bearing demand deposits   6,604    9,781    8,197  
Savings and money market deposits   43,405    47,722    49,159  
Time deposits   55,169    55,329    65,983  
Total deposits   109,212    117,335    128,086  
        
Accrued interest payable   79    72    74  
Short-term FHLB borrowings   5,846   —     14,141  
Long-term FHLB borrowings   5,500    6,500    6,500  
Accounts payable and other liabilities   449    352    889  
TOTAL LIABILITIES   121,086    124,259    149,690  
        
Common stock   27    27    27  
Additional paid-in capital   27,126    27,121    26,840  
Accumulated deficit   (7,638)   (7,973)   (8,407) 
Accumulated other comprehensive (loss) gain   (278)   241    (78) 
Treasury stock, at cost   (156)   (156)   (102) 
TOTAL STOCKHOLDERS' EQUITY   19,081    19,260    18,280  
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $  140,167  $  143,519  $  167,970  
   

 

SOLERA NATIONAL BANCORP, INC.     
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)     
                
  Three Months Ended Six Months Ended     
($000s, except per share data) 6/30/2015 3/31/2015 6/30/2014 6/30/2015 6/30/2014     
Interest and dividend income               
Interest and fees on loans$  1,042 $  1,029 $  1,098 $  2,071 $  2,220      
Interest on loans held for sale  —      —       104   —       157      
Investment securities   242    293    397    535    813      
Dividends on bank stocks   12    11    16    23    31      
Other   3    1    3    4    5      
Total interest income   1,299    1,334    1,618    2,633    3,226      
Interest expense               
Deposits   246    246    274    492    543      
FHLB borrowings   27    25    40    52    80      
Total interest expense   273    271    314    544    623      
Net interest income   1,026    1,063    1,304    2,089    2,603      
Provision for loan and lease losses  —      —       150   —       150      
Net interest income after
provision for loan and lease losses
   1,026    1,063    1,154    2,089    2,453      
Noninterest income               
Customer service and other fees   30    27    30    57    57      
Other income   35    36    36    71    73      
Gain on loans sold  —      —       1,542   —       2,432      
Gain on sale of available-for-sale securities   35    100    59    135    109      
Total noninterest income   100    163    1,667    263    2,671      
Noninterest expense               
Employee compensation and benefits   373    376    1,520    749    3,203      
Occupancy   69   —       242    69    492      
Professional fees   32    85    271    117    507      
Other general and administrative   317    290    811    607    1,314      
Total noninterest expense   791    751    2,844    1,542    5,516      
Net income (loss)  335   475   (23)  810   (392)     
                
Income (loss) per share $  0.12   $  0.17   $  (0.01) $  0.30   $  (0.15)     
Tangible book value per share $  6.99   $  6.86   $  6.82   $  6.99   $  6.86       
Net interest margin  3.10%  3.14%  3.27%  3.12%  3.29%     
                
Asset Quality:               
Non-performing loans to gross loans  0.18%  0.19%  0.19%         
Non-performing assets to total assets  0.10%  0.11%  0.88%         
Allowance for loan losses to gross loans  1.95%  1.97%  1.56%         
Allowance for loan losses to non-performing loans  1,113.70%  1,047.40%  807.45%         
Other real estate owned  $              —  $              — $      1,485           
Selected Financial Ratios: (Solera National Bank Only)             
Tier 1 leverage ratio  12.6%  12.1%  9.8%         
Tier 1 risk-based capital ratio  17.3%  17.0%  14.5%         
Total risk-based capital ratio  18.6%  18.2%  15.6%         
                
                

 

Robert J. Fenton, President & CEO (303) 202-0933

Primary Logo

NEXT ARTICLE

More From BioPortfolio on "Solera National Bancorp Announces 2Q, First Half 2015 Financial Results"

Advertisement
Quick Search
Advertisement
Advertisement