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Seacoast Commerce Banc Holdings Announces Fourth Quarter and Full Year 2019 Results

Full Year 2019 Highlights

  • Net income for the full year of $14.6 million, up $1.7 million, or 13.1%
  • Earnings per share of $1.51, up $0.14, or 10.2%
  • Return on Average Tangible Common Equity of 16.41%
  • Return on Average Assets of 1.34%
  • Asset growth of $91.2 million, or 8.8%, to $1.1 billion
  • Gross loan growth of $67.4 million, or 7.7%, to $945.5 million
  • Deposit growth of $149.6 million, or 18.5%, to $958.4 million
  • Non-interest bearing deposit growth of $124.7 million, or 35.6%, to $475.7 million
  • Non-interest bearing deposits represent 49.6% of total deposits
  • Specialty deposit growth of $169.6 million, or 28.6%, to $762.8 million
  • SBA loan production growth of $47.6 million, or 18.6%, to $303.7 million
  • Retained SBA guaranteed loan growth of $48.4 million, or 12.0%, to $450.1 million
  • Opened our 5th full-service branch, in Las Vegas, Nevada
  • Hired one new deposit business development officer
  • Hired five new SBA business development officers
  • Became the 10th largest SBA lender in the nation according to the SBA with $320.7 million in FY 2019 loan approvals, up 9.6% over 2018 approvals

SAN DIEGO, CA / ACCESSWIRE / January 16, 2020 / Seacoast Commerce Banc Holdings (OTC PINK:SCBH) ("Company"), the holding company of Seacoast Commerce Bank ("Bank"), reported consolidated unaudited net income for 2019 of $14.6 million, or $1.51 per share, compared with net income of $12.9 million, or $1.37 per share, for 2018, a 13.1% increase. For the fourth quarter of 2019, the Company reported net income of $3.8 million, compared to net income of $3.1 million for the fourth quarter of 2018, a 23.6% increase. The Company's 2019 full year return on average tangible common equity (ROATCE) and return on average assets (ROAA) were 16.41% and 1.34%, respectively, versus 16.99% and 1.33%, respectively, for 2018.

Richard M. Sanborn, President & Chief Executive Officer, commented, "As with previous years, 2019 was a continuation of our past consistent performance with excellent results across all our business lines. Our specialty deposit group had an exceptional year, growing our core deposits by $170 million, or 28.6%, to $763 million in specialty deposit balances. Our SBA group increased loan production by 18.6%, booking $303 million in new SBA loans, while our commercial banking team added an additional $84 million in loan fundings, resulting in a combined $388 million in loans provided to small businesses. Our strategy of originating and holding variable-rate SBA loans, and funding those loans with low-cost core deposits, 50% of which are non-interest bearing, continues to result in superior operating metrics for the Company. We feel confident that in the current rate and economic cycle that we are positioned well to outperform our peers and deliver superior returns for our shareholders."

Allan W. Arendsee, Chairman of the Board, stated, "While 2019 had its external challenges with economic uncertainty, rate cuts, and global unrest, the Seacoast team performed exceptionally well, as always. Our financial performance continues to be not only consistent, but also well above peers. We have always strived to do the right thing better than anyone else, and always in a safe and sound manner. The Board of Directors fully believes that the strategies we have been implementing are the right strategies to drive the company's growth and profitability in a way that provides an exemplary return to our shareholders."

Quarterly Financial highlights (in millions):

12/31/2019 09/30/2019 12/31/2018 12/31 Change % Change
Consolidated Net Income
$ 3.807 $ 3.684 $ 3.079 $ 0.73 23.6 %
ROATCE
16.22 % 16.17 % 15.13 % 1.09 % 7.2 %
ROAA
1.35 % 1.33 % 1.22 % 0.13 % 12.6 %
Earnings Per Share (Basic)
$ 0.39 $ 0.38 $ 0.32 $ 0.07 21.9 %
Dividend Paid Per Share
$ 0.12 $ 0.11 $ 0.09 $ 0.03 33.3 %
Net Interest Margin YTD
6.10 % 6.18 % 5.97 % 0.13 % 2.2 %
Efficiency Ratio
68.1 % 67.7 % 68.6 % (0.50 %) (0.7 %)

Divisional quarter-to-date results (in millions):

12/31/2019 09/30/2019 12/31/2018
Change
% Change
SBA Loan Production
$ 95.716 $ 70.657 $ 73.719 $ 21.007 29.8 %
SBA 7(a) guaranteed Loan Sales
$ 17.339 $ 8.320 $ 12.225 $ 5.114 41.8 %
Percent of Guaranteed Loan Sales
24.2 % 15.7 % 22.1 % 2.1 % 9.5 %
SBA Guaranteed Loan Inventory
$ 450.090 $ 435.250 $ 401.732 $ 48.358 12.0 %
Commercial Loan Production
$ 29.911 $ 13.955 $ 29.107 $ 0.804 2.76 %
1031 Exchange Deposits
$ 186.601 $ 119.919 $ 174.807 $ 11.794 6.7 %
Property Management Deposits
$ 253.161 $ 230.705 $ 167.434 $ 85.727 51.2 %
Association Management Deposits
$ 238.993 $ 214.354 $ 172.386 $ 66.607 38.6 %

Selected highlights for fourth-quarter 2019 versus fourth-quarter 2018:

Balance Sheet Metrics

  • Asset growth of 8.8%, or $91.2 million, to $1.1 billion;
  • Loan growth of 7.7%, or $67.4 million, to $945.5 million;
  • SBA loans held for sale up 12.0%, or $48.4 million, to $450.1 million;
  • Deposit growth of 18.5%, or $149.6 million, to $958.4 million;
  • Non-Interest bearing deposits represent 49.6% of total deposits;
  • Shareholders' Equity growth of 10.1%, or $12.2 million, to $132.3 million.

Income Statement Metrics

  • Interest Income up 2.0%, or $313 thousand, to $16.3 million;
  • Interest Expense down 31.8%, or $513 thousand, to $1.1 million;
  • Net-Interest Income up 5.8%, or $826 thousand, to $15.2 million;
  • Non-Interest Income up 62.3%, or $758 thousand, to $2.0 million;
  • Non-Interest Expenses up 7.1%, or $795 thousand, to $12.0 million;
  • Net Income up 23.6%, or $728 thousand, to $3.8 million.

Other Metrics

  • SBA loans funded QTD up 29.8%, or $22.0 million, to $95.7 million;
  • SBA loans funded YTD up 18.6%, or $47.6 million, to $303.7 million;
  • Allowance for loan losses of $6.1 million was 1.57% of loans held for investment (net);
  • Non-performing loans to total gross loans of 0.91%;
  • Non-performing assets to Tier 1 Capital plus ALLL (Texas Ratio) of 2.16%;
  • Since inception of the Bank's SBA program ten years ago, the bank has funded 2,206 loans for $2.0 billion in small business financing;
  • The Bank services a total of 1,304 SBA loans for $1.0 billion, of which $313 million has been sold in the secondary market and is not reflected on the banks balance sheet.

The Bank has always maintained capital levels well above the regulatory highest designation, "well capitalized", and had capital ratios at December 31, 2019, as follows:

Capital Ratios as of Dec. 31, 2019
Company Bank "Well Capitalized" Level
Tier 1 Leverage Ratio:
8.85% 8.86% 5.00%
Common Equity Tier 1 Ratio:
13.99% 14.01% 7.00%
Tier 1 Risk-Based Capital Ratio:
13.99% 14.01% 8.50%
Total Risk-Based Capital Ratio:
14.89% 14.91% 10.50%

As reported by the U.S. Small Business Administration ("SBA") for their fiscal year ending September 30, 2019, Seacoast Commerce Bank was the 10th largest SBA lender in the nation, out of over 3,000 financial institutions that are approved as an SBA lender. SBA rankings are based on total dollars approved with Seacoast having $320.7 million approved.

Seacoast Commerce Banc Holdings: Seacoast Commerce Banc Holdings is a bank holding company with one wholly owned banking subsidiary, Seacoast Commerce Bank. Both the holding company and the bank are headquartered in San Diego, California, with the Bank having five full-service banking branches in California and Nevada, with loan and deposit production offices throughout Arizona, California, Colorado, Georgia, Illinois, Indiana, Massachusetts, Nevada, New Jersey, North Carolina, Ohio, Oregon, Texas, Utah, and Washington. For more information on Seacoast Commerce Banc Holdings or Seacoast Commerce Bank, please visit www.scbholdings.com or www.sccombank.com, or contact Richard M. Sanborn, President and Chief Executive Officer at (725) 465-1919, or rsanborn@scbholdings.com.

This press release contains some non-GAAP financial analysis provided to supplement information regarding the Bank's performance, and to enhance investors' overall understanding of such financial performance. Certain statements in this press release, including statements regarding the anticipated development and expansion of the Bank's business, and the intent, belief or current expectations of the Bank, its directors or its officers, are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such "forward-looking" statements. These risks and uncertainties include, but are not limited to, risks related to the local and national economy, the Bank's performance and regulatory matters.

Seacoast Commerce Banc Holdings
Selected Financial Data
Consolidated and Unaudited
(000)

For the Quarters Ended % Change
12/31/2019 09/30/2019 12/31/2018 12/31 - 12/31
Balance Sheet Items
Total Gross Loans
945,533 921,047 878,142 7.7 %
SBA Loans Available for Sale (Memo Only)
450,090 435,250 401,732 12.0 %
Total Assets
1,131,355 1,082,173 1,040,131 8.8 %
Total Deposits
958,367 851,984 808,760 18.5 %
Non-Interest DDA (Memo Only)
475,366 443,897 350,694 35.6 %
Bank Borrowings
25,000 86,000 100,000 (75 %)
Shareholders' Equity
132,250 129,353 120,066 10.1 %
Bank Shareholders' Equity (Memo Only)
132,373 129,399 119,659 10.6 %
Income Statement Items
Total Interest Income
16,287 17,010 15,974 2.0 %
Total Interest Expense
1,100 1,224 1,613 (31.8 %)
Net Interest Income
15,187 15,786 14,361 5.8 %
Provision for Loan Losses
167 360 350 (52.3 %)
Non-Interest Income (excluding gains)
537 884 250 115.3 %
Gain on Sale Income
1,438 710 967 48.7 %
Non-Interest Expense
11,978 11,982 11,183 7.1 %
Pre-Tax Income
5,018 5,038 4,045 24.1 %
Our Fair Share of Income Taxes (24.1%)
1,211 1,354 966 25.4 %
Net Income
3,807 3,684 3,079 23.6 %
QTD Basic Earnings per Share
$ 0.39 $ 0.38 $ 0.32 21.9 %
YTD Basic Earnings per Share
$ 1.51 $ 1.12 $ 1.37 10.2 %
Book Value per Share
$ 13.83 $ 13.54 $ 12.84 7.7 %
Tangible Book Value per Share
$ 9.95 $ 9.65 $ 8.84 12.6 %
QTD ROAA
1.35 % 1.33 % 1.22 % 10.7 %
YTD ROAA
1.34 % 1.34 % 1.33 % 0.8 %
QTD ROATCE
16.22 % 16.17 % 15.13 % 7.2 %
YTD ROATCE
16.41 % 16.48 % 16.99 % (3.4 %)
Ending Shares Outstanding
9,564 9,557 9,353 2.3 %
Stock Price
$ 18.20 $ 18.15 $ 20.50 (11.2 %)
Market Capitalization
$ 174,065 $ 173,461 $ 191,743 (9.2 %)
Qtr. Cash Dividends Paid to Shareholders
$ 0.12 $ 0.11 $ 0.09 33.3 %
YTD Cash Dividends Paid to Shareholders
$ 0.44 $ 0.32 $ 0.34 29.4 %

Seacoast Commerce Banc Holdings
Selected Financial Data
Consolidated and Unaudited
(000)

For the Years Ended
12/31/2019 12/31/2018 $ Change % Change
Balance Sheet Items
Total Gross Loans
945,533 878,142 67,391 7.7 %
SBA Loans Available for Sale (Memo Only)
450,090 401,732 48,358 12.0 %
Total Assets
1,131,355 1,040,131 91,224 8.8 %
Total Deposits
958,367 808,760 149,607 18.5 %
Non-Interest DDA (Memo Only)
475,366 350,694 124,672 23.6 %
Bank Borrowings
25,000 100,000 (75,000 ) (75 %)
Shareholders' Equity
132,250 120,066 12,184 10.1 %
Bank Shareholders' Equity (Memo Only)
132,373 119,659 12,714 10.6 %
Income Statement Items
Total Interest Income
66,084 57,147 8,937 15.6 %
Total Interest Expense
5,020 5,307 (287 ) (5.4 %)
Net Interest Income
61,065 51,839 9,226 17.8 %
Provision for Loan Losses
1,461 550 911 165.6 %
Non-Interest Income (excluding gains)
2,783 1,950 833 42.7 %
Gain on Sale Income
4,719 5,995 (1,276 ) (21.3 %)
Non-Interest Expense
46,993 41,754 5,239 12.5 %
Pre-Tax Income
20,112 17,479 2,633 15.1 %
Our Fair Share of Income Taxes (27.5%)
5,524 4,579 945 20.6 %
Net Income
14,588 12,900 1,688 13.1 %
YTD Basic Earnings per Share
$ 1.51 $ 1.37 $ 0.14 10.2 %
Book Value per Share
$ 13.83 $ 12.84 $ 0.99 7.7 %
Tangible Book Value per Share
$ 9.95 $ 8.84 $ 1.11 12.6 %
YTD ROAA
1.34 % 1.33 % 0.01 % 0.8 %
YTD ROATCE
16.41 % 16.99 % (0.58 %) (3.4 %)
Ending Shares Outstanding
9,564 9,353 313 2.3 %
Stock Price
$ 18.20 $ 20.50 $ (2.30 ) (11.2 %)
Market Capitalization
$ 174,065 $ 191,743 $ (15,819 ) (9.2 %)
YTD Cash Dividends Paid to Shareholders
$ 0.44 $ 0.34 $ 0.10 29.4 %

Contact:
Richard M. Sanborn
President & Chief Executive Officer
Phone: 858-432-7001
Email: rsanborn@scbholdings.com

SOURCE: Seacoast Commerce Bank



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