Solera National Bancorp Announces Second Quarter 2023 Financial Results
American Banker ranks Solera number 5 for publicly traded banks under $2B.
LAKEWOOD, CO / ACCESSWIRE / July 28, 2023 / Solera National Bancorp, Inc. (OTC PINK:SLRK) ("Company"), the holding company for Solera National Bank ("Bank"), a business-focused bank located in the Denver metropolitan area, today reported financial results for the three months and six months ended June 30, 2023. For the second quarter of 2023, net income was $3.6 million ($0.84 per share) and $8.2 million year to date.
2Q23 Financial Highlights
(Comparison to 2Q22 unless otherwise noted)
The Company had pre-tax, pre-provision, and pre-one-time expense earnings of $6.1 million in the second quarter of 2023 compared to $6.3 million.
Return on equity was 21.96%.
Allowance for loan losses is now $9.4 million. Solera's allowance ratio is 1.24%. Q2 2023 provision was $559 thousand.
Efficiency ratio stayed low at 47.46%.
Net interest income increased by $855 thousand or 11%.
Michael Quagliano, Executive Chairman of the Board, commented: "We continue to take what the market will give us."
Steve Snailum, COO, commented: "Solera National Bank will complete a conversion of its core banking system during Q3 2023. The whole team has been hard at work making this transition possible, and we are very excited to continue providing outstanding service while upgrading our capabilities and functionality. Our people continue to represent a significant competitive advantage for the bank, and this quarter has been no exception. You can count on the Solera team to be a trusted and reliable resource now and for years to come."
Kreighton Reed, EVP, commented: "Our self-directed department continues to flourish. This quarter we continued to add to the bench strength of our staff by adding numerous team members with years of self-directing experience. Investing in certified and experienced staff will pay dividends with our customer experience as we continue to expand our offerings in this niche space. The summer months are typically a slower time for the self-directed sector. We were delighted that we saw an increase in account openings in the latter half of the quarter compared to the same period last year. A sign that investors are ready to get off the sidelines and invest in this "new normal" economy."
Tim Pester, the Controller, commented: "As Solera's prepares to transition to a new banking system in Q3 2023, increases in market rates and significant one-time costs associated with the conversion emerged in Q2 2023. Nevertheless, the bank is excited to see that earnings remained strong despite the rising rates and one-time expenses. As core earnings have continued to grow, we are eager to see how the remainder of the year plays out once these one-time conversion costs are behind Solera."
Jay Hansen, CFO, commented: "We are still growing as fast as our capital allows. We won't have these high rates forever, and we need to take advantage of them. Our future is looking great! Just compare our key ratios to most other banks, and you too will see the excitement."
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 the needs of emerging businesses and real estate investors. At the core of Solera National Bank is welcoming, attentive, and respectful customer service, a focus on supporting a growing and diverse 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. and its wholly-owned subsidiary, Solera National 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.
Contacts: Jay Hansen, CFO (303) 209-8600
FINANCIAL TABLES FOLLOW
SOLERA NATIONAL BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(unaudited)
($000s) | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | ||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Cash and due from banks | $ | 1,657 | $ | 1,957 | $ | 3,490 | $ | 2,683 | $ | 4,714 | $ | 4,025 | ||||||||||||
Federal funds sold | - | 5,300 | - | - | - | 31,000 | ||||||||||||||||||
Interest-bearing deposits with banks | 1,528 | 2,214 | 1,499 | 2,379 | 1,788 | 2,459 | ||||||||||||||||||
Investment securities, available-for-sale | 173,552 | 170,033 | 164,176 | 154,044 | 171,151 | 141,175 | ||||||||||||||||||
Investment securities, held-to-maturity | 204,900 | 205,425 | 207,048 | 205,475 | 125,890 | 51,965 | ||||||||||||||||||
FHLB and Federal Reserve Bank stocks, at cost | 9,043 | 7,103 | 3,954 | 3,843 | 5,400 | 1,626 | ||||||||||||||||||
Paycheck Protection Program (PPP) loans, gross | 111 | 111 | 578 | 589 | 10,709 | 37,951 | ||||||||||||||||||
Net deferred (fees)/expenses, PPP loans | - | - | (6 | ) | (7 | ) | (271 | ) | (1,026 | ) | ||||||||||||||
Net PPP loans | 111 | 111 | 572 | 582 | 10,438 | 36,925 | ||||||||||||||||||
Traditional loans, gross | 745,666 | 717,943 | 578,584 | 539,568 | 461,447 | 433,506 | ||||||||||||||||||
Allowance for loan and lease losses | (9,404 | ) | (8,847 | ) | (8,005 | ) | (8,004 | ) | (7,153 | ) | (7,153 | ) | ||||||||||||
Net traditional loans | 736,262 | 709,096 | 570,188 | 531,147 | 453,861 | 425,909 | ||||||||||||||||||
Premises and equipment, net | 27,625 | 26,816 | 25,266 | 25,040 | 14,104 | 14,195 | ||||||||||||||||||
Accrued interest receivable | 6,557 | 7,044 | 5,825 | 5,833 | 4,352 | 3,689 | ||||||||||||||||||
Bank-owned life insurance | 4,944 | 4,917 | 4,891 | 4,864 | 5,094 | 5,068 | ||||||||||||||||||
Other assets | 8,952 | 10,291 | 8,408 | 11,003 | 19,410 | 3,910 | ||||||||||||||||||
TOTAL ASSETS | $ | 1,175,131 | $ | 1,150,307 | $ | 995,317 | $ | 946,893 | $ | 816,202 | $ | 721,946 | ||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||||||||||||
Noninterest-bearing demand deposits | $ | 539,522 | $ | 536,880 | $ | 551,990 | $ | 543,260 | $ | 543,956 | $ | 515,929 | ||||||||||||
Interest-bearing demand deposits | 42,825 | 56,715 | 40,853 | 33,236 | 10,392 | 10,100 | ||||||||||||||||||
Savings and money market deposits | 219,834 | 210,476 | 202,542 | 170,148 | 113,819 | 117,799 | ||||||||||||||||||
Time deposits | 130,716 | 147,174 | 84,398 | 108,520 | 17,735 | 18,743 | ||||||||||||||||||
Total deposits | 932,897 | 951,245 | 879,783 | 855,164 | 685,902 | 662,571 | ||||||||||||||||||
Accrued interest payable | 150 | 70 | 438 | 238 | 124 | 33 | ||||||||||||||||||
Short-term borrowings | 137,193 | 98,432 | 52,175 | 37,223 | 72,634 | - | ||||||||||||||||||
Long-term FHLB borrowings | 34,000 | 34,000 | 4,000 | 4,000 | 4,000 | 4,000 | ||||||||||||||||||
Accounts payable and other liabilities | 2,786 | 2,489 | 1,192 | 628 | 1,166 | 1,102 | ||||||||||||||||||
TOTAL LIABILITIES | 1,107,026 | 1,086,236 | 937,588 | 897,253 | 763,826 | 667,706 | ||||||||||||||||||
Common stock | 43 | 43 | 43 | 43 | 43 | 43 | ||||||||||||||||||
Additional paid-in capital | 38,748 | 38,748 | 38,748 | 38,748 | 38,748 | 38,748 | ||||||||||||||||||
Retained earnings | 46,240 | 42,562 | 37,978 | 32,994 | 28,094 | 23,008 | ||||||||||||||||||
Accumulated other comprehensive (loss) gain | (16,926 | ) | (17,282 | ) | (19,040 | ) | (22,145 | ) | (14,509 | ) | (7,559 | ) | ||||||||||||
TOTAL STOCKHOLDERS' EQUITY | 68,105 | 64,071 | 57,729 | 49,640 | 52,376 | 54,240 | ||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 1,175,131 | $ | 1,150,307 | $ | 995,317 | $ | 946,893 | $ | 816,202 | $ | 721,946 | ||||||||||||
SOLERA NATIONAL BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended
($000s, except per share data) | 6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | |||||||||||||||
Interest and dividend income | ||||||||||||||||||||
Interest and fees on traditional loans | $ | 10,684 | $ | 9,691 | $ | 7,678 | $ | 6,140 | $ | 4,935 | ||||||||||
Interest and fees on PPP loans | - | 11 | 2 | 277 | 824 | |||||||||||||||
Investment securities | 3,679 | 3,549 | 3,500 | 3,130 | 2,215 | |||||||||||||||
Dividends on bank stocks | 163 | 120 | 64 | 68 | 51 | |||||||||||||||
Other | 23 | 17 | 18 | 18 | 2 | |||||||||||||||
Total interest income | $ | 14,549 | $ | 13,388 | $ | 11,262 | 9,633 | 8,027 | ||||||||||||
Interest expense | ||||||||||||||||||||
Deposits | 4,307 | 3,947 | 2,322 | 1,062 | 300 | |||||||||||||||
FHLB & Fed borrowings | 1,819 | 1,281 | 480 | 327 | 159 | |||||||||||||||
Total interest expense | 6,126 | 5,228 | 2,802 | 1,389 | 459 | |||||||||||||||
Net interest income | 8,423 | 8,160 | 8,460 | 8,244 | 7,568 | |||||||||||||||
Provision for loan and lease losses | 559 | 759 | 5 | 859 | 10 | |||||||||||||||
Net interest income after | 7,864 | 7,401 | 8,455 | 7,385 | 7,558 | |||||||||||||||
Noninterest income | ||||||||||||||||||||
Customer service and other fees | 417 | 405 | 303 | 257 | 321 | |||||||||||||||
Other income | 972 | 747 | 726 | 551 | 183 | |||||||||||||||
Gain on sale of loan | - | - | - | - | - | |||||||||||||||
Gain on sale of securities | - | 242 | 96 | 478 | 1,179 | |||||||||||||||
Total noninterest income | 1,389 | 1,394 | 1,125 | 1,286 | 1,683 | |||||||||||||||
Noninterest expense | ||||||||||||||||||||
Employee compensation and benefits | 2,101 | 2,015 | 1,949 | 1,690 | 1,800 | |||||||||||||||
Occupancy | 336 | 292 | 310 | 198 | 177 | |||||||||||||||
Professional fees | 96 | 112 | 110 | 65 | 119 | |||||||||||||||
Other general and administrative | 2,124 | 1,104 | 1,406 | 974 | 825 | |||||||||||||||
Total noninterest expense | 4,657 | 3,523 | 3,775 | 2,927 | 2,921 | |||||||||||||||
Net Income Before Taxes | $ | 4,596 | $ | 5,273 | $ | 5,805 | $ | 5,744 | $ | 6,320 | ||||||||||
Income Tax Expense | 968 | 689 | 821 | 843 | 1,235 | |||||||||||||||
Net Income | $ | 3,628 | $ | 4,584 | $ | 4,984 | $ | 4,901 | $ | 5,085 | ||||||||||
Income Per Share | $ | 0.84 | $ | 1.03 | $ | 1.16 | $ | 1.14 | $ | 1.18 | ||||||||||
Tangible Book Value Per Share | $ | 15.84 | $ | 14.45 | $ | 13.43 | $ | 11.54 | $ | 12.18 | ||||||||||
WA Shares outstanding | 4,299,953 | 4,433,286 | 4,299,953 | 4,299,953 | 4,299,953 | |||||||||||||||
Pre-Tax Pre-Provision Income | $ | 5,155 | $ | 6,032 | $ | 5,810 | $ | 6,603 | $ | 6,330 | ||||||||||
Net Interest Margin | 3.37 | % | 3.36 | % | 3.97 | % | 4.18 | % | 3.81 | % | ||||||||||
Cost of Funds | 2.24 | % | 1.98 | % | 1.21 | % | 0.66 | % | 0.25 | % | ||||||||||
Efficiency Ratio | 47.46 | % | 37.83 | % | 39.78 | % | 32.34 | % | 36.19 | % | ||||||||||
Return on Average Assets | 1.25 | % | 1.71 | % | 2.05 | % | 2.22 | % | 2.64 | % | ||||||||||
Return on Average Equity | 21.96 | % | 30.11 | % | 37.14 | % | 38.43 | % | 38.16 | % | ||||||||||
Leverage Ratio | 7.2 | % | 7.2 | % | 7.9 | % | 8.1 | % | 8.4 | % | ||||||||||
Asset Quality: | ||||||||||||||||||||
Non-performing loans to gross loans | 1.07 | % | 0.74 | % | 0.93 | % | 1.01 | % | 1.20 | % | ||||||||||
Non-performing assets to total assets | 0.68 | % | 0.46 | % | 0.54 | % | 0.57 | % | 0.68 | % | ||||||||||
Allowance for loan losses to gross traditional loans | 1.24 | % | 1.23 | % | 1.38 | % | 1.48 | % | 1.55 | % | ||||||||||
Criticized loans/assets: | ||||||||||||||||||||
Special mention | $ | 29,164 | $ | 23,951 | $ | 23,566 | $ | 19,385 | $ | 11,661 | ||||||||||
Substandard: Accruing | 1,720 | 2,195 | 1,739 | 1,911 | 1,931 | |||||||||||||||
Substandard: Nonaccrual | 8,005 | 5,300 | 5,364 | 5,431 | 5,530 | |||||||||||||||
Doubtful | - | - | - | - | - | |||||||||||||||
Total criticized loans | $ | 38,889 | $ | 31,446 | $ | 30,669 | $ | 26,727 | $ | 19,122 | ||||||||||
Other real estate owned | - | - | - | - | - | |||||||||||||||
Investment securities | - | - | - | - | - | |||||||||||||||
Total criticized assets | $ | 38,889 | $ | 31,446 | $ | 30,669 | $ | 26,727 | $ | 19,122 | ||||||||||
Criticized assets to total assets | 3.31 | % | 2.73 | % | 3.08 | % | 2.82 | % | 2.34 | % | ||||||||||
SOURCE: Solera National Bancorp, Inc.
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