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Solera National Bancorp Announces Second Quarter and YTD 2022 Financial Results

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·9 min read
Solera National Bancorp, Inc.
In this article:
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LAKEWOOD, CO / ACCESSWIRE / July 28, 2022 / 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, 2022. For the second quarter of 2022, net income was $5.1 million and $8.3 million year to date as of June 30, 2022.

2Q22 Financial Highlights

(Comparison to 2Q21 unless otherwise noted)

The Company had record pre-tax and pre-provision earnings of $6.3 million in the second quarter of 2022 compared to $4.0 million in the second quarter of 2021. Year to date pre-tax and pre-provision earnings through June 30, 2022 increased to $11.1 million, which is $3.9 million higher over the prior year.

  • Noninterest-bearing deposits rose 5% during the quarter to $544 million, which is a $28 million increase over the previous quarter and a 63% or $209 million increase from June 30, 2021.

  • Net interest income of $7.6 million for the second quarter 2022 represents a 47% increase over the $5 million earned in the second quarter of 2021.

  • Tangible book value per share was $12.18 per share as of June 30, 2022 compared to $12.60 per share as of June 30, 2021.

  • The Company's impressive efficiency ratio of 36.19% decreased from 42.01% from the first quarter 2022.

  • Net interest margin increased to 4.18% as of June 30, 2022 from 3.81% in the first quarter of 2022.

  • Asset quality remained strong with a modest level of criticized assets of 2.34% of total assets and nonperforming assets of 0.68% of total assets as of June 30, 2022.

For the three months ended June 30, 2022, the Company reported net income of $5.1 million, or $1.19 per share, compared to net income of $3.2 million, or $0.74 per share, for the three months ended March 31, 2022, and net income of $3.0 million, or $0.71 per share, for the three months ended June 30, 2021.

Michael Quagliano, Executive Chairman of the Board, commented: "The numbers speak for themselves. Over the past quarter, the Bank was able to take advantage of the raising rate environment and we are ready to react to any future gyrations of the market. We have levers at our discretion to weather any storm. I extend a special thank you to the Board of Directors and all of our employees at Solera for their high level of performance."

Jordan Wright, Vice Chairman of the Board, commented: "This quarter's earnings show how Mike Quagliano's leadership of the Bank continues to enable us to punch above our weight class. Under his direction, we've found great ways to grow revenue and perform at the highest levels. And we're just getting started."

Cheri Walz, CFO, commented: "The Bank continued to perform very well in the second quarter of this year and we are extremely pleased and proud to deliver these results to our shareholders. We saw record earnings this quarter which were largely driven by growth and activity in the Bank's investment portfolio. Within the quarter, we saw a 10% growth in net interest margin, a 42% improvement in ROA, and a 69% improvement in ROE. We see these trends continuing as we head into the next six months of the year."

Kreighton Reed, commented: "I'm pleased to announce this next quarter Solera is refreshing its logo and revolutionizing its website. These aesthetic and feature-rich changes better reflect the future direction Solera must march towards to compete in a rapidly tech-advancing bank industry.

Jordan Wright's vision and direction around tech and software enhancements have already benefited our loan and deposit team's efficiency. Solera will see exponential growth through further implementation of software through our own software development team led by Stephen Tippets.

Solera shareholders can continue to bank on Solera's steady 8 years of continuous growth. Solera is perfectly poised to benefit from this rising rate environment thanks to the relentless focus Michael Quagliano has had the past 8 years with his unwavering discipline around efficiency, profitability, and talent acquisition.

I'm immensely happy to be back home at Solera. The freedom to innovate and be part of a bank that is wildly successful was too alluring to stay away from.

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: Cheri Walz, EVP & CFO (720) 764-9090

FINANCIAL TABLES FOLLOW
SOLERA NATIONAL BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(unaudited)

($000s)

6/30/2022

3/31/2022

12/31/2021

9/30/2021

6/30/2021

ASSETS






Cash and due from banks

$

4,714

$

4,025

$

4,124

$

2,714

$

2,525

Federal funds sold

-

31,000

12,000

15,000

2,700

Interest-bearing deposits with banks

1,788

2,459

1,251

1,267

880

Investment securities, available-for-sale

171,151

141,175

130,199

82,588

73,308

Investment securities, held-to-maturity

125,890

51,965

10,500

10,423

10,421

FHLB and Federal Reserve Bank stocks, at cost

5,400

1,626

2,853

1,626

2,330

Paycheck Protection Program (PPP) loans, gross

10,709

37,951

50,901

68,901

97,172

Net deferred (fees)/expenses, PPP loans

(271

)

(1,026

)

(1,493

)

(2,165

)

(3,118

)

Net PPP loans

10,438

36,925

49,408

66,736

94,054

Traditional loans, gross

461,447

433,506

419,638

355,636

328,633

Net deferred (fees)/expenses, traditional loans

(433

)

(444

)

(422

)

(846

)

(688

)

Allowance for loan and lease losses

(7,153

)

(7,153

)

(6,452

)

(5,633

)

(5,500

)

Net traditional loans

453,861

462,834

412,764

349,157

322,445

Premises and equipment, net

14,104

14,195

18,830

12,939

13,019

Accrued interest receivable

4,352

3,689

2,756

2,334

2,080

Bank-owned life insurance

5,094

5,068

5,042

5,015

4,989

Other assets

19,410

3,910

1,450

2,086

3,241

TOTAL ASSETS

$

816,202

$

721,946

$

651,177

$

551,885

$

531,992


LIABILITIES AND STOCKHOLDERS' EQUITY

Noninterest-bearing demand deposits

$

543,956

$

515,929

$

464,050

$

390,138

$

334,620

Interest-bearing demand deposits

10,392

10,100

11,071

12,809

15,979

Savings and money market deposits

113,819

117,799

93,937

66,444

89,223

Time deposits

17,735

18,743

18,860

19,678

27,647

Total deposits

685,902

662,571

587,918

489,069

467,469


Accrued interest payable

124

33

36

36

41

Short-term borrowings

72,634

-

-

-

4,735

Long-term FHLB borrowings

4,000

4,000

4,000

4,000

4,000

Accounts payable and other liabilities

1,166

1,102

294

2,804

1,589

TOTAL LIABILITIES

763,826

667,706

592,248

495,909

477,834


Common stock

43

43

43

43

43

Additional paid-in capital

38,748

38,748

38,748

38,748

38,748

Retained earnings

28,094

23,008

19,809

17,185

13,786

Accumulated other comprehensive (loss) gain

(14,509

)

(7,559

)

329

-

1,581

TOTAL STOCKHOLDERS' EQUITY

52,376

54,240

58,929

55,976

54,158

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

816,202

$

721,946

$

651,177

$

551,885

$

531,992

SOLERA NATIONAL BANCORP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS (unaudited)


Three Months Ended

Six Months Ended

($000s, except per share data)

6/30/2022

3/31/2022

12/31/2021

9/30/2021

6/30/2021

6/30/2022

6/30/2021

Interest and dividend income








Interest and fees on traditional loans

$

4,965

$

4,561

$

4,426

$

3,498

$

3,298

$

9,526

$

6,303

Interest and fees on PPP loans

824

581

821

1,152

1,259

1,405

2,245

Investment securities

2,185

1,201

876

614

647

3,386

1,180

Dividends on bank stocks

51

17

19

17

29

68

55

Other

2

-

-

5

3

2

6

Total interest income

8,027

6,360

$

6,142

5,286

5,236

14,387

9,789

Interest expense

Deposits

300

221

189

192

200

521

374

FHLB & Fed borrowings

159

17

20

17

33

176

64

Total interest expense

459

238

209

209

233

697

438

Net interest income

7,568

6,122

5,933

5,077

5,003

13,690

9,351

Provision for loan and lease losses

10

702

837

149

5

712

610

Net interest income after
provision for loan and lease losses

7,558

5,420

5,096

4,928

4,998

12,978

8,741

Noninterest income

Customer service and other fees

321

300

264

250

353

621

559

Other income

183

262

118

118

114

445

228

Gain on sale of loan

-

943

-

-

-

943

-

Gain on sale of securities

1,179

278

1,392

462

1,179

510

Total noninterest income

1,683

1,505

660

1,760

929

3,188

1,297

Noninterest expense

Employee compensation and benefits

1,800

1,651

1,189

1,279

1,085

3,451

1,896

Occupancy

177

215

174

175

165

392

320

Professional fees

119

101

115

92

65

220

121

Other general and administrative

825

841

665

695

603

1,666

1,087

Total noninterest expense

2,921

2,808

2,143

2,241

1,918

5,729

3,424

Net Income Before Taxes

$

6,320

$

4,117

$

3,613

$

4,447

$

4,009

$

10,437

$

6,614

Income Tax Expense

1,235

919

990

1,048

945

2,154

1,546

Net Income

$

5,085

$

3,198

$

2,623

$

3,399

$

3,064

$

8,283

$

5,068


Income Per Share

$

1.19

$

0.74

$

0.61

$

0.79

$

0.71

$

1.94

$

1.18

Tangible Book Value Per Share

$

12.18

$

12.62

$

13.72

$

13.03

$

12.60

$

12.18

$

12.60

WA Shares outstanding

4,276,953

4,299,953

4,299,953

4,299,953

4,143,620

4,276,953

4,294,815

Pre-Tax Pre-Provision Income

$

6,330

$

4,819

$

4,450

$

4,596

$

4,014

$

11,149

$

7,224

Net Interest Margin

4.18

%

3.81

%

4.05

%

3.92

%

3.88

%

4.01

%

3.85

%

Cost of Funds

0.25

%

0.15

%

0.15

%

0.17

%

0.19

%

0.20

%

0.19

%

Efficiency Ratio

36.19

%

42.01

%

33.94

%

41.16

%

35.06

%

38.82

%

33.77

%

Return on Average Assets

2.64

%

1.86

%

1.74

%

2.51

%

2.95

%

2.27

%

2.00

%

Return on Average Equity

31.61

%

22.61

%

18.26

%

24.69

%

25.57

%

30.02

%

20.12

%

Leverage Ratio (CBLR)

8.4

%

8.9

%

11.3

%

11.4

%

11.0

%


Asset Quality:

Non-performing loans to gross loans

1.20

%

1.30

%

1.58

%

1.89

%

2.07

%

Non-performing assets to total assets

0.68

%

0.78

%

1.02

%

1.22

%

1.28

%

Allowance for loan losses to gross traditional loans

1.55

%

1.65

%

1.54

%

1.58

%

1.67

%


Criticized loans/assets:

Special mention

$

11,661

$

11,742

$

17,745

$

7,734

$

7,018

Substandard: Accruing

1,931

12,882

3,766

4,729

4,772

Substandard: Nonaccrual

5,530

5,631

6,629

6,710

6,796

Doubtful

-

-

-

-

-

Total criticized loans

$

19,122

$

30,255

$

28,140

$

19,173

$

18,586

Other real estate owned

-

-

-

-

-

Investment securities

-

-

-

-

-

Total criticized assets

$

19,122

$

30,255

$

28,140

$

19,173

$

18,586

Criticized assets to total assets

2.34

%

4.19

%

4.32

%

3.47

%

3.49

%

SOURCE: Solera National Bancorp, Inc.



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https://www.accesswire.com/710192/Solera-National-Bancorp-Announces-Second-Quarter-and-YTD-2022-Financial-Results