Loan and Deposit Growth Pace 2009 Results for Solera National Bancorp, Inc.
Entering Third Year of Operation, Company Approaches Break-Even with Eye on Growth
LAKEWOOD, Colo., Feb. 4 /PRNewswire-FirstCall/ --
Performance Highlights
- Net Loss Declines Sharply: Net loss of $9,000 in fourth quarter 2009 declined $252,000, or 97%, from third quarter 2009, and $754,000, or 99%, from fourth quarter 2008. The Bank opened its doors in September 2007 and, despite economic conditions in the past two years, has steadily moved towards its goal of consistent profitability.
- Significant Revenue Growth: Net interest and dividend income increased 102% to $925,000 in fourth quarter 2009 compared with $458,000 in fourth quarter 2008, reflecting strong net interest margin management.
- Solid Loan Production: The loan portfolio grew 136% to $50.5 million at December 31, 2009 compared to $21.4 million at December 31, 2008. The Bank continued to find quality lending opportunities to small and midsize businesses in the Denver Metropolitan area.
- Superior Asset Quality: At December 31, 2009, Solera had no non-performing assets and has not experienced net credit losses since opening in September 2007. The Bank has an allowance for loan losses of 1.64% of gross loans as of December 31, 2009.
- Strong Core Deposit Growth: Customer deposits grew 177% to $104.4 million at December 31, 2009 compared with $37.7 million at December 31, 2008. Enhancing the Bank's low cost of funds, core deposits, which exclude time deposits, comprised 62% of total deposits at December 31, 2009 compared with 36% of total deposits at December 31, 2008.
- New Accounts: The number of loan and deposit accounts grew 101% to 1,745 at December 31, 2009 from 869 accounts as of December 31, 2008.
- Expense Control: Noninterest expense in fourth quarter 2009 of $1.0 million declined 2% from prior quarter and 16%, or $191,000, from fourth quarter 2008.
- Capital Strength: At December 31, 2009, the Company's tangible book value per share was $6.96. Solera National Bank's Tier 1 Leverage Capital Ratio of 11.1% and Total Risk-Based Capital Ratio of 20.8% at December 31, 2009 substantially exceeded the regulatory requirements of a well-capitalized bank.
Solera National Bancorp, Inc. (OTC Bulletin Board: SLRK), the parent company of Solera National Bank, reported a fourth quarter 2009 net loss of $9,000 or less than one cent per share compared with a net loss of $261,000 or ($0.10) per share in third quarter 2009 and a net loss of $763,000 or ($0.30) per share in fourth quarter 2008.
For the year ended December 31, 2009, the Company reported a net loss of $1,276,000 or ($0.50) per share compared with a net loss of $2,214,000 or ($0.87) per share at December 31, 2008. The Company continues to steadily narrow losses as it moves toward consistent and healthy profitability.
During fourth quarter 2009, total interest and dividend income was $1.63 million, the best in the Company's history, growing 130% compared with fourth quarter 2008. Interest and fee income on loans was $713,000, also the highest in the Bank's history, growing 198% compared with fourth quarter 2008.
"We made substantial and rapid progress during 2009 in building our franchise. Our well-capitalized status, strong balance sheet and ample liquidity position us well for 2010," commented Douglas Crichfield, President and CEO. "We have continued to win market share by providing excellent service and leading-edge products to small and midsize business customers who are finding fewer opportunities with large national and regional institutions as they focus on larger business customers."
The Bank's executives and Board members actively reach out to the business community to build awareness of Solera and generate new business opportunities. In 2009, the Bank expanded its active outreach by forming a Community Advisory Council, consisting of Bank founders and members of the Denver Metropolitan area business community.
Crichfield commented: "Our expertise in serving small businesses, Hispanic- and minority-owned businesses, and our multi-faceted support of the area's growing Hispanic community in areas such as education, financial literacy, and small business management has been vital to winning new business and enhancing customer loyalty."
Net interest and dividend income rose to $925,000 in fourth quarter 2009, 21% higher than the prior quarter and a 102% increase over fourth quarter 2008, which management noted reflects the Bank's active outreach and high levels of customer retention.
"Management's focus during the fourth quarter was on growing net interest income while positioning the balance sheet for expanding net interest margin in 2010," remarked Robert J. Fenton, Executive Vice President and Chief Financial Officer. "We attracted a significant number of customers during the first nine months of 2009, due in part to very competitive rates offered on our savings and interest-bearing checking accounts. We lowered those rates during the fourth quarter with no net loss of customers, which resulted in a 20 basis point reduction in our cost of funds. We anticipate this improvement, coupled with a shift in asset mix from the investment portfolio to the loan portfolio during 2010, will result in a meaningful expansion of net interest margin throughout the year."
The Company generated noninterest income of $200,000 in fourth quarter 2009, compared with $178,000 and $62,000 in third quarter 2009 and fourth quarter 2008, respectively. During fourth quarter 2009, the Company recognized a $173,000 net gain on sale of securities compared to a $98,000 and $2,000 net gain on sale of securities during the third quarter 2009 and fourth quarter 2008, respectively.
The Company reported record total assets of $132.8 million at December 31, 2009, compared with $67.7 million at December 31, 2008. Average earning assets were $130.6 million in the fourth quarter 2009 compared with $106.1 million in the third quarter 2009.
Management noted the Company continues to be successful in generating revenue growth well in excess of noninterest expense. Noninterest expense in fourth quarter 2009 of $1.0 million was the lowest of the year and represented a decline of $191,000 compared with fourth quarter 2008.
At the end of fourth quarter 2009, the Company had no non-performing assets. In light of the growth in the loan portfolio and the current economic environment, the Company deemed it prudent to increase its allowance for loan losses by $130,000 from the trailing quarter to $830,000, representing 1.64% of gross loans.
Customer deposits totaled $104.4 million in fourth quarter 2009, an increase of $66.7 million compared to fourth quarter 2008. Importantly, management notes the growth in customer deposits during 2009 was primarily in core deposits, which exclude time deposits. The Company believes these core deposits will be a more stable source of funds over the long-term. Core deposits comprised 62% of deposits at December 31, 2009 compared to 36% at December 31, 2008. The number of deposit accounts grew to 1,595, an increase of 6% and 106% compared to third quarter 2009 and fourth quarter 2008, respectively. The Bank's Tier 1 Leverage Capital Ratio was 11.1% at year end, while its Total Risk-Based Capital was 20.8% — both in excess of commonly accepted regulatory standards for well-capitalized institutions.
The Company had significant liquidity at quarter-end, including unsecured federal fund purchase lines and additional secured borrowing capacity at the Federal Home Loan Bank Topeka, the Federal Reserve Bank, and through a correspondent bank relationship.
Looking ahead to 2010, Crichfield concluded, "We expect to continue the significant expansion of our franchise through customer acquisition while building on the momentum established in 2009 in terms of the bottom-line. Our primary focus will be achieving sustained profitability and growth in shareholder value this year and beyond."
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 on September 10, 2007. Solera National Bank is a traditional, community, commercial bank with a specialized focus serving the Hispanic market. For more information, visit http://www.solerabank.com.
Cautions Concerning Forward-Looking Statements
All information in this press release consists of 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 within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These risks and uncertainties can include the risks associated with the ability to grow the Bank and the services it provides, the ability to successfully integrate new business lines and expand into new markets, competition in the marketplace, general economic conditions and many other risks described in the Company's Securities and Exchange Commission filings. The most significant of these uncertainties are described in our Annual Report on Form 10-K and Quarterly reports on Form 10-Q all of which any reader of this release is encouraged to study (including all amendments to those reports) and exhibits to those reports, and include (but are not limited to) the following: the Company has a very limited operating history upon which to base an estimate of its future financial performance; the Company expects to incur losses during its initial years of operations; the Bank's failure to implement its business strategies may adversely affect the Company's financial performance; the departures of key personnel or directors may impair the Bank's operations; and general economic and market conditions. 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: |
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Douglas Crichfield, President & CEO, 303-937-6429 |
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Robert J. Fenton, EVP, Chief Financial Officer, 303-202-0933 |
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FINANCIAL TABLES FOLLOW
SOLERA NATIONAL BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
($000s) 12/31/09 9/30/09 6/30/09 3/31/09 12/31/08
-------- ------- ------- ------- --------
ASSETS
Cash and due from banks $1,696 $1,087 $718 $1,577 $1,436
Federal funds sold 820 4,975 385 - 965
Interest-bearing
deposits with banks 3,784 2,241 - - -
Investment securities,
available-for-sale 73,441 73,026 53,718 52,484 41,557
FHLB and Federal Reserve
Bank stocks, at cost 1,131 1,092 1,064 1,069 1,080
Gross loans 50,504 48,490 39,308 31,066 21,413
Net deferred
(fees)/expenses (114) (135) (103) (118) (57)
Allowance for loan
losses (830) (700) (520) (386) (268)
---- ---- ---- ---- ----
Net loans 49,560 47,655 38,685 30,562 21,088
Premises and equipment,
net 875 909 948 978 1,012
Accrued interest receivable 814 677 657 468 383
Other assets 719 752 214 244 222
--- --- --- --- ---
TOTAL ASSETS $132,840 $132,414 $96,389 $87,382 $67,743
======== ======== ======= ======= =======
LIABILITIES AND
STOCKHOLDERS' EQUITY
Noninterest-bearing
demand deposits $2,624 $4,346 $5,637 $5,171 $3,910
Interest-bearing demand
deposits 6,830 11,537 2,773 4,372 2,604
Savings and money market
deposits 55,318 42,323 13,219 8,676 6,873
Time deposits 39,629 44,696 44,630 37,269 24,275
------ ------ ------ ------ ------
TOTAL DEPOSITS 104,401 102,902 66,259 55,488 37,662
Securities sold under
agreements to repurchase
and federal funds purchased 326 26 1,541 1,182 398
Accrued interest payable 82 139 113 109 80
Accounts payable and
other liabilities 344 1,894 420 1,799 394
FHLB borrowings 8,750 7,750 9,500 10,000 10,000
Deferred rent liability 85 80 74 68 61
Capital lease liability 118 128 138 147 156
--- --- --- --- ---
TOTAL LIABILITIES 114,106 112,919 78,045 68,793 48,751
Common stock 26 26 26 26 26
Additional paid-in
capital 25,768 25,713 25,660 25,607 25,558
Accumulated deficit (8,016) (8,007) (7,746) (7,222) (6,740)
Accumulated other
comprehensive income 956 1,763 404 178 148
--- ----- --- --- ---
TOTAL STOCKHOLDERS'
EQUITY 18,734 19,495 18,344 18,589 18,992
------ ------ ------ ------ ------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $132,840 $132,414 $96,389 $87,382 $67,743
======== ======== ======= ======= =======
SOLERA NATIONAL BANCORP, INC.
CONSOLIDATED INCOME STATEMENTS
(unaudited)
For the Three Months Ended:
---------------------------
($000s) 12/31/09 9/30/09 6/30/09 3/31/09 12/31/08
-------- ------- ------- ------- --------
Interest and dividend
income
Interest and fees on loans $713 $598 $469 $314 $239
Federal funds sold 2 2 - 1 6
Investment securities 896 752 650 598 436
Dividends on bank stocks 11 11 10 10 11
Other 8 - - - 18
--- --- --- --- --
Total interest and
dividend income 1,630 1,363 1,129 923 710
----- ----- ----- --- ---
Interest expense
Deposits 622 517 369 294 144
Securities sold under
agreements to repurchase
and federal funds purchased 2 2 4 3 2
FHLB borrowings 78 78 86 92 102
Capital leases 3 3 3 4 4
--- --- --- --- ---
Total interest expense 705 600 462 393 252
--- --- --- --- ---
Net interest and dividend
income 925 763 667 530 458
Provision for loan losses 130 180 135 117 88
--- --- --- --- --
Net interest and dividend
income after provision
for loan losses 795 583 532 413 370
Noninterest income
Customer service and
other fees 27 80 71 69 53
Gain on sale of
securities 173 98 30 77 2
Sublease income - - - 4 7
--- --- --- --- ---
Total noninterest
income 200 178 101 150 62
--- --- --- --- --
Noninterest expense
Salaries and
employee benefits 548 591 686 612 766
Occupancy 141 142 139 136 135
Professional fees 80 53 67 116 91
Other general and
administrative 235 236 264 181 203
--- --- --- --- ---
Total noninterest
expense 1,004 1,022 1,156 1,045 1,195
----- ----- ----- ----- -----
Net loss $(9) $(261) $(523) $(482) $(763)
=== ===== ===== ===== =====
Number of deposit accounts 1,595 1,510 1,152 1,034 773
Number of loan accounts 150 141 127 114 96
--- --- --- --- --
Total accounts 1,745 1,651 1,279 1,148 869
SOURCE Solera National Bancorp, Inc.
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