Solera National Bancorp Announces Fourth Quarter 2023 Financial Results

Rhea-AI Summary

Solera National Bancorp, Inc. reported strong financial results for the fourth quarter of 2023, with net income of $3.5 million and YTD pre-tax and pre-provision income of $22.8 million. The company had a return on equity of 35.64% and an efficiency ratio of 42.37%. Despite a 525 basis points increase by the Fed Reserve, the bank managed to earn $3.87 per share for 2023. Solera National Bank launched Prestige banking and a new live chat feature on its website. The bank witnessed substantial core earnings growth during a high-rate environment, positioning it effectively to navigate future market uncertainties confidently.

Positive

• Strong YTD pre-tax and pre-provision income of $22.8 million
• Net income of $16.7 million YTD (3.87 per share)
• Total interest income of $16.4 million increased by 45% from Q4 2022
• Return on equity of 35.64%
• Efficiency ratio of 42.37%
• Successful launch of Prestige banking and a new live chat feature on the website
• Substantial core earnings growth during a high-rate environment

Negative

• None.

YTD pre-tax and pre-provision income of $22.8 million

Net income of $16.7 million YTD (3.87 per share)

LAKEWOOD, CO / ACCESSWIRE / January 24, 2024 / 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 twelve months ended December 31, 2023. For the fourth quarter of 2023, net income was $3.5 million ($0.82 per share). Q4 2023 total interest income of $16.4 million increased $5.1 million or 45% from Q4 2022.

4Q23 Financial Highlights

• The Company had a pre-tax and pre-provision income of $5.7 million.
• Return on equity was 35.64%.
• Earning asset yield increased to 5.90% from 5.13% in Q4 2022.
• Total criticized loans have decreased by $16 million.
• Efficiency ratio was 42.37%.

Michael Quagliano, Executive Chairman of the Board, commented: "Despite unprecedented 525 basis points increases by the Fed Reserve resulting in higher cost of funds, Solera National Bank managed to earn $3.87 per share for 2023. Solera National Bank is well positioned for any future."

Solera as a community: "We want to wish Kreighton Reed continued success in his new career."

Steve Snailum, COO, commented: "We have officially launched Prestige banking by Solera! Our goal is to provide concierge-style banking to both business and consumer customers looking for great rates and easy-to-use products. Our relationship managers are already working with numerous customers and businesses to help them achieve their goals. We have also launched a new live chat feature on our website and online banking platform. This enhancement lets customers interact with our terrific staff more efficiently and is quickly becoming the preferred method of communication for our customers. I am extremely proud of the hard work the team is putting in to take Solera to greater heights. We will continue to thrive and make a difference!"

Tim Pester, the Controller, commented: " In 2023, our bank witnessed substantial core earnings growth during a high-rate environment. This proactive approach positions Solera effectively to navigate the future market's uncertainties confidently."

Jay Hansen, CFO, commented: "We adjusted our tax accrual and needed a catchup in Q4. This was mainly due to our higher cost of funds in 2023, which increased our interest disallowance (TEFRA). We've already captured some security gains from the recent decrease in rates. More decreases could result in even more gains if the market allows for it. Plus, it's an election year to spice things up. Very excited about our position and the number of options we have."

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)		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022
ASSETS
Cash and due from banks		$	3,518			$	2,156			$	1,657			$	1,957			$	3,490
Federal funds sold			-				-				-				5,300				-
Interest-bearing deposits with banks			2,582				1,651				1,528				2,214				1,499
Investment securities, available-for-sale			183,500				169,673				173,552				170,033				164,176
Investment securities, held-to-maturity			200,825				199,875				204,900				205,425				207,048
FHLB and Federal Reserve Bank stocks, at cost			12,225				7,516				9,043				7,103				3,954
Paycheck Protection Program (PPP) loans, gross			79				86				111				111				578
Net PPP loans			79				86				111				111				572
Traditional loans, gross			787,280				746,198				745,666				717,943				578,584
Allowance for loan and lease losses			(9,607	)			(9,405	)			(9,404	)			(8,847	)			(8,005	)
Net traditional loans			777,673				736,793				736,262				709,096				570,188
Premises and equipment, net			28,173				28,918				27,625				26,816				25,266
Accrued interest receivable			7,272				7,232				6,557				7,044				5,825
Bank-owned life insurance			5,002				4,972				4,944				4,917				4,891
Other assets			7,799				12,611				8,952				10,291				8,408
TOTAL ASSETS		$	1,228,648			$	1,171,483			$	1,175,131			$	1,150,307			$	995,317
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing demand deposits		$	512,705			$	509,382			$	539,522			$	536,880			$	551,990
Interest-bearing demand deposits			48,122				46,153				42,825				56,715				40,853
Savings and money market deposits			172,092				272,948				219,834				210,476				202,542
Time deposits			238,386				232,728				130,716				147,174				84,398
Total deposits			971,305				1,061,211				932,897				951,245				879,783
Accrued interest payable			1,680				1,042				150				70				438
Short-term borrowings			138,077				7,100				137,193				98,432				52,175
Long-term FHLB borrowings			34,000				34,000				34,000				34,000				4,000
Accounts payable and other liabilities			4,045				2,860				2,786				2,489				1,192
TOTAL LIABILITIES			1,149,107				1,106,213				1,107,026				1,086,236				937,588
Common stock			43				43				43				43				43
Additional paid-in capital			38,748				38,748				38,748				38,748				38,748
Retained earnings			54,421				50,877				46,240				42,562				37,978
Accumulated other comprehensive (loss) gain			(13,671	)			(24,398	)			(16,926	)			(17,282	)			(19,040	)
TOTAL STOCKHOLDERS' EQUITY			79,541				65,270				68,105				64,071				57,729
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	1,228,648			$	1,171,483			$	1,175,131			$	1,150,307			$	995,317

Solera National Bancorp, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

($000s, except per share data)		12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022
Interest and dividend income
Interest and fees on traditional loans		$	12,425			$	11,638			$	10,684			$	9,691			$	7,678
Interest and fees on PPP loans			-				-				-				11				2
Investment securities			3,704				3,826				3,679				3,549				3,500
Dividends on bank stocks			159				163				163				120				64
Other			88				59				23				17				18
Total interest income		$	16,376			$	15,686			$	14,549			$	13,388			$	11,262
Interest expense
Deposits			6,066				5,680				4,307				3,947				2,322
FHLB & Fed borrowings			1,662				1,497				1,819				1,281				480
Total interest expense			7,728				7,177				6,126				5,228				2,802
Net interest income			8,648				8,509				8,423				8,160				8,460
Provision for loan and lease losses			203				9				559				759				5
Net interest income after provision for loan and lease losses			8,445				8,500				7,864				7,401				8,455
Noninterest income
Customer service and other fees			528				372				417				405				303
Other income			617				822				972				747				726
Gain on sale of securities			68				-				-				242				96
Total noninterest income			1,213				1,194				1,389				1,394				1,125
Noninterest expense
Employee compensation and benefits			2,046				1,957				2,101				2,015				1,949
Occupancy			342				341				336				292				310
Professional fees			383				148				96				112				110
Other general and administrative			1,378				1,362				2,124				1,104				1,406
Total noninterest expense			4,149				3,808				4,657				3,523				3,775
Net Income Before Taxes		$	5,509			$	5,886			$	4,596			$	5,273			$	5,805
Income Tax Expense			1,965				985				968				689				821
Net Income		$	3,544			$	4,901			$	3,628			$	4,584			$	4,984
Income Per Share		$	0.82			$	1.14			$	0.84			$	1.07			$	1.16
Tangible Book Value Per Share		$	18.50			$	15.18			$	15.84			$	14.90			$	13.43
WA Shares outstanding			4,299,953				4,299,953				4,299,953				4,299,953				4,299,953
Pre-Tax Pre-Provision Income		$	5,712			$	5,895			$	5,155			$	6,032			$	5,810
Net Interest Margin			3.32	%			3.29	%			3.37	%			3.36	%			3.97	%
Cost of Funds			2.72	%			2.54	%			2.24	%			1.98	%			1.21	%
Efficiency Ratio			42.37	%			39.25	%			47.46	%			37.83	%			39.78	%
Return on Average Assets			2.31	%			1.67	%			1.25	%			1.71	%			2.05	%
Return on Average Equity			35.64	%			29.40	%			21.96	%			30.11	%			37.14	%
Leverage Ratio			7.6	%			7.6	%			7.3	%			7.2	%			7.9	%
Asset Quality:
Non-performing loans to gross loans			0.66	%			0.87	%			1.07	%			0.74	%			0.93	%
Non-performing assets to total assets			0.43	%			0.55	%			0.68	%			0.46	%			0.54	%
Allowance for loan losses to gross traditional loans			1.21	%			1.24	%			1.24	%			1.23	%			1.38	%
Criticized loans/assets:
Special mention		$	9,688			$	26,006			$	29,164			$	23,951			$	23,566
Substandard: Accruing			1,685				1,695				1,720				2,195				1,739
Substandard: Nonaccrual			5,223				6,508				8,005				5,300				5,364
Doubtful			-				-				-				-				-
Total criticized loans		$	16,596			$	34,209			$	38,889			$	31,446			$	30,669
Other real estate owned			-				-				-				-				-
Investment securities			-				-				-				-				-
Total criticized assets		$	16,596			$	34,209			$	38,889			$	31,446			$	30,669
Criticized assets to total assets			1.35	%			2.91	%			3.31	%			2.73	%			3.08	%

SOURCE: Solera National Bancorp, Inc.

View the original press release on accesswire.com

FAQ

What was Solera National Bancorp's net income for the fourth quarter of 2023?

Solera National Bancorp reported a net income of $3.5 million for the fourth quarter of 2023.

What was the YTD pre-tax and pre-provision income for Solera National Bancorp?

Solera National Bancorp reported a YTD pre-tax and pre-provision income of $22.8 million.

What was the return on equity for Solera National Bancorp?

The return on equity for Solera National Bancorp was 35.64%.

What is the efficiency ratio of Solera National Bancorp?

The efficiency ratio of Solera National Bancorp was 42.37%.

What new banking feature did Solera National Bank launch?

Solera National Bank launched Prestige banking and a new live chat feature on its website.

What growth did Solera National Bank witness in a high-rate environment?

Solera National Bank witnessed substantial core earnings growth during a high-rate environment, positioning it effectively to navigate future market uncertainties confidently.