Solera National Bancorp Announces Second Quarter and YTD 2022 Financial Results

Rhea-AI Summary

Solera National Bancorp (OTC PINK:SLRK) reported a strong second quarter for 2022, achieving a net income of $5.1 million and $8.3 million year-to-date. Pre-tax and pre-provision earnings reached a record $6.3 million, up from $4.0 million year-over-year. Key highlights include a 47% increase in net interest income to $7.6 million and a 63% growth in noninterest-bearing deposits. The efficiency ratio improved to 36.19%, while the net interest margin increased to 4.18%. The bank maintains solid asset quality with nonperforming assets at 0.68%.

Positive

• Net income increased to $5.1 million for 2Q22, up from $3.0 million in 2Q21.
• Pre-tax and pre-provision earnings were a record $6.3 million, compared to $4.0 million in 2Q21.
• Net interest income rose 47% to $7.6 million from $5 million YoY.
• Noninterest-bearing deposits grew by $28 million or 5% in 2Q22.
• Efficiency ratio improved to 36.19%, down from 42.01% in 1Q22.
• Net interest margin increased to 4.18% from 3.81% in 1Q22.

Negative

• Tangible book value per share decreased to $12.18 from $12.60 YoY.

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.

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

FAQ

What were Solera National Bancorp's earnings for the second quarter of 2022?

Solera National Bancorp reported net income of $5.1 million for the second quarter of 2022.

What is the current net interest income for SLRK?

The net interest income for Solera National Bancorp was $7.6 million in the second quarter of 2022.

How did noninterest-bearing deposits change for Solera in 2Q22?

Noninterest-bearing deposits rose by 5% to $544 million in the second quarter of 2022.

What is the net interest margin for Solera National Bancorp?

As of June 30, 2022, the net interest margin for Solera National Bancorp is 4.18%.

How does Solera's asset quality appear in the recent report?

Solera's asset quality remains strong, with nonperforming assets at 0.68% of total assets.