Solera National Bancorp Announces Third Quarter 2023 Financial Results

Rhea-AI Summary

Solera National Bancorp reports financial results for Q3 2023, with net income of $4.9 million and year-to-date net income on pace to equal 2022.

Positive

• Total deposits are now over $1 billion, up 21% from 12/31/2022.
• Net interest income of $8.5 million for Q3 2023 represents a 15% increase over Q3 2022.
• Efficiency ratio stayed low at 39.25%.
• Total non-interest expense decreased by $849 thousand or 18%.
• Return on equity was 29.40%.

Negative

• Cost of funds has increased 188 BPS from Q3 2022.

Total deposits are now over $1 Billion, up 21% from 12/31/2022.

Year-to-date net income of 13.1 million is on pace to equal 2022.

LAKEWOOD, CO / ACCESSWIRE / October 19, 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 nine months ended September 30, 2023. For the third quarter of 2023, net income was $4.9 million ($1.11 per share) and $13.1 million year to date.

3Q23 Financial Highlights

(Comparison to 3Q22 unless otherwise noted)

• The Company had a pre-tax, pre-provision income of $5.9 million in the third quarter of 2023 compared to $5.2 million from Q2 2023.
• Net interest income of $8.5 million for the third quarter of 2023 represents a 15% increase over the $7.4 million.
• Our cost of funds has increased 188 BPS from Q3 2022.
• Return on equity was 29.40%.
• Total criticized loans have decreased by 40 bps. Non-performing loans 0.87%.
• Efficiency ratio stayed low at 39.25%.
• Total non-interest expense decreased by $849 thousand or 18%.

Michael Quagliano, Executive Chairman of the Board, commented: "Wow, in this high-rate environment, we made 1.11 EPS and over 10% return in one quarter for the shareholders. I/we continue to work relentlessly for the shareholders. If you have a new metric to judge us on, let me know what it is, and we will achieve that, too!"

Steve Snailum, COO, commented: "Solera continues to demonstrate strength and resilience in the face of challenges. The foresight and strategic thinking of bank leadership has enabled the bank to thrive in both rates up and rates down economic cycles, and furthermore, the ability of the team to execute the strategy remains a pillar of success for Solera. As Thomas Edison said, "Genius is one percent inspiration, ninety-nine percent perspiration." Solera is never afraid of hard work, and we are committed to providing exceptional service and results to our clients and shareholders ."

Kreighton Reed, EVP, commented: "Non-interest bearing deposits have been and will remain a main priority for Solera. We will be expanding our product set to expand our non-interest bearing growth. Our non-interest bearing deposits have shown strong resilience to this high rate environment."

Tim Pester, the Controller, commented: " We are excited to report another outstanding quarter, as our bank's strong earnings performance in this elevated rate environment reflects our unwavering commitment to financial excellence and our ability to navigate dynamic economic landscapes with precision and resilience."

Jay Hansen, CFO, commented: "We slowed down our growth mainly because of a core system conversion and to let our capital numbers catch up, and we have significantly reduced our FHLB borrowings & moved to more core deposits. Higher for longer appears to be the Fed position, but we are ready for markets to go up or down. I am very proud of our team and the extra hours they have put in during our exhausting conversion. Our key ratios are some of the best for less than $2 Billion banks, especially in Colorado."

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)		9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
ASSETS
Cash and due from banks		$	2,156			$	1,657			$	1,957			$	3,490			$	2,683
Federal funds sold			-				-				5,300				-				-
Interest-bearing deposits with banks			1,651				1,528				2,214				1,499				2,379
Investment securities, available-for-sale			169,673				173,552				170,033				164,176				154,044
Investment securities, held-to-maturity			199,875				204,900				205,425				207,048				205,475
FHLB and Federal Reserve Bank stocks, at cost			7,516				9,043				7,103				3,954				3,843
Paycheck Protection Program (PPP) loans, gross			86				111				111				578				589
Net deferred (fees)/expenses, PPP loans			-				-				-				(6	)			(7	)
Net PPP loans			86				111				111				572				582
Traditional loans, gross			746,198				745,666				717,943				578,584				539,568
Allowance for loan and lease losses			(9,405	)			(9,404	)			(8,847	)			(8,005	)			(8,004	)
Net traditional loans			736,793				736,262				709,096				570,188				531,147
Premises and equipment, net			28,918				27,625				26,816				25,266				25,040
Accrued interest receivable			7,232				6,557				7,044				5,825				5,833
Bank-owned life insurance			4,972				4,944				4,917				4,891				4,864
Other assets			12,611				8,952				10,291				8,408				11,003
TOTAL ASSETS		$	1,171,483			$	1,175,131			$	1,150,307			$	995,317			$	946,893
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing demand deposits		$	509,382			$	539,522			$	536,880			$	551,990			$	543,260
Interest-bearing demand deposits			46,153				42,825				56,715				40,853				33,236
Savings and money market deposits			272,948				219,834				210,476				202,542				170,148
Time deposits			232,728				130,716				147,174				84,398				108,520
Total deposits			1,061,211				932,897				951,245				879,783				855,164
Accrued interest payable			1,042				150				70				438				238
Short-term borrowings			7,100				137,193				98,432				52,175				37,223
Long-term FHLB borrowings			34,000				34,000				34,000				4,000				4,000
Accounts payable and other liabilities			2,860				2,786				2,489				1,192				628
TOTAL LIABILITIES			1,106,213				1,107,026				1,086,236				937,588				897,253
Common stock			43				43				43				43				43
Additional paid-in capital			38,748				38,748				38,748				38,748				38,748
Retained earnings			50,877				46,240				42,562				37,978				32,994
Accumulated other comprehensive (loss) gain			(24,398	)			(16,926	)			(17,282	)			(19,040	)			(22,145	)
TOTAL STOCKHOLDERS' EQUITY			65,270				68,105				64,071				57,729				49,640
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	1,171,483			$	1,175,131			$	1,150,307			$	995,317			$	946,893

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

	Three Months Ended
($000s, except per share data)		9/30/2023				6/30/2023				3/31/2023				12/31/2022				9/30/2022
Interest and dividend income
Interest and fees on traditional loans		$	11,638			$	10,684			$	9,691			$	7,678			$	6,140
Interest and fees on PPP loans			-				-				11				2				277
Investment securities			3,826				3,679				3,549				3,500				3,130
Dividends on bank stocks			163				163				120				64				68
Other			59				23				17				18				18
Total interest income		$	15,686			$	14,549			$	13,388			$	11,262				9,633
Interest expense
Deposits			5,680				4,307				3,947				2,322				1,062
FHLB & Fed borrowings			1,497				1,819				1,281				480				327
Total interest expense			7,177				6,126				5,228				2,802				1,389
Net interest income			8,509				8,423				8,160				8,460				8,244
Provision for loan and lease losses			9				559				759				5				859
Net interest income after provision for loan and lease losses			8,500				7,864				7,401				8,455				7,385
Noninterest income
Customer service and other fees			372				417				405				303				257
Other income			822				972				747				726				551
Gain on sale of loan			-				-				-				-				-
Gain on sale of securities			-				-				242				96				478
Total noninterest income			1,194				1,389				1,394				1,125				1,286
Noninterest expense
Employee compensation and benefits			1,957				2,101				2,015				1,949				1,690
Occupancy			341				336				292				310				198
Professional fees			148				96				112				110				65
Other general and administrative			1,362				2,124				1,104				1,406				974
Total noninterest expense			3,808				4,657				3,523				3,775				2,927
Net Income Before Taxes		$	5,886			$	4,596			$	5,273			$	5,805			$	5,744
Income Tax Expense			985				968				689				821				843
Net Income		$	4,901			$	3,628			$	4,584			$	4,984			$	4,901
Income Per Share		$	1.11			$	0.84			$	1.03			$	1.16			$	1.14
Tangible Book Value Per Share		$	14.72			$	15.84			$	14.45			$	13.43			$	11.54
WA Shares outstanding			4,433,286				4,299,953				4,433,286				4,299,953				4,299,953
Pre-Tax Pre-Provision Income		$	5,895			$	5,155			$	6,032			$	5,810			$	6,603
Net Interest Margin			3.29	%			3.37	%			3.36	%			3.97	%			4.18	%
Cost of Funds			2.54	%			2.24	%			1.98	%			1.21	%			0.66	%
Efficiency Ratio			39.25	%			47.46	%			37.83	%			39.78	%			32.34	%
Return on Average Assets			1.67	%			1.25	%			1.71	%			2.05	%			2.22	%
Return on Average Equity			29.40	%			21.96	%			30.11	%			37.14	%			38.43	%
Leverage Ratio			7.6	%			7.3	%			7.2	%			7.9	%			8.1	%
Asset Quality:
Non-performing loans to gross loans			0.87	%			1.07	%			0.74	%			0.93	%			1.01	%
Non-performing assets to total assets			0.55	%			0.68	%			0.46	%			0.54	%			0.57	%
Allowance for loan losses to gross traditional loans			1.24	%			1.24	%			1.23	%			1.38	%			1.48	%
* Not meaningful due to the insignificant amount of non-performing loans.
Criticized loans/assets:
Special mention		$	26,006			$	29,164			$	23,951			$	23,566			$	19,385
Substandard: Accruing			1,695				1,720				2,195				1,739				1,911
Substandard: Nonaccrual			6,508				8,005				5,300				5,364				5,431
Doubtful			-				-				-				-				-
Total criticized loans		$	34,209			$	38,889			$	31,446			$	30,669			$	26,727
Other real estate owned			-				-				-				-				-
Investment securities			-				-				-				-				-
Total criticized assets		$	34,209			$	38,889			$	31,446			$	30,669			$	26,727
Criticized assets to total assets			2.91	%			3.31	%			2.73	%			3.08	%			2.82	%

SOURCE: Solera National Bank

View source version on accesswire.com:
https://www.accesswire.com/794821/solera-national-bancorp-announces-third-quarter-2023-financial-results

FAQ

What is the total amount of deposits?

Total deposits are now over $1 billion.

What is the net interest income for Q3 2023?

Net interest income for Q3 2023 is $8.5 million.

What is the efficiency ratio?

The efficiency ratio is 39.25%.

How much did the total non-interest expense decrease by?

Total non-interest expense decreased by $849 thousand or 18%.

What is the return on equity?

The return on equity is 29.40%.