Solera National Bancorp Announces Third Quarter Results

Rhea-AI Summary

Solera National Bancorp (OTC PINK:SLRK) reported strong financial results for Q3 2022, achieving a net income of $4.9 million and $13.1 million year-to-date. This marks a significant increase in pre-tax earnings to $6.6 million, up from $4.6 million in Q3 2021. The bank's net interest income rose 52% to $8.2 million, with an improved net interest margin of 4.18%. Noninterest-bearing deposits surged by 39%, and the efficiency ratio decreased to 32.34%. Asset quality remains solid with low levels of nonperforming assets at 0.57%. Management emphasizes continued strong growth prospects.

Positive

• Net income increased to $4.9 million in Q3 2022.
• Year-to-date net income reached $13.1 million.
• Pre-tax earnings rose to $6.6 million, compared to $4.6 million in Q3 2021.
• Net interest income grew by 52% to $8.2 million.
• Net interest margin improved to 4.18%.
• Noninterest-bearing deposits increased by 39% ($153 million).
• Efficiency ratio decreased to 32.34%.
• Asset quality remained strong with nonperforming assets at 0.57%.

Negative

• None.

Year to Date Net Income of $13.1 million

LAKEWOOD, CO / ACCESSWIRE / October 25, 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 nine months ended September 30, 2022. For the third quarter of 2022, net income was $4.9 million and $13.1 million year to date as of September 30, 2022.

3Q22 Financial Highlights

(Comparison to 3Q21 unless otherwise noted)

The Company experienced another quarter of record pre-tax and pre-provision earnings of $6.6 million in the third quarter of 2022 compared to $4.6 million in the third quarter of 2021. Year to date pre-tax and pre-provision earnings through September 30, 2022, increased to $17.8 million, which is $5.9 million higher over the prior year.

• Net interest income of $8.2 million for the third quarter 2022 represents a 52% increase over the $5.1 million earned in the third quarter of 2021.
• Net interest margin increased to 4.18% as of September 30, 2022, from 3.81% in the first quarter of 2022.
• Noninterest-bearing deposits increased 39% or $153 million increase from September 30, 2021.
• The Company's efficiency ratio of 32.34% decreased from 36.19% from the second quarter 2022.
• Asset quality remained strong with a modest level of criticized assets of 2.82% of total assets and nonperforming assets of 0.57% of total assets as of September 30, 2022.

Michael Quagliano, Executive Chairman of the Board, commented: "Everyone at Solera is working hard for our shareholders. Our enthusiasm is infectious, and our unity is unwavering. I love my job at Solera National Bank, the community bank for all the States."

Cheri Walz, CFO, commented: "This was another excellent quarter for Solera. Our balance sheet management strategies have delivered stable deposits and strong commercial and investment growth. Not only were our financial results strong this quarter, the underlying drivers of increases in profitability should provide tailwinds into the future."

Kreighton Reed, commented: "To bolster our strong growth we added to our bench strength this quarter by deepening our C-Suite. Stephen Tippetts our Chief Technology Officer will run our software development team. Steve Snailum, a 16 year banking veteran, was named Chief Operations Officer and will help us to continue to build scaleable operational foundation for our rapidly growing organization."

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 SHEETS
(unaudited)

($000s)		9/30/2022				6/30/2022				3/31/2022				12/31/2021				9/30/2021
ASSETS
Cash and due from banks		$	2,683			$	4,714			$	4,025			$	4,124			$	2,714
Federal funds sold			-				-				31,000				12,000				15,000
Interest-bearing deposits with banks			2,379				1,788				2,459				1,251				1,267
Investment securities, available-for-sale			154,044				171,151				141,175				130,199				82,588
Investment securities, held-to-maturity			205,475				125,890				51,965				10,500				10,423
FHLB and Federal Reserve Bank stocks, at cost			3,843				5,400				1,626				2,853				1,626
Paycheck Protection Program (PPP) loans, gross			589				10,709				37,951				50,901				68,901
Net deferred (fees)/expenses, PPP loans			(7	)			(271	)			(1,026	)			(1,493	)			(2,165	)
Net PPP loans			582				10,438				36,925				49,408				66,736
Traditional loans, gross			539,568				461,447				433,506				419,638				355,636
Net deferred (fees)/expenses, traditional loans			(417	)			(433	)			(444	)			(422	)			(846	)
Allowance for loan and lease losses			(8,004	)			(7,153	)			(7,153	)			(6,452	)			(5,633	)
Net traditional loans			531,147				453,861				425,909				412,764				349,157
Premises and equipment, net			25,040				14,104				14,195				18,830				12,939
Accrued interest receivable			5,833				4,352				3,689				2,756				2,334
Bank-owned life insurance			4,864				5,094				5,068				5,042				5,015
Other assets			11,003				19,410				3,910				1,450				2,086
TOTAL ASSETS		$	946,893			$	816,202			$	721,946			$	651,177			$	551,885
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing demand deposits		$	543,260			$	543,956			$	515,929			$	464,050			$	390,138
Interest-bearing demand deposits			33,236				10,392				10,100				11,071				12,809
Savings and money market deposits			170,148				113,819				117,799				93,937				66,444
Time deposits			108,520				17,735				18,743				18,860				19,678
Total deposits			855,164				685,902				662,571				587,918				489,069
Accrued interest payable			238				124				33				36				36
Short-term borrowings			37,223				72,634				-				-				-
Long-term FHLB borrowings			4,000				4,000				4,000				4,000				4,000
Accounts payable and other liabilities			628				1,166				1,102				294				2,804
TOTAL LIABILITIES			897,253				763,826				667,706				592,248				495,909
Common stock			43				43				43				43				43
Additional paid-in capital			38,748				38,748				38,748				38,748				38,748
Retained earnings			32,994				28,094				23,008				19,809				17,185
Accumulated other comprehensive (loss) gain			(22,145	)			(14,509	)			(7,559	)			329				-
TOTAL STOCKHOLDERS' EQUITY			49,640				52,376				54,240				58,929				55,976
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	946,893			$	816,202			$	721,946			$	651,177			$	551,885

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

		Three Months Ended																				Nine Months Ended
($000s, except per share data)		9/30/2022				6/30/2022				3/31/2022				12/31/2021				9/30/2021				9/30/2022				9/30/2021
Interest and dividend income
Interest and fees on traditional loans		$	6,140			$	4,965			$	4,561			$	4,426			$	3,498			$	15,666			$	9,801
Interest and fees on PPP loans			277				824				581				821				1,152				1,682				3,397
Investment securities			3,130				2,185				1,201				876				614				6,516				1,794
Dividends on bank stocks			86				51				17				19				17				154				72
Other			-				2				-				-				5				2				11
Total interest income			9,633				8,027				6,360				6,142				5,286				24,020				15,075
Interest expense
Deposits			1,062				300				221				189				192				1,583				566
FHLB & Fed borrowings			327				159				17				20				17				503				81
Total interest expense			1,389				459				238				209				209				2,086				647
Net interest income			8,244				7,568				6,122				5,933				5,077				21,934				14,428
Provision for loan and lease losses			859				10				702				837				149				1,571				759
Net interest income after provision for loan and lease losses			7,385				7,558				5,420				5,096				4,928				20,363				13,669
Noninterest income
Customer service and other fees			257				321				300				264				250				878				809
Other income			551				183				262				118				118				996				346
Gain on sale of loan			-				-				943				-				-				943				-
Gain on sale of securities			478				1,179								278				1,392				1,657				1,902
Total noninterest income			1,286				1,683				1,505				660				1,760				4,474				3,057
Noninterest expense
Employee compensation and benefits			1,690				1,800				1,651				1,189				1,279				5,141				3,175
Occupancy			198				177				215				174				175				590				495
Professional fees			65				119				101				115				92				285				213
Other general and administrative			974				825				841				665				695				2,638				1,782
Total noninterest expense			2,927				2,921				2,808				2,143				2,241				8,654				5,665
Net Income Before Taxes		$	5,744			$	6,320			$	4,117			$	3,613			$	4,447			$	16,183			$	11,061
Income Tax Expense			843				1,235				919				990				1,048				2,997				2,594
Net Income		$	4,901			$	5,085			$	3,198			$	2,623			$	3,399			$	13,186			$	8,467
Income Per Share		$	1.14			$	1.18			$	0.74			$	0.61			$	0.79			$	3.07			$	1.97
Tangible Book Value Per Share		$	11.54			$	12.18			$	12.61			$	13.70			$	13.02			$	11.54			$	13.02
WA Shares outstanding			4,299,953				4,299,953				4,299,953				4,297,216				4,296,378				4,299,953				4,296,378
Pre-Tax Pre-Provision Income		$	6,603			$	6,330			$	4,819			$	4,450			$	4,596			$	17,754			$	11,820
Net Interest Margin			4.18	%			4.18	%			3.81	%			4.05	%			3.92	%			4.07	%			3.88	%
Cost of Funds			0.66	%			0.25	%			0.15	%			0.15	%			0.17	%			0.38	%			0.18	%
Efficiency Ratio			32.34	%			36.19	%			42.01	%			33.94	%			41.16	%			36.35	%			36.01	%
Return on Average Assets			2.22	%			2.64	%			1.86	%			1.74	%			2.51	%			2.12	%			2.18	%
Return on Average Equity			38.43	%			38.16	%			22.61	%			18.26	%			24.69	%			33.75	%			21.81	%
Leverage Ratio			8.1	%			8.4	%			8.9	%			11.3	%			11.4	%
Asset Quality:
Non-performing loans to gross loans			1.01	%			1.20	%			1.30	%			1.58	%			1.89	%
Non-performing assets to total assets			0.57	%			0.68	%			0.78	%			1.02	%			1.22	%
Allowance for loan losses to gross traditional loans			1.48	%			1.55	%			1.65	%			1.54	%			1.58	%
Criticized loans/assets:
Special mention		$	19,385			$	11,661			$	11,742			$	17,745			$	7,734
Substandard: Accruing			1,911				1,931				12,882				3,766				4,729
Substandard: Nonaccrual			5,431				5,530				5,631				6,629				6,710
Doubtful			-				-				-				-				-
Total criticized loans		$	26,727			$	19,122			$	30,255			$	28,140			$	19,173
Other real estate owned			-				-				-				-				-
Investment securities			-				-				-				-
Total criticized assets		$	26,727			$	19,122			$	30,255			$	28,140			$	19,173
Criticized assets to total assets			2.82	%			2.34	%			4.19	%			4.32	%			3.47	%

SOURCE: Solera National Bancorp, Inc.

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FAQ

What were Solera National Bancorp's Q3 2022 earnings results?

Solera National Bancorp reported a net income of $4.9 million for Q3 2022.

What is the year-to-date net income for Solera National Bancorp?

The year-to-date net income as of September 30, 2022, is $13.1 million.

How much did net interest income increase in Q3 2022 for SLRK?

Net interest income increased by 52% to $8.2 million in Q3 2022.

What is the current net interest margin for Solera National Bancorp?

As of September 30, 2022, the net interest margin is 4.18%.

How has Solera National Bancorp's asset quality changed?

As of September 30, 2022, the nonperforming assets remained low at 0.57%.