Solera National Bancorp Announces Second Quarter and YTD 2022 Financial Results

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.



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