Solera National Bancorp Announces Third Quarter Results

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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