Solera National Bancorp Announces Second Quarter 2023 Financial Results

American Banker ranks Solera number 5 for publicly traded banks under $2B.

LAKEWOOD, CO / ACCESSWIRE / July 28, 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 six months ended June 30, 2023. For the second quarter of 2023, net income was $3.6 million ($0.84 per share) and $8.2 million year to date.

2Q23 Financial Highlights

(Comparison to 2Q22 unless otherwise noted)

• The Company had pre-tax, pre-provision, and pre-one-time expense earnings of $6.1 million in the second quarter of 2023 compared to $6.3 million.
• Return on equity was 21.96%.
• Allowance for loan losses is now $9.4 million. Solera's allowance ratio is 1.24%. Q2 2023 provision was $559 thousand.
• Efficiency ratio stayed low at 47.46%.
• Net interest income increased by $855 thousand or 11%.

Michael Quagliano, Executive Chairman of the Board, commented: "We continue to take what the market will give us."

Steve Snailum, COO, commented: "Solera National Bank will complete a conversion of its core banking system during Q3 2023. The whole team has been hard at work making this transition possible, and we are very excited to continue providing outstanding service while upgrading our capabilities and functionality. Our people continue to represent a significant competitive advantage for the bank, and this quarter has been no exception. You can count on the Solera team to be a trusted and reliable resource now and for years to come."

Kreighton Reed, EVP, commented: "Our self-directed department continues to flourish. This quarter we continued to add to the bench strength of our staff by adding numerous team members with years of self-directing experience. Investing in certified and experienced staff will pay dividends with our customer experience as we continue to expand our offerings in this niche space. The summer months are typically a slower time for the self-directed sector. We were delighted that we saw an increase in account openings in the latter half of the quarter compared to the same period last year. A sign that investors are ready to get off the sidelines and invest in this "new normal" economy."

Tim Pester, the Controller, commented: "As Solera's prepares to transition to a new banking system in Q3 2023, increases in market rates and significant one-time costs associated with the conversion emerged in Q2 2023. Nevertheless, the bank is excited to see that earnings remained strong despite the rising rates and one-time expenses. As core earnings have continued to grow, we are eager to see how the remainder of the year plays out once these one-time conversion costs are behind Solera."

Jay Hansen, CFO, commented: "We are still growing as fast as our capital allows. We won't have these high rates forever, and we need to take advantage of them. Our future is looking great! Just compare our key ratios to most other banks, and you too will see the excitement."

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 [phone]

FINANCIAL TABLES FOLLOW

SOLERA NATIONAL BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(unaudited)

($000s)		6/30/2023				3/31/2023				12/31/2022				9/30/2022				6/30/2022				3/31/2022
ASSETS
Cash and due from banks		$	1,657			$	1,957			$	3,490			$	2,683			$	4,714			$	4,025
Federal funds sold			-				5,300				-				-				-				31,000
Interest-bearing deposits with banks			1,528				2,214				1,499				2,379				1,788				2,459
Investment securities, available-for-sale			173,552				170,033				164,176				154,044				171,151				141,175
Investment securities, held-to-maturity			204,900				205,425				207,048				205,475				125,890				51,965
FHLB and Federal Reserve Bank stocks, at cost			9,043				7,103				3,954				3,843				5,400				1,626
Paycheck Protection Program (PPP) loans, gross			111				111				578				589				10,709				37,951
Net deferred (fees)/expenses, PPP loans			-				-				(6	)			(7	)			(271	)			(1,026	)
Net PPP loans			111				111				572				582				10,438				36,925
Traditional loans, gross			745,666				717,943				578,584				539,568				461,447				433,506
Allowance for loan and lease losses			(9,404	)			(8,847	)			(8,005	)			(8,004	)			(7,153	)			(7,153	)
Net traditional loans			736,262				709,096				570,188				531,147				453,861				425,909
Premises and equipment, net			27,625				26,816				25,266				25,040				14,104				14,195
Accrued interest receivable			6,557				7,044				5,825				5,833				4,352				3,689
Bank-owned life insurance			4,944				4,917				4,891				4,864				5,094				5,068
Other assets			8,952				10,291				8,408				11,003				19,410				3,910
TOTAL ASSETS		$	1,175,131			$	1,150,307			$	995,317			$	946,893			$	816,202			$	721,946
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing demand deposits		$	539,522			$	536,880			$	551,990			$	543,260			$	543,956			$	515,929
Interest-bearing demand deposits			42,825				56,715				40,853				33,236				10,392				10,100
Savings and money market deposits			219,834				210,476				202,542				170,148				113,819				117,799
Time deposits			130,716				147,174				84,398				108,520				17,735				18,743
Total deposits			932,897				951,245				879,783				855,164				685,902				662,571
Accrued interest payable			150				70				438				238				124				33
Short-term borrowings			137,193				98,432				52,175				37,223				72,634				-
Long-term FHLB borrowings			34,000				34,000				4,000				4,000				4,000				4,000
Accounts payable and other liabilities			2,786				2,489				1,192				628				1,166				1,102
TOTAL LIABILITIES			1,107,026				1,086,236				937,588				897,253				763,826				667,706
Common stock			43				43				43				43				43				43
Additional paid-in capital			38,748				38,748				38,748				38,748				38,748				38,748
Retained earnings			46,240				42,562				37,978				32,994				28,094				23,008
Accumulated other comprehensive (loss) gain			(16,926	)			(17,282	)			(19,040	)			(22,145	)			(14,509	)			(7,559	)
TOTAL STOCKHOLDERS' EQUITY			68,105				64,071				57,729				49,640				52,376				54,240
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	1,175,131			$	1,150,307			$	995,317			$	946,893			$	816,202			$	721,946

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

($000s, except per share data)		6/30/2023				3/31/2023				12/31/2022				9/30/2022				6/30/2022
Interest and dividend income
Interest and fees on traditional loans		$	10,684			$	9,691			$	7,678			$	6,140			$	4,935
Interest and fees on PPP loans			-				11				2				277				824
Investment securities			3,679				3,549				3,500				3,130				2,215
Dividends on bank stocks			163				120				64				68				51
Other			23				17				18				18				2
Total interest income		$	14,549			$	13,388			$	11,262				9,633				8,027
Interest expense
Deposits			4,307				3,947				2,322				1,062				300
FHLB & Fed borrowings			1,819				1,281				480				327				159
Total interest expense			6,126				5,228				2,802				1,389				459
Net interest income			8,423				8,160				8,460				8,244				7,568
Provision for loan and lease losses			559				759				5				859				10
Net interest income after provision for loan and lease losses			7,864				7,401				8,455				7,385				7,558
Noninterest income
Customer service and other fees			417				405				303				257				321
Other income			972				747				726				551				183
Gain on sale of loan			-				-				-				-				-
Gain on sale of securities			-				242				96				478				1,179
Total noninterest income			1,389				1,394				1,125				1,286				1,683
Noninterest expense
Employee compensation and benefits			2,101				2,015				1,949				1,690				1,800
Occupancy			336				292				310				198				177
Professional fees			96				112				110				65				119
Other general and administrative			2,124				1,104				1,406				974				825
Total noninterest expense			4,657				3,523				3,775				2,927				2,921
Net Income Before Taxes		$	4,596			$	5,273			$	5,805			$	5,744			$	6,320
Income Tax Expense			968				689				821				843				1,235
Net Income		$	3,628			$	4,584			$	4,984			$	4,901			$	5,085
Income Per Share		$	0.84			$	1.03			$	1.16			$	1.14			$	1.18
Tangible Book Value Per Share		$	15.84			$	14.45			$	13.43			$	11.54			$	12.18
WA Shares outstanding			4,299,953				4,433,286				4,299,953				4,299,953				4,299,953
Pre-Tax Pre-Provision Income		$	5,155			$	6,032			$	5,810			$	6,603			$	6,330
Net Interest Margin			3.37	%			3.36	%			3.97	%			4.18	%			3.81	%
Cost of Funds			2.24	%			1.98	%			1.21	%			0.66	%			0.25	%
Efficiency Ratio			47.46	%			37.83	%			39.78	%			32.34	%			36.19	%
Return on Average Assets			1.25	%			1.71	%			2.05	%			2.22	%			2.64	%
Return on Average Equity			21.96	%			30.11	%			37.14	%			38.43	%			38.16	%
Leverage Ratio			7.2	%			7.2	%			7.9	%			8.1	%			8.4	%
Asset Quality:
Non-performing loans to gross loans			1.07	%			0.74	%			0.93	%			1.01	%			1.20	%
Non-performing assets to total assets			0.68	%			0.46	%			0.54	%			0.57	%			0.68	%
Allowance for loan losses to gross traditional loans			1.24	%			1.23	%			1.38	%			1.48	%			1.55	%
Criticized loans/assets:
Special mention		$	29,164			$	23,951			$	23,566			$	19,385			$	11,661
Substandard: Accruing			1,720				2,195				1,739				1,911				1,931
Substandard: Nonaccrual			8,005				5,300				5,364				5,431				5,530
Doubtful			-				-				-				-				-
Total criticized loans		$	38,889			$	31,446			$	30,669			$	26,727			$	19,122
Other real estate owned			-				-				-				-				-
Investment securities			-				-				-				-				-
Total criticized assets		$	38,889			$	31,446			$	30,669			$	26,727			$	19,122
Criticized assets to total assets			3.31	%			2.73	%			3.08	%			2.82	%			2.34	%

SOURCE: Solera National Bancorp, Inc.

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The Solera National Bancorp (CO) Stock at the time of publication of the news with a fall of -2,07 % to 12,51USD on Nasdaq OTC stock exchange (28. Juli 2023, 17:29 Uhr).