Security California Bancorp Reports Net Income of $1.542 Million for the First Six Months of 2013

RIVERSIDE, Calif.--()--Security California Bancorp (OTCBB:SCAF), the parent company of Security Bank of California, reported today earnings for the first six months of 2013 of $1.542 million, up $1.134 million from the $408 thousand reported for the same period in 2012. Highlights compared to same period ended June 30, 2012 include:

Total Assets were at $498 million, up $38 million or 8%
Total Loans grew $16 million or 5% to $323 million
Total Deposits increased $18 million or 4% to $413 million

Net income available to common shareholders was $1.506 million or 27 cents diluted earnings per common share, an increase of 20 cents per share or 35% compared to a year ago.

“We are pleased with our overall growth, given the competitive pricing pressures present in each of our markets,” commented James A. Robinson, Chairman and CEO. “Nevertheless we see significant opportunities for us going forward given our dedicated approach to delivering our relationship-focused business banking model in each of the communities we serve.

“With the opening of our Loan Production Office in Palm Desert earlier this month, we now have 6 locations,” added Robinson. “We see the Coachella Valley as a vibrant economic engine and we are excited about the Bank’s future in that market.”

The following are the changes and movements compared to a year ago in the major components of the statement of conditions, the mix and overall structure of which provide stability and are instrumental in the generation of sustainable core income:

Total interest bearing balances or short term investments with correspondent banks have been reduced by $37 million to a more efficient level of $20 million, and is being continuously shifted to profitable earning assets, i.e., AFS investment securities and loans.

Total investments in AFS Securities grew to $130 million or 49% that provides a better risk based earning assets and satisfactory level of readily available stand by liquidity. The securities portfolio consists of government agency and agency sponsored debenture bonds, and mortgage related securitized collateral.

Total loans have moved up organically by $15 million or 5% in a challenging market to $323 million, a level that is a major source of stable and sustainable interest income. The loan portfolio’s C & I concentration reflects the overall business strategy of the Company that emphasizes the importance of solid business relationships with its clientele base.

Total deposits increased to $413 million, a net growth of $18 million or 11%, which is prevalently in the non-interest bearing DDAs, the balance of which grew to $180 million or 44% of the total deposits.

Loan Portfolio Profile: Of the total loans of $323 million, 98% are performing or on accrual status. The Company’s non-performing loans (“NPL”) are fair valued at $6.4 million, a favorable change of $1.1 million or 15% compared to a year ago. Loans that were charged off during the first six months of 2013 were $281 thousand compared to $3.6 million that were written off during the same period a year ago. The estimated Allowance for Loan & Lease Losses (“ALLL”) of $5.942 million is about 1.84% of the consolidated total loans. The Company’s Texas Ratio continues to be stable at 8.45%, a reduction from 10.96% from a year ago. (Texas Ratio represents non-performing + 90 days past due loans divided by Tangible Equity + ALLL).

Operating Performance: The Company’s net income of $1.542 million included the following major components and their movements compared to the same period a year ago:

Net Interest Income was $8.434 million, an increase of $533 thousand or 6.7% primarily driven by higher net growth in earning asset balances.

Provision for Loan & Lease Losses (“PLLL”) of $300 thousand is a significant favorable turnaround from $2,469 thousand, which is a representation of much improved credit quality of the loan portfolio.

Non-Interest Income was $1.726 million, better by $338 thousand led by the positive impact of SBA related income.

Non-Interest Expense was $7.225 million, higher by $1.135 million, principally due to investment in additional personnel complement and improvement in operational structure vital and necessary to support the on-going growth in the Company.

Capital Requirements: The Company with a capital of $63.6 million is well capitalized and at this level provides satisfactory cushions over minimum regulatory requirements. The Tier 1 leverage ratio is 13.34%, Tier 1 risk based ratio is 16.74%, and the Total risk based ratio is 18.00% compared to regulatory minimum standards of 5.00%, 6.00% and 10.00%, respectively.

Security California Bancorp is traded on the Over the Counter Bulletin Board (“OTCBB”) under the symbol SCAF.OB. It offers, through its wholly owned subsidiary, Security Bank of California, personalized banking services to businesses and individuals through its full service offices in Riverside, San Bernardino, Redlands and Orange. It also has Loan Production Offices (“LPO”) in Irwindale and Palm Desert.

Visit us at www.securitybankca.com

Security California Bancorp
Security Bank of California
Forward-Looking Statement Disclaimer -
General Form

This release may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, and competition within the business areas in which the Bank is conducting its operations, including the real estate market in California and other factors beyond the Bank’s control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management’s view only as of the date hereof. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

                       
Security California Bancorp & Subsidiaries
Statements of Condition (Unaudited)
(In thousands)
 
      As of Growth / Change
June 30 June 30
2013 2012 $ %
Assets
Cash and due from banks $ 10,696 $ 5,180 $ 5,516 106 %
Interest bearing balances with banks 20,285 56,962 (36,677 ) -64 %
Investment securities available-for-sale 130,124 87,178 42,946 49 %
 
Loans, net of unearned income 322,936 306,996 15,940 5 %
Less: Allowance for loan and lease losses (ALLL)   (5,942 )   (5,621 )   (321 )   6 %
Net Loans 316,994 301,375 15,619 5 %
 
Premises and equipment, net 3,996 1,314 2,681 204 %
Accrued interest receivable 1,582 1,371 212 15 %
Other assets   14,058     6,664     7,393     111 %
 
Total Assets $ 497,734   $ 460,044   $ 37,690     8 %
 
Liabilities
Deposits:
Noninterest-bearing deposits $ 180,206 $ 162,743 $ 17,463 11 %
Interest-bearing deposits   232,394     232,218     176     0 %
Total deposits 412,600 394,961 17,638 4 %
Brokered deposits - -
Other borrowings - FHLB 20,200 - 20,200 100 %
Accrued interest and other liabilities   1,356     1,369     (13 )   -1 %
 
Total Liabilities 434,156 396,330 37,826 10 %
 
Shareholders' Equity   63,578     63,714     (136 )   0 %
 
Total Liabilities and Shareholders' Equity $ 497,734   $ 460,044   $ 37,690     8 %
 
 
Security California Bancorp & Subsidiaries
Statements of Income (Unaudited)
(In thousands)
 
3 Months Quarter to Date 6 Months Year to Date
June 30 March June 30 June 30
2013 2013 2013 2012
 
Net interest income 4,246 4,188 8,434 7,901
 
Provision for ALLL   -     300     300     2,469  
 

Net interest income after provision for ALLL

4,246 3,888 8,134 5,432
 
Non interest income 800 926 1,726 1,388
Non interest expense   3,834     3,391     7,225     6,090  
 
Net income (loss) before taxes 1,212 1,423 2,635 730
Provision for income taxes   500     593     1,093     322  
 
Net income (loss) after taxes $ 712   $ 830   $ 1,542   $ 408  
 
% of Change from Previous Period -14 % 278 %
 
 
Security California Bancorp & Subsidiaries
Regulatory Capital Ratios (Unaudited)
 
As of As of
June 30 June 30 March 31 March 31
2013 2012 2013 2012
 
Total Risk Based Capital Ratio
Bank 18.00 % 19.44 % 17.97 % 19.18 %
Regulatory - Well Capitalized 10.00 % 10.00 % 10.00 % 10.00 %
 
Tier 1 Risk Based Capital Ratio
Bank 16.74 % 18.19 % 16.72 % 17.92 %
Regulatory - Well Capitalized 6.00 % 6.00 % 6.00 % 6.00 %
 
Tier 1 Leverage Capital Ratio
Bank 13.34 % 13.98 % 13.41 % 14.57 %
Regulatory - Well Capitalized 5.00 % 5.00 % 5.00 % 5.00 %
 
 
Security California Bancorp & Subsidiaries
Per Share Information (Unaudited)
 
As of As of
June 30 June 30 March 31 March 31
2013 2012 2013 2012
Book Value - Common Shares
 
Outstanding Shares 5,669,416 5,652,776 5,665,937 5,645,076
Per Share $ 9.956 $ 10.009 $ 10.256 $ 9.726
 
 
Quarter to Date Year to Date
June 30 March June 30 June 30
2013 2013 2013 2012
Earnings - Common Shares
 
Weighted Average Shares 5,669,416 5,665,937 5,667,686 5,645,641
Per Share $ 0.122 $ 0.143 $ 0.266 $ 0.065

Contacts

Security California Bancorp
Thomas M. Ferrer, Executive Vice President & CFO
951-368-2268
tferrer@securitybankca.com
or
Security California Bancorp
Marcia McQuern, External Relations
951-505-8624
mcquern@charter.net

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Contacts

Security California Bancorp
Thomas M. Ferrer, Executive Vice President & CFO
951-368-2268
tferrer@securitybankca.com
or
Security California Bancorp
Marcia McQuern, External Relations
951-505-8624
mcquern@charter.net