Security California Bancorp Reports Record Net Income and Asset Growth for 2013

RIVERSIDE, Calif.--()--Security California Bancorp (OTCBB:SCAF), the parent company of Security Bank of California, reported net income for the year ended December 31, 2013 of $3.166 million.

Highlights of the Company’s performance included:

Net Income for 2013 was $3.166 million, a 93% increase over 2012 net income of $1.637 million
Diluted earnings per common share were $0.55 for 2013, compared to $0.27 in 2012
Total Assets reached $557 million, an increase of $70 million or 14%
Total Loans grew by $41 million or 13% to $364 million
Total Deposits grew by $24 million or 6% to $445 million

“We are very pleased with the Company’s financial performance during 2013,” commented James A. Robinson, Chairman and CEO. “We reached $557 million in Assets, led by our substantial loan growth of 13%, which was achieved by contributions from each of our business units, reflecting our steady progress in building a solid banking franchise. We have continued to attract talented bankers to our team, who understand what it takes to provide flexible solutions to our clients in each of our markets, and are adept at insuring that the bank maintains a strong level of compliance with the numerous regulatory changes facing our industry,” added Robinson.

The following summarizes the notable changes in the major statement of conditions’ classifications, which have contributed to bank’s consistent generation of sustainable core income:

Operating Performance: The Company’s net income of $3.166 million included the following breakdown by category with comparisons to the same period a year ago:

Net Interest Income was $17.791 million, an increase of $1.740 million or 11% primarily driven by higher net growth in earning asset balances. Net interest margin was 3.61% as of December 31, 2013, modest reduction of 0.05% over the same period as a result of increased investment securities dilution of total earning asset yield.

Provision for Loan & Lease Losses (“PLLL”) of $1.128 million compared to last year of $4.299 million, a substantial favorable reduction of $3.171 million or 74%, a further strong demonstration of a much improved credit quality of the loan portfolio.

Non-Interest Income was $3.419 million, better by $0.720 million, led by the positive movement in SBA related income.

Non-Interest Expense was $14.812 million, higher by $3.199 million, principally due to investment in newly established loan production offices (“LPO”), as well as increase in personnel to support the institutions continued growth.

Total investments in AFS Securities grew to $143 million, an increase of 31%. The securities portfolio consists of US government agency and agency sponsored debenture bonds and mortgage related securitized collateral.

Total loan portfolio has grown organically by $41 million or 13% in a very competitive market to $364 million, which represents the primary core of stable and sustainable interest income. The loan portfolio’s C & I concentration reflects the overall business strategy of the company that emphasizes the intrinsic value of solid business relationships with its clients.

Total deposits increased to $445 million, a net growth of $24 million or 6%, of which $191 million are non-interest bearing DDAs that represents 43% of the total deposits.

Other Borrowings – FHLB was at $48 million at year-end that has been the support source for funding during 2013, the balance of which constantly fluctuated during the year in tandem with the movements in the core deposits and the need to fund the growth in earning assets.

Asset Quality: The estimated Allowance for Loan & Lease Losses (“ALLL”) of $5.7 million is 1.58% of consolidated total loans as of December 31, 2013. The company’s fair valued nonperforming loans declined to $5.7 million, or 1.56% of total loans at December 31, 2013, a reduction of $3.3 million or 37% compared to December 31, 2012. Loans that were charged off during the year were $1.4 million or 0.37% of total loan portfolio compared to $5.4 million or 1.67% of total loan portfolio during the same period a year ago. The company’s Texas Ratio is down to 7.77%, a reduction by 5.15% from 12.92% from a year ago. (Texas Ratio represents non-performing + 90 days past due loans divided by Tangible Equity + ALLL).

Capital Requirements: The Company with a capital of $62.3 million is well capitalized and at this level provides satisfactory cushions over minimum regulatory requirements. The Tier 1 leverage ratio is 12.38%; Tier 1 risk based ratio is 15.77%, and the Total risk based ratio is 17.02% 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
Dec 31 Dec 31
2013 2012 $ %
Assets
Cash and due from banks $ 11,193 $ 17,326 $ (6,134 ) -35 %
Interest bearing balances with banks 21,199 28,612 (7,413 ) -26 %
Investment securities available-for-sale 143,653 109,885 33,768 31 %
 
Loans, net of unearned income 364,387 322,904 41,483 13 %
Less: Allowance for loan and lease losses (ALLL)   (5,742 )   (5,759 )   16   0 %
Net Loans 358,644 317,145 41,499 13 %
 
Premises and equipment, net 4,028 1,166 2,861 245 %
Accrued interest receivable 1,775 1,517 258 17 %
Other assets   16,257     10,658     5,599   53 %
 
Total Assets $ 556,748   $ 486,309   $ 70,439   14 %
 
Liabilities
Deposits:
Noninterest-bearing deposits $ 190,868 $ 186,169 $ 4,699 3 %
Interest-bearing deposits   254,041     234,280     19,761   8 %
Total deposits 444,909 420,450 24,459 6 %
 
Other borrowings - FHLB 48,050 - 48,050 100 %
Accrued interest and other liabilities   1,454     843     611   73 %
 
Total Liabilities 494,413 421,293 73,121 17 %
 
Shareholders' Equity   62,335     65,017     (2,682 ) -4 %
 
Total Liabilities and Shareholders' Equity $ 556,748   $ 486,309   $ 70,439   14 %
 
 
Security California Bancorp & Subsidiaries
Statements of Income (Unaudited)
(In thousands)
                     
Twelve Months Year to Date
Dec 31 Dec 31 Change
2013 2012 $ %
 
Net interest income $ 17,791 $ 16,051 $ 1,740 11 %
 
Provision for ALLL   1,127   4,299   (3,172 ) 100 %
 
Net interest income
after provision for ALLL 16,664 11,752 4,912 42 %
 
Non interest income 3,419 2,699 721 27 %
Non interest expense   14,812   11,612   3,200   28 %
 
Net income (loss) before taxes 5,271 2,838 2,433 86 %
Provision for income taxes   2,105   1,201   904   75 %
 
Net income (loss) after taxes $ 3,166 $ 1,637 $ 1,529   93 %
 
 
Security California Bancorp & Subsidiaries
Statements of Income - Quarterly (Unaudited)
(in thousands)
                     
Quarter Ended - 2013
1st 2nd 3rd 4th
Quarter Quarter Quarter   Quarter
 
Net interest income $ 4,188 $ 4,246 $ 4,558 $ 4,799
 
Provision for ALLL   300   -   423   405
 
Net interest income
after provision for ALLL 3,888 4,246 4,135 4,394
 
Non interest income 926 800 829 864
Non interest expense   3,391   3,834   3,654   3,933
 
Net income (loss) before taxes 1,423 1,212 1,310 1,326
Provision for income taxes   593   500   551   461
 
Net income (loss) after taxes $ 830 $ 712 $ 759 $ 865
 
 
Security California Bancorp & Subsidiaries
Regulatory Capital Ratios (Unaudited)
                 
As of       As of      
Dec 31 Dec 31 Sept Sept
2013 2012 2013 2012
 
Total Risk Based Capital Ratio
Bank 17.02 % 18.14 % 17.63 % 18.75 %
Regulatory - Well Capitalized 10.00 % 10.00 % 10.00 % 10.00 %
 
Tier 1 Risk Based Capital Ratio
Bank 15.77 % 16.89 % 16.38 % 17.49 %
Regulatory - Well Capitalized 6.00 % 6.00 % 6.00 % 6.00 %
 
Tier 1 Leverage Capital Ratio
Bank 12.38 % 13.08 % 12.70 % 13.23 %
Regulatory - Well Capitalized 5.00 % 5.00 % 5.00 % 5.00 %
 
 
Security California Bancorp & Subsidiaries
Per Share Information (Unaudited)
                     
As of       As of      
Dec 31 Dec 31 Sept Sept
2013 2012 2013 2012
Book Value - Common Shares
 
Outstanding Shares 5,669,416 5,663,276 5,669,416 5,652,776
Per Share $ 9.737 $ 10.221 $ 9.729 $ 10.056
 
 
Year to Date       Quarter to Date      
Dec Dec Dec 31 Dec 31
2013 2012 2013 2013
Earnings - Common Shares
 
Weighted Average Shares 5,668,558 5,648,518 5,669,416 5,656,885
Per Share $ 0.546 $ 0.272 $ 0.149 $ 0.232

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