RIVERSIDE, Calif., July 16, 2015 (GLOBE NEWSWIRE) -- Security California Bancorp (OTCBB:SCAF), the parent company of Security Bank of California, reported net income of $1.3 million, or 23 cents per share, for the second quarter of 2015, an increase of 54% from net income of $858,000, or 15 cents per share, for the second quarter of 2014.
For the six months ended June 30, 2015, the Company reported net income of $2.5 million, or 44 cents per share, an increase of 35% from net income of $1.9 million, or 32 cents per share, for the same period in 2014.
Second Quarter 2015 Year-Over-Year Highlights
- Total loans were $468 million, an increase of 20%
- Total deposits were $573 million, an increase of 23%
- Total assets were $665 million, an increase of 13%
"We continue to steadily attract new customers to the Bank, which has helped us increase our net income by 35% over the first half of 2015," said James A. Robinson, Chairman and CEO of Security California Bancorp. "We are seeing healthy economic conditions within our core markets and solid loan demand among the small- and middle-market businesses we serve. We anticipate that our acquisition of a branch in the Temecula/Murrieta market will be completed during the third quarter, which will provide another catalyst for the growth of our franchise. We have a solid pipeline of new business development opportunities, which we expect to result in a continuation of our positive trends during the second half of the year."
Second Quarter 2015 Summary Results
Net Interest Income and Net Interest Margin
Net interest income for the second quarter of 2015 was $5.8 million, an increase of 12% from $5.2 million in the second quarter of 2014. The increase in net interest income was primarily driven by growth in total loans outstanding.
Net interest margin was 3.66% in the second quarter of 2015, an increase of 6 basis points from the prior quarter. The increase in net interest margin was primarily attributable to higher yields on loans.
Non-interest Income
Non-interest income for the second quarter of 2015 was $1.1 million, an increase of 30% from $858,000 in the same quarter of the prior year. The increase in non-interest income was primarily attributable to higher gains on sales of SBA loans.
Non-interest Expense
Non-interest expense was $4.4 million for the second quarter of 2015, an increase of 7% from $4.2 million in the year-ago period. The increase in non-interest expense was primarily due to an increase in personnel to support the Bank's growth.
Balance Sheet
Total Assets
Total assets were $665 million at June 30, 2015, an increase of 13% from $591 million at June 30, 2014, driven by strong growth in both loans and deposits.
Total Loans
Total loans were $468 million at June 30, 2015, an increase of 20% from $391 million at June 30, 2014. The increase in total loans was driven by growth in the commercial and industrial, commercial real estate, and construction portfolios.
Total Deposits
Total deposits were $573 million at June 30, 2015, an increase of 23% from $465 million at June 30, 2014. The increase in total deposits was primarily driven by the addition of new client relationships.
Asset Quality
Total non-performing assets were $5.1 million, or 0.76% of total assets, at June 30, 2015, compared with $5.0 million, or 0.78% of total assets, at March 31, 2015.
At June 30, 2015, total non-accrual loans were $5.1 million, or 1.08% of total loans, compared with $5.0 million, or 1.10% of total loans, at March 31, 2015.
During the second quarter of 2015, the Company had $33,000 in net recoveries, compared with net recoveries of $440,000 in the first quarter of 2015.
The Company recorded a provision for loan losses of $234,000 in the second quarter of 2015 to reflect the growth in the loan portfolio. The allowance for loan losses as a percentage of gross loans increased to 1.54% at June 30, 2015 from 1.53% at March 31, 2015.
Capital
Security California Bancorp remained well capitalized as of June 30, 2015. All of the Company's capital ratios exceeded minimum regulatory standards for "well capitalized" institutions. As of June 30, 2015, the Company's Tier 1 leverage ratio was 11.31%, the Common Equity Tier 1 capital ratio was 13.93%, the Tier 1 risk-based ratio was 13.93% and the Total risk-based ratio was 15.18%, compared with the regulatory minimum standards of 4%, 4.5%, 6% and 8%, respectively.
About Security California Bancorp and Security Bank of California
Security California Bancorp is the parent of Security Bank of California and is traded on the OTC Markets under the symbol SCAF. Through its full service offices in Riverside, San Bernardino, Redlands, Orange and Palm Desert, Security Bank of California is a full service community bank, focusing on providing banking services for businesses, their owners and families, and successful individuals. The bank also has Loan Production Office ("LPO") in Irwindale. To learn more about the bank's products and services, call 951-368-2265 or visit the company's Web site at www.securitybankca.com.
Forward Looking Statements
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 and Subsidiaries | |||||
| Consolidated Income Statements (Unaudited) | |||||
| (Dollars in Thousands) | |||||
| Three months ended | Six months ended | ||||
| 6/30/2015 | 3/31/2015 | 6/30/2014 | 6/30/2015 | 6/30/2014 | |
| INTEREST INCOME | |||||
| Loans, with fees | $ 5,525 | $ 5,038 | $ 4,720 | $ 10,563 | $ 9,141 |
| Deposit with banks | 30 | 27 | 23 | 56 | 45 |
| Investment securities | 683 | 701 | 820 | 1,384 | 1,709 |
| Total interest income | 6,238 | 5,765 | 5,564 | 12,003 | 10,895 |
| INTEREST EXPENSE | |||||
| Deposits | 420 | 391 | 350 | 811 | 692 |
| Other | 8 | 7 | 15 | 14 | 29 |
| Total interest expense | 428 | 398 | 365 | 826 | 721 |
| Net interest income | 5,810 | 5,368 | 5,198 | 11,178 | 10,174 |
| Provision for loan losses | 234 | (181) | 429 | 53 | 677 |
| Net income after provision for loan losses | 5,575 | 5,549 | 4,769 | 11,124 | 9,497 |
| NON INTEREST INCOME | |||||
| Service charges on deposits | 251 | 254 | 254 | 505 | 487 |
| Gain on sale of securities | 69 | 24 | 51 | 93 | 51 |
| SBA gains on sales and fees | 548 | 292 | 371 | 840 | 831 |
| Other | 245 | 126 | 183 | 371 | 354 |
| Total non interest income | 1,113 | 696 | 858 | 1,809 | 1,722 |
| NON INTEREST EXPENSE | |||||
| Salaries & benefits | 2,728 | 2,681 | 2,612 | 5,409 | 5,145 |
| Premises & equipment | 469 | 451 | 481 | 920 | 929 |
| Other | 1,240 | 1,071 | 1,064 | 2,311 | 1,964 |
| Total non interest expense | 4,436 | 4,203 | 4,157 | 8,640 | 8,037 |
| Net income before taxes | 2,252 | 2,041 | 1,471 | 4,293 | 3,181 |
| Provision for income tax | 934 | 850 | 614 | 1,784 | 1,325 |
| NET INCOME | $ 1,319 | $ 1,191 | $ 858 | $ 2,510 | $ 1,857 |
| EARNINGS PER SHARE | |||||
| Diluted earning per share | $ 0.23 | $ 0.21 | $ 0.15 | $ 0.44 | $ 0.32 |
| Average outstanding common shares | 5,670,916 | 5,670,916 | 5,669,797 | 5,670,916 | 5,669,797 |
| PERFORMANCE INDICATORS | |||||
| Return on average assets | 0.81% | 0.78% | 0.60% | 0.79% | 0.66% |
| Return on average equity | 7.20% | 6.70% | 5.20% | 6.96% | 5.75% |
| Efficiency ratio | 64.73% | 69.60% | 69.21% | 67.01% | 67.86% |
| Security California Bancorp & Subsidiaries | |||||
| Consolidated Balance Sheets (Unaudited) | |||||
| (Dollars in thousands) | |||||
| As of | |||||
| 06/30/15 | 03/31/15 | 12/31/14 | 09/30/14 | 06/30/14 | |
| ASSETS | |||||
| Cash & due from banks | $ 10,227 | $ 12,554 | $ 13,730 | $ 12,097 | $ 16,158 |
| Interest bearing deposits with banks | 35,628 | 30,285 | 37,012 | 35,523 | 26,783 |
| Investment Securities | 142,367 | 136,486 | 137,323 | 138,272 | 144,468 |
| Loans: | |||||
| Commercial & Industrial | 177,425 | 168,128 | 157,447 | 157,448 | 138,713 |
| Real Estate - Commercial | 239,830 | 240,923 | 220,757 | 213,281 | 213,264 |
| Real Estate - Construction | 23,662 | 18,439 | 14,509 | 12,350 | 8,040 |
| Real Estate - Consumer | 21,809 | 22,382 | 23,747 | 22,579 | 25,940 |
| Other | 4,964 | 4,578 | 5,051 | 5,087 | 5,292 |
| Total | 467,690 | 454,450 | 421,512 | 410,745 | 391,249 |
| Allowance for loan losses | (7,206) | (6,939) | (6,680) | (6,454) | (6,160) |
| Loans, net | 460,484 | 447,511 | 414,832 | 404,291 | 385,089 |
| Premises & equipment | 4,002 | 4,003 | 4,075 | 3,821 | 3,831 |
| Accrued interest | 1,861 | 1,784 | 1,716 | 1,721 | 1,713 |
| Other assets | 10,414 | 9,208 | 9,554 | 11,175 | 13,230 |
| TOTAL ASSETS | $ 664,982 | $ 641,831 | $ 618,242 | $ 606,900 | $ 591,273 |
| LIABILITIES | |||||
| Deposits: | |||||
| Demand non interest bearing | $ 247,984 | $ 239,620 | $ 232,187 | $ 217,237 | $ 194,079 |
| Demand interest bearing | 25,659 | 42,519 | 29,737 | 21,427 | 21,092 |
| Money market & savings | 198,472 | 172,673 | 171,322 | 180,813 | 158,667 |
| Time certificate | 101,018 | 101,852 | 92,534 | 94,925 | 91,381 |
| Total deposits | 573,133 | 556,665 | 525,780 | 514,402 | 465,219 |
| Other borrowings | 18,300 | 11,000 | 19,000 | 22,000 | 57,750 |
| Accrued interest & other liabilities | 634 | 1,312 | 2,495 | 2,199 | 1,425 |
| Total Liabilities | 592,068 | 568,976 | 547,275 | 538,601 | 524,394 |
| SHAREHOLDERS' EQUITY | |||||
| Preferred stock | 7,133 | 7,133 | 7,133 | 7,133 | 7,133 |
| Common stock | 56,626 | 56,616 | 56,607 | 56,596 | 56,569 |
| Retained earnings | 10,835 | 9,516 | 8,326 | 7,082 | 6,033 |
| Accumulated other comprehensive income | (1,680) | (411) | (1,098) | (2,513) | (2,857) |
| Total Shareholders' Equity | 72,915 | 72,855 | 70,967 | 68,299 | 66,878 |
| TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | $ 664,982 | $ 641,831 | $ 618,242 | $ 606,900 | $ 591,273 |
| CAPITAL ADEQUACY | |||||
| Tier 1 leverage ratio | 11.31% | 11.69% | 11.84% | 11.95% | 12.09% |
| Common Equity Tier 1 capital ratio | 13.93% | 13.93% | N/A | N/A | N/A |
| Tier 1 risk-based capital ratio | 13.93% | 13.93% | 14.77% | 14.89% | 15.24% |
| Total risk-based capital ratio | 15.18% | 15.18% | 16.02% | 16.15% | 16.49% |
| Tangible Equity / Tangible Total Assets | 10.93% | 11.31% | 11.44% | 11.21% | 11.27% |
| Outstanding common shares | 5,670,916 | 5,670,916 | 5,670,916 | 5,670,916 | 5,670,916 |
| Book value (total equity) per common share | $ 12.86 | $ 12.85 | $ 12.51 | $ 12.04 | $ 11.79 |
| Security California Bancorp & Subsidiaries | ||||||
| Consolidated Average Balance Sheets and Yield Data (Unaudited) | ||||||
| (Dollars in thousands) | ||||||
| Three months ended - 2015 | ||||||
| June 30 | March 31 | |||||
| Yields | Interest | Yields | Interest | |||
| Average | or | Income/ | Average | or | Income/ | |
| Balance | Rates | Expense | Balance | Rates | Expense | |
| ASSETS | ||||||
| Interest earning assets | ||||||
| Loans, with fees | $ 461,734 | 4.80% | $ 5,525 | $ 434,846 | 4.70% | $ 5,038 |
| Interest bearing with banks | 35,193 | 0.34% | 30 | 33,520 | 0.32% | 27 |
| Investment securities | 139,150 | 1.96% | 683 | 135,929 | 2.06% | 701 |
| Total interest earning assets | 636,076 | 3.93% | $ 6,238 | 604,295 | 3.86% | $ 5,765 |
| Non interest earning assets | ||||||
| Cash & due from banks | 11,887 | 11,366 | ||||
| All other assets | 6,710 | 6,663 | ||||
| Total non interest earning assets | 18,597 | 18,029 | ||||
| TOTAL ASSETS | $ 654,674 | $ 622,324 | ||||
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||
| Interest bearing liabilities | ||||||
| Deposits | ||||||
| Demand interest bearing | $ 29,765 | 0.14% | $ 10 | $ 35,804 | 0.15% | $ 14 |
| Money market & savings | 186,753 | 0.52% | 242 | 172,022 | 0.51% | 217 |
| Time certificate | 101,087 | 0.67% | 168 | 99,287 | 0.66% | 160 |
| Other borrowings | 15,766 | 0.19% | 8 | 15,905 | 0.17% | 7 |
| Total interest bearing liabilities | 333,371 | 0.51% | $ 428 | 323,018 | 0.50% | $ 398 |
| Non interest bearing liabilities | ||||||
| Demand deposits | 247,360 | 225,237 | ||||
| Accrued interest & other liabilities | 514 | 2,014 | ||||
| Total non interest bearing liabilities | 247,873 | 227,251 | ||||
| Shareholders' equity | 73,429 | 72,055 | ||||
| TOTAL LIABILITIES & SHAREHOLDERS'S EQUITY | $ 654,674 | $ 622,324 | ||||
| NIM and NET INTEREST INCOME | 3.66% | $ 5,810 | 3.60% | $ 5,368 | ||
| Security California Bancorp & Subsidiaries | ||||||
| Consolidated Average Balance Sheets and Yield Data (Unaudited) | ||||||
| (Dollars in thousands) | ||||||
| Three months ended June 30, | ||||||
| 2015 | 2014 | |||||
| Yields | Interest | Yields | Interest | |||
| Average | or | Income/ | Average | or | Income/ | |
| Balance | Rates | Expense | Balance | Rates | Expense | |
| ASSETS | ||||||
| Interest earning assets | ||||||
| Loans, with fees | $ 461,734 | 4.80% | $ 5,525 | $ 390,528 | 4.85% | $ 4,720 |
| Interest bearing with banks | 35,193 | 0.34% | 30 | 22,054 | 0.43% | 23 |
| Investment securities | 139,150 | 1.96% | 683 | 142,105 | 2.31% | 820 |
| Total interest earning assets | 636,076 | 3.93% | 6,238 | 554,687 | 4.02% | $ 5,564 |
| Non interest earning assets | ||||||
| Cash & due from banks | 11,887 | 10,361 | ||||
| All other assets | 6,710 | 9,007 | ||||
| Total non interest earning assets | 18,597 | 19,368 | ||||
| TOTAL ASSETS | $ 654,674 | $ 574,054 | ||||
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||
| Interest bearing liabilities | ||||||
| Deposits | ||||||
| Demand interest bearing | $ 29,765 | 0.14% | $ 10 | $ 17,304 | 0.14% | $ 6 |
| Money market & savings | 186,753 | 0.52% | $ 242 | 157,657 | 0.51% | 202 |
| Time certificate | 101,087 | 0.67% | $ 168 | 90,636 | 0.63% | 142 |
| Other borrowings | 15,766 | 0.19% | $ 8 | 43,881 | 0.14% | 15 |
| Total interest bearing liabilities | 333,371 | 0.51% | 428 | 309,477 | 0.47% | $ 365 |
| Non interest bearing liabilities | ||||||
| Demand deposits | 247,360 | 197,297 | ||||
| Accrued interest & other liabilities | 514 | 1,122 | ||||
| Total non interest bearing liabilities | 247,873 | 198,419 | ||||
| Shareholders' equity | 73,429 | 66,158 | ||||
| TOTAL LIABILITIES & SHAREHOLDERS'S EQUITY | $ 654,674 | $ 574,054 | ||||
| NIM and NET INTEREST INCOME | 3.66% | $ 5,810 | 3.76% | $ 5,199 | ||
| Security California Bancorp & Subsidiaries | ||||||
| Consolidated Average Balance Sheets and Yield Data (Unaudited) | ||||||
| (Dollars in thousands) | ||||||
| Six months ended June 30, | ||||||
| 2015 | 2014 | |||||
| Yields | Interest | Yields | Interest | |||
| Average | or | Income/ | Average | or | Income/ | |
| Balance | Rates | Expense | Balance | Rates | Expense | |
| ASSETS | ||||||
| Interest earning assets | ||||||
| Loans, with fees | $ 448,290 | 4.75% | $ 10,563 | $ 380,269 | 4.85% | $ 9,141 |
| Interest bearing with banks | 34,357 | 0.33% | 56 | 20,871 | 0.44% | 45 |
| Investment securities | 137,539 | 2.01% | 1,384 | 146,781 | 2.33% | 1,709 |
| Total interest earning assets | 620,186 | 3.90% | $ 12,003 | 547,921 | 4.00% | $ 10,895 |
| Non interest earning assets | ||||||
| Cash & due from banks | 11,627 | 10,388 | ||||
| All other assets | 6,687 | 8,279 | ||||
| Total non interest earning assets | 18,313 | 18,667 | ||||
| TOTAL ASSETS | $ 638,499 | $ 566,588 | ||||
| LIABILITIES & SHAREHOLDERS' EQUITY | ||||||
| Interest bearing liabilities | ||||||
| Deposits | ||||||
| Demand interest bearing | $ 32,785 | 0.15% | $ 24 | $ 18,001 | 0.14% | $ 13 |
| Money market & savings | 179,388 | 0.52% | 459 | 154,193 | 0.51% | 391 |
| Time certificate | 100,187 | 0.66% | 328 | 90,215 | 0.65% | 289 |
| Other borrowings | 15,836 | 0.18% | 14 | 44,376 | 0.13% | 29 |
| Total interest bearing liabilities | 328,195 | 0.51% | $ 826 | 306,786 | 0.47% | $ 721 |
| Non interest bearing liabilities | ||||||
| Demand deposits | 236,298 | 193,390 | ||||
| Accrued interest & other liabilities | 1,264 | 1,345 | ||||
| Total non interest bearing liabilities | 237,562 | 194,735 | ||||
| Shareholders' equity | 72,742 | 65,067 | ||||
| TOTAL LIABILITIES & SHAREHOLDERS'S EQUITY | $ 638,499 | $ 566,588 | ||||
| NIM and NET INTEREST INCOME | 3.63% | $ 11,178 | 3.74% | $ 10,174 | ||
| Security California Bancorp & Subsidiaries | |||||
| Consolidated Asset Quality and Credit Data (Unaudited) | |||||
| (Dollars in thousands) | |||||
| As of | |||||
| 06/30/15 | 03/31/15 | 12/31/14 | 09/30/14 | 06/30/14 | |
| TOTAL ASSETS | 664,982 | 641,831 | 618,242 | 606,900 | 591,273 |
| GROSS LOANS | 467,690 | 454,450 | 421,512 | 410,745 | 391,249 |
| ALLOWANCE FOR LOAN LOSSES | |||||
| Beginning of period | $ 6,939 | $ 6,680 | $ 6,454 | $ 6,160 | $ 6,064 |
| Quarterly movement: | |||||
| Provision for loan losses | 234 | (181) | 99 | 164 | 429 |
| Charge-offs | (20) | (176) | -- | -- | (390) |
| Recoveries | 53 | 616 | 127 | 130 | 58 |
| End of period | $ 7,206 | $ 6,939 | $ 6,680 | $ 6,454 | $ 6,160 |
| NON PERFORMING ASSETS | |||||
| Loans accounted for on a non-accrual basis | $ 5,050 | $ 4,994 | $ 5,169 | 5,261 | 5,390 |
| Loans with principal and/or interest contractually past due 90 days and still accruing interest | -- | -- | -- | -- | -- |
| Non performing loans | 5,050 | 4,994 | 5,169 | 5,261 | 5,390 |
| Other real estate owned | -- | -- | -- | -- | 747 |
| Non performing assets | 5,050 | 4,994 | 5,169 | 5,261 | 6,137 |
| Loans restructured and in compliance with modified terms | 1,274 | 1,298 | 563 | 659 | -- |
| Non performing assets and restructured loans | $ 6,324 | $ 6,292 | $ 5,732 | $ 5,920 | $ 6,137 |
| Non Performing Loans by Asset Type | |||||
| Commercial & Industrial | $ 3,916 | $ 3,935 | $ 4,093 | $ 4,162 | $ 4,265 |
| SBA | 272 | 179 | 185 | 193 | 201 |
| Consumer | 862 | 880 | 891 | 906 | 924 |
| Other | -- | -- | -- | -- | -- |
| Total non performing loans by asset type | $ 5,050 | $ 4,994 | $ 5,169 | $ 5,261 | $ 5,390 |
| ASSET QUALITY | |||||
| Allowance for loan losses / gross loans | 1.54% | 1.53% | 1.58% | 1.57% | 1.57% |
| Allowance for loan losses / non performing loans | 142.69% | 138.95% | 129.24% | 122.67% | 114.29% |
| Non performing assets / total assets | 0.76% | 0.78% | 0.84% | 0.87% | 1.07% |
| Non performing loans /gross loans | 1.08% | 1.10% | 1.23% | 1.28% | 1.38% |
| Net quarterly charge-offs / gross loans | 0.00% | -0.04% | 0.00% | 0.00% | -0.10% |