SOURCE: Seacoast Commerce Banc Holdings

Seacoast Commerce Banc Holdings

April 21, 2016 08:00 ET

Seacoast Commerce Banc Holdings Announces First Quarter 2016 Results

SAN DIEGO, CA--(Marketwired - April 21, 2016) - Seacoast Commerce Banc Holdings (OTC PINK: SCBH) ("Company"), and its wholly owned subsidiary Seacoast Commerce Bank ("Bank"), today announced its consolidated unaudited results of operations for the first quarter ended March 31, 2016. For the first quarter of 2016, the Company reported net income of $1.7 million, or a 28.1% increase over first quarter 2015 net income of $1.3 million. This was the Company's 23rd consecutive quarterly profit. The following is a comparison of return metrics (in millions):

                 
    03/31/2016   03/31/2015   Change   % Change
Quarterly Consolidated Net Income   $1.711   $1.335   $0.376   28.1%
Quarterly Return on Ave. Common Equity   19.72%   19.65%   0.07%   0.4%
Quarterly Return on Ave. Assets   1.33%   1.26%   0.07%   5.6%
Quarterly Earnings Per Share (Basic)   $0.29   $0.23   $0.06   26.1%
                 

The following is a comparison of the SBA Division's quarter-to-date results, which is the Bank's primary lending driver:

                 
    03/31/2016   03/31/2015   $ Change   % Change
SBA Loan Production   $40.026   $50.653   ($10.627)   (21.0%)
SBA 7(a) Guaranteed Loan Sales   $20.033   $27.282   ($7.25)   (26.6%)
Period-end SBA Guaranteed Loan Inventory   $270.543   $220.186   $50.356   22.9%
                 

As previously discussed, the Company's growth and long-term shareholder value creation strategy is based on consistently generating and holding more saleable SBA loans. Holding loans, versus selling for a one-time gain, results in more consistent, predictable, and re-occurring spread income.

Selected highlights for first-quarter 2016 versus first-quarter 2015:

Balance Sheet Metrics

  • Asset growth of $89.7 million, or 20.5%, to $526.5 million;
  • Loan growth of $22.4 million, or 6.1%, to $391.3 million;
  • SBA loans held for sale up $50.4 million, or 22.9%, to $270.5 million;
  • Deposit growth of $83.2 million, or 21.2%, to $475.4 million;
  • Non-Interest Bearing deposit growth of $101.7 million or 83.2%, to $223.9 million;
  • Non-Interest Bearing deposits represent 47.2% of total deposits, up from 31.4%;
  • Shareholders' Equity growth of $3.6 million, or 10.9%, to $36.3 million.

Income Statement Metrics

  • Interest Income of $5.9 million, up $774 thousand, or 15.0%;
  • Interest Expense of $397 thousand, down $11 thousand, or (2.6%);
  • Net-Interest Income of $5.6 million, up $784 thousand, or 16.4%;
  • Non-Interest Income of $3.4 million, up $356 thousand, or 11.8%;
  • Non-Interest Expenses of $6.0 million, up $754 thousand or 14.2%;
  • Net Income of $1.7 million, up $376 thousand, or 28.1%.

Other Metrics

  • SBA loans funded of $40.0 million, down $10.6 million, or (21.0%);
  • Allowance for loan losses of $5.5 million was 4.56% of loans held for investment;
  • Allowance for loan losses stands at 355% of non-performing loans;
  • Non-performing loans to total gross loans of 0.40%;
  • Non-performing assets to Tier 1 Capital plus ALLL (Texas Ratio) of 3.01%;
  • No net charge-offs;
  • No other real estate owned;
  • Since inception of the Bank's SBA program over six years ago, the bank has funded 1,276 loans for $993 million in small business financing;
  • The Bank services a total of 970 SBA loans for $719 million, of which $339 million has been sold in the secondary market and is not reflected on the banks balance sheet;
  • Efficiency ratio reduced (0.2%) from 67.9% to 67.7%.

The Bank has always maintained capital levels well above the regulatory highest designation, "well capitalized", and had capital ratios at March 31, 2016, as follows:

         
        "Well Capitalized" Level
Tier 1 Capital Ratio:   8.90%   5.00%
Common Equity Tier 1 Ratio:   20.77%   7.00%
Tier 1 Risk-Based Capital Ratio:   20.77%   8.50%
Total Risk-Based Capital Ratio:   22.03%   10.50%
         

As reported by the U.S. Small Business Administration ("SBA") for their 6-months ending March 31, 2016, Seacoast Commerce Bank was the 14th largest SBA lender in the nation, out of 1,708 financial institutions that have at least one SBA loan approved during that 6-month period, and over 3,000 financial institution that are approved as an SBA lender. SBA rankings are based on total dollars approved with Seacoast having $105.5 million approved. In addition to being ranked the 14th largest SBA lender in the nation, Seacoast was the 6th largest SBA lender in California; the largest SBA lender the in Las Vegas, Nevada, District; the 3rd largest SBA lender in the Sacramento, California, District; the 4th largest SBA lender in the San Diego, California, District; the 5th largest SBA lender in the Santa Ana, California, District; the 7th largest SBA lender in the Houston, Texas, District; and the 9th largest SBA lender in the Los Angeles, California, District Office.

Allan W. Arendsee, Chairman of the Board, stated, "The Board of Directors is again very proud of our team for doing what's right; focusing on adding long-term shareholder value. The Board is firmly committed to ensuring the bank operates in a safe and sound manner, and with a strategy that will provide shareholders with a superior return on their investment over the long run. Along the lines of providing a return to shareholders, our strategy heading into 2016 and beyond will be to put the Company in a position where it can start to pay a dividend to shareholders. We look forward to sharing more at our annual meeting of shareholders." Arendsee concluded.

Richard M. Sanborn, President & Chief Executive Officer, commented, "We are pleased to report continued success with our strategy of focusing on lending to small business owners, and more importantly, focusing on consistent performance. While our first quarter loan production was down from last year, our pipeline of approved deals is strong and we feel confident we will achieve our year-end production goals. From a financial perspective, our performance continues to consistently exceed our peers. Our strong return on equity provides capital to support our growth, and allows us to help more small businesses get the financing they need to hire more employees, grow their businesses, and expand our economy. We are also fortunate that our strong capital base is complimented by a balance sheet that has significantly less risk than our peers, due to the majority of our loans having not only a guarantee from the U.S. Government, but also hard collateral in the form of real estate. Let's face it; loans go bad, and when they do, it is always better to have hard collateral to take, versus being unsecured where you will lose money. 99% of our loans are fully secured with real estate collateral, and, 68% of our portfolio also has a guarantee from the U.S. Government. Very few, if any other banks can match that risk profile." Sanborn continued, "As our Chairman stated, our focus for 2016 is on positioning the Company in a way to pay shareholders dividends. That requires us to manage our growth in a way where we can create excess capital, which can then be given back to shareholders. We look forward to communicating more about our 2016 plans at our annual shareholders meeting in May." Sanborn concluded.

About Seacoast Commerce Banc Holding: Seacoast Commerce Banc Holdings is a bank holding company with one wholly-owned banking subsidiary, Seacoast Commerce Bank. Both the Company and the Bank are headquartered in San Diego, California, with the Bank having full-service banking branches in San Diego and Chula Vista, California, and production offices in San Diego, Orange County, Los Angeles, Sacramento and San Ramon, California; Phoenix, Arizona; Denver, Colorado; Las Vegas and Reno, Nevada; Houston and Dallas, Texas; and Bellevue, Washington. For more information on Seacoast Commerce Banc Holdings, please visit www.scbholdings.com; to learn more about Seacoast Commerce Bank, visit www.sccombank.com, or contact Richard M. Sanborn, President and Chief Executive Officer at 858-432-7001, or rsanborn@scbholdings.com.

This press release contains some non-GAAP financial analysis provided to supplement information regarding the Bank's performance, and to enhance investors' overall understanding of such financial performance.

Certain statements in this press release, including statements regarding the anticipated development and expansion of the Bank's business, and the intent, belief or current expectations of the Bank, its directors or its officers, are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such "forward-looking" statements. These risks and uncertainties include, but are not limited to, risks related to the local and national economy, the Bank's performance and regulatory matters.

   
   
Seacoast Commerce Banc Holdings  
Selected Financial Data  
Consolidated and Unaudited (000)  
                         
    For the Quarters Ended     % Change  
    03/31/2016     12/31/2015     03/31/2015     03/31 - 03/31  
Balance Sheet Items                              
Total Gross Loans     391,274       396,404       368,845     6.0 %
SBA Loans Available for Sale (Memo Only)     270,543       268,185       220,186     22.9 %
Total Assets     526,529       514,907       436,876     20.5 %
Total Deposits     475,367       463,309       392,176     21.2 %
Non-Interest DDA (Memo Only)     223,947       204,385       122,270     83.2 %
Shareholders' Equity     36,327       38,394       32,768     10.9 %
Bank Shareholders' Equity (Memo Only)     46,004       44,014       38,592     19.2 %
                               
Income Statement Items                              
Total Interest Income     5,949       6,061       5,176     15.0 %
Total Interest Expense     397       449       408     (2.6 %)
Net Interest Income     5,552       5,612       4,768     16.4 %
                               
Provision for Loan Losses     0       0       250     (100 %)
Non-Interest Income     3,376       3,612       3,021     11.8 %
Non-Interest Expense     6,045       6,502       5,291     14.2 %
Pre-Tax Income     2,884       2,722       2,248     28.2 %
Our Fair Share of Income Taxes (40.7%)     1,173       1,099       913     28.6 %
                               
Net Income     1,711       1,623       1,335     28.1 %
                               
QTD Basic Earnings per Share   $ 0.29     $ 0.28     $ 0.23     24.6 %
YTD Basic Earnings per Share   $ 0.29     $ 1.00     $ 0.23     24.6 %
Book Value per Share   $ 6.21     $ 5.96     $ 5.05     23.0 %
QTD Return on Average Assets     1.33 %     1.20 %     1.26 %   5.3 %
YTD Return on Average Assets     1.33 %     1.20 %     1.26 %   5.3 %
QTD Return on Average Common Equity     19.72 %     19.86 %     19.65 %   0.3 %
YTD Return on Average Common Equity     19.72 %     19.17 %     19.65 %   0.3 %
Ending Shares Outstanding     5,848,061       5,766,571       5,697,634     2.6 %
Stock Price   $ 16.25     $ 17.19     $ 11.50     41.3 %
Market Capitalization   $ 95,030,991     $ 99,127,355     $ 65,522,791     45.0 %
                               

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