SOURCE: Seacoast Commerce Banc Holdings

Seacoast Commerce Banc Holdings

January 22, 2015 08:00 ET

Seacoast Commerce Banc Holdings Announces Fourth Quarter and Full-Year Results With Record Earnings, Asset, Loan, and Deposit Growth

SAN DIEGO, CA--(Marketwired - January 22, 2015) - Seacoast Commerce Banc Holdings (OTCQB: SCBH) ("Company"), and its wholly owned subsidiary Seacoast Commerce Bank ("Bank"), today announced its consolidated unaudited results of operations for the fourth quarter and full-year ended December 31, 2014. For 2014, the Company reported net income of $4.3 million, compared to net income of $1.0 million, or a 333% increase over 2013. For the fourth quarter of 2014, the Company reported net income of $830 thousand, compared to $251 thousand in the fourth quarter of 2013, or a 231% increase. The difference between the Company and Bank full-year net income was $95 thousand, representing expenses at the Company not related to the Bank's operations. This was the Bank's 17th consecutive quarterly profit.

As has been previously discussed, the Company's growth and long-term shareholder value creation strategy is based on generating and holding more saleable SBA loans. The Bank grew its inventory of guaranteed, saleable SBA loans by $52.6 million in 2014. Had the Bank sold all its saleable loan production it could have generated approximately $2.4 million in additional net after-tax income based on actual gains received on loans that were sold. Holding loans, versus selling for a one-time gain, ultimately results in more consistent, predictable, and reoccurring spread income.

Company assets reached a record $410.4 million, up $70.2 million or 20.6%; gross loans reached a record $357.1 million, up $68.4 million or 23.7%; deposits reached a record $362.1 million, up $52.0 million or 16.8%.

Selected highlights for the full year-end 2014 versus year-end 2013:

Balance Sheet Metrics

  • Asset growth of $70.2 million, or 20.6%, to a record $410.4 million;
  • Loan growth of $68.4 million, or 23.7%, to a record $357.1 million;
  • SBA loans funded of $174.1 million, down $7.7 million, or 4.3%;
  • SBA loans held for sale up $52.6 million, or 32.2%, to a record $215.6 million;
  • SBA guaranteed loan sales of $66.3 million, up $23.4 million, or 54.5%;
  • The Bank services a total of 851 SBA loans for $579.3 million, of which the guaranteed portion on 348 loans, totaling $237.2 million, has been sold in the secondary market;
  • Deposit growth of $52.0 million, or 16.8%, to a record $362.1 million;
  • Non-Interest Bearing deposit growth of $49.5 million or 112.7%, to $93.7 million;
  • Non-Interest Bearing deposits represent 25.9% of total deposits;
  • Shareholders' Equity growth of $4.9 million, or 18.8%, to a record $31.3 million.

Income Statement Metrics

  • Interest Income of $18.2 million, up $4.3 million, or 31.3%;
  • Net Interest Income of $16.2 million, up $3.7 million, or 29.6%;
  • Non-Interest Income (excluding gain-on-sale) of $2.0 million, up $563 thousand, or 38.8%;
  • Gain-on-sale of loans income of $7.6 million, up $3.4 million, or 82.5%;
  • Percent of loans sold in 2014 increased to 51% from 34%;
  • Total revenue of $25.8 million, up $7.7 million, or 42.4%;
  • Growth in Non-Interest Expenses reduced 19.0% from 24.7% to 20.0%;
  • Positive operating leverage with growth in total revenue of 42.4% versus growth in non- interest expenses of 20.0%;
  • Efficiency Ratio reduced 15.8% from 82.8% to 69.7%;

Other Metrics

  • Year-end ALLL of $5.1 million was 3.58% of loans held for investment;
  • Year-end ALLL was 215% of non-performing loans;
  • Non-performing loans to total gross loans was 0.66%;
  • Non-performing assets to Tier 1 Capital plus ALLL (Texas Ratio) was 6.51%;
  • Since inception of the Bank's SBA program over five years ago, the bank has funded 979 loans for $728 million in small business financing;
  • Of the 979 loans funded over the past five-plus years, only three have defaulted and been foreclosed on, with the underlying collateral subsequently sold with no loss to the bank.

The Bank has always maintained capital levels well above the FDIC's highest designation, "well capitalized", and had capital ratios at December 31, 2014 as follows:

   
    FDIC "Well Capitalized" Level
Tier 1 Capital Ratio: 8.27% 5.00%
Tier 1 Risk-Based Capital Ratio: 14.81% 6.00%
Total Risk-Based Capital Ratio: 16.08% 10.00%
BASEL III Common Equity Tier 1 Ratio:13.64% 6.50%
   

As reported by the U.S. Small Business Administration ("SBA") for their fiscal year ended September 30, 2014, Seacoast Commerce Bank was the 13th largest SBA lender in the Nation. SBA rankings are based on total dollars approved, with Seacoast having $214 million approved in 2014. In addition to being ranked the 13th largest SBA lender in the Nation, Seacoast was the 4th largest SBA lender in the State of California. On a District level, Seacoast was the 2nd largest SBA lender the in Las Vegas, Nevada, District, the 11th largest SBA lender in the Dallas/Fort Worth, Texas, District, the 13th largest SBA lender in the Phoenix, Arizona District; and the 17th largest SBA lender in the Seattle, Washington, District. Within California, Seacoast was the 4th largest SBA lender in the Sacramento District; the 5th largest SBA lender in the San Diego District; the 6th largest SBA lender in the San Francisco District; the 8th largest SBA lender in the Fresno District; and the 9th largest SBA lender in the Los Angeles District.

Richard M. Sanborn, President & Chief Executive Officer, commented, "We are very pleased to again report a record year of performance. Although 2014 had its challenges, we remained defiant and committed to our long-term strategic plan which is focused on safety, soundness, consistency, and shareholder value creation. Financially, growth in the bank was achieved across all categories including assets, loans, and deposits, which was a direct result of the focus and hard work of our entire team. From the loan and deposit production staff to the back-office support staff, everyone understands our plan and is committed to excelling at it. Our strategy changeup three-years ago to hold more loans continues to pay off as we knew it would. Our annual interest income is up $10.3 million a year, or 135% over 2012, on balance sheet growth of $210 million, or 104% over the same period, with loan production up $21.5 million, or 14% in 2013, and down $7.7 million, or 4.3% in 2014. This validates our strategy that holding more loans will, over time, produce more consistent, predictable, reoccurring income, and adds more long-term shareholder value. We look forward to communicating more about our 2015 plans at our annual shareholder's meeting in May." Sanborn concluded.

Allan W. Arendsee, Chairman of the Board, stated, "We made two very important moves in 2014; becoming a member of the Federal Reserve banking system, and forming a bank holding company, with both actions taken to support our future growth initiatives. The Board is firmly committed to ensuring the bank is operated 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. The Board of Directors is also very proud of our team for doing what's right; focusing on adding long-term shareholder value." Arendsee concluded.

About Seacoast Commerce Banc Holdings: Seacoast Commerce Banc Holdings is a bank holding company with one wholly-owned banking subsidiary, Seacoast Commerce Bank. Both the holding company and the bank are headquartered in San Diego, California, with the bank having full-service banking branches in San Diego, Chula Vista, and Glendale, California, and production offices in San Diego, Orange County, Los Angeles, Sacramento and San Ramon, California; Phoenix, Arizona; Denver, Colorado; Portland, Oregon; 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.

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 - Unaudited (000)  
   
   For the Year Ended   %  
   12/31/2014   12/31/2013   Change  
Balance Sheet Items             
Total Gross Loans  357,084   288,656   23.7 %
SBA Loans Available for Sale (Memo Only)  215,625   163,058   32.2 %
Total Assets  410,404   340,173   20.6 %
Total Deposits  362,144   310,178   16.8 %
Shareholders' Equity  31,301   26,356   18.8 %
   
Income Statement Items             
Total Interest Income  18,211   13,870   31.3 %
Total Interest Expense  1,973   1,341   47.2 %
Net Interest Income  16,238   12,529   29.6 %
   
Provision for Loan Losses  450   1,500   (70.0 %)
Non-Interest Income  9,580   5,596   71.2 %
Non-Interest Expense  17,995   14,998   20.0 %
Pre-Tax Income  7,373   1,627   353.0 %
Our Fair Share of Income Taxes (41.14%)  3,035   625   385.3 %
   
Net Income  4,338   1,002   332.9 %
   
YTD Basic Earnings per Share  0.76   0.18   322.2 %
Book Value per Share  4.85   4.01   20.8 %
Return on Average Assets  1.22 % 0.39 % 212.8 %
Return on Average Common Equity  16.97 % 4.56 % 272.0 %
Ending Shares Outstanding  5,631,838   5,573,032   1.1 %
          

Contact Information

  • Contact:

    Richard M. Sanborn
    President & Chief Executive Officer
    Phone: 858-432-7001
    Email: rsanborn@sccombank.com