Solera National Bancorp Year-to-Date Earnings Increase 121%

Solera National Bancorp, Inc. (OTCQB: SLRK), the holding company for Solera National Bank, reported today net income more than doubled to $168,000, or $0.07 per share, in the first nine months of 2012, compared to $76,000, or $0.03 per share in the like period a year ago. Improving loan demand, increased noninterest income and continued improvements in asset quality, contributed to profitability in the third quarter and the first nine months of 2012. In the third quarter of 2012, Solera earned $74,000, or $0.03 per share, compared to $133,000, or $0.05 per share in the preceding quarter, and $159,000, or $0.06 per share in the third quarter a year ago.

“Our third quarter results marks our eighth profitable quarter out of the last ten quarters. And, although our third quarter results were impacted by a legal settlement and associated legal expenses, our profits are a positive result in this slow-growing economy,” said Douglas Crichfield, President and Chief Executive Officer. “Asset quality continues to improve, with only one nonperforming loan and two foreclosed commercial businesses in nonperforming assets. With solid asset quality and recoveries on previously charged-off loans of approximately $25,000 in the quarter, we were able to maintain strong reserves without a provision for loan losses in the third quarter.” At the end of September 2012, the allowance for loan and lease losses was $1.0 million, or 1.68% of total loans.

Financial Highlights (at or for the period ended September 30, 2012)

• Net income increased 121% to $168,000 for the first nine months of 2012, compared to $76,000 for the first nine months of 2011.
• Solera earned $0.03 per share in the third quarter of 2012, compared to $0.05 in the preceding quarter and $0.06 in the like quarter a year ago.
• Gross loans increased 5% to $61.7 million from the preceding quarter and grew 11% compared to the third quarter of 2011.
• Total assets grew 10% to $154.7 million from $140.7 million reported in the like quarter a year ago.
• Total deposits grew 11% from a year ago to $125.5 million, with a 6% increase in noninterest-bearing demand deposits.
• Solera’s capital ratios continue to significantly exceed regulatory requirements for a well-capitalized financial institution with total risk-based capital at 19.1%.
• Tangible book value, excluding unrealized gains on securities, improved to $7.34 per share up 2% from $7.19 per share a year earlier.
• Solera’s tangible common equity ratio, excluding unrealized gains on securities, was 12.1% at September 30, 2012.
• In July 2012, Solera National Bank was recognized as the Diversity Corporation of the Year by ColoradoBiz magazine, for their service to the diverse business community in Denver.

“Job gains in Metro Denver continue to help fuel the local economy. Metro Denver employers added 3,900 jobs during July and August. From strengthening commercial and residential real estate markets to increasing consumer confidence, it's clear that the Metro Denver economy continues to emerge from the recession,” according to data compiled by the Metro Denver Economic Development Corporation in its Monthly Economic Summary for October 2012. Commenting on residential real estate the publication continued, “The total number of August sales was 17.9% higher than the August 2011 sales total, and the total number of homes placed under contract in August was a striking 20.5% higher than the comparable 2011 figure.”

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