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Security California Bancorp (“Company”) (OTCBB: SCAF) reported today its results for the 12 months ended, December 31, 2012. Highlights include:
Total Assets were $486 million, up $74 million or 18% from the same period a year ago
Core Operating Earnings for 2012 were $7 million
Total Loans organically grew by $20 million or 7% to $323 million, and represent 67% of Total Assets
Total Deposits increased to $420 million, up $73 million or 21%
“The Company continues to build a strong stable earnings asset base, as evidenced by 2012’s Core earnings,” commented James A. Robinson, Chairman and CEO of the Security California Bancorp. “We are looking forward to expanding that base in 2013, as our economy begins to show signs of improvement in several areas, which will continue to benefit our C & I business model.”
Regarding the Company’s growth in our earning assets, the following are the changes in major balance sheet accounts the profile and mix of which contributed to the improvement in the Company’s risk based earning assets base, reliable liquidity, and sustainable core income:
Total Short Term Investments with correspondent banks moved up by $6 million or 25% to $29 million.
Total Investments in Securities grew to $110 million or 101% from $55 million. The securities portfolio consists of government agency and agency sponsored debenture bonds and mortgage backed securities.
Total Loans organically grew by $20 million or 7% to $323 million in a very challenging market environment, concentrated in the C & I segment of the loan portfolio in line with the business strategy of the Company.
Total Deposits grew to an impressive level of $420 million or growth of $73 million or 21%, of which $186 million were Non Interest Bearing DDAs that grew by $37 million or 24% from a level of $150 million.
Loan Portfolio Profile: The Company’s performing loans amounted to $314 million or 97% of the total loan portfolio reflected an improvement of $23 million or 8% over last year. The non performing loans (NPL”) fair valued at $9 million is a reduction of $2 million or 22% compared to a year ago. The NPL level is expected to be resolved without further loss of value in the current year. The Allowance for Loan and Lease Losses (“ALLL”) of $5.8 million was 1.78% of the total loans. The Company’s Texas Ratio continues to be exceptional at 12.92%. A Texas Ratio of 100% or greater indicates a higher probability of problems in the future. (Texas Ratio is calculated as follows: Non-performing assets + 90 day past due loans divided by Tangible Equity + ALLL)
Operating Performance: The Company’s Core Net Operating Earnings, which represent the Company’s pre-loan loss provision on charge-offs, pre-gains on sale of securities, and pre-tax provision were $7.0 million. The Company’s net income of $1.637 million or 27 cents per share included the impact of provision for loan losses of $4.1 million directly related to charge offs to recognize the valuation realizable fair value of a few loan accounts. The following are the changes in major components of the Core Net Operating Earnings.
Net Interest Income is $16 million, a positive move from a year ago by $1.5 million or 10%, which is driven by volume growth.
Non-Interest Income is $2.7 million, lower by $280 thousand compared to last year, primarily due to the timing of boarding SBA gain from sale of loans and referral premium fees.
Non-Interest Expense is $11.6 million, higher by $529 thousand than last year, principally due to restructuring costs related to the acquisition in early 2012 of the branch operation in Orange County and the full expense effect of the Irwindale Loan Production Office that was established in the last quarter of 2011.
Capital Adequacy: The Company with a capital of $65 million is well capitalized with satisfactory cushions over regulatory requirements. The Tier 1 leverage ratio is 13.08%; Tier 1 risk based ratio is 16.89% and Total risk based ratio is 18.14% compared to regulatory minimum benchmarks of 5.00%, 6.00% and 10.00%, respectively, which shows the Company’s capacity to grow in the near future.
Security California Bancorp is traded on the Over the Counter Bulletin Board 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 a Loan production Office in Irwindale.