Market Overview

Security California Bancorp Grows to $486 million in Assets

RIVERSIDE, Calif.--(BUSINESS WIRE)--

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.

Visit us at www.securitybankca.com

Security California Bancorp
Security Bank of California
Forward Looking Statement Disclaimer -
General Form

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 & Subsidiary
Statements of Condition (Unaudited)
(In thousands)
                     
As of Growth / Change
December 31 December 31
2012 2011 $ %
Assets
Cash and due from banks $ 17,326 $ 29,008 $ (11,682 ) -40 %
Interest bearing balances with banks 28,612 22,891 5,721 25 %
Investment securities available-for-sale 109,885 54,723 55,162 101 %
 
Loans, net of unearned income 322,904 302,463 20,441 7 %
Less: Allowance for loan and lease losses (ALLL)   (5,759 )   (5,759 )   (0 ) 0 %
Net Loans 317,145 296,704 20,441 7 %
 
Premises and equipment, net 1,166 1,389 (223 ) -16 %
Accrued interest receivable 1,517 1,312 205 16 %
Other assets   10,658     6,043     4,615   76 %
 
Total Assets $ 486,309   $ 412,070   $ 74,239   18 %
 
Liabilities
Deposits:
Noninterest-bearing deposits $ 186,169 $ 149,538 $ 36,631 24 %
Interest-bearing deposits   234,280     198,281     35,999   18 %
Total deposits 420,450 347,819 72,630 21 %
Brokered deposits - - - 0 %
Other borrowings - FHLB - - - 0 %
Accrued interest and other liabilities   843     1,332     (489 ) -37 %
 
Total Liabilities 421,293 349,151 72,142 21 %
 
Shareholders' Equity   65,017     62,919     2,097   3 %
 
Total Liabilities and Shareholders' Equity $ 486,309   $ 412,070   $ 74,239   18 %
 

Security California Bancorp & Subsidiary
Statements of Income (Unaudited)
(In thousands)
                     
Year to Date Quarter to Date
December 31 December 31 December 31 December 31
2012 2011 2012 2011
 
Net interest income 16,051 14,580 4,100 3,826
 
Provision for loan and lease losses ("PLLL")   4,299     2,212   -     940
 
Net interest income
after PLLL 11,752 12,368 4,100 2,886
 
Non interest income 2,699 2,979 718 829
Non interest expense   11,612     11,084   2,542     2,917
 
Net income (loss) before taxes 2,838 4,264 2,276 797
Provision for income taxes   1,201     1,899   943     360
 
Net income (loss) after taxes $ 1,637   $ 2,365 $ 1,332   $ 437
 
% of Change from Previous Period -31 % 205 %
 

Security California Bancorp & Subsidiary
Regulatory Capital Ratios (Unaudited)
                     
As of As of
December 31 December 31 September 30 September 30
2012 2011 2012 2011
 
Total Risk Based Capital Ratio
Company 18.14 % 19.84 % 18.75 % 20.51 %
Regulatory - Well Capitalized 10.00 % 10.00 % 10.00 % 10.00 %
 
Tier 1 Risk Based Capital Ratio
Company 16.89 % 18.58 % 17.49 % 19.25 %
Regulatory - Well Capitalized 6.00 % 6.00 % 6.00 % 6.00 %
 
Tier 1 Leverage Capital Ratio
Company 13.08 % 15.35 % 13.23 % 16.22 %
Regulatory - Well Capitalized 5.00 % 5.00 % 5.00 % 5.00 %
 

Security California Bancorp & Subsidiary
Per Share Information (Unaudited)
                     
As of As of
December 31 December 31 September 30 September 30
2012 2011 2012 2011
Book Value - Common Shares
 
Outstanding Shares 5,663,276 5,638,156 5,652,776 5,638,206
Per Share $ 10.221 $ 9.894 $ 10.056 $ 9.828
 
 
Year to Date Quarter to Date
December 31 December 31 December 31 December 31
2012 2011 2012 2011
Earnings - Common Shares
 
Weighted Average Shares 5,650,261 5,635,794 5,656,885 5,638,156
Per Share $ 0.272 $ 0.328 $ 0.232 $ 0.127

Security California Bancorp
Thomas M. Ferrer, Executive Vice President & CFO
951-368-2268
tferrer@securitybankca.com

 

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