Seacoast Commerce Banc Holdings Announces Third Quarter 2019 Results

Company Release - 10/16/2019 9:00 AM ET

Third Quarter 2019 Highlights

  • Return on Average Tangible Common Equity of 16.17%
  • Return on Average Assets of 1.33%
  • Net income of $3.7 million, up $213 thousand, or 6.1%
  • Diluted earnings per share of $0.37, up $0.02, or 5.3%
  • Net Interest Margin of 6.18%
  • Asset growth of $59.9 million, or 5.9% annualized
  • Gross loan growth of $99.8 million, or 12.2% annualized
  • Deposit growth of $86.6 million, or 11.3% annualized
  • Non-interest bearing deposit growth of $120.4million, or 37.2% annualized
  • Non-interest bearing deposits represent 52.1% of total deposits
  • Property Management specialty deposit growth of $121.7 million, or 37.6% annualized
  • Retained SBA guaranteed loan growth of $46.0 million, or 11.8% annualized
  • Opened a deposit production office in Concord, North Carolina
  • Opened an SBA production office in San Antonio, Texas
  • Quarterly cash dividend of $0.11 per share, up 22.2%
  • Became the 10th largest SBA in the nation according to the SBA with $320.7 million in FY 2019 loan approvals, up 9.6% over 2018 approvals

SAN DIEGO, CA / ACCESSWIRE / October 16, 2019 / Seacoast Commerce Banc Holdings (OTCPK:SCBH) ("Company"), the holding company of Seacoast Commerce Bank ("Bank"), today reported unaudited consolidated net income for the third quarter ended September 30, 2019, of $3.7 million versus 2018 third quarter unaudited consolidated net income of $3.5 million, a 6.1% increase. On a per share basis, net income increased 5.3% to $0.38 per share versus $0.35 per share in 2018. Additionally, the Company reported third quarter return on average tangible common equity (ROATCE) of 16.17% and return on average assets (ROAA) of 1.33%, compared to 17.81% and 1.46% for the third quarter of 2018 respectively.

Richard M. Sanborn, President & Chief Executive Officer, commented, "The third quarter of 2019 was a continuation of our past consistent results with strong financial metrics across all our business lines. Our 2019 plan called for the expansion of our SBA loan production team and our specialty deposit team, with branch expansion into Nevada, which is all well underway. So far this year we have added one deposit and three SBA business development offices, and our Las Vegas branch is fully licensed to operate with an expected mid-November opening date. As previously mentioned, we had a significant inflow of 1031 deposits at the end of the second quarter, which we expected to run off in the third quarter. As a result, third quarter 1031 deposits decreased $137.8 million, which was offset by growth in other specialty deposits of $56.6 million. This transition goes along with our plan of focusing on property-management company deposits, which characteristically are more stable and lower cost. Our unique banking model of focusing on specialty lending and deposit platforms continues to be strong financially, and a compelling model that is allowing us to continually post superior financial results."

Allan W. Arendsee, Chairman of the Board, stated, "The Board of Directors is pleased with the Company's third quarter performance and our expectations for the remainder of the year. While we realize there are headwinds in the economy, we believe in our plan, which provides tremendous operating flexibility. Our balance sheet is strong as is our capital position and our income producing capabilities. As always, the Board of Directors believes that the right plan is in place to continue providing shareholders with an exceptional return on their investment over the long-term."


Quarterly Financial highlights (in millions):

09/30/2019 06/30/2019 09/30/2018 09/30 Change % Change
Consolidated Net Income
$3.684 $3.577 $3.471 $0.213 6.1%
ROATCE
16.17% 16.41% 17.81% (1.63%) (9.2%)
ROAA
1.33% 1.30% 1.46% (0.13%) (8.8%)
Earnings Per Share (Diluted)
$0.38 $0.36 $0.35 $0.02 5.3%
Dividend Paid
$0.11 $0.11 $0.09 $0.02 22.2
Bank Net Interest Margin
6.18% 6.26% 5.99% $0.19 3.2
Bank Efficiency Ratio
67.7% 67.3% 67.9% (0.02) (0.03%)


Specialty Division quarter-to-date results (in millions):

09/30/2019 06/30/2019 09/30/2018
Change
% Change
SBA Loan Production
$70.657 $68.783 $81.314 $(10.657) (13.1%)
SBA 7(a) Guaranteed Loan Sales
$8.320 $14.629 $23.157 $(14.836) (64.1%)
Percent of Guaranteed Loan Sales
15.7% 28.4% 38.0% (22.3%) (58.6%)
SBA Guaranteed Loan Inventory
$435.250 $424.071 $389.231 $46.019 11.8%
Commercial Loan Production
$10.050 $7.158 $18.460 $(8.410) (45.6%)
1031 Exchange Deposits
$119.919 $304.446 $149.160 $(29.241) (19.6%)
Property Management Deposits
$230.705 $204.162 $159.440 $71.265 44.7%
Association Management Deposits
$214.354 $188.827 $163.930 $50.424 30.8%


Selected highlights for third-quarter 2019 versus third-quarter 2018:

Balance Sheet Metrics

  • Asset growth of 5.9%, or $59.9 million, to $1.082 billion;
  • Loan growth of 12.2%, or $99.8 million, to $921.0 million;
  • SBA loans held for sale up 11.8%, or $46.0 million, to $435.3 million;
  • Deposit growth of 11.3%, or $86.6 million, to $852.0 million;
  • Property Management deposit growth of 37.6%, up $121.7 million, to $445.1 million;
  • Non-Interest Bearing deposits represent 52.1% of total deposits;
  • Shareholders' Equity growth of 10.0%, or $11.8 million, to $129.4 million.

Income Statement Metrics

  • Interest Income up 20.0%, or $2.8 million, to $17.0 million;
  • Interest Expense down (9.6%), or ($130) thousand, to $1.2 million;
  • Net-Interest Income up 23.1%, or $3.0 million to $15.8 million;
  • Non-Interest Income (excluding gains) up 72.3%, or $371 thousand, to $884.0 million;
  • Gain on sale income down 61.9%, or $1.2 million, to $710.3 thousand;
  • Non-Interest Expenses up 11.4%, or $1.2 million, to $12.0 million;
  • Net Income up 6.1% or $213 thousand, to $3.7 million.

Other Metrics

  • SBA loans funded down 13.1% or $10.7 million, to $70.7 million;
  • SBA 7(a) loan sales percentage down (58.6%), to 15.7% of guaranteed production;
  • Allowance for loan losses of $5.9 million, or 1.62% of held for investment, net of FV marks;
  • Allowance for loan losses stands at 109.0% of non-performing loans, net of FV marks;
  • Non-performing loans to total gross loans of 0.59%;
  • Non-performing assets to Tier 1 Capital plus ALLL (Texas Ratio) of 1.68%;
  • Since inception of the Bank's SBA program a little over ten years ago, the bank has funded 2,138 loans for $1.91 billion in small business financing;
  • The Bank services a total of 1,282 SBA loans for $1.04 billion, of which $318 million has been sold in the secondary market and is not reflected on the bank's balance sheet.

The Bank has always maintained capital levels well above the regulatory highest designation, "well capitalized", and had capital ratios at September 30, 2019, as follows:

Capital Ratios as of Sept. 30, 2019
Company Bank "Well Capitalized" Level
Tier 1 Leverage Ratio:
8.71% 8.72% 5.00%
Common Equity Tier 1 Ratio:
13.95% 13.95% 7.00%
Tier 1 Risk-Based Capital Ratio:
13.95% 13.95% 8.50%
Total Risk-Based Capital Ratio:
14.85% 14.85% 10.50%


As reported by the U.S. Small Business Administration ("SBA") for their fiscal year ending September 30, 2019, Seacoast Commerce Bank was the 10th largest SBA lender in the nation, out of over 3,000 financial institutions that are approved as an SBA lender. SBA rankings are based on total dollars approved with Seacoast having $320.7 million approved, up 9.6% over 2018.

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 four full-service banking branches in San Diego and Orange County, California, and loan and deposit production offices throughout Arizona, California, Colorado, Georgia, Illinois, Indiana, Massachusetts, Nevada, North Carolina, Oregon, Texas, Utah, Virginia and Washington. For more information on Seacoast Commerce Banc Holdings or Seacoast Commerce Bank, please visit www.scbholdings.com or 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
09/30/2019 06/30/2019 09/30/2018 09/30 - 09/30
Balance Sheet Items
Total Gross Loans
921,047 914,634 821,256 12.1%
SBA Loans Available for Sale (Memo Only)
435,250 424,071 389,231 11.8%
Total Assets
1,082,173 1,150,834 1,022,248 5.9%
Total Deposits
851,984 1,010,171 765,402 11.3%
Non-Interest DDA (Memo Only)
443,897 546,393 323,546 37.2%
Bank Borrowings
86,000 - 115,000 (25.2%)
Shareholders' Equity
129,353 126,395 117,566 10.0%
Bank Shareholders' Equity (Memo Only)
129,399 126,392 129,117 0.2%
Income Statement Items
Total Interest Income
17,010 17,050 14,181 20.0%
Total Interest Expense
1,224 1,197 1,355 (9.6%)
Net Interest Income
15,786 15,852 12,826 23.1%
Provision for Loan Losses
360 700 - -
Non-Interest Income (excluding gains)
884 712 513 72.3%
Gain on Sale Income
710 1310 1,866 (61.9%)
Non-Interest Expense
11,982 12,103 10,754 11.4%
Pre-Tax Income
5,038 5,071 4,451 13.2%
Our Fair Share of Income Taxes (26.9%)
1,354 1,494 979 38.2%
Net Income
3,684 3,577 3,471 6.1%
QTD Basic Earnings per Share
0.38 0.36 0.37 3.3%
YTD Basic Earnings per Share
1.12 0.72 1.05 6.6%
Book Value per Share
13.54 13.24 12.57 7.7%
Tangible Book Value per Share
9.65 9.33 8.56 12.7%
QTD ROAA
1.33% 1.30% 1.46% (8.84%)
YTD ROAA
1.34% 1.34% 1.37% (2.24%)
QTD ROATCE
16.17% 16.41% 17.81% (9.2%)
YTD ROATCE
16.48% 16.65% 17.67% (6.7%)
Ending Shares Outstanding
9,557 9,549 9,353 2.2%
Stock Price
18.15 20.00 22.65 (19.9%)
Market Capitalization
173,461 190,983 211,843 (18.1%)
Qtr. Cash Dividends Paid to Shareholders
0.11 0.11 0.09 22.2%
YTD Cash Dividends Paid to Shareholders
0.32 0.21 0.25 28.0%


Contact:

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

SOURCE: Seacoast Commerce Bank



View source version on accesswire.com:
https://www.accesswire.com/563162/Seacoast-Commerce-Banc-Holdings-Announces-Third-Quarter-2019-Results