Seacoast Commerce Banc Holdings Announces Fourth Quarter and Full Year 2019 Results

Full Year 2019 Highlights

Net income for the full year of $14.6 million, up $1.7 million, or 13.1%
Earnings per share of $1.51, up $0.14, or 10.2%
Return on Average Tangible Common Equity of 16.41%
Return on Average Assets of 1.34%
Asset growth of $91.2 million, or 8.8%, to $1.1 billion
Gross loan growth of $67.4 million, or 7.7%, to $945.5 million
Deposit growth of $149.6 million, or 18.5%, to $958.4 million
Non-interest bearing deposit growth of $124.7 million, or 35.6%, to $475.7 million
Non-interest bearing deposits represent 49.6% of total deposits
Specialty deposit growth of $169.6 million, or 28.6%, to $762.8 million
SBA loan production growth of $47.6 million, or 18.6%, to $303.7 million
Retained SBA guaranteed loan growth of $48.4 million, or 12.0%, to $450.1 million
Opened our 5th full-service branch, in Las Vegas, Nevada
Hired one new deposit business development officer
Hired five new SBA business development officers
Became the 10th largest SBA lender 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 / January 16, 2020 / Seacoast Commerce Banc Holdings (OTC PINK:SCBH) ("Company"), the holding company of Seacoast Commerce Bank ("Bank"), reported consolidated unaudited net income for 2019 of $14.6 million, or $1.51 per share, compared with net income of $12.9 million, or $1.37 per share, for 2018, a 13.1% increase. For the fourth quarter of 2019, the Company reported net income of $3.8 million, compared to net income of $3.1 million for the fourth quarter of 2018, a 23.6% increase. The Company's 2019 full year return on average tangible common equity (ROATCE) and return on average assets (ROAA) were 16.41% and 1.34%, respectively, versus 16.99% and 1.33%, respectively, for 2018.

Richard M. Sanborn, President & Chief Executive Officer, commented, "As with previous years, 2019 was a continuation of our past consistent performance with excellent results across all our business lines. Our specialty deposit group had an exceptional year, growing our core deposits by $170 million, or 28.6%, to $763 million in specialty deposit balances. Our SBA group increased loan production by 18.6%, booking $303 million in new SBA loans, while our commercial banking team added an additional $84 million in loan fundings, resulting in a combined $388 million in loans provided to small businesses. Our strategy of originating and holding variable-rate SBA loans, and funding those loans with low-cost core deposits, 50% of which are non-interest bearing, continues to result in superior operating metrics for the Company. We feel confident that in the current rate and economic cycle that we are positioned well to outperform our peers and deliver superior returns for our shareholders."

Allan W. Arendsee, Chairman of the Board, stated, "While 2019 had its external challenges with economic uncertainty, rate cuts, and global unrest, the Seacoast team performed exceptionally well, as always. Our financial performance continues to be not only consistent, but also well above peers. We have always strived to do the right thing better than anyone else, and always in a safe and sound manner. The Board of Directors fully believes that the strategies we have been implementing are the right strategies to drive the company's growth and profitability in a way that provides an exemplary return to our shareholders."

Quarterly Financial highlights (in millions):

 
12/31/2019
 
 
09/30/2019
 
 
12/31/2018
 
 
12/31 Change
 
 
% Change
 

Consolidated Net Income

 
$
3.807
 
 
$
3.684
 
 
$
3.079
 
 
$
0.73
 
 
 
23.6
%

ROATCE

 
 
16.22
%
 
 
16.17
%
 
 
15.13
%
 
 
1.09
%
 
 
7.2
%

ROAA

 
 
1.35
%
 
 
1.33
%
 
 
1.22
%
 
 
0.13
%
 
 
12.6
%

Earnings Per Share (Basic)

 
$
0.39
 
 
$
0.38
 
 
$
0.32
 
 
$
0.07
 
 
 
21.9
%

Dividend Paid Per Share

 
$
0.12
 
 
$
0.11
 
 
$
0.09
 
 
$
0.03
 
 
 
33.3
%

Net Interest Margin YTD

 
 
6.10
%
 
 
6.18
%
 
 
5.97
%
 
 
0.13
%
 
 
2.2
%

Efficiency Ratio

 
 
68.1
%
 
 
67.7
%
 
 
68.6
%
 
 
(0.50
%)
 
 
(0.7
%)

Divisional quarter-to-date results (in millions):

 
12/31/2019
 
 
09/30/2019
 
 
12/31/2018
 
 

Change
 
 
% Change
 

SBA Loan Production

 
$ 
95.716
 
 
$ 
70.657
 
 
$ 
73.719
 
 
$ 
21.007
 
 
 
29.8
%

SBA 7(a) guaranteed Loan Sales

 
$ 
17.339
 
 
$ 
8.320
 
 
$ 
12.225
 
 
$ 
5.114
 
 
 
41.8
%

Percent of Guaranteed Loan Sales

 
 
24.2
%
 
 
15.7
%
 
 
22.1
%
 
 
2.1
%
 
 
9.5
%

SBA Guaranteed Loan Inventory

 
$ 
450.090
 
 
$ 
435.250
 
 
$ 
401.732
 
 
$ 
48.358
 
 
 
12.0
%

Commercial Loan Production

 
$ 
29.911
 
 
$ 
13.955
 
 
$ 
29.107
 
 
$ 
0.804
 
 
 
2.76
%

1031 Exchange Deposits

 
$ 
186.601
 
 
$ 
119.919
 
 
$ 
174.807
 
 
$ 
11.794
 
 
 
6.7
%

Property Management Deposits

 
$ 
253.161
 
 
$ 
230.705
 
 
$ 
167.434
 
 
$ 
85.727
 
 
 
51.2
%

Association Management Deposits

 
$ 
238.993
 
 
$ 
214.354
 
 
$ 
172.386
 
 
$ 
66.607
 
 
 
38.6
%

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

Balance Sheet Metrics

Asset growth of 8.8%, or $91.2 million, to $1.1 billion;
Loan growth of 7.7%, or $67.4 million, to $945.5 million;
SBA loans held for sale up 12.0%, or $48.4 million, to $450.1 million;
Deposit growth of 18.5%, or $149.6 million, to $958.4 million;
Non-Interest bearing deposits represent 49.6% of total deposits;
Shareholders' Equity growth of 10.1%, or $12.2 million, to $132.3 million.

Income Statement Metrics

Interest Income up 2.0%, or $313 thousand, to $16.3 million;
Interest Expense down 31.8%, or $513 thousand, to $1.1 million;
Net-Interest Income up 5.8%, or $826 thousand, to $15.2 million;
Non-Interest Income up 62.3%, or $758 thousand, to $2.0 million;
Non-Interest Expenses up 7.1%, or $795 thousand, to $12.0 million;
Net Income up 23.6%, or $728 thousand, to $3.8 million.

Other Metrics

SBA loans funded QTD up 29.8%, or $22.0 million, to $95.7 million;
SBA loans funded YTD up 18.6%, or $47.6 million, to $303.7 million;
Allowance for loan losses of $6.1 million was 1.57% of loans held for investment (net);
Non-performing loans to total gross loans of 0.91%;
Non-performing assets to Tier 1 Capital plus ALLL (Texas Ratio) of 2.16%;
Since inception of the Bank's SBA program ten years ago, the bank has funded 2,206 loans for $2.0 billion in small business financing;
The Bank services a total of 1,304 SBA loans for $1.0 billion, of which $313 million has been sold in the secondary market and is not reflected on the banks balance sheet.

The Bank has always maintained capital levels well above the regulatory highest designation, "well capitalized", and had capital ratios at December 31, 2019, as follows:

Capital Ratios as of Dec. 31, 2019

 
Company
 
 
Bank
 
 
"Well Capitalized" Level

Tier 1 Leverage Ratio:

 
 
8.85%
 
 
 
8.86%
 
 
 
5.00%

Common Equity Tier 1 Ratio:

 
 
13.99%
 
 
 
14.01%
 
 
 
7.00%

Tier 1 Risk-Based Capital Ratio:

 
 
13.99%
 
 
 
14.01%
 
 
 
8.50%

Total Risk-Based Capital Ratio:

 
 
14.89%
 
 
 
14.91%
 
 
 
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.

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 five full-service banking branches in California and Nevada, with loan and deposit production offices throughout Arizona, California, Colorado, Georgia, Illinois, Indiana, Massachusetts, Nevada, New Jersey, North Carolina, Ohio, Oregon, Texas, Utah, 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 (725) 465-1919, 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
 

 
12/31/2019
 
 
09/30/2019
 
 
12/31/2018
 
 
12/31 – 12/31
 

Balance Sheet Items

Total Gross Loans

 
 
945,533
 
 
 
921,047
 
 
 
878,142
 
 
 
7.7
%

SBA Loans Available for Sale (Memo Only)

 
 
450,090
 
 
 
435,250
 
 
 
401,732
 
 
 
12.0
%

Total Assets

 
 
1,131,355
 
 
 
1,082,173
 
 
 
1,040,131
 
 
 
8.8
%

Total Deposits

 
 
958,367
 
 
 
851,984
 
 
 
808,760
 
 
 
18.5
%

Non-Interest DDA (Memo Only)

 
 
475,366
 
 
 
443,897
 
 
 
350,694
 
 
 
35.6
%

Bank Borrowings

 
 
25,000
 
 
 
86,000
 
 
 
100,000
 
 
 
(75
%)

Shareholders' Equity

 
 
132,250
 
 
 
129,353
 
 
 
120,066
 
 
 
10.1
%

Bank Shareholders' Equity (Memo Only)

 
 
132,373
 
 
 
129,399
 
 
 
119,659
 
 
 
10.6
%

Income Statement Items

Total Interest Income

 
 
16,287
 
 
 
17,010
 
 
 
15,974
 
 
 
2.0
%

Total Interest Expense

 
 
1,100
 
 
 
1,224
 
 
 
1,613
 
 
 
(31.8
%)

Net Interest Income

 
 
15,187
 
 
 
15,786
 
 
 
14,361
 
 
 
5.8
%

Provision for Loan Losses

 
 
167
 
 
 
360
 
 
 
350
 
 
 
(52.3
%)

Non-Interest Income (excluding gains)

 
 
537
 
 
 
884
 
 
 
250
 
 
 
115.3
%

Gain on Sale Income

 
 
1,438
 
 
 
710
 
 
 
967
 
 
 
48.7
%

Non-Interest Expense

 
 
11,978
 
 
 
11,982
 
 
 
11,183
 
 
 
7.1
%

Pre-Tax Income

 
 
5,018
 
 
 
5,038
 
 
 
4,045
 
 
 
24.1
%

Our Fair Share of Income Taxes (24.1%)

 
 
1,211
 
 
 
1,354
 
 
 
966
 
 
 
25.4
%

Net Income

 
 
3,807
 
 
 
3,684
 
 
 
3,079
 
 
 
23.6
 %

QTD Basic Earnings per Share

 
$ 
0.39
 
 
$ 
0.38
 
 
$ 
0.32
 
 
 
21.9
%

YTD Basic Earnings per Share

 
$ 
1.51
 
 
$ 
1.12
 
 
$ 
1.37
 
 
 
10.2
%

Book Value per Share

 
$ 
13.83
 
 
$ 
13.54
 
 
$ 
12.84
 
 
 
7.7
%

Tangible Book Value per Share

 
$ 
9.95
 
 
$ 
9.65
 
 
$ 
8.84
 
 
 
12.6
%

QTD ROAA

 
 
1.35
%
 
 
1.33
%
 
 
1.22
%
 
 
10.7
%

YTD ROAA

 
 
1.34
%
 
 
1.34
%
 
 
1.33
%
 
 
0.8
%

QTD ROATCE

 
 
16.22
%
 
 
16.17
%
 
 
15.13
%
 
 
7.2
%

YTD ROATCE

 
 
16.41
%
 
 
16.48
%
 
 
16.99
%
 
 
(3.4
%)

Ending Shares Outstanding

 
 
9,564
 
 
 
9,557
 
 
 
9,353
 
 
 
2.3
%

Stock Price

 
$ 
18.20
 
 
$ 
18.15
 
 
$ 
20.50
 
 
 
(11.2
%)

Market Capitalization

 
$ 
174,065
 
 
$ 
173,461
 
 
$ 
191,743
 
 
 
(9.2
%)

Qtr. Cash Dividends Paid to Shareholders

 
$ 
0.12
 
 
$ 
0.11
 
 
$ 
0.09
 
 
 
33.3
%

YTD Cash Dividends Paid to Shareholders

 
$ 
0.44
 
 
$ 
0.32
 
 
$ 
0.34
 
 
 
29.4
%

Seacoast Commerce Banc Holdings
Selected Financial Data
Consolidated and Unaudited (000)

 
For the Years Ended
 
 
 
 
 
 
 

 
12/31/2019
 
 
12/31/2018
 
 
$ Change
 
 
% Change
 

Balance Sheet Items

Total Gross Loans

 
 
945,533
 
 
 
878,142
 
 
 
67,391
 
 
 
7.7
%

SBA Loans Available for Sale (Memo Only)

 
 
450,090
 
 
 
401,732
 
 
 
48,358
 
 
 
12.0
%

Total Assets

 
 
1,131,355
 
 
 
1,040,131
 
 
 
91,224
 
 
 
8.8
%

Total Deposits

 
 
958,367
 
 
 
808,760
 
 
 
149,607
 
 
 
18.5
%

Non-Interest DDA (Memo Only)

 
 
475,366
 
 
 
350,694
 
 
 
124,672
 
 
 
23.6
%

Bank Borrowings

 
 
25,000
 
 
 
100,000
 
 
 
(75,000
)
 
 
(75
%)

Shareholders' Equity

 
 
132,250
 
 
 
120,066
 
 
 
12,184
 
 
 
10.1
%

Bank Shareholders' Equity (Memo Only)

 
 
132,373
 
 
 
119,659
 
 
 
12,714
 
 
 
10.6
%

Income Statement Items

Total Interest Income

 
 
66,084
 
 
 
57,147
 
 
 
8,937
 
 
 
15.6
%

Total Interest Expense

 
 
5,020
 
 
 
5,307
 
 
 
(287
)
 
 
(5.4
%)

Net Interest Income

 
 
61,065
 
 
 
51,839
 
 
 
9,226
 
 
 
17.8
%

Provision for Loan Losses

 
 
1,461
 
 
 
550
 
 
 
911
 
 
 
165.6
%

Non-Interest Income (excluding gains)

 
 
2,783
 
 
 
1,950
 
 
 
833
 
 
 
42.7
%

Gain on Sale Income

 
 
4,719
 
 
 
5,995
 
 
 
(1,276
)
 
 
(21.3
%)

Non-Interest Expense

 
 
46,993
 
 
 
41,754
 
 
 
5,239
 
 
 
12.5
%

Pre-Tax Income

 
 
20,112
 
 
 
17,479
 
 
 
2,633
 
 
 
15.1
%

Our Fair Share of Income Taxes (27.5%)

 
 
5,524
 
 
 
4,579
 
 
 
945
 
 
 
20.6
%

Net Income

 
 
14,588
 
 
 
12,900
 
 
 
1,688
 
 
 
13.1
%

YTD Basic Earnings per Share

 
$ 
1.51
 
 
$ 
1.37
 
 
$ 
0.14
 
 
 
10.2
%

Book Value per Share

 
$ 
13.83
 
 
$ 
12.84
 
 
$ 
0.99
 
 
 
7.7
%

Tangible Book Value per Share

 
$ 
9.95
 
 
$ 
8.84
 
 
$ 
1.11
 
 
 
12.6
%

YTD ROAA

 
 
1.34
%
 
 
1.33
%
 
 
0.01
%
 
 
0.8
%

YTD ROATCE

 
 
16.41
%
 
 
16.99
%
 
 
(0.58
%)
 
 
(3.4
%)

Ending Shares Outstanding

 
 
9,564
 
 
 
9,353
 
 
 
313
 
 
 
2.3
%

Stock Price

 
$ 
18.20
 
 
$ 
20.50
 
 
$ 
(2.30
)
 
 
(11.2
%)

Market Capitalization

 
$ 
174,065
 
 
$ 
191,743
 
 
$ 
(15,819
)
 
 
(9.2
%)

YTD Cash Dividends Paid to Shareholders

 
$ 
0.44
 
 
$ 
0.34
 
 
$ 
0.10
 
 
 
29.4
%

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

SOURCE: Seacoast Commerce Bank

ReleaseID: 573190