Seacoast Commerce Bank (OTC: SCCB) today announced its unaudited results of operations for the fourth quarter and full-year ending December 31, 2011. The Bank reported net income of $2.3 million for the year, compared to net income of $326 thousand for 2010, a 598% increase, with net income of $711 thousand in the fourth quarter compared to net income of $585 thousand in the third quarter, a 21.5% increase on linked quarters. This marks the bank's sixth consecutive quarterly profit.

Selected highlights for year-end 2011 versus year-end 2010:

  • Asset growth(1) of $38.8 million, or 35.1%, to a record $149.6 million;
  • Loan growth(1) was essentially flat, with levels ending at $89.2 million;
  • SBA loans funded totaled $104 million, up 5.1%;
  • SBA loans held for sale up $5.1 million(1), or 47.1%, to $16 million;
  • SBA loan sales during 2011 totaled $72.3 million;
  • Deposit growth of $36.4 million, or 39.1%, $129.7 million;
  • Shareholders' Equity growth of $4.7 million, or 34.8%, to $18.0 million;
  • FDIC Core deposit growth of $38.7 million, or 54.8%;
  • Core deposits as a percent of total deposits up 11.3%, to 84.4% of total deposits;
  • The Bank held no brokered deposits nor any wholesale (non-core) borrowings;
  • Interest Income growth of $952 thousand, or 16.8%, to $6.6 million;
  • Interest Expense reduction of $442 thousand, or 24.3%, to $1.4 million;
  • Non-Interest Income growth of $703 thousand, or 8.4%, to $9.1 million;
  • Allowance for Loan Losses ("ALLL") provision for the year of $1.2 million, down $1.7 million, or 58.6%;
  • Year over year reserve build of $740 thousand, or 29%, resulting in an ending ALLL reserve of $3.3 million, or 3.69% of gross loans;
  • Net charge-offs of $460 thousand were down $2.4 million, or 83.7%;
  • Other Real Estate owned ("ORE") reduced by $296 thousand, or 22.6%, to $1.0 million, representing one property that is well secured;
  • Non-performing assets to Tier 1 Capital plus ALLL (Texas Ratio) of 15.3%;

The Bank has always maintained capital levels well above the FDIC's highest designation, "well capitalized", and had capital ratios at December 31, 2011 as follows:

 

                   

FDIC "Well Capitalized" Level

 
? Tier 1 Capital Ratio: 12.08% 5.00%
? Tier 1 Risk-Based Capital Ratio: 21.39% 6.00%
? Total Risk-Based Capital Ratio: 22.68% 10.00%

As reported by the U.S. Small Business Administration ("SBA") for their fiscal year ended September 30, 2011, Seacoast Commerce Bank's SBA Division was the #1 local SBA lender in the San Diego District, the 5th largest SBA lender in California, and the 18th largest SBA lender in the Nation, up from the 23rd largest lender last year. SBA rankings are based on total dollars approved, with Seacoast having $156 million approved in 2011, up from $92 million in 2010. Seacoast funded $104 million in new SBA loans during calendar year 2011 compared to $99 million funded in 2010, a 5.1% increase. Of the $104 million funded in 2011, fourth quarter fundings were $24.1 million, compared to $19.6 million in the third quarter.

As also reported, MultiFunding released its first annual list of the 'most committed' SBA lenders in the nation, and Seacoast Commerce Bank was ranked the 3rd most committed, nationally, at helping small-business owners get SBA loans. MultiFunding's list was based on SBA loans made as a percentage of a bank's total deposits. Ami Kassar, founder and CEO of MultiFunding stated, "MultiFunding has released its first annual ranking of the most committed SBA lenders in order to honor and recognize the banks across the country who are aggressively helping small business owners through the SBA program. These banks deserve all of our recognition and support for assisting the economy." MultiFunding's list can be found at www.multifunding.com.

Richard M. Sanborn, President & Chief Executive Officer, commented, "We're excited about our 2011 results as they show the earnings power of our business strategy, which we committed to in late 2009, and we've consistently produced above Peer results the last six quarters. We are also excited about the expansion of our HOA Division in late 2011 as we see that Division as a great source of low-cost, stable funding to assist with our SBA program goals. With high levels of capital and liquidity, and our credit quality under control, we see an opportunity to start holding more SBA loans going forward. Holding SBA loans will result in higher earning asset levels and higher levels of consistent, predictable, interest income, albeit we will experience lower levels of gain-on-sale income. While this will affect our net income in the short-term, we firmly believe that this strategy will add substantial shareholder value to our institution over the long-term. We look forward to communicating more about this strategy at our annual shareholder's meeting in May," Sanborn concluded.

Allan W. Arendsee, Chairman of the Board, stated, "The Board of Directors is proud of our team for being able to consistently produce returns on assets and returns on equity many times greater than our Peer group, and our new strategy of holding loans versus selling loans will add tremendous long-term value for our shareholders," Arendsee concluded.

Seacoast Commerce Bank is a business bank operating in San Diego, California, with loan production offices in San Diego County, Orange County, Los Angeles, Sacramento and San Ramon, California; Bellevue, Washington; Phoenix, Arizona and Dallas, Texas. For more information on the bank please visit our website at www.sccombank.com or contact Richard M. Sanborn, President and Chief Executive Officer at 619-409-5762.

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 Bank

Selected Financial Data - Unaudited (000)
       
For the Year Ended %
12/31/2011       12/31/2010   Change

Balance Sheet Items

Liquidity 53,393 19,732 170.6
Gross Loans (1) 89,145 89,607 (0.52 )
Gross Loans 89,145 108,596 (17.8 )
Total Deposits 129,674   93,244   39.1
Total Assets (1) 149,644   110,799   35.1
Total Assets 149,644   129,669   15.4
Shareholders' Equity 18,075   13,413   34.8
 
Income Statement Items
Total Interest Income 6,616 5,664 16.8
Total Interest Expense 1,376   1,818   24.3
Net Interest Income 5,239   3,846   36.2
 
Provision for Loan Losses 1,200 2,900 58.6
Non-Interest Income 9,067 8,364 8.4
Non-Interest Expense 10,808   8,981   20.3
 
Net Income (Loss) 2,298   329   598.5
 
Basic Earnings per Share 0.51 0.08 537.5
Book Value per Share 3.20 2.64 21.2
Return on Average Assets* 1.70 % 0.27 % 529.6
Return on Average Equity* 15.52 % 3.10 % 400.6
*Annualized
(1) Net of the effects of FAS 166 for 2010, which were eliminated in Q2, 2011.

Seacoast Commerce Bank
Richard M. Sanborn, President and Chief Executive Officer
619-409-5762
www.sccombank.com