RIVERSIDE, Calif.--(BUSINESS WIRE)--Security California Bancorp (OTCBB: SCAF), the parent company of Security Bank of California, reported net income for nine months ended September 30, 2013 of $2.301 million or 0.39 cents per diluted shares, which is a significant favorable change compared to the same period last year of $305 thousand, an increase of $1.996 million or 0.35 cents per diluted share.

Highlights on growth, compared to the same period ended September 30, 2012 include:

Total Assets grew to $544 million, up by $56 million or 11%Total Loans increased to $333 million, grew by $24 million or 8%Total Deposits moved to $442 million, increased by $19 million or 5%

“The company reached a significant milestone, finishing the quarter with $544 million in Assets, despite the slow economic recovery throughout our region,” commented James A. Robinson, Chairman and CEO. “Contributions from each of our business units have fueled this growth, which underscores our continued commitment to building a solid banking franchise.

“We are pleased with our results and remain focused on becoming the leading Southern California community bank,” added Robinson.

The following are the notable changes compared to a year ago in the major categories of the statement of conditions, the allocation and overall structure of which provides stability and are influential in the generation of sustainable core income:

Total interest bearing balances or short term investments of $21 million with correspondent banks reflect a reduction of $37 million from the level a year ago. These balances have been shifted to core earning assets, i.e., loans and AFS investment securities that inherently have better yields and are more profitable.

Total investments in AFS Securities grew to $158 million, an increase of 53%, which provides better risk based earning assets as well as providing a satisfactory level of readily available stand by liquidity. The securities portfolio consists of US government agency and agency sponsored debenture bonds and mortgage related securitized collateral.

Total loan portfolio has grown organically by $24 million or 8% in a very competitive market to $333 million, which represents a base that is a major source of stable and sustainable interest income. The loan portfolio’s C & I concentration reflects the overall business strategy of the Company that emphasizes the intrinsic value of solid business relationships with its clients.

Total deposits increased to $441 million, a net growth of $19 million or 5%, of which $192 million are non-interest bearing DDAs that represents 43% of the total deposits.

Loan Portfolio Profile: Total loans grew by $24 million or 8% to $333 million, of which 99% is performing or on accrual status, an improvement from a year ago of 9%. The Company’s fair valued non-performing loans (“NPL”) are $4.2 million, a favorable reduction of $4.8 million or 53% compared to a year ago. Loans that were charged off during the first nine months in 2013 were $1.1 million compared to $5.3 million during the same period a year ago, which is a reduction of 80%, a demonstration of a sustained improvement in the loan asset credit quality. The estimated Allowance for Loan & Lease Losses (“ALLL”) of $5.566 million is about 1.67% of the consolidated total loans. The Company’s Texas Ratio is down to 5.89%, a reduction from 13.19% from a year ago. (Texas Ratio represents non-performing + 90 days past due loans divided by Tangible Equity + ALLL).

Operating Performance: The Company’s net income of $2.301 million included the following major categories and their movements compared to the same period a year ago:

Net Interest Income was $12.992 million, an increase of $1.041 million or 9% primarily driven by higher net growth in earning asset balances.

Provision for Loan & Lease Losses (“PLLL”) of $723 thousand compared to last year of $4.299 million is a significant favorable reduction of $3.576 million, a further representation of a much improved credit quality of the loan portfolio.

Non-Interest Income was $2.555 million, better by $574 thousand led by the positive impact of SBA related income.

Non-Interest Expense was $10.879 million, higher by $1.1809 million, principally due to investment in additional personnel for the newly established loan production office (“LPO”) and front office deposit gathering activities, as well as additions made to strengthen the BSA and Compliance structure to satisfactorily conform to the current regulatory requirements, which is vital and necessary to support the on-going growth in the banking operation of the Company.

Capital Requirements: The Company with a capital of $62.3 million is well capitalized and at this level provides satisfactory cushions over minimum regulatory requirements. The Tier 1 leverage ratio is 12.70%; Tier 1 risk based ratio is 16.38%, and the Total risk based ratio is 17.63% compared to regulatory minimum standards of 5.00%, 6.00% and 10.00%, respectively.

Security California Bancorp is traded on the Over the Counter Bulletin Board (“OTCBB”) 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 Loan Production Offices (“LPO”) in Irwindale and Palm Desert.

Visit us at www.securitybankca.com.

Security California BancorpSecurity 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.