Solera National Bancorp Reports Third Quarter 2013 Results; Gross Loans Increase 18% Year-Over-Year

Solera National Bancorp Reports Third Quarter 2013 Results; Gross Loans
Increase 18% Year-Over-Year

LAKEWOOD, Colo., Oct. 25, 2013 (GLOBE NEWSWIRE) -- Solera National Bancorp,
Inc. (OTCQB:SLRK), the holding company for Solera National Bank, today
reported a net loss of $638,000, or $0.25 per share, for the third quarter of
2013, compared to net income of $439,000, or $0.17 per share, for the second
quarter of 2013, and earnings of $74,000, or $0.03 per share for the third
quarter a year ago. Impacting third quarter earnings were lower gain on
mortgage loans sold, higher expenses from nonrecurring items, and lower gain
on the sale of securities. For the first nine months of 2013, Solera lost
$18,000, or $0.01 per share, compared to net income of $168,000, or $0.07 per
share, for the like period a year ago.

"After our strong second quarter performance, this quarter's financial results
were disappointing, but not unexpected. We had anticipated a slowdown in
residential mortgage refinancing activity given the increase in longer-term
interest rates," said John P. Carmichael, President & Chief Executive Officer.
"However, we are encouraged by the fact that third quarter activity for new
home purchases remained strong despite the increase in interest rates. We
funded $50.6 million for home purchases in the third quarter 2013, compared to
$53.2 million during the second quarter 2013. Our decision to invest in the
mortgage business was for the long term, and the division remains focused on
financing new home purchases."

Residential construction continues to improve in the Metro Denver area, as
residential building permits reached the highest point during August 2013,
since June 2007, according to October's Metro Denver Economic Development
Corporation's (Metro Denver EDC) monthly economic summary.

Third Quarter 2013 Highlights (at or for the period ended September 30, 2013,
except as noted):

  *Net loss for 3Q13 was $0.25 per share, compared to net income of $0.17 per
    share for 2Q13 and $0.03 per share in 3Q12.
    
  *Total revenue (which includes net interest income plus total noninterest
    income) was $2.9 million in 3Q13, compared to $3.8 million in 2Q13 and
    $1.4 million in 3Q12.
    
  *Net interest income was $1.2 million for 3Q13, compared to $1.1 million in
    2Q13 and $1.1 million in 3Q12.
    
  *Residential mortgage originations totaled $62.3 million in 3Q13, compared
    to $84.4 million in 2Q13.Year-to-date, mortgage originations totaled
    $198.8 million.
    
  *Due to the spike in interest rates in May 2013, mortgage refinancing
    activity declined to $11.6 million in 3Q13, from $31.2 million in 2Q13.By
    comparison, mortgage activity associated with new purchases remained
    stable with $50.6 million funded in 3Q13, compared to $53.2 million funded
    in 2Q13.
    
  *Gross loans increased 10%, or $6.8 million, to $72.6 million from the
    2Q13, and grew 18%, or $10.9 million, from 3Q12.
    
  *The Bank's capital ratios significantly exceed regulatory requirements for
    a well-capitalized financial institution with total risk-based capital at
    16.0%.
    
  *Tangible book value per share, excluding accumulated other comprehensive
    income, was $7.21 at September 30, 2013, compared to $7.34 at September
    30, 2012 and $7.49 at June 30, 2013.

2013 Metro Denver Economic Update

"Strong growth throughout Metro Denver's economy has helped to highlight the
region as a leading area in which to live and do business," according to data
compiled by the Metro Denver EDC."Metro Denver is regarded as a strong
location for business as robust job growth continues."

Residential Real Estate: August existing-home sales were up 20.3% compared
with August 2012. The average sale price of a single family home during
August of $345,487 was 10.8% higher versus prior year. Year-to-date data
indicates that sales through the first eight months of 2013 were 21.7% above
the same period in 2012. The year-to-date average sale price of a single
family home of $333,769 was up 10.4% versus the prior year.

Labor and Employment: After a one-month decline of 0.4% between June and July,
Metro Denver employment increased slightly between July and August by 0.1%.
Compared with August 2012, employment in Metro Denver increased 2.7%, adding
37,900 jobs.

Balance Sheet Review and Credit Quality

Solera's total assets grew 11% to $172.3 million at September 30, 2013, from
$154.7 million a year ago.Loans held for investment increased $10.9 million,
or 18%, to $72.6 million at September 30, 2013, compared to $61.7 million at
September 30, 2012. "We expect to accelerate the growth in the commercial loan
portfolio with the hiring of experienced commercial bankers in Boulder and
Cherry Creek," commented Carmichael. "We are targeting to open a full-service
branch in our Boulder loan production office early in the first quarter of
2014."

Loan originations totaled $9.9 million, offset by payoffs of $5.4 million for
the third quarter 2013. Loan originations in the second quarter 2013 were $7.2
million, offset by loan payoffs of $4.4 million.

The investment securities portfolio totaled $77.6 million at September 30,
2013, up 3% from June 30, 2013, and down 9% from year ago balances. "Although
higher longer-term interest rates have reduced the market value of our
investment securities portfolio, the portfolio still generates an attractive
rate of return, while providing liquidity to fund our growing, and
higher-yielding loan portfolio," said Robert J. Fenton, Chief Financial
Officer.The mark-to-market adjustment was a loss of $885,000 at September 30,
2013, compared to a loss of $869,000 in the preceding quarter and a gain of
$1.2 million a year ago.

Total deposits showed marginal improvement, growing 2% over both the preceding
quarter and the prior year to $127.4 million at September 30, 2013. Core
deposits, which exclude certificates of deposits, accounted for 52% of total
deposits at September 30, 2013.

"Solera's loan quality continues to remain healthy," Fenton commented.
"Consequently, we did not book a provision for loan and lease losses this
quarter.In fact, we have not recorded a provision for loan and lease losses
since the fourth quarter of 2011."

Primarily due to growth in loans, the allowance for loan and lease losses
totaled $1.1 million, or 1.52% of gross loans, at September 30, 2013, down
from 1.65% at the end of the preceding quarter.

Stockholders' equity was $18.3 million and tangible book value was $7.21 per
share at September 30, 2013.Solera's tangible common equity was 10.9% of
total assets at the end of September 2013.

Review of Operations

Revenue totaled $2.9 million in the third quarter of 2013, compared to $3.8
million in the preceding quarter, and $1.4 million in the third quarter of
2012.The decline in total revenue for the quarter compared to the preceding
quarter was primarily related to lower mortgage refinancing, and hence lower
gains realized from selling mortgage loans on the secondary
market.Year-to-date, total revenue increased 151% to $9.4 million compared to
$3.8 million in the first nine months of 2012.The increased revenue for the
first nine months of 2013 was mainly due to revenue generated from the launch
of the mortgage division in the first quarter of 2013.

Solera's net interest margin (NIM) expanded 10 basis points to 2.92% for the
third quarter of 2013, compared to 2.82% for the second quarter of 2013, and
increased 9 basis points from 2.83% for the third quarter of
2012.Year-to-date, the NIM was 2.83%; essentially unchanged from the first
nine months of 2012. 

Noninterest expense totaled $3.5 million in the third quarter 2013, compared
to $3.4 million in the preceding quarter and $1.3 million in the third quarter
a year ago.For the first nine months of 2013, noninterest expense was $9.4
million compared to $3.6 million for the like period in 2012. The third
quarter of 2013 was adversely impacted by approximately $400,000 of
non-recurring expenses incurred in conjunction with the retirement of our
former President and CEO as well as expenses associated with one of our two
OREO properties.Excluding these items, noninterest expense was lower in the
third quarter 2013, as compared to the second quarter 2013, primarily due to
reduced commissions paid to mortgage loan officers, which directly correlates
to the decline in origination volumes.

About Solera National Bancorp, Inc.

Solera National Bancorp, Inc. was incorporated in 2006 to organize and serve
as the holding company for Solera National Bank which opened for business in
2007. Solera National Bank is a high-touch, high-tech community business bank
delivering personalized customer service that is welcoming, inclusive and
respectful with particular emphasis on the Hispanic market. As a preferred
Small Business Administration Lender and superior mortgage provider, Solera
embraces emerging communities, one individual, one family and one business at
a time.For more information, visit http://www.solerabank.com. 

Cautions Concerning Forward-Looking Statements

This press release contains statements that may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995.The statements contained in this release, which are not historical
facts and that relate to future plans or projected results of Solera National
Bancorp, Inc. ("Company") and its wholly-owned subsidiary, Solera National
Bank ("Bank"), are forward-looking statements within the meaning of
Section27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934.These forward-looking statements are subject to risks
and uncertainties that could cause actual results to differ materially from
those projected, anticipated or implied.These risks and uncertainties can
include the risks associated with the ability to grow the Bank and the
services it provides, the ability to successfully integrate new business lines
and expand into new markets, competition in the marketplace, general economic
conditions and many other risks described in the Company's Securities and
Exchange Commission filings.The most significant of these uncertainties are
described in our Annual Report on Form 10-K and Quarterly reports on Form10-Q
all of which any reader of this release is encouraged to study (including all
amendments to those reports) and exhibits to those reports, and include (but
are not limited to) the following: the Company has a limited operating history
upon which to base an estimate of its future financial performance; general
economic conditions may be less favorable than expected, causing an adverse
impact on our financial performance; and the Company is subject to extensive
regulatory oversight, which could restrain its growth and profitability.We
undertake no obligation to update or revise any forward-looking
statement.Readers of this release are cautioned not to put undue reliance on
forward-looking statements.


SOLERA NATIONAL BANCORP, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited)
($000s)                                       9/30/2013  6/30/2013  9/30/2012
ASSETS                                                            
Cash and due from banks                       $1,432   $765     $869
Federal funds sold                            390       300       1,075
Interest-bearing deposits with banks          257       257       357
Investment securities, available-for-sale     77,648    75,375    84,921
FHLB and Federal Reserve Bank stocks, at cost 2,395     2,386     1,175
Gross loans                                   72,595    65,822    61,664
Net deferred (fees)/expenses                  47        78        215
Allowance for loan and lease losses           (1,101)   (1,088)   (1,033)
Net loans                                     71,541    64,812    60,846
Loans held for sale                           9,672     17,251    —
Premises and equipment, net                   937       980       530
Other real estate owned                       1,776     1,776     1,776
Accrued interest receivable                   679       726       707
Bank-owned life insurance                     4,277     4,121     2,047
Other assets                                  1,293     1,483     419
TOTAL ASSETS                                  $172,297 $170,232 $154,722
                                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY                               
Noninterest-bearing demand deposits           $4,742   $4,615   $2,958
Interest-bearing demand deposits              9,562     11,160    8,299
Savings and money market deposits             52,429    50,575    56,519
Time deposits                                 60,639    58,385    57,694
Total deposits                                127,372   124,735   125,470
                                                                 
Accrued interest payable                      78        70        74
FHLB borrowings                               25,447    25,307    8,500
Accounts payable and other liabilities        1,143     1,387     710
TOTAL LIABILITIES                             154,040   151,499   134,754
                                                                 
Common stock                                  26        26        26
Additional paid-in capital                    26,493    26,315    26,184
Accumulated deficit                           (7,377)   (6,739)   (7,472)
Accumulated other comprehensive income        (885)     (869)     1,230
TOTAL STOCKHOLDERS' EQUITY                    18,257    18,733    19,968
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY    $172,297 $170,232 $154,722



SOLERA NATIONAL BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

                           Three Months Ended             Nine Months Ended
($000s, except per share    9/30/2013  6/30/2013 9/30/2012 9/30/2013 9/30/2012
data)
Interest and dividend                                            
income
Interest and fees on loans  $949    $868   $862   $2,607 $2,437
Interest on loans held for  112      121     —        327     —
sale
Investment securities       432      411     505     1,289   1,548
Dividends on bank stocks    17       19      11      51      29
Other                       3        2       3       6       8
Total interest income       1,513    1,421   1,381   4,280   4,022
Interest expense                                                 
Deposits                    271      257     285     785     864
FHLB borrowings             40       40      34      119     98
Other                       —         —        1       —        4
Total interest expense      311      297     320     904     966
Net interest income         1,202    1,124   1,061   3,376   3,056
Provision for loan and      —         —        —        —        —
lease losses
Net interest income after
provision for loan and      1,202    1,124   1,061   3,376   3,056
lease losses
Noninterest income                                               
Customer service and other  31       23      20      73      54
fees
Other income                39       36      20      94      49
Gain on loans sold          1,564    2,487   —        5,576   25
Gain on sale of
available-for-sale          49       145     289     294     569
securities
Total noninterest income    1,683    2,691   329     6,037   697
Noninterest expense                                              
Employee compensation and   2,429    2,407   635     6,509   1,789
benefits
Occupancy                   257      264     120     777     367
Professional fees           187      103     123     424     345
Other general and           650      602     438     1,721   1,084
administrative
Total noninterest expense   3,523    3,376   1,316   9,431   3,585
Net (loss) income           $(638)   $439   $74    $(18)   $168
                                                                
Earnings (Loss) per share   $(0.25)  $0.17  $0.03  $(0.01) $0.07
Tangible book value per     $7.21   $7.49  $7.34  $7.21  $7.34
share
Net interest margin         2.92 %     2.82 %    2.83 %    2.83 %    2.82 %
                                                                
Asset Quality:                                                   
Non-performing loans to     —%         0.03 %    0.02 %             
gross loans
Non-performing assets to    1.03 %     1.05 %    1.16 %             
total assets
Allowance for loan losses   1.52 %     1.65 %    1.68 %             
to gross loans
Allowance for loan losses   NM*        NM*       NM*                
to non-performing loans
Other real estate owned     $1,776  $1,776 $1,776          
* Not meaningful due to the insignificant amount                   
of non-performing loans.
                                                                
Selected Financial Ratios: (Solera                                
National Bank Only)
Tier 1 leverage ratio       9.8 %      10.2 %    10.6 %             
Tier 1 risk-based capital   15.0 %     15.8 %    17.9 %             
ratio
Total risk-based capital    16.0 %     16.8 %    19.1 %             
ratio

CONTACT: SOLERA NATIONAL BANK
         John P. Carmichael, President & CEO
         303.937.6422
         Robert J. Fenton, EVP & CFO
         303.202.0933

         The Cereghino Group
         IR CONTACT: 206-388-5785