Suncrest Bank Reports Fourth Quarter Results

VISALIA, Calif., Feb. 1, 2017

Merger Economics and Earnings

Fourth quarter earnings of $110,000 were impacted by approximately $725,000 in pre-tax, one-time expenses related to our acquisition of Security First Bank. In addition, the completion of the acquisition created $3.3 million in goodwill, driven in part by the increase in the Suncrest Bank stock price through the fourth quarter. Year to date earnings per share at December 31, 2016 were 34 cents which represents a 36% increase over full year earnings per share for 2015. Excluding one-time merger expenses, year to date earnings per share at December 31, 2016 were 44 cents which represents a 76% increase over full year earnings per share for 2015. The acquisition also resulted in a decrease in Suncrest's tangible book value per share of 77 cents or 9.3% from the tangible book value per share of $8.28 at September 30, 2016. As a result of the merger, loans increased in the fourth quarter by $85.8 million while total deposits increased by $78.5 million.

Credit Quality

Non-performing assets to total assets improved from 0.87% at September, 30, 2016 to 0.47% at December 31, 2016. Due to the positive resolution of several non-accrual loan relationships, total non-performing loans declined by approximately 31% in the fourth quarter. Excluding approximately $35 million in loans acquired from Sutter Community Bank and $81 million acquired from Security First Bank, covered under purchase accounting rules, the bank's loan loss reserve as a percentage of total loans was approximately 1.31% at December 31 2016. The legacy Suncrest Bank has only had approximately $100,000 in charge-offs in its history, and at December 31, 2016 does not report any impaired loans.

Selected financial highlights

• Total assets $447.7 million, growth of 26.7%, or $94.4 million versus third-quarter 2016 and growth of 50.8%, or $150.8 million versus fourth-quarter 2015;
• Net loans of $307.6 million, growth of 38.7%, or $85.8 million versus third-quarter 2016 and growth of 47.6%, or $99.2 million versus fourth-quarter 2015;
• Deposits of $389.0 million, growth of 25.3%, or $78.5 million versus third-quarter 2016 and growth of 51.5%, or $132.3 million versus fourth-quarter 2015.
• Net Income (inclusive of one-time merger expenses) of $110,000 for the fourth-quarter, versus 676,000 for the third-quarter and $265,000 for the fourth-quarter 2015.
• Non-interest expense as a percentage of average assets was 2.79% for the quarter versus 3.04% for third-quarter 2016.
• Return on Average Assets (ROAA) was 0.49% for the year ended December 31, 2016 as compared to 0.41% for the same period last year.
• Excluding one-time merger expenses, Return on Average Assets (ROAA) was 0.69% for the year ended December 31, 2016.
• Efficiency ratio was 76.7% for the year ended December 31, 2016 as compared to 77.1% for the same period last year.
• Excluding one-time merger expenses, Efficiency ratio was 71.28% for the year ended December 31, 2016.
• Basic Earnings per share of 34 cents for the year ended December 31, 2016 as compared to 25 cents for the same period last year.
• Excluding one-time merger expenses, basic earnings per share for the year ended December 31, 2016 were 44 cents.

About Suncrest Bank
Suncrest Bank, member FDIC, is locally owned and operated and offers a full range of commercial, small business and agribusiness loans, cash management services and personal deposit products throughout the Central Valley of California. It is regularly rated Five Stars by Bauer Financial as one of the nation's strongest financial institutions, and in 2015 for the second straight year, was named in the top 200 Healthiest Banks in America by analysis firm, DepositAccounts.com. It is a Preferred Lender with the Small Business Administration and its stock can be purchased on the open market, trading on the OTCQX under the ticker symbol SBKK. For all other information, visit www.suncrestbank.com