Suncrest Bank Reports Fourth Quarter Results

VISALIA, Calif., Feb. 1, 2017 /PRNewswire/ -- Suncrest Bank (OTCQX: SBKK) today reported unaudited financial results for the fourth quarter of 2016. Total assets were $448 million at December 31, 2016, compared to $297 million at December 31, 2015. The acquisition of Security First Bank, with total assets of $104 million, which closed on December 16, 2016, will affect the comparability of financial information for the fourth quarter 2016, and year-to-date, versus similar periods in 2015. Financial results for the fourth quarter will also be affected by one-time merger expenses related to the acquisition. "We are pleased to have completed our second acquisition in a year, following our acquisition of Sutter Community Bank in December 2015," said Ciaran McMullan, President and CEO of Suncrest Bank. "We are also pleased to report significantly improved earnings and return on average assets through 2016, reflecting our commitment to not only grow the balance sheet but to steadily improve our profitability at the same time."

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

Forward Looking Statements

Except for the historical information in this news release, the matters described herein contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties include: the credit risks of lending activities, including changes in the level and trend of loan delinquencies and charge-offs, results of examinations by our banking regulators, our ability to maintain adequate levels of capital and liquidity, our ability to manage loan delinquency rates, our ability to price deposits to retain existing customers and achieve low-cost deposit growth, manage expenses and lower the efficiency ratio, expand or maintain the net interest margin, mitigate interest rate risk for changes in the interest rate environment, competitive pressures in the banking industry, access to available sources of credit to manage liquidity, the local and national economic environment, and other risks and uncertainties.  Accordingly, undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this release. Suncrest Bank undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Investors are encouraged to read the Suncrest Bank annual reports which are available on our website.

SOURCE Suncrest Bank