Suncrest Bank Reports Third Quarter Results

VISALIA, Calif., Oct. 31, 2016 /PRNewswire/ -- Suncrest Bank (OTCQX: SBKK) today reported unaudited financial results for the third quarter of 2016 with net income of $676,000, increasing 129% over the third quarter of 2015. Total assets were $353 million at September 30, 2016, compared to $218 million at September 30, 2015. The acquisition of Sutter Community Bank, with total assets of $68 million, which closed in December 2015, will affect the comparability of financial information for the third quarter 2016 and year-to-date versus similar periods in 2015. "The integration of the former Sutter Community Bank has been successfully completed and we look forward to further building our business in the northern Central Valley," said Ciaran McMullan, President and CEO of Suncrest Bank. "The improvement in our efficiency ratio, non-interest expense as a percentage of average assets, and tangible book value per share when compared to the same period last year, just prior to the acquisition, demonstrates how quickly and effectively we have leveraged this merger."

Balance Sheet

Significant deposit growth this quarter reflects the bank's ongoing focus on building core, local deposit relationships together with the normal seasonal inflow of funds related to the local farming industry. The decline in net loans during the quarter was primarily driven by approximately $4.0 million in expected annual pay downs of agricultural lines of credit, secured by both farmland and crops, in our Yuba-Sutter Market. In addition, approximately $1.6 million in classified loans paid-off in the third quarter further improving our overall credit quality, and the bank sold approximately $2.0 million in government guaranteed loans, at a premium. The bank is an approved lender under the Farmer Mac program, which allows it to offer long-term fixed rate loans while preserving capital, managing interest rate risk and still maintaining the customer relationship. The bank completed approximately $4.0 million in Farmer Mac loans during the third quarter. These loans are not held on the bank's balance sheet however the bank receives an ongoing servicing fee.

"We have been carefully managing our loan to deposit ratio through the last quarter to ensure we are well positioned to take advantage of the new growth opportunities resulting from our upcoming merger with Security First Bank and subsequent increase in lending limits," said McMullan.

Credit Quality

As a result of the acquisition of approximately $4.3 million in non-performing assets due to the merger with Sutter Community Bank in December, 2015, non-performing assets to total assets increased from 0.07% at September, 30, 2015 to 1.54% at December 31, 2015. "Active management of our non-performing portfolio has reduced non-performing assets to total assets to 0.9% at September 30, 2016, and our credit quality remains strong," said Peter Nutz, Chief Credit Officer of Suncrest Bank. Excluding approximately $35 million in loans acquired from Sutter Community Bank that are still covered under purchase accounting rules, the bank's loan loss reserve as a percentage of total loans was approximately 1.33% at September, 30, 2015. The legacy Suncrest Bank has only had approximately $100,000 in charge-offs in its history.

Selected financial highlights

• Total assets $353.2 million, growth of 11.5%, or $36.4 million versus second-quarter 2016 and growth of 62.0%, or $135.2 million versus third-quarter 2015;
• Net loans of $221.4 million, decline of (4.2%), or $9.8 million versus second-quarter 2016 and growth of 49%, or $73 million versus third-quarter 2015;
• Deposits of $310.5 million, growth of 12.9%, or $35.6 million versus second-quarter 2016 and growth of 66%, or $124 million versus third-quarter 2015.
• Net Income of $0.68 million, flat versus second-quarter 2016 and growth of 129%, or $0.38 million versus third-quarter 2015.
• Non-interest expense as a percentage of average assets was 3.04% for the quarter versus 3.42% for third-quarter 2015.
• Return on Average Assets (ROAA) was 0.68% annualized for the nine months ended September 30, 2016 as compared to 0.43% for the same period last year.
• Efficiency ratio was 71.4% for the nine months ended September 30, 2016 as compared to 76.0% for the same period last year.
• Basic Earnings per share of 32 cents for the nine months ended September 30, 2016 as compared to 18 cents for the same period last year.
• Tangible book value per share of $8.28, growth of 2% or 14 cents versus second-quarter 2016, and growth of 4%, or 30 cents versus third-quarter 2015.

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

Related Links

http://www.suncrestbank.com