Lighthouse Bank Reports Strong Deposit and Loan Growth in Q3 2016

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Oct 21, 2016, 04:10 ET

SANTA CRUZ, Calif., Oct. 21, 2016 /PRNewswire/ -- Locally owned Lighthouse Bank (OTC-QB: LGHT) today released unaudited financial results for the quarter-ended September 30, 2016. The Bank posted a $520 thousand profit for the period, representing the 29th successive quarter of profitable operations for the nine-year-old Bank. Lighthouse Bank hit another milestone in the quarter reaching $209 million in Total Assets, an increase of $33 million, or 19%, from September 30, 2015.

The Bank experienced solid loan growth during the quarter, up 8% from June 30, 2016, to $167 million. Year-over-year, loans increased $35 million. Credit quality continues to remain strong. During the quarter, deposits increased $9.4 million, or 6%, to $179 million, representing a 21% increase year-over-year from September 30, 2015. Overall positive performance continued to be driven by the Bank's control of overhead expenses and growth in the loan portfolio.

Core earnings, net income before loan loss provision, for the quarter was $860 thousand representing a $68 thousand, or 9%, increase compared to the quarter-ended June 30, 2016 and a $249 thousand, or 41%, increase year-over-year from the quarter ended September 30, 2015. Net Income after the Provision for Loan Losses for the quarter ending September 30, 2016 represented a $20 thousand, or 4%, increase in earnings compared to the quarter-ended June 30, 2016.

The Bank's loan loss reserve of 2.38% of gross loans remained significantly above the industry average for banks of all sizes. The Bank had one nonperforming loan, an SBA loan in the amount of $61,500, and no past due loans in excess of 30 days at the end of Q3-2016. Lighthouse Bank has not taken a loan loss in over 4 years and has experienced only a single loan loss since opening in 2007.

For the quarter, total shareholders' equity increased by $453 thousand to $29.6 million. Year-over-year, shareholders' equity increased $2.6 million, or 10%.

In July, 2016, the Bank announced an $0.08 per share quarterly cash dividend to shareholders, an increase of 6.67% over the four previous consecutive quarterly cash dividends of $0.075 per share. In early 2015, the Bank paid a special $0.40 per share cash dividend to shareholders, which followed two stock dividends granted in 2011 and 2013. Since December 2014, the Bank has paid $1,754,000 to shareholders.

During the quarter, the Bank continued with expansion plans for its first branch location that will be situated in Silicon Valley. The Cupertino location will operate as a Loan Production Office beginning in the 4^th quarter, 2016. The location, at 19240 Stevens Creek Blvd. in Cupertino, is adjacent to the new Main St. Cupertino Business Center and close to the 3.1 million sq. ft. Apple headquarters building now under construction. The Bank took possession of the Stevens Creek Blvd. site in March, 2016 and recently completed tenant improvements. The contiguous nature of the Silicon Valley market to that of Santa Cruz, staff experience in that market, as well as community bank consolidations, have combined to provide a unique growth opportunity for Lighthouse Bank in Silicon Valley.

Lighthouse Bank's consistently strong financial results continue to place it at the top of the industry in a variety of categories including asset quality, capital adequacy, return on equity and operational efficiency. SNL Financial ranked Lighthouse Bank as the 130th highest performing community bank in the nation based on 2015 performance, of the 4,258 banks of asset size under $1 billion. DepositAccounts.com ranked Lighthouse Bank as the 5th healthiest bank in the nation for 2016, of 6,199 total banking institutions.

For seventeen consecutive quarters, the Bank has been rated by Bauer Financial as Five-Star "Superior" for strong financial performance, the top rating given by the independent bank rating firm. The Findley Reports banking publication named the Bank as a "Super Premier" performing bank for 2016, their highest ranking. Lighthouse Bank has no financial relationship with any of these rating agencies.

Lighthouse Bank stock, (LGHT) is actively traded via the Bank's market makers and online and full-service brokerage providers. More information on the Bank's stock and historical financial performance may be located on the Bank's website at www.lighthousebank.net.

ABOUT LIGHTHOUSE BANK:

Lighthouse Bank is a locally owned and operated full-service commercial bank located in Santa Cruz, CA. The Bank offers a full array of banking products and services to businesses, professionals, individuals, developers and commercial property owners. The Bank is dedicated to providing exceptional personalized service and access to decision makers who are close at hand. Lighthouse Bank's unique worldwide ATM fee waiver program and complimentary business courier service expand the geographical reach of its banking office location throughout Santa Cruz County and the Silicon Valley. Lighthouse Bank is committed to operating an open, ethical and financially successful company without engaging in the corporate excesses that have characterized the financial services industry. All decisions are intended to contribute to the long-term success of its clients, employees, owners and the communities it serves. Lighthouse Bank has never been subject to either formal or informal regulatory action.

Lighthouse Bank is located at 2020 North Pacific Avenue in Downtown Santa Cruz, CA. Lighthouse Bank's common stock is listed under the stock symbol LGHT. More Information on the Bank may be obtained through its website www.lighthousebank.net or by calling 831-600-4000.

Member FDIC / Equal Housing Lender / SBA Preferred Lender

The attached 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 fluctuation 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.

	Selected Financial Data (unaudited)
	Quarter-Ended		Change	Quarter-Ended	Change	Year-to-Date Ended		Change
	9/30/2016	6/30/2016	%	9/30/2015	%	9/30/2016	9/30/2015	%

Balance Sheet

Total assets	$209,145,253	$201,102,652	4%	$176,086,483	19%
Gross loans	167,337,677	154,966,815	8%	132,081,919	27%
Allowance for loan losses	3,982,751	3,641,751	9%	3,282,031	21%
Non interest-bearing deposits	41,241,780	40,936,900	1%	37,435,035	10%
Total deposits	179,062,469	169,649,448	6%	148,436,933	21%
Shareholders' equity	29,555,301	29,102,162	2%	26,941,579	10%

Income Statement

Interest income	2,531,219	2,341,659	8%	2,159,988	17%	$6,984,751	$6,090,383	15%
Interest expense	120,029	99,983	20%	93,562	28%	315,983	277,035	14%
Net interest income	2,411,190	2,241,676	8%	2,066,426	17%	6,668,768	5,813,348	15%

Non-interest income	78,478	70,275	12%	62,987	25%	207,707	220,571	-6%
Non-interest expense	1,288,794	1,192,178	8%	1,129,954	14%	3,641,891	3,243,511	12%
Income tax expense	340,273	327,721	4%	388,110	-12%	1,010,328	1,031,735	-2%
Net income before loan loss provisions	859,874	792,052	9%	611,349	41%	2,224,256	1,758,673	26%
Provision for loan losses	341,000	292,500	17%	-	N/A	682,500	118,000	478%
Net income	$ 519,601	$ 499,552	4%	$ 611,349	-15%	$1,541,756	$1,640,673	-6%

Earnings per share (basic)	$ 0.22	$ 0.21	5%	$ 0.27	-19%	$ 0.66	$ 0.74	-11%
Book value per share	$ 12.57	$ 12.42	1%	$ 12.00	5%	$ 12.57	$ 12.00	5%

Ratios
Net interest margin	4.84%	5.04%		4.81%		4.86%	4.67%
Equity capital-to-total assets	14.1%	14.5%		15.3%		14.1%	15.3%
Return on Average Assets	0.98%	1.05%		1.36%		1.06%	1.25%
Return on Average Equity	7.00%	6.93%		9.05%		7.14%	8.39%
Allowance for Loan Losses-to-Total Loans	2.38%	2.35%		2.48%		2.38%	2.48%
Non-Performing Assets-to-Total Assets	0.03%	0.03%		0.00%		0.03%	0.00%
Efficiency Ratio	51.8%	51.6%		53.1%		53.1%	54.0%