Lighthouse Bank Reports Strong Quarterly Results

Total Assets Reach New Record

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Oct 23, 2018, 16:15 ET

SANTA CRUZ, Calif., Oct. 23, 2018 /PRNewswire/ -- Lighthouse Bank (OTC-QB: LGHT), a top-rated locally owned and operated community bank, today released unaudited financial results for the quarter-ended September 30, 2018. Net income was $1.1 million for the quarter, which represents the Bank's 37^th successive quarter of profitable operations. Net income year-to-date through September 30, 2018 totaled $3.3 million, an increase of $865 thousand, or 35%, over the same nine-month period in 2017. Total assets grew to a record $298 million, an increase of $41.5 million, or 16%, from the quarter-ended September 30, 2017.

The Bank experienced another quarter of solid year-over-year growth in loans and deposits. Loans increased by $43 million, or 22% year-over-year, and deposits increased $37.8 million, or 17%, compared to the quarter-ended September 30, 2017. Loan yields remain strong with a year-to-date net interest margin of 5.46%, and year-over-year profitability continues to benefit with the Bank's growth and the reduction in the effective tax rate.

Shareholders' equity totaled $37.6 million as of the end of the third quarter. Year-over-year, shareholders' equity increased $3.6 million, or 11%. In August 2018, the Bank paid a $0.10 per share quarterly cash dividend to shareholders. This followed four consecutive quarterly cash dividends of $0.09, $0.08 and $0.075 per share. Since January 2015, the Bank has paid $3.5 million in cash dividends to shareholders.

Chief Executive Officer Lane Lawson commented, "We continue to be extremely pleased with the Bank's performance in 2018. Our Board, Management and entire team of banking professionals continue to be essential drivers of our success, and we appreciate their dedication and efforts."

Since opening, Lighthouse Bank has earned consecutive top rankings based on a variety of categories including asset quality, capital adequacy, return on average assets, return on average equity and operational efficiency.

Recognition and Awards Received:

Three consecutive-years ranking in "Nation's Top Ten Healthiest Banks", by depositaccounts.com.
S&P Global Market Intelligence ranking as "Nation's 11^th Best-Performing Community Bank" for 2017, of 4,383 banks of asset size under $1 billion.
Financial Management Consulting's "Sixth Highest Performing Bank" out of 159 California banks, based on overall performance.
25-consecutive quarters possessing "Five-Star Superior," the top rating by Bauer Financial.
Seven consecutive-year achievement of "Super Premier Performing Bank," the highest designation given by Findley Reports, Inc.

ABOUT LIGHTHOUSE BANK:
Lighthouse Bank is a highly rated locally owned and operated full-service commercial bank with offices in Santa Cruz and Silicon Valley. The Bank's Santa Cruz office is located at 2020 North Pacific Avenue in Santa Cruz, CA. The Bank's Silicon Valley office is located at 19240 Stevens Creek Blvd, Cupertino, 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, complimentary business courier service, and remote deposit technology expand the Bank's geographical reach throughout Santa Cruz County and the Silicon Valley.

Lighthouse Bank's stock is listed and publicly traded under the ticker symbol LGHT. More information on the Bank and historical financial performance may be obtained through the Bank's website at www.lighthousebank.com 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
	9/30/2018	6/30/2018	$	%	9/30/2017	$	%	9/30/2018	9/30/2017	$	%

Balance Sheet

Total assets	$ 298,033,881	$ 281,882,158	$ 16,151,723	6%	$ 256,508,791	$ 41,525,090	16%
Gross loans	236,143,033	229,324,233	6,818,800	3%	193,370,670	42,772,363	22%
Allowance for loan losses	5,401,290	4,953,790	447,500	9%	4,360,530	1,040,760	24%
Non interest-bearing deposits	80,038,580	70,386,954	9,651,626	14%	60,030,905	20,007,675	33%
Total deposits	259,432,322	245,020,574	14,411,748	6%	221,640,019	37,792,303	17%
Shareholders' equity	37,622,590	36,659,368	963,222	3%	34,017,779	3,604,811	11%

Income Statement

Interest income	4,100,032	3,739,337	360,695	10%	3,155,220	944,812	30%	$ 11,415,602	$ 8,774,257	$ 2,641,345	30%
Interest expense	314,686	194,794	119,892	62%	146,257	168,429	115%	659,967	417,480	242,487	58%
Net interest income	3,785,346	3,544,543	240,803	7%	3,008,963	776,383	26%	10,755,635	8,356,777	2,398,858	29%
Provision for loan losses	447,500	46,260	401,240	867%	280,000	167,500	60%	712,760	336,000	376,760	112%
Net interest income after provision for loan losses	3,337,846	3,498,283	(160,437)	-5%	2,728,963	608,883	22%	10,042,875	8,020,777	2,022,098	25%

Non-interest income	83,484	79,041	4,443	6%	311,795	(228,311)	-73%	230,527	450,949	(220,422)	-49%
Non-interest expense	1,893,457	1,775,520	117,937	7%	1,650,584	242,873	15%	5,471,302	4,643,978	827,324	18%
Net income before taxes	1,527,873	1,801,804	(273,931)	-15%	1,390,174	137,699	10%	4,802,100	3,827,748	974,352	25%
Income tax expense	469,562	560,390	(90,828)	-16%	412,196	57,366	14%	1,463,992	1,354,296	109,696	8%
Net income	$ 1,058,311	$ 1,241,414	(183,103)	-15%	$ 977,978	80,333	8%	$ 3,338,108	$ 2,473,452	864,656	35%

Earnings per share (basic)	$ 0.41	$ 0.48	$ (0.07)	-15%	$ 0.39	$ 0.02	5%	$ 1.29	$ 1.00	$ 0.29	29%
Book value per share	$ 14.49	$ 14.18	$ 0.31	2%	$ 13.32	$ 1.17	9%	$ 14.49	$ 13.32	$ 1.17	29%

Ratios
Net interest margin *	5.38%	5.51%			4.99%			5.46%	4.96%
Equity capital-to-total assets	12.6%	13.0%			13.3%			12.6%	13.3%
Return on Average Assets *	1.43%	1.83%			1.54%			1.61%	1.38%
Return on Average Equity *	11.21%	13.72%			11.54%			12.30%	10.16%
Allowance for Loan Losses-to-Total Loans	2.29%	2.16%			2.26%			2.29%	2.26%
Non-Performing Assets-to-Total Assets	0.00%	0.00%			0.00%			0.00%	0.00%
Efficiency Ratio *	48.9%	49.0%			49.7%			49.8%	53.0%
* Average for period