Lighthouse Bank Reports Strong Second Quarter Earnings

Year-to-Date Net Income up 52% From 2017

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Jul 20, 2018, 17:35 ET

SANTA CRUZ, Calif., July 20, 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 June 30, 2018. Net income was $1.2 million, an increase of 20% over the prior quarter-ended March 31, 2018, and 58% over the same quarter in 2017. Total assets grew to a record $282 million, an increase of $38 million, or 16%, from the quarter-ended June 30, 2017.

These results represent the Bank's 36^th successive quarter of profitable operations. Highlights for the second quarter results include: Loans increased by $44 million, or 24% year-over-year, and deposits increased $34.6 million, or 16%, compared to the quarter-ended June 30, 2017. In addition to increased loan yields, year-over-year profitability has benefited by a reduction in the Bank's effective tax rate.

For the quarter-ended June 30, 2018, total shareholders' equity increased by $1.1 million to $37 million. Year-over-year, shareholders' equity increased $4 million, or 12%. In May 2018, the Bank paid its fourth $0.09 per share quarterly cash dividend to shareholders. This followed four consecutive quarterly cash dividends of $0.08 and $0.075 per share. Since January 2015, the Bank has paid $3.3 million in cash dividends to shareholders.

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

During the quarter, the Bank appointed John D. Rockwell as Executive Vice President, Chief Credit Officer. Mr. Rockwell brings nearly 40 years of accomplished lending and community banking experience with him as well as a track record of successful achievements in credit administration with local banks similar in size to that of Lighthouse Bank.

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.
24-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 and headquarters are 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 and complimentary business courier service 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
	6/30/2018	3/31/2018	$	%	6/30/2017	$	%	6/30/2018	6/30/2017	$	%

Balance Sheet

Total assets	281,882,158	$ 268,978,242	$ 12,903,916	5%	$ 243,782,964	$ 38,099,194	16%
Gross loans	229,324,233	227,215,328	2,108,905	1%	185,442,862	43,881,371	24%
Allowance for loan losses	4,953,790	4,907,530	46,260	1%	4,080,530	873,260	21%
Non interest-bearing deposits	70,386,954	66,529,651	3,857,303	6%	56,938,106	13,448,848	24%
Total deposits	245,020,574	232,707,740	12,312,834	5%	210,462,931	34,557,643	16%
Shareholders' equity	36,659,368	35,579,552	1,079,816	3%	32,615,093	4,044,275	12%

Income Statement

Interest income	3,739,377	$ 3,576,233	163,144	5%	2,899,943	839,434	29%	$ 7,315,570	$ 5,619,037	$ 1,696,533	30%
Interest expense	194,794	150,487	44,307	29%	139,515	55,279	40%	345,281	271,223	74,058	27%
Net interest income	3,544,583	3,425,746	118,837	3%	2,760,428	784,155	28%	6,970,289	5,347,814	1,622,475	30%
Provision for loan losses	46,260	219,000	(172,740)	-79%	56,000	(9,740)	-17%	265,260	56,000	209,260	374%
Net interest income after provision for loan losses	3,498,323	3,206,746	291,577	9%	2,704,428	793,895	29%	6,705,029	5,291,814	1,413,215	27%

Non-interest income	79,041	68,002	11,039	16%	73,901	5,140	7%	147,043	139,154	7,889	6%
Non-interest expense	1,775,520	1,802,325	(26,805)	-1%	1,521,141	254,379	17%	3,577,845	2,993,394	584,451	20%
Net income before taxes	1,801,844	1,472,423	329,421	22%	1,257,188	544,656	43%	3,274,227	2,437,574	836,653	34%
Income tax expense	560,390	434,040	126,350	29%	470,839	89,551	19%	994,430	942,100	52,330	6%
Net income	$ 1,241,454	$ 1,038,383	$ 203,071	20%	$ 786,349	$ 455,105	58%	$ 2,279,797	$ 1,495,474	$ 784,323	52%

Earnings per share (basic)	$ 0.48	$ 0.40	$ 0.08	20%	$ 0.32	$ 0.16	50%	$ 0.88	$ 0.61	$ 0.27	44%
Book value per share	$ 14.18	$ 13.76	$ 0.42	3%	$ 13.16	$ 1.02	8%	$ 14.18	$ 13.16	$ 1.02	8%

Ratios
Net interest margin *	5.51%	5.49%			4.94%			5.50%	4.95%
Equity capital-to-total assets	13.0%	13.2%			13.4%			13.0%	13.4%
Return on Average Assets *	1.83%	1.59%			1.33%			1.71%	1.31%
Return on Average Equity *	13.72%	11.97%			9.76%			12.85%	9.47%
Allowance for Loan Losses-to-Total Loans	2.16%	2.16%			2.20%			2.16%	2.20%
Non-Performing Assets-to-Total Assets	0.00%	0.00%			0.00%			0.00%	0.00%
Efficiency Ratio *	49.0%	51.6%			53.7%			50.3%	54.6%
* Average for period