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Lighthouse Bank Reports Record Assets and Deposits

SCZC | July 22, 2019

SANTA CRUZ, Calif., July 22, 2019 /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, 2019. Total assets grew to a record $316.3 million, an increase of $34 million, or 12%, from the quarter-ended June 30, 2018. Deposits increased by $28.3 million, or 12% year-over-year, to a record $273.3 million.

Lighthouse Bank Logo

Net income for the quarter was $1.17 million, compared to $1.24 million in the second quarter a year ago. Excluding $292 thousand of merger related expenses, net income for the quarter was $1.46 million, an increase of 18% compared to the year ago quarter. Year-to-date net income was $2.50 million. Excluding merger related expenses, year-to-date net income was $2.79 million, an increase of 23% over $2.28 million a year ago.

On May 28, 2019, Lighthouse Bank and Santa Cruz County Bank (OTC Pink: SCZC) announced an agreement and plan of reorganization and merger. Information regarding the announcement is available on the Lighthouse Bank website.

For the quarter-ended June 30, 2019, total shareholders' equity increased by $1.1 million to $41.4 million, an increase of $4.7 million, or 13% compared to the year ago quarter. On May 24, 2019 the Bank paid its fourth $0.10 per share quarterly cash dividend to shareholders. Since January 2015, the Bank has paid $4.3 million in cash dividends to shareholders.

Chief Executive Officer Lane Lawson commented, "We are pleased to report continued growth and record levels of assets and deposits. We also look forward to the new opportunities for growth that we can create through our combination with Santa Cruz County Bank, subject to the customary regulatory and shareholder approvals associated with the merger." Upon closing, the combined bank is expected to exceed $1 billion in total assets.

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. Lighthouse Bank's "Modern Banking, Traditional Service" mantra extends into every aspect of their customer experience. The Bank's dedication to providing personalized relationship-based service and easy access to decision makers give its customers a refreshing alternative to "big banking". The Bank further supports this commitment by offering unique services such as worldwide surcharge free ATM/Debit Cards, remote deposit capture, and complimentary business courier service throughout Santa Cruz County.

Lighthouse is also focused on supporting the community and actively participates and donates to over 120 local non-profits, which includes matching employees' personal donation to non-profits of their choice. The focus on community and creating a customer experience that blends modern banking standards and traditional service has been the foundation of a number of local businesses choosing Lighthouse Bank.

Lighthouse offers a variety of competitive deposit and lending solutions for businesses and individuals; including loans, lines of credit, construction and commercial real estate financing, SBA government guaranteed loans, credit cards, merchant services, mobile banking, remote deposit capture, and online banking bill payment and cash management.

Recognition and Awards Received:

Voted "Best Bank" in the Santa Cruz Sentinel Readers Choice Awards.
Ranked in "Top Ten Healthiest Banks" for three consecutive-years, by depositaccounts.com
S&P Global Market Intelligence ranking as "Nation's 19^th Best-Performing Community Bank" for 2018, of all U.S. banks of asset size under $3 billion.
Financial Management Consulting's "Seventh Highest Performing Bank" out of 148 California banks, based on overall performance.
27-consecutive quarters possessing "Five-Star Superior," the top rating by Bauer Financial.
Eight consecutive-year achievement of "Super Premier Performing Bank," the highest designation given by Findley Reports, Inc.

Lighthouse Bank stock is actively traded under the symbol LGHT. More information on the Bank's stock and historical financial performance may be located on the Bank's website 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
	6/30/2019	3/31/2019	$	%	6/30/2018	$	%	6/30/2019	6/30/2018	$	%

Balance Sheet

Total assets	$ 316,338,841	$ 314,400,116	$ 1,938,725	1%	$ 281,882,158	$ 34,456,683	12%
Gross loans	230,190,086	236,203,413	(6,013,327)	-3%	229,324,233	865,853	0%
Allowance for loan losses	5,401,290	5,401,290	-	0%	4,953,790	447,500	9%
Non interest-bearing deposits	72,276,901	74,311,294	(2,034,393)	-3%	70,386,954	1,889,947	3%
Total deposits	273,315,669	272,173,382	1,142,287	0%	245,020,574	28,295,095	12%
Shareholders' equity	41,365,793	40,286,234	1,079,559	3%	36,659,368	4,706,425	13%

Income Statement

Interest income	4,298,698	4,227,458	71,240	2%	3,739,337	559,361	15%	$ 8,526,156	$ 7,315,570	$ 1,210,586	17%
Interest expense	475,074	438,031	37,043	8%	194,794	280,280	144%	913,105	345,281	567,824	164%
Net interest income	3,823,624	3,789,427	34,197	1%	3,544,543	279,081	8%	7,613,051	6,970,289	642,762	9%
Provision for loan losses	-	-	-	N/A	46,260	(46,260)	-100%	-	265,260	(265,260)	-100%
Net interest income after provision for loan losses	3,823,624	3,789,427	34,197	1%	3,498,283	325,341	9%	7,613,051	6,705,029	908,022	14%

Non-interest income	76,890	77,568	(678)	-1%	79,041	(2,151)	-3%	154,458	147,043	7,415	5%
Non-interest expense	1,842,227	1,989,375	(147,148)	-7%	1,775,520	66,707	4%	3,831,602	3,577,845	253,757	7%
Net income before taxes and merger expenses	2,058,287	1,877,620	180,667	10%	1,801,804	256,483	14%	3,935,907	3,274,227	661,680	20%
Income tax expense	598,086	544,554	53,532	10%	560,390	37,696	7%	1,142,640	994,430	148,210	15%
Net income before merger expenses	1,460,201	1,333,066	127,135	10%	1,241,414	218,787	18%	2,793,267	2,279,797	513,470	23%
Merger expenses	291,788	-	291,788	N/A	-	291,788	N/A	291,788	-	291,788	N/A
Net income	$ 1,168,413	$ 1,333,066	(164,653)	-12%	$ 1,241,414	(73,001)	-6%	$ 2,501,479	$ 2,279,797	221,682	10%

Earnings per share, without merger expenses (basic)	$ 0.56	$ 0.51	$ 0.05	10%	$ 0.48	$ 0.08	17%	$ 1.07	$ 0.88	$ 0.19	22%
Earnings per share (basic)	$ 0.45	$ 0.51	$ (0.06)	-12%	$ 0.48	$ (0.03)	-6%	$ 0.96	$ 0.88	$ 0.08	9%

Book value per share	$ 15.87	$ 15.48	$ 0.39	2%	$ 14.18	$ 1.69	12%	$ 15.87	$ 14.18	$ 1.69	12%

Ratios based on net income after merger expenses
Net interest margin *	5.01%	5.17%			5.51%			5.09%	5.50%
Equity capital-to-total assets	13.1%	12.8%			13.0%			13.1%	13.0%
Return on Average Assets *	1.48%	1.74%			1.83%			1.61%	1.71%
Return on Average Equity *	11.41%	13.56%			13.72%			12.48%	12.85%
Allowance for Loan Losses-to-Total Loans	2.35%	2.29%			2.16%			2.35%	2.16%
Non-Performing Assets-to Total Assets	0.00%	0.0%			0.00%			0.00%	0.00%
Efficiency Ratio *	54.7%	51.4%			49.0%			53.1%	50.3%
* Average for period