Suncrest Bank Reports Third Quarter Earnings.

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SACRAMENTO, Calif. and VISALIA, Calif., Oct. 26, 2021 /PRNewswire/ -- Suncrest Bank (OTCQX: SBKK) today reported unaudited financial results for the third quarter of 2021.

Third Quarter 2021 Highlights

Announced agreement to merge with CVB Financial Corp. on July 27, 2021
Net income of $4.3 million, an increase of $1.1 million over Q3 2020
Diluted EPS of $0.34, an increase of 30.8% over Q3 2020
New originations1 during the quarter (excluding PPP) of $32.6 million
QTD total loan growth (excluding PPP) of $2.0 million2
YTD total loan growth (excluding PPP) of $56.9 million or 8.10%
QTD total deposits (excluding brokered) increased $56.2 million or 4.9%
YTD total deposits (excluding brokered) increased $167.5 million or 16.18%
Return on average tangible assets of 1.27%
Return on average tangible equity of 12.74%
Efficiency ratio of 53.20%
Tier 1 leverage ratio of 9.50%

_______________________________
1	Includes unfunded commitments
2.	Includes a decline of approximately $6.0 million in a borrower LOC exclusively to fund PPP loans

Income Statement

Net income for the quarter was $4.3 million compared to $4.5 million for the linked quarter and $3.2 million for the same quarter last year. The decrease over the linked quarter is primarily due to merger expenses of $389,000 before tax or $348,000 after tax. The increase over the third quarter of 2020 is mostly driven by an increase in net interest income and the reduction in provision for loan losses, partially offset by an increase in noninterest expense.

Interest income increased to $12.8 million versus $12.5 million for the linked quarter and increased from $11.3 million compared to the third quarter of 2020. The increase over the linked quarter is primarily a result of an increase in the loan yield from 4.80% in the linked quarter to 4.95% for the quarter ended September 30, 2021. Interest expense declined to $484,000 as compared to $490,000 over the linked quarter due to a decline in our cost of funds to 16 basis points (bps) from 17 bps last quarter. In addition, the decrease in interest expense was $220,000 over the same quarter last year due to a decline in our cost of funds by 9 basis points.

Included in interest income are fees earned on Paycheck Protection Program ("PPP") Loans of approximately $878,000 in the third quarter versus $764,000 in the linked quarter and $449,000 in the third quarter of 2020.

Net interest Margin (NIM) declined slightly to 3.72% compared to 3.82% for the linked quarter and increased as compared to 3.47% for the third quarter of 2020. NIM improved over the same quarter last year primarily due to the decrease in the cost of funds by 9 basis points. Yield on loans improved to 4.95% in Q3 from 4.80% for the linked quarter.

Total noninterest expense increased over the linked quarter by 7.1% or $452,000, and increased over the same quarter last year by approximately $1.2 million. The increase over the linked quarter was primarily a result of merger expenses of $389,000. The increase over the same quarter last year is predominantly a result of increased employee expenses. We continue to maintain our key expense ratios at consistently low levels with efficiency ratio being 53.20% in Q3 while our burden ratio and noninterest expense to average assets were 1.82% and 1.96% respectively.

Balance Sheet

Total assets at September 30, 2021 increased to $1.42 billion as compared to $1.37 billion for the linked quarter. The increase was $44.2 million or 3.22% as a result of an increase in total federal funds sold and were funded by an increase in deposits.

Total deposits (excluding brokered deposits) at September 30, 2021 were $1.20 billion, an increase of $56.2 million or 4.90% over the linked quarter. Total deposits (excluding brokered deposits) increased year to date by $167.5 million or 16.18%.

During the quarter ended March 31, 2021 the bank acquired $60.0 million in low cost brokered deposits to partially fund PPP loans and pay down advances from the Federal Home Loan Bank. Brokered deposits at September 30, 2021 were $30.0 million.

Total loans (excluding PPP loans) at September 30, 2021 were $759.5 million, an increase of $2.0 million over the linked quarter and $56.9 million or 8.10% year to date. The increase over the linked quarter includes a reduction of approximately $6.0 million in a line of credit provided to a local partner CDFI specifically and exclusively for the funding of PPP loans.

Total PPP loans were $61.4 million at September 30, 2021 compared to $111.3 million at June 30, 2021.

Asset Quality

Non-performing assets decreased to $4.5 million or 0.31% of total assets at September 30, 2021 compared to 0.35% at June 30, 2021.

Based on our standard analysis of portfolio trends and considerations for stabilizing economic conditions of our primary industries, we determined a provision for loan losses was not required for the quarter. As a result, our allowance as a percentage of total loans (excluding both PPP and acquired loans) declined to 1.34% at September 30, 2021 compared to 1.36% at June 30, 2021.

At the end of the third quarter all loans that were previously in our payment deferral program have resumed scheduled payments.

Per the table below, both classified accrual and classified nonaccrual loan balances declined through the quarter. Total classified loans as a percentage of total loans, excluding PPP loans, declined to 1.60%. The percentage including PPP loans slightly increased to 1.48% due to the reduction in PPP loans in the third quarter.

	Q3 2021	Q2 2021	Q4 2020	Q3 2020
Total Classified Loans (a)	$12,189,182	$12,533,580	$12,928,632	$14,370,053
Classified - Accrual Loans	$7,730,350	$7,864,816	$9,176,720	$10,111,838
Classified - Non-Accrual Loans	$4,458,832	$4,668,764	$3,751,912	$4,258,215
Total Classified / Total Loans	1.48%	1.44%	1.58%	1.78%
Total Classified / Total Loans (excluding PPP)	1.60%	1.65%	1.84%	2.12%

(a) Includes classified accrual loans and non-accrual loans

Capital

Suncrest Bank remained well capitalized at September 30, 2021. All of the bank's capital ratios are above minimum regulatory standards for "well capitalized" institutions.

At September 30, 2021 tangible book value per common share was $10.91 with common shares issued of 12,251,000 as of the same date.

About Suncrest Bank Suncrest Bank, member FDIC, offers a full range of commercial, small business and agribusiness loans, cash management services and personal deposit products throughout the Central Valley of California and the Greater Sacramento Region. It is regularly rated Five Stars by Bauer Financial as one of the nation's strongest financial institutions, and in 2017 and 2018 was named to the OTCQX® Best 50, a ranking of top performing companies traded on the OTCQX Best Market. 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.

Suncrest Bank
Statements of Financial Condition
(Unaudited)
	September 30,	June 30,	September 30,
	2021	2021	2020
ASSETS
Cash and Due from Banks	$ 21,931,450	$ 15,578,565	$ 44,079,328
Federal Funds Sold	134,380,000	41,425,000	44,895,000
TOTAL CASH AND CASH EQUIVALENTS	156,311,450	57,003,565	88,974,328

Investment Securities Available for Sale (AFS)	373,683,522	379,724,228	326,352,206
Loans:
Total Loans	820,909,341	868,818,328	809,529,778
Allowance for Loan Losses	(8,502,685)	(8,502,239)	(8,259,802)
NET LOANS	812,406,656	860,316,089	801,269,976

Federal Home Loan Bank and Other Bank Stock, at Cost	5,366,684	5,366,684	5,862,141
Premises and Equipment	5,846,699	5,990,719	6,318,134
Other Real Estate Owned	-	-	129,644
Bank Owned Life Insurance	8,894,306	8,835,996	8,665,725
Goodwill	38,989,566	38,989,566	38,989,566
Core Deposit Intangible	2,099,076	2,232,796	2,687,236
Accrued Interest and Other Assets	12,561,061	13,524,738	11,119,069
	$ 1,416,159,020	$ 1,371,984,381	$ 1,290,368,025

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing Demand	$ 535,404,805	$ 528,012,539	$ 463,293,142
Savings, NOW and Money Market Accounts	605,771,974	552,252,423	514,649,377
Time Deposits - Retail	61,911,688	66,582,888	72,677,647
Time Deposits - Wholesale	30,000,000	45,000,000	-
TOTAL DEPOSITS	1,233,088,467	1,191,847,850	1,050,620,166
Accrued Interest and Other Liabilities	8,283,875	7,621,556	7,586,690
Other Borrowings	-	-	68,559,008
TOTAL LIABILITIES	1,241,372,342	1,199,469,406	1,126,765,864

Shareholders' Equity:
Common Stock - No par value	118,210,416	118,199,166	118,088,766
Additional Paid-in Capital	3,885,288	3,741,305	3,331,027
Retained Earnings	46,920,609	42,624,814	32,843,797
Accumulated Other Comprehensive Income - Net
Unrealized Gain on Securities AFS	5,770,365	7,949,690	9,338,571
TOTAL SHAREHOLDERS' EQUITY	174,786,678	172,514,975	163,602,161
	$ 1,416,159,020	$ 1,371,984,381	$ 1,290,368,025

Suncrest Bank
Statements of Income (Unaudited)
For the Three Months Ended

	September 30,	June 30,	September 30,
	2021	2021	2020
INTEREST INCOME
Interest and Fees on Loans	$ 10,593,539	$ 10,334,296	$ 9,621,006
Interest on Investment Securities	2,176,940	2,184,839	1,620,278
Interest on Federal Funds Sold and Other	30,752	13,995	39,284
TOTAL INTEREST INCOME	12,801,231	12,533,130	11,280,568

INTEREST EXPENSE
Interest on Savings Deposits, NOW and Money Market Accounts	384,204	397,994	451,276
Interest on Time Deposits - Retail	90,719	80,198	191,864
Interest on Time Deposits - Wholesale	8,989	11,342	-
Interest on Other Borrowings	-	-	60,757
TOTAL INTEREST EXPENSE	483,912	489,534	703,897

NET INTEREST INCOME	12,317,319	12,043,596	10,576,671

Provision for Loan Losses	-	-	1,000,000
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES	12,317,319	12,043,596	9,576,671

NONINTEREST INCOME
Service Charges, Fees, and Other Income	484,266	438,819	407,018
Gain on Sale of Loans	-	28,273	-
	484,266	467,092	407,018

NONINTEREST EXPENSE
Salaries and Employee Benefits	3,576,488	3,536,175	3,148,861
Occupancy Expenses	593,456	591,437	587,021
Other Expenses	2,640,644	2,231,227	1,895,345
	6,810,588	6,358,839	5,631,227
INCOME BEFORE INCOME TAXES	5,990,997	6,151,849	4,352,462
Income Taxes	1,695,200	1,664,600	1,144,000
NET INCOME	$ 4,295,797	$ 4,487,249	$ 3,208,462

Suncrest Bank
Statements of Income (Unaudited)
For the Nine Months Ended

	September 30,	September 30,
	2021	2020
INTEREST INCOME
Interest and Fees on Loans	$ 30,395,689	$ 27,975,918
Interest on Investment Securities	6,407,199	4,439,179
Interest on Federal Funds Sold and Other	59,767	333,081
TOTAL INTEREST INCOME	36,862,655	32,748,178

INTEREST EXPENSE
Interest on Savings Deposits, NOW and Money Market Accounts	1,180,719	1,851,301
Interest on Time Deposits - Retail	274,875	650,650
Interest on Time Deposits - Wholesale	30,278	-
Interest on Other Borrowings	5,302	97,680
TOTAL INTEREST EXPENSE	1,491,174	2,599,631

NET INTEREST INCOME	35,371,481	30,148,547

Provision for Loan Losses	-	3,300,000
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES	35,371,481	26,848,547

NONINTEREST INCOME
Service Charges, Fees, and Other Income	1,385,881	1,177,288
Gain on Sale of Loans	28,273	-
	1,414,154	1,177,288

NONINTEREST EXPENSE
Salaries and Employee Benefits	10,479,590	9,100,782
Occupancy Expenses	1,769,297	1,745,487
Other Expenses	6,902,598	5,694,756
	19,151,485	16,541,025
INCOME BEFORE INCOME TAXES	17,634,150	11,484,810
Income Taxes	4,846,500	2,702,600
NET INCOME	$ 12,787,650	$ 8,782,210

Suncrest Bank
Selected Financial Data & Ratios (Unaudited)
	September 30,	June 30,	September 30,
	2021	2021	2020
For the three months ended:
Return on Average Assets(ROAA)	1.23%	1.33%	0.99%
Return on Average Tangible Assets (1)	1.27%	1.37%	1.03%
Return on Average Equity(ROAE)	9.77%	10.65%	7.84%
Return on Average Tangible Equity (1)	12.74%	14.10%	10.52%
Noninterest Expense (NIE) To Average Assets	1.96%	1.89%	1.74%
Efficiency Ratio	53.20%	50.83%	51.27%
Burden Ratio	1.82%	1.75%	1.62%
Net Interest Margin	3.72%	3.82%	3.47%
Cost of Funds	0.16%	0.17%	0.25%
Basic Earnings Per Share (EPS)	$ 0.35	$ 0.37	$ 0.26
Diluted EPS	$ 0.34	$ 0.36	$ 0.26

	September 30,	September 30,
	2021	2020
For the nine months ended:
Return on Average Assets(ROAA)	1.27%	1.00%
Return on Average Tangible Assets (1)	1.31%	1.04%
Return on Average Equity(ROAE)	9.97%	7.42%
Return on Average Tangible Equity (1)	13.13%	10.09%
Noninterest Expense (NIE) To Average Assets	1.90%	1.89%
Efficiency Ratio	52.06%	52.80%
Burden Ratio	1.76%	1.75%
Net Interest Margin	3.74%	3.70%
Cost of Funds	0.17%	0.35%
Basic Earnings Per Share (EPS)	$ 1.04	$ 0.71
Diluted EPS	$ 1.02	$ 0.70


(1) These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They should not be
considered in isolation or as a substitute for analyses of results reported under GAAP. These non-GAAP measures may not be
comparable to similarly titled measures reported by other companies.

Suncrest Bank
Selected Financial Data & Ratios Continued (Unaudited)

	September 30,	June 30,	September 30,
	2021	2021	2020
At Period End:
Loans to Deposits	66.57%	72.90%	77.05%
Average Loans to Average Deposits (QTD)	70.27%	73.64%	76.22%
Non-Performing Assets to Assets	0.31%	0.35%	0.34%
Outstanding Shares	12,251,000	12,249,500	12,235,500
Tangible Book Value Per Share (1)	$ 10.91	$ 10.72	$ 9.96
Tangible Book Value Per Share excluding Unrealized Gain on Securities (1)	$ 10.44	$ 10.07	$ 9.20
Book Value Per Share	$ 14.27	$ 14.08	$ 13.37


Regulatory Capital Ratios
Tier 1 Leverage (to average assets)	9.50%	9.45%	9.50%
Common Equity Tier 1 Capital (to risk weighted assets)	13.73%	13.86%	13.72%
Tier 1 Capital (to risk weighted assets)	13.73%	13.86%	13.72%
Total Capital (to risk weighted assets)	14.66%	14.84%	14.74%



	September 30,	June 30,	September 30,
	2021	2021	2020
Loan Composition
Commercial and Industrial:	$ 33,897,330	$ 39,134,449	$ 45,755,958
Paycheck Protection Program:	61,419,920	111,280,895	130,394,846
Loans to Finance Agricultural Production and Other Loans to Farmers:	37,679,663	40,194,038	38,392,086
Loans Secured by Real Estate:
Secured by Farmland	133,994,326	130,397,870	138,428,801
Construction, Land Development and Other Land	21,716,590	21,182,675	26,641,282
1-4 Family Residential Properties	53,128,911	53,532,531	41,388,691
Multifamily Residential Properties	50,070,051	49,661,004	45,446,188
Owner Occupied Nonresidential Properties	102,148,976	110,743,084	93,084,165
Non-Owner Occupied Nonresidential Properties	308,410,748	293,982,408	230,224,802
Total Loans Secured by Real Estate	669,469,602	659,499,572	575,213,929

Municipal Leases:	18,323,150	18,584,601	19,626,108
Other Loans:	119,676	124,773	146,851

Total Loans	$ 820,909,341	$ 868,818,328	$ 809,529,778

(1) These non-GAAP measures have inherent limitations, are not required to be uniformly applied and are not audited. They
should not be considered in isolation or as a substitute for analyses of results reported under GAAP. These non-GAAP
measures may not be comparable to similarly titled measures reported by other companies.

Suncrest Bank
Average Balance Sheet and Yields (Unaudited)
For the Three Months Ended
	September 30, 2021			June 30, 2021
	Average		Average	Average		Average
	Balance	Interest	Yield/Rate	Balance	Interest	Yield/Rate

Interest Earning Assets:
Deposits in Other Financial Institutions	$ 80,895,754	$ 30,752	0.15%	$ 35,405,889	$ 13,995	0.16%
Investment Securities	382,461,945	2,176,940	2.28%	367,244,025	2,184,839	2.38%
Loans	849,690,018	10,593,539	4.95%	862,921,793	10,334,296	4.80%
Total Interest Earning Assets	1,313,047,717	12,801,231	3.87%	1,265,571,707	12,533,130	3.97%
Noninterest Earning Assets	79,883,114			82,474,013
Total Assets	$ 1,392,930,831			$ 1,348,045,720

Interest Bearing Liabilities
Interest Bearing Transaction Accounts	$ 164,148,322	167,499	0.40%	$ 158,481,231	171,063	0.43%
Savings and Money Market Accounts	423,094,624	216,705	0.20%	400,437,784	226,931	0.23%
Time Deposits - Retail	64,067,178	90,719	0.56%	69,314,072	80,198	0.46%
Time Deposits - Wholesale	34,076,127	8,989	0.10%	49,120,942	11,342	0.09%
Total Interest Bearing Deposits	685,386,251	483,912	0.28%	677,354,029	489,534	0.29%
Other Borrowings and FLHB Advances	-	-	0.00%	-	-	0.00%
Total Interest Bearing Liabilities	685,386,251	483,912	0.28%	677,354,029	489,534	0.29%
Noninterest Bearing Transaction Accounts	523,774,669			494,517,122
Total Funding Sources	1,209,160,920			1,171,871,151
Noninterest Bearing Liabilities	7,806,527			7,664,587
Shareholders' Equity	175,963,384			168,509,982
Total Liabilities and Shareholder's Equity	$ 1,392,930,831			$ 1,348,045,720
Net Interest Income		$12,317,319			$ 12,043,596
Net Interest Margin			3.72%			3.82%

Suncrest Bank
Average Balance Sheet and Yields (Unaudited)
For the Three Months Ended
	September 30, 2021			September 30, 2020
	Average		Average	Average		Average
	Balance	Interest	Yield/Rate	Balance	Interest	Yield/Rate

Interest Earning Assets:
Deposits in Other Financial Institutions	$ 80,895,754	$ 30,752	0.15%	$ 134,317,994	$ 39,284	0.12%
Investment Securities	382,461,945	2,176,940	2.28%	277,443,763	1,620,278	2.34%
Loans	849,690,018	10,593,539	4.95%	801,674,194	9,621,006	4.77%
Total Interest Earning Assets	1,313,047,717	12,801,231	3.87%	1,213,435,951	11,280,568	3.70%
Noninterest Earning Assets	79,883,114			78,283,592
Total Assets	$ 1,392,930,831			$ 1,291,719,543

Interest Bearing Liabilities
Interest Bearing Transaction Accounts	$ 164,148,322	167,499	0.40%	$ 149,384,315	165,969	0.44%
Savings and Money Market Accounts	423,094,624	216,705	0.20%	364,811,548	285,307	0.31%
Time Deposits - Retail	64,067,178	90,719	0.56%	74,361,165	191,864	1.03%
Time Deposits - Wholesale	34,076,127	8,989	0.10%	-	-	0.00%
Total Interest Bearing Deposits	685,386,251	483,912	0.28%	588,557,028	643,140	0.43%
Other Borrowings and FLHB Advances	-	-	0.00%	68,563,899	60,757	0.35%
Total Interest Bearing Liabilities	685,386,251	483,912	0.28%	657,120,927	703,897	0.43%
Noninterest Bearing Transaction Accounts	523,774,669			463,248,302
Total Funding Sources	1,209,160,920			1,120,369,229
Noninterest Bearing Liabilities	7,806,527			7,730,135
Shareholders' Equity	175,963,384			163,620,179
Total Liabilities and Shareholder's Equity	$ 1,392,930,831			$ 1,291,719,543
Net Interest Income		$12,317,319			$ 10,576,671
Net Interest Margin			3.72%			3.47%

Suncrest Bank
Average Balance Sheet and Yields (Unaudited)
For the Nine Months Ended
	September 30, 2021			September 30, 2020
	Average		Average	Average		Average
	Balance	Interest	Yield/Rate	Balance	Interest	Yield/Rate

Interest Earning Assets:
Deposits in Other Financial Institutions	$ 52,811,090	$ 59,767	0.15%	$ 106,016,940	$ 333,081	0.42%
Investment Securities	363,748,840	6,407,199	2.35%	242,738,055	4,439,179	2.44%
Loans	847,995,236	30,395,689	4.79%	740,923,105	27,975,918	5.04%
Total Interest Earning Assets	1,264,555,166	36,862,655	3.90%	1,089,678,100	32,748,178	4.01%
Noninterest Earning Assets	55,443,016			80,211,321
Total Assets	$ 1,344,575,852			$ 1,169,889,421

Interest Bearing Liabilities
Interest Bearing Transaction Accounts	$ 158,178,277	496,416	0.42%	$ 138,419,679	314,028	0.30%
Savings and Money Market Accounts	399,517,542	684,303	0.23%	359,887,691	1,537,273	0.57%
Time Deposits - Retail	68,471,206	274,875	0.54%	77,858,739	650,650	1.12%
Time Deposits - Wholesale	41,923,143	30,278	0.10%	-	-	0.00%
Total Interest Bearing Deposits	668,090,168	1,485,872	0.30%	576,166,109	2,501,951	0.58%
Other Borrowings and FLHB Advances	3,848,246	5,302	0.18%	37,179,040	97,680	0.35%
Total Interest Bearing Liabilities	671,938,414	1,491,174	0.30%	613,345,149	2,599,631	0.57%
Noninterest Bearing Transaction Accounts	493,776,669			391,224,164
Total Funding Sources	1,165,715,083			1,004,569,313
Noninterest Bearing Liabilities	7,904,884			7,608,560
Shareholders' Equity	170,955,885			157,711,548
Total Liabilities and Shareholder's Equity	$ 1,344,575,852			$ 1,169,889,421
Net Interest Income		$35,371,481			$ 30,148,547
Net Interest Margin			3.74%			3.70%

View original content:https://www.prnewswire.com/news-releases/suncrest-bank-reports-third-quarter-earnings-301409193.html

SOURCE Suncrest Bank

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