Sierra Vista Bank Reports Earnings Growth of 138% in the First Half of 2014

FOLSOM, CA--(Marketwired - Jul 28, 2014) - Sierra Vista Bank (OTCQB: SVBA) today reported pre-tax earnings of $530,000 for the six month period ending June 30, 2014, a 137.7% increase over the same six month period in 2013 of $223,000. Pre-tax earnings for the 2^nd Quarter 2014 totaled $220,000, a 29.4% increase over the $170,000 earned in the 2^nd Quarter a year earlier. The Bank reported year to date net income of $298,000 as of June 30, 2014, and net income of $122,000 for the 2^nd Quarter of 2014.

Total assets grew $9.8 million or 9.3% in the 2^nd Quarter of 2014 to $114.5 million, an increased 30.2% over one year ago. Loans increased $4.5 million or 6.0% during the 2^nd Quarter to a total of $80.6 million, an increase of 17.0% over the last year. Total deposits increased $10.3 million or 11.9% to $96.9 million during the Quarter, 26.6% higher than one year ago. The 2013 financial results are preliminary and unaudited. "The Bank experienced excellent growth in the 2^nd Quarter 2014 as we continued to expand our market share," stated Gary D. Gall, President/CEO. "The opening of our 3^rd branch in Fair Oaks Village in late June 2014 has been met with early results which have exceeded our expectations."

Sierra Vista Bank continued to show a strong net interest margin of 4.66% for the 2^nd Quarter 2014, with a yield on earning assets of 4.97% and a total cost of funds of 0.35%. "We acknowledge the challenging interest rate environment, but remain pleased with our strong earning asset yield and low cost of funds," stated Gall. "While the net interest margin will likely see some continued compression, we believe the Bank's margin will remain strong compared to peers."

Capital levels at June 30, 2014 remain above the regulatory "well-capitalized" minimum levels:

• The Tier 1 Leverage Capital ratio: 15.08%
• The Tier 1 Risk Based Capital ratio: 19.46%
• The Total Risk Based Capital ratio: 20.72% 

Due to continued improvement in credit quality, the Bank did not pass a provision for loan losses in the first half of 2014. The allowance for loan losses was 1.83% of total loans at June 30, 2014. Non-performing assets continued to decline, totaling $1.1 million at the end of June 2014 compared to $2.0 million at the end of June 2013. Non-performing loans to total loans as a ratio decreased to 1.35% at June 30, 2014 compared to 2.89% on June 30, 2013. All non-accruing loans are paid current under their original terms or are paying as agreed under forbearance agreements.

About Sierra Vista Bank
Sierra Vista Bank is a locally owned community bank headquartered at 1710 Prairie City Road in Folsom, California since March 2007. The Bank has a branch located in the Sam's Town Center in Cameron Park, and opened its newest branch in Fair Oaks Village in June 2014. The Bank prides itself on serving the financial needs of small businesses and professionals in Folsom and throughout the Highway 50 Corridor while remaining committed to community philanthropy. Additional information about Sierra Vista Bank can be found at www.sierravistabank.com or by calling (916) 850-1500.

Forward Looking Statement:
In addition to historical information, this press release includes forward-looking statements, such as statements regarding increases in non-interest income, future profitability, the bank's ability to address challenges impacting economy in which it operates and future loan losses, which reflect management's current expectations for the bank's future financial results and business prospects. Forward-looking statements are inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to: (a) changes in competitive pressures among depository and other financial institutions or in the bank's ability to compete effectively against larger financial institutions in its banking market; (b) actions of government regulators or changes in laws, regulations or accounting standards, that adversely affect the bank's business; (c) changes in interest rates and/or inflation; (d) changes in general economic or business conditions and the real estate market in the bank's market; and (e) other unexpected developments or changes in the bank's business or its customers' businesses. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. You 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.

SIERRA VISTA BANK
CONSOLIDATED BALANCE SHEETS
(unaudited)
($000s)				6/30/14				3/31/14				6/30/13
ASSETS
Cash and due from banks				$	3,226			$	2,309			$	2,474
Federal funds sold					12,465				8,215				1,410
Investment securities, available-for-sale					14,459				14,490				13,887
Gross loans					80,633				76,092				68,941
	Net deferred (fees)				43				(38	)			(34	)
	Allowance for loan losses				(1,475	)			(1,460	)			(1,478	)
		Net loans			79,201				74,594				67,429
Premises and equipment, net					608				512				726
Accrued interest receivable					296				301				334
Other real estate					0				0				1,468
Other assets					4,260				4,336				226
TOTAL ASSETS				$	114,515			$	104,757			$	87,954
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing demand deposits				$	25,402			$	24,226			$	23,702
Interest-bearing demand deposits					3,863				3,526				3,909
Savings and money market deposits					16,164				15,376				16,450
Time deposits					51,509				43,498				32,507
TOTAL DEPOSITS					96,938				86,626				76,568
FHLB borrowings					1,000				2,000				0
Accrued interest payable					35				30				20
Accounts payable and other liabilities					452				345				303
TOTAL LIABILITIES					98,425				89,001				76,891
Common stock					21,252				21,189				21,131
Additional paid-in capital					377				377				377
Accumulated deficit					(5,411	)			(5,555	)			(10,245	)
Accumulated other comprehensive income					(128	)			(255	)			(200	)
TOTAL STOCKHOLDERS' EQUITY					16,090				15,756				11,063
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY				$	114,515			$	104,757			$	87,954

SIERRA VISTA BANK
CONSOLIDATED INCOME STATEMENTS
(unaudited)
				For the Three Months Ended:												For the Six Months Ended:
($000s, except per share data)				6/30/14				3/31/14				6/30/13				6/30/14				6/30/13
Interest income
	Loans			$	1,150			$	1,139			$	1,056			$	2,289			$	2,005
	Investment securities				95				104				84				199				146
	Federal Funds sold				5				4				2				9				3
		Total interest income			1,250				1,247				1,142				2,497				2,154
Interest expense
	Deposits				78				79				47				157				92
	FHLB borrowings				1				1				1				2				3
		Total interest expense			79				80				48				159				95
		Net interest income			1,171				1,167				1,094				2,338				2,059
Provision for loan and lease losses					0				0				110				0				180
		Net interest income after provision for loan losses			1,171				1,167				984				2,338				1,879
Noninterest income
	Customer service and other fees				74				73				114				147				212
	Gain (loss) on sale of loans				0				79				22				79				22
	Gain (loss) on sale of other real estate				0				0				(1	)			0				(1	)
	Gain (loss) on available-for-sale securities				2				(3	)			0				(1	)			0
		Total noninterest income			76				149				135				225				233
Noninterest expense
	Salaries and employee benefits				560				526				480				1,086				956
	Occupancy and equipment				166				184				174				350				332
	Other general and administrative				301				296				295				597				601
		Total noninterest expense			1,027				1,006				949				2,033				1,889
		Income (loss) before taxes		$	220			$	310			$	170			$	530			$	223
		Taxes			98				134				0				232				0
		Net income (loss)		$	122			$	176			$	170			$	298			$	223
Earnings (loss) per share				$	0.03			$	0.04			$	0.05			$	0.07			$	0.06
Tangible book value per share				$	4.01			$	3.99			$	2.83			$	4.01			$	2.83
Net interest margin					4.66	%			4.77	%			5.25	%			4.71	%			5.11	%
Asset Quality:
Non-performing loans to total loans					1.35	%			1.46	%			2.89	%			1.35	%			2.89	%
Non-performing assets to total loans and ORE					1.35	%			1.46	%			4.91	%			1.35	%			4.91	%
Non-performing assets to total assets					0.95	%			1.06	%			3.93	%			0.95	%			3.93	%
Allowance for loan losses to total loans					1.83	%			1.92	%			2.14	%			1.83	%			2.14	%
Allowance for loan losses to non-performing loans					135.69	%			131.41	%			74.31	%			135.69	%			74.31	%
Other real estate				$	0			$	0			$	1,468			$	0			$	1,468
Selected Financial Ratios:
Tier 1 leverage capital ratio					15.08	%			15.13	%			12.88	%			15.08	%			12.88	%
Tier 1 risk-based capital ratio					19.46	%			20.55	%			16.34	%			19.46	%			16.34	%
Total risk-based capital ratio					20.72	%			21.81	%			17.60	%			20.72	%			17.60	%