Sierra Vista Bank Reports Earnings Growth of 54% Through 9 Months of 2014

FOLSOM, CA--(Marketwired - Nov 3, 2014) - Sierra Vista Bank (OTCQB: SVBA) today reported pre-tax earnings of $696,000 for the nine month period ending September 30, 2014, a 54.3% increase over the same nine month period in 2013 of $451,000. Pre-tax earnings for the 3^rd Quarter 2014 totaling $166,000 were impacted by the opening of the Bank's 3^rd branch in June 2014. The 3^rd Quarter 2014 earnings were $12,000 or 6.7% lower than 3^rd Quarter 2013 adjusted pre-tax earnings totaling $178,000 (adjusted for a one time $50,000 gain). The Bank reported year to date net income of $388,000 as of September 30, 2014, and net income of $90,000 for the 3^rd Quarter of 2014.

Total assets grew $6.9 million or 6.0% in the 3^rd Quarter of 2014 to $121.4 million, representing a 31.7% increase over one year ago. Loans increased $5.4 million or 6.6% during the 3^rd Quarter to a total of $86.0 million, an increase of 24.9% over the last year. Total deposits increased $6.6 million or 6.8% to $103.5 million during the Quarter, 28.4% higher than one year ago. The 2014 financial results are preliminary and unaudited. "The Bank experienced strong growth in the 3^rd 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 excellent results."

Sierra Vista Bank continued to show a strong net interest margin of 4.28% for the 3^rd Quarter 2014, with a yield on earning assets of 4.64% and a total cost of funds of 0.38%. "Although the interest rate environment remains challenging, the Bank continues to show a strong earning asset yield and low cost of funds," stated Lesa Fynes, EVP/CFO. "While we have experienced some net interest margin compression, we believe the Bank's interest margin will continue to outperform peers."

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

• The Tier 1 Leverage Capital ratio: 13.54%
• The Tier 1 Risk Based Capital ratio: 18.57%
• The Total Risk Based Capital ratio: 19.83%

Due to continued improvement in credit quality, the Bank did not pass a provision for loan losses in the first nine months of 2014. The allowance for loan losses was 1.73% of total loans at September 30, 2014. Non-performing assets continued to decline, totaling $1.0 million at the end of September 2014 compared to $1.8 million at the end of September 2013. Non-performing loans to total loans as a ratio decreased to 1.18% at September 30, 2014 compared to 2.65% on September 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)				9/30/14				6/30/14				9/30/13
ASSETS
Cash and due from banks				$	2,831			$	3,226			$	3,071
Federal funds sold					9,885				12,465				7,325
Investment securities, available-for-sale					17,135				14,459				13,246
Gross loans					85,992				80,633				68,853
	Net deferred (fees)				18				43				(47	)
	Allowance for loan losses				(1,486	)			(1,475	)			(1,443	)
		Net loans			84,524				79,201				67,363
Premises and equipment, net					915				608				592
Accrued interest receivable					320				296				279
Other real estate					0				0				0
Other assets					5,760				4,260				310
TOTAL ASSETS				$	121,370			$	114,515			$	92,186
LIABILITIES AND STOCKHOLDERS' EQUITY
Noninterest-bearing demand deposits				$	28,332			$	25,402			$	24,377
Interest-bearing demand deposits					5,451				3,863				5,111
Savings and money market deposits					16,018				16,164				15,992
Time deposits					53,716				51,509				35,163
TOTAL DEPOSITS					103,517				96,938				80,643
FHLB borrowings					1,000				1,000				0
Accrued interest payable					49				35				22
Accounts payable and other liabilities					574				452				229
TOTAL LIABILITIES					105,140				98,425				80,894
Common stock					21,252				21,252				21,187
Additional paid-in capital					377				377				377
Accumulated deficit					(5,297	)			(5,411	)			(10,006	)
Accumulated other comprehensive income					(102	)			(128	)			(266	)
TOTAL STOCKHOLDERS' EQUITY					16,230				16,090				11,292
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY				$	121,370			$	114,515			$	92,186

SIERRA VISTA BANK
CONSOLIDATED INCOME STATEMENTS
(unaudited)
				For the Three Months Ended:												For the Nine Months Ended:
($000s, except per share data)				9/30/14				6/30/14				9/30/13				9/30/14				9/30/13
Interest income
	Loans			$	1,199			$	1,150			$	1,085			$	3,487			$	3,090
	Investment securities				111				95				80				310				226
	Federal Funds sold				9				5				2				18				5
		Total interest income			1,319				1,250				1,167				3,815				3,321
Interest expense
	Deposits				100				78				58				257				150
	FHLB borrowings				1				1				0				3				3
		Total interest expense			101				79				58				260				153
		Net interest income			1,218				1,171				1,109				3,555				3,168
Provision for loan and lease losses					0				0				0				0				180
	Net interest income after provision for loan losses				1,218				1,171				1,109				3,555				2,988
Noninterest income
	Customer service and other fees				98				74				135				244				347
	Gain (loss) on sale of loans				25				0				7				104				29
	Gain (loss) on sale of other real estate				0				0				5				0				4
	Gain (loss) on available-for-sale securities				0				2				0				0				0
		Total noninterest income			123				76				147				348				380
Noninterest expense
	Salaries and employee benefits				623				560				500				1,708				1,457
	Occupancy and equipment				197				166				180				547				512
	Other general and administrative				355				301				348				952				948
		Total noninterest expense			1,175				1,027				1,028				3,207				2,917
		Income (loss) before taxes		$	166			$	220			$	228			$	696			$	451
		Taxes			76				98				0				308				0
		Net income (loss)		$	90			$	122			$	228			$	388			$	451
Earnings (loss) per share				$	0.02			$	0.03			$	0.06			$	0.10			$	0.12
Tangible book value per share				$	4.04			$	4.01			$	2.88			$	4.04			$	2.88
Net interest margin					4.28	%			4.66	%			5.06	%			4.57	%			5.09	%
Asset Quality:
Non-performing loans to total loans					1.18	%			1.35	%			2.65	%			1.18	%			2.65	%
Non-performing assets to total loans and ORE					1.18	%			1.35	%			2.65	%			1.18	%			2.65	%
Non-performing assets to total assets					0.84	%			0.95	%			1.98	%			0.84	%			1.98	%
Allowance for loan losses to total loans					1.73	%			1.83	%			2.10	%			1.73	%			2.10	%
Allowance for loan losses to non-performing loans					145.83	%			135.69	%			79.16	%			145.83	%			79.16	%
Other real estate				$	0			$	0			$	0			$	0			$	0
Selected Financial Ratios:
Tier 1 leverage capital ratio					13.54	%			15.08	%			12.80	%			13.54	%			12.80	%
Tier 1 risk-based capital ratio					18.57	%			19.46	%			16.83	%			18.57	%			16.83	%
Total risk-based capital ratio					19.83	%			20.72	%			18.09	%			19.83	%			18.09	%