Investor Relations

SaviBank YTD Profits Increase 27%

SaviBank YTD Profits Increased 27% to $703,000, or $0.06 Per Share

Burlington, WA – December 14, 2016 — SaviBank (OTCPink: SVVB), today reported that, fueled by the 19% growth in both average loans and average deposits, net income grew 27% to $703,000, or $0.06 per share for the first nine months of 2016, compared to $555,000, or $0.05 per share, for the nine months ended September 30, 2015. Third quarter 2016 earnings increased 311%, year-over-year, and 44% in the quarter to $333,000, or $0.03 per share, from $81,000, or $0.01 per share for the third quarter of 2015, and $232,000, or $0.02 per share, in the second quarter of 2016. All results are unaudited.

“We are continuing to build momentum with improving profitability, strong loan and deposit growth and improving asset quality,” said Michal D. Cann, Chairman and Chief Executive Officer. “We delivered a strong net interest margin of 4.27% in the third quarter, up 27 basis points from a year ago. Our net interest margin is significantly better than the 3.58% posted by other micro-cap banks in the nation, as measured by SNL Financials Microcap Bank Index.

“Our new loan production office on Whidbey Island, Washington, continues to attract new relationships to our bank,” Cann continued. “Our markets in Northwest Washington generate excellent opportunities for growth.”

Third Quarter 2016 (at, or for the period September 30, 2016):

• Net interest income increased 33% to $1.7 million for the third quarter of 2016, compared to $1.3 million for the third quarter a year ago, and $1.6 million for the second quarter of 2016. Year-to-date, net interest income grew 29% to $4.7 million compared to $3.6 million for the first nine months of 2015.
• Non-interest income was $275,000, down 6% from $292,000 generated in the third quarter of 2015, and up 2% from $270,000 on a linked quarter basis. For the first nine months of 2016, non-interest income was $797,000 down from $1.3 million for the first nine months of 2015, which included $1.1 million in gains from sale of SBA and other loans.
• As of September 30, 2016, SaviBank had an unbooked deferred tax asset of approximately $4.7 million, or $0.40 per share. SaviBank has been profitable for seven consecutive quarters.
• For the third quarter of 2016, net interest margin (“NIM”) was 4.27% compared to 4.00% for the third quarter of 2015 and 4.44% for the second quarter of 2016. Net interest margin was 4.27% for year-to-date 2016, up from 3.98% for first nine months of 2015.
• Average third quarter total loans increased 24%, to $141.1 million, compared to $113.8 million at September 30, 2015, and grew 6%, from $132.6 million at June 30, 2016. End of period total loans were $147.2 million, compared to $114.4 million a year ago.
• Average third quarter total deposits grew 26% to $142.0 million from $113.1 million in the third quarter a year ago, and increased 13% from $125.6 million in the second quarter of 2016. End of period deposits totaled $149.0 million reflecting the seasonality of the deposit flows in our market.
• Asset quality continues to improve with nonperforming assets decreasing to 1.07% of total assets, at September 30, 2016, compared to 2.56% of total assets a year earlier, and 1.32% of total assets, at June 30, 2016.
• Allowance for loan losses, as a percentage of total loans, was 1.00% at September 30, 2016, compared to 1.03% at September 30, 2015.
• SaviBank remained well capitalized with total risk-based capital ratio of 10.51% and tier-1 leverage ratio 9.18%.
• Book value per share was $1.29 at September 30, 2016, from $1.27 a year ago.

Attachment: SVVB 3Q16 Final (PDF)

About Northwest Washington
SaviBank operates two branches in Skagit County, and one branch each in Whatcom and Island Counties. It also operates two Loan Production Offices – one in Skagit County and one in Island County. The Skagit, Whatcom and Island counties region stretches north from the greater Seattle/Everett/Bellevue metropolis to the Canadian border. Skagit County’s economy is dominated by manufacturing, which accounts for 33.4% of GDP with food, machinery and oil and petroleum products the leading contributors. Skagit’s population is projected to grow 5.22% from 2017 through 2022 and median household income is projected to increase by 7.98% during the same time frame. Whatcom County is home to Western Washington University and is the nation’s largest producers of raspberries. Whatcom County’s population is projected to grow 5.93% from 2017 through 2022 and median household income is projected to increase by 6.86%. Island County is home to the Whidbey Island Naval Air Base which supports approximately 7,000 military personnel with an additional 14,000 family members, over 14,000 retirees, 350+ reservists, and 2,400 civilian employees. Island County’s population is projected to grow 4.57% from 2017 through 2022 and median household income is projected to increase by 11.02%.

Sources:

• https://fortress.wa.gov/esd/employmentdata/reports-publications/regional-reports/countyprofiles/skagit-county-profile
• https://esd.wa.gov/labormarketinfo/county-profiles/whatcom
• https://www.snl.com/interactiveX/DemographicProfileReport.aspx?ID=4100094&Ownership=Current&MarketType=County&submit3=Apply
• https://www.thebalance.com/overview-naval-air-station-whidbey-island-3354751

Forward Looking Statement
This release may contain “forward-looking statements” that are subject to risks and uncertainties. Readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. All statements, other than statements of historical fact, regarding our financial position, business strategy and management’s plans and objectives for future operations are forward-looking statements. When used in this report, the words “anticipate,” “believe,” “estimate,” “expect,” and “intend” and words or phrases of similar meaning, as they relate to SaviBank or management, are intended to help identify forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although we believe that management’s expectations as reflected in forward-looking statements are reasonable, we cannot assure readers that those expectations will prove to be correct. Forward-looking statements are subject to various risks and uncertainties that may cause our actual results to differ materially and adversely from our expectations as indicated in the forward-looking statements. These risks and uncertainties include our ability to maintain or expand our market share or net interest margins, and to implement our marketing and growth strategies. Further, actual results may be affected by our ability to compete on price and other factors with other financial institutions; customer acceptance of new products and services; the regulatory environment in which we operate; and general trends in the local, regional and national banking industry and economy, as those factors relate to our cost of funds and return on assets. In addition, there are risks inherent in the banking industry relating to collectability of loans and changes in interest rates. Many of these risks, as well as other risks may have a material adverse impact on our operations and business.