Sunshine Bancorp (SBCP) 8-K Sunshine Bancorp, Inc. Reports 2016 Results; Total assets approach $1 billion

Sunshine Bancorp

Press Release

For Immediate Release

Contact:

Brent Smith

SVP, Corporate Development

(813)659-8626

Sunshine Bancorp, Inc. Reports 2016 Results; Total assets approach $1 billion

Plant City, FL – January 25, 2017 –

Sunshine Bancorp, Inc. (the “Company”) (NASDAQ: SBCP), the holding company for Sunshine Bank (the “Bank”), has released its unaudited financial results for the fourth quarter and the year ended December 31, 2016.

Key Accomplishments During 2016

-   Converted Tampa and Orlando loan production offices to full service branches

-   Successfully raised $11 million of subordinated debt

-   Announced and completed the Florida Bank of Commerce acquisition

-   Established a franchise connecting the Florida coasts along I4 corridor

-   Loans Outstanding Growth of 110%

-   NPA/Assets at December 31, 2016 was 0.03%

The Company recognized a $514,000 loss for the fourth quarter of 2016 and a $43,000 loss for the year ended December 31, 2016 compared to a $1.8 million loss for the fourth quarter 2015 and a $2.2 million loss for the year end December 31, 2015.  The 2016 results include merger-related expenses of $2.7 million in the fourth quarter and $3.0 million for the year, relating primarily to the Florida Bank of Commerce acquisition.

Total assets were $931.4 million at December 31, 2016 compared to $564.0 million at September 30, 2016 and $507.3 million at December 31, 2015.  Net loans increased to $683.8 million at December 31, 2016 compared to $396.0 million at September 30, 2016 and $326.3 million at December 31, 2015.  Year over year loan growth was 109.6%.  Total deposits were $729.9 million at December 31, 2016 compared to $438.8 million at September 30, 2016 and $399.1 million at December 31, 2015.  The Bank’s deposit composition as of December 31, 2016 was 78% core deposits and 22% time deposits.  Noninterest bearing deposits equaled 30% of total deposits at December 31, 2016 compared to 22% at December 31, 2015.

Andrew Samuel, President and CEO, commented, “A little over two years ago the organization set course to build a dominant community bank in Florida.  With the acquisition of Florida Bank of Commerce fully integrated we have achieved the critical mass needed to begin to produce appropriate returns for our shareholders.  The strategic and organic achievements of the past two years have produced a well-positioned balance sheet as of December 31, 2016, and will substantially increase the earnings power of our franchise in 2017.”

The Bank’s non-performing assets as of December 31, 2016 were $323,000 compared to $783,000 as of December 31, 2015.   The Bank’s non-performing assets to total assets ratio as of December 31, 2016 was 0.03% compared to 0.15% as of December 31, 2015. In addition, the allowance for loan losses was 1125.1% of non-performing loans at December 31, 2016.

Noninterest expenses for 2016 totaled $21.6 million, compared to $17.3 million in 2015. The increase included an increase in merger-related expenses which totaled $3.0 million in 2016 and an increased expense base from our previously completed acquisitions and loan production office conversions to full service branches.  The Company does not anticipate incurring further significant merger related expenses associated with the Florida Bank of Commerce acquisition.

Salaries and employee benefits expense for the year ended December 31, 2016 was $10.8 million compared to $9.6 million in 2015. The Company undertook several expense saving initiatives throughout the year in addition to the cost savings to be achieved in the Florida Bank of Commerce acquisition.  Fourth quarter 2016 salaries and employee benefits expense was $3.3 million which represents only a partial quarter of combined company expense given the acquisition closed on October 31, 2016.

Net interest income for the year ended December 31, 2016 was $18.9 million, an increase of $7.8 million from the $11.1 million for the year ended December 31, 2015.  Since the Company’s new strategic plan was initiated, net interest income has experienced growth  of $12.9 million over the past two years. Net interest income for the fourth quarter 2016 was $6.7 million compared to $4.3 million in the third quarter of 2016 and $3.9 million during the fourth quarter of 2015.

Stockholders’ equity increased to $112.1 million at December 31, 2016 compared to $71.4 million at December 31, 2015.

Forward Looking Statements

This news release contains forward-looking statements within the meaning of the federal securities laws. Statements in this release that are not strictly historical are forward-looking and are based upon current expectations that may differ materially from actual results. These forward-looking statements, identified by words such as “will,” “expected,” “believe,” and “prospects,” involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. These risks and uncertainties involve general economic trends and changes in interest rates, increased competition, changes in consumer demand for financial services, the possibility of unforeseen events affecting the industry generally, the uncertainties associated with newly developed or acquired operations, and market disruptions. The Company undertakes no obligation to release revisions to these forward-looking statements publicly to reflect events or circumstances after the date hereof or to reflect the occurrence of unforeseen events, except as required to be reported under the rules and regulations of the Securities and Exchange Commission.

About Sunshine Bancorp, Inc.

Sunshine Bancorp, Inc. was formed in 2014 as the holding company for Sunshine Bank. The Bank was first organized in 1954 in Plant City.  In 2014 after converting from the mutual form of organization to the stock form, the current name of Sunshine Bank was adopted. The Company provides financial services to individuals, families, and business customers from 18 branch locations stretching from the East Coast to the West Coast of Florida in Brevard, Hillsborough, Manatee, Orange, Osceola, Pasco, Polk, Sarasota, and Seminole Counties. The Company’s common stock is traded on the NASDAQ Capital Market under the symbol “SBCP.” For further information, visit the Company website www.mysunshinebank.com.

2

Sunshine Bancorp, Inc.

Consolidated Balance Sheet

(Dollars in thousands, except per share information)

	As of December 31,			As of December 31,
	2016			2015
	(Unaudited)
Assets
Cash and due from banks	$	16,562		$	13,220
Interest-earning deposits in financial institutions		21,386			16,523
Federal funds sold		12,325			29,601
Cash and cash equivalents		50,273			59,344
Time deposits with banks		2,794			4,410
Securities available for sale		109,668			65,944
Loans held for sale		443			790
Loans, net of allowance for loan losses of $3,274 and $2,511		683,784			326,266
Premises and equipment, net		25,920			17,612
Federal Home Loan Bank stock, at cost		3,478			1,597
Cash surrender value of bank-owned life insurance		22,462			12,122
Deferred income tax asset		6,660			6,426
Goodwill and other intangibles		22,308			10,101
Accrued interest receivable		2,077			1,048
Other real estate owned		32			32
Other assets		1,536			1,573
Total assets	$	931,435		$	507,265
Liabilities and Stockholders’ Equity
Liabilities:
Noninterest-bearing demand accounts	$	217,418		$	89,114
Interest-bearing demand and savings accounts		354,327			198,977
Time deposits		158,204			111,020
Total deposits		729,949			399,111
Other borrowings		71,867			28,927
Subordinated Notes		11,000			-
Other liabilities		6,518			7,833
Total liabilities		819,334			435,871
Stockholders’ equity:
Preferred stock, $0.01 par value, 5,000,000 authorized; none outstanding		-			-
Common stock, $0.01 par value, 50,000,000 shares authorized; issued and outstanding  of 7,986,074  at December 31, 2016 and 5,259,321  at December 31, 2015		80			53
Additional paid in capital		94,302			52,763
Retained income		21,803			21,846
Unearned employee stock ownership plan (“ESOP”) shares		(3,047	)		(3,160	)
Accumulated other comprehensive income		(1,037	)		(108	)
Total stockholders’ equity		112,101			71,394
Total liabilities and stockholders’ equity	$	931,435		$	507,265

3

Sunshine Bancorp, Inc.
Consolidated Statement of Operations
(Dollars in thousands, except per share information)
	Three months Ended						Twelve months Ended
	December 31,						December 31,
		2016			2015			2016			2015
Interest income:	(Unaudited)						(Unaudited)
Loans	$	6,966		$	4,001		$	19,644		$	10,963
Securities		339			158			1,023			683
Other		96			95			260			200
Total interest income		7,401			4,254			20,927			11,846
Interest Expense:
Deposits		458			289			1,426			670
Borrowed funds		223			27			588			81
Total interest expense		681			316			2,014			751
Net interest income		6,720			3,938			18,913			11,095
Provision for loan losses		-			-			350			-
Net interest income after provision for loan losses		6,720			3,938			18,563			11,095
Noninterest income:
Fees and service charges on deposit accounts		416			230			1,368			762
Gain on sale of other real estate owned		-			-			18			20
Mortgage Broker Fees		41			43			152			146
Gain on sale of securities		-			-			208			195
Income from bank-owned life insurance		113			128			402			331
Other		131			70			1,038			175
Total noninterest income		701			471			3,186			1,629
Noninterest expenses:
Salaries and employee benefits		3,311			4,105			10,752			9,633
Occupancy and equipment		636			441			2,342			1,441
Data and item processing services		404			457			1,581			948
Professional fees		143			276			808			776
Advertising and promotion		27			171			107			302
Stationery and supplies		40			58			205			148
FDIC Deposit insurance		124			102			422			289
Merger related		2,653			261			2,955			1,501
Other		634			992			2,443			2,238
Total noninterest expenses		7,972			6,863			21,615			17,276
Income (Loss) before income taxes		(551	)		(2,454	)		134			(4,552	)
Income tax (benefit) expense		(37	)		(678	)		177			(2,321	)
Net income (loss)	$	(514	)	$	(1,776	)	$	(43	)	$	(2,231	)
Preferred Stock dividend requirement		-			-			-			(14	)
Net income (loss) available to common stockholders	$	(514	)	$	(1,776	)	$	(43	)	$	(2,245	)
Basic earnings (loss) per share	$	(0.10	)	$	(0.42	)	$	(0.01	)	$	(0.56	)
Diluted earnings (loss) per share	$	(0.10	)	$	(0.42	)	$	(0.01	)	$	(0.56	)

4

	Three Month Periods Ended *
	12/31/2016			9/30/2016			6/30/2016			3/31/2016			12/31/2015
Operating Highlights	(Unaudited)
Net Income (Loss)	$	(514	)	$	244		$	73		$	154		$	(1,776	)
Net interest income		6,720			4,306			3,873			4,014			3,938
Provision for loan losses		-			-			350			-			-
Non-Interest Income		701			669			1,149			667			471
Non-Interest Expense		7,972			4,602			4,563			4,478			6,863
Financial Condition Data:
Total Assets	$	931,435		$	563,992		$	514,729		$	523,067		$	507,265
Loans, Net		683,784			395,994			371,538			337,784			326,266
Deposits:
Noninterest-bearing demand accounts		217,418			85,304			92,342			101,490			89,114
Interest-bearing demand and savings accounts		354,327			234,697			199,121			207,410			198,977
Time deposits		158,204			118,766			103,852			106,300			111,020
Total Deposits		729,949			438,767			395,315			415,200			399,111
Selected Ratios
Net interest margin		3.78	%		3.69	%		3.53	%		3.64	%		3.78	%
Annualized return (loss) on average assets		(0.3	%)		0.2	%		0.1	%		0.1	%		(1.5	%)
Annualized return (loss) on average equity		(2.2	%)		1.4	%		0.4	%		0.9	%		(11.2	%)
Capital Ratios **
Total Capital Ratio		12.7	%		15.8	%		15.4	%		15.6	%		13.1	%
Tier 1 capital ratio		12.2	%		15.2	%		14.7	%		14.9	%		12.4	%
Common equity tier 1 capital ratio		12.2	%		15.2	%		14.7	%		14.9	%		12.4	%
Leverage ratio		10.0	%		12.6	%		12.1	%		11.3	%		9.8	%
Asset Quality Ratios
Non-performing assets	$	323		$	988		$	1,324		$	985		$	783
Non-performing assets to total assets		0.03	%		0.18	%		0.26	%		0.19	%		0.15	%
Non-performing loans to total loans		0.04	%		0.24	%		0.35	%		0.28	%		0.23	%
Allowance for loan losses(AFLL)	$	3,274		$	2,846		$	2,895		$	2,532		$	2,511
AFLL to total loans		0.48	%		0.71	%		0.77	%		0.74	%		0.76	%
AFLL to  non-performing loans		1125.1	%		297.7	%		224.1	%		265.7	%		334.4	%
* Dollars in thousands
** Capital Ratios for Sunshine Bank only

5