Sunshine Bancorp (SBCP) 8-K Sunshine Bancorp, Inc. Reports 2nd Quarter and Year to Date Results

Press Release

For Immediate Release

Contact:

Brent Smith

SVP, Corporate Development

(813)659-8626

Sunshine Bancorp, Inc. Reports 2nd Quarter and Year to Date Results

Plant City, FL – July 26, 2017 –

Sunshine Bancorp, Inc. (the "Company") (NASDAQ: SBCP), the holding company for Sunshine Bank (the "Bank"), has released its unaudited consolidated financial results for the second quarter and six months ended June 30, 2017.

Key Highlights from the 2^nd Quarter 2017

- Earnings of $0.23 per basic and diluted share

- Total assets of $956 million

- Annualized loan growth of 8%

- Maintained top tier credit metrics with NPAs to Assets at 0.08%

The Company recognized net income of $1.8 million for the second quarter of 2017 compared to net income of $1.6 million in the first quarter 2017 and net income of $73,000 for the second quarter 2016.  Net income was $3.4 million for the six months ended June 30, 2017 compared to $227,000 for the six months ended June 30, 2016.

Total assets were $955.9 million at June 30, 2017 compared to $956.4 million at March 31, 2017 and $931.4 million at December 31, 2016.  Net loans increased to $703.9 million at June 30, 2017 compared to $689.7 million at March 31, 2017 and $683.8 million at December 31, 2016.  The Commercial Real Estate to Total Risk Based Capital ratio at June 30, 2017 was below 265%. The Company continues to deliver on the organizational focus around relationship banking.

Total deposits were $776.1 million at June 30, 2017 compared to $771.2 million at March 31, 2017 and $729.9 million at December 31, 2016.  The Company continues to maintain a low cost of funds led by strong core deposit funding.  Despite a slower second quarter, deposit growth annualized year to date was 12%.

Andrew Samuel, President and CEO, commented, "We are thrilled to announce another strong quarter of financial results.  We continue to focus on delivering uncompromised service to our clients and the credit for our success goes to our great employees.  Our team has worked incredibly hard over the past few years to deliver on our goal of creating a dynamic community banking franchise in Central Florida."

The Bank's non-performing assets as of June 30, 2017 were $739,000 compared to $988,000 as of June 30, 2016.   The Bank's non-performing assets to total assets ratio as of June 30, 2017 was 0.08% compared to 0.18% as of June 30, 2016. In addition, the allowance for loan losses was 519.1% of non-performing loans at June 30, 2017.

Net interest income for the second quarter 2017 was $8.1 million compared to $7.6 million during the first quarter of 2017 and $3.9 million during the second quarter of 2016.  The net interest margin for the six months ended June 30, 2017 was 3.76% compared to 3.57% for the six months ended June 30, 2016.  The net interest margin benefited from the recent increases in the short-term interest rates, a decrease in the use of borrowed funds, and an  increase in loans as a percentage of interest earning assets.  The average loan yield has remained stable decreasing five basis points to 4.73% for the six months ended June 30, 2017 and increasing eight basis points to 4.79% for the three months ended June 30, 2017 from the comparable prior year period.  Deposit costs remained constant with the average cost of deposits at 0.30% for the six months ended June 30, 2017 and 0.30% for the six months ended June 30, 2016.

Noninterest expenses for the second quarter 2017 totaled $6.4 million compared to $6.1 million in the first quarter of 2017. Noninterest expense remained stable during the second quarter 2017 with noninterest expense to average assets of 2.7% annualized, compared to 2.6% annualized in the first quarter 2017.

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.

SUNSHINE BANCORP, INC.

Consolidated Balance Sheets

(Dollars in thousands)

	As of June 30, 2017			As of December 31, 2016
Assets	(Unaudited)
Cash and due from banks	$	32,311		$	16,562
Interest-earning deposits in financial institutions		21,264			21,386
Federal funds sold		10,039			12,325
Cash and cash equivalents		63,614			50,273
Time deposits with banks		835			2,794
Securities available for sale		106,456			109,668
Loans held for sale		844			443
Loans, net of allowance for loan losses of $3,670 and $3,274		703,863			683,784
Premises and equipment, net		25,153			25,920
Federal Home Loan Bank stock, at cost		2,452			3,478
Cash surrender value of bank-owned life insurance		22,779			22,462
Deferred income tax asset		4,573			6,660
Goodwill and other intangibles		22,155			22,308
Accrued interest receivable		2,035			2,077
Other real estate owned		32			32
Other assets		1,094			1,536
Total assets	$	955,885		$	931,435
Liabilities and Stockholders' Equity
Liabilities:
Noninterest-bearing demand accounts	$	238,762		$	217,418
Interest-bearing demand and savings accounts		378,420			354,327
Time deposits		158,871			158,204
Total deposits		776,053			729,949
Other borrowings		45,887			71,867
Subordinated Notes		11,000			11,000
Other liabilities		6,437			6,518
Total liabilities		839,377			819,334
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 8,021,650 at June 30, 2017 and 7,986,074 shares at December 31, 2016		80			80
Additional paid in capital		94,902			94,302
Retained income		25,234			21,803
Unearned employee stock ownership plan ("ESOP") shares		(3,047	)		(3,047	)
Accumulated other comprehensive income (loss)		(661	)		(1,037	)
Total stockholders' equity		116,508			112,101
Total liabilities and stockholders' equity	$	955,885		$	931,435

SUNSHINE BANCORP, INC.

Consolidated Statements of Income (Unaudited)

(Dollars in thousands, except per share amounts)

	Three months Ended				Six months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Interest income:
Loans	$	8,285	$	4,041	$	16,215	$	8,096
Securities		447		241		874		462
Other		99		43		230		121
Total interest income		8,831		4,325		17,319		8,679
Interest Expense:
Deposits		543		304		1,140		619
Borrowed funds		223		148		477		173
Total interest expense		766		452		1,617		792
Net interest income		8,065		3,873		15,702		7,887
Provision for loan losses		—		350		—		350
Net interest income after provision for loan losses		8,065		3,523		15,702		7,537
Noninterest income:
Fees and service charges on deposit accounts		543		312		1,008		638
Mortgage Broker Fees		121		22		180		69
Gain on sale of securities		—		105		—		131
Gain on sale of premise		—		563		—		563
Income from bank-owned life insurance		188		97		370		192
Other		296		50		665		223
Total noninterest income		1,148		1,149		2,223		1,816
Noninterest expenses:
Salaries and employee benefits		3,676		2,442		7,325		5,018
Occupancy and equipment		705		586		1,429		1,162
Data and item processing services		561		396		1,101		737
Professional fees		254		248		467		419
Advertising and promotion		8		22		14		67
Stationery and supplies		58		55		105		101
FDIC Deposit insurance		102		100		177		202
Merger Related		—		95		—		95
Other		1,074		619		1,933		1,240
Total noninterest expenses		6,438		4,563		12,551		9,041
Income before income taxes		2,775		109		5,374		312
Income taxes		974		36		1,943		85
Net income	$	1,801	$	73	$	3,431	$	227
Basic earnings per share	$	0.23	$	0.01	$	0.44	$	0.05
Diluted earnings per share	$	0.23	$	0.01	$	0.43	$	0.05

	Three Month Periods Ended *
	6/30/2017			3/31/2017			12/31/2016			9/30/2016			6/30/2016
Operating Highlights	(Unaudited)
Net Income	$	1,801		$	1,630		$	(514	)	$	244		$	73
Net interest income	$	8,065		$	7,637		$	6,720		$	4,306		$	3,873
Provision for loan losses	$	—		$	—		$	—		$	—		$	350
Non-Interest Income	$	1,148		$	1,075		$	701		$	669		$	1,149
Non-Interest Expense	$	6,438		$	6,113		$	7,972		$	4,602		$	4,563
Financial Condition Data:
Total Assets	$	955,885		$	956,378		$	931,435		$	563,992		$	514,729
Loans, Net	$	703,863		$	689,656		$	683,784		$	395,994		$	371,538
Deposits:
Noninterest-bearing demand accounts	$	238,762		$	243,313		$	217,418		$	85,304		$	92,342
Interest-bearing demand and savings accounts		378,420			377,045			354,327			234,697			199,121
Time deposits		158,871			150,810			158,204			118,766			103,852
Total Deposits	$	776,053		$	771,168		$	729,949		$	438,767		$	395,315
Selected Ratios
Net interest margin		3.86	%		3.65	%		3.78	%		3.53	%		3.53	%
Annualized return on average assets		0.8	%		0.8	%		(0.3	%)		0.2	%		0.1	%
Annualized return on average equity		6.3	%		5.8	%		(2.1	%)		1.4	%		0.4	%
Capital Ratios **
Total Capital Ratio		13.4	%		12.9	%		12.7	%		15.8	%		15.4	%
Tier 1 capital ratio		12.9	%		12.4	%		12.2	%		15.2	%		14.7	%
Common equity tier 1 capital ratio		12.9	%		12.4	%		12.2	%		15.2	%		14.7	%
Leverage ratio		10.6	%		10.1	%		10.0	%		13.6	%		12.1	%
Asset Quality Ratios
Non-performing assets	$	739		$	619		$	323		$	988		$	1,324
Non-performing assets to total assets		0.08	%		0.06	%		0.03	%		0.18	%		0.26	%
Non-performing loans to total loans		0.10	%		0.08	%		0.04	%		0.24	%		0.35	%
Allowance for loan losses(AFLL)	$	3,670		$	3,643		$	3,274		$	2,846		$	2,895
AFLL to total loans		0.52	%		0.53	%		0.47	%		0.71	%		0.77	%
AFLL to  non-performing loans		519.1	%		620.6	%		1125.1	%		297.7	%		224.1	%
* Dollars in thousands
** Capital Ratios for Sunshine Bank only