 Quarterly Cash Dividend of 0.0575 Per Common Share DeclaredSecond Quarter 2020 Summary Net income of 9.3 million, or 0.18 per diluted share Loan production of 487.9 million; 62.7 million net loan growth COVID-19 loan modifications total 6.4 of the total aggregate loan portfolio balance Cost of interest bearing deposits of 1.49, compared to 1.89 for Q1 2020 Net interest margin of 1.88 compared to 1.84 for Q1 2020 Provision for loan losses recorded of 5.3 million Stock repurchases of 1.9 million common shares at an average share price of 9.62 Book value per share of 11.39SANTA ROSA, Calif., July 28, 2020 GLOBE NEWSWIRE -- Luther Burbank Corporation NASDAQ: LBC the Company, the holding company for Luther Burbank Savings the Bank, today reported net income of 9.3 million and 16.9 million, or 0.18 and 0.31, diluted earnings per common share EPS, for the three and six months ended June 30, 2020, respectively.Simone Lagomarsino, President and Chief Executive Officer, stated, As the COVID-19 pandemic continues to impact almost every aspect of our lives, the focus of our team has remained steadfast on supporting our customers and communities by ensuring that we are able to safely and securely serve their banking needs. In March 2020, we implemented safety protocols at our offices and reduced branch hours, while simultaneously expanding phone and online customer support services. During this period, we have seen the best in our team, as they continue to selflessly remain committed to providing the highest level of service to our customers despite these difficult conditions. Ms. Lagomarsino continued, Consistent with the prior quarter, our financial results for June 30, 2020 have been impacted by the pandemic; however, Im encouraged that weve been able to maintain our profitability throughout this period, reporting quarterly net income of 9.3 million, or 0.18 per diluted share. Furthermore, we are beginning to experience an improvement in our net interest margin resulting from the repricing of our deposits. During the quarter, deposits grew by 98.1 million while, at the same time, repricing down by 40 basis points. Net interest margin was 1.88 during the current quarter compared to 1.84 during the linked quarter. As a result of the uncertain economic environment, we recorded an additional 5.3 million provision for loan losses during the quarter, increasing our allowance for loan losses coverage ratio by 12.3, or eight basis points, to 0.73. In addition, through the end of the second quarter, we have successfully modified 271 loans for customers affected by the pandemic with an aggregate outstanding loan balance of 398.4 million. We have sustained our strong liquidity and capital positions during this period. As of June 30, 2020, we had access to over 2.1 billion in liquidity resources and our Common Equity Tier 1 Capital ratio measured 14.7.Board Declares Quarterly Cash Dividend of 0.0575 Per ShareOn July 28, 2020, the Board of Directors of the Company declared a quarterly cash dividend of 0.0575 per common share. The dividend is payable on August 17, 2020 to shareholders of record as of August 7, 2020.Net IncomeThe Company reported net income of 9.3 million and 16.9 million, or 0.18 and 0.31 EPS, for the three and six months ended June 30, 2020, respectively, compared to net income of 7.6 million, or 0.14 EPS, for the linked quarter and 23.7 million, or 0.42 EPS, for the six months ended June 30, 2019. Pre-tax, pre-provision net earnings totaled 18.5 million and 34.5 million for the three and six months ended June 30, 2020, respectively, compared to 16.1 million for the linked quarter and 34.6 million for the six months ended June 30, 2019.Pre-tax, pre-provision net earnings, a non-GAAP financial measure, is presented because management believes this financial metric provides stockholders with useful information for evaluating the profitability of the Company. A schedule reconciling our GAAP net income to pre-tax, pre-provision net earnings is provided in the tables below.Net Interest Income Q2 2020 vs Q1 2020 Net interest income in the second quarter was 33.1 million, an increase of 1.0 million from the first quarter, primarily due to lower interest expense on our deposit portfolio, which benefited from the decline in market interest rates that began in August 2019, but significantly accelerated in March 2020. During the quarter, the cost of interest bearing deposits declined by 40 basis points as compared to the linked quarter. The improvement in net interest income was partially offset by a decline in interest income earned on our loan and investment portfolios caused by a decrease in the average yield of 19 and 64 basis points, respectively. The decline in our loan yield was primarily caused by an increase in the cost of our interest rate swaps and the prepayment of higher yielding loans, which are being replaced by loans at lower current interest rates, partially offset by an increase in loan prepayment fees collected during the quarter. The decline in our investment yield was generally caused by variable rate securities repricing to lower current interest rates, as well as the accelerated prepayment of securities backed by mortgages.Net interest margin for the second quarter was 1.88, compared to 1.84 for the previous quarter. Consistent with the discussion above, our net interest margin benefited from the decline in the cost of interest bearing deposits, partially offset by a reduction in loan and investment yields. During the second quarter, the yield on our interest earning assets decreased by 25 basis points, while the cost of our interest bearing liabilities decreased by 32 basis points. Our net interest spread in the second quarter improved to 1.73, increasing by 7 basis points as compared to the linked quarter. YTD 2020 vs YTD 2019 Net interest income totaled 65.3 million for the six months ended June 30, 2020, an increase of 2.6 million, compared to the same period last year. The increase in net interest income was primarily impacted by a 31 basis point decline in the cost of interest bearing deposits, partially offset by a 153.0 million increase in the average balance of interest bearing deposits. Net interest income was further enhanced by a decrease in the average balance and cost of Federal Home Loan Bank of San Francisco FHLB advances of 131.0 million and 9 basis points, respectively. These items were partially offset by a 4.0 million increase in the cost of our interest rate swaps as compared to the same period last year, as well as the prepayment of higher yielding loans, which are being replaced by loans at lower current interest rates, partially offset by a 48.5 million increase in the average balance of loans. Net interest income was further impacted by a 71 basis points decline in the yield on our investment securities. As discussed above, the decline in our investment yield was generally caused by variable rate securities repricing to lower current interest rates, as well as the accelerated prepayment of securities backed by mortgages. Net interest margin for the six months ended June 30, 2020 was 1.86, compared to 1.81 for the same period last year. The increase in our margin was primarily related to the decline in the cost of our interest bearing deposits, partially offset by the decline in the yields of our loan and investment portfolios, as discussed above. The yield on our interest earning assets decreased by 21 basis points, while the cost of our interest bearing liabilities decreased by 29 basis points. Our net interest spread for the six months ended June 30, 2020 was 1.70, increasing by 8 basis points as compared to the same period last year. Noninterest IncomeQ2 2020 vs Q1 2020 Noninterest income for the second quarter was 671 thousand, a decrease of 127 thousand compared to the first quarter. The decrease is primarily attributable to a decrease of 161 thousand in FHLB dividends and 89 thousand in fair value adjustments recorded on equity securities, partially offset by an increase of 135 thousand in servicing fee income. During the second quarter, the FHLB decreased its annualized dividend rate from 7 to 5. The increase in servicing fee income was primarily due to a reduction in the amortization of mortgage servicing rights caused by a slowing in the estimated prepayments of serviced loans as compared to the linked quarter. YTD 2020 vs YTD 2019 Noninterest income for the six months ended June 30, 2020 totaled 1.5 million, a decrease of 1.4 million compared to the same period last year. The decrease was primarily due to a 530 thousand gain on sale of loans and a non-recurring equipment recovery of 384 thousand, both recognized during the prior year to date period, as well as a 344 thousand decrease in servicing fee income related to elevated actual and estimated prepayments on serviced loans that decreased the fair value of our mortgage servicing rights during the current year to date period.Noninterest income primarily consists of FHLB stock dividends, fair value adjustments on equity securities, fee income and the financial impact related to loans sold.Noninterest ExpenseQ2 2020 vs Q1 2020 Noninterest expense for the second quarter was 15.3 million, a decrease of 1.5 million compared to the first quarter. The decrease was primarily due to a decrease in compensation costs of 904 thousand caused by an increase in capitalized loan origination costs related to higher loan origination volume in the current quarter compared to the prior quarter and a decline in payroll taxes caused by the seasonal nature of these taxes. 