Banco Sofisa : Earnings Release 4Q16

São Paulo, February 23th, 2017

Banco Sofisa S.A. (SFSA4), a multiple bank specializing in originating credit to small and medium enterprises, announces today its results for the fourth quarter of 2016 (4Q16). Except where stated otherwise, all operating and financial information is in Brazilian real and presented on a consolidated basis, in accordance with Brazilian Corporate Law.

Main Indicators

R$ millions (except where indicated)

Balance Sheet	4Q16	3Q16	4Q15	4Q16/3Q16		4Q16/4Q15
Free Cash(1)	1,233.7	1,217.0	1,047.8	1.4%	17.7%
Loan Operations(2) (A)	2,404.1	2,110.8	1,918.1	13.9%	25.3%
Funding (B)	3,759.3	3,894.2	3,152.0	-3.5%	19.3%
Total Deposits	3,280.9	3,460.3	2,843.0	-5.2%	15.4%
Loan Operations / Funding Index (A/B)	64.0%	54.2%	60.9%	9.7	p.p.	3.1	p.p.
Shareholders' Equity (C)	749.6	739.5	691.0	1.4%	8.5%
Leverage (A/C)	3.2	2.9	2.8	12.4%	15.5%
Results	4Q16	3Q16	4Q15	4Q16/3Q16		4Q16/4Q15
Result from Financial Intermediation	84.3	49.6	56.6	70.1%	48.9%
Income from Services Provided	6.8	5.9	4.8	15.6%	42.0%
Personnel Expenses	(18.6)	(16.3)	(16.5)	14.0%	12.8%
Other Administrative Expenses	(16.8)	(15.2)	(13.2)	10.4%	27.2%
Employees profit sharing	(2.6)	(2.2)	(1.8)	18.5%	43.7%
Net Income	49.2	11.1	19.6	341.2%	150.9%
Shares	4Q16	3Q16	4Q15	4Q16/3Q16		4Q16/4Q15
Net Income per Share (R$)	0.36	0.08	0.14	342.0%	151.4%
Number of Shares Outstanding | (thousands)	137,492	137,747	137,747	-0.2%	-0.2%
Asset Value per Share | (R$)	5.45	5.37	5.02	1.6%	8.7%
Dividends + Net Interest on Equity	43.0	-	21.7	-	98.4%
Dividends + Net Interest on Equity per share | (R$)	0.31	-	0.16	-	98.8%
Market Value	-	613.0	282.4	-100.0%	-100.0%
Eficiency / Profitability (%)	4Q16	3Q16	4Q15	4Q16/3Q16		4Q16/4Q15
ROAE | (p.a.)	26.4%	6.1%	11.4%	20.3	p.p.	15.0	p.p.
ROAA | (p.a.)	4.1%	0.9%	1.8%	3.1	p.p.	2.2	p.p.
Net Interest Margin(3)	8.2%	7.0%	8.1%	1.2	p.p.	0.1	p.p.
Efficiency(3)	40.0%	42.8%	44.3%	-2.8	p.p.	-4.3	p.p.
Basel Ratio	21.0%	22.1%	21.0%	-1.1	p.p.	0.0	p.p.
Credit Portfolio Quality (%)	4Q16	3Q16	4Q15	4Q16/3Q16		4Q16/4Q15
Provision for Loan Losses / Loan Operations(2)	2.3%	3.6%	3.3%	-1.3	p.p.	-1.0	p.p.
Delinquency Cred. w/more than 90 days(4)/ Loan Oper.(2)	0.5%	0.7%	0.9%	-0.2	p.p.	-0.4	p.p.

Main Annual Indicators (R$ thousands)	2016	2015	2016/2015
Result from Financial Intermediation 247,020 168,580 46.5%
Income from operations 116,799 94,325 23.8%
Net Income 75,815 83,907 -9.6%
ROAE 10.5% 12.3% -1.8 p.p.
ROAA 1.8% 2.2% -0.4 p.p.
Net Interest Margin(3) 7.2% 7.5% -0.3p.p.
Efficiency(3) 44.9% 44.8% 0.1 p.p.

(1) Cash and cash equivalents + short - term investments + securities - open market funding. | (2) Excludes provisions for NPL .

Operating Highlights | Total Loan Portfolio (R$mn)

The portfolio of credit operations reached a balance of R$2,404.1 at the end of 4Q16, an increase of 13.9% over the previous quarter and 25.3% for the last 12 months.

1,918.1 2,110.8 2,404.1

4Q15 3Q16 4Q16

The Bank continues to focus on the quality of the loan portfolio and attention to risk management, favoring short- term operations and high diversification.

As a result, 95.7% of operations mature in up to one year and the largest debtor accounts for only 1.3% of the total loan portfolio.

R$ millions

Portfolio Breakdown | (R$mn)	4Q16	3Q16	4Q15	4Q16/3Q16	4Q16/4Q15
Overdraft-Secured Account 810.5 705.5 603.9 14.9% 34.2%
Working Capital 1,071.3 994.8 990.2 7.7% 8.2%
Others(1) 522.3 410.5 324.0 27.2% 61.2%
Total 2,404.1 2,110.8 1,918.1 13.9% 25.3%
(1) Includes: discounted bonds, import financing and export advances to depositors, check company, leases, vehicles, payroll loans, CDC, other receivables and exchange.

Collateral Breakdown | (R$ mn)

R$ millions

4Q16	% of Total	3Q16	% of Total
Trade Notes Receivable	1,661.5	69.1%	1,493.0	70.7%
Pledge on Real Estate, Vehicles and Equipments	206.4	8.6%	214.1	10.1%
Rent and Property Receivables	226.7	9.4%	193.7	9.2%
Investments	42.1	1.8%	36.9	1.7%
Warrants and Lien	16.5	0.7%	16.1	0.8%
Post-dated Checks	14.9	0.6%	14.3	0.7%
Joint Obligations from other Financial Institutions	13.5	0.6%	6.8	0.3%
Agreements and Blocked Accounts	2.8	0.1%	3.6	0.2%
Overseas Companies Withdrawals	3.1	0.1%	3.2	0.2%
Others	0.1	0.0%	0.1	0.0%
Subtotal	2,187.6	91.0%	1,981.8	93.9%
Promissory Notes	216.5	9.0%	129.0	6.1%
Total	2,404.1	100.0%	2,110.8	100.0%

Loan Operations | Delinquency and Provisions for Losses

The strong management of assets has resulted in the maintenance of good quality indicators of the loan portfolio and the improvement of these indicators at the end of the fourth quarter compared to previous periods. Accordingly, in relation to the loan portfolio in 4Q16, provisions represented 2.3% (3.3% in 4Q15), provisions for loans classified with D-H rating represented 1.4% (1.8% in 4Q15) and loans overdue over 90 days represented 0.5% (0.9% in 4Q15). There was a high coverage ratio, which was 476.8% in 4Q16 (365.4% in 4Q15).

R$ millions

4Q16			3Q16
Own Portfolio	Provision	% of Total	Own Portfolio	Provision	% of Total
Credits "AA - C"	2,298.1 22.1 39.7%			2,015.4 34.8 46.1%
Credits "D - H"	106.0 33.5 60.3% 95.4 40.7 53.9%
Total	2,404.1 55.6 100.0% 2,110.8 75.5 100.0%
Provision/Credit Portfolio(2)	- 2.3% - 3.6%
Provision D-H/Credit Portfolio(2)	- 1.4% - 1.9%
Overdue More Than 90 Days(1)/Credit Portfolio(2)	- 0.5% - 0.7%

3.3% 3.2%3.6% 3.6%

1.8%1.7% 2.0% 1.9%

2.3%

432.6%

541.4%

476.8%

0.9%

0.8%

1.1%

1.4%

0.7% 0.5%

365.4%

315.8%

2,404.1

1,918.1 1,839.11,865.4

2,110.8

63.9 59.7 67.2 75.555.6

. 0

4Q15 1Q16 2Q16 3Q16 4Q16

PORTFOLIO (R$ MN) OVERDUE CREDITS > 90 DAYS/PORTFOLIO

PROVISION D-H/PORTFOLIO PROVISION/PORTFOLIO

4Q15 1Q16 2Q16 3Q16 4Q16

PROVISION COVERAGE RATIO (PROVISION / OVERDUE CREDITS > 90 D)

Shareholders' Equity

The Bank's Shareholders' Equity stood at R$749.6 mn in 4Q16, as the following table shows:

R$ millions

Position as of 09.30.2016	739.5
MTM Adjustments	1.5
Provisions for Interest on Equity	of	the	Period	(40.6)
Results of the Period	49.2
Position as of 12.31.2016	749.6

Funding

Funding totaled R$3.8 bn in 4Q16, representing the decrease of 3.5% compared to 3Q16 and increase of 19.3% compared to 4Q15.

R$ millions

Funding		4Q16	3Q16	4Q15	4Q16/3Q16	4Q16/4Q15
Demand Deposits	86.3	61.4	95.6	40.6%	-9.7%
Time Deposits + Agribusiness and Real Estate Letters of	Credit	2,410.2	2,238.9	1,568.7	7.7%	53.6%
Up to 1 year	1,486.9	1,418.8	1,024.4	4.8%	45.2%
More than 1 year	923.3	820.1	544.3	12.6%	69.6%
Interbank Deposits	62.9	79.0	106.4	-20.4%	-40.9%
Open Market Funding	242.9	267.7	148.2	-9.3%	63.9%
Foreign Borrowings and Onlending Obligations(1)	235.5	166.2	160.9	41.7%	46.4%
Time Deposit with Special Guarantee ("DPGE")	721.5	1,081.0	1,072.2	-33.3%	-32.7%
Total	3,759.3	3,894.2	3,152.0	-3.5%	19.3%

Ratings

The credit-rating agencies maintained the ratings assigned to Banco Sofisa, reflecting the excellent quality of its assets, the conservative policy adopted by its Management, its vast expertise in the SME segment, as well as its healthy liquidity and capitalization.

Aa3.br/Br-1 (domestic)

A-(bra): Long Term Low Risk: Mid Term - BRMP 2 F2(bra): Short Term Disclosure: Excellent

September 2016 November 2016 January 2017 Relevant Event and Subsequent Event

On 10/25/2016 was held successfully the auction of the Tender Offer, which was proposed by the Controlling Shareholder and resulted in the acquisition of 97.19% of shares in the offer. The process of closing the capital and delisting was finalized on 22/24/2016.

On 01/05/2017 the meeting of the Board of Directors approved a distribution of dividends to shareholders of R$ 30,000 from profit reserves in prior years.