Greater Sacramento Bancorp Reports 1st Quarter Net Income Up 14% from 2013

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Apr 14, 2014, 08:00 ET

SACRAMENTO, Calif., April 14, 2014 /PRNewswire/ -- For the First Quarter 2014 ended March 31, Greater Sacramento Bancorp (GSB) (OTC: GSCB.OB), parent company of Bank of Sacramento (BOS), reported Net Income of $626,000 ($.23 per share diluted). This represented a 14% increase over the $550,000 ($.21 per share diluted) reported for the First Quarter 2013.

GSB continued to demonstrate improving "core earnings" as Net Interest Income for the First Quarter 2014 of $3,660,000 was 9% greater than the $3,373,000 earned during the First Quarter 2013. Net Interest Income is the purest form of "core earnings" for a community bank. The year to year First Quarter increase in Net Interest Income reflects Bank of Sacramento's continuing loan growth.

First Quarter 2014 Net Income was down 21% from the Fourth Quarter 2013 figure of $790,000. The majority of the $164,000 reduction was caused by the State of California's reversals of certain tax credits previously allowed on the interest earned on loans which the Bank made between 2009 and 2012 to borrowers residing in Enterprise Zones. The reinterpretation of their rules by the State is estimated to result in an approximate reduction of GSB's 2014 Net Income of $300,000. In anticipation of this State action we are accruing $75,000 quarterly which commenced with this first quarter.

Non-Interest Income for First Quarter 2014 was $194,000 down by 69% from the First Quarter 2013 figure of $624,000. The 2013 income was enhanced by $470,000 as a result of a gain on the sale of securities. There were no securities sold in First Quarter 2014.

Non-Interest Expense of $2,922,000 for the First Quarter 2014 represented a 5% decrease from the like period of 2013 ($3,067,000). Provision and OREO expense for First Quarter 2014 was $35,000 down 85% from First Quarter 2013's figure of $229,000 when the Bank experienced an expense of $184,000 associated with the sale of an OREO property.

Net Interest Margin which has been a challenge for GSB and for the entire industry showed a slight improvement in the First Quarter 2014. For the First Quarter 2014 Net Interest Margin was 3.56% compared to 3.46 % in the First Quarter 2013 and 3.55% for the full year 2013.

Regarding GSB's First Quarter 2014 performance CEO and Chairman, William J. Martin, commented, "We are experiencing continued loan growth as a result of slow but steady improvement in the local economy and, more importantly, because of our very active marketing programs. In fact at the end of First Quarter 2014 our Total Loans Outstanding reached an all-time high of $274.6 million. This loan growth has resulted in improved core earnings. As our loans increase we remain vigilant in maintaining very high credit quality in our loan portfolio."

GSB's Net Income over the past five quarters follows:

	3/31/14	12/31/13	9/30/13	6/30/13	3/31/13
Net Income	$626,000	$790,000	$710,000	$886,000	$550,000

$ Per Share Diluted	$.23	$.30	$.27	$.33	$.21

As of March 31, 2014 the Bank's Tier One Capital stood at $45,912,000 and GSB's Tier One Capital was $46,228,000. The Leverage Capital Ratio for BOS and GSB were 9.87% and 9.94%, respectively. By all regulatory measures the Bank and GSB are considered well capitalized.

Comparing balance sheets for the years ending March 31, 2014 and March 31, 2013, the following highlights are noted:

Total Loans
3/31/14	3/31/13	% Increase
$274,567,000	$269,261,000	2%

Total Deposits
3/31/14	3/31/13	% (Decrease)
$365,662,000	$381,874,000	(4%)

Total Assets
3/31/14	3/31/13	% Increase
$468,780,000	$464,268,000	1%

A copy of the company's information and disclosure statement pursuant to Securities and Exchange Commission Rule 15c2-11 can be found on the home page of the company's website at www.bankofsacramento.com under the title Investor Relations.

Contact: William J. Martin, CEO and Chairman, 916-648-2100

This report may contain forward-looking statements that are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, and competition within the business areas in which the Company is conducting its operations, including the real estate market in California and other factors beyond the Company's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

Greater Sacramento Bancorp
Consolidated Statement of Condition
(IN THOUSANDS)
Unaudited

			DOLLAR	PERCENT
	3/31/2014	3/31/2013	CHANGE	CHANGE
ASSETS
Cash and due from banks	$ 8,536	$ 11,362	$ (2,826)	-25%
Federal funds sold	-	-	-	-
Securities, available-for-sale and held-to-maturity	164,222	163,864	358	0%
Loans
Construction	7,627	911	6,716	737%
Commercial Real Estate	220,566	230,198	(9,632)	-4%
Commercial and Industrial	44,259	36,326	7,933	22%
Consumer	2,115	1,826	289	16%
Total Loans outstanding	274,567	269,261	5,306	2%
Less: Allowance for Loan Losses	3,996	4,148	(152)	-4%
Loans, net	270,571	265,113	5,458	2%

Bank premises and equipment, net	151	245	(94)	-38%
FHLB, FRB and PCBB restricted stock	3,377	2,850	527	18%
Other Real Estate Owned	2,622	3,109	(487)	-16%
Bank Owned Life Insurance	10,985	10,640	345	3%
Accrued interest and other assets	8,316	7,085	1,231	17%
TOTAL ASSETS	$ 468,780	$ 464,268	$ 4,512	1%

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits
Noninterest bearing	$ 119,861	$ 109,549	$ 10,312	9%
NOW Accounts	23,572	15,729	7,843	50%
Money Market and Savings	114,147	153,774	(39,627)	-26%
Time Deposits	108,082	102,822	5,260	5%
Total Deposits	365,662	381,874	(16,212)	-4%

FHLB borrowings	54,000	34,000	20,000	59%
Accrued interest and other liabilities	4,451	3,798	653	17%
Junior subordinated debentures	8,248	8,248	-	0%
TOTAL LIABILITIES	432,361	427,920	4,442	1%

SHAREHOLDERS' EQUITY
Preferred convertible stock; Issued and outstanding, none in 2014 and 2013	-	-	-
Common stock; Issued and outstanding, 2,610,687 in 2014 and 2013	22,551	22,551	-	0%
Paid in Capital	602	409	193	47%
Retained earnings	15,705	12,693	3,012	24%
Accumulated other comprehensive income (loss), net of tax	(2,439)	695	(3,134)	N.A.
TOTAL SHAREHOLDERS' EQUITY	36,419	36,348	71	0%
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$ 468,780	$ 464,268	$ 4,512	1%

Book Value per common share	$ 13.95	$ 13.92	$ 0.03	0%
Tier 1 Leverage ratio	9.94%	9.64%
Allowance for Loan Losses coverage ratio	1.46%	1.54%

Greater Sacramento Bancorp
Consolidated Statement of Income
(IN THOUSANDS)
Unaudited

	Results of Operation
	Three Months Ending		PERCENT
	3/31/2014	3/31/2013	CHANGE
Interest Income
Interest and fees on Loans	$ 3,083	$ 3,108	-1%
Interest on Investments	975	692	41%
Total Interest Income	4,058	3,800	7%

Interest Expense
Interest on Deposits	295	365	-19%
Interest on Borrowed Funds	103	62	66%
Total Interest Expense	398	427	-7%

Net Interest Income	3,660	3,373	9%

Non-interest Income
Service charges and other fees	194	154	26%
Gain on the sale of securities	-	470	-100%
Total Non-interest Income	194	624	-69%

Total Revenue	3,854	3,997	-4%

Non-interest Expense
Salaries and employee benefits	1,810	1,879	-4%
Occupancy expense	228	221	3%
Furniture and equipment expense	148	143	3%
Other Operating expense	736	824	-11%
Total Non-interest Expense	2,922	3,067	-5%

Income from Operations	932	930	0%

Provision for possible loan losses	-	-	N/M
OREO Expense and Valuation Allowance	35	229	-85%
Total Provision/OREO Expense	35	229	-85%

Income before taxes	897	701	28%
Income taxes	271	151	79%
NET INCOME	$ 626	$ 550	14%

Earnings per share: basic	$ 0.24	$ 0.21
Earnings per share: diluted	$ 0.23	$ 0.21
Net Interest Margin (tax equivalent)	3.56%	3.46%
Return on Average Assets	0.55%	0.50%
Return on Average Equity	6.58%	6.28%