Greater Sacramento Bancorp Reports 2013 Net Income Down 4% from 2012

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Feb 05, 2014, 02:51 ET

SACRAMENTO, Calif., Feb. 5, 2014 /PRNewswire/ -- For the full year 2013 Greater Sacramento Bancorp (GSB) (OTC: GSCB.OB), parent company of Bank of Sacramento (BOS), reported Net Income of $2,936,000 ($1.10 per share diluted) compared to Net Income of $3,051,000 ($1.15 per share diluted) for the full year 2012 representing a slight decrease of $115,000 or 4%.

Net Income for the Fourth Quarter 2013 was $790,000 ($.30 per share diluted) down 26% from Fourth Quarter 2012's figure of $1,072,000. Fourth Quarter 2012's Net Income was enhanced by the reimbursement of approximately $400,000 in expenses associated with the resolution of a problem loan and the recapture of another $400,000 related to the reduction of OREO Valuation expenses.

Fourth Quarter 2013 Net Income was 11% greater than the $710,000 ($.27 per share diluted) reported for Third Quarter 2013.

In comparing twelve months 2012 to the full year of 2013 it is a study of recoveries and extraordinary gains in 2012 versus core earnings in 2013. Net Interest Income in 2013 of $14.6 million was $1.4 million or 11% greater than the $13.2 million reported for 2012. Net Interest Income is the purest form of "core earnings" for a community bank and the year to year increase in Net Income reflects Bank of Sacramento's improved loan growth.

Non-Interest Income in 2013 was $1.3 million or $1.4 million (51%) less than the $2.7 million reported in 2012. The 2012 number reflects a substantial amount of both fee and expense recovery associated with resolved problem loans and gains from security transactions.

The sum of the Net Interest Income plus Non-Interest Income for the two years results in a dead heat as far as Total Revenue for the two years: $15,913,000 in 2013 and $15,871,000 in 2012.

Much of the Non-Interest Income in 2012 was one time in nature; therefore the improved "core earnings" generated in 2013 bodes well for the future.

Non-Interest Expense was slightly reduced in 2013 with a total Non-Interest Expense of $11,472,000 compared to $11,519,000 in 2012. Provision and OREO Valuation Expense in 2013 was up substantially over 2012: $469,000 versus $93,000. This was the result of a loss taken in 2013 on the sale of a residential lot and the reappraisal of another lot.

The result of the above was again a very close call as far as Net Income for each year; $2.936 million in 2013 and $3.051 million in 2012.

Net Interest Margin remains a challenge for GSB as it does for the industry. For 2013 GSB's Net Interest Margin was 3.55% slightly greater than the margin of 3.50% in 2012.

Regarding GSB's performance for 2013, CEO and Chairman William J. Martin commented: "We are most pleased that loan demand is showing life as our local economy slowly improves. During 2013 we increased loans by $12.8 million over 2012 and since the end of 2011 loans have grown by $44.1 million. The result has been a steady improvement in our core earnings. Growth in quality loans remains the key initiative in what remains a less than vibrant local economy."

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

	12/31/13	9/30/13	6/30/13	3/31/13	12/31/12
Net Income	$790,000	$710,000	$886,000	$550,000	$1,072,000

$ Per Share Diluted	$.30	$.27	$.33	$.21	$.40

As of December 31, 2013 the Bank's Tier One Capital stood at $45,960,000 and GSB's Tier One Capital was $45,394,000. The Leverage Capital Ratio for BOS and GSB were 9.78% and 9.88%, respectively. By all regulatory measures the Bank and GSB are considered well capitalized.

Comparing balance sheets for the years ending December 31, 2013 and December 31, 2012, the following highlights are noted:

Total Loans
12/31/13	12/31/12	% Increase
$271,698,000	$258,915,000	5%

Total Deposits
12/31/13	12/31/12	% (Decrease)
$363,037,000	$385,887,000	(6%)

Total Assets
12/31/13	12/31/12	% Increase
$461,082,000	$445,161,000	4%

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
	12/31/2013	12/31/2012	CHANGE	CHANGE
ASSETS
Cash and due from banks	$ 10,007	$ 8,716	$ 1,291	15%
Federal funds sold	-	-	-	-
Securities, available-for-sale and held-to-maturity	157,884	157,631	253	0%
Loans
Construction	5,819	2,584	3,235	125%
Commercial Real Estate	223,361	212,373	10,988	5%
Commercial and Industrial	40,420	41,720	(1,300)	-3%
Consumer	2,098	2,238	(140)	-6%
Total Loans outstanding	271,698	258,915	12,783	5%
Less: Allowance for Loan Losses	3,980	4,142	(162)	-4%
Loans, net	267,718	254,773	12,945	5%

Bank premises and equipment, net	172	277	(105)	-38%
FHLB, FRB and PCBB restricted stock	3,066	2,847	219	8%
Other Real Estate Owned	2,655	3,322	(667)	-20%
Bank Owned Life Insurance	10,889	10,558	331	3%
Accrued interest and other assets	8,691	7,037	1,654	24%
TOTAL ASSETS	$ 461,082	$445,161	$15,921	4%

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits
Noninterest bearing	$ 116,792	$ 112,799	$ 3,993	4%
NOW Accounts	18,651	16,003	2,648	17%
Money Market and Savings	121,766	149,287	(27,521)	-18%
Time Deposits	105,828	107,798	(1,970)	-2%
Total Deposits	363,037	385,887	(22,850)	-6%

FHLB borrowings	50,000	10,000	40,000	400%
Accrued interest and other liabilities	4,485	4,216	269	6%
Junior subordinated debentures	8,248	8,248	-	0%
TOTAL LIABILITIES	425,770	408,351	17,420	4%

SHAREHOLDERS' EQUITY
Preferred convertible stock; Issued and outstanding, none in 2013 and 2012	-	-	-
Common stock; Issued and outstanding, 2,610,687 in 2013 and 2,602,607 in 2012	22,551	22,531	20	0%
Paid in Capital	554	356	198	56%
Retained earnings	15,079	12,143	2,936	24%
Accumulated other comprehensive income (loss), net of tax	(2,872)	1,780	(4,652)	-261%
TOTAL SHAREHOLDERS' EQUITY	35,312	36,810	(1,498)	-4%
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$ 461,082	$ 445,161	$ 15,921	4%

Book Value per common share	$ 13.53	$ 14.14	$ (0.62)	-4%
Tier 1 Leverage ratio	9.88%	9.47%
Allowance for Loan Losses coverage ratio	1.46%	1.60%

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

	Results of Operation			Results of Operation
	Three Months Ending		PERCENT	Year to Date		PERCENT
	12/31/2013	12/31/2012	CHANGE	12/31/2013	12/31/2012	CHANGE
Interest Income
Interest and fees on Loans	$ 3,195	$ 3,299	-3%	$ 12,779	$ 12,049	6%
Interest on Investments	939	810	16%	3,458	3,087	12%
Total Interest Income	4,134	4,109	1%	16,237	15,136	7%

Interest Expense
Interest on Deposits	300	406	-26%	1,313	1,633	-20%
Interest on Borrowed Funds	107	87	23%	320	292	10%
Total Interest Expense	407	493	-17%	1,633	1,925	-15%

Net Interest Income	3,727	3,616	3%	14,604	13,211	11%

Non-interest Income
Service charges and other fees	167	522	-68%	684	1,599	-57%
Gain on the sale of securities	-	124	-100%	625	1,061	-41%
Total Non-interest Income	167	646	-74%	1,309	2,660	-51%

Total Revenue	3,894	4,262	-9%	15,913	15,871	0%

Non-interest Expense
Salaries and employee benefits	1,435	1,990	-28%	6,805	6,873	-1%
Occupancy expense	224	224	0%	888	942	-6%
Furniture and equipment expense	153	155	-1%	592	612	-3%
Other Operating expense	719	794	-9%	3,187	3,092	3%
Total Non-interest Expense	2,531	3,163	-20%	11,472	11,519	0%

Income from Operations	1,363	1,099	24%	4,441	4,352	2%

Provision for possible loan losses	-	-		-	120	-100%
OREO Expense and Valuation Allowance	214	(387)	-155%	469	(27)	-1837%
Total Provision/OREO Expense	214	(387)	-155%	469	93	404%

Income before taxes	1,149	1,486	-23%	3,972	4,259	-7%
Income taxes	359	414	-13%	1,036	1,208	-14%
NET INCOME	$ 790	$ 1,072	-26%	$ 2,936	$ 3,051	-4%

Earnings per share: basic	$ 0.30	$ 0.41		$ 1.13	$ 1.17
Earnings per share: diluted	$ 0.30	$ 0.40		$ 1.10	$ 1.15
Net Interest Margin (tax equivalent)	3.57%	3.60%		3.55%	3.50%
Return on Average Assets	0.67%	0.95%		0.64%	0.72%
Return on Average Equity	8.45%	12.33%		8.01%	9.17%