Greater Sacramento Bancorp Reports 2nd Quarter Earnings Up 31% from 2nd Quarter 2012

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Jul 15, 2013, 07:09 ET

SACRAMENTO, Calif., July 15, 2013 /PRNewswire/ -- GREATER SACRAMENTO BANCORP (OTC: GSCB.OB) -- For the Second Quarter 2013, ended 6/30/13, Greater Sacramento Bancorp (GSB), parent company of Bank of Sacramento (BOS) reported Net Income of $886,000 ($.33 per share diluted) representing a 31% increase over the $675,000 ($.25 per share diluted) reported in the Second Quarter 2012; it also represented a 61% increase over the $550,000 ($.21 per share diluted) reported for the First Quarter 2013.

For the first six months of 2013, GSB reported Net Income of $1,436,000 ($.54 per share diluted) up 2% from the $1,403,000 ($.53 per share diluted) reported for the first six months of 2012.

The improved Net Income for both the quarter and the six months was driven by our significant improvement in Net Interest Income, the core revenue generator for GSB. Net Interest Income for the Second Quarter 2013 was $3,730,000 up 16% from the Second Quarter 2012 figure of $3,204,000. For the six months the 2013 Net Interest Income amounted to $7,103,000 up 11% over the six month 2012 figure of $6,424,000. This improvement is the result of strong loan volume growth and improved yields in our securities portfolio.

Non-Interest Income for the 2013 Second Quarter at $322,000 was down 32% from the $472,000 reported for Second Quarter 2012. Likewise, the six month's year to year comparison was also down 32% from $1,396,000 at 6/30/12 to $946,000 for the six months ending 6/30/13. The 2012 number benefited from one-time gains resulting from the recovery of prior problem loan related expenses.

Non-Interest Expense for both the comparative quarters and the comparative six month periods is up 7% from 2012 to 2013. While all other categories are flat or down, Salaries and Employee Benefits are up 14% as a result of an Executive Retirement Plan that was instituted in July 2012. For the first six months of 2013 Salary/Benefits were $3,622,000 compared to $3,188,000 during six months of 2012. For the second half of this year Salary/Benefit Expense should be in line with 2012's second half.

Net Interest Margin which has been under downward pressure because of the protracted period of low interest rates showed improvement in Second Quarter 2013. Net Interest Margin for the Second Quarter 2013 was 3.59% compared to 3.50% for Second Quarter 2012 and 3.46% for First Quarter 2013. This improvement was the result of our ability to employ our funds in higher yielding loans rather than securities as well as some improvement in the yield of our securities portfolio.

Regarding GSB's performance for Second Quarter 2013, CEO and Chairman, William J. Martin commented: "Management and the Board are most pleased with the income performance, the loan growth, and the loan quality of Bank of Sacramento. While our income performance in 2012 was primarily driven by improved loan quality, 2013 income has originated more from our traditional loan and deposit growth. Loans and deposits form the core of our revenues and improvement in that area is critical to our long term positive performance."

In looking at asset quality, two key indicators for Bank of Sacramento over the past five quarters witness the stability of our asset quality:

Ratio of Non-Performing Loans plus Trouble Debt Restructures plus OREO to Total Assets:

6-30-13	3/31/13	12-31-12	9-30-12	6-30-12
.66%	.67%	.90%	1.14%	1.24%

Ratio of Non-Performing Assets plus Trouble Debt Restructures to Equity plus Loan Loss Reserve ("Texas Ratio"):

6-30-13	3/31/13	12-31-12	9-30-12	6-30-12
6.79%	6.52%	8.34%	10.58%	11.21%

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

Net Income and Dollar Per Share Diluted:

6-30-13

3/31/13

12-31-12

9-30-12

6-30-12

Net Income

$886,000

$550,000

$1,072,000

$576,000

$675,000

$ Per Share Diluted

$.33

$.21

$.40

$.22

$.25

As of June 30, 2013 the Bank's Tier One Capital stood at $43,441,000 and GSB's Tier One Capital was $44,118,000. The Leverage Capital Ratio for BOS and GSB were 9.30% and 9.45%, respectively. By all regulatory measures the Bank and GSB are considered well capitalized.

Comparing balance sheets for the quarters ending June 30, 2013 and June 30, 2012, the following highlights are noted:

Total Loans
6/30/13	6/30/12	% Increase
$267,627,000	$220,768,000	21%

Total Deposits
6/30/13	6/30/12	% Increase
$370,740,000	$360,275,000	3%

Total Assets
6/30/13	6/30/12	% Increase
$466,839,000	$411,117,000	14%

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
	6/30/2013	6/30/2012	CHANGE	CHANGE
ASSETS
Cash and due from banks	$ 9,633	$ 16,353	$ (6,720)	-41%
Federal funds sold	-	-	-	-
Securities, available-for-sale and held-to-maturity	167,910	154,224	13,686	9%
Loans
Construction	1,484	4,614	(3,130)	-68%
Commercial Real Estate	227,958	178,540	49,418	28%
Commercial and Industrial	35,674	35,638	36	0%
Consumer	2,511	1,976	535	27%
Total Loans outstanding	267,627	220,768	46,859	21%
Less: Allowance for Loan Losses	4,108	3,953	155	4%
Loans, net	263,519	216,815	46,704	22%

Bank premises and equipment, net	215	509	(294)	-58%
FHLB, FRB and PCBB restricted stock	3,136	2,847	289	10%
Other Real Estate Owned	3,094	3,032	62	2%
Bank Owned Life Insurance	10,730	10,372	358	3%
Accrued interest and other assets	8,602	6,965	1,637	24%
TOTAL ASSETS	$ 466,839	$ 411,117	$ 55,722	14%

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits
Noninterest bearing	$ 108,100	$ 97,035	$ 11,065	11%
NOW Accounts	16,963	18,889	(1,926)	-10%
Money Market and Savings	138,693	128,802	9,891	8%
Time Deposits	106,984	115,549	(8,565)	-7%
Total Deposits	370,740	360,275	10,465	3%

FHLB borrowings	49,000	5,000	44,000	880%
Accrued interest and other liabilities	4,617	3,169	1,448	46%
Junior subordinated debentures	8,248	8,248	-	0%
TOTAL LIABILITIES	432,605	376,692	55,914	15%

SHAREHOLDERS' EQUITY
Preferred convertible stock; Issued and outstanding,
none in 2013 and 2012	-	-	-
Common stock; Issued and outstanding,
2,610,687 in 2013 and 2,600,645 in 2012	22,551	22,514	37	0%
Paid in Capital	459	296	163	55%
Retained earnings	13,579	10,495	3,084	29%
Accumulated other comprehensive income (loss), net of tax	(2,355)	1,120	(3,475)	N.A.
TOTAL SHAREHOLDERS' EQUITY	34,234	34,425	(191)	-1%
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$ 466,839	$ 411,117	$ 55,722	14%

Book Value per common share	$ 13.11	$ 13.24	$ -0.12	-1%
Tier 1 Leverage ratio	9.45%	9.91%
Allowance for Loan Losses coverage ratio	1.53%	1.79%

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

	Results of Operation			Results of Operation
	Three Months Ending		PERCENT	Year to Date		PERCENT
	6/30/2013	6/30/2012	CHANGE	6/30/2013	6/30/2012	CHANGE
Interest Income
Interest and fees on Loans	$ 3,221	$ 2,903	11%	$ 6,329	$ 5,824	9%
Interest on Investments	918	765	20%	1,610	1,535	5%
Total Interest Income	4,139	3,668	13%	7,939	7,359	8%

Interest Expense
Interest on Deposits	332	390	-15%	697	792	-12%
Interest on Borrowed Funds	77	74	4%	139	143	-3%
Total Interest Expense	409	464	-12%	836	935	-11%

Net Interest Income	3,730	3,204	16%	7,103	6,424	11%

Non-interest Income
Service charges and other fees	173	217	-20%	327	787	-58%
Gain on the sale of securities	149	255	-42%	619	609	2%
Total Non-interest Income	322	472	-32%	946	1,396	-32%

Total Revenue	4,052	3,676	10%	8,049	7,820	3%

Non-interest Expense
Salaries and employee benefits	1,743	1,533	14%	3,622	3,188	14%
Occupancy expense	238	235	1%	459	493	-7%
Furniture and equipment expense	145	161	-10%	288	316	-9%
Other Operating expense	723	730	-1%	1,547	1,545	0%
Total Non-interest Expense	2,849	2,659	7%	5,916	5,542	7%

Income from Operations	1,203	1,017	18%	2,133	2,278	-6%

Provision for possible loan losses	-	-	N.A.	-	120	-100%
OREO Expense and Valuation Allowance	19	96	-80%	248	233	6%
Total Provision/OREO Expense	19	96	-80%	248	353	-30%

Income before taxes	1,184	921	29%	1,885	1,925	-2%
Income taxes	298	246	21%	449	522	-14%
NET INCOME	$ 886	$ 675	31%	$ 1,436	$ 1,403	2%

Earnings per share: basic	$ 0.34	$ 0.26		$ 0.55	$ 0.54
Earnings per share: diluted	$ 0.33	$ 0.25		$ 0.54	$ 0.53
Net Interest Margin (tax equivalent)	3.59%	3.50%		3.52%	3.52%
Return on Average Assets	0.76%	0.66%		0.63%	0.69%
Return on Average Equity	9.83%	8.25%		8.08%	8.68%