Greater Sacramento Bancorp Reports First Quarter 2011 Net Income of $433,000

SACRAMENTO, Calif., April 18, 2011 /PRNewswire/ -- GREATER SACRAMENTO BANCORP (OTC: GSCB) - For the First Quarter ended March 31, 2011 Greater Sacramento Bancorp (GSB), parent company of Bank of Sacramento, reported Net Income of $433,000 ($.17 per share diluted) compared to a Net Loss of $1,129,000 (-$.43 per share diluted) in the First Quarter of 2010, representing an improvement of $1,562,000. The First Quarter 2010 was negatively impacted by the addition to the Provision for Possible Loan Losses of $3,905,000; for the First Quarter 2011 the Provision was reduced to $165,000.

On a consecutive quarter basis, First Quarter 2011 Net Income was down 29% ($179,000) from the Fourth Quarter 2010 Net Income figure of $612,000. The primary reasons for this reduction were: 1) Non-Interest Income fell $212,000 from $541,000 in the Fourth Quarter 2010 to $329,000 in the First Quarter 2011. This was the result of securities trades in the Fourth Quarter 2010 that resulted in net gains of $379,000 compared to only $70,000 net gains in the First Quarter 2011; and 2) Salary expenses, quarter-to-quarter, increased $171,000 as a result of annual raises and higher payroll taxes.

After a blip in the Fourth Quarter 2010 when a $1.5 million loan was placed on non-accrual, the First Quarter 2011 key asset quality indicators for Bank of Sacramento returned to the improving trend that has been demonstrated over the past twelve months.

• Ratio of Non-Performing Loans plus OREO to Total Assets:

• Ratio of Non-Performing Assets to Equity Capital plus Loan Loss Reserve ("Texas Ratio"):

• OREO Balance ('000s omitted):

• Allowance for Loan Loss to Total Loans:

Regarding our Allowance for Loan Losses it is important to note that as of March 31, 2011 the Allowance is equal to 145.9% of Non-Current Loans (Loans past due 90 days or more plus non-accrual loans). This compares extremely favorably to the Fourth Quarter 2010 national average of 60% for our peer banks and demonstrates substantial coverage for any future loan losses.

The positive impact that improved loan quality has had on quarterly Net Income over the past five quarters is evidenced in the reduction of the quarterly Provision for Possible Loan Losses plus the OREO Expense and Valuation Allowance:

Regarding the First Quarter's performance, CEO and Chairman William J. Martin, commented: "Again asset quality improvement has been the main contributor to our fourth consecutive quarter of positive earnings. While improved loan quality is critical for Bank of Sacramento's long term success it is also becoming extremely important to focus on rebuilding our earning asset base. A vastly reduced quarterly loan provision and OREO expense will allow us to more quickly grow earnings as the local economy improves."

As of March 31, 2011 the Bank's Tier One Capital stood at $35,881,000 and GSB's Tier One Capital was $37,037,000. The Leverage Capital Ratio for the Bank and GSB were 9.47% and 9.74%, respectively. By all regulatory measures the Bank and GSB are considered well capitalized.

Comparing the income statements and balance sheets for March 31, 2011 and March 31, 2010, the following highlights are noted:

• Net Interest Income for the First Quarter 2011 at $3,635,000 was 8% less than the $3,949,000 recorded in the First Quarter 2010. The primary cause for this was a 5% reduction in total loans outstanding between the quarters.
• Non-Interest Income during March 31, 2011 at $329,000 was 21% less than the $419,000 reported at March 31, 2010. This was a result of a reduction of the volume of security transactions and the associated gains.
• In the First Quarter 2011 the Provision for Possible Loan Losses was $165,000 compared to $3,905,000 for the First Quarter 2010.
• Total Deposits at March 31, 2011 stood at $324,723,000, up 7% from the $304,289,000 March 31, 2010 figure.
• Total Loans Outstanding at March 31, 2011 stood at $237,552,000, a 5% ($12,169,000) reduction from the March 2010 figure of $249,721,000. Much of this reduction was the result of culling out problem loans as well as a general low loan demand caused by the slack economy.

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.

SOURCE Greater Sacramento Bancorp