Greater Sacramento Bancorp Reports Third Quarter 2010 Net Income of $657,000

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Oct 25, 2010, 01:29 ET

SACRAMENTO, Calif., Oct. 25 /PRNewswire-FirstCall/ -- For the Third Quarter ended September 30, 2010 Greater Sacramento Bancorp (GSB) (OTC Bulletin Board: GSCB), parent company of Bank of Sacramento reported Net Income of $657,000 ($.25 per share diluted) compared to a loss in the Third Quarter 2009 of $124,000. Third Quarter 2010 Net Income was also 15% greater than the Second Quarter 2010 Net Income figure of $573,000.

The two consecutive quarters of positive earnings brought GSB's 2010 year-to-date Net Income through September 30, 2010 to $101,000 ($.04 per share diluted). This represents a significant turnaround following the First Quarter's loss of $1,129,000.

Although the profit performance in the Second and Third Quarters put GSB in the black for 2010, the nine months Net Income of $101,000 was 80% less than the $509,000 reported for the nine months of 2009.

Key asset quality indicators for Bank of Sacramento over the past five quarters reflect a positive and improving trend.

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

9-30-10	6-30-10	3-31-10	12-31-09	9-30-09
1.88%	2.57%	3.49%	3.30%	3.54%

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

9-30-10	6-30-10	3-31-10	12-31-09	9-30-09
17.41%	23.25%	32.26%	29.63%	32.42%

- OREO Balance ('000s omitted):

9-30-10	6-30-10	3-31-10	12-31-09	9-30-09
$5,002	$5,706	$7,389	$5,316	$5,837

- Allowance for Loan Loss to Total Loans:

9-30-10	6-30-10	3-31-10	12-31-09	9-30-09
1.90%	1.94%	1.90%	1.82%	1.53%

Regarding the return to profit in the Second and Third Quarters and year-to-date 2010, CEO and Chairman, William J. Martin commented: "Our improving profitability is directly correlated to our improving asset quality. In the First Quarter 2010 our Loan Loss Provision plus OREO expenses and valuation allowance totaled $3,999,000. In the Second Quarter this was reduced to $1,031,000 and in the current quarter this was reduced further to $793,000. This is indicative of the fact that our efforts to address problem loans are showing positive results."

In conclusion Martin added: "While the quality of our loan portfolio is improving and the incident of new troubled assets appears to be on the decline, the health and vibrancy of the Sacramento market remains weak. This necessitates continued vigilance in order to quickly identify and address problem assets. Going forward, however, the Bank continues to demonstrate two key positive strengths (1) Our core earnings remain very sound and are improving. Our "Income from Operations": (Earnings before Provision and OREO Expenses) for the nine months ending September 30, 2010 was $5,364,000 an 11% increase over Income from Operations for the nine months ending September 30, 2009 of $4,833,000; (2) Likewise our Capital position and Loan Loss Reserve insure that we will successfully manage through this challenging market."

As of September 30, 2010 the Bank's Tier One Capital stood at $34,891,000 and GSB's Tier One Capital was $36,094,000. The Leverage Capital Ratios for the Bank and GSB were 9.37% and 9.67%, respectively. By all regulatory measures the Bank and GSB are considered well capitalized.

In reviewing the Third Quarter income statement and balance sheet performance the following highlights are noted:

Net Interest Income for the Third Quarter 2010 at $3,970,000 was 4% greater than the Third Quarter 2009 figure of $3,808,000. For the nine months of 2010 Net Interest Income is up 3% from 2009; $11,810,000 compared to $11,415,000.
Non-Interest Income in the Third Quarter 2010 at $670,000 was 75% greater than the Third Quarter 2009 figure of $382,000. For the nine months of 2010 Non-Interest Income of $1,838,000 is 30% greater than the $1,416,000 posted for the nine months of 2009. This increase is the result of profits earned from securities transactions.
Net Interest Margin for the nine months of 2010 was 4.64%, down slightly from 4.75% for the nine months of 2009.
For the nine months of 2010 $4,030,000 was added to the loan loss reserve compared to $3,300,000 for the nine months of 2009.
Total Deposits at September 30, 2010 were $307,418,000, down 3% from the September 30, 2009 figure of $317,429,000. This is indicative of a reduced level of revenue activity for many of our predominantly business customers.
Total Net Loans at September 30, 2010 stood at $242,073,000, down 8% from the September 30, 2009 figure of $263,301,000. This reduction is reflective of the culling of problem loans and the increase of the loan loss reserve.

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 Financial Highlights
(IN THOUSANDS)
Unaudited

CONDENSED STATEMENT OF CONDITION			DOLLAR	PERCENT
	9/30/2010	9/30/2009	CHANGE	CHANGE
ASSETS
Cash and due from banks	$ 6,956	$ 12,308	$ (5,352)	-43%
Federal funds sold	-	-	-	N.A.
Securities, available-for sale and held-to-maturity	100,279	61,845	38,434	62%
Total Loans outstanding	246,751	267,379	(20,628)	-8%
Less: Allowance for Loan Losses	4,678	4,078	600	15%
Loans, net	242,073	263,301	(21,228)	-8%

Bank premises and equipment, net	781	999	(218)	-22%
FHLB and FRB restricted stock	2,306	2,142	164	8%
Other Real Estate Owned	5,002	5,837	(835)	-14%
Accrued interest and other assets	16,802	12,372	4,430	36%
TOTAL ASSETS	$ 374,200	$ 358,804	$ 15,396	4%

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits
Noninterest bearing	$ 88,425	$ 91,008	$ (2,583)	-3%
Interest bearing	218,992	226,421	(7,429)	-3%
Total Deposits	307,418	317,429	(10,011)	-3%

FHLB borrowings	27,000	2,094	24,906	1189%
Accrued interest and other liabilities	2,586	1,971	615	31%
Junior subordinated debentures	8,248	8,248	-	0%
TOTAL LIABILITIES	345,251	329,742	15,510	5%

SHAREHOLDERS' EQUITY
Preferred convertible stock; Issued and outstanding,
23,175 in 2010 and 23,175 in 2009	515	515	-	0%
Common stock; Issued and outstanding,
2,567,893 in 2010 and 2,565,893 in 2009	21,983	21,950	33	0%
Paid in Capital	110	87	23	26%
Retained earnings	6,142	5,911	231	4%
Accumulated other comprehensive income (loss), net of tax	198	599	(401)	-67%
TOTAL SHAREHOLDERS' EQUITY	28,948	29,062	(114)	0%
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$ 374,200	$ 358,804	$ 15,396	4%
Allowance for Loan Losses Coverage ratio	1.90%	1.53%
Tier 1 Leverage ratio	9.67%	10.12%

CONDENSED STATEMENT OF INCOME
	Results of Operation			Results of Operation
	Three Months Ending		PERCENT	Year to Date		PERCENT
	9/30/2010	9/30/2009	CHANGE	9/30/2010	9/30/2009	CHANGE
Interest Income	$ 4,535	$ 4,555	0%	$ 13,502	$ 13,923	-3%
Interest Expense	565	747	-24%	1,692	2,508	-33%
Net Interest Income	3,970	3,808	4%	11,810	11,415	3%

Noninterest Income	670	382	75%	1,838	1,416	30%
Total Revenue	4,640	4,190	11%	13,648	12,831	6%

Noninterest Expense	2,833	2,541	11%	8,283	7,998	4%
Income from Operations	1,806	1,649	10%	5,364	4,833	11%

Provision for possible loan losses	25	1,100	-98%	4,030	3,300	22%
OREO Expense and Valuation Allowance	768	958	-20%	1,793	1,144	57%
Total Provision/OREO Expense	793	2,058	-61%	5,823	4,444	31%

Income before taxes	1,014	(409)	NM	(458)	389	NM

Income taxes	357	(285)	NM	(559)	(120)	366%
NET INCOME	$ 657	$ (124)	NM	$ 101	$ 509	-80%

Earnings per share: basic	$0.26	-$0.05	NM	$0.04	$0.20	NM
Earnings per share: diluted	$0.25	-$0.05	NM	$0.04	$0.20	NM
Book Value per common share	$11.07	$11.13	0%	$11.07	$11.13	-1%
Net Interest Margin (tax equivalent)	4.54%	4.68%		4.64%	4.75%
Return on Average Assets	0.70%	-0.14%		0.04%	0.19%
Return on Average Equity	9.20%	-1.72%		0.48%	2.38%