Greater Sacramento Bancorp Reports 2012 Net Up 30% from 2011

SACRAMENTO, Calif., Feb. 4, 2013 /PRNewswire/ -- For the full year of 2012 Greater Sacramento Bancorp (GSB) (OTC: GSCB.OB), parent company of Bank of Sacramento (BOS), reported Net Income of $3,051,000 ($1.15 per share diluted) compared to Net Income of $2,338,000 ($.89 per share diluted) for the full year of 2011 representing a 30% increase.

Net Income for the Fourth Quarter of 2012 of $1,072,000 ($.40 per share diluted) was up 78% from Fourth Quarter 2011's figure of $601,000 ($.23 per share diluted).  Net Income for the Fourth Quarter of 2012 was benefited by two events: 1) The reimbursement of approximately $400,000 in expenses previously incurred during the resolution of a prior year's problem loan; and 2) During the first nine months of 2012 BOS had been writing down our OREO in anticipation of year end appraisals showing diminished values which would require a write down.  In actuality the appraisals showed that OREO values remained equal to 2011 values; therefore, BOS was able to reverse about $400,000 of OREO Valuation expenses.

The improvement in Net Income for the full twelve months was the result of a combination of improved loan quality and an increase in loan volume. Total expenses related to additions to the loan loss reserve and OREO expense and valuation allowance was $93,000 for 2012 compared to $1,895,000 for 2011.  Also of critical importance was a 14% increase in loan volume as total loans outstanding at December 31, 2012 stood at $258,915,000 compared to $227,667,000 at December 31, 2011.

Non-Interest Income for 2012 at $2,660,000 was 20% greater than the $2,214,000 recorded in 2011 principally due to the aforementioned problem loan expenses that were recovered. Non-Interest expense for 2012 was up slightly (3%) from 2011;  $11,519,000 in 2012 compared to $11,160,000 in 2011.

Net Interest Income for 2012 was $13,211,000 which was a decrease of 8% from the 2011 figure of $14,283,000. Reduced loan volumes in the first half of 2012 along with low interest rates were the cause of this decrease.  However, for the Fourth Quarter 2012 Net Interest Income of $3,616,000 represented a 6% increase over the Fourth Quarter 2011 figure of $3,413,000. This improvement was the result of the increased loan volume in both the Third and Fourth Quarter of 2012 and is a harbinger of improved core earnings going forward.

Because of extremely low interest rates Net Interest Margin (NIM) remains a challenge for the entire banking industry. For 2012 BOS's NIM was 3.50% compared to 4.06% for 2011.  Improvement, however, was evidenced in the Fourth Quarter 2012 which showed a NIM of 3.60% compared to 3.37% for the Third Quarter 2012.

Regarding GSB's performance for 2012, CEO and Chairman William J. Martin commented:  "Management and the Board are extremely pleased with the success we have had in resolving problem loans and improving overall asset quality which has obviously greatly contributed to an improved bottom line. We also find most encouraging that loan demand is showing life as our local economy slowly improves. During the Third Quarter 2012 we added $13,445,000 to our loan outstandings and in the Fourth Quarter loan outstandings grew by $24,702,000.  By continuing an intense marketing campaign we are optimistic that loan growth will continue into 2013."

Regarding asset quality, two key indicators for BOS over the past five quarters witness the continuation of improving asset quality:

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

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

GSB's profit over the past five quarters follows:

• Net Income and Dollar Per Share Diluted:

As of December 31, 2012 the Bank's Tier One Capital stood at $41,908,000 and GSB's Tier One Capital was $42,673,000.  The Leverage Capital Ratio for BOS and GSB were 9.30% and 9.47%, respectively.  By all regulatory measures the Bank and GSB are considered well capitalized.

Comparing balance sheets for the years ending December 31, 2012 and December 31, 2011, the following highlights are noted:

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