Greater Sacramento Bancorp Reports 2012 Net Up 30% from 2011

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Feb 04, 2013, 03:23 ET

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:

12-31-12	9-30-12	6-30-12	3-31-12	12-31-11
.82%	1.06%	1.15%	.89%	.93%

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

12-31-12	9-30-12	6-30-12	3-31-12	12-31-11
8.34%	10.58%	11.21%	8.26%	8.62%

GSB's profit over the past five quarters follows:

Net Income and Dollar Per Share Diluted:

	12-31-12	9-30-12	6-30-12	3-31-12	12-31-11
Net Income	$1,072,000	$576,000	$675,000	$728,000	$601,000

$ Per Share Diluted	$.40	$.22	$.25	$.28	$.23

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:

Total Deposits
12-31-12	12-31-11	% Increase
$385,887,000	$343,062,000	12%

Total Loans
12-31-12	12-31-11	% Increase
$258,915,000	$227,667,000	14%

Total Assets
12-31-12	12-31-11	% Increase
$445,161,000	$407,621,000	9%

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
	12/31/2012	12/31/2011	CHANGE	CHANGE
ASSETS
Cash and due from banks	$ 8,716	$ 10,530	$ (1,814)	-17%
Federal funds sold	-	-	-	-
Securities, available-for-sale and held-to-maturity	157,731	148,591	9,140	6%
Loans
Construction	2,584	4,638	(2,054)	-44%
Commercial Real Estate	212,373	185,323	27,050	15%
Commercial and Industrial	41,720	35,427	6,293	18%
Consumer	2,238	2,279	(41)	-2%
Total Loans outstanding	258,915	227,667	31,248	14%
Less: Allowance for Loan Losses	4,142	4,331	(189)	-4%
Loans, net	254,773	223,336	31,437	14%

Bank premises and equipment, net	277	444	(167)	-38%
FHLB and FRB restricted stock	2,747	2,505	242	10%
Other Real Estate Owned	3,322	3,260	62	2%
Bank Owned Life Insurance	10,558	10,183	375	4%
Accrued interest and other assets	7,037	8,772	(1,735)	-20%
TOTAL ASSETS	$445,161	$407,621	$37,540	9%

LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits
Noninterest bearing	$ 112,799	$ 86,712	$ 26,087	30%
NOW Accounts	16,003	27,190	(11,187)	-41%
Money Market and Savings	149,287	98,346	50,941	52%
Time Deposits	107,798	130,814	(23,016)	-18%
Total Deposits	385,887	343,062	42,825	12%

FHLB borrowings	10,000	20,000	(10,000)	-50%
Accrued interest and other liabilities	4,216	3,883	333	9%
Junior subordinated debentures	8,248	8,248	-	0%
TOTAL LIABILITIES	408,351	375,193	33,159	9%

SHAREHOLDERS' EQUITY
Preferred convertible stock; Issued and outstanding, none in 2012 and 2011	-	-	-
Common stock; Issued and outstanding, 2,602,607 in 2012 and 2,596,056 in 2011	22,531	22,507	24	0%
Paid in Capital	356	237	119	50%
Retained earnings	12,143	9,092	3,051	34%
Accumulated other comprehensive income (loss), net of tax	1,780	592	1,188	201%
TOTAL SHAREHOLDERS' EQUITY	36,810	32,428	4,382	14%
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY	$445,161	$407,621	$37,540	9%

Book Value per common share	$ 14.14	$ 12.49	$1.65	13%
Tier 1 Capital Leverage ratio	9.47%	9.58%
Allowance for Loan Losses coverage ratio	1.60%	1.90%

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

	Results of Operation			Results of Operation
	Three Months Ending		PERCENT	Year to Date		PERCENT
	12/31/2012	12/31/2011	CHANGE	12/31/2012	12/31/2011	CHANGE
Interest Income
Interest and fees on Loans	$ 3,299	$ 3,133	5%	$ 12,049	$ 13,179	-9%
Interest on Investments	810	770	5%	3,087	3,137	-2%
Total Interest Income	4,109	3,903	5%	15,136	16,316	-7%

Interest Expense
Interest on Deposits	406	429	-5%	1,633	1,786	-9%
Interest on Borrowed Funds	87	61	43%	292	247	18%
Total Interest Expense	493	490	1%	1,925	2,033	-5%

Net Interest Income	3,616	3,413	6%	13,211	14,283	-8%

Non-interest Income
Service charges and other fees	522	177	195%	1,599	1,090	47%
Gain on the sale of securities	124	71	75%	1,061	1,124	-6%
Total Non-interest Income	646	248	160%	2,660	2,214	20%

Total Revenue	4,262	3,661	16%	15,871	16,497	-4%

Non-interest Expense
Salaries and employee benefits	1,990	1,630	22%	6,873	6,403	7%
Occupancy expense	224	279	-20%	942	1,111	-15%
Furniture and equipment expense	155	147	5%	612	570	7%
Other Operating expense	794	727	9%	3,092	3,076	1%
Total Non-interest Expense	3,163	2,783	14%	11,519	11,160	3%

Income from Operations	1,099	878	25%	4,352	5,337	-18%

Provision for possible loan losses	-	-	N/M	120	1,095	-89%
OREO Expense and Valuation Allowance	(387)	58	-767%	(27)	800	-103%
Total Provision/OREO Expense	(387)	58	-767%	93	1,895	-95%

Income before taxes	1,486	820	81%	4,259	3,442	24%
Income taxes	414	219	89%	1,208	1,104	9%
NET INCOME	$ 1,072	$ 601	78%	$ 3,051	$ 2,338	30%

Earnings per share: basic	$ 0.41	$ 0.23		$ 1.17	$ 0.90
Earnings per share: diluted	$ 0.40	$ 0.23		$ 1.15	$ 0.89
Net Interest Margin (tax equivalent)	3.60%	3.75%		3.50%	4.06%
Return on Average Assets	0.95%	0.58%		0.72%	0.60%
Return on Average Equity	12.33%	7.57%		9.17%	7.64%