Greater Sacramento Bancorp Reports 2nd Quarter Net Income of $625,000

SACRAMENTO, Calif., July 16, 2014 /PRNewswire/ -- GREATER SACRAMENTO BANCORP (OTC: GSCB.OB) – For the Second Quarter 2014 ended June 30, 2014, Greater Sacramento Bancorp (GSB), parent company of Bank of Sacramento (BOS), reported Net Income of $625,000 ($.23 per share diluted) which represented a 29% decrease from the $886,000 ($.33 per share diluted) reported for the Second Quarter 2013.  Second Quarter 2014 Net Income was virtually flat compared to the $626,000 reported for the First Quarter 2014.

The decrease in Net Income compared to Second Quarter 2013 was attributable to three factors:

1. As stated in our First Quarter 2014 earnings release, during 2014 GSB is taking a quarterly $45,000 after tax charge to Net Income to amortize the State of California's reversals of certain tax credits previously allowed on the interest earned on loans which BOS made between 2009 and 2012 to borrowers residing in Enterprise Zones. This reversal of the tax credit does not represent any type of penalty, but stems from the State's reinterpretation of their own tax credit rules.
2. During the Second Quarter 2014, BOS effected a minimum reduction in force including one senior officer resulting in one-time separation payments that reduced Net Income by $84,000. This was a one-time expense.
3. During the Second Quarter 2013 we experienced gains on the sale of securities of $149,000; we sold no securities for gains or losses in the Second Quarter 2014.

On the positive side Net Interest Income, which represents the "core earnings" for a community bank, continued to improve. Net Interest Income for Second Quarter 2014 at $3,772,000 was up slightly from the Second Quarter 2013 figure of $3,730,000. For the full six months of 2014 Net Interest Income was $7,432,000 or 5% greater than the $7,103,000 earned during the first half of 2013.

Non-Interest Income (NII) for both Second Quarter 2014 and six months 2014 was down from 2013 due to the lack of securities gains.  Second Quarter 2014 NII was $175,000 versus $322,000 for Second Quarter 2013 which enjoyed $149,000 in security sale gains. For the first six months of 2014 NII was $369,000 compared to the 2013 figure of $946,000 which contained $619,000 of gains from security sales.

Non-Interest Expense (NIE) in Second Quarter 2014 was up 4% over Second Quarter 2013; $2,957,000 in 2014 compared to $2,849,000 in 2013. The increase was virtually totally the result of the one-time separation expenses described above. For the six months ended June 30, 2014 NIE was $5,879,000 representing 1% less than the June 30, 2013 figure of $5,916,000.

Regarding GSB's Second Quarter and First Half of 2014 performance CEO and Chairman, William J. Martin, commented:  "While extraordinary expenses somewhat dampened Second Quarter earnings performance, Net Interest Income for the six months grew 5% over the same period of 2013. This growth in our core earnings evidenced both a modest but steady growth in our loans and good control of our core non-interest expenses. Loan quality remains extremely strong with our Texas Ratio (including Trouble Debt Restructured) under 10.00% at 9.69%.  With certain one-time expenses behind us we look forward to improving earnings during the second half of 2014."

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

As of June 30, 2014 BOS's Tier One Capital stood at $46,757,000 and GSB's Tier One Capital was $47,133,000.  The Leverage Capital Ratio for BOS and GSB were 9.94% and 10.02%, respectively.  By all regulatory measures the Bank and GSB are considered well capitalized.

Comparing balance sheets for the period ending June 30, 2014 and June 30, 2013, 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