Greater Sacramento Bancorp Reports Increased Net Income for Third Quarter and YTD; Passes $400 Million Total Assets Mark

SACRAMENTO, Calif., Oct. 17, 2011 /PRNewswire/ -- GREATER SACRAMENTO BANCORP (OTC: GSCB.OB) -- For the Third Quarter ended September 30, 2011 Greater Sacramento Bancorp (GSB), parent company of Bank of Sacramento (BOS) reported Net Income of $680,000 ($.26 per share diluted).  This represents a 4% increase over the $657,000 ($.25 per share diluted) reported for the Third Quarter 2010 and a 9% increase over the Second Quarter 2011 Net Income figure of $624,000.

For the nine months of 2011 Net Income was $1,737,000, which represented a substantial increase over the $101,000 reported for the nine months of 2010.

The improved performance in the Third Quarter was achieved despite net loan charge offs of $651,000 which required the addition of $357,000 to the loan loss reserve.  For the nine months, however, improved loan quality was markedly evidenced by the reduction of expenses for the Provision for Possible Loan Losses from $4,030,000 for the nine months of 2010 to $1,095,000 for the nine months of 2011. This loan quality improvement, along with enhanced non-interest income and virtual flat non-interest expense, resulted in the much improved nine month earnings.

Key quality indicators for BOS over the past five quarters show a positive trend as our problem assets continue to be resolved:

• 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, as of September 30, 2011 it represents 884% of loans past due 90 days or more plus non-accrual loans.  This far exceeds the Second Quarter 2011 national average of 62.1% for our peer banks and demonstrates our substantial coverage for future losses.

Commenting on the performance of GSB during the Third Quarter and the nine months of 2011, CEO and Chairman, William J. Martin, stated: "During this very difficult economy we are most pleased with our success in resolving problem credits which led directly to our vastly improved profit picture.  Also noteworthy during the Third Quarter was our growth in deposits which led to our asset size going beyond $400 million for the first time in our history.  Some of the deposit growth was represented by transitory deposits, but even deleting these our year over year increase in deposits was 15%."

"Loan growth is a major challenge.  While the local economy remains slack, we continue our aggressive marketing efforts to book quality loan assets."

As of September 30, 2011 the Bank's Tier I Capital stood at $37,467,000 and GSB's Tier I Capital was $38,501,000.  The Leverage Capital Ratio for the Bank and GSB were 9.55% and 9.79%, respectively.  By all regulatory measures the Bank and GSB are considered well capitalized.

Comparing income statements and balance sheets for September 30, 2011 and September 30, 2010 the following highlights are noted:

• Net Interest Income for the Third Quarter 2011 at $3,548,000 was 11% less than the $3,970,000 reported for the Third Quarter 2010.  For the nine months 2011, Net Interest Income was down 8% to $10,870,000 from $11,810,000.  The cause for this was a reduction in loan outstandings which was down 7% from September 30, 2010 and lower interest rates which compressed the Net Interest Margin.  For the nine months of 2011, the Net Interest Margin was 4.16% compared to 4.64% for the nine months of 2010.
• Non-Interest Income for the Third Quarter 2011 was $892,000, up 33% from the Third Quarter 2010 figure of $670,000.  For the comparative nine months, 2011 was 7% greater; $1,966,000 in 2011 compared to $1,838,000 in 2010.
• Non-Interest Expense for the comparative Third Quarters and nine months was virtually the same.  For nine months 2011 Non-Interest Expense was $8,377,000 while 2010 Non-Interest Expense was $8,283,000, a 1% increase.
• Total Deposits at September 30, 2011 stood at $369,973,000 which was 20% greater than the $307,418,000 reported at September 30, 2010.  Approximately $16 million of this total is represented by special transitory deposits which will probably leave BOS by year end.  Excluding that amount deposits at September 30, 2011 would have amounted to $354 million, 15% greater than a year earlier.
• Total Loans at September 30, 2011 amounted to $230,288,000, down 7% from the $246,752,000 reported at September 30, 2010.  The reduction is represented by both a culling of problem loans, along with the dampened demand caused by the area's weak economic condition.
• And finally, Assets at September 30, 2011 totaled $414,134,000, an increase of 11% over the September 30, 2010 figure of $374,200,000.

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