Business & Real Estate

Sacramento-area banks ring up profits, amid drag of low interest rates

Banks serving the Sacramento region said a stronger loan environment and a gradually improving economy enabled them to amass solid third-quarter profits, although relatively low interest rates were a drag on year-over-year gains.

Greater Sacramento Bancorp, parent company of Bank of Sacramento, had one of the stronger quarterly performances. GSB amassed net income of $955,000, or 36 cents per share, in the quarter ended Sept. 30, a nearly 35 percent increase over $710,000, or 27 cents a share, in the year-ago period.

GSB noted that its bottom line in the most recent quarter was boosted by a r the most recent quarter was boosted by a reversal of $400,000 from its loan loss reserve, which the bank called a byproduct of an improving loan portfolio.

Bank of Sacramento announced last week that it has an agreement to be acquired in a $60 million transaction by Spokane, Wash.-based AmericanWest Bank. That deal, subject to standard regulatory and shareholder approvals, is expected to close in the first half of 2015.

Other quarterly financial results for banks serving the Sacramento region include:

▪ Sacramento-based River City Bank reported a profit of $2.9 million, or $2.05 a share, down slightly from $3.1 million, or $2.16, a share, last year.

Steve Fleming, president and CEO, said the “Sacramento market is experiencing mild economic growth.” He said rising home prices and lower unemployment rates have resulted in “a significant decrease in charge-offs associated with our home equity loan portfolio.” He added, however, that “low interest rates are putting downward pressure on the bank’s net interest margin and revenue.”

▪ Rancho Cordova-based American River Bankshares, parent of American River Bank, had net income of $1.1 million, or 14 cents per share, up 23 percent from $893,000, or 10 cents a share, in the third quarter of 2013.

President and CEO David Taber said year-over-year earnings were boosted by an improving economy and a growth in core deposits.

▪ Folsom Lake Bank, which has branches in Folsom, Roseville and Rancho Cordova, reported its 19th consecutive profitable quarter, with net income of $245,030, which was down about 5 percent from the third quarter of 2013.

Through nine months, net income was $721,816, up about 6.5 percent from a profit of $677,342 through the first three quarters of last year.

▪ Minneapolis-based U.S. Bancorp, which has more than 40 U.S. Bank branches in the Sacramento region, reported record third-quarter net income of $1.47 billion, or 78 cents a share, up a tick from $1.46 billion, or 76 cents a share, in the year-ago period.

▪ Yuba City-based River Valley Community Bank posted a profit of $281,290, or 16 cents per share, up from $279,135, or 16 cents a share, in the year-ago period.

The bank, which opened in June 2006 and added a branch in Grass Valley last year, has reported 29 consecutive profitable quarters.

▪ Yuba City-based Bank of Feather River recorded its 20th consecutive quarterly profit with net income of $272,000 in the third quarter. The bank amassed net income of $136,000 in the same period one year ago.

▪ Fresno-based Central Valley Community Bancorp, parent of Central Valley Community Bank, amassed quarterly net income of $2.35 million, or 21 cents a share, compared with $2.96 million, or 26 cents a share, in the third quarter of 2013. The bank said the decline was “primarily driven by a decrease in net interest income.”

The bank oversees 21 branches in the region, including one in Sacramento.

▪ West Sacramento-based Community Business Bank, which also has a branch in Lodi and serves businesses and nonprofits throughout the region, announced that it surpassed the $200 million threshold in total assets this month. The bank opened in November 2005.

Call The Bee’s Mark Glover, (916) 321-1184.