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NorCal Community Bancorp Earns $414,000 in 2008

^{Published on 2009-01-30 13:54:01, Last Modified on 2009-01-30 13:55:44 - Market Wire}
 

ALAMEDA, Calif.--([ BUSINESS WIRE ])--NorCal Community Bancorp (the "Company") (OTCBB: NCLC), parent company for Bank of Alameda, today announced earnings for 2008 of $414,000 ($0.13 per diluted share), compared to $2.9 million ($0.87 per diluted share) earned in 2007. The Company recorded a net loss for the quarter ended December 31, 2008 of $576,000 ($0.18 per diluted share), compared to net income of $638,000 ($0.20 per diluted share) for the quarter ended December 31, 2007.

The significant decrease in earnings for the year and net loss reported in the fourth quarter were primarily attributed to the substantial increase in the provision for loan and lease losses recorded in 2008 resulting from credit deterioration and related write-downs recorded in the loan portfolio throughout the year. The Company provided to its allowance for loan and lease losses $2.1 million and $3.5 million for the three and twelve months ended December 31, 2008, respectively, compared to $225,000 and $335,000 for the like periods in 2007. "While 2008 continued a long string of profitability for the Company, it was an extraordinarily challenging year in many respects," stated Stephen G. Andrews, President and CEO. "We were certainly disappointed that our earnings were not as robust as in recent years. Our earnings, however, are reflective of the current tumultuous economic environment."

The allowance for loan and lease losses stood at 1.95% of total loans and leases at December 31, 2008 compared to 1.29% at December 31, 2007. Non-performing loans and OREO as a percentage of total assets was 5.67% or $15.0 million at December 31, 2008. "Management continues to focus on early identification of credit weaknesses resulting from the stress the economy has created in segments of our loan portfolio. By increasing our loss reserves management believes we are prudently positioning the Company to weather a potential protracted and deepening economic downturn," said Andrews.

Troy Williams, Executive Vice President and Chief Credit Officer, noted, "We are working closely with our borrowers to best resolve their credit problems while maintaining realistic repayment resources and collateral valuations."

The Company and its subsidiary, Bank of Alameda both remain "well capitalized" as defined under regulatory capital guidelines. The total risk-based capital ratio at December 31, 2008 stood at 15.47% and 14.64%, respectively, at the Company and Bank, well in excess of the 10% required by regulators to maintain "well capitalized" status.

"Our Company, like so many others, will weather through these unique economic times but not without a few bumps in the road," stated Andrews. As part of the Company's ongoing risk management process, plans were set in motion to deal with the uncertainty around the depth and duration of the recession. These plans included aggressively building reserves in 2008, maintaining strong capital ratios and positioning ourselves to achieve continued profitability. As part of the planning process the Company recently reduced its workforce by approximately ten percent and eliminated all officer bonuses for the year. "While we believe these actions are judiciously sound they can be painful in the short-run. Management believes our steps of building loan reserves and implementing cost cutting measures will build long term shareholder value," said Andrews. In conclusion Andrews conveyed, "We thank our shareholders, customers and employees for their support and enthusiasm during past, present and future periods."

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.bankofalameda.com ] under the Investor Relations section.

Cautionary Statement: This release may contain certain forward-looking statements that are subject to risks and uncertainties that could cause actual results and events to differ materially from those stated herein. Words such as "anticipate," "believe," "estimate," "expect," "should," "intend," "project," and words or phrases of similar meaning are intended to identify forward-looking statements. Management's assumptions and projections are based on their anticipation of future events and actual performance may differ materially from that projected.