SOURCE: Granite Community Bank, N.A.

January 27, 2006 17:55 ET

Granite Community Bank Announces Fourth Quarter Results

GRANITE BAY, CA -- (MARKET WIRE) -- January 27, 2006 -- Granite Community Bank, N.A. (the "Company") (OTC BB: GCBK), today announced results for the quarter ended December 31, 2005. Net income for the three months ended December 31 increased $145 thousand or 120% to $266 thousand, compared to net income (as restated) of $121 thousand in the fourth quarter of 2004. Earnings per diluted share increased 100 % to $0.20 in the fourth quarter of 2005, compared to $0.10 in the fourth quarter of 2004.

Net income for the year ended December 31, 2005 increased $435 thousand or 130% to $771 thousand, compared to net income (as restated) of $336 thousand for the year ended December 31, 2004. Earnings per diluted share increased 26% to $0.59 for the year ended December 31, 2005, compared to $0.47 for the year ended December 31, 2004.

Note on restating prior year's income and taxes:

In the fourth quarter of the prior year, the Bank received the proceeds of a life insurance policy resulting in $400,000 in tax free income. There was $168,116 in offsetting expenses. The net result was an increase of $231,884 in pre-tax income. The pre-tax audited income was thus increased 42.5%. In addition the Bank benefited from a net operating loss carryforward that resulted in a tax benefit of $7,000 and not, as one would anticipate, a tax expense. The amounts of net income and tax expense are shown net of these non-recurring items.

The audited pre-tax income was $777,741 and the tax benefit was $7,000, resulting in an audited after tax income of $784,741. A copy of the audited financial statements is available from the Bank's main office in Granite Bay.

Net interest income was $1.39 million and $4.79 million in the fourth quarter and year of 2005, respectively, compared to $0.94 million and $3.06 million for the same period in 2004. The net interest margin for the fourth quarter and year of 2005 was 5.38% and 5.01%, respectively. This is a change of -51 basis points and +51 basis points compared to the same periods in 2004. A change in the earnings assets mix resulted in a decrease in yield of 62 basis points for the fourth quarter of 2005 compared to the same period in 2004. Increases in market rates in 2005 have helped increase the Bank's yield on earning assets by 75 basis points to 6.46% for the year 2005 compared to 2004. The cost of funds increased 6 basis points to 2.55% in the fourth quarter of 2005 compared to 2.49% in 2004 and 47 basis points to 2.23% for the year ended December 31, 2005 compared to 1.76% in 2004.

Non-interest income decreased $17 thousand or 18% in the fourth quarter of 2005, compared to the fourth quarter of 2004. For the year ended December 31, 2005 non-interest income increased $23 thousand or 6% compared to the same period in 2004.

Non-interest expense increased $71 thousand or 9% in the fourth quarter of 2005, compared to the fourth quarter of 2004 and $818 thousand or 31% for the year ended December 31, 2005 compared to the year ended December 31, 2004.

At December 31, 2005, the Company's total assets were $118 million, an increase of $27 million or 30%, compared to December 31, 2004. Total loans and leases were $93 million at December 31, 2005, an increase of $ 29 million or 45%, compared to December 31, 2004. Total deposits were $104 million at December 31, 2005, an increase of $26 million or 33%, compared to December 31, 2004.

David R. Kaiser, President and CEO stated, "We are pleased with our results thus far in 2005. We continue to focus on providing quality service to our clients, shareholders and community while simultaneously building shareholder value."

ABOUT GRANITE COMMUNITY BANK, N.A.

Granite Community Bank, N.A. was founded in June of 2002 and is headquartered in Granite Bay, California. A full service community bank serving Placer County, California, Granite Community Bank offers a full array of financial products and services through two offices located in Granite Bay and Auburn California. The Bank also operates a mortgage loan production office in Paradise, Butte County, California.

Cautionary Statement: This report contains forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those reflected in these statements. The forward-looking statements are made pursuant to the safe harbor provisions of Section 21D of the Securities Exchange Act of 1934, as amended. Words such as, 'expect to,' 'plan,' 'will,' 'believe' and words of similar predictive nature 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. Granite Community Bank, N.A. undertakes no obligation to update any forward-looking statements contained herein.

                              Three Months Ended      Twelve Months Ended
                          -----------------------  -----------------------
FOR THE PERIOD:                December 31,    %        December 31,    %
                             2005     2004*  Change   2005     2004* Change
                          --------- --------- ---  --------- --------- ---
Net interest income       $   1,385 $     939  48% $   4,790 $   3,061  57%

Provision for loan loss         171        80 114%       431       270  60%

Noninterest income               79        96 -18%       385       362   6%

Noninterest expense             833       762   9%     3,426     2,608  31%
                          --------- ---------      --------- ---------
Income before provision
 for income tax                 460       196 135%     1,318       545 142%

Provision for income tax        194        75 159%       547       209 162%
                          --------- ---------      --------- ---------
Net income                $     266 $     121 120% $     771       336 130%
                          ========= =========      ========= =========
*As restated, see previous
 note.

Net income per average
 share                    $    0.21 $    0.10 110% $    0.61 $    0.47  30%

Income per diluted share  $    0.20 $    0.10 100% $    0.59 $    0.47  26%

Average shares
 outstanding              1,265,600 1,262,222      1,256,778   713,140

Fully diluted             1,320,788 1,266,422      1,311,966   717,340



SELECTED FINANCIAL RATIOS (Annualized)

Return on average assets       0.98%     0.54%          0.76%     0.47%

Return on average equity       7.73%     3.80%          5.76%     3.74%

Average equity to average
 assets                       12.63%    14.26%         13.20%    12.65%

Net interest margin            5.38%     5.89%          5.01%     4.50%

AT PERIOD END

Gross loans                                        $  92,568 $  63,700

Allowance for loan losses                          $   1,081 $     650

Total assets                                       $ 118,074 $  91,192

Shareholder equity                                 $  13,862 $  12,935

Deposits                                           $ 103,632 $  77,854

Total risk based capital ratio                         14.64%    18.60%

Allowance for loan losses
 to total loans                                         1.17%     1.02%

Shares outstanding                                 1,268,000 1,250,000

Contact Information

  • Contact:
    Granite Community Bank, N.A.
    David R. Kaiser
    916-788-8200
    Granitecb.com