Non-performing assets Balance
Non-performing loans that are current to terms*
(five loans or leases) $2,413,000
Non-performing loans that are past due (29 loans or leases) 15,610,000
Other real estate owned (net) (fifteen properties) 3,484,000
$21,507,000
* loans that are current (less than 30 days past due) pursuant to original
or modified terms
The Company evaluates non-performing loans for impairment and assigns
specific reserves when necessary. At September 30, 2009, specific reserves
of $592,000 were held on the non-performing loans considered to be
impaired. In addition to five loans and leases totaling $2,422,000 that
are included in the $18,023,000 of non-performing loans and leases that
have been modified and considered troubled debt restructures, there were
eighteen loans and leases totaling $17,981,000 that were modified and
considered troubled debt restructures. All of the loans and leases
considered troubled debt restructures are considered impaired and have been
evaluated accordingly. There were no loans or leases considered troubled
debt restructures as of September 30, 2008.
Other Real Estate Owned
At September 30, 2009, the Company had fifteen other real estate owned
("OREO") properties totaling $3,484,000. This compares to three properties
totaling $2,158,000 at December 31, 2008 and no OREO at September 30, 2008.
At June 30, 2009, the Company had twelve OREO properties with a net balance
of $3,347,000. During the third quarter of 2009, the Company sold one
property for a slight gain and added four properties with loan balances
totaling $1,168,000. The four properties added during the quarter were
simultaneously written down to fair value by $159,000 leaving a net value
of $1,009,000. The Company periodically obtains property valuations to
determine whether the recorded book value is considered fair value. During
the third quarter of 2009, this valuation process resulted in the Company
reducing the book value of the properties and as a result added $721,000 to
the OREO reserve. At June 30, 2009, the OREO reserve was $300,000. The
resulting write-downs during the quarter reduced the reserve balance to
zero at September 30, 2009, as the Company believes that all fifteen
properties are carried at fair value.
Deposits and Borrowed Funds
Total deposits as of September 30, 2009 increased $29,012,000 (6.7%) to
$464,917,000 from $435,905,000 as of September 30, 2008, and increased
$27,856,000 (6.4%) from $437,061,000 as of December 31, 2008 and
$15,308,000 (3.4%) as of June 30, 2009.
"We're excited about the opportunities that our Company is seeing in the
marketplace and that is reflected in this quarter's growth in deposits,"
said David Taber, President and CEO of American River Bankshares. "We've
been successful in focusing our front line employees on providing excellent
client service and as a result, it has given them the confidence to
continue to bring in new relationships."
Noninterest-bearing deposits decreased $1,813,000 (1.5%) to $118,418,000 as
of September 30, 2009 from $120,231,000 as of September 30, 2008, decreased
$725,000 (0.6%) from $119,143,000 as of December 31, 2008 and increased
$3,382,000 (2.9%) from $115,036,000 as of June 30, 2009. Interest-bearing
deposits increased $30,825,000 (9.8%) to $346,499,000 as of September 30,
2009 from $315,674,000 as of September 30, 2008 and increased $28,581,000
(9.0%) from $317,918,000 as of December 31, 2008 and increased $11,926,000
(3.6%) from $334,573,000 as of June 30, 2009. Other borrowings, which
include both short- and long-term borrowings, decreased $39,373,000 (53.7%)
to $34,000,000 as of September 30, 2009 from $73,373,000 as of September
30, 2008, decreased $23,231,000 (40.6%) from $57,231,000 at December 31,
2008, and decreased $2,000,000 (5.6%) from $36,000,000 as of June 30, 2009.
Noninterest Income and Expense
Noninterest income for the third quarter of 2009 increased $151,000 (33.9%)
to $597,000 from $446,000 for the third quarter of 2008 and for the nine
months ended September 30, 2009 increased $86,000 (5.1%) to $1,756,000 from
$1,670,000 for the nine months ended September 30 2008. The increase
during the third quarter of 2009 compared to 2008 was primarily related to
gains on security sales. During the third quarter of 2009, the Company
sold most of its municipal bonds where the municipality was insured by
insurance companies that were no longer rated investment grade. The
Company reinvested the proceeds into GNMA securities. During the third
quarter of 2009, the Company recorded gains on investment sales of $93,000
while, in comparison, the Company recognized a $233,000 impairment loss on
its FNMA preferred stock during the third quarter of 2008. In addition,
during the third quarter of 2009, the Company experienced an increase in
service charges on deposit accounts ($78,000 or 40.8%) compared to the
third quarter of 2008. During the same period the Company recorded
decreases from fees on residential lending ($72,000 compared to zero) and
lower income from bank owned life insurance ($40,000 or 38.8%).
Noninterest expense for the third quarter of 2009 increased $574,000
(15.5%) to $4,268,000 from $3,694,000 for the third quarter of 2008 and for
the nine months ended September 30, 2009 increased $1,143,000 (10.4%) to
$12,108,000 from $10,965,000 for the nine months ended September 30, 2008.
Much of this increase is related to an increase in costs associated with
the Company's OREO. The total OREO expense for the three months ended
September 30, 2009 was $760,000 compared to zero for the same period in
2008. In addition, FDIC insurance increased by $130,000 from $36,000 for
the three months ended September 30, 2008 to $166,000 in 2009. These cost
increases were partially offset by reductions in salaries and benefits.
Total salaries and benefits decreased in the third quarter of 2009 by
$317,000 (15.1%) from the third quarter of 2008. Most of this decrease
resulted from a reduction in the number of full-time equivalent employees
and a reduction in the Company's performance based incentive accrual. The
total OREO expense for the nine months ended September 30, 2009 was
$1,318,000 compared to zero for the same period in 2008. In addition, FDIC
insurance increased by $512,000 from $63,000 for the nine months ended
September 30, 2008 to $575,000 in 2009. Total salaries and benefits
decreased in 2009 by $712,000 (11.5%) from 2008.
The fully taxable equivalent efficiency ratio for the third quarter of 2009
increased to 63.71% from 49.76% for the third quarter of 2008 and for the
nine months ended September 30, 2009 increased to 58.72% from 50.20% for
the nine months ended September 30, 2008.
Income Taxes
Income taxes for the third quarter of 2009 decreased $753,000 (63.7%) to
$429,000 from $1,182,000 for the third quarter of 2008 and for the nine
months ended September 30, 2009, income taxes decreased $3,034,000 (85.9%)
from $3,531,000 to $497,000. The effective tax rate for the quarter ended
September 30, 2009 was 34.2%, a decrease from 38.0% during the third
quarter of 2008 and for the nine months ended September 30, 2009 was 26.1%,
down from the 38.1% during the first nine months of 2008. The lower
effective tax rate in 2009 results from the Company realizing the benefits
of tax free income related to such items as municipal bonds and bank owned
life insurance against an overall lower amount of taxable income.
Capital
Total shareholders' equity at September 30, 2009 was $63,886,000, up
$2,292,000 (3.7%) from $61,594,000 at September 30, 2008, up $439,000
(0.7%) from $63,447,000 at December 31, 2008, and up $1,610,000 (2.6%) from
$62,276,000 at June 30, 2009. The Company's subsidiary, American River
Bank, remains above the well-capitalized regulatory guidelines. At
September 30, 2009, American River Bank's leverage ratio was 8.55%, the
Tier 1 risk based ratio was 11.15% and the Total Risk Based Capital ratio
was 12.41%. These ratios were all up from one year ago. At September 30,
2008, American River Bank's leverage ratio was 7.98%, the Tier 1 risk based
ratio was 9.83% and the Total Risk Based Capital ratio was 11.08%.
Performance Metrics
Performance measures for the third quarter of 2009 (annualized): the Return
on Average Assets (ROAA) was 0.59%, Return on Average Equity (ROAE) was
5.22% and Return on Average Tangible Equity (ROATE) was 7.17% compared to
the ROAA of 1.32%, ROAE of 12.51% and ROATE of 17.43%, during the third
quarter of 2008. For the nine months ended September 30, 2009, the Company
had a ROAA of 0.33%, ROAE of 2.96% and ROATE of 4.05% compared to a ROAA of
1.33%, ROAE of 12.63% and ROATE of 17.70% for the nine months ended
September 30, 2008.
Earnings Conference Call
The third quarter earnings conference call will be held Thursday, October
22, 2009 at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time). David T.
Taber, President and CEO, and Mitchell A. Derenzo, Executive Vice President
and Chief Financial Officer, both of American River Bankshares, will lead a
live forty-five minute presentation and answer questions. Shareholders,
analysts and other interested parties are invited to join the call by
dialing (877) 584-2599 and entering the Conference ID # 36117681. A
recording of the call will be available twenty-four hours after the call's
completion on http://amrb.podbean.com.
About American River Bankshares
American River Bankshares (
AMERICAN RIVER BANKSHARES
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
SEPTEMBER 30 DECEMBER 31 SEPTEMBER 30
2009 2008 2008
ASSETS
Cash and due from banks $ 54,304,000 $ 15,170,000 $ 17,258,000
Federal funds sold - - -
Interest-bearing deposits
in banks - 4,248,000 4,941,000
Investment securities 84,270,000 91,621,000 94,499,000
Loans and leases:
Real estate 289,856,000 300,934,000 301,726,000
Commercial 79,332,000 90,625,000 100,888,000
Lease financing 4,161,000 4,475,000 3,775,000
Other 22,181,000 22,811,000 21,245,000
Deferred loan and lease
originations fees, net (642,000) (571,000) (540,000)
Allowance for loan and
lease losses (7,572,000) (5,918,000) (6,183,000)
------------- ------------ -------------
TOTAL LOANS AND LEASES,
NET 387,316,000 412,356,000 420,911,000
------------- ------------ -------------
Bank premises and equipment 2,168,000 2,115,000 2,028,000
Goodwill and intangible
assets 17,029,000 17,228,000 17,299,000
Other real estate owned 3,484,000 2,158,000 716,000
Accrued interest receivable
and other assets 17,566,000 18,261,000 19,016,000
------------- ------------ -------------
$ 566,137,000 $563,157,000 $ 576,668,000
============= ============ =============
LIABILITIES & SHAREHOLDERS'
EQUITY
Noninterest-bearing
deposits $ 118,418,000 $119,143,000 $ 120,231,000
Interest checking 45,084,000 45,581,000 46,460,000
Money market 126,627,000 105,919,000 112,080,000
Savings 34,404,000 33,438,000 36,519,000
Time deposits 140,384,000 132,980,000 120,615,000
------------- ------------ -------------
TOTAL DEPOSITS 464,917,000 437,061,000 435,905,000
------------- ------------ -------------
Short-term borrowings 17,000,000 43,231,000 56,873,000
Long-term borrowings 17,000,000 14,000,000 16,500,000
Accrued interest payable and
other liabilities 3,334,000 5,418,000 5,796,000
------------- ------------ -------------
TOTAL LIABILITIES 502,251,000 499,710,000 515,074,000
TOTAL SHAREHOLDERS'
EQUITY 63,886,000 63,447,000 61,594,000
------------- ------------ -------------
$ 566,137,000 $563,157,000 $ 576,668,000
============= ============ =============
RATIOS:
Nonperforming loans and leases
to total loans and leases 4.56% 1.49% 1.97%
Net chargeoffs to average
loans and leases
(annualized) 1.43% 0.42% 0.20%
Allowance for loan and lease
loss to total loans and
leases 1.92% 1.41% 1.45%
AMERICAN RIVER BANK CAPITAL
RATIOS:
Leverage Ratio 8.55% 8.40% 7.98%
Tier 1 Risk-Based Capital
Ratio 11.15% 10.35% 9.83%
Total Risk-Based Capital
Ratio 12.41% 11.60% 11.08%
AMERICAN RIVER BANKSHARES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
THIRD THIRD FOR THE NINE MONTHS
QUARTER QUARTER % ENDED SEPTEMBER 30, %
2009 2008 CHANGE 2009 2008 CHANGE
---------- ---------- ------ ----------- ----------- ------
INTEREST
INCOME $7,163,000 $8,604,000 (16.7%) $22,235,000 $25,434,000 (12.6%)
INTEREST
EXPENSE 1,235,000 1,862,000 (33.7%) 3,950,000 5,955,000 (33.7%)
---------- ---------- ----- ----------- ----------- -----
NET
INTEREST
INCOME 5,928,000 6,742,000 (12.1%) 18,285,000 19,479,000 (6.1%)
TOTAL
NON-
INTEREST
INCOME 597,000 446,000 33.9% 1,756,000 1,670,000 5.1%
PROVISION
FOR LOAN
AND LEASE
LOSSES 1,001,000 381,000 162.7% 6,030,000 908,000 564.1%
TOTAL
NON-
INTEREST
EXPENSE 4,268,000 3,694,000 15.5% 12,108,000 10,965,000 10.4%
---------- ---------- ----- ----------- ----------- -----
INCOME
BEFORE
PROVISION
FOR
INCOME
TAXES 1,256,000 3,113,000 (59.7%) 1,903,000 9,276,000 (79.5%)
PROVISION
FOR
INCOME
TAXES 429,000 1,182,000 (63.7%) 497,000 3,531,000 (85.9%)
---------- ---------- ----- ----------- ----------- -----
NET
INCOME $ 827,000 $1,931,000 (57.2%) $ 1,406,000 $ 5,745,000 (75.5%)
---------- ---------- ----- ----------- ----------- -----
BASIC
EARNINGS
PER
SHARE $ 0.14 $ 0.33 (57.6%) $ 0.24 $ 0.99 (75.8%)
DILUTED
EARNINGS
PER
SHARE $ 0.14 $ 0.33 (57.6%) $ 0.24 0.98 (75.5%)
AVERAGE
DILUTED
SHARES
OUTSTA-
NDING 5,859,536 5,808,514 5,847,955 5,836,430
NET
INTEREST
MARGIN
AS A
PERCENTAGE
OF
AVERAGE
EARNING
ASSETS 4.91% 5.14% 4.96% 5.02%
OPERATING
RATIOS
(ANNUALIZED):
Return on
average
assets 0.59% 1.32% 0.33% 1.33%
Return on
average
equity 5.22% 12.51% 2.96% 12.63%
Return on
average
tangible
equity 7.17% 17.43% 4.05% 17.70%
Efficiency
ratio
(fully
taxable
equiva-
lent) 63.71% 49.76% 58.72% 50.20%
Share and earnings per share data have been adjusted for a 5% stock
dividend in 2008
AMERICAN RIVER BANKSHARES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
Trailing Four Quarters
THIRD SECOND FIRST FOURTH
QUARTER QUARTER QUARTER QUARTER
2009 2009 2009 2008
----------- ----------- ----------- -----------
INTEREST
INCOME $ 7,163,000 $ 7,321,000 $ 7,751,000 $ 8,119,000
INTEREST
EXPENSE 1,235,000 1,303,000 1,412,000 1,673,000
----------- ----------- ----------- -----------
NET INTEREST
INCOME 5,928,000 6,018,000 6,339,000 6,446,000
TOTAL
NONINTEREST
INCOME 597,000 649,000 510,000 498,000
PROVISION FOR
LOAN AND
LEASE LOSSES 1,001,000 3,800,000 1,229,000 835,000
TOTAL
NONINTEREST
EXPENSE 4,268,000 4,239,000 3,601,000 3,236,000
----------- ----------- ----------- -----------
INCOME BEFORE
PROVISION FOR
(BENEFIT FROM)
INCOME TAXES 1,256,000 (1,372,000) 2,019,000 2,873,000
PROVISION FOR
(BENEFIT FROM)
INCOME TAXES 429,000 (668,000) 736,000 1,047,000
----------- ----------- ----------- -----------
NET INCOME
(LOSS) $ 827,000 $ (704,000) $ 1,283,000 $ 1,826,000
=========== =========== =========== ===========
BASIC
EARNINGS (LOSS)
PER SHARE $ 0.14 $ (0.12) $ 0.22 $ 0.32
DILUTED
EARNINGS (LOSS)
PER SHARE $ 0.14 $ (0.12) $ 0.22 $ 0.32
AVERAGE DILUTED
SHARES
OUTSTANDING 5,859,536 5,797,533 5,824,407 5,794,733
SHARES
OUTSTANDING-END
OF PERIOD 5,797,533 5,797,533 5,797,533 5,792,283
NET INTEREST
MARGIN AS A
PERCENTAGE OF
AVERAGE
EARNING
ASSETS 4.91% 4.87% 5.08% 5.04%
OPERATING RATIOS
(ANNUALIZED):
Return on
average
assets 0.59% (0.50%) 0.90% 1.28%
Return on
average
equity 5.22% (4.41%) 8.15% 11.71%
Return on
average
tangible
equity 7.17% (6.01%) 11.16% 16.23%
Efficiency ratio
(fully tax
equivalent) 63.17% 61.81% 50.97% 45.03%
Share and earnings per share data have been adjusted for a 5% stock
dividend in 2008
AMERICAN RIVER BANKSHARES
ANALYSIS OF NET INTEREST MARGIN ON EARNING ASSETS
(Taxable Equivalent Basis)
THREE MONTHS
ENDED
SEPTEMBER
30, 2009 2008
AVG AVG AVG AVG
BALANCE INTEREST YIELD BALANCE INTEREST YIELD
ASSETS
Loans and
leases $399,739,000 $6,302,000 6.25% $414,492,000 $7,283,000 6.99%
Taxable
investment
securities 62,845,000 635,000 4.01% 81,101,000 984,000 4.83%
Tax-exempt
investment
securities 21,494,000 291,000 5.37% 28,101,000 371,000 5.25%
Corporate
stock 32,000 - - 169,000 5,000 11.77%
Federal
funds sold - - - 177,000 1,000 2.25%
Interest-
bearing
deposits
in banks 570,000 6,000 4.18% 4,941,000 52,000 4.19%
------------ ---------- ------------ ----------
TOTAL
EARNING
ASSETS $484,680,000 $7,234,000 5.92% $528,981,000 $8,696,000 6.54%
------------ ---------- ------------ ----------
Cash & due
from banks 41,026,000 19,224,000
Other
assets 41,763,000 39,822,000
Allowance
for loan
& lease
losses (8,019,000) (6,176,000)
------------ ------------
$559,450,000 $581,851,000
============ ============
LIABILITIES
&
SHARE-
HOLDERS'
EQUITY
Interest
checking
and money
market $164,654,000 $ 366,000 0.88% $162,985,000 $ 454,000 1.11%
Savings 35,879,000 64,000 0.71% 37,798,000 95,000 1.00%
Time
deposits 138,836,000 567,000 1.62% 123,554,000 866,000 2.79%
Other
borrowings 35,543,000 238,000 2.66% 64,423,000 447,000 2.76%
------------ ---------- ------------ ----------
TOTAL
INTEREST
BEARING
LIABILIT-
IES $374,912,000 $1,235,000 1.31% $388,760,000 $1,862,000 1.91%
------------ ---------- ------------ ----------
Noninterest
bearing
demand
deposits 117,594,000 125,905,000
Other
liabilities 4,125,000 5,770,000
------------ ------------
TOTAL
LIABILIT-
IES 496,631,000 520,435,000
SHARE-
HOLDERS'
EQUITY 62,819,000 61,416,000
------------ ------------
$559,450,000 $581,851,000
============ ========== ===== ============ ========== =====
NET INTEREST
INCOME &
MARGIN $5,999,000 4.91% $6,834,000 5.14%
========== ===== ========== =====
AMERICAN RIVER BANKSHARES
ANALYSIS OF NET INTEREST MARGIN ON EARNING ASSETS
(Taxable Equivalent Basis)
NINE
MONTHS
ENDED
SEPTEMBER
30, 2009 2008
AVG AVG AVG AVG
BALANCE INTEREST YIELD BALANCE INTEREST YIELD
ASSETS
Loans and
leases $409,425,000 $19,384,000 6.33% $407,723,000 $21,472,000 7.03%
Taxable
invest-
ment
securit-
ies 63,679,000 2,046,000 4.30% 84,148,000 2,946,000 4.68%
Tax-exempt
invest-
ment
securit-
ies 24,468,000 981,000 5.36% 27,463,000 1,074,000 5.22%
Corporate
stock 29,000 6,000 27.66% 216,000 22,000 13.61%
Federal
funds
sold 14,000 - - 541,000 9,000 2.22%
Interest-
bearing
deposits
in banks 2,144,000 59,000 3.68% 4,942,000 176,000 4.76%
------------ ----------- ------------ -----------
TOTAL
EARNING
ASSETS $499,759,000 $22,476,000 6.01% $525,033,000 $25,699,000 6.54%
------------ ----------- ------------ -----------
Cash & due
from
banks 33,611,000 19,106,000
Other
assets 41,948,000 39,136,000
Allowance
for loan
& lease
losses (6,669,000) (6,055,000)
------------ ------------
$568,649,000 $577,220,000
============ ============
LIABILIT-
IES
&
SHARE-
HOLDERS'
EQUITY
Interest
checking
and money
market $156,950,000 $ 1,007,000 0.86% $166,744,000 $ 1,522,000 1.22%
Savings 33,907,000 172,000 0.68% 36,671,000 245,000 0.89%
Time
deposits 137,464,000 1,897,000 1.85% 121,475,000 2,855,000 3.14%
Other
borrow-
ings 55,646,000 874,000 2.10% 57,747,000 1,333,000 3.09%
------------ ----------- ------------ -----------
TOTAL
INTEREST
BEARING
LIABILIT-
IES $383,967,000 $ 3,950,000 1.38% $382,637,000 $ 5,955,000 2.08%
------------ ----------- ------------ -----------
Non-
interest
bearing
demand
deposits 115,769,000 127,601,000
Other
liabilit-
ies 5,338,000 6,211,000
------------ ------------
TOTAL
LIABILIT-
IES 505,074,000 516,449,000
SHARE-
HOLDERS'
EQUITY 63,575,000 60,771,000
------------ ------------
$568,649,000 $577,220,000
============ =========== ===== ============ =========== =====
NET
INTEREST
INCOME &
MARGIN $18,526,000 4.96% $19,744,000 5.02%
=========== ===== =========== =====
Contact Information: Investor Contact: Mitchell A. Derenzo Chief Financial Officer American River Bankshares 916-231-6723 Media Contact: Diana Walery Corporate Communications American River Bankshares 916-231-6717