Non-performing assets December 31, December 31,
2010 2009
------------- -------------
Non-performing loans that are current to terms*
(11 loans or leases at December 31, 2010 and
12 loans or leases at December 31, 2009) $ 3,004,000 $ 2,133,000
------------- -------------
Non-performing loans that are past due (43
loans or leases at December 31, 2010 and 40
loans or leases at December 31, 2009) 19,567,000 18,831,000
------------- -------------
Other real estate owned (net) (12 properties
at December 31, 2010 and 13 at December 31,
2009) 2,696,000 2,508,000
------------- -------------
------------- -------------
$ 25,267,000 $ 23,472,000
------------- -------------
* loans that are current (less than 30 days past due) pursuant to original
or modified terms
The Company evaluates these non-performing loans for impairment and assigns
specific reserves when necessary. At December 31, 2010, specific reserves
of $385,000 were held on the non-performing loans, compared to $1,421,000
on December 31, 2009. Charge offs in 2010 have reduced the Company's
calculated specific reserve requirements in relation to impaired loan
amounts. In addition, there were 21 loans and leases totaling $7,971,000
that are included in the $22,571,000 of non-performing loans and leases
that have been modified and are considered troubled debt restructures.
There were 13 non-performing loans or leases totaling $3,133,000 which are
reported as troubled debt restructures as of December 31, 2009. All of the
loans and leases considered troubled debt restructures are considered
impaired and have been evaluated according to the Company's best practices,
which follows the guidance established by Generally Accepted Accounting
Principles and Regulatory requirements.
Other Real Estate Owned
At December 31, 2010, the Company had 12 other real estate owned ("OREO")
properties totaling a net of $2,696,000. This compares to 13 totaling a
net of $2,508,000 at December 31, 2009. During the fourth quarter of 2010,
the Company sold 4 properties for a net loss of $22,000 and added 3
properties with adjusted loan balances totaling $971,000. The Company
periodically obtains property valuations to determine whether the recorded
book value is considered fair value. The Company considers fair value to be
fair market value less the expected cost of sale. During the fourth
quarter of 2010, this valuation process resulted in the Company reducing
the book value, with a charge to expense, of six properties by $257,000.
In addition, as of December 31, 2010, the Company has a $100,000 reserve
against potential losses on its 12 OREO properties.
Deposits and Borrowed Funds
Total deposits as of December 31, 2010 decreased $4,633,000 (0.99%) to
$465,122,000 from $469,755,000 as of December 31, 2009. Core deposits as
of December 31, 2010 increased $18,554,000 (5.52%) to $354,884,000 from
$336,330,000 as of December 31, 2009. The Company considers all deposits
except time deposits as core deposits.
Noninterest-bearing deposits increased $8,308,000 (7.02%) to $126,636,000
as of December 31, 2010 from $118,328,000 as of December 31, 2009.
Interest-bearing deposits decreased $12,941,000 (3.68%) to $338,486,000 as
of December 31, 2010 from $351,427,000 as of December 31, 2009. Other
borrowings, which include both short- and long-term borrowings, decreased
$14,500,000 (46.03%) to $17,000,000 as of December 31, 2010 from
$31,500,000 at December 31, 2009. The decrease in borrowings was due to a
decision by the Company to effectively utilize its increase in deposits to
pay down borrowings.
Noninterest Income and Expense
Noninterest income for the fourth quarter of 2010 decreased $71,000
(13.84%) to $442,000 from $513,000 for the fourth quarter of 2009 and for
the twelve months ended December 31, 2009, decreased $465,000 (20.49%) to
$1,804,000 from $2,269,000 for the twelve months ended December 31, 2009.
Much of the year-over-year decrease relates to sales of investment
securities. For the twelve months ended December 31, 2010, sales of
investment securities resulted in a net loss of $7,000 compared to a gain
of $270,000 for the twelve months ended December 31, 2009. In addition,
during the twelve months ended December 31, 2010, the Company experienced a
decline in service charge income of $151,000, or 14.88%, due to a decrease
in insufficient funds fee income.
Noninterest expense for the fourth quarter of 2010 increased $555,000
(14.99%) to $4,258,000 from $3,703,000 for the fourth quarter of 2009 and
for the twelve months ended December 31, 2010, increased $659,000 (4.17%)
to $16,470,000 from $15,811,000 for the twelve months ended December 31,
2009. Much of the fluctuation in noninterest expense reflects costs
associated with the Company's OREO, salaries and benefits, and FDIC
insurance expense. OREO-related expense increased by $344,000 from
$123,000 in the fourth quarter of 2009 to $467,000 in the fourth quarter of
2010. FDIC insurance expense increased $168,000 from $195,000 in the
fourth quarter of 2009 to $363,000 in the fourth quarter of 2010. Total
salaries and benefits increased $176,000 from $1,800,000 during the fourth
quarter of 2009 to $1,976,000 during the fourth quarter of 2010. The
increase in OREO expenses resulted from the Company's costs of maintaining
its existing and sold properties during the period. The majority of the
increase in FDIC insurance relates to increased assessments from the FDIC.
The increase in salaries and benefits relates to increased staff to manage
problem assets and to supplement compliance personnel. For the twelve
months ended December 31, 2010, the FDIC insurance expense was up $653,000,
from $770,000 for the twelve months ended December 31, 2009 to $1,423,000
for the twelve months ended December 31, 2010. Salaries and benefits
expense was up $597,000 from $7,279,000 during 2009 to $7,876,000 in 2010.
The increase in FDIC insurance and salary and benefit expenses was
partially offset by lower
OREO-related expenses during the year. OREO-related expenses in 2010 were
lower by $231,000, falling from $1,441,000 for the full year of 2009 to
$1,210,000 during 2010.
The fully taxable equivalent efficiency ratio for the fourth quarter of
2010 increased to 71.34% from 57.58% for the fourth quarter of 2009 and for
the twelve months ended December 31, 2010 increased to 66.87% from 58.45%
for the twelve months ended December 31, 2009. This increase was due, in
part, to the lower interest margin and the higher overall noninterest
expense.
Income Taxes
The Company recorded an income tax benefit for the quarter ended December
31, 2010 of $185,000, compared to a benefit of $123,000 for the quarter
ended December 31, 2009. For the twelve months ended December 31, 2010,
the benefit for income taxes was $251,000, compared to a provision of
$374,000 for the twelve months ended December 31, 2009. The tax benefit in
2010 results from the Company realizing the benefits of tax-free income
related to such items as municipal bonds and bank owned life insurance in
conjunction with an overall lower amount of taxable income.
Capital
Total shareholders' equity at December 31, 2010 was $89,544,000, up
$2,199,000 (2.52%) from $87,345,000 at December 31, 2009. The increase was
primarily driven by the unrealized gain booked from the Company's
available-for-sale investment securities. The Company's subsidiary,
American River Bank, exceeds all regulatory capital ratio requirements
including being above the well-capitalized regulatory guidelines. At
December 31, 2010, American River Bank's Leverage ratio was 11.76%, the
Tier 1 Risk Based ratio was 17.91% and the Total Risk Based Capital ratio
was 19.17%. At December 31, 2009, American River Bank's Leverage ratio was
11.65%, Tier 1 Risk Based ratio was 16.04% and the Total Risk Based Capital
ratio was 17.30%.
At December 31, 2010, American River Bankshares' Leverage ratio was 12.55%,
the Tier 1 Risk Based Capital ratio was 19.07% and the Total Risk Based
Capital ratio was 20.33%. At December 31, 2009, American River Bankshares'
leverage ratio was 12.45%, the Tier 1 Risk Based Capital ratio was 17.13%
and the Total Risk Based Capital ratio was 18.39%. Book Value Per Share
was $9.07 and Tangible Book Value Per Share was $7.38 at December 31, 2010
compared to $8.87 and $7.15 at December 31, 2009.
Performance Metrics
Performance measures for the fourth quarter of 2010 (annualized): the
Return on Average Assets (ROAA) was 0.05%, Return on Average Equity (ROAE)
was 0.34% and Return on Average Tangible Equity (ROATE) was 0.42% compared
to the ROAA of 0.12%, ROAE of 1.03% and ROATE of 1.37%, during the fourth
quarter of 2009. For the year ended December 31, 2010, the Company had a
ROAA of 0.08%, ROAE of 0.53% and ROATE of 0.66% compared to a ROAA of
0.28%, ROAE of 2.44% and ROATE of 3.31% for the year ended December 31,
2009.
Earnings Conference Call
The fourth quarter earnings conference call will be held Thursday, January
27, 2011 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 presentation and answer questions. Shareholders, analysts and other
interested parties are invited to join the call by dialing (800) 926-9853.
No conference ID number is required. 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)
(Dollars in thousands)
December 31, December 31,
ASSETS 2010 2009
------------ ------------
Cash and due from banks $ 31,871 $ 58,493
Federal funds sold - -
Interest-bearing deposits in banks 2,248 -
Investment securities 164,150 112,935
Loans & leases:
Real estate 265,114 286,565
Commercial 58,261 72,621
Lease financing 2,766 3,920
Other 20,404 21,725
Deferred loan and lease origination fees, net (427) (600)
Allowance for loan and lease losses (7,585) (7,909)
------------ ------------
Loans and leases, net 338,533 376,322
------------ ------------
Bank premises and equipment, net 2,026 2,094
Goodwill and intangible assets 16,723 16,965
Other real estate owned, net 2,696 2,508
Accrued interest receivable and other assets 20,693 25,101
------------ ------------
$ 578,940 $ 594,418
============ ============
LIABILITIES & SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $ 126,636 $ 118,328
Interest checking 45,075 50,154
Money market 137,636 131,614
Savings 45,537 36,234
Time deposits 110,238 133,425
------------ ------------
Total deposits 465,122 469,755
------------ ------------
Short-term borrowings 7,000 14,500
Long-term borrowings 10,000 17,000
Accrued interest and other liabilities 7,274 5,818
------------ ------------
Total liabilities 489,396 507,073
Total shareholders' equity 89,544 87,345
------------ ------------
$ 578,940 $ 594,418
============ ============
Ratios:
Nonperforming loans and leases to total
loans and leases 6.52% 5.46%
Net chargeoffs to average loans and
leases (YTD) 2.12% 1.62%
Allowance for loan and lease losses
to total loans and leases 2.19% 2.06%
American River Bank Capital Ratios:
Leverage Ratio 11.76% 11.65%
Tier 1 Risk-Based Capital Ratio 17.91% 16.04%
Total Risk-Based Capital Ratio 19.17% 17.30%
American River Bankshares Capital Ratios:
Leverage Ratio 12.55% 12.45%
Tier 1 Risk-Based Capital Ratio 19.07% 17.13%
Total Risk-Based Capital Ratio 20.33% 18.39%
American River Bankshares
Condensed Consolidated Statement of Operations (Unaudited)
(Dollars in thousands, except share and per share data)
Fourth Fourth For the year
Quarter Quarter % ended December 31, %
2010 2009 Change 2010 2009 Change
--------- --------- ------ --------- --------- ------
Interest
income $ 6,175 $ 6,887 (10.34)% $ 25,706 $ 29,122 (11.73)%
Interest
expense 779 1,140 (31.67)% 3,450 5,090 (32.22)%
--------- --------- --------- ---------
Net
interest
income 5,396 5,747 (6.11)% 22,256 24,032 (7.39)%
Provision
for loan
and lease
losses 1,688 2,500 (32.48)% 7,365 8,530 (13.66)%
Total
noninterest
income 442 513 (13.84)% 1,804 2,269 (20.49)%
Total
noninterest
expense 4,258 3,703 14.99% 16,470 15,811 4.17%
--------- --------- --------- ---------
(Loss)
income
before
(benefit
from)
provision
for income
taxes (108) 57 (289.47)% 225 1,960 (88.52)%
(Benefit
from)
provision
for income
taxes (185) (123) 50.41% (251) 374 (167.11)%
========= ========= ========= =========
Net income $ 77 $ 180 (57.22)% $ 476 $ 1,586 (69.99)%
========= ========= ========= =========
Basic
earnings
per share $ 0.01 $ 0.03 (66.67)% $ 0.05 $ 0.26 (80.77)%
Diluted
earnings
per share $ 0.01 $ 0.03 (66.67)% $ 0.05 $ 0.26 (80.77)%
Averarge
diluted
shares
outstand-
ing 9,874,867 6,725,359 9,858,713 6,038,022
Net interest
margin as a
percentage
of average
earning
assets 4.29% 4.74% 4.49% 4.90%
Operating Ratios:
Return on
average
assets 0.05% 0.12% 0.08% 0.28%
Return on
average
equity 0.34% 1.03% 0.53% 2.44%
Return on
average
tangible
equity 0.42% 1.37% 0.66% 3.31%
Efficiency
ratio
(fully
taxable
equivalent) 71.34% 57.58% 66.87% 58.45%
American River Bankshares
Condensed Consolidated Statement of Income (Unaudited)
Trailing Four Quarters
(Dollars in thousands, except
share and per share data)
Fourth Third Second First
Quarter Quarter Quarter Quarter
2010 2010 2010 2010
--------- --------- --------- ---------
Interest income $ 6,175 $ 6,344 $ 6,473 $ 6,714
Interest expense 779 838 891 942
--------- --------- --------- ---------
Net interest income 5,396 5,506 5,582 5,772
Provision for loan and lease
losses 1,688 2,025 2,011 1,641
Total noninterest income 442 441 460 461
Total noninterest expense 4,258 3,972 4,055 4,185
--------- --------- --------- ---------
(Loss) income before
(benefit from) provision
for income taxes (108) (50) (24) 407
(Benefit from) provision for
income taxes (185) (89) (78) 101
========= ========= ========= =========
Net income $ 77 $ 39 $ 54 $ 306
========= ========= ========= =========
Basic earnings per share $ 0.01 $ 0.00 $ 0.01 $ 0.03
Diluted earnings per share $ 0.01 $ 0.00 $ 0.01 $ 0.03
Net interest margin as a
percentage of average
earning assets 4.29% 4.41% 4.52% 4.73%
Averarge diluted shares
outstanding 9,874,867 9,868,490 9,845,533 9,845,533
Shares outstanding -- end of
period 9,874,867 9,874,887 9,845,533 9,845,533
Operating Ratios (annualized):
Return on average assets 0.05% 0.03% 0.04% 0.21%
Return on average equity 0.34% 0.17% 2.40% 1.41%
Return on average tangible
equity 0.42% 0.21% 0.30% 1.74%
Efficiency ratio (fully
taxable equivalent) 71.34% 65.19% 65.53% 65.56%
American River Bankshares
Analysis of Net Interest Margin on Earning Assets
(Taxable Equivalent Basis)
(Dollars in thousands, except share and per share data)
Three months ended
December 31, 2010 2009
-------------------------- --------------------------
Avg Avg Avg Avg
ASSETS Balance Interest Yield Balance Interest Yield
-------- -------- ------ -------- -------- ------
Loans and leases $350,112 $ 5,344 6.06% $390,042 $ 5,994 6.10%
Taxable investment
securities 137,136 680 1.97% 78,365 717 3.63%
Tax-exempt
investment
securities 14,722 194 5.23% 17,213 234 5.39%
Corporate stock 19 - - 28 - -
Federal funds sold - - - - - -
Interest-bearing
deposits in banks 1,610 5 1.23% - - -
-------- -------- -------- --------
Total earning
assets 503,599 6,223 4.90% 485,648 6,945 5.67%
-------- -------- -------- --------
Cash & due from
banks 48,458 63,181
Other assets 41,430 39,718
Allowance for loan
& lease losses (7,835) (7,987)
======== ========
$585,652 $580,560
======== ========
LIABILITIES &
SHAREHOLDERS'
EQUITY
Interest checking
and money market $184,290 $ 304 0.65% $181,509 $ 368 0.80%
Savings 44,954 54 0.48% 35,833 57 0.63%
Time deposits 113,125 317 1.11% 138,009 502 1.44%
Other borrowings 17,000 104 2.43% 32,234 213 2.62%
-------- -------- -------- --------
Total interest
bearing
liabilities 359,369 779 0.86% 387,585 1,140 1.17%
-------- -------- -------- --------
Noninterest bearing
demand deposits 131,213 123,010
Other liabilities 5,051 698
-------- --------
Total liabilities 495,633 511,293
Shareholders'
equity 90,019 69,267
======== ========
$585,652 $580,560
========================== ==========================
Net interest income
& margin $ 5,444 4.29% $ 5,805 4.74%
======== ====== ======== ======
Twelve months ended
December 31, 2010 2009
-------------------------- --------------------------
Avg Avg Avg Avg
ASSETS Balance Interest Yield Balance Interest Yield
-------- -------- ------ -------- -------- ------
Loans and leases $362,445 $ 22,227 6.13% $404,539 $ 25,378 6.27%
Taxable investment
securities 122,381 2,840 2.32% 67,480 2,763 4.09%
Tax-exempt
investment
securities 15,628 843 5.39% 22,541 1,215 5.39%
Corporate stock 22 - - 28 6 21.43%
Federal funds sold - - - 11 - -
Interest-bearing
deposits in banks 406 5 1.23% 1,603 59 3.68%
-------- -------- -------- --------
Total earning
assets 500,882 25,915 5.17% 496,202 29,421 5.93%
-------- -------- -------- --------
Cash & due from
banks 48,318 41,064
Other assets 43,142 42,208
Allowance for loan
& lease losses (8,228) (7,001)
======== ========
$584,114 $572,473
======== ========
LIABILITIES &
SHAREHOLDERS'
EQUITY
Interest checking
and money market $182,495 $ 1,327 0.73% $163,141 $ 1,375 0.84%
Savings 41,510 224 0.54% 34,392 229 0.67%
Time deposits 121,050 1,401 1.16% 137,601 2,399 1.74%
Other borrowings 20,458 498 2.43% 49,745 1,087 2.19%
-------- -------- -------- --------
Total interest
bearing
liabilities 365,513 3,450 0.94% 384,879 5,090 1.32%
-------- -------- -------- --------
Noninterest bearing
demand deposits 124,122 117,594
Other liabilities 5,221 4,993
-------- --------
Total liabilities 494,856 507,466
Shareholders'
equity 89,258 65,007
======== ========
$584,114 $572,473
========================== ==========================
Net interest income
& margin $ 22,465 4.49% $ 24,331 4.90%
======== ====== ======== ======
Contact Information: Investor Contact: Mitchell A. Derenzo Chief Financial Officer American River Bankshares 916-231-6723 Media Contact: Diana La Point Corporate Communications American River Bankshares 916-231-6717