Non-performing assets September 30, December 31, September 30,
2010 2009 2009
------------- ------------- -------------
Non-performing loans that are
current to terms* (9 loans or
leases at September 30, 2010, 12
loans or leases at December 31,
2009 and 5 loans or leases at
September 30, 2009) $ 4,504,000 $ 2,133,000 $ 2,413,000
------------- ------------- -------------
Non-performing loans that are
past due (46 loans or leases at
September 30, 2010, 40 loans or
leases at December 31, 2009 and
29 loans or leases at September
30, 2009) 20,398,000 18,831,000 15,610,000
------------- ------------- -------------
Other real estate owned (net)
(13 properties at September 30,
2010 and December 31, 2009 and
15 properties at September 30,
2009) 3,067,000 2,508,000 3,484,000
------------- ------------- -------------
------------- ------------- -------------
$ 27,969,000 $ 23,472,000 $ 21,507,000
------------- ------------- -------------
* 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 September 30, 2010, specific reserves
of $252,000 were held on the non-performing loans, compared to $1,421,000
on December 31, 2009. In addition, there were 19 loans and leases totaling
$9,154,000 that are included in the $24,902,000 of non-performing loans and
leases, that have been modified and 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 September 30, 2010, the Company had 13 other real estate owned ("OREO")
properties totaling $3,067,000. This compares to 17 properties totaling a
net $3,219,000 at June 30, 2010, 15 properties totaling a net $3,484,000 at
September 30, 2009 and 13 totaling $2,508,000 at December 31, 2009. During
the third quarter of 2010, the Company sold 7 properties for a net gain of
$4,000 and added three properties with adjusted loan balances totaling
$730,000. 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 third quarter of 2010, this valuation process resulted
in the Company reducing the book value of two properties by $120,000.
Deposits and Borrowed Funds
Total deposits as of September 30, 2010 increased $4,882,000 (1.05%) to
$469,799,000 from $464,917,000 as of September 30, 2009, and increased
$44,000 (.01%) from $469,755,000 as of December 31, 2009. Core deposits as
of September 30, 2010 increased $29,467,000 (9.08%) to $354,000,000 from
$324,533,000 as of September 30, 2009 and increased $17,670,000 (5.25%)
from $336,330,000 as of December 31, 2009. The Company considers all non
time deposits as core deposits.
Noninterest-bearing deposits increased $10,357,000 (8.75%) to $128,775,000
as of September 30, 2010 from $118,418,000 as of September 30, 2009 and
increased $10,447,000 (8.83%) from $118,328,000 as of December 31, 2009.
Interest-bearing deposits decreased $5,475,000 (1.58%) to $341,024,000 as
of September 30, 2010 from $346,499,000 as of September 30, 2009 decreased
$10,403,000 (2.96%) from $351,427,000 as of December 31, 2009. Other
borrowings, which include both short- and long-term borrowings, decreased
$17,000,000 (50.00%) to $17,000,000 as of September 30, 2010 from
$34,000,000 as of September 30, 2009 and decreased $14,500,000 (46.03%)
from $31,500,000 at December 31, 2009. The decrease in borrowings was due
to a decision by the Company to effectively utilize its increases in
deposits to pay down borrowings.
Noninterest Income and Expense
Noninterest income for the third quarter of 2010 decreased $156,000
(26.13%) to $441,000 from $597,000 for the third quarter of 2009 and for
the nine months ended September 30, 2009, decreased $394,000 (22.44%) to
$1,362,000 from $1,756,000 for the nine months ended September 30, 2009.
Much of this decrease relates to sales of investment securities. For the
third quarter of 2010, the Company recorded a gain on sale of $1,000
compared to a gain on sale of $93,000 for the third quarter of 2009. For
the nine months ended September 30, 2010, sales of investment securities
resulted in a net loss of $4,000 compared to a gain of $252,000 in the
first nine months of 2009. In addition, during the first nine months ended
September 30, 2010, the Company experienced a decline in service charge
income of $96,000 or 12.57% due to a decrease in insufficient funds fee
income.
Noninterest expense for the third quarter of 2010 decreased $296,000
(6.94%) to $3,972,000 from $4,268,000 for the third quarter of 2009 and for
the nine months ended September 30, 2010, increased $104,000 (.86%) to
$12,212,000 from $12,108,000 for the nine months ended September 30, 2009.
Much of the fluctuation in noninterest expense reflects costs associated
with the Company's OREO, legal fees, and increased costs of FDIC insurance.
In the third quarter of 2010, OREO related expense decreased $621,000 from
the third quarter of 2009. This decrease was partially offset by an
increase in FDIC insurance of $217,000 from the third quarter of 2009. For
the nine months ended September 30, 2010, the total OREO-related expense
was $743,000 compared to $1,318,000 for the same period in 2009, a decrease
of $575,000 or 43.63%. This decrease was offset by legal fees, associated
with loan collections, which increased by $206,000 from $125,000 for the
nine months ended September 30, 2009 to $331,000 in expense for the nine
months ended September 30, 2010, and FDIC insurance which was $1,061,000
for the nine months ended September 30, 2010 up $486,000 (84.50%) from
$575,000 for the nine months ended September 30, 2009.
The fully taxable equivalent efficiency ratio for the third quarter of 2010
increased to 65.19% from 63.71% for the third quarter of 2009 and for the
nine months ended September 30, 2010 increased to 65.44% from 58.72% for
the nine months ended September 30, 2009.
Income Taxes
The Company recorded an income tax benefit for the quarter ended September
30, 2010 of $89,000, compared to a provision of $429,000 for September 30,
2009. For the nine months ended September 30, 2010, the benefit for income
taxes was $66,000, compared to a provision of $497,000 for the nine months
ended September 30, 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 against an overall lower
amount of taxable income.
Capital
Total shareholders' equity at September 30, 2010 was $89,994,000, up
$2,649,000 (3.03%) 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 securities. The Company's subsidiary, American River
Bank, exceeds all regulatory requirements including being above the
well-capitalized regulatory guidelines. At September 30, 2010, American
River Bank's Leverage ratio was 11.81%, the Tier 1 Risk Based ratio was
17.78% and the Total Risk Based Capital ratio was 19.04%. At September 30,
2009, American River Bank's Leverage ratio was 8.55%, Tier 1 Risk Based
ratio was 11.15% and the Total Risk Based Capital ratio was 12.41%.
At September 30, 2010, American River Bankshares' Leverage ratio was
12.60%, the Tier 1 Risk Based ratio was 18.95% and the Total Risk Based
Capital ratio was 20.21%. At September 30, 2009, American River
Bankshares' leverage ratio was 8.49%, the Tier 1 Risk Based ratio was
11.06% and the Total Risk Based Capital ratio was 12.31%.
Performance Metrics
Performance measures for the third quarter of 2010 (annualized): the Return
on Average Assets (ROAA) was 0.03%, Return on Average Equity (ROAE) was
0.17% and Return on Average Tangible Equity (ROATE) was 0.21% compared to
the ROAA of .59%, ROAE of 5.22% and ROATE of 7.17%, during the third
quarter of 2009. For the nine months ended September 30, 2010, the Company
had a ROAA of 0.09%, ROAE of 0.60% and ROATE of .74% compared to a ROAA of
0.33%, ROAE of 2.96% and ROATE of 4.05% for the nine months ended September
30, 2009.
Earnings Conference Call
The third quarter earnings conference call will be held Thursday, October
21, 2010 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 (800) 679-2939. No conference ID number 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)
September 30, December 31, September 30,
ASSETS 2010 2009 2009
------------- ------------- -------------
Cash and due from banks $ 51,458 $ 58,493 $ 54,304
Federal funds sold - - -
Interest-bearing deposits in
banks - - -
Investment securities 142,642 112,935 84,270
Loans & leases:
Real estate 267,700 286,565 289,856
Commercial 61,178 72,621 79,332
Lease financing 2,986 3,920 4,161
Other 21,007 21,725 22,181
Deferred loan and lease
origination fees, net (428) (600) (642)
Allowance for loan and
lease losses (7,447) (7,909) (7,572)
------------- ------------- -------------
Loans and leases, net 344,996 376,322 387,316
------------- ------------- -------------
Bank premises and equipment 1,991 2,094 2,168
Goodwill and intangible assets 16,782 16,965 17,029
Other real estate owned, net 3,067 2,508 3,484
Accrued interest receivable
and other assets 20,000 25,101 17,566
============= ============= =============
$ 580,936 $ 594,418 $ 566,137
============= ============= =============
LIABILITIES &
SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $ 128,775 $ 118,328 $ 118,418
Interest checking 46,895 50,154 45,084
Money market 134,930 131,614 126,627
Savings 43,400 36,234 34,404
Time deposits 115,799 133,425 140,384
------------- ------------- -------------
Total deposits 469,799 469,755 464,917
------------- ------------- -------------
Short-term borrowings 7,000 14,500 17,000
Long-term borrowings 10,000 17,000 17,000
Accrued interest and other
liabilities 4,143 5,818 3,334
------------- ------------- -------------
Total liabilities 490,942 507,073 502,251
Total shareholders' equity 89,994 87,345 63,886
============= ============= =============
$ 580,936 $ 594,418 $ 566,137
============= ============= =============
Ratios:
Nonperforming loans and leases
to total loans and leases 7.07% 5.46% 4.56%
Net chargeoffs to average
loans and leases (YTD) 2.24% 1.62% 1.43%
Allowance for loan and lease
loss to total loans and
leases 2.11% 2.06% 1.92%
American River Bank Capital
Ratios:
Leverage Ratio 11.81% 11.65% 8.55%
Tier 1 Risk-Based Capital
Ratio 17.78% 16.04% 11.15%
Total Risk-Based Capital Ratio 19.04% 17.30% 12.41%
American River Bankshares
Capital Ratios:
Leverage Ratio 12.60% 12.45% 8.49%
Tier 1 Risk-Based Capital
Ratio 18.95% 17.13% 11.06%
Total Risk-Based Capital Ratio 20.21% 18.39% 12.31%
American River Bankshares
Condensed Consolidated Statement of Operations (Unaudited)
(Dollars in thousands, except share and per share data)
Third Third For the Nine Months
Quarter Quarter % Ended September 30, %
2010 2009 Change 2010 2009 Change
--------- --------- ------- --------- --------- -------
Interest
income $ 6,344 $ 7,163 (11.43)% $ 19,531 $ 22,235 (12.16)%
Interest
expense 838 1,235 (32.15)% 2,671 3,950 (32.38)%
--------- --------- --------- ---------
Net
interest
income 5,506 5,928 (7.12)% 16,860 18,285 (7.79)%
Provision
for loan
and lease
loss 2,025 1,001 102.30 % 5,677 6,030 (5.85)%
Total
noninterest
income 441 597 (26.13)% 1,362 1,756 (22.44)%
Total
noninterest
expense 3,972 4,268 (6.94)% 12,212 12,108 0.86 %
--------- --------- --------- ---------
(Loss)
income
before
provision
for income
taxes (50) 1,256 (103.98)% 333 1,903 (82.50)%
(Benefit
from)
provision
for income
taxes (89) 429 (120.75)% (66) 497 (113.28)%
========= ========= ========= =========
Net income $ 39 $ 827 104.72 % $ 399 $ 1,406 (71.62)%
========= ========= ========= =========
Basic
earnings
per share $ 0.00 $ 0.14 (100.00)% $ 0.04 $ 0.24 (83.33)%
Diluted
earnings
per share $ 0.00 $ 0.14 (100.00)% $ 0.04 $ 0.24 (83.33)%
Averarge
diluted
shares
outstand-
ing 9,868,506 5,859,536 9,853,275 5,847,955
Net
interest
margin as
a
percentage
of
average
earning
assets 4.41% 4.91% 4.55% 4.96%
--------- --------- ------- --------- --------- -------
Operating
Ratios:
Return on
average
assets 0.03% 0.59% 0.09% 0.33%
Return on
average
equity 0.17% 5.22% 0.60% 2.96%
Return on
average
tangible
equity 0.21% 7.17% 0.74% 4.05%
Efficiency
ratio
(fully
taxable
equival-
ent) 65.19% 63.71% 65.44% 58.72%
--------- --------- ------- --------- --------- -------
American River Bankshares
Condensed Consolidated Statement of Income (Unaudited)
Trailing Four Quarters
(Dollars in thousands, except share and per share data)
Third Second First Fourth
Quarter Quarter Quarter Quarter
2010 2010 2010 2009
--------- --------- --------- ---------
Interest income $ 6,344 $ 6,473 $ 6,714 $ 6,887
Interest expense 838 891 942 1,140
--------- --------- --------- ---------
Net interest income 5,506 5,582 5,772 5,747
Provision for loan and lease
loss 2,025 2,011 1,641 2,500
Total noninterest income 441 460 461 513
Total noninterest expense 3,972 4,055 4,185 3,703
--------- --------- --------- ---------
(Loss) income before provision
for income taxes (50) (24) 407 57
(Benefit from) provision for
income taxes (89) (78) 101 (123)
========= ========= ========= =========
Net income $ 39 $ 54 $ 306 $ 180
========= ========= ========= =========
Basic earnings per share $ 0.00 $ 0.01 $ 0.03 $ 0.03
Diluted earnings per share $ 0.00 $ 0.01 $ 0.03 $ 0.03
Net interest margin as a
percentage of average
earning assets 4.41% 4.52% 4.73% 4.74%
Averarge diluted shares
outstanding 9,868,506 9,845,533 9,845,533 6,725,359
Shares outstanding-end of
period 9,874,887 9,845,533 9,845,533 9,845,533
--------- --------- --------- ---------
Operating Ratios (annualized):
Return on average assets 0.03% 0.04% 0.21% 0.12%
Return on average equity 0.17% 2.40% 1.41% 1.03%
Return on average tangible
equity 0.21% 0.30% 1.74% 1.37%
Efficiency ratio (fully
taxable equivalent) 65.19% 65.53% 65.56% 57.58%
--------- --------- --------- ---------
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
September 30, 2010 2009
---------------------------- ----------------------------
Avg Avg Avg Avg
ASSETS Balance Interest Yield Balance Interest Yield
Loans and
leases $356,340 $ 5,465 6.08% $399,739 $ 6,302 6.25%
Taxable
investment
securities 127,788 722 2.24% 62,845 635 4.01%
Tax-exempt
investment
securities 15,640 209 5.30% 21,494 291 5.37%
Corporate stock 19 - - 32 - -
Federal funds
sold - - - - - -
Interest-bearing
deposits in
banks - - - 570 6,000 4.18%
-------- --------- -------- ---------
Total earning
assets 499,787 6,396 5.08% 484,680 7,234 5.92%
-------- --------- -------- ---------
Cash & due from
banks 48,021 41,026
Other assets 42,215 41,763
Allowance for
loan & lease
losses (8,065) (8,019)
======== ========
$581,958 $559,450
======== ========
LIABILITIES &
SHAREHOLDERS'
EQUITY
Interest
checking and
money market $182,165 $ 330 0.72% $164,654 $ 366 0.88%
Savings 42,146 55 0.52% 35,879 64 0.71%
Time deposits 118,292 333 1.12% 138,836 567 1.62%
Other
borrowings 19,636 120 2.42% 35,543 238 2.66%
-------- --------- -------- ---------
Total
interest
bearing
liabilities 362,239 838 0.92% 374,912 1,235 1.31%
-------- --------- -------- ---------
Noninterest
bearing demand
deposits 125,139 117,594
Other
liabilities 4,591 4,125
-------- --------
Total
liabilities 491,969 496,631
Shareholders'
equity 89,989 62,819
======== ========
$581,958 $559,450
======== ========= ======== ======== ========= ========
Net interest
income &
margin $ 5,558 4.41% $ 5,999 4.91%
========= ======== ========= ========
Nine months
ended
September 30, 2010 2009
---------------------------- ----------------------------
Avg Avg Avg Avg
ASSETS Balance Interest Yield Balance Interest Yield
Loans and
leases $366,601 $ 16,883 6.16% $409,425 $ 19,384 6.33%
Taxable
investment
securities 117,409 2,160 2.46% 63,679 2,046 4.30%
Tax-exempt
investment
securities 15,933 649 5.45% 24,468 981 5.36%
Corporate stock 23 - - 29 6 27.66%
Federal funds
sold - - - 14 - -
Interest-bearing
deposits in
banks - - - 2,144 59 3.68%
-------- --------- -------- ---------
Total earning
assets 499,966 19,692 5.27% 499,759 22,476 6.01%
-------- --------- -------- ---------
Cash & due from
banks 48,271 33,611
Other assets 43,718 41,948
Allowance for
loan & lease
losses (8,360) (6,669)
======== ========
$583,595 $568,649
======== ========
LIABILITIES &
SHAREHOLDERS'
EQUITY
Interest
checking and
money market $181,890 $ 1,023 0.75% $156,950 $ 1,007 0.86%
Savings 40,350 170 0.56% 33,907 172 0.68%
Time deposits 123,720 1,084 1.17% 137,464 1,897 1.85%
Other
borrowings 21,623 394 2.44% 55,646 874 2.10%
-------- --------- -------- ---------
Total
interest
bearing
liabilities 367,583 2,671 0.97% 383,967 3,950 1.38%
-------- --------- -------- ---------
Noninterest
bearing demand
deposits 121,731 115,769
Other
liabilities 5,280 5,338
-------- --------
Total
liabilities 494,594 505,074
Shareholders'
equity 89,001 63,575
======== ========
$583,595 $568,649
======== ========= ======== ======== ========= ========
Net interest
income &
margin $ 17,021 4.55% $ 18,526 4.96%
========= ======== ========= ========
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