American River Bankshares (NASDAQ-GS: AMRB) today reported net
income of $2.4 million, or $0.40 per diluted share for the second
quarter of 2021 compared to $1.7 million, or $0.30 per diluted
share for the second quarter of 2020. For the six months ended June
30, 2021, net income was $5.0 million or $0.84 per diluted share,
compared to $3.2 million or $0.54 per diluted share for the six
months ended June 30, 2020.
“The second quarter of 2021 was quite active for AMRB; we
announced the merger with Bank of Marin Bancorp, worked diligently
to help our PPP borrowers have their loans forgiven, and continued
to keep our focus on growing the Company,” said David E. Ritchie,
Jr., President and Chief Executive Officer. “Despite these
activities, our priority was keeping our staff and clients safe
through the COVID-19 Pandemic and helping our clients navigate
through this crisis.”
Financial Highlights
- On April 19, 2021, the Company announced that it had entered
into an Agreement to Merge and Plan of Reorganization with Bank of
Marin Bancorp. See the Form 8-K filed by the Company with the
Securities and Exchange Commission (“SEC”) on April 19, 2021 or the
Form DEFM-14 filed with the SEC on June 28, 2021.
- Net income for the second quarter of 2021, excluding merger
related expenses of $431,000, was $2.8 million, or $0.47 per
diluted share and net income for the six months ending June 30,
2021, excluding merger costs of $431,000, was $5.4 million, or
$0.92 per diluted share.
- Net loans decreased $32.5 million (7.1%) from June 30, 2020 to
June 30, 2021. During the first half of 2021, net loans decreased
$44.0 million (9.3%). Much of the decrease in 2021 is related to
loans funded under the Paycheck Protection Program (“PPP”) that
have subsequently been forgiven and closed. PPP loans decreased
$50.0 million (66.0%) from $75.8 million at June 30, 2020 to $25.8
million at June 30, 2021. During the first half of 2021, PPP loans
decreased $29.7 million (53.5%).
- Deposits increased $46.0 million (6.2%) from $741.7 million at
June 30, 2020 to $787.7 million at June 30, 2021 and increased
$43.5 million (5.8%) during the first six months of 2021.
- The second quarter 2021 net interest margin was 3.44%, compared
to 3.58% for the first quarter of 2021 and 3.48% for the second
quarter of 2020. The net interest margin for the six months ended
June 30, 2021 was 3.51%, compared to 3.60% for the six months ended
June 30, 2020.
- Net interest income was $7.2 million in the second quarter of
2021, compared to $6.5 million in the second quarter of 2020. For
the six months ended June 30, 2021, net interest income was $14.3
million, compared to $12.7 million for the six months ended June
30, 2020.
- Pretax, pre-provision income increased $46,000 (1.5%) to $3.0
million in the second quarter of 2021, compared to $2.9 million in
the second quarter of 2020. For the six months ended June 30, 2021
pretax, pre-provision income was $6.6 million, an increase of $1.2
million (23.9%) when compared to $5.4 million for the first six
months of 2020.
- The allowance for loan losses was $6.3 million (1.45% of total
loans) at June 30, 2021, compared to $6.2 million (1.33% of total
loans) at June 30, 2020. There were no nonperforming loans at June
30, 2021, December 31, 2020 or June 30, 2020.
- Shareholders’ equity was $95.3 million at June 30, 2021,
compared to $92.9 million at March 31, 2021 and $90.3 million at
June 30, 2020. Tangible book value per share was $13.19 at June 30,
2021, compared to $12.84 at March 31, 2021 and $12.45 at June 30,
2020. Book value per share was $15.91 per share at June 30, 2021,
compared to $15.58 per share at March 31, 2021 and $15.20 per share
at June 30, 2020.
- The Company continued the quarterly cash dividend by paying a
$0.07 per share cash dividend on May 19, 2021.
- The Company continues to maintain strong capital ratios. At
June 30, 2021, the Leverage ratio was 8.4% compared to 8.5% at
March 31, 2021 and 8.4% at June 30, 2020, the Tier 1 Risk-Based
Capital ratio was 16.4% compared to 15.5% at March 31, 2021 and
15.5% at June 30, 2020, and the Total Risk-Based Capital ratio was
17.6% compared to 16.7% at March 31, 2021 and June 30, 2020.
Northern California Economic Update, June 30,
2021
Each quarter, management at American River Bank prepares an
economic report for internal use that analyzes the recent
historical rolling quarters within the three primary markets in
which the Company does business – Greater Sacramento Area and
Sonoma and Amador Counties. Sources of economic and industry
information include: Colliers International, Keegan & Coppin
Company, Inc., ycharts, and the State of California Employment
Development Department.
The commercial real estate and employment data below, primarily
covering years 2018 through 2020, reflects mostly positive trends
in the markets served by the Bank. 2019 commercial real estate
results reflect some slight signs of slowing when compared to
year-end 2018. Unemployment for the month of December 2019
decreased when compared to year-end 2018. As of December 31, 2020,
unemployment increased when compared to year over year results, in
all of the market areas of the Bank, due in large part to the
COVID-19 pandemic which has persisted for much of 2020 and
continuing into 2021. Although unemployment in the State of
California was higher at December 31, 2020 compared to December 31,
2019, unemployment shows a decreasing trend over the year, ending
May 2021 at 7.9% compared to May 2020 of 15.6%.
The Bank’s management continues to closely monitor the ongoing
economic effects of the COVID-19 pandemic, including temporary and
permanent business closures, increased unemployment, the impact of
the excess stimulus in the economy, and the disruption of supply
chains for construction and other industries. Unemployment has
stabilized as businesses have begun to reopen while the commercial
real estate market begins to recover as the vaccine continues to be
administered and restrictions are lifted in the State of
California. As of June 15, 2021, most of the COVID-19 restrictions
put in place in 2020 where lifted by the Governor of
California.
Commercial Real Estate. In the Greater
Sacramento Area, when comparing fourth quarter 2019 to fourth
quarter 2018, commercial real estate vacancies improved, or stayed
the same, in all segments. Office vacancy decreased from 14.0% to
13.8%, retail vacancy remains at 7.8%, and industrial vacancy
decreased from 4.7% to 4.6%. Vacancy rates have increased for the
office segment for the fourth quarter 2020, increasing to 14.9%, a
110 bps increase compared to the fourth quarter 2019, with
industrial vacancy rates increasing to 5.5%, a 70 bps increase
compared to fourth quarter 2019. For the first quarter 2021, the
trend continued for vacancy rates for the office segment,
increasing to 15.6%, a 230 bps increase from the first quarter of
2020. For the first quarter of 2021, the industrial sector showed a
reduction in vacancy to 4.7%, a 10 bps decrease compared to the
first quarter of 2020.
In Sonoma County, vacancy rates fluctuated within a relatively
narrow range during 2019. Comparing fourth quarter 2019 to fourth
quarter 2018, commercial real estate office vacancy remained at
12.3%, retail vacancy decreased from 4.5% to 4.3%, and industrial
vacancy decreased from 4.8% to 4.7%. As of the fourth quarter 2020,
both industrial and office vacancy increased compared to 2019, with
industrial vacancy of 5.7% and office of 13.9%. In line with
industrial and office vacancy, retail vacancy also increased to
7.7%. 2021 figures were not available at the time of this
report.
In all segments (office, retail, and industrial), the Greater
Sacramento Area reported a positive absorption from December 31,
2018 through December 31, 2019. Some fluctuation occurred in 2019
but as of December 31, 2019 absorption was a positive 129,414
square feet (SF) for office, 568,000 SF for retail, and 120,000 SF
for industrial. For the fourth quarter of 2020, office space
decreased while industrial space increased; office had net loss of
466,000 SF and industrial had a net absorption of 1,969,000 SF.
Overall, for the year 2020, office had a net loss of 494,000 SF
while industrial had a net absorption of 2,660,000 SF which was
more than three times as high as 2019. Major drivers of occupancy
gains in industrial space come from retailers Walmart and Amazon
which have seen increased business during the COVID-19 pandemic.
For the first quarter of 2021, office space continued the decline
with a net loss of 511,000 SF for a 12-month decline of 1,168,000
SF. Industrial space continued the positive trend with net
absorption of 903,000 SF and 12-month net absorption of 3,506,000
SF.
Sonoma County and the City of Santa Rosa reported positive
absorption for the office segment from December 31, 2018 through
most of 2019, with mixed results by the end of the third quarter
2019 as it was negative 45,441 SF in Sonoma County and a positive
44,143 SF in Santa Rosa. As the COVID-19 pandemic has continued for
the past year, office space for Sonoma County and the City of Santa
Rosa reported decreased to absorption. For the fourth quarter 2020,
the office sector lost 185,000 SF in Sonoma County with Santa Rosa
totaling a loss of 136,000 SF of the total 185,000 SF. 2021 data
was not available for this report.
Industrial absorption in Sonoma County was also positive through
third quarter 2018, however, experienced an increasingly negative
absorption since that time. During the third quarter 2019, some
improvement was made, however, absorption was still a negative
71,923 SF. As of fourth quarter 2019, industrial absorption
improved further to a positive 18,599 SF. In the City of Santa
Rosa, industrial absorption began to decline as of September 30,
2018 at which time absorption was a negative 7,795 SF. As of
September 30, 2019, absorption was a negative 6,876 SF, however,
improved as of December 31, 2019 to a positive 81,630 SF. Despite
the COVID-19 pandemic, trends for industrial in Sonoma County
continued to be positive. For the fourth quarter 2020, industrial
absorbed a net 12,000 SF.
In the Greater Sacramento area, commercial lease rates overall
have remain stable from December 31, 2018 through December 31, 2019
with lease rates as follows--office: $1.99/SF; retail: $1.41/SF,
and industrial: $0.57/SF. The fourth quarter 2020 reported average
lease rates for office increased to $2.07/SF a 3.9% increase year
over year and industrial increased to $0.58/SF a 1.1% increase year
over year. The first quarter 2021 reported an increase to office
lease rates to $2.12/SF a 4.7% increase, year over year. Industrial
space showed no increase with a rate of $0.58/SF from quarter to
quarter but increased 6.9% year over year. Updated retail lease
rates for 2021 are not available at this time.
As a proxy for Sonoma County, the City of Santa Rosa’s gross
office lease rates as of year-end 2018 ranged from $1.80/SF to
$2.50/SF (depending on quality) and industrial rates ranged from
$0.95/SF to $1.30/SF with cannabis use rents ranging from $1.50/SF
to $3.00+ per SF gross. As of second quarter 2019, office rental
rates ranged from $1.95 - $2.35/SF full service for Class A, and
$1.75 - $1.90/SF full service for Class B. Industrial rental rates
ranged from $0.95 - $1.25/SF gross (non-cannabis). Retail rental
rates ranged from $2.00 - $4.50/SF NNN for shops in anchor centers
and $1.25 - $1.50/SF NNN for anchor space in anchor centers.
Subsequent data for Santa Rosa is no longer available nor is there
any retail rental rate data available for the City of Santa Rosa
for the other time periods mentioned above, or thereafter.
Due to the rural nature of the Amador County region, it has the
lowest level of commercial real estate concentration in the Bank’s
footprint. There is limited supply for commercial real estate in
this region and as a result, minimal information is available.
Multi-family. The Bank’s multi-family loan
portfolio is widely spread geographically throughout California.
Sacramento data is currently being used below as it is the Bank’s
largest concentration, however, as multi-family loans become more
concentrated in other major areas they may be added in the
future.
The multi-family market in the Sacramento area has reflected
high occupancy from March 31, 2018 through December 31, 2019. The
highest occupancy rate within this time range was in third quarter
2019 at 96.9%, and the lowest was first quarter 2018 at 96.3%. As
of fourth quarter 2019, occupancy was at 96.5%. Monthly lease rates
during this period ranged from $1,367 in first quarter 2018 to
$1,495 in fourth quarter 2019. As of the third quarter 2020,
occupancy totaled 97.3% and lease rates increased to $1,563. For
the fourth quarter of 2020 and the first quarter of 2021, occupancy
remained steady at 97.4% while lease rates continued to increase to
$1,597 for the fourth quarter of 2020 and $1,628 for the first
quarter 2021.
The trailing 12-month cap rate from first quarter 2018 through
fourth quarter 2019, ranged with some fluctuation from a high of
5.8% in fourth quarter 2019 to a low of 4.8% in the second quarter
2019. As of first quarter 2020, the 12-month cap rate was 5.3%. As
of second quarter 2020, the 12-month cap rate is no longer
available from the Bank’s normal sources.
Employment. National unemployment, which
reached a high of 10.0% at October 31, 2009, had dropped steadily
over the years and stabilized. However, the recent global COVID-19
pandemic facing the nation has had a sudden and tremendous impact
on unemployment. As of December 31, 2020, the national unemployment
rate was 6.7%, an increase compared to February 2020’s 3.9%
unemployment rate but a sharp decrease from a high in April 30,
2020 of 14.7% at the start of the pandemic. As of May 31, 2021, the
trend in the national unemployment continues the positive trend and
is down to 5.8%.
California unemployment was 4.4% at December 31, 2017. As of
December 2018 and December 2019, the rate decreased further to 4.3%
and 3.9% respectively. The California unemployment rate increased
to 9.3% as of December 2020 with further improvement to 7.9% at May
31, 2021. The unemployment rate has improved from a high in April
2020 of 16.2% due to the COVID-19 pandemic. The number of employed
Californians increased during years 2017 and 2018, and slowed at
year-end 2019. There were 18.7 million at the end of years 2018 and
2019. As of December 2020, the number of employed Californians
decreased since year-end 2019 by 1.7 million jobs to 17.0 million.
Employed Californians increased by a further 461 thousand as of May
31, 2021 compared to December 31, 2020.
All three of the Bank’s markets reported positive unemployment
rate results from year-end 2017 to year-end 2019 with an increase
in unemployment in 2020 due to the COVID-19 pandemic. When
comparing December 31, 2017 to December 31, 2018, unemployment
rates increased slightly from 3.9% to 4.0% in the Sacramento MSA
and decreased from 2.9% to 2.6% in the Santa Rosa-Petaluma MSA. As
of December 31, 2019, the unemployment rate for Sacramento and
Santa Rosa-Petaluma MSAs decreased to 3.2% and 2.4%, respectively.
Over the same period, Amador County’s unemployment has improved
decreasing to 4.3% at December 31, 2017, 4.0% at December 31, 2018,
and 3.6% at December 31, 2019.
For December 2020, unemployment rates increased in all areas
compared to year-end 2019 as follows: Sacramento MSA increased from
3.2% to 7.6%, Santa-Rosa-Petaluma MSA increased from 2.4% to 6.6%,
and Amador County from 3.6% to 8.1%. All three areas of the Bank’s
market area have continued to show improvement in unemployment
since April/May 2020, the beginning of the COVID-19 pandemic, but
still higher than year-end 2019.
For May 2021, the unemployment rate continued to improve in all
areas compared to the start of the COVID-19 pandemic and December
2020 as follows: Sacramento MSA decreased to 6.3%, Santa
Rosa-Petaluma MSA decreased to 5.3% and Amador county decreased to
6.3%. The unemployment rate for each of the areas continue to
improve from the start of the pandemic as restrictions are lifted
and workers are able to return to work as businesses reopen
fully.
Job growth was positive in all of the Bank’s markets prior to
the COVID-19 pandemic. As of December 2019, the number employed
decreased slightly in the Sacramento MSA and Santa Rosa MSA, 0.19%
and 0.39% respectively, while Amador County increased the number
employed 2.08%. Job growth decreased as of December 2020 compared
to December 2019 due to the COVID-19 pandemic.
Compared to the number employed in the Sacramento MSA employment
decreased by 64,000 jobs or 5.96% from December 2019, Santa Rosa
MSA lost 33,000 jobs or 12.97% compared to December 2019, and
Amador County lost 1,180 jobs or 8.27% compared to December 2019.
However, the December 2020 results reflect an increase in job
growth for all three areas compared to May 2020. The number
employed in the Sacramento MSA increased by 93,000 jobs or 10.11%
from May 2020, Santa Rosa MSA gained 48,600 jobs or 25.88% compared
to May 2020, and Amador County gained 1,290 jobs or 10.83% compared
to May 2020. Although the local economy continues to be impacted by
the COVID-19 pandemic, unemployment for the Bank’s market area
shows improvement as businesses are allowed to reopen with case
numbers decreasing across the region. For May 2021, the Sacramento
MSA increased jobs by 8,900 jobs, the Santa Rosa MSA increased jobs
by 9,000 jobs and Amador county jobs increased by 480 jobs.
California, as a whole, showed an increase in employment numbers
year over year between May 2020 and May 2021 with an increase of
1,888,700 jobs. All markets of the Bank showed a similar trend as
the statewide trend. The Sacramento MSA had a year over year
increase of 92,900 jobs between May 2020 and May 2021, or 10.1%.
The unemployment rate in the Sacramento MSA was 6.7% as of May
2021. The Santa Rosa MSA had a year over year increase in jobs of
21,900 or 10.5 and had an unemployment rate of 5.3% as of May 2021.
Amador County had a year over year increase of 1,690 jobs or 14.2%
and had an unemployment rate of 6.3% as of May 2021.
Balance Sheet Review
American River Bankshares’ assets totaled $906.1 million at June
30, 2021, compared to $869.0 million at December 31, 2020, and
$870.9 million at June 30, 2020.
Net loans totaled $427.9 million at June 30, 2021, compared to
$471.9 million at December 31, 2020, and $460.4 million at June 30,
2020.
The loan portfolio at June 30, 2021 included: real estate loans
of $339.9 million (78% of the portfolio), Paycheck Protection
Program Loans (“PPP”) of $25.8 million (6% of the portfolio),
commercial loans of $35.2 million (8% of the portfolio) and other
loans, which consist mainly of agriculture and consumer loans of
$34.8 million (8% of the portfolio). The real estate loan portfolio
at June 30, 2021 includes: owner-occupied commercial real estate
loans of $89.0 million (26% of the real estate portfolio), investor
commercial real estate loans of $155.1 million (46% of the real
estate portfolio), multi-family real estate loans of $46.3 million
(14% of the real estate portfolio), construction and land
development loans of $21.8 million (6% of the real estate
portfolio) and residential real estate loans of $27.7 million (8%
of the real estate loan portfolio).
Nonperforming assets (“NPAs”) include nonperforming loans, other
assets and other real estate owned (“OREO”). Nonperforming loans
include all such loans that are either placed on nonaccrual status
or are 90 days past due as to principal or interest, but still
accrue interest because such loans are well-secured and in the
process of collection. NPAs were $800,000 at June 30, 2021 and
December 31, 2020 compared to $865,000 at June 30, 2020. The NPAs
to total assets ratio remained at 0.09% at the end of June 2021
from December 31, 2020 and decreased from 0.10% one year
ago.
The lone NPA at June 30, 2021 and at December 31, 2020 was an
OREO property totaling $800,000 compared to a balance of $846,000
at June 30, 2020. During the fourth quarter of 2020, the book value
of this OREO property was written down by $46,000 to $800,000 from
$846,000 due to an updated appraisal. At June 30, 2021, December
31, 2020 and June 30, 2020 there was no valuation allowance for
OREO properties.
Loans measured for impairment were $6.9 million at the end of
June 2021, a decrease from $7.0 million at December 31, 2020, and a
decrease from $7.1 million at the end of June 2020. Specific
reserves of $102,000 were held on the impaired loans at June 30,
2021, compared to $112,000 at December 31, 2020 and $130,000 at
June 30, 2020. There was a $410,000 reversal in provision for loan
losses in the second quarter of 2021 compared to a $545,000
provision for the second quarter of 2020. The Company had net
recoveries of $2,000 in the second quarter of 2021, compared to net
recoveries of $16,000 in the second quarter of 2020. There was a
$410,000 reversal in provision for loan losses in the first half of
2021 compared to $1.0 million in provision for the first half of
2020. For the first six months of 2021, the Company had net
recoveries of $70,000 compared to net recoveries of $20,000 in the
first six months of 2020. The Company continues to gather the
latest information available to perform and update its impairment
analysis. As more information becomes available, including the
economic impact of the COVID-19 pandemic and stimulus programs
implemented by the U.S. and State Governments, the Company will
update the impairment analysis, which could lead to further charges
to the ALLL. The Company maintains the allowance for loan and lease
losses at a level believed to be adequate for known and inherent
risks in the portfolio. The methodology incorporates a variety of
risk considerations, both quantitative and qualitative, in
establishing an allowance for loan and lease losses that management
believes is appropriate at each reporting date.
During 2020, the Company diligently worked with our borrowers to
provide loan payment relief to those affected by the COVID-19
pandemic. At June 30, 2021, all remaining such arrangements have
returned to their contractual loan terms, and are current to those
terms. During 2020, the Company funded 477 PPP loans
totaling $80.2 million and in 2021 the Company funded an additional
203 PPP loans totaling $26.0 million. As of June 30, 2021, 178 of
these loans, totaling $25.8 million remained, with the difference
being loans forgiven or paid down. The unamortized processing fees
related to these PPP loans was $702,000, $87,000 of which was
related to PPP loans funded in 2020 and $615,000 was related to PPP
loans funded in 2021. Investment securities, which
excludes $4.9 million in stock of the Federal Home Loan Bank of San
Francisco (“FHLB Stock”), totaled $312.2 million at June 30, 2021,
up 1.7% from $307.0 million at December 31, 2020 and up 23.7% from
$252.4 million at June 30, 2020. At June 30, 2021, the investment
portfolio was comprised of 93% U.S. Government agencies or U.S.
Government-sponsored agencies (primarily mortgage-backed
securities), 5% obligations of states and political subdivisions,
and 2% corporate bonds.
At June 30, 2021, total deposits were $787.7 million, compared
to $744.2 million at December 31, 2020 and $741.7 million one year
ago. Core deposits increased 6.8% to $718.1 million at June 30,
2021 from $672.2 million at June 30, 2020 and increased 6.4% from
$675.0 million at December 31, 2020. The Company considers all
deposits except time deposits as core deposits.
At June 30, 2021, noninterest-bearing demand deposits accounted
for 42% of total deposits, interest-bearing demand accounts were
13%, savings deposits were 12%, money market balances accounted for
24% and time certificates were 9% of total deposits. At June 30,
2020, noninterest-bearing demand deposits accounted for 42% of
total deposits, interest-bearing demand accounts were 11%, savings
deposits were 11%, money market balances accounted for 27% and time
certificates were 9% of total deposits.
Shareholders’ equity increased $2.2 million (2.4%) to $95.3
million at June 30, 2021 compared to $93.1 million at December 31,
2020 and $5.0 million (5.6%) from $90.3 million at June 30, 2020.
The increase in equity from December 31, 2020 was due to a $4.2
million increase in Retained Earnings due to the net income for the
year less cash dividends declared ($833,000), plus a $380,000
million increase in common stock from equity compensation offset by
a $2.4 million decrease in accumulated other comprehensive income
related to a decrease in the unrealized gain on securities.
Net Interest Income
The net interest income during the second quarter of 2021
increased $673,000 (10.3%) to $7.2 million from $6.5 million in the
second quarter of 2020 and for the six months ended June 30, 2021,
net interest income increased $1.6 million (12.7%) to $14.3 million
from $12.7 million for the six months ended June 30, 2020. The net
interest margin as a percentage of average earning assets was 3.44%
in the second quarter of 2021, compared to 3.58% in the first
quarter of 2021 and 3.48% in the second quarter of 2020. For the
six months ended June 30, 2021 the net interest margin was 3.51%
compared to 3.60% for the six months ended June 30, 2020. Interest
income for the second quarter of 2021 increased $425,000 (6.1%) to
$7.4 million from $7.0 million for the second quarter of 2020 and
for the six months ended June 30, 2021, interest income increased
$1.1 million (7.8%) to $14.8 million from $13.7 million for the six
months ended June 30, 2020.
The average tax equivalent yield on earning assets decreased
from 3.72% in the second quarter of 2020 to 3.54% for the second
quarter of 2021 and for the six months ended June 30, 2021
decreased to 3.61% from 3.88% for the six months ended June 30,
2020. Much of the decrease in yields for both the three- and
six-month period comparisons can be attributed to an overall lower
rate environment for investment securities and a large increase in
cash held in interest-bearing deposits in banks during this low
rate environment. The average balance of interest-bearing deposits
in banks increased $9.6 million from $53.4 million to $63.0 million
for the second quarter of 2021, while the yield decreased from
0.15% to 0.13% during that same time period. Interest-bearing
deposits in banks increased $15.9 million from $31.0 million to
$46.9 million for the first half of 2021 while the yield decreased
from 0.35% to 0.12%.
The average balance of earning assets increased $83.7 million
(11.0%) from $760.0 million in the second quarter of 2020 to $843.7
million in the second quarter of 2021 and for the six months ended
June 30, 2021, increased $114.1 million (16.0%) to $829.1 million
from $715.0 million for the six months ended June 30, 2020.
Included in interest income on loans are fees recognized on PPP
loans. These fees are amortized over the life of the PPP loan and
are accelerated once a loan is paid off, primarily through loan
forgiveness. PPP loan fees recognized in the second quarter of 2021
were $720,000, compared to $307,000 recognized in the second
quarter of 2020 and for the first six months of 2021, the Company
recognized $1,392,000 in PPP fees compared to $307,000, in the
first six months of 2020. Interest income from PPP loans in the
second quarter of 2021 was $120,000, compared to $139,000
recognized in the second quarter of 2020 and for the first six
months of 2021, the Company recognized $266,000 in interest income
on PPP loans compared to $139,000, in the first six months of
2020.
Interest expense for the second quarter of 2021 decreased
$248,000 (54.5%) to $207,000 from $455,000 for the second quarter
of 2020 and for the six months ended June 30, 2021 decreased
$553,000 (56.3%) to $429,000 from $1.0 million for the six months
ended June 30, 2020. The decrease in interest expense is related to
a replacement of some higher rate time deposits with lower rate
ones and an increase in lower rate interest checking and money
market deposits. As time deposits matured, they renewed at lower
market rates or they exited the Company and were replaced by lower
cost checking and money market accounts. Average time deposits
increased $4.5 million (6.4%) from $70.2 million during the second
quarter of 2020 to $74.7 million during the second quarter of 2021
and the cost of those funds decreased from 1.09% to 0.48% during
that same time period. The average cost of funds decreased from
0.42% in the second quarter of 2020 to 0.18% in the second quarter
of 2021. Average interest-bearing deposits increased $18.8 million
(7.1%) from $265.9 million during the second quarter of 2020 to
$284.7 million during the second quarter of 2021.
Noninterest Income and Expense
Noninterest income for the second quarter of 2021 was $462,000,
an increase of $126,000 (37.5%) from $336,000 in the second quarter
of 2020 and was $1.1 million, an increase of $265,000 (33.6%) for
the six months ended June 30, 2021 from $788,000 in the first six
months of 2020. For both periods, the increase in noninterest
income was predominately related to an increase in gain on sale of
securities from no gain in the second quarter of 2020 to a gain of
$22,000 in the second quarter of 2021 and from $38,000 in the first
half of 2020 to $194,000 for the first half of 2021. Service
charges also increased from $111,000 in the second quarter of 2020
to $184,000 in 2021 and from $266,000 in the first half of 2020 to
$348,000 in the first half of 2021.
Noninterest expense increased $753,000 (19.2%) to $4.7 million
for the second quarter of 2021 from $3.9 million in the second
quarter of 2020 and increased $600,000 (7.4%) from $8.1 million for
the six months ended June 30, 2020 to $8.7 million for the same
period in 2021. The increase is primarily due to an increase
in salaries and employee benefits of $490,000 (19.5%) from the
second quarter of 2020 to 2021 and $387,000 (7.2%) from the first
half of 2020 to the first half of 2021 due to a decrease in
deferred direct loan origination costs, which increased salary
expense. The increase in noninterest expense is also due to an
increase in other expense of $287,000 (30.5%) from $940,000 in the
second quarter of 2020 to $1.2 million in the second quarter of
2021. The primary reason for the increase in other expense was
related to merger expenses of $431,000 and are related to the
pending merger with Bank of Marin Bancorp.
The fully taxable equivalent efficiency ratio for the second
quarter of 2021 increased to 60.6% from 56.7% for the second
quarter of 2020 and for the six months ended June 30, 2021,
decreased to 56.4% from 59.8% for the six months ended June 30,
2020. The primary reason for the increased efficiency ratio in the
second quarter of 2021 compared to the second quarter of 2020 was
related to the $431,000 merger related expenses.
Provision for Income Taxes
Federal and state income taxes for the quarter ended June 30,
2021 increased by $376,000 (57.5%) from $654,000 in the second
quarter of 2020 to $1.0 million in the second quarter of 2021 and
increased $892,000 (77.5%) from $1.2 million in the first six
months of 2020 to $2.0 million in 2021. The higher provision for
taxes in 2021 compared to 2020 primarily resulted from a lower
level of tax benefits from tax-exempt investments and equity
compensation in 2021 compared to 2020, an increase in taxable
income in 2021 compared to 2020, and non-tax-deductible merger
related expenses in 2021. About American River
Bankshares
American River Bankshares [NASDAQ-GS: AMRB] is the parent
company of American River Bank, a regional bank serving Northern
California since 1983. We provide financial expertise and
exceptional service to complement a full suite of banking products
and services to meet the needs of the communities we serve. For
more information, call (800) 544-0545 or visit our website at
AmericanRiverBank.com.
Use of Non-GAAP Financial Measures
This news release contains certain non-GAAP (Generally Accepted
Accounting Principles) financial measures in addition to results
presented in accordance with GAAP. These measures include
income before provisions for loan losses and income taxes (referred
to as “pretax, pre-provision income”), tangible book value, taxable
equivalent basis, and net income and certain ratios adjusted for
merger related expenses. Management has presented these
non-GAAP financial measures in this earnings release because it
believes that they provide useful and comparative information to
assess trends in the Company’s financial position reflected in the
current quarter and year-to-date results and facilitate comparison
of our performance with the performance of our peers.
Income Before Provision for Loan Losses and Income Taxes
(non-GAAP financial measures)
Income before provision for loan losses and income taxes
(pretax, pre-provision income) adds back both the provision for
loan losses and the provision for income taxes to net income.
The Company believes the income before deducting the provisions for
loan losses and income taxes facilitates the comparison of results
for ongoing business operations. The Company’s management
internally assesses its performance based, in part, on these
non-GAAP financial measures.
Net Interest Margin and Efficiency Ratio (non-GAAP
financial measures)
In accordance with industry standards, certain designated net
interest income amounts are presented on a taxable equivalent
basis, including the calculation of net interest margin and the
efficiency ratio. The Company believes the presentation of
net interest margin on a taxable equivalent basis using a 21%
effective tax rate for 2020 and 2021 allows for comparability of
net interest margin with industry peers by eliminating the effect
of the differences in portfolios attributable to the proportion
represented by both taxable and tax-exempt loans and investments.
The efficiency ratio is a measure of a banking company’s overhead
as a percentage of its revenue. The Company derives this ratio by
dividing total noninterest expense by the sum of the taxable
equivalent net interest income and the total noninterest
income.
Tangible Equity (non-GAAP financial
measures)
Tangible common stockholders' equity (tangible book value)
excludes goodwill and other intangible assets. The Company
believes the exclusion of goodwill and other intangible assets to
create “tangible equity” facilitates the comparison of results for
ongoing business operations. The Company’s management
internally assesses its performance based, in part, on these
non-GAAP financial measures.
Net Income adjusted for Merger Related Expenses
(non-GAAP financial measures)
On April 19, 2021, the Company announced that it had entered
into an Agreement to Merge and Plan of Reorganization (the
“Agreement”) with Bank of Marin Bancorp. As part of
this Agreement, the Company will have expenses that are solely
related to this transaction and are not normal operating expenses.
Net Income adjusted for Merger Related Expenses excludes these
expenses. In addition, we have calculated certain operating ratios
and diluted earnings per share excluding these expenses.
Forward-Looking Statements
Certain matters discussed in this release are “forward-looking
statements” within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, Section 27A of the Securities Act
of 1933, as amended, and subject to the safe-harbor provisions of
the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements may contain words related to future
projections including, but not limited to, words such as “believe,”
“expect,” “anticipate,” “intend,” “may,” “will,” “should,” “could,”
“would,” and variations of those words and similar words that are
subject to risks, uncertainties and other factors that could cause
actual results to differ significantly from those projected.
Factors that could cause or contribute to such differences include,
but are not limited to, the following: the adverse effects of the
COVID-19 pandemic on the economy, our business, borrowers,
customers and employees and the impact of local, state and federal
governments in response to the pandemic, including various
government stimulus packages; current and future legislation and
regulation promulgated by the United States Congress and actions
taken by governmental agencies that may impact the U.S. financial
system; the risks presented by economic volatility and recession,
which could adversely affect credit quality, collateral values,
including real estate collateral, investment values, liquidity and
loan originations and loan portfolio delinquency rates; variances
in the actual versus projected growth in assets and return on
assets; potential loan losses; potential expenses associated with
resolving nonperforming assets; changes in the interest rate
environment including interest rates charged on loans, earned on
securities investments and paid on deposits and other borrowed
funds; competitive effects; the effects of strategic transactions
we are a party to; inadequate internal controls over financial
reporting or disclosure controls and procedures; changes in
accounting policies and practices and the effects of adopting ASU
No. 2016-13, Measurement of Credit Losses on Financial Instruments
(“CECL”); potential declines in fee and other noninterest income
earned associated with economic factors; general economic
conditions nationally, regionally, and within our operating markets
could be less favorable than expected or could have a more direct
and pronounced effect on us than expected and adversely affect our
ability to continue internal growth at historical rates and
maintain the quality of our earning assets; changes in the
regulatory environment including increased capital and regulatory
compliance requirements and government intervention in the U.S.
financial system; changes in business conditions and inflation;
changes in securities markets, public debt markets, and other
capital markets; potential data processing, cybersecurity and other
operational systems failures, breach or fraud; potential decline in
real estate values in our operating markets; the effects of
uncontrollable events such as terrorism, the threat of terrorism or
the impact of military conflicts in connection with the conduct of
the war on terrorism by the United States and its allies, natural
disasters (including earthquakes and wildfires), pandemic disease
and viruses, and disruption of power supplies and communications;
changes in accounting standards, tax laws or regulations and
interpretations of such standards, laws or regulations; projected
business increases following any future strategic expansion could
be lower than expected; the goodwill we have recorded in connection
with acquisitions could become impaired, which may have an adverse
impact on our earnings; our ability to comply with any regulatory
orders or requirements we may become subject to; the effects and
costs of litigation, regulatory, and other legal developments; the
reputation of the financial services industry could experience
deterioration, which could adversely affect our ability to access
markets for funding and to acquire and retain customers; the
possibility that the announced merger with Bank of Marin Bancorp
(“Marin Bancorp”) does not close when expected or at all because
required regulatory, shareholder or other approvals, financial
tests or other conditions to closing are not received or satisfied
on a timely basis or at all; the businesses of the Company and
Marin Bancorp may not be integrated successfully or such
integration may be more difficult, time-consuming or costly than
expected; changes in the Company’s or Marin Bancorp’s stock price
before the effective time of the merger, including as a result of
financial performance, or more generally due to broader stock
market movements, and the performance of financial companies and
peer group companies; the risk that the benefits from the
transaction may not be fully realized or may take longer to realize
than expected, or that expected revenue synergies and cost savings
from the announced merger with Marin Bancorp may not be fully
realized or realized within the expected time frame, including as a
result of changes in general economic and market conditions,
interest and exchange rates, monetary policy, laws and regulations
and their enforcement, the effect of pandemic disease (including
Covid-19) and the degree of competition in the geographic and
business areas in which the Company and Marin Bancorp operate; the
ability to promptly and effectively integrate the businesses of the
Company and Marin Bancorp; the reaction to the merger transaction
of the companies’ clients, employees and counterparties; diversion
of time of directors, management and other employees on
merger-related issues; and the efficiencies we may expect to
receive from any investments in personnel and infrastructure may
not be realized. In addition, the factors set forth under “Item 1A
- Risk Factors” in the Company’s Annual Report on Form 10-K for the
year ended December 31, 2020, and other cautionary statements and
information set forth in the Company’s other periodic filings with
the SEC should also be carefully considered and understood as being
applicable to all related forward-looking statements contained in
this release.
Investor Contact:Mitchell A. DerenzoExecutive Vice
President andChief Financial OfficerAmerican River
Bankshares916-231-6723
Media Contact:Jennifer J. HeldVice President,
Marketing DirectorAmerican River Bankshares916-231-6717
American
River Bankshares |
|
|
Condensed
Consolidated Balance Sheets (Unaudited) |
|
|
(Dollars in
thousands) |
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
June 30, |
ASSETS |
|
2021 |
|
2020 |
|
2020 |
Cash and due
from banks |
$ |
16,884 |
$ |
14,030 |
$ |
17,472 |
Federal
funds sold |
|
- |
|
- |
|
- |
Interest-bearing deposits in banks |
|
101,196 |
|
28,479 |
|
95,230 |
Investment
securities |
|
312,200 |
|
306,978 |
|
252,353 |
Loans: |
|
|
|
|
|
|
Commercial |
|
35,214 |
|
38,976 |
|
40,014 |
Paycheck Protection Program loans
("PPP") |
|
25,805 |
|
55,546 |
|
75,804 |
Real estate |
|
|
|
|
|
|
Commercial |
|
244,108 |
|
251,348 |
|
215,508 |
Multi-family |
|
46,322 |
|
48,760 |
|
48,421 |
Construction |
|
21,796 |
|
18,424 |
|
26,849 |
Residential |
|
27,643 |
|
32,329 |
|
29,034 |
Agriculture |
|
5,831 |
|
6,091 |
|
6,152 |
Consumer |
|
28,930 |
|
28,804 |
|
27,585 |
|
|
435,649 |
|
480,278 |
|
469,367 |
Deferred loan origination (fees)
costs, net |
|
(1,458) |
|
(1,797) |
|
(2,729) |
Allowance for loan losses |
|
(6,288) |
|
(6,628) |
|
(6,198) |
Loans, net |
|
427,903 |
|
471,853 |
|
460,440 |
Bank
premises and equipment, net |
|
933 |
|
1,002 |
|
979 |
Goodwill and
intangible assets |
|
16,321 |
|
16,321 |
|
16,321 |
Investment
in Federal Home Loan Bank Stock |
|
4,857 |
|
4,212 |
|
4,212 |
Other real
estate owned, net |
|
800 |
|
800 |
|
846 |
Accrued
interest receivable and other assets |
|
24,960 |
|
25,316 |
|
23,065 |
|
$ |
906,054 |
$ |
868,991 |
$ |
870,918 |
|
|
|
|
|
|
|
LIABILITIES & SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
Noninterest-bearing deposits |
$ |
328,344 |
$ |
330,095 |
$ |
310,502 |
Interest
checking |
|
106,789 |
|
82,045 |
|
77,930 |
Money
market |
|
188,564 |
|
175,541 |
|
199,941 |
Savings |
|
94,377 |
|
87,315 |
|
83,830 |
Time
deposits |
|
69,607 |
|
69,181 |
|
69,447 |
Total deposits |
|
787,681 |
|
744,177 |
|
741,650 |
Short-term
borrowings |
|
3,000 |
|
7,000 |
|
17,000 |
Long-term
borrowings |
|
10,787 |
|
13,787 |
|
10,460 |
Accrued
interest and other liabilities |
|
9,263 |
|
10,932 |
|
11,538 |
Total liabilities |
|
810,731 |
|
775,896 |
|
780,648 |
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
Common
stock |
$ |
31,341 |
$ |
30,961 |
$ |
30,745 |
Retained
earnings |
|
60,158 |
|
55,978 |
|
52,927 |
Accumulated
other comprehensive income |
|
3,824 |
|
6,156 |
|
6,598 |
Total shareholders' equity |
|
95,323 |
|
93,095 |
|
90,270 |
|
$ |
906,054 |
$ |
868,991 |
$ |
870,918 |
|
|
|
|
|
|
|
Ratios: |
|
|
|
|
|
|
Nonperforming loans to total loans |
|
0.00% |
|
0.00% |
|
0.00% |
Net charge-offs (recoveries) to average loans (annualized at June
30, |
|
|
|
|
|
2021 and 2020) |
|
0.00% |
|
0.01% |
|
-0.01% |
Allowance
for loan losses to total loans |
|
1.45% |
|
1.39% |
|
1.33% |
Allowance
for loan losses to total non PPP loans |
|
1.54% |
|
1.56% |
|
1.58% |
|
|
|
|
|
|
|
American River Bank Capital Ratios: |
|
|
|
|
|
|
Leverage
Capital Ratio |
|
8.36% |
|
8.37% |
|
8.49% |
Common
Equity Tier 1 Risk-Based Capital |
|
16.35% |
|
15.10% |
|
15.62% |
Tier 1
Risk-Based Capital Ratio |
|
16.35% |
|
15.10% |
|
15.62% |
Total
Risk-Based Capital Ratio |
|
17.60% |
|
16.36% |
|
16.88% |
|
|
|
|
|
|
|
American River Bankshares Capital Ratios: |
|
|
|
|
|
|
Leverage
Capital Ratio |
|
8.37% |
|
8.29% |
|
8.42% |
Tier 1
Risk-Based Capital Ratio |
|
16.35% |
|
14.96% |
|
15.48% |
Total
Risk-Based Capital Ratio |
|
17.60% |
|
16.21% |
|
16.73% |
|
|
|
|
|
|
|
Nonperforming loans |
|
- |
|
- |
|
- |
|
Nonperforming assets |
|
800 |
|
800 |
|
865 |
|
|
|
|
|
|
|
|
American
River Bankshares |
Condensed
Consolidated Statements of Income
(Unaudited) |
(Dollars in thousands,
except per share data) |
|
|
Second |
|
Second |
|
|
|
|
For the Six
Months |
|
|
|
|
|
Quarter |
|
Quarter |
% |
|
|
|
Ended June
30, |
% |
|
|
|
|
|
2021 |
|
|
|
2020 |
|
Change |
|
|
|
|
2021 |
|
|
|
2020 |
|
Change |
|
|
Interest income |
$ |
|
7,400 |
|
$ |
|
6,975 |
|
6.1 |
|
% |
|
$ |
|
14,754 |
|
$ |
|
13,690 |
|
7.8 |
|
% |
|
Interest
expense |
|
|
207 |
|
|
|
455 |
|
(54.5 |
) |
% |
|
|
|
429 |
|
|
|
982 |
|
(56.3 |
) |
% |
|
Net interest
income |
|
|
7,193 |
|
|
|
6,520 |
|
10.3 |
|
% |
|
|
|
14,325 |
|
|
|
12,708 |
|
12.7 |
|
% |
|
Provision
for (reversal of) loan losses |
|
|
(410 |
) |
|
|
545 |
|
(175.2 |
) |
% |
|
|
|
(410 |
) |
|
|
1,040 |
|
(139.4 |
) |
% |
|
Noninterest
income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit
accounts |
|
|
184 |
|
|
|
111 |
|
65.8 |
|
% |
|
|
|
348 |
|
|
|
266 |
|
30.8 |
|
% |
|
Gain on sale of securities |
|
|
22 |
|
|
|
- |
|
N/A |
|
% |
|
|
|
194 |
|
|
|
38 |
|
410.5 |
|
% |
|
Other noninterest income |
|
|
256 |
|
|
|
225 |
|
13.8 |
|
% |
|
|
|
511 |
|
|
|
484 |
|
5.6 |
|
% |
|
Total
noninterest income |
|
|
462 |
|
|
|
336 |
|
37.5 |
|
% |
|
|
|
1,053 |
|
|
|
788 |
|
33.6 |
|
% |
|
Noninterest
expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
3,001 |
|
|
|
2,511 |
|
19.5 |
|
% |
|
|
|
5,763 |
|
|
|
5,376 |
|
7.2 |
|
% |
|
Occupancy |
|
|
251 |
|
|
|
259 |
|
(3.1 |
) |
% |
|
|
|
510 |
|
|
|
515 |
|
(1.0 |
) |
% |
|
Furniture and equipment |
|
|
125 |
|
|
|
139 |
|
(10.1 |
) |
% |
|
|
|
259 |
|
|
|
282 |
|
(8.2 |
) |
% |
|
Federal Deposit Insurance Corporation
assessments |
|
61 |
|
|
|
49 |
|
24.5 |
|
% |
|
|
|
115 |
|
|
|
76 |
|
51.3 |
|
% |
|
Expenses related to other real estate
owned |
|
|
4 |
|
|
|
18 |
|
(77.8 |
) |
% |
|
|
|
8 |
|
|
|
23 |
|
(65.2 |
) |
% |
|
Other expense |
|
|
1,227 |
|
|
|
940 |
|
30.5 |
|
% |
|
|
|
2,077 |
|
|
|
1,860 |
|
11.7 |
|
% |
|
Total
noninterest expense |
|
|
4,669 |
|
|
|
3,916 |
|
19.2 |
|
% |
|
|
|
8,732 |
|
|
|
8,132 |
|
7.4 |
|
% |
|
Income
before provision for income taxes |
|
|
3,396 |
|
|
|
2,395 |
|
41.8 |
|
% |
|
|
|
7,056 |
|
|
|
4,324 |
|
63.2 |
|
% |
|
Provision
for income taxes |
|
|
1,030 |
|
|
|
654 |
|
57.5 |
|
% |
|
|
|
2,043 |
|
|
|
1,151 |
|
77.5 |
|
% |
|
Net
income |
$ |
|
2,366 |
|
$ |
|
1,741 |
|
35.9 |
|
% |
|
$ |
|
5,013 |
|
$ |
|
3,173 |
|
58.0 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share |
$ |
|
0.40 |
|
$ |
|
0.30 |
|
33.3 |
|
% |
|
$ |
|
0.85 |
|
$ |
|
0.54 |
|
57.4 |
|
% |
|
Diluted
earnings per share |
$ |
|
0.40 |
|
$ |
|
0.30 |
|
33.3 |
|
% |
|
$ |
|
0.84 |
|
$ |
|
0.54 |
|
55.6 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
margin as a percentage of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
average
earning assets (fully taxable equivalent) |
|
|
3.44% |
|
|
|
3.48% |
|
|
|
|
|
|
3.51% |
|
|
|
3.60% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
diluted shares outstanding |
|
|
5,951,585 |
|
|
|
5,879,219 |
|
|
|
|
|
|
5,939,100 |
|
|
|
5,881,387 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
1.03% |
|
|
|
0.85% |
|
|
|
|
|
|
1.12% |
|
|
|
0.83% |
|
|
|
|
Return on average equity |
|
|
10.14% |
|
|
|
7.98% |
|
|
|
|
|
|
10.83% |
|
|
|
7.39% |
|
|
|
|
Return on average tangible
equity |
|
|
12.28% |
|
|
|
9.81% |
|
|
|
|
|
|
13.13% |
|
|
|
9.11% |
|
|
|
|
Efficiency ratio (fully taxable
equivalent) |
|
|
60.62% |
|
|
|
56.71% |
|
|
|
|
|
|
56.44% |
|
|
|
59.79% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
sets forth a reconciliation of pretax, pre-provision income by
adding back the provisions for both loan losses and
income taxes to net income. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second |
|
Second |
|
|
|
|
For the Six
Months |
|
|
|
|
|
Quarter |
|
Quarter |
|
|
|
|
Ended June
30, |
|
|
|
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
Reported net
income |
$ |
|
2,366 |
|
$ |
|
1,741 |
|
|
|
|
$ |
|
5,013 |
|
$ |
|
3,173 |
|
|
|
|
Provision
for (reversal of) loan losses |
|
|
(410 |
) |
|
|
545 |
|
|
|
|
|
|
(410 |
) |
|
|
1,040 |
|
|
|
|
Provision
for income taxes |
|
|
1,030 |
|
|
|
654 |
|
|
|
|
|
|
2,043 |
|
|
|
1,151 |
|
|
|
|
Pretax,
pre-provision net income |
$ |
|
2,986 |
|
$ |
|
2,940 |
|
|
|
|
$ |
|
6,646 |
|
$ |
|
5,364 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
arrives at net income, diluted earnings per share, and operating
ratios, excluding merger related costs. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second |
|
Second |
|
|
|
|
For the Six
Months |
|
|
|
|
|
Quarter |
|
Quarter |
|
|
|
|
Ended June
30, |
|
|
|
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
2021 |
|
|
|
2020 |
|
|
|
|
Reported net
income |
$ |
|
2,366 |
|
$ |
|
1,741 |
|
|
|
|
$ |
|
5,013 |
|
$ |
|
3,173 |
|
|
|
|
Merger
related expenses |
|
|
431 |
|
|
|
- |
|
|
|
|
|
|
431 |
|
|
|
- |
|
|
|
|
Net income,
excluding merger related costs |
$ |
|
2,797 |
|
$ |
|
1,741 |
|
|
|
|
$ |
|
5,444 |
|
$ |
|
3,173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
earnings per share, excluding merger related costs |
$ |
|
0.47 |
|
$ |
|
0.30 |
|
|
|
|
$ |
|
0.92 |
|
$ |
|
0.54 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Ratios (excluding merger related costs): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
|
1.22% |
|
|
|
0.85% |
|
|
|
|
|
|
1.22% |
|
|
|
0.83% |
|
|
|
|
Return on average equity |
|
|
11.99% |
|
|
|
7.98% |
|
|
|
|
|
|
11.77% |
|
|
|
7.39% |
|
|
|
|
Return on average tangible
equity |
|
|
14.52% |
|
|
|
9.81% |
|
|
|
|
|
|
14.26% |
|
|
|
9.11% |
|
|
|
|
Efficiency ratio (fully taxable
equivalent) |
|
|
55.02% |
|
|
|
56.71% |
|
|
|
|
|
|
53.65% |
|
|
|
59.79% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American
River Bankshares |
Condensed
Consolidated Statements of Income (Unaudited) |
(Dollars in
thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
Second |
|
First |
|
Fourth |
|
Third |
|
Second |
|
|
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
|
|
2021 |
|
2021 |
|
2020 |
|
2020 |
|
2020 |
Interest
income |
$ |
7,400 |
|
$ |
7,354 |
|
$ |
7,155 |
|
$ |
7,055 |
|
$ |
6,975 |
|
Interest
expense |
|
207 |
|
|
222 |
|
|
265 |
|
|
335 |
|
|
455 |
|
Net interest
income |
|
7,193 |
|
|
7,132 |
|
|
6,890 |
|
|
6,720 |
|
|
6,520 |
|
Provision
for (reversal of) loan losses |
|
(410 |
) |
|
- |
|
|
35 |
|
|
445 |
|
|
545 |
|
Noninterest
income: |
|
|
|
|
|
|
|
|
|
|
Service charges on deposit
accounts |
|
184 |
|
|
164 |
|
|
119 |
|
|
115 |
|
|
111 |
|
Gain on sale of securities |
|
22 |
|
|
172 |
|
|
- |
|
|
- |
|
|
- |
|
Other noninterest income |
|
256 |
|
|
255 |
|
|
245 |
|
|
259 |
|
|
225 |
|
Total
noninterest income |
|
462 |
|
|
591 |
|
|
364 |
|
|
374 |
|
|
336 |
|
Noninterest
expense: |
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
3,001 |
|
|
2,762 |
|
|
2,937 |
|
|
2,889 |
|
|
2,511 |
|
Occupancy |
|
251 |
|
|
259 |
|
|
258 |
|
|
258 |
|
|
259 |
|
Furniture and equipment |
|
125 |
|
|
134 |
|
|
136 |
|
|
140 |
|
|
139 |
|
Federal Deposit Insurance Corporation
assessments |
|
61 |
|
|
54 |
|
|
69 |
|
|
62 |
|
|
49 |
|
Expenses related to other real estate
owned |
|
4 |
|
|
4 |
|
|
54 |
|
|
4 |
|
|
18 |
|
Other expense |
|
1,227 |
|
|
850 |
|
|
904 |
|
|
870 |
|
|
940 |
|
Total
noninterest expense |
|
4,669 |
|
|
4,063 |
|
|
4,358 |
|
|
4,223 |
|
|
3,916 |
|
Income
before provision for income taxes |
|
3,396 |
|
|
3,660 |
|
|
2,861 |
|
|
2,426 |
|
|
2,395 |
|
Provision
for income taxes |
|
1,030 |
|
|
1,013 |
|
|
758 |
|
|
647 |
|
|
654 |
|
Net
income |
$ |
2,366 |
|
$ |
2,647 |
|
$ |
2,103 |
|
$ |
1,779 |
|
$ |
1,741 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share |
$ |
0.40 |
|
$ |
0.45 |
|
$ |
0.36 |
|
$ |
0.30 |
|
$ |
0.30 |
|
Diluted
earnings per share |
$ |
0.40 |
|
$ |
0.45 |
|
$ |
0.36 |
|
$ |
0.30 |
|
$ |
0.30 |
|
|
|
|
|
|
|
|
|
|
|
|
Net interest
margin as a percentage of |
|
|
|
|
|
|
|
|
|
|
average
earning assets (fully taxable equivalent) |
|
3.44% |
|
|
3.58% |
|
|
3.46% |
|
|
3.42% |
|
|
3.48% |
|
|
|
|
|
|
|
|
|
|
|
|
Average
diluted shares outstanding |
|
5,951,585 |
|
|
5,921,958 |
|
|
5,899,490 |
|
|
5,886,304 |
|
|
5,879,219 |
|
Shares
outstanding-end of period |
|
5,990,514 |
|
|
5,962,466 |
|
|
5,937,529 |
|
|
5,938,009 |
|
|
5,938,009 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Ratios (annualized): |
|
|
|
|
|
|
|
|
|
|
Return on average assets |
|
1.03% |
|
|
1.21% |
|
|
0.96% |
|
|
0.82% |
|
|
0.85% |
|
Return on average equity |
|
10.14% |
|
|
11.54% |
|
|
9.12% |
|
|
7.79% |
|
|
7.98% |
|
Return on average tangible
equity |
|
12.28% |
|
|
14.00% |
|
|
11.10% |
|
|
9.49% |
|
|
9.81% |
|
Efficiency ratio (fully taxable
equivalent) |
|
60.62% |
|
|
52.29% |
|
|
59.49% |
|
|
59.12% |
|
|
56.71% |
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table
sets forth a reconciliation of pretax, pre-provision income by
adding back the provisions for both loan losses and income taxes to
net income. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second |
|
First |
|
Fourth |
|
Third |
|
Second |
|
|
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
|
Quarter |
|
|
2021 |
|
2021 |
|
2020 |
|
2020 |
|
2020 |
Reported net
income |
$ |
2,366 |
|
$ |
2,647 |
|
$ |
2,103 |
|
$ |
1,779 |
|
$ |
1,741 |
|
Provision
for (reversal of) loan losses |
|
(410 |
) |
|
- |
|
|
35 |
|
|
445 |
|
|
545 |
|
Provision
for income taxes |
|
1,030 |
|
|
1,013 |
|
|
758 |
|
|
647 |
|
|
654 |
|
Pretax,
pre-provision net income |
$ |
2,986 |
|
$ |
3,660 |
|
$ |
2,896 |
|
$ |
2,871 |
|
$ |
2,940 |
|
|
|
|
|
|
|
|
|
|
|
|
American
River Bankshares |
|
Analysis of
Net Interest Margin on Earning Assets (Unaudited) |
|
(Taxable Equivalent
Basis) |
|
(Dollars in
thousands) |
|
Three months ended June 30, |
|
2021 |
|
|
|
2020 |
|
|
ASSETS |
Avg
Balance |
Interest |
Avg
Yield |
|
Avg
Balance |
Interest |
Avg
Yield |
|
Taxable loans |
$ |
445,864 |
|
$ |
5,656 |
5.09 |
% |
|
$ |
427,494 |
|
$ |
5,084 |
4.78 |
% |
|
Tax-exempt
loans |
|
18,508 |
|
|
231 |
5.01 |
% |
|
|
20,783 |
|
|
245 |
4.74 |
% |
|
Taxable
investment securities |
|
311,249 |
|
|
1,499 |
1.93 |
% |
|
|
252,928 |
|
|
1,632 |
2.60 |
% |
|
Tax-exempt
investment securities |
|
5,077 |
|
|
40 |
3.16 |
% |
|
|
5,372 |
|
|
43 |
3.22 |
% |
|
Federal
funds |
|
- |
|
|
- |
N/A |
|
|
- |
|
|
- |
N/A |
|
Interest-bearing deposits in banks |
|
62,985 |
|
|
21 |
0.13 |
% |
|
|
53,399 |
|
|
20 |
0.15 |
% |
|
Total earning assets |
|
843,683 |
|
|
7,447 |
3.54 |
% |
|
|
759,976 |
|
|
7,024 |
3.72 |
% |
|
Cash &
due from banks |
|
39,944 |
|
|
|
|
|
29,142 |
|
|
|
|
Other
assets |
|
42,090 |
|
|
|
|
|
39,844 |
|
|
|
|
Allowance
for loan losses |
|
(6,750 |
) |
|
|
|
|
(5,724 |
) |
|
|
|
|
$ |
918,967 |
|
|
|
|
$ |
823,238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES & SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Interest
checking and money market |
$ |
284,725 |
|
$ |
57 |
0.08 |
% |
|
$ |
265,937 |
|
$ |
175 |
0.26 |
% |
|
Savings |
|
94,563 |
|
|
6 |
0.03 |
% |
|
|
78,891 |
|
|
7 |
0.04 |
% |
|
Time
deposits |
|
74,688 |
|
|
90 |
0.48 |
% |
|
|
70,208 |
|
|
191 |
1.09 |
% |
|
Other
borrowings |
|
15,457 |
|
|
54 |
1.40 |
% |
|
|
24,140 |
|
|
82 |
1.37 |
% |
|
Total interest bearing liabilities |
|
469,433 |
|
|
207 |
0.18 |
% |
|
|
439,176 |
|
|
455 |
0.42 |
% |
|
Noninterest
bearing demand deposits |
|
345,009 |
|
|
|
|
|
284,831 |
|
|
|
|
Other
liabilities |
|
10,933 |
|
|
|
|
|
11,515 |
|
|
|
|
Total liabilities |
|
825,375 |
|
|
|
|
|
735,522 |
|
|
|
|
Shareholders' equity |
|
93,592 |
|
|
|
|
|
87,716 |
|
|
|
|
|
$ |
918,967 |
|
|
|
|
$ |
823,238 |
|
|
|
|
Net
interest income & margin |
|
$ |
7,240 |
3.44 |
% |
|
|
$ |
6,569 |
3.48 |
% |
|
|
|
|
|
|
|
|
|
|
Six
months ended June 30, |
|
2021 |
|
|
|
2020 |
|
|
ASSETS |
Avg
Balance |
Interest |
Avg
Yield |
|
Avg
Balance |
Interest |
Avg
Yield |
|
Taxable
loans |
$ |
454,134 |
|
$ |
11,260 |
5.00 |
% |
|
$ |
400,160 |
|
$ |
9,759 |
4.90 |
% |
|
Tax-exempt
loans |
|
18,611 |
|
|
464 |
5.03 |
% |
|
|
22,140 |
|
|
523 |
4.75 |
% |
|
Taxable
investment securities |
|
304,011 |
|
|
3,014 |
2.00 |
% |
|
|
256,260 |
|
|
3,371 |
2.65 |
% |
|
Tax-exempt
investment securities |
|
5,409 |
|
|
81 |
3.02 |
% |
|
|
5,409 |
|
|
88 |
3.27 |
% |
|
Federal
funds |
|
- |
|
|
- |
N/A |
|
|
- |
|
|
- |
N/A |
|
Interest-bearing deposits in banks |
|
46,897 |
|
|
29 |
0.12 |
% |
|
|
31,007 |
|
|
54 |
0.35 |
% |
|
Total earning assets |
|
829,062 |
|
|
14,848 |
3.61 |
% |
|
|
714,976 |
|
|
13,795 |
3.88 |
% |
|
Cash &
due from banks |
|
37,548 |
|
|
|
|
|
22,494 |
|
|
|
|
Other
assets |
|
41,999 |
|
|
|
|
|
40,340 |
|
|
|
|
Allowance
for loan losses |
|
(6,748 |
) |
|
|
|
|
(5,471 |
) |
|
|
|
|
$ |
901,861 |
|
|
|
|
$ |
772,339 |
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES & SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Interest
checking and money market |
$ |
275,859 |
|
$ |
118 |
0.09 |
% |
|
$ |
248,080 |
|
$ |
379 |
0.31 |
% |
|
Savings |
|
92,830 |
|
|
12 |
0.03 |
% |
|
|
76,710 |
|
|
14 |
0.04 |
% |
|
Time
deposits |
|
74,482 |
|
|
183 |
0.50 |
% |
|
|
70,498 |
|
|
420 |
1.20 |
% |
|
Other
borrowings |
|
18,107 |
|
|
116 |
1.29 |
% |
|
|
20,559 |
|
|
169 |
1.65 |
% |
|
Total interest bearing liabilities |
|
461,278 |
|
|
429 |
0.19 |
% |
|
|
415,847 |
|
|
982 |
0.47 |
% |
|
Noninterest
bearing demand deposits |
|
335,645 |
|
|
|
|
|
258,695 |
|
|
|
|
Other
liabilities |
|
11,636 |
|
|
|
|
|
11,400 |
|
|
|
|
Total liabilities |
|
808,559 |
|
|
|
|
|
685,942 |
|
|
|
|
Shareholders' equity |
|
93,302 |
|
|
|
|
|
86,397 |
|
|
|
|
|
$ |
901,861 |
|
|
|
|
$ |
772,339 |
|
|
|
|
Net
interest income & margin |
|
$ |
14,419 |
3.51 |
% |
|
|
$ |
12,813 |
3.60 |
% |
|
|
|
|
|
|
|
|
|
|
Grafico Azioni American River Bankshares (NASDAQ:AMRB)
Storico
Da Apr 2024 a Mag 2024
Grafico Azioni American River Bankshares (NASDAQ:AMRB)
Storico
Da Mag 2023 a Mag 2024