The average yield on earning assets declined from 6.42% in the second quarter of 2008 to 5.91% for the second quarter of 2009 and declined from 6.54% for the six months ended June 30, 2008 to 6.06% for the six months ended June 30, 2009. Much of the decline in yields can be attributed to the overall lower interest rate environment in response to the Federal Open Market Committee’s (the “FOMC”) decreases in the Federal funds rate. Since September of 2007, the “Prime” rate has decreased ten times for a total of 500 basis points resulting in a steady decline in short-term interest rates. The average balance of earning assets decreased 3.8% from $522,550,000 in the second quarter of 2008 to $502,445,000 in the second quarter of 2009 and decreased 3.0% from $523,037,000 for the six months ended June 30, 2008 to $507,425,000 for the six months ended June 30, 2009. While the overall balance decreased slightly during the three and six-month periods, the Company did see a positive change in mix with an increase in average loan balances offset by a corresponding decrease in average investment securities.
When compared to the second quarter of 2008, average loan balances were up $5,862,000 (1.4%) to $410,959,000 for the second quarter of 2009 and when compared to the first six months of 2008, average loan balances were up $10,046,000 (2.5%) for the six months ended June 30, 2009 while average investment securities were down $22,248,000 (20.0%) to $89,061,000 for the second quarter of 2009 and down $22,956,000 (20.3%) for the six months ended June 30, 2009. This is a direct result of the Company’s decision to use the proceeds from principal reductions, sales, and maturing investment securities to provide funding for loan growth and to offset decreases in deposit balances. Foregone interest income on nonaccrual loans during the second quarter of 2009 was approximately $378,000, compared to $260,000 during the second quarter of 2008. Foregone interest income on nonaccrual loans for the six months ended June 30, 2009 was approximately $647,000, compared to $597,000 for the six months ended June 30, 2008. Overall, the yield on loans during the second quarter of 2009 was 6.21% as compared to 6.90% for the second quarter of 2008 and 6.37% for the six months ended June 30, 2009 compared to 7.06% for the six months ended June 30, 2008, reflective of the declining rate environment and the higher amounts of foregone interest.
The average cost of funds decreased from 1.96% in the second quarter of 2008 to 1.36% for the second quarter of 2009. The average balance of interest bearing liabilities increased 0.6% from $380,969,000 in the second quarter of 2008 to $383,067,000 in the second quarter of 2009. This increase resulted primarily from an increase in average time deposits of $16,973,000 (13.8%). The increased time deposits were used to offset the decrease in noninterest demand and money market accounts. For the six months ended June 30, 2009, the average cost of funds decreased 0.76% to 1.41%, down from 2.17% reported in the first half of 2008. The average balance of interest bearing liabilities increased 2.4% from $379,541,000 in the first half of 2008 to $388,569,000 in the first half quarter of 2009.
Net loans as of June 30, 2009 decreased $4,240,000 (1.1%) to $398,191,000 from $402,431,000 as of June 30, 2008 and decreased $14,165,000 (3.4%) from $412,356,000 as of December 31, 2008. Net loan balances decreased $10,258,000 (2.5%) from the balances as of March 31, 2009. Average loan balances decreased $6,820,000 (1.6%) from $417,779,000 during the first quarter of 2009 to $410,959,000 during the second quarter of 2009. Real estate loans increased $12,736,000 (4.5%) to $297,023,000 as of June 30, 2009 from $284,287,000 as of June 30, 2008, but decreased $3,911,000 (1.3%) from $300,934,000 as of December 31, 2008, and decreased $3,912,000 (1.3%) from March 31, 2009. Commercial loans decreased $18,474,000 (18.2%) to $82,799,000 as of June 30, 2009 from $101,273,000 as of June 30, 2008, decreased $7,826,000 (8.6%) from $90,625,000 as of December 31, 2008, and decreased $5,578,000 (6.3%) from March 31, 2009.
The loan portfolio at June 30, 2009 included: real estate loans of $297,023,000 (73% of the portfolio), commercial loans of $82,799,000 (20% of the portfolio) and other loans, which consist mainly of leases and consumer loans of $267,220,000 (7% of the portfolio). The real estate loan portfolio at June 30, 2009 includes: business property loans of $120,961,000 (41% of the real estate portfolio), investor commercial real estate of $102,057,000 (34% of the real estate portfolio), construction and land development of $38,176,000 (13% of the real estate portfolio) and other, which consists of residential and multi-family real estate of $35,829,000 (12% of the real estate portfolio).
At June 30, 2009, the allowance for loan and lease losses was $7,758,000 (1.91% of total loans and leases) compared with $6,111,000 (1.50% of total loans and leases) at June 30, 2008, $5,918,000 (1.41% of total loans and leases) at December 31, 2008, and $5,839.000 (1.40% of total loans and leases) at March 31, 2009. The provision for loan and lease losses was $3,800,000 for the second quarter of 2009, compared to $190,000 for the second quarter of 2008 and for the six months ended June 30, 2009, the provision was $5,029,000 compared to $527,000 for the six months ended June 30, 2008. Net chargeoffs for the second quarter of 2009 were $1,881,000 compared to $96,000 for the second quarter of 2008 and for the six months ended June 30, 2009, net chargeoffs were $3,189,000 compared to $299,000 for the six months ended June 20, 2008. Non-performing loans and leases as of June 30, 2009 were $20,946,000 or 5.16% of total loans and leases compared to $14,265,000 or 3.49% one year ago and $6,241,000 or 1.49% as of December 31, 2008. Loans and leases past due 30 to 89 days decreased to $8,251,000 at June 30, 2009 from $10,135,000 at June 30, 2008 but increased from $7,812,000 at December 31, 2008 and $6,226,000 at March 31, 2009.
Non-performing assets were $24,293,000 at June 30, 2009 compared to $14,625,000 at June 30, 2008, $8,399,000 at December 31, 2008, and $10,919,000 at March 31, 2009. Non-performing assets to total assets as of June 30, 2009 were 4.40% compared to 2.46% one year ago, 1.49% as of December 31, 2008, and 1.96% as of March 31, 2009. Non-performing assets consist of the following as of June 30, 2009.
| | | | |
Non-performing assets | | Balance | |
| | | |
Non-performing loans that are current to terms* (six loans or leases) | | $ | 7,040,000 | |
Non-performing loans paid off subsequent to quarter end (one loan) | | | 294,000 | |
Non-performing loans that are past due (26 loans or leases) | | | 13,563,000 | |
Loans past due 90 or more days and still accruing (two leases) | | | 49,000 | |
Other real estate owned (net) (twelve properties) | | | 3,347,000 | |
| | | | |
| | $ | 24,293,000 | |
* loans that are current (less than 30 days past due) pursuant to original or modified terms
The Company evaluates non-performing loans for impairment and assigns specific reserves when necessary. After the chargeoffs recorded through June 30, 2009, specific reserves of $1,862,000 were held on the non-performing loans considered to be impaired. In addition, at June 30, 2009, there were eight loans that were modified and considered troubled debt restructures totaling $6,245,000.
Other Real Estate Owned
At June 30, 2009, the Company had twelve other real estate owned (“OREO”) properties totaling $3,647,000 with a corresponding reserve of $300,000. This compares to three properties totaling $2,158,000 at December 31, 2008 and no OREO at June 30, 2008. At March 31, 2009, the Company had eight OREO properties totaling $4,478,000, and during the second quarter of 2009, the Company sold two properties totaling $1.9 million and added six properties for $1.1 million.
Page 6 of Page 13
Deposits and Borrowed Funds
Total deposits as of June 30, 2009 decreased $9,591,000 (2.1%) to $449,609,000 from $459,200,000 as of June 30, 2008, but increased $12,548,000 (2.9%) from $437,061,000 as of December 31, 2008 and $12,668,000 (2.9%) as of March 31, 2009. Noninterest-bearing deposits decreased $12,684,000 (9.9%) to $115,036,000 as of June 30, 2009 from $127,720,000 as of June 30, 2008 and decreased $4,107,000 (3.4%) from $119,143,000 as of December 31, 2008 and increased $716,000 (0.6%) from $114,320,000 as of March 31, 2009. Interest-bearing deposits increased $3,093,000 (0.9%) to $334,573,000 as of June 30, 2009 from $331,480,000 as of June 30, 2008 and increased $16,655,000 (5.2%) from $317,918,000 as of December 31, 2008 and increased $10,327,000 (3.2%) from $324,246,000 as of March 31, 2009. Other borrowings, which include both short- and long-term borrowings, decreased $17,803,000 (33.1%) to $36,000,000 as of June 30, 2009 from $53,803,000 as of June 30, 2008, decreased $21,231,000 (37.1%) from $57,231,000 at December 31, 2008, and decreased $12,621,000 (26.0%) from $48,621,000 as of March 31, 2009.
Noninterest Income and Expense
Noninterest income for the second quarter of 2009 increased $10,000 (1.6%) to $649,000 from $639,000 for the second quarter of 2008 and for the six months ended June 30, 2009 decreased $65,000 (5.3%) to $1,159,000 from $1,224,000 for the six months ended June 30 2008. The decrease from the first half of 2008 to the first half of 2009 was primarily related to lower income from fees from accounts receivable servicing ($64,000 or 68%), lower income from fees on residential lending ($178,000 or 962%) and lower income from bank owned life insurance ($86,000 or 43%). The decrease was offset by an increase in higher service charges on deposit accounts ($139,000 or 39%) and gains on sales of securities which was $160,000, up from $33,000 in the first half of 2008.
Noninterest expense for the second quarter of 2009 increased $597,000 (16.4%) to $4,239,000 from $3,642,000 for the second quarter of 2008 and for the six months ended June 30, 2009 increased $569,000 (7.8%) to $7,840,000 from $7,271,000. Much of this increase is related to an increase in costs associated with maintaining the Company’s OREO. The total OREO expense for the six months ended June 30, 2009 was $567,000, including a $300,000 reserve, compared to zero for the same period in 2008. In addition, FDIC insurance increased by $383,000 from $26,000 for the six months ended June 30, 2008 to $409,000 in 2009. These cost increases were partially offset by reductions in salaries and benefits. Total salaries and benefits decreased $395,000 (9.6%) from the first half of 2008 to the first half of 2009. Most of this decrease resulted from a reduction in the number of full-time equivalent employees and a reduction in the Company’s performance based incentive accrual.
The fully taxable equivalent efficiency ratio for the second quarter of 2009 increased to 61.81% from 50.13% for the second quarter of 2008 and for the six months ended June 30, 2009 increased to 56.32% from 50.43% for the six months ended June 30, 2008.
Income Taxes
The Company recorded a benefit for income taxes for the quarter ended June 30, 2009 of $668,000, resulting in an effective tax benefit rate of 48.7%, compared to a tax provision of $1,221,000, or an effective tax rate of 38.1%, for the quarter ended June 30, 2008. The provision for income taxes for the six months ended June 30, 2009 was $68,000, resulting in an effective tax rate of 10.5%, compared to $2,349,000, or an effective tax rate of 38.1%, for the same period in 2008. The lower effective tax rate in 2009 results from the Company realizing the benefits of tax free income related to such items as municipal bonds and bank owned life insurance against an overall lower amount of taxable income.
Page 7 of Page 13
Capital
Total shareholders’ equity at June 30, 2009 was $62,276,000, up $1,209,000 (2.0%) from $61,067,000 at June 30, 2008, down $1,171,000 (1.8%) from $63,447,000 at December 31, 2008, and down $1,653,000 (2.6%) from $63,929,000 at March 31, 2009. The Company’s subsidiary, American River Bank, remains above the well-capitalized regulatory guidelines. At June 30, 2009, American River Bank’s leverage ratio was 8.23%, the Tier 1 risk based ratio was 10.65% and the Total Risk Based Capital ratio was 11.91%. These ratios were all up significantly from one year ago. At June 30, 2008, American River Bank’s leverage ratio was 7.84%, the Tier 1 risk based ratio was 9.75% and the Total Risk Based Capital ratio was 11.00%.
Performance Metrics
Performance measures for the second quarter of 2009 (annualized): the Return on Average Assets (ROAA) was –0.50%, Return on Average Equity (ROAE) was –4.41% and Return on Average Tangible Equity (ROATE) was –6.01% compared to the ROAA of 1.38%, ROAE of 13.11% and ROATE of 18.38%, during the second quarter of 2008. For the six months ended June 30, 2009, the Company had a ROAA of 0.20%, ROAE of 1.83% and ROATE of 2.50% compared to a ROAA of 1.33%, ROAE of 12.69% and ROATE of 17.84% for the six months ended June 30, 2008.
Earnings Conference Call
The second quarter earnings conference call will be held Monday, July 27, 2009 at 4:00 p.m. Pacific Time (7:00 p.m. Eastern Time). David T. Taber, President and CEO, and Mitchell A. Derenzo, Executive Vice President and Chief Financial Officer, both of American River Bankshares, will lead a live forty-five minute presentation and answer questions. Shareholders, analysts and other interested parties are invited to join the call by dialing (877) 584-2599 and entering the Conference ID # 21059117. A recording of the call will be available twenty-four hours after the call’s completion onhttp://amrb.podbean.com.
About American River Bankshares
American River Bankshares [NASDAQ – GS: AMRB] is the parent company of American River Bank (“ARB”), a community business bank serving Sacramento, CA that operates a family of financial services providers, including North Coast Bank [a division of “ARB”] in Sonoma County and Bank of Amador [a division of “ARB”] in Amador County. For more information, please call 916-851-0123 or visitwww.amrb.com;www.americanriverbank.com;www.northcoastbank.com; orwww.bankofamador.com.
Forward-Looking Statement
Certain statements contained herein are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and subject to the safe harbor provisions of the of Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. Actual results may differ materially from the results in these forward-looking statements. Factors that might cause such a difference include, among other matters, changes in interest rates, economic conditions, governmental regulation and legislation, credit quality, and competition affecting the Company’s businesses generally; the risk of natural disasters and future catastrophic events including terrorist related incidents; and other factors discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, and in subsequent reports filed on Form 10-Q and Form 8-K. The Company does not undertake any obligation to publicly update or revise any of these forward-looking statements, whether to reflect new information, future events or otherwise, except as required by law.
Page 8 of Page 13
American River Bankshares
Condensed Consolidated Balance Sheet (Unaudited)
| | | | | | | | | | |
| | June 30 2009 | | December 31 2008 | | June 30 2008 | |
| | | | | | | | | | |
ASSETS | | | | | | | |
Cash and due from banks | | $ | 25,074,000 | | $ | 15,170,000 | | $ | 24,042,000 | |
Federal funds sold | | | — | | | — | | | — | |
Interest-bearing deposits in banks | | | 891,000 | | | 4,248,000 | | | 4,941,000 | |
Investment securities | | | 86,806,000 | | | 91,621,000 | | | 111,233,000 | |
Loans and leases: | | | | | | | | | | |
Real estate | | | 297,023,000 | | | 300,934,000 | | | 284,287,000 | |
Commercial | | | 82,799,000 | | | 90,625,000 | | | 101,273,000 | |
Lease financing | | | 4,390,000 | | | 4,475,000 | | | 3,569,000 | |
Other | | | 22,332,000 | | | 22,811,000 | | | 19,882,000 | |
Deferred loan and lease originations fees, net | | | (595,000 | ) | | (571,000 | ) | | (469,000 | ) |
Allowance for loan and lease losses | | | (7,758,000 | ) | | (5,918,000 | ) | | (6,111,000 | ) |
| | | | | | | | | | |
Total loans and leases, net | | | 398,191,000 | | | 412,356,000 | | | 402,431,000 | |
| | | | | | | | | | |
Bank premises and equipment | | | 2,164,000 | | | 2,115,000 | | | 2,058,000 | |
Accounts receivable servicing receivables, net | | | 80,000 | | | 1,236,000 | | | 1,372,000 | |
Goodwill and intangible assets | | | 17,096,000 | | | 17,228,000 | | | 17,371,000 | |
Other real estate owned | | | 3,347,000 | | | 2,158,000 | | | — | |
Accrued interest receivable and other assets | | | 18,161,000 | | | 17,025,000 | | | 16,902,000 | |
| | | | | | | | | | |
| | $ | 551,810,000 | | $ | 563,157,000 | | $ | 580,350,000 | |
| | | | | | | | | | |
| | | | | | | | | | |
LIABILITIES & SHAREHOLDERS’ EQUITY | | | | | | | | | | |
Noninterest-bearing deposits | | $ | 115,036,000 | | $ | 119,143,000 | | $ | 127,720,000 | |
Interest checking | | | 44,833,000 | | | 45,581,000 | | | 44,179,000 | |
Money market | | | 117,429,000 | | | 105,919,000 | | | 124,963,000 | |
Savings | | | 37,557,000 | | | 33,438,000 | | | 39,159,000 | |
Time deposits | | | 134,754,000 | | | 132,980,000 | | | 123,179,000 | |
| | | | | | | | | | |
Total deposits | | | 449,609,000 | | | 437,061,000 | | | 459,200,000 | |
| | | | | | | | | | |
Short-term borrowings | | | 14,500,000 | | | 43,231,000 | | | 36,303,000 | |
Long-term borrowings | | | 21,500,000 | | | 14,000,000 | | | 17,500,000 | |
Accrued interest payable and other liabilities | | | 3,925,000 | | | 5,418,000 | | | 6,280,000 | |
| | | | | | | | | | |
Total liabilities | | | 489,534,000 | | | 499,710,000 | | | 519,283,000 | |
Total shareholders’ equity | | | 62,276,000 | | | 63,447,000 | | | 61,067,000 | |
| | | | | | | | | | |
| | $ | 551,810,000 | | $ | 563,157,000 | | $ | 580,350,000 | |
| | | | | | | | | | |
| | | | | | | | | | |
Ratios: | | | | | | | | | | |
Nonperforming loans and leases to total loans and leases | | | 5.16 | % | | 1.49 | % | | 3.49 | % |
Net chargeoffs to average loans and leases (annualized) | | | 1.55 | % | | 0.42 | % | | 0.15 | % |
Allowance for loan and lease loss to total loans and leases | | | 1.91 | % | | 1.41 | % | | 1.50 | % |
| | | | | | | | | | |
American River Bank Capital Ratios: | | | | | | | | | | |
Leverage Ratio | | | 8.23 | % | | 8.40 | % | | 7.84 | % |
Tier 1 Risk-Based Capital Ratio | | | 10.65 | % | | 10.35 | % | | 9.75 | % |
Total Risk-Based Capital Ratio | | | 11.91 | % | | 11.60 | % | | 11.00 | % |
Page 9 of Page 13
American River Bankshares
Condensed Consolidated Statement of Operations (Unaudited)
| | | | | | | | | | | | | | | | | | | |
| | Second
Quarter
2009 | | Second
Quarter
2008 | | %
Change | | For the Six Months
Ended June 30, | | %
Change | |
| | | | | 2009 | | 2008 | | |
| | |
|
Interest income | | $ | 7,321,000 | | $ | 8,252,000 | | (11.3 | %) | | $ | 15,072,000 | | $ | 16,830,000 | | (10.4 | %) | |
Interest expense | | | 1,303,000 | | | 1,857,000 | | (29.8 | %) | | | 2,715,000 | | | 4,093,000 | | (33.7 | %) | |
| | | |
| | | | |
Net interest income | | | 6,018,000 | | | 6,395,000 | | (5.9 | %) | | | 12,357,000 | | | 12,737,000 | | (3.0 | %) | |
Total noninterest income | | | 649,000 | | | 639,000 | | 1.6 | % | | | 1,159,000 | | | 1,224,000 | | (5.3 | %) | |
Total noninterest expense | | | 4,239,000 | | | 3,642,000 | | 16.4 | % | | | 7,840,000 | | | 7,271,000 | | 7.8 | % | |
| | | |
Income before provisions for income taxes and loan and lease losses | | | 2,428,000 | | | 3,392,000 | | (28.4 | %) | | | 5,676,000 | | | 6,690,000 | | (15.2 | %) | |
| | | |
| | | | |
Provision for loan and lease losses | | | 3,800,000 | | | 190,000 | | — | | | | 5,029,000 | | | 527,000 | | — | | |
| | | |
(Benefit from) provision for income taxes | | | (668,000 | ) | | 1,221,000 | | — | | | | 68,000 | | | 2,349,000 | | — | | |
| | | |
| | | | |
Net (loss) income | | $ | (704,000 | ) | $ | 1,981,000 | | (135.5 | %) | | $ | 579,000 | | $ | 3,814,000 | | (84.8 | %) | |
| | | |
| | | | | | | | | | | | | | | | | | | |
Basic (loss) earnings per share | | $ | (0.12 | ) | $ | 0.34 | | (135.3 | %) | | $ | 0.10 | | $ | 0.65 | | (84.6 | %) | |
Diluted (loss) earnings per share | | $ | (0.12 | ) | $ | 0.34 | | (135.3 | %) | | $ | 0.10 | | $ | 0.65 | | (84.6 | %) | |
| | | | | | | | | | | | | | | | | | | |
Average diluted shares outstanding | | | 5,797,533 | | | 5,826,304 | | | | | | 5,842,069 | | | 5,849,035 | | | | |
| | | | | | | | | | | | | | | | | | | |
Net interest margin as a percentage of average earning assets | | | 4.87 | % | | 4.99 | % | | | | | 4.98 | % | | 4.96 | % | | | |
| | | | | | | | | | | | | | | | | | | |
Operating Ratios (annualized): | | | | | | | | | | | | | | | | | | | |
Return on average assets | | | (0.50 | %) | | 1.38 | % | | | | | 0.20 | % | | 1.33 | % | | | |
Return on average equity | | | (4.41 | %) | | 13.11 | % | | | | | 1.83 | % | | 12.69 | % | | | |
Return on average tangible equity | | | (6.01 | %) | | 18.38 | % | | | | | 2.50 | % | | 17.84 | % | | | |
Efficiency ratio (fully taxable equivalent) | | | 61.81 | % | | 50.13 | % | | | | | 56.32 | % | | 50.43 | % | | | |
Share and earnings per share data have been adjusted for a 5% stock dividend in 2008
Page 10 of Page 13
American River Bankshares
Condensed Consolidated Statement of Operations(Unaudited)
Trailing Four Quarters
| | | | | | | | | | | | | |
| | Second
Quarter
2009 | | First
Quarter
2009 | | Fourth
Quarter
2008 | | Third
Quarter
2008 | |
| | |
Interest income | | $ | 7,321,000 | | $ | 7,751,000 | | $ | 8,119,000 | | $ | 8,604,000 | |
Interest expense | | | 1,303,000 | | | 1,412,000 | | | 1,673,000 | | | 1,862,000 | |
| | | |
| | | | | | | | | | | | | |
Net interest income | | | 6,018,000 | | | 6,339,000 | | | 6,446,000 | | | 6,742,000 | |
Total noninterest income | | | 649,000 | | | 510,000 | | | 498,000 | | | 446,000 | |
Total noninterest expense | | | 4,239,000 | | | 3,601,000 | | | 3,236,000 | | | 3,694,000 | |
| | | |
| | | | | | | | | | | | | |
Income before provisions for income taxes and loan and lease losses | | | 2,428,000 | | | 3,248,000 | | | 3,708,000 | | | 3,494,000 | |
| | | |
| | | | | | | | | | | | | |
Provision for loan and lease losses | | | 3,800,000 | | | 1,229,000 | | | 835,000 | | | 381,000 | |
(Benefit from) provision for income taxes | | | (668,000 | ) | | 736,000 | | | 1,047,000 | | | 1,182,000 | |
| | | |
| | | | | | | | | | | | | |
Net (loss) income | | $ | (704,000 | ) | $ | 1,283,000 | | $ | 1,826,000 | | $ | 1,931,000 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
Basic (loss) earnings per share | | $ | (0.12 | ) | $ | 0.22 | | $ | 0.32 | | $ | 0.33 | |
Diluted (loss) earnings per share | | $ | (0.12 | ) | $ | 0.22 | | $ | 0.32 | | $ | 0.33 | |
| | | | | | | | | | | | | |
Average diluted shares outstanding | | | 5,797,533 | | | 5,824,407 | | | 5,794,733 | | | 5,808,514 | |
Shares outstanding-end of period | | | 5,797,533 | | | 5,797,533 | | | 5,792,283 | | | 5,793,286 | |
| | | | | | | | | | | | | |
Net interest margin as a percentage of average earning assets | | | 4.87 | % | | 5.08 | % | | 5.04 | % | | 5.14 | % |
| | | | | | | | | | | | | |
Operating Ratios (annualized): | | | | | | | | | | | | | |
Return on average assets | | | (0.50 | %) | | 0.90 | % | | 1.28 | % | | 1.32 | % |
Return on average equity | | | (4.41 | %) | | 8.15 | % | | 11.71 | % | | 12.51 | % |
Return on average tangible equity | | | (6.01 | %) | | 11.16 | % | | 16.23 | % | | 17.43 | % |
Efficiency ratio (fully tax equivalent) | | | 61.81 | % | | 50.97 | % | | 45.03 | % | | 49.76 | % |
Share and earnings per share data have been adjusted for a 5% stock dividend in 2008
Page 11 of Page 13
American River Bankshares
Analysis of Net Interest Margin on Earning Assets
(Taxable Equivalent Basis)
| | | | | | | | | | | | | | | | | | | |
Three months ended June 30, | | 2009 | | 2008 | |
| | Avg
Balance | | Interest | | Avg
Yield | Avg
Balance | | Interest | | Avg
Yield |
| | |
ASSETS | | | | | | | | | | | | | | | | | | | |
Loans and leases | | $ | 410,959,000 | | $ | 6,364,000 | | | 6.21 | % | $ | 405,097,000 | | $ | 6,945,000 | | | 6.90 | % |
Taxable investment securities | | | 63,584,000 | | | 676,000 | | | 4.26 | % | | 83,410,000 | | | 962,000 | | | 4.64 | % |
Tax-exempt investment securities | | | 25,450,000 | | | 339,000 | | | 5.34 | % | | 27,664,000 | | | 355,000 | | | 5.16 | % |
Corporate stock | | | 27,000 | | | 6,000 | | | 89.13 | % | | 235,000 | | | 13,000 | | | 22.25 | % |
Federal funds sold | | | 6,000 | | | — | | | 0.00 | % | | 1,202,000 | | | 6,000 | | | 2.01 | % |
Interest-bearing deposits in banks | | | 2,429,000 | | | 20,000 | | | 3.30 | % | | 4,942,000 | | | 59,000 | | | 4.80 | % |
| | | | | | | | | | | | | | | | | | | |
Total earning assets | | | 502,455,000 | | $ | 7,405,000 | | | 5.91 | % | | 522,550,000 | | $ | 8,340,000 | | | 6.42 | % |
| | | | | | | | | | | | | | | | | | | |
Cash & due from banks | | | 34,679,000 | | | | | | | | | 21,204,000 | | | | | | | |
Other assets | | | 38,122,000 | | | | | | | | | 38,145,000 | | | | | | | |
Allowance for loan & lease losses | | | (6,158,000 | ) | | | | | | | | (6,072,000 | ) | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | $ | 569,098,000 | | | | | | | | $ | 575,827,000 | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
LIABILITIES & SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | |
Interest checking and money market | | $ | 155,630,000 | | $ | 323,000 | | | 0.83 | % | $ | 168,788,000 | | $ | 471,000 | | | 1.12 | % |
Savings | | | 33,380,000 | | | 54,000 | | | 0.65 | % | | 35,902,000 | | | 64,000 | | | 0.72 | % |
Time deposits | | | 139,844,000 | | | 621,000 | | | 1.78 | % | | 122,871,000 | | | 929,000 | | | 3.04 | % |
Other borrowings | | | 54,213,000 | | | 305,000 | | | 2.26 | % | | 53,408,000 | | | 393,000 | | | 2.96 | % |
| | | | | | | | | | | | | | | | | | | |
Total interest bearing liabilities | | | 383,067,000 | | $ | 1,303,000 | | | 1.36 | % | | 380,969,000 | | $ | 1,857,000 | | | 1.96 | % |
| | | | | | | | | | | | | | | | | | | |
Noninterest bearing demand deposits | | | 116,091,000 | | | | | | | | | 128,266,000 | | | | | | | |
Other liabilities | | | 5,842,000 | | | | | | | | | 5,837,000 | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total liabilities | | | 505,000,000 | | | | | | | | | 515,072,000 | | | | | | | |
Shareholders’ equity | | | 64,098,000 | | | | | | | | | 60,755,000 | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | $ | 569,098,000 | | | | | | | | $ | 575,827,000 | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Net interest income & margin | | | | | $ | 6,102,000 | | | 4.87 | % | | | | $ | 6,483,000 | | | 4.99 | % |
| | | | | | | | | | | | | | | | | | | |
Page 12 of Page 13
American River Bankshares
Analysis of Net Interest Margin on Earning Assets
(Taxable Equivalent Basis)
| | | | | | | | | | | | | | | | | | | |
Six months ended June 30, | | 2009 | | 2008 | |
| | Avg
Balance | | Interest | | Avg
Yield | Avg
Balance | | Interest | | Avg
Yield |
| | |
ASSETS | | | | | | | | | | | | | | | | | | | |
Loans and leases | | $ | 414,347,000 | | $ | 13,082,000 | | | 6.37 | % | $ | 404,301,000 | | $ | 14,189,000 | | | 7.06 | % |
Taxable investment securities | | | 64,113,000 | | | 1,411,000 | | | 4.44 | % | | 85,689,000 | | | 1,962,000 | | | 4.60 | % |
Tax-exempt investment securities | | | 25,981,000 | | | 690,000 | | | 5.36 | % | | 27,140,000 | | | 703,000 | | | 5.21 | % |
Corporate stock | | | 19,000 | | | 6,000 | | | 63.68 | % | | 240,000 | | | 17,000 | | | 14.24 | % |
Federal funds sold | | | 22,000 | | | — | | | 0.00 | % | | 725,000 | | | 8,000 | | | 2.22 | % |
Interest-bearing deposits in banks | | | 2,943,000 | | | 53,000 | | | 3.63 | % | | 4,942,000 | | | 124,000 | | | 5.05 | % |
| | | | | | | | | | | | | | | | | | | |
Total earning assets | | | 507,425,000 | | $ | 15,242,000 | | | 6.06 | % | | 523,037,000 | | $ | 17,003,000 | | | 6.54 | % |
| | | | | | | | | | | | | | | | | | | |
Cash & due from banks | | | 29,843,000 | | | | | | | | | 19,046,000 | | | | | | | |
Other assets | | | 42,037,000 | | | | | | | | | 38,790,000 | | | | | | | |
Allowance for loan & lease losses | | | (5,983,000 | ) | | | | | | | | (5,994,000 | ) | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | $ | 573,322,000 | | | | | | | | $ | 574,879,000 | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
LIABILITIES & SHAREHOLDERS’ EQUITY | | | | | | | | | | | | | | | | | | | |
Interest checking and money market | | $ | 153,033,000 | | $ | 641,000 | | | 0.84 | % | $ | 168,644,000 | | $ | 1,068,000 | | | 1.27 | % |
Savings | | | 32,904,000 | | | 108,000 | | | 0.66 | % | | 36,101,000 | | | 150,000 | | | 0.84 | % |
Time deposits | | | 136,767,000 | | | 1,330,000 | | | 1.96 | % | | 120,424,000 | | | 1,989,000 | | | 3.32 | % |
Other borrowings | | | 65,865,000 | | | 636,000 | | | 1.95 | % | | 54,372,000 | | | 886,000 | | | 3.28 | % |
| | | | | | | | | | | | | | | | | | | |
Total interest bearing liabilities | | | 388,569,000 | | $ | 2,715,000 | | | 1.41 | % | | 379,541,000 | | $ | 4,093,000 | | | 2.17 | % |
| | | | | | | | | | | | | | | | | | | |
Noninterest bearing demand deposits | | | 114,844,000 | | | | | | | | | 128,572,000 | | | | | | | |
Other liabilities | | | 5,949,000 | | | | | | | | | 6,321,000 | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Total liabilities | | | 509,362,000 | | | | | | | | | 514,434,000 | | | | | | | |
Shareholders’ equity | | | 63,960,000 | | | | | | | | | 60,445,000 | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
| | $ | 573,322,000 | | | | | | | | $ | 574,879,000 | | | | | | | |
| | | | | | | | | | | | | | | | | | | |
Net interest income & margin | | | | | $ | 12,527,000 | | | 4.98 | % | | | | $ | 12,910,000 | | | 4.96 | % |
| | | | | | | | | | | | | | | | | | | |
Page 13 of Page 13
