EXHIBIT 99.3
American River Bankshares & Subsidiaries
Unaudited Pro Forma Combined Consolidated Balance Sheet
September 30, 2004
(dollars in thousands)
American River Bank of
Bankshares Amador Adjustments Pro Forma
-------------- -------------- -------------- --------------
ASSETS
Cash and cash equivalents
Cash and due from banks $ 41,439 $ 4,558 $ -- $ 45,997
Federal funds sold 2,800 21,150 (13,949)(a) 10,001
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Total cash and cash equivalents 44,239 25,708 (13,949) 55,998
Interest-bearing deposits in banks 5,641 100 5,741
Investment securities
Available for sale, at fair value 84,595 23,702 -- 108,297
Held to maturity, at amortized cost 42,221 -- -- 42,221
Loans and leases, net of allowance for loan and lease losses 268,001 81,399 -- (b) 349,400
Premises and equipment, net 1,734 276 -- (b) 2,010
FHLB & FRB Stock 2,139 -- -- 2,139
Goodwill 63 -- 16,004 (c) 16,067
Core deposit intangible, net -- -- 2,784 (c) 2,784
Other assets 8,044 4,801 909 (d) 13,754
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Total Assets $ 456,677 $ 135,986 $ 5,748 $ 598,411
============== ============== ============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
Noninterest-bearing demand deposits $ 126,969 $ 25,902 $ -- $ 152,871
Interest-bearing
Demand deposits 155,059 15,665 -- 170,724
Savings 27,263 39,484 -- 66,747
Time Certificates 65,946 38,623 -- 104,569
-------------- -------------- -------------- --------------
Total deposits 375,237 119,674 -- (b) 494,911
Other borrowed funds 38,202 -- -- (b) 38,202
Accrued interest payable and other liabilities 4,137 892 1,114 (e) 6,143
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Total liabilities 417,576 120,566 1,114 539,256
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SHAREHOLDERS' EQUITY
Common stock 18,100 7,159 12,895 (f) 38,154
Retained Earnings 20,363 7,875 (7,875)(g) 20,363
Accumulated other comprehensive gain, net of tax 638 386 (386)(g) 638
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Total shareholders' equity 39,101 15,420 4,634 59,155
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Total Liabilities and Shareholders' Equity $ 456,677 $ 135,986 $ 5,748 $ 598,411
============== ============== ============== ==============
See notes to the Unaudited Pro Forma Combined Consolidated Financial Information
Page 15 of 19 Pages
American River Bankshares & Subsidiaries
Unaudited Pro Forma Combined Consolidated Income Statement
Nine Months ended September 30, 2004
(in thousands, except per share data)
American
River
Bankshares Bank of Amador Adjustments Consolidated
-------------- -------------- -------------- --------------
Interest Income
Loans and leases including fees $ 12,999 $ 4,486 $ -- $ 17,485
Investment securities
Taxable 2,719 201 -- 2,920
Non-taxable 400 350 -- 750
Federal funds sold 23 121 (81) (h) 63
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Total interest income 16,141 5,158 (81) 21,218
Interest Expense
Deposits 1,698 1,005 -- 2,703
Other borrowings 514 -- -- 514
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Total Interest Expense 2,212 1,005 -- 3,217
NET INTEREST INCOME 13,929 4,153 (81) 18,001
PROVISION FOR LOAN AND LEASE LOSSES 695 50 -- 745
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NET INTEREST INCOME AFTER PROVISION
FOR LOAN AND LEASE LOSSES 13,234 4,103 (81) 17,256
NONINTEREST INCOME
Service charges on deposit accounts 408 171 -- 579
Other fees and charges 1,437 60 -- 1,497
Earnings on cash surrender value of life
insurance policies 47 113 -- 160
Gain on sale of loans -- 125 125
-------------- -------------- -------------- --------------
Total noninterest income 1,892 469 -- 2,361
NONINTEREST EXPENSE
Salaries and employee benefits 4,681 851 -- 5,532
Equipment expense 556 143 -- 699
Occupancy expense 698 157 -- 855
Other 3,091 1,083 261 (i) 4,326
(109)(j)
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Total noninterest expense 9,026 2,234 152 11,412
INCOME BEFORE PROVISION FOR
INCOME TAXES 6,100 2,338 (233) 8,205
PROVISION FOR INCOME TAXES 2,174 858 (93)(j) 2,939
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NET INCOME $ 3,926 $ 1,480 $ (140) $ 5,266
============== ============== ============== ==============
NET INCOME PER SHARE
Basic .94 .95 1.04
Diluted .89 .91 1.00
Weighted Average Shares
Basic 4,198,917 1,566,284 5,049,484
Diluted 4,401,282 1,626,382 5,251,849
See notes to the Unaudited Pro Forma Combined Consolidated Financial Information
Page 16 of 19 Pages
American River Bankshares & Subsidiaries
Unaudited Pro Forma Combined Consolidated Income Statement
Year ended December 31, 2003
(in thousands, except per share data)
American
River
Bankshares Bank of Amador Adjustments Consolidated
-------------- -------------- -------------- --------------
Interest Income
Loans and leases including fees $ 16,744 $ 5,672 $ -- $ 22,416
Investment securities
Taxable 2,501 340 -- 2,841
Non-taxable 475 498 -- 973
Federal funds sold 48 118 (107)(h) 59
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Total interest income 19,768 6,628 (107) 26,289
Interest Expense
Deposits 2,390 1,213 -- 3,603
Other borrowings 512 -- -- 512
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Total Interest Expense 2,902 1,213 -- 4,115
NET INTEREST INCOME 16,866 5,415 (107) 22,174
PROVISION FOR LOAN AND LEASE LOSSES 946 104 -- 1,050
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NET INTEREST INCOME AFTER PROVISION
FOR LOAN AND LEASE LOSSES 15,920 5,311 (107) 21,124
NONINTEREST INCOME
Service charges on deposit accounts 534 222 -- 756
Other fees and charges 1,659 87 -- 1,746
Earnings on cash surrender value of life
insurance policies 27 64 -- 91
Gain on sale of securities 33 -- -- 33
Gain on sale of loans -- 149 149
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Total noninterest income 2,253 522 -- 2,775
NONINTEREST EXPENSE
Salaries and employee benefits 6,233 1,224 -- 7,457
Equipment expense 653 199 -- 852
Occupancy expense 817 188 -- 1,005
Other 2,669 963 348 (i) 3,871
(109)(j)
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Total noninterest expense 10,372 2,574 239 13,185
INCOME BEFORE PROVISION FOR
INCOME TAXES 7,801 3,259 (346) 10,714
PROVISION FOR INCOME TAXES 3,060 1,195 (137)(k) 4,118
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NET INCOME $ 4,741 $ 2,064 $ (209) $ 6,596
============== ============== ============== ==============
NET INCOME PER SHARE
Basic 1.19 1.36 1.36
Diluted 1.10 1.28 1.28
Weighted Average Shares
Basic 3,988,856 1,519,886 4,839,423
Diluted 4,317,793 1,613,064 5,168,360
See notes to the Unaudited Pro Forma Combined Consolidated Financial Information
Page 17 of 19 Pages
NOTES TO THE UNAUDITED PRO FORMA
COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Unaudited Pro Forma Combined Condensed Consolidated Balance Sheet ("Pro
Forma Balance Sheet") combines the historical Balance Sheets of American River
Bankshares ("AMRBK") and Bank of Amador ("BNKA") giving effect to the
consummation of the merger as of September 30, 2004. The Unaudited Pro Forma
Combined Condensed Consolidated Statements of Income ("Pro Forma Income
Statements") for the nine months ended September 30, 2004 and the year ended
December 31, 2003 give effect to the consummation of the merger as if such
transaction had become effective at the beginning of each respective period. The
merger will be accounted for using the purchase method of accounting and giving
effect to the related pro forma adjustments described in the accompanying notes
to the Unaudited Pro Forma Combined Condensed Consolidated Financial Statements
("Pro Forma Financial Statements").
The Pro Forma Financial Statements included herein are presented for information
purposes only. They include various estimates and may not necessarily be
indicative of the financial position or results of operations that would have
occurred if the merger had been consummated on the date or at the beginning of
the periods indicated or which may be obtained in the future. These pro forma
financial statements and accompanying notes should be read together with the
historical financial statements, including the notes thereto, of AMRBK that have
been presented in prior filings with the SEC and of BNKA, which are included and
incorporated by reference herein.
We anticipate that the merger will provide the combined company with financial
benefits including cost savings and enhanced revenue opportunities. The pro
forma information, while helpful in illustrating the financial characteristics
of the combined company under one set of assumptions, does not reflect benefits
of expected cost savings or revenue opportunities and, accordingly, does not
attempt to predict or suggest future operating results. It also does not
necessarily reflect what the historical results of the combined company would
have been had the companies been combined during these periods.
Note (1) - Basis of Presentation
The merger with BNKA was completed on December 3, 2004 through the exchange of
850,627 shares of AMRBK's common stock valued at approximately $20,054,000 and
cash of approximately $10,763,000 for all of the outstanding common shares of
AMRBK. The shares and the cash exchanged assumes no BNKA shareholders exercise
their dissenters' rights and assumes no holdback of cash as set forth in the
merger agreement.
Management of AMRBK determined the estimated fair value adjustments for assets
acquired and liabilities assumed by AMRBK with the assistance of certain
investment banking and consulting firms. Based upon a preliminary analysis, it
is anticipated that book value will be a reasonable approximation of fair value
with the exception of the valuation of BNKAs investment securities portfolio.
The resulting core deposit intangible is being amortized into income over eight
years.
Deferred tax assets and liabilities were recorded to reflect the tax
consequences associated with differences between the tax basis and book basis of
the assets acquired and liabilities assumed, using a tax rate of 40%.
Certain reclassifications have been made to BNKA's historical financial
information in order to conform to AMRBK's financial information.
Note (2) - Pro Forma Adjustments
Summarized below are the pro forma adjustments necessary to reflect the merger
based on the purchase method of accounting:
(a) Cash consideration paid to Bank of Amador shareholders assuming no
holdback of cash at the closing, in addition to cash paid for
merger related costs.
(b) Adjustments to reflect the fair value of the assets and
liabilities are not considered material and are omitted for this
presentation.
Page 18 of 19 Pages
(c) Goodwill of $16.0 million and core deposit intangible of $2.8
million, resulting from the application of the purchase method of
accounting. Goodwill results from the calculation below and
assumes no BNKA shareholders exercised their dissenters' rights:
Cost to Acquire BNKA:
---------------------
AMRBK Common Stock Issued $ 20,054
Cash paid to BNKA shareholders 10,763
Direct costs of merger 365
----------
Consideration Paid for BNKA 31,182
Net Assets Acquired:
BNKA Stockholders' Equity at September 30, 2004 $ 15,420
Less: Pre Merger Costs, net of tax (1,912)
----------
Subtotal $ 13,508
Core Deposit Intangible 2,784
Tax Effect of Core Deposit Intangible (1,114)
Net Core Deposit Intangible 1,670
Estimated Goodwill Recognized $ 16,004
Core deposit intangible estimated value at 2.5 percent of core deposits
acquired (exclusive of time deposits greater than $100,000). Tax effect
estimated at 40 percent.
(d) Deferred tax asset relates to merger-related costs expected to be
incurred ($1,2 million), less direct costs to issue the new shares
($.4 million)
(e) Deferred taxes of $1.1 million.
(f) Issuance of American River Bankshares common stock, based on
$23.576, to Bank of Amador shareholders, less the elimination of
Bank of Amador common stock.
(g) Elimination of Bank of Amador retained earnings and unrealized net
gains on securities available for sale.
(h) Opportunity costs on cash consideration paid to Bank of Amador
shareholders (assumed interest rate of 1.00%).
(i) Amortization expense related to the estimated core deposit
intangible asset. The core deposit intangible will be amortized on
a straight-line basis over its estimated useful life of 8 years.
(j) Adjustment for merger costs paid by BNKA through September 30,
2004.
(k) The provision for income taxes related to pro forma adjustments is
computed using a combined federal and state tax rate of 40%.
Page 19 of 19 Pages