EXHIBIT 99.1
American River Bankshares announces a 29% increase in EPS
Sacramento, CA, July 19, 2005 - American River Bankshares (NASDAQ: AMRB) today
reported net income for the second quarter of 2005 of $2,190,000, a 53.5%
increase from $1,427,000 recorded during the second quarter of 2004. Diluted
earnings per share increased 29.0% to $0.40 from $0.31 diluted earnings per
share during the second quarter of 2004.
Net income for the six months ended June 30, 2005 rose 63.9% to $4,241,000 from
$2,587,000 and diluted earnings per share increased 39.3% to $0.78 compared to
$0.56 diluted earnings per share for the six months ended June 30, 2004. Also
for the six months ended June 30, 2005, net interest income increased 40.8% to
$12,754,000 from $9,060,000 for the six months ended June 30, 2004.
"This has been a very exciting quarter with the Company hitting several
milestones, including $600 million in assets and record earnings for another
quarter," said David T. Taber, President and CEO of American River Bankshares.
"Our new business pipeline is strong and we continue to deliver the exceptional
service that our clients have come to expect from us over our 22 year history."
Net interest income for the second quarter of 2005 increased 38.8% to $6,439,000
from $4,638,000 in the same quarter last year. The increase relates to an
increase in average earning assets of $137,323,000, compared to an increase of
$93,775,000 in interest-bearing liabilities. Average noninterest-bearing
deposits increased $42,366,000, which was invested mainly in interest bearing
loans and investments.
Noninterest income for the second quarter of 2005 decreased 42.9% to $584,000
from $1,022,000 recorded in the second quarter of 2004. The decrease was
primarily the result of proceeds received in the second quarter of 2004 from a
life insurance policy on a former Company executive in the amount of $552,000.
Noninterest expense decreased 1.7% to $3,403,000 from $3,463,000 in part due to
a contribution of $503,000 in 2004 to create a charitable foundation known as
the American River Bankshares Foundation. Excluding the $503,000 contribution in
2004, noninterest expense increased 15.0%, which is principally related to the
increased expenses associated with Bank of Amador's three offices, which were
acquired in December 2004. The income and expense associated with Bank of Amador
was first included in the Company's fourth quarter 2004 results. The Company's
tax rate increased to 38.6% in the second quarter of 2005 from 27.4% in the
second quarter of 2004. The increase is due primarily to the tax-free nature of
the above-referenced life insurance proceeds.
Noninterest income for the six months ended June 30, 2005 decreased 19.7% to
$1,165,000 from $1,451,000 and noninterest expense increased 8.4% to $6,731,000
from $6,212,000 for the six months ended June 30, 2004. The Company's tax rate
increased to 38.7% for the first six months of 2005 from 33.2% for the six
months ended June 30, 2004.
Total assets crossed the $600 million threshold for the first time in the
Company's history, reaching $606,052,000 at June 30, 2005. The increase was
aided in part by the December 2004 acquisition of Bank of Amador. Net loans
decreased $6,405,000 (1.9%) over the six months ended June 30, 2005 and total
deposits increased $34,678,000 (7.3%) at June 30, 2005 to $510,065,000 from
$475,387,000 at December 31, 2004. The decrease in loans came despite the
tremendous loan volume during the first half of 2005, which included the
origination of $99 million in new loans, some of which have not yet been
disbursed. Investment securities increased 6.4% to $169,649,000 from
$159,402,000 at December 31, 2004.
Credit quality remains excellent, with nonperforming loans and leases at 0.37%
of total loans and leases and annualized net chargeoffs for the first six months
of 2005 at 0.02% of average loans and leases, remaining below industry averages.
Additions to the allowance for loan and lease losses decreased from $429,000 in
the first six months of 2004 to $272,000 in 2005. The Company's excellent credit
quality allowed it to reduce the allocations. The reserve as a percentage of
loans and leases was 1.63% at June 30, 2005.
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Performance measures continue to be outstanding, with a Return of Average Assets
(ROAA) of 1.50%, Return of Average Equity (ROAE) of 14.68%, Return of Average
Tangible Equity (ROATE) of 21.13% and an efficiency ratio of 47.93% for the
second quarter of 2005. Over the six months ended June 30, 2005, the Company has
a ROAA of 1.47%, ROAE of 14.38%, ROATE of 20.77% and an efficiency ratio of
47.84%.
Highlights
o American River Bankshares continues a long history of enhancing shareholder
value with its 86th consecutive profitable quarter.
o American River Bankshares increased its quarterly cash dividend 4% over the
cash dividend paid in the prior quarter, continuing a tradition of
commitment that includes thirty cash dividends since 1992.
o Net interest margin for the quarter ended June 30, 2005 was 4.98% compared
to 4.85% for the quarter ended June 30, 2004. Net interest margin for the
six months ended June 30, 2005 was 4.97% compared to 4.89% for the six
months ended June 30, 2004.
o American River Bank's five offices in the Greater Sacramento Area and
Placer County increased deposits 12.6% to $338,659,000 at June 30, 2005
from $300,798,000 at December 31, 2004. Loans decreased 3.7% to
$198,925,000 as of June 30, 2005 from $206,499,000 at December 31, 2004.
o North Coast Bank, a division of American River Bank with three offices in
Sonoma County, experienced a decrease in deposits of 2.2% to $61,588,000 at
June 30, 2005 from $62,988,000 as of December 31, 2004. Loans increased
marginally to $73,802,000 at June 30, 2005 from $73,670,000 as of December
31, 2004.
o Bank of Amador, a division of American River Bank with three offices in
Amador County, experienced a decrease in deposits of 2.9% to $110,937,000
at June 30, 2005 from $114,255,000 at December 31, 2004. Loans increased
1.6% to $79,071,000 at June 30, 2005 from $77,795,000 at December 31, 2004.
o American River Bankshares was included as a member in the June launch of
the new Russell Microcap(TM) Index by the Russell Investment Group. The new
index was created to track the performance of a universe of 2,000 small-cap
companies and offers investors a genuine marketplace of microcap stocks in
which to identify opportunities.
o Sandler O'Neill identified AMRB as one of thirty-eight all stars in their
2005 Bank and Thrift Sm-All Stars. Each company included in the list
delivers nearly two times the level of loan, deposit and earnings growth of
the industry over the past twelve months, while simultaneously maintaining
pristine credit quality metrics and a return on equity that ranks in the
top quartile for the industry.
o U.S. Banker Magazine (July 2005) ranked AMRB as number thirty-five on their
"Top 200 Publicly Traded Community Banks" list. The magazine's annual
performance ranking includes banks and thrifts with assets under $1 billion
and lists each company by three-year average rate of return on equity.
o Wayne Garibaldi was promoted to senior vice president of Bank of Amador.
Mr. Garibaldi has been with Bank of Amador since their doors opened in
November 1983 and he will continue to serve as branch manager of the
Jackson Office.
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About American River Bankshares
- -------------------------------
American River Bankshares [NASDAQ: 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 916-565-6100 or visit www.amrb.com;
www.americanriverbank.com; www.northcoastbank.com; or www.bankofamador.com.
Forward-Looking Statement
- -------------------------
In addition to the historical information contained herein, this press release
contains certain forward-looking statements. The reader of this press release
should understand that all such forward-looking statements are subject to
various uncertainties and risks that could affect their outcome. The Company's
actual results could differ materially from those suggested by such
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, variances in the actual versus
projected growth in assets, return on assets, loan losses, expenses, changes in
the interest environment including interest rates charged on loans, earned on
securities investments and paid on deposits, competition effects, fee and other
non interest income earned, general economic conditions, nationally, regionally,
and in the operating market areas of the Company and its subsidiaries, changes
in the regulatory environment, changes in business conditions and inflation,
changes in securities markets, data processing problems, a decline in real
estate values in the Company's market area, the conduct of the war on terrorism,
the threat of terrorism or the impact of potential military conflicts and the
conduct of war on terrorism by the United States and its allies, as well as
other factors. To gain a more complete understanding of the uncertainties and
risks involved in the Company's business, this press release should be read in
conjunction with the Company's annual report on Form 10-K for the year ended
December 31, 2004, and subsequent quarterly reports on Form 10Q and current
reports on Form 8-K.
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American River Bankshares
Consolidated Balance Sheet (Unaudited)
June 30 June 30 % December 31
ASSETS 2005 2004 Change 2004
Cash and due from banks $ 31,314,000 $ 27,407,000 14.3% $ 28,115,000
Federal funds sold 19,400,000 -- n/m 7,000,000
Interest-bearing deposits in bank 6,429,000 5,740,000 12.0% 5,939,000
Investment securities 169,649,000 121,410,000 39.7% 159,402,000
Loans and leases:
Real estate 256,568,000 189,159,000 35.6% 264,321,000
Commercial 69,604,000 56,088,000 24.1% 66,864,000
Lease financing 8,479,000 10,733,000 (21.0%) 9,994,000
Other 17,888,000 15,523,000 15.2% 17,669,000
Deferred loan and lease originations fees, net (740,000) (633,000) 16.9% (885,000)
Allowance for loan and lease losses (5,737,000) (4,233,000) 35.5% (5,496,000)
--------------------------------------------------------------
Total loans and leases, net 346,062,000 266,637,000 29.8% 352,467,000
--------------------------------------------------------------
Bank premises and equipment 1,772,000 1,796,000 (1.3%) 1,876,000
Accounts receivable servicing receivable, net 2,376,000 2,040,000 16.5% 2,409,000
Intangible assets 18,208,000 63,000 n/m 18,329,000
Accrued interest and other assets 10,842,000 6,004,000 80.6% 11,129,000
--------------------------------------------------------------
606,052,000 431,097,000 40.6% 586,666,000
--------------------------------------------------------------
LIABILITIES & EQUITY
Noninterest-bearing deposits $ 154,917,000 $ 110,109,000 40.7% $ 143,710,000
Interest checking, money market & savings 241,389,000 169,648,000 42.3% 225,382,000
Time deposits 113,759,000 70,265,000 61.9% 106,295,000
--------------------------------------------------------------
Total deposits 510,065,000 350,022,000 45.7% 475,387,000
--------------------------------------------------------------
Short-term borrowings 20,359,000 30,855,000 (34.0%) 24,457,000
Long-term debt 10,801,000 9,861,000 9.5% 9,832,000
Accrued interest and other liabilities 3,747,000 2,850,000 31.5% 18,000,000
--------------------------------------------------------------
Total liabilities 544,972,000 393,588,000 38.5% 527,676,000
Total equity 61,080,000 37,509,000 62.8% 58,990,000
--------------------------------------------------------------
$ 606,052,000 $ 431,097,000 40.6% $ 586,666,000
==============================================================
Nonperforming loans and leases to total loans and leases 0.37% 0.03% 0.07%
Net chargeoffs to average loans and leases (annualized) 0.02% 0.11% 0.08%
Allowance for loan and lease loss to total loans and leases 1.63% 1.56% 1.54%
Leverage Ratio 7.5% 8.9% 8.4%
Tier 1 Risk-Based Capital Ratio 10.4% 12.2% 9.6%
Total Risk-Based Capital Ratio 11.6% 13.4% 10.9%
n/m = not meaningful
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American River Bankshares
Consolidated Statement of Income (Unaudited)
Second Second % For the Six Months %
Quarter Quarter Change Ended June 30 Change
2005 2004 2005 2004
---------------------------------------------------------------------------------
Interest income $ 8,011,000 $ 5,356,000 49.6% $15,685,000 $10,469,000 49.8%
Interest expense 1,572,000 718,000 118.9% 2,931,000 1,409,000 108.0%
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Net interest income 6,439,000 4,638,000 38.8% 12,754,000 9,060,000 40.8%
Provision for loan and lease losses 55,000 231,000 (76.2%) 272,000 429,000 (36.6%)
Total noninterest income 584,000 1,022,000 (42.9%) 1,165,000 1,451,000 (19.7%)
Total noninterest expense 3,403,000 3,463,000 (1.7%) 6,731,000 6,212,000 8.4%
---------------------------------------------------------------------------------
Income before taxes 3,565,000 1,966,000 81.3% 6,916,000 3,870,000 78.7%
Income taxes 1,375,000 539,000 155.1% 2,675,000 1,283,000 108.5%
---------------------------------------------------------------------------------
Net income $ 2,190,000 $ 1,427,000 53.5% 4,241,000 2,587,000 63.9%
=================================================================================
Basic earnings per share $ 0.41 $ 0.32 28.1% $ 0.79 $ 0.59 33.9%
Diluted earnings per share 0.40 0.31 29.0% 0.78 0.56 39.3%
Trailing 12-month diluted earnings
per share 1.46 1.09 33.9%
Net interest margin as a percentage 4.98% 4.85% 4.97% 4.89%
Operating Ratios:
Return on average assets 1.50% 1.36% 1.47% 1.27%
Return on average equity 14.68% 15.45% 14.38% 14.22%
Return on average tangible equity 21.13% 15.48% 20.77% 14.25%
Efficiency ratio (fully taxable equivalent) 47.93% 60.74% 47.84% 58.62%
Earnings per share have been adjusted for a 5% stock dividend distributed in
2004.
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American River Bankshares
Consolidated Statement of Income (Unaudited)
Trailing Four Quarters
Second First Fourth Third
Quarter Quarter Quarter Quarter
2005 2005 2004 2004
------------ ------------ ------------ ------------
Interest income $ 8,011,000 $ 7,674,000 $ 6,495,000 $ 5,672,000
Interest expense 1,572,000 1,359,000 1,006,000 803,000
------------ ------------ ------------ ------------
Net interest income 6,439,000 6,315,000 5,489,000 4,869,000
Provision for loan and lease losses 55,000 217,000 200,000 266,000
Total noninterest income 584,000 581,000 503,000 441,000
Total noninterest expense 3,403,000 3,328,000 2,687,000 2,814,000
------------ ------------ ------------ ------------
Income before taxes 3,565,000 3,351,000 3,105,000 2,230,000
Income taxes 1,375,000 1,300,000 1,204,000 891,000
------------ ------------ ------------ ------------
Net income 2,190,000 2,051,000 1,901,000 1,339,000
------------ ------------ ------------ ------------
Basic earnings per share $ 0.41 $ 0.38 $ 0.40 $ 0.30
Diluted earnings per share 0.40 0.37 0.39 0.29
Net interest margin as a percentage 4.98% 4.96% 4.90% 4.78%
Quarterly Operating Ratios:
Return on average assets 1.50% 1.43% 1.51% 1.19%
Return on average equity 14.68% 14.08% 16.70% 13.96%
Return on average tangible equity 21.13% 20.40% 19.14% 13.98%
Efficiency ratio (fully tax equivalent) 47.93% 47.75% 44.44% 52.56%
Earnings per share have been adjusted for a 5% stock dividend distributed in
2004.
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