EXHIBIT 99.1
American River Bankshares' 3rd Quarter Net Income Increases 77%
Sacramento, CA, October 18, 2005 - American River Bankshares (NASDAQ: AMRB)
today reported net income for the third quarter of 2005 of $2,376,000, a 77.4%
increase from $1,339,000 during the third quarter of 2004. Diluted earnings per
share increased 48.3% to $0.43 from $0.29 diluted earnings per share during the
third quarter of 2004.
Net income for the nine months ended September 30, 2005 rose 68.5% to $6,617,000
from $3,926,000 and diluted earnings per share increased 42.4% to $1.21 compared
to $0.85 diluted earnings per share for the nine months ended September 30,
2004. Also for the nine months ended September 30, 2005, net interest income
increased 40.0% to $19,507,000 from $13,929,000 for the nine months ended
September 30, 2004.
"American River Bankshares continues to steadily grow assets, providing
exceptional returns for our shareholders, which allowed us to increase our
dividend for the past three consecutive quarters," said David T. Taber,
President and CEO of American River Bankshares. "We remain focused on building
business through our core banking operations in the Greater Sacramento, Amador,
Sonoma and South Placer markets."
Net interest income for the third quarter of 2005 increased 38.7% to $6,753,000
from $4,869,000 in the same quarter last year. The increase relates to an
increase in average earning assets of $142,372,000, compared to an increase of
$96,823,000 in interest-bearing liabilities. Average noninterest-bearing
deposits increased $42,346,000, which was invested mainly in interest bearing
loans and investments.
Noninterest income for the third quarter of 2005 increased 34.7% to $594,000
from $441,000 recorded in the third quarter of 2004 due to increased business as
a result of the Bank of Amador merger, specifically a 31.2% increase in service
fees and a 207.1% increase in residential lending fees. Noninterest expense
increased 23.1% to $3,464,000 from $2,814,000, mainly related to increases in
salaries and benefits and premises and equipment as a result of the three
offices acquired from the Bank of Amador in the 4th quarter of 2004. Noninterest
income for the nine months ended September 30, 2005 decreased 7.0% to $1,759,000
from $1,892,000 and noninterest expense increased 13.0% to $10,195,000 from
$9,026,000 for the nine months ended September 30, 2004.
Net loans increased $5,789,000 (1.6%) over the nine months ended September 30,
2005 and 3.5% since June 30, 2005. Total deposits increased $43,258,000 (9.1%)
at September 30, 2005 to $518,655,000 from $475,387,000 at December 31, 2004.
Investment securities increased 10.1% to $175,539,000 from $159,402,000 at
December 31, 2004.
Credit quality remains excellent, with nonperforming loans and leases at 0.05%
of total loans and leases and annualized net chargeoffs for the first nine
months of 2005 at 0.04% of average loans and leases, remaining below industry
averages. Additions to the allowance for loan and lease losses decreased from
$695,000 in the first nine 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 1.56% at September 30, 2005.
Performance measures continue to be outstanding; in the third quarter of 2005,
the Return on Average Assets (ROAA) was 1.54%, Return on Average Equity (ROAE)
was 15.32%, Return on Average Tangible Equity (ROATE) was 21.74% and the
efficiency ratio was 45.44%. Over the nine months ended September 30, 2005, the
Company has a ROAA of 1.49%, ROAE of 14.71%, ROATE of 21.11% and an efficiency
ratio of 46.21%.
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Highlights
o American River Bankshares continues a long history of enhancing shareholder
value with its 87th consecutive profitable quarter.
o American River Bankshares increased its quarterly cash dividend 15% over
the cash dividend paid in the prior quarter, continuing a tradition of
commitment that includes thirty-one cash dividends since 1992.
o Net interest margin for the quarter ended September 30, 2005 was 4.92%
compared to 4.78% for the quarter ended September 30, 2004. Net interest
margin for the nine months ended September 30, 2005 was 4.95% compared to
4.85% for the nine months ended September 30, 2004.
o American River Bank's five offices in the Greater Sacramento Area and
Placer County increased deposits 14.3% to $343,676,000 at September 30,
2005 from $300,798,000 at December 31, 2004. Loans increased 2.0% to
$210,690,000 as of September 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 0.8% to $62,509,000 at
September 30, 2005 from $62,988,000 as of December 31, 2004. Loans
increased marginally to $73,804,000 at September 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 0.7% to $113,421,000
at September 30, 2005 from $114,255,000 at December 31, 2004. Loans
increased 2.1% to $79,452,000 at September 30, 2005 from $77,795,000 at
December 31, 2004.
o The Healdsburg Office of North Coast Bank completed a $300,000 remodel. The
office was remodeled to reflect the relationship-orientated philosophy of
the Bank, removing the traditional teller line in favor of a business
environment with comfortable seating areas, sit-down client service desks
and local artwork.
o Amy J. Wheeler joined American River Bankshares as Vice President and Risk
Manager. Ms. Wheeler has 18 years of industry experience and is responsible
for company-wide risk management, including internal controls and
compliance with Sarbanes-Oxley regulations. Ms. Wheeler is a Certified
Regulatory Compliance Manager and a Certified Anti-Money Laundering
Specialist.
o Erik A. Lawson, CPA, joined American River Bankshares as Vice President and
Controller. Mr. Lawson has 11 years of industry experience and is
responsible for overseeing the accounting department, as well as financial
and regulatory reporting.
o Georgia Presnell, Secretary at the Point West Office of American River
Bank, was selected as Outstanding Older Worker for the State of California
by Experience Works, a non-profit organization that supports mature
workers. Georgia, who is 86 years old and works 40 hours a week, was
selected for her leadership, mentoring and over 30 years of service to a
variety of community projects, including the March of Dimes and Soroptimist
International.
Page 5 of 9
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.
Page 6 of 9
American River Bankshares
Consolidated Balance Sheet (Unaudited)
September 30 September 30 % December 31
ASSETS 2005 2004 Change 2004
----------------------------------------------------------
Cash and due from banks $ 38,215,000 $ 41,439,000 (7.8%) $ 28,115,000
Federal funds sold 1,100,000 2,800,000 (60.7%) 7,000,000
Interest-bearing deposits in bank 5,339,000 5,641,000 (5.4%) 5,939,000
Investment securities 175,539,000 128,955,000 36.1% 159,402,000
Loans and leases:
Real estate 265,974,000 191,078,000 39.2% 264,321,000
Commercial 70,407,000 57,512,000 22.4% 66,864,000
Lease financing 7,809,000 10,164,000 (23.2%) 9,994,000
Other 20,543,000 14,374,000 42.9% 17,669,000
Deferred loan and lease originations fees, net (786,000) (631,000) 24.6% (885,000)
Allowance for loan and lease losses (5,691,000) (4,496,000) 26.6% (5,496,000)
----------------------------------------------------------
Total loans and leases, net 358,256,000 268,001,000 33.7% 352,467,000
----------------------------------------------------------
Bank premises and equipment 1,983,000 1,734,000 14.4% 1,876,000
Accounts receivable servicing receivable, net 2,486,000 2,152,000 15.5% 2,409,000
Intangible assets 18,119,000 63,000 n/m 18,329,000
Accrued interest and other assets 12,937,000 5,892,000 119.6% 11,129,000
----------------------------------------------------------
$ 613,974,000 $ 456,677,000 34.4% $ 586,666,000
==========================================================
LIABILITIES & EQUITY
Noninterest-bearing deposits $ 175,516,000 $ 126,969,000 38.2% $ 143,710,000
Interest checking, money market & savings 225,311,000 182,322,000 23.6% 225,382,000
Time deposits 117,828,000 65,946,000 78.7% 106,295,000
----------------------------------------------------------
Total deposits 518,655,000 375,237,000 38.2% 475,387,000
----------------------------------------------------------
Short-term borrowings 18,860,000 28,356,000 (33.5%) 24,457,000
Long-term debt 8,286,000 9,846,000 (15.8%) 9,832,000
Accrued interest and other liabilities 5,961,000 4,137,000 44.1% 18,000,000
----------------------------------------------------------
Total liabilities 551,762,000 417,576,000 32.1% 527,676,000
Total equity 62,212,000 39,101,000 59.1% 58,990,000
----------------------------------------------------------
$ 613,974,000 $ 456,677,000 34.4% $ 586,666,000
==========================================================
Nonperforming loans and leases to total loans and
leases 0.05% 0.04% 0.07%
Net chargeoffs to average loans and leases
(annualized) 0.04% 0.07% 0.08%
Allowance for loan and lease loss to total loans and
leases 1.56% 1.65% 1.54%
Leverage Ratio 7.50% 8.61% 8.35%
Tier 1 Risk-Based Capital Ratio 10.52% 12.27% 9.65%
Total Risk-Based Capital Ratio 11.78% 13.52% 10.90%
n/m = not meaningful
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American River Bankshares
Consolidated Statement of Income (Unaudited)
For the Nine Months
Third Third Ended September 30
Quarter Quarter % --------------------------- %
2005 2004 Change 2005 2004 Change
---------------------------------------------------------------------------------
Interest income $ 8,562,000 $ 5,672,000 51.0% $ 24,247,000 $ 16,141,000 50.2%
Interest expense 1,809,000 803,000 125.3% 4,740,000 2,212,000 114.3%
---------------------------------------------------------------------------------
Net interest income 6,753,000 4,869,000 38.7% 19,507,000 13,929,000 40.0%
Provision for loan and lease losses 0 266,000 n/m 272,000 695,000 (60.9%)
Total noninterest income 594,000 441,000 34.7% 1,759,000 1,892,000 (7.0%)
Total noninterest expense 3,464,000 2,814,000 23.1% 10,195,000 9,026,000 13.0%
---------------------------------------------------------------------------------
Income before taxes 3,883,000 2,230,000 74.1% 10,799,000 6,100,000 77.0%
Income taxes 1,507,000 891,000 69.1% 4,182,000 2,174,000 92.4%
---------------------------------------------------------------------------------
Net income $ 2,376,000 $ 1,339,000 77.4% $ 6,617,000 $ 3,926,000 68.5%
=================================================================================
Basic earnings per share $ 0.44 $ 0.30 46.7% $ 1.24 $ 0.89 39.3%
Diluted earnings per share 0.43 0.29 48.3% 1.21 0.85 42.4%
Trailing 12-month diluted earnings
per share 1.60 1.10 45.5%
Net interest margin as a percentage 4.92% 4.78% 4.95% 4.85%
Operating Ratios:
Return on average assets 1.54% 1.19% 1.49% 1.24%
Return on average equity 15.32% 13.96% 14.71% 14.13%
Return on average tangible equity 21.74% 13.98% 21.11% 14.16%
Efficiency ratio (fully taxable
equivalent) 45.44% 52.56% 46.21% 56.59%
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
Third Second First Fourth
Quarter Quarter Quarter Quarter
2005 2005 2005 2004
---------------------------------------------------------
Interest income $ 8,562,000 $ 8,011,000 $ 7,674,000 $ 6,495,000
Interest expense 1,809,000 1,572,000 1,359,000 1,006,000
---------------------------------------------------------
Net interest income 6,753,000 6,439,000 6,315,000 5,489,000
Provision for loan and lease losses 0 55,000 217,000 200,000
Total noninterest income 594,000 584,000 581,000 503,000
Total noninterest expense 3,464,000 3,403,000 3,328,000 2,687,000
---------------------------------------------------------
Income before taxes 3,883,000 3,565,000 3,351,000 3,105,000
Income taxes 1,507,000 1,375,000 1,300,000 1,204,000
---------------------------------------------------------
Net income $ 2,376,000 $ 2,190,000 $ 2,051,000 $ 1,901,000
=========================================================
Basic earnings per share $ 0.44 $ 0.41 $ 0.38 $ 0.40
Diluted earnings per share 0.43 0.40 0.37 0.39
Net interest margin as a percentage 4.92% 4.97% 4.96% 4.90%
Quarterly Operating Ratios:
Return on average assets 1.54% 1.50% 1.43% 1.51%
Return on average equity 15.32% 14.68% 14.08% 16.70%
Return on average tangible equity 21.74% 21.13% 20.40% 19.14%
Efficiency ratio (fully tax equivalent) 45.44% 46.72% 47.75% 44.44%
Earnings per share have been adjusted for a 5% stock dividend distributed in
2004.
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