EXHIBIT 99.1
American River Bankshares announces 3rd Quarter EPS of $0.41
Sacramento, CA, October 19, 2006 - American River Bankshares (NASDAQ-GS: AMRB)
today reported diluted earnings per share for the third quarter of 2006 of
$0.41, a 7.9% increase from $0.38 during the second quarter of 2006 and no
change from the third quarter of 2005. Net income for the third quarter of 2006
increased 6.5% to $2,275,000 from $2,137,000 during the second quarter of 2006
and decreased 4.3% to $2,376,000 for the third quarter of 2005. Diluted earnings
per share for the nine months ended September 30, 2006 increased 1.7% to $1.17
from $1.15 diluted earnings per share and net income rose 0.6% to $6,655,000
from $6,617,000 for the nine months ended September 30, 2005.
"American River Bankshares has been able to show improvement in a very
challenging banking environment," said David T. Taber, President and CEO of
American River Bankshares. "We didn't let the fact that second quarter earnings
were below our expectations change our direction with the strategic plan and as
a result, are encouraged by our effort in the third quarter."
Net interest income for the third quarter of 2006 increased 1.5% to $6,798,000
from $6,699,000 for the second quarter of 2006 and increased 0.7% from
$6,753,000 for the third quarter of 2005. Interest income for the third quarter
of 2006 increased 2.9% to $9,737,000 from $9,463,000 for the second quarter of
2006 and increased 13.7% from $8,562,000 for the third quarter of 2005. For the
nine months ended September 30, 2006, net interest income increased 4.0% to
$20,289,000 from $19,507,000 and interest income increased 16.8% to $28,317,000
from $24,247,000 for the nine months ended September 30, 2005.
Net interest margin as a percentage increased to 5.01% for the third quarter of
2006 from 4.96% for the second quarter of 2006 and from 4.92% for the third
quarter of 2005. For the nine months ended September 30, 2006, net interest
margin as a percentage increased to 5.03% from 4.95% for the nine months ended
September 30, 2005.
Interest expense for the third quarter of 2006 increased 6.3% to $2,939,000 from
$2,764,000 for the second quarter of 2006 and increased 62.5% from $1,809,000
for the third quarter of 2005. For the nine months ended September 30, 2006,
interest expense increased 69.4% to $8,028,000 from $4,740,000.
Noninterest income for the third quarter of 2006 increased 1.3% to $605,000 from
$597,000 for the second quarter of 2006 and increased 1.9% from $594,000 for the
third quarter of 2005. For the nine months ended September 30, 2006, noninterest
income increased 4.4% to $1,836,000 from $1,759,000. Noninterest expense
decreased 0.6% to $3,602,000 from $3,622,000 in the second quarter of 2006 and
increased 4.0% from $3,464,000 for the third quarter of 2005. For the nine
months ended September 30, 2006, noninterest expense increased 6.5% to
$10,862,000 from $10,195,000. This increase is primarily related to higher
personnel costs (up $415,000 or 7.9% excluding FAS 123 (R) related costs),
occupancy expense (up $88,000 or 5.6%), professional fees (up $47,000 or 8.4%)
and costs associated with adopting FAS 123(R) ($160,000).
Net loans as of September 30, 2006 decreased $17,779,000 (4.5%) to $374,396,000
from $392,175,000 as of June 30, 2006 but increased $16,140,000 (4.5%) from
$358,256,000 as of September 30, 2005. From December 31, 2005, net loans
increased $8,825,000 (2.4%) from $365,571,000. Total deposits as of September
30, 2006 increased $12,834,000 (2.7%) to $493,444,000 from $480,610,000 as of
June 30, 2006 but decreased $25,211,000 (4.9%) from $518,655,000 as of September
30, 2005. From December 31, 2005, total deposits decreased $7,262,000 (1.5%)
from $500,706,000. Short-term borrowings decreased 55.0% to $25,566,000 at
September 30, 2006 from $56,840,000 at June 30, 2006. Short-term borrowings are
up 35.6% from $18,860,000 at September 30, 2005.
"Our net interest margin is back above 5%, due in large part to the fact that we
were able to cut short-term borrowings in half over last quarter," said Mr.
Taber. "We accomplished this major shift by working hard to increase core
deposits, while at the same time decreasing our investment portfolio."
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Credit quality remains good, with nonperforming loans and leases at 0.08% of
total loans and leases compared to 0.07% last quarter and 0.05% one year ago.
The allowance for loan and lease losses decreased to $5,871,000 as of September
30, 2006 from $5,924,000 as of June 30, 2006 and increased from $5,691,000 as of
September 30, 2005. The provision for loan and lease losses was $30,000 for the
third quarter of 2006, a decrease from $156,000 for the second quarter of 2006
and an increase from $0 for the third quarter of 2005. The reserve as a
percentage of loans and leases was 1.54% at September 30, 2006, compared to
1.49% at June 30, 2006 and 1.56% at September 30, 2005. Non performing assets
were $299,000 at September 30, 2006 and net chargeoffs for the first nine months
of 2006 were $78,000.
Performance measures in the third quarter of 2006: the Return on Average Assets
(ROAA) was 1.50%, Return on Average Equity (ROAE) was 14.39%, Return on Average
Tangible Equity (ROATE) was 20.16% and the efficiency ratio was 47.03%. For the
quarter ended June 30, 2006, the Company had a ROAA of 1.41%, ROAE of 13.52%,
ROATE of 18.92% and an efficiency ratio of 48.01%. For the quarter ended
September 30, 2005, the Company had a ROAA of 1.54%, ROAE of 15.32%, ROATE of
21.74% and an efficiency ratio of 45.44%.
Third Quarter Highlights
o American River Bankshares continues a long history of enhancing shareholder
value with its 91st consecutive profitable quarter. In the third quarter of
2006, the Company repurchased 130,000 shares totaling $3,302,000 and year
to date, has repurchased over 230,000 shares totaling nearly $6,000,000.
Also in the third quarter of 2006, the Company declared a quarterly cash
dividend of 15 cents per share.
o Net interest margin for the quarter ended September 30, 2006 was 5.01%
compared to 4.92% for the quarter ended September 30, 2005. Net interest
margin for the nine months ended September 30, 2006 was 5.03% compared to
4.95% for the nine months ended September 30, 2005.
o American River Bank's offices in the Greater Sacramento Area and Placer
County experienced a decrease in total deposits of 7.5% to $317,860,000 at
September 30, 2006 from $343,676,000 at September 30, 2005. Year over year,
net loans increased 6.1% to $219,683,000 from $207,125,000.
o North Coast Bank, a division of American River Bank with three offices in
Sonoma County, increased total deposits 9.0% to $68,159,000 at September
30, 2006 from $62,509,000 as of September 30, 2005. Year over year, net
loans increased 5.0% to $76,241,000 from $72,597,000.
o Bank of Amador, a division of American River Bank with three offices in
Amador County, experienced a decrease in total deposits of 5.1% to
$107,661,000 at September 30, 2006 from $113,421,000 at September 30, 2005.
Year over year, net loans decreased marginally to $78,472,000 from
$78,534,000.
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 916-231-6700 or visit www.amrb.com;
www.americanriverbank.com; www.northcoastbank.com; or www.bankofamador.com.
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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 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, 2005, and
in reports filed on its 2006 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.
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American River Bankshares
Consolidated Balance Sheet (Unaudited)
September 30 September 30 % December 31
ASSETS 2006 2005 Change 2005
-------------------------------------------------------------
Cash and due from banks $ 29,076,000 $ 38,215,000 (23.9%) $ 34,825,000
Federal funds sold -- 1,100,000 n/a 1,250,000
Interest-bearing deposits in bank 4,951,000 5,339,000 (7.3%) 4,844,000
Investment securities 149,776,000 175,539,000 (14.7%) 171,809,000
Loans and leases:
Real estate 271,350,000 265,974,000 2.0% 265,995,000
Commercial 83,128,000 70,407,000 18.1% 77,971,000
Lease financing 6,686,000 7,809,000 (14.4%) 7,967,000
Other 19,790,000 20,543,000 (3.7%) 20,029,000
Deferred loan and lease originations fees, net (687,000) (786,000) (12.6%) (712,000)
Allowance for loan and lease losses (5,871,000) (5,691,000) 3.2% (5,679,000)
-------------------------------------------------------------
Total loans and leases, net 374,396,000 358,256,000 4.5% 365,571,000
-------------------------------------------------------------
Bank premises and equipment 1,905,000 1,983,000 (3.9%) 2,090,000
Accounts receivable servicing receivable, net 2,611,000 2,486,000 5.0% 2,000,000
Intangible assets 17,903,000 18,119,000 (1.2%) 18,152,000
Accrued interest and other assets 11,481,000 12,937,000 (11.3%) 12,222,000
-------------------------------------------------------------
$ 592,099,000 $ 613,974,000 (3.6%) $ 612,763,000
=============================================================
LIABILITIES & EQUITY
Noninterest-bearing deposits $ 154,549,000 $ 175,516,000 (11.9%) $ 164,397,000
Interest checking 42,670,000 47,652,000 (10.5%) 46,364,000
Money market 125,170,000 140,307,000 (10.8%) 133,443,000
Savings 36,785,000 37,352,000 (1.5%) 37,610,000
Time deposits 134,270,000 117,828,000 14.0% 118,892,000
-------------------------------------------------------------
Total deposits 493,444,000 518,655,000 (4.9%) 500,706,000
-------------------------------------------------------------
Short-term borrowings 25,566,000 18,860,000 35.6% 39,386,000
Long-term debt 6,722,000 8,286,000 (18.9%) 4,270,000
Accrued interest and other liabilities 4,747,000 5,961,000 (20.4%) 5,655,000
-------------------------------------------------------------
Total liabilities 530,479,000 551,762,000 (3.9%) 550,017,000
Total equity 61,620,000 62,212,000 (1.0%) 62,746,000
-------------------------------------------------------------
$ 592,099,000 $ 613,974,000 (3.6%) $ 612,763,000
=============================================================
Nonperforming loans and leases to total loans and leases 0.08% 0.05% 0.02%
Net chargeoffs to average loans and leases (annualized) 0.03% 0.03% 0.04%
Allowance for loan and lease loss to total loans and leases 1.55% 1.56% 1.53%
Leverage Ratio 7.59% 7.50% 7.64%
Tier 1 Risk-Based Capital Ratio 10.19% 10.52% 10.57%
Total Risk-Based Capital Ratio 11.44% 11.78% 11.82%
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American River Bankshares
Consolidated Statement of Income (Unaudited)
Third Third % For the Nine Months %
Quarter Quarter Change Ended September 30 Change
2006 2005 2006 2005
-------------------------------------------------------------------------
Interest income $ 9,737,000 $ 8,562,000 13.7% $28,317,000 $24,247,000 16.8%
Interest expense 2,939,000 1,809,000 62.5% 8,028,000 4,740,000 69.4%
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Net interest income 6,798,000 6,753,000 0.7% 20,289,000 19,507,000 4.0%
Provision for loan and lease losses 30,000 -- n/a 270,000 272,000 (0.7%)
Total noninterest income 605,000 594,000 1.9% 1,836,000 1,759,000 4.4%
Total noninterest expense 3,602,000 3,464,000 4.0% 10,862,000 10,195,000 6.5%
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Income before taxes 3,771,000 3,883,000 (2.9%) 10,993,000 10,799,000 1.8%
Income taxes 1,496,000 1,507,000 (0.7%) 4,338,000 4,182,000 3.7%
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Net income $ 2,275,000 $ 2,376,000 (4.3%) $ 6,655,000 $ 6,617,000 0.6%
=========================================================================
Basic earnings per share $ 0.41 $ 0.42 (2.4%) $ 1.19 $ 1.18 0.8%
Diluted earnings per share 0.41 0.41 -- 1.17 1.15 1.7%
Average diluted shares outstanding 5,609,839 5,740,870 5,677,800 5,741,351
Net interest margin as a percentage 5.01% 4.92% 5.03% 4.95%
Operating Ratios:
Return on average assets 1.50% 1.54% 1.47% 1.49%
Return on average equity 14.39% 15.32% 14.11% 14.71%
Return on average tangible equity 20.16% 21.74% 19.76% 21.11%
Efficiency ratio (fully taxable equivalent) 47.03% 45.44% 47.45% 46.21%
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American River Bankshares
Consolidated Statement of Income (Unaudited)
Trailing Four Quarters
Third Second First Fourth
Quarter Quarter Quarter Quarter
2006 2006 2006 2005
------------------------------------------------------------
Interest income $ 9,737,000 $ 9,463,000 $ 9,117,000 $ 8,966,000
Interest expense 2,939,000 2,764,000 2,325,000 2,011,000
------------------------------------------------------------
Net interest income 6,798,000 6,699,000 6,792,000 6,955,000
Provision for loan and lease losses 30,000 156,000 84,000 50,000
Total noninterest income 605,000 597,000 634,000 570,000
Total noninterest expense 3,602,000 3,622,000 3,638,000 3,298,000
------------------------------------------------------------
Income before taxes 3,771,000 3,518,000 3,704,000 4,177,000
Income taxes 1,496,000 1,381,000 1,461,000 1,610,000
------------------------------------------------------------
Net income $ 2,275,000 $ 2,137,000 $ 2,243,000 $ 2,567,000
============================================================
Basic earnings per share $ 0.41 $ 0.38 $ 0.40 $ 0.46
Diluted earnings per share 0.41 $ 0.38 0.39 0.45
Average diluted shares outstanding 5,609,839 5,698,170 5,726,674 5,721,542
Shares outstanding-end of period 5,407,500 5,535,576 5,624,644 5,604,479
Net interest margin as a percentage 5.01% 4.96% 5.12% 5.09%
Quarterly Operating Ratios:
Return on average assets 1.50% 1.41% 1.49% 1.67%
Return on average equity 14.39% 13.53% 14.41% 16.41%
Return on average tangible equity 20.16% 18.92% 20.20% 23.15%
Efficiency ratio (fully tax equivalent) 47.03% 48.01% 47.34% 42.21%
Earnings per share have been adjusted for a 5% stock dividend declared in 2005.
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