EXHIBIT 99.1
American River Bankshares Announces First Quarter 2008 Earnings
Sacramento, CA, April 17, 2008 - American River Bankshares (NASDAQ-GS: AMRB)
today reported diluted earnings per share, as adjusted for the 5% stock dividend
distributed in December 2007, for the first quarter of 2008 of $0.33, a 5.7%
decrease from $0.35 recorded in the first quarter of 2007. Net income for the
first quarter of 2008 decreased $253,000 (12.1%) to $1,833,000 from $2,086,000
during the first quarter of 2007.
"Clearly, first quarter earnings were negatively impacted by the $4 million
increase from year end in our non-performing loans to nearly $12 million," said
David Taber, President and CEO of American River Bankshares. "We have a seasoned
credit administration team in place that is managing our non-performing loans by
establishing appropriate reserves and being proactive towards resolution of
these credits."
Net Interest Margin
Net interest margin as a percentage was 4.94% for the first quarter of 2008
compared to 5.04% for the first quarter of 2007. Net interest income for the
first quarter of 2008 decreased 3.1% to $6,342,000 from $6,547,000 for the first
quarter of 2007. Interest income for the first quarter of 2008 decreased 9.4% to
$8,578,000 from $9,464,000 for the first quarter of 2007. The average yield on
earning assets declined from 7.26% in the first quarter of 2007 to 6.66% for the
first quarter of 2008. Much of the decline in yields can be attributed to the
overall lower interest rate environment, in response to the Federal Reserve
Board (the "FRB") decreases in the Federal funds and discount rates. Decreases
by the FRB have resulted in a 300 basis point decline in short-term interest
rates since September 2007. The average balance of earning assets also decreased
from $533,645,000 in the first quarter of 2007 to $523,520,000 in the first
quarter of 2008. The decrease in average earning assets was based on the
Company's decision to use the proceeds from principal reductions and maturing
investment securities to reduce the level of higher cost time deposits and
provide funding for loan growth. This strategy has reduced the average balances
on investment securities by 18.6% from $141,045,000 during the first quarter of
2007 to $114,045,000 during the first quarter of 2008. An increased level of
non-accrual loans negatively impacted the yield on loans by approximately 26
basis points, which declined from 8.22% in the first quarter of 2007 to 7.22%
for the first quarter of 2008.
Interest expense for the first quarter of 2008 decreased 23.4% to $2,236,000
from $2,917,000 for the first quarter of 2007. The average cost of funds
declined from 3.18% in the first quarter of 2007 to 2.38% for the first quarter
of 2008. The average balance of interest bearing liabilities increased from
$371,733,000 in the first quarter of 2007 to $378,114,000 in the first quarter
of 2008. The Company continues to focus on attracting lower cost business
relationships, particularity business checking and money market accounts. In
addition, the Company has taken advantage of the lower borrowing rates by
locking in one to two year funding from its financial partners and letting
maturing time deposits, that were seeking above market rates, run-off.
Loan Growth and Asset Quality
Net loans as of March 31, 2008 increased $3,449,000 (0.9%) from December 31,
2007 and increased $18,778,000 (4.9%) to $398,424,000 from $379,646,000 as of
March 31, 2007. The largest growth was in commercial loans, which increased
$4,086,000 (3.9%) to $109,553,000 as of March 31, 2008 from $105,467,000 as of
December 31, 2007 and increased $22,124,000 (25.3%) from $87,429,000 as of March
31, 2007.
"Aside from additional work needed on our non-performing loans, we continue to
gain momentum with our strategic plan," said Mr. Taber. "Business loans and
loans to finance facilities for business purposes are all up from year end."
He continued, "Because of our strong team of credit administration
professionals, the rest of our team is able to keep focused on building
relationships with clients and prospects. It's important to the continued
success of our Company that we have been able to remain in expansion mode."
American River Bank's offices in the Greater Sacramento Area and Placer County
experienced an increase in net loans of 1.0% to $249,261,000 at March 31, 2008
from $246,742,000 at December 31, 2007 and an increase of 11.0% from
$224,558,000 from March 31, 2007.
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North Coast Bank, a division of American River Bank with three offices in Sonoma
County, experienced a slight increase in net loans to $88,102,000 t March 31,
2008 from $87,559,000 at December 31, 2007 and an increase of 2.0% from
$86,355,000 from March 31, 2007. Bank of Amador, a division of American River
Bank with three offices in Amador County, experienced a slight increase in net
loans of 0.6% to $61,062,000 at March 31, 2008 from $60,674,000 at December 31,
2007 and a decrease of 12.6% from $68,733,000 at March 31, 2007.
At March 31, 2008, the allowance for loan and lease losses was $6,017,000
compared with $5,883,000 at December 31, 2007 and $5,935,000 at March 31, 2007.
The provision for loan and lease losses was $337,000 for the first quarter of
2008, compared to $135,000 for the fourth quarter of 2007 and $121,000 for the
first quarter of 2007. The allowance as a percentage of loans and leases was
1.49% at March 31, 2008, compared to 1.47% at December 31, 2007 and 1.54% at
March 31, 2007. Net chargeoffs for the first quarter of 2008 were $203,000
compared to $60,000 for the first quarter of 2007. Non-performing loans and
leases as of March 31, 2008 were 2.89% of total loans and leases compared to
1.86% at December 31, 2007 and 0.20% one year ago.
Non-performing assets were $11,688,000 at March 31, 2008 compared to $7,501,000
at December 31, 2007 and $766,000 at March 31, 2007. At March 31, 2008, three
loan relationships made up $10,371,000 or 88.7% of the non-performing assets. Of
these three relationships two continue from last quarter, the $1,352,000
development loan for residential lots and the $5,286,000 loan for a mini storage
facility. In April 2008, the Company confirmed that the borrower on the mini
storage facility loan had filed for reorganization under Chapter 11 bankruptcy.
The business has appointed new management and we have received a budget
projection indicating their ability to service our loan at a market rate of
interest. During the first quarter of 2008 the Company added an additional
relationship in the amount of $3,734,000. This relationship is made up of eight
individual loans to a developer and includes loans on three finished homes
totaling $2,242,000; one partially competed home for $493,000, and four finished
lots for $999,000. In April 2008, the Company filed notices of default on all
eight properties.
All non-performing loans have been evaluated for impairment. At March 31, 2008,
specific reserves in the amount of $1,583,000 were held on the nonperforming
loans considered to be impaired.
Deposits and Borrowed Funds
Total deposits as of March 31, 2008 increased $6,320,000 (1.4%) to $461,965,000
from $455,645,000 as of December 31, 2007 and decreased $23,779,000 (4.9%) from
$485,744,000 as of March 31, 2007. The increase during the first quarter of 2008
compared to December 31, 2007 was primarily the result of an increase in
interest checking and money market accounts from $170,974,000 at December 31,
2007 to $177,242,000 at March 31, 2008--an increase of $6,268,000 or 3.7%. Even
with the Company lowering its rates on time deposits, we were able to increase
the level of time deposits slightly from $116,366,000 at December 31, 2007 to
$118,200,000 or and increase of $1,834,000 (1.6%). During this time the average
rates paid on the time deposits dropped from 4.01% in the fourth quarter of 2007
to 3.61% during the first quarter of 2008.
American River Bank's Sacramento region experienced an increase in total
deposits of 2.5% to $288,731,000 at March 31, 2008 from $281,705,000 at December
31, 2007 and a decrease of 6.7% from $309,600,000 at March 31, 2007. North Coast
Bank experienced a decrease in total deposits of 6.8% to $60,420,000 from
$64,856,000 at December 31, 2007 and a decrease of 13.9% from $70,206,000 at
March 31, 2007. Bank of Amador experienced an increase in total deposits of 3.7%
to $91,459,000 at March 31, 2008 from $88,194,000 at December 31, 2007 and a
decrease of 13.8% from $106,087,000 at March 31, 2007.
Total borrowings increased $4,288,000 (8.3%) from $51,603,000 at December 31,
2007 to $55,891,000 at March 31, 2008 and increased $33,308,000 (147.5%) from
March 31, 2007. The average rates paid on the other borrowings decreased 1.27%
from 4.85% during the fourth quarter of 2007 to 3.58% during the first quarter
of 2008.
Noninterest Income and Expense
Noninterest income for the first quarter of 2008 decreased $56,000 (8.7%) to
$585,000 from $641,000 for the first quarter of 2007 and noninterest expense
decreased $63,000 (1.7%) to $3,629,000 from $3,692,000. The efficiency ratio for
the first quarter of 2008 increased slightly to 50.73% from 49.68% for the first
quarter of 2007.
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Income Taxes
Income taxes for the first quarter of 2008 decreased $161,000 (12.5%) to
$1,128,000 from $1,289,000 for the first quarter of 2007. The effective tax rate
for the quarter ended March 31, 2008 was 38.1% compared to 38.2% during the
first quarter of 2007.
Capital
Total shareholders' equity at March 31, 2008 was $60,399,000, up $426,000 (0.7%)
from December 31, 2007 and up $416,000 (0.7%) from March 31, 2007. During the
first quarter of 2008, the Company repurchased 80,500 shares of its common stock
and declared a quarterly cash dividend of $0.15 per share, which will be paid on
April 18, 2008.
Performance Metrics
American River Bankshares continues a long history of enhancing shareholder
value with its 97th consecutive profitable quarter. Performance measures for the
first quarter of 2008 (annualized): the Return on Average Assets (ROAA) was
1.28%, Return on Average Equity (ROAE) was 12.26% and Return on Average Tangible
Equity (ROATE) was 17.29%. For the quarter ended March 31, 2007, the Company had
a ROAA of 1.44%, ROAE of 14.02% and ROATE of 19.89%.
Earnings Conference Call
The first quarter earnings conference call will be held Thursday, April 17, 2008
at 1:30 p.m. Pacific Time (4:30 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
Conference ID 42468369.
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 visit
www.amrb.com; www.americanriverbank.com; www.northcoastbank.com; or
www.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 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, 2007, and
in reports filed on 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
Condensed Consolidated Balance Sheet (Unaudited)
March 31 December 31 March 31
2008 2007 2007
------------- ------------- -------------
ASSETS
Cash and due from banks $ 32,029,000 $ 16,245,000 $ 16,275,000
Federal funds sold -- 1,700,000 400,000
Interest-bearing deposits in banks 4,942,000 4,951,000 4,951,000
Investment securities 114,760,000 116,524,000 134,279,000
Loans and leases:
Real estate 272,718,000 272,911,000 274,007,000
Commercial 109,553,000 105,467,000 87,429,000
Lease financing 3,705,000 4,070,000 5,970,000
Other 18,929,000 18,927,000 18,805,000
Deferred loan and lease originations fees, net (464,000) (517,000) (630,000)
Allowance for loan and lease losses (6,017,000) (5,883,000) (5,935,000)
-------------------------------------------------
Total loans and leases, net 398,424,000 394,975,000 379,646,000
-------------------------------------------------
Bank premises and equipment 2,008,000 1,983,000 1,765,000
Accounts receivable servicing receivable, net 1,621,000 1,666,000 1,842,000
Goodwill and intangible assets 17,442,000 17,514,000 17,745,000
Accrued interest and other assets 16,720,000 18,127,000 17,746,000
-------------------------------------------------
$ 587,946,000 $ 573,685,000 $ 574,649,000
=================================================
LIABILITIES & SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $ 130,051,000 $ 132,666,000 $ 146,964,000
Interest checking 47,160,000 43,577,000 39,676,000
Money market 130,082,000 127,397,000 131,891,000
Savings 36,472,000 35,639,000 39,135,000
Time deposits 118,200,000 116,366,000 128,078,000
-------------------------------------------------
Total deposits 461,965,000 455,645,000 485,744,000
-------------------------------------------------
Short-term borrowings 38,391,000 51,603,000 20,083,000
Long-term borrowings 17,500,000 -- 2,500,000
Accrued interest and other liabilities 9,691,000 6,464,000 6,339,000
-------------------------------------------------
Total liabilities 527,547,000 513,712,000 514,666,000
Total shareholders' equity 60,399,000 59,973,000 59,983,000
-------------------------------------------------
$ 587,946,000 $ 573,685,000 $ 574,649,000
=================================================
Ratios:
Nonperforming loans and leases to total loans and leases 2.89% 1.86% 0.20%
Net chargeoffs to average loans and leases (annualized) 0.20% 0.11% 0.06%
Allowance for loan and lease loss to total loans and leases 1.49% 1.47% 1.54%
Leverage Ratio 7.62% 7.72% 7.46%
Tier 1 risk-based capital ratio 9.43% 9.45% 9.94%
Total risk-based capital ratio 10.68% 10.70% 11.19%
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American River Bankshares
Condensed Consolidated Statement of Income (Unaudited)
First First
Quarter Quarter %
2008 2007 Change
------------- ------------- ---------
Interest income $ 8,578,000 $ 9,464,000 (9.36%)
Interest expense 2,236,000 2,917,000 (23.35%)
-------------------------------------------
Net interest income 6,342,000 6,547,000 (3.13%)
Provision for loan and lease losses 337,000 121,000 178.50%
Total noninterest income 585,000 641,000 (8.74%)
Total noninterest expense 3,629,000 3,692,000 (1.7%)
-------------------------------------------
Income before taxes 2,961,000 3,375,000 (12.27%)
Income taxes 1,128,000 1,289,000 (12.49%)
-------------------------------------------
Net income $ 1,833,000 $ 2,086,000 (12.13%)
===========================================
Basic earnings per share $ 0.33 $ 0.36 (8.33%)
Diluted earnings per share $ 0.33 $ 0.35 (5.71%)
Average diluted shares outstanding 5,592,158 5,925,375
Net interest margin as a percentage 4.94% 5.04%
Operating Ratios:
Return on average assets 1.28% 1.44%
Return on average equity 12.26% 14.02%
Return on average tangible equity 17.29% 19.89%
Efficiency ratio (fully taxable equivalent) 50.73% 49.68%
Earnings per share have been adjusted for a 5% stock dividend declared in 2007.
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American River Bankshares
Condensed Consolidated Statement of Income (Unaudited)
Trailing Four Quarters
First Fourth Third Second
Quarter Quarter Quarter Quarter
2008 2007 2007 2007
------------- ------------- ------------- -------------
Interest income $ 8,578,000 $ 9,062,000 $ 9,454,000 $ 9,498,000
Interest expense 2,236,000 2,496,000 2,774,000 2,889,000
----------------------------------------------------------------
Net interest income 6,342,000 6,566,000 6,680,000 6,609,000
Provision for loan and lease losses 337,000 135,000 50,000 144,000
Total noninterest income 585,000 565,000 669,000 724,000
Total noninterest expense 3,629,000 3,566,000 3,796,000 3,779,000
----------------------------------------------------------------
Income before taxes 2,961,000 3,430,000 3,503,000 3,410,000
Income taxes 1,128,000 1,288,000 1,351,000 1,312,000
----------------------------------------------------------------
Net income $ 1,833,000 $ 2,142,000 $ 2,152,000 $ 2,098,000
================================================================
Basic earnings per share $ 0.33 $ 0.38 $ 0.37 $ 0.36
Diluted earnings per share $ 0.33 $ 0.38 $ 0.37 $ 0.36
Average diluted shares outstanding 5,592,158 5,685,788 5,823,480 5,868,598
Shares outstanding-end of period 5,520,433 5,590,277 5,744,754 5,805,306
Net interest margin as a percentage 4.94% 5.10% 5.17% 5.10%
Operating Ratios:
Return on average assets 1.28% 1.50% 1.50% 1.46%
Return on average equity 12.26% 14.10% 13.99% 13.91%
Return on average tangible equity 17.29% 19.89% 19.68% 19.67%
Efficiency ratio (fully tax equivalent) 50.73% 48.37% 50.02% 49.87%
Earnings per share have been adjusted for a 5% stock dividend declared in 2007.
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American River Bankshares
Analysis of Net Interest Margin on Earning Assets
(Taxable Equivalent Basis)
Three months ended March 31, 2008 2007
Avg Avg Avg Avg
ASSETS Balance Interest Yield Balance Interest Yield
------------- ------------- --------- ------------- ------------- ---------
Loans and leases $ 403,506,000 $ 7,244,000 7.22% $ 387,398,000 $ 7,848,000 8.22%
Taxable investment securities 87,971,000 1,000,000 4.57% 110,666,000 1,249,000 4.58%
Tax-exempt investment securities 26,607,000 348,000 5.26% 29,818,000 376,000 5.11%
Corporate stock 244,000 4,000 6.59% 561,000 9,000 6.51%
Federal funds sold 249,000 2,000 3.23% 238,000 3,000 5.11%
Interest-bearing deposits in banks 4,943,000 65,000 5.29% 4,964,000 68,000 5.56%
------------------------------ ------------------------------
Total earning assets 523,520,000 8,663,000 6.66% 533,645,000 $ 9,553,000 7.26%
------------------------------ ------------------------------
Cash & due from banks 16,886,000 20,919,000
Other assets 39,411,000 40,129,000
Allowance for loan & lease losses (5,916,000) (5,918,000)
------------- -------------
$ 573,901,000 $ 588,775,000
============= =============
LIABILITIES & SHAREHOLDERS' EQUITY
Interest checking and money market $ 168,500,000 $ 597,000 1.42% $ 165,321,000 $ 906,000 2.22%
Savings 36,301,000 86,000 0.95% 37,534,000 130,000 1.40%
Time deposits 117,976,000 1,060,000 3.61% 131,604,000 1,411,000 4.35%
Other borrowings 55,337,000 493,000 3.58% 37,274,000 470,000 5.11%
------------------------------ ------------------------------
Total interest bearing liabilities 378,114,000 2,236,000 2.38% 371,733,000 2,917,000 3.18%
------------------------------ ------------------------------
Noninterest bearing demand deposits 128,868,000 150,754,000
Other liabilities 6,785,000 5,955,000
------------- -------------
Total liabilities 513,767,000 528,442,000
Shareholders' equity 60,134,000 60,333,000
------------- -------------
$ 573,901,000 $ 588,775,000
========================================================================================
Net interest income & margin $ 6,427,000 4.94% $ 6,636,000 5.04%
=======================================================================
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