AMRB - Earnings call transcript Q1 2018 | American River Bancshares

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Operator

Welcome to the First Quarter 2018 Earnings Conference Call. My name is Adrian and I will your operator for today’s call. At this time, all participants are in a listen only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] Please note this conference is been recorded. the David turn now will call Ritchie. to I Ritchie, you begin. may David

David Ritchie

parent all And CEO afternoon, Bankshares, pleased River to Adrian. today California. you, activities. with an Rancho and headquartered of to in Bank, thank River be Ritchie’s, Thank quarter I’m Dave update you good on Cordova, first American is everyone. American you here company with This our

relationships. we call, quarter, Very of be with did and you the instrumental an to all I capital to on my out in investor plan first to the the update At shared execute quarter Bank the that many our is do. of time, I you the deployment our we As grow have we In Please releases ratings. you delivering I we financial continue satisfaction today. fourth profitable in advised set simply, of advise that with high are with market went start two after are what press initiatives need the for keep on our to capital. we same out need well-positioned provide on to liquidity will and client our report.

detailed with our earnings second month. dividend was cash will results; First, release be quarterly the that next paid

will results. Now, I’m quarter with to he it provide discussion Chief And our turn Mitch over first you Derenzo, going and an to Officer. Executive Vice Financial President of in-depth

Mitch Derenzo

Dave. you, Thank

all you thank in call First, listening our today. for

Actual obligation forward-looking laws the purposes may need may securities that our from and discussed a results forward-looking Certain XX, discussed X-K. year or law. presentation this on as to by Form difference matters cause do information not Before such ending XX-K americanriverbank.com. subsequent forward of federal on Factors except any annual to constitute or and and future are involve these statements, XX-Q found December materially in include in undertake We everyone risks can differ and filed be disclosures. safe the events, revise website, looking on for any in would we remind to these might report XXXX forms uncertainties. in may report annual XX-K get started, the our statements. of publicly Links our and for results I our statements which this reports of required update

to of Bankshares going per within year-ago. quarter questions. This try going the quarter to I’m respectively compared XXXX. were X.XX% a one reported that Earnings respectively income X.X $X.X try share, of million first and analysis out for of X.XX%, turn of $X.XX to and it the to The net went over XXXX. River first the ROE details XXXX quarter $X.X and comments, back will X.XX% some first share the were for morning. compares key release As then areas the during quarter conference and $X.XX calls, additional that to to Dave to lines provide additional and past for a highlight American to ROA compared press from million the open for Dave the share mentioned I’m this some and morning, some in

running. future, should sheet…[Technical get the new Difficulty] balance around up lenders once we us the Our turn and

got lender in weeks just April. he since discussion I going seeing I the going to Dave’s in new in later quite here on jump the added quarter bit be to here that’s million. to fill loans lenders. early $X.X New few know to just the but little going to am not I’m during here going talk the bit started first loans. of a about loan is We enough of this were that call grow comments am some positive last

what compares I’m we year. that to far. the prepayment first are of penalties. liking will discussions but paydowns $XX,XXX quarter positive I about these quarter payoffs the first guarantees, only guess no prepayment course, hearing XXXX Loan in to the thing for of is penalties $XXX,XXX last Of the so collecting I’m produce growth, during lead loan loan did

On the during that been and about really two We credit credits quarters. shared changed whole in recoveries quality, And the not really zero quarter. report on in isn’t our a past about talking $XX,XXX national much we’ve have did charge-offs. to there loan lot

monitor We continue very to closely.

to And going available. information We’re to gathering additional you find can information write-down, it we the if requires so in the as are going do that let future. know all we any I’m that becomes just we a

down the on a adjusted do to is balance We have loan. reserve $X,XXX,XXX. Our $XXX,XXX specific

still So, loans. last some Rest delays. to have loan. in non-accrual property real XX% the made represents loans exposure our then down $XXX,XXX That is $X,XXX,XXX. of small the quarter loan commercial been of estate consumer there escrow. of our in in net It’s I non-accrual and property commercial escrow; up was $X,XXX mentioned loan those one that

We X.XX% and believe current trying are seller closes We full get we at The X.XX% price. sales expect get allowance if does that that should closed. March with one recovery, XXXX work buyer a to closed, a the assuming the to XX, to year-ago. it price the compares loans, at to that sales

the $XX,XXX that loans loan is was No had one over of the On of one days, borrower of the to that quarter net was non-accrual XX the the $XXX,XXX. side. the at still activity we course. and past just in end of with was the on book process That X.X%. refinancing due, have one a third-party. balance the OREO excluding equity Classified We loan

Of and million non-accrual $XXX,XXX being course in $X.X classified the with OREO. assets the

changes really well. there no On portfolio, the as investment

with of it’s well was mixed little end flowing At of at compares still structured cash XXXX. $XXX.X mortgages, million million the As quality the as the of $XXX.X far bonds. in the bit balance municipal the the goes, quarter, to that end

deposits, fed about those funds balances and for the that of and quarter the in the in a In funds. from short period minute end the but a addition, from talk be These a results deposits those we did $XX,XXX securities I’ll fed bank in some have in time. may of obviously nice increase we with increased

is around entire X.X XXX years. is low And and tad effective bond So, XX%. in duration years. the guaranteed of the portfolio basis mortgage-backed About government’s municipal still sponsored the -- price just products U.S. change the still the the again is remains mortgage fed X.X of securities. XX% or And quite those. it of rates portfolio a place best Average are of does above Average years. still primarily lives portfolio up the at five park to agencies, is the portfolio funds lives points short. is And the

$X.XX is the million. share, tangible know, $XXX,XXX. to book side; the at loss This we been gains bonds. book rates shorter that As share. we’ve unrealized XXXX, but to a XX, to a XXst in of an those gain $X.XX value a you impacting market now XX, per in so At March unrealized created our And had unrealized XXXX, a Whereas increase the decrease value unrealized $X.X our and March roll unrealized of our experiencing March per now tangible in ago, reduction per added an value. tangible net loss to share. difference be loss cause end a had loss we of over it’s book $X.XX A because did on unrealized on year we tend gain

increased the compares XX.X year that’s overall caused the balances relationship. their million million a the to to business points in as a XX.X the end the to little the decreased relationship and at pay increase off roll in loan million, that of the the about The company. that This funds they risk-based those to one first XX off fed they how end the added XXXX. of million did about from points funds basis the rate had the $XX basis deposits was they Again decrease increased of about earlier. total of sold up year but points XX Obviously, About their quarter. is $XXX from these ago. on Capital levels of at leverage money which or cost I occurred Those and market end also higher on in of the $X the clients well a first deposit balances that we’re the quarter deposits million basis determine basis FHLB Much over points; quarter $XXX due The we’re leverage pay increase $XXX stay nearly the our our tad to quarter XX loan increase increased. still hence increase over, ratio basis to total points, were On when bit Working came primarily first year X.X% $X.X balance CDs, We is XX to with that’s as X actually, versus by on CD from side, the did at the at just basis the that sold remained of end balances million and strong. liability from the at $XXX.X XX% points with the million fund these X%. costs up cost in Bank, year. points of non-interest- the the market, of last of paying environments Average borrowing still at increase last first little total just the of about March was mentioned end balances. basis long more. will quarter; X they’re bit -- of XX year increase March. X.X% over at of the deposits. quarter; which a XXXX, risk-based in one half end did loan

stock the our stock. As you repurchase do repurchased we We of common know, shares program. have XXX,XXX

Gains mentioned average $XX.XX. the paid $XX,XXX; year just XXXX, this were Dave dividend believe Also [Technical announcement a they We to did good was strategies. management those that were Our capital we morning. last $X,XXX. cash Difficulty] price release be

made went than On do some up, is the some I debit the went to card decreased this have the processor a fluctuations we point would out, up to point expense $XX,XXX Really expense. year-over-year, lines expense that from of $XX,XXX reason lot $XX,XXX, that out reduced our say to a nothing rebate other absolute down. noninterest onetime side,

So, biggest that the that’s of probably $XX,XXX. chunk

a was this XX. income the X,XXX,XXX down lower year XXXX. Just federal $XXX,XXX, kind last $XXX,XXX but a of on a to were out. versus in Difficulty] year Taxes year us taxes $X,XXX,XXX help down to side, last Pretax the [Technical

last in tax XX.X% year XX.X% effective to rate that Our decreased was XXXX.

additional some and we Of basis And our back couple course the basis ratio now Thank I’m a margin as it ones comments. taxable quote XX by efficiency you. does rate tax over points points. fully as impact turn Dave going the by for that ratios to our effective, lower reduced about to

David Ritchie

I we is the Mitch. mentioned, you, think, I I very early what single first I good the which includes that’s on company-wide [Technical integrated doing really and quarter, plan about. last told River aligns Yes, update toward mean, we’re we help I you we’re Thank track Bank return progress and a as goal, focused -- I which which would things will in Difficult] had made have efforts you that all growth. which strategic progress, important. and performance I think American that a is top quarter to some help you comment completed our all

the I Difficult]many we one lack the or [Technical branding. people first main items some of think of things that is One

are serve. we as in think, the not I we visible communities

just thing. some marketing take those pure I some wondering let’s because opportunities the put was what’s dollars, and That’s foundation out strategy helps our sweat get in and the us relationship back that. had quarter. equity telling people together events a of Bank. dollars other am really think our is do all the and And And community. of definitely being different things part great story, kind XX it. consistent was It’s in on reputation is managers have and really And you think -- excited I count media thing gotten felt we’ve hence, presence I hired through honestly first the and kind to And in the first building great has that the nearly tell other really our it’s going of new story, And avenues. of recruit. first the for American River helped helped us So,

couple up to thing We bank. is a and with started hiring second out piece. just desire of a that My have whole staff managers was since time. team relationship banking five build is The here. transitioned One retired, commercial the the

experience The back skilled were to years is folks. are that and we technically like to average officially really tell really some I’m two. So, eight. at we’ve XX hired We of we happy of number hired you years.

alone. opening, to well we lot it. think still really had The of this have month we’ve wanted a These I have people I’m experience. get majority so, we started one them quality are four -- And with more about to nine. excited And of

other diversity on on we focused over. sure make the any hired The they was it little from bringing us piece of weren’t and to separate we a potential relationships bank. for wanted that We have because banks quality the single of people relationships gives kind

-- walks six of people I five or different think there’s that So, life. banks, from

And so, it’s four kind first of nice been months. an

So, RMs. have now three we three teams,

managers a teams -- team there. were We’re we pretty and were Rosa that them in time One in have two putting for Sacramento, really about in feel, the long Rosa excited there relationship we teams. Santa much now team. Santa and underserved three I we

really feel that. So, about I good

believe. been glad I which to C&I do The to interest, Three of lot other difficult it’s able have exciting. of of I’m so is a experience, this. find, And and the have thing we that’s very is RMs

we people tell -- board. right energy the lot I have of brought can now. bank in you these on a the weeks, two three We or there’s last in

has as noted that the we do. Santa be as the curve, senior in thought And experience. from and hiring Rosa wine should my standpoint, of business ahead our experience well think of would we ag it think, I I ahead we schedule are leader

we where I think, a we months are be. I ahead couple of thought would

So, engaged, I’m excited want people that, about successful. are be and definitely right the going in all to really and direction,

buildup all was with of just was pipeline. a that thing third The

I in some conversations do Mitch I went this going how In had we’ve a process new new lot addressed opportunities the a in couple and been it’s we -- We excellent pipeline. We’ve was mid it’s the a And candidates. and the Credit of weeks, the terrific, had Officer. here, the think update buzz past bit. around grow a relationship think direction. right we Chief loan definitely And been through February. last it’s

would we for. find didn’t think looking we were all really agree what that I we exactly

There’s actually in really more such great we couple And interviews a over little qualified we we patient we people candidates. It’s next good about an But will making decision. individuals couple making making in you, it the very so, offer tell we fortunate number or are decided should completed difficult feel the a and to week be to it. last of a a so with very and there. months. have I be really just of

that bought they So, and one it, if the release say economic grow doesn’t really second will. we Bank. general, in include positive great continue nation first did data a markets take to the maybe and California trends in and some our with would press the one But all our I strategies just are they as in in in whole. And the plans candidates into the all,

you’d Now, like the Adrian I would if great. up that be open like -- to questions for lines up to it open

Operator

ahead. Coffey from from comes question first FIG our Tim Partners. And Instructions] [Operator Please go

Tim Coffey

be additions well? for frontline you on and also personnel as the on Are support color to people. So, these hirings seem making mostly thanks the

Mitch Derenzo

good the shape. Right we our some will. and got need hard now, we I admin support now believe we staff. this are pretty in we think underwriting pretty The machine really and area. get in credit have we if be, right quality cranking is But, working hope those and people We’ve people

David Ritchie

Yes.

a underwriting Our of analysts. varying staff, there’s you I talent couple but degrees have there, mean,

about I think the seven total count is people.

growth. think shape pretty we’re good I So, in for

Tim Coffey

go hires. of Okay. could these one And the we then more time over if just timing

all And some in Credit April? said Chief Mitch XQ. salary or started think, you lenders Officer in of the So, comments your have I went without that during you

David Ritchie

and started we April in or had XXth Monday, was Tim; on January, started then, and one that Xnd; we one so. three About half. had this We last that had which the

two And have one that in weeks. I so, another we think believe starting, it. about And does I

Tim Coffey

Okay.

David Ritchie

half of April. most about -- So, in them are

Tim Coffey

Okay.

So, in we salary rise should see expenses from here? a

David Ritchie

Yes.

Tim Coffey

question; mostly And have on any you kind of that that comment. future guidance, quarter. drove this have actually question the in made -- timing those decision you growth then, wasn’t your the the of might on be the a when deposit relationship the idea I timing of Yes. Do funds? give don’t on Again, a do since was timing on that

Mitch Derenzo

We liquid. it’s funds don’t, much the are keeping we why pretty

Tim Coffey

next and at kind We’re a there’s of going -- of say fed low going pretty end balance you to that level quarter? would model probability look be the this this forward will funds pretty of your at this average

Mitch Derenzo

I the the on and Well, what huge spread just I doing think this, exclude because were paying it modeling between funds if there I not them. fed were is would a

Operator

O’Neill. from Tim from question O’Brien comes Sandler Our next

Tim O’Brien

and you your do FTEs? FTEs have the of So, quarter end the end of also

Mitch Derenzo

say, was I’m XX March, the it XX to year. and the or it at was the end going of XX think of end I at

Tim O’Brien

And then, assume…. I

Mitch Derenzo

that had Again, left we in are RMs some April. and adding some the we quarter in more

Tim O’Brien

And then, Chief fully are Chief at the there beyond executive that you are Credit fill you or hires senior besides staffed Officer? the any or looking Credit of to Officer are level the

David Ritchie

Yes.

We’re good. That’s it.

Tim O’Brien

increase of taxes, of And a accruals assume first the then, the income, good I of the payroll for severance seasonal some XQ, from was increase kind how much quarter well, cost of Mitch? taking chunk -- out the

Mitch Derenzo

Tim. it’s percent overall... number, I few the don’t have a on additional that But,

Tim O’Brien

about how to the approximately? new tied much this, hires, was So, how

Mitch Derenzo

those rephrase me here started let new April. -- hires regroup Let and me say of in let’s most

Tim O’Brien

and So, showed that what new and was you that’s up. have January it, one hire really in

Mitch Derenzo

Yes.

Tim O’Brien

all bankers know be you but could to willing hires? the XQ offer It do don’t of other care that would pretty with River. look a that. I number might to like you’re the new what do if Would guys That a ballpark American be helpful,

something or forthcoming like that. more be might -- might’ve You

Mitch Derenzo

going numbers forward I’ll to that going you remind but you I’m we... the repeat not what give I said,

Tim O’Brien

I’m that to Club lessons Press repeat foreheads and They more on my from wanted it the House. the record time. just works until get are you just National the over one over their White taking bloody. I

Mitch Derenzo

any information later information. Well, I’ll you How’s give that? sit on insider to

Tim O’Brien

would -- you guys something? quarter that that have or then, And any merit annual you in kicks increase second

Mitch Derenzo

Yes. really in kick Xst. April It does

Tim O’Brien

typically And is that X%?

Mitch Derenzo

X%. Typically

Tim O’Brien

nature Was one-time mentioned checking. in just you right. the no, that the All double suspicion my is Great. probably, anything but it either or in there would’ve was else P&L side on expense

Mitch Derenzo

The in the fed actually that -- $XX,XXX the the funds we rebate got odd processor. -- invested then items we from that the fed And funds. fact were current

Tim O’Brien

All right.

your was this and for a what Just quarter. it remind for give it you year prepay gave number -- interest ‘XX? for me, prepay You ago XQ

Mitch Derenzo

The prepayment penalties?

Tim O’Brien

for XQ? Yes,

Mitch Derenzo

down --I’ll What gave was was That have first year. this I to dig year and Tim. last that, on first I gave quarter quarter

Tim O’Brien

Okay. that Yes, in number it. Mitch. great, was [ph] if in the then, away tucked you and that’d wouldn’t there, mind you that to missed I And press digging out guys release posted just nonaccrual that that be thousand your

Mitch Derenzo

No.

enough forward. change You to badgered me going

Tim O’Brien

All you remaining right, fantastic. have on that’s And then, repurchase any X% the plan? authority buyback did

Mitch Derenzo

Yes.

XXX,XXX roughly was announced and the we XX,XXX XXX,XXX, repurchased or think I so pending. so

Tim O’Brien

Great. Those questions. guys. Thanks, my were

Operator

question from Worthington next Raymond our comes And from Don James.

Don Worthington

more. Just a couple

terms on kind on ‘XX? one maybe on once are another of what In buyback, Tim’s in thoughts exhausted your of following the is one, this question

Mitch Derenzo

we’ve tangible the Board. the it up it another lot quarter. couple do able the first to was happy XXX,XXX The easier to were I’m a up of done book. That’s It bit That’s trading past in was good. I round. really closer In that when to roughly shares a purchase years. more. we is little stock price ticking to

a of is reduce, the said, acquire the as shares know, buyback is the -- but tougher there can’t you As going reasons fan no am gets decide I for shares. say guarantee. I of that it number I Board that to the to

Don Worthington

increasing in upward to deposit just marketplace or in deposit you pricing, either terms from customers the are prices? then, of starting see on And pressure,

Mitch Derenzo

wood Don I to say when had I is core I was my that of deposits. I lot about ask but haven’t our to -- -- was to my no because one was I was here, in was on doing comments, I’m pressure, hoping that about going something knocking we on really a going

they the has deposit mentioned,. those rates re-price, price our I to up, tend increase. As treasury. But been the an going CD base as to have core

year relationship I to did money year, you but high, markets little about. -- the compare we first that large up deposit see are this first bit the see will that if talked you a quarter can quarter You paying for last increase, that

want much that’s wood So, or which I pressure, to bit overall tweaking it. haven’t savings little jinx on again accounts really had checking on a knocking I’m but that. don’t

Operator

today’s now participating. you ladies for call. may disconnect. you, This concludes conference And gentlemen. Thank and Thank you

American River Bancshares (AMRB) 19 Apr 182018 Q1 Earnings call transcript