PHOENIX, April 25, 2024 (GLOBE NEWSWIRE) -- RBAZ Bancorp, Inc. (OTCIQ: RBAZ) (the “Company”), parent company of Republic Bank of Arizona (the “Bank” or “RBAZ”), announced a consolidated net income of $713,000, or $0.40 per share, for the quarter ended March 31, 2024 as compared to a consolidated net income of $462,000, or $0.26 per share, for the quarter ended March 31, 2023.
President and CEO Brian Ruisinger stated “I am pleased with our strong Q1 earnings performance reflecting an increase over 50% from a year ago primarily due to increased net interest income. We were able to increase pricing on our earning assets while cost of funds stabilized as a result of the recent pauses by the Federal Reserve. Our liquidity position also strengthened during the quarter; a significant achievement given the tightening of liquidity experienced in the industry over the past 18 months. We saw some expected loan payoffs late in the quarter on completed construction projects and bridge loans. Once again, we ended the quarter with outstanding asset quality evidenced by the lack of past due loans in our core portfolio.”
Mr. Ruisinger continued, “Late last year, many anticipated the beginning of a rate reduction cycle by the Federal Reserve with the March meeting as the expected target date. However, inflation, unemployment and GDP all remain at elevated levels providing little to no support for the start of these reductions. Locally, real estate remains in short supply at heightened values, and, without rate relief, affordability continues to be challenging. Despite these trends, RBAZ continues to see significant loan opportunities resulting in a robust pipeline heading into the second quarter. RBAZ remains well capitalized and poised for continued growth in its mission to be the premier Arizona-based community bank, as reflected in our Bauer Five-Star bank rating.”
March 31, 2024 Company Highlights Include:
- Total loans of $199,714,000 decreased $2,115,000, or 1.0%, from December 31, 2023 as the Company had significant maturities during the quarter exceeding funding from new loan originations. While loan production during the quarter was strong, it was concentrated in construction and commercial lines of credit, which resulted in lower balances at origination but provide opportunity for significant future funding.
- Total deposits of $249,661,000 increased $21,489,000, or 9.4%, from December 31, 2023 and relate entirely to core deposit generation. The increase in core deposits was the result of deepening of existing relationships and cultivation of new banking relationships. Liquidity continues to be a top priority for 2024.
- Total borrowings of $5,936,000 at March 31, 2024 relate entirely to the Company’s subordinated debt as advances outstanding from the Federal Home Loan Bank at year-end were repaid during the quarter.
- Total interest income increased $1,167,000 to $4,208,000 for the quarter ended March 31, 2024 outpacing total interest income of $3,041,000 for the same period of the prior year equating to an increase of 38.4%.
- Cost of deposits increased to 2.36% for the quarter ended March 31, 2024 from 1.57% for the quarter ended March 31, 2023 as the result of continued upward rate pressure from the Federal Reserve keeping rates elevated through the first quarter of 2024. Additionally, the Company is continuing to see customers place funds in interest bearing products to take advantage of the high-rate environment in anticipation of potential rate decreases later in 2024 resulting in a change in deposit product mix for the Company.
- Total non-interest expense increased $260,000 to $1,943,000 for the quarter ended March 31, 2024 compared to $1,683,000 for the same period of the prior year resulting primarily from several additional full-time employees and the addition of the new Scottsdale AZ branch and conversion of the existing location to an administrative office, all of which took place in Q4 2023.
The Bank remains “Well Capitalized” under the Community Bank Leverage Ratio (CBLR) framework as follows:
| March 31, 2024 (%) | Ratio to be Well Capitalized (%) | ||
| CBLR ratio | 10.39 | 9.00 |
About the Company
RBAZ Bancorp, Inc. was established on June 10, 2021 as a single-bank holding company for its Arizona state-chartered bank subsidiary, Republic Bank of Arizona. The Company is traded over-the-counter as RBAZ.
About the Bank
Republic Bank of Arizona is a locally owned, community bank in Phoenix, Scottsdale and Gilbert, Arizona. RBAZ is a full service, community bank providing deposit and loan products and convenient, online and mobile banking to individuals, businesses and professionals. The Bank was established in April 2007 and is headquartered at 645 E. Missouri Avenue, Suite 108, Phoenix, AZ. At the end of September 2023, our second location at 6909 E. Greenway Parkway, Suite 150, Scottsdale, AZ was converted to an administrative office, and our Scottsdale branch was relocated to 7373 N. Scottsdale Road, Suite A-195, Scottsdale, AZ. Our third location is located at 1417 W. Elliot Road, Gilbert, AZ. The Bank is the wholly-owned subsidiary of RBAZ Bancorp, Inc. For further information, please visit our web site: www.republicbankaz.com.
Forward-looking Statements
This press release may include forward-looking statements about the Company and the Bank (collectively referred to herein as the “Company”), for which the Company claims the protection of safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management’s knowledge and belief as of today and include information concerning the Company’s possible or assumed future financial condition, and its results of operations and business. Forward-looking statements are subject to risks and uncertainties. Several important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include fluctuations in interest rates, government policies and regulations (including monetary and fiscal policies), legislation, economic conditions, borrower capacity to repay, operational factors and competition in the geographic and business areas in which the Company conducts its operations. All forward-looking statements included in this press release are based on information available at the time of the release, and the Company assumes no obligation to update any forward-looking statement.
| Summary Company Financial Information (unaudited) | ||||||||
| For the three months ended March 31, | For the twelve months ended December 31, | |||||||
| 2024 | 2023 | 2023 | 2022 | |||||
| (dollars in thousands, except per share data) | ||||||||
| Summary Income Data: | ||||||||
| Interest income | $ | 4,208 | $ | 3,041 | $ | 14,208 | $ | 9,218 |
| Interest expense | 1,557 | 942 | 4,742 | 1,674 | ||||
| Net interest income | 2,651 | 2,099 | 9,466 | 7,544 | ||||
| Provision for credit losses | - | - | - | 218 | ||||
| Non-interest income | 220 | 210 | 820 | 511 | ||||
| Non-interest expense | 1,943 | 1,683 | 7,142 | 5,386 | ||||
| Income before provision for income tax | 928 | 626 | 3,144 | 2,451 | ||||
| Provision for income tax | 215 | 164 | 684 | 538 | ||||
| Net income | $ | 713 | $ | 462 | $ | 2,460 | $ | 1,913 |
| Per Share Data: | ||||||||
| Shares outstanding end-of-period | 1,778 | 1,807 | 1,795 | 1,797 | ||||
| Earnings per common share | $ | 0.40 | $ | 0.26 | $ | 1.36 | $ | 1.06 |
| Diluted earnings per common share | $ | 0.38 | $ | 0.25 | $ | 1.33 | $ | 1.02 |
| Book value per share | $ | 12.12 | $ | 10.47 | $ | 11.77 | $ | 10.11 |
| Selected Balance Sheet Data: | ||||||||
| Total assets | $ | 279,134 | $ | 252,209 | $ | 272,044 | $ | 237,620 |
| Securities available-for-sale, at fair value | 40,079 | 41,787 | 40,998 | 43,441 | ||||
| Securities held-to-maturity | 10,650 | 12,031 | 10,648 | 12,176 | ||||
| Loans | 199,714 | 165,363 | 201,829 | 162,954 | ||||
| Allowance for credit losses | 2,116 | 2,115 | 2,116 | 1,764 | ||||
| Deposits | 249,661 | 225,683 | 228,172 | 203,332 | ||||
| Other borrowings | 5,936 | 5,907 | 20,929 | 14,900 | ||||
| Shareholders’ equity | 21,541 | 18,918 | 21,128 | 18,166 | ||||
| Performance Ratios: | ||||||||
| Return on average shareholders’ equity (annualized) (%) | 13.24 | 9.77 | 11.64 | 10.53 | ||||
| Net interest margin (%) | 4.01 | 3.53 | 3.68 | 3.21 | ||||
| Average assets | $ | 280,444 | $ | 247,576 | $ | 264,488 | $ | 239,864 |
| Return on average assets (annualized) (%) | 1.02 | 0.75 | 0.93 | 0.80 | ||||
| Shareholders’ equity to assets (%) | 7.72 | 7.50 | 7.77 | 7.64 | ||||
| Efficiency ratio (%) | 67.68 | 72.90 | 69.43 | 66.87 | ||||
| Asset Quality Data: | ||||||||
| Nonaccrual loans | $ | 190 | $ | 43 | $ | 209 | $ | 118 |
| Troubled debt restructurings | $ | - | $ | 122 | $ | - | $ | 156 |
| Other real estate owned | $ | - | $ | - | $ | - | $ | - |
| Nonperforming loans | $ | 190 | $ | 43 | $ | 209 | $ | 118 |
| Nonperforming loans to total assets (%) | 0.07 | 0.02 | 0.08 | 0.05 | ||||
| Nonperforming loans to total loans (%) | 0.10 | 0.03 | 0.10 | 0.07 | ||||
| Reserve for credit losses to total loans (%) | 1.06 | 1.28 | 1.05 | 1.08 | ||||
| Reserve for credit losses to nonperforming loans (%) | 1,113.68 | 4,918.60 | 1,012.44 | 1,494.92 | ||||
| Net recoveries for period | $ | - | $ | 351 | $ | 352 | $ | 78 |
| Average loans | $ | 205,904 | $ | 161,534 | $ | 176,146 | $ | 138,529 |
| Ratio of net recoveries to average loans (%) | n/a | 0.22 | 0.20 | 0.06 | ||||
Contact: Brian Ruisinger
President and Chief Executive Officer
Phone: 602.280.9404
Email: bruisinger@republicaz.com
