RBAZ Bancorp, Inc. Announces Unaudited Financial Results For the Quarter Ending June 30, 2024

Rhea-AI Summary

RBAZ Bancorp, Inc. (OTCIQ: RBAZ) reported strong Q2 2024 financial results, with consolidated net income of $893,000 ($0.50 per share) for the quarter and $1,607,000 ($0.90 per share) for the six months ended June 30, 2024. This represents a 60% increase in Q2 earnings compared to the previous year. The company's performance was driven by increased net interest income and positive loan growth. Total loans reached $203,177,000, up 0.7% from December 31, 2023, while total deposits grew by 10.8% to $252,827,000. RBAZ also announced a definitive agreement to merge with Pima Federal Credit Union, expected to close in Q4 2024 pending shareholder and regulatory approvals.

Positive

• Consolidated net income increased by 60% year-over-year for Q2 2024
• Total loans grew by 0.7% to $203,177,000 from December 31, 2023
• Total deposits increased by 10.8% to $252,827,000 from December 31, 2023
• Total interest income rose by 31.4% to $4,459,000 for Q2 2024
• The Bank remains 'Well Capitalized' with a CBLR ratio of 10.11%
• Announced merger agreement with Pima Federal Credit Union

Negative

• Cost of deposits increased to 2.03% for Q2 2024 from 1.75% in Q2 2023
• Total non-interest expense increased by $221,000 to $1,986,000 for Q2 2024

News Market Reaction – RBAZ

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Mid-Year 2024; Earnings up 57% YoY

PHOENIX, July 26, 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 $893,000, or $0.50 per share, for the quarter ended June 30, 2024 and $1,607,000, or $0.90 per share, for the six months ended June 30, 2024 as compared to a consolidated net income of $561,000, or $0.31 per share, for the quarter ended June 30, 2023 and $1,023,000, or $0.57 per share, for the six months ended June 30, 2023.

President and CEO Brian Ruisinger stated, “I am pleased with our strong Q2 earnings performance reflecting an increase of 60% from a year ago primarily due to increased net interest income. Loan growth in Q2 came back to positive year-to-date overcoming loan payoffs in Q1. Additionally, we benefited from non-recurring interest income from a short-term large deposit during the quarter. Our deposit growth kept pace in Q2 allowing our liquidity to be sourced entirely from core deposits. Cost of funds remains a challenge for RBAZ and the industry as a whole, but has seen a leveling following seven consecutive meetings where the Fed held rates unchanged. Looking ahead, there is currently a high likelihood of a Fed rate decrease in the second half of 2024, which would signal the end of this historical rate cycle.”

Mr. Ruisinger continued, “On May 16^th, we announced the signing of a definitive agreement to join forces with Pima Federal Credit Union. Pima has a rich history dating back to 1951 and is headquartered in Tucson, AZ with total assets of $1.2 billion across eight branches. Pima is actively branching into Yuma, AZ and the Show Low area in Northern Arizona and has no current presence in Maricopa County. Our coming together will create a premier banking experience in Maricopa County as RBAZ’s commercial expertise will be combined with Pima’s strength in consumer products. This proposed transaction is a great outcome for our loyal shareholders and customers and is anticipated to close in Q4 following approvals from RBAZ shareholders and regulatory agencies. A special shareholder meeting is set for August 22^nd to approve this transaction.”

June 30, 2024 Company Highlights Include:

• Total loans of $203,177,000 increased $1,348,000, or 0.7%, from December 31, 2023. This increase consisted of $16,869,000 in new loan originations and advances on construction lines of credit, offset by $15,531,000 in scheduled loan maturities and participations sold. Advances and repayments on commercial lines of credit and normal payment attrition comprise the balance of the loan activity in the first half of 2024.
• Total deposits of $252,827,000 increased $24,655,000, or 10.8%, from December 31, 2023 and related 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 interest income increased $1,066,000 to $4,459,000 for the quarter ended June 30, 2024 outpacing total interest income of $3,393,000 for the same period of the prior year equating to an increase of 31.4%.
• Cost of deposits increased to 2.03% for the quarter ended June 30, 2024 from 1.75% for the quarter ended June 30, 2023. This increase of 28 basis points marks the smallest quarter-over-quarter increase since Q3 2022 when the Federal Reserve began rapidly increasing interest rates and evidences stabilization in the interest rate environment as the Federal Reserve continues to hold rates at 5.25% to 5.50%.
• Total non-interest expense increased $221,000 to $1,986,000 for the quarter ended June 30, 2024 compared to $1,765,000 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:

	June 30, 2024 (%)		Ratio to be Well Capitalized (%)
CBLR ratio	10.11		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. Additional branches are located at 7373 N. Scottsdale Road, Suite A-195, Scottsdale, AZ and 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 June 30,		For the six months  ended June 30,		Year-End
	2024	2023	2024	2023	2023
	(dollars in thousands, except per share data)
Summary Income Data:
Interest income	$4,459	$3,393	$8,668	$6,434	$14,208
Interest expense	1,439	1,096	2,996	2,037	4,742
Net interest income	3,020	2,297	5,672	4,397	9,466
Provision for credit losses	125	-	125	-	-
Non-interest income	256	194	475	405	820
Non-interest expense	1,986	1,765	3,928	3,449	7,142
Income before provision for income tax	1,165	726	2,094	1,353	3,144
Provision for income tax	272	165	487	330	684
Net income	$893	$561	$1,607	$1,023	$2,460
Per Share Data:
Shares outstanding end-of-period	1,779	1,808	1,779	1,808	1,795
Earnings per common share	$0.50	$0.31	$0.90	$0.57	$1.36
Diluted earnings per common share	$0.47	$0.30	$0.85	$0.55	$1.33
Book value per share	$12.71	$10.57	$12.71	$10.57	$11.77
Selected Balance Sheet Data:
Total assets	$283,060	$266,716	$283,060	$266,716	$272,044
Securities available-for-sale, at fair value	37,429	39,880	37,429	39,880	40,998
Securities held-to-maturity	10,651	11,326	10,651	11,326	10,648
Loans	203,177	176,986	203,177	176,986	201,829
Allowance for credit losses	2,163	2,116	2,163	2,116	2,116
Deposits	252,827	240,169	252,827	240,169	228,172
Other borrowings	5,943	5,914	5,943	5,914	20,929
Shareholders’ equity	22,617	19,112	22,617	19,112	21,128
Performance Ratios:
Return on average shareholders’ equity (annualized) (%)	15.79	11.74	14.21	10.71	11.64
Net interest margin (%)	4.20	3.61	4.12	3.58	3.68
Average assets	$297,997	$261,179	$289,220	$254,415	$264,488
Return on average assets (annualized) (%)	1.20	0.86	1.11	0.80	0.93
Shareholders’ equity to assets (%)	7.99	7.17	7.99	7.17	7.77
Efficiency ratio (%)	60.62	70.86	63.90	71.82	69.43
Asset Quality Data:
Nonaccrual loans	$436	$224	$436	$224	$209
Loan modifications to borrowers experiencing financial difficulty	$-	$88	$-	$88	$-
Other real estate owned	$-	$-	$-	$-	$-
Nonperforming loans	$436	$224	$436	$224	$209
Nonperforming loans to total assets (%)	0.15	0.08	0.15	0.08	0.08
Nonperforming loans to total loans (%)	0.21	0.13	0.21	0.13	0.10
Allowance for credit losses to total loans (%)	1.06	1.20	1.06	1.20	1.05
Allowance for credit losses to nonperforming loans (%)	496.10	944.64	496.10	944.64	1,012.44
Net charge-offs (recoveries) for period	$23	$-	$23	($352)	($352)
Average loans	$200,699	$169,623	$202,524	$165,612	$176,146
Ratio of net charge-offs (recoveries) to average loans (%)	0.01	n/a	0.01	(0.21)	(0.20)

Contact:  Brian Ruisinger
President and Chief Executive Officer
Phone:  602.280.9404
Email:  bruisinger@republicaz.com

FAQ

What was RBAZ Bancorp's net income for Q2 2024?

RBAZ Bancorp reported a consolidated net income of $893,000, or $0.50 per share, for the quarter ended June 30, 2024.

How much did RBAZ's total loans increase in the first half of 2024?

RBAZ's total loans increased by $1,348,000, or 0.7%, to $203,177,000 from December 31, 2023 to June 30, 2024.

What was the percentage increase in RBAZ's total deposits for the first half of 2024?

RBAZ's total deposits increased by 10.8%, or $24,655,000, to $252,827,000 from December 31, 2023 to June 30, 2024.

What is RBAZ Bancorp's Community Bank Leverage Ratio (CBLR) as of June 30, 2024?

RBAZ Bancorp's Community Bank Leverage Ratio (CBLR) was 10.11% as of June 30, 2024, which is above the 9.00% required to be considered 'Well Capitalized'.

What major corporate announcement did RBAZ make regarding a merger in 2024?

RBAZ announced a definitive agreement to merge with Pima Federal Credit Union, expected to close in Q4 2024 pending shareholder and regulatory approvals.