RBAZ Bancorp, Inc. Announces Unaudited Financial Results For the Quarter Ending September 30, 2023
RBAZ Bancorp, Inc. announced strong quarterly earnings with a consolidated net income of $748,000 for the quarter ended September 30, 2023. Total loans and deposits increased significantly, and total interest income saw a 61.4% increase. However, higher funding costs, compressing margins, and pressuring liquidity are the main challenges the company is facing.
Positive
RBAZ reported a consolidated net income of $748,000 for Q3 2023, a 50% increase compared to the same quarter last year.
Total loans increased by 14.8% to $187,117,000 in the first nine months of 2023.
Total deposits increased by 26.9% to $257,997,000 in the first nine months of 2023.
Total interest income increased by 61.4% to $3,959,000 for Q3 2023 compared to the same period last year.
Negative
Higher funding costs, compressing margins, and pressuring liquidity are the main challenges faced by RBAZ.
10/25/2023 - 02:49 PM
Despite Headwinds, RBAZ Delivers Strong Quarterly Earnings
PHOENIX, Oct. 25, 2023 (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 $748,000 , or $0.41 per share, for the quarter ended September 30, 2023 and $1,771,000 , or $0.98 per share, for the nine months ended September 30, 2023 as compared to a consolidated net income of $490,000 , or $0.27 per share, for the quarter ended September 30, 2022 and $1,270,000 , or $0.70 per share, for the nine months ended September 30, 2022. Current year earnings of $0.98 per share were attributable entirely to core operations. Prior year earnings of $0.70 per share were comprised of $0.60 per share attributable to core operations and $0.10 per share due to impacts from the Paycheck Protection Program.
President and CEO Brian Ruisinger stated “We are proud to report our strongest earnings quarter of 2023 reflecting a greater than 50% increase over the same quarter of the prior year. During the quarter, we saw robust net loan growth of over $10 million while continuing to maintain high asset quality. Our Q3 performance has put us back on track for achieving our 2023 strategic objectives. However, our growth has underscored a need for increased staffing resources in Q4 to continue providing our brand of personalized service.”
Mr. Ruisinger continued, “Our team weathered the industry turmoil from earlier in the year that created so much uncertainty and stayed the course to produce these results. In addition, we converted our IT platform and have been working on the establishment of a new branch on Scottsdale Road, which opened early Q4. These efforts were undertaken to enhance customer experience and convenience. An outstanding team effort. Higher funding costs, compressing margins and pressuring liquidity are the most prevalent headwinds we are facing. The Phoenix economy continues to outperform other large cities nationwide so loan demand, while slowing slightly, continues to present viable opportunities. 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.”
September 30, 2023 Company Highlights Include:
Total loans of $187,117,000 increased $24,163,000 , or 14.8% , from December 31, 2022 as the Company experienced significant, diversified loan growth in the first nine months of the year. Total deposits of $257,997,000 increased $54,665,000 , or 26.9% , from December 31, 2022 as the Company supplemented short-term deposits gathered in the first quarter with significant core deposit generation in the second and third quarters through deepening of existing relationships and cultivation of new banking relationships. Management prioritized liquidity in its 2023 Strategic Plan and deployed additional resources into deposit production. Total interest income increased $1,506,000 t o $3,959,000 for the quarter ended September 30, 2023 outpacing total interest income of $2,453,000 for the same period of the prior year equating to an increase of 61.4% . Cost of deposits increased to 1.93% for the quarter ended September 30, 2023 from 0.72% for the quarter ended September 30, 2022 as the result of upward rate pressure as the Federal Reserve increased interest rates by 2.25% since the end of the third quarter of 2022. Total non-interest expense increased $506,000 t o $1,836,000 for the quarter ended September 30, 2023 compared to $1,330,000 for the same period of the prior year resulting primarily from several additional full-time employees, the addition of the Gilbert AZ branch, and investments made in technology and marketing in support of the Company’s growth. The Bank remains “Well Capitalized” under the Community Bank Leverage Ratio (CBLR) framework as follows:
September 30, 2023 (%) Ratio to be Well CBLR ratio 9.88 9.00
About the Company
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. A number of 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 September 30, For the nine months ended September 30, Year-End 2023 2022 2023 2022 2022 (dollars in thousands, except per share data) Summary Income Data: Interest income $3,959 $2,453 $10,393 $6,599 $9,218 Interest expense 1,346 468 3,383 982 1,674 Net interest income 2,613 1,985 7,010 5,617 7,544 Provision for credit losses - 66 - 171 218 Non-interest income 196 87 601 121 511 Non-interest expense 1,836 1,330 5,285 3,805 5,386 Income before income taxes 973 676 2,326 1,762 2,451 Provision for income tax 225 186 555 492 538 Net income $748 $490 $1,771 $1,270 $1,913 Per Share Data: Shares outstanding end-of-period 1,831 1,797 1,831 1,797 1,797 Earnings per common share $0.41 $0.27 $0.98 $0.70 $1.06 Diluted earnings per common share $0.40 $0.26 $0.96 $0.67 $1.02 Book value per share $10.73 $9.78 $10.73 $9.78 $10.11 Selected Balance Sheet Data: Total assets $285,627 $226,251 $285,627 $226,251 $237,620 Securities available-for-sale, at fair value 36,318 42,352 36,318 42,352 43,441 Securities held-to-maturity 10,907 12,177 10,907 12,177 12,176 Loans 187,117 142,872 187,117 142,872 162,954 Allowance for credit losses 2,116 1,692 2,116 1,692 1,764 Deposits 257,997 201,486 257,997 201,486 203,332 Other borrowings 5,921 5,892 5,921 5,892 14,900 Shareholders’ equity 19,646 17,583 19,646 17,583 18,166 Performance Ratios: Return on average shareholders’ equity (annualized) (%) 15.23 11.15 12.02 9.63 10.53 Net interest margin (%) 3.76 3.42 3.65 3.15 3.21 Average assets $283,605 $236,222 $264,252 $243,927 $239,864 Return on average assets (annualized) (%) 1.05 0.83 0.89 0.69 0.80 Shareholders’ equity to assets (%) 6.88 7.77 6.88 7.77 7.64 Efficiency ratio (%) 65.36 64.19 69.44 66.31 66.87 Asset Quality Data: Nonaccrual loans $219 $65 $219 $65 $118 Troubled debt restructurings $54 $164 $54 $164 $156 Other real estate $- $- $- $- $- Nonperforming loans $219 $118 $219 $118 $118 Nonperforming loans to total assets (%) 0.08 0.05 0.08 0.05 0.05 Nonperforming loans to total loans (%) 0.12 0.08 0.12 0.08 0.07 Reserve for credit losses to total loans (%) 1.13 1.18 1.13 1.18 1.08 Reserve for credit losses to nonperforming loans (%) 966.21 1,433.90 966.21 1,433.90 1,494.92 Net recoveries for period $- $23 $352 $53 $78 Average loans $183,063 $134,414 $171,002 $135,250 $138,529 Ratio of net recoveries to average loans (%) n/a 0.02 0.21 0.04 0.06
Contact: Brian Ruisinger bruisinger@republicaz.com
What was RBAZ's consolidated net income for Q3 2023?
RBAZ reported a consolidated net income of $748,000 for the quarter ended September 30, 2023.
How much did total loans increase in the first nine months of 2023?
Total loans increased by 14.8% to $187,117,000 in the first nine months of 2023.
What was the increase in total deposits for the first nine months of 2023?
Total deposits increased by 26.9% to $257,997,000 in the first nine months of 2023.
What was the increase in total interest income for Q3 2023 compared to the same period last year?
Total interest income increased by 61.4% to $3,959,000 for the quarter ended September 30, 2023 compared to the same period last year.
What are the main challenges faced by RBAZ?
The main challenges faced by RBAZ are higher funding costs, compressing margins, and pressuring liquidity.
