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 16th, 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 22nd 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
