Republic Bank of Arizona Announces Unaudited Financial Results For the Quarter Ending December 31, 2018

Fourth quarter continues to show positive trends


PHOENIX, Feb. 07, 2019 (GLOBE NEWSWIRE) -- Republic Bank of Arizona, (OTCBB:RBAZ) (“RBAZ”) (“Bank”) announced a net income of $326,000, or $0.19 per share, for the quarter ended December 31, 2018 and $1,107,000, or $0.63 per share for the twelve months ended December 31, 2018 as compared to a net income of $215,000, or $0.13 per share, for the quarter ended December 31, 2017 and $624,000 or $0.37 per share for the twelve months ended December 31, 2017.

President and CEO Ralph Tapscott stated, “I am pleased to report our fourth quarter results and am proud of our team. Quality loan growth has been a focus so I am happy to report positive loan growth for 2018, but we also have no non-performing loans in our portfolio. Our core earnings exceeded the same quarter last year by over 26% when adjusting for loan loss allowance reversals and deferred tax charges. Our deposits jumped 52% in 2017 and normalized in 2018 by decreasing 19% of that prior year spike as our two largest depositors utilized some of their excess cash for normal operating distributions. While we experienced some early payoffs in the fourth quarter, our pipeline is robust so we expect a strong start to our Q1 loan growth.”   

Mr. Tapscott continued, “Our capital is strong and will support continued growth, our asset quality is exceptional, and our team is committed to growing relationships that will manifest in loan and core deposit growth, with a corresponding growth in core earnings.  We continue to enjoy a Bauer Five-Star bank rating further supporting our foundation and strength.”

December 31, 2018 Highlights Include:

  • Total interest income of $1,286,000 for the quarter ended December 31, 2018 exceeded total interest income of $1,159,000 for the same period of the prior year, and represents an increase of 10.9% as loan growth and yields on invested funds increased over the same period a year ago.
  • Quarterly interest expense for the December 31, 2018 quarter increased 29.3% or $47,000 over the same quarter in 2017 as interest rate increases by the Federal Reserve Bank prompted the Phoenix market competitors to follow suit.
  • Total loans decreased $6,500,000 to $62,000,000 for the quarter ended December 31, 2018, a 9.5% decrease as a result of a series of large early payoffs. Loan growth was $2,130,000 or 3.6% for the year compared with a decrease of $2,200,000 or 3.5% for the previous year ended.
  • Total deposits of $88,250,000 were down $8,200,000 for the fourth quarter, as two of our largest depositors decreased their balances for normal operating distributions.

The Bank remains “well capitalized” as follows:

      
 December 31,
2018 (%)
 Ratio to be Well
Capitalized (%)
      
Leverage Ratio  14.11    5.00 
Common Equity Tier 1  25.83    6.50 
Tier 1 Capital to Risk Weighted Assets  25.83    8.00 
Total Capital to Risk Weighted Assets  27.09    10.00 
      

About the Company

Republic Bank of Arizona is a state chartered community bank located in Phoenix, Arizona.  RBAZ is a full service community bank providing deposit and loan products, and convenient on-line banking to individuals, businesses and professionals with a business and commercial focus.  The Bank was established in April 2007 and operates out of a single location at 645 E. Missouri Avenue, Suite 108.  The Bank is traded over-the-counter as RBAZ.  For further information, please visit our web site: www.republicbankaz.com.

Forward-looking Statements

This press release may include forward-looking statements about RBAZ, for which the Bank 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 Bank’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 Bank 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 Bank assumes no obligation to update any forward-looking statement.

 
Unaudited Summary Financial Information
 
(dollars in thousands, except per share data or noted otherwise)
   
 For the Three months
ended December 31,
  For the Twelve months
ended December 31, 
 
 2018 2017 2018 2017 
  
 (dollars in thousands, except per share data)
Summary Income Data    
Interest income$  1,303  $  1,168  $  5,123  $  4,379 
Interest expense 203   157   714   628 
Net interest income 1,100   1,011   4,409   3,751 
Provision for (reduction in) loan losses (150)  (266)  (450)  (416)
Non-interest income 35   231   328   421 
Non-interest expense 844   803   3,522   3,222 
Realized gains (losses) on sales of securities -   1   (116)  1 
Income before income taxes 441   706   1,549   1,367 
Provision for income tax 115   491   442   743 
Net income $326   $215   $1,107   $624 
Per Share Data:    
Shares outstanding end-of-period 1,744   1,702   1,744   1,702 
Earnings per common share$  0.19  $  0.13  $  0.63  $  0.37 
Cash dividend declared -   -   -   - 
Total shareholders’ equity$  15,194  $   14,015  $  15,194  $ 14,015 
Book value per share 8.71   8.23   8.71   8.23 
Selected Balance Sheet Data:    
Total assets$  104,105  $ 122,923  $  104,105  $ 122,923 
Securities available-for-sale 20,676   20,570   20,676   20,570 
Securities held-to-maturity 6,230   6,320   6,230   6,320 
Loans 62,017   59,887   62,017   59,887 
Allowance for loan losses 1,184   1,665   1,184   1,665 
Deposits 88,244   108,489   88,244   108,489 
Other borrowings -   -   -   - 
Shareholders’ equity 15,194   14,015   15,194   14,015 
Performance Ratios:    
Return on average shareholders’ equity (annualized) 8.75   6.14   7.70   4.56 
Net interest margin (%) 4.00   3.72   3.87   3.96 
Average assets 110,668   109,376   114,344   94,451 
Return on average assets (annualized) (%) 1.18   0.79   0.97   0.66 
Shareholders’ equity to assets (%) 14.59   11.40   14.59   11.40 
Efficiency ratio (%) 73.95   64.01   73.96   76.45 
Asset Quality Data:    
Nonaccrual loans -   -   -   - 
Troubled debt restructurings 563   592   563   592 
Other real estate -   -   -   - 
Nonperforming assets -   -   -   - 
Nonperforming assets to total assets (%) -   -   -   - 
Nonperforming loans to total loans (%) -   -   -   - 
Reserve for loan losses to total loans (%) 1.91   2.78   1.91   2.78 
Reserve for loan losses to nonperforming loans (%) *   *   *   * 
Net charge-offs for period 5   -   5   144 
Average loans 64,897   61,431   63,356   61,409 
Ratio of charge‑offs to average loans (%) 0.01      0.01   0.23  
Regulatory Capital Ratios:    
Tier 1 leverage capital ratio (%) 14.11   13.08   14.11   13.08 
Common Equity Tier 1 (%) 25.83   24.93   25.83   24.93 
Tier 1 risk-based capital ratio (%) 25.83   24.93   25.83   24.93 
Total risk-based capital ratio (%) 27.09   26.20   27.09   26.20 
* Denominator is zero    
     

Contact: Ralph Tapscott,
President and Chief Executive Officer
Phone: 602.280.9403
Email: rtapscott@republicaz.com