RBAZ Posts Record Performance; Earnings Up 29% YOY
03/22/24
By Christine Haugen, EVP and Chief Financial
Consolidated earnings were $688,000, or $0.38 per share, for the quarter ended December 31, 2023, and $2,460,000, or $1.36 per share, for the twelve months ended December 31, 2023, as compared to consolidated earnings of $644,000, or $0.36 per share, for the quarter ended December 31, 2022, and $1,913,000, or $1.06 per share, for the twelve months ended December 31, 2022. Current year consolidated earnings of $1.36 per share were attributable entirely to core operations whereas prior year consolidated earnings of $1.06 per share were comprised of $0.96 per share attributable to core operations and $0.10 per share due to impacts from the Paycheck Protection Program.
The Company achieved its strongest year on record, posting a year-over-year increase in earnings of 29% and outpacing our annual earnings objective by 10%. Significant loan production spread evenly throughout the year coupled with a strong cash position through the first three quarters allowed for strong interest income from earning assets. The Company also experienced a significant increase in its interest expense as the result of upward rate pressure as the Federal Reserve continued to increase interest rates during 2023. However, the significant volume in our earning assets outpaced the increased cost of funds preventing severe margin compression, which was a key concern heading into 2023. As a result of the significant growth during the year, increased overhead resources were added in the form of additional headcount and the opening of our new Scottsdale branch location while the existing location was converted to an administrative office. The Company also made investments in technology and marketing in support of this growth.
From a balance sheet perspective, total assets were $272.0 million as of December 31, 2023, indicating growth of 14% since December 31, 2022. The largest component of this asset balance is the loan portfolio totaling $201.8 million as of December 31, 2023, which represents an increase of $38.9 million or 24% from year-end as the Company experienced significant, diversified loan growth throughout the year. Achieving $200 million in total loans marks a significant milestone for the Company.
On the other side of the balance sheet, deposits ended the year at $228.2 million, an increase of $24.8 million or 12% since December 31, 2022, and relate entirely to core deposit generation as the short-term deposits gathered earlier in the year withdrew in the fourth quarter, as expected. Our deposit growth marks another significant achievement for the year knowing that liquidity challenges were also a key concern for 2023. While deposit growth was strong, the Company did advance $15 million from its borrowing line with the Federal Home Loan Bank late in the fourth quarter to support loan growth that outpaced deposit generation.
The Bank remains Well Capitalized with a community bank leverage ratio of 10.68% and maintains its Bauer five-star rating.