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Net Interest Margin Up 22% QoQ

PHOENIX, Oct. 29, 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 $981,000, or $0.55 per share, for the quarter ended September 30, 2024 and $2,586,000, or $1.45 per share, for the nine months ended September 30, 2024 as compared to 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.

President and CEO Brian Ruisinger stated “I am pleased with our strong Q3 earnings performance as we achieved a 22% increase in our net interest margin while the increase in overhead costs was nominal at 2% from the year ago quarter. Net interest margin was bolstered by premium loan pricing that more than offset the increase in cost of deposits over the same period. Additionally, non-interest income was up 26% over the same quarter from a year ago. RBAZ experienced a surge in loan growth in Q3, which necessitated a commensurate increase in our allowance for credit losses, driving the provision expense recorded for the quarter.”

Mr. Ruisinger continued, “During the quarter, the Federal Reserve executed its first rate cut in over four years. As a result of this signaling from the Fed, we have seen both loan and deposit rates begin to drop in the Phoenix market. RBAZ management closely monitors our peer and competitor banks and will adjust rates accordingly to remain competitive in our market while maintaining a healthy net interest margin.”

Mr. Ruisinger concluded, “At a Special Shareholder meeting held on August 22^nd, shareholders approved the transaction to join forces with Pima Federal Credit Union, headquartered in Tucson, AZ, that was announced on May 16^th of this year. 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 pending regulatory approval. Additional information will be provided once approvals are obtained, and a closing date is established.”

September 30, 2024 Company Highlights Include:

• Total loans of $216,451,000 increased $14,622,000, or 7.2%, from December 31, 2023. This increase consisted of $40,976,000 in new loan originations and advances on construction lines of credit, offset by $25,879,000 in 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 three quarters of 2024.

• Total deposits of $259,902,000 increased $31,730,000, or 13.9%, 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 the remainder of 2024.

• Total interest income increased $694,000 to $4,653,000 for the quarter ended September 30, 2024 outpacing total interest income of $3,959,000 for the same period of the prior year equating to an increase of 17.5%.

• Cost of deposits increased to 2.11% for the quarter ended September 30, 2024 from 1.93% for the quarter ended September 30, 2023 representing an increase of 18 basis points. For two consecutive quarters, the increase in cost of deposits over the prior year comparative quarter has been at a declining rate evidencing stabilization in the interest rate environment.

• Total non-interest expense increased $45,000 to $1,881,000 for the quarter ended September 30, 2024 compared to $1,836,000 for the same period of the prior year resulting primarily from additional full-time employees and the addition of the new Scottsdale branch and conversion of the existing location to an administrative office, all of which took place in Q4 2023.