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American Riviera Bank Merger Benefits Clients, Community and Shareholders

American Riviera Bank (OTC Markets: ARBV) announced today record unaudited net income of $4,130,000 ($0.94 per share) for the year ended December 31, 2016, compared to the $1,303,000 ($0.48 per share) reported for the previous fiscal year prior to the merger. For the fourth quarter ended December 31, 2016, unaudited net income was $1,115,000 ($0.25 per share), as compared to the $365,000 ($0.14 per share) achieved for the same reporting period last year prior to the merger.

For the year ended December 31, 2016, the Bank reported record return on average assets of 0.95% and return on average equity of 8.65%, which represents an increase from the 0.56% and 4.67%, respectively, achieved for the previous fiscal year prior to the merger.

Jeff DeVine, President and Chief Executive Officer stated, “Our first full year since the merger with The Bank of Santa Barbara has been busy and successful. We are now positioned to better serve our clients and the community with a larger legal lending limit, expanded branch network, and a full line of lending products including SBA, residential mortgage, construction and commercial lending. Our growth has also provided great benefit to our shareholders. Earnings per share increased 96% from the prior year and our stock closed at $15.10 per share on December 31, 2016, which represents a 34% increase from the closing price on December 31, 2015.”

As of December 31, 2016, the Bank reported $356 million in total loans with no other real estate owned. Non-interest bearing demand deposits are now 34% of the $392 million in total deposits. As of December 31, 2016, American Riviera Bank had $446 million in total assets, and maintained a strong capital position with a Tier 1 Capital Ratio of 12%; well above the regulatory guideline of 8% for well capitalized institutions. The tangible book value per share of American Riviera Bank’s common stock is $10.32 and the book value is $11.66 at December 31, 2016, an increase from the $10.56 book value at December 31, 2015.

Company Profile

American Riviera Bank is a full-service community bank focused on serving the lending and deposit needs of businesses and consumers in Santa Barbara and the surrounding communities. The state-chartered bank opened for business on July 18, 2006, with the support of local shareholders. Offices are located at 1033 Anacapa Street in Santa Barbara, 525 San Ysidro Road in Montecito, and 5880 Calle Real in Goleta. As a result of the merger, American Riviera Bank became the second-largest community bank based in the city of Santa Barbara. For six consecutive years the Bank has been recognized for strong financial performance by the Findley Reports. As of September 30, 2016, the Bank was rated five stars by BauerFinancial.

Statements concerning future performance, developments or events concerning expectations for growth and market forecasts, and any other guidance on future periods, constitute forward looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, effects of interest rate changes, ability to control costs and expenses, impact of consolidation in the banking industry, financial policies of the US government, and general economic conditions.

Balance Sheets (unaudited)
(dollars in thousands)
Dec 30,Dec 30,One Year
20162015Change
Assets
Cash & Due From Banks $ 45,332 $ 23,636 92 %
Fed Funds Sold 19,539 1,838 963 %
Securities 5,722 5,886 -3 %
Loans 356,471 211,789 68 %
Allowance For Loan Losses (3,368 ) (2,703 ) 25 %
Net Loans 353,103 209,086 69 %
Fixed Assets 1,303 901 45 %
Goodwill 5,874 - N/A
Other Assets 15,104 7,196 110 %
Total Assets 445,977 248,543 79 %
Liabilities & Shareholders' Equity
Demand Deposits 132,965 72,568 83 %
Interest Bearing Deposits 258,857 146,441 77 %
Total Deposits 391,822 219,009 79 %
Borrowed Funds 2,000 - N/A
Other Liabilities 1,192 1,064 12 %
Total Liabilities 395,014 220,073 79 %
Common Stock 42,934 24,735 74 %
Retained Earnings 8,050 3,765 114 %
Other Capital (21 ) (30 ) -30 %
Total Shareholders' Equity 50,963 28,470 79 %
Total Liabilities & Shareholders' Equity $ 445,977 $ 248,543 79 %
Book Value Per Share $ 11.66 $ 10.56
Tangible Book Value Per Share $ 10.32 $ 10.56
Statements of Income (unaudited)
(dollars in thousands)
Quarter Ended12 Months Ended
Dec 30,Dec 30,Dec 30,Dec 30,
20162015Change20162015Change
Interest Income
Interest and Fees on Loans $ 4,852 $ 2,716 79 % $ 19,089 $ 9,777 95 %
Loan Fair Value Accretion, net 415 - N/A 1,187 - N/A
Interest on Securities 21 21 1 % 101 95 6 %
Interest on Fed Funds 46 5 794 % 98 18 436 %
Interest on Due From Banks 50 24 111 % 173 133 30 %
Total Interest Income 5,384 2,765 95 % 20,648 10,024 106 %
Interest Expense
Interest Expense on Deposits 214 100 113 % 805 384 109 %
Interest Expense on Borrowings 15 - N/A 81 22 269 %
Total Interest Expense 229 100 128 % 886 406 118 %
Net Interest Income 5,155 2,665 93 % 19,761 9,617 105 %
Provision for Loan Losses 117 190 -38 % 505 353 43 %
Net Interest Income After Provision 5,038 2,475 104 % 19,256 9,264 108 %
Non-Interest Income
Service Charges, Commissions and Fees 279 139 101 % 1,206 569 112 %
Other Non-Interest Income 174 45 290 % 427 207 106 %
Total Non-Interest Income 453 184 147 % 1,633 777 110 %
Non-Interest Expense
Salaries and Employee Benefits 2,008 1,095 83 % 7,748 4,051 91 %
Occupancy and Equipment 388 252 54 % 1,549 1,050 48 %
Merger Related Expenses (non recurring) 83 272 -70 % 1,066 571 87 %
Other Non-Interest Expense 944 374 153 % 3,499 1,917 82 %
Total Non-Interest Expense 3,423 1,992 72 % 13,862 7,590 83 %
Net Income Before Provison for Taxes 2,068 667 210 % 7,027 2,450 187 %
Provision for Taxes 953 302 216 % 2,896 1,148 152 %
Net Income 1,115 365 205 % 4,130 1,303 217 %
Shares (end of period) 4,372,290 2,697,927 62 % 4,372,290 2,697,927 62 %
Earnings Per Share - Basic $ 0.25 $ 0.14 88 % $ 0.94 $ 0.48 96 %
Return on Average Assets (annualized) 0.95 % 0.57 % 0.95 % 0.56 %
Return on Average Equity (annualized) 8.59 % 4.85 % 8.65 % 4.67 %
Net Interest Margin (annualized) 4.74 % 4.58 % 4.81 % 4.33 %
Net Interest Margin (excluding FV amortization) 4.34 % 4.58 % 4.26 % 4.33 %

Contacts:

American Riviera Bank
Michelle Martinich, 805-965-5942
www.americanrivierabank.com

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