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American Riviera Bank Reports Record Quarterly Earnings

American Riviera Bank (OTC Markets: ARBV) announced today unaudited net income of $4,398,000 ($0.99 per share) for the nine months ended September 30, 2018. This represents a 26% increase in net income from the $3,501,000 ($0.80 per share) for the same reporting period in the prior year. The annualized return on average assets of 1.06% and return on average equity of 10.38% represents an increase from the 0.99% and 8.92%, respectively, achieved for the same reporting period in the prior year. The Bank reported its best quarter ever with unaudited net income of $1,571,000 ($0.35 per share) for the third quarter ended September 30, 2018 compared to $1,383,000 ($0.31 per share) for the same reporting period in the prior year.

As of September 30, 2018 the Bank reported $504 million in total deposits. This represents a 9% increase from the same reporting period prior year. Checking accounts, comprised of non-interest bearing demand deposits and interest bearing NOW accounts, increased by $40 million or 19% from the same quarter last year.

Loan demand remains strong, with total loans increasing $83 million or 21% from September 30, 2017, reaching $489 million at September 30, 2018 with no loans that were 90 days or more past due and no other real estate owned. The Bank reported an annualized net interest margin of 4.47% for the nine months ending September 30, 2018.

Jeff DeVine, President and Chief Executive Officer stated, The third quarter was another strong quarter for American Riviera Bank, as we are quickly approaching $600 million in assets and continue to increase profitability. Moving forward, we remain committed to being the leading independent bank on the Central Coast and continue to make American Riviera Bank better for its shareholders, customers and employees. Our organic growth and community centric approach continues to differentiate us in the market as we solidify our position as the Central Coast’s leading community bank.”

As of September 30, 2018, American Riviera Bank maintained a strong capital position with a Tier 1 Capital Ratio of 10%, well above the regulatory guideline of 8% for well capitalized institutions. The tangible book value per share of American Riviera Bank common stock is $11.96 at September 30, 2018, an 8% increase from $11.12 at September 30, 2017.

Company Profile

American Riviera Bank is a full-service community bank focused on serving the lending and deposit needs of businesses and consumers on the Central Coast of California. The state-chartered bank opened for business on July 18, 2006, with the support of local shareholders. Full-service branches are located at 1033 Anacapa Street in Santa Barbara, 525 San Ysidro Road in Montecito, 5880 Calle Real in Goleta and 1601 Spring Street in Paso Robles with the Santa Barbara Lending office at 30 East Figueroa and a residential loan production office located at 18 East Figueroa in Santa Barbara. For eight consecutive years the Bank has been recognized for strong financial performance by the Findley Reports, and received the highest “Super Premier” rating from Findley for 2017. As of June 30, 2018, 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)
Sep 30,Sep 30,One Year
20182017Change
Assets
Cash & Due From Banks $ 31,392 $ 59,861 -48 %
Fed Funds Sold - 11,428 -100 %
Securities 46,549 22,351 108 %
Loans 489,401 405,947 21 %
Allowance For Loan Losses (5,242 ) (4,076 ) 29 %
Net Loans 484,159 401,871 20 %
Fixed Assets 5,308 1,261 321 %
Goodwill and Other Intangibles 6,417 5,740 12 %
Other Assets 15,178 15,716 -3 %
Total Assets 589,003 518,228 14 %
Liabilities & Shareholders' Equity
Demand Deposits 166,145 162,835 2 %
NOW Accounts 86,543 50,072 73 %
Other Interest Bearing Deposits 250,958 249,173 1 %
Total Deposits 503,646 462,080 9 %
Borrowed Funds 24,000 - N/A
Other Liabilities 2,295 1,504 53 %
Total Liabilities 529,941 463,584 14 %
Common Stock 46,400 45,791 1 %
Retained Earnings 13,339 8,880 50 %
Other Capital (677 ) (27 ) 2407 %
Total Shareholders' Equity 59,062 54,644 8 %
Total Liabilities & Shareholders' Equity $ 589,003 $ 518,228 14 %
Book Value Per Share $ 13.40 $ 12.42 8 %
Tangible Book Value Per Share $ 11.96 $ 11.12 8 %
Statements of Income (unaudited)
(dollars in thousands)
Quarter Ended9 Months Ended
Sep 30,Sep 30,Sep 30,Sep 30,
20182017Change20182017Change
Interest Income
Interest and Fees on Loans $ 6,256 $ 5,275 19 % $ 17,294 $ 15,186 14 %
Net Fair Value Amortization Income 118 246 -52 % 424 597 -29 %
Interest on Securities 266 85 212 % 702 145 384 %
Interest on Fed Funds 1 38 -98 % 12 80 -85 %
Interest on Due From Banks 167 142 17 % 436 318 37 %
Total Interest Income 6,808 5,786 18 % 18,868 16,326 16 %
Interest Expense
Interest Expense on Deposits 622 273 128 % 1,214 738 65 %
Interest Expense on Borrowings 6 1 500 % 126 23 446 %
Total Interest Expense 628 274 129 % 1,340 761 76 %
Net Interest Income 6,180 5,512 12 % 17,528 15,565 13 %
Provision for Loan Losses 294 68 330 % 925 707 31 %
Net Interest Income After Provision 5,886 5,444 8 % 16,603 14,858 12 %
Non-Interest Income
Service Charges, Commissions and Fees 397 288 38 % 1,242 863 44 %
Other Non-Interest Income 60 74 -19 % 258 240 8 %
Total Non-Interest Income 457 362 26 % 1,500 1,103 36 %
Non-Interest Expense
Salaries and Employee Benefits 2,429 2,027 20 % 7,061 5,880 20 %
Occupancy and Equipment 483 415 17 % 1,304 1,155 13 %
Other Non-Interest Expense 1,210 1,005 20 % 3,585 3,106 15 %
Total Non-Interest Expense 4,122 3,447 20 % 11,950 10,141 18 %
Net Income Before Provision for Taxes 2,221 2,359 -6 % 6,153 5,820 6 %
Provision for Taxes 650 976 -33 % 1,755 2,319 -24 %
Net Income $ 1,571 $ 1,383 14 % $ 4,398 $ 3,501 26 %
Shares (end of period) 4,459,269 4,400,663 1 % 4,459,269 4,400,663 1 %
Earnings Per Share - Basic $ 0.35 $ 0.31 13 % $ 0.99 $ 0.80 24 %
Return on Average Assets (annualized) 1.03 % 1.06 % 1.06 % 0.99 %
Return on Average Equity (annualized) 10.39 % 9.90 % 10.38 % 8.92 %
Net Interest Margin (annualized) 4.39 % 4.62 % 4.47 % 4.67 %

Contacts:

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

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