American Riviera Bancorp Completes $18 Million Subordinated Note Offering

News item February 28, 2022 by Michelle Martinich

Santa Barbara, California (February 28, 2022) – American Riviera Bancorp (the “Company”) (OTCQX: ARBV), whose subsidiary is American Riviera Bank (the “Bank”), today announced that it has completed a private placement of $18 million in fixed-to-floating rate subordinated notes due March 1, 2032 (the “Notes”) to certain qualified buyers and accredited investors. The Company intends to use the net proceeds for general corporate purposes, the maintenance of required regulatory capital at the Bank, and to support the Company’s and Bank’s future growth.

The Notes are structured to qualify as Tier 2 capital for the Company for regulatory purposes and will carry a fixed rate of 3.75% until March 1, 2027. Thereafter, the Notes will pay interest at a floating rate, reset quarterly, equal to the then current three-month SOFR plus 212 basis points. The subordinated notes are redeemable by the Company at its option, in whole or in part, on any interest payment date on or after March 1, 2027, or at any time, in whole or in part, upon certain other specified events prior to the Notes’ maturity on March 1, 2032.

“We are very pleased with the excellent result of our subordinated note offering,” said Michelle Martinich, Executive Vice President and Chief Financial Officer. “There was strong interest from the market as indicated by the rate that we were able to secure for a non-rated community bank offering. It further validates the consistent earnings power and reputation of our Bank. This offering provides us with low cost capital in order to support our balance sheet growth plans.”

D.A. Davidson & Co. served as the sole placement agent for this offering. Sheppard, Mullin, Richter & Hampton, LLP served as legal counsel to the Company and Stuart | Moore | Staub served as legal counsel to the placement agent.

This press release is for informational purposes only and shall not constitute an offer to sell, or the solicitation of an offer to buy the Notes, nor shall there be any sale in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The indebtedness evidenced by the Notes is not a deposit and is not insured by the Federal Deposit Insurance Corporation or any other government agency or fund.

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.