Santa Barbara, California (October 26, 2020) – American Riviera Bank (OTC Markets: ARBV) announced today unaudited net income of $5,000,000 ($0.99 per share) for the nine months ended September 30, 2020. This represents a 4% increase in net income from the $4,821,000 ($0.96 per share) for the same reporting period in the prior year.
The Bank reported record unaudited net income of $2,264,000 ($0.45 per share) for the third quarter ended September 30, 2020. This represents a 46% increase from the $1,547,000 ($0.31 per share) for the same quarter last year.
“Despite significant uncertainty in the economy, the Bank generated record earnings in the third quarter, reflecting the diversity of our business model and growing market share position. Thanks to the hard work of our employees and our solid financial footing, we have been able to serve as economic first responders to our clients and Central Coast communities impacted by the COVID-19 pandemic.”
Jeff DeVine, President and Chief Executive Officer
The Bank has experienced a significant decrease in temporary loan payment deferrals for clients negatively affected by the COVID-19 pandemic. Total loans on deferral at September 30, 2020 were approximately $18 million, representing 3% of total loans excluding SBA PPP, and have notably fallen from the $108 million reported at June 30, 2020. Approximately $5 million of such deferrals are to borrowers wishing to conserve cash for the economic uncertainty, and who have asked for the principal portion of their payments to be deferred while continuing to pay interest. The remaining $13 million are full deferrals of both principal and interest on loans secured by commercial real estate with significant equity cushion (see detail on Loan Deferrals exhibit). The sizeable increase in loan loss provision year-to-date was primarily driven by qualitative factors in our loan loss methodology related to COVID-19 pandemic economic uncertainty, and not by actual delinquencies or defaults. At September 30, 2020, the Bank had no other real estate owned and no loans 90 days or more past due.
The Bank has experienced tremendous growth in new and existing relationships, reporting $930 million in total assets as of September 30, 2020, which represents a $233 million or 33% increase from September 30, 2019. Total loans including SBA PPP increased 32% from September 30, 2019, reaching $722 million at September 30, 2020. Total loans excluding SBA PPP increased $57 million or 10% from September 30, 2019, reaching $605 million at September 30, 2020. Total deposits increased 37% from September 30, 2019, reaching $829 million at September 30, 2020. Non-interest bearing demand deposit accounts increased $123 million or 59% from the same reporting period in the prior year. Interest bearing demand deposit accounts increased $31 million or 39% from the same reporting period in the prior year.
As of September 30, 2020, American Riviera Bank was highly liquid with $179 million in cash and available-for-sale securities, and well capitalized 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 common stock was $15.11 at September 30, 2020.
| Balance Sheets (unaudited) | |||||||
| (dollars in thousands) | |||||||
| Sep 30, | Sep 30, | One Year | |||||
| 2020 | 2019 | Change | |||||
| Assets | |||||||
| Cash & Due From Banks | $ 105,157 | $ 79,101 | 33% | ||||
| Securities | 73,886 | 41,797 | 77% | ||||
| Loans (excluding PPP) | 604,728 | 547,956 | 10% | ||||
| PPP Loans | 117,361 | - | n/a | ||||
| Allowance For Loan Losses | (8,040) | (6,145) | 31% | ||||
| Net Loans | 714,049 | 541,811 | 32% | ||||
| Premise & Equipment | 6,634 | 6,812 | -3% | ||||
| Goodwill and Other Intangibles | 5,203 | 5,382 | -3% | ||||
| Other Assets | 25,287 | 22,364 | 13% | ||||
| Total Assets | $ 930,216 | $ 697,267 | 33% | ||||
| Liabilities & Shareholders' Equity | |||||||
| Demand Deposits | $ 331,035 | $ 207,643 | 59% | ||||
| NOW Accounts | 110,476 | 79,509 | 39% | ||||
| Other Interest Bearing Deposits | 387,293 | 316,124 | 23% | ||||
| Total Deposits | 828,804 | 603,276 | 37% | ||||
| Borrowed Funds | 10,000 | 10,000 | 0% | ||||
| Other Liabilities | 9,311 | 9,452 | -1% | ||||
| Total Liabilities | 848,115 | 622,728 | 36% | ||||
| Common Stock | 55,571 | 54,889 | 1% | ||||
| Retained Earnings | 26,224 | 19,653 | 33% | ||||
| Other Capital | 306 | (3) | n/a | ||||
| Total Shareholders' Equity | 82,101 | 74,539 | 10% | ||||
| Total Liabilities & Shareholders' Equity | $ 930,216 | $ 697,267 | 33% | ||||
| Balance Sheets (unaudited) | |||||||||||
| (dollars in thousands) | |||||||||||
| September, 30 | June, 30 | March 31, | December 31, | September 30, | |||||||
| 2020 | 2020 | 2020 | 2019 | 2019 | |||||||
| Assets | |||||||||||
| Cash & Due From Banks | $ 105,157 | $ 84,722 | $ 59,793 | $ 66,472 | $ 79,101 | ||||||
| Securities | 73,886 | 57,099 | 50,518 | 43,403 | 41,797 | ||||||
| Loans (excluding PPP) | 604,728 | 615,367 | 603,631 | 578,458 | 547,956 | ||||||
| PPP Loans | 117,361 | 116,531 | - | - | - | ||||||
| Allowance For Loan Losses | (8,040) | (7,890) | (7,171) | (6,366) | (6,145) | ||||||
| Net Loans | 714,049 | 724,008 | 596,460 | 572,092 | 541,811 | ||||||
| Premise & Equipment | 6,634 | 6,731 | 6,832 | 6,878 | 6,812 | ||||||
| Goodwill and Other Intangibles | 5,203 | 5,248 | 5,293 | 5,337 | 5,382 | ||||||
| Other Assets | 25,287 | 24,846 | 24,514 | 24,753 | 22,364 | ||||||
| Total Assets | $ 930,216 | $ 902,654 | $ 743,410 | $ 718,935 | $ 697,267 | ||||||
| Liabilities & Shareholders' Equity | |||||||||||
| Demand Deposits | $ 331,035 | $ 328,748 | $ 219,331 | $ 216,671 | $ 207,643 | ||||||
| NOW Accounts | 110,476 | 121,741 | 117,453 | 87,906 | 79,509 | ||||||
| Other Interest Bearing Deposits | 387,293 | 342,668 | 308,666 | 316,586 | 316,124 | ||||||
| Total Deposits | 828,804 | 793,157 | 645,450 | 621,163 | 603,276 | ||||||
| Borrowed Funds | 10,000 | 20,000 | 10,000 | 10,000 | 10,000 | ||||||
| Other Liabilities | 9,311 | 9,772 | 10,723 | 11,629 | 9,452 | ||||||
| Total Liabilities | 848,115 | 822,929 | 666,173 | 642,792 | 622,728 | ||||||
| Common Stock | 55,571 | 55,418 | 55,084 | 55,034 | 54,889 | ||||||
| Retained Earnings | 26,224 | 23,960 | 22,395 | 21,224 | 19,653 | ||||||
| Other Capital | 306 | 347 | (242) | (115) | (3) | ||||||
| Total Shareholders' Equity | 82,101 | 79,725 | 77,237 | 76,143 | 74,539 | ||||||
| Total Liabilities & Shareholders' Equity | $ 930,216 | $ 902,654 | $ 743,410 | $ 718,935 | $ 697,267 | ||||||
| Statements of Income (unaudited) | |||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||
| Quarter Ended | Nine Months Ended | ||||||||||||
| Sep 30, | Sep 30, | Sep 30, | Sep 30, | ||||||||||
| 2020 | 2019 | Change | 2020 | 2019 | Change | ||||||||
| Interest Income | |||||||||||||
| Interest and Fees on Loans | $ 7,822 | $ 7,224 | 8% | $ 23,127 | $ 20,896 | 11% | |||||||
| Fees on PPP Loans | 559 | - | n/a | 950 | - | n/a | |||||||
| Net Fair Value Amortization Income | 5 | 71 | -93% | 166 | 379 | -56% | |||||||
| Interest on Securities | 306 | 264 | 16% | 874 | 778 | 12% | |||||||
| Interest on Fed Funds | - | - | n/a | - | 1 | -100% | |||||||
| Interest on Due From Banks | 67 | 291 | -77% | 326 | 694 | -53% | |||||||
| Total Interest Income | 8,759 | 7,850 | 12% | 25,443 | 22,748 | 12% | |||||||
| Interest Expense | |||||||||||||
| Interest Expense on Deposits | 333 | 1,065 | -69% | 1,696 | 2,887 | -41% | |||||||
| Interest Expense on Borrowings | 22 | 32 | -31% | 123 | 234 | -47% | |||||||
| Total Interest Expense | 355 | 1,097 | -68% | 1,819 | 3,121 | -42% | |||||||
| Net Interest Income | 8,404 | 6,753 | 24% | 23,624 | 19,627 | 20% | |||||||
| Provision for Loan Losses | 209 | 205 | 2% | 1,702 | 600 | 184% | |||||||
| Net Interest Income After Provision | 8,195 | 6,548 | 25% | 21,922 | 19,027 | 15% | |||||||
| Non-Interest Income | |||||||||||||
| Service Charges, Commissions and Fees | 609 | 523 | 16% | 1,574 | 1,530 | 3% | |||||||
| Other Non-Interest Income | 149 | 216 | -31% | 501 | 495 | 1% | |||||||
| Total Non-Interest Income | 758 | 739 | 3% | 2,075 | 2,025 | 2% | |||||||
| Non-Interest Expense | |||||||||||||
| Salaries and Employee Benefits | 3,604 | 3,137 | 15% | 10,551 | 8,710 | 21% | |||||||
| Occupancy and Equipment | 677 | 653 | 4% | 2,028 | 1,693 | 20% | |||||||
| Other Non-Interest Expense | 1,434 | 1,303 | 10% | 4,351 | 3,982 | 9% | |||||||
| Total Non-Interest Expense | 5,715 | 5,093 | 12% | 16,930 | 14,385 | 18% | |||||||
| Net Income Before Provision for Taxes | 3,238 | 2,194 | 48% | 7,067 | 6,667 | 6% | |||||||
| Provision for Taxes | 974 | 647 | 51% | 2,067 | 1,846 | 12% | |||||||
| Net Income | $ 2,264 | $ 1,547 | 46% | $ 5,000 | $ 4,821 | 4% | |||||||
| Shares (end of period) | 5,070,556 | 5,031,788 | 1% | 5,070,556 | 5,031,788 | 1% | |||||||
| Earnings Per Share - Basic | $ 0.45 | $ 0.31 | 45% | $ 0.99 | $ 0.96 | 3% | |||||||
| Return on Average Assets | 0.98% | 0.89% | 10% | 0.81% | 1.00% | -19% | |||||||
| Return on Average Equity | 10.95% | 8.09% | 35% | 8.51% | 9.36% | -9% | |||||||
| Net Interest Margin | 3.86% | 4.23% | -9% | 4.04% | 4.30% | -6% | |||||||
| Five Quarter Statements of Income (unaudited) | |||||||||||
| (dollars in thousands) | |||||||||||
| Three Months Ended | |||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||
| 2020 | 2020 | 2020 | 2019 | 2019 | |||||||
| Interest Income | |||||||||||
| Interest and Fees on Loans | $ 7,822 | $ 7,766 | $ 7,537 | $ 7,387 | $ 7,224 | ||||||
| Fees on PPP Loans | 559 | 391 | - | - | - | ||||||
| Net Fair Value Amortization Income | 5 | 46 | 115 | 62 | 71 | ||||||
| Interest on Securities | 306 | 246 | 323 | 247 | 264 | ||||||
| Interest on Fed Funds | - | - | - | - | - | ||||||
| Interest on Due From Banks | 67 | 72 | 187 | 290 | 291 | ||||||
| Total Interest Income | 8,759 | 8,521 | 8,162 | 7,986 | 7,850 | ||||||
| Interest Expense | |||||||||||
| Interest Expense on Deposits | 333 | 501 | 862 | 1,085 | 1,065 | ||||||
| Interest Expense on Borrowings | 22 | 48 | 53 | 43 | 32 | ||||||
| Total Interest Expense | 355 | 549 | 915 | 1,128 | 1,097 | ||||||
| Net Interest Income | 8,404 | 7,972 | 7,247 | 6,858 | 6,753 | ||||||
| Provision for Loan Losses | 209 | 710 | 783 | 205 | 205 | ||||||
| Net Interest Income After Provision | 8,195 | 7,262 | 6,464 | 6,653 | 6,548 | ||||||
| Non-Interest Income | |||||||||||
| Service Charges, Commissions and Fees | 609 | 463 | 502 | 566 | 523 | ||||||
| Other Non-Interest Income | 149 | 159 | 193 | 199 | 216 | ||||||
| Total Non-Interest Income | 758 | 622 | 695 | 765 | 739 | ||||||
| Non-Interest Expense | |||||||||||
| Salaries and Employee Benefits | 3,604 | 3,495 | 3,452 | 3,212 | 3,137 | ||||||
| Occupancy and Equipment | 677 | 666 | 685 | 665 | 653 | ||||||
| Other Non-Interest Expense | 1,434 | 1,534 | 1,383 | 1,309 | 1,303 | ||||||
| Total Non-Interest Expense | 5,715 | 5,695 | 5,520 | 5,186 | 5,093 | ||||||
| Net Income Before Provision for Taxes | 3,238 | 2,189 | 1,639 | 2,232 | 2,194 | ||||||
| Provision for Taxes | 974 | 624 | 468 | 660 | 647 | ||||||
| Net Income | $ 2,264 | $ 1,565 | $ 1,171 | $ 1,572 | $ 1,547 | ||||||
| Shares (end of period) | 5,070,556 | 5,069,523 | 5,047,696 | 5,033,348 | 5,031,788 | ||||||
| Earnings Per Share - Basic | $ 0.45 | $ 0.31 | $ 0.23 | $ 0.31 | $ 0.31 | ||||||
| Selected Financial Highlights (unaudited) | |||||||||||
| (dollars in thousands, except per share data) | |||||||||||
| At or for the Three Months Ended | |||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||
| 2020 | 2020 | 2020 | 2019 | 2019 | |||||||
| Income and performance ratios: | |||||||||||
| Net Income | $ 2,264 | $ 1,565 | $ 1,171 | $ 1,572 | $ 1,547 | ||||||
| Earnings per share - basic | 0.45 | 0.31 | 0.23 | 0.31 | 0.31 | ||||||
| Return on average assets | 0.98% | 0.76% | 0.67% | 0.85% | 0.89% | ||||||
| Return on average equity | 10.95% | 8.18% | 6.27% | 8.04% | 8.09% | ||||||
| Net interest margin | 3.86% | 3.98% | 4.27% | 4.06% | 4.23% | ||||||
| Net interest margin (excluding PPP loans) | 3.99% | 4.12% | n/a | n/a | n/a | ||||||
| Efficiency ratio | 62.64% | 65.96% | 69.18% | 68.49% | 68.46% | ||||||
| Asset quality: | |||||||||||
| Allowance for loan and lease losses | $ 8,040 | $ 7,890 | $ 7,171 | $ 6,366 | $ 6,145 | ||||||
| Nonperforming assets | $ 12 | $ 40 | $ 341 | $ 284 | $ 276 | ||||||
| Allowance for loan and lease losses / total loans and leases | 1.11% | 1.08% | 1.19% | 1.10% | 1.12% | ||||||
| Allowance for loan and lease losses / total loans and leases (excluding PPP loans) (b) | 1.33% | 1.28% | n/a | n/a | n/a | ||||||
| Net charge-offs / average loans and leases (annualized) | 0.03% | -0.01% | ‐0.01% | -0.01% | -0.04% | ||||||
| Texas ratio | 0.01% | 0.05% | 0.43% | 0.37% | 0.37% | ||||||
| Other ratios: | |||||||||||
| Tier 1 risk-based capital (a) | 11.82% | 11.31% | 11.17% | 11.35% | 11.56% | ||||||
| Total risk-based capital (a) | 13.07% | 12.54% | 12.30% | 12.40% | 12.62% | ||||||
| Common equity tier 1 risk-based capital (a) | 11.82% | 11.31% | 11.17% | 11.35% | 11.56% | ||||||
| Tier 1 leverage ratio (a) | 8.49% | 8.87% | 10.04% | 10.04% | 10.32% | ||||||
| Equity and share related: | |||||||||||
| Common equity | $ 82,101 | 79,725 | 77,237 | $ 76,143 | $ 74,539 | ||||||
| Book value per share | 16.13 | 15.66 | 15.35 | 15.15 | 14.81 | ||||||
| Tangible book value per share | 15.11 | 14.62 | 14.30 | 14.09 | 13.74 | ||||||
| Stock closing price per share | 12.10 | 12.25 | 12.00 | 19.80 | 17.85 | ||||||
| Number of shares issued and outstanding | 5,071 | 5,070 | 5,048 | 5,033 | 5,032 | ||||||
Notes:
(a) Presented as projected for most recent quarter and actual for the remaining periods.
(b) PPP loans are 100% guaranteed by the Small Business Administration.
| Loan Deferrals | |||||||||
| As of September 30, 2020 | |||||||||
| Principal Only | Principal and Interest | Weighted Average LTV | Total Deferred Loans | Percentage of Total Loans excluding PPP | |||||
| CRE - Retail | $ 3,198,603 | $ 8,727,555 | 53% | $ 11,926,158 | 1.97% | ||||
| CRE - Special Purpose | $ - | $ 3,799,533 | 65% | $ 3,799,533 | 0.63% | ||||
| CRE - Hospitality | $ - | $ - | $ - | ||||||
| C&I | $ 1,901,583 | $ - | $ 1,901,583 | 0.31% | |||||
| $ 5,100,186 | $ 12,527,088 | $ 17,627,274 | 2.91% | ||||||
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.
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