The Bank reported an annualized return on average assets of 1.00% and return on average equity of 9.36%. The Bank reported unaudited net income of $1,547,000 ($0.31 per share) for the third quarter ended September 30, 2019 compared to $1,571,000 ($0.35 per share) for the same quarter last year. Share count has increased primarily due to the $8,500,000 common stock capital raise closed in the quarter ended March 31, 2019.
The Bank continues to experience significant growth, reporting $697 million in total assets as of September 30, 2019. Total deposits increased 20% from September 30, 2018 reaching $603 million at September 30, 2019. Non-interest bearing demand deposit accounts increased $41 million, or 25% from the same reporting period last year, reaching $208 million at September 30, 2019.
The Bank reported strong loan growth, with gross loans increasing $59 million, or 12% from September 30, 2018, reaching $548 million at September 30, 2019, with no other real estate owned and no loans 30 days or more past due. The Bank’s net interest income increased by approximately $2.1 million, or 12% for the nine months ended September 30, 2019, compared to the same reporting period in the prior year. The Bank reported an annualized net interest margin of 4.30% for the nine months ended September 30, 2019, reflecting only modest compression from the 4.47% reported for the same reporting period last year.
“We continue to invest in the expansion of the Bank and consistently report strong earnings. This is a direct result of our loan and deposit growth, expanded regional presence and the strength of our relationships throughout the Santa Barbara and San Luis Obispo Counties.”
Jeff DeVine, President and Chief Executive Officer
As of September 30, 2019, American Riviera Bank has 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 common stock is $13.74 at September 30, 2019, a 15% increase from $11.96 at September 30, 2018.
| Balance Sheets (unaudited) | |||||||
| (dollars in thousands) | |||||||
| Sep 30, | Sep 30, | One Year | |||||
| 2019 | 2018 | Change | |||||
| Assets | |||||||
| Cash & Due From Banks | $ 79,101 | $ 31,392 | 152% | ||||
| Fed Funds Sold | - | - | - | ||||
| Securities | 41,797 | 46,549 | -10% | ||||
| Loans | 547,956 | 489,401 | 12% | ||||
| Allowance For Loan Losses | (6,145) | (5,242) | 17% | ||||
| Net Loans | 541,811 | 484,159 | 12% | ||||
| Premise & Equipment | 6,812 | 5,308 | 28% | ||||
| Goodwill and Other Intangibles | 5,382 | 5,561 | -3% | ||||
| Other Assets (a) | 22,364 | 16,034 | 39% | ||||
| Total Assets | $ 697,267 | $ 589,003 | 18% | ||||
| Liabilities & Shareholders' Equity | |||||||
| Demand Deposits | $ 207,643 | $ 166,145 | 25% | ||||
| NOW Accounts | 79,509 | 86,543 | -8% | ||||
| Other Interest Bearing Deposits | 316,124 | 250,958 | 26% | ||||
| Total Deposits | 603,276 | 503,646 | 20% | ||||
| Borrowed Funds | 10,000 | 24,000 | -58% | ||||
| Other Liabilities (a) | 9,452 | 2,295 | 312% | ||||
| Total Liabilities | 622,728 | 529,941 | 18% | ||||
| Common Stock (b) | 54,889 | 46,400 | 18% | ||||
| Retained Earnings | 19,653 | 13,339 | 47% | ||||
| Other Capital | (3) | (677) | -100% | ||||
| Total Shareholders' Equity | 74,539 | 59,062 | 26% | ||||
| Total Liabilities & Shareholders' Equity | $ 697,267 | $ 589,003 | 18% | ||||
| Notes: | |||||||
| (a) Other assets and other liabilities primarily increased due to the adoption of ASU2016-02, "Leases (Topic 842)" as of January 1, 2019. As of September 30, 2019 the right of use asset totals $5.6 million and the operating lease liability is $6 million. | |||||||
| (b) Common stock increased in the first quarter 2019 due to $8.5 million common stock capital raise. | |||||||
| Balance Sheets (unaudited) | |||||||||||
| (dollars in thousands) | |||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||
| 2019 | 2019 | 2019 | 2018 | 2018 | |||||||
| Assets | |||||||||||
| Cash & Due From Banks | $ 79,101 | $ 47,640 | $ 48,835 | $ 41,271 | $ 31,392 | ||||||
| Fed Funds Sold | - | - | - | - | - | ||||||
| Securities | 41,797 | 42,961 | 44,123 | 46,010 | 46,549 | ||||||
| Loans | 547,956 | 541,869 | 520,857 | 508,397 | 489,401 | ||||||
| Allowance For Loan Losses | (6,145) | (5,883) | (5,661) | (5,542) | (5,242) | ||||||
| Net Loans | 541,811 | 535,986 | 515,196 | 502,855 | 484,159 | ||||||
| Premise & Equipment | 6,812 | 6,528 | 5,588 | 5,299 | 5,308 | ||||||
| Goodwill and Other Intangibles | 5,382 | 5,427 | 5,472 | 5,516 | 5,561 | ||||||
| Other Assets (a) | 22,364 | 23,054 | 19,524 | 15,501 | 16,034 | ||||||
| Total Assets | $ 697,267 | $ 661,596 | $ 638,738 | $ 616,452 | $ 589,003 | ||||||
| Liabilities & Shareholders' Equity | |||||||||||
| Demand Deposits | $ 207,643 | $ 186,845 | $ 187,048 | $ 169,549 | $ 166,145 | ||||||
| NOW Accounts | 79,509 | 73,782 | 76,370 | 73,652 | 86,543 | ||||||
| Other Interest Bearing Deposits | 316,124 | 304,223 | 282,874 | 270,106 | 250,958 | ||||||
| Total Deposits | 603,276 | 564,850 | 546,292 | 513,307 | 503,646 | ||||||
| Borrowed Funds | 10,000 | 15,000 | 15,000 | 40,000 | 24,000 | ||||||
| Other Liabilities (a) | 9,452 | 8,806 | 6,562 | 2,258 | 2,295 | ||||||
| Total Liabilities | 622,728 | 588,656 | 567,854 | 555,565 | 529,941 | ||||||
| Common Stock (b) | 54,889 | 54,739 | 54,513 | 46,477 | 46,400 | ||||||
| Retained Earnings | 19,653 | 18,105 | 16,600 | 14,831 | 13,339 | ||||||
| Other Capital | (3) | 96 | (229) | (421) | (677) | ||||||
| Total Shareholders' Equity | 74,539 | 72,940 | 70,884 | 60,887 | 59,062 | ||||||
| Total Liabilities & Shareholders' Equity | $ 697,267 | $ 661,596 | $ 638,738 | $ 616,452 | $ 589,003 | ||||||
| Notes: | |||||||||||
| (a) Other assets and other liabilities primarily increased due to the adoption of ASU2016-02, "Leases (Topic 842)" as of January 1, 2019. As of September 30, 2019 the right of use asset totals $5.6 million and the operating lease liability is $6 million. The San Luis Obispo branch was added for the quarter ending June 30, 2019. | |||||||||||
| (b) Common stock increased in the first quarter 2019 due to $8.5 million common stock capital raise. | |||||||||||
| Statements of Income (unaudited) | |||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||
| Quarter Ended | Nine Months Ended | ||||||||||||
| Sep 30, | Sep 30, | Sep 30, | Sep 30, | ||||||||||
| 2019 | 2018 | Change | 2019 | 2018 | Change | ||||||||
| Interest Income | |||||||||||||
| Interest and Fees on Loans | $ 7,224 | $ 6,256 | 15% | $ 20,896 | $ 17,294 | 21% | |||||||
| Net Fair Value Amortization Income | 71 | 118 | -40% | 379 | 424 | -11% | |||||||
| Interest on Securities | 264 | 266 | -1% | 778 | 702 | 11% | |||||||
| Interest on Fed Funds | 0 | 1 | -100% | 1 | 12 | -92% | |||||||
| Interest on Due From Banks | 291 | 167 | 74% | 694 | 436 | 59% | |||||||
| Total Interest Income | 7,850 | 6,808 | 15% | 22,748 | 18,868 | 21% | |||||||
| Interest Expense | |||||||||||||
| Interest Expense on Deposits | 1,065 | 622 | 71% | 2,887 | 1,214 | 138% | |||||||
| Interest Expense on Borrowings | 32 | 6 | 433% | 234 | 126 | 86% | |||||||
| Total Interest Expense | 1,097 | 628 | 75% | 3,121 | 1,340 | 133% | |||||||
| Net Interest Income | 6,753 | 6,180 | 9% | 19,627 | 17,528 | 12% | |||||||
| Provision for Loan Losses | 205 | 294 | -30% | 600 | 925 | -35% | |||||||
| Net Interest Income After Provision | 6,548 | 5,886 | 11% | 19,027 | 16,603 | 15% | |||||||
| Non-Interest Income | |||||||||||||
| Service Charges, Commissions and Fees | 523 | 397 | 32% | 1,530 | 1,242 | 23% | |||||||
| Other Non-Interest Income | 216 | 60 | 260% | 495 | 258 | 92% | |||||||
| Total Non-Interest Income | 739 | 457 | 62% | 2,025 | 1,500 | 35% | |||||||
| Non-Interest Expense | |||||||||||||
| Salaries and Employee Benefits | 3,137 | 2,429 | 29% | 8,710 | 7,061 | 23% | |||||||
| Occupancy and Equipment | 653 | 483 | 35% | 1,693 | 1,304 | 30% | |||||||
| Other Non-Interest Expense | 1,303 | 1,210 | 8% | 3,982 | 3,585 | 11% | |||||||
| Total Non-Interest Expense | 5,093 | 4,122 | 24% | 14,385 | 11,950 | 20% | |||||||
| Net Income Before Provision for Taxes | 2,194 | 2,221 | -1% | 6,667 | 6,153 | 8% | |||||||
| Provision for Taxes | 647 | 650 | 0% | 1,846 | 1,755 | 5% | |||||||
| Net Income | $ 1,547 | $ 1,571 | -2% | $ 4,821 | $ 4,398 | 10% | |||||||
| Shares (end of period) | 5,031,788 | 4,459,269 | 13% | 5,031,788 | 4,459,269 | 13% | |||||||
| Earnings Per Share - Basic | $ 0.31 | $ 0.35 | -11% | $ 0.96 | $ 0.99 | -3% | |||||||
| Return on Average Assets | 0.89% | 1.03% | -14% | 1.00% | 1.06% | -6% | |||||||
| Return on Average Equity | 8.09% | 10.39% | -22% | 9.36% | 10.38% | -10% | |||||||
| Net Interest Margin | 4.23% | 4.39% | -4% | 4.30% | 4.47% | -4% | |||||||
| Five Quarter Statements of Income (unaudited) | |||||||||||
| (dollars in thousands) | |||||||||||
| Three Months Ended | |||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||
| 2019 | 2019 | 2019 | 2018 | 2018 | |||||||
| Interest Income | |||||||||||
| Interest and Fees on Loans | $ 7,224 | $ 6,992 | $ 6,680 | $ 6,533 | $ 6,256 | ||||||
| Net Fair Value Amortization Income | 71 | 86 | 222 | 423 | 118 | ||||||
| Interest on Securities | 264 | 230 | 284 | 297 | 266 | ||||||
| Interest on Fed Funds | - | - | 1 | - | 1 | ||||||
| Interest on Due From Banks | 291 | 205 | 198 | 165 | 167 | ||||||
| Total Interest Income | 7,850 | 7,513 | 7,385 | 7,418 | 6,808 | ||||||
| Interest Expense | |||||||||||
| Interest Expense on Deposits | 1,065 | 998 | 825 | 681 | 622 | ||||||
| Interest Expense on Borrowings | 32 | 60 | 141 | 73 | 6 | ||||||
| Total Interest Expense | 1,097 | 1,058 | 966 | 754 | 628 | ||||||
| Net Interest Income | 6,753 | 6,455 | 6,418 | 6,664 | 6,180 | ||||||
| Provision for Loan Losses | 205 | 220 | 175 | 369 | 294 | ||||||
| Net Interest Income After Provision | 6,548 | 6,235 | 6,244 | 6,295 | 5,886 | ||||||
| Non-Interest Income | |||||||||||
| Service Charges, Commissions and Fees | 523 | 580 | 427 | 289 | 397 | ||||||
| Other Non-Interest Income (a) | 216 | 113 | 166 | (53) | 60 | ||||||
| Total Non-Interest Income | 739 | 693 | 593 | 236 | 457 | ||||||
| Non-Interest Expense | |||||||||||
| Salaries and Employee Benefits | 3,137 | 2,881 | 2,692 | 2,633 | 2,429 | ||||||
| Occupancy and Equipment | 653 | 546 | 494 | 503 | 483 | ||||||
| Other Non-Interest Expense | 1,303 | 1,366 | 1,313 | 1,212 | 1,210 | ||||||
| Total Non-Interest Expense | 5,093 | 4,793 | 4,499 | 4,348 | 4,122 | ||||||
| Net Income Before Provision for Taxes | 2,194 | 2,135 | 2,338 | 2,183 | 2,221 | ||||||
| Provision for Taxes | 647 | 629 | 570 | 691 | 650 | ||||||
| Net Income | $ 1,547 | $ 1,506 | $ 1,768 | $ 1,492 | $ 1,571 | ||||||
| Shares (end of period) | 5,031,788 | 5,028,906 | 5,020,829 | 4,461,068 | 4,459,269 | ||||||
| Earnings Per Share - Basic | $ 0.31 | $ 0.30 | $ 0.35 | $ 0.33 | $ 0.35 | ||||||
| Notes: | |||||||||||
| (a) The Bank conducted a Bank Owned Life Insurance carrier exchange that cost $170k in other non-interest income during the quarter ended December 31, 2018 . | |||||||||||
| 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, | |||||||
| 2019 | 2019 | 2019 | 2018 | 2018 | |||||||
| Income and performance ratios: | |||||||||||
| Net Income | $ 1,547 | $ 1,506 | $ 1,768 | $ 1,492 | $ 1,571 | ||||||
| Eamings per share - basic | 0.31 | 0.30 | 0.35 | 0.33 | 0.35 | ||||||
| Retum on average assets | 0.89% | 0.95% | 1.19% | 0.95% | 1.03% | ||||||
| Return on average equity | 8.09% | 8.46% | 11.90% | 9.60% | 10.39% | ||||||
| Net interest margin | 4.23% | 4.27% | 4.42% | 4.61% | 4.39% | ||||||
| Efficiency ratio | 68.46% | 66.90% | 63.40% | 63.45% | 62.55% | ||||||
| Asset quality: | |||||||||||
| Allowance for loan and lease losses | $ 6,145 | $ 5,883 | $ 5,661 | $ 5,542 | $ 5,242 | ||||||
| Nonperforming assets | 276 | 281 | 292 | 349 | 359 | ||||||
| Allowance for loan and lease losses / total loans and leases | 1.12% | 1.09% | 1.09% | 1.09% | 1.06% | ||||||
| Net charge-offs / average loans and leases (annualized) | 0.00% | 0.02% | 0.04% | 0.00% | 0.00% | ||||||
| Texas ratio | 0.37% | 0.38% | 0.41% | 0.57% | 0.61% | ||||||
| Other ratios: | |||||||||||
| Tier 1 risk-based capital (a) | 11.56% | 11.56% | 11.76% | 10.30% | 10.35% | ||||||
| Total risk-based capital (a) | 12.62% | 12.61% | 12.81% | 11.36% | 11.38% | ||||||
| Common equity tier 1 risk-based capital (a) | 11.56% | 11.56% | 11.76% | 10.30% | 10.35% | ||||||
| Tier 1 leverage ratio (a) | 10.32% | 10.48% | 10.55% | 9.21% | 9.13% | ||||||
| Equity and share related: | |||||||||||
| Common equity | $ 74,539 | $ 72,940 | $ 70,884 | $ 60,887 | $ 59,062 | ||||||
| Book value per share | 14.81 | 14.49 | 14.16 | 13.74 | 13.40 | ||||||
| Tangible book value per share | 13.74 | 13.41 | 13.07 | 12.51 | 11.96 | ||||||
| Stock closing price per share | 17.85 | 18.35 | 18.25 | 17.85 | 19.20 | ||||||
| Number of shares issued and outstanding | 5,032 | 5,029 | 5,021 | 4,461 | 4,459 | ||||||
| Notes: | |||||||||||
| (a) Presented as projected for most recent quarter and actual for the remaining periods. | |||||||||||
