American Riviera Bank Reports over $600 Million in Assets

News item January 28, 2019 by Michelle Martinich

Santa Barbara, California – American Riviera Bank (OTC Markets: ARBV) announced today record unaudited net income of $5,890,000 ($1.32 per share) for the year ended December 31, 2018. This represents a 67% increase in net income from the $3,536,000 ($0.80 per share) for the same reporting period in the prior year.

The annualized return on average assets of 1.03% and return on average equity of 10.19% represent an increase from the 0.73% and 6.61%, respectively, achieved for the same reporting period in the prior year. For the fourth quarter ended December 31, 2018, the Bank reported unaudited net income of $1,492,000 ($0.33 per share) compared to $35,000 ($0.01 per share) for the fourth quarter last year.

Prior year results were negatively impacted by a non-recurring $1,119,000 revaluation of deferred tax assets in the fourth quarter ended December 31, 2017 related to enacted federal tax reform. In 2018 the Bank benefitted from the lower federal income tax rate associated with such reform, and reinvested by hiring 18 new employees and continued our expansion into San Luis Obispo County.

The Bank’s continued organic growth in Santa Barbara County and the opening of our full-service Paso Robles branch resulted in a 20% increase in total assets, with $616 million in total assets reported at December 31, 2018. Asset growth was driven by strong loan demand, with total loans increasing $94 million or 23% from December 31, 2017, reaching $508 million at December 31, 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 4.51% for the year ended December 31, 2018.

As of December 31, 2018, the Bank reported $513 million in total deposits. This represents a $65 million or 14% increase from the same reporting period in the prior year. Checking accounts, comprised of non-interest bearing demand deposits and interest bearing NOW accounts, increased by $17 million or 8% from the same reporting period last year.

"2018 was an exciting year of growth for American Riviera Bank with assets increasing just over $100 million. Our bankers are creating lasting relationships with clients in our Central Coast communities by serving their deposit and credit needs. As a result, the Bank continues to grow our client base, asset size and earnings. We are looking forward to further expansion in 2019 with a full-service branch in the City of San Luis Obispo.”

Jeff DeVine, President and Chief Executive Officer

As of December 31, 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 $12.51 at December 31, 2018, a 12% increase from $11.16 at December 31, 2017.

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 31,		Dec 31,		One Year
			2018		2017		Change
Assets
	Cash & Due From Banks		$          41,271		$       42,999		-4%
	Fed Funds Sold		-		4,040		-100%
	Securities		46,010		33,534		37%
	Loans		508,397		414,165		23%
	Allowance For Loan Losses		(5,542)		(4,260)		30%
	Net Loans		502,855		409,905		23%
	Fixed Assets		5,299		3,903		36%
	Goodwill and Other Intangibles		5,516		5,695		-3%
	Other Assets		15,501		15,046		3%
Total Assets			616,452		515,122		20%
Liabilities & Shareholders' Equity
	Demand Deposits		169,549		148,332		14%
	NOW Accounts		73,652		77,483		-5%
	Other Interest Bearing Deposits		270,106		222,941		21%
	Total Deposits		513,307		448,756		14%
	Borrowed Funds		40,000		10,000		300%
	Other Liabilities		2,258		1,681		34%
	Total Liabilities		555,565		460,437		21%
	Common Stock		46,477		45,895		1%
	Retained Earnings		14,831		8,915		66%
	Other Capital		(421)		(125)		-237%
	Total Shareholders' Equity		60,887		54,685		11%
Total Liabilities & Shareholders' Equity			$       616,452		$     515,122		20%
	Book Value Per Share		$            13.74		$          12.45		10%
	Tangible Book Value Per Share		$            12.51		$          11.16		12%

Statements of Income (unaudited)
(dollars in thousands)
			Quarter Ended						12 Months Ended
			Dec 31,		Dec 31,				Dec 31,		Dec 31,
			2018		2017		Change		2018		2017		Change
Interest Income
	Interest and Fees on Loans		$           6,533		$           5,272		24%		$         23,827		$           20,235		18%
	Net Fair Value Amortization Income		423		96		341%		847		916		-8%
	Interest on Securities		297		120		148%		999		265		277%
	Interest on Fed Funds		0		21		-100%		12		100		-88%
	Interest on Due From Banks		165		132		25%		601		450		34%
	Total Interest Income		7,418		5,641		32%		26,286		21,966		20%
Interest Expense
	Interest Expense on Deposits		681		276		147%		1,895		1,014		87%
	Interest Expense on Borrowings		73		1		7200%		199		25		695%
	Total Interest Expense		754		277		172%		2,094		1,039		101%
Net Interest Income			6,664		5,364		24%		24,192		20,927		16%
	Provision for Loan Losses		369		207		78%		1,294		914		42%
Net Interest Income After Provision			6,295		5,157		22%		22,898		20,013		14%
Non-Interest Income
	Service Charges, Commissions and Fees		289		231		25%		1,531		1,094		40%
	Other Non-Interest Income		(53)		76		-170%		205		316		-35%
	Total Non-Interest Income		236		307		-23%		1,736		1,410		23%
Non-Interest Expense
	Salaries and Employee Benefits		2,633		2,186		20%		9,694		8,066		20%
	Occupancy and Equipment		503		397		27%		1,806		1,553		16%
	Other Non-Interest Expense		1,212		1,005		21%		4,797		4,109		17%
	Total Non-Interest Expense		4,348		3,588		21%		16,297		13,728		19%
Net Income Before Provision for Taxes			2,183		1,876		16%		8,337		7,695		8%
Provision for Taxes			691		722		-4%		2,447		3,040		-19%
Non Recurring Tax Provision			-		1,119		100%		-		1,119		100%
Net Income			$           1,492		$                 35		4223%		$           5,890		$             3,536		67%
	Shares (end of period)		4,461,068		4,402,841		1%		4,461,068		4,402,841		1%
	Earnings Per Share - Basic		$             0.33		$             0.01		3259%		$             1.32		$               0.80		65%
	Return on Average Assets (annualized)		0.95%		0.00%				1.03%		0.73%
	Return on Average Equity (annualized)		9.60%		0.00%				10.19%		6.61%
	Net Interest Margin (annualized)		4.61%		4.42%				4.51%		4.61%

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