American Riviera Bank Reports Record Quarterly Earnings

News item October 23, 2018 by Michelle Martinich

Santa Barbara, California (October 23, 2018) – 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.

 “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.”

Jeff DeVine, President and Chief Executive Officer

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, a 8% increase from $11.12 at September 30, 2017.

Balance Sheets (unaudited)
(dollars in thousands)
			Sep 30,		Sep 30,		One Year
			2018		2017		Change
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 Ended						9 Months Ended
			Sep 30,		Sep 30,				Sep 30,		Sep 30,
			2018		2017		Change		2018		2017		Change
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%

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