American Riviera Bank Reports Strong Growth and Expansion

News item July 19, 2019 by Michelle Martinich

Santa Barbara, California (July 19, 2019) – American Riviera Bank (OTC Markets: ARBV) announced today unaudited net income of $3,274,000 ($0.65 per share) for the six months ended June 30, 2019. This represents a 16% increase in net income from the $2,827,000 ($0.64 per share) for the same reporting period in the prior year.

The Bank reported an annualized return on average assets of 1.07% and return on average equity of 10.06%. The Bank reported unaudited net income of $1,506,000 ($0.30 per share) for the second quarter ended June 30, 2019 compared to $1,475,000 ($0.33 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 first quarter ended March 31, 2019.

The Bank continues to experience significant growth, reporting $662 million in total assets as of June 30, 2019. Total deposits, excluding wholesale deposits, increased 16% from June 30, 2018. The Bank had $5 million of wholesale deposits at June 30, 2019, down from the $49 million at June 30, 2018. Over the past twelve months the Bank has replaced these wholesale deposits with local customer deposits. Non-interest bearing demand deposit accounts increased $18 million, or 11% from the same reporting period last year, reaching $187 million at June 30, 2019.

The Bank reported strong loan growth, with gross loans increasing $64 million, or 13% from June 30, 2018, reaching $542 million at June 30, 2019, with no other real estate owned and no loans 30 or more days past due. The Bank’s net interest income increased by approximately $1.5 million, or 13% for the six months ended June 30, 2019, compared to the same reporting period in the prior year. The Bank reported an annualized net interest margin of 4.34% for the six months ended June 30, 2019, reflecting only modest compression from the 4.52% reported for the same reporting period last year.

“We continue to invest in our expansion and are pleased to announce the opening of our full service branch in the City of San Luis Obispo which will allow us to better serve the needs of businesses and consumers in San Luis Obispo County.  We look forward to welcoming new clients affected by mega-mergers who will benefit from our high level of service built on relationships with local decision makers.”  

Jeff DeVine, President and Chief Executive Officer

As of June 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 $13.41 at June 30, 2019, a 14% increase from $11.80 at June 30, 2018.

Balance Sheets (unaudited)
(dollars in thousands)
			Jun 30,		Jun 30,		One Year
			2019		2018		Change
Assets
	Cash & Due From Banks		$          47,640		$            42,796		11%
	Fed Funds Sold		-		-		-
	Securities		42,961		48,274		-11%
	Loans		541,869		477,837		13%
	Allowance For Loan Losses		(5,883)		(4,895)		20%
	Net Loans		535,986		472,942		13%
	Fixed Assets		6,528		5,294		23%
	Goodwill and Other Intangibles		5,427		5,606		-3%
	Other Assets		23,054		16,320		41%
Total Assets			661,596		591,232		12%
Liabilities & Shareholders' Equity
	Demand Deposits		186,845		168,609		11%
	NOW Accounts		73,782		86,543		-15%
	Other Interest Bearing Deposits		304,223		276,460		10%
	Total Deposits		564,850		531,612		6%
	Borrowed Funds		15,000		-		N/M
	Other Liabilities		8,806		2,134		313%
	Total Liabilities		588,656		533,746		10%
	Common Stock		54,739		46,212		18%
	Retained Earnings		18,105		11,768		54%
	Other Capital		96		(494)		N/M
	Total Shareholders' Equity		72,940		57,486		27%
Total Liabilities & Shareholders' Equity			$       661,596		$         591,232		12%
	Book Value Per Share		$            14.49		$              13.06		11%
	Tangible Book Value Per Share		$            13.41		$              11.80		14%

Statements of Income (unaudited)
(dollars in thousands)
			Quarter Ended						6 Months Ended
			Jun 30,		Jun 30,				Jun 30,		Jun 30,
			2019		2018		Change		2019		2018		Change
Interest Income
	Interest and Fees on Loans		$        6,992		$        5,769		21%		$        13,672		$        11,037		24%
	Net Fair Value Amortization Income		86		176		-51%		308		306		1%
	Interest on Securities		230		253		-9%		514		437		18%
	Interest on Fed Funds		0		1		-100%		1		11		-91%
	Interest on Due From Banks		205		122		68%		403		269		50%
	Total Interest Income		7,513		6,321		19%		14,898		12,060		24%
Interest Expense
	Interest Expense on Deposits		998		326		206%		1,822		592		208%
	Interest Expense on Borrowings		60		98		-39%		202		120		68%
	Total Interest Expense		1,058		424		150%		2,024		712		184%
Net Interest Income			6,455		5,897		9%		12,874		11,348		13%
	Provision for Loan Losses		220		363		-39%		395		631		-37%
Net Interest Income After Provision			6,235		5,534		13%		12,479		10,717		16%
Non-Interest Income
	Service Charges, Commissions and Fees		580		409		42%		1,007		845		19%
	Other Non-Interest Income		113		84		35%		279		198		41%
	Total Non-Interest Income		693		493		41%		1,286		1,043		23%
Non-Interest Expense
	Salaries and Employee Benefits		2,881		2,278		26%		5,573		4,631		20%
	Occupancy and Equipment		546		429		27%		1,040		821		27%
	Other Non-Interest Expense		1,366		1,227		11%		2,679		2,376		13%
	Total Non-Interest Expense		4,793		3,934		22%		9,292		7,828		19%
Net Income Before Provision for Taxes			2,135		2,093		2%		4,473		3,932		14%
Provision for Taxes			629		618		2%		1,199		1,105		9%
Net Income			$        1,506		$        1,475		2%		$          3,274		$          2,827		16%
	Shares (end of period)		5,028,906		4,440,082		13%		5,028,906		4,440,082		13%
	Earnings Per Share - Basic		$          0.30		$          0.33		-9%		$            0.65		$            0.64		2%
	Return on Average Assets (annualized)		0.95%		1.07%				1.07%		1.08%
	Return on Average Equity (annualized)		8.46%		10.47%				10.06%		10.37%
	Net Interest Margin (annualized)		4.27%		4.54%				4.34%		4.52%

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