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American Riviera Bank Reports Growth and Earnings

SANTA BARBARA, Calif.–(BUSINESS WIRE)–#BankonBetter–American Riviera Bank (OTC Markets: ARBV) announced today unaudited net income of $6,393,000 ($1.27 per share) for the year ended December 31, 2019. This represents a 9% increase in net income from the $5,890,000 ($1.32 per share) for the same reporting period in the prior year. The Bank reported an annualized return on average assets of 0.97% and return on average equity of 9.01%. The Bank reported unaudited net income of $1,572,000 ($0.31 per share) for the fourth quarter ended December 31, 2019 compared to $1,492,000 ($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 quarter ended March 31, 2019.

The Bank continues to experience significant growth, reporting $719 million in total assets as of December 31, 2019, representing a $102 million, or 17% increase from December 31, 2018. Total deposits increased 21% from December 31, 2018 reaching $621 million at December 31, 2019. Non-interest bearing demand deposit accounts increased $47 million, or 28% from the same reporting period in the prior year, reaching $217 million at December 31, 2019.

The Bank reported strong loan growth, with gross loans increasing $70 million, or 14% from December 31, 2018, reaching $578 million at December 31, 2019, with 6% or $31 million of growth in the fourth quarter of 2019. At December 31, 2019, the Bank had no other real estate owned and no loans 30 days or more past due. The Bank’s net interest income increased by approximately $2.3 million, or 9% for the year ended December 31, 2019, compared to the same reporting period in the prior year. The Bank’s non-interest income grew by $1.0 million, or 58% for the year ended December 31, 2019, compared to the same reporting period in the prior year. The increase in non-interest income came from diversified sources, including sales and servicing of SBA loans, mortgage broker fees, commercial loan swap fees and Farmer Mac lending.

Jeff DeVine, President and Chief Executive Officer, stated, “2019 was an impactful year for the Bank by significantly growing loans, deposits and increasing earnings. During the year the Bank raised capital, opened a full service branch in San Luis Obispo and added a Chief Technology Officer and Chief Compliance & Risk Officer to the executive team in order to support our growth and expand our relationships throughout the Central Coast.”

As of December 31, 2019, American Riviera Bank has a strong capital position with a Tier 1 Capital Ratio of 11%; well above the regulatory guideline of 8% for well capitalized institutions. The tangible book value per share of American Riviera Bank common stock is $14.09 at December 31, 2019, a 13% increase from $12.51 at December 31, 2018.

Company Profile

American Riviera Bank is a full-service community bank focused on serving the lending and deposit needs of businesses and consumers on the Central Coast of California. The state-chartered bank opened for business on July 18, 2006, with the support of local shareholders. Full-service branches are located in Santa Barbara, Montecito, Goleta, San Luis Obispo and Paso Robles. The bank provides commercial, residential mortgage, construction and Small Business Administration lending services as well as convenient online and mobile technology. For nine consecutive years the Bank has been recognized for strong financial performance by the Findley Reports, and received the highest “Super Premier” rating from Findley for 2018 and 2017. As of September 30, 2019, the Bank was rated five stars by BauerFinancial.

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

2019

 

2018

 

Change

Assets
Cash & Due From Banks

$ 66,472

$ 41,271

61%

Fed Funds Sold

Securities

43,403

46,009

-6%

 
Loans

578,458

508,397

14%

Allowance For Loan Losses

(6,366)

(5,542)

15%

Net Loans

572,092

502,855

14%

 
Premise & Equipment

6,878

5,299

30%

Goodwill and Other Intangibles

5,337

5,516

-3%

Other Assets (a)

24,753

15,590

59%

Total Assets

$ 718,935

$ 616,540

17%

 
 
Liabilities & Shareholders’ Equity
Demand Deposits

$ 216,671

$ 169,549

28%

NOW Accounts

87,906

73,652

19%

Other Interest Bearing Deposits

316,586

270,106

17%

Total Deposits

621,163

513,307

21%

 
Borrowed Funds

10,000

40,000

-75%

Other Liabilities (a)

11,629

2,346

396%

Total Liabilities

642,792

555,653

16%

 
Common Stock (b)

55,034

46,477

18%

Retained Earnings

21,224

14,831

43%

Other Capital

(115)

(421)

-73%

Total Shareholders’ Equity

76,143

60,887

25%

 
Total Liabilities & Shareholders’ Equity

$ 718,935

$ 616,540

17%

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 December 31, 2019 the right-of-use asset totals $7.7 million and the operating lease liability is $8 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)

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

2019

 

2019

 

2019

 

2019

 

2018

Assets
Cash & Due From Banks

$ 66,472

$ 79,101

$ 47,640

$ 48,835

$ 41,271

Fed Funds Sold

Securities

43,403

41,797

42,961

44,123

46,009

 
Loans

578,458

547,956

541,869

520,857

508,397

Allowance For Loan Losses

(6,366)

(6,145)

(5,883)

(5,661)

(5,542)

Net Loans

572,092

541,811

535,986

515,196

502,855

 
Premise & Equipment

6,878

6,812

6,528

5,588

5,299

Goodwill and Other Intangibles

5,337

5,382

5,427

5,472

5,516

Other Assets (a)

24,753

22,364

23,054

19,524

15,590

Total Assets

$ 718,935

$ 697,267

$ 661,596

$ 638,738

$ 616,540

 
 
Liabilities & Shareholders’ Equity
Demand Deposits

$ 216,671

$ 207,643

$ 186,845

$ 187,048

$ 169,549

NOW Accounts

87,906

79,509

73,782

76,370

73,652

Other Interest Bearing Deposits

316,586

316,124

304,223

282,874

270,106

Total Deposits

621,163

603,276

564,850

546,292

513,307

 
Borrowed Funds

10,000

10,000

15,000

15,000

40,000

Other Liabilities (a)

11,629

9,452

8,806

6,562

2,346

Total Liabilities

642,792

622,728

588,656

567,854

555,653

 
Common Stock (b)

55,034

54,889

54,739

54,513

46,477

Retained Earnings

21,224

19,653

18,105

16,600

14,831

Other Capital

(115)

(3)

96

(229)

(421)

Total Shareholders’ Equity

76,143

74,539

72,940

70,884

60,887

 
Total Liabilities & Shareholders’ Equity

$ 718,935

$ 697,267

$ 661,596

$ 638,738

$ 616,540

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 December 31, 2019 the right-of-use asset totals $7.7 million and the operating lease liability is $8 million. The San Luis Obispo branch was added for the quarter ending June 30, 2019 and the Santa Barbara Branch increased as of December 31, 2019 with the expectation to extend the lease term.
(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

 

Twelve Months Ended

Dec 31,

 

Dec 31,

 

 

 

Dec 31,

 

Dec 31,

 

 

2019

 

2018

 

Change

 

2019

 

2018

 

Change

Interest Income
Interest and Fees on Loans

$ 7,387

$ 6,533

13%

$ 28,283

$ 23,827

19%

Net Fair Value Amortization Income

62

423

-85%

442

847

-48%

Interest on Securities

247

297

-17%

1,025

999

3%

Interest on Fed Funds

0

0

0%

1

12

-92%

Interest on Due From Banks

290

165

76%

984

601

64%

Total Interest Income

7,986

7,418

8%

30,735

26,286

17%

 
Interest Expense
Interest Expense on Deposits

1,085

681

59%

3,973

1,894

110%

Interest Expense on Borrowings

43

73

-41%

276

199

39%

Total Interest Expense

1,128

754

50%

4,249

2,093

103%

 
Net Interest Income

6,858

6,664

3%

26,486

24,193

9%

Provision for Loan Losses

205

369

-44%

806

1,294

-38%

Net Interest Income After Provision

6,653

6,295

6%

25,680

22,899

12%

 
Non-Interest Income
Service Charges, Commissions and Fees

566

289

96%

2,096

1,567

34%

Other Non-Interest Income

199

(53)

475%

695

205

239%

Total Non-Interest Income

765

236

224%

2,791

1,772

58%

 
Non-Interest Expense
Salaries and Employee Benefits

3,212

2,633

22%

11,922

9,694

23%

Occupancy and Equipment

665

503

32%

2,358

1,806

31%

Other Non-Interest Expense

1,309

1,212

8%

5,292

4,835

9%

Total Non-Interest Expense

5,186

4,348

19%

19,572

16,335

20%

 
Net Income Before Provision for Taxes

2,232

2,183

2%

8,899

8,336

7%

Provision for Taxes

660

691

-4%

2,506

2,446

2%

Net Income

$ 1,572

$ 1,492

5%

$ 6,393

$ 5,890

9%

 
Shares (end of period)

5,033,348

4,461,068

13%

5,033,348

4,461,068

13%

Earnings Per Share – Basic

$ 0.31

$ 0.33

-6%

$ 1.27

$ 1.32

-4%

Return on Average Assets

0.85%

0.95%

-11%

0.97%

1.03%

-6%

Return on Average Equity

8.04%

9.60%

-16%

9.01%

10.19%

-12%

Net Interest Margin

4.06%

4.61%

-12%

4.24%

4.51%

-6%

Five Quarter Statements of Income (unaudited)
(dollars in thousands)

Three Months Ended

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

2019

 

2019

 

2019

 

2019

 

2018

Interest Income
Interest and Fees on Loans

$ 7,387

$ 7,224

$ 6,992

$ 6,680

$ 6,533

Net Fair Value Amortization Income

62

71

86

222

423

Interest on Securities

247

264

230

284

297

Interest on Fed Funds

1

Interest on Due From Banks

290

291

205

198

165

Total Interest Income

7,986

7,850

7,513

7,385

7,418

 
Interest Expense
Interest Expense on Deposits

1,085

1,065

998

825

681

Interest Expense on Borrowings

43

32

60

141

73

Total Interest Expense

1,128

1,097

1,058

966

754

 
Net Interest Income

6,858

6,753

6,455

6,418

6,664

Provision for Loan Losses

205

205

220

175

369

Net Interest Income After Provision

6,653

6,548

6,235

6,244

6,295

 
Non-Interest Income
Service Charges, Commissions and Fees

566

523

580

427

289

Other Non-Interest Income (a)

199

216

113

166

(53)

Total Non-Interest Income

765

739

693

593

236

 
Non-Interest Expense
Salaries and Employee Benefits

3,212

3,137

2,881

2,692

2,633

Occupancy and Equipment

665

653

546

494

503

Other Non-Interest Expense

1,309

1,303

1,366

1,313

1,212

Total Non-Interest Expense

5,186

5,093

4,793

4,499

4,348

 
Net Income Before Provision for Taxes

2,232

2,194

2,135

2,338

2,183

Provision for Taxes

660

647

629

570

691

Net Income

$ 1,572

$ 1,547

$ 1,506

$ 1,768

$ 1,492

 
Shares (end of period)

5,033,348

5,031,788

5,028,906

5,020,829

4,461,068

Earnings Per Share – Basic

$ 0.31

$ 0.31

$ 0.30

$ 0.35

$ 0.33

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. This loss was reclassified to non-interest expense in the annualized income statement.
Selected Financial Highlights (unaudited)
(dollars in thousands, except per share data)

At or for the Three Months Ended

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

2019

 

2019

 

2019

 

2019

 

2018

Income and performance ratios:
Net Income

$ 1,572

$ 1,547

$ 1,506

$ 1,768

$ 1,492

Earnings per share – basic

0.31

0.31

0.30

0.35

0.33

Return on average assets

0.85%

0.89%

0.95%

1.19%

0.95%

Return on average equity

8.04%

8.09%

8.46%

11.90%

9.60%

Net interest margin

4.06%

4.23%

4.27%

4.42%

4.61%

Efficiency ratio

68.49%

68.46%

66.90%

63.40%

63.45%

 
Asset quality:
Allowance for loan and lease losses

$ 6,366

$ 6,145

$ 5,883

$ 5,661

$ 5,542

Nonperforming assets

284

276

281

292

349

Allowance for loan and lease losses / total loans and leases

1.10%

1.12%

1.09%

1.09%

1.09%

Net charge-offs / average loans and leases (annualized)

-0.01%

-0.04%

0.00%

0.04%

0.02%

Texas ratio

0.37%

0.37%

0.38%

0.41%

0.57%

 
Other ratios:
Tier 1 risk-based capital (a)

11.35%

11.56%

11.56%

11.76%

10.30%

Total risk-based capital (a)

12.40%

12.62%

12.61%

12.81%

11.36%

Common equity tier 1 risk-based capital (a)

11.35%

11.56%

11.56%

11.76%

10.30%

Tier 1 leverage ratio (a)

10.04%

10.32%

10.48%

10.55%

9.21%

 
Equity and share related:
Common equity

$ 76,143

74,539

$ 72,940

$ 70,884

$ 60,887

Book value per share

15.15

14.81

14.49

14.16

13.74

Tangible book value per share

14.09

13.74

13.41

13.07

12.51

Stock closing price per share

19.80

17.85

18.35

18.25

17.85

Number of shares issued and outstanding

5,033

5,032

5,029

5,021

4,461

Notes:
(a) Presented as projected for most recent quarter and actual for the remaining periods.

 

Contacts

American Riviera Bank

www.americanrivierabank.com
805-965-5942

Michelle Martinich

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