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American Riviera Bank reports Earnings and Growth

Santa Barbara, California (October 26, 2020) – American Riviera Bank (OTC Markets: ARBV) announced today unaudited net income of $5,000,000 ($0.99 per share) for the nine months ended September 30, 2020. This represents a 4% increase in net income from the $4,821,000 ($0.96 per share) for the same reporting period in the prior year. The Bank reported record unaudited net income of $2,264,000 ($0.45 per share) for the third quarter ended September 30, 2020. This represents a 46% increase from the $1,547,000 ($0.31 per share) for the same quarter last year.

 

Jeff DeVine, President and Chief Executive Officer stated, “Despite significant uncertainty in the economy, the Bank generated record earnings in the third quarter, reflecting the diversity of our business model and growing market share position. Thanks to the hard work of our employees and our solid financial footing, we have been able to serve as economic first responders to our clients and Central Coast communities impacted by the COVID-19 pandemic.”

The Bank has experienced a significant decrease in temporary loan payment deferrals for clients negatively affected by the COVID-19 pandemic. Total loans on deferral at September 30, 2020 were approximately $18 million, representing 3% of total loans excluding SBA PPP, and have notably fallen from the $108 million reported at June 30, 2020. Approximately $5 million of such deferrals are to borrowers wishing to conserve cash for the economic uncertainty, and who have asked for the principal portion of their payments to be deferred while continuing to pay interest. The remaining $13 million are full deferrals of both principal and interest on loans secured by commercial real estate with significant equity cushion (see detail on Loan Deferrals exhibit). The sizeable increase in loan loss provision year-to-date was primarily driven by qualitative factors in our loan loss methodology related to COVID-19 pandemic economic uncertainty, and not by actual delinquencies or defaults. At September 30, 2020, the Bank had no other real estate owned and no loans 90 days or more past due. 

The Bank has experienced tremendous growth in new and existing relationships, reporting $930 million in total assets as of September 30, 2020, which represents a $233 million or 33% increase from September 30, 2019. Total loans including SBA PPP increased 32% from September 30, 2019, reaching $722 million at September 30, 2020. Total loans excluding SBA PPP increased $57 million or 10% from September 30, 2019, reaching $605 million at September 30, 2020. Total deposits increased 37% from September 30, 2019, reaching $829 million at September 30, 2020. Non-interest bearing demand deposit accounts increased $123 million or 59% from the same reporting period in the prior year. Interest bearing demand deposit accounts increased $31 million or 39% from the same reporting period in the prior year.

As of September 30, 2020, American Riviera Bank was highly liquid with $179 million in cash and available-for-sale securities, and well capitalized 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 was $15.11 at September 30, 2020.

American Riviera Bank
www.americanrivierabank.com

805-965-5942

Michelle Martinich

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)            
      Sep 30,   Sep 30,   One Year
      2020   2019   Change
Assets            
  Cash & Due From Banks    $               105,157    $                  79,101   33%
  Securities                        73,886                         41,797   77%
               
  Loans (excluding PPP)                     604,728                      547,956   10%
  PPP Loans                     117,361                                  -     n/a
  Allowance For Loan Losses                        (8,040)                         (6,145)   31%
  Net Loans                     714,049                      541,811   32%
               
  Premise & Equipment                          6,634                           6,812   -3%
  Goodwill and Other Intangibles                          5,203                           5,382   -3%
  Other Assets                         25,287                         22,364   13%
Total Assets    $               930,216    $                697,267   33%
               
               
Liabilities & Shareholders' Equity            
  Demand Deposits    $               331,035    $                207,643   59%
  NOW Accounts                     110,476                         79,509   39%
  Other Interest Bearing Deposits                     387,293                      316,124   23%
  Total Deposits                     828,804                      603,276   37%
               
  Borrowed Funds                        10,000                         10,000   0%
  Other Liabilities                           9,311                           9,452   -1%
  Total Liabilities                     848,115                      622,728   36%
               
  Common Stock                         55,571                         54,889   1%
  Retained Earnings                        26,224                         19,653   33%
  Other Capital                              306                                (3)   n/a
  Total Shareholders' Equity                        82,101                         74,539   10%
               
Total Liabilities & Shareholders' Equity    $               930,216    $                697,267   33%
               

 

Balance Sheets (unaudited)                    
(dollars in thousands)                    
      September, 30   June, 30   March 31,   December 31,   September 30,
      2020   2020   2020   2019   2019
Assets                    
  Cash & Due From Banks    $       105,157    $      84,722    $          59,793    $          66,472    $          79,101
  Securities                73,886                57,099                50,518                43,403                41,797
                       
  Loans (excluding PPP)              604,728              615,367              603,631              578,458              547,956
  PPP Loans              117,361              116,531                         -                           -                           -  
  Allowance For Loan Losses                (8,040)                (7,890)                (7,171)                (6,366)                (6,145)
  Net Loans              714,049              724,008              596,460              572,092              541,811
                       
  Premise & Equipment                  6,634                  6,731                  6,832                  6,878                  6,812
  Goodwill and Other Intangibles                  5,203                  5,248                  5,293                  5,337                  5,382
  Other Assets                 25,287                24,846                24,514                24,753                22,364
Total Assets    $       930,216    $       902,654    $       743,410    $       718,935    $       697,267
                       
                       
Liabilities & Shareholders' Equity                    
  Demand Deposits    $       331,035    $       328,748    $       219,331    $       216,671    $       207,643
  NOW Accounts              110,476              121,741              117,453                87,906                79,509
  Other Interest Bearing Deposits              387,293              342,668              308,666              316,586              316,124
  Total Deposits              828,804              793,157              645,450              621,163              603,276
                       
  Borrowed Funds                10,000                20,000                10,000                10,000                10,000
  Other Liabilities                   9,311                  9,772                10,723                11,629                  9,452
  Total Liabilities              848,115              822,929              666,173              642,792              622,728
                       
  Common Stock                 55,571                55,418                55,084                55,034                54,889
  Retained Earnings                26,224                23,960                22,395                21,224                19,653
  Other Capital                      306                      347                    (242)                    (115)                        (3)
  Total Shareholders' Equity                82,101                79,725                77,237                76,143                74,539
                       
Total Liabilities & Shareholders' Equity    $       930,216    $       902,654    $       743,410    $       718,935    $       697,267

 

Statements of Income (unaudited)                        
(dollars in thousands, except per share data)                        
      Quarter Ended   Nine Months Ended
      Sep 30,   Sep 30,       Sep 30,   Sep 30,    
      2020   2019   Change   2020   2019   Change
Interest Income                        
  Interest and Fees on Loans    $          7,822    $          7,224   8%    $        23,127    $        20,896   11%
  Fees on PPP Loans                   559                        -   n/a                   950                        -   n/a
  Net Fair Value Amortization Income                       5                     71   -93%                   166                   379   -56%
  Interest on Securities                   306                   264   16%                   874                   778   12%
  Interest on Fed Funds                         -                        -   n/a                        -                       1   -100%
  Interest on Due From Banks                     67                   291   -77%                   326                   694   -53%
  Total Interest Income                8,759                7,850   12%              25,443              22,748   12%
                           
Interest Expense                        
  Interest Expense on Deposits                   333                1,065   -69%                1,696                2,887   -41%
  Interest Expense on Borrowings                     22                     32   -31%                   123                   234   -47%
  Total Interest Expense                   355                1,097   -68%                1,819                3,121   -42%
                           
Net Interest Income                8,404                6,753   24%              23,624              19,627   20%
  Provision for Loan Losses                   209                   205   2%                1,702                   600   184%
Net Interest Income After Provision                8,195                6,548   25%              21,922              19,027   15%
                           
Non-Interest Income                        
  Service Charges, Commissions and Fees                   609                   523   16%                1,574                1,530   3%
  Other Non-Interest Income                   149                   216   -31%                   501                   495   1%
  Total Non-Interest Income                   758                   739   3%                2,075                2,025   2%
                           
Non-Interest Expense                        
  Salaries and Employee Benefits                3,604                3,137   15%              10,551                8,710   21%
  Occupancy and Equipment                   677                   653   4%                2,028                1,693   20%
  Other Non-Interest Expense                1,434                1,303   10%                4,351                3,982   9%
  Total Non-Interest Expense                5,715                5,093   12%              16,930              14,385   18%
                           
Net Income Before Provision for Taxes                3,238                2,194   48%                7,067                6,667   6%
Provision for Taxes                   974                   647   51%                2,067                1,846   12%
Net Income     $          2,264    $          1,547   46%    $          5,000    $          4,821   4%
                           
  Shares (end of period)        5,070,556        5,031,788   1%        5,070,556        5,031,788   1%
  Earnings Per Share - Basic    $            0.45    $            0.31   45%    $            0.99    $            0.96   3%
  Return on Average Assets   0.98%   0.89%   10%   0.81%   1.00%   -19%
  Return on Average Equity   10.95%   8.09%   35%   8.51%   9.36%   -9%
  Net Interest Margin   3.86%   4.23%   -9%   4.04%   4.30%   -6%

 

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,
      2020   2020   2020   2019   2019
Income and performance ratios:                    
  Net Income    $            2,264    $            1,565    $            1,171    $            1,572    $            1,547
  Earnings per share - basic                     0.45                    0.31                     0.23                     0.31                    0.31
  Return on average assets   0.98%   0.76%   0.67%   0.85%   0.89%
  Return on average equity    10.95%   8.18%   6.27%   8.04%   8.09%
  Net interest margin   3.86%   3.98%   4.27%   4.06%   4.23%
  Net interest margin (excluding PPP loans)   3.99%   4.12%   n/a   n/a   n/a
  Efficiency ratio   62.64%   65.96%   69.18%   68.49%   68.46%
                       
Asset quality:                    
  Allowance for loan and lease losses    $            8,040    $            7,890    $            7,171    $            6,366    $            6,145
  Nonperforming assets    $                  12    $                 40    $                341    $                284    $               276
  Allowance for loan and lease losses / total loans and leases   1.11%   1.08%   1.19%   1.10%   1.12%
  Allowance for loan and lease losses / total loans and leases (excluding PPP loans) (b) 1.33%   1.28%   n/a   n/a   n/a
  Net charge-offs / average loans and leases (annualized)   0.03%   -0.01%   ‐0.01%   -0.01%   -0.04%
  Texas ratio   0.01%   0.05%   0.43%   0.37%   0.37%
                       
Other ratios:                    
  Tier 1 risk-based capital (a)   11.82%   11.31%   11.17%   11.35%   11.56%
  Total risk-based capital (a)   13.07%   12.54%   12.30%   12.40%   12.62%
  Common equity tier 1 risk-based capital (a)   11.82%   11.31%   11.17%   11.35%   11.56%
  Tier 1 leverage ratio (a)   8.49%   8.87%   10.04%   10.04%   10.32%
                       
Equity and share related:                    
  Common equity    $          82,101                79,725                77,237    $          76,143    $          74,539
  Book value per share                  16.13                  15.66                  15.35                  15.15                  14.81
  Tangible book value per share                  15.11                  14.62                  14.30                  14.09                  13.74
  Stock closing price per share                  12.10                  12.25                  12.00                  19.80                  17.85
  Number of shares issued and outstanding                  5,071                  5,070                  5,048                  5,033                  5,032
                       
                       
Notes:                    
  (a) Presented as projected for most recent quarter and actual for the remaining periods.                    
  (b) PPP loans are 100% guaranteed by the Small Business Administration.                    

 

Loan Deferrals
As of September 30, 2020
                   
  Principal Only    Principal and Interest   Weighted Average LTV   Total Deferred Loans   Percentage of Total Loans excluding PPP
CRE - Retail  $                3,198,603    $                     8,727,555   53%    $     11,926,158   1.97%
CRE - Special Purpose  $                              -    $                     3,799,533   65%    $       3,799,533   0.63%
CRE - Hospitality  $                              -    $                                    -        $                         -    
C&I  $                1,901,583    $                                    -        $       1,901,583   0.31%
   $                5,100,186    $                   12,527,088        $     17,627,274   2.91%