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American Riviera Bank Reports Continued Growth and Strong Earnings

SANTA BARBARA, CALIFORNIA (JANUARY 31, 2018) – American Riviera Bank (OTC Markets: ARBV) announced today that excluding a nonrecurring charge to tax expense, the Bank reported unaudited net income of $4,655,000 ($1.06 per share), a 0.96% return on average assets and an 8.70% return on average equity for the year ended December 31, 2017. This is an increase in net income from the $4,130,000 ($0.94 per share) reported for the previous fiscal year.  As a result of the Tax Cuts and Job Act enacted December 22, 2017, the Bank revalued its deferred tax assets and liabilities to account for the decrease in the federal corporate rate.  The Bank recorded a one-time net tax expense of $1,119,000 ($0.25 per share) which is reflected in American Riviera Bank’s operating results for the fourth quarter of 2017 and was in addition to the normal provision for income taxes. As a result of this revaluation, the Bank reported unaudited net income for the year ended December 31, 2017 of $3,536,000 ($0.80 per share). For the fourth quarter ended December 31, 2017, the Bank reported unaudited net income of $35,000 ($0.01 per share) compared to $1,115,000 ($0.26 per share) for the same quarter last year. 

The Bank experienced significant organic growth in the last year, reporting $515 million in total assets as of December 31, 2017. Asset growth was made possible by total deposits increasing 15% from December 31, 2016, reaching $449 million at December 31, 2017. Non-interest bearing demand deposits increased 12% from the same reporting period last year. Deposit origination volume is noteworthy, with the Bank opening over 1,885 new accounts at our three locations during 2017.

Loan demand remained strong, with total loans increasing 16% from December 31, 2016, reaching $414 million at December 31, 2017 with no other real estate owned. The Bank reported an annualized net interest margin of 4.61% for the year ending December 31, 2017.

 Jeff DeVine, President and Chief Executive Officer stated, “We are very pleased with the Bank’s strong growth in loans, deposits, net income and book value.  We have been investing in our expansion into San Luis Obispo County and expect to open our Paso Robles branch in March.  Although the Tax Cuts and Job Act required us to incur unplanned tax expense in 2017, we expect the benefits of the reduced tax rate to have an ongoing positive impact on the Bank’s earnings.”

During the fourth quarter of 2017, the Bank purchased property and began improvements for the Paso Robles branch that is anticipated to open in March of 2018.  As of December 31, 2017, American Riviera Bank maintained 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 $11.16 at December 31, 2017, an 8% increase from $10.32 at December 31, 2016.