American Riviera Bank Reports Strong Core Loan Growth

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SANTA BARBARA, Calif.–()–American Riviera Bank (OTCQX: ARBV) announced today unaudited net income of $6,132,000 ($1.19 per share) for the six months ended June 30, 2021. This represents a 124% increase in net income from the $2,736,000 ($0.54 per share) earned in the same reporting period in the prior year. In 2021, the Bank has achieved an annualized return on average assets of 1.20% and return on average equity of 14.26%. Unaudited net income was $3,572,000 ($0.70 per share) for the second quarter ended June 30, 2021, compared to the $1,565,000 ($0.31 per share) earned in the same reporting period in the prior year. Net income in the second quarter of 2021 was positively impacted by a $751,000 loan interest recovery and accelerated recognition of Paycheck Protection Program (PPP) fee income upon loan forgiveness by the Small Business Administration (SBA).

Core loans, excluding SBA PPP loans, have grown 14% or $86 million over the last year since June 30, 2020. Year to date, core loans excluding PPP loans have grown 9% or $60 million since December 31, 2020. PPP loans totaled $76 million at June 30, 2021, with $78 million processed by the Bank and approved for forgiveness by the SBA during the six months ended June 30, 2021. The Bank maintained strong credit quality with no other real estate owned, no loans 90 days or more past due, and only $3.4 million or 0.48% of total loans excluding PPP on non-accrual status, which are well supported by collateral.

American Riviera Bank continues to experience tremendous deposit growth with a 33% or $258 million increase in total deposits over the last year since June 30, 2020. Non-interest bearing demand deposits increased 30% or $100 million since June 30, 2020. Deposit inflows from our clients have been the driving factor in the total assets of the Bank increasing $248 million since June 30, 2020 to a total of $1.15 billion at June 30, 2021.

Jeff DeVine, President and Chief Executive Officer noted, “We are pleased as our community recovers from the pandemic to put deposits to work funding loans to local businesses and real estate projects. The Bank has been working closely with our clients to process and obtain prompt forgiveness decisions from the SBA, which has contributed to strong PPP fee income recognition this year. We will continue to make significant investments in people, products and technology to support our clients and the communities of the Central Coast.”

As of June 30, 2021, American Riviera Bank continues to be well capitalized 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 was $16.72 at June 30, 2021.

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 eleven consecutive years the Bank has been recognized for strong financial performance by the Findley Reports, and has received the highest “Super Premier” rating from Findley every year since 2016. As of March 31, 2021, the Bank was rated five stars by BauerFinancial. The Bank was rated “Outstanding” by the Federal Deposit Insurance Corporation in 2020 for its performance under the Community Reinvestment Act.

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)

June 30,

 

June 30,

 

One Year

2021

 

2020

 

Change

Assets
Cash & Due From Banks

$

233,502

 

$

84,722

 

176

%

Securities

 

110,403

 

57,099

 

93

%

 
Loans (excluding PPP)

 

701,399

 

615,367

 

14

%

PPP Loans

 

76,093

 

116,531

 

-35

%

Allowance For Loan Losses

 

(9,373

)

(7,890

)

19

%

Net Loans

 

768,119

 

724,008

 

6

%

 
Premise & Equipment

 

6,229

 

6,731

 

-7

%

Goodwill and Other Intangibles

 

5,069

 

5,248

 

-3

%

Other Assets (a)

 

26,947

 

24,846

 

8

%

Total Assets

$

1,150,269

 

$

902,654

 

27

%

 
 
Liabilities & Shareholders’ Equity
Demand Deposits

$

428,577

 

$

328,748

 

30

%

NOW Accounts

170,029

 

121,741

 

40

%

Other Interest Bearing Deposits

452,867

 

342,668

 

32

%

Total Deposits

1,051,473

 

793,157

 

33

%

 
Borrowed Funds

 

20,000

 

-100

%

Other Liabilities

 

7,986

 

9,772

 

-18

%

Total Liabilities

 

1,059,459

 

822,929

 

29

%

 
Common Stock

 

56,146

 

55,418

 

1

%

Retained Earnings

34,735

 

23,960

 

45

%

Other Capital

(71

)

347

 

-120

%

Total Shareholders’ Equity

90,810

 

79,725

 

14

%

 
Total Liabilities & Shareholders’ Equity

$

1,150,269

 

$

902,654

 

27

%

 
Notes:
(a) Increase is primarily due to additional Bank Owned Life Insurance policies (BOLI) purchased and required accumulation of Federal Home Loan Bank stock as a member.
Balance Sheets (unaudited)
(dollars in thousands)
June 30, March, 31

December, 31

September, 30

June, 30

2021

 

2021

 

2020

 

2020

 

2020

Assets
Cash & Due From Banks

$

233,502

 

$

187,886

 

$

129,732

 

$

105,157

 

$

84,722

 

Securities

 

110,403

 

 

86,587

 

 

86,942

 

 

73,886

 

 

57,099

 

 
Loans (excluding PPP)

 

701,399

 

 

661,520

 

 

641,603

 

 

604,728

 

 

615,367

 

PPP Loans

 

76,093

 

 

119,429

 

 

84,464

 

 

117,361

 

 

116,531

 

Allowance For Loan Losses

 

(9,373

)

 

(8,817

)

 

(8,467

)

 

(8,040

)

 

(7,890

)

Net Loans

 

768,119

 

 

772,132

 

 

717,600

 

 

714,049

 

 

724,008

 

 
Premise & Equipment

 

6,229

 

 

6,365

 

 

6,458

 

 

6,634

 

 

6,731

 

Goodwill and Other Intangibles

 

5,069

 

 

5,114

 

 

5,158

 

 

5,203

 

 

5,248

 

Other Assets

 

26,947

 

 

25,242

 

 

25,733

 

 

25,287

 

 

24,846

 

Total Assets

$

1,150,269

 

$

1,083,326

 

$

971,623

 

$

930,216

 

$

902,654

 

 
 
Liabilities & Shareholders’ Equity
Demand Deposits

$

428,577

 

$

405,264

 

$

332,995

 

$

331,035

 

$

328,748

 

NOW Accounts

 

170,029

 

 

144,591

 

 

128,266

 

 

110,476

 

 

121,741

 

Other Interest Bearing Deposits

 

452,867

 

 

433,310

 

 

410,837

 

 

387,293

 

 

342,668

 

Total Deposits

 

1,051,473

 

 

983,165

 

 

872,098

 

 

828,804

 

 

793,157

 

 
Borrowed Funds

 

 

 

5,000

 

 

5,000

 

 

10,000

 

 

20,000

 

Other Liabilities

 

7,986

 

 

8,705

 

 

9,606

 

 

9,311

 

 

9,772

 

Total Liabilities

 

1,059,459

 

 

996,870

 

 

886,704

 

 

848,115

 

 

822,929

 

 
Common Stock

 

56,146

 

 

55,821

 

 

55,738

 

 

55,571

 

 

55,418

 

Retained Earnings

 

34,735

 

 

31,163

 

 

28,603

 

 

26,224

 

 

23,960

 

Other Capital

 

(71

)

 

(528

)

 

578

 

 

306

 

 

347

 

Total Shareholders’ Equity

 

90,810

 

 

86,456

 

 

84,919

 

 

82,101

 

 

79,725

 

 
Total Liabilities & Shareholders’ Equity

$

1,150,269

 

$

1,083,326

 

$

971,623

 

$

930,216

 

$

902,654

 

Statements of Income (unaudited)
(dollars in thousands, except per share data)
Quarter Ended Six Months Ended
June 30, June 30, June 30, June 30,

2021

 

2020

 

Change

 

2021

 

2020

 

Change

Interest Income
Interest and Fees on Loans

$

8,840

$

7,766

14%

$

16,714

$

15,302

9%

Fees on PPP Loans

 

1,412

 

391

261%

 

2,358

 

391

503%

Net Fair Value Amortization Income

 

19

 

46

-59%

 

62

 

162

-62%

Interest on Securities

 

311

 

246

26%

 

583

 

569

2%

Interest on Fed Funds

 

 

n/a

 

 

n/a

Interest on Due From Banks

 

72

 

72

0%

 

132

 

259

-49%

Total Interest Income

 

10,654

 

8,521

25%

 

19,849

 

16,683

19%

 
Interest Expense
Interest Expense on Deposits

 

259

 

501

-48%

 

522

 

1,363

-62%

Interest Expense on Borrowings

 

 

48

-100%

 

 

101

-100%

Total Interest Expense

 

259

 

549

-53%

 

522

 

1,464

-64%

 
Net Interest Income

 

10,395

 

7,972

30%

 

19,327

 

15,219

27%

Provision for Loan Losses

 

 

710

-100%

 

338

 

1,493

-77%

Net Interest Income After Provision

 

10,395

 

7,262

43%

 

18,989

 

13,726

38%

 
Non-Interest Income
Service Charges, Commissions and Fees

 

664

 

463

43%

 

1,317

 

965

36%

Other Non-Interest Income

 

309

 

159

94%

 

483

 

352

37%

Total Non-Interest Income

 

973

 

622

56%

 

1,800

 

1,317

37%

 
Non-Interest Expense
Salaries and Employee Benefits

 

3,829

 

3,495

10%

 

7,535

 

6,947

8%

Occupancy and Equipment

 

778

 

666

17%

 

1,368

 

1,351

1%

Other Non-Interest Expense

 

1,792

 

1,534

17%

 

3,323

 

2,917

14%

Total Non-Interest Expense

 

6,399

 

5,695

12%

 

12,226

 

11,215

9%

 
Net Income Before Provision for Taxes

 

4,969

 

2,189

127%

 

8,563

 

3,828

124%

Provision for Taxes

 

1,397

 

624

124%

 

2,431

 

1,092

123%

Net Income

$

3,572

$

1,565

128%

$

6,132

$

2,736

124%

 
Shares (end of period)

 

5,132,809

 

5,069,523

1%

 

5,132,809

 

5,069,523

1%

Earnings Per Share – Basic

$

0.70

$

0.31

126%

$

1.19

$

0.54

120%

Return on Average Assets

 

1.31%

 

0.76%

72%

 

1.20%

 

0.72%

67%

Return on Average Equity

 

16.14%

 

8.18%

97%

 

14.26%

 

7.23%

97%

Net Interest Margin

 

3.97%

 

3.98%

0%

 

3.88%

 

4.11%

-6%

Five Quarter Statements of Income (unaudited)
(dollars in thousands)
Three Months Ended
June 30, March 31, December 31, September 30, June 30,

2021

 

2021

 

2020

 

2020

 

2020

Interest Income
Interest and Fees on Loans

$

8,840

$

7,874

$

7,589

$

7,822

$

7,766

Fees on PPP Loans

 

1,412

 

946

 

1,374

 

559

 

391

Net Fair Value Amortization Income

 

19

 

43

 

14

 

5

 

46

Interest on Securities

 

311

 

271

 

274

 

306

 

246

Interest on Fed Funds

 

 

 

 

 

Interest on Due From Banks

 

72

 

60

 

74

 

67

 

72

Total Interest Income

 

10,654

 

9,194

 

9,325

 

8,759

 

8,521

 
Interest Expense
Interest Expense on Deposits

 

259

 

263

 

295

 

333

 

501

Interest Expense on Borrowings

 

 

 

 

22

 

48

Total Interest Expense

 

259

 

263

 

295

 

355

 

549

 
Net Interest Income

 

10,395

 

8,931

 

9,030

 

8,404

 

7,972

Provision for Loan Losses

 

 

338

 

418

 

209

 

710

Net Interest Income After Provision

 

10,395

 

8,593

 

8,612

 

8,195

 

7,262

 
Non-Interest Income
Service Charges, Commissions and Fees

 

664

 

653

 

543

 

609

 

463

Other Non-Interest Income

 

309

 

173

 

251

 

149

 

159

Total Non-Interest Income

 

973

 

826

 

794

 

758

 

622

 
Non-Interest Expense
Salaries and Employee Benefits

 

3,829

 

3,706

 

3,847

 

3,604

 

3,495

Occupancy and Equipment

 

778

 

590

 

722

 

677

 

666

Other Non-Interest Expense

 

1,792

 

1,530

 

1,562

 

1,434

 

1,534

Total Non-Interest Expense

 

6,399

 

5,826

 

6,131

 

5,715

 

5,695

 
Net Income Before Provision for Taxes

 

4,969

 

3,593

 

3,275

 

3,238

 

2,189

Provision for Taxes

 

1,397

 

1,033

 

896

 

974

 

624

Net Income

$

3,572

$

2,560

$

2,379

$

2,264

$

1,565

 
Shares (end of period)

 

5,132,809

 

5,127,895

 

5,083,648

 

5,070,556

 

5,069,523

Earnings Per Share – Basic

$

0.70

$

0.50

$

0.47

$

0.45

$

0.31

Selected Financial Highlights (unaudited)
(dollars in thousands, except per share data)
At or for the Three Months Ended
June 30, March 31, December 31, September 30, June 30,

2021

 

2021

 

2020

 

2020

 

2020

Income and performance ratios:
Net Income

$

3,572

$

2,560

$

2,379

$

2,264

$

1,565

Earnings per share – basic

 

0.70

 

0.50

 

0.47

 

0.45

 

0.31

Return on average assets

 

1.31%

 

1.07%

 

0.96%

 

0.98%

 

0.76%

Return on average equity

 

16.14%

 

12.34%

 

11.16%

 

10.95%

 

8.18%

Net interest margin

 

3.97%

 

3.78%

 

3.85%

 

3.86%

 

3.98%

Efficiency ratio (c)

 

56.25%

 

59.06%

 

62.65%

 

62.64%

 

65.96%

 
Asset quality:
Allowance for loan and lease losses

$

9,373

$

8,817

$

8,467

$

8,040

$

7,890

Nonperforming assets

 

3,413

 

3,588

 

3,446

 

12

 

40

Allowance for loan and lease losses / total loans and leases

 

1.21%

 

1.13%

 

1.17%

 

1.11%

 

1.08%

Allowance for loan and lease losses / total loans and leases (excluding PPP loans) (a)

 

1.34%

 

1.33%

 

1.32%

 

1.33%

 

1.28%

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

 

-0.28%

 

-0.01%

 

-0.01%

 

0.03%

 

-0.01%

Texas ratio (b)

 

3.59%

 

3.98%

 

3.91%

 

0.01%

 

0.05%

 
Other ratios:
Tier 1 risk-based capital

 

11.18%

 

11.30%

 

11.45%

 

11.82%

 

11.31%

Total risk-based capital

 

12.43%

 

12.55%

 

12.70%

 

13.07%

 

12.54%

Common equity tier 1 risk-based capital

 

11.18%

 

11.30%

 

11.45%

 

11.82%

 

11.31%

Tier 1 leverage ratio

 

7.90%

 

8.21%

 

8.16%

 

8.49%

 

8.87%

 
Equity and share related:
Common equity

$

90,810

 

86,456

 

84,919

 

82,101

$

79,725

Book value per share

 

17.69

 

16.86

 

16.70

 

16.19

 

15.73

Tangible book value per share

 

16.72

 

15.97

 

15.58

 

15.11

 

14.62

Stock closing price per share

 

19.22

 

18.50

 

16.50

 

12.10

 

12.25

Number of shares issued and outstanding

 

5,133

 

5,128

 

5,084

 

5,071

 

5,070

 
 
Notes:
(a) PPP loans are 100% guaranteed by the Small Business Administration.
(b) The sum of Nonperforming assets and Other Real Estate Owned, divided by the sum of Total Shareholder Equity and Total Allowance for Loan and Lease Losses (less Preferred Stock and Intangible Assets).
(c) Annualized Operating Expense excluding Loan Loss Provisions minus Annualized Extraordinary Expense, divided by Annualized Interest Income including Loan Fees minus Annualized Interest Expense plus Annualized Non-Interest Income minus Annualized Extraordinary Income, expressed as a percentage.
Loan Deferrals
As of June 30, 2021
Principal Only
Deferred
Total Deferred
Loans (e)
Percentage of
Total Loans
excluding PPP
CRE – Retail

$

7,981,909

$

7,981,909

1.14%

CRE – Special Purpose

$

$

0.00%

CRE – Hospitality

$

$

0.00%

C&I

$

588,114

$

588,114

0.08%

$

8,570,023

$

8,570,023

1.22%

 
Total Loans excluding PPP

$

701,399,000

 



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