American Riviera Bank Reports Record Earnings and Growth

Rhea-AI Summary

American Riviera Bank (OTC Markets: ARBV) reported record unaudited net income of $7,378,000 ($1.45 per share) for the year ended December 31, 2020, a 15% increase from the previous year. The fourth quarter net income was $2,379,000 ($0.47 per share), up 51% year-over-year. The Bank also achieved considerable growth in total assets, reaching $972 million—a 35% increase—and total deposits rising 40% to $872 million. Despite challenges from the COVID-19 pandemic, the Bank's loan deferrals decreased significantly, reflecting effective management amid economic uncertainty.

Positive

• Net income increased by 15% to $7,378,000 for 2020.
• Fourth quarter net income rose by 51% year-over-year.
• Total assets grew by 35%, reaching $972 million.
• Total deposits increased by 40% to $872 million.
• No loans were 90 days or more past due, indicating strong asset quality.

Negative

• Significant increase in loan loss provision due to COVID-19 uncertainty.

American Riviera Bank (OTC Markets: ARBV) announced today record unaudited net income of $7,378,000 ($1.45 per share) for the twelve months ended December 31, 2020. This represents a 15% increase in net income from the $6,393,000 ($1.27 per share) for the same reporting period in the prior year. The Bank reported unaudited net income of $2,379,000 ($0.47 per share) for the fourth quarter ended December 31, 2020. This represents a 51% increase from the $1,572,000 ($0.31 per share) for the same quarter last y

Jeff DeVine, President and Chief Executive Officer stated, “American Riviera Bank is proud to serve an important role in providing economic stability to the Santa Barbara and San Luis Obispo counties while also reporting strong earnings to our shareholders. During these unprecedented times, the Bank originated tremendous SBA PPP loan volume while still growing non-PPP loans at a double digit pace. Our branch network, drive-ups, ATMs, and robust digital banking capabilities allowed us to deliver uninterrupted depository services despite the COVID-19 pandemic and related stay-at-home orders. I thank our frontline team members, and those working from their office or remotely from home, who quickly adapted and safely helped our clients and communities in 2020.”

The Bank has seen a continued decrease in temporary loan payment deferrals for clients negatively affected by the COVID-19 pandemic. Total loans on deferral at December 31, 2020 were approximately $9.6 million, representing 1.5% of total loans excluding SBA PPP, and have fallen from the $18 million reported at September 30, 2020. The deferrals are primarily 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 (see detail on Loan Deferrals exhibit). The sizeable increase in loan loss provision in 2020 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 December 31, 2020, the Bank had no other real estate owned, no loans 90 days or more past due, and only $3.4 million or 0.53% of total loans excluding PPP on non-accrual status which are well supported by collateral.

The Bank has experienced tremendous growth in new and existing relationships, reporting $972 million in total assets as of December 31, 2020, which represents a $253 million or 35% increase from December 31, 2019. Total loans including SBA PPP increased 26% from December 31, 2019, reaching $726 million at December 31, 2020. Total loans excluding SBA PPP increased $63 million or 11% from December 31, 2019, reaching $642 million at December 31, 2020. Total deposits increased 40% from December 31, 2019, reaching $872 million at December 31, 2020. Non-interest bearing demand deposit accounts increased $116 million or 54% from the same reporting period in the prior year.

As of December 31, 2020, American Riviera Bank was highly liquid with $217 million in cash and available-for-sale securities, and 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 $15.58 at December 31, 2020.

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 ten 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 September 30, 2020, 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)
			Dec 31,			Dec 31,			One Year
			2020			2019			Change
Assets
	Cash & Due From Banks		$ 129,732			$ 66,472			95	%
	Securities		86,942			43,403			100	%
	Loans (excluding PPP)		641,603			578,458			11	%
	PPP Loans		84,464			-			n/a
	Allowance For Loan Losses		(8,467	)		(6,366	)		33	%
	Net Loans		717,600			572,092			25	%
	Premise & Equipment		6,458			6,878			-6	%
	Goodwill and Other Intangibles		5,158			5,337			-3	%
	Other Assets		25,733			24,753			4	%
Total Assets			$ 971,623			$ 718,935			35	%
Liabilities & Shareholders' Equity
	Demand Deposits		$ 332,995			$ 216,671			54	%
	NOW Accounts		128,266			87,906			46	%
	Other Interest Bearing Deposits		410,837			316,585			30	%
	Total Deposits		872,098			621,162			40	%
	Borrowed Funds		5,000			10,000			-50	%
	Other Liabilities		9,606			11,630			-17	%
	Total Liabilities		886,704			642,792			38	%
	Common Stock		55,738			55,034			1	%
	Retained Earnings		28,603			21,224			35	%
	Other Capital		578			(115	)		n/a
	Total Shareholders' Equity		84,919			76,143			12	%
Total Liabilities & Shareholders' Equity			$ 971,623			$ 718,935			35	%

Balance Sheets (unaudited)
(dollars in thousands)
			December, 31			September, 30			June, 30			March 31,			December 31,
			2020			2020			2020			2020			2019
Assets
	Cash & Due From Banks		$ 129,732			$ 105,157			$ 84,722			$ 59,793			$ 66,472
	Securities		86,942			73,886			57,099			50,518			43,403
	Loans (excluding PPP)		641,603			604,728			615,367			603,631			578,458
	PPP Loans		84,464			117,361			116,531			-			-
	Allowance For Loan Losses		(8,467	)		(8,040	)		(7,890	)		(7,171	)		(6,366	)
	Net Loans		717,600			714,049			724,008			596,460			572,092
	Premise & Equipment		6,458			6,634			6,731			6,832			6,878
	Goodwill and Other Intangibles		5,158			5,203			5,248			5,293			5,337
	Other Assets		25,733			25,287			24,846			24,514			24,753
Total Assets			$ 971,623			$ 930,216			$ 902,654			$ 743,410			$ 718,935
Liabilities & Shareholders' Equity
	Demand Deposits		$ 332,995			$ 331,035			$ 328,748			$ 219,331			$ 216,671
	NOW Accounts		128,266			110,476			121,741			117,453			87,906
	Other Interest Bearing Deposits		410,837			387,293			342,668			308,666			316,585
	Total Deposits		872,098			828,804			793,157			645,450			621,162
	Borrowed Funds		5,000			10,000			20,000			10,000			10,000
	Other Liabilities		9,606			9,311			9,772			10,723			11,630
	Total Liabilities		886,704			848,115			822,929			666,173			642,792
	Common Stock		55,738			55,571			55,418			55,084			55,034
	Retained Earnings		28,603			26,224			23,960			22,395			21,224
	Other Capital		578			306			347			(242	)		(115	)
	Total Shareholders' Equity		84,919			82,101			79,725			77,237			76,143
Total Liabilities & Shareholders' Equity			$ 971,623			$ 930,216			$ 902,654			$ 743,410			$ 718,935

Statements of Income (unaudited)
(dollars in thousands, except per share data)
			Quarter Ended									Twelve Months Ended
			Dec 31,			Dec 31,						Dec 31,			Dec 31,
			2020			2019			Change			2020			2019			Change
Interest Income
	Interest and Fees on Loans		$ 7,589			$ 7,387			3	%		$ 30,715			$ 28,283			9	%
	Fees on PPP Loans		1,374			-			n/a			2,324			-			n/a
	Net Fair Value Amortization Income		14			62			-77	%		180			442			-59	%
	Interest on Securities		274			247			11	%		1,149			1,025			12	%
	Interest on Fed Funds		-			-			n/a			-			1			-100	%
	Interest on Due From Banks		74			290			-74	%		400			984			-59	%
	Total Interest Income		9,325			7,986			17	%		34,768			30,735			13	%
Interest Expense
	Interest Expense on Deposits		295			1,085			-73	%		1,991			3,973			-50	%
	Interest Expense on Borrowings		-			43			-100	%		123			276			-55	%
	Total Interest Expense		295			1,128			-74	%		2,114			4,249			-50	%
Net Interest Income			9,030			6,858			32	%		32,654			26,486			23	%
	Provision for Loan Losses		418			205			104	%		2,120			806			163	%
Net Interest Income After Provision			8,612			6,653			29	%		30,534			25,680			19	%
Non-Interest Income
	Service Charges, Commissions and Fees		543			566			-4	%		2,117			2,096			1	%
	Other Non-Interest Income		251			199			26	%		751			695			8	%
	Total Non-Interest Income		794			765			4	%		2,868			2,791			3	%
Non-Interest Expense
	Salaries and Employee Benefits		3,847			3,212			20	%		14,398			11,922			21	%
	Occupancy and Equipment		722			665			9	%		2,750			2,358			17	%
	Other Non-Interest Expense		1,562			1,309			19	%		5,913			5,292			12	%
	Total Non-Interest Expense		6,131			5,186			18	%		23,061			19,572			18	%
Net Income Before Provision for Taxes			3,275			2,232			47	%		10,341			8,899			16	%
Provision for Taxes			896			660			36	%		2,963			2,506			18	%
Net Income			$ 2,379			$ 1,572			51	%		$ 7,378			$ 6,393			15	%
	Shares (end of period)		5,083,648			5,033,348			1	%		5,083,648			5,033,348			1	%
	Earnings Per Share - Basic		$ 0.47			$ 0.31			52	%		$ 1.45			$ 1.27			14	%
	Return on Average Assets		0.96	%		0.85	%		13	%		0.86	%		0.97	%		-11	%
	Return on Average Equity		11.16	%		8.04	%		39	%		9.20	%		9.01	%		2	%
	Net Interest Margin		3.85	%		4.06	%		-5	%		3.97	%		4.24	%		-6	%

Five Quarter Statements of Income (unaudited)
(dollars in thousands)
			Three Months Ended
			December 31,		September 30,		June 30,		March 31,		December 31,
			2020		2020		2020		2020		2019
Interest Income
	Interest and Fees on Loans		$ 7,589		$ 7,822		$ 7,766		$ 7,537		$ 7,387
	Fees on PPP Loans		1,374		559		391		-		-
	Net Fair Value Amortization Income		14		5		46		115		62
	Interest on Securities		274		306		246		323		247
	Interest on Fed Funds		-		-		-		-		-
	Interest on Due From Banks		74		67		72		187		290
	Total Interest Income		9,325		8,759		8,521		8,162		7,986
Interest Expense
	Interest Expense on Deposits		295		333		501		862		1,085
	Interest Expense on Borrowings		-		22		48		53		43
	Total Interest Expense		295		355		549		915		1,128
Net Interest Income			9,030		8,404		7,972		7,247		6,858
	Provision for Loan Losses		418		209		710		783		205
Net Interest Income After Provision			8,612		8,195		7,262		6,464		6,653
Non-Interest Income
	Service Charges, Commissions and Fees		543		609		463		502		566
	Other Non-Interest Income		251		149		159		193		199
	Total Non-Interest Income		794		758		622		695		765
Non-Interest Expense
	Salaries and Employee Benefits		3,847		3,604		3,495		3,452		3,212
	Occupancy and Equipment		722		677		666		685		665
	Other Non-Interest Expense		1,562		1,434		1,534		1,383		1,309
	Total Non-Interest Expense		6,131		5,715		5,695		5,520		5,186
Net Income Before Provision for Taxes			3,275		3,238		2,189		1,639		2,232
Provision for Taxes			896		974		624		468		660
Net Income			$ 2,379		$ 2,264		$ 1,565		$ 1,171		$ 1,572
	Shares (end of period)		5,083,648		5,070,556		5,069,523		5,047,696		5,033,348
	Earnings Per Share - Basic		$ 0.47		$ 0.45		$ 0.31		$ 0.23		$ 0.31

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,
			2020			2020			2020			2020			2019
Income and performance ratios:
	Net Income		$ 2,379			$ 2,264			$ 1,565			$ 1,171			$ 1,572
	Earnings per share - basic		0.47			0.45			0.31			0.23			0.31
	Return on average assets		0.96	%		0.98	%		0.76	%		0.67	%		0.85	%
	Return on average equity		11.16	%		10.95	%		8.18	%		6.27	%		8.04	%
	Net interest margin		3.85	%		3.86	%		3.98	%		4.27	%		4.06	%
	Net interest margin (excluding PPP loans)		3.53	%		3.99	%		4.12	%		n/a			n/a
	Efficiency ratio (d)		62.65	%		62.64	%		65.96	%		69.18	%		68.49	%
Asset quality:
	Allowance for loan and lease losses		$ 8,467			$ 8,040			$ 7,890			$ 7,171			$ 6,366
	Nonperforming assets		$ 3,446			$ 12			$ 40			$ 341			$ 284
	Allowance for loan and lease losses / total loans and leases		1.17	%		1.11	%		1.08	%		1.19	%		1.10	%
	Allowance for loan and lease losses / total loans and leases (excluding PPP loans) (b)		1.32	%		1.33	%		1.28	%		n/a			n/a
	Net charge-offs / average loans and leases (annualized)		-0.01	%		0.03	%		-0.01	%		‐0.01%			-0.01	%
	Texas ratio (c)		3.91	%		0.01	%		0.05	%		0.43	%		0.37	%
Other ratios:
	Tier 1 risk-based capital (a)		11.45	%		11.82	%		11.31	%		11.17	%		11.35	%
	Total risk-based capital (a)		12.70	%		13.07	%		12.54	%		12.30	%		12.40	%
	Common equity tier 1 risk-based capital (a)		11.45	%		11.82	%		11.31	%		11.17	%		11.35	%
	Tier 1 leverage ratio (a)		8.16	%		8.49	%		8.87	%		10.04	%		10.04	%
Equity and share related:
	Common equity		$ 84,919			82,101			79,725			77,237			$ 76,143
	Book value per share		16.59			16.13			15.66			15.35			15.15
	Tangible book value per share		15.58			15.11			14.62			14.30			14.09
	Stock closing price per share		16.50			12.10			12.25			12.00			19.80
	Number of shares issued and outstanding		5,084			5,071			5,070			5,048			5,033
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.
	(c) 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).
	(d) 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 December 31, 2020
	Principal Only		Principal and Interest		Total Deferred Loans (e)		Percentage of Total Loans excluding PPP
CRE - Retail	$ 8,727,555		$ -		$ 8,727,555		1.36	%
CRE - Special Purpose	$ -		$ -		$ -		0.00	%
CRE - Hospitality	$ -		$ -		$ -		0.00	%
C&I	$ 651,239		$ 236,269		$ 887,508		0.14	%
	$ 9,378,794		$ 236,269		$ 9,615,063		1.50	%
Total Loans excluding PPP	$ 641,603,130
Notes:
(e) Ten separate loans are included in total loans on deferral

 

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FAQ

What were American Riviera Bank's earnings for 2020?

American Riviera Bank reported a net income of $7,378,000 ($1.45 per share) for the twelve months ended December 31, 2020.

How did American Riviera Bank perform in the fourth quarter of 2020?

In the fourth quarter of 2020, American Riviera Bank reported a net income of $2,379,000 ($0.47 per share), a 51% increase from the previous year.

What is the total asset growth for American Riviera Bank in 2020?

The total assets of American Riviera Bank grew by 35% to reach $972 million by December 31, 2020.

How much did total deposits increase for American Riviera Bank in 2020?

Total deposits for American Riviera Bank increased by 40%, reaching $872 million as of December 31, 2020.

What is the current loan deferral status at American Riviera Bank?

As of December 31, 2020, loan deferrals decreased to approximately $9.6 million, down from $18 million reported at September 30, 2020.