American Riviera Bank Reports Strong Core Loan Growth

Rhea-AI Summary

American Riviera Bank (OTCQX: ARBV) reported an unaudited net income of $6,132,000 ($1.19 per share) for the first half of 2021, marking a 124% increase from $2,736,000 ($0.54 per share) in 2020. The bank achieved an annualized return on average assets of 1.20% and return on average equity of 14.26%. Second quarter net income reached $3,572,000 ($0.70 per share), boosted by a $751,000 loan interest recovery. Core loans grew by 14% or $86 million year-over-year, with total assets increasing to $1.15 billion.

Positive

• 124% increase in net income to $6,132,000 for the first half of 2021.
• Core loans grew 14% or $86 million year-over-year.
• Strong credit quality with no loans 90 days past due.
• 33% increase in total deposits amounting to $258 million since June 30, 2020.
• Well-capitalized with a Tier 1 Capital Ratio of 11%.

Negative

• None.

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

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20210722006042/en/

FAQ

What is American Riviera Bank's net income for the first half of 2021?

American Riviera Bank reported a net income of $6,132,000 ($1.19 per share) for the first half of 2021.

How much did American Riviera Bank's core loans grow in 2021?

Core loans at American Riviera Bank grew by 14% or $86 million year-over-year.

What was the annualized return on average assets for ARBV?

The annualized return on average assets for American Riviera Bank was 1.20%.

How much did total deposits increase for American Riviera Bank?

Total deposits increased by 33% or $258 million since June 30, 2020.

What is the Tier 1 Capital Ratio for American Riviera Bank?

American Riviera Bank has a Tier 1 Capital Ratio of 11%, well above the regulatory guideline.