American Riviera Bank Achieves Financial Synergies Of Merger

American Riviera Bank (OTC Markets: ARBV) announced today unaudited net income of $1,409,000 ($0.32 per share) for the third quarter ended September 30, 2016, compared to the $133,000 ($0.05 per share) reported September 30, 2015. For the nine months ended September 30, 2016 unaudited net income was $3,015,000 ($0.69 per share), as compared to the $938,000 ($0.35 per share) achieved for the same reporting period last year prior to the merger.

As of September 30, 2016, the Bank reported $347 million in total loans with no other real estate owned. Non-interest bearing demand deposits have increased to 35% of the $392 million in total deposits at September 30, 2016, an increase from 32% one year ago.

Jeff DeVine, President and Chief Executive Officer stated, "It has only been 9 months since we completed the merger with The Bank of Santa Barbara and our financial results are already reflecting the synergies from that merger. Common share count is up 63% from one year ago as a result of the merger, however earnings per share are up 98%."

As of September 30, 2016 American Riviera Bank had $464 million in total assets, and maintained a strong capital position with a Tier 1 Capital Ratio of 12%; well above the regulatory guideline of 8% for well capitalized institutions. For the first nine months of 2016, the Bank recorded a return on average assets of 0.95% and a return on average equity of 8.69%. The tangible book value per share of American Riviera Bank's common stock is $10.24 and the book value is $11.40 at September 30, 2016, an increase from the $10.47 book value at September 30, 2015.

Company Profile

American Riviera Bank is a full-service community bank focused on serving the lending and deposit needs of businesses and consumers in Santa Barbara and the surrounding communities. The state-chartered bank opened for business on July 18, 2006, with the support of local shareholders. Offices are located at 1033 Anacapa Street in Santa Barbara, 525 San Ysidro Road in Montecito, and 5880 Calle Real in Goleta. As a result of the merger, American Riviera Bank became the second-largest community bank based in the city of Santa Barbara. For six consecutive years the Bank has been recognized for strong financial performance by the Findley Reports. As of June 30, 2016, the Bank was rated five stars by BauerFinancial.

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)
 
Sept 30, Sept 30, One Year
  2016 2015 Change
Assets
Cash & Due From Banks $ 52,996 $ 18,551 186 %
Fed Funds Sold 38,458 5,415 610 %
Securities 6,581 6,184 6 %
 
Loans 347,345 191,372 82 %
Allowance For Loan Losses   (3,226 )   (2,374 ) 36 %
Net Loans 344,119 188,998 82 %
 
Fixed Assets 1,351 893 51 %
Goodwill 5,071 - N/A
Other Assets   14,996     6,964   115 %
Total Assets   463,572     227,005   104 %
 
 
Liabilities & Shareholders' Equity
Demand Deposits 135,757 62,558 117 %
Interest Bearing Deposits   256,418     135,478   89 %
Total Deposits 392,175 198,036 98 %
 
Borrowed Funds 20,000 - N/A
Other Liabilities   1,643     891   84 %
Total Liabilities 413,818 198,927 108 %
 
Common Stock 42,946 24,735 74 %
Retained Earnings 6,810 3,357 103 %
Other Capital   (2 )   (14 ) -86 %
Total Shareholders' Equity   49,754     28,078   77 %
     
Total Liabilities & Shareholders' Equity $ 463,572   $ 227,005   104 %
 
Book Value Per Share $ 11.40 $ 10.47
Tangible Book Value Per Share $ 10.24 $ 10.47
 
               
Statements of Income (unaudited)
(dollars in thousands)
 
Quarter Ended 9 Months Ended
Sept 30, Sept 30, Sept 30, Sept 30,
  2016 2015 Change 2016 2015 Change
Interest Income
Interest and Fees on Loans $ 4,780 $ 2,472 93 % $ 14,237 $ 7,061 102 %
Loan Fair Value Accretion, net 194 - N/A 771 - N/A
Interest on Securities 23 23 0 % 80 75 7 %
Interest on Fed Funds 36 3 1330 % 52 13 295 %
Interest on Due From Banks   44     31   42 %   123     109   12 %
Total Interest Income 5,077 2,529 101 % 15,263 7,258 110 %
 
Interest Expense
Interest Expense on Deposits 190 92 107 % 591 284 108 %
Interest Expense on Borrowings   30     -   N/A     66     22   198 %
Total Interest Expense   220     92   -140 %   657     306   -115 %
 
Net Interest Income 4,857 2,437 99 % 14,606 6,952 110 %
Provision for Loan Losses   137     163   -16 %   388     163   138 %

Net Interest Income After Provision
4,720 2,274 108 % 14,218 6,789 109 %
 
Non-Interest Income
Service Charges, Commissions and Fees 295 149 97 % 927 430 115 %
Other Non-Interest Income   103     48   113 %   254     163   56 %
Total Non-Interest Income 398 197 102 % 1,181 593 99 %
 
Non-Interest Expense
Salaries and Employee Benefits 1,823 1,047 74 % 5,780 2,957 95 %
Occupancy and Equipment 395 262 51 % 1,161 798 45 %
Merger Related Expenses (non recurring) (81 ) 255 -132 % 938 421 123 %
Other Non-Interest Expense   1,015     460   121 %   2,561     1,422   80 %
Total Non-Interest Expense 3,152 2,024 56 % 10,440 5,598 86 %
 

Net Income Before Provision for Taxes
1,966 447 339 % 4,959 1,784 178 %
Provision for Taxes   557     314   77 %   1,944     846   130 %
Net Income   1,409     133   957 %   3,015     938   222 %
 
Shares (end of period) 4,362,930 2,683,254 63 % 4,362,930 2,683,254 63 %
Earnings Per Share - Basic $ 0.32 $ 0.05 550 % $ 0.69 $ 0.35 98 %
 
Return on Average Assets (annualized) 1.23 % 0.20 % 0.95 % 0.55 %
Return on Average Equity (annualized) 11.25 % 1.64 % 8.69 % 4.59 %
Net Interest Margin (annualized) 4.57 % 4.52 % 4.84 % 4.24 %
Net Interest Margin (excluding FV amortization) 4.37 % 4.52 % 4.57 % 4.24 %
 

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