American Riviera Bank Reports Strong Core Loan Growth
07/22/2021 - 06:40 PM
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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