American Riviera Bancorp (“Company”) (OTCQX: ARBV), holding
company of American Riviera Bank (“Bank”), announced today
unaudited net income of $4.6 million ($0.80 per share) for the six
months ended June 30, 2024, compared to $5.7 million ($0.98 per
share) earned in the same reporting period in the previous year.
Unaudited net income was $2.5 million ($0.42 per share) for the
three months ended June 30, 2024, compared to $2.2 million ($0.37
per share) in the previous quarter, and $2.7 million ($0.47 per
share) earned in the same reporting period in the previous
year.
Jeff DeVine, President and CEO of the Company and the Bank
stated, “We continue to expand and grow our client base, opening
over 1,100 new demand deposit and savings accounts in the first
half of the year. We opened our Atascadero branch just a few weeks
ago and have already gathered over $5 million in new deposits. Loan
demand is increasing, allowing us to serve customer needs, support
the growth of our communities and enhance shareholder return.”
Second Quarter Highlights
- The Bank has the highest “Super Premier” rating for financial
performance from the Findley Reports and maintained a “5 Star -
Superior” rating from Bauer Financial as of March 31, 2024.
- The Bank was rated “Outstanding” by the Federal Deposit
Insurance Corporation in 2023 for its performance under the
Community Reinvestment Act.
- Total shareholders’ equity of $105.4 million at June 30, 2024,
has increased $3.7 million or 3.6% from the prior quarter-end, and
$12.6 million or 13.6% from the same reporting period in the
previous year.
- Tangible book value per share of $17.26 at June 30, 2024, has
increased $0.64 or 3.9% from the prior quarter-end, and $2.04 or
13.4% from the same reporting period in the previous year.
- All Bank capital ratios increased in the second quarter of 2024
as well as the Company’s tangible common equity ratio. The Bank’s
regulatory capital ratios were all above “well-capitalized”
standards. The Company’s tangible common equity ratio at June 30,
2024 was 7.92%, an increase from 6.86% at June 30, 2023.
- Return on average assets for the second quarter ended June 30,
2024, was 0.77%, and return on average equity was 9.57%.
- Total loans were $963.7 million at June 30, 2024, an increase
of $12.9 million or 1.4% from the prior quarter-end, and an
increase of $18.3 million or 1.9% from June 30, 2023. The Bank’s
loan-to-deposit ratio at June 30, 2024, was 90.2%.
- Total deposits were $1.07 billion at June 30, 2024,
representing $18.6 million or 1.8% increase from the $1.05 billion
at March 31, 2024, and a slight decrease of $14.5 million or 1.3%
from June 30, 2023.
- Non-interest-bearing demand deposits represent 39.8% of total
deposits, and total demand deposits represent 50.1% of total
deposits, respectively, at June 30, 2024.
- Total cost of deposits increased to 1.35% for the second
quarter of 2024, compared to 1.09% in the prior quarter, and 0.73%
for the same quarter in the prior year. Total cost of funding
sources increased to 1.70% for the second quarter of 2024, compared
to 1.51% in the prior quarter, and 1.02% for the same quarter in
the prior year. Overall funding costs for the Company have
increased due to Federal Reserve policy but remain modest compared
to industry averages based on our relationship banking focus.
- Non-interest expenses have remained tightly controlled at $8.1
million for the second quarter of 2024, the same as the prior
quarter, and only slightly more than the $8.0 million for the same
quarter of the prior year.
- On-balance sheet liquidity continues to be substantial with
$218.1 million of cash, due from banks, and available-for-sale
(“AFS”) securities market value at June 30, 2024.
- Access to available sources of liquidity including fed funds
lines of credit with correspondent banks, unused secured borrowing
capacity with the Federal Home Loan Bank (“FHLB”), and unused
secured borrowing capacity with the Federal Reserve totaled $404.2
million at June 30, 2024.
- Allowance for Credit Losses (“ACL”) was 1.21% of total loans at
June 30, 2024, slightly decreased from 1.23% at March 31, 2024 and
June 30, 2023.
- The Bank’s commercial real estate (“CRE”) portfolio is diverse,
with only $83.8 million in the non-owner occupied office category.
Credit underwriting is strong with weighted average loan-to-values
of 31% to 54% and weighted average debt coverage ratios between
1.96 and 2.76 depending on the individual CRE category.
- The Bank maintained strong credit quality with no other real
estate owned, no loans 90 days or more past due, and only $0.6
million or 0.06% of total loans on non-accrual status, which are
well supported by collateral or reserves.
Second Quarter Earnings
For the second quarter of 2024, unaudited net income was $2.5
million, compared to $2.2 million in the first quarter of 2024, and
$2.7 million in the second quarter of 2023. The decrease in
earnings compared to the second quarter of the previous year is
primarily attributable to increased interest expense on deposits
and borrowings.
The Bank continues to grow interest and fees on loans
sequentially over the last four quarters from $11.8 million in the
second quarter of 2023 to $13.0 million in the second quarter of
2024, representing a $1.2 million or 10.6% increase. However, the
cost of funding has also increased sequentially due to the Federal
Reserve’s higher-rate policy. Total interest expense has increased
from $3.0 million in the second quarter of 2023 to $4.9 million in
the second quarter of 2024, a $1.9 million or 65.0% increase.
Non-Interest Income and Expense
Total non-interest income was $1.5 million for the second
quarter of 2024, compared to $0.9 million for the prior quarter,
and $1.0 million for the same quarter last year. The second quarter
of 2024 included a non-recurring $0.5 million pre-tax gain on the
redemption of $1.5 million in subordinated debentures. Variances
between the quarters relate primarily to SBA loan sale premiums,
mortgage broker fees, loan interest rate swap fees, and loan
prepayment fees.
Non-interest expense was $8.1 million for the second quarter of
2024, same as the prior quarter, and slightly more than the $8.0
million reported for the same quarter of the prior year. Cost
savings generated from our core and online banking vendor contract
have allowed for targeted personnel increases in deposit generating
roles including staffing for our recently opened branch in
Atascadero.
Loans and Asset Quality
Total loans were $963.7 million at June 30, 2024, an increase of
$12.9 million or 1.4% from the prior quarter-end, and an increase
of $18.3 million or 1.9% from June 30, 2023.
The Bank’s ACL was $11.7 million at June 30, 2024, with a
resulting coverage ratio of 1.21%, as compared to $11.6 million or
1.23% at June 30, 2023. As of June 30, 2024, non-accrual loans
totaled $0.6 million, no change from the previous quarter-end, and
a reduction of $2.2 million from June 30, 2023. Credit quality
remains strong.
Deposits & Borrowings
Total deposits were $1.07 billion at June 30, 2024, representing
an $18.6 million or 1.8% increase from March 31, 2024, and a slight
decrease of $14.5 million or 1.3% since June 30, 2023.
Non-interest-bearing demand deposits totaled $425.0 million at
June 30, 2024, an increase of $9.3 million or 2.2% from the prior
quarter-end, and a decrease of $17.1 million or 3.9% from June 30,
2023. Non-interest-bearing demand deposits represent 39.8% of total
deposits at June 30, 2024, compared to 39.6% at the prior
quarter-end, and 40.8% at June 30, 2023.
Interest-bearing demand deposits totaled $110.3 million at June
30, 2024, a decrease of $24.2 million or 18.0% from the prior
quarter-end, and a decrease of $30.6 million or 21.7% from June 30,
2023. Demand deposits represent 50.1% of total deposits at June 30,
2024, a decrease from 52.4% at the prior quarter-end, and 53.9% at
June 30, 2023.
Other interest-bearing deposits totaled $532.7 million at June
30, 2024, an increase of $33.4 million or 6.7% from the prior
quarter-end, and an increase of $33.2 million or 6.7% from June 30,
2023.
Although the Bank continues to maintain core deposit
relationships, consistent with industry trends in this higher-rate
environment, certain depositors are reinvesting their excess cash
in non-FDIC insured, external investment products resulting in a
deposit mix shift from non-interest-bearing to
interest-bearing.
The weighted average cost of deposits for the second quarter of
2024 was 1.35%, compared to 1.09% for the previous quarter, and
0.73% for the same quarter last year. The increase in the cost of
deposits this quarter is partially due to the Bank acquiring an
additional $10.0 million, for a total of $39.3 million, in
short-term brokered CD’s at rates higher than our average cost of
deposits, but at a favorable spread to FHLB borrowings.
The Bank decreased its FHLB advances to $60.0 million at June
30, 2024 from $85.0 million at March 31, 2024. At June 30, 2024,
the Bank had $50.0 million of short-term, 30 days or less, FHLB
advances and another $10.0 million of long-term FHLB advances
outstanding. At June 30, 2024, the Company also had $10.0 million
drawn on a correspondent bank line of credit at a favorable rate of
3.85% and $16.5 million of subordinated notes outstanding at a
favorable rate of 3.75%. The weighted average cost on all
borrowings for the quarter was 5.06%, resulting in $1.4 million in
interest expense. The $86.5 million of total borrowings at June 30,
2024, was a $26.5 million decrease from the level carried at the
end of the first quarter of 2024.
The Bank’s liquidity position remained strong with a primary
liquidity ratio (cash and cash equivalents, deposits held in other
banks and unpledged AFS securities as a percentage of total assets)
of 15.3% at June 30, 2024, compared to 16.7% at March 31, 2024.
As of June 30, 2024, the Bank had available and unused, secured
borrowing capacity with the FHLB of San Francisco of $219.5
million, and had available and unused, secured borrowing capacity
with the Federal Reserve of $41.3 million. In addition, the Bank
also had $143.4 million of unused fed funds lines of credit with
correspondent banks at June 30, 2024. Available contingent funding
sources of $404.2 million remain robust.
Overall uninsured deposits, excluding public agency deposits
that are collateralized, are conservatively estimated to be $375.9
million, or 35.2% of total deposit balances as of June 30, 2024.
The actual level of uninsured deposits is lower than the percentage
stated above, as our knowledgeable bankers have helped clients
obtain more than $250,000 of FDIC insurance with vesting structures
such as joint accounts, payable upon death accounts, and revocable
trust accounts with multiple beneficiaries. In addition, the Bank
can offer up to $50 million of FDIC pass-through insurance to
clients via the IntraFi network Insured Cash Sweep (“ICS”) or
Certificate of Deposit Account Registry System (“CDARS”)
products.
Shareholders’ Equity
Total shareholders’ equity was $105.4 million at June 30, 2024,
a $3.7 million or 3.6% increase since March 31, 2024, and an
increase of $12.6 million or 13.6% over the same period of the
prior year. The tax adjusted unrealized loss on securities, which
is a component of equity (accumulated other comprehensive income or
“AOCI”), decreased $0.9 million or 4.3% from $21.9 million at March
31, 2024, to $20.9 million at the end of the second quarter of
2024. The Bank fully expects to receive all principal when the
investments mature. As of June 30, 2024, the Company has not
repurchased any shares under the previously announced share
repurchase program.
Company
Profile
American Riviera Bancorp (OTCQX: ARBV) is a registered bank
holding company headquartered in Santa Barbara, California.
American Riviera Bank, the 100% owned subsidiary of American
Riviera Bancorp, 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, Santa Maria, San Luis Obispo, Atascadero, and
Paso Robles. The Bank provides commercial business, commercial real
estate, residential mortgage, construction, and Small Business
Administration lending services as well as convenient online and
mobile technology. For thirteen 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. The Bank was rated “Outstanding” by
the Federal Deposit Insurance Corporation in 2023 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.
American Riviera Bancorp and Subsidiaries Balance Sheets
(unaudited) (dollars in thousands)
June 30, June
30, One Year One Year
2024
2023
$ Change
% Change
Assets Cash & Due From Banks
$
28,557
$
30,428
$
(1,871
)
-6%
Available-for-sale securities
189,514
215,951
(26,437
)
-12%
Held-to-maturity securities, net
41,360
41,295
65
0%
Loans
963,701
945,389
18,312
2%
Allowance For Credit Losses
(11,694
)
(11,638
)
(56
)
0%
Net Loans
952,008
933,751
18,257
2%
Premise & Equipment
8,527
8,716
(189
)
-2%
Operating Lease Right-of-Use Asset
4,636
6,126
(1,490
)
-24%
Bank Owned Life Insurance
11,930
11,487
443
4%
Stock in Other Banks
6,786
6,699
87
1%
Goodwill and Other Intangibles
4,956
4,936
20
0%
Other Assets
24,932
25,665
(733
)
-3%
Total Assets
$
1,273,206
$
1,285,054
$
(11,848
)
-1%
Liabilities & Shareholders' Equity
Non-interest-bearing Demand Deposits
$
424,991
$
442,078
$
(17,087
)
-4%
Interest-bearing Demand Deposits
110,323
140,935
(30,612
)
-22%
Other Interest-bearing Deposits
532,656
499,424
33,232
7%
Total Deposits
1,067,970
1,082,437
(14,467
)
-1%
Borrowed Funds
86,500
98,000
(11,500
)
-12%
Other Liabilities
13,342
11,819
1,523
13%
Total Liabilities
1,167,812
1,192,256
(24,444
)
-2%
Common Stock
67,509
66,836
673
1%
Retained Earnings
58,812
49,324
9,488
19%
Other Capital
(20,927
)
(23,362
)
2,435
-10%
Total Shareholders' Equity
105,394
92,798
12,596
14%
Total Liabilities & Shareholders' Equity
$
1,273,206
$
1,285,054
$
(11,848
)
-1%
American Riviera Bancorp and Subsidiaries Balance
Sheets (unaudited) (dollars in thousands)
June 30, March
31, December 31, September 30, June 30,
2024
2024
2023
2023
2023
Assets Cash & Due From Banks
$
28,557
$
33,029
$
19,683
$
26,905
$
30,428
Available-for-sale securities
189,514
200,905
207,271
206,842
215,951
Held-to-maturity securities
41,360
41,343
41,326
41,309
41,295
Loans
963,701
950,820
946,411
941,124
945,389
Allowance for Credit Losses
(11,694
)
(11,648
)
(11,648
)
(11,647
)
(11,638
)
Net Loans
952,008
939,172
934,763
929,477
933,751
Premise & Equipment
8,527
8,529
8,801
9,452
8,716
Operating Lease Right-of-Use Asset
4,636
4,931
5,193
5,234
6,126
Bank Owned Life Insurance
11,930
11,839
11,738
11,613
11,487
Stock in Other Banks
6,786
6,699
6,699
6,699
6,699
Goodwill and Other Intangibles
4,956
4,955
4,930
4,934
4,936
Other Assets
24,932
24,828
24,632
26,341
25,665
Total Assets
$
1,273,206
$
1,276,230
$
1,265,036
$
1,268,806
$
1,285,054
Liabilities & Shareholders' Equity
Non-interest-bearing Demand Deposits
$
424,991
$
415,648
$
443,070
$
457,723
$
442,078
Interest-bearing Demand Deposits
110,323
134,532
123,686
129,484
140,935
Other Interest-bearing Deposits
532,656
499,236
482,926
514,266
499,424
Total Deposits
1,067,970
1,049,416
1,049,682
1,101,473
1,082,437
Borrowed Funds
86,500
113,000
103,000
63,000
98,000
Other Liabilities
13,342
12,120
11,715
11,976
11,819
Total Liabilities
1,167,812
1,174,535
1,164,397
1,176,449
1,192,256
Common Stock
67,509
67,198
67,388
67,108
66,836
Retained Earnings
58,812
56,357
54,177
51,972
49,324
Other Capital
(20,927
)
(21,860
)
(20,926
)
(26,723
)
(23,362
)
Total Shareholders' Equity
105,394
101,695
100,639
92,357
92,798
Total Liabilities & Shareholders' Equity
$
1,273,206
$
1,276,230
$
1,265,036
$
1,268,806
$
1,285,054
American Riviera Bancorp and Subsidiaries
Statement of Income (unaudited) (dollars in thousands,
except per share data)
Quarter Ended Six Months Ended
June 30, June 30, June 30, June 30,
2024
2023
Change
2024
2023
Change
Interest Income Interest and Fees on Loans
$
13,043
$
11,794
11%
$
25,715
$
22,996
12%
Interest on Securities
1,595
1,792
-11%
3,306
3,525
-6%
Interest on Due From Banks
291
265
10%
443
541
-18%
Total Interest Income
14,928
13,851
8%
29,465
27,061
9%
Interest Expense Interest Expense on Deposits
3,534
1,965
80%
6,340
3,239
96%
Interest Expense on Borrowings
1,370
1,006
36%
2,908
1,427
104%
Total Interest Expense
4,903
2,971
65%
9,248
4,666
98%
Net Interest Income
10,025
10,880
-8%
20,217
22,395
-10%
Provision for Credit Losses
45
163
-72%
43
163
-73%
Net Interest Income After Provision
9,980
10,717
-7%
20,174
22,233
-9%
Non-Interest Income Service Charges, Commissions and
Fees
731
764
-4%
1,251
1,227
2%
Other Non-Interest Income
805
222
262%
1,165
289
304%
Total Non-Interest Income
1,536
987
56%
2,416
1,516
59%
Non-Interest Expense Salaries and Employee Benefits
5,104
4,588
11%
10,327
9,529
8%
Occupancy and Equipment
893
868
3%
1,766
1,773
0%
Other Non-Interest Expense
2,129
2,508
-15%
4,134
4,643
-11%
Total Non-Interest Expense
8,126
7,964
2%
16,228
15,946
2%
Net Income Before Provision for Taxes
3,389
3,740
-9%
6,362
7,803
-18%
Provision for Taxes
934
1,052
-11%
1,727
2,143
-19%
Net Income
$
2,455
$
2,687
-9%
$
4,635
$
5,660
-18%
0
Shares Outstanding
5,819,759
5,772,012
1%
5,819,759
5,772,012
1%
Earnings Per Share - Basic
$
0.42
$
0.47
-9%
$
0.80
$
0.98
-19%
Return on Average Assets
0.77%
0.85%
-9%
0.73%
0.92%
-21%
Return on Average Equity
9.57%
11.84%
-19%
9.11%
13.00%
-30%
Net Interest Margin
3.24%
3.51%
-8%
3.28%
3.64%
-10%
American Riviera Bancorp and Subsidiaries Five
Quarter Statements of Income (unaudited) (dollars in thousands,
except per share data)
Three Months Ended June 30,
March 31, December 31, September 30, June 30,
2024
2024
2023
2023
2023
Interest Income Interest and Fees on Loans
$
13,043
$
12,672
$
12,557
$
12,134
$
11,794
Interest on Securities
1,595
1,712
1,751
1,664
1,792
Interest on Due From Banks
291
153
293
221
265
Total Interest Income
14,928
14,537
14,601
14,019
13,851
Interest Expense Interest Expense on Deposits
3,534
2,806
2,735
2,514
1,965
Interest Expense on Borrowings
1,370
1,538
863
618
1,006
Total Interest Expense
4,903
4,344
3,598
3,131
2,971
Net Interest Income
10,025
10,192
11,003
10,888
10,880
Provision for Credit Losses
45
(2
)
-
8
163
Net Interest Income After Provision
9,980
10,194
11,003
10,880
10,717
Non-Interest Income Service Charges, Commissions and
Fees
731
520
525
467
764
Other Non-Interest Income
805
361
(257
)
225
222
Total Non-Interest Income
1,536
881
268
692
987
Non-Interest Expense Salaries and Employee Benefits
5,104
5,223
4,838
4,599
4,588
Occupancy and Equipment
893
873
907
862
868
Other Non-Interest Expense
2,129
2,006
2,485
2,452
2,508
Total Non-Interest Expense
8,126
8,101
8,230
7,912
7,964
Net Income Before Provision for Taxes
3,389
2,974
3,041
3,660
3,740
Provision for Taxes
934
793
838
1,011
1,052
Net Income
$
2,455
$
2,180
$
2,203
$
2,649
$
2,688
Shares Outstanding
5,819,759
5,820,150
5,768,697
5,771,679
5,772,012
Earnings Per Share - Basic
$
0.42
$
0.37
$
0.38
$
0.46
$
0.47
Net Income pre-tax, pre-provision (Non-GAAP)
$
3,434
$
2,972
$
3,039
$
3,668
$
3,902
American Riviera Bancorp and Subsidiaries 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,
2024
2024
2023
2023
2023
Income and performance ratios: Net Income
$
2,455
$
2,180
$
2,203
$
2,649
$
2,688
Earnings per share - basic
0.42
0.37
0.38
0.46
0.47
Return on average assets
0.77%
0.69%
0.69%
0.80%
0.85%
Return on average equity
9.57%
8.65%
9.36%
10.98%
11.84%
Cost of Funds
1.70%
1.51%
1.23%
1.06%
1.02%
Cost of Deposits
1.35%
1.09%
1.00%
0.90%
0.73%
Net interest margin
3.24%
3.34%
3.61%
3.47%
3.51%
Efficiency ratio (b)
70.30%
74.33%
73.01%
68.79%
66.97%
Balance Sheet ratios: Loan-to-deposit ratio
90.24%
90.60%
90.16%
85.44%
87.34%
Non-interest-bearing deposits / total deposits
39.79%
39.61%
42.21%
41.56%
40.84%
Demand deposits / total deposits
50.12%
52.43%
53.99%
53.31%
53.86%
Asset quality: Allowance for credit losses
$
11,694
$
11,648
$
11,648
$
11,647
$
11,638
Nonperforming assets
614
631
595
2,708
2,818
Allowance for credit losses / total loans and leases
1.21%
1.23%
1.23%
1.24%
1.23%
Net charge-offs / average loans and leases (annualized)
0.00%
0.00%
0.00%
0.00%
0.00%
Texas ratio (a)
0.69%
0.74%
0.71%
2.73%
2.83%
Capital ratios for American Riviera Bank (c): Tier 1
risk-based capital
12.85%
12.76%
12.62%
12.14%
12.02%
Total risk-based capital
13.99%
13.90%
13.77%
13.28%
13.17%
Tier 1 leverage ratio
11.00%
10.82%
10.62%
10.12%
9.95%
Capital ratios for American Riviera Bancorp (c): Tier
1 risk-based capital
11.17%
11.07%
10.94%
10.52%
10.39%
Total risk-based capital
13.77%
13.84%
13.72%
13.31%
13.22%
Tier 1 leverage ratio
9.56%
9.39%
9.21%
8.77%
8.60%
Tangible common equity ratio
7.92%
7.61%
7.60%
6.92%
6.86%
Equity and share related: Common equity
$
105,394
$
101,695
$
100,639
$
92,357
$
92,798
Book value per share
18.11
17.47
17.45
16.00
16.08
Tangible book value per share
17.26
16.62
16.59
15.15
15.22
Tangible book value per share, excluding AOCI (d)
20.85
20.38
20.22
19.78
19.27
Stock closing price per share
16.60
15.96
16.50
16.15
15.20
Number of shares issued and outstanding
5,819.76
5,820.15
5,768.70
5,771.68
5,772.01
Notes: (a) The sum of Nonperforming assets and Other
Real Estate Owned, divided by the sum of Total Shareholder Equity
and Total Allowance for Credit Losses (less Preferred Stock and
Intangible Assets). (b) Annualized Operating Expense excluding
Provision for Credit Losses 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.
(c) Current period capital ratios are preliminary. (d) Accumulated
Other Comprehensive Income (AOCI), is comprised of the tax adjusted
unrealized loss on securities and is presented as Other Capital on
the Balance Sheet.
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version on businesswire.com: https://www.businesswire.com/news/home/20240724993042/en/
American Riviera Bank www.americanriviera.bank 805-965-5942
Michelle Martinich