American Riviera Bancorp (“Company”) (OTCQX: ARBV), holding
company of American Riviera Bank (“Bank”), announced today
unaudited net income was $2.2 million ($0.37 per share) for the
quarter ended March 31, 2024, compared to $2.2 million ($0.38 per
share) in the previous quarter, and $3.0 million ($0.52 per share)
earned in the same reporting period in the previous year. Earnings
for the last two quarters have remained stable despite the
continued high-rate environment.
Jeff DeVine, President and CEO of the Company and the Bank,
stated, “With our newly enhanced online banking technology we have
been able to launch new products and services to meet the needs of
our existing and prospective clients. We are serving additional
communities and industries within our geographic footprint that are
benefiting from what American Riviera Bank has to offer. Competitor
consolidation has provided attractive opportunities to hire
relationship bankers, and we look forward to announcing continued
expansion on the Central Coast of California.”
First 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 December 31, 2023.
- 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 $101.7 million at March 31, 2024,
has increased $1.1 million or 1.0% from the prior quarter-end, and
$10.1 million or 11.1% from the same reporting period in the
previous year.
- Tangible book value per share of $16.62 at March 31, 2024, has
increased $0.03 or 0.2% from the prior quarter-end, and $1.59 or
10.6% from the same reporting period in the previous year.
- All Bank and Company capital ratios increased in the first
quarter of 2024. The Bank’s regulatory capital ratios were all
above “well-capitalized” standards.
- Return on average assets for the first quarter ended March 31,
2024, was 0.69%, and return on average equity was 8.65%.
- Total loans were $950.8 million at March 31, 2024, an increase
of $4.4 million or 0.5% from the prior quarter-end, and an increase
of $26.1 million or 2.8% from March 31, 2023. The Bank’s
loan-to-deposit ratio at March 31, 2024, was 90.6%.
- Total deposits were $1.05 billion at March 31, 2024,
representing no change from the $1.05 billion at December 31, 2023,
and a modest decrease of $50.2 million or 4.6% from March 31,
2023.
- Non-interest-bearing demand deposits represent 39.6% of total
deposits, and total demand deposits represent 52.4% of total
deposits, respectively, at March 31, 2024.
- Total cost of deposits increased to 1.09% for the first quarter
of 2024, compared to 1.00% in the prior quarter, and 0.45% for the
same quarter in the prior year. Total cost of funding sources
increased to 1.51% for the first quarter of 2024, compared to 1.23%
in the prior quarter, and 0.59% 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 first quarter of 2024, compared to $8.2 million in
the prior quarter, and $8.0 million for the same quarter of the
prior year.
- On-balance sheet liquidity continues to be substantial with
$233.9 million of cash, due from banks, and available-for-sale
(“AFS”) securities market value at March 31, 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 $386.2
million at March 31, 2024.
- Allowance for Credit Losses (“ACL”) was 1.23% of total loans at
March 31, 2024, unchanged from December 31, 2023, and 1.24% at
March 31, 2023. Provision for credit losses related to securities
for the first quarter of 2024 was a $2,000 reversal of previous
expense, compared to zero in the prior quarter and the same quarter
in the prior year.
- 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 0.07% of total loans on non-accrual status, which are
well supported by collateral or reserves.
First Quarter Earnings
For the first quarter of 2024, unaudited net income was $2.2
million, compared to $2.2 million in the fourth quarter of 2023,
and $3.0 million in the first quarter of 2023. The decrease in
earnings compared to the first quarter of the previous year is
primarily attributable to increased interest expense and decreased
interest income on cash and due from banks.
The Bank continues to grow interest and fees on loans
sequentially over the last four quarters from $11.2 million in the
first quarter of 2023 to $12.7 million in the first quarter of
2024, representing a $1.5 million or 13.1% increase. However, the
cost of funding has also increased sequentially from the
historically low levels that existed prior to the Federal Reserve’s
aggressive rate increase policy. Total interest expense has
increased from $1.7 million in the first quarter of 2023 to $4.3
million in the first quarter of 2024, a $2.6 million or 156.3%
increase.
Non-Interest Income and Expense
Total non-interest income was $0.9 million for the first quarter
of 2024, compared to $0.3 million for the prior quarter, and $0.5
million for the same quarter last year. The fourth quarter of 2023
included a non-recurring $0.5 million pre-tax loss on the sale of
$15.6 million in AFS securities. Variances between the quarters
relate primarily to SBA loan sale premiums, mortgage broker fees,
loan swap fees and loan prepayment fees.
Non-interest expense was $8.1 million for the first quarter of
2024, compared to $8.2 million in the prior quarter, and $8.0
million for the same quarter of the prior year. Expenses in the
second, third, and fourth quarters of 2023 were elevated due to
non-recurring expenses related to technology upgrades that were
completed in the fourth quarter of 2023.
Loans and Asset Quality
Total loans were $950.8 million at March 31, 2024, an increase
of $4.4 million or 0.5% from the prior quarter-end, and an increase
of $26.1 million or 2.8% from March 31, 2023.
The Bank’s ACL was $11.6 million at March 31, 2024, with a
resulting coverage ratio of 1.23%, as compared to $11.5 million or
1.24% at March 31, 2023. As of March 31, 2024, non-accrual loans
totaled $0.6 million, resulting in no change from previous
quarter-end, and a reduction of $2.3 million from March 31, 2023.
Credit quality remains strong.
Deposits & Borrowings
Total deposits were $1.05 billion at March 31, 2024,
representing no change from December 31, 2023, and a decrease of
$50.2 million or 4.6% since March 31, 2023.
Non-interest-bearing demand deposits totaled $415.6 million at
March 31, 2024, a decrease of $27.4 million or 6.2% from the prior
quarter-end, and a decrease of $45.0 million or 9.8% from March 31,
2023. Non-interest-bearing demand deposits represent 39.6% of total
deposits at March 31, 2024, a decrease from 42.2% at the prior
quarter-end, and 41.9% at March 31, 2023.
Interest-bearing demand deposits totaled $134.5 million at March
31, 2024, an increase of $10.8 million or 8.8% from the prior
quarter-end, and a decrease of $3.9 million or 2.8% from March 31,
2023. Demand deposits represent 52.4% of total deposits at March
31, 2024, a decrease from 54.0% at the prior quarter-end, and 54.5%
at March 31, 2023.
Other interest-bearing deposits totaled $499.2 million at March
31, 2024, an increase of $16.3 million or 3.4% from the prior
quarter-end, and a decrease of $1.4 million or 0.3% from March 31,
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 first quarter of
2024 was 1.09%, compared to 1.00% for the previous quarter, and
0.45% for the same quarter last year. The increase in the cost of
deposits this quarter is partially due to the Bank acquiring $29.0
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 increased its FHLB advances to $85.0 million at March
31, 2024 from $75.0 million at December 31, 2023. At March 31,
2024, the Bank had $75.0 million of short-term, 30 days or less,
FHLB advances and another $10.0 million of long-term FHLB advances
outstanding. At March 31, 2024, the Company also had $10.0 million
drawn on a correspondent bank line of credit at a favorable rate of
3.85% and $18.0 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 $1.5 million in
interest expense. The $113.0 million of total borrowings at March
31, 2024, was a $10.0 million increase from the level carried at
the end of the fourth quarter of 2023.
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 16.7% at March 31, 2024, compared to 16.4% at December 31,
2023.
As of March 31, 2024, the Bank had available and unused, secured
borrowing capacity with the FHLB of San Francisco of $199.2
million, and had available and unused, secured borrowing capacity
with the Federal Reserve of $42.0 million. In addition, the Bank
also had $145.0 million of unused fed funds lines of credit with
correspondent banks at March 31, 2024. Available contingent funding
sources of $386.2 million remain robust.
Overall uninsured deposits, excluding public agency deposits
that are collateralized, are conservatively estimated to be $373.1
million, or 35.5% of total deposit balances as of March 31, 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 $101.7 million at March 31, 2024,
a $1.1 million or 1.0% increase since December 31, 2023, and an
increase of $10.1 million or 11.1% 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”), increased $0.9 million or 4.5% from $20.9 million at the
end of 2023 to $21.9 million at the end of the first quarter of
2024. The Bank fully expects to receive all principal when the
investments mature.
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, 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)
March 31,
March 31,
One Year
One Year
2024
2023
$ Change
% Change
Assets Cash & Due From Banks
$
33,029
$
64,252
$
(31,223
)
-49
%
Available-for-sale securities
200,905
223,547
(22,642
)
-10
%
Held-to-maturity securities, net
41,343
41,274
69
0
%
Loans
950,820
924,761
26,059
3
%
Allowance For Credit Losses
(11,648
)
(11,468
)
(180
)
2
%
Net Loans
939,172
913,293
25,879
3
%
Premise & Equipment
8,529
14,098
(5,569
)
-40
%
Goodwill and Other Intangibles
4,955
4,942
13
0
%
Other Assets
48,297
40,588
7,709
19
%
Total Assets
$
1,276,230
$
1,301,994
$
(25,764
)
-2
%
Liabilities & Shareholders' Equity
Non-interest-bearing Demand Deposits
$
415,648
$
460,667
$
(45,019
)
-10
%
Interest-bearing Demand Deposits
134,532
$
138,384
(3,852
)
-3
%
Other Interest-bearing Deposits
499,236
500,602
(1,366
)
0
%
Total Deposits
1,049,416
1,099,653
(50,237
)
-5
%
Borrowed Funds
113,000
98,000
15,000
15
%
Other Liabilities
12,120
12,785
(665
)
-5
%
Total Liabilities
1,174,535
1,210,438
(35,903
)
-3
%
Common Stock
67,198
66,381
817
1
%
Retained Earnings
56,357
46,250
10,108
22
%
Other Capital
(21,860
)
(21,075
)
(785
)
04
%
Total Shareholders' Equity
101,695
91,556
10,139
11
%
Total Liabilities & Shareholders' Equity
$
1,276,230
$
1,301,994
$
(25,763
)
-2
%
American Riviera Bancorp and Subsidiaries Balance Sheets
(unaudited) (dollars in thousands)
March 31,
December 31,
September 30,
June 30,
March 31,
2024
2023
2023
2023
2023
Assets Cash & Due From Banks
$
33,029
$
19,683
$
26,905
$
30,428
$
64,252
Available-for-sale securities
200,905
207,271
206,842
215,951
223,547
Held-to-maturity securities
41,343
41,326
41,309
41,295
41,274
Loans
950,820
946,411
941,124
945,389
924,761
Allowance for Credit Losses
(11,648
)
(11,648
)
(11,647
)
(11,638
)
(11,468
)
Net Loans
939,172
934,763
929,477
933,751
913,293
Premise & Equipment
8,529
13,994
14,686
14,842
14,098
Goodwill and Other Intangibles
4,955
4,930
4,934
4,936
4,942
Other Assets
48,297
43,069
44,653
43,851
40,588
Total Assets
$
1,276,230
$
1,265,036
$
1,268,806
$
1,285,054
$
1,301,994
Liabilities & Shareholders' Equity
Non-interest-bearing Demand Deposits
$
415,648
$
443,070
$
457,723
$
442,078
$
460,667
Interest-bearing Demand Deposits
134,532
123,686
129,484
140,935
138,384
Other Interest-bearing Deposits
499,236
482,926
514,266
499,424
500,602
Total Deposits
1,049,416
1,049,682
1,101,473
1,082,437
1,099,653
Borrowed Funds
113,000
103,000
63,000
98,000
98,000
Other Liabilities
12,120
11,715
11,976
11,819
12,785
Total Liabilities
1,174,535
1,164,397
1,176,449
1,192,256
1,210,438
Common Stock
67,198
67,388
67,108
66,836
67,411
Retained Earnings
56,357
54,177
51,972
49,324
46,251
Other Capital
(21,860
)
(20,926
)
(26,723
)
(23,362
)
(21,075
)
Total Shareholders' Equity
101,695
100,639
92,357
92,798
91,556
Total Liabilities & Shareholders' Equity
$
1,276,230
$
1,265,036
$
1,268,806
$
1,285,054
$
1,301,994
American Riviera Bancorp and Subsidiaries Statement of
Income (unaudited) (dollars in thousands, except per share
data)
Quarter Ended
March 31,
March 31,
2024
2023
Change
Interest Income Interest and Fees on Loans
$
12,672
$
11,201
13
%
Interest on Securities
1,712
1,733
-1
%
Interest on Due From Banks
153
276
-45
%
Total Interest Income
14,537
13,210
10
%
Interest Expense Interest Expense on Deposits
2,806
1,274
120
%
Interest Expense on Borrowings
1,538
421
266
%
Total Interest Expense
4,344
1,695
156
%
Net Interest Income
10,192
11,515
-11
%
Provision for Credit Losses
(2
)
-
0
%
Net Interest Income After Provision
10,194
11,515
-11
%
Non-Interest Income Service Charges, Commissions and
Fees
520
463
12
%
Other Non-Interest Income
361
66
445
%
Total Non-Interest Income
881
529
66
%
Non-Interest Expense Salaries and Employee Benefits
5,223
4,942
6
%
Occupancy and Equipment
873
905
-4
%
Other Non-Interest Expense
2,006
2,134
-6
%
Total Non-Interest Expense
8,101
7,981
2
%
Net Income Before Provision for Taxes
2,974
4,063
-27
%
Provision for Taxes
793
1,090
-27
%
Net Income
$
2,180
$
2,973
-27
%
Shares Outstanding
5,820,150
5,763,854
1
%
Earnings Per Share - Basic
$
0.37
$
0.52
-27
%
Return on Average Assets
0.69
%
0.98
%
-30
%
Return on Average Equity
8.65
%
14.22
%
-39
%
Net Interest Margin
3.34
%
3.76
%
-11
%
American Riviera Bancorp and Subsidiaries Five Quarter
Statements of Income (unaudited) (dollars in thousands, except
per share data)
Quarters Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2024
2023
2023
2023
2023
Interest Income Interest and Fees on Loans
$
12,672
$
12,557
$
12,134
$
11,794
$
11,201
Interest on Securities
1,712
1,751
1,664
1,792
1,733
Interest on Due From Banks
153
293
221
265
276
Total Interest Income
14,537
14,601
14,019
13,851
13,210
Interest Expense Interest Expense on Deposits
2,806
2,735
2,514
1,965
1,274
Interest Expense on Borrowings
1,538
863
618
1,006
421
Total Interest Expense
4,344
3,598
3,131
2,971
1,695
Net Interest Income
10,192
11,003
10,888
10,880
11,515
Provision for Credit Losses
(2
)
-
8
163
-
Net Interest Income After Provision
10,194
11,003
10,880
10,717
11,515
Non-Interest Income Service Charges, Commissions and
Fees
520
525
467
764
463
Other Non-Interest Income
361
(257
)
225
222
66
Total Non-Interest Income
881
268
692
987
529
Non-Interest Expense Salaries and Employee Benefits
5,223
4,838
4,599
4,588
4,942
Occupancy and Equipment
873
907
862
868
905
Other Non-Interest Expense
2,006
2,485
2,452
2,508
2,134
Total Non-Interest Expense
8,101
8,230
7,912
7,964
7,981
Net Income Before Provision for Taxes
2,974
3,041
3,660
3,740
4,063
Provision for Taxes
793
838
1,011
1,052
1,090
Net Income
$
2,180
$
2,203
$
2,649
$
2,688
$
2,973
Shares Outstanding
5,820,150
5,768,697
5,771,679
5,772,012
5,763,854
Earnings Per Share - Basic
$
0.37
$
0.38
$
0.46
$
0.47
$
0.52
Net Income pre-tax, pre-provision (Non-GAAP)
$
2,972
$
3,039
$
3,668
$
3,902
$
4,062
American Riviera Bancorp and Subsidiaries Selected
Financial Highlights (unaudited) (dollars in thousands, except
per share data)
At or for the Quarters Ended
March 31,
December 31,
September 30,
June 30,
March 31,
2024
2023
2023
2023
2023
Income and performance ratios: Net Income
$
2,180
$
2,203
$
2,649
$
2,688
$
2,973
Earnings per share - basic
0.37
0.38
0.46
0.47
0.52
Return on average assets
0.69
%
0.69
%
0.80
%
0.85
%
0.98
%
Return on average equity
8.65
%
9.36
%
10.98
%
11.84
%
14.22
%
Cost of Funds
1.51
%
1.23
%
1.06
%
1.02
%
0.59
%
Cost of Deposits
1.09
%
1.00
%
0.90
%
0.73
%
0.45
%
Net interest margin
3.34
%
3.61
%
3.47
%
3.51
%
3.76
%
Efficiency ratio (b)
74.33
%
73.01
%
68.79
%
66.97
%
65.52
%
Balance Sheet ratios: Loan-to-deposit ratio
90.60
%
90.16
%
85.44
%
87.34
%
84.10
%
Non-interest-bearing deposits / total deposits
39.61
%
42.21
%
41.56
%
40.84
%
41.89
%
Demand deposits / total deposits
52.43
%
53.99
%
53.31
%
53.86
%
54.48
%
Asset quality: Allowance for credit losses
$
11,648
$
11,648
$
11,647
$
11,638
$
11,468
Nonperforming assets
631
595
2,708
2,818
2,955
Allowance for credit losses / total loans and leases
1.23
%
1.23
%
1.24
%
1.23
%
1.24
%
Net charge-offs / average loans and leases (annualized)
0.00
%
0.00
%
0.00
%
0.00
%
0.00
%
Texas ratio (a)
0.74
%
0.71
%
2.73
%
2.83
%
3.01
%
Capital ratios for American Riviera Bank (c): Tier 1
risk-based capital
12.76
%
12.62
%
12.14
%
12.02
%
11.96
%
Total risk-based capital
13.90
%
13.77
%
13.28
%
13.17
%
13.12
%
Tier 1 leverage ratio
10.82
%
10.62
%
10.12
%
9.95
%
9.67
%
Capital ratios for American Riviera Bancorp (c): Tier
1 risk-based capital
11.07
%
10.94
%
10.52
%
10.39
%
10.32
%
Total risk-based capital
13.84
%
13.72
%
13.31
%
13.22
%
13.21
%
Tier 1 leverage ratio
9.39
%
9.21
%
8.77
%
8.60
%
8.32
%
Tangible common equity ratio
7.61
%
7.60
%
6.92
%
6.86
%
6.68
%
Equity and share related: Common equity
$
101,695
$
100,639
$
92,357
$
92,798
$
91,556
Book value per share
17.47
17.45
16.00
16.08
15.88
Tangible book value per share
16.62
16.59
15.15
15.22
15.03
Tangible book value per share, excluding AOCI (d)
20.38
20.22
19.78
19.27
18.68
Stock closing price per share
15.96
16.50
16.15
15.20
16.81
Number of shares issued and outstanding
5,820.15
5,768.70
5,771.68
5,772.01
5,763.85
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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American Riviera Bank www.americanriviera.bank 805-965-5942
Michelle Martinich