American Riviera Bank Reports Growth and Earnings

American Riviera Bank (OTC Markets: ARBV) announced today unaudited net income of $2,827,000 ($0.64 per share) for the six months ended June 30, 2018. This represents a 33% increase in net income from the $2,118,000 ($0.48 per share) for the same reporting period in the prior year. The annualized return on average assets of 1.08% and return on average equity of 10.37% represents an increase from the 0.95% and 8.40%, respectively, achieved for the same reporting period in the prior year. The Bank reported unaudited net income of $1,475,000 ($0.33 per share) for the second quarter ended June 30, 2018 compared to $1,163,000 ($0.27 per share) for the same quarter last year.

Loans and deposits continue to experience double digit growth. As of June 30, 2018, the Bank reported $532 million in total deposits. Checking accounts, comprised of non-interest bearing demand deposits and interest bearing NOW accounts, increased by $46 million or 22% from the same reporting period last year. Deposit origination volume is noteworthy, with the Bank opening over 1,100 new accounts at our four locations year to date 2018.

Loan demand remained strong, with total loans increasing $81 million or 20% from June 30, 2017, reaching $478 million at June 30, 2018 with no loans that were 90 days or more past due and no other real estate owned. The Bank reported an annualized net interest margin of 4.52% for the six months ending June 30, 2018.

Jeff DeVine, President and Chief Executive Officer, stated, "American Riviera Bank's net income of $2.8 million in the first six months of 2018 represents strong core earnings and the continued growth of our relationships in Santa Barbara and San Luis Obispo Counties. The earnings are a reflection of growth in both loans and deposits. Our commitment to community banking – meeting the financial needs of families and businesses with service that is both personal and high tech continues to build our presence throughout the Central Coast."

As of June 30, 2018, American Riviera Bank maintained a strong capital position with a Tier 1 Capital Ratio of 10%, well above the regulatory guideline of 8% for well capitalized institutions. The tangible book value per share of American Riviera Bank common stock is $11.60 at June 30, 2018, a 7% increase from $10.81 at June 30, 2017.

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 at 1033 Anacapa Street in Santa Barbara, 525 San Ysidro Road in Montecito, 5880 Calle Real in Goleta and 1601 Spring Street in Paso Robles with the Santa Barbara Lending office at 30 East Figueroa and a residential loan production office located at 18 East Figueroa in Santa Barbara. For eight consecutive years the Bank has been recognized for strong financial performance by the Findley Reports, and received the highest "Super Premier" rating from Findley for 2017. As of March 31, 2018, 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)
						Jun 30,						Jun 30,						One Year
						2018						2017						Change
Assets
		Cash & Due From Banks				$	42,796					$	46,054					-7	%
		Fed Funds Sold					-						15,841					-100	%
		Securities					48,274						18,695					158	%
		Loans					477,837						396,876					20	%
		Allowance For Loan Losses					(4,895	)					(4,001	)				22	%
		Net Loans					472,942						392,875					20	%
		Fixed Assets					5,294						1,210					338	%
		Goodwill and Other Intangibles					6,462						5,785					12	%
		Other Assets					15,464						15,369					1	%
Total Assets							591,232						495,829					19	%
Liabilities & Shareholders' Equity
		Demand Deposits					168,609						159,289					6	%
		NOW Accounts					86,543						50,072					88	%
		Other Interest Bearing Deposits					276,460						230,160					20	%
		Total Deposits					531,612						439,521					21	%
		Borrowed Funds					-						2,000					-100	%
		Other Liabilities					2,134						1,092					95	%
		Total Liabilities					533,746						442,613					21	%
		Common Stock					46,212						42,824					8	%
		Retained Earnings					11,768						10,384					13	%
		Other Capital					(494	)					8					-6275	%
		Total Shareholders' Equity					57,486						53,216					8	%
Total Liabilities & Shareholders' Equity						$	591,232					$	495,829					19	%
		Book Value Per Share				$	13.06					$	12.13					8	%
		Tangible Book Value Per Share				$	11.60					$	10.81					7	%

Statements of Income (unaudited)
(dollars in thousands)
						Quarter Ended																	6 Months Ended
						Jun 30,						Jun 30,											Jun 30,						Jun 30,
						2018						2017						Change					2018						2017						Change
Interest Income
		Interest and Fees on Loans				$	5,769					$	5,006					15	%				$	11,037					$	9,794					13	%
		Net Fair Value Amortization Income					176						233					-24	%					306						468					-35	%
		Interest on Securities					253						41					521	%					437						60					628	%
		Interest on Fed Funds					1						28					-97	%					11						42					-73	%
		Interest on Due From Banks					122						87					40	%					269						175					53	%
		Total Interest Income					6,321						5,395					17	%					12,060						10,539					14	%
Interest Expense
		Interest Expense on Deposits					326						245					33	%					592						464					27	%
		Interest Expense on Borrowings					98						18					444	%					120						23					423	%
		Total Interest Expense					424						263					61	%					712						487					46	%
Net Interest Income							5,897						5,132					15	%					11,348						10,052					13	%
		Provision for Loan Losses					363						252					44	%					631						639					-1	%
Net Interest Income After Provision							5,534						4,880					13	%					10,717						9,413					14	%
Non-Interest Income
		Service Charges, Commissions and Fees					409						302					35	%					845						576					47	%
		Other Non-Interest Income					84						76					11	%					198						165					20	%
		Total Non-Interest Income					493						378					30	%					1,043						741					41	%
Non-Interest Expense
		Salaries and Employee Benefits					2,278						1,898					20	%					4,631						3,854					20	%
		Occupancy and Equipment					429						372					16	%					821						741					11	%
		Other Non-Interest Expense					1,227						1,125					9	%					2,376						2,099					13	%
		Total Non-Interest Expense					3,934						3,395					16	%					7,828						6,694					17	%
Net Income Before Provision for Taxes							2,093						1,863					12	%					3,932						3,460					14	%
Provision for Taxes							618						700					-12	%					1,105						1,342					-18	%
Net Income						$	1,475					$	1,163					27	%				$	2,827					$	2,118					33	%
		Shares (end of period)					4,440,082						4,387,369					1	%					4,440,082						4,387,369					1	%
		Earnings Per Share - Basic				$	0.33					$	0.27					26	%				$	0.64					$	0.48					33	%
		Return on Average Assets (annualized)					1.07	%					0.99	%										1.08	%					0.95	%
		Return on Average Equity (annualized)					10.47	%					8.92	%										10.37	%					8.40	%
		Net Interest Margin (annualized)					4.54	%					4.63	%										4.52	%					4.70	%

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