Market Overview

American Riviera Bank Reports Growth and Earnings

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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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