American Riviera Bank (OTC BB: ARBV) announced today unaudited net income of $931,000 for the nine months ended September 30, 2010. The strong earnings are attributable to increased net interest margin and stabilized credit costs.

Jeff DeVine, President and Chief Executive Officer stated, “We are very pleased with the Bank’s performance, and plan to re-invest our profits in the local community through relationship based lending at a time when many other financial institutions have pulled back.”

The Bank’s net interest margin reached 4.82% for the nine months ended September 30, 2010, up from 3.85% for the same period last year, and benefited from an increased core deposit mix. In the last 12 months, core deposits have increased 13% to $90 million, representing 84% of total deposits as of September 30, 2010. Demand deposits alone have grown a notable 40% since December 31, 2009. Year to date average loan balances for the nine months ended September 30, 2010 increased 8% from one year ago, with the Bank reporting $105 million in total loans outstanding at September 30, 2010.

American Riviera Bank continues to maintain an ample 2.76% loan loss allowance as a percentage of total loans. The Bank recorded $281,000 in loan loss provision and $57,000 in net recoveries for the nine months ended September 30, 2010. Continued improvements in loan quality have resulted in a 48% reduction in non-performing loans and other real estate owned since December 31, 2009.

The Bank reported a record $429,000 in unaudited net income for the quarter ended September 30, 2010. During the quarter, the Bank recorded a $58,000 loan charge-off and an $82,000 reduction in the fair value of other real estate owned. Net interest margin was 5.11% for the quarter ended September 30, 2010, up from 4.90% for the previous quarter. The Bank maintains a strong capital position with Tier 1 capital to total assets of 14% as of September 30, 2010, well above the regulatory guideline of 5% for well capitalized institutions.

Company Profile

American Riviera Bank is a full service community bank, focused on serving the lending and deposit needs of businesses and consumers in our community. The Bank was founded in 2006 by over 400 local shareholders and has one branch located at 1033 Anacapa Street in downtown Santa Barbara.

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.

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