For the nine months ending September 30, 2012, American Riviera Bank reported unaudited pre-tax income of $1.3 million ($0.51 per share), compared to $1.1 million ($0.45 per share) reported for the same period last year. After-tax, unaudited net income was $807 thousand ($0.32 per share) for the nine months ending September 30, 2012.
Jeff DeVine, President and Chief Executive Officer stated, “We are pleased to report strong growth in earnings to our shareholders this quarter and year to date. We plan to utilize our stable and growing earnings to invest in our new branch in Montecito which will open in early 2013. With an additional branch, the Bank will further its mission of building lasting relationships in our community.”
Record pre-tax income was achieved through a combination of growth in the loan portfolio, stable funding costs from increased non-interest bearing deposits, and reduced credit costs. Loans averaged $118 million in the third quarter of 2012 versus $100 million in the third quarter of 2011. The loan portfolio was $117 million at September 30, 2012, an increase of 14% since September 30, 2011.
Deposits have also grown substantially with a 44% increase in non-interest bearing checking accounts compared to one year ago. American Riviera Bank reported $133 million in total deposits with $30 million in non-interest bearing checking accounts at September 30, 2012; compared to $108 million and $21 million at September 30, 2011, respectively. Although there has been some pressure on net interest margin due to competition for quality loans in our community; net interest margin remains well above peer average at 5.22% year to date, and 4.96% in the most recent quarter, due to the funding advantage provided by growing non-interest bearing deposits.
American Riviera Bank was successful in its efforts to dispose of substantially all other real estate owned during the third quarter of 2012. At September 30, 2012, the ratio of non-performing assets to total assets declined to 0.47% from 2.85% at June 30, 2012. The Bank’s non-performing asset ratio is now significantly lower than the peer average of 3.44% representing California banks with assets between $100-500 million. American Riviera Bank has no loans past due more than 30 days, no non-accrual loans, and only $550 thousand of other real estate owned at September 30, 2012. The Bank did not need to add to the allowance for loan and lease loss in the third quarter, as the 1.90% allowance to total loans was considered adequate given improved credit quality.
As of September 30, 2012, total assets were $162 million. The Bank continues to maintain a strong capital position with Tier 1 capital to total assets of 13%, well above the regulatory guideline of 5% for well capitalized institutions. The tangible book value of one share of American Riviera Bank common stock is now $9.18.
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 currently has one branch located at 1033 Anacapa Street in downtown Santa Barbara.