American Riviera Bancorp: Navigating Growth and Resilience in 2024

American Riviera Bancorp (ARBV), the holding company of American Riviera Bank, recently announced its financial results for the fourth quarter of 2024. The company reported unaudited net income of $8.7 million ($1.50 per share) for the year ended December 31, 2024, compared to $10.5 million ($1.82 per share) in the same period the previous year. For the three months ended December 31, 2024, unaudited net income was $2.0 million ($0.35 per share), slightly less than the previous quarter and the same period in the previous year. Despite the slight decrease in quarterly earnings, ARBV's financial performance remains robust, driven by its strategic focus on relationship banking and high demand deposits.

ARBV's strategic focus on relationship banking and high demand deposits has contributed significantly to its financial performance and stability. The bank's emphasis on providing high-quality, relationship-based services has led to a substantial increase in local deposits, which are considered "core deposits" from clients. At December 31, 2024, total deposits were $1.11 billion, an increase of $63.7 million or 6.1% from the previous year. This growth is a testament to the bank's dedication to providing high-quality, relationship-based services and responding to the needs of its community.



The increase in average core deposits allowed the bank to significantly reduce average wholesale-funded certificates of deposit and Federal Home Loan Bank (FHLB) advances. As a result of this favorable shift in funding mix, the total cost of funds decreased to 1.63% for the fourth quarter of 2024, compared to 1.66% in the prior quarter. Despite the increase in Federal Reserve policy rates, ARBV's overall funding costs remain modest compared to industry averages, due to its relationship banking focus and high percentage of demand deposits, which account for 49.2% of total deposits.

ARBV's strong capital structure and regulatory capital ratios position it to withstand potential economic downturns and geopolitical uncertainties. The company's total shareholders' equity increased by $10.7 million or 10.7% to $111.4 million at December 31, 2024, compared to the same reporting period in the previous year. This increase reflects the bank's ability to generate profits and retain earnings, which strengthens its capital base and enhances its ability to absorb potential losses during economic downturns. The tangible book value per share also increased by $1.72 or 10.4% to $18.31 at December 31, 2024, indicating that the bank's assets have increased in value, providing a buffer against potential losses.



All Bank and Company capital ratios increased in the fourth quarter of 2024, with the Bank's regulatory capital ratios being above "well-capitalized" standards. The Company's tangible common equity ratio at December 31, 2024, was 8.35%, an increase from 7.60% at December 31, 2023. These high capital ratios indicate that the bank has sufficient capital to absorb potential losses and maintain its financial stability.

In conclusion, American Riviera Bancorp's strategic focus on relationship banking and high demand deposits, combined with its strong capital structure and regulatory capital ratios, positions it to navigate potential economic downturns and geopolitical uncertainties. As the bank continues to grow and expand into new markets, it should maintain its strong credit quality and loan portfolio diversity to further strengthen its financial resilience. By doing so, ARBV will be well-equipped to face the challenges and opportunities that lie ahead in the ever-evolving financial landscape.