American Riviera Bancorp (OTCQX:ARBV), the holding company of American Riviera Bank, reported unaudited net income of $4.3 million, or $0.75 per share, for the three months ended September 30, 2026. The result compared with $3.3 million, or $0.57 per share, in the previous quarter and $2.9 million, or $0.51 per share, in the same period of the previous year.
#Nine-month earnings increase
For the nine months ended September 30, 2026, unaudited net income reached $11.6 million, or $2.01 per share, compared with $7.9 million, or $1.38 per share, in the corresponding period of the previous year. The company reported that net income improved 46.7% and earnings per share improved 45.7% from the first nine months of 2025.
Third-quarter earnings included $477,000 of non-recurring loan interest recovery related to one non-accrual loan that was sold. Net income before tax and provision for credit losses, a non-GAAP measure, was $6.3 million. That was a $0.9 million, or 16.0%, increase from the second quarter of 2026 and a $1.8 million, or 40.2%, increase from the third quarter of 2025.
#Loans and deposits
Total loans stood at $1.18 billion at September 30, 2026, up $30.2 million, or 2.6%, from the prior quarter-end and $142.0 million, or 13.6%, from September 30, 2025.
Total deposits were $1.26 billion at September 30, 2026. Deposits increased $36.3 million, or 3.0%, during the third quarter and $2.5 million, or 0.2%, from the same date in the previous year. The company said quarterly deposit growth was primarily generated by core deposits, with $5.0 million of wholesale brokered deposits accepted at September 30, 2026.
Non-interest-bearing demand deposits were $486.5 million, or 38.5% of total deposits. Total demand deposits represented 52.1% of total deposits. The loan-to-deposit ratio was 93.71% at September 30, 2026, compared with 82.64% at September 30, 2025.
#Interest margin and funding costs
Net interest margin increased to 4.11% in the third quarter of 2026, compared with 4.01% in the prior quarter and 3.66% in the third quarter of 2025. Excluding the $477,000 non-recurring loan interest recovery, net interest margin was 4.02%.
The weighted average cost of deposits was 1.27%, down from 1.45% in the same quarter of the previous year but up from 1.24% in the second quarter of 2026. The company attributed the quarterly increase to a competitive deposit rate environment. Cost of funds was 1.42%, compared with 1.36% in the prior quarter and 1.48% in the third quarter of 2025.
Total interest expense was $4.7 million in the third quarter, compared with $4.6 million in the same period of the previous year. The company said interest expense increased from the prior quarter primarily because of higher average short-term borrowings used to support loan growth.
#Credit quality and liquidity
The allowance for credit losses was $14.3 million at September 30, 2026, producing a coverage ratio of 1.21%. Non-accrual loans totalled $4.2 million, or 0.35% of total loans, down from $9.8 million at September 30, 2025. American Riviera Bank reported no other real estate owned and no loans 90 days or more past due and still accruing. It said non-accrual loans were supported by collateral, borrower assets, Small Business Administration guarantees or specific reserves.
The bank reported $192.9 million in cash, amounts due from banks and available-for-sale securities at market value. Its primary liquidity ratio was 11.7%, and available contingent funding sources were $545.0 million at September 30, 2026.
Uninsured deposits, excluding collateralised public agency deposits, were conservatively estimated at $439.6 million, or 34.8% of total deposit balances. The company said the actual level was lower because clients had obtained additional Federal Deposit Insurance Corporation coverage through account structures. The bank can also offer up to $285 million of FDIC pass-through insurance through the IntraFi network's Insured Cash Sweep and Certificate of Deposit Account Registry Service products.
#Capital and expenses
Total shareholders' equity was $137.5 million at September 30, 2026, an increase of $15.4 million, or 12.7%, from the same period of the previous year. Tangible book value per share was $23.02, while the company's tangible common equity ratio was 9.02%.
The tax-adjusted unrealised loss on securities, recorded in accumulated other comprehensive income, was $16.0 million and had increased $1.3 million, or 8.7%, from September 30, 2025. The company said it expects to receive all principal when the securities mature.
Third-quarter non-interest expense was $9.6 million, compared with $9.2 million in the prior quarter and $8.6 million in the third quarter of 2025. The company attributed the changes to staffing, bonus accrual adjustments, operating losses and recoveries, and the timing of advertising and event costs.
#Share repurchases and company background
American Riviera Bancorp had repurchased a cumulative 130,616 shares at a weighted average cost of $19.80 as of September 30, 2026. The company had $2.4 million remaining under its existing share repurchase programme, and no shares were repurchased during the quarter.
Headquartered in Santa Barbara, California, American Riviera Bancorp owns American Riviera Bank, a full-service community bank serving businesses and consumers on California's Central Coast. The bank provides commercial business, commercial real estate, residential mortgage, construction and Small Business Administration lending services, along with online and mobile banking technology.
#Key Takeaways
- American Riviera Bancorp reported third-quarter 2026 net income of $4.3 million, or $0.75 per share.
- Nine-month net income was $11.6 million, or $2.01 per share, compared with $7.9 million, or $1.38 per share, in the previous year's period.
- Total loans reached $1.18 billion and total deposits reached $1.26 billion at September 30, 2026.
- Third-quarter net interest margin was 4.11%, while cost of deposits was 1.27% and cost of funds was 1.42%.
- Non-accrual loans were $4.2 million, or 0.35% of total loans, with no other real estate owned and no loans 90 days or more past due and still accruing reported.
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