American Riviera Bank announced Thursday unaudited net income of $1,024,000 for the year ended Dec. 31, 2010.

“2010 was a significant year for the bank,” said Jeff DeVine, president and chief executive officer. “We had substantial growth in our relationship customer base; while achieving profitability despite a
challenging banking environment. We are pleased to share this news with our shareholders and our community.”

The bank’s net interest margin was 4.75 percent for the year ended Dec. 31, up from 3.97 percent for the same period last year, and benefited from an increased core deposit mix.

In 2010, the number of core deposit accounts increased 18 percent, and the dollar amount of core deposits increased 11 percent to $95 million; a figure that represented 87 percent of total deposits as of Dec. 31. Noninterest bearing demand deposits have grown a notable 57 percent since Dec. 31, 2009.

Average loan balances for the year ended Dec. 31 increased 5 percent to $103 million from the same period last year. However, because of normal loan payment amortization and targeted construction loan payoffs in conjunction with limited new loan demand from qualified borrowers; loan balances outstanding at Dec. 31 were $94 million.

American Riviera Bank had a 3.37 percent and 2.43 percent allowance for loan losses as a percentage of total loans at Dec. 31, 2010 and 2009, respectively. Management and the Board of Directors believes the allowance for loan losses is adequate at Dec. 31.

The bank recorded $648,000 in loan loss provision and $54,000 in net loan charge-offs for the year ended Dec. 31, compared with $2.7 million and $1.2 million for the year ended Dec. 31, 2009, respectively. Continued improvements in loan quality have resulted in a 57 percent reduction in nonperforming loans and real estate owned since Dec. 31, 2009. As of Dec. 31, 2010, the bank was not carrying any real estate owned.

The bank has $140 million in total assets and maintains a strong capital position with Tier 1 capital to total assets exceeding 13 percent as of Dec. 31, well above the regulatory guideline of 5 percent for well-capitalized institutions.

— Michelle Martinich is senior vice president and chief financial officer for American Riviera Bank.