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American Riviera Bank Posts Its First Month of Profitability

The Santa Barbara bank, open for two years, reports a 93 percent rise in revenue for the first half of 2008

American Riviera Bank of Santa Barbara on Tuesday announced that the bank’s financial performance for the second quarter of 2008 reflects an increase to capital of $20,000.

David Duarte, acting president and CEO, said American Riviera Bank has shown its first month of profitability. The bank earned $45,000 in June.

“The profitability shown for the month of June is not a fluke,” Duarte said. “Management has been employing various strategies that kept the bank’s YTD net interest margin at 4.19 percent vs. our peer group average of 3.57 percent.”

American Riviera Bank (OTC BB:ARBV.OB) reported that revenue was $2.7 million in the first half, an increase of 93 percent, or $1.3 million, compared with the first half of 2007. The bank’s focus in 2008 has been on gathering core deposits. Net loss for the first half was $327,000 compared with $887,000 for the same period in 2007. The bank reported a net loss of $21,000 for the second quarter, compared with a net loss of $306,000 in the first quarter.

In the second quarter, the bank’s assets grew to $92.9 million, up from $73.2 million at year-end 2007. Loans grew from $62.2 million at year-end to $78.2 million, or 26 percent, at June 30. The bank holds $65.8 million in deposits, up from $50.5 million at year-end. Core deposits make up 88 percent of total deposits.

“Our cutting-edge technology, including remote deposit capture and online banking, partnered with our focus on excellent service, has been instrumental in achieving this growth,” said Laurie Leighty, the bank’s senior vice president of operations and human resources.

The bank’s loan portfolio continues to perform well. American Riviera Bank continues to have no nonperforming loans and no loan charge-offs.

“The bank is in a very strong capital position, with a Tier 1 Leverage ratio of 22 percent at June 30, 2008, well above the regulatory definition of 5 percent for a well-capitalized institution,” Duarte said.

American Riviera Bank will celebrate its two-year anniversary on Friday.

“The road to sustainable profitability was budgeted and planned while the bank was in organization during 2005. The bank’s business plan and projections were submitted with the bank’s charter application prior to the bank opening its doors for business,” said Michelle Martinich, the bank’s chief financial officer. “As projected, our first profitable month occurred in the second quarter of 2008.”

“With the global chaos in the financial markets and its ripple effect on the national, state and local economies, the bank’s ability to produce a profit on target is remarkable,” said Larry Koppleman, the bank’s chairman of the board. “This achievement speaks to the quality of the bank’s management and staff and the support from our community.”

The bank can be contacted at 805.965.5942 or via www.americanrivierabank.com.

— Michelle Martinich is chief financial officer of American Riviera Bank.

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