June 29, 2023

Business Outlook 2023

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This year’s panel included thought leaders who addressed the state of the economy. Led by economists Dr. Jerry Nickelsburg, Director of UCLA’s Anderson Forecast, and Katheryn Russ, Professor, and Chair of the University of California, Davis Economics Department, and moderated by Natalie Kling, Marketing Strategist with Mariani Packing Co., Inc. and the host of the “A Seat at the Table” podcast, attendees received critical insights on the current key economic drivers and where the national and local economies are headed.

It was an impressive group of panelists, topics, and dialogue! Plans are already underway for Business Outlook 2024!

View the event video here.

June 29, 2023

How to Protect Yourself from Automated Clearing House (ACH) Fraud

Conceptual illustration of automated clearing house fraud
Conceptual illustration of automated clearing house fraud

ACH fraud occurs when unauthorized transactions are electronically posted to your account. It is on an exponential rise and starts with just two things: Your business checking account number and a routing number. These two pieces of information are all cybercriminals need to attempt a fraudulent ACH transaction.

According to the Association for Financial Professionals’ (AFP) latest Payments Fraud and Control Survey Report, fraud perpetrators are targeting ACH payment methods more frequently than check and wire transfers. As ACH transactions are typically considered safer and more difficult to compromise, the increased focus on ACH transactions suggests that fraudsters are acquiring more sophisticated techniques when targeting organizations.

Fortunately, there are steps you can take to guard against ACH fraud:

  1. Monitoring your bank account regularly for unauthorized transactions is one of the best ways to notice potential ACH fraud. Set up account alerts to immediately notify you of any suspicious activity. If you see a fraudulent transaction, report it to your Bank immediately.
  2. Use ACH Positive Pay. For businesses, this is a service allowing users to review unexpected incoming debits before they’re cleared to post in the bank account.
  3. Use a secure payment gateway. A secure payment gateway is one of the best ways to prevent ACH fraud. It will encrypt your account information and protect it from unauthorized access.
  4. Install anti-virus and malware software and keep it up to date. Staying safe online is an ongoing effort, and one of the simplest yet most effective ways to do so is to remain vigilant and keep your devices updated with the latest software. These software updates frequently come with software patches that fix security gaps and prevent a potential hacking effort across multiple logged-in devices. These patches keep one’s device secure and protect it from software holes that give hackers easy access to multiple devices and the data stored within them.
  5. Be smart when creating passwords. Using secure passwords and PINs to secure your devices is one of the most essential steps taken while using multiple devices. It goes without saying that one must always use different passwords for different devices. Use strong passwords that can’t easily be guessed or decoded using brute force. Only store credentials in official password managers to keep everything secure.
  6. Make sure websites are secure. A secure URL should begin with “https” rather than “http.” The “s” in “https” stands for secure, which indicates that the site is using a Secure Sockets Layer (SSL) Certificate. This lets you know that all your communication and data are encrypted as it passes from your browser to the website’s server; however, this doesn’t mean that you are connecting to the correct website. Double check the URL to ensure you are going to the correct and intended website.
  7. Keep your firewall turned on. A firewall helps protect your computer from hackers who might try to access your system to steal your information. Always keep your firewall turned on and up-to-date.
  8. Stay Educated. Stay Protected. Being vigilant is crucial to being more digitally secure. The best way to do this is to stay updated with the latest developments and be aware of the tactics implemented by those looking to compromise multiple systems. This can also help one spot potential risks and mitigate them before the need arises.
  9. Verify payment requests. If you receive a payment request, make sure to verify the request before sending any money. Verify the requestor’s identity and ensure you understand the payment’s purpose. If you have any doubts, contact the requestor using a known and verified contact.
  10. Don’t click on links and open attachments in suspicious emails. If you receive an email from a sender you don’t know, or if the email looks suspicious, don’t click on any links or open any attachments. They can be malicious and lead you to a website that will steal your information or compromise your device
  11. Refrain from trusting a sense of urgency. Scammers often try to create a sense of urgency to get you to act quickly. Don’t let yourself be pressured into making a decision; take the time to verify any payment requests.

When it comes to preventing ACH fraud, it takes a village. We can only win this battle by implementing various layers of internal controls throughout the funds transfer process. If you believe you or your business is a victim of ACH fraud, contact us immediately to halt additional fraudulent transactions. Also, consider reporting the incident to law enforcement, which helps your business and others avoid similar fraud attempts.

Should you have any questions regarding your personal or financial information at the Bank, please do not hesitate to contact a Customer Service Representative at (916) 567-2899 or (800) 564-7144 or by email at [email protected].

June 29, 2023

Q+A with Adham Sbeih, CEO of Socotra Capital

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According to the website, Socotra Capital is a private money lender specializing in hard money. Can you explain what “hard money” is?

Socotra Capital is a private money lender specializing in financing real estate investors on projects that may not be possible through traditional methods. As a premier lender, we are filling the space that many banks aren’t filling, whether it be a bridge loan, fix and flip loan, commercial refinance, construction projects, or other real estate projects.

The term “hard money loan” refers to a loan backed by a “hard” asset, such as real estate. If you’re a real estate investor or house flipper and need financing for a deal, a hard money loan might be a solid option to explore.

These types of loans aim to secure a property to renovate or develop and ultimately sell it for a profit. An investor might choose a hard money loan over a conventional loan because of the ease of access to the funds. Lending options from financial institutions often have complicated approval processes and weigh heavily on the borrower for approval. Hard money loans are asset-based and typically secured by a mortgage, so their approval process is much faster.

The company has been in business for 15 years and has become a successful regional loan provider. As a start-up, were there things you learned through the process?

I started Socotra in 2007, and John Ingoglia (my partner who passed away in July 2020) joined me in 2008 right before the Lehman Brothers collapse. Back then, I did everything:

  • Sourced the loans.
  • Found the lenders.
  • Drafted up the loan documents.
  • Collected the payments from the borrower.

In the 15 years since our inception, we’ve learned that there is always room for improvement. Problems happen when things get sloppy, so sticking with and trusting our processes is essential. We always ask ourselves: What can we be doing better? Where can we find additional opportunities? How can we improve?

Head shot of Adham Sbeih
Adham Sbeih of Socotra

Last year Socotra Capital was voted one of the Best Places to Work by the Sacramento Business Journal. What are the key ingredients in hiring and retaining your team?

Socotra hired its first employee in 2008. We are now 31 people strong.

We know that for the team to win, we must also help the individual team members succeed. As a company, we work hard to ensure everyone on the team is respected. There is a relentless pursuit of improving the process and systems to give people opportunities.

We embrace the theory of aggregation of marginal gains, where everyone looks for 1% improvements. Everything we do is driven by and measured against our values. And now that things are starting to open up, we are excited about the opportunities that bring us back to the office. We enjoy the camaraderie and the engagement.

What is your favorite part of the job?

My favorite part is watching people grow and develop. I enjoy challenging our team and seeing them grow and respond. Along the way, we have hired college students as interns. Some have stayed with us after college and have become superstars. I am excited to continue to grow Socotra and provide value to our investors, good loans to our borrowers, and solid careers for our team.

Volunteerism is part of your company’s culture. What community organizations does Socotra support and why?

Since 2009, we have sponsored and organized a summer softball league for commercial realty brokers in Sacramento. The money raised during the season comes from the players who ask sponsors to pledge $20 for each strikeout, hit, or homerun. The league now has several sponsors, raising thousands of dollars each year. Socotra Capital matches the money raised by sponsors and players, and the funds are donated to Los Amigos/Sacramento Children’s Home.

Why the name Socotra? Is there a special meaning behind the name?

Socotra is named after an island off the coast of Yemen in the Arabian Sea. Many residents of mainland Yemen have sought safety from the war on Socotra Island. Socotra’s name stems from the firm’s ability to be an island of refuge for borrowers. The late John Ingoglia, the company’s founding partner, named it as such because he always said the best loans are those made in the ‘depths of uncertainty.’

Socotra’s logo is of a dragon tree, an endangered species that can only be found on the island.

River City Bank is not making a recommendation or endorsement, nor assumes any responsibility or liability for any content or services referenced in this interview.

June 2, 2023

River City Bank Announces New Interim Chief Financial Officer

SACRAMENTO, CA — River City Bank (the Bank) announced today that Anker Christensen, Executive Vice President and Chief Financial Officer of the Bank, will step down effective July 3, 2023.

Brian Killeen, currently the Bank’s Senior Vice President and Controller, has been appointed Interim Chief Financial Officer, effective July 3, 2023. Mr. Killeen has been the Bank’s Controller for the past 16 years. Prior to joining the Bank, Mr. Killeen spent the first seven years of his career working for KPMG LLP. Mr. Killeen holds a B.S. in Business Administration, with concentrations in Accounting and Finance, from California State University, Sacramento and is a Certified Public Accountant (inactive). The Bank will engage a search firm as part of the process for selecting the Bank’s permanent Chief Financial Officer, and Mr. Killeen will be a candidate for the position.

Mr. Christensen stated, “It has been a tremendous privilege to work with my exceptional colleagues at River City Bank over the past 19 years. The work has been highly rewarding and I am personally very gratified to have played a key role in transforming the Bank to such a large extent. While I will miss my colleagues at the Bank, I am also looking forward to starting a new chapter in my career.”

“Anker has been an instrumental part of our transformation at River City Bank from a small retail-oriented bank to a high-performing boutique commercial bank,” said Steve Fleming, the Bank’s President and CEO. “On behalf of the entire River City Bank team, I would like to express my deep gratitude to Anker for all his valuable and significant contributions to the Bank and wish him all the best in his future endeavors. He will be missed.”

“We are fortunate to have an executive with Brian’s experience to serve as Interim CFO,” added Mr. Fleming. “He is intimately familiar with the Bank’s culture, along with all of the Bank’s accounting, treasury management, and financial reporting requirements. We will be conducting a search to fill the CFO position on a permanent basis and Brian will be a candidate for the role.”

May 25, 2023

River City Bank adds former Umpqua Regional Director Rebecca Fabisch Miller as EVP, Commercial Banking Director

Head shot of Rebecca Fabish Miller

SACRAMENTO, CA – River City Bank has announced Rebecca Fabisch Miller as Executive Vice President, Commercial Banking Director. In this role, Fabisch Miller will focus on providing services to the Bank’s middle-market commercial clients. She will lead the Bank’s commercial banking team in expanding and enhancing RCB’s commercial deposit and lending presence throughout California. Before joining RCB, Fabisch Miller held a senior commercial banking position with Umpqua Bank, managing a diverse portfolio of clients in the Sacramento region across multiple industries.

“With Rebecca’s proven leadership and tremendous depth of commercial banking experience, we will build on the strengths of our commercial banking team while meeting the unique needs of our clients,” said Steve Fleming, President and CEO of River City Bank. “Rebecca has the client focus, track record, industry experience, and extraordinary talent to lead RCB forward in this segment of the market.”

Fabisch Miller’s expertise includes orchestrating credit arrangements of varying sizes and complexity as direct lender or as the lead bank in syndicated deals.  She has managed a diverse portfolio of clients across multiple industries, including not-for-profit organizations and agriculture. A solutions-oriented banker, Fabisch Miller has extensive knowledge of treasury management, real estate and equipment finance, global and investment banking, derivatives, debt capital markets, and insurance.

“I am excited to join the River City Bank Team,” said Fabisch Miller, Executive Vice President and Commercial Banking Director. “With its headquarters in Sacramento, River City Bank is uniquely positioned to offer customized credit facilities, access to decision-makers, and competitive pricing to middle-market businesses.”

Fabisch Miller earned her MBA from the University of California, Davis and has an undergraduate degree in International Business and Marketing from California State University, Sacramento. She is the Treasurer for the California Forest Foundation and has also been involved with many other local charities. Fabisch Miller is a mother of two and enjoys exercising with friends; she has run sixteen marathons and even more half-marathons.

For more information about River City Bank, visit RiverCityBank.com

April 21, 2023

River City Bank Reports a Quarterly Cash Dividend on Common Shares

SACRAMENTO, CA — Steve Fleming, president and chief executive officer of River City Bank (the Bank), announced that the Bank’s board of directors has approved, in connection with the Bank’s recently reported net income of $12.9 million or $8.64 diluted earnings per share for the quarter ending March 31, 2023, a cash dividend of $0.35 per common share to shareholders of record as of May 2, 2023, and payable on May 16, 2023.

April 19, 2023

River City Bank Reports 2023 First Quarter Net Income of $12.9 Million

SACRAMENTO, CA —River City Bank (the Bank) reported net income of $12.9 million, or $8.64 per diluted share, for the quarter ending March 31, 2023, which compares to the $16.5 million, or $11.10 per diluted share, for the same period in 2022. The prior year quarter net income benefitted by several non-recurring revenue sources, as follows:

  • $7.0 million in mark-to-market gains on interest rate swaps for the quarter ending March 31, 2022 compared to none in the current As of March 31, 2023, all of the Bank’s interest rate swap contracts are being accounted for as hedges.
  • $6.9 million gain on sale derived from a true-up related to earn-out provisions from the sale of an investment in the prior year quarter.
  • $443,000 deferred loan fees earned on Paycheck Protection Program (PPP) loans for which the outstanding loan balances were forgiven by the Small Business Administration in the prior year quarter compared to virtually none in the current quarter.

Partially mitigating the above was the reduced provision for loan losses of $1.5 million for the current year quarter compared to $6.4 million in the prior year quarter.

The Bank’s earnings for the quarter ending March 31, 2023 represented a healthy 14% return on equity capital and 1.29% return on assets.

“With the Bank’s founding in 1973, we are celebrating 50 years of consistent and reliable service to our customers in 2023 and we are thankful for the goodwill that we have built with our loyal customer base,” said Steve Fleming, president and chief executive officer. “Notwithstanding the anxiety that was caused by the failure of several banks in the first quarter, our total deposits of over $3.4 billion are essentially unchanged from December 31, 2022; as such, the Bank’s liquidity remains healthy. At the same time, our asset quality remains strong with a short duration (average of 1.7 years) bond portfolio and virtually no delinquencies or non-performing loans. We believe we can continue to grow our commercial real estate loan portfolio as we focus on loans secured by multi-family and industrial properties, as well as expanding our geographic footprint to other western states outside of California. We will remain diligent with our monitoring of potential impacts to the office segment of our commercial real estate loan portfolio from the reduction in demand as employers continue to provide work from home opportunities for their employees.”

“The Bank’s high quality investment securities portfolio continues to perform well with minimal unrealized losses included in accumulated other comprehensive loss within shareholders’ equity and there are no investment securities categorized as held-to maturity,” said Anker Christensen, chief financial officer of River City Bank. “Operational efficiency remains a core competency for the Bank, as evidenced by our 32 percent efficiency ratio for the quarter ending March 31, 2023.”

Shareholders’ equity for River City Bank on March 31, 2023 increased $13.5 million to $366.5 million, when compared to the $353 million as of December 31, 2022. The increase was driven by current year retained earnings as the Bank distributes only a small portion of its net income. The Bank’s equity continues to be minimally impacted by the $4.4 million accumulated other comprehensive loss as of March 31, 2023. The Bank’s capital ratio remains well above the regulatory definition for being Well Capitalized with a Tier 1 Leverage Ratio of 9.3% as of March 31, 2023.

February 6, 2023

A Seat at the Table Podcast: River City Bank – It All Started with an Idea on a Cocktail Napkin

A Seat at the Table Podcast
A Seat at the Table Podcast

Find out how RCB founder Jon Kelly’s business plan, written on a cocktail napkin during a dinner at Frank Fat’s in Sacramento, was the catalyst for building the region’s largest, independent, locally-owned and managed bank.

The Capital Region Family Business Center podcast, “A Seat at the Table,” will give you a glimpse of the history and beginnings of RCB. Listen in as host Natalie Kling chats with River City Bank’s Board Chair, Shawn Devlin, and President and CEO Steve Fleming, as they embark on RCB’s 50th year.

Listen to the podcast here.

January 27, 2023

River City Bank Reports 6 Percent Increase to the Quarterly Cash Dividend on Common Shares

SACRAMENTO, CA — Steve Fleming, president and chief executive officer of River City Bank (the Bank), announced that the Bank’s board of directors has approved a 6 percent increase to the quarterly cash dividend from $0.33 per common share to $0.35 per common share. This increase was made in connection with the Bank’s recently reported net income of $11.5 million and $47.8 million, or $7.72 and $32.22 diluted earnings per share, for the quarter and year ending December 31, 2022, respectively. These dividends will be made to shareholders of record as of February 7, 2023, and payable on February 21, 2023.

January 26, 2023

River City Bank Reports 7th Consecutive Year With Record Net Income in 2022

SACRAMENTO, CA — River City Bank (the Bank) reported earnings for the fourth quarter of 2022 of $11.5 million, or $7.72 per share, compared to $9.8 million, or $6.63 per share in the fourth quarter of 2021. The Bank also reported its 7th consecutive year of record net income with $47.8 million or $32.22 per diluted share, for the year ending December 31, 2022; this was $3.3 million more than the $44.5 million, or $30.14 per diluted share, for the year ending December 31, 2021. The improved net income versus the prior year was driven by the following factors:

  • Average loans outstanding, excluding Paycheck Protection Program (“PPP”) loans, were $560 million higher in 2022 than the prior year, thereby increasing net interest income.
  • Mark-to-market gains (“MTM”) on interest rate swaps in 2022 were $2.3 million higher than the prior year. The Bank entered into these swap agreements to hedge the interest rate risk associated with its ongoing origination of medium-term fixed rate commercial real estate loans.
  • $6.9 million gain on sale in 2022 derived from earn-out provisions on the sale of an investment in the prior year. The initial gain recognized on the sale of this investment in the prior year was $3.4 million.
  • $728,000 gain on sale of an office building that was no longer in use in 2022.

Partially mitigating the above were the following factors:

  • $1.0 million deferred loan fees earned on PPP loans for which the outstanding loan balances were forgiven by the Small Business Administration in the current year compared to $5.7 million recognized in the prior year.
  • $18.4 million provision for loan losses in 2022 compared to the $10.5 million provision for loan losses recorded in the prior year. The increase in the loan loss provisions was a function of the robust loan growth and some deterioration in the segment of the loan portfolio secured by office properties.
  • The Bank recognized a $3.9 million loss in the current year on the sale of $34 million of available for sale corporate bonds yielding only 0.95%.

“In addition to seven consecutive years of record net income, we are very pleased to report record net loan growth of $536 million for the year ending December 31, 2022, after excluding the $32 million reduction in PPP loans,” said Steve Fleming, president and chief executive officer of River City Bank. “Our asset quality remains strong with virtually no delinquencies or non-performing loans; however, we remain cautious about the impact to the office segment of commercial real estate (approximately 20% of the Bank’s commercial real estate loan portfolio) due to the reduction in demand as employers provide work-from-home opportunities.”

“Operational efficiency remains a core competency for the Bank, as evidenced by our 28 percent efficiency ratio after excluding the swap MTM gain and the loss on sale of securities for the year ending December 31, 2022” said Anker Christensen, chief financial officer of River City Bank. “Though our total non-interest expense increased in 2022 over the prior year, our focus on high productivity and managing expenses continues to be evident by our continued low efficiency ratio.”

Shareholders’ equity for River City Bank on December 31, 2022 increased $45 million to $353 million, when compared to the $308 million as of December 31, 2021. The increase was driven by current year retained earnings, slightly offset by a $5.4 million net decrease in accumulated other comprehensive income as the increase in short and medium-term interest rates resulted in unrealized losses in the Bank’s investment securities portfolio which was partially offset by unrealized gains on certain interest rate swap contracts designated as cash flow hedges. The Bank’s capital ratio remains well above the regulatory definition for being Well Capitalized with a Tier 1 Leverage Ratio of 8.7% as of December 31, 2022.