September 29, 2021

The Legacy of Randy Paragary

Portrait of Randy Paragary

Randy Paragary, a pioneer in Sacramento’s restaurant and nightlife scenes for over 50 years, passed away on August 13th after a short bout with cancer. His entrepreneurial spirit led and shaped a renaissance of food, drink, and hospitality in the state capital.

The Paragary legacy in Sacramento is incomparable. As a graduate of McClatchy High School and an alumnus of Sacramento State and McGeorge School of Law, Randy’s roots in Sacramento ran deep. His debut into the restaurant scene began in the late 60s. Along with his high school friend and business partner Patrick Power, Randy opened his first venture, the ParaPow Palace Saloon, in 1969. Randy continued to succeed in other restaurant concepts, including Paragary’s, Café Benardo, and Centro Cocina Mexicana.

Successful restaurants were not Randy’s only legacy. He provided support and mentoring to many who began their careers in one of his establishments. Randy left behind a generation of industry leaders he helped mold. This unique group included Patrick Mulvaney of Mulvaney’s B&L, N’Gina Guyton of South, Henry DeVere White of DeVere’s Irish Pub, and others who worked at his places before opening their own.

Fort Sutter Hotel

Before he passed away, Randy took on a new role, that of hotelier. Located in Midtown’s Sutter District, Randy and his wife Stacy recently unveiled their six-story, 105-room Fort Sutter Hotel this past January. The boutique hotel boasts a striking interior and architectural design while creating a space for Sacramento artists to showcase their work.

Midtown Parks

Randy Paragary and Riley Gardner
River City Bank’s Riley Gardner with Randy Paragary
September 29, 2021

Meet Dominick Carlson

Coastal photo by Dominick Carlson
Coastal photo by Dominick Carlson
Photo by Dominick Carlson

As River City Bank’s Vice President, Credit Manager, Dominick Carlson manages a team of commercial credit analysts tasked with recommending prospective commercial loans for approval based on the loan’s credit assessment.  His team is responsible for identifying the associated risks and evaluating historical business operations, company background, industry outlook, and the current economic environment.

We spoke with the avid photographer about resiliency, the beauty of the Sacramento region, the calming effects of coffee, and seeing the world through a different lens.

Brenna and Dominick Carlson
Brenna and Dominick Carlson
Photo by Dominick Carlson
Photo by Dominick Carlson
September 29, 2021

Sustainability Strategies for the Wine Industry and Agribusinesses

Building with solar panels

By Rosa Cucicea, Director of the Clean Energy Division at River City Bank.

Building with solar panels
Photo courtesy of Silver Oak

Like many other agricultural enterprises, the wine industry has always been one of high risks and high rewards. With roots in antiquity, it is also one of the world’s most innovative industries.

Here in the heart of California wine country, a growing number of wineries have implemented new ways to harness the best that the natural world has to offer, including an embrace of solar power generation and energy storage, the development of completely self-sustaining microgrids, and other innovative solutions to drive greater energy independence and long-term resilience.

This forward-thinking approach requires partnerships between wineries and clean energy providers, as well as flexible approaches to financing and leveraging tax incentives

Sustainability in Action: Silver Oak

Named “California’s most eco-conscious winery” by the San Francisco ChronicleSilver Oak has established a reputation for leading the way when it comes to sustainability. Its wineries in Napa Valley and Alexander Valley were the world’s first product wineries to be LEED Platinum Certified by the U.S. Green Building Council.

Haley Duncan, sustainability manager and a third-generation family leader at Silver Oak, says her family’s business has been laser-focused on sustainability for the past 10 years. This includes planning for the reduction and reuse of natural resources such as solar energy and water, as well as incorporating renewable technologies that will help facilities continue to produce great wine.

“We invested in technology that we weren’t previously familiar with,” Duncan said. “There was a steep learning curve as we continued construction, and the reaction from our customers since opening the new Alexander Valley tasting room has been overwhelmingly positive.”

Silver Oak’s Alexander Valley facility includes solar panels on all roof surfaces, with nearly 2,600 panels in place, as well as solar-thermal panels to heat water without tapping into the external power grid and a secondary system of CO2 heat pumps that can heat water to clean all cellar equipment. In April 2020, the facility earned a Living Building Challenge (LBC) certification from the International Living Future Institute. It was the only manufacturing facility to receive such recognition.

Microgrids and the Power of Hydrogen: Stone Edge Winery

The team at Stone Edge Farm Estate Vineyards and Winery has pushed the boundaries of alternative energy further with the integration of a unique, self-contained microgrid that incorporates both solar energy and a state-of-the-art hydrogen power system.

Stone Edge owner Mac McQuown has worked directly with a team of engineers for the better part of six years to make his farm fully energy independent, with no need to rely on PG&E for electricity.

“Hydrogen is a safe, readily available energy source, and the system we have in place is 4.5 times more efficient than a combustion engine,” McQuown said.

“This represents a huge leap forward for wineries and other businesses that are looking for sustainable energy solutions,” he continued. “There’s seemingly no limit on the amount of hydrogen you can produce and store with the right tools in place.”

The hydrogen power system relies on a sophisticated electrolyzer that utilizes small amounts of electricity to break down rain water into hydrogen and oxygen. The hydrogen produced in that exchange is then stored and used for power, primarily during the winter months when solar energy can be more challenging to collect.

According to McQuown, the time is coming when hydrogen production will be possible from salt water sources as well, which will greatly enhance the possible applications for hydrogen power systems like the one at Stone Edge.

The facility has been running in “island mode,” completely independent of PG&E, since December 2019. McQuown noted that Stone Edge’s marginal cost of electricity is zero, as is its marginal carbon footprint.

Financing Sustainability

While sustainable farming and clean energy initiatives may be attractive for wineries and other businesses throughout the North Bay, funding remains a major hurdle. Even with recent reductions in operating costs for solar energy and microgrid technologies, future-minded teams can have difficulty getting started.

Michael Kremer, co-founder and head of strategic finance for White Pine Renewables, said his company has seen the economic equation improving every year.

“The rise of battery storage has been a game changer,” he noted. “Batteries enable customers to shift electricity consumption from the grid to an independent power system at times when the power grid is in high demand and PG&E’s rates are higher. Battery costs have decreased as well in recent years, which opens new opportunities for businesses to implement sophisticated solutions for the long haul.”

White Pine Renewables works with wineries, farms and other businesses to deliver solar energy solutions under a Power Purchase Agreement (PPA) that can deliver the energy savings of a self-contained solar power grid without the burden of maintenance costs, permitting and other common sticking points. PPA financing is an alternative solution to owning the renewable energy assets directly and can be a cost effective solution for businesses that do not have sufficient ability to utilize tax credits.

White Pine coordinates the registration and permitting of the solar equipment, as well as ongoing maintenance obligations, and property owners pay a contracted rate to purchase the solar power generated on their properties and land.

Possible Tax Benefits

A number of sustainability programs and innovations may also qualify for tax credits and deductions, which can reduce out-of-pocket costs and limit the amount of financing needed. Derrick Wilkinson, a CPA and senior manager with Moss Adams, commented that many wineries and other agriculture-based businesses don’t realize how much they may qualify for in terms of tax deductions and R&D credits.

For building owners who implement a system that achieves an efficiency increase of more than 50 percent, for example, a Section 179D tax deduction of $1.80 per square foot may be within reach.

“Most people think that R&D credits and other tax scenarios apply only to major manufacturing operations or that qualifying initiatives have to be completely ‘new to the world,’ but that isn’t the case,” Wilkinson said.

“There are a number of programs that may qualify for credits and deductions, which will help fund the businesses’ labor, material and third-party costs for these programs. You can even go back a number of years to review whether or not you qualify for credits that were made available in past years,” he said.

To maximize tax incentives, Wilkinson advised wineries to stay proactive and loop in a CPA very early on. This will ensure that documents are tracked appropriately in the moment. Qualifying programs may include smoke taint removal initiatives, dry irrigation and cultivation efforts, wastewater treatment processes, CO2 capture programs and new automation systems to address labor shortages.

Getting Started

Sustainability is the way of the future, and there are a number of long-term benefits to pursuing new systems and incorporating new technologies to make today’s energy-dependent wineries more self-sufficient and energy independent.

As Duncan noted, “The most important thing is to take the first step. You’ll learn a lot along the way, but it’s important to focus on one project at a time so you can apply what you’ve learned to the projects that follow.”

Helping to connect the dots is why third-party providers such as White Pine Renewables exist, and looping in tax professionals such as Moss Adams early is paramount. It is also the core purpose of River City Bank’s Clean Energy Division, which provides credit and cash management services for clean energy projects. As the bank of choice for a majority of California’s Community Choice Aggregation (CCA) providers, River City Bank is committed to supporting its clients and empowering them with the resources needed to enact meaningful and lasting change.

Named one of Sacramento Business Journal’s “50 Fastest Growing Companies” for each of the past five years, River City Bank provides tailored, executive-level service and solutions to businesses throughout Northern California. It is the largest independent, locally-owned and managed bank in the Sacramento region and has commercial banking offices in Petaluma and San Francisco.

Rosa Cucicea is Director of the Clean Energy Division at River City Bank. In this role, she supports a variety of Community Choice Aggregation (CCA) providers and other clean energy businesses throughout California with custom-tailored solutions spanning start-up capital, lines of credit, renewable energy project financing and custodian “lockbox” accounts.

August 31, 2021

River City Bank earns investment grade rating from S&P Global Ratings

Long term debt rating attributed to strong capital, earnings and loan quality

SACRAMENTO, CA – River City Bank, Sacramento’s premier business bank and consistently one of the region’s fastest growing companies, has announced that S&P Global Ratings (S&P) has assigned it an investment grade long-term rating of BBB-. This rating reflects the bank’s strong credit performance in recent years, including through the COVID-19 pandemic, as well as its experienced management team, large loan loss reserve balances and low loan-to-value on its commercial real estate (CRE) loans. S&P’s outlook for the bank also underscores its stability, operational efficiency and solid earnings capacity for the next two years or more.

“We are excited to announce our investment grade rating from S&P Global, one of the undisputed leaders in credit ratings on the global stage,” said Steve Fleming, President and CEO of River City Bank. “River City Bank is now one of the only banks in the nation with an asset size under five billion dollars to have secured an investment grade rating from S&P.”

River City Bank has been named one of Sacramento Business Journal’s “50 Fastest Growing Companies” for five consecutive years. Over the past five years, it has experienced average annual compounded loan growth of 18 percent. In addition to commercial real estate loan growth, a significant portion of the bank’s growth has been due to the expansion of the bank’s Clean Energy Division across California.

In its release, S&P noted, “Overall asset quality has performed well in recent years–in fact, better than peers.’ The bank reported no nonperforming assets (NPAs) as of June 30, 2021, and it hasn’t had positive net charge-offs since 2015.”

According to S&P Global Market Intelligence, River City Bank ranked 19th among the nation’s best-performing community banks with asset size between $3B and $10B in 2020. S&P Global Market Intelligence and S&P Global Ratings are separately managed divisions of S&P Global.

July 20, 2021

River City Bank Reports a Quarterly Cash Dividend on Common Shares

SACRAMENTO, CASteve 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 $7.3 million or $4.97 diluted earnings per share for the quarter ending June 30, 2021, a cash dividend of $0.315 per common share to shareholders of record as of August 3, 2021, and payable on August 17, 2021.

July 19, 2021

River City Bank Reports Net Income of $7.3 Million for the Second Quarter of 2021 and $23.0 Million Year to Date

SACRAMENTO, CA — River City Bank (the Bank) reported net income of $7.3 million, or $4.97 per diluted share, for the quarter ending June 30, 2021, which compares favorably to the $6.1 million, or $4.20 per diluted share, for the same period in 2020.  Net income was $23.0 million or $15.59 per diluted share for the six months ending June 30, 2021, which compares favorably to the $13.4 million or $9.96 per diluted share for the six months ending June 30, 2020. Significant items impacting quarterly net income for June 30, 2021 and 2020, include the following:

  • Higher loan balances – Average loans outstandings were $211 million higher than the prior year quarter, thereby increasing net interest income.
  • The provision for loan losses for the current quarter of $2.5 million was less than the $4.5 million for the prior year quarter.
  • The Bank recorded an elevated level of prepayment premium income on commercial real estate loans that paid off prior to their maturity dates of $1.2 million for the quarter ending June 30, 2021 compared to only $140,000 for the prior year quarter.
  • Mark-to-market losses (“MTM”) of $3.0 million and $1.3 million on interest rate swaps were recorded for the quarters ending June 30, 2021 and 2020, respectively. 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.
  • Deferred loan fee income associated with Paycheck Protection Program (PPP) loans was lower in the current quarter with $1.4 million and $2.5 million for the quarters ending June 30, 2021 and 2020, respectively.

“We are very pleased with the $153 million of loan growth during the first half of the year after excluding the $118 million reduction in PPP loans,” said Steve Fleming, president and chief executive officer of River City Bank.  “With vaccine distribution having ramped up and the California economy showing signs of improvement, we are optimistic about the near-term outlook for the Bank. We do, however, remain cautious about the impact to the office segment of commercial real estate due to the potential reduction in demand as employers provide work-from-home opportunities. Nevertheless, our asset quality remains strong with zero delinquencies and non-performing loans.”

“Operational efficiency remains a core competency for the Bank, as evidenced by our 31 percent efficiency ratio after excluding the swap MTM loss noted above for the quarter ending June 30, 2021” said Anker Christensen, chief financial officer of River City Bank. “Though our total non-interest expense increased over the prior year period, our focus on managing expenses continues to be evident by our continued low efficiency ratio.”

Shareholders’ equity for River City Bank on June 30, 2021 increased $20 million to $290 million, when compared to the $270 million as of December 31, 2020. The increase was driven by current year retained earnings, slightly offset by a $2.3 million decrease in accumulated other comprehensive income as the increase in short and medium-term interest rates resulted in unrealized losses in our investment securities portfolio. The Bank’s capital ratio remains well above the regulatory definition for being Well Capitalized with a Tier 1 Leverage Ratio of 8.5% as of June 30, 2021.

July 7, 2021

Doggy Dash 2021

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On June 5th, walkers with and without four-legged companions participated in the 2021 Sacramento SPCA (SSPCA) virtual Doggy Dash. Celebrating its 28th anniversary, the SSPCA’s Doggy Dash has grown into Northern California’s largest 2K/5K dog walk and pet festival. This year, the SSPCA had hoped to raise $150,000, but with support from individuals, businesses, and foundations, the event surpassed its 2021 goal, raising $165,000.

Event attendees shared photos and enjoyed the event’s live broadcast and pet festival. Those who connected online also took a virtual tour of the new Zoe K. McCrea Animal Health Center before the event officially kicked off.

The SSPCA is the only full-service 100% non-profit animal shelter in the Sacramento region and relies on donations from the community to support its mission.  In 2020, the organization was responsible for 2,603 animal adoptions, 13,012 animals spayed or neutered, and 1,181 animals ushered through foster care. To donate or learn more about the Sacramento SPCA, visit their website at www.sspca.org.

July 7, 2021

San Diego Community Power Provides Choice and Competitive Rates for Cleaner Energy

San Diego Community Power logo

For the first time in our region’s history, families, businesses, and municipalities in Encinitas, La Mesa, Chula Vista, Imperial Beach, and San Diego have a future-focused choice in energy providers and a clear path to reach 100% renewable energy by 2035 or sooner.

Organized as a community-driven not-for-profit, SDCP is committed to investing back into local communities through job training, renewable energy development projects, and aid programs for communities of concern. While generating revenue in support of shareholder returns drives the incumbent investor-owned utility, SDCP is focused on clean technology innovation, creating local jobs, and energy programs supporting communities of concern.

“The launch of San Diego Community Power is a game-changer for customer choice, fighting climate change, and creating healthier and more equitable communities for future generations,” said Joe Mosca, Encinitas Councilmember and SDCP Board Chair. “We are excited to usher in a new era for San Diego communities and to do our part to reduce the impacts of climate change by providing greener energy options.”

San Diego Mayor Todd Gloria and SDCP executives at SDCP launch press conference
San Diego Mayor Todd Gloria and SDCP executives celebrated the SDCP launch with a press conference on May 1st, 2021.

San Diego Community Power’s renewable energy portfolio comes from wind, solar, and battery storage. At 50% to 100% renewable energy, SDCP products are affordable and substantially better for the environment than the current 31% option offered by the local investor-owned utility. Committed to meeting and beating state reliability standards, SDCP rigorously vets its energy sources and works in partnership with the local utility to ensure reliability in the energy delivery infrastructure.

Volunteer planting a tree
To commemorate the launch and our sustainable future, the mayors of all the member cities planted trees in local community parks.

“We are flipping the switch on San Diego Community Power and finally bringing a future-focused energy choice and a clear path to 100% renewable energy,” Mayor Todd Gloria said at the official launch on March 1st, 2021. “This launch is an essential next step in meeting our regional climate action goals. By embracing renewable energy sources, we are going to protect San Diego for generations to come.”

Delivering on its promise to reinvest in renewable energy development, San Diego Community Power recently announced its first power purchase agreement with an affiliate of RAI Energy International, Inc. Located nearby in Imperial County, the Vikings Farm project will provide a 20-year supply of solar energy and battery storage.

“We are here to advocate for ratepayers, drive economic vitality, and support clean energy jobs for local workers,” said Serge Dedina, Imperial Beach Mayor and SDCP Board member. “Clean technology already provides more jobs in the region than all coal-related jobs in the country, and we want to see that trend grow.”

SDCP is now preparing to launch commercial and residential service on June 1st, 2021 and is forecast to provide energy to more than 70,000 commercial and industrial accounts of all sizes in the region. SDCP has received a warm welcome from area businesses eager to meet corporate responsibility and sustainability goals with a competitively priced service.

May 3, 2021

River City Bank builds up its board with addition of former Bank of the West executive Paul Duncan

New director brings extensive government, commercial, and investment banking strategy and experience

Head shot of Paul Duncan

“On behalf of the entire River City Bank team, we are excited to welcome Paul Duncan to the board,” said Shawn Devlin, chairman of the board at River City Bank. “We expect to gain much from his insights and expertise from his years in the Sacramento market and beyond.”

“Under the expert guidance of Steve Fleming and my colleagues on the board of directors, River City Bank has made substantial progress in expanding its presence to new markets and supporting the Sacramento region,” said Paul Duncan, board member at River City Bank. “Growth strategy is a particular passion of mine, and I look forward to leveraging my experience by contributing to River City Bank’s continued success.”
Immediately prior to his appointment to River City Bank’s board of directors, Duncan served for 15 years as Managing Director for Bank of the West. In that role, he successfully implemented a new division focused on government banking and public finance, while also continuing to work with businesses of all sizes on strategic growth and expansion initiatives. Prior to his work with Bank of the West, Duncan worked in various capacities for several of the largest banks in the Sacramento region and nationwide, including Wells Fargo and Bank of America.

Lightning Round with Paul

Favorite Vacation Spot:  Currently the Big Island in Hawaii.  Alaska is a very close second.

Best Business Advice:  Listen far more than you speak.  You learn much more and will make fewer mistakes.

Ideal Saturday:  Play tennis for a couple of hours in the morning and then enjoy a quiet afternoon at home before barbecuing.

April 23, 2021

River City Bank Reports a Quarterly Cash Dividend on Common Shares

SACRAMENTO, CASteve 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 $15.6 million, or $10.62 diluted earnings per share, for the quarter ending March 31, 2021, a cash dividend of $0.315 per common share to shareholders of record as of May 4, 2021, and payable on May 18, 2021.