July 18, 2018

River City Bank reports 2018 second quarter net income of $5.7 million

SACRAMENTO, CA — July 18, 2018 — River City Bank (the Bank) reported net income of $5.7 million, or $3.94 per diluted share, for the quarter ending June 30, 2018, which compares to the $6.4 million, or $4.42 per diluted share, for the same period in 2017. The prior year quarter benefited from a $3.4 million pre-tax gain on sale of an Other Real Estate Owned property. Net income was $11.3 million or $7.76 per diluted share for the six months ending June 30, 2018, which compares to the $10.6 million or $7.35 per diluted share for the six months ending June 30, 2017.

“Although loan growth has slowed versus the prior three years, we are pleased to have exceeded $1.5 billion in loan outstandings as of June 30, 2018,” said Steve Fleming, President and Chief Executive Officer of River City Bank. “We are also very excited for the future of our recently launched Clean Energy Division. We have taken the lead in providing banking services for clean energy companies throughout California and look forward to a continued expansion of this practice.”

The Bank’s net interest margin declined from 2.86 percent to 2.73 percent for the quarters ending June 30, 2017 and 2018, respectively. The reduced net interest margin is a function of the Federal Reserve having pushed up short-term interest rates and the flattening of the yield curve. Consequently, our net interest margin compresses as the cost of deposits and other borrowings rise faster than the yield on our earning assets.

The Bank’s asset quality remains healthy with the ratio of nonperforming loans to total gross loans declining from an already low 0.06 percent as of June 30, 2017 to 0.01 percent as of June 30, 2018. With the economic recovery in its 9th year, we are at a point in the credit cycle when most banks are experiencing minimal loan losses.

“Operational efficiency remains a core competency for the Bank, as evidenced by our 42 percent and 39 percent efficiency ratios for the quarters ending June 30, 2018 and 2017, respectively,” said Anker Christensen, Chief Financial Officer of River City Bank. “Managing expenses continues to be a priority for the management team.”

Shareholders’ equity for River City Bank on June 30, 2018 increased $10 million to $195 million, when compared to the $185 million as of December 31, 2017. The increase was driven through increased retained earnings. The Bank’s capital ratios remain well above the regulatory definitions for being Well Capitalized. Common Equity Tier 1, Tier 1 Leverage and Total Risk-based capital ratios were 12.0 percent, 9.7 percent and 13.2 percent, respectively, as of June 30, 2018.

About River City Bank

Named one of Sacramento Business Journal’s “50 Fastest Growing Companies” for each of the past six years, River City Bank is a leading boutique commercial bank throughout California with assets of over $4.9 billion. River City Bank offers a comprehensive suite of banking services, including loans, deposits, and cash management tools to the business, consumer, and commercial real estate sectors. With tailored, concierge-like level of service River City Bank redefines the banking experience and every touch point that surrounds it. River City Bank is the largest, independent, locally-owned and managed bank in the Sacramento region with an office in the San Francisco Bay Area and a presence in Southern California. For additional information, please visit www.rivercitybank.com or call (916) 567-2600. Member FDIC. Equal Housing Lender.

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