Tag: Earnings Report

April 25, 2024

River City Bank Reports 2024 First Quarter Net Income of $18.7 Million and a Quarterly Cash Dividend

SACRAMENTO, CA - River City Bank (the Bank) reported net income of $18.7 million, or $12.63 per diluted share, for the quarter ended March 31, 2024, which compares to $12.9 million, or $8.64 per diluted share, for the same period in 2023. The Bank’s earnings for the quarter ended March 31, 2024 represented a healthy 17.5% return on equity capital and 1.47% return on assets.

Significant items impacting quarterly net income for March 31, 2024 and 2023 include the following:

  • Higher loan balances – Average loan outstandings for the quarter ended March 31, 2024 were $494 million higher than the same period prior year, thereby increasing net interest income despite higher cost of funds.
  • Increased cash and investment balances – Average cash balances grew by $533 million and average investments balances grew by $61 million, when compared to the same period in 2023. The increased balances, at higher yields, provided an $11.9 million increase in income from cash and investments versus the prior year quarter.
  • Deposit growth – Average deposits grew by $1.05 billion compared to the same period a year earlier, supporting the Bank’s loan growth while reducing higher cost borrowings and increasing liquid assets.
  • The Bank recognized $4.3 million in mark-to-market gains on undesignated interest rate swaps for the quarter ended March 31, 2024 that benefitted from rising interest rates during the quarter. These swaps were entered into for the purpose of hedging the medium-term fixed rate loans in the Bank’s loan portfolio, as part of the Bank’s standard interest rate risk management program. Until these interest rate swaps are designated as a hedge to specific assets or liabilities, the mark-to-market fluctuations (positive and negative) will flow through the income statement.
  • The provision for credit losses for loans in for the quarter ended March 31, 2024 was $4.0 million, which was $2.5 million greater than the $1.5 million in the same period in 2023. The increased provision for credit losses for loans reflects the growth in the Bank’s loans as well as concern for continued deterioration in the office segment of the Bank’s commercial real estate portfolio. During the quarter ended March 31, 2024, the Bank did not experience any actual credit losses and the Bank’s Allowance for Credit Losses for Loans was a robust 2.67% as of March 31, 2024.

“Our customers continue to appreciate the value the Bank provides with over 50 years of consistently exceptional service as evidenced by our significant growth in total deposits from $3.4 billion at March 31, 2023 to over $4.3 billion as of March 31, 2024,” said Steve Fleming, president and chief executive officer. “The Bank’s balance sheet remains highly liquid with $503 million in cash and $699 million in high quality short duration investments (investment portfolio effective duration of only 1.1 years). At the same time, our loan quality remains pristine with 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, retail, 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 relatively small unrealized losses of 1.7 percent and there are no investment securities categorized as held-to-maturity,” said Brian Killeen, chief financial officer of River City Bank. “Operational efficiency remains a core competency for the Bank, as evidenced by our 24.4 percent efficiency ratio for the quarter ended March 31, 2024.”

Shareholders’ equity for River City Bank on March 31, 2024 increased $17.3 million to $435 million when compared to the $418 million as of December 31, 2023. The increase was driven by current year retained earnings. The Bank’s capital ratios remain healthy and well above the regulatory definition for being Well Capitalized with a Tier 1 Leverage Ratio of 8.5% as of March 31, 2024.

Additionally, Mr. Fleming announced that the Bank’s board of directors has approved a cash dividend of $0.37 per common share to shareholders of record as of May 7, 2024, and payable on May 21, 2024.

October 18, 2023

River City Bank Reports Net Income of $16.3 Million for the Third Quarter of 2023, $43.6 Million Year to Date and a Quarterly Cash Dividend

SACRAMENTO, CA —River City Bank (the Bank) reported net income of $16.3 million, or $10.94 per diluted share, for the quarter ending September 30, 2023, which compares favorably to the $11 million, or $7.43 per diluted share, for the same period in 2022.  Net income was $43.6 million or $29.22 per diluted share for the nine months ending September 30, 2023, which compares favorably to the $36.3 million or $24.51 per diluted share for the nine months ending September 30, 2022.  The Bank’s earnings for the first nine months ending September 30, 2023 represented a healthy 15.4% return on equity capital and 1.34% return on assets.

Significant items impacting quarterly net income for September 30, 2023 and 2022 include the following:

  • Higher loan balances – Average loan outstandings were $513 million higher than the prior year quarter, thereby increasing net interest income.
  • Increased net interest margin (NIM) – For the current quarter, NIM has increased to 2.87% from 2.72% in the prior year quarter.  Year-to-date NIM has increased to 2.86% from 2.59% in the prior year through nine months.  The Bank has seen a benefit in NIM as market rates have increased over these timeframes.
  • The provision for credit losses for the current quarter of $4.6 million was higher than the $3.7 million for the prior year quarter.  The increase in the provision for credit losses in 2023 reflects the growth in the Bank’s loans this year and concern for continued deterioration in the office segment of the Bank’s commercial real estate portfolio.  For the nine months ending September 30, 2023, the provision for credit losses was $12.6 million – notwithstanding an absence of actual loan losses during that period.
  • The Bank recognized $2.4 million in mark-to-market gains on interest rate swaps for the current quarter compared to none in the prior year quarter.  These swaps were recently entered into for the purpose of hedging the medium term fixed rate loans in the Bank’s loan portfolio, as part of the Bank’s standard interest rate risk management program.

“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 and expanding customer base,” said Steve Fleming, president and chief executive officer. “Notwithstanding the turmoil in the banking industry that was caused by the failure of several banks in the first half of this year, our total deposits have grown significantly from $3.4 billion as of December 31, 2022 to $4.2 billion as of September 30, 2023; as such, the Bank’s liquidity remains healthy.  At the same time, our asset quality remains strong with a very short effective duration (average of 1.1 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, retail, and industrial properties, as well as expanding our geographic footprint to other western states outside of California. On the other hand, we continue to see deterioration in 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 relatively small unrealized losses included in accumulated other comprehensive loss within shareholders’ equity (3%) and there are no investment securities categorized as held-to maturity,” said Brian Killeen, interim chief financial officer of River City Bank. “Operational efficiency remains a core competency for the Bank, as evidenced by our 29 percent efficiency ratio, after excluding the interest rate swap mark-to-market gain of $7.7 million, for the nine month period ending September 30, 2023.”

Shareholders’ equity for River City Bank on September 30, 2023 increased $52 million to $405 million, when compared to the $353 million as of December 31, 2022. The increase was primarily driven by current year retained earnings, as well as a $10.2 million improvement in the Bank’s accumulated other comprehensive income position. River City Bank is one of a small percentage of banks in the United States which can claim a positive accumulated other comprehensive income. The Bank’s capital ratios remain well above the regulatory definition for being Well Capitalized, with a Tier 1 Leverage Ratio of 8.6% as of September 30, 2023.

Additionally, Mr. Fleming announced that the Bank’s board of directors has approved a cash dividend of $0.35 per common share to shareholders of record as of October 31, 2023, and payable on November 14, 2023.

July 19, 2023

River City Bank Reports Net Income of $14.4 Million for the Second Quarter of 2023 and $27.3 Million Year to Date

SACRAMENTO, CA —River City Bank (the Bank) reported net income of $14.4 million, or $9.65 per diluted share, for the quarter ending June 30, 2023, which compares favorably to the $8.9 million, or $5.98 per diluted share, for the same period in 2022. Net income was $27.3 million or $18.28 per diluted share for the six months ending June 30, 2023, which compares favorably to the $25.3 million or $17.08 per diluted share for the six months ending June 30, 2022. The Bank’s earnings for the first six months ending June 30, 2023 represented a
healthy 14.8% return on equity capital and 1.35% return on assets.

Significant items impacting quarterly net income for June 30, 2023 and 2022 include the following:

  • Higher loan balances – Average loan outstandings were $470 million higher than the prior year quarter, thereby increasing net interest income.
  • The provision for credit losses on loans for the current quarter of $6.5 million was significantly higher than the $1.3 million for the prior year quarter. The increase in the provision for credit losses in 2023 reflects the growth in the Bank’s loans this year and concern for continued deterioration in the office segment of the Bank’s commercial real estate portfolio.
  • During the prior year quarter, the Bank had recognized a $3.9 million loss on the sale of $34 million of available for sale corporate bonds. The Bank had no investment sales during the current quarter.
  • The Bank recognized $5.3 million in mark-to-market gains on interest rate swaps for the current quarter compared to none in the prior year quarter. These swaps were recently entered into for the purpose of hedging the medium term fixed rate loans in the Bank’s loan portfolio, as part of the Bank’s standard interest rate risk management program.

“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 turmoil in the banking industry that was caused by the failure of several banks in the first half of this year, our total deposits have grown from $3.4 billion as of December 31, 2022 to $3.6 billion as of June 30, 2023; as such, the Bank’s liquidity remains healthy. At the same time, our asset quality remains strong with a very 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, retail, and industrial properties, as well as expanding our geographic footprint to other western states outside of California. On the other hand, we continue to see deterioration in 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 relatively small unrealized losses included in accumulated other comprehensive loss within shareholders’ equity and there are no investment securities categorized as held-to maturity,” said Brian Killeen, interim chief financial officer of River City Bank. “Operational efficiency remains a core competency for the Bank, as evidenced by our 30 percent efficiency ratio,after excluding the interest rate swap mark-to-market gain of $5.3 million, for the six month period ending June 30, 2023.”

Shareholders’ equity for River City Bank on June 30, 2023 increased $31 million to $384 million, when compared to the $353 million as of December 31, 2022. The increase was driven by current year retained earnings, as well as a $4.7 million reduction in the Bank’s accumulated other comprehensive loss. The Bank’s equity continues to be minimally impacted by a slight $477 thousand accumulated other comprehensive loss position as of June 30, 2023. The Bank’s capital ratios remain well above the regulatory definition for being Well Capitalized with a Tier 1 Leverage Ratio of 9.3% as of June 30, 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.

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.

October 19, 2022

River City Bank Reports Net Income of $11.0 Million for the Third Quarter of 2022 and $36.3 Million Year to Date

SACRAMENTO, CA — River City Bank (the Bank) reported net income of $11.0 million, or $7.43 per diluted share, for the quarter ending September 30, 2022, which was $663,000 less than the $11.7 million, or $7.92 per diluted share, for the same period in 2021. Net income was $36.3 million or $24.51 per diluted share for the nine months ending September 30, 2022, more than the $34.7 million or $23.51 per diluted share for the nine months ending September 30, 2021. Significant items impacting quarterly net income for September 30, 2022 and 2021 include the following:

  • Higher loan balances – Average loan outstandings were $538 million higher than the prior year quarter, thereby increasing net interest income.
  • The provision for loan losses for the current quarter of $3.73 million was higher than the $2.0 million for the prior year quarter.
  • The Bank recorded an elevated level ($1.9 million) of prepayment premium income on commercial real estate loans that paid off prior to their maturity dates for the quarter ending September 30, 2021 compared to only $124,000 for the current quarter.
  • Deferred loan fee income associated with Paycheck Protection Program (PPP) loans was lower in the current quarter with $50,000 compared to the significantly higher $1.4 million for the quarter ending September 30, 2021.

“We are very pleased with the $416 million or 15% loan growth during the nine months ending September 30, 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 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 interest rate swap mark-to-market gain of $7 million and the $3.9 million realized loss on sale of investment securities for the nine months ending September 30, 2022,” said Anker Christensen, chief financial officer of River City Bank.

Shareholders’ equity for River City Bank on September 30, 2022 increased $32 million to $340 million, when compared to the $308 million as of December 31, 2021. The increase was driven by current year retained earnings, partially offset by a $6.5 million increase in accumulated other comprehensive loss as the increase in short and medium-term interest rates resulted in unrealized losses in the Bank’s 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 9.0% as of September 30, 2022.

July 20, 2022

River City Bank Reports Net Income of $8.9 Million for the Second Quarter of 2022 and $25.3 Million Year to Date

SACRAMENTO, CA — River City Bank (the Bank) reported net income of $8.9 million, or $5.98 per diluted share, for the quarter ending June 30, 2022, which compares favorably to the $7.3 million, or $4.97 per diluted share, for the same period in 2021.  Net income was $25.3 million or $17.08 per diluted share for the six months ending June 30, 2022, which compares favorably to the $23.0 million or $15.59 per diluted share for the six months ending June 30, 2021. Significant items impacting quarterly net income for June 30, 2022 and 2021 include the following:

  • Higher loan balances – Average loan outstandings were $353 million higher than the prior year quarter, thereby increasing net interest income.
  • The provision for loan losses for the current quarter of $1.25 million was less than the $2.5 million for the prior year quarter.
  • During the current quarter, the Bank recognized a gain of $728,000 on the sale of an office building that was no longer in use.
  • The Bank recorded an elevated level of prepayment premium income on commercial real estate loans that paid off prior to their maturity dates of $1.3 million for the quarter ending June 30, 2021 compared to only $877,000 for the current quarter.
  • The Bank recognized a mark to market loss on interest rate swap contracts of $3 million during the second quarter of 2021.
  • Deferred loan fee income associated with Paycheck Protection Program (PPP) loans was lower in the current quarter with $253,000 and $1.4 million for the quarters ending June 30, 2022 and 2021, respectively.
  • The Bank recognized a $3.9 million loss in the current quarter on the sale of $34 million of available for sale corporate bonds yielding only 0.95% and reinvested the proceeds in 1-year U.S. Treasuries yielding 2.87%.

“After a slow-start in the first quarter, we are pleased with the $239 million of loan growth during the first half of the year (after excluding the $30 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 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 27 percent efficiency ratio after excluding the interest rate swap mark-to-market gain of $7 million for the six month period ending June 30, 2022” said Anker Christensen, chief financial officer of River City Bank.

“Our focus on managing expenses continues to be evident by our continued low efficiency ratio and our total non-interest expense remains relatively unchanged from the prior period.”

Shareholders’ equity for River City Bank on June 30, 2022 increased $19 million to $327 million, when compared to the $308 million as of December 31, 2021. The increase was driven by current year retained earnings, partially offset by a $6.5 million 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. The Bank’s capital ratio remains well above the regulatory definition for being Well Capitalized with a Tier 1 Leverage Ratio of 9.1% as of June 30, 2022.

April 20, 2022

River City Bank Reports 2022 First Quarter Net Income of $16.4 Million

SACRAMENTO, CA — River City Bank (the Bank) reported net income of $16.4 million, or $11.10 per diluted share, for the quarter ending March 31, 2022, which compares favorably to the $15.6 million, or $10.62 per diluted share, for the same period in 2021.  The improved net income versus the prior year quarter was driven by:

  • $7.0 million in mark-to-market gains on interest rate swaps for the quarter ending March 31, 2022 compared to a gain of $6.8 million for the prior year quarter. 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. If the Bank had been able to obtain hedge accounting treatment for these swaps, the mark-to-market gains would not have been recognized for the quarter as they were offset by losses on the loans being hedged.
  • $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. The initial gain recognized on the sale of this investment in the prior year quarter was $3.4 million.
  • Higher loan balances – Average loans outstandings, excluding PPP loans, were $455 million higher than the prior year, thereby increasing net interest income.

Partially mitigating the above were the following factors:

  • $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 current quarter compared to $2.0 million recognized in the prior year quarter.
  • $6.4 million provision for loan losses during the current quarter compared to the $3.0 million provision for loan losses recorded in the prior year quarter.

Our asset quality remains strong with virtually no delinquencies or non-performing loans, however, we made a sizeable provision to our loan loss reserve in the first quarter due to concerns with rising inflation, the war in Ukraine, and potential impacts to the office segment of commercial real estate from a reduction in demand as employers continue to provide work-from-home opportunities,” said Steve Fleming, president and chief executive officer.  “Nevertheless, we believe we can prudently continue to grow our loan portfolio as we focus more on commercial loans secured by multi-family and industrial properties, as well as expanding our geographic footprint to other western states outside of California.”

“Operational efficiency remains a core competency for the Bank, as evidenced by our 33 percent efficiency ratio   after excluding the swap MTM and investment gains noted above for the quarter ending March 31, 2022” said Anker Christensen, chief financial officer of River City Bank. “Our total non-interest expense has remained stable compared to the prior year period as evidence of our focus on managing expenses.”

Shareholders’ equity for River City Bank on March 31, 2022 increased $5.4 million to $313 million, when compared to the $308 million as of December 31, 2021. The increase was driven by current year retained earnings, offset somewhat by an $11.1 million 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. The Bank’s capital ratio remains well above the regulatory definition for being Well Capitalized with a Tier 1 Leverage Ratio of 9.0% as of March 31, 2022.

January 27, 2022

River City Bank Reports 6th Consecutive Year with Record Net Income

SACRAMENTO, CA — River City Bank (the Bank) reported earnings for the fourth quarter of 2021 of $9.81 million, or $6.63 per share, compared to $9.86 million, or $6.71 per share in the fourth quarter of 2020. The Bank also reported its 6th consecutive year of record net income with $44.5 million or $30.14 per diluted share, for the year ending December 31, 2021; this was $12.9 million more than the $31.6 million, or $21.58 per diluted share, for the year ending December 31, 2020. The improved net income versus the prior year was driven by:

  • Higher loan balances – Average loans outstandings were $232 million higher than the prior year, thereby increasing net interest income.
  • Deferred loan fee income associated with Paycheck Protection Program (PPP) loans for the current year was $1.9 million higher than the prior year.
  • Interest expense declined $7.5 million as the Bank’s cost of funds declined from 0.74% in 2020 to 0.40% in 2021.
  • The provision for loan losses for the current year was $1.9 million lower than the prior year.
  • Mark-to-market gains (“MTM”) on interest rate swaps were $4.1 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.
  • The Bank recognized a $3.4 million gain on the sale of an investment in the first quarter of 2021.

“In addition to six consecutive years of record net income, we are very pleased to report record net loan growth of  $510 million for the year ending December 31, 2021, after excluding the $204 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 due to the potential reduction in demand as employers provide work-from-home opportunities.”

“Operational efficiency remains a core competency for the Bank, as evidenced by our 30 percent efficiency ratio   after excluding the swap MTM gain for the year ending December 31, 2021” said Anker Christensen, chief financial officer of River City Bank. “Though our total non-interest expense increased 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, 2021 increased $39 million to $308 million, when compared to the $269 million as of December 31, 2020. The increase was driven by current year retained earnings, slightly offset by a $5.4 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 8.4% as of December 31, 2021.

October 21, 2021

River City Bank Reports Net Income of $11.7 Million for the Third Quarter of 2021 and $34.7 Million Year To Date

River City Bank Also Received an Investment Grade Long Term Debt Rating from Standard & Poors

SACRAMENTO, CA — River City Bank (the Bank) reported net income of $11.7 million, or $7.92 per diluted share, for the quarter ending September 30, 2021, which compares favorably to the $8.3 million, or $5.70 per diluted share, for the same period in 2020.  Net income was $34.7 million or $23.51 per diluted share for the nine months ending September 30, 2021, which compares favorably to the $21.8 million or $14.86 per diluted share for the nine months ending September 30, 2020. Significant items impacting quarterly net income for September 30, 2021 and 2020, include the following:

  • Higher loan balances – Average loans outstandings were $233 million higher than the prior year quarter, thereby increasing net interest income.
  • The provision for loan losses for the current quarter of $2.0 million was less than the $3.35 million for the prior year quarter.
  • The Bank recorded an elevated level of $1.9 million prepayment premium income for the current quarter on commercial real estate loans that paid off prior to their maturity dates compared to only $764,000 for the prior year quarter.
  • Mark-to-market gains (“MTM”) of $740,000 and $365,000 on interest rate swaps were recorded for the quarters ending September 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 slightly lower in the current quarter with $1.4 million and $1.7 million for the quarters ending September 30, 2021 and 2020, respectively.

Receiving an investment grade long term credit rating from S&P Global was an important milestone for the Bank this quarter as it reflects their assessment of our operational efficiency, strong loan quality,  solid earnings capacity, and management stability,” said Shawn Devlin, chairman of the board of River City Bank.  “We are now one of the only banks in the nation with less than five billion dollars in total assets to have secured an investment grade rating from S&P.”

“We are very pleased with the $296 million of loan growth during the first nine-months of the year after excluding the $183 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 virtually no delinquencies or non-performing loans.”

“Operational efficiency remains a core competency for the Bank, as evidenced by our 30 percent efficiency ratio after excluding the swap MTM gain for the nine-months ending September 30, 2021,” said Anker Christensen, chief financial officer of River City Bank. “Though our year-to-date 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 September 30, 2021 increased $31 million to $301 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 $3.1 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 8.6% as of September 30, 2021.