Tag: Earnings Report

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.

April 21, 2021

River City Bank Reports 2021 First Quarter Net Income of $15.6 Million

SACRAMENTO, CA — River City Bank (the Bank) reported net income of $15.6 million, or $10.62 per diluted share, for the quarter ending March 31, 2021, which compares favorably to the $7.3 million, or $4.96 per diluted share, for the same period in 2020.  The improved net income versus the prior year quarter was driven by:

  • $6.8 million in mark-to-market gains on interest rate swaps for the quarter ending March 31, 2021 compared to a loss of $164,000 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.
  • $3.4 million gain on sale of an investment.
  • $2.0 million deferred loan fees earned on Paycheck Protection Program (PPP) loans for which the outstanding loan balances were forgiven by the Small Business Administration.
  • Higher loan balances – Average loans outstandings were $533 million higher than the prior year, thereby increasing net interest income; $246 million of the increase was attributable to PPP loans.
  • $3.0 million provision for loan losses during the current quarter compared to the $1.0 million provision for loan losses recorded in the prior year quarter which partially offsets the benefits noted above.

“With many businesses in California continuing to struggle from the ongoing effects of the pandemic shutting down many segments of our economy, we are pleased to report that we were able to assist 292 customers obtain PPP round two loans totaling $79 million in outstandings as of March 31, 2021,” said Steve Fleming, president and chief executive officer of River City Bank.  “With vaccine distribution ramping up and California stating that it will allow indoor concerts, theater performances and other private gatherings starting on June 15th, we are expecting to see continued improvement in our local economy. Nevertheless, we continue to be concerned about the long-term impacts to the retail and office segments of commercial real estate due to rising levels of online shopping and work-from-home opportunities.”

“Operational efficiency remains a core competency for the Bank, as evidenced by our 34 percent efficiency ratio after excluding the swap MTM and investment gains noted above for the quarter ending March 31, 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 March 31, 2021, increased $12 million to $282 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 $2.9 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 8.3% as of March 31, 2021.

January 28, 2021

River City Bank reports record net income and deposit growth for 2020

SACRAMENTO, CA — River City Bank (the Bank) reported record net income of $31.6 million, or $21.58 per diluted share, for the year ending December 31, 2020; this was $6.3 million more than the $25.3 million, or $17.33 per diluted share, for the year ending December 31, 2019. The improved net income versus the prior year was driven by:

  • Higher loan balances – Average loans outstandings were $554 million higher than the prior year, thereby increasing net interest income.
  • Paycheck Protection Program (PPP) loans – As of December 31, 2020 the Bank had $236 million PPP loans outstanding and recorded $2.0 million of interest income and $3.8 million of loan fee income in 2020 related to PPP loans.
  • Prepayment penalty income of $3.9 million and $2.2 million for the years ending December 31, 2020 and 2019, respectively. In both years, the Bank recorded an elevated level of prepayment penalty fee income on commercial real estate loans that paid off prior to their maturity dates.
  • Mark-to-market adjustments on interest rate swaps resulting in a gain of $659,000 for the year ending December 31, 2020 compared to zero for the prior year period. 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.
  • Partially offsetting the benefits noted above to net income was a $6.4 million increase in the provision for loan losses versus the prior year. The increased level of provisions for loan losses was attributed to the Bank’s loan growth and some deterioration in loan quality caused by COVID-19. Nonetheless, management is very pleased with the Bank’s asset quality as evidenced by the following as of December 31, 2020:
    • No remaining loan modifications related to COVID-19
    • 0.02% Total delinquent loans
    • A total of one non-performing loan in the amount of $25,000
    • No charge-offs for the year ending December 31, 2020

“At the risk of stating the obvious, 2020 was an unprecedented year due to the COVID-19 pandemic,” said Steve Fleming, president and chief executive officer of River City Bank. “We experienced a shutting down of many segments of the economy in the first half of the year, with many businesses suffering massive interruptions in their operations. Though the economy improved during the second half of the year, until the vaccine is widely distributed amongst the population and determined to be effective, we believe that the California economy will remain weak.”

“I am very proud of the performance of the Bank in 2020, particularly given the very challenging circumstances,” said Fleming. “In early March our office staff had to adjust to working from home on a full-time basis. Within a month, many of them were also working long hours to process a large volume of Paycheck Protection Program loans for our existing customers and even some new customers. At the same time, our branch staff were on the front line, as they provided an essential service to our customers.  Though almost all of our branches remain open to provide services to our customers, given the health risks associated with COVID-19, we are continuing to protect our staff through minimizing the number of customers that can enter a branch at one time and are following California’s guidelines for wearing masks and social distancing.”

“Notwithstanding the challenges noted above, we experienced outstanding deposit growth of $866 million or 40% for the year ending December 31, 2020,” said Steve Fleming. “We are very pleased with the trust placed in us by our deposit customers, which has provided us with the liquidity necessary to continue our robust lending (25% growth in 2020) into the communities we serve. That said, we noticed a significant slowdown in loan demand since the onset of the pandemic and, thus, expect slow loan growth for most of 2021.”

“Operational efficiency remains a core competency for the Bank, as evidenced by our 33 percent efficiency ratio for the year ending December 31, 2020” 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 December 31, 2020 increased $33 million to $269 million, when compared to the $237 million as of December 31, 2019. The increase was driven by current year retained earnings and a $1.6 million increase in accumulated other comprehensive income as the decline in short and medium-term interest rates resulted in increased unrealized gains 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 8.1% as of December 31, 2020.

July 22, 2020

River City Bank reports net income of $6.1 million for the second quarter and $13.4 million year to date

SACRAMENTO, CA — River City Bank (the Bank) reported net income of $6.1 million, or $4.20 per diluted share, for the quarter ending June 30, 2020, which compares to the $6.5 million, or $4.44 per diluted share, for the same period in 2019.  Net income was $13.4 million or $9.16 per diluted share for the six months ending June 30, 2020, which compares to the $12.4 million or $8.51 per diluted share for the six months ending June 30, 2019.

The improved net income for the six months versus the prior year period was driven by a $7 million or 23% increase to net interest income from higher loan balances. Average loan outstandings, including Paycheck Protection Program (PPP) loans were $461 million higher than the prior year period, thereby increasing loan interest and fee income. PPP loans originated in the second quarter totaled $283 million as of June 30, 2020.  Partially, offsetting the higher level of loan interest and fee income were the following:

  • Provision for loan losses of $5.5 million or $3.5 million higher than the prior year period. Approximately $4.3 million of this provision can be attributed to the exceptional loan growth (over $200 million, excluding the PPP loans which are guaranteed by the US Government’s Small Business Administration), with the remaining $1.2 million primarily due to some Covid-19 caused deterioration in loan quality.
  • Mark to market on the interest rate swaps resulting in a loss of $1.5 million for the six months ending June 30, 2020 compared to zero for the prior year period. The Bank entered into these swap agreements to hedge the interest rate risk associated with its ongoing origination of medium-term fixed rate loans. Because certain of the Bank’s interest rate swaps were not designed to receive hedge accounting treatment, these swaps must be carried on the balance sheet at fair market value with any changes in value recorded in the income statement.

“Until an effective vaccine is developed and widely distributed amongst the population, we believe that the California economy will be seriously stressed; we are very pleased to be entering this period with solid asset quality metrics”, said Steve Fleming, president and chief executive officer of River City Bank.  “Through our disciplined and financially conservative loan underwriting and diligent management of the portfolio, we have reported no non-performing loans over the past three consecutive quarters. Perhaps even more importantly is the minimal number of loan modifications that we have had to make as a result of the COVID-19 pandemic.” The COVID-19 related loan modifications through June 30, 2020 consisted of the following:

  • Consumer: One residential mortgage loan with an outstanding balance of only $6,278 had its P&I payments deferred to October 2020.
  • C&I: One loan with an outstanding balance of $1.3 million had its P&I payments deferred to July 15, 2020.
  • CRE: Seven loans with an aggregate outstanding balance of $24 million have been making interest only payments for three months.

“In addition to the exceptional loan growth noted above, we also experienced outstanding deposit growth of $542 million or 25% during the first half of 2020”, said Steve Fleming. “It should be noted that some of this deposit growth is temporary in nature due to an extension in the tax filing due date from April 15 to July 15 and the recent funding of the PPP loans into deposit accounts at the Bank. Nevertheless, we are very pleased with the trust placed in us by our deposit customers, which has allowed us to continue our robust lending into the communities we serve. Though our branches remain open to provide services to our customers, given the health risks associated with COVID-19, we are continuing to protect our staff through minimizing the number of customers that can enter a branch at one time and are following California’s guidelines for wearing masks and social distancing.”

“Operational efficiency remains a core competency for the Bank, as evidenced by our 36 percent efficiency ratio for the six months ending June 30, 2020” said Anker Christensen, chief financial officer of River City Bank. “Though our total non-interest expense has 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, 2020, increased $16.5 million to $253 million, when compared to the $237 million as of December 31, 2019. The increase was driven by current year retained earnings and a $3.5 million increase in accumulated other comprehensive income as the decline in short and medium term interest rates resulted in increased unrealized gains 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 8.7% as of June 30, 2020.

April 23, 2020

River City Bank reports 2020 first quarter net income of $7.3 million

SACRAMENTO, CA — River City Bank (the Bank) reported net income of $7.3 million, or $4.96 per diluted share, for the quarter ending March 31, 2020, which compares favorably to the $5.9 million, or $4.07 per diluted share, for the same period in 2019. The improved net income versus the prior year quarter was driven by:

  • Higher loan balances – Average loan outstandings were $333 million higher than the prior year quarter, thereby increasing net interest income.
  • Non-core income of $657,000 during the current quarter related to prepayment penalty and deferred loan fee income on loans that paid off prior to their maturity compared to only $3,000 in the prior year quarter.
  • Increased loan income of $428,000 associated with hedge accounting entries related to our interest rate swap contracts compared to only $26,000 in the prior year quarter.
  • Partially offsetting the benefits to net income was a $500,000 increase in the provision for loan losses versus the prior year.

“We experienced exceptional deposit growth of $133 million, or 6.2 percent, during the first quarter of 2020,” said Steve Fleming, President and CEO of River City Bank. “We are very pleased with the trust placed in us by our deposit customers, which has allowed us to continue our robust lending into the communities we serve. These are unprecedented times and we are thankful that we can play a vital role through providing Paycheck Protection Program Loans (PPP Loans) to our existing customers as well as some new customers. As of April 20, 2020, we have funded $251 million of these PPP Loans. Our staff has performed at an exceptionally high level to ensure our customers received the resources they needed for their businesses in a timely fashion. Additionally, given the health risks associated with Covid-19, we are protecting our staff through minimizing the number of customers that can enter a branch at one time and through the use of acrylic barriers on our teller-line. Lastly, for those working in our corporate and back offices, we have been able to allow 80-90 percent of those staff to work from home.”

“These will be trying times for our economy and we are very pleased to be entering this period with solid asset quality metrics,” Fleming said. “Through our disciplined underwriting and consistency of monitoring the portfolio, we reported no non-performing loans for the two consecutive quarters ending March 31, 2020, and December 31, 2019.”

After excluding the prepayment penalty, accelerated deferred loan fee income and hedge accounting entries noted above, the Bank’s net interest margin decreased slightly from 2.66 percent to 2.64 percent for the quarters ending March 31, 2019 and 2020, respectively.

“Operational efficiency remains a core competency for the Bank, as evidenced by our 39 percent efficiency ratio for the quarter ending March 31, 2020,” said Anker Christensen, Chief Financial Officer of River City Bank. “Though our total non-interest expense has increased over the prior year quarter, our focus on managing expenses continues to be evident by our continued low efficiency ratio.”

Shareholders’ equity for River City Bank on March 31, 2020, increased $10.4 million to $247 million, when compared to the $237 million as of December 31, 2019. The increase was driven by increased retained earnings and a $3.2 million increase in accumulated other comprehensive income as the decline in short- and medium-term interest rates resulted in increased unrealized gains in our investment securities portfolio. The Bank’s capital ratio remains well above the regulatory definitions for being Well Capitalized, with a Tier 1 Leverage ratio of 9.5 percent as of March 31, 2020.

January 28, 2020

River City Bank reports record net income of $25.3 million for 2019

SACRAMENTO, CA — River City Bank (the Bank) reported record net income of $25.3 million, or $17.33 per diluted share, for the year ending December 31, 2019. This was $1.3 million more than the $24.0 million, or $16.50 per diluted share, for the year ending December 31, 2018. The improved net income versus the prior year was driven by:

  • Higher loan balances – Average loan outstandings were $208 million higher than the prior year, thereby increasing net interest income.
  • Non-core income of $2.0 million and $496,000 for the years ending December 31, 2019 and 2018, respectively — In 2019, the Bank recorded an elevated level of prepayment penalty and deferred loan fee income on loans that paid off prior to their maturity; it also received interest recoveries from loans that were previously charged off.
  • Partially offsetting the benefits to net income was a $3.25 million increase in the provision for loan losses versus the prior year. The increased level of provisions for loan losses was attributed to the Bank’s exceptional loan growth.

Additionally, the exceptional loan growth required a higher provision for loan losses in the fourth quarter causing the Bank to report lower net income of $5.8 million or $4.00 per diluted share, for the three months ending December 31, 2019, compared to the $6.8 million or $4.67 per diluted share, for the three months ending December 31, 2018.

Steve Fleming, president and chief executive officer of River City Bank, commented “We are pleased to report our fourth consecutive year of record earnings in 2019, along with exceptional loan (21%) and deposit (24%) growth. We achieved this loan growth due to our excellent reputation in the commercial markets that we operate in throughout California and the decline in long term interest rates. Perhaps more importantly, we accomplished this loan growth without compromising our asset quality. Through our disciplined underwriting and consistency of monitoring the portfolio, we are reporting no non-performing loans as of December 31, 2019.”

The loan growth has also been sufficient to mitigate the negative impact of the rise in the Bank’s cost of funds as it grew deposits at an accelerated pace. After excluding the prepayment penalty and deferred loan fee income noted above, the Bank’s net interest margin declined from 2.70 percent to 2.64 percent for the years ending December 31, 2018 and 2019, respectively.

“Our management team is committed to growing the Bank in an operationally efficient manner as evidenced by maintaining an efficiency ratio under 40 percent for the years ending December 31, 2019 and 2018” said Anker Christensen, chief financial officer of River City Bank. “We have a highly productive group of employees at the Bank and managing expenses continues to be a priority for the management team.”

Shareholders’ equity for River City Bank on December 31, 2019, increased $28 million to $237 million, when compared to the $209 million as of December 31, 2018. The increase was driven largely by 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 11.1 percent, 9.5 percent and 12.3 percent, respectively, as of December 31, 2019.

October 17, 2019

River City Bank reports net income of $7.0 million for the third quarter of 2019 and $19.5 million year-to-date

SACRAMENTO, CA — River City Bank (the Bank) reported record net income of $7.0 million, or $4.82 per diluted share, for the quarter ending September 30, 2019. This compares favorably to the $5.9 million, or $4.06 per diluted share, for the same period in 2018. Net income was $19.5 million, or $13.33 per diluted share, for the nine months ending September 30, 2019, which compares to the $17.2 million, or $11.82 per diluted share, for the nine months ending September 30, 2018. The improved net income versus the prior year quarter was driven by:

  • Higher loan balances – Average loan outstandings were $217 million higher than the prior year quarter, thereby increasing net interest income.
  • Non-core income of $376,000 and $72,000 for the quarters ending September 20, 2019 and 2018, respectively — The Bank recorded an elevated level of prepayment penalty and deferred loan fee income on loans that paid off prior to their maturity and received interest recoveries from loans that were previously charged off.
  • A $250,000 increased level of provisions for loan losses due to the Bank’s exceptional loan growth; this partially offset the above benefits to net income versus the prior quarter.

“We experienced solid loan growth of $217 million, or 13.5 percent, in the nine months of 2019 due to our excellent reputation in the commercial real estate loan market and the decline in long term interest rates,” said Steve Fleming, President and CEO of River City Bank. “This growth continues to propel our net interest income higher. Though our solid loan growth during the current quarter resulted in a higher provision for loan losses, our asset quality remains exceptional. The ratio of nonperforming loans and Other Real Estate Owned to total gross loans was zero as of September 30, 2019, and we have reported net recoveries for over four years. While the credit risk environment is benign today, we know from prior experience that it will change for the worse at some point, and we think it is prudent to maintain adequate loan loss reserves in anticipation of the eventual downturn.”

The loan growth has also been sufficient to mitigate the negative impact of the rise in short term interest rates and the flattening of the interest rate yield curve over the last year. After excluding the prepayment penalty and deferred loan fee income noted above, the Bank’s net interest margin declined from 2.68 percent to 2.61 percent for the three months ending September 30, 2018 and 2019, respectively.

“Operational efficiency remains a core competency for the Bank, as evidenced by our 40 percent and 42 percent efficiency ratios for the nine months ending September 30, 2019 and 2018, respectively,” said Anker Christensen, Chief Financial Officer of River City Bank. “Over the prior year period, our focus on managing expenses continues to be evident by our low efficiency ratio. This demonstrates our ability to grow profitably despite some net interest margin compression.”

Shareholders’ equity for River City Bank on September 30, 2019, increased $22.4 million to $231 million, when compared to the $209 million as of December 31, 2018. The increase was driven by increased retained earnings and accumulated other comprehensive income due to the decline in interest rates since December 31, 2018. 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 11.2 percent, 9.3 percent and 12.5 percent, respectively, as of September 30, 2019.

July 18, 2019

River City Bank reports net income of $6.5 million for the second quarter of 2019 and $12.4 million year-to-date

SACRAMENTO, CA — River City Bank (the Bank) reported record net income of $6.5 million, or $4.44 per diluted share, for the quarter ending June 30, 2019. This compares favorably to the $5.7 million, or $3.94 per diluted share, for the same period in 2018. Net income was $12.4 million, or $8.51 per diluted share, for the six-months ending June 30, 2019, which compares to the $11.3 million, or $7.76 per diluted share, for the six-month period ending June 30, 2018. The improved net income versus the prior year quarter was driven by:

  • Higher loan balances – Average loan outstandings were $192 million higher than the prior year quarter, thereby increasing net interest income.
  • Non-recurring income of $1.3 million – The Bank recorded an elevated level of prepayment penalty and deferred loan fee income on loans that paid off prior to their maturity and received interest recoveries from loans that were previously charged off.
  • Partially offsetting the above benefits to net income was a $750,000 increase in the provision for loan losses versus the prior year quarter. The increased level of provisions for loan losses was attributed to the Bank’s exceptional loan growth.

“We experienced solid growth of $147 million, or nine percent, in the first half of 2019 due to our excellent reputation in the commercial real estate loan market and the decline in long term interest rates,” said Steve Fleming, President and CEO of River City Bank. “Though our solid loan growth during the current quarter resulted in higher provision for loan losses, our asset quality remains exceptional. The ratio of nonperforming loans and Other Real Estate Owned to total gross loans of only 0.02 percent as of June 30, 2019, and we have reported net recoveries for more than four years. While the credit risk environment is benign today, we know from prior experience that it will change for the worse at some point, and we think it is prudent to maintain adequate loan loss reserves in anticipation of the eventual downturn.”

The loan growth has also been sufficient to mitigate the negative impact of the rise in short term interest rates and the flattening of the interest rate yield curve over the last year. After excluding the prepayment penalty and deferred loan fee income noted above, the Bank’s net interest margin declined from 2.73 percent to 2.67 percent for the six months ending June 30, 2018 and 2019, respectively.

“Operational efficiency remains a core competency for the Bank, as evidenced by our 40 percent and 42 percent efficiency ratios for the six months ending June 30, 2019 and 2018, respectively,” said Anker Christensen, Chief Financial Officer of River City Bank. “Over the prior year period, our focus on managing expenses continues to be made evident by our low efficiency ratio. This demonstrates our ability to grow profitably despite some net interest margin compression.”

Shareholders’ equity for River City Bank on June 30, 2019, increased $15.1 million to $224 million, when compared to the $209 million as of December 31, 2018. The growth was driven by increased retained earnings and accumulated other comprehensive income due to the decline in interest rates since December 31, 2018. 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 11.4 percent, 9.8 percent and 12.7 percent, respectively, as of June 30, 2019.

April 22, 2019

River City Bank reports 2019 first quarter net income of $5.9 million

SACRAMENTO, CA — River City Bank (the Bank) reported record net income of $5.9 million, or $4.07 per diluted share, for the quarter ending March 31, 2019. This compares favorably to the $5.5 million, or $3.82 per diluted share, for the same period in 2018. The improved net income versus the prior year quarter was driven by higher loan balances.

“We experienced solid growth of $67 million, or 4.2 percent, during the first quarter,” said Steve Fleming, President and CEO of River City Bank. “We are also pleased with the progress of our Clean Energy Division, which continues to open up new opportunities for us to expand our customer base. Our asset quality continues to be exceptional, with the ratio of nonperforming loans and Other Real Estate Owned to total gross loans of only 0.05 percent as of March 31, 2019.”

The loan growth has also been sufficient to mitigate the negative impact of the rise in short term interest rates over the last year and the flattening of the interest rate yield curve. The Bank’s net interest margin declined from 2.75 percent to 2.67 percent for the quarters ending March 31, 2018 and 2019, respectively.

“Operational efficiency remains a core competency for the Bank, as evidenced by our 42 percent efficiency ratio for the quarter ending March 31, 2019,” said Anker Christensen, Chief Financial Officer of River City Bank. “Though our total non-interest expense has increased over the prior year quarter, our focus on managing expenses continues to be made evident by our continued low-efficiency ratio. This demonstrates our ability to grow profitably even though we are experiencing some net interest margin compression.”

Shareholders’ equity for River City Bank on March 31, 2019, increased $7.1 million to $216 million, when compared to the $209 million as of December 31, 2018. The growth was driven by 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 11.6 percent, 9.7 percent and 12.9 percent, respectively, as of March 31, 2019.

January 28, 2019

River City Bank reports record net income of $24 million for 2018

SACRAMENTO, CA — River City Bank (the Bank) reported record net income of $24.0 million, or $16.50 per diluted share, for the year ending December 31, 2018. This was $7.3 million more than the $16.7 million, or $11.52 per diluted share, for the year ending December 31, 2017. The Bank’s earnings for 2018 were higher due to organic growth, as well as lower taxes from the Tax Cut and Jobs Act that was passed at the end of 2017. Earnings in 2017 were impacted by a one-time, non-cash charge of $4.6 million, or $3.18 per diluted share, in the fourth quarter of 2017. The charge was related to the re-measurement of the Bank’s deferred tax assets arising from a lower corporate tax rate. In addition, the 2017 results benefited from a pre-tax $3.5 million gain on sale of an Other Real Estate Owned property and a $765,000 mark to market gain on interest rate swap contracts.

“We are very proud to have finished 2018 with record earnings, significant growth in our customer base, and the successful opening of our loan production office in downtown San Francisco,” said Steve Fleming, President and CEO of River City Bank. “The new office and the recent launch of our Clean Energy Division will provide us with new and additional opportunities to serve the thriving Bay Area marketplace.”

The Bank experienced solid growth in its balance sheet in 2018, as evidenced by 9.6 percent loan growth and 12.4 percent deposit growth.

The Bank’s net interest margin declined from 2.83 percent to 2.73 percent for the years ending December 31, 2017 and 2018, respectively. The reduced net interest margin is a function of the Federal Reserve having increased short-term interest rates and the flattening of the yield curve. Consequently, the Bank’s net interest margin compresses as the cost of deposits and other borrowings rise faster than the yield on its earning assets.

“Operational efficiency remains a core competency for the Bank, as evidenced by our 40 percent efficiency ratio for the years ending December 31, 2018 and 2017, respectively,” said Anker Christensen, Chief Financial Officer of River City Bank. “We have a highly productive group of employees at the Bank, and managing expenses continues to be a priority for the management team.”

Shareholders’ equity for River City Bank on December 31, 2018 increased $24 million to $209 million, when compared to the $185 million as of December 31, 2017. The growth was driven by 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 11.8 percent, 9.6 percent and 13.1 percent, respectively, as of December 31, 2018.