Executive Team Archives

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.”

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.

February 26, 2024

Meet Brian Killeen

Brian Killeen is River City Bank's Chief Financial Officer. As CFO, Brian oversees its accounting, financial reporting, and treasury functions. Since his arrival at the Bank in 2007 as the Controller, he has gradually assumed additional responsibilities within the Finance Department and spearheaded several bank-wide initiatives. Brian joined us to chat about his passion for Bay Area sports teams, his new role at River City Bank, and the importance of his faith.

Hometown: I grew up in Davis, CA and still live there to this day. It has been a great place to raise our kids.

First Job: Outside of the standard yardwork and newspaper delivery jobs, my first real jobs were working at the local library and a pizza place.

Favorite Quote(s): “Some people make things happen, some people watch things happen and some people wondered what happened.”

Favorite Movie: Chariots of Fire – Some people view it as a slow movie, but it has multiple stories going on and one of the protagonists is Eric Liddell, a Christian hero of mine and missionary.

Favorite city to visit: My family and I have visited a number of great places, but I think my favorite city to visit is London. I especially like the historical places and museums to visit, but amidst a vibrant, modern city.

Favorite place in Sacramento/Bay Area/Southern California: I like to get away to Marin and enjoy hiking on Mt. Tamalpais.

First site or app you check in the morning: Wall Street Journal website.

What are you reading right now? “Six Days of War”. It’s a book about the Six Day War in Israel in 1967. Interesting to read, given the war that is currently going on in Israel/Gaza now.

Morning ritual: After a shower to wake up, I read several chapters in the Bible, spend some time praying and drink coffee. This helps me get in the right state of mind for the day.

Radio or podcasts? Generally radio, I like listening to Armstrong and Getty for news and current events. I do listen to the “Men in Blazers” podcast to get my fix for Premier League football talk.

Who is your favorite hero/heroine of fiction? I loved the Star Wars movies growing up and Luke Skywalker was my guy.

What is something people would be surprised to know about you? I’m a life-long Raiders fan. It has generally proven to be a recipe for suffering, but I haven’t been able to quit them.

Which causes/nonprofits do you support? Sacramento Life Center, they provide an important service to our community.

What did you want to be when you were a child? I wanted to play baseball for the San Francisco Giants. Unfortunately, this dream had to change by about the age of 14 or so.

What is your greatest extravagance? Probably the last house we purchased. It has a pool, which I never thought we would have or want.

What is your current state of mind? As a new CFO, I would say “invigorated” as I navigate the challenges and opportunities each day that come with the role.

What do you like best about working at River City Bank? I enjoy working for a community bank in the area that I live in and with a number of talented and dedicated people.

January 25, 2024

River City Bank Reports 8th Consecutive Year With Record Net Income in 2023 and a Quarterly Cash Dividend

SACRAMENTO, CA - River City Bank (the Bank) reported its 8th consecutive year of record net income with $60.3 million or $40.49 per diluted share for the year ended December 31, 2023; this was $12.5 million more than the $47.8 million or $32.22 per diluted share for the year ended December 31, 2022. The Bank also reported net income of $16.8 million, or $11.28 per diluted share, for the quarter ended December 31, 2023, which compares favorably to the $11.5 million, or $7.72 per diluted share, for the same period in 2022. The Bank’s earnings for the year ended December 31, 2023 represented a healthy 15.7% return on equity capital and 1.34% return on assets. The improved net income versus the prior year was driven by the following factors:

Higher loan balances – Average loan outstandings in 2023 were $477 million higher than the prior year, thereby increasing net interest income.
Increased net interest margin (NIM) – For 2023, NIM increased to 2.74% from 2.68% in the prior year. The Bank has seen a benefit in NIM as market rates have increased over these two years. Despite experiencing significantly higher deposit costs during 2023, the Bank had $19.1 million more net interest income than in 2022.
The provision for credit losses in 2023 was $12.6 million, which was $5.8 million less than the $18.4 million in 2022. 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 2023, the Bank did not experience any actual credit losses and the Bank’s Allowance for Credit Losses for Loans was a robust 2.61% as of December 31, 2023.
The Bank recognized a $3.9 million loss in 2022 on the sale of $34 million of available for sale corporate bonds which were yielding only 0.95%. At the time of the sale, the Bank was able to re-invest in U.S. Treasuries and Agency securities at a significantly higher yield.

“With the Bank’s founding in 1973, we celebrated 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 grew significantly from $3.4 billion as of December 31, 2022 to $4.3 billion as of December 31, 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 1.15 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 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 26.6 percent efficiency ratio for the year ended December 31, 2023. Though our total non-interest expense increased in 2023 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, 2023 increased $65 million to $418 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 $9.3 million improvement in the Bank’s accumulated other comprehensive income position. The Bank’s capital ratios remain well above the regulatory definition for being Well Capitalized, with a Tier 1 Leverage Ratio of 8.2% as of December 31, 2023.

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 February 6, 2024, and payable on February 20, 2024.

October 25, 2023

River City Bank Announces Restructure of Risk Management Department

SACRAMENTO, CA — River City Bank's President and CEO Steve Fleming recently announced the restructure of the bank's risk management department, which will be implemented Nov. 1, 2023. The reorganization will create a completely independent internal audit department, implementing best practices to ensure the highest levels of risk mitigation and compliance. River City Bank believes that a proactive approach to risk management is a priority and these initiatives reinforce the company's commitment to the financial security of its customers.

Pat McHone has been appointed to the newly created role of Chief Risk Officer (CRO). Reporting to the CRO will be the Credit, Compliance, and Information Security Departments. In addition to providing ongoing executive oversight of the three groups noted above, McHone will be responsible for Business Continuity Planning, Vendor Management, and Policy Administration.

As the Bank's Executive Vice President and Chief Credit Officer, McHone has been an integral member of River City Bank's Executive Team since 2008. With close to 40 years of experience, his banking career includes 16 years as Senior Vice President and Region Manager at Mechanics Bank and seven years at Security Pacific Bank.

Ken Imwinkelried, currently the Bank's Senior Vice President and Senior Credit Manager, will be promoted to Chief Credit Officer and will report to the Chief Risk Officer. As the new CCO, Imwinkelried is responsible for all aspects of the loan approval process, credit quality, and management of the Bank's portfolio of commercial real estate, commercial and industrial, and consumer loans. He will join the Bank's Executive Team, Asset Liability Committee, Pricing Committee, and Loan Committee.

Imwinkelried first joined River City Bank in 2010 through its Commercial Banking Associate training program. Throughout his career at the Bank, he has advanced through a broad range of credit analysis, underwriting, and management positions.

Jeremy Spencer has been named as Director of Internal Audit and Regulatory Relations (DIA). The DIA will maintain a direct reporting line to the Audit Committee with an administrative reporting to the CEO. In addition to managing all in-house and outsourced audits, Spencer is the Bank's liaison to regulatory agencies.

Spencer joined River City Bank in 2011 and is currently the Senior Vice President and Director of Risk Management. Prior to joining the Bank, he was a Senior Manager with KPMG LLP U.S., where he spent five years providing audit services, Sox404 compliance consulting, and SEC reporting services to clients in the financial services industry.

"Our primary focus has always been the safety and security of our customers' assets and information," said Steve Fleming. "By identifying, evaluating and mitigating risk, we reinforce our commitment to providing a secure and trustworthy banking environment. This Risk Management Department will provide guidance to the Bank's entire executive team and board of directors to ensure our risk management practices align with the best industry practices and regulatory guidelines."

October 19, 2023

River City Bank Announces Promotion of New Chief Financial Officer

SACRAMENTO, CA — River City Bank (the Bank) announced that Brian Killeen has been named Chief Financial Officer effective October 18, 2023.

After serving as the Bank’s Controller since 2007, Mr. Killeen was appointed Interim Chief Financial Officer on July 3, 2023. Prior to joining the Bank, Mr. Killeen spent seven years working for KPMG LLP in Sacramento, where he focused on performing audits of financial institutions. Mr. Killeen holds a B.S. in Business Administration, with concentrations in Accounting and Finance, from California State University, Sacramento and is a Certified Public Accountant (inactive). Mr. Killeen will spearhead the search for a successor Controller/Deputy CFO to join the Bank’s finance team.

“With Brian’s excellent performance over many years as our Controller and his most recent time as our Interim CFO, he is absolutely the right individual to take on this important leadership role at the Bank.” Steve Fleming, the Bank’s President and CEO. “I am confident his knowledge of the Bank’s accounting, treasury management and financial reporting requirements combined with his commitment to the Bank’s growth and success, makes him the ideal person for the CFO position.”