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.