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.