River City Bank Reports 2023 First Quarter Net Income of $12.9 Million

Rhea-AI Summary

River City Bank reported a net income of $12.9 million or $8.64 per diluted share for Q1 2023, down from $16.5 million or $11.10 per diluted share in Q1 2022. The prior year's income included $7.0 million in mark-to-market gains and $6.9 million from a sale true-up. The Bank's provision for loan losses decreased to $1.5 million from $6.4 million in the previous year. As of March 31, 2023, the Bank maintained a healthy 14% return on equity capital and a 1.29% return on assets. Total deposits remained stable at over $3.4 billion, supporting liquidity. Shareholders' equity increased to $366.5 million, up from $353 million. The Bank also emphasized its operational efficiency with a 32% efficiency ratio for the quarter.

Positive

• Net income of $12.9 million represents a healthy return on equity of 14%.
• Decreased provision for loan losses to $1.5 million, down from $6.4 million.
• Shareholders' equity increased by $13.5 million to $366.5 million.
• Total deposits stable at over $3.4 billion, indicating strong liquidity.
• Efficiency ratio of 32% highlights operational efficiency.

Negative

• Net income decreased from $16.5 million in Q1 2022 to $12.9 million in Q1 2023, indicating a decline in overall profitability.
• Significant prior year gains from interest rate swaps and PPP loans were absent this quarter, impacting revenue.

SACRAMENTO, CA / ACCESSWIRE / April 19, 2023 / 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 quarter. 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.

ABOUT RIVER CITY BANK:

Named one of Sacramento Business Journal's "50 Fastest Growing Companies" for each of the past six years, River City Bank is the Sacramento region's premier business bank with assets of over $4.3 billion. River City Bank offers a comprehensive suite of banking services, including loans, deposits and cash management tools to the business, consumer and commercial real estate sectors. With tailored, executive-level service and a long-term investment grade credit rating from Standard & Poor's, River City Bank redefines the banking experience and every touch point that surrounds it. River City Bank is the largest, independent, locally-owned and managed bank in the Sacramento region with offices in the San Francisco Bay Area and a presence in Southern California. For additional information, please visit www.rivercitybank.com or call (916) 567-2600. Member FDIC. Equal Housing Lender.

Contact Information:

Pat Lewis
Executive Vice President - Chief Operating Officer
pat.lewis@rivercitybank.com
916-567-2600

SOURCE: River City Bank

View source version on accesswire.com:
https://www.accesswire.com/750215/River-City-Bank-Reports-2023-First-Quarter-Net-Income-of-129-Million

FAQ

What was River City Bank's net income for Q1 2023?

River City Bank reported a net income of $12.9 million for Q1 2023.

How did River City Bank's Q1 2023 net income compare to Q1 2022?

In Q1 2022, River City Bank's net income was $16.5 million, showing a decline in Q1 2023.

What was the provision for loan losses reported by River City Bank in Q1 2023?

The provision for loan losses in Q1 2023 was $1.5 million.

What was the total deposit amount reported by River City Bank as of March 31, 2023?

Total deposits were reported at over $3.4 billion.

What is River City Bank's efficiency ratio for Q1 2023?

The efficiency ratio for Q1 2023 was reported at 32%.