River City Bank Reports Strong Asset Growth, Reduced Losses
12 May 2006 - 9:00AM
PR Newswire (US)
MECHANICSVIILE, Va., May 11 /PRNewswire-FirstCall/ -- River City
Bank (NASDAQ:RCBK), a Virginia state-chartered bank headquartered
in Mechanicsville, VA, today reported strong quarterly asset growth
with a reduction in comparative quarterly operating losses. William
D. Stegeman, President & CEO, reported March 31, 2006 operating
results, stating that the Bank experienced strong deposit and loan
growth while recording a significant reduction in quarterly
operating losses. From a review of the Bank's unaudited quarterly
financial statements, total assets of the Bank at March 31, 2006
amounted to $66,771,439, compared with $32,665,123 at March 31,
2005 representing an increase of 104.4%. Asset growth was
concentrated in net loans originated and securities purchased. As
of March 31, 2006, net loans outstanding amounted to $44,849,029
compared to $19,549,264 as of March 31, 2005, an increase of
129.7%. Net securities available-for-sale increased to $13,285,842
as of March 31, 2006 compared to $3,385,000 as of March 31, 2005,
an increase of 292.5%. The Bank carried no loans classified as
available-for-sale for either reporting periods. Loans
held-for-investment as a percentage of assets and deposits were
67.8% and 89.3% respectively as of March 31, 2006 compared to 60.5%
and 79.9% as of March 31, 2005. The Bank recorded total deposits at
March 31, 2006 of $50,726,110 compared to total deposits of
$24,701,351 at March 31, 2005, an increase of 105.4%. Growth
occurred consistently across all lines of deposit products and can
be attributed to the Bank's continuing marketing initiatives
implemented during the past quarter and year, as well as aggressive
interest rate pricing on certificates of deposit. For the quarter
ended March 31, 2006, the Bank recorded a comprehensive net
operating loss of $(117,218). For the first quarter ended March 31,
2005, the Bank recorded a comprehensive operating loss of
$(290,346). Excluding net unrealized losses of $(57,104) for
securities held-for-sale, the Bank recorded a net operating loss of
$(60,114) for the quarter ended March 31, 2006, compared to a three
month operating loss of $(234,550) recorded at March 31, 2005. The
Bank's net unrealized losses for securities held-for-sale at March
31, 2005 amounted to $(55,796). On July 5, 2005, the Bank issued
869,180 shares of its common stock, par value $5.00 per share
("Common Stock"). Of that amount, 767,318 shares of Common Stock
were issued in a public offering at $10.50 per share, and 101,862
shares of Common Stock were issued in a rights offering to
shareholders at $10.50 per share. Proceeds from the offering
amounted to $9,126,390. After deducting expenses related to the
offering of $608,003, the Bank increased stockholders' equity by
$8,518,387 in the third quarter of 2005. At March 31, 2006, the
Bank's total stockholders' equity amounted to $15,745,034, compared
to $7,822,217 at March 31, 2005, an increase of 101.3%. At March
31, 2006, the Bank's recorded loss per share of common stock
outstanding amounted to $(0.03), compared to $(0.25) at March 31,
2005. Interest income increased to $1,006,500 for the quarter ended
March 31, 2006 from $348,592 for the first quarter of 2005.
Interest expense increased to $393,476 for the quarter ended March
31, 2006 from $112,606 for the same period in 2005. Net interest
income for the quarter ended March 31, 2006 was $613,024 compared
to $235,986 for the same period in 2005, an increase of 159.8%. The
growth in net interest income for the three months ended March 31,
2006 as compared with the comparable three months in 2005 was due
to the increase in average earning assets, which resulted from
growth in the Bank's loan portfolio and investment securities, both
of which were funded by a strong increase in deposits and
additional equity capital raised in mid-2005. The Bank's average
earning assets for the period ending March 31, 2006 were
$60,844,233 compared to $26,848,000 for the same period in 2005.
Total non-interest income for the three month period ended March
31, 2006, was $52,337 compared to $33,717 for the same period in
2005. This increase was due in large part to an increase in
residential mortgage origination volume for the three month period
ended March 31, 2006 from the comparable period in 2005. In
addition, the revenues from fees and service charges related to the
Bank's deposit accounts increased due to an increased number of
transactional deposit accounts. Mr. Stegeman commented: "We are
pleased to report that River City Bank continues to experience
strong balance sheet growth, while materially reducing quarterly
net operating losses from 2005. The Bank has been able to sustain a
strong net interest margin and spread, with net interest income
increasing by nearly 160% from first quarter 2005 to the first
quarter of 2006. The Bank also benefited from a 55% quarterly
increase in non-interest income associated with fee revenue
generated from loan servicing, mortgage originations, and
transactional deposit growth and fee related activity. Excluding
the Bank's expense for its allowance for loan loss and unrealized
losses from securities held-for-sale, the Bank recorded a net
operating loss of $(5,114) for the quarter ended March 31, 2006,
compared to $(204,550) at March 31, 2005. To further strengthen our
ability to compete, we are diligently preparing for the opening of
our third branch office to be located in Highland Springs, Virginia
and expect to commence operations prior to June 30, 2006." This
press release contains forward-looking statements as defined by
federal securities laws. These statements may address certain
results that are expected or anticipated to occur or otherwise
state the company's predictions for the future. These particular
forward-looking statements and all other statements that are not
historical facts are subject to a number of risks and
uncertainties, and actual results may differ materially. Such
factors include but are not limited to: general economic
conditions, significant fluctuations in interest rates that could
reduce the net interest margin; difficulties in execution
integration plans; reduction of fee income from existing products
due to market conditions; and the amount of growth in the company's
general administrative expenses. Consequently, these cautionary
statements qualify all forward-looking statements made herein.
DATASOURCE: River City Bank CONTACT: Zirkle Blakey, III, Executive
Vice President & Chief Financial Officer of River City Bank,
+1-804-730-4100 Web site: http://www.rivercitybank.org/
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