River City Bank Announces 2006 Third Quarter Operating Results
01 November 2006 - 9:00AM
PR Newswire (US)
MECHANICSVILLE, Va., Oct. 31 /PRNewswire-FirstCall/ -- River City
Bank (NASDAQ:RCBK), a Virginia state-chartered bank headquartered
in Mechanicsville, VA, today reported quarterly and year-to-date
financial progress for the period ended September 30, 2006. William
D. Stegeman, President & CEO, reported September 30, 2006
operating results, stating that the Bank experienced continued
strong balance sheet growth while materially reducing year-to-date
losses experienced in 2005. From a review of the Bank's unaudited
quarterly financial statements, total assets of the Bank at
September 30, 2006 amounted to $83,857,697, compared with
$47,963,982 at September 30, 2005, representing an increase of
74.8%. Asset growth was concentrated primarily in net loans
originated, securities available-for-sale, and federal funds sold
to correspondent banks. As of September 30, 2006, net loans
outstanding amounted to $53,423,172 compared to $30,017,117 as of
September 30, 2005, an increase of 77.9%. Net securities
available-for-sale and federal funds sold increased to $27,389,227
as of September 30, 2006 compared to $15,940,158 as of September
30, 2005, an increase of 71.8%. 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 63.7% and 78.8% respectively as of September 30, 2006 compared
to 62.6% and 94.7% as of September 30, 2005. The Bank recorded
total deposits at September 30, 2006 of $67,790,595 compared to
total deposits of $31,710,989 at September 30, 2005, an increase of
113.8%. Growth in deposits was realized primarily from aggressive
rates paid on time certificate of deposits in the past twelve month
operating period, but the Bank also experienced exceptional growth
in consumer and commercial checking accounts and money market and
savings accounts managed. At September 30, 2006, non-interest
bearing deposits and fixed-term certificates represented 10.5% and
52.9% respectively of total deposits carried. For the nine months
ended September 30, 2006, the Bank recorded a comprehensive net
operating loss of $(175,411), compared to $(586,278) for the nine
months ended September 30, 2005. Excluding net unrealized losses of
$(653) for securities available-for-sale, the Bank recorded a
year-to-date net operating loss of $(174,758) for the period ended
September 30, 2006, compared to a nine month net operating loss
$(564,245) for the period ended September 30, 2005. The noted 2005
nine month net operating loss excludes unrealized losses for
securities available-for-sale of $(22,023). For the third quarter
ended September 30, 2006, excluding net unrealized gains on
securities available-for-sale of $242,586, the Bank recorded a net
operating loss of $(130,769). This compares to a three month net
operating loss of $(131,224), exclusive of net unrealized losses
from securities available-for-sale that amounted to $(24,069) for
the quarter ended September 30, 2005. At September 30, 2006, the
Bank's quarterly and year-to-date basic and diluted loss per share
of common stock outstanding amounted to $(.07) and $(.10)
respectively, compared to $(.07) and $(.47) respectively at
September 30, 2005. For the nine months ended September 30, 2006,
net interest income increased to $3,594,577 from $1,446,021 for the
comparable period in 2005, an increase of 79.4%. On a comparative
quarterly basis, net interest income amounted to $1,411,799 at
September 30, 2006 compared to $650,857 at September 30, 2005, an
increase of 116.9%. The significant growth in quarterly and
year-to-date net interest income was due to an increase in average
earning assets, which resulted from continued growth in the Bank's
loan portfolio, investment securities, and federal funds sold to
correspondent banks. These were effectively funded by a strong
increase in deposits and additional equity capital raised in
mid-2005. Total non-interest income for the nine month period ended
September 30, 2006 amounted to $200,421, compared to $175,783 for
the same period in 2005, an increase of 13.9%. For the quarter
ended September 30, 2006, non-interest income amounted to $73,161
compared to $78,170 for the quarter ended September 30, 2005, a
slight decrease of 6.8%. Fee income continues to be bolstered by
residential mortgage origination activity. Total non-interest
expense for the nine month period ended September 30, 2006 amounted
to $2,342,614 compared to $1,580,847 in 2005, an increase of 48.1%.
For the quarter ended September 30, 2006, non-interest expense
amounted to $926,465 compared to $589,502 for the third quarter of
2005, an increase of 57.2%. It should be noted that the Bank opened
its second and third branch offices in August 2005 and June 2006
respectively that materially increased non-interest expense in 2006
from 2005. Mr. Stegeman commented: "The Bank's operating
performance continues to closely parallel budget expectations and
management's forecast for balance sheet growth while progressing
forward towards sustainable profitability. The Bank's successful
opening of our third branch office late in the second quarter of
2006, with the initial impact in creating a quarterly loss in our
third quarter 2006 results due to increased overhead, is expected
to be fully absorbed in the fourth quarter of 2006 and give us an
exceptional start going into 2007. The Bank's net interest margin
through three quarters of operations in 2006 has declined slightly
and stood at approximately 3.75% as of September 30, 2006, but
remains strong in a highly competitive rate environment. The Bank
continues to grow at an aggressive pace, and management anticipates
that new deposit and loan activity will continue well into the
fourth quarter of 2006. Excluding the Bank's expense for its
allowance for potential loan losses, the Bank has experienced
nominal operating losses both for the third quarter of 2006 and for
the year-to-date period ended September 30, 2006. We will continue
to increase reserves to manage future risk, although asset quality
remains strong and loan delinquencies remain minimal at the present
time." 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 executing
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, EVP &
CFO of River City Bank, +1-804-730-4100, Web site:
http://www.rivercitybank.org/
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