River City Bank Reports Net Income Of $17.9 Million for the First Quarter of 2026 and Assets in Excess of $6 Billion

The Bank Also Announces a Quarterly Cash Dividend

SACRAMENTO, Calif.--(BUSINESS WIRE)-- River City Bank (“the Bank”) reported net income of $17.9 million or $1.24 per share for the quarter ended March 31, 2026, which compares to $12.3 million, or $0.84 per share, for the same period in 2025. The Bank’s earnings for the quarter ended March 31, 2026 resulted in a 13.07% return on average equity and a 1.22% return on average assets. The Bank’s book value per share rose to $39.37 as of March 31, 2026 from $34.50 per share as of March 31, 2025, an increase of 14%.

First Quarter Highlights

Performance and operating highlights for the Bank for the periods noted below included the following:

“The Bank delivered strong operating results in the first quarter of 2026, as evidenced by the earnings per share of $1.24 and continued compounding of book value per share. Also, due to strong deposit growth of $238 million (or 4.6%) for the first quarter of 2026, the Bank crossed over the $6.0 billion in assets threshold for the first time in the Bank’s history. These results demonstrate the appreciation our customers have for the more than 50 years of consistently exceptional service the Bank continues to deliver,” said Steve Fleming, president and chief executive officer. “The Bank continues to perform at a high level, as reflected in the metrics of growth in book value per share, return on average equity, return on average assets, and operating efficiency. In addition, credit quality remains pristine as we have not suffered any material losses on loans originated since the current management team took over in 2008.”

“Operational efficiency remains a core competency for the Bank, as evidenced by our first quarter 2026 efficiency ratio of 32%,” said Brian Killeen, chief financial officer of River City Bank. “We view this operational efficiency as a competitive advantage that we have sustained for many years. In addition, the Bank continues to maintain high levels of liquidity with $1.4 billion of cash and investments combined with $2.1 billion in available borrowing capacity as of March 31, 2026. The Bank’s high quality investment securities portfolio continues to perform well with a very low unrealized loss position of 0.8% as of March 31, 2026.”

Financial Highlights

Financial highlights as of and during the three months ended March 31, 2026 compared to the same period in the prior year included the following:

• Interest-earning asset growth – Average loans outstanding for the quarter ended March 31, 2026 were $299 million higher than the prior year quarter. On the other hand, loans outstanding as of March 31, 2026 were down $14 million from December 31, 2025. Average cash balance and investment securities were $378 million higher than the prior year quarter.
• Deposit growth – Average deposits were $672 million higher in the first quarter of 2026 compared to the same period a year earlier, supporting the Bank’s loan and cash balance growth.
• The Bank recognized a $1.7 million increase to non-interest income during the first quarter of 2026 compared to a $6.4 million reduction in non-interest income in the first quarter of the prior year related to undesignated interest rate swaps that have yet to be designated into a hedging relationship. The Bank regularly enters interest rate swaps to mitigate interest rate risk and all swaps are entered into for this purpose (regardless of accounting treatment). Approximately 15% of the Bank’s interest rate swaps are undesignated as of March 31, 2026, and until these interest rate swaps are designated as a hedge to specific assets or liabilities, the mark-to-market fluctuations (positive and negative) will flow through the income statement.
• The Bank recorded a $1.5 million provision for credit losses for the first quarter of 2026 compared to a $124,000 reversal of provision for the same period in 2025. As of March 31, 2026, the Bank had zero non-performing loans, virtually no delinquent loans (0.02% of total loans), no loans more than 90 days past due and still accruing interest, and the Bank’s Allowance for Credit Losses for Loans ("ACL") was 2.29% of total loans.
• The Bank's efficiency ratio continued to be low by industry standards at 32% for the three months ended March 31, 2026 and 39% for the three months ended March 31, 2025, reflecting consistent cost discipline which is consistent with the Bank's commitment to being a low-cost producer.
• Net interest margin ("NIM") – The Bank’s NIM decreased by 11 basis points to 2.38% compared to 2.49% in the prior year quarter. This was driven by a 0.26% decrease in the yield on average earning assets while the cost of funds only decreased by 0.17% during the same period.

Summary Results

Three months ended March 31, 2026, as compared to three months ended March 31, 2025

The Bank’s net income was $17.9 million for the three months ended March 31, 2026, as compared to $12.3 million for the three months ended March 31, 2025. The primary items of note are as follows:

• Interest income increased by $4.7 million, primarily due to an increase in average balances of loans and cash held at the Federal Reserve Bank ("FRB").
• Interest expense increased by $2.1 million due to significant growth in the average balance of interest-bearing deposits, partially offset by 0.30% decrease in the cost of interest-bearing deposits as compared to the same quarter in the prior year.
• The mark-to-market ("MTM") adjustment associated with interest rate swaps yet to be designated into a hedge relationship increased by $8.2 million to a $1.7 million MTM gain compared to $6.4 million MTM loss in the prior year quarter.
• Non-interest expense increased by $1.4 million over the prior year quarter, primarily due to an $830,000 increase in compensation expenses as the Bank continues to build out its team to support its growth.

Three months ended March 31, 2026, as compared to three months ended December 31, 2025

The Bank’s net income was $17.9 million for the three months ended March 31, 2026, as compared to $21.0 million for the three months ended December 31, 2025. The primary items of note are as follows:

• Interest income decreased by $2.7 million, primarily due to a $718,000 reduction in loan prepayment premiums and a $1.9 million decrease in loan fair value hedge income.
• Interest expense increased by $995,000 due to growth in interest bearing deposit balances, as compared to the prior quarter, and cost of funds remaining relatively flat over the two quarters.
• The provision for credit losses decreased by $1.2 million, reflecting slight decreases in average loan balances and some improvement in credit quality in the three months ended March 31, 2026, as compared to the three months ended December 31, 2025.
• Non-interest expense increased by $1.1 million, primarily due to increased salaries, incentive compensation and payroll taxes, as compared to the prior quarter.

Balance Sheet Summary

Year over Year Balance Sheet Change

Loans outstanding increased by $310 million or 7.2% as of March 31, 2026 compared to March 31, 2025. The growth was primarily in Commercial Real Estate loans that grew $315 million or 8.1% from March 31, 2025.

Deposit balances increased by $718 million or 15.4% from March 31, 2025 to March 31, 2026, due primarily to significant growth in Commercial and Clean Energy client relationships.

Shareholders’ equity increased $66 million, or 13.2% to $564 million as of March 31, 2026 when compared to $498 million as of March 31, 2025. The increase was driven primarily by growth in retained earnings, as the Bank continues to maintain a relatively low dividend payout ratio.

Trailing Quarter Balance Sheet Change

Total loans decreased slightly by $14 million or 0.3% during the quarter ended March 31, 2026. During the current quarter, Commercial Real Estate loans increased by $56 million while Commercial loans and Agriculture loans decreased by $38 million and $26 million respectively. Loan originations totaled approximately $91 million for the quarter ended March 31, 2026.

Deposit balances increased by $238 million or 4.6% during the quarter ended March 31, 2026, as the Bank continued to see strong growth from its existing deposit clients. As of March 31, 2026, the Bank had no wholesale funding.

Shareholders’ equity increased $15 million, or 2.8% to $564 million as of March 31, 2026 when compared to $549 million as of December 31, 2025. The increase was driven primarily by the current year retained earnings, less cash dividends paid. The Bank’s capital ratios remain healthy and well above the regulatory definition for being Well Capitalized with a Tier 1 Leverage Ratio of 9.4% and a Total Risk-Based Capital Ratio of 14.4% as of March 31, 2026.

Asset Quality Ratios

At March 31, 2026, the Bank had no other real estate owned or non-performing loans and there were no charge-offs during the quarter. The Bank’s allowance for credit losses was $105 million, as compared to $104 million at December 31, 2025.

Provision for Income Taxes

The Bank’s effective tax rate was 27.7% for the quarter ended March 31, 2026, as compared to 26.6% for the quarter ended December 31, 2025, and 29.1% for the quarter ended March 31, 2025. Differences between the Bank’s effective tax rate and applicable federal and state (primarily California) blended statutory rate of approximately 29.4% are primarily due to the proportion of excess benefit from restricted share instruments vesting, the benefits of tax credits, and changes in the Bank’s apportionment of taxable income in certain states.

Dividend Announcement

Mr. Fleming announced that the Bank’s board of directors has approved a cash dividend of $0.05 per common share to shareholders of record as of May 5, 2026, and payable on May 19, 2026.

ABOUT RIVER CITY BANK:

As a leading boutique commercial bank with assets over $6.0 billion, River City Bank is the largest, independent, locally owned and managed bank in the Sacramento region, with an office in San Francisco and a focus on the Western United States. River City Bank offers a comprehensive suite of banking services with a tailored, concierge-like level of service, to redefine the banking experience. Please visit http://www.rivercitybank.com or call (916) 567-2600. Member FDIC. Equal Housing Lender.

FORWARD-LOOKING STATEMENTS

The statements contained herein that are not historical facts are forward-looking statements based on management’s current expectations and beliefs concerning future developments and their potential effects on us. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “goal,” “target,” “outlook,” “aim,” “would,” “annualized” and “outlook,” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

The financial results reported in this document are preliminary and unaudited.

Condensed Financial Data (Unaudited)

Income Statement Data

Net Interest Income and Net Interest Margin

Balance Sheet Data

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