River Valley Community Bancorp Announces 4th Quarter Earnings and Record Annual Earnings for 2017 (Unaudited)

 

YUBA CITY...January 18, 2018 -- River Valley Community Bancorp (OTC:RVCB) with its wholly owned subsidiary, River Valley Community Bank (collectively referred to as the "Bank"), today announced financial results for the quarter and year ended December 31, 2017.

Consolidated financial highlights:

  • Net income for the quarter ended December 31, 2017 totaled $512,000 or $0.21 per diluted share, compared to $648,000 or $0.28 per diluted share for the quarter ended December 31, 2016 and $720,000 or $0.29 per diluted share for the quarter ended September 30, 2017.
  • Net income for the year ended December 31, 2017 reached a record level of $2.6 million or $1.05 per diluted share, compared to $2.0 million or $0.83 per diluted share for the year ended December 31, 2016.  This increase occurred despite a special one-time charge to reduce the carrying value of the Bank's deferred tax assets as of December 31, 2017 and increase Federal income taxes in 2017 resulting from the Tax Cuts and Jobs Act.
  • Total assets as of December 31, 2017 were $334.0 million compared to $321.2 million as of December 31, 2016.
  • Net interest income totaled $2.1 million for the quarter ended December 31, 2017 compared to $2.1 million for the quarter ended December 31, 2016 and $2.3 million for the quarter ended September 30, 2017.
Selected Consolidated Financial Information - Unaudited
(amounts in thousands, except per share data)
                   
  Dec 31,   Sep 30,   Jun 30,   Mar 31,   Dec 31,
    2017       2017       2017       2017       2016  
                   
Total investment securities $   128,836     $   145,424     $   149,189     $   150,226     $   143,633  
Total loans, gross     142,588         139,554         136,041         131,440         125,036  
Allowance for loan losses     (2,000 )       (2,058 )       (2,056 )       (1,999 )       (1,926 )
Total assets     333,982         337,085         321,567         319,380         321,189  
Total deposits     255,105         237,108         233,318         242,119         243,950  
Borrowings     50,000         71,000         60,000         50,000         50,000  
Total shareholders' equity     28,119         28,132         27,597         26,170         25,301  
                   
Loan to deposit ratio   56 %     59 %     58 %     54 %     51 %
Book value per common share $   11.74     $   11.74     $   11.55     $   10.96     $   10.60  
Subsidiary Bank's Tier 1 leverage ratio   8.23 %     8.33 %     8.19 %     8.08 %     8.48 %

Total gross loans reached a record level of $142.6 million as of December 31, 2017, which represents an increase of $17.6 million or 14.0% from $125.0 million as of December 31, 2016.  Total deposits of $255.1 million as of December 31, 2017 represent an increase of $11.2 million or 4.6% from $244.0 million as of December 31, 2016.

Selected Consolidated Financial Information - Unaudited (continued)
(amounts in thousands, except per share data)
                   
  Dec 31, 
2017
  Sep 30,
2017
  Jun 30,
2017
  Mar 31,
2017
  Dec 31,
2016
                   
Net interest income $   2,145      $   2,297      $   2,186      $   2,123     $ 2,058  
Provision for loan losses     (60 )       -          55         70       51  
Net income     512         720         711         629       648  
                   
Earnings per share - basic $   0.21     $   0.30     $   0.30     $   0.26     $   0.28  
Earnings per share - diluted $   0.21     $   0.29     $   0.29     $   0.26     $   0.28  
Net interest margin   2.64 %     2.88 %     2.81 %     2.80 %     2.86 %
Net interest margin - tax equivalent   2.70 %     2.96 %     2.90 %     2.91 %     2.97 %
Efficiency ratio   53.96 %     53.71 %     51.26 %     54.20 %     50.53 %
Return on average assets   0.60 %     0.87 %     0.87 %     0.79 %     0.86 %
Return on average equity   7.13 %     10.23 %     10.62 %     9.90 %     10.05 %

Net interest income of $2.1 million for the quarter ended December 31, 2017 is consistent with the quarter ended December 31, 2016 and a decrease of $152,000 or 6.6% from the quarter ended September 30, 2017.  The decrease from the prior quarter is attributable to the implementation of a rule change by the U.S. Small Business Administration (SBA) in October 2017 that adversely impacted the Bank's holdings in SBA investment securities.  Income from these bonds significantly reduced as a result of accelerated principal repayments.  During the quarter ended December 31, 2017, management reduced the Bank's holdings in the bonds most impacted by the rule change and partially replaced them with other investment securities to help reduce the impact on future earnings.

Net income for the year ended December 31, 2017 was negatively impacted by the recently enacted Tax Cuts and Jobs Act, which reduced the Federal corporate income tax rate to 21% effective January 1, 2018.  As a result of the new law, the Bank was required to reduce the carrying value of its deferred tax assets as of December 31, 2017, which resulted in a one-time charge of $210,000 to increase Federal income tax expense during the quarter and year ended December 31, 2017.

CFO Michael Finn stated, "While the recently enacted tax reform law adversely affected the Bank's fourth quarter earnings, it will reduce tax expense and improve earnings in future periods.  During the fourth quarter, management faced a challenge with the SBA rule change previously noted, but we've been taking steps to reduce the impact on the Bank's future earnings and will continue to closely monitor the remaining holdings in SBA investment securities."

CEO John M. Jelavich commented, "We are pleased with our record earnings for 2017.  Notably, our loans and deposits also achieved record levels for our Bank, reflecting our ability to serve our markets.  Looking beyond the unevenness of our fourth quarter results, we remain optimistic about 2018.  In addition to the core banking momentum we carry into the New Year, we expect the impact of the recently passed tax reform to add to the already strengthening economic climate, which bodes well for new business investment and growth."

The Bank is rated "5-Star Superior" by Bauer Financial and serves its customer base through its offices located at: 

  • 1629 Colusa Avenue, Yuba City, CA
  • 426 Sutton Way, Grass Valley, CA

The Bank offers a full suite of competitive products, services, and banking technology. For more information please visit our website at: www.myrvcb.com or contact John M. Jelavich at 530-821-2469.

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