RCBK River City Bank (MM)

MECHANICSVILLE, Va., Feb. 1 /PRNewswire-FirstCall/ -- River City Bank (NASDAQ:RCBK) (the "Bank") (quarterly and 2006 year-to-date results unaudited) reported today asset growth for the twelve months ended December 31, 2006 of $25,415,345 or 41.6% increase over total assets at December 31, 2005. For year-end 2006, the Bank recorded total assets of $86.4 million compared to $61.0 million at December 31, 2005. The Bank also reported a net loss for the same twelve month period of $(287,469) or $(0.16) per share (basic and diluted) a 51.5% decrease over the loss of $(593,011) or $(0.44) per share (basic and diluted) for the previous twelve month period ended December 31, 2005. The Bank's President and Chief Executive Officer William D. Stegeman stated, "Our Bank continued to make strong progress in 2006 as we were able to significantly build our asset base and at the same time materially reduce our operating losses. While we experienced a loss in our second full year of operations primarily due to the absorption of overhead in opening our third branch office and funding our allowance for possible loan and lease losses, overall asset quality remains strong and the Bank has not experienced any bad debt charge offs since opening in mid 2004. Our focus in 2007 will be to maintain strong balance sheet growth and achieve profitability for the year." Asset growth centered around loans, which increased from $20,905,470 at December 31, 2005 to December 31, 2006, an increase of 54.5%. Mr. Stegeman commented, "Our loan growth demonstrates management's continued commitment to originate loans in the central Virginia marketplace as a high percent of total assets, utilizing a vibrant local economy with dynamic funding sources to achieve this desired result." The Bank also increased its securities available-for-sale by $5,908,553 or 49.6% during the twelve month period ending December 31, 2006. Deposits, which funded the increase in loans and securities available-for- sale, increased from $44,931,704 as of December 31, 2005 to $70,505,923, an increase of 56.9%. The Bank's net interest income increased from $1,645,834 for the twelve month period ended December 31, 2005 to $2,963,603 for the period ended December 31, 2006, an increase of $1,317,769 or 80%. Net interest income increased despite a decrease in the Bank's net interest margin which decreased 17 basis points from 4.30% for the twelve months ended December 31, 2005 to 4.17% for the same period ended December 31, 2006. Non interest income increased from $133,003 for the period ended December 31, 2005 to $287,871 for the period ended December 31, 2006, an increase of 116.4%. The increase is attributable to fees derived from increased mortgage origination volume as well as revenue from the Bank's investment in a title insurance company. River City Bank currently operates three banking locations, two of which are located in Mechanicsville, and a third banking office in Highland Springs. Selected financial (unaudited) information: BALANCE SHEETS 31-Dec-06 31-Dec-05 (Unaudited) Assets Cash and cash equivalents Cash and due from banks $1,009,353 $810,992 Federal funds sold 4,193,998 5,082,030 Total cash and cash equivalents 5,203,351 5,893,022 Securities available-for-sale, at fair value 17,824,532 11,916,979 Certificates of deposit 2,082,000 3,282,000 Loans, net of allowance for loan losses of $605,000 2006 and $395,000 for 2005 59,257,336 38,351,866 Bank premises and equipment, net 978,711 929,530 Accrued interest receivable 486,275 301,188 Restricted Federal Reserve Bank stock, at cost 470,650 234,700 Other real estate owned - - Other assets 149,036 127,261 Total assets $86,451,891 $61,036,546 Liabilities and Stockholders' Equity Liabilities Deposits Demand $8,090,229 $5,204,289 NOW and money market 8,445,302 5,802,951 Savings 21,398,358 12,420,946 Time 32,572,034 21,503,518 Total deposits 70,505,923 44,931,704 Accrued interest payable 294,557 132,125 Other liabilities 106,036 110,465 Total liabilities 70,906,516 45,174,294 Total stockholders' equity 15,545,375 15,862,252 Total liabilities and stockholders' equity $86,451,891 $61,036,546 STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) Three Months Ended Twelve Months Ended December 31, December 31, 2006 2005 2006 2005 Total interest income $1,583,341 $845,206 $5,177,918 $2,375,200 Total interest expense 727,173 274,074 2,214,315 729,366 Net interest income 856,168 571,132 2,963,603 1,645,834 Provision for loan losses 70,000 65,000 210,000 215,000 Total noninterest income 87,450 41,103 287,871 133,003 Total noninterest expense 986,329 576,001 3,328,943 2,156,848 Income (loss) before income tax expense (112,711) (28,766) (287,469) (593,011) Income tax expense - - - - Net income (loss) $(112,711) $(28,766) $(287,469) $(593,011) Other comprehensive income (loss): Net unrealized gain (loss) on securities available-for-sale (28,661) (154,254) (29,408) (176,287) Comprehensive income (loss) $(141,372) $(183,020) $(316,877) $(769,298) Per share data: Net income (loss) per share, basic and diluted $(0.06) $(0.02) $(0.16) $(0.44) See accompanying notes to financial statements. 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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