River City Bank Reports Third Quarter 2026 Results and Announces a Quarterly Cash Dividend
SACRAMENTO, Calif., October 23, 2026--River City Bank (Nasdaq: RCBC) ("the Bank") reported net income of $30.6 million or $2.16 per share for the quarter ended September 30, 2026, which compares to $19.7 million, or $1.36 per share, for the same period in 2025. Net income was $68.2 million or $4.75 per share for the nine months ended September 30, 2026, which compares to $47.4 million, or $3.24 per share, for the nine months ended September 30, 2025. The Bank's earnings for the quarter ended September 30, 2026 resulted in a 21.06% return on average equity and a 1.92% return on average assets. The Bank's book value per share rose 14% to $42.32 as of September 30, 2026 from $37.04 per share as of September 30, 2025.
In August 2026, the Bank successfully completed its initial public offering ("IPO") and its shares began trading on the Nasdaq Capital Market under the RCBC ticker symbol. The secondary offering consisted solely of existing shares held by two of the Bank's long-time shareholders associated with the family of the Bank's founder, Jon Kelly, and no new shares were issued by the Bank. The IPO was a major milestone in the Bank's history, increased the Bank's visibility within the public capital markets, and provided liquidity for shareholders, while establishing a publicly traded market value for its common stock.
Third Quarter Highlights
Performance and operating highlights for the Bank for the periods noted below included the following:
| For the Three Months Ended | ||||||||||||
| September 30, 2026 | June 30, 2026 | September 30, 2025 | ||||||||||
| ($ in thousands, except per share data) | ||||||||||||
| Return on average assets ("ROAA") | 1.92 | % | 1.28 | % | 1.43 | % | ||||||
| Adjusted ROAA (1) | 1.15 | % | 1.14 | % | 1.51 | % | ||||||
| Return on average equity ("ROAE") | 21.06 | % | 13.92 | % | 15.06 | % | ||||||
| Adjusted ROAE (1) | 12.63 | % | 12.31 | % | 15.92 | % | ||||||
| Efficiency ratio | 19.43 | % | 29.44 | % | 29.39 | % | ||||||
| Core pre-tax, pre-provision ("PTPP") income (1) | $ | 29,294 | $ | 25,433 | $ | 28,391 | ||||||
| Net income | $ | 30,609 | $ | 19,616 | $ | 19,684 | ||||||
| Earnings per share | $ | 2.16 | $ | 1.37 | $ | 1.36 | ||||||
| Adjusted EPS (1) | $ | 1.29 | $ | 1.21 | $ | 1.43 | ||||||
| Book value per share | $ | 42.32 | $ | 40.58 | $ | 37.04 | ||||||
| Weighted average shares outstanding | 14,190,307 | 14,341,273 | 14,517,644 | |||||||||
| Common shares outstanding at end of period | 13,962,925 | 13,994,875 | 14,247,800 | |||||||||
| (1) See the section entitled "Non-GAAP Reconciliation" for a reconciliation of these non-GAAP financial measures. |
Net income increased to $30.6 million, or $2.16 per share, for the third quarter of 2026, as compared to $19.6 million, or $1.37 per share, for the preceding quarter and $19.7 million, or $1.36 per share, for the same period in the prior year. This significant increase in the current quarter was primarily due to a $17.1 million mark-to-market ("MTM") gain related to certain interest rate swaps. The MTM gain was due to the increase in U.S. Treasury rates during the third quarter of 2026. Management believes that core PTPP income(1), which also removes the MTM gains and losses is a better metric to evaluate the Bank's core earnings. Core PTPP income increased 15% to $29.3 million for the third quarter of 2026 as compared to $25.4 million for the trailing quarter and increased 3% from $28.4 million for the same quarter in the prior year.
Average loans increased by $108 million (2% growth) compared to the trailing quarter and by $363 million (8% growth) compared to the same period in the prior year, reflecting continued organic loan growth.
Average deposits for the third quarter of 2026 increased by $158 million (3% growth) compared to the trailing quarter and by $766 million (16% growth) compared to the same period in the prior year, supporting the Bank's loan growth and liquidity position.
As of September 30, 2026, the Bank had zero non-performing loans, virtually no delinquent loans (0.00% of total loans), no loans more than 90 days past due and still accruing interest, no other real estate owned ("OREO"), and the Bank's Allowance for Credit Losses for Loans ("ACL") was 2.30% of total loans. Due to the loan growth, the Bank recorded a $3.7 million provision for credit losses (loans and unfunded commitments) for the three months ended September 30, 2026, compared to $1.5 million provision in the trailing quarter and a $644,000 reversal of provision for the same period in the prior year. The ACL to total loans ratio was unchanged at September 30, 2026 from the prior quarter end at 2.30%.
The Bank continued to maintain an exceptional efficiency ratio by industry standards at 19.4% for the third quarter of 2026, compared to 29.4% in both the trailing quarter and the third quarter of 2025. Even excluding the $17.1 million MTM gain on undesignated interest rate swaps, the Bank's adjusted efficiency ratio(1) was 27.7% compared to 31.9% in the trailing quarter and 28.2% for the same period in the prior year.
Net interest margin ("NIM") – The Bank's NIM was 2.39% and 2.34% for the three months ended September 30, 2026 and June 30, 2026. The modest increase in the current quarter was due to slightly higher yields on interest-earning assets because of the increase in U.S. Treasury rates and a 0.03% reduction in cost of funds.