MECHANICSVILLE, Va., Aug. 4, 2008 (PRIME NEWSWIRE) -- River City Bank (Nasdaq:RCBK) (the "Bank") (quarterly results unaudited) reported today net income of $73,713 or $0.04 per share (basic and diluted) for the quarter ended June 30, 2008, and $121,139 or $0.07 per share (basic and diluted) year-to-date, compared to net losses of $(135,393) or $(0.08) (basic and diluted) for the quarter ended June 30, 2007 and $(226,359) or $(0.13) per share (basic and diluted) for the six month period ended June 30, 2007.
The Bank continues to experience strong balance sheet growth, with net loans increasing $15,151,173, or 16%, from December 31, 2007 to June 30, 2008. For the same comparative period, total deposits increased $17,245,450, or 17%, in the first half of 2008. Overall, the Bank has realized total asset growth of approximately $21.2 million, or 20%, in the first six months of the year.
William D. Stegeman, the Bank's President and Chief Executive Officer, commented, "Despite an unsettling economy and a troubled real estate market, with a detrimental impact to the banking industry nation-wide, River City Bank continues to realize sound asset growth coupled with year-to-date profitability. Our management and staff have worked diligently in delivering exceptional customer service, which continues to attract a growing customer base with positive results. Our emphasis on controlling costs, while managing balance sheet growth and interest rate risk prudently, has allowed the Bank to achieve its second consecutive profitable quarter in 2008."
Net interest income amounted to $991,223 for the quarter ended June 30, 2008 and $1,952,003 for the six month period ended June 30, 2008, compared to $898,029 and $1,700,559 for the respective periods in 2007. This represents quarterly and year-to-date increases of 10% and 15% respectively. Non-interest income for the quarter ended June 30, 2008 amounted to $117,147 and for the six months ended June 30, 2008 amounted to $205,594, compared to $92,717 and $180,277 for the respective periods one year ago. This represents respective quarterly and year-to-date increases of 26% and 14%. Despite concerns of a slowing local residential real estate market, the Bank's revenue from mortgage origination fees in 2008, a major component of non-interest income, remained consistent with amounts generated for the comparative periods in 2007.
2008 second quarter non-interest expense amounted to $974,657, compared to $956,139 for the three months ended June 30, 2007, an increase of 2%. 2008 year-to-date non-interest expense amounted to $1,901,458, compared to $1,817,194 for the first six months of 2007, representing an increase of 5%. Management's continuing strategy will be to aggressively monitor and control non-interest expenses where possible for the remainder of 2008.
On March 9, 2008, the Bank entered into a definitive merger agreement with Village Bank and Trust Financial Corporation and Village Bank whereby the Bank will merge with and into Village Bank in a transaction valued at approximately $20.2 million, payable in cash and common stock. Under terms of the merger agreement, which was approved by the Board of Directors of both companies, shareholders of River City Bank will be entitled to receive for each share of its common stock owned $11.00 in cash or one share of Village Bank and Trust Financial Corporation common stock, subject to proration of 20% cash and 80% common stock, if either cash or common stock is oversubscribed.
Mr. Stegeman further commented, "With the pending merger of our institution with Village Bank announced in March and currently projected for completion in the fourth quarter of 2008, our Board of Directors is encouraged by the Bank's year-to-date results and excited about our future prospects as a combined entity with Village Bank. We believe the merger will be accretive to future earnings, creating a strongly capitalized company operating fifteen branch offices in the greater Richmond metropolitan area, with total assets under management of approximately $540 million and a staff of approximately 200 employees. We believe the merger, subject to regulatory and shareholder approvals, will create the premiere Richmond-area based commercial bank. Given numerous beneficial dynamics of the transaction, the merger should give us the ability to compete more aggressively, provide greater services to our customers, and return an enhanced long term value to our shareholders."
River City Bank currently operates three banking locations, two located in Mechanicsville, Virginia and the third office in Highland Springs, Virginia. A fourth branch in Hanover, Virginia has been approved by regulatory agencies, with an anticipated opening date in the fourth quarter of 2008 under the merged Village Bank banner. The Bank's mortgage division operates within the Bank's administrative office also located in Mechanicsville. Shares of the Bank's Common Stock trade on the NASDAQ Capital Market listing under the symbol "RCBK."
The River City Bank logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4049
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.