River City Bank Reports Continued Asset Growth

MECHANICSVILLE, Va., Dec. 7  /PRNewswire-FirstCall/ -- River City Bank (NASDAQ:RCBK), a Virginia state-chartered bank headquartered in Mechanicsville, VA today reported continued growth in deposits, loans, and total assets.

William D. Stegeman, President & CEO, reported September 30, 2005 unaudited operating results, stating that the Bank continues to experience strong asset and liability growth with a reduction in operating losses realized in its fifth full quarter of operations.

Total assets of the Bank at September 30, 2005 amounted to $47,963,982, compared to $23,585,462 at December 31, 2004, representing an YTD increase of 103%.  Asset growth was concentrated in net loan growth and an increase in securities held for sale and purchased from net capital raised from the Bank's public secondary and rights offering completed in July, 2005.  Net loans increased to $30,017,117 at September 30, 2005 from $13,954,859 at December 31, 2004, an increase of 115%.  At fair market value, securities held for sale amounted to $10,144,271 at September 30, 2005, compared to $3,470,550 at December 31, 2004, an increase of 192%.  Total stockholders' equity amounted to $16,045,271 at September 30, 2005, compared to $8,113,163 at December 31, 2004, an increase of 98%.  From the Bank's secondary public and rights offering concluded July 5, 2005, net stockholders' equity increased $8,518,387.

Total Deposits at September 30, 2005 amounted to $31,710,989, compared to total deposits of $15,415,757 at December 31, 2004, an increase of 106%.  YTD growth was realized in each of the Bank's deposit categories, including savings deposits which increased $8,126,750 or 253%, demand deposits which increased $2,397,478 or 114%, NOW and money market deposits, which increased $1,813,455 or 50%, and time deposits which increased $3,957,549, or 61%. Overall deposits increased due to various marketing initiatives implemented, as well as the opening of the Bank's second branch banking office located at 8051 Mechanicsville Turnpike, Mechanicsville, VA on September 10, 2005.

The Bank reported a YTD net operating loss of $(564,245) for the period ended September 30, 2005, representing a basic income (loss) per share of $(0.46).  On a comparative quarterly basis, the Bank recorded a net operating loss of $(131,224) for the quarter ended September 30, 2005, compared to a net operating loss realized of $(387,633) for the quarter ended September 30, 2004.  The quarter ended September 30, 2005 represents the Bank's fifth full quarter of operations since the Bank's opening date of July 1, 2004.  Due to the starting date of operations, there is not an applicable similar period of operations for which to make annual income statement comparisons.  The Bank reported a net operating loss of $(198,471) for the second quarter ended June 30, 2005.

Mr. Stegeman commented:

"With the opening of the Bank's second branch office in mid-September, and strong growth realized in net loans and deposits both in year-to-date production and the third quarter of 2005, the Bank's Board and management will strive to implement new products and services to make the Bank more competitive.  We anticipate that strong loan demand will continue, and such demand will be funded with structured growth of core deposits derived from our primary market service area.  The Bank's mortgage division has progressed well, and is generating good results in supplementary non-interest fee income. The Bank's investment services division has progressed to the operational stage, and we look forward to this area generating another source of fee income to our bottom line in 2005 and the coming years."

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 margins; difficulties in execution integrations 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,

[phone], 



Web site:  http://www.rivercitybank.org/

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