Loans – River Valley Community Bancorp announces 4th quarter, annual results
River Valley Community Bancorp with its wholly owned subsidiary, River Valley Community Bank, announced financial results for the quarter and year ended Dec. 31, 2020.
Total assets ended the year at $496.5 million compared to $442.3 million as of Dec. 31, 2019 and $531.1 million as of Sept. 30, 2020. Much of the growth during 2020 was attributable to loans originated under the federal government’s Paycheck Protection Program (PPP) and non-PPP related growth in the Bank’s deposit base, which were partially offset by a reduction in borrowings.
Total gross loans were $257.7 million as of Dec. 31, 2020, which represents an increase of $54.4 million or 26.7% from $203.4 million as of Dec. 31, 2019. When excluding PPP loans, the Bank experienced loan growth of 4.5% since Dec. 31, 2019. As of Dec. 31, 2020, $11.1 million of the $56.4 million originated PPP loans had been forgiven with full payments received from the Small Business Administration. Total deposits of $445.2 million as of Dec. 31, 2020 represent an increase of $108.0 million or 32.0% from $337.1 million as of Dec. 31, 2019. The growth in deposits is partially due to PPP loan funds being deposited with the Bank until utilized by the borrowers, but organic deposit growth was also strong during 2020.
Net interest income of $3.9 million for the quarter ended Dec. 31, 2020 is an increase of $667,000 or 20.9% from the quarter ended Dec. 31, 2019 and an increase of $292,000 or 8.2% (32.7% annualized) from the quarter ended Sept. 30, 2020. The quarter-over-quarter increase is primarily attributable to loan fees recognized upon the forgiveness of PPP loans during the quarter ended Dec. 31, 2020. An expense of $1.4 million was recognized during the quarter ended Dec. 31, 2020 for costs related to the early repayment of outstanding borrowings, which was offset by a comparable gain from the sale of $9 million of corporate investment securities.
CFO Michael Finn commented, “With stronger than expected deposit growth during 2020 and the resulting impact on the Bank’s capital ratios, during the quarter ended De. 31, 2020, management elected to use excess cash balances to repay $80 million of FHLB borrowings. As a result of this transaction, the Bank’s Tier 1 leverage ratio improved to 8.01% as of De. 31, 2020. Additionally, we anticipate improved net interest income going forward (all else remaining equal), as previous borrowing costs exceeded the earnings from the cash and investment securities used in the transaction. While the debt restructurings that occurred during 2020 improved earnings in the current and future years, the related prepayment penalties incurred caused a temporary increase in the Bank’s efficiency ratio for the year 2020, which would have been 56.70% if not for the debt restructurings.”
CEO John M. Jelavich stated, “After experiencing considerable uncertainty in the first half of 2020 related to the ongoing COVID-19 pandemic, we were encouraged to see stabilization in the second half of the year, as businesses quickly adapted to the environment and government stimulus measures provided support. While we increased our allowance for loan losses as a precaution during the first half of the year, we saw no meaningful deterioration in our credit portfolio as we concluded 2020. That said, the pandemic is still present, and we remain attentive to our borrowers and stand ready to take mitigating action if needed.”
Jelavich continued, “The bank also demonstrated its adaptability by not only serving our communities during this challenging year, but we also successfully opened our fourth branch in Marysville in August, which is off to a strong start. Further, our Auburn branch, which opened in late 2018, achieved stand-alone profitability in 2020, of which we are very proud.”
“We enter 2021 well positioned in all four of our markets and carry good momentum into the new year. I am encouraged by recent developments in the bond markets, as moderately increasing rates and a steepening of the yield curve are a reflection of a recovering economy and could provide further wind in our sails in 2021,” Jelavich concluded.
The Bank remains highly rated with BauerFinancial, Depositaccounts.com and Fintech Zoom and serves its customer base through its offices located at:
• 1629 Colusa Avenue, Yuba City, CA
• 580 Brunswick Rd, Grass Valley, CA
• 905 Lincoln Way, Auburn, CA
• 904 B Street, Marysville, CA
The Bank offers a full suite of competitive products, services, and banking technology. For more information please visit our website at http://www.myrvcb.com or contact John M. Jelavich at 530-821-2469.
Source: River Valley Community Bank