River Valley Community Bank- Growing Bank Selling For A Quality Price

River Valley Community Bank (RVVY) is a two branch bank located in California. Despite the non-public nature of the company, River Valley Community Bank continues to break new records. With asset and deposit growth, net income growth and trading near book value, River Valley Community Bank should be on the radar of any investor interested in small hidden banks.

Record Breaking Year(s)

Twenty-fifteen was a record breaking year for River Valley Community Bank. In 4Q15, net income increased to $508,070 a 54.3% increase YOY. Furthermore, FY net income increased 55.8% to $1,729,848 from $1,111,000 YOY. Also, in Q2, their Grass Valley Branch had its first profitable quarter ever. Profitability has continued to sustain thereon forth.

The year 2015 wasn’t just a record breaking for income growth either. Total assets increased 12.4% to $237,472,669 and total deposits increased 12.6% to $213,232,980. Furthermore, deposit market share grew to a 10% record in the Yuba/Sutter market, an increase from 8.8% YOY.

Deposit marketshare stats for the Yuba/Sutter market are shown below:

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Management appears to be shareholder friendly. In 4Q15 they enacted a five-for-four common stock split. This move has potential to increase the company’s visibility, liquidity and accessibility for their stock. Further shareholder friendliness can be seen from their $0.35/share special dividend announcement in 2Q15. John Jelavich, the CEO stated the following…

“We are very pleased to be in the position to return capital to our shareholders with the special cash dividend announced today. Our continued profitability has positioned us with substantial capital and this dividend, in addition to the one we paid in 2012 represents over $1.1 million we will have returned to our shareholders.”

Twenty-fifteen wasn’t an anomaly either. In 1Q16, net interest income increased 23.5% YOY and 2.1% QOQ. In addition to net interest income growth, total assets increased 9.7% to $246mm. Finally, net interest margin increased to 3.07% from 2.78% YOY. In a low interest rate environment, growth in NIM is a good suggestion of the competence of management and growth of the California market.

1Q16 report

Source: 1Q16 Report

In light of the 5.16% increase in book value per share, ROE and ROA took a heavy hit. The reason for the rampant decline was due to a $480,000 provision for loan losses. The borrower of this monetary amount closed its business in 1Q16, thus reporting insolvency. The loan is deemed as secure, but the collection still remains uncertain.

The great thing about using CompleteBankData’s software is that accessibility of asset quality is at your fingertips.

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Source: CompleteBankData RVVY Asset Quality

The historical data on asset quality, shows that the recent $480,000 loan provision was an anomaly and should not be recurring. Jelavich stated the following in regards to the loan loss…

“Our first quarter results reflect continued growth achieved by the Bank. Total assets and deposits achieved record levels, and our top line interest income also achieved a record quarterly high for the Bank.” Jelavich continued, “Unfortunately, we experienced a loan loss of $480,000 at the end of the quarter; and while our decision to charge off the loan effectively puts this behind us, we will continue to pursue full recovery.” Jelavich concluded, “The fact that we were able to absorb this loan loss and still generate $247,600 in after tax net income for the quarter speaks to the earnings strength we have established. The credit quality of the Bank’s loan and investment portfolios remains strong, with no nonperforming assets and only $166,000 of classified loans as of quarter-end.”

River Valley Community Bank has also been awarded top ratings for its financial strength for over 30 consecutive quarters. Top ratings have been awarded by BauerFinancial, Inc. and DepositAccounts.com. BauerFinancial, Inc. has awarded River Valley Community Bank Five-Star Superior rating for its 31 consecutive quarters financial strength. Additionally, DepositAccounts.com has earned an A+ rating for the past 32 consecutive quarters.

Furthermore CompleteBankData’s risk model has deemed the bank to be a “Moderate Risk” institution.  Banks are ranked from “Low Risk” to “Severe Risk” with “Moderate Risk” being the second safest level of classification.  Investors and depositors can rest assured that River Valley Community Bank is on firm footing.

These strong historical financial ratings show the company’s financial and loan portfolio strength before, during and after the Great Recession.


River Valley Community Bank is a quality bank selling for a decent price. RVVY has shown investors that it can growth deposits and increase its bottom-line without taking on risky loans. Furthermore, the low amount of non-performing loans during the Great Recession shows management’s quality and competence as a whole.

If the trend in income and asset growth continues, the book value of the company should further increase. Finally, management’s intent on getting River Valley Community Bank more investor visibility may severe as a catalyst this hidden bank needs. In short, River Valley Community Bank is a great example of a small, quality, community bank growing under the nose of the investment community.


Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Nick Bodnar

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