As a fast-growing bank in California's capital city of Sacramento, River City Bank, a $5.2-billion-asset boutique commercial bank and a member of the Federal Home Loan Bank of San Francisco (FHLBank San Francisco), has tapped into FHLBank San Francisco’s product offerings to efficiently serve the public sector.

To collateralize a portion of its public sector deposits and meet the needs of its clean energy and public sector clients, River City Bank takes advantage of FHLBank San Francisco letters of credit. The letters of credit have enabled River City Bank to meet its client’s needs for collateralization in a more efficient manner than the traditional alternative of pledging investment securities.

"We have appreciated FHLBank San Francisco’s support over the years as it has been an important part of River City Bank’s liquidity management," said Rosa Cucicea, Director of Clean Energy and Public Sector Banking at River City Bank, which has been recognized seven years in a row as one of the fastest growing companies in the Sacramento area.

River City Bank has found multiple additional benefits to using FHLBank San Francisco letters of credit:

• River City Bank finds letters of credit beneficial to reporting and compliance with collateral requirements for public funds held at banks.

• Unlike securities, which fluctuate in value based on day-to-day market changes, the value of letters of credit remains constant. This stability provides operational efficiency for banks like River City Bank utilizing a letter of credit to secure public unit deposits.

• FHLBank San Francisco letters of credit provide more liquidity to River City Bank because public funds can be collateralized at a rate of 105% rather than the 110% rate required when using permissible securities. With their slightly more favorable rate of collateralization requirement, the letters of credit give River City Bank more capacity for accepting public sector deposits.

• Utilizing letters of credit frees up River City Bank’s investment portfolio which assists it in managing its liquidity ratio.

FHLBank San Francisco’s letter of credit product can be used to support a variety of financial transactions and allows member institutions to leverage FHLBank San Francisco’s Aaa/AA+ credit rating.

Learn more about FHLBank San Francisco letters of credit and other products and services by contacting your Relationship Manager or the Member Services Desk at (415) 616-2500.

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