FRESNO, CA -- (Marketwire - April 22, 2010) - The Board of Directors of Central Valley Community Bancorp (Company) (NASDAQ: CVCY), the parent company of Central Valley Community Bank (Bank), reported today unaudited consolidated net income of $1,292,000, and diluted earnings per common share of $0.13 for the three months ended March 31, 2010, compared to $1,259,000 and $0.16 per diluted common share for the three months ended March 31, 2009. The increase in earnings for the first quarter of 2010 was primarily driven by a decrease in credit related charges, partially offset by decreases in net interest income and non-interest income, and an increase in non-interest expenses.
Return on average equity (ROE) for the three months ended March 31, 2010 was 5.53%, compared to 6.13% for the same period in 2009. The decrease in this ratio reflects an increase in capital from the issuance of common and preferred stock, and an increase in retained earnings. Return on average assets (ROA) was 0.68% for the first quarter of 2010, compared to 0.66% for the same period in 2009. The ROA increase is due to a slight increase in net income and a slight decrease in average assets.
During the three months ended March 31, 2010, the Company recorded a provision for credit losses of $600,000, compared to $1,917,000 for the first quarter of 2009. The period-to-period decrease in provision for credit losses resulted from a decrease in the level of outstanding loans and what appears to be stabilization of the Company's non-performing assets.
At March 31, 2010, the allowance for credit losses stood at $10,595,000, compared to $10,200,000 at December 31, 2009, a net increase of $395,000. The allowance for credit losses as a percentage of total loans was 2.34% at March 31, 2010, and 2.22% at December 31, 2009.
During the three months ended March 31, 2010, the Company recorded $205,000 in net loan charge offs, compared to $1,474,000 for the same period in 2009. In addition, recoveries of previously charged off loan balances during the quarter ended March 31, 2010 were $271,000. Of the $476,000 charge offs recorded in the first quarter of 2010, only $15,000 related to non-accrual loans. The Company also recorded OREO related expenses of $314,000 during the first quarter of 2010 compared to $13,000 in the first quarter of 2009.
Total non-performing assets were $20,646,000, or 2.72% of total assets, as of March 31, 2010 compared to $21,838,000 or 2.85% of total assets as of December 31, 2009. Total non-performing assets as of March 31, 2010 consisted of $18,053,000 in non-accrual loans, $2,549,000 in OREO, and other assets of $44,000. Non-accrual loans were 3.99% of total loans at March 31, 2010. This compares to non-accrual loans of $18,959,000 or 4.13% of total loans, OREO of $2,832,000, and other assets of $47,000 at December 31, 2009. The Company believes the allowance for credit losses is adequate to provide for probable losses inherent within the loan portfolio at March 31, 2010.
The following provides a reconciliation of the change in non-accrual loans for the first quarter of 2010.
Additions Transfers Returns
Balance to Non- to to Balance
(Dollars in December Accrual Net Foreclosed Accrual Charge March
thousands) 31, 2009 Loans Paydowns Collateral Status Offs 31, 2010
-------- --------- -------- --------- ------ ----- --------
Commercial
and
industrial $ 3,414 $ 92 $ (375) $ - $ (165) $ (15) $ 2,951
Real estate 7,723 183 (1,133) - - - 6,773
Real estate
construction
and land
development 7,474 - - - - - 7,474
Consumer 348 - - - - - 348
Equity loans
and lines
of credit - 508 (1) - - - 507
-------- --------- -------- --------- ------ ----- --------
Totals $ 18,959 $ 783 $ (1,509) $ - $ (165) $ (15) $ 18,053
======== ========= ======== ========= ====== ===== ========
The Company's annualized net interest margin (fully tax equivalent basis) was 4.98% for the three months ended March 31, 2010, compared to 5.23% for the same period in 2009. The 2010 net interest margin decrease in the period-to-period comparison resulted primarily from a decrease in the yield on the Company's investment portfolio partially offset by a decrease in the Company's cost of funds. For the three months ended March 31, 2010, the effective yield on total earning assets decreased 71 basis points to 5.69% compared to 6.40% for the same period in 2009, while the cost of total interest-bearing liabilities decreased 62 basis points to 0.96% compared to 1.58% for the same period in 2009. The effective yield on average investment securities decreased to 5.66% for the three months ended March 31, 2010 compared to 7.06% for the same period in 2009, while the effective yield on average loans decreased to 6.31% from 6.48% over the same periods. The decrease in yield in the Company's investment securities in the first quarter of 2010 resulted primarily from increased prepayments on agency CMOs purchased at a premium resulting in accelerated amortization of the premium. The cost of total deposits decreased 46 basis points to 0.67% for the three months ended March 31, 2010 compared to 1.13% for the same period in 2009. Net interest income for the three months ended March 31, 2010 was $7,986,000, compared to $8,485,000 for the same period in 2009, a decrease of $499,000 or 5.88%. Net interest income decreased as a result of these yield changes combined with a slight decrease in the levels of earning assets and interest-bearing liabilities.
Total average assets for the three months ended March 31, 2010 were $758,896,000, compared to $763,729,000 for the same period in 2009, a decrease of $4,833,000 or 0.63%. Total average loans were $454,245,000 for the first quarter of 2010, compared to $486,518,000 for the same period in 2009, representing a decrease of $32,273,000 or 6.63%. Total average investments increased to $234,210,000 for the three months ended March 31, 2010 from $201,526,000 for the same period in 2009, representing an increase of $32,684,000 or 16.22%. Total average deposits decreased $4,357,000 or 0.68% to $637,435,000 for the three months ended March 31, 2010, compared to $641,792,000 for the same period in 2009. Average interest-bearing deposits increased $5,920,000, or 1.23% and average non-interest bearing demand deposits decreased $10,277,000 or 6.41% for the three months ended March 31, 2010 compared to the same period in 2009. The Company's ratio of average non-interest bearing deposits to total deposits was 23.5% for the three months ended March 31, 2010.
Non-interest income for the three months ended March 31, 2010 decreased $404,000, or 23.25% to $1,334,000, compared to $1,738,000 for the same period in 2009, mainly due to a $428,000 decrease in net realized gains on sales and calls of investment securities.
Non-interest expense for the three months ended March 31, 2010 increased $364,000, or 5.32% to $7,204,000 compared to $6,840,000 for the same period in 2009, primarily due to an increase in OREO expenses of $301,000.
The Company recorded a provision for income taxes of $224,000 for the three months ended March 31, 2010, compared to $207,000 for the same period in 2009. The effective tax rate for the first quarter of 2010 was 14.78% compared to 14.12% for the same period in 2009.
"It is encouraging to see a decrease in non-performing assets for the first quarter of 2010 compared to the fourth quarter of 2009, but with the economic uncertainty, we recorded over $900,000 in credit related expenses. It is also a positive sign to have net income exceed the previous linked quarter and the same quarter last year, although investment yields did decline and had a negative impact on our net interest margin," stated Daniel J. Doyle, President and CEO of Central Valley Community Bancorp and Central Valley Community Bank.
"Hopefully the positive trend this quarter in our asset quality and earnings will continue to improve," concluded Doyle.
Central Valley Community Bancorp trades on the NASDAQ stock exchange under the symbol CVCY. Central Valley Community Bank, headquartered in Fresno, California, was founded in 1979 and is the sole subsidiary of Central Valley Community Bancorp. Central Valley Community Bank currently operates 16 offices in Clovis, Fresno, Kerman, Lodi, Madera, Oakhurst, Prather, Merced, Sacramento, Stockton, Tracy, and a loan production office in Modesto, California. Additionally, the Bank operates Commercial Real Estate Lending, SBA Lending and Agribusiness Lending Departments. Investment services are provided by Investment Centers of America and insurance services are offered through Central Valley Community Insurance Services LLC. Members of Central Valley Community Bancorp's and the Bank's Board of Directors are: Daniel N. Cunningham (Chairman), Sidney B. Cox, Edwin S. Darden, Jr., Daniel J. Doyle, Steven D. McDonald, Louis McMurray, Wanda L. Rogers (Director Emeritus), William S. Smittcamp, and Joseph B. Weirick.
More information about Central Valley Community Bancorp and Central Valley Community Bank can be found at www.cvcb.com.
Forward-looking Statements -- Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained herein that are not historical facts, such as statements regarding the Company's current business strategy and the Company's plans for future development and operations, are based upon current expectations. These statements are forward-looking in nature and involve a number of risks and uncertainties. Such risks and uncertainties include, but are not limited to (1) significant increases in competitive pressure in the banking industry; (2) the impact of changes in interest rates, a decline in economic conditions at the international, national or local level on the Company's results of operations, the Company's ability to continue its internal growth at historical rates, the Company's ability to maintain its net interest margin, and the quality of the Company's earning assets; (3) changes in the regulatory environment; (4) fluctuations in the real estate market; (5) changes in business conditions and inflation; (6) changes in securities markets; and (7) the other risks set forth in the Company's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2009. Therefore, the information set forth in such forward-looking statements should be carefully considered when evaluating the business prospects of the Company.
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
----------- -----------
(In thousands, except share amounts) 2010 2009
----------- -----------
ASSETS
Cash and due from banks $ 13,276 $ 13,857
Interest-bearing balances in other banks 42,407 34,544
Federal funds sold 1,141 279
----------- -----------
Total cash and cash equivalents 56,824 48,680
Available-for-sale investment securities
(Amortized cost of $192,593 at March 31, 2010
and $199,744 at December 31, 2009) 192,219 197,319
Loans, less allowance for credit losses of
$10,595 at March 31,
2010 and $10,200 at December 31, 2009 441,295 449,007
Bank premises and equipment, net 6,241 6,525
Other real estate owned 2,549 2,832
Bank owned life insurance 11,095 10,998
Federal Home Loan Bank stock 3,140 3,140
Goodwill 23,577 23,577
Core deposit intangibles 1,508 1,612
Accrued interest receivable and other assets 21,053 21,798
----------- -----------
Total assets $ 759,501 $ 765,488
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 142,752 $ 159,630
Interest bearing 493,541 480,537
----------- -----------
Total deposits 636,293 640,167
Short-term borrowings 10,000 5,000
Long-term debt 4,000 14,000
Junior subordinated deferrable interest
debentures 5,155 5,155
Accrued interest payable and other liabilities 9,893 9,943
----------- -----------
Total liabilities 665,341 674,265
----------- -----------
Commitments and contingencies
Shareholders' equity:
Preferred stock, no par value, $1,000 per share
liquidation preference; 10,000,000 shares
authorized;
Series A, no par value, 7,000 shares issued and
outstanding 6,830 6,819
Series B, no par value, 1,359 shares issued and
outstanding 1,317 1,317
Common stock, no par value; 80,000,000
authorized; issued and outstanding 9,079,754 at
March 31, 2010 and 8,949,754 at December 31,
2009 38,113 37,611
Retained earnings 48,124 46,931
Accumulated other comprehensive loss, net of tax (224) (1,455)
----------- -----------
Total shareholders' equity 94,160 91,223
----------- -----------
Total liabilities and shareholders'
equity $ 759,501 $ 765,488
=========== ===========
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months
Ended March 31,
-------------------
(In thousands, except share and per share amounts) 2010 2009
--------- ---------
INTEREST INCOME:
Interest and fees on loans $ 6,778 $ 7,540
Interest on Federal funds sold - 11
Interest and dividends on investment securities:
Taxable 1,653 2,211
Exempt from Federal income taxes 757 707
--------- ---------
Total interest income 9,188 10,469
--------- ---------
INTEREST EXPENSE:
Interest on deposits 1,053 1,782
Interest on junior subordinated deferrable interest
debentures 23 41
Other 126 161
--------- ---------
Total interest expense 1,202 1,984
--------- ---------
Net interest income before provision for credit
losses 7,986 8,485
PROVISION FOR CREDIT LOSSES 600 1,917
--------- ---------
Net interest income after provision for credit
losses 7,386 6,568
--------- ---------
NON-INTEREST INCOME:
Service charges 861 820
Appreciation in cash surrender value of bank owned
life insurance 97 98
Loan placement fees 28 46
Net realized gains on sales and calls of investment
securities 21 449
Federal Home Loan Bank stock dividends 2 -
Other income 325 325
--------- ---------
Total non-interest income 1,334 1,738
--------- ---------
NON-INTEREST EXPENSES:
Salaries and employee benefits 3,747 3,688
Occupancy and equipment 926 945
Other real estate owned expenses 314 13
Other expenses 2,217 2,194
--------- ---------
Total non-interest expenses 7,204 6,840
========= =========
Income before provision for income taxes 1,516 1,466
PROVISION FOR INCOME TAXES 224 207
--------- ---------
Net income $ 1,292 $ 1,259
========= =========
Net income $ 1,292 $ 1,259
Preferred stock dividends and accretion 99 49
--------- ---------
Net income available to common shareholders $ 1,193 $ 1,210
========= =========
Basic earnings per common share $ 0.13 $ 0.16
========= =========
Weighted average common shares used in basic
computation 8,969,687 7,642,280
========= =========
Diluted earnings per common share $ 0.13 $ 0.16
========= =========
Weighted average common shares used in diluted
computation 9,082,070 7,770,449
========= =========
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31,
For the three months 2010 2009 2009 2009 2009
ended ---------- --------- --------- ---------- ----------
(In thousands,
except share and
per share amounts)
Net interest income $ 7,986 $ 8,220 $ 8,654 $ 8,748 $ 8,485
Provision for credit
losses 600 2,864 3,233 2,500 1,917
---------- --------- --------- ---------- ----------
Net interest income
after provision for
credit losses 7,386 5,356 5,421 6,248 6,568
Total non-interest
income 1,334 1,103 1,608 1,401 1,738
Total non-interest
expense 7,204 6,616 6,946 7,129 6,840
Provision for
(benefit from)
income taxes 224 (643) (296) 56 207
---------- --------- --------- ---------- ----------
Net income $ 1,292 $ 486 $ 379 $ 464 $ 1,259
========== ========= ========= ========== ==========
Net income available
to common
shareholders $ 1,193 $ 416 $ 268 $ 329 $ 1,210
========== ========= ========= ========== ==========
Basic earnings per
share $ 0.13 $ 0.05 $ 0.04 $ 0.04 $ 0.16
========== ========= ========= ========== ==========
Weighted average
shares used in
basic computation 8,969,687 7,782,841 7,664,802 7,651,918 7,642,280
========== ========= ========= ========== ==========
Diluted earnings
Per share $ 0.13 $ 0.05 $ 0.03 $ 0.04 $ 0.16
========== ========= ========= ========== ==========
Weighted average
shares used in
diluted
computation 9,082,070 7,900,679 7,781,789 7,760,014 7,770,449
========== ========= ========= ========== ==========
CENTRAL VALLEY COMMUNITY BANCORP
SELECTED RATIOS
(Unaudited)
As of and for the three Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31,
months ended 2010 2009 2009 2009 2009
------- ------- ------- ------- -------
(Dollars in thousands, except
per share amounts)
Allowance for credit losses to
total loans 2.34% 2.22% 2.09% 1.75% 1.57%
Nonperforming loans to total
loans 3.99% 4.13% 2.46% 2.95% 2.89%
Total nonperforming assets $20,646 $21,838 $15,002 $17,171 $16,636
Net loan charge offs $ 205 $ 2,691 $ 1,798 $ 1,574 $ 1,474
Net charge offs to average
loans 0.18% 2.31% 1.48% 1.28% 1.21%
Book value per share $ 9.47 $ 9.28 $ 10.28 $ 9.68 $ 9.88
Tangible book value per share $ 6.71 $ 6.47 $ 6.96 $ 6.34 $ 6.52
Tangible common equity $60,928 $57,898 $53,332 $48,583 $49,796
Net interest margin
(calculated on a fully tax
equivalent basis) (1) 4.98% 5.09% 5.43% 5.51% 5.23%
Return on average assets (2) 0.68% 0.26% 0.20% 0.25% 0.66%
Return on average equity (2) 5.53% 2.24% 1.86% 2.28% 6.13%
Tier 1 leverage - Bancorp 9.59% 9.30% 8.64% 8.82% 8.53%
Tier 1 leverage - Bank 9.44% 9.20% 8.49% 8.43% 8.12%
Tier 1 risk-based capital -
Bancorp 12.91% 12.28% 10.76% 10.54% 10.62%
Tier 1 risk-based capital -
Bank 12.68% 12.12% 10.58% 10.08% 10.11%
Total risk-based capital -
Bancorp 14.17% 13.54% 12.02% 11.79% 11.86%
Total risk based capital -
Bank 13.94% 13.38% 11.84% 11.33% 11.36%
(1) Net Interest Margin is computed by dividing annualized quarterly net
interest income by quarterly average interest-bearing assets.
(2) Computed by annualizing quarterly net income.
CENTRAL VALLEY COMMUNITY BANCORP
AVERAGE BALANCES AND RATES
(Unaudited)
For the Three Months
AVERAGE AMOUNTS Ended March 31,
--------------------
(Dollars in thousands) 2010 2009
--------- ---------
Federal funds sold $ 858 $ 15,500
Interest-bearing deposits in other banks 37,067 38
Investments 196,285 185,988
Loans (1) 435,550 471,964
Federal Home Loan Bank stock 3,140 3,140
--------- ---------
Earning assets 672,900 676,630
Allowance for credit losses (10,606) (7,325)
Non-accrual loans 18,695 14,554
Other non-earning assets 77,907 79,870
--------- ---------
Total assets $ 758,896 $ 763,729
========= =========
Interest bearing deposits $ 487,440 $ 481,520
Other borrowings 21,099 29,083
--------- ---------
Total interest-bearing liabilities 508,539 510,603
Non-interest bearing demand deposits 149,995 160,272
Non-interest bearing liabilities 7,029 10,753
--------- ---------
Total liabilities 665,563 681,628
--------- ---------
Total equity 93,333 82,101
--------- ---------
Total liabilities and equity $ 758,896 $ 763,729
========= =========
AVERAGE RATES
--------- ---------
Federal funds sold 0.25% 0.28%
Investments 5.66% 7.06%
Loans 6.31% 6.48%
Earning assets 5.69% 6.40%
Interest bearing deposits 0.88% 1.50%
Other borrowings 2.88% 2.82%
Total interest-bearing liabilities 0.96% 1.58%
Net interest margin (calculated
on a fully tax equivalent basis) 4.98% 5.23%
(1) Average loans do not include non-accrual loans.
Contact: Debbie Nalchajian-Cohen 559-222-1322