FRESNO, CA--(Marketwire - April 15, 2008) - 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 $1,305,000, or $0.21 per diluted share, for the first quarter
ended March 31, 2008, compared to $1,452,000, or $0.23 per diluted share
for the same period of 2007. This represents a decrease in net income of
$147,000 or 10.1% comparing the two periods.
Annualized return on average equity (ROE) for the first quarter of 2008 was
9.55%, compared to 11.55% for the same period in 2007. Annualized return
on average assets (ROA) was 1.08% for the first quarter of 2008, compared
to 1.23% for the same period in 2007. The Company's ROE and ROA for the
trailing 12 months ended March 31, 2008 was 11.61% and 1.28%, respectively,
compared to 14.60% and 1.47%, respectively, for the prior year period.
Asset quality remains strong. The Company had three non-accrual loans at
March 31, 2008 totaling $109,000 or 0.03% of total loans compared to four
loans totaling $179,000 or 0.05% of total loans at December 31, 2007 and
none at March 31, 2007. The Company expects the loss exposure on these
loans to be minimal due to government guarantees. The Company had no Other
Real Estate Owned at March 31, 2008, December 31, 2007 or March 31, 2007.
The Company is not involved in any sub-prime mortgage lending activities
and the investment portfolio does not include any sub-prime mortgage loans.
During the first quarter of 2008, the Company recorded a $135,000 pre-tax
addition to the allowance for credit losses, compared to $120,000 for the
same period in 2007. The allowance for credit losses as a percentage of
total loans was 1.14% at March 31, 2008 and December 31, 2007 and 1.12% at
March 31, 2007.
The Company's annualized net interest margin (NIM) for the first quarter of
2008 (fully tax equivalent basis) was 5.40% compared to 5.66% for the same
period in 2007. NIM was 5.68% for the trailing 12-month period ended March
31, 2008, compared to 5.77% for the trailing 12-month period ended March
31, 2007. The decrease is a reflection of the 300 basis points decline in
interest rates by the Federal Reserve Bank since September 2007 coupled
with competition for deposits that continues to challenge the Company along
with most other financial institutions.
Total average assets for the first quarter of 2008 were $484,809,000
compared to $473,733,000 for the same period in 2007. Total average
outstanding loans were $340,363,000 for the first quarter of 2008, a 7.2%
increase, compared to $317,522,000 for the same period in 2007. Total
average investments decreased from $113,033,000 for the first quarter of
2007 to $101,312,000 for the first quarter of 2008 as maturities and
principal pay downs in the portfolio provided funding for loan growth.
Total average deposits decreased 2.3% to $404,274,000 for the first quarter
of 2008 compared to $413,839,000 for the first quarter of 2007. The
decrease in average deposits is due to a $17,687,000 combined decrease in
non-interest bearing deposits, NOW and savings deposits offset by an
$8,122,000 increase in time certificates of deposits. The Company's ratio
of non-interest bearing deposits to total deposits continued to be high at
31.7%.
Total assets were $495,561,000 at March 31, 2008, an increase of 2.5%
compared to $483,685,000 at December 31, 2007. Total loans were
$348,644,000 at March 31, 2008, an increase of 2.2% compared to
$341,128,000 at December 31, 2007. Total investments were $101,224,000 at
March 31, 2008 compared to $84,373,000 at December 31, 2007, an increase of
$16,851,000 or 20.0%. The Company utilized $19,000,000 in Federal Home
Loan Bank advances and $5,000,000 in callable brokered certificates of
deposit (CDs) as part of a leveraged strategy in the first quarter of 2008
to purchase investments of approximately $24,000,000 in an effort to
increase net interest income. Total deposits were $410,267,000 at March
31, 2008, an increase of 1.9% compared to $402,562,000 at December 31,
2007. Deposits increased due to an $8,209,000 increase in money market
accounts and the $5,000,000 in callable brokered CDs offset by a decrease
of $4,097,000 in bank generated CDs.
Net interest income before provision for credit losses for the quarter
ended March 31, 2008 was $5,849,000 compared to $5,968,000 for the same
period in 2007, representing a decrease of $119,000 or 2.0%. This decrease
was due primarily to a decrease in the yield on total average earning
assets. Yield on earning assets for the three month period ended March 31,
2008 was 7.06% compared to 7.41% for the same period in 2007. The decrease
in yield was offset by growth in total average earning assets and a
decrease in the rate paid on deposits. Total average earning assets
increased $11,215,000 or 2.6% to $443,596,000 for the quarter ended March
31, 2008 from $432,381,000 for the quarter ended March 31, 2007. The
overall cost of our deposits decreased to 1.66% for the quarter ended March
31, 2008 compared to 1.76% for the quarter ended March 31, 2007.
Non-interest income for the first quarter of 2008 increased $79,000, or
6.8% compared to the same period in 2007, due to a $111,000 increase in
income from service charges and a $42,000 increase in other income, offset
by a $44,000 decrease in realized gains from sales of available-for-sale
investment securities and a $32,000 decrease in loan placement fees.
Non-interest expenses for the quarter ended March 31, 2008 increased
$267,000, or 5.7% compared to the same period in 2007, due to a $161,000
increase in salary expenses from an increase in the number of employees and
ordinary increases in salaries and benefits, and $121,000 increase in other
expense. Increases in professional and consulting expenses, education and
training and regulatory assessments were the main contributors to the
increase in other expenses.
"The Company continues to demonstrate the safety and soundness of Central
Valley Community Bank with continuing low levels of non-performing loans,
no other real estate owned, low charge offs, strong liquidity, and
continued profitability," stated Daniel J. Doyle, President and CEO of
Central Valley Community Bancorp and Central Valley Community Bank.
"Profit declines for the quarter are mainly attributed to the compression
of the net interest margin from significant declines in Fed funds interest
rates of 300 basis points, mirrored by a 300 basis points decline in the
Prime rate since September 2007. Additionally, while the cost of deposits
has also declined, because of the timing of maturities on deposits it
normally takes longer for the cost of funds to decrease, as compared to the
more immediate decrease in loan yields. Some competitors are paying what
we see as unrealistic and above-market interest rates for deposits in an
apparent need to bolster their liquidity," 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
twelve offices in Clovis, Fresno, Kerman, Madera, Oakhurst, Prather,
Sacramento, and a loan production office in Modesto. Additionally, the
Bank operates Commercial Real Estate Lending, SBA Lending and Agribusiness
Lending Departments. Insurance services are offered through Central Valley
Community Insurance Services LLC and investment services are provided by
Investment Centers of America. 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, 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, 2007.
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) 2008 2007
----------- -----------
ASSETS
Cash and due from banks $ 18,291 $ 17,108
Federal funds sold 828 14,536
----------- -----------
Total cash and cash equivalents 19,119 31,644
Available-for-sale investment securities, at fair
value (Amortized cost of $101,092 at March 31,
2008 and $84,139 at December 31, 2007) 101,224 84,373
Loans, less allowance for credit losses of $3,976
at March 31, 2008 and $3,887 at December 31, 2007 344,668 337,241
Bank premises and equipment, net 5,742 5,767
Bank owned life insurance 6,785 6,723
Federal Home Loan Bank stock 2,050 2,022
Goodwill 8,934 8,934
Accrued interest receivable, intangibles and other
assets 7,039 6,981
----------- -----------
Total assets $ 495,561 $ 483,685
=========== ===========
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Non-interest bearing $ 127,608 $ 128,120
Interest bearing 282,659 274,442
----------- -----------
Total deposits 410,267 402,562
Short-term borrowings 5,000 20,000
Long-term debt 19,000 -
Accrued interest payable and other liabilities 6,652 6,929
----------- -----------
Total liabilities 440,919 429,491
----------- -----------
Shareholders’ equity:
Preferred stock, no par value: 10,000,000
shares authorized, no shares issued or
outstanding - -
Common stock, no par value; 80,000,000
authorized; outstanding 5,982,316 at March 31,
2008, 5,975,316 at December 31, 2007 13,689 13,571
Retained earnings 40,874 40,483
Accumulated other comprehensive income, net of
tax 79 140
----------- -----------
Total shareholders’ equity 54,642 54,194
----------- -----------
Total liabilities and
shareholders’ equity $ 495,561 $ 483,685
=========== ===========
CONDENSED CONSOLDIATED
STATEMENTS OF INCOME
(Unaudited)
March December September June March
31, 31, 30, 30, 31,
For the three months ended 2008 2007 2007 2007 2007
======= ======== ========= ======= =======
(In thousands except per
share amounts)
Net interest income $ 5,849 $ 6,224 $ 6,186 $ 6,130 $ 5,968
Provision for credit losses 135 120 120 120 120
------- -------- --------- ------- -------
Net interest income after
provision for credit losses 5,714 6,104 6,066 6,010 5,848
Total non-interest income 1,238 1,168 1,075 1,116 1,159
Total non-interest expense 4,972 4,774 4,864 4,756 4,705
Provision for income taxes 675 865 701 751 850
------- -------- --------- ------- -------
Net income $ 1,305 $ 1,633 $ 1,576 $ 1,619 $ 1,452
======= ======== ========= ======= =======
Basic earnings per share $ 0.22 $ 0.27 $ 0.26 $ 0.27 $ 0.24
======= ======== ========= ======= =======
Diluted earnings per share $ 0.21 $ 0.26 $ 0.25 $ 0.25 $ 0.23
======= ======== ========= ======= =======
SELECTED RATIOS
(Unaudited)
March December September June March
31, 31, 30, 30, 31,
For the three months ended 2008 2007 2007 2007 2007
======= ======== ========= ======= =======
(Dollars in thousands)
Allowance for credit losses to
total loans 1.14% 1.14% 1.13% 1.10% 1.12%
Nonperforming loans to total
loans 0.03% 0.05% - 0.03% -
Total nonperforming assets $ 109 $ 179 $ 11 $ 86 $ -
Net interest margin (calculated
on a fully tax equivalent
basis) (1) 5.40% 5.81% 5.80% 5.69% 5.66%
Annualized return on average
assets (2) 1.08% 1.36% 1.33% 1.35% 1.23%
Annualized return on average
equity (2) 9.55% 12.10% 12.21% 12.67% 11.55%
(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.
Contact Information: Contact:
Debbie Nalchajian-Cohen
559-222-1322