FRESNO, CA--(Marketwire - Apr 20, 2011) - 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 $1,588,000, and diluted earnings per common share of $0.16 for the quarter ended March 31, 2011, compared to $1,292,000 and $0.13 per diluted common share for the quarter ended March 31, 2010. Net income increased 22.91% primarily driven by lower provision for credit losses, gains on sales of Other Real Estate Owned, and a decrease in non-interest expenses, partially offset by a decrease in net interest income before provision for credit losses and an increase in the provision for income taxes in the first quarter of 2011 compared to the same period in 2010.
During the first quarter of 2011, the Company's total assets decreased 1.40%, total liabilities decreased 1.92% and shareholders' equity increased 2.21% compared to balances at December 31, 2010. Annualized return on average equity (ROE) for the quarter ended March 31, 2011 was 6.41%, compared to 5.53% for the quarter ended March 31, 2010. The increase in this ratio reflects an increase in net income partially offset by an increase in capital due to increases in other comprehensive income and retained earnings. Annualized return on average assets (ROA) was 0.82% for the quarter ended March 31, 2011, compared to 0.68% for the quarter ended March 31, 2010. The ROA increase is due to an increase in net income partially offset by an increase in average assets.
During the quarter ended March 31, 2011, the Company recorded a provision for credit losses of $100,000, compared to $600,000 for the quarter ended March 31, 2010. During the quarter ended March 31, 2011, the Company recorded $95,000 in net loan charge-offs, compared to $234,000 for the quarter ended March 31, 2010. During the first quarter of 2011, gross charge offs of $330,000 were offset by gross recoveries of $235,000.
At March 31, 2011, the allowance for credit losses stood at $11,019,000, compared to $11,014,000 at December 31, 2010. The allowance for credit losses as a percentage of total loans was 2.61% at March 31, 2011, and 2.55% at December 31, 2010. The Company believes the allowance for credit losses is adequate to provide for probable losses inherent within the loan portfolio at March 31, 2011.
Total non-performing assets were $15,846,000, or 2.07% of total assets, as of March 31, 2011 compared to $19,984,000 or 2.57% of total assets as of December 31, 2010.
The following provides a reconciliation of the change in non-accrual loans for the first quarter of 2011.
Additions Transfer
Balances to to Returns Balances
December Non- Foreclosed to March
(Dollars in 31, accrual Net Pay Collateral Accrual Charge 31,
thousands) 2010 Loans Downs - OREO Status Offs 2011
------- ------- ------- ------- ------- ------ -------
Non-accrual
loans:
Commercial
and
industrial $ 377 $ 390 $ (42) $ (95) $ - $ (149) $ 481
Real estate 1,407 297 (720) - (195) (26) 763
Real estate
construction
and land
development 5,634 - (101) - - - 5,533
Equity loans
and lines of
credit 488 248 (214) - - - 522
Restructured
loans (non-
accruing):
Commercial
and
industrial 1,978 - (206) - (850) - 922
Real estate 4,198 - (1,324) - - - 2,874
Real estate
construction
and land
development 4,479 - (67) - - - 4,412
Consumer - 82 - - - - 82
------- ------- ------- ------- ------- ------ -------
Total
non-
accrual $18,561 $ 1,017 $(2,674) $ (95) $(1,045) $ (175) $15,589
======= ======= ======= ======= ======= ====== =======
The following provides a summary of the change in the OREO balance for the quarter ended March 31, 2011:
Three Months
Ended
(Dollars in thousands) March 31, 2011
--------------
Balance, December 31, 2010 $ 1,325
Additions 257
Dispositions (1,870)
Write-downs -
Gain on sale 562
Loss on sale (17)
--------------
Balance, March 31, 2011 $ 257
==============
The Company's annualized net interest margin (fully tax equivalent basis) was 4.67% for the quarter ended March 31, 2011, compared to 4.98% for the quarter ended March 31, 2010. The 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 quarter ended March 31, 2011, the effective yield on total earning assets decreased 55 basis points to 5.14% compared to 5.69% for the quarter ended March 31, 2010, while the cost of total interest-bearing liabilities decreased 29 basis points to 0.67% compared to 0.96% for the quarter ended March 31, 2010. The cost of total deposits decreased 22 basis points to 0.45% for the quarter ended March 31, 2011 compared to 0.67% for the quarter ended March 31, 2010. The average balance of investment securities, including deposits in other banks and Federal funds sold, increased 16.92% while the effective yield on average investment securities decreased to 3.45% for the quarter ended March 31, 2011 compared to 4.78% for the quarter ended March 31, 2010. Average loans, which generally yield higher rates than investment securities, decreased 6.17% while the effective yield on average loans increased slightly to 6.40% from 6.31% over the same periods. The decrease in yield in the Company's investment securities during the first quarter of 2011 resulted primarily from the purchase of lower yielding investment securities along with higher average balances in interest bearing deposits in other banks. Net interest income before provision for credit losses for the quarter ended March 31, 2011 was $7,598,000, compared to $7,986,000 for the quarter ended March 31, 2010, a decrease of $388,000 or 4.86%. Foregone interest on non-accrual and restructured loans adversely impacted the net interest margin by 0.17% for the quarter ended March 31, 2011, compared to 0.23% for the quarter ended March 31, 2010. Net interest income decreased as a result of these yield changes offset by an increase in average earning assets and a decrease in interest-bearing liabilities.
Total average assets for the quarter ended March 31, 2011 were $770,729,000, compared to $758,896,000 for the quarter ended March 31, 2010, an increase of $11,833,000 or 1.56%. Total average loans were $426,234,000 for the first quarter of 2011, compared to $454,245,000 for the first quarter of 2010, representing a decrease of $28,011,000 or 6.17%. Total average investments, including deposits in other banks and Federal funds sold, increased to $273,827,000 for the quarter ended March 31, 2011 from $234,210,000 for the quarter ended March 31, 2010, representing an increase of $39,617,000 or 16.92%, primarily due to an increase in deposits in other banks. Total average deposits increased $12,017,000 or 1.89% to $649,452,000 for the quarter ended March 31, 2011, compared to $637,435,000 for the quarter ended March 31, 2010. Average interest-bearing deposits decreased $10,993,000, or 2.26% and average non-interest bearing demand deposits increased $23,010,000 or 15.34% for the quarter ended March 31, 2011 compared to the quarter ended March 31, 2010. The Company's ratio of average non-interest bearing deposits to total deposits was 26.64% for the quarter ended March 31, 2011 compared to 23.53% for the quarter ended March 31, 2010.
Non-interest income for the quarter ended March 31, 2011 increased $414,000, or 31.03% to $1,748,000, compared to $1,334,000 for the quarter ended March 31, 2010, mainly due to an increase in gains on the sale of OREO of $545,000 partially offset by a decrease in customers service charges of $162,000.
Non-interest expense for the quarter ended March 31, 2011 decreased $51,000, or 0.71% to $7,153,000 compared to $7,204,000 for the quarter ended March 31, 2010, primarily due to decreases in OREO expenses of $305,000 and legal fees of $29,000, offset by an increase in salaries and employee benefits of $331,000.
The Company recorded a provision for income taxes of $505,000 for the quarter ended March 31, 2011, compared to $224,000 for the quarter ended March 31, 2010. The effective tax rate for the first quarter of 2011 was 24.13% compared to 14.78% for the quarter ended March 31, 2010. The increase in the effective tax rate is due to increases in taxable income and reserves for uncertain tax positions which are primarily attributable to tax credits and deductions related to certain enterprise zone activities in California.
"We are pleased to report increased earnings for the first quarter of 2011 considering the lower yields available in our investment portfolio and muted demand for credit usage at this time," stated Daniel J. Doyle, President and CEO for Central Valley Community Bancorp and Central Valley Community Bank.
"Our loan portfolio asset quality trends continue to improve requiring lower additions to our provision for future loan losses. The Company has also benefited from recoveries of previous loan charge offs and gains from the sale of OREO," 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 17 full service offices in Clovis, Fresno, Kerman, Lodi, Madera, Oakhurst, Prather, Merced, Sacramento, Stockton, Tracy, and 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, 2010. 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
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
(In thousands, except share amounts) 2011 2010
------------- -------------
(Unaudited)
ASSETS
Cash and due from banks $ 15,274 $ 11,357
Interest-earning deposits in other banks 68,296 89,042
Federal funds sold 861 600
------------- -------------
Total cash and cash equivalents 84,431 100,999
Available-for-sale investment securities
(Amortized cost of $205,605 at March 31, 2011
and $189,682 at December 31, 2010) 207,403 191,325
Loans, less allowance for credit losses of
$11,019 at March 31, 2011 and $11,014 at
December 31, 2010 411,023 420,583
Bank premises and equipment, net 5,591 5,843
Other real estate owned 257 1,325
Bank owned life insurance 11,487 11,390
Federal Home Loan Bank stock 3,050 3,050
Goodwill 23,577 23,577
Core deposit intangibles 1,094 1,198
Accrued interest receivable and other assets 18,777 18,304
------------- -------------
Total assets $ 766,690 $ 777,594
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 165,753 $ 173,867
Interest bearing 478,424 476,628
------------- -------------
Total deposits 644,177 650,495
Short-term borrowings - 10,000
Long-term debt 4,000 4,000
Junior subordinated deferrable interest
debentures 5,155 5,155
Accrued interest payable and other liabilities 13,815 10,553
------------- -------------
Total liabilities 667,147 680,203
------------- -------------
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 6,875 6,864
Common stock, no par value; 80,000,000
authorized; issued and outstanding 9,232,654
at March 31, 2011 and 9,109,154 at December
31, 2010 38,987 38,428
Non-voting common stock, 1,000,000 authorized;
issued and outstanding 258,862 at March 31,
2010 and at December 31, 2010 1,317 1,317
Retained earnings 51,306 49,815
Accumulated other comprehensive income, net of
tax 1,058 967
------------- -------------
Total shareholders' equity 99,543 97,391
------------- -------------
Total liabilities and
shareholders' equity $ 766,690 $ 777,594
============= =============
CENTRAL VALLEY COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months
Ended March 31,
-----------------------
(In thousands, except share and per share amounts) 2011 2010
---------- -----------
INTEREST INCOME:
Interest and fees on loans $ 6,462 $ 6,778
Interest on deposits in other banks 50 23
Interest on Federal funds sold 1 -
Interest and dividends on investment
securities:
Taxable 1,097 1,630
Exempt from Federal income taxes 800 757
---------- -----------
Total interest income 8,410 9,188
---------- -----------
INTEREST EXPENSE:
Interest on deposits 717 1,053
Interest on junior subordinated deferrable
interest debentures 25 23
Other 70 126
---------- -----------
Total interest expense 812 1,202
---------- -----------
Net interest income before provision for
credit losses 7,598 7,986
PROVISION FOR CREDIT LOSSES 100 600
---------- -----------
Net interest income after provision for
credit losses 7,498 7,386
---------- -----------
NON-INTEREST INCOME:
Service charges 699 861
Appreciation in cash surrender value of bank
owned life insurance 97 97
Loan placement fees 57 28
Gain on sale of other real estate owned 545 -
Net realized (loss) gains on sales and calls of
investment securities (16) 21
Total impairment on investment securities (31) -
Increase in fair value recognized in other
comprehensive income - -
---------- -----------
Net impairment loss recognized in earnings (31) -
Federal Home Loan Bank dividends 2 2
Other income 395 325
---------- -----------
Total non-interest income 1,748 1,334
---------- -----------
NON-INTEREST EXPENSES:
Salaries and employee benefits 4,078 3,747
Occupancy and equipment 934 926
Regulatory assessments 289 300
Data processing expense 276 286
Advertising 184 192
Audit and accounting fees 112 114
Legal fees 93 122
Other real estate owned 9 314
Amortization of core deposit intangibles 104 104
Other expense 1,074 1,099
---------- -----------
Total non-interest expenses 7,153 7,204
---------- -----------
Income before benefit from income
taxes 2,093 1,516
PROVISION FOR INCOME TAXES 505 224
---------- -----------
Net income $ 1,588 $ 1,292
========== ===========
Net income $ 1,588 $ 1,292
Preferred stock dividends and accretion 99 99
---------- -----------
Net income available to common
shareholders $ 1,489 $ 1,193
========== ===========
Net income per common share:
Basic earnings per common share $ 0.16 $ 0.13
========== ===========
Weighted average common shares used in basic
computation 9,475,444 8,969,687
========== ===========
Diluted earnings per common share $ 0.16 $ 0.13
========== ===========
Weighted average common shares used in diluted
computation 9,503,313 9,082,070
========== ===========
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the three months Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31,
ended 2011 2010 2010 2010 2010
---------- --------- --------- ---------- ----------
(In thousands,
except share and
per share amounts)
Net interest income $ 7,598 $ 7,641 $ 8,173 $ 7,930 $ 7,986
Provision for credit
losses 100 900 1,300 1,000 600
---------- --------- --------- ---------- ----------
Net interest
income after
provision for
credit losses 7,498 6,741 6,873 6,930 7,386
Total non-interest
income 1,748 347 1,293 747 1,334
Total non-interest
expense 7,153 6,986 7,409 7,142 7,204
Provision for
(benefit from)
income taxes 505 (517) (107) 31 224
---------- --------- --------- ---------- ----------
Net income $ 1,588 $ 619 $ 864 $ 504 $ 1,292
========== ========= ========= ========== ==========
Net income available
to common
shareholders $ 1,489 $ 520 $ 766 $ 405 $ 1,193
========== ========= ========= ========== ==========
Basic earnings per
common share $ 0.16 $ 0.06 $ 0.08 $ 0.04 $ 0.13
========== ========= ========= ========== ==========
Weighted average
common shares
used in basic
computation 9,475,444 9,368,016 9,363,908 9,131,753 8,969,687
========== ========= ========= ========== ==========
Diluted earnings
per common share $ 0.16 $ 0.06 $ 0.08 $ 0.04 $ 0.13
========== ========= ========= ========== ==========
Weighted average
common shares
used in diluted
computation 9,503,313 9,429,226 9,432,301 9,210,838 9,082,070
========== ========= ========= ========== ==========
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 2011 2010 2010 2010 2010
-------- -------- -------- -------- --------
(Dollars in thousands,
except per share
amounts)
Allowance for credit
losses to total loans 2.61% 2.55% 2.42% 2.45% 2.34%
Nonperforming assets to
total assets 2.07% 2.57% 2.89% 2.45% 2.72%
Total nonperforming
assets $ 15,846 $ 19,984 $ 22,119 $ 18,496 $ 20,646
Net loan charge offs $ 95 $ 992 $ 1,662 $ 127 $ 205
Net charge offs to
average loans
(annualized) 0.09% 0.89% 1.43% 0.11% 0.18%
Book value per share $ 9.76 $ 9.66 $ 9.78 $ 9.46 $ 9.47
Tangible book value per
share $ 7.16 $ 7.02 $ 7.13 $ 6.80 $ 6.71
Tangible common equity $ 67,748 $ 65,753 $ 66,763 $ 63,628 $ 60,928
Interest and dividends on
investment securities
exempt from Federal
income taxes $ 800 $ 762 $ 761 $ 759 $ 757
Net interest margin
(calculated on a fully
tax equivalent basis)
(1) 4.67% 4.67% 5.10% 5.06% 4.98%
Return on average assets
(2) 0.82% 0.32% 0.46% 0.27% 0.68%
Return on average equity
(2) 6.41% 2.53% 3.53% 2.11% 5.53%
Tier 1 leverage - Bancorp 9.87% 9.48% 10.07% 9.94% 9.61%
Tier 1 leverage - Bank 9.67% 9.32% 9.93% 9.80% 9.44%
Tier 1 risk-based capital
- Bancorp 14.81% 14.16% 13.75% 12.96% 12.91%
Tier 1 risk-based capital
- Bank 14.51% 13.92% 13.55% 12.77% 12.68%
Total risk-based capital
- Bancorp 16.08% 15.42% 15.03% 14.24% 14.17%
Total risk based capital
- Bank 15.78% 15.19% 14.82% 14.05% 13.94%
(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
Ended March 31,
AVERAGE AMOUNTS --------------------
(Dollars in thousands) 2011 2010
--------- ---------
Federal funds sold $ 758 $ 858
Interest-bearing deposits in other banks 76,618 37,067
Investments 196,451 196,285
Loans (1) 409,353 435,550
Federal Home Loan Bank stock 3,050 3,140
--------- ---------
Earning assets 686,230 672,900
Allowance for credit losses (11,007) (10,606)
Non-accrual loans 16,881 18,695
Other real estate owned 620 2,826
Other non-earning assets 78,005 75,081
--------- ---------
Total assets $ 770,729 $ 758,896
========= =========
Interest bearing deposits $ 476,447 $ 487,440
Other borrowings 13,655 21,099
--------- ---------
Total interest-bearing liabilities 490,102 508,539
Non-interest bearing demand deposits 173,005 149,995
Non-interest bearing liabilities 8,504 7,029
--------- ---------
Total liabilities 671,611 665,563
--------- ---------
Total equity 99,118 93,333
--------- ---------
Total liabilities and equity $ 770,729 $ 758,896
========= =========
AVERAGE RATES
Federal funds sold 0.30% 0.25%
Interest-earning deposits in other banks 0.26% 0.25%
Investments 4.70% 5.66%
Loans 6.40% 6.31%
Earning assets 5.14% 5.69%
Interest-bearing deposits 0.61% 0.88%
Other borrowings 2.82% 2.86%
Total interest-bearing liabilities 0.67% 0.96%
Net interest margin (calculated on a fully tax
equivalent basis) 4.67% 4.98%
(1) Average loans do not include non-accrual loans.
(2) Calculated on a fully tax equivalent basis, which includes Federal tax
benefits relating to income earned on municipal bonds totaling $412
and $390 for the quarters ended March 31, 2011 and 2010, respectively.