FRESNO, Calif.–(BUSINESS WIRE)–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 $11,303,000, and fully diluted earnings per common share of $0.83 for the six months ended June 30, 2019, compared to $10,256,000 and $0.74 per fully diluted common share for the six months ended June 30, 2018.

SECOND QUARTER FINANCIAL HIGHLIGHTS

  • Net loans increased $41.2 million or 4.53%, and total assets increased $75.4 million or 4.90% at June 30, 2019 compared to December 31, 2018.
  • Total deposits increased 0.92% to $1.29 billion at June 30, 2019 compared to December 31, 2018.
  • Total cost of deposits remains at low levels at 0.15% and 0.08% for the quarter ended June 30, 2019 and 2018, respectively.
  • Average non-interest bearing demand deposit accounts as a percentage of total average deposits was 42.45% and 40.85% for the quarters ended June 30, 2019 and 2018, respectively.
  • Capital positions remain strong at June 30, 2019 with a 11.43% Tier 1 Leverage Ratio; a 14.72% Common Equity Tier 1 Ratio; a 15.16% Tier 1 Risk-Based Capital Ratio; and a 16.00% Total Risk-Based Capital Ratio.
  • The Company declared a $0.11 per common share cash dividend, payable on August 16, 2019 to shareholders of record on August 2, 2019.
  • During the quarter ended June 30, 2019, the Company repurchased and retired a total of 223,121 shares of common stock at an average price paid per share of $19.94. Since the Company approved the stock repurchased program on July 18, 2018, the Company has repurchased and retired a total of 379,382 shares at an average price paid per share of $19.60.
  • The Company opened a new banking office in Gold River. The Company closed two banking offices – one in Rancho Cordova and one in Fair Oaks during the second quarter of 2019, and incurred approximately $51,000 in consolidation/closing costs during the quarter.

“This quarter we improved net income, grew loans and enhanced client relationships. With the addition of our new Market Executives in July, we expect this momentum to continue throughout our market area,” stated James M. Ford, President & CEO of Central Valley Community Bank and Central Valley Community Bancorp. “Given our strong capital levels, the Board of Directors authorized a new stock repurchase program for an additional $10 million of common stock.”

Net income for the six months ended June 30, 2019 increased 10.21%, primarily driven by an increase in net interest income and an increase in net realized gains on sales and calls of investment securities, partially offset by an increase in non-interest expense and an increase in the provision for income taxes, compared to the six months ended June 30, 2018. During the six months ended June 30, 2019, the Company recorded a $275,000 provision for credit losses, compared to a $50,000 provision during the six months ended June 30, 2018. Net interest income before the provision for credit losses for the six months ended June 30, 2019 was $31,781,000, compared to $30,823,000 for the six months ended June 30, 2018, an increase of $958,000 or 3.11%. The impact to interest income from the accretion of the loan marks on acquired loans was $451,000 and $590,000 for the six months ended June 30, 2019 and 2018, respectively. In addition, net interest income before the provision for credit losses for the six months ended June 30, 2019 was benefited by approximately $183,000 in nonrecurring income from prepayment penalties and payoff of loans previously on nonaccrual status, as compared to a $175,000 in nonrecurring income for the six months ended June 30, 2018. Excluding these reversals and benefits, net interest income for the six months ended June 30, 2019 increased by $950,000 compared to the six months ended June 30, 2018.

During the six months ended June 30, 2019, the Company’s shareholders’ equity increased $11,942,000, or 5.43%, compared to December 31, 2018. The increase in shareholders’ equity was driven by the retention of earnings, net of dividends paid, and an increase in net unrealized gains on available-for-sale (AFS) securities recorded, net of estimated taxes, in accumulated other comprehensive income (AOCI).

Return on average equity (ROE) for the six months ended June 30, 2019 was 10.06%, compared to 9.84% for the six months ended June 30, 2018. The increase in ROE reflects increase in net income, notwithstanding an increase in shareholders’ equity. The Company declared and paid $0.21 and $0.14 per share in cash dividends to holders of common stock during the six months ended June 30, 2019 and 2018, respectively. Annualized return on average assets (ROA) was 1.45% for the six months ended June 30, 2019 and 1.28% for the six months ended June 30, 2018. During the six months ended June 30, 2019, the Company’s total assets increased 4.90%, and total liabilities increased 4.81%, compared to December 31, 2018.

Non-performing assets decreased by $298,000, or 10.88%, to $2,442,000 at June 30, 2019, compared to $2,740,000 at December 31, 2018. During the six months ended June 30, 2019, the Company recorded $26,000 in net loan recoveries, compared to $92,000 in net recoveries for the six months ended June 30, 2018. The net charge-off (recovery) ratio, which reflects annualized net recoveries to average loans, was (0.01)% for the six months ended June 30, 2019, compared to (0.02)% for the same period in 2018. Total non-performing assets were 0.15% and 0.18% of total assets as of June 30, 2019 and December 31, 2018, respectively.

At June 30, 2019, the allowance for credit losses was $9,405,000, compared to $9,104,000 at December 31, 2018, a net increase of $301,000 reflecting the net recoveries and provision during the period. The allowance for credit losses as a percentage of total loans was 0.98% and 0.99% as of June 30, 2019 and December 31, 2018, respectively. Total loans includes loans acquired in the acquisitions of Folsom Lake Bank on October 1, 2017, Sierra Vista Bank on October 1, 2016 and Visalia Community Bank on July 1, 2013 that, at their respective acquisition dates, were recorded at fair value and did not have a related allowance for credit losses. The recorded value of acquired loans totaled $168,792,000 at June 30, 2019 and $189,719,000 at December 31, 2018. Excluding these acquired loans from the calculation, the allowance for credit losses to total gross loans was 1.19% and 1.25% as of June 30, 2019 and December 31, 2018, respectively, and general reserves associated with non-impaired loans to total non-impaired loans was 1.18% and 1.25%, respectively. The Company believes the allowance for credit losses is adequate to provide for probable incurred credit losses within the loan portfolio at June 30, 2019.

The Company’s net interest margin (fully tax equivalent basis) was 4.56% for the six months ended June 30, 2019, compared to 4.33% for the six months ended June 30, 2018. The increase in net interest margin in the period-to-period comparison resulted from the increase in the effective yield on interest earning deposits in other banks and Federal Funds sold, the increase in the effective yield on average investment securities, and the increase in the yield on the Company’s loan portfolio.

For the six months ended June 30, 2019, the effective yield on average total earning assets increased 32 basis points to 4.75% compared to 4.43% for the six months ended June 30, 2018, while the cost of average total interest-bearing liabilities increased to 0.34% for the six months ended June 30, 2019 as compared to 0.17% for the six months ended June 30, 2018. Over the same periods, the cost of average total deposits increased to 0.14% for the six months ended June 30, 2019 compared to 0.07% for the same period in 2018.

For the six months ended June 30, 2019, the Company’s average investment securities, including interest-earning deposits in other banks and Federal funds sold, totaled $496,076,000, a decrease of $58,933,000, or 10.62%, compared to the six months June 30, 2018. The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, increased to 3.15% for the six months ended June 30, 2019, compared to 2.72% for the six months ended June 30, 2018.

Total average loans (including nonaccrual), which generally yield higher rates than investment securities, increased $12,044,000, from $910,630,000 for the six months ended June 30, 2018 to $922,674,000 for the six months ended June 30, 2019. The effective yield on average loans increased to 5.59% for the six months ended June 30, 2019, compared to 5.46% for the six months ended June 30, 2018.

Total average assets for the six months ended June 30, 2019 was $1,562,541,000 compared to $1,606,475,000 for the six months ended June 30, 2018, a decrease of $43,934,000 or 2.73%. During the six months ended June 30, 2019 and 2018, the loan-to-deposit ratio was 74.20% and 70.60%, respectively. Total average deposits decreased $78,278,000 or 5.75% to $1,282,041,000 for the six months ended June 30, 2019, compared to $1,360,319,000 for the six months ended June 30, 2018. Average interest-bearing deposits decreased $70,404,000, or 8.69%, and average non-interest bearing demand deposits decreased $7,874,000, or 1.43%, for the six months ended June 30, 2019, compared to the six months ended June 30, 2018. The Company’s ratio of average non-interest bearing deposits to total deposits was 42.28% for the six months ended June 30, 2019, compared to 40.42% for the six months ended June 30, 2018.

Non-interest income for the six months ended June 30, 2019 increased by $2,117,000 to $7,574,000, compared to $5,457,000 for the six months ended June 30, 2018, primarily driven by an increase of $2,614,000 in net realized gains on sales and calls of investment securities, an increase of $123,000 in other income, and an increase in loan placement fees of $20,000, offset by decrease in gain on sale of credit card portfolio of $578,000 and a decrease in service charge income of $78,000.

Non-interest expense for the six months ended June 30, 2019 increased $572,000, or 2.50%, to $23,439,000 compared to $22,867,000 for the six months ended June 30, 2018. The net increase year over year resulted from increases in information technology of $948,000, salaries and employee benefits of $153,000, and directors’ expenses of $146,000, offset by decreases in acquisition and integration expenses of $217,000, professional services of $194,000, data processing expenses of $54,000, and occupancy and equipment expenses of $183,000 in 2019 compared to 2018. The increase in the information technology expenses was a result of the Company outsourcing its network maintenance and IT support during the fourth quarter of 2018. The increase in the directors’ expenses was related to the change in the discount rate used to calculate the liability for deferred compensation and split dollar plans.

The Company recorded an income tax provision of $4,338,000 for the six months ended June 30, 2019, compared to $3,107,000 for the six months ended June 30, 2018. The effective tax rate for the six months June 30, 2019 was 27.73% compared to 23.25% for the six months June 30, 2018. The increase in the effective rate was a result of a decrease in tax-exempt interest.

Quarter Ended June 30, 2019

For the quarter ended June 30, 2019, the Company reported unaudited consolidated net income of $6,087,000 and earnings per diluted common share of $0.45, compared to consolidated net income of $4,965,000 and $0.36 per diluted share for the same period in 2018. The increase in net income during the second quarter of 2019 compared to the same period in 2018 was primarily due to an increase in net interest income of $549,000, and an increase in non-interest income of $1,912,000, offset by an increase in the provision for income taxes of $816,000, and an increase in total non-interest expenses of $273,000. The effective tax rate increased to 28.15% from 24.01% for the quarters ended June 30, 2019 and June 30, 2018, respectively. Net income for the immediately trailing quarter ended March 31, 2019 was $5,216,000, or $0.38 per diluted common share.

Annualized return on average equity (ROE) for the second quarter of 2019 was 10.68%, compared to 9.53% for the same period of 2018. The increase in ROE reflects increase in net income, notwithstanding an increase in shareholders’ equity. Annualized return on average assets (ROA) was 1.54% for the second quarter of 2019 compared to 1.25% for the same period in 2018. This increase is due to an increase in net income notwithstanding a decrease in average assets.

In comparing the second quarter of 2019 to the second quarter of 2018, average total loans increased by $20,784,000, or 2.26%. During the second quarter of 2019, the Company recorded net loan charge-off of $13,000 compared to $82,000 net loan recoveries for the same period in 2018. The net charge-off (recovery) ratio, which reflects annualized net charge-offs to average loans, was 0.01% for the quarter ended June 30, 2019 compared to (0.04)% for the quarter ended June 30, 2018.

Average total deposits for the second quarter of 2019 decreased $62,091,000 or 4.65% to $1,274,159,000 compared to $1,336,250,000 for the same period of 2018. In comparing the second quarter of 2019 to the second quarter of 2018, average borrowed funds increased $29,253,000 or 118.44% to $53,952,000 compared to $24,699,000.

The Company’s net interest margin (fully tax equivalent basis) was 4.50% for the quarter ended June 30, 2019, compared to 4.35% for the quarter ended June 30, 2018. Net interest income, before provision for credit losses, increased $549,000, or 3.57%, to $15,946,000 for the second quarter of 2019, compared to $15,397,000 for the same period in 2018. The accretion of the loan marks on acquired loans increased interest income by $192,000 and $332,000 during the quarters ended June 30, 2019 and 2018, respectively. Net interest income during the second quarters of 2019 and 2018 benefited by approximately $56,000 and $196,000, respectively, from prepayment penalties and payoff of loans previously on nonaccrual status. The net interest margin period-to-period comparisons were impacted by an increase in the yield on the average investment securities and the loan portfolio. Over the same periods, the cost of total deposits increased to 0.15% from 0.08%.

For the quarter ended June 30, 2019, the Company’s average investment securities, including interest-earning deposits in other banks and Federal funds sold, decreased by $36,160,000, or 6.79%, compared to the quarter ended June 30, 2018, and increased by $540,000, or 0.11%, compared to the quarter ended March 31, 2019.

The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, was 3.17% for the quarter ended June 30, 2019, compared to 2.67% for the quarter ended June 30, 2018 and 3.13% for the quarter ended March 31, 2019. Total average loans, which generally yield higher rates than investment securities, increased by $20,784,000 to $939,055,000 for the quarter ended June 30, 2019, from $918,271,000 for the quarter ended June 30, 2018 and increased by $32,944,000 from $906,111,000 for the quarter ended March 31, 2019. The effective yield on average loans was 5.55% for the quarter ended June 30, 2019, compared to 5.49% and 5.64% for the quarters ended June 30, 2018 and March 31, 2019, respectively.

Total average assets for the quarter ended June 30, 2019 were $1,584,122,000 compared to $1,588,644,000 for the quarter ended June 30, 2018 and $1,540,721,000 for the quarter ended March 31, 2019, a decrease of $4,522,000 and an increase of $43,401,000, or (0.28)% and 2.82%, respectively.

Total average deposits decreased $62,091,000, or 4.65%, to $1,274,159,000 for the quarter ended June 30, 2019, compared to $1,336,250,000 for the quarter ended June 30, 2018. Total average deposits decreased $15,853,000, or 1.23%, for the quarter ended June 30, 2019, compared to $1,290,012,000 for the quarter ended March 31, 2019. The Company’s ratio of average non-interest bearing deposits to total deposits was 42.45% for the quarter ended June 30, 2019, compared to 40.85% and 42.10% for the quarters ended June 30, 2018 and March 31, 2019, respectively.

Non-interest income increased $1,912,000, or 71.18%, to $4,598,000 for the second quarter of 2019 compared to $2,686,000 for the same period in 2018. For the quarter ended June 30, 2019, non-interest income included $2,459,000 net realized gains on sales and calls of investment securities compared to net realized gains of $82,000 for the same period in 2018, a $2,377,000 increase. During the second quarter of 2019 loan placement fees increased $47,000, other income increased by $61,000, and interchange fees increased $4,000, offset by a decrease in the gain on sale of credit card portfolio of $578,000, and a decrease in service charge income of $13,000 compared to the same period in 2018. Non-interest income for the quarter ended June 30, 2019 increased by $1,622,000 to $4,598,000, compared to $2,976,000 for the quarter ended March 31, 2019. The increase compared to the trailing quarter was primarily a $1,407,000 increase in net realized gains on sales and calls of investment securities, a $23,000 increase in service charges, and a $54,000 increase in other income.

Non-interest expense for the quarter ended June 30, 2019 increased $273,000, or 2.37%, to $11,772,000 compared to $11,499,000 for the quarter ended June 30, 2018. The net increase quarter over quarter was a result of an increase of $383,000 in information technology expenses, an increase of $80,000 in amortization of core deposit intangibles, an increase in salaries and employee benefits of $79,000, and an increase of $10,000 in advertising expenses, partially offset by a decrease in occupancy and equipment expenses of $125,000, a decrease in professional services of $83,000, a decrease of $26,000 in regulatory assessments, and a decrease of $114,000 in operating losses.

Non-interest expense for the quarter ended June 30, 2019 increased by $105,000 compared to $11,667,000 for the trailing quarter ended March 31, 2019. The increase compared to the trailing quarter was primarily due to an increase in salaries and employee benefits of $422,000, and an increase of $17,000 in directors’ expense, partially offset by a $172,000 decrease in information technology expenses, a $71,000 decrease in other non-interest expenses, and a decrease in occupancy and equipment expense of $27,000.

The majority of the $71,000 decrease in other non-interest expenses was comprised of a decrease of $112,000 in credit card operation expenses and a $40,000 decrease in personnel costs, offset by a $24,000 increase in stationery and supplies. The increase in salaries and employee benefits of $422,000 was the result of increased salaries and interest on deferred compensation plans as a result of change in discount rate.

The Company recorded an income tax provision of $2,385,000 for the quarter ended June 30, 2019, compared to $1,569,000 for the quarter ended June 30, 2018. The effective tax rate for the quarter ended June 30, 2019 was 28.15% compared to 24.01% for the same period in 2018. The increase in the effective tax rate was the result of a decrease in tax exempt interest.

Quarterly Dividend Announcement

On July 17, 2019, the Board of Directors of the Company declared an increase in the regular quarterly cash dividend to $0.11 per share on the Company’s common stock. The dividend is payable on August 16, 2019 to shareholders of record as of August 2, 2019.

Stock Repurchase Plan Announcement

The Board of Directors of the Company also approved the adoption of a program to effect repurchases of the Company’s common stock. Under the program, the Company may repurchase up to $10 million of the Company’s outstanding shares of common stock, which represents approximately 3% of the Company’s outstanding shares of common stock, or approximately 479,616 shares based on the closing stock price of the Company’s common stock on July 16, 2019 of $20.85. The share repurchase program will begin on July 22, 2019 and end on July 17, 2020. The shares will be repurchased in open market transactions through brokers, subject to availability. All such transactions will be structured to comply with SEC Rule 10b-18, and all shares repurchased will be retired.

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 operates 20 full-service offices throughout California’s San Joaquin Valley and Greater Sacramento Region. Additionally, the Bank maintains Commercial Real Estate, Agribusiness and SBA Lending Departments. Central Valley Investment Services are provided by Raymond James Financial, Inc.

Members of Central Valley Community Bancorp’s and the Bank’s Board of Directors are: Daniel J. Doyle (Chairman), Daniel N. Cunningham (Vice Chairman), Edwin S. Darden, Jr., F. T. “Tommy” Elliott, IV, James M. Ford, Robert J. Flautt, Gary D. Gall, Steven D. McDonald, Louis C. McMurray, Karen Musson, and William S. Smittcamp. Sidney B. Cox is Director Emeritus.

More information about Central Valley Community Bancorp and Central Valley Community Bank can be found at www.cvcb.com. Also, visit Central Valley Community Bank on Twitter and Facebook.

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; (3) a decline in economic conditions at the international, national or local level on the Company’s results of operations; (4) the Company’s ability to continue its internal growth at historical rates; (5) the Company’s ability to maintain its net interest margin; (6) the quality of the Company’s earning assets; (7) changes in the regulatory environment; (8) fluctuations in the real estate market; (9) changes in business conditions and inflation; (10) changes in securities markets; and (11) the other risks set forth in the Company’s reports filed with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K for the year ended December 31, 2018. 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

(Unaudited)

 

 

 

June 30,

 

December 31,

 

June 30,

(In thousands, except share amounts)

 

2019

 

2018

 

2018

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Cash and due from banks

 

$

 

33,787

 

 

$

 

24,954

 

 

$

 

29,811

 

Interest-earning deposits in other banks

 

 

14,739

 

 

 

6,725

 

 

 

16,812

 

Federal funds sold

 

 

77

 

 

 

48

 

 

 

7

 

Total cash and cash equivalents

 

 

48,603

 

 

 

31,727

 

 

 

46,630

 

Available-for-sale investment securities

 

 

476,211

 

 

 

463,905

 

 

 

484,001

 

Equity securities

 

 

7,458

 

 

 

7,254

 

 

 

7,254

 

Loans, less allowance for credit losses of $9,405, $9,104 and $8,920 at June 30, 2019, December 31, 2018, and June 30, 2018, respectively

 

 

950,806

 

 

 

909,591

 

 

 

925,914

 

Bank premises and equipment, net

 

 

7,742

 

 

 

8,484

 

 

 

9,131

 

Bank owned life insurance

 

 

29,863

 

 

 

28,502

 

 

 

28,154

 

Federal Home Loan Bank stock

 

 

6,062

 

 

 

6,843

 

 

 

6,843

 

Goodwill

 

 

53,777

 

 

 

53,777

 

 

 

53,777

 

Core deposit intangibles

 

 

2,225

 

 

 

2,572

 

 

 

2,840

 

Accrued interest receivable and other assets

 

 

30,480

 

 

 

25,181

 

 

 

25,359

 

Total assets

 

$

 

1,613,227

 

 

$

 

1,537,836

 

 

$

 

1,589,903

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

Non-interest bearing

 

$

 

558,000

 

 

$

 

550,657

 

 

$

 

554,465

 

Interest bearing

 

 

736,087

 

 

 

731,641

 

 

 

769,746

 

Total deposits

 

 

1,294,087

 

 

 

1,282,298

 

 

 

1,324,211

 

Short-term borrowings

 

 

54,000

 

 

 

10,000

 

 

 

30,000

 

Junior subordinated deferrable interest debentures

 

 

5,155

 

 

 

5,155

 

 

 

5,155

 

Accrued interest payable and other liabilities

 

 

28,305

 

 

 

20,645

 

 

 

19,353

 

Total liabilities

 

 

1,381,547

 

 

 

1,318,098

 

 

 

1,378,719

 

Shareholders’ equity:

 

 

 

 

 

 

Preferred stock, no par value; 10,000,000 shares authorized, none issued and outstanding

 

 

 

 

 

 

Common stock, no par value; 80,000,000 shares authorized; issued and outstanding: 13,488,983, 13,754,965, and 13,785,591, at June 30, 2019, December 31, 2018, and June 30, 2018, respectively

 

 

98,210

 

 

 

103,851

 

 

 

104,226

 

Retained earnings

 

 

128,723

 

 

 

120,294

 

 

 

111,545

 

Accumulated other comprehensive income (loss), net of tax

 

 

4,747

 

 

 

(4,407

)

 

 

(4,587

)

Total shareholders’ equity

 

 

231,680

 

 

 

219,738

 

 

 

211,184

 

Total liabilities and shareholders’ equity

 

$

 

1,613,227

 

 

$

 

1,537,836

 

 

$

 

1,589,903

 

 

CENTRAL VALLEY COMMUNITY BANCORP

CONSOLIDATED INCOME STATEMENTS

(Unaudited)

 

 

 

For the Three Months Ended,

 

For the Six Months Ended

 

 

June 30,

 

March 31,

 

June 30,

 

June 30,

(In thousands, except share and per share amounts)

 

2019

 

2019

 

2018

 

2019

 

2018

INTEREST INCOME:

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

12,955

 

 

$

 

12,554

 

 

$

 

12,519

 

 

$

 

25,509

 

 

$

 

24,525

 

Interest on deposits in other banks

 

 

59

 

 

 

150

 

 

 

44

 

 

 

209

 

 

 

142

 

Interest and dividends on investment securities:

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

3,337

 

 

 

3,023

 

 

 

2,185

 

 

 

6,360

 

 

 

4,744

 

Exempt from Federal income taxes

 

 

429

 

 

 

562

 

 

 

1,045

 

 

 

991

 

 

 

2,112

 

Total interest income

 

 

16,780

 

 

 

16,289

 

 

 

15,793

 

 

 

33,069

 

 

 

31,523

 

INTEREST EXPENSE:

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

469

 

 

 

393

 

 

 

252

 

 

 

862

 

 

 

490

 

Interest on junior subordinated deferrable interest debentures

 

 

55

 

 

 

57

 

 

 

52

 

 

 

112

 

 

 

95

 

Other

 

 

310

 

 

 

4

 

 

 

92

 

 

 

314

 

 

 

115

 

Total interest expense

 

 

834

 

 

 

454

 

 

 

396

 

 

 

1,288

 

 

 

700

 

Net interest income before provision for credit losses

 

 

15,946

 

 

 

15,835

 

 

 

15,397

 

 

 

31,781

 

 

 

30,823

 

PROVISION FOR (REVERSAL OF) CREDIT LOSSES

 

 

300

 

 

 

(25

)

 

 

50

 

 

 

275

 

 

 

50

 

Net interest income after provision for credit losses

 

 

15,646

 

 

 

15,860

 

 

 

15,347

 

 

 

31,506

 

 

 

30,773

 

NON-INTEREST INCOME:

 

 

 

 

 

 

 

 

 

 

Service charges

 

 

713

 

 

 

690

 

 

 

726

 

 

 

1,403

 

 

 

1,481

 

Net realized gains on sale of credit card portfolio

 

 

 

 

 

 

578

 

 

 

 

 

578

 

Appreciation in cash surrender value of bank owned life insurance

 

 

190

 

 

 

171

 

 

 

176

 

 

 

361

 

 

 

347

 

Interchange fees

 

 

384

 

 

 

343

 

 

 

380

 

 

 

727

 

 

 

725

 

Loan placement fees

 

 

220

 

 

 

139

 

 

 

173

 

 

 

359

 

 

 

339

 

Net realized gains on sales and calls of investment securities

 

 

2,459

 

 

 

1,052

 

 

 

82

 

 

 

3,511

 

 

 

897

 

Federal Home Loan Bank dividends

 

 

118

 

 

 

121

 

 

 

118

 

 

 

239

 

 

 

239

 

Other income

 

 

514

 

 

 

460

 

 

 

453

 

 

 

974

 

 

 

851

 

Total non-interest income

 

 

4,598

 

 

 

2,976

 

 

 

2,686

 

 

 

7,574

 

 

 

5,457

 

NON-INTEREST EXPENSES:

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

6,912

 

 

 

6,490

 

 

 

6,833

 

 

 

13,402

 

 

 

13,249

 

Occupancy and equipment

 

 

1,452

 

 

 

1,479

 

 

 

1,577

 

 

 

2,931

 

 

 

3,114

 

Acquisition and integration expenses

 

 

 

 

 

 

 

 

 

 

217

 

Professional services

 

 

280

 

 

 

327

 

 

 

363

 

 

 

607

 

 

 

801

 

Data processing expense

 

 

401

 

 

 

395

 

 

 

370

 

 

 

796

 

 

 

850

 

Directors’ expenses

 

 

193

 

 

 

176

 

 

 

133

 

 

 

369

 

 

 

223

 

ATM/Debit card expenses

 

 

186

 

 

 

191

 

 

 

176

 

 

 

377

 

 

 

377

 

Information technology

 

 

605

 

 

 

777

 

 

 

222

 

 

 

1,382

 

 

 

434

 

Regulatory assessments

 

 

134

 

 

 

152

 

 

 

160

 

 

 

286

 

 

 

322

 

Advertising

 

 

198

 

 

 

202

 

 

 

188

 

 

 

400

 

 

 

377

 

Internet banking expenses

 

 

199

 

 

 

194

 

 

 

175

 

 

 

393

 

 

 

370

 

Amortization of core deposit intangibles

 

 

173

 

 

 

174

 

 

 

93

 

 

 

347

 

 

 

187

 

Other expense

 

 

1,039

 

 

 

1,110

 

 

 

1,209

 

 

 

2,149

 

 

 

2,346

 

Total non-interest expenses

 

 

11,772

 

 

 

11,667

 

 

 

11,499

 

 

 

23,439

 

 

 

22,867

 

Income before provision for income taxes

 

 

8,472

 

 

 

7,169

 

 

 

6,534

 

 

 

15,641

 

 

 

13,363

 

PROVISION FOR INCOME TAXES

 

 

2,385

 

 

 

1,953

 

 

 

1,569

 

 

 

4,338

 

 

 

3,107

 

Net income

 

$

6,087

 

 

$

 

5,216

 

 

$

 

4,965

 

 

$

 

11,303

 

 

$

 

10,256

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

0.45

 

 

$

 

0.38

 

 

$

 

0.36

 

 

$

 

0.84

 

 

$

 

0.75

 

Weighted average common shares used in basic computation

 

 

13,533,724

 

 

 

13,646,489

 

 

 

13,692,358

 

 

 

13,515,752

 

 

 

13,681,229

 

Diluted earnings per common share

 

$

0.45

 

 

$

 

0.38

 

 

$

 

0.36

 

 

$

 

0.83

 

 

$

 

0.74

 

Weighted average common shares used in diluted computation

 

 

13,635,834

 

 

 

13,755,615

 

 

 

13,823,278

 

 

 

13,612,866

 

 

 

13,814,087

 

Cash dividends per common share

 

$

0.11

 

 

$

 

0.10

 

 

$

 

0.07

 

 

$

 

0.21

 

 

$

 

0.14

 

 

CENTRAL VALLEY COMMUNITY BANCORP

CONDENSED CONSOLIDATED INCOME STATEMENTS

(Unaudited)

 

 

 

Jun. 30

 

Mar. 31

 

Dec. 31,

 

Sep. 30

 

Jun. 30,

For the three months ended

 

2019

 

2019

 

2018

 

2018

 

2018

(In thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

Net interest income

 

$

 

15,946

 

 

$

 

15,835

 

 

$

 

15,973

 

 

$

 

15,907

 

 

$

 

15,397

 

Provision for (reversal of) credit losses

 

 

300

 

 

 

(25

)

 

 

 

 

 

 

50

 

Net interest income after provision for credit losses

 

 

15,646

 

 

 

15,860

 

 

 

15,973

 

 

 

15,907

 

 

 

15,347

 

Total non-interest income

 

 

4,598

 

 

 

2,976

 

 

 

2,404

 

 

 

2,463

 

 

 

2,686

 

Total non-interest expense

 

 

11,772

 

 

 

11,667

 

 

 

11,410

 

 

 

10,791

 

 

 

11,499

 

Provision for income taxes

 

 

2,385

 

 

 

1,953

 

 

 

1,686

 

 

 

1,827

 

 

 

1,569

 

Net income

 

$

 

6,087

 

 

$

 

5,216

 

 

$

 

5,281

 

 

$

 

5,752

 

 

$

 

4,965

 

Basic earnings per common share

 

$

 

0.45

 

 

$

 

0.38

 

 

$

 

0.38

 

 

$

 

0.42

 

 

$

 

0.36

 

Weighted average common shares used in basic computation

 

 

13,533,724

 

 

 

13,646,489

 

 

 

13,721,087

 

 

 

13,715,141

 

 

 

13,692,358

 

Diluted earnings per common share

 

$

 

0.45

 

 

$

 

0.38

 

 

$

 

0.38

 

 

$

 

0.42

 

 

$

 

0.36

 

Weighted average common shares used in diluted computation

 

 

13,635,834

 

 

 

13,755,615

 

 

 

13,834,662

 

 

 

13,836,828

 

 

 

13,823,278

 

 

CENTRAL VALLEY COMMUNITY BANCORP

SELECTED RATIOS

(Unaudited)

 

 

 

Jun. 30,

 

Mar. 31,

 

Dec. 31,

 

Sept. 30,

 

Jun. 30,

As of and for the three months ended

 

2019

 

2019

 

2018

 

2018

 

2018

(Dollars in thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses to total loans

 

 

0.98

%

 

 

0.99

%

 

 

0.99

%

 

 

0.99

%

 

 

0.95

%

Non-performing assets to total assets

 

 

0.15

%

 

 

0.10

%

 

 

0.18

%

 

 

0.27

%

 

 

0.26

%

Total non-performing assets

 

$

 

2,442

 

 

$

 

1,548

 

 

$

 

2,740

 

 

$

 

4,133

 

 

$

 

4,092

 

Total nonaccrual loans

 

$

 

2,442

 

 

$

 

1,548

 

 

$

 

2,740

 

 

$

 

4,133

 

 

$

 

4,092

 

Net loan charge-offs (recoveries)

 

$

 

13

 

 

$

 

(39

)

 

$

 

(79

)

 

$

 

(105

)

 

$

 

(82

)

Net charge-offs (recoveries) to average loans (annualized)

 

 

0.01

%

 

 

(0.02

)%

 

 

(0.03

)%

 

 

(0.05

)%

 

 

(0.04

)%

Book value per share

 

$

 

17.18

 

 

$

 

16.63

 

 

$

 

15.98

 

 

$

 

15.47

 

 

$

 

15.32

 

Tangible book value per share

 

$

 

13.02

 

 

$

 

12.52

 

 

$

 

11.87

 

 

$

 

11.37

 

 

$

 

11.21

 

Tangible common equity

 

$

 

175,678

 

 

$

 

171,279

 

 

$

 

163,389

 

 

$

 

156,911

 

 

$

 

154,567

 

Cost of total deposits

 

 

0.15

%

 

 

0.12

%

 

 

0.10

%

 

 

0.10

%

 

 

0.08

%

Interest and dividends on investment securities exempt from Federal income taxes

 

$

 

429

 

 

$

 

562

 

 

$

 

530

 

 

$

 

896

 

 

$

 

1,045

 

Net interest margin (calculated on a fully tax equivalent basis) (1)

 

 

4.50

%

 

 

4.63

%

 

 

4.55

%

 

 

4.53

%

 

 

4.35

%

Return on average assets (2)

 

 

1.54

%

 

 

1.35

%

 

 

1.37

%

 

 

1.48

%

 

 

1.25

%

Return on average equity (2)

 

 

10.68

%

 

 

9.42

%

 

 

9.82

%

 

 

10.80

%

 

 

9.53

%

Loan to deposit ratio

 

 

74.20

%

 

 

71.32

%

 

 

71.64

%

 

 

71.49

%

 

 

70.60

%

Efficiency ratio

 

 

63.78

%

 

 

63.92

%

 

 

60.80

%

 

 

58.65

%

 

 

62.99

%

Tier 1 leverage – Bancorp

 

 

11.43

%

 

 

11.69

%

 

 

11.48

%

 

 

11.16

%

 

 

10.59

%

Tier 1 leverage – Bank

 

 

11.36

%

 

 

11.64

%

 

 

11.32

%

 

 

11.06

%

 

 

10.44

%

Common equity tier 1 – Bancorp

 

 

14.72

%

 

 

15.13

%

 

 

15.13

%

 

 

15.17

%

 

 

14.35

%

Common equity tier 1 – Bank

 

 

15.08

%

 

 

15.50

%

 

 

15.38

%

 

 

15.51

%

 

 

14.59

%

Tier 1 risk-based capital – Bancorp

 

 

15.16

%

 

 

15.58

%

 

 

15.59

%

 

 

15.64

%

 

 

14.80

%

Tier 1 risk-based capital – Bank

 

 

15.08

%

 

 

15.50

%

 

 

15.38

%

 

 

15.51

%

 

 

14.59

%

Total risk-based capital – Bancorp

 

 

16.00

%

 

 

16.41

%

 

 

16.44

%

 

 

16.51

%

 

 

15.64

%

Total risk based capital – Bank

 

 

15.91

%

 

 

16.34

%

 

 

16.23

%

 

 

16.37

%

 

 

15.43

%

(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

 

For the Six Months Ended

AVERAGE AMOUNTS

 

June 30,

 

March 31,

 

June 30,

 

June 30,

 

June 30,

(Dollars in thousands)

 

2019

 

2019

 

2018

 

2019

 

2018

Federal funds sold

 

$

119

 

 

$

105

 

 

$

35

 

 

$

112

 

 

$

48

 

Interest-bearing deposits in other banks

 

11,195

 

 

24,571

 

 

11,037

 

 

17,846

 

 

18,208

 

Investments

 

485,031

 

 

471,129

 

 

521,433

 

 

478,118

 

 

536,753

 

Loans (1)

 

936,602

 

 

903,415

 

 

914,236

 

 

920,099

 

 

906,566

 

Earning assets

 

1,432,947

 

 

1,399,220

 

 

1,446,741

 

 

1,416,175

 

 

1,461,575

 

Allowance for credit losses

 

(9,234

)

 

(9,124

)

 

(8,822

)

 

(9,179

)

 

(8,806

)

Nonaccrual loans

 

2,453

 

 

2,696

 

 

4,035

 

 

2,575

 

 

4,064

 

Other non-earning assets

 

157,956

 

 

147,929

 

 

146,690

 

 

152,970

 

 

149,642

 

Total assets

 

$

1,584,122

 

 

$

1,540,721

 

 

$

1,588,644

 

 

$

1,562,541

 

 

$

1,606,475

 

 

 

 

 

 

 

 

 

 

 

 

Interest bearing deposits

 

$

733,291

 

 

$

746,875

 

 

$

790,396

 

 

$

740,045

 

 

$

810,449

 

Other borrowings

 

53,952

 

 

5,766

 

 

24,699

 

 

29,992

 

 

17,837

 

Total interest-bearing liabilities

 

787,243

 

 

752,641

 

 

815,095

 

 

770,037

 

 

828,286

 

Non-interest bearing demand deposits

 

540,868

 

 

543,137

 

 

545,854

 

 

541,996

 

 

549,870

 

Non-interest bearing liabilities

 

28,078

 

 

23,433

 

 

19,221

 

 

25,766

 

 

19,783

 

Total liabilities

 

1,356,189

 

 

1,319,211

 

 

1,380,170

 

 

1,337,799

 

 

1,397,939

 

Total equity

 

227,933

 

 

221,510

 

 

208,474

 

 

224,742

 

 

208,536

 

Total liabilities and equity

 

$

1,584,122

 

 

$

1,540,721

 

 

$

1,588,644

 

 

$

1,562,541

 

 

$

1,606,475

 

 

 

 

 

 

 

 

 

 

 

 

AVERAGE RATES

 

 

 

 

 

 

 

 

 

 

Federal funds sold

2.40

%

 

2.40

%

 

1.78

%

 

2.39

%

 

1.61

%

Interest-earning deposits in other banks

 

2.11

%

 

2.44

%

 

1.63

%

 

2.34

%

 

1.56

%

Investments

 

3.20

%

 

3.17

%

 

2.69

%

 

3.18

%

 

2.76

%

Loans (3)

 

5.55

%

 

5.64

%

 

5.49

%

 

5.59

%

 

5.46

%

Earning assets

 

4.73

%

 

4.76

%

 

4.46

%

 

4.75

%

 

4.43

%

Interest-bearing deposits

 

0.26

%

 

0.21

%

 

0.13

%

 

0.23

%

 

0.12

%

Other borrowings

 

2.71

%

 

4.23

%

 

2.33

%

 

2.84

%

 

2.35

%

Total interest-bearing liabilities

 

0.42

%

 

0.24

%

 

0.19

%

 

0.34

%

 

0.17

%

Net interest margin (calculated on a fully tax equivalent basis) (2)

 

4.50

%

 

4.63

%

 

4.35

%

 

4.56

%

 

4.33

%

(1)

Average loans do not include nonaccrual loans.

(2)

Calculated on a fully tax equivalent basis, which includes Federal tax benefits relating to income earned on municipal bonds of $114, $150, and $278, for the three months ended June 30, 2019, March 31, 2019, and June 30, 2018, respectively. The Federal tax benefits relating to income earned on municipal bonds totaled $264 and $562 for the six months ended June 30, 2019 and 2018, respectively.

(3)

Loan yield includes loan fees (costs) for the three months ended June 30, 2019, March 31, 2019, and June 30, 2018 of $(42), $26, and $107, respectively. Loan yield includes loan fees (costs) for the six months ended June 30, 2019 and 2018 of $(16) and $228, respectively.

 



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