Central Valley Community Bancorp Reports Earnings Results for the Quarter Ended March 31, 2012

Marketwired

FRESNO, CA--(Marketwire -04/18/12)- The Board of Directors of Central Valley Community Bancorp (Company) (NASDAQ: CVCY - News), the parent company of Central Valley Community Bank (Bank), reported today unaudited consolidated net income of $1,713,000, and diluted earnings per common share of $0.17 for the quarter ended March 31, 2012, compared to $1,588,000 and $0.16 per diluted common share for the quarter ended March 31, 2011. Net income increased 7.87%, primarily driven by an increase in net interest income and a decrease in non-interest expense, partially offset by a higher provision for credit losses and decreases in non-interest income in 2012 compared to 2011. Non-performing assets decreased $2,039,000 or 14.13% to $12,395,000 at March 31, 2012, compared to $14,434,000 at December 31, 2011. Included in non-performing assets is $2,253,000 in OREO as of March 31, 2012 compared to none at December 31, 2011. Shareholders' equity increased $3,250,000, or 3.02% during the three months ended March 31, 2012.

During the first quarter of 2012, the Company's total assets decreased 1.69%, total liabilities decreased 2.37% and shareholders' equity increased 3.02% compared to the balances at December 31, 2011. Return on average equity (ROE) for the quarter ended March 31, 2012 was 6.19%, compared to 6.41% for the quarter ended March 31, 2011. The decrease in ROE reflects an increase in capital from an increase in other comprehensive income and an increase in retained earnings which were greater than the increase in net income. Return on average assets (ROA) was 0.82% for both of the quarters ended March 31, 2012 and March 31, 2011.

During the quarter ended March 31, 2012, the Company recorded a provision for credit losses of $400,000, compared to $100,000 for the quarter ended March 31, 2011. During the quarter ended March 31, 2012, the Company recorded $1,511,000 in net loan charge-offs, compared to $95,000 for the quarter ended March 31, 2011. The net charge-off ratio, which reflects net charge-offs to average loans, was 1.46% for the quarter ended March 31, 2012, compared to 0.09% for the same period in 2011. The Company also recorded OREO related expenses of $63,000 during 2012 compared to $9,000 for the quarter ended March 31, 2011.

At March 31, 2012, the allowance for credit losses stood at $10,285,000, compared to $11,396,000 at December 31, 2011, a net decrease of $1,111,000. The allowance for credit losses as a percentage of total loans was 2.52% at March 31, 2012, and 2.67% at December 31, 2011. The Company believes the allowance for credit losses is adequate to provide for probable losses inherent within the loan portfolio at March 31, 2012.

Total non-performing assets were $12,395,000, or 1.48% of total assets as of March 31, 2012 compared to $14,434,000 or 1.70% of total assets as of December 31, 2011. Total non-performing assets as of March 31, 2011 were $15,846,000 or 2.07% of total assets.

The following provides a reconciliation of the change in non-accrual loans for 2012.

 

                                         Transfer
                       Additions            to     Returns
              Balances  to Non-         Foreclosed   to             Balances
(Dollars in   December  accrual Net Pay Collateral Accrual  Charge    March
 thousands)   31, 2011   Loans   Downs   - OREO    Status    Offs   31, 2012
              -------- -------- -------  -------  -------- -------  --------
Non-accrual
 loans:
 Commercial
  and
  industrial  $    267 $      4 $   (11) $  (155) $     -- $   (81) $     24
 Real estate     2,787       --      (6)  (2,175)       --    (381)      225
 Equity loans
  and lines of
  credit           705       --    (125)      --        --     (76)      504
 Consumer           74       --      (1)      --        --      --        73
Restructured
 loans (non-
 accruing):
 Commercial
  and
  industrial        --       --      --       --        --      --        --
 Real estate     2,129       --     (15)      (7)       --  (1,103)    1,004
 Real estate
  construction
  and land
  development    6,823       --    (127)      --        --      --     6,696
 Equity loans
  and lines of
  credit         1,649       --     (33)      --        --      --     1,616
              -------- -------- -------  -------  -------- -------  --------
  Total non-
   accrual    $ 14,434 $      4 $  (318) $(2,337) $     -- $(1,641) $ 10,142
              ======== ======== =======  =======  ======== =======  ========

The following provides a summary of the change in the OREO balance for the quarter ended March 31, 2012:

 

                                                   Quarter Ended
                                                     March 31,
          (Dollars in thousands)                        2012
                                                   -------------
          Balance, Beginning of period             $          --
          Additions                                        2,337
          Dispositions                                       (82)
          Write-downs                                         --
          Net gain (loss) on disposition                      (2)
                                                   -------------
          Balance, End of period                   $       2,253
                                                   =============

The Company's net interest margin (fully tax equivalent basis) was 4.37% for the quarter ended March 31, 2012, compared to 4.67% for the quarter ended March 31, 2011. The decrease in net interest margin 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, 2012, the effective yield on total earning assets decreased 48 basis points to 4.66% compared to 5.14% for the quarter ended March 31, 2011, while the cost of total interest-bearing liabilities decreased 24 basis points to 0.43% compared to 0.67% for the quarter ended March 31, 2011. The amount of the Company's average investment securities, including interest-earning deposits in other banks and Federal funds sold, increased 26.70% while the effective yield on average investment securities decreased to 3.07% for the quarter ended March 31, 2012, compared to 3.45% for the quarter ended March 31, 2011. The decrease in yield in the Company's investment securities during 2012 resulted primarily from the purchase of lower yielding investment securities. Average loans, which generally yield higher rates than investment securities, decreased 3.18%, from $426,234,000 for the quarter ended March 31, 2011 to $412,680,000 for the quarter ended March 31, 2012. The effective yield on average loans decreased to 6.10% from 6.40% between March 31, 2011 and March 31, 2012. The cost of total deposits decreased 18 basis points to 0.27% for the quarter ended March 31, 2012, compared to 0.45% for the quarter ended March 31, 2011. Net interest income before the provision for credit losses for the quarter ended March 31, 2012 was $7,666,000, compared to $7,598,000 for the quarter ended March 31, 2011, an increase of $68,000 or 0.89%. Net interest income increased as a result of an increase in average earning assets combined with these yield changes, offset by an increase in interest-bearing liabilities.

Total average assets for the quarter ended March 31, 2012 were $835,548,000 compared to $770,729,000, for the quarter ended March 31, 2011, an increase of $64,819,000 or 8.41%. Total average loans were $412,680,000 for 2012, compared to $426,234,000 for 2011, representing a decrease of $13,554,000 or 3.18%. Total average investments, including deposits in other banks and Federal funds sold, increased to $346,950,000 for the quarter ended March 31, 2012, from $273,827,000 for the quarter ended March 31, 2011, representing an increase of $73,123,000 or 26.70%. Total average deposits increased $55,067,000 or 8.48% to $704,519,000 for the quarter ended March 31, 2012, compared to $649,452,000 for the quarter ended March 31, 2011. Average interest-bearing deposits increased $22,524,000, or 4.73%, and average non-interest bearing demand deposits increased $32,543,000, or 18.81%, for the quarter ended March 31, 2012, compared to the quarter ended March 31, 2011. The Company's ratio of average non-interest bearing deposits to total deposits was 29.18% for the quarter ended March 31, 2012, compared to 26.64% for the quarter ended March 31, 2011.

Non-interest income for the quarter ended March 31, 2012 was $1,658,000, compared to $1,748,000 for the quarter ended March 31, 2011. The $90,000 decrease resulted primarily from a decrease in gain on sale of other real estate owned of $547,000 during 2012, partially offset by a $363,000 increase in net realized gains on sales and calls of investment securities, a $71,000 increase in loan placement fees, and a $31,000 decrease in net impairment loss recognized in earnings.

Non-interest expense for the quarter ended March 31, 2012 decreased $235,000, or 3.29%, to $6,918,000 compared to $7,153,000 for the quarter ended March 31, 2011, primarily due to decreases in occupancy and equipment expenses of $53,000, advertising fees of $44,000, legal fees of $65,000, and regulatory assessments of $133,000, partially offset by increases in salaries and employee benefits of $51,000.

The Company recorded an income tax expense of $293,000 for the quarter ended March 31, 2012, compared to $505,000 for the quarter ended March 31, 2011. The effective tax rate for 2012 was 14.61% compared to 24.13% for the quarter ended March 31, 2011.

"The first quarter of 2012 shows consistency in earnings with recent quarters and continued improvement in asset quality. One large credit with a large specific reserve was moved from non-accrual status to OREO and has since been sold and is in escrow," stated Daniel J. Doyle, President and CEO of Central Valley Community Bancorp and Central Valley Community Bank.

"This first quarter of the year is also consistent with our historical trends of loan and deposit reductions compared to the fourth quarter due to the cash flow cycle of agricultural customers and payment of taxes. While there are some signs of modest economic improvement in our markets, interest income is still negatively impacted due to weak loan demand and aggressive pricing and terms by large financial institutions in term lending products. Combined with low yields on securities, and despite our low cost of funds and deposit growth, we continue to see net interest margin constraints on growth which impacts our normal levels of net income," 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, 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, 2011. 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


(In thousands, except share and per share          March 31,    December 31,
 amounts)                                             2012          2011
                                                 ------------- -------------
                                                  (Unaudited)
ASSETS
Cash and due from banks                          $      20,496 $      19,409
Interest-earning deposits in other banks                30,929        24,467
Federal funds sold                                         475           928
                                                 ------------- -------------
    Total cash and cash equivalents                     51,900        44,804
Available-for-sale investment securities
 (Amortized cost of $314,497 at March 31, 2012
 and $321,405 at December 31, 2011)                    323,748       328,413
Loans, less allowance for credit losses of
 $10,285 at March 31, 2012 and $11,396 at
 December 31, 2011                                     398,063       415,999
Bank premises and equipment, net                         6,272         5,872
Other real estate owned                                  2,253            --
Bank owned life insurance                               11,897        11,655
Federal Home Loan Bank stock                             2,893         2,893
Goodwill                                                23,577        23,577
Core deposit intangibles                                   733           783
Accrued interest receivable and other assets            13,348        15,027
                                                 ------------- -------------
    Total assets                                 $     834,684 $     849,023
                                                 ============= =============

LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
  Non-interest bearing                           $     205,825 $     208,025
  Interest bearing                                     497,571       504,961
                                                 ------------- -------------
    Total deposits                                     703,396       712,986
Short-term borrowings                                    4,000            --
Long-term debt                                              --         4,000
Junior subordinated deferrable interest
 debentures                                              5,155         5,155
Accrued interest payable and other liabilities          11,401        19,400
                                                 ------------- -------------
      Total liabilities                                723,952       741,541
                                                 ------------- -------------
Commitments and contingencies
Shareholders' equity:
Preferred stock, no par value, $1,000 per share
 liquidation preference; 10,000,000 shares
 authorized, Series C, issued and outstanding:
 7,000 shares at March 31, 2012 and December 31,
 2011                                                    7,000         7,000
Common stock, no par value; 80,000,000 shares
 authorized; issued and outstanding: 9,591,316
 at March 31, 2012 and 9,547,816 at December 31,
 2011                                                   40,857        40,552
Retained earnings                                       57,431        55,806
Accumulated other comprehensive income, net of
 tax                                                     5,444         4,124
                                                 ------------- -------------
      Total shareholders' equity                       110,732       107,482
                                                 ------------- -------------
      Total liabilities and shareholders' equity $     834,684 $     849,023
                                                 ============= =============



                      CENTRAL VALLEY COMMUNITY BANCORP
                     CONSOLIDATED STATEMENTS OF INCOME

                                                 For the Three Months Ended
                                                          March 31,
                                                 --------------------------
(In thousands, except share and earnings per
 share amounts)                                      2012          2011
                                                 ------------  ------------
                                                  (Unaudited)   (Unaudited)
INTEREST INCOME:
  Interest and fees on loans                     $      6,084  $      6,462
  Interest on deposits in other banks                      18            50
  Interest on Federal funds sold                           --             1
  Interest and dividends on investment
   securities:
    Taxable                                             1,073         1,097
    Exempt from Federal income taxes                    1,037           800
                                                 ------------  ------------
      Total interest income                             8,212         8,410
                                                 ------------  ------------
INTEREST EXPENSE:
  Interest on deposits                                    481           717
  Interest on junior subordinated deferrable
   interest debentures                                     29            25
  Other                                                    36            70
                                                 ------------  ------------
    Total interest expense                                546           812
                                                 ------------  ------------
    Net interest income before provision for
     credit losses                                      7,666         7,598
PROVISION FOR CREDIT LOSSES                               400           100
                                                 ------------  ------------
    Net interest income after provision for
     credit losses                                      7,266         7,498
                                                 ------------  ------------
NON-INTEREST INCOME:
  Service charges                                         689           699
  Appreciation in cash surrender value of bank
   owned life insurance                                    94            97
  Loan placement fees                                     128            57
  Gain (loss) on disposal of other real estate
   owned                                                   (2)          545
  Net realized gains (losses) on sales and calls
   of investment securities                               347           (16)
  Other-than-temporary impairment loss:
    Total impairment loss                                  --           (31)
    Loss recognized in other comprehensive
     income                                                --            --
                                                 ------------  ------------
      Net impairment loss recognized in earnings           --           (31)
  Federal Home Loan Bank dividends                          4             2
  Other income                                            398           395
                                                 ------------  ------------
    Total non-interest income                           1,658         1,748
                                                 ------------  ------------
NON-INTEREST EXPENSES:
  Salaries and employee benefits                        4,129         4,078
  Occupancy and equipment                                 881           934
  Regulatory assessments                                  156           289
  Data processing expense                                 294           276
  Advertising                                             140           184
  Audit and accounting fees                               128           112
  Legal fees                                               28            93
  Other real estate owned                                  63             9
  Amortization of core deposit intangibles                 50           104
  Other expense                                         1,049         1,074
                                                 ------------  ------------
    Total non-interest expenses                         6,918         7,153
                                                 ------------  ------------
      Income before provision for income taxes          2,006         2,093
PROVISION FOR INCOME TAXES                                293           505
                                                 ------------  ------------
    Net income                                   $      1,713  $      1,588
                                                 ============  ============
Net income                                       $      1,713  $      1,588
Preferred stock dividends and accretion                    88            99
                                                 ------------  ------------
    Net income available to common shareholders  $      1,625  $      1,489
                                                 ============  ============
    Net income per common share:
      Basic earnings per common share            $       0.17  $       0.16
                                                 ============  ============
      Weighted average common shares used in
       basic computation                            9,570,297     9,475,444
                                                 ============  ============
      Diluted earnings per common share          $       0.17  $       0.16
                                                 ============  ============
      Weighted average common shares used in
       diluted computation                          9,577,432     9,503,313
                                                 ============  ============



                      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                   2012       2011       2011       2011       2011
                      ---------- ---------- ---------- ---------- ----------
(In thousands, except
 share and per share
 amounts)
Net interest income   $    7,666 $    8,016 $    7,949 $    7,794 $    7,598
Provision for credit
 losses                      400        300        400        250        100
                      ---------- ---------- ---------- ---------- ----------
Net interest income
 after provision for
 credit losses             7,266      7,716      7,549      7,544      7,498
Total non-interest
 income                    1,658      1,336      1,595      1,597      1,748
Total non-interest
 expense                   6,918      6,803      7,222      7,067      7,153
Provision for income
 taxes                       293        541        514        301        505
                      ---------- ---------- ---------- ---------- ----------
Net income            $    1,713 $    1,708 $    1,408 $    1,773 $    1,588
                      ========== ========== ========== ========== ==========
Net income available
 to common
 shareholders         $    1,625 $    1,622 $    1,206 $    1,674 $    1,489
                      ========== ========== ========== ========== ==========
Basic earnings per
 common share         $     0.17 $     0.17 $     0.13 $     0.18 $     0.16
                      ========== ========== ========== ========== ==========
Weighted average
 common shares used
 in basic computation  9,570,297  9,547,816  9,547,816  9,516,110  9,475,444
                      ========== ========== ========== ========== ==========
Diluted earnings per
 common share         $     0.17 $     0.17 $     0.13 $     0.18 $     0.16
                      ========== ========== ========== ========== ==========
Weighted average
 common shares used
 in diluted
 computation           9,577,432  9,552,043  9,557,609  9,540,615  9,503,313
                      ========== ========== ========== ========== ==========



                      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               2012      2011       2011      2011      2011
                          --------  --------   --------  --------  --------
(Dollars in thousands,
 except per share
 amounts)
Allowance for credit
 losses to total loans        2.52%     2.67%      2.59%     2.53%     2.61%
Nonperforming assets to
 total assets                 1.48%     1.70%      2.04%     1.89%     2.07%
Total nonperforming
 assets                   $ 12,395  $ 14,434   $ 17,064  $ 14,959  $ 15,846
Net loan charge offs
 (recoveries)             $  1,511  $    (66)  $    404  $    235  $     95
Net charge offs
 (recoveries) to average
 loans (annualized)           1.46%    (0.06)%     0.37%     0.22%     0.09%
Book value per share      $  10.82  $  10.52   $  10.41  $  10.15  $   9.76
Tangible book value per
 share                    $   8.28      7.97   $   7.84  $   7.58  $   7.16
Tangible common equity    $ 79,422  $ 76,122   $ 74,883  $ 72,389  $ 67,748
Interest and dividends on
 investment securities
 exempt from Federal
 income taxes             $  1,037  $    942   $    892  $    830  $    800
Net interest margin
 (calculated on a fully
 tax equivalent basis)
 (1)                          4.37%     4.50%      4.66%     4.71%     4.67%
Return on average assets
 (2)                          0.82%     0.81%      0.70%     0.91%     0.82%
Return on average equity
 (2)                          6.19%     6.41%      5.34%     6.92%     6.41%
Tier 1 leverage - Bancorp    10.33%    10.13%     10.19%    10.22%     9.87%
Tier 1 leverage - Bank       10.21%    10.01%     10.07%    10.04%     9.67%
Tier 1 risk-based capital
 - Bancorp                   16.97%    16.20%     15.95%    15.26%    14.81%
Tier 1 risk-based capital
 - Bank                      16.78%    16.02%     15.76%    14.99%    14.51%
Total risk-based capital
 - Bancorp                   18.25%    17.49%     17.25%    16.53%    16.08%
Total risk based capital
 - Bank                      18.06%    17.31%     17.05%    16.26%    15.78%

(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)                               2012          2011
                                                 ------------  ------------
Federal funds sold                               $        529  $        758
Interest-bearing deposits in other banks               29,059        76,618
Investments                                           317,362       196,451
Loans (1)                                             401,132       409,353
Federal Home Loan Bank stock                            2,893         3,050
                                                 ------------  ------------
Earning assets                                        750,975       686,230
Allowance for credit losses                           (10,977)      (11,007)
Non-accrual loans                                      11,548        16,881
Other real estate owned                                   871           620
Other non-earning assets                               83,131        78,005
                                                 ------------  ------------
Total assets                                     $    835,548  $    770,729
                                                 ============  ============

Interest bearing deposits                        $    498,971  $    476,447
Other borrowings                                        9,155        13,655
                                                 ------------  ------------
Total interest-bearing liabilities                    508,126       490,102
Non-interest bearing demand deposits                  205,548       173,005
Non-interest bearing liabilities                       11,199         8,504
                                                 ------------  ------------
Total liabilities                                     724,873       671,611
                                                 ------------  ------------
Total equity                                          110,675        99,118
                                                 ------------  ------------
Total liabilities and equity                     $    835,548  $    770,729
                                                 ============  ============

AVERAGE RATES
Federal funds sold                                         --%         0.30%
Interest-earning deposits in other banks                 0.25%         0.26%
Investments                                              3.33%         4.70%
Loans                                                    6.10%         6.40%
Earning assets                                           4.66%         5.14%
Interest-bearing deposits                                0.39%         0.61%
Other borrowings                                         2.86%         2.82%
Total interest-bearing liabilities                       0.43%         0.67%
Net interest margin (calculated on a fully tax
 equivalent basis) (2)                                   4.37%         4.67%

(1) Average loans do not include non-accrual loans.
(2) Calculated on a fully tax equivalent basis, which includes Federal tax
    benefits relation to income earned on municipal bonds totaling $534 and
    $412 for the quarters ended March 31, 2012 and 2011, respectively.

Rates

View Comments (0)