CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
(In thousands, except share amounts) 2009 2008
----------- ------------
ASSETS
Cash and due from banks $ 13,660 $ 18,061
Federal funds sold 25,734 1,457
----------- ------------
Total cash and cash equivalents 39,394 19,518
Investment securities:
Available-for-sale investment securities
(Amortized cost of $176,170 and $185,405 at
March 31, 2009 and December 31, 2008) 173,767 185,718
Held-to-maturity, at amortized cost 6,314 7,040
Loans, less allowance for credit losses of $7,666
and $7,223 at March 31, 2009 and December 31,
2008 479,944 477,015
Bank premises and equipment, net 6,673 6,900
Other real estate owned 2,550 -
Bank owned life insurance 10,905 10,808
Federal Home Loan Bank stock 3,140 3,140
Goodwill 23,773 23,773
Core deposit intangibles 1,923 2,026
Accrued interest receivable and other assets 18,578 16,775
----------- ------------
Total assets $ 766,961 $ 752,713
=========== ============
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Non-interest bearing $ 151,470 $ 162,106
Interest bearing 487,606 472,952
----------- ------------
Total deposits 639,076 635,058
Short-term borrowings 10,000 6,368
Long-term debt 19,000 19,000
Junior subordinated deferrable interest
debentures 5,155 5,155
Accrued interest payable and other liabilities 11,683 11,757
----------- ------------
Total liabilities 684,914 677,338
----------- ------------
Shareholders’ equity:
Preferred stock, $1,000 per share liquidation
preference: 10,000,000 shares authorized, 7,000
shares outstanding at March 31, 2009 6,555 -
Common stock, no par value; 80,000,000 shares
authorized; 7,642,280 shares outstanding at
March 31, 2009 and December 31, 2008 31,016 30,479
Retained earnings 45,918 44,708
Accumulated other comprehensive (loss) income,
net of tax (1,442) 188
----------- ------------
Total shareholders’ equity 82,047 75,375
----------- ------------
Total liabilities and shareholders’ equity $ 766,961 $ 752,713
=========== ============
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months
(In thousands, except share and per share amounts) Ended March 31,
--------------------
2009 2008
--------- ----------
INTEREST INCOME:
Interest and fees on loans $ 7,540 $ 6,485
Interest on Federal funds sold 11 71
Interest and dividends on investment securities:
Taxable 2,211 904
Exempt from Federal income taxes 707 229
--------- ----------
Total interest income 10,469 7,689
--------- ----------
INTEREST EXPENSE:
Interest on deposits 1,782 1,676
Interest on junior subordinated deferrable interest
debentures 41 -
Other 161 164
--------- ----------
Total interest expense 1,984 1,840
--------- ----------
Net interest income before provision for credit
losses 8,485 5,849
PROVISION FOR CREDIT LOSSES 1,917 135
--------- ----------
Net interest income after provision for credit
losses 6,568 5,714
--------- ----------
NON-INTEREST INCOME:
Service charges 820 803
Appreciation in cash surrender value of bank owned
life insurance 98 62
Loan placement fees 46 33
Net realized gains on sales and calls of investment
securities 449 -
Federal Home Loan Bank stock dividends - 27
Other income 325 313
--------- ----------
Total non-interest income 1,738 1,238
--------- ----------
NON-INTEREST EXPENSES:
Salaries and employee benefits 3,688 2,869
Occupancy and equipment 945 635
Other expenses 2,207 1,468
--------- ----------
Total non-interest expenses 6,840 4,972
--------- ----------
Income before provision for income taxes 1,466 1,980
PROVISION FOR INCOME TAXES 207 675
--------- ----------
Net income $ 1,259 $ 1,305
========= ==========
Preferred stock dividends and accretion (49) -
Net income available to common shareholders $ 1,210 $ 1,305
========= ==========
Basic earnings per common share $ 0.16 $ 0.22
========= ==========
Weighted average common shares used in basic
computation 7,642,280 5,976,948
========= ==========
Diluted earnings per common share $ 0.16 $ 0.21
========= ==========
Weighted average common shares used in diluted
computation 7,770,449 6,276,614
========= ==========
Cash dividends per share $ - $ .10
========= ==========
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 2009 2008 2008 2008 2008
--------- --------- --------- --------- ---------
(In thousands, except
share and per share
amounts)
Net interest income $ 8,485 $ 6,969 $ 6,023 $ 5,726 $ 5,849
Provision for credit
losses 1,917 385 635 135 135
--------- --------- --------- --------- ---------
Net interest income
after provision
for credit losses 6,568 6,584 5,388 5,591 5,714
Total non-interest income 1,738 1,296 1,382 1,274 1,238
Total non-interest
expense 6,840 6,054 4,984 4,966 4,972
Provision for income
taxes 207 521 572 584 675
--------- --------- --------- --------- ---------
Net income $ 1,259 $ 1,305 $ 1,214 $ 1,315 $ 1,305
========= ========= ========= ========= =========
Net income available to
common shareholders $ 1,210 $ 1,305 $ 1,214 $ 1,315 $ 1,305
========= ========= ========= ========= =========
Basic earnings per common
share $ 0.16 $ 0.19 $ 0.20 $ 0.22 $ 0.22
========= ========= ========= ========= =========
Weighted average shares
used in basic
computation 7,642,280 6,866,081 6,009,706 5,991,101 5,976,948
========= ========= ========= ========= =========
Diluted earnings per
common share $ 0.16 $ 0.19 $ 0.19 $ 0.21 $ 0.21
========= ========= ========= ========= =========
Weighted average shares
used in diluted
computation 7,770,449 7,046,583 6,255,652 6,277,690 6,276,614
========= ========= ========= ========= =========
CENTRAL VALLEY COMMUNITY BANCORP
selected ratios
(Unaudited)
For the three months Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31,
ended 2009 2008 2008 2008 2008
-------- -------- -------- -------- --------
(Dollars in thousands)
Allowance for credit
losses to total loans 1.57% 1.49% 1.28% 1.16% 1.14%
Nonperforming loans to
total loans 2.89% 3.25% 0.40% 0.10% 0.03%
Total nonperforming
assets $ 16,636 $ 15,750 $ 1,419 $ 366 $ 109
Net interest margin
(calculated on a fully
tax equivalent basis)
(1) 5.23% 4.95% 5.19% 5.04% 5.40%
Return on average assets
(2) 0.66% 0.80% 0.93% 1.04% 1.08%
Return on average equity
(2) 6.13% 7.48% 8.82% 9.71% 9.55%
(1) Net Interest Margin is computed by dividing annualized quarterly net
interest income by quarterly average interest-bearing assets.
(2) Computed by annualizing quarterly net income.
CENTRAL VALLEY COMMUNITY BANCORP
AVERAGE BALANCES AND RATES
(Unaudited)
For the Three Months
AVERAGE AMOUNTS Ended March 31,
--------------------
(Dollars in thousands) 2009 2008
--------- ---------
Investments $ 185,988 $ 92,803
Deposits in other banks 38 -
Federal funds sold 15,500 8,509
Loans (1) 471,964 340,260
Federal Home Loan Bank stock 3,140 2,024
--------- ---------
Earning assets 676,630 443,596
Allowance for credit losses (7,325) (3,934)
Non-accrual loans 14,554 103
Other non-earning assets 79,870 45,044
--------- ---------
Total assets $ 763,729 $ 484,809
========= =========
Interest bearing deposits $ 481,520 $ 276,004
Other borrowings 29,083 20,528
--------- ---------
Total interest-bearing liabilities 510,603 296,532
Non-interest bearing demand deposits 160,272 128,270
Non-interest bearing liabilities 10,753 5,342
--------- ---------
Total liabilities 681,628 430,144
--------- ---------
Total equity 82,101 54,665
--------- ---------
Total liabilities and equity $ 763,729 $ 484,809
========= =========
AVERAGE RATES
Investments 7.06% 5.39%
Federal funds sold 0.28% 3.30%
Loans 6.48% 7.64%
Earning assets 6.40% 7.06%
Interest bearing deposits 1.50% 2.44%
Other borrowings 2.82% 3.20%
Total interest-bearing liabilities 1.58% 2.49%
Net interest margin (calculated on a fully tax
equivalent basis) 5.23% 5.40%
(1) Average loans do not include non-accrual loans.
Central Valley Community Bancorp Reports Earnings Results for the First Quarter Ended March 31, 2009
| Source: Central Valley Community Bancorp
FRESNO, CA--(Marketwire - April 16, 2009) - 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 $1,259,000, or $0.16 per diluted common share, for the quarter
ended March 31, 2009, compared to $1,305,000, or $0.21 per diluted common
share for the quarter ended March 31, 2008, and $1,305,000 or $0.19 per
diluted common share for the trailing quarter ended December 31, 2008.
Despite the turbulent current economic times for banks, earnings for the
first quarter of 2009 represent 96.5% of the earnings from one year ago.
The 3.5% decline in earnings was primarily a function of lower interest
rates, a charge to reflect the current fair value of the Company's only
Other Real Estate Owned property, and certain additional expenses related
to the fourth quarter 2008 acquisition of Service 1st Bancorp ("Service
1st").
Annualized return on average equity (ROE) for the quarter ended March 31,
2009 was 6.13%, compared to 9.55% for the same period in 2008. Annualized
return on average assets (ROA) was 0.66% for quarter ended March 31, 2009,
compared to 1.08% for the same period in 2008. The Company's ROE and ROA
for the trailing 12 months ended March 31, 2009 was 7.82% and 0.83%,
respectively, compared to 11.61% and 1.28%, respectively, for the prior
year period.
On November 12, 2008, the Company completed its acquisition of Service 1st
with total assets of $224 million. The Company paid cash of $5,972,000,
inclusive of a $3,500,000 escrow amount related to litigation on one
Service 1st loan, and issued 1,628,397 new shares of common stock. In
conjunction with this acquisition, the Company added full-service branches
in Stockton, Lodi and Tracy, $192 million in deposits and $123 million in
loans. In connection with the transaction, Service 1st Bank was merged
with and into Central Valley Community Bank. The results of operations for
the quarter ended March 31, 2009 include the operating results of the
former Service 1st for the full quarter.
Total non-performing assets were $16,636,000 as of March 31, 2009
consisting of $2,550,000 in Other Real Estate Owned (OREO) and non-accrual
loans totaling $14,086,000. Non-accrual loans were 2.89% of total loans at
March 31, 2009. This compares to non-accrual loans of $15,750,000 or 3.25%
of total loans at December 31, 2008, and $109,000 or 0.03% of total loans
at March 31, 2008. The Company did not have any OREO at December 31, or
March 31, 2008. During the first quarter of 2009, the Company sold its
participation interest in a loan to the Regent Hotel, LLC back to the lead
bank, reducing non-accrual loans by $3,486,000. The Company also
transferred one loan in the amount of $2,550,000, net of a charge off of
$1,132,000, to OREO during the first quarter 2009 reducing non-performing
loans by $3,263,000. The Company believes the Allowance for Loan and Lease
Losses to be adequate to provide for probable losses when considered with
the government guarantees, strong collateral positions, and the fair market
value adjustments for the Service 1st loans recorded in connection with the
merger.
During the first quarter of 2009, the Company recorded $1,474,000 in net
loan charge-offs, compared to $46,000 for the same period in 2008. The
increase in the first quarter 2009 loan charge offs was primarily due to
the $1,132,000 charge off on the loan that was transferred to OREO. During
the first quarter of 2009, the Company increased its provision for credit
losses to $1,917,000, up from $135,000 for the same period in 2008. The
increase in 2009 is principally a result of maintaining the level of the
allowance after recording the OREO-related charge off, the current economic
downturn affecting our market area, the other charge offs recorded, and the
increase in the level of outstanding loans. The allowance for credit
losses as a percentage of total loans was 1.57% at March 31, 2009, compared
to 1.14% at March 31, 2008. The Company is not involved in any sub-prime
mortgage lending activities.
The Company's annualized net interest margin (fully tax equivalent basis)
was 5.23% for the quarter ended March 31, 2009, compared to 5.40% for the
same period in 2008. The decrease in margin is a reflection of the 500
basis point reduction in interest rates by the Federal Reserve Bank since
September 2007, coupled with competition for deposits that continues to
challenge the Company along with most other financial institutions. For
the quarter ended March 31, 2009, the effective yield on total earning
assets decreased 66 basis points to 6.40% compared to 7.06% for the same
period in 2008, while the cost of total interest-bearing liabilities
decreased 91 basis points to 1.58% compared to 2.49% for the same period in
2008. Over the same periods, the cost of total deposits decreased 60 basis
points to 1.25% compared to 1.85% in 2008. Net interest income for the
quarter ended March 31, 2009 was $8,485,000, compared to $5,849,000 for the
same period in 2008, an increase of $2,636,000 or 45.1%. Although the
margin declined slightly, net interest income increased as a result of the
increased levels of earning assets offset by the increased levels of
interest bearing liabilities. The increases were primarily from the
Service 1st acquisition and also from our organic growth.
Total average assets for the quarter ended March 31, 2009 were
$763,729,000, compared to $484,809,000 for the same period in 2008, an
increase of $278,920,000 or 57.5%. Total average loans were $486,518,000
for the first quarter of 2009, compared to $340,363,000 for the same period
in 2008, representing an increase of $146,155,000 or 42.9%. Total average
investments increased to $201,526,000 for the first quarter of 2009 from
$101,312,000 for the same period in 2008, representing an increase of
$100,214,000 or 98.9%. Total average deposits increased $237,518,000 or
58.8% to $641,792,000 for the quarter ended March 31, 2009, compared to
$404,274,000 for the same period in 2008. Average interest-bearing
deposits increased $205,516,000, or 74.5% and average non-interest bearing
demand deposits increased $32,002,000 or 25.0% for the quarter ended March
31, 2009. The Company's ratio of average non-interest bearing deposits to
total deposits continued to be above industry averages at 25.0% for the
first quarter of 2009. The increases in balance sheet averages during 2009
reflect the acquisition of Service 1st in November 2008 and our organic
growth.
Non-interest income for the quarter ended March 31, 2009 increased
$500,000, or 40.4% to $1,738,000, compared to $1,238,000 for the same
period in 2008, mainly due to a $449,000 increase in net realized gains on
sales and calls of investment securities, a $36,000 increase in
appreciation of cash surrender value of bank owned life insurance, and a
$17,000 increase in income from customer service charges. The net realized
gain on investment securities related to certain investment securities
acquired from Service 1st, the value of which had been marked to market at
the time of the Service 1st acquisition. Certain of those securities were
subsequently called at par value or sold during the first quarter of 2009
and generated the majority of the gains.
Non-interest expense for the quarter ended March 31, 2009 increased
$1,868,000, or 37.6% to $6,840,000 compared to $4,972,000 for the same
period in 2008, primarily due to a $819,000 increase in salary and benefit
expenses, a $310,000 increase in occupancy and equipment expenses, and a
$739,000 increase in other expenses. The increases in non-interest expense
in the first quarter of 2009 reflect the addition of employees and
properties in connection with the acquisition of Service 1st and expected
increases in salaries and benefits. In addition, the Company's FDIC
insurance assessments increased significantly to $353,000 for the quarter
ended March 31, 2009 compared to $41,000 for the same period in 2008.
On January 30, 2009, the Company entered into a Letter Agreement with the
United States Department of the Treasury under the Capital Purchase
Program, and issued and sold 7,000 shares of the Company's Series A Fixed
Rate Cumulative Perpetual Preferred Stock and a warrant to purchase 158,133
shares of the Company's common stock, no par value, for an aggregate
purchase price of $7,000,000 in cash.
"The impact of the overall weak economy, unprecedented decline in interest
rates, write down of Other Real Estate Owned, and operating costs related
to the acquisition of Service 1st in the fourth quarter of 2008 all had a
negative impact on the March 31, 2009 earnings compared to March 31, 2008.
The Company continued to make positive progress in resolving and decreasing
the level of non-performing loans on our books during the first quarter of
2009. After the close of the first quarter, an additional pay down on
non-performing loans of approximately $1.5 million was received," stated
Daniel J. Doyle, President and CEO of Central Valley Community Bancorp and
Central Valley Community Bank. "While the economic environment will
continue to present challenges throughout the remainder of 2009 in the
markets we serve, we believe our ongoing initiatives coupled with the
acquisition of Service 1st will prove to be an important and long-term
strategic opportunity for our Company," 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
15 offices in Clovis, Fresno, Kerman, Lodi, Madera, Oakhurst, Prather,
Sacramento, Stockton, Tracy, and a loan production office in Modesto,
California. Additionally, the Bank operates Commercial Real Estate
Lending, SBA Lending and Agribusiness Lending Departments. Investment
services are provided by Investment Centers of America and insurance
services are offered through Central Valley Community Insurance Services
LLC. Members of Central Valley Community Bancorp's and the Bank's Board of
Directors are: Daniel N. Cunningham (Chairman), Sidney B. Cox, Edwin S.
Darden, Jr., Daniel J. Doyle, Steven D. McDonald, Louis McMurray, Wanda L.
Rogers (Director Emeritus), William S. Smittcamp, and Joseph B. Weirick.
More information about Central Valley Community Bancorp and Central Valley
Community Bank can be found at www.cvcb.com.
Forward-looking Statements- Certain matters discussed in this press release
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements contained herein
that are not historical facts, such as statements regarding the Company's
current business strategy and the Company's plans for future development
and operations, are based upon current expectations. These statements are
forward-looking in nature and involve a number of risks and uncertainties.
Such risks and uncertainties include, but are not limited to (1)
significant increases in competitive pressure in the banking industry; (2)
the impact of changes in interest rates, a decline in economic conditions
at the international, national or local level on the Company's results of
operations, the Company's ability to continue its internal growth at
historical rates, the Company's ability to maintain its net interest
margin, and the quality of the Company's earning assets; (3) changes in the
regulatory environment; (4) fluctuations in the real estate market; (5)
changes in business conditions and inflation; (6) changes in securities
markets; and (7) the other risks set forth in the Company's reports filed
with the Securities and Exchange Commission, including its Annual Report on
Form 10-K for the year ended December 31, 2008. Therefore, the information
set forth in such forward-looking statements should be carefully considered
when evaluating the business prospects of the Company.