SOURCE: Central Valley Community Bancorp

Central Valley Community Bancorp

October 15, 2014 16:15 ET

Central Valley Community Bancorp Reports Earnings Results for the Nine Months and Quarter Ended September 30, 2014

FRESNO, CA--(Marketwired - Oct 15, 2014) - 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 $7,660,000, and diluted earnings per common share of $0.70 for the nine months ended September 30, 2014, compared to $6,039,000 and $0.57 per diluted common share for the nine months ended September 30, 2013. Unless otherwise noted, material changes in year-over-year operating performance in dollar (rather than percentage) terms for the nine months ended September 30 were the result of the Visalia Community Bank (VCB) acquisition, which closed on July 1, 2013. 

Net income increased 26.84%, primarily driven by an increase in net interest income in 2014 compared to 2013. Net interest income during the first nine months of 2014 was positively impacted by the collection of nonaccrual loans totaling $1,846,000 which resulted in a recovery of interest income of $861,000. Net interest income during the first nine months of 2013 was positively impacted by the collection of nonaccrual loans totaling $4,731,000 which resulted in a recovery of interest income of $1,484,000 and legal expenses of $51,000.

Non-performing assets decreased by $3,510,000, or 45.14%, to $4,266,000 at September 30, 2014, compared to $7,776,000 at December 31, 2013. During the nine months ended September 30, 2014, the Company's shareholders' equity increased $12,970,000, or 10.80%. The increase in shareholders' equity was driven by the retention of earnings net of dividends paid and improvement in unrealized gains on available-for-sale securities recorded in accumulated other comprehensive income (AOCI). 

During the first three quarters of 2014, the Company's total assets increased 1.61%, and total liabilities increased 0.54% compared to December 31, 2013. The Company declared and paid $1,641,000 in cash dividends to holders of common stock during the first nine months of 2014 ($0.15 per share). Annualized return on average equity (ROE) for the nine months ended September 30, 2014 was 7.90%, compared to 6.83% for the nine months ended September 30, 2013. The increase in ROE in the first nine months of 2014 reflects an increase in net income, notwithstanding an increase in capital from an increase in AOCI and an increase in retained earnings as previously discussed. Annualized return on average assets (ROA) was 0.89% and 0.86% for the nine months ended September 30, 2014 and 2013, respectively. The increase in ROA is due to an increase in net income, notwithstanding an increase in average assets.

During the nine months ended September 30, 2014 the Company recorded a reverse provision for credit losses of $400,000. The Company did not record a provision during the nine months ended September 30, 2013. During the nine months ended September 30, 2014, the Company recorded $1,319,000 in net loan charge-offs, compared to $401,000 for the nine months ended September 30, 2013. The net charge-off ratio, which reflects net charge-offs to average loans, was 0.33% for the nine months ended September 30, 2014, compared to 0.12% for the same period in 2013. The majority of the loans charged off during the nine months ended September 30, 2014 were previously classified and sufficient funds were held in the allowance for credit losses as of December 31, 2013.

At September 30, 2014, the allowance for credit losses stood at $7,489,000, compared to $9,208,000 at December 31, 2013, a net decrease of $1,719,000 reflecting the net charge offs, the majority of which related to a nonaccrual commercial and industrial loan charged off in the first quarter which was reserved for as of December 31, 2013. The allowance for credit losses as a percentage of total loans was 1.35% at September 30, 2014, and 1.80% at December 31, 2013. Total loans includes VCB loans that were recorded at fair value in connection with the acquisition of $81,442,000 at September 30, 2014 and $99,948,000 at December 31, 2013. Excluding these VCB loans from the calculation, the allowance for credit losses to total gross loans was 1.58% and 2.23% as of September 30, 2014 and December 31, 2013, respectively. The Company believes the allowance for credit losses is adequate to provide for probable incurred losses inherent within the loan portfolio at September 30, 2014.

Total non-performing assets were $4,266,000, or 0.37% of total assets as of September 30, 2014, compared to $7,776,000, or 0.68% of total assets as of December 31, 2013. Total non-performing assets as of September 30, 2013 were $8,146,000 or 0.75% of total assets. 

The following provides a reconciliation of the change in non-accrual loans for 2014.

                                     
(In thousands)   Balances December 31, 2013   Additions to Non-accrual Loans   Net Pay Downs     Transfer to Foreclosed Collateral - OREO     Returns to Accrual Status     Charge Offs     Balances September 30, 2014
Non-accrual loans:                                                  
  Commercial and industrial   $ 335   $ 129   $ (293 )   $ --     $ (20 )   $ (129 )   $ 22
  Real estate     1,935     314     (1,014 )     (235 )     (187 )     (183 )     630
  Equity loans and lines of credit     721     97     (236 )     --       --       (59 )     523
  Consumer     --     23     (2 )     --       --       --       21
Restructured loans (non-accruing):                                                  
  Commercial and industrial     1,192     --     (145 )     --       --       (1,047 )     --
  Real estate     384     --     (24 )     --       --       --       360
  Real estate construction and land development     1,450     --     (131 )     --       --       --       1,319
  Equity loans and lines of credit     1,565     6     (114 )     --       (66 )     --       1,391
  Consumer     4     --     --       --       (4 )     --       --
    Total non-accrual   $ 7,586   $ 569   $ (1,959 )   $ (235 )   $ (277 )   $ (1,418 )   $ 4,266
                                                       

The Company's net interest margin (fully tax equivalent basis) was 4.13% for the nine months ended September 30, 2014, compared to 4.16% for the nine months ended September 30, 2013. The decrease in net interest margin in the period-to-period comparison resulted primarily from a decrease in the yield on the Company's loan portfolio offset by an increase in the yield on the Company's investment portfolio, and a decrease in the Company's cost of funds. 

For the nine months ended September 30, 2014, the effective yield on total earning assets decreased 8 basis points to 4.24% compared to 4.32% for the nine months ended September 30, 2013, while the cost of total interest-bearing liabilities decreased 7 basis points to 0.18% compared to 0.25% for the nine months ended September 30, 2013. The cost of total deposits decreased 5 basis points to 0.11% for the nine months ended September 30, 2014, compared to 0.16% for the nine months ended September 30, 2013. 

For the nine months ended September 30, 2014, the Company's average investment securities, including interest-earning deposits in other banks and Federal funds sold, increased by $90,733,000, or 21.45%, compared to the nine months ended September 30, 2013. 

The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, increased to 2.80% for the nine months ended September 30, 2014, compared to 2.52% for the nine months ended September 30, 2013. The increase in yield in the Company's investment securities during 2014 resulted primarily from a decrease in the rate of prepayments on mortgage backed securities compared to the same period of 2013. Total average loans, which generally yield higher rates than investment securities, increased $94,996,000, from $435,873,000 for the nine months ended September 30, 2013 to $530,869,000 for the nine months ended September 30, 2014. The effective yield on average loans decreased to 5.65% for the nine months ended September 30, 2014, compared to 6.12% for the nine months ended September 30, 2013.

Net interest income before the provision for credit losses for the nine months ended September 30, 2014 was $29,879,000, compared to $24,259,000 for the nine months ended September 30, 2013, an increase of $5,620,000 or 23.17%. Net interest income increased as a result of yield changes, the recovery of $861,000 of foregone interest income from the repayment of loans previously identified as nonaccrual, asset mix changes, and an increase in average earning assets, partially offset by an increase in interest-bearing liabilities, primarily as a result of the VCB acquisition.

Total average assets for the nine months ended September 30, 2014 were $1,147,366,000 compared to $941,030,000, for the nine months ended September 30, 2013, an increase of $206,336,000 or 21.93%. Total average loans increased $94,996,000, or 21.79% for the nine months ended September 30, 2014 compared to the nine months ended September 30, 2013. Total average investments, including deposits in other banks and Federal funds sold, increased to $513,778,000 for the nine months ended September 30, 2014, from $423,045,000 for the nine months ended September 30, 2013, representing an increase of $90,733,000 or 21.45%. Total average deposits increased $192,471,000 or 23.89% to $998,213,000 for the nine months ended September 30, 2014, compared to $805,742,000 for the nine months ended September 30, 2013. Average interest-bearing deposits increased $109,115,000, or 20.06%, and average non-interest bearing demand deposits increased $83,356,000, or 31.85%, for the nine months ended September 30, 2014, compared to the nine months ended September 30, 2013. The Company's ratio of average non-interest bearing deposits to total deposits was 34.57% for the nine months ended September 30, 2014, compared to 32.48% for the nine months ended September 30, 2013. 

Non-interest income for the nine months ended September 30, 2014 increased $215,000 to $6,081,000, compared to $5,866,000 for the nine months ended September 30, 2013, primarily driven by a $159,000 increase in service charge income, a $246,000 increase in interchange fees, a $124,000 increase in Federal Home Loan Bank dividends, and a $172,000 increase in other income, partially offset by a decrease of $560,000 in net realized gains on sales and calls of investment securities, and a $106,000 decrease in loan placement fees . 

Non-interest expense for the nine months ended September 30, 2014 increased $3,373,000, or 14.57%, to $26,520,000 compared to $23,147,000 for the nine months ended September 30, 2013. The net increase year over year was a result of increases in salaries and employee benefits of $1,917,000, increases in occupancy and equipment expenses of $735,000, increases in data processing expenses of $413,000, increases in Internet banking expenses of $102,000, increases in regulatory assessments of $52,000, increases in ATM/Debit card expenses of $88,000, increases in license and maintenance contracts of $46,000, increases in advertising fees of $116,000, and other non-interest expense increases of $534,000 offset by a decrease of $784,000 in acquisition and integration expenses. During the nine months ended September 30, 2014, other non-interest expenses included increases of $191,000 in net losses on disposal or writedown of premises and equipment, $64,000 in armored courier expenses, $136,000 in legal fees, $50,000 in appraisal fees, $33,000 in postage expenses, $20,000 in personnel expenses, $13,000 in donations, and $14,000 in stationery/supplies expenses, as compared to the same period in 2013.

The Company recorded an income tax expense of $2,180,000 for the nine months ended September 30, 2014, compared to $939,000 for the nine months ended September 30, 2013. The effective tax rate for the first nine months of 2014 was 22.15% compared to 13.46% for the nine months ended September 30, 2013. The increase in the effective tax rate during 2014 was primarily due to the loss of the tax credits related to the California enterprise zone program, offset by a slight increase in interest income on non-taxable investment securities. Beginning January 1, 2014, tax credits and deductions related to the California enterprise zone program were reduced due to legislative changes affecting the program. 

Quarter Ended September 30, 2014
For the quarter ended September 30, 2014, the Company reported unaudited consolidated net income of $2,351,000 and diluted earnings per common share of $0.21, compared to $2,969,000 and $0.26 per diluted share for the same period in 2013. Net income for the immediately trailing quarter ended June 30, 2014 was $2,693,000, or $0.24 per diluted common share.

The decrease in net income during the third quarter of 2014 compared to the same period in 2013 was primarily driven by a decrease in net interest income. 

Annualized return on average equity (ROE) for the third quarter of 2014 was 7.10%, compared to 9.87% for the same period of 2013. The decrease in ROE reflects a decrease in net income, and an increase in capital from the retention of earnings net of dividends paid and improvement in unrealized gains on available-for-sale securities recorded in accumulated other comprehensive income (AOCI). Annualized return on average assets (ROA) was 0.81% for the third quarter of 2014 compared to 1.11% for the same period in 2013. This decrease is due to a decrease in net income, along with an increase in average assets.

In comparing the third quarter of 2014 to the third quarter of 2013, average total loans increased by $29,160,000, or 5.65%. During the third quarter of 2014, the Company recorded $182,000 in net loan recoveries compared to $131,000 for the same period in 2013. The net charge-off ratio, which reflects annualized net charge-offs (recoveries) to average loans, was (0.13)% for the quarter ended September 30, 2014 compared to (0.10)% for the quarter ended September 30, 2013.

The following provides a reconciliation of the change in non-accrual loans for the quarter ended September 30, 2014.

                                 
(Dollars in thousands)   Balances June 30, 2014   Additions to Non-accrual Loans   Net Pay Downs     Transfer to Foreclosed Collateral - OREO   Returns to Accrual Status     Charge Offs   Balances September 30, 2014
Non-accrual loans:                                              
  Commercial and industrial   $ 38   $ --   $ (16 )   $ --   $ --     $ --   $ 22
  Real estate     836     --     (19 )     --     (187 )     --     630
  Equity loans and lines of credit     517     --     6       --     --       --     523
  Consumer     22     --     (1 )     --     --       --     21
Restructured loans (non-accruing):                                              
  Real estate     366     --     (6 )     --     --       --     360
  Real estate construction and land development     1,358     --     (39 )     --     --       --     1,319
  Equity loans and lines of credit     1,495     --     (38 )     --     (66 )     --     1,391
    Total non-accrual   $ 4,632   $ --   $ (113 )   $ --   $ (253 )   $ --   $ 4,266
                                                   

Average total deposits for the third quarter of 2014 increased $68,990,000, or 7.35%, to $1,007,446,000, compared to $938,456,000 for the same period of 2013. 

The Company's net interest margin (fully tax equivalent basis) decreased 60 basis points to 4.06% for the quarter ended September 30, 2014, compared to 4.66% and 4.09% for the quarters ended September 30, 2013 and June 30, 2014, respectively. Net interest income, before provision for credit losses, decreased $660,000, or 6.26%, to $9,876,000 for the third quarter of 2014, compared to $10,536,000 for the same period in 2013. Net interest income for the quarter ended September 30, 2013 included the recovery of foregone interest of $1,484,000 related to the collection of a $4,731,000 non-accrual loan. The decrease in net interest margin in the period-to-period comparison resulted primarily from a decrease in the yield on the loan portfolio offset by an increase in the yield on investment securities and a decrease in the Company's cost of funds. Over the same periods, the cost of total deposits decreased 4 basis points to 0.10% compared to 0.14% in 2013.

For the quarter ended September 30, 2014, the Company's average investment securities, including interest-earning deposits in other banks and Federal funds sold, increased by $45,007,000, or 9.67%, compared to the quarter ended September 30, 2013 and decreased by $5,507,000, or 1.07%, compared to the quarter ended June 30, 2014. 

The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, increased to 2.76% for the quarter ended September 30, 2014, compared to 2.62% for the quarter ended September 30, 2013 and 2.83% for the quarter ended June 30, 2014. Total average loans, which generally yield higher rates than investment securities, increased by $29,160,000 to $545,665,000 for the quarter ended September 30, 2014, from $516,505,000 for the quarter ended September 30, 2013 and increased by $13,435,000 from $532,230,000 for the quarter ended June 30, 2014. The effective yield on average loans decreased to 5.35% for the quarter ended September 30, 2014, compared to 6.76% and 5.54% for the quarters ended September 30, 2013 and June 30, 2014, respectively.

Total average assets for the quarter ended September 30, 2014 were $1,160,690,000 compared to $1,071,721,000 for the quarter ended September 30, 2013 and $1,152,451,000 for the quarter ended June 30, 2014, an increase of $88,969,000 and $8,239,000, or 8.30% and 0.71%, respectively.

Total average deposits increased $68,990,000, or 7.35%, to $1,007,446,000 for the quarter ended September 30, 2014, compared to $938,456,000 for the quarter ended September 30, 2013. Total average deposits increased $4,721,000, or 0.47%, for the quarter ended September 30, 2014, compared to $1,002,725,000 for the quarter ended June 30, 2014. The Company's ratio of average non-interest bearing deposits to total deposits was 33.76% for the quarter ended September 30, 2014, compared to 35.38% and 34.66% for the quarters ended September 30, 2013 and June 30, 2014, respectively.

Non-interest income increased $248,000, or 13.68%, to $2,061,000 for the third quarter of 2014 compared to $1,813,000 for the same period in 2013. The third quarter of 2014 non-interest income included $240,000 in net realized gains on sales and calls of investment securities compared to none for the same period in 2013. For the quarter ended September 30, 2014, service charge income decreased $100,000 and interchange fee income increased $27,000, compared to the same period in 2013. Loan placement fees increased $84,000 during the third quarter of 2014, compared to the same period in 2013. Non-interest income for the quarter ended September 30, 2014 increased $17,000 to $2,061,000, compared to $2,044,000 for the quarter ended June 30, 2014.

Non-interest expense for the quarter ended September 30, 2014 increased $60,000, or 0.67%, to $9,051,000 compared to $8,991,000 for the quarter ended September 30, 2013. The net increase quarter over quarter was a result of increases in legal fees of $133,000, increases in salaries and employee benefits of $28,000, increases in occupancy and equipment of $88,000, increases in data processing expenses of $91,000, partially offset by a decrease in acquisition and integration expenses of $271,000, and decreases in consulting, regulatory assessments, and license and maintenance expenses. Advertising expenses, audit and accounting fees, and Internet banking expenses also increased comparing the third quarter of 2014 to the same period in 2013. Non-interest expense for the quarter ended September 30, 2014 increased $317,000 compared to $8,734,000 for the trailing quarter ended June 30, 2014. 

"The results of the first three quarters of 2014 show good progress in net income, loan and deposit growth as well as the continuation of improving asset quality metrics compared to the same nine months of 2013. While net income is less for the quarter ending September 2014 compared to the quarter ending September 2013, this result is weighted by the recovery of forgone interest on a non-accrual loan collected in the third quarter of 2013. The third quarter of 2014 reflects an increase in gross loans over the trailing quarter, in addition to the same quarter in 2013, which is reflective of positive organic loan growth as well as growth from the Visalia Community Bank merger completed July 1, 2013," stated Daniel J. Doyle, President and CEO of Central Valley Community Bancorp and CEO of Central Valley Community Bank.

"Many of the agricultural crops grown by our Central Valley customers have been harvested with preliminary results demonstrating that California's drought has definitely had an impact with lower crop yields compared to the previous year for certain crops. Many farmers and ranchers have instituted improved farming practices including planting less acreage, as part of the mitigation for the cost of water delivery and the expense of pumping. The offset to lower yields is crop prices remaining at levels allowing profitability for most farming operations, although the end result of the 2014 crop year will not be realized until the fourth quarter and into first quarter of 2015 when proceeds from crop sales are finalized. By closely monitoring the water and the related issues affecting our customers in 2014 we are optimistic as we look to 2015, knowing that the need for rain and a significant snow pack continue to be important factors for the short and long-term economic impact on agribusiness in California's San Joaquin Valley," continued Doyle.

"Regardless of stock market fluctuations, the fundamentals of our company are strong, as is our commitment to provide shareholder value by continuing to build a company with franchise value for the long-term," 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 now operates 21 full service offices in Clovis, Exeter, Fresno, Kerman, Lodi, Madera, Merced, Modesto, Oakhurst, Prather, Sacramento, Stockton, Tracy, and Visalia, 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, F. T. "Tommy" Elliott, IV, Steven D. McDonald, Louis McMurray, William S. Smittcamp, and Joseph B. Weirick. Wanda L. Rogers 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, 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, 2013. 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  
   
    September 30,   December 31,  
(In thousands, except share amounts)   2014   2013  
    (Unaudited)      
ASSETS              
Cash and due from banks   $ 28,059   $ 25,878  
Interest-earning deposits in other banks     26,658     85,956  
Federal funds sold     331     218  
      Total cash and cash equivalents     55,048     112,052  
Available-for-sale investment securities (Amortized cost of $439,576 at September 30, 2014 and $447,108 at December 31, 2013)     447,016     443,224  
Held-to-maturity investment securities (Fair value of $34,523 at September 30, 2014)     31,837     -  
Loans, less allowance for credit losses of $7,489 at September 30, 2014 and $9,208 at December 31, 2013     547,247     503,149  
Bank premises and equipment, net     10,443     10,541  
Other real estate owned     -     190  
Bank owned life insurance     20,802     19,443  
Federal Home Loan Bank stock     4,791     4,499  
Goodwill     29,917     29,917  
Core deposit intangibles     1,428     1,680  
Accrued interest receivable and other assets     15,590     20,940  
      Total assets   $ 1,164,119   $ 1,145,635  
               
LIABILITIES AND SHAREHOLDERS' EQUITY              
Deposits:              
  Non-interest bearing   $ 345,003   $ 356,392  
  Interest bearing     663,860     647,751  
    Total deposits     1,008,863     1,004,143  
               
Junior subordinated deferrable interest debentures     5,155     5,155  
Accrued interest payable and other liabilities     17,088     16,294  
      Total liabilities     1,031,106     1,025,592  
Shareholders' equity:              
Common stock, no par value; 80,000,000 shares authorized; issued and outstanding: 10,979,370 at September 30, 2014 and 10,914,680 at December 31, 2013     54,125     53,981  
Retained earnings     74,367     68,348  
Accumulated other comprehensive income (loss), net of tax     4,521     (2,286 )
    Total shareholders' equity     133,013     120,043  
      Total liabilities and shareholders' equity   $ 1,164,119   $ 1,145,635  
                     
                     
 
CENTRAL VALLEY COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF INCOME
 
    For the Three Months
Ended September 30,
  For the Nine Months
Ended September 30,
(In thousands, except share and per share amounts)   2014   2013   2014     2013
    (Unaudited)   (Unaudited)   (Unaudited)     (Unaudited)
INTEREST INCOME:                          
  Interest and fees on loans   $ 7,301   $ 8,677   $ 22,197     $ 19,523
  Interest on deposits in other banks     37     45     134       104
  Interest on Federal funds sold     -     -     1       -
  Interest and dividends on investment securities:                          
    Taxable     1,341     588     4,127       1,341
    Exempt from Federal income taxes     1,469     1,593     4,305       4,329
      Total interest income     10,148     10,903     30,764       25,297
INTEREST EXPENSE:                          
  Interest on deposits     249     342     813       947
  Interest on junior subordinated deferrable interest debentures     23     25     72       74
  Other     -     -     -       17
      Total interest expense     272     367     885       1,038
    Net interest income before provision for credit losses     9,876     10,536     29,879       24,259
PROVISION FOR CREDIT LOSSES     -     -     (400 )     -
    Net interest income after provision for credit losses     9,876     10,536     30,279       24,259
NON-INTEREST INCOME:                          
  Service charges     811     911     2,441       2,282
  Appreciation in cash surrender value of bank owned life insurance     156     149     459       342
  Interchange fees     295     268     924       678
  Loan placement fees     212     128     401       507
  Net gain on disposal of other real estate owned     -     -     63       -
  Net realized gains on sales and calls of investment securities     240     -     573       1,133
  Federal Home Loan Bank dividends     86     59     237       113
  Other income     261     298     983       811
    Total non-interest income     2,061     1,813     6,081       5,866
NON-INTEREST EXPENSES:                          
  Salaries and employee benefits     5,076     5,048     14,833       12,916
  Occupancy and equipment     1,222     1,134     3,671       2,936
  Data processing expense     448     357     1,362       949
  ATM/Debit card expenses     166     170     476       388
  License & maintenance contracts     128     139     384       338
  Regulatory assessments     177     220     569       517
  Advertising     155     124     462       346
  Audit and accounting fees     185     135     492       406
  Internet banking expenses     134     109     359       257
  Acquisition and integration     -     271     -       784
  Amortization of core deposit intangibles     84     84     252       184
  Other expense     1,276     1,200     3,660       3,126
    Total non-interest expenses     9,051     8,991     26,520       23,147
      Income before provision for income taxes     2,886     3,358     9,840       6,978
PROVISION FOR INCOME TAXES     535     389     2,180       939
    Net income   $ 2,351   $ 2,969   $ 7,660     $ 6,039
Preferred stock dividends and accretion     -     87     -       262
    Net income available to common shareholders   $ 2,351   $ 2,882   $ 7,660     $ 5,777
Net income per common share:                          
  Basic earnings per common share   $ 0.22   $ 0.26   $ 0.70     $ 0.58
  Weighted average common shares used in basic computation     10,919,630     10,899,086     10,917,892       10,020,057
  Diluted earnings per common share   $ 0.21   $ 0.26   $ 0.70     $ 0.57
  Weighted average common shares used in diluted computation     11,014,907     10,958,811     11,005,553       10,080,034
Cash dividends per common share   $ 0.05   $ 0.05   $ 0.15     $ 0.15
                           
                           
 
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 

For the three months ended
  Sep. 30,
2014
  Jun. 30,
2014
    Mar. 31,
2014
  Dec. 31,
2013
  Sep. 30,
2013
(In thousands, except share and per share amounts)                                
Net interest income   $ 9,876   $ 9,905     $ 10,099   $ 9,192   $ 10,536
Provision for credit losses     -     (400 )     -     -     -
Net interest income after provision for credit losses     9,876     10,305       10,099     9,192     10,536
Total non-interest income     2,061     2,044       1,977     1,965     1,813
Total non-interest expense     9,051     8,734       8,736     8,538     8,991
Provision for income taxes     535     922       724     408     389
Net income   $ 2,351   $ 2,693     $ 2,616   $ 2,211   $ 2,969
Net income available to common shareholders   $ 2,351   $ 2,693     $ 2,616   $ 2,123   $ 2,882
Basic earnings per common share   $ 0.22   $ 0.25     $ 0.24   $ 0.19   $ 0.26
Weighted average common shares used in basic computation     10,919,630     10,918,065       10,915,945     10,914,296     10,899,086
Diluted earnings per common share   $ 0.21   $ 0.24     $ 0.24   $ 0.19   $ 0.26
Weighted average common shares used in diluted computation     11,014,907     10,999,663       10,998,630     10,980,390     10,958,811
                                 
                                 
   
CENTRAL VALLEY COMMUNITY BANCORP  
SELECTED RATIOS  
(Unaudited)  
   

As of and for the three months ended
  Sep. 30,
2014
    Jun. 30,
2014
    Mar. 31,
2014
    Dec. 31,
2013
    Sep. 30,
2013
 
(Dollars in thousands, except per share amounts)                                        
Allowance for credit losses to total loans     1.35 %     1.34 %     1.62 %     1.80 %     1.89 %
Nonperforming assets to total assets     0.37 %     0.40 %     0.44 %     0.68 %     0.75 %
Total nonperforming assets   $ 4,266     $ 4,632     $ 4,982     $ 7,776     $ 8,146  
Total nonaccrual loans   $ 4,266     $ 4,632     $ 4,982     $ 7,586     $ 8,022  
Net loan charge-offs (recoveries)   $ (182 )   $ 614     $ 887     $ 524     $ (131 )
Net charge-offs (recoveries) to average loans (annualized)     (0.13 )%     0.46 %     0.69 %     0.41 %     (0.10 )%
Book value per share   $ 12.11     $ 11.98     $ 11.55     $ 11.00     $ 10.98  
Tangible book value per share   $ 9.26     $ 9.11     $ 8.66     $ 8.1     $ 8.09  
Tangible common equity   $ 101,668     $ 99,502     $ 94,655     $ 88,446     $ 88,333  
Interest and dividends on investment securities exempt from Federal income taxes   $ 1,469     $ 1,434     $ 1,402     $ 1,449     $ 1,593  
Net interest margin (calculated on a fully tax equivalent basis) (1)     4.06 %     4.09 %     4.24 %     3.92 %     4.66 %
Return on average assets (2)     0.81 %     0.93 %     0.93 %     0.79 %     1.11 %
Return on average equity (2)     7.10 %     8.27 %     8.37 %     7.04 %     9.87 %
Loan to deposit ratio     54.99 %     54.02 %     51.91 %     51.02 %     54.59 %
Tier 1 leverage - Bancorp     9.09 %     8.93 %     8.63 %     8.14 %     8.86 %
Tier 1 leverage - Bank     9.02 %     8.89 %     8.59 %     8.09 %     8.78 %
Tier 1 risk-based capital - Bancorp     14.95 %     14.73 %     14.67 %     13.88 %     14.41 %
Tier 1 risk-based capital - Bank     14.84 %     14.68 %     14.60 %     13.79 %     14.23 %
Total risk-based capital - Bancorp     16.06 %     15.83 %     15.92 %     15.13 %     15.67 %
Total risk based capital - Bank     15.94 %     15.77 %     15.85 %     15.04 %     15.48 %
                                         
(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)  
   
AVERAGE AMOUNTS   For the Three Months
Ended September 30,
    For the Nine Months
Ended September 30,
 
(Dollars in thousands)   2014     2013     2014     2013  
Federal funds sold   $ 310     $ 98     $ 274     $ 214  
Interest-bearing deposits in other banks     44,877       47,770       55,463       35,910  
Investments     465,316       417,628       458,041       386,921  
Loans (1)     541,229       508,905       525,492       426,265  
Federal Home Loan Bank stock     4,791       4,499       4,669       4,061  
Earning assets     1,056,523       978,900       1,043,939       853,371  
Allowance for credit losses     (7,439 )     (9,635 )     (8,333 )     (9,720 )
Non-accrual loans     4,436       7,600       5,377       9,608  
Other real estate owned     -       163       48       55  
Other non-earning assets     107,170       94,693       106,335       87,716  
Total assets   $ 1,160,690     $ 1,071,721     $ 1,147,366     $ 941,030  
                                 
Interest bearing deposits   $ 667,380     $ 606,386     $ 653,122     $ 544,007  
Other borrowings     5,155       5,155       5,155       5,810  
Total interest-bearing liabilities     672,535       611,541       658,277       549,817  
Non-interest bearing demand deposits     340,066       332,070       345,091       261,735  
Non-interest bearing liabilities     15,631       7,803       14,790       11,666  
Total liabilities     1,028,232       951,414       1,018,158       823,218  
Total equity     132,458       120,307       129,208       117,812  
Total liabilities and equity   $ 1,160,690     $ 1,071,721     $ 1,147,366     $ 941,030  
                                 
AVERAGE RATES                                
Federal funds sold     0.25 %     0.25 %     0.25 %     0.25 %
Interest-earning deposits in other banks     0.32 %     0.37 %     0.32 %     0.39 %
Investments     3.00 %     2.88 %     3.10 %     2.72 %
Loans     5.35 %     6.76 %     5.65 %     6.12 %
Earning assets     4.16 %     4.81 %     4.24 %     4.32 %
Interest-bearing deposits     0.15 %     0.22 %     0.17 %     0.23 %
Other borrowings     1.77 %     1.92 %     1.87 %     2.09 %
Total interest-bearing liabilities     0.16 %     0.24 %     0.18 %     0.25 %
Net interest margin (calculated on a fully tax equivalent basis) (2)     4.06 %     4.66 %     4.13 %     4.16 %
                                 
(1) Average loans do not include non-accrual loans.
(2) Calculated on a fully tax equivalent basis, which includes Federal tax benefits relating to income earned on municipal bonds totaled $757 and $821 for the three months ended September 30, 2014 and 2013, respectively. The Federal tax benefits relating to income earned on municipal bonds totaled $2,217 and $2,230 for the nine months ended September 30, 2014 and 2013, respectively.