SOURCE: Central Valley Community Bancorp

Central Valley Community Bancorp

October 21, 2015 16:22 ET

Central Valley Community Bancorp Reports Earnings Results for the Nine Months and Quarter Ended September 30, 2015

FRESNO, CA--(Marketwired - Oct 21, 2015) -  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 $8,061,000, and diluted earnings per common share of $0.73 for the nine months ended September 30, 2015, compared to $7,660,000 and $0.70 per diluted common share for the nine months ended September 30, 2014. 

Net income for the period increased 5.23% in 2015 compared to the nine-month period in 2014, primarily driven by an increase in non-interest income, offset by an increase in provision for credit losses. During the nine months ended September 30, 2015, the Company recorded a provision for credit losses of $600,000. The company recorded a reverse provision for credit losses of $400,000 during the nine months ended September 30, 2014. Net interest income before the provision for credit losses for the nine months ended September 30, 2015 was $30,137,000, compared to $29,879,000 for the nine months ended September 30, 2014, an increase of $258,000 or 0.86%. Net interest income during the first nine months of 2015 and 2014 was benefited by approximately $274,000 and $861,000, respectively, in net interest income from prepayment penalties and payoff of loans previously on nonaccrual status. Excluding these benefits, net interest income for the first nine months ended September 30, 2015 increased by $845,000 compared to the nine months ended September 30, 2014. 

Non-performing assets decreased by $11,558,000, or 82.25%, to $2,494,000 at September 30, 2015, compared to $14,052,000 at December 31, 2014. During the nine months ended September 30, 2015, the Company's shareholders' equity increased $6,408,000, or 4.89%. The increase in shareholders' equity was driven by the retention of earnings net of dividends paid, partially offset by a decrease in unrealized gains on available-for-sale securities recorded in accumulated other comprehensive income (AOCI). 

Annualized return on average equity (ROE) for the nine months ended September 30, 2015 was 8.01%, compared to 7.90% for the nine months ended September 30, 2014. This increase in ROE reflects an increase in net income, notwithstanding an increase in shareholders' equity. The Company declared and paid $0.12 per share in cash dividends to holders of common stock during the first nine months of 2015 compared to $0.15 per share in the first nine months of 2014. Annualized return on average assets (ROA) was 0.89% for the nine months ended September 30 in both 2015 and 2014. During the nine months ended September 30, 2015, the Company's total assets increased 3.51%, and total liabilities increased 3.34% compared to December 31, 2014. 

During the nine months ended September 30, 2015, the Company recorded a provision for credit losses of $600,000, whereas the company recorded a reverse provision for credit losses of $400,000 during the nine months ended September 30, 2014. During the nine months ended September 30, 2015, the Company recorded $185,000 in net loan recoveries, compared to $1,319,000 in net loan charge-offs for the nine months ended September 30, 2014. The net (recovery) charge-off ratio, which reflects net (recoveries) charge-offs to average loans, was (0.04)% for the nine months ended September 30, 2015, compared to 0.33% for the same period in 2014.

At September 30, 2015, the allowance for credit losses stood at $9,093,000, compared to $8,308,000 at December 31, 2014, a net increase of $785,000 reflecting the provision of $600,000 and the net recoveries during the period. The allowance for credit losses as a percentage of total loans was 1.52% at September 30, 2015, and 1.45% at December 31, 2014. Total loans included loans acquired in the acquisition of Visalia Community Bank in 2013 ("VCB loans") that were recorded at fair value in connection with the acquisition. The value of the VCB loans totaled $66,572,000 at September 30, 2015 and $77,882,000 at December 31, 2014. Excluding these VCB loans from the calculation, the allowance for credit losses to total gross loans was 1.71% and 1.68% as of September 30, 2015 and December 31, 2014, respectively and general reserves associated with non-impaired loans to total non-impaired loans was 1.69% and 1.62%, 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, 2015. 

Total non-performing assets were $2,494,000, or 0.20% of total assets as of September 30, 2015, compared to $14,052,000, or 1.18% of total assets as of December 31, 2014. The decrease in non-performing assets resulted from the continued liquidation of certain assets serving as collateral for various impaired credits. On October 2, 2015, the Company received an additional $375,000 from the liquidation of collateralized assets which will be recorded as a recovery in the fourth quarter of 2015. 

In connection with the partial charge-off of a single commercial and agricultural relationship in the fourth quarter of 2014, the Company is actively working to collect all balances legally owed to the Company. The Company plans to continue to track and identify any expenses, net of recoveries, associated with the collection efforts of this commercial and agricultural relationship. For the nine months ended September 30, 2015, collection expenses related to this relationship totaled $303,000.

The following provides a reconciliation of the change in nonaccrual loans for 2015.

                                     
(In thousands)   Balances December 31, 2014   Additions to Nonaccrual Loans   Net Pay Downs     Transfer to Foreclosed Collateral - OREO     Returns to Accrual Status     Charge-Offs     Balances September 30, 2015
Nonaccrual loans:                                    
  Commercial and industrial   $ 7,209   $ 105   $ (6,607 )   $ -     $ -     $ (686 )   $ 21
  Agricultural land and production     -     -     -       -       -       -       -
  Real estate     2,831     720     (2,633 )     -       -       -       918
  Real estate construction and land development     -     53     (53 )     -       -       -       -
  Agricultural real estate     360     -     (360 )     -       -       -       -
  Equity loans and lines of credit     1,751     152     (1,319 )     (227 )     (111 )     (29 )     217
  Consumer     19     -     (5 )     -       -       -       14
Restructured loans (non-accruing):                                                  
  Commercial and industrial     56     -     (22 )     -       -       -       34
  Real estate     -     25     (2 )     -       -       -       23
  Real estate construction and land development     547     -     (547 )     -       -       -       -
  Equity loans and lines of credit     1,279     -     (12 )     -       -       -       1,267
  Consumer     -     -     -       -       -       -       -
    Total nonaccrual   $ 14,052   $ 1,055   $ (11,560 )   $ (227 )   $ (111 )   $ (715 )   $ 2,494
                                                       

The Company's net interest margin (fully tax equivalent basis) was 4.01% for the nine months ended September 30, 2015, compared to 4.13% for the nine months ended September 30, 2014. The decrease in net interest margin in the period-to-period comparison primarily resulted from a decrease in the yield on the Company's loan portfolio, partially offset by a decrease in the Company's cost of funds.

For the nine months ended September 30, 2015, the effective yield on total earning assets decreased 14 basis points to 4.10% compared to 4.24% for the nine months ended September 30, 2014, while the cost of total interest-bearing liabilities decreased 2 basis points to 0.16% compared to 0.18% for the nine months ended September 30, 2014. The cost of total deposits decreased 2 basis points to 0.09% for the nine months ended September 30, 2015, compared to 0.11% for the nine months ended September 30, 2014.

For the nine months ended September 30, 2015, the Company's average investment securities, including interest-earning deposits in other banks and Federal funds sold, increased by $2,465,000, or 0.48%, compared to the nine months ended September 30, 2014.

The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, decreased to 2.75% for the nine months ended September 30, 2015, compared to 2.80% for the nine months ended September 30, 2014. Total average loans, which generally yield higher rates than investment securities, increased $55,164,000, from $530,869,000 for the nine months ended September 30, 2014 to $586,033,000 for the nine months ended September 30, 2015. The effective yield on average loans decreased to 5.26% for the nine months ended September 30, 2015, compared to 5.65% for the quarter ended September 30, 2014 due to continued competitive and market rate pressures as well as a reduction in the amount of interest income recovered in more recent quarters on nonaccrual or charged-off loans.

Total average assets for the nine months ended September 30, 2015 were $1,209,143,000 compared to $1,147,366,000, for the nine months ended September 30, 2014, an increase of $61,777,000 or 5.38%. Total average loans increased $55,164,000, or 10.39% for the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014. Total average investments, including deposits in other banks and Federal funds sold, increased to $516,243,000 for the nine months ended September 30, 2015, from $513,778,000 for the nine months ended September 30, 2014, representing an increase of $2,465,000 or 0.48%. Total average deposits increased $55,094,000 or 5.52% to $1,053,307,000 for the nine months ended September 30, 2015, compared to $998,213,000 for the nine months ended September 30, 2014. Average interest-bearing deposits increased $18,532,000, or 2.84%, and average non-interest bearing demand deposits increased $36,562,000, or 10.59%, for the nine months ended September 30, 2015, compared to the nine months ended September 30, 2014. The Company's ratio of average non-interest bearing deposits to total deposits was 36.23% for the nine months ended September 30, 2015, compared to 34.57% for the nine months ended September 30, 2014.

Non-interest income for the nine months ended September 30, 2015 increased by $1,427,000 to $7,508,000, compared to $6,081,000 for the nine months ended September 30, 2014, primarily driven by an increase of $886,000 in net realized gains on sales and calls of investment securities, a $393,000 increase in loan placement fees, a $134,000 increase in other income, and a $237,000 increase in Federal Home Loan Bank dividends, partially offset by a $120,000 decrease in service charge income, and a $43,000 decrease in interchange fees. The Company also realized a $345,000 tax-free gain related to the collection of life insurance proceeds in June 2015 which is included in other non-interest income.

Non-interest expense for the nine months ended September 30, 2015 increased $493,000, or 1.86%, to $27,013,000 compared to $26,520,000 for the nine months ended September 30, 2014. The net increase year over year was a result of increases in salaries and employee benefits of $639,000, increases in professional services of $326,000, increases in Internet banking expenses of $182,000, increases in regulatory assessments of $252,000, increases in license and maintenance contracts of $8,000, and increases in advertising fees of $12,000, offset by decreases in data processing expenses of $500,000, decreases in ATM/Debit card expenses of $65,000, and decreases in occupancy and equipment expenses of $149,000. The increase in professional services was driven by $303,000 related to defending and collecting a deteriorated credit. The increase in salaries and employee benefits was primarily the result of increased performance incentives, and higher health insurance expenses. During the nine months ended September 30, 2015, other non-interest expenses included increases of $46,000 in telephone expenses, $17,000 in director's fees and related expenses, $12,000 in personnel expenses, $10,000 in stationery/supplies expenses, $8,000 in general insurance expenses, and $3,000 in operating losses, offset by decreases of $185,000 in net losses on disposal or write-down of premises and equipment, $48,000 in appraisal fees, $21,000 in postage expenses, $6,000 in armored courier expenses, and $1,000 in donations, as compared to the same period in 2014.

The Company recorded an income tax provision of $1,971,000 for the nine months ended September 30, 2015, compared to $2,180,000 for the nine months ended September 30, 2014. The effective tax rate for the nine months ended September 30, 2015 was 19.65% compared to 22.15% for the same period in 2014. The decrease in effective tax rate was primarily due to the additional nontaxable gain on collection of life insurance proceeds received in the second quarter of 2015.

Quarter Ended September 30, 2015

For the quarter ended September 30, 2015, the Company reported an unaudited consolidated net income of $2,517,000 and diluted earnings per common share of $0.23, compared to consolidated net income of $2,351,000 and $0.21 per diluted share for the same period in 2014. Net income for the immediately trailing quarter ended June 30, 2015 was $3,078,000, or $0.28 per diluted common share. The increase in net income during the third quarter of 2015 compared to the same period in 2014 is primarily due to an increase in net interest income, partially offset by a decrease in non-interest income and an increase in provision for credit losses. The Company recorded $100,000 in provision for credit losses during the third quarter of 2015 compared to none during the same period of 2014.

Annualized return on average equity (ROE) for the third quarter of 2015 was 7.47%, compared to 7.10% for the same period of 2014. The increase in ROE reflects an increase in net income, offset by an increase in shareholders' equity. Annualized return on average assets (ROA) was 0.82% for the third quarter of 2015 compared to 0.81% for the same period in 2014. This increase is due to an increase in net income, notwithstanding an increase in average assets.

In comparing the third quarter of 2015 to the third quarter of 2014, average total loans increased by $52,063,000, or 9.54%. During the third quarter of 2015, the Company recorded $279,000 in net loan recoveries compared to $182,000 for the same period in 2014. The net charge-off (recovery) ratio, which reflects annualized net charge-offs to average loans, was (0.19)% for the quarter ended September 30, 2015 compared to (0.13)% for the quarter ended September 30, 2014.

The following provides a reconciliation of the change in nonaccrual loans for the quarter ended September 30, 2015.

                               
(Dollars in thousands)   Balances June 30, 2015   Additions to Nonaccrual Loans   Net Pay Downs     Transfer to Foreclosed Collateral - OREO   Returns to Accrual Status   Charge-Offs   Balances September 30, 2015
Nonaccrual loans:                              
  Commercial and industrial   $ 237   $ -   $ (216 )   $ -   $ -   $ -   $ 21
  Agricultural land and production     -     -     -       -     -     -     -
  Real estate     3,027     -     (2,109 )     -     -     -     918
  Real estate construction and land development     -     -     -       -     -     -     -
  Agricultural real estate     360     -     (360 )     -     -     -     -
  Equity loans and lines of credit     700     -     (483 )     -     -     -     217
  Consumer     16     -     (2 )     -     -     -     14
Restructured loans (non-accruing):                                            
  Commercial and industrial     38           (4 )     -     -     -     34
  Real estate     24     -     (1 )     -     -     -     23
  Real estate construction and land development     547     -     (547 )     -     -     -     -
  Equity loans and lines of credit     1,267     -     -       -     -     -     1,267
    Total nonaccrual   $ 6,216   $ -   $ (3,722 )   $ -   $ -   $ -   $ 2,494
                                                 

The Company had no OREO transactions recorded during the quarter ended September 30, 2015.

Average total deposits for the third quarter of 2015 increased $67,212,000 or 6.67% to $1,074,658,000 compared to $1,007,446,000 for the same period of 2014. 

The Company's net interest margin (fully tax equivalent basis) decreased 5 basis points to 4.01% for the quarter ended September 30, 2015, compared to 4.06% for the quarters ended September 30, 2014 and June 30, 2015. Net interest income, before provision for credit losses, increased $476,000, or 4.82%, to $10,352,000 for the third quarter of 2015, compared to $9,876,000 for the same period in 2014. The decrease in net interest margin in the period-to-period comparison resulted primarily from a decrease in the yield on the loan portfolio, partially offset by a decrease in the Company's cost of funds. Over the same periods, the cost of total deposits decreased 1 basis point to 0.09% compared to 0.10% in 2014.

For the quarter ended September 30, 2015, the Company's average investment securities, including interest-earning deposits in other banks and Federal funds sold, increased by $17,203,000, or 3.37%, compared to the quarter ended September 30, 2014 and increased by $20,711,000, or 4.09%, compared to the quarter ended June 30, 2015. 

The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, decreased to 2.74% for the quarter ended September 30, 2015, compared to 2.76% for the quarter ended September 30, 2014 and 2.70% for the quarter ended June 30, 2015. Total average loans, which generally yield higher rates than investment securities, increased by $52,063,000 to $597,728,000 for the quarter ended September 30, 2015, from $545,665,000 for the quarter ended September 30, 2014 and increased by $5,710,000 from $592,018,000 for the quarter ended June 30, 2015. The effective yield on average loans decreased to 5.18% for the quarter ended September 30, 2015, compared to 5.35% and 5.28% for the quarters ended September 30, 2014 and June 30, 2015, respectively. 

Total average assets for the quarter ended September 30, 2015 were $1,230,687,000 compared to $1,160,690,000 for the quarter ended September 30, 2014 and $1,203,803,000 for the quarter ended June 30, 2015, an increase of $69,997,000 and $26,884,000, or 6.03% and 2.23%, respectively.

Total average deposits increased $67,212,000, or 6.67%, to $1,074,658,000 for the quarter ended September 30, 2015, compared to $1,007,446,000 for the quarter ended September 30, 2014. Total average deposits increased $28,040,000, or 2.68%, for the quarter ended September 30, 2015, compared to $1,046,618,000 for the quarter ended June 30, 2015. The Company's ratio of average non-interest bearing deposits to total deposits was 37.35% for the quarter ended September 30, 2015, compared to 33.76% and 35.42% for the quarters ended September 30, 2014 and June 30, 2015, respectively.

Non-interest income decreased $339,000, or 16.45%, to $1,722,000 for the third quarter of 2015 compared to $2,061,000 for the same period in 2014. The third quarter 2015 non-interest income included no net realized gains on sales and calls of investment securities compared to $240,000 for the same period in 2014. For the quarter ended September 30, 2015, service charge income decreased $111,000, and loan placement fees increased $29,000, while interchange fee income increased $2,000, compared to the same period in 2014. Non-interest income for the quarter ended September 30, 2015 decreased by $1,374,000 to $1,722,000, compared to $3,096,000 for the quarter ended June 30, 2015. The second quarter of 2015 included a $345,000 tax-free gain related to the collection of life insurance proceeds and $732,000 in net realized gains on sales and calls of investment securities which were absent from the results for the quarter ended September 30, 2015.

Non-interest expense for the quarter ended September 30, 2015 decreased $23,000, or 0.25%, to $9,028,000 compared to $9,051,000 for the quarter ended September 30, 2014. The net decrease quarter over quarter was a result of a decrease in data processing expenses of $161,000, a decrease in occupancy and equipment expense of $18,000, decreases in license and maintenance expenses of $5,000, partially offset by increases in salaries and employee benefits of $178,000, and increases in professional fees of $20,000. Non-interest expense for the quarter ended September 30, 2015 increased by $331,000 compared to $8,697,000 for the trailing quarter ended June 30, 2015. 

The Company recorded an income tax provision of $429,000 for the quarter ended September 30, 2015, compared to $535,000 for the quarter ended September 30, 2014. The effective tax rate for the quarter ended September 30, 2015 was 14.56% compared to 18.54% for the quarter ended September 30, 2014. 

"The third quarter financial results were solid for the Company. Loan and deposit growth continues as the economic climate in California's San Joaquin Valley showed ongoing improvement. The Company's one large non-performing loan relationship is now eliminated on the balance sheet with a small recovery posted as of this quarter end. We are monitoring economic conditions throughout the San Joaquin Valley and feel the Company is well-positioned to take advantage of a number of business sectors showing growth and improvement," stated James M. Ford, President and CEO of Central Valley Community Bancorp and Central Valley Community Bank.

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.

Members of Central Valley Community Bancorp's and the Bank's Board of Directors are: Daniel J. Doyle (Chairman), Daniel N. Cunningham (Lead Independent Director), Sidney B. Cox, Edwin S. Darden, Jr., F. T. "Tommy" Elliott, IV, James M. Ford, 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, 2014. 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)   2015   2014
    (Unaudited)    
ASSETS        
Cash and due from banks   $ 27,148   $ 21,316
Interest-earning deposits in other banks     47,872     55,646
Federal funds sold     266     366
    Total cash and cash equivalents     75,286     77,328
Available-for-sale investment securities (Amortized cost of $444,728 at September 30, 2015 and $423,639 at December 31, 2014)     452,842     432,535
Held-to-maturity investment securities (Fair value of $35,256 at September 30, 2015 and $35,096 at December 31, 2014)     32,367     31,964
Loans, less allowance for credit losses of $9,093 at September 30, 2015 and $8,308 at December 31, 2014     590,197     564,280
Bank premises and equipment, net     9,494     9,949
Bank owned life insurance     20,557     20,957
Federal Home Loan Bank stock     4,823     4,791
Goodwill     29,917     29,917
Core deposit intangibles     1,091     1,344
Accrued interest receivable and other assets     17,421     19,118
      Total assets   $ 1,233,995   $ 1,192,183
             
LIABILITIES AND SHAREHOLDERS' EQUITY            
Deposits:            
  Non-interest bearing   $ 386,408   $ 376,402
  Interest bearing     688,446     662,750
    Total deposits     1,074,854     1,039,152
             
Junior subordinated deferrable interest debentures     5,155     5,155
Accrued interest payable and other liabilities     16,533     16,831
      Total liabilities     1,096,542     1,061,138
Shareholders' equity:            
Common stock, no par value; 80,000,000 shares authorized; issued and outstanding: 10,993,463 at September 30, 2015 and 10,980,440 at December 31, 2014     54,345     54,216
Retained earnings     78,195     71,452
Accumulated other comprehensive income, net of tax     4,913     5,377
    Total shareholders' equity     137,453     131,045
      Total liabilities and shareholders' equity   $ 1,233,995   $ 1,192,183
 
 
 
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)   2015   2014   2015   2014  
    (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)  
INTEREST INCOME:                  
  Interest and fees on loans   $ 7,747   $ 7,301   $ 22,677   $ 22,197  
  Interest on deposits in other banks     49     37     147     134  
  Interest on Federal funds sold     -     -     -     1  
  Interest and dividends on investment securities:                          
    Taxable     1,234     1,341     3,477     4,127  
    Exempt from Federal income taxes     1,593     1,469     4,627     4,305  
      Total interest income     10,623     10,148     30,928     30,764  
INTEREST EXPENSE:                          
  Interest on deposits     246     249     718     813  
  Interest on junior subordinated deferrable interest debentures     25     23     73     72  
      Total interest expense     271     272     791     885  
    Net interest income before provision for credit losses     10,352     9,876     30,137     29,879  
PROVISION FOR CREDIT LOSSES     100     -     600     (400 )
    Net interest income after provision for credit losses     10,252     9,876     29,537     30,279  
NON-INTEREST INCOME:                          
  Service charges     700     811     2,321     2,441  
  Appreciation in cash surrender value of bank owned life insurance     142     156     451     459  
  Interchange fees     297     295     881     924  
  Loan placement fees     241     212     794     401  
  Net gain on disposal of other real estate owned     -     -     11     63  
  Net realized gains on sales and calls of investment securities     -     240     1,459     573  
  Federal Home Loan Bank dividends     120     86     474     237  
  Other income     222     261     1,117     983  
    Total non-interest income     1,722     2,061     7,508     6,081  
NON-INTEREST EXPENSES:                          
  Salaries and employee benefits     5,254     5,076     15,472     14,833  
  Occupancy and equipment     1,204     1,222     3,522     3,671  
  Professional services     395     375     1,212     886  
  Data processing expense     287     448     862     1,362  
  ATM/Debit card expenses     145     166     411     476  
  License & maintenance contracts     123     128     392     384  
  Regulatory assessments     223     177     821     569  
  Advertising     157     155     474     462  
  Internet banking expenses     167     134     541     359  
  Amortization of core deposit intangibles     85     84     253     252  
  Other expense     988     1,086     3,053     3,266  
    Total non-interest expenses     9,028     9,051     27,013     26,520  
      Income before provision for income taxes     2,946     2,886     10,032     9,840  
PROVISION FOR INCOME TAXES     429     535     1,971     2,180  
  Net income   $ 2,517   $ 2,351   $ 8,061   $ 7,660  
Net income per common share:                          
  Basic earnings per common share   $ 0.23   $ 0.22   $ 0.74   $ 0.70  
  Weighted average common shares used in basic computation     10,938,160     10,919,630     10,928,780     10,917,892  
  Diluted earnings per common share   $ 0.23   $ 0.21   $ 0.73   $ 0.70  
  Weighted average common shares used in diluted computation     11,024,954     11,014,907     11,012,024     11,005,553  
Cash dividends per common share   $ 0.06   $ 0.05   $ 0.12   $ 0.15  
 
 
 
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
    Sep. 30,   Jun. 30,   Mar. 31,   Dec. 31,     Sep. 30,
For the three months ended   2015   2015   2015   2014     2014
(In thousands, except share and per share amounts)                      
Net interest income   $ 10,352   $ 10,065   $ 9,720   $ 10,005     $ 9,876
Provision for credit losses     100     500     -     8,385       -
Net interest income after provision for credit losses     10,252     9,565     9,720     1,620       9,876
Total non-interest income     1,722     3,096     2,691     2,083       2,061
Total non-interest expense     9,028     8,697     9,288     8,819       9,051
Provision (benefit) for income taxes     429     886     657     (2,750 )     535
Net income (loss)   $ 2,517   $ 3,078   $ 2,466   $ (2,366 )   $ 2,351
Basic earnings (loss) per common share   $ 0.23   $ 0.28   $ 0.23   $ (0.22 )   $ 0.22
Weighted average common shares used in basic computation     10,938,160     10,924,437     10,923,590     10,923,211       10,919,630
Diluted earnings (loss) per common share   $ 0.23   $ 0.28   $ 0.22   $ (0.22 )   $ 0.21
Weighted average common shares used in diluted computation     11,024,954     11,009,916     11,002,976     11,000,147       11,014,907
 
 
 
CENTRAL VALLEY COMMUNITY BANCORP
SELECTED RATIOS
(Unaudited)
 
    Sep. 30,     Jun. 30,     Mar. 31,     Dec. 31,     Sep. 30,  
As of and for the three months ended   2015     2015     2015     2014     2014  
(Dollars in thousands, except per share amounts)                              
Allowance for credit losses to total loans     1.52 %     1.46 %     1.46 %     1.45 %     1.35 %
Non-performing assets to total assets     0.20 %     0.51 %     1.17 %     1.18 %     0.37 %
Total non-performing assets   $ 2,494     $ 6,216     $ 14,044     $ 14,052     $ 4,266  
Total nonaccrual loans   $ 2,494     $ 6,216     $ 13,696     $ 14,052     $ 4,266  
Net loan charge-offs (recoveries)   $ (279 )   $ 185     $ (91 )   $ 7,566     $ (182 )
Net charge-offs (recoveries) to average loans (annualized)     (0.19 )%     0.12 %     (0.06 )%     5.35 %     (0.13 )%
Book value per share   $ 12.50     $ 12.13     $ 12.24     $ 11.93     $ 12.11  
Tangible book value per share   $ 9.68     $ 9.30     $ 9.41     $ 9.09     $ 9.26  
Tangible common equity   $ 106,445     $ 102,215     $ 103,370     $ 99,784     $ 101,668  
Cost of total deposits     0.09 %     0.09 %     0.09 %     0.10 %     0.10 %
Interest and dividends on investment securities exempt from Federal income taxes   $ 1,593     $ 1,496     $ 1,538     $ 1,528     $ 1,469  
Net interest margin (calculated on a fully tax equivalent basis) (1)     4.01 %     4.06 %     3.95 %     4.04 %     4.06 %
Return on average assets (2)     0.82 %     1.02 %     0.83 %     (0.80 )%     0.81 %
Return on average equity (2)     7.47 %     9.15 %     7.41 %     (7.06 )%     7.10 %
Loan to deposit ratio     55.76 %     56.04 %     55.38 %     55.10 %     54.99 %
Tier 1 leverage - Bancorp     8.68 %     8.72 %     8.57 %     8.36 %     9.09 %
Tier 1 leverage - Bank     8.55 %     8.65 %     8.54 %     8.31 %     9.02 %
Common Equity Tier 1 - Bancorp (3)     13.14 %     13.12 %     12.95 %     N/A       N/A  
Common Equity Tier 1 - Bank (3)     13.34 %     13.36 %     13.21 %     N/A       N/A  
Tier 1 risk-based capital - Bancorp     13.50 %     13.47 %     13.30 %     13.67 %     14.95 %
Tier 1 risk-based capital - Bank     13.34 %     13.36 %     13.21 %     13.59 %     14.84 %
Total risk-based capital - Bancorp     14.72 %     14.66 %     14.47 %     14.88 %     16.06 %
Total risk based capital - Bank     14.57 %     14.55 %     14.38 %     14.80 %     15.94 %
   
(1) Net Interest Margin is computed by dividing annualized quarterly net interest income by quarterly average interest-bearing assets.
(2) Computed by annualizing quarterly net income.
(3) New capital ratio required with new Basel III capital rules that took effect January 1, 2015.
   
 
 
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)   2015     2014     2015     2014  
Federal funds sold   $ 249     $ 310     $ 242     $ 274  
Interest-bearing deposits in other banks     60,569       44,877       62,664       55,463  
Investments     466,888       465,316       453,337       458,041  
Loans (1)     593,395       541,229       576,356       525,492  
Federal Home Loan Bank stock     4,823       4,791       4,810       4,669  
Earning assets     1,125,924       1,056,523       1,097,409       1,043,939  
Allowance for credit losses     (8,857 )     (7,439 )     (8,782 )     (8,333 )
Nonaccrual loans     4,333       4,436       9,677       5,377  
Other real estate owned     -       -       45       48  
Other non-earning assets     109,287       107,170       110,794       106,335  
Total assets   $ 1,230,687     $ 1,160,690     $ 1,209,143     $ 1,147,366  
                                 
Interest bearing deposits   $ 673,273     $ 667,380     $ 671,654     $ 653,122  
Other borrowings     5,155       5,155       5,156       5,155  
Total interest-bearing liabilities     678,428       672,535       676,810       658,277  
Non-interest bearing demand deposits     401,385       340,066       381,653       345,091  
Non-interest bearing liabilities     16,165       15,631       16,571       14,790  
Total liabilities     1,095,978       1,028,232       1,075,034       1,018,158  
Total equity     134,709       132,458       134,109       129,208  
Total liabilities and equity   $ 1,230,687     $ 1,160,690     $ 1,209,143     $ 1,147,366  
                                 
AVERAGE RATES                                
Federal funds sold     0.25 %     0.25 %     0.25 %     0.25 %
Interest-earning deposits in other banks     0.32 %     0.32 %     0.31 %     0.32 %
Investments     3.06 %     3.00 %     3.08 %     3.10 %
Loans (3)     5.18 %     5.35 %     5.26 %     5.65 %
Earning assets     4.11 %     4.16 %     4.10 %     4.24 %
Interest-bearing deposits     0.15 %     0.15 %     0.14 %     0.17 %
Other borrowings     1.90 %     1.77 %     1.87 %     1.87 %
Total interest-bearing liabilities     0.16 %     0.16 %     0.16 %     0.18 %
Net interest margin (calculated on a fully tax equivalent basis) (2)     4.01 %     4.06 %     4.01 %     4.13 %
                                 
(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 totaled $820 and $757 for the three months ended September 30, 2015 and 2014, respectively. The Federal tax benefits relating to income earned on municipal bonds totaled $2,383 and $2,217 for the nine months ended September 30, 2015 and 2014, respectively.
(3) Loan yield includes loan (costs) fees for the three months ended September 30, 2015 and 2014 of ($54) and $64, respectively, related to recoveries on nonaccrual or charged off loans. Loan yield includes loan fees for the nine months ended September 30, 2015 and 2014 of $96 and $236, respectively, related to recoveries on nonaccrual or charged off loans.