CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31, September 30,
(In thousands, except share amounts) 2008 2007 2007
----------- ------------ ------------
ASSETS
Cash and due from banks $ 19,461 $ 17,108 $ 16,579
Federal funds sold 23,759 14,536 11,285
----------- ------------ ------------
Total cash and cash equivalents 43,220 31,644 27,864
Interest bearing deposits in other
banks - - 118
Investment securities:
Available-for-sale, at fair value
(amortized cost of $94,388 at
September 30, 2008, $84,139 at
December 31, 2007 and $85,080 at
September 30, 2007) 90,533 84,373 85,225
Held-to-maturity, at amortized
cost 7,453 - -
Loans, less allowance for credit
losses of $4,533 at September 30,
2008, $3,887 at December 31, 2007
and $3,830 at September 30, 2007 349,345 337,241 333,907
Bank premises and equipment, net 5,940 5,767 5,940
Bank owned life insurance 6,911 6,723 6,315
Federal Home Loan Bank stock 2,110 2,022 1,996
Goodwill 8,934 8,934 8,934
Accrued interest receivable,
intangibles and other assets 10,190 6,981 7,203
----------- ------------ ------------
Total assets $ 524,636 $ 483,685 $ 477,502
=========== ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 126,063 $ 128,120 $ 132,262
Interest bearing 296,123 274,442 275,814
----------- ------------ ------------
Total deposits 422,186 402,562 408,076
Short-term borrowings 19,900 20,000 10,313
Long-term debt 19,000 - -
Accrued interest payable and other
liabilities 8,444 6,929 6,403
----------- ------------ ------------
Total liabilities 469,530 429,491 424,792
----------- ------------ ------------
Shareholders' equity:
Preferred stock, no par value:
10,000,000 shares authorized, no
shares issued or outstanding - - -
Common stock, no par value;
80,000,000 shares authorized;
6,019,319 outstanding at
September 30, 2008, 5,975,316 at
December 31, 2007, and 5,999,591
at September 30, 2007 14,016 13,571 12,683
Retained earnings 43,403 40,483 39,940
Accumulated other comprehensive
income (loss), net of tax (2,313) 140 87
----------- ------------ ------------
Total shareholders' equity 55,106 54,194 52,710
----------- ------------ ------------
Total liabilities and shareholders'
equity $ 524,636 $ 483,685 $ 477,502
=========== ============ ============
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
September 30, September 30,
For the nine months ended 2008 2007
------------- -------------
(In thousands except per share amounts)
Net interest income $ 17,598 $ 18,284
Provision for credit losses 905 360
------------- -------------
Net interest income after provision for
credit losses 16,693 17,924
Total non-interest income 3,894 3,350
Total non-interest expense 14,922 14,325
Provision for income taxes 1,831 2,302
------------- -------------
NET INCOME $ 3,834 $ 4,647
============= =============
Basic earnings per share $ 0.64 $ 0.78
============= =============
Diluted earnings per share $ 0.61 $ 0.73
============= =============
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the three September June 30, March 31, December 31, September
months ended 30, 2008 2008 2008 2007 30, 2007
------------ -------- -------- ------------ ------------
(In thousands
except per share
amounts)
Net interest income $ 6,023 $ 5,726 $ 5,849 $ 6,224 $ 6,186
Provision for
credit losses 635 135 135 120 120
------------ -------- -------- ------------ ------------
Net interest
income after
provision for
credit losses 5,388 5,591 5,714 6,104 6,066
Total non-interest
income 1,382 1,274 1,238 1,168 1,075
Total non-interest
expense 4,984 4,966 4,972 4,774 4,864
Provision for
income taxes 572 584 675 865 701
------------ -------- -------- ------------ ------------
Net income $ 1,214 $ 1,315 $ 1,305 $ 1,633 $ 1,576
============ ======== ======== ============ ============
Basic earnings per
share $ 0.20 $ 0.22 $ 0.22 $ 0.27 $ 0.26
============ ======== ======== ============ ============
Diluted earnings
per share $ 0.19 $ 0.21 $ 0.21 $ 0.26 $ 0.25
============ ======== ======== ============ ============
CENTRAL VALLEY COMMUNITY BANCORP
SELECTED RATIOS
(Unaudited)
For the three September June 30, March 31, December 31, September
months ended 30, 2008 2008 2008 2007 30, 2007
(Dollars in
thousands)
Allowance for credit
losses to total
loans 1.28% 1.16% 1.14% 1.14% 1.13%
Nonperforming loans
to total loans 0.40% 0.10% 0.03% 0.05% -
Total nonperforming
assets $ 1,419 $ 366 $ 109 $ 179 $ 11
Net interest margin
(calculated on a
fully tax equivalent
basis) (1) 5.19% 5.04% 5.40% 5.81% 5.80%
Return on average
assets (2) 0.93% 1.04% 1.08% 1.36% 1.33%
Return on average
equity (2) 8.82% 9.71% 9.55% 12.10% 12.21%
(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 Reports Earnings Results for the Nine Months and Third Quarter Ended September 30, 2008
| Source: Central Valley Community Bancorp
FRESNO, CA--(Marketwire - October 16, 2008) - 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 $3,834,000, or $0.61 per diluted share, for the nine-month period
ended September 30, 2008, compared to $4,647,000, or $0.73 per diluted
share for the same period of 2007.
Annualized return on average equity for the first three quarters of 2008
was 9.36%, compared to 12.15% for the same period in 2007. This comparison
is reflective of a decrease in net income and an increase in capital from
retained earnings. Annualized return on average assets was 1.01% for the
nine months ended September 30, 2008, compared to 1.30% for the same period
in 2007.
The Company's asset quality continues to be a comparative strength.
Although non-accrual loans at September 30, 2008 increased to $1,419,000,
they represent only 0.40% of total loans. This compares to $179,000 or
0.05% of total loans at December 31, 2007 and $11,000 or 0.003% at
September 30, 2007. The Company expects the loss exposure on these loans
to be minimal due to government guarantees and strong collateral position.
During the first nine months of 2008, the Company recorded $259,000 in net
loan charge-offs, a decrease of $80,000 from the $339,000 for the same
period in 2007. The Company had no Other Real Estate Owned at September
30, 2008, December 31, 2007 or September 30, 2007.
The Company is not involved in any sub-prime mortgage lending activities
and our investment portfolio does not include any preferred stock or debt
securities issued by companies currently identified as troubled or any
mortgage obligations collaterized by sub-prime mortgage loans. During the
first nine months of 2008, the Company recorded a $905,000 provision for
credit losses, compared to $360,000 for the same period in 2007. The
increase in 2008 is principally due to our assessment of the overall
adequacy of the allowance for credit losses and the increase in the level
of outstanding loans. The allowance for credit losses as a percentage of
total loans was 1.28% at September 30, 2008, 1.14% at December 31, 2007 and
1.13% at September 30, 2007.
The Company's annualized net interest margin (fully tax equivalent basis)
was 5.21% for the nine months ended September 30, 2008, compared to 5.72%
for the same period in 2007. The decrease in margin is a reflection of the
325 basis points 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 nine months ended September 30, 2008, the effective yield on total
earning assets decreased 85 basis points to 6.73% compared to 7.58% for the
same period in 2007, while the cost of total interest bearing liabilities
decreased only 63 basis points to 2.22% compared to 2.85% for the same
period in 2007. The cost of total deposits decreased 42 basis points to
1.48% compared to 1.90% for the same period in 2007. Net interest income
for the nine months ended September 30, 2008 was $17,598,000, compared to
$18,284,000 for the same period in 2007, a decrease of $686,000 or 3.75%.
Total average assets for the nine months ended September 30, 2008 were
$503,847,000, compared to $476,852,000 for the same period in 2007, an
increase of 5.66%. Total average loans were $348,872,000 for the first
three quarters of 2008, compared to $329,694,000 for the same period in
2007, representing a 5.82% increase. Total average investments increased
to $97,702,000 for the first three quarters of 2008 from $93,764,000 for
the same period in 2007, representing a 4.20% increase. Total average
deposits decreased 1.50% to $411,207,000 for the nine months ended
September 30, 2008, compared to $417,486,000 for the same period in 2007.
The decrease in average deposits consists of an $8,375,000 decrease in
average non-interest bearing deposits, partially offset by a $2,096,000
increase in average interest bearing deposits. The Company's ratio of
average non-interest bearing deposits to total deposits continued to be
above industry averages at 30.9% for the first three quarters of 2008.
Non-interest income for the nine months ended September 30, 2008 increased
$544,000, or 16.24% to $3,894,000, compared to $3,350,000 for the same
period in 2007, mainly due to a $409,000 increase in income from customer
service charges and an $82,000 increase in other income. Non-interest
expense for the nine months ended September 30, 2008 increased $597,000, or
4.17% compared to the same period in 2007, primarily due to a $388,000
increase in salary and benefit expenses attributable to an increase in the
number of employees and ordinary increases in salaries and benefits.
Non-interest expenses of $40,000 related to the Herndon and Fowler office
relocation in Clovis from an in-store location to a new expanded
traditional branch location were included in the nine-month period ended
September 30, 2008.
In May 2008, the Company entered into a definitive merger agreement to
acquire Service 1st Bancorp and has filed the required regulatory
applications with federal and state banking regulators and a securities
registration statement with the Securities and Exchange Commission. The
Company has received all regulatory and shareholder approvals and, subject
to satisfying the closing conditions, expects to complete the merger on or
about November 12, 2008. The Company recorded merger-related expenses of
$35,000 during the nine months ended September 30, 2008 in non-interest
expense.
Quarter Ended September 30, 2008
For the quarter ended September 30, 2008, the Company reported unaudited
consolidated net income of $1,214,000, or $0.19 per diluted share, compared
to $1,576,000, or $0.25 per diluted share, for the same period in 2007, and
$1,315,000, or $0.21 per diluted share, for the quarter ended June 30,
2008.
Annualized return on average equity for the third quarter of 2008 was
8.82%, compared to 12.21% for the same period of 2007. This decrease is
reflective of a decrease in net income and an increase in capital from
retained earnings. Annualized return on average assets was 0.93% for the
third quarter of 2008 compared to 1.33% for the same period in 2007.
In comparing third quarter 2008 to third quarter 2007, average total loans
increased $14,692,000, or 4.35%. During the third quarter of 2008, the
Company recorded a $635,000 provision for credit losses, compared to
$120,000 for the same period in 2007. The increase in 2008 is principally
due to our assessment of the overall adequacy of the allowance for credit
losses and the increase in the level of outstanding loans. During the
third quarter of 2008, the Company recorded $178,000 in net loan
charge-offs compared to $33,000 for the same period in 2007.
Average total deposits for the third quarter of 2008 increased 0.72% to
$420,096,000 compared to $417,108,000 for the same period of 2007.
The Company's net interest margin (fully tax equivalent basis) decreased 61
basis points to 5.19% for the three months ended September 30, 2008, from
5.80% for the three months ended September 30, 2007. Net interest income
decreased 2.63% to $6,023,000 for the third quarter of 2008, compared to
$6,186,000 for the same period in 2007. The decreases in net interest
margin and in net interest income reflect the impact of the 325 basis point
decline in interest rates by the Federal Reserve Bank since September 2007.
Non-interest income increased $307,000 to $1,382,000 for the third quarter
of 2008 compared to $1,075,000 for the same period in 2007, driven
primarily by an increase in customer service charges of $120,000 to
$827,000 in the third quarter of 2008 compared to $707,000 for the 2007
period and an increase in net gains on sales of investment securities of
$99,000 to $156,000 in the third quarter of 2008 compared to $57,000 for
the same period in 2007. Non-interest expense increased $120,000, or 2.47%
for the same periods mainly due to increases in salary and occupancy
expenses.
"Central Valley Community Bank continues to exceed the highest tier level
of the capital requirements established by the banking regulators, and
continues to have relatively low levels of non-performing loans and
charge-offs compared to our peers. During the third quarter we were able
to grow the levels of our deposits, loans and total assets," stated Daniel
J. Doyle, President and CEO of Central Valley Community Bancorp and Central
Valley Community Bank.
"We have seen tremendous turbulence in the global financial markets along
with recent unprecedented actions by the US Congress, US Treasury and the
Federal Reserve Bank to stabilize these markets. While Central Valley
Community Bank's loan portfolio has faired well due to past underwriting,
diversification of types of loans, and the overall strength of our
borrowers; we have increased the provision for credit losses in this
quarter due to the continuing uncertainty in our economy as well as some
stress to our borrowers related to economic events. This addition to the
provision for credit losses along with the significant drop in rates from
the previous year due to the Federal Reserve Bank cutting rates 325 basis
points are the most significant contributors to the decrease in the current
quarter and year to date earnings. We continue to believe our strong
capital position, the quality of our balance sheet, and our liquidity
position, help keep our bank well positioned to serve our customers and our
communities and weather the current economic cycle," 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
twelve offices in Clovis, Fresno, Kerman, Madera, Oakhurst, Prather,
Sacramento, and a loan production office in Modesto, California. In May
2008, Central Valley Community Bancorp entered into a definitive merger
agreement to acquire Service 1st Bancorp with three banking offices in
Tracy, Stockton and Lodi, California which is expected to be completed
during November of 2008. Additionally, the Bank operates Commercial Real
Estate Lending, SBA Lending and Agribusiness Lending Departments.
Investment services are provided by Investment Centers of America. 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,
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, 2007.
Therefore, the information set forth in such forward-looking statements
should be carefully considered when evaluating the business prospects of
the Company.