FRESNO, CA--(Marketwire - July 11, 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 $2,620,000, or $0.42 per diluted share, for the six-month period
ended June 30, 2008, compared to $3,071,000, or $0.48 per diluted share for
the same period of 2007.
Annualized return on average equity for the first half of 2008 was 9.63%,
compared to 12.11% 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 1.06% for the
first half of 2008, compared to 1.29% for the same period in 2007.
The Company's asset quality remains strong. Non-accrual loans at June 30,
2008 totaled $366,000 or 0.10% of total loans compared to $179,000 or 0.05%
of total loans at December 31, 2007 and $86,000 or 0.03% at June 30, 2007.
The Company expects the loss exposure on these loans to be minimal due to
government guarantees. During the first six months of 2008, the Company
recorded $81,000 in net loan charge-offs, compared to $306,000 for the same
period in 2007. The Company had no Other Real Estate Owned at June 30,
2008, December 31, 2007 or June 30, 2007.
The Company is not involved in any sub-prime mortgage lending activities
and the investment portfolio does not include any sub-prime mortgage loans.
During the first half of 2008, the Company recorded a $270,000 addition to
the allowance for credit losses, compared to $240,000 for the same period
in 2007. The allowance for credit losses as a percentage of total loans
was 1.16% at June 30, 2008, 1.14% at December 31, 2007 and 1.10% at June
30, 2007.
The Company's annualized net interest margin (fully tax equivalent basis)
was 5.22% for the six months ended June 30, 2008, compared to 5.68% for the
same period in 2007. The net interest margin was 5.53% for the trailing
12-month period ended June 30, 2008, compared to 5.74% for the trailing
12-month period ended June 30, 2007. The decrease in margin is a
reflection of the 325 basis points decline 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. In comparing the two periods, the effective yield on total
earning assets decreased 70 basis points to 6.81% compared to 7.51% for the
same period in 2007, while the cost of total interest bearing liabilities
decreased only 46 basis points to 2.34% compared to 2.80% for the same
period in 2007. The cost of total deposits decreased 29 basis points to
1.57% compared to 1.86% for the same period in 2007. Net interest income
for the six months ended June 30, 2008 was $11,575,000, compared to
$12,098,000 for the same period in 2007, a decrease of $523,000 or 4.32%.
Total average assets for the six months ended June 30, 2008 were
$495,944,000, compared to $477,140,000 for the same period in 2007, an
increase of 3.9%. Total average loans were $346,970,000 for the first half
of 2008, compared to $325,541,000 for the same period in 2007, representing
a 6.6% increase. Total average investments decreased from $108,923,000 for
the first half of 2007 to $105,954,000 for the first half of 2008. Total
average deposits decreased 2.6% to $406,734,000 for the six months ended
June 30, 2008, compared to $417,678,000 for the same period in 2007. The
decrease in average deposits is due primarily to an $8,692,000 decrease in
average non-interest bearing deposits and a $2,252,000 decrease 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 31.2% for the first half of 2008.
Non-interest income for the six months ended June 30, 2008 increased
$237,000, or 10.4% to $2,512,000, compared to $2,275,000 for the same
period in 2007, mainly due to a $289,000 increase in income from customer
service charges partially offset by a $73,000 decrease in brokered loan
fees. Non-interest expense for the six months ended June 30, 2008
increased $477,000, or 5.0% compared to the same period in 2007, primarily
due to a $344,000 increase in salary and benefits expenses attributable to
an increase in the number of employees and ordinary increases in salaries
and benefits. The six month period ended June 30, 2008 also included
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 located across the street.
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 anticipates it will receive regulatory and shareholder approvals
and expects to complete the merger near the end of the third quarter of
2008.
Quarter Ended June 30, 2008
For the quarter ended June 30, 2008, the Company reported unaudited
consolidated net income of $1,315,000, or $0.21 per diluted share, compared
to $1,619,000, or $0.25 per diluted share, for the same period in 2007, and
$1,305,000, or $0.21 per diluted share, for the quarter ended March 31,
2008.
Annualized return on average equity for the second quarter of 2008 was
9.71%, compared to 12.67% 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 1.04% for the
second quarter of 2008 compared to 1.35% for the same period in 2007.
In comparing second quarter 2008 to second quarter 2007, average total
loans increased $20,106,000, or 6.0%. During the second quarter of 2008,
the Company recorded a $135,000 addition to the allowance for credit
losses, compared to $120,000 for the same period in 2007. The increase in
2008 is principally due to the increase in the level of outstanding loans
and our assessment of the overall adequacy of the allowance for credit
losses. During the second quarter of 2008, the Company recorded $35,000 in
net loan charge-offs compared to $58,000 for the same period in 2007.
Average total deposits for the second quarter of 2008 decreased 2.9% to
$409,154,000 compared to $421,473,000 for the same period of 2007.
The Company's net interest margin (fully tax equivalent basis) decreased 65
basis points to 5.04% for the three months ended June 30, 2008, from 5.69%
for the three months ended June 30, 2007. Net interest income decreased
6.6% to $5,726,000 for the second quarter of 2008, compared to $6,130,000
for the same period in 2007. The decreases in net interest margin and in
net interest income reflects the impact of the 325 basis point decline in
interest rates by the Federal Reserve Bank since September 2007.
Non-interest income increased $158,000 to $1,274,000 for the second quarter
of 2008 compared to $1,116,000 for the same period in 2007, driven
primarily by an increase in customer service charges. Non-interest expense
increased $210,000, or 4.4% for the same periods mainly due to increases in
salary and occupancy expenses.
"While the second quarter 2008 net income was lower than the second quarter
2007, this is primarily a result of the 325 basis point decrease in
interest rates and was not driven by credit costs of problem loans. The
slight increase in non-accrual loans consists of five small business
customers and each loan is supported by government guarantees. We are
seeing more stress in the markets we serve due to the slowdown in the
economy, rising costs of food and energy, and increases in unemployment.
However, the overall quality of the loan portfolio remains strong which
reflects the quality of our borrowers and the diversification of the loans.
The slower growth in loans is a reflection of a slower local economy, fewer
credit-worthy borrowers, and the full payoff received in the second quarter
of an $11 million adversely risk-rated loan," stated Daniel J. Doyle,
President and CEO of Central Valley Community Bancorp and Central Valley
Community Bank.
"During the second quarter, we announced the pending merger with Service
1st Bancorp which has three full-service offices in Tracy, Stockton, and
Lodi. We believe adding these offices, their professional employees and
customers to our current structure will provide a long-term benefit to the
growth and profitability of our company. This merger is subject to
regulatory approval as well as shareholder approval from both companies and
is expected to close near the end of the third quarter of 2008," 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 2008. Additionally, the Bank operates Commercial Real Estate
Lending, SBA Lending and Agribusiness Lending Departments. Insurance
services are offered through Central Valley Community Insurance Services
LLC and 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.
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, December 31, June 30,
(In thousands, except share amounts) 2008 2007 2007
----------- ------------ -----------
ASSETS
Cash and due from banks $ 21,911 $ 17,108 $ 23,853
Federal funds sold 17,369 14,536 9,530
----------- ------------ -----------
Total cash and cash equivalents 39,280 31,644 33,383
Interest bearing deposits in other
banks 5,000 - 158
Available-for-sale investment
securities (Amortized cost of
$99,880 at June 30, 2008, $84,139
at December 31, 2007 and $90,446 at
June 30, 2007) 96,635 84,373 89,591
Loans, less allowance for credit
losses of $4,076 at June 30, 2008,
$3,887 at December 31, 2007 and
$3,743 at June 30, 2007 348,177 337,241 335,622
Bank premises and equipment, net 6,043 5,767 5,984
Bank owned life insurance 6,847 6,723 6,258
Federal Home Loan Bank stock 2,079 2,022 1,971
Goodwill 8,934 8,934 8,934
Accrued interest receivable,
intangibles and other assets 9,515 6,981 7,615
----------- ------------ -----------
Total assets $ 522,510 $ 483,685 $ 489,516
=========== ============ ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 127,499 $ 128,120 $ 138,185
Interest bearing 289,548 274,442 283,722
----------- ------------ -----------
Total deposits 417,047 402,562 421,907
Short-term borrowings 19,900 20,000 10,625
Long-term debt 19,000 - -
Accrued interest payable and other
liabilities 12,421 6,929 6,063
----------- ------------ -----------
Total liabilities 468,368 429,491 438,595
----------- ------------ -----------
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;
6,006,119 outstanding at June
30, 2008, 5,975,316 at December
31, 2007, and 5,958,786 at June
30, 2007 13,900 13,571 12,475
Retained earnings 42,189 40,483 38,959
Accumulated other comprehensive
income (loss), net of tax (1,947) 140 (513)
----------- ------------ -----------
Total shareholders' equity 54,142 54,194 50,921
----------- ------------ -----------
Total liabilities and shareholders'
equity $ 522,510 $ 483,685 $ 489,516
=========== ============ ===========
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
June 30, June 30,
For the six months ended 2008 2007
========= =========
(In thousands, except per share amounts)
Net interest income $ 11,575 $ 12,098
Provision for credit losses 270 240
--------- ---------
Net interest income after provision for credit losses 11,305 11,858
Total non-interest income 2,512 2,275
Total non-interest expenses 9,938 9,461
Provision for income taxes 1,259 1,601
--------- ---------
NET INCOME $ 2,620 $ 3,071
========= =========
Basic earnings per share $ 0.44 $ 0.51
========= =========
Diluted earnings per share $ 0.42 $ 0.48
========= =========
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the three June 30, March 31, December 31, September 30, June 30,
months ended 2008 2008 2007 2007 2007
========= ========= ============ ============ =========
(In thousands,
except per share
amounts)
Net interest income $ 5,726 $ 5,849 $ 6,224 $ 6,186 $ 6,130
Provision for credit
losses 135 135 120 120 120
--------- --------- ------------ ------------ ---------
Net interest
income after
provision for
credit losses 5,591 5,714 6,104 6,066 6,010
Total non-interest
income 1,274 1,238 1,168 1,075 1,116
Total non-interest
expense 4,966 4,972 4,774 4,864 4,756
Provision for income
taxes 584 675 865 701 751
--------- --------- ------------ ------------ ---------
Net income $ 1,315 $ 1,305 $ 1,633 $ 1,576 $ 1,619
========= ========= ============ ============ =========
Basic earnings per
share $ 0.22 $ 0.22 $ 0.27 $ 0.26 $ 0.27
========= ========= ============ ============ =========
Diluted earnings per
share $ 0.21 $ 0.21 $ 0.26 $ 0.25 $ 0.25
========= ========= ============ ============ =========
CENTRAL VALLEY COMMUNITY BANCORP
SELECTED RATIOS
(Unaudited)
For the three June 30, March 31, December 31, September 30, June 30,
months ended 2008 2008 2007 2007 2007
========= ========= ============ ============ =========
(Dollars in
thousands)
Allowance for credit
losses to total
loans 1.16% 1.14% 1.14% 1.13% 1.10%
Nonperforming loans
to total loans 0.10% 0.03% 0.05% - 0.03%
Total nonperforming
assets $ 366 $ 109 $ 179 $ 11 $ 86
Net interest margin
(calculated on a
fully tax
equivalent basis)(1) 5.04% 5.40% 5.81% 5.80% 5.69%
Annualized return on
average assets 1.04% 1.08% 1.36% 1.33% 1.35%
Annualized return on
average equity (2) 9.71% 9.55% 12.10% 12.21% 12.67%
(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.
Contact Information: Contact:
Debbie Nalchajian-Cohen
Phone: 559-222-1322
Cell: 559-281-1312