SOURCE: Pacific Valley Bank

August 03, 2009 20:48 ET

Pacific Valley Bank Announces Restatement of 1st Quarter 2009 Earnings

SALINAS, CA--(Marketwire - August 3, 2009) - Pacific Valley Bank (OTCBB: PVBK) today announced that it will restate its 1st quarter 2009 financial statements following a recent regulatory examination.

Prior to the examination, in May 2009, as part of its ongoing review of the Bank's loan portfolio management determined that there was deterioration in the performance and credit worthiness in several specific loans and the portfolio in general due to the continuing weakness in the local and national economy. Based on this review the Bank recorded a provision of $1,500,000 to the allowance for loan losses. The Bank calculated this provision in accordance with its loan policies, its allowance for loan loss methodology and generally accepted accounting principles.

Following a recent regulatory examination conducted in June 2009, the Bank's regulatory agencies concluded that they did not have any issues as to the amount of the allowance for loan losses at May 31, 2009. The regulatory agencies believed that due to certain performance issues in the loan portfolio, management should have recorded $1,350,000 of the provision in the first quarter of 2009. They recommended that management consider accelerating the recording of this amount back into the first quarter. Although the Bank believes it correctly recognized the increase in its allowance in the second quarter in accordance with Generally Accepted Accounting Principles, the Bank has agreed to recognize $1,350,000 of the increase in the allowance for loan losses in the first quarter.

As a result of the restatement, the Bank will recognize a loss of $1,220,300 (a loss of $0.52 per share) for the first quarter of 2009 as compared to a previously reported earnings of $129,700 (basic earnings of $0.06 per share). The Bank has amended its 1st Quarter 2009 Report of Income and Condition, or "Call Report," with the FDIC and the Bank is in the process of amending its Quarterly Report on Form 10-Q also filed with the FDIC.

David B. Warner, Pacific Valley Bank's Chief Executive Officer, stated, "It is important to note that this restatement represents a timing issue between the first and second quarters as the regulators accepted management's assessment of its allowance for loans losses as of the end of the examination period. Also, Pacific Valley Bank remains in compliance with all regulatory capital requirements."

About Pacific Valley Bank

Pacific Valley Bank is a California banking corporation that commenced operations on September 14, 2004. We offer our services from three locations: our headquarters and Main Street office in Salinas, California, our office located in King City and our office located in Monterey. We provide a broad range of banking products and services, including credit and deposit services to our targeted client base of small and medium sized businesses, agriculture related businesses, non-profit organizations, professionals and individuals primarily in Monterey County. For more information, visit www.pacificvalleybank.com.

Forward-Looking Statements

Statements concerning future performance, developments or events, expectations for growth and income forecasts, and any other guidance on future periods, constitute forward-looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, loan production, competitive pressure in the banking industry, balance sheet management, net interest margin variations, the ability to control costs and expenses, changes in the interest rate environment and financial policies of the United States government and general economic conditions. The Bank disclaims any obligation to update any such factors.

Contact Information

  • Contact:

    David Warner
    CEO
    831-771-4323