CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31, December 31,
----------- ------------
(In thousands, except share amounts) 2009 2008
----------- ------------
ASSETS
Cash and due from banks $ 13,857 $ 18,061
Interest-bearing balances due from banks 34,544 -
Federal funds sold 279 1,457
----------- ------------
Total cash and cash equivalents 48,680 19,518
Available-for-sale investment securities
(Amortized cost of $199,744 at December 31,
2009 and $185,405 at December 31, 2008) 197,319 185,718
Held-to-maturity, at amortized cost - 7,040
Loans, less allowance for credit losses of
$10,200 at December 31, 2009 and $7,223 at
December 31, 2008 449,007 477,015
Bank premises and equipment, net 6,525 6,900
Other real estate owned 2,832 -
Bank owned life insurance 10,998 10,808
Federal Home Loan Bank stock 3,140 3,140
Goodwill 23,577 23,773
Core deposit intangibles 1,612 2,026
Accrued interest receivable and other assets 21,798 16,775
----------- ------------
Total assets $ 765,488 $ 752,713
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 159,630 $ 162,106
Interest bearing 480,537 472,952
----------- ------------
Total deposits 640,167 635,058
Short-term borrowings 5,000 6,368
Long-term debt 14,000 19,000
Junior subordinated deferrable interest
debentures 5,155 5,155
Accrued interest payable and other liabilities 9,943 11,757
----------- ------------
Total liabilities 674,265 677,338
----------- ------------
Commitments and contingencies
Shareholders' equity:
Preferred stock, no par value, $1,000 per
share liquidation preference; authorized -
10,000,000 shares; issued and outstanding -
8,359 shares at December 31, 2009 and none
at December 31, 2008 7,941 -
Common stock, no par value; 80,000,000
authorized; issued and outstanding -
8,949,754 at December 31, 2009 and 7,642,280
at December 31, 2008 37,846 30,479
Retained earnings 46,891 44,708
Accumulated other comprehensive (loss)
income, net of tax (1,455) 188
----------- ------------
Total shareholders' equity 91,223 75,375
----------- ------------
Total liabilities and shareholders'
equity $ 765,488 $ 752,713
=========== ============
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Years
(In thousands, except share and per share amounts) Ended December 31,
---------------------
2009 2008
--------- ----------
INTEREST INCOME:
Interest and fees on loans $ 29,920 $ 25,631
Interest on Federal funds sold 48 251
Interest and dividends on investment securities:
Taxable 7,709 4,845
Exempt from Federal income taxes 3,057 1,118
--------- ----------
Total interest income 40,734 31,845
--------- ----------
INTEREST EXPENSE:
Interest on deposits 5,867 6,340
Interest on junior subordinated deferrable
interest debentures 129 46
Other 631 892
--------- ----------
Total interest expense 6,627 7,278
--------- ----------
Net interest income before provision for
credit losses 34,107 24,567
PROVISION FOR CREDIT LOSSES 10,514 1,290
--------- ----------
Net interest income after provision for
credit losses 23,593 23,277
--------- ----------
NON-INTEREST INCOME:
Service charges 3,509 3,350
Appreciation in cash surrender value of bank
owned life insurance 391 268
Loan placement fees 231 111
Net realized gains on sales and calls of
investment securities 466 165
Federal Home Loan Bank stock dividends 7 118
Other income 1,246 1,178
--------- ----------
Total non-interest income 5,850 5,190
--------- ----------
NON-INTEREST EXPENSES:
Salaries and employee benefits 13,926 11,578
Occupancy and equipment 3,812 2,890
Loss on sale of assets 55 -
Other expenses 9,738 6,508
--------- ----------
Total non-interest expenses 27,531 20,976
--------- ----------
Income before provision for income taxes 1,912 7,491
(BENEFIT) PROVISION FOR INCOME TAXES (676) 2,352
--------- ----------
Net income 2,588 5,139
--------- ----------
Preferred stock dividends and accretion (365) -
--------- ----------
Net income available to common
shareholders $ 2,223 $ 5,139
========= ==========
Basic earnings per common share $ 0.29 $ 0.83
========= ==========
Weighted average common shares used in basic
computation 7,685,789 6,212,199
========= ==========
Diluted earnings per common share $ 0.28 $ 0.79
========= ==========
Weighted average common shares used in diluted
computation 7,803,764 6,496,236
========= ==========
Cash dividends per share $ - $ 0.10
========= ==========
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the three months Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
ended 2009 2009 2009 2009 2008
--------- --------- ---------- ---------- ----------
(In thousands,
except share and
per share amounts)
Net interest income $ 8,220 $ 8,654 $ 8,748 $ 8,485 $ 6,969
Provision for credit
losses 2,864 3,233 2,500 1,917 385
--------- --------- ---------- ---------- ----------
Net interest
income after
provision for
credit losses 5,356 5,421 6,248 6,568 6,584
Total non-interest
income 1,103 1,608 1,401 1,738 1,296
Total non-interest
expense 6,616 6,946 7,129 6,840 6,054
(Benefit) provision
for income taxes (643) (296) 56 207 521
--------- --------- ---------- ---------- ----------
Net income $ 486 $ 379 $ 464 $ 1,259 $ 1,305
========= ========= ========== ========== ==========
Net income available
to common
shareholders $ 416 $ 268 $ 329 $ 1,210 $ 1,305
========= ========= ========== ========== ==========
Basic earnings per
share $ 0.05 $ 0.04 $ 0.04 $ 0.16 $ 0.19
========= ========= ========== ========== ==========
Weighted average
shares used in
basic
computation 7,782,841 7,664,802 7,651,918 7,642,280 6,866,081
========= ========= ========== ========== ==========
Diluted earnings per
share $ 0.05 $ 0.03 $ 0.04 $ 0.16 $ 0.19
========= ========= ========== ========== ==========
Weighted average
shares used in
diluted
computation 7,900,679 7,781,789 7,760,014 7,770,449 7,046,583
========= ========= ========== ========== ==========
CENTRAL VALLEY COMMUNITY BANCORP
SELECTED RATIOS
(Unaudited)
As of and for the Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
three months ended 2009 2009 2009 2009 2008
--------- --------- ---------- ---------- ----------
(Dollars in
thousands)
Allowance for credit
losses to total
loans 2.22% 2.09% 1.75% 1.57% 1.49%
Nonperforming loans
to total loans 4.13% 2.46% 2.95% 2.89% 3.25%
Total nonperforming
assets $ 18,959 $ 15,002 $ 17,171 $ 16,636 $ 15,750
Net interest margin
(calculated on a
fully tax equivalent
basis) (1) 5.09% 5.43% 5.51% 5.23% 4.95%
Return on average
assets (2) 0.26% 0.20% 0.25% 0.66% 0.80%
Return on average
equity (2) 2.24% 1.86% 2.28% 6.13% 7.48%
Tier 1 leverage -
Bancorp 9.30% 8.64% 8.82% 8.53% 8.67%
Tier 1 leverage -
Bank 9.20% 8.49% 8.43% 8.12% 8.18%
Tier 1 risk-based
capital - Bancorp 12.28% 10.76% 10.54% 10.62% 9.33%
Tier 1 risk-based
capital - Bank 12.12% 10.58% 10.08% 10.11% 8.81%
Total risk-based
capital - Bancorp 13.54% 12.02% 11.79% 11.86% 10.57%
Total risk based
capital - Bank 13.38% 11.84% 11.33% 11.36% 10.05%
(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)
For the Three Months For the Years
AVERAGE AMOUNTS Ended December 31, Ended December 31,
-------------------- --------------------
(Dollars in thousands) 2009 2008 2009 2008
--------- --------- --------- ---------
Federal funds sold $ 30,497 $ 19,584 $ 17,627 $ 13,980
Interest-bearing deposits in
other banks 7,892 297 3,008 1,318
Investments 181,060 149,149 178,790 110,634
Loans (1) 454,296 411,785 469,341 364,285
Federal Home Loan Bank stock 3,140 2,603 3,140 2,197
--------- --------- --------- ---------
Earning assets 676,885 583,418 671,906 492,414
Allowance for credit losses (10,323) (6,573) (8,608) (4,676)
Non-accrual loans 12,666 9,234 13,117 2,724
Other non-earning assets 77,276 68,411 76,094 51,327
--------- --------- --------- ---------
Total assets $ 756,504 $ 654,490 $ 752,509 $ 541,789
========= ========= ========= =========
Interest bearing deposits $ 484,734 $ 400,974 $ 479,115 $ 313,541
Other borrowings 24,155 32,413 29,987 32,526
--------- --------- --------- ---------
Total interest-bearing
liabilities 508,889 433,387 509,102 346,067
Non-interest bearing demand
deposits 154,502 145,776 153,148 131,744
Non-interest bearing
liabilities 6,322 6,185 6,859 5,727
--------- --------- --------- ---------
Total liabilities 669,713 585,348 669,109 483,538
--------- --------- --------- ---------
Total equity 86,791 69,142 83,400 58,251
--------- --------- --------- ---------
Total liabilities and equity $ 756,504 $ 654,490 $ 752,509 $ 541,789
========= ========= ========= =========
AVERAGE RATES
Federal funds sold 0.25% 0.90% 0.27% 1.80%
Investments 6.13% 6.38% 6.90% 5.88%
Loans 6.29% 6.53% 6.37% 7.06%
Earning assets 5.91% 6.33% 6.30% 6.61%
Interest bearing deposits 1.00% 1.74% 1.22% 2.03%
Other borrowings 2.86% 3.08% 2.53% 2.89%
Total interest-bearing
liabilities 1.08% 1.84% 1.30% 2.11%
Net interest margin (calculated
on a fully tax equivalent
basis) 5.09% 4.95% 5.31% 5.13%
(1) Average loans do not include non-accrual loans.
Central Valley Community Bancorp Reports Earnings Results for the Year Ended December 31, 2009
| Source: Central Valley Community Bancorp
FRESNO, CA--(Marketwire - February 1, 2010) - 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 $2,588,000, and diluted earnings per common share of $0.28 for
the year ended December 31, 2009, compared to $5,139,000 and $0.79 per
diluted common share for the year ended December 31, 2008. Earnings for
2009 were negatively impacted by the overall weak economy, increased
provision for credit losses, and the significant increase in FDIC insurance
assessments for all banks, partially offset by gains from sales and calls
of investment securities.
As a result of the merger with Service 1st Bancorp (Service 1st) in November
2008, comparisons of performance for the years ended December 31, 2009 and
2008 reported in this press release will reflect both operating performance
changes for the Company and changes resulting from the merger. On November
12, 2008, the Company completed its acquisition of Service 1st with total
assets of $224 million. In conjunction with this acquisition, the Company
added full-service branches in Stockton, Lodi and Tracy, $192 million in
deposits and $123 million in loans. In connection with the transaction,
Service 1st Bank was merged with and into Central Valley Community Bank.
As previously announced, the Company completed an equity offering to a
group of institutional investors on December 23, 2009 by issuing 1,264,952
shares of common stock at $5.25 per share and 1,359 shares of non-voting
Series B Adjustable Rate Non-Cumulative Perpetual Preferred Stock at $1,000
per share. The net proceeds after fees and transaction expenses were
approximately $7.8 million. Also in 2009, on January 30, 2009, the Company
entered into a Letter Agreement with the United States Department of the
Treasury (U.S. Treasury) under the Capital Purchase Program, and issued and
sold, for an aggregate purchase price of $7,000,000 in cash, 7,000 shares
of the Company's Series A Fixed Rate Cumulative Perpetual Preferred Stock
(Preferred Stock) and a warrant to purchase 158,133 shares of the Company's
common stock, no par value. The Company accrued preferred stock dividends
to the U.S. Treasury and accretion of the discount for the fair value of
the warrants in the amount of $365,000 for the year ended December 31,
2009. As a result of the equity offering in December 2009, the warrant
issued to the Treasury was reduced to 79,067 shares of common stock.
Return on average equity (ROE) for the year ended December 31, 2009 was
3.10%, compared to 8.82% for 2008. The decrease in this ratio reflects
both a decrease in net income and an increase in capital from the Service
1st merger, the issuance of common and preferred stock, and an increase in
retained earnings. Return on average assets (ROA) was 0.34% for 2009,
compared to 0.95% for 2008. The ROA decrease is due to a reduction in net
income and the increase in average assets.
During the year ended December 31, 2009, the Company recorded a provision
for credit losses of $10,514,000, compared to $1,290,000 for 2008. The
increase in 2009 is primarily a result of maintaining an adequate allowance
for credit losses during the current economic downturn affecting borrowers
in our market area as well as an increase in the level of outstanding
loans. At December 31, 2009, the allowance for credit losses stood at
$10,200,000, compared to $7,223,000 at December 31, 2008. The allowance
for credit losses as a percentage of total loans was 2.22% at December 31,
2009, and 1.49% at December 31, 2008. During the year ended December 31,
2009, the Company recorded $7,537,000 in net loan charge offs, compared to
$740,000 for 2008. The increase in 2009 loan charge offs was primarily due
to ongoing challenges in the loan portfolio due to the economic environment
in California's Central Valley.
Total non-performing assets were $21,838,000 as of December 31, 2009
consisting of $18,959,000 in non-accrual loans, $2,832,000 in OREO, and
other assets of $47,000. Non-accrual loans were 4.13% of total loans at
December 31, 2009. This compares to non-accrual loans of $15,750,000 or
3.25% of total loans at December 31, 2008. The Company did not have any
OREO at December 31, 2008. The Company believes the allowance for credit
losses is adequate to provide for probable losses inherent within the loan
portfolio at December 31, 2009.
The Company's annualized net interest margin (fully tax equivalent basis)
was 5.31% for the year ended December 31, 2009, compared to 5.13% for 2008.
Despite a 500 basis point reduction in interest rates by the Federal
Reserve Bank since September 2007, our net interest margin has increased
because we lowered our cost of interest bearing liabilities by an amount
that more than offsets the decrease in the yield on our interest-earning
assets. For the year ended December 31, 2009, the effective yield on total
earning assets decreased 31 basis points to 6.30% compared to 6.61% for
2008, while the cost of total interest-bearing liabilities decreased 81
basis points to 1.30% compared to 2.11% for 2008. The effective yield on
average investment securities improved to 6.21% for the year ended December
31, 2009 compared to 5.39% for 2008, while the effective yield on average
loans decreased to 6.37% from 7.06% over the same periods. The cost of
total deposits decreased 49 basis points to 0.93% for the year ended
December 31, 2009 compared to 1.42% for 2008. Net interest income for the
year ended December 31, 2009 was $34,107,000, compared to $24,567,000 for
2008, an increase of $9,540,000 or 38.8%. Net interest income increased as
a result of these yield changes combined with increased levels of earning
assets offset by the increased levels of interest-bearing liabilities. The
increases in average assets and liabilities were primarily from the Service
1st acquisition.
Total average assets for the year ended December 31, 2009 were
$752,509,000, compared to $541,789,000 for 2008, an increase of
$210,720,000 or 38.9%. Total average loans were $482,458,000 for 2009,
compared to $367,009,000 for 2008, representing an increase of $115,449,000
or 31.5%. Total average investments increased to $199,425,000 for the year
ended December 31, 2009 from $125,932,000 for 2008, representing an
increase of $73,493,000 or 58.4%. Total average deposits increased
$186,978,000 or 42.0% to $632,263,000 for the year ended December 31, 2009,
compared to $445,285,000 for 2008. Average interest-bearing deposits
increased $165,574,000, or 52.8% and average non-interest bearing demand
deposits increased $21,404,000 or 16.3% for the year ended December 31,
2009 compared to 2008. The Company's ratio of average non-interest bearing
deposits to total deposits continued to be above industry averages at 24.2%
for the year ended December 31, 2009. The increases in balance sheet
averages during 2009 were driven primarily by the acquisition of Service 1st
in November 2008, which was reflected for the entire year in 2009 and only
a portion of the year during 2008.
Non-interest income for the year ended December 31, 2009 increased
$660,000, or 12.7% to $5,850,000, compared to $5,190,000 for the same
period in 2008, mainly due to a $301,000 increase in net realized gains on
sales and calls of investment securities, a $159,000 increase in income
from customer service charges, a $123,000 increase in appreciation of cash
surrender value of bank owned life insurance, and a $120,000 increase in
loan placement fees, partially offset by a decrease in Federal Home Loan
Bank stock dividends of $111,000. Total net realized gains from sales and
calls of investments were $766,000 partially offset by an
other-than-temporary impairment loss of $300,000. The net realized gain on
investment securities related to certain investment securities acquired
from Service 1st, the value of which had been marked to market at the time
of the Service 1st acquisition. Certain of those securities were
subsequently called at par value or sold during the first half of 2009
which contributed to the gains.
Non-interest expense for the year ended December 31, 2009 increased
$6,555,000, or 31.3% to $27,531,000 compared to $20,976,000 for 2008,
primarily due to a $2,348,000 increase in salary and benefit expenses, a
$922,000 increase in occupancy and equipment expenses, and a $3,285,000
increase in other expenses. The increases in non-interest expense in the
year ended December 31, 2009 reflect the addition of employees and
properties in connection with the acquisition of Service 1st, relocation of
an office from an in-store branch to a stand alone facility, opening of a
new office in Merced, relocation of our Oakhurst branch to a new facility,
and expected increases in salaries and benefits. In addition, the
Company's FDIC insurance assessments increased significantly to $1,604,000
for the year ended December 31, 2009 compared to $330,000 for 2008.
Included in the 2009 FDIC insurance assessment is a special assessment of
$343,000 which was incurred in the second quarter of 2009.
The Company recorded an income tax benefit of $676,000 for the year ended
December 31, 2009, compared to a provision for income taxes of $2,352,000
for 2008. The effective tax rate for 2009 was (35.4%) compared to 31.4%
for 2008. The decrease in the effective tax rate in 2009 compared to 2008
is due to increases, as a percentage of pretax income, in the federal tax
deduction for tax-free municipal bonds and solar tax credits, as well as
the state tax deduction for loans in designated enterprise zones in
California, and state hiring tax credits.
"Asset quality was a challenge for most banks in the fourth quarter as well
as all of 2009 driven by the economic recession. We added over $10 million
to the provision for credit losses in 2009 to respond to the uncertainty in
borrowers' abilities to perform on loans. There continues to be
uncertainty in the direction of the economy and when we will see reductions
in unemployment or a spark to build confidence in the direction of the
economy and lessen financial stress for our clients. Despite all the
challenges in the economy, our Company was able to show a profit for 2009
and have non-performing loans lower than many of our peers," stated Daniel
J. Doyle, President and CEO of Central Valley Community Bancorp and Central
Valley Community Bank.
"We were pleased to be able to raise additional capital at the end of 2009
to increase our existing well-capitalized ratios and position the Company
to take advantage of growth opportunities that may present themselves in
2010 or beyond. While we believe 2010 will still be a challenge for bank
profits, we believe we are taking the necessary steps to maintain a safe
and sound bank
for the future and to be well positioned as the economic climate
improves," 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
16 offices in Clovis, Fresno, Kerman, Lodi, Madera, Oakhurst, Prather,
Merced, Sacramento, Stockton, Tracy, and a loan production office in
Modesto, 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, Steven D. McDonald, Louis McMurray,
Wanda L. Rogers (Director Emeritus), 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, 2008.
Therefore, the information set forth in such forward-looking statements
should be carefully considered when evaluating the business prospects of
the Company.