FRESNO, CA -- (Marketwired) -- 04/17/13 --
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 $1,793,000, and diluted earnings per common share of $0.18 for the three months ended March 31, 2013, compared to $1,713,000 and $0.17 per diluted common share for the three months ended March 31, 2012. Net income increased 4.67%, primarily driven by increases in non-interest income and lower provision for credit losses, partially offset by a slight increase in non-interest expense and a decrease in net interest income in 2013 compared to 2012. Non-performing assets increased $1,320,000 or 13.62% to $11,015,000 at March 31, 2013, compared to $9,695,000 at December 31, 2012. The Company had no OREO as of March 31, 2013 or December 31, 2012. During the first quarter of 2013, the Company's shareholders' equity decreased $440,000, or 0.37%. The reduction in shareholders' equity was driven by a decrease in other comprehensive income, partially offset by a net increase in retained earnings. The Company also declared and paid $478,000 in cash dividends to holders of common stock during the first quarter of 2013 ($0.05 per share).
During the first quarter of 2013, the Company's total assets decreased 0.43%, total liabilities decreased 0.44%, and shareholders' equity decreased 0.37% compared to December 31, 2012. Return on average equity (ROE) for the three months ended March 31, 2013 was 6.11%, compared to 6.19% for the three months ended March 31, 2012. ROE decreased, notwithstanding an increase in net income, due to an increase in capital resulting from an increase in retained earnings, offset by a decrease in other comprehensive income. Return on average assets (ROA) was 0.82% for both quarters ended March 31, 2013 and 2012.
During the three months ended March 31, 2013, the Company did not record a provision for credit losses, compared to $400,000 for the three months ended March 31, 2012. During the three months ended March 31, 2013, the Company recorded $644,000 in net loan charge-offs, compared to $1,511,000 for the three months ended March 31, 2012. The net charge-off ratio, which reflects net charge-offs to average loans, was 0.66% for the three months ended March 31, 2013, compared to 1.46% for the same period in 2012. The loans charged off in first quarter 2013 were previously identified and adequately reserved for as of December 31, 2012.
At March 31, 2013, the allowance for credit losses stood at $9,489,000, compared to $10,133,000 at December 31, 2012, a net decrease of $644,000. The allowance for credit losses as a percentage of total loans was 2.43% at March 31, 2013, and 2.56% at December 31, 2012. The Company believes the allowance for credit losses is adequate to provide for probable incurred losses inherent within the loan portfolio at March 31, 2013.
Total non-performing assets were $11,015,000, or 1.24% of total assets as of March 31, 2013 compared to $9,695,000 or 1.09% of total assets as of December 31, 2012. Total non-performing assets as of March 31, 2012 were $12,395,000 or 1.48% of total assets.
The following provides a reconciliation of the change in non-accrual loans for 2013.
Additions
Balances to Non-
December 31, accrual Net Pay
(Dollars in thousands) 2012 Loans Downs
------------ ----------- -----------
Non-accrual loans:
Commercial and industrial $ -- $ -- $ --
Real estate 213 157 (6)
Equity loans and lines of
credit 237 -- (2)
Restructured loans (non-
accruing):
Commercial and industrial -- 2,084 (28)
Real estate 1,362 -- (28)
Real estate construction
and land development 6,288 -- (137)
Equity loans and lines of
credit 1,595 -- (23)
------------ ----------- -----------
Total non-accrual $ 9,695$ 2,241$ (224)
============ =========== ===========
Transfer to
Foreclosed Returns to Balances
Collateral Accrual March 31,
(Dollars in thousands) - OREO Status Charge Offs 2013
----------- ----------- ----------- -----------
Non-accrual loans:
Commercial and industrial $ -- $ -- $ -- $ --
Real estate -- -- -- 364
Equity loans and lines of
credit -- -- -- 235
Restructured loans (non-
accruing):
Commercial and industrial -- -- (697) 1,359
Real estate -- -- -- 1,334
Real estate construction
and land development -- -- -- 6,151
Equity loans and lines of
credit -- -- -- 1,572
----------- ----------- ----------- -----------
Total non-accrual $ -- $ -- $ (697)$ 11,015
=========== =========== =========== ===========
The Company's net interest margin (fully tax equivalent basis) was 3.85% for the three months ended March 31, 2013, compared to 4.37% for the three months ended March 31, 2012. The decrease in net interest margin in the period-to-period comparison resulted primarily from a decrease in the yield on the Company's investment portfolio and loan portfolio, partially offset by a decrease in the Company's cost of funds. For the three months ended March 31, 2013, the effective yield on total earning assets decreased 64 basis points to 4.02% compared to 4.66% for the three months ended March 31, 2012, while the cost of total interest-bearing liabilities decreased 17 basis points to 0.26% compared to 0.43% for the three months ended March 31, 2012. The cost of total deposits decreased 11 basis points to 0.16% for the three months ended March 31, 2013, compared to 0.27% for the three months ended March 31, 2012. For the three months ended March 31, 2013, the amount of the Company's average investment securities, including interest-earning deposits in other banks and Federal funds sold, increased $54,066,000 or 15.58% compared to the three months ended March 31, 2012. The effective yield on average investment securities decreased to 2.45% for the three months ended March 31, 2013, compared to 3.07% for the three months ended March 31, 2012. The decrease in yield in the Company's investment securities during 2013 resulted primarily from the purchase of lower yielding investment securities. Total average loans, which generally yield higher rates than investment securities, decreased $22,007,000, from $412,680,000 for the three months ended March 31, 2012 to $390,673,000 for the three months ended March 31, 2013. The effective yield on average loans decreased to 5.77% for the year ended March 31, 2013, compared to 6.10% for the year ended March 31, 2012. Net interest income before the provision for credit losses for the three months ended March 31, 2013 was $6,845,000, compared to $7,666,000 for the three months ended March 31, 2012, a decrease of $821,000 or 10.71%. Net interest income decreased as a result of these yield changes, asset mix changes explained above, and an increase in interest-bearing liabilities, partially offset by an increase in average earning assets.
Total average assets for the three months ended March 31, 2013 were $870,418,000 compared to $835,548,000, for the three months ended March 31, 2012, an increase of $34,870,000 or 4.17%. Total average loans decreased $22,007,000, or 5.33% for the three months ended March 31, 2013 compared to the three months ended March 31, 2012 Total average investments, including deposits in other banks and Federal funds sold, increased to $401,016,000 for the three months ended March 31, 2013, from $346,950,000 for the three months ended March 31, 2012, representing an increase of $54,066,000 or 15.58%. Total average deposits increased $31,209,000 or 4.43% to $735,728,000 for the three months ended March 31, 2013, compared to $704,519,000 for the three months ended March 31, 2012. Average interest-bearing deposits increased $10,943,000, or 2.19%, and average non-interest bearing demand deposits increased $20,266,000, or 9.86%, for the three months ended March 31, 2013, compared to the three months ended March 31, 2012. The Company's ratio of average non-interest bearing deposits to total deposits was 30.69% for the three months ended March 31, 2013, compared to 29.18% for the three months ended March 31, 2012.
Non-interest income for the three months ended March 31, 2013 increased $583,000 to $2,243,000, compared to $1,660,000 for the three months ended March 31, 2012, driven primarily by an increase of $483,000 in net realized gains on sales and calls of investment securities, a $37,000 increase in loan placement fees, and a $9,000 increase in service charge income.
Non-interest expense for the three months ended March 31, 2013 increased $13,000, or 0.19%, to $6,933,000 compared to $6,920,000 for the three months ended March 31, 2012, primarily due to increases in occupancy and equipment expenses of $20,000, advertising fees of $2,000, legal fees of $3,000, and other non-interest expenses of $97,000, partially offset by decreases in salaries and employee benefits of $110,000, and regulatory assessments of $13,000. First quarter 2013 other expense included a write-down of $102,000 on equipment owned from a matured lease.
The Company recorded an income tax expense of $362,000 for the three months ended March 31, 2013, compared to $293,000 for the three months ended March 31, 2012. The effective tax rate for 2013 was 16.80% compared to 14.61% for the three months ended March 31, 2012.
In December 2012, the Company entered into a definitive merger agreement to acquire Visalia Community Bank 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 approvals and expects to complete the merger near the end of the second quarter of 2013. During the three months ended March 31, 2013, the company recorded $8,000 in merger-related expenses as a part of non-interest expense.
"The first quarter of 2013 showed consistent earnings improvement due to holding non-interest expense stable and a non-interest income increase from securities called/sold and from loan placement fees. Asset quality decreased slightly due to the addition of one non-performing loan even though payments continue to be made by the borrower," stated Daniel J. Doyle, President and CEO of Central Valley Community Bancorp and Central Valley Community Bank.
"Gross loans showed a decrease to the linked quarter due to normal seasonal payment from agricultural borrowers. Overall, we continue to see reduced usage of lines of credit by our business customers due to the economic uncertainty and competitive pricing and terms being offered in our market. Likewise, our favorable mix of deposits has continued to allow a low cost of funds, but our net interest margin is under pressure due to the low interest rate environment and our increase in our securities portfolio due to soft loan demand."
"During fourth quarter 2012, we announced the pending merger with Visalia Community Bank which has three full-service offices in Visalia and one branch in Exeter. 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. The transaction, which is expected to close in the second quarter of 2013, is subject to customary closing conditions, including regulatory approvals and approval by Visalia Community Bank's shareholders," 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 17 full service offices in Clovis, Fresno, Kerman, Lodi, Madera, Merced, Modesto, Oakhurst, Prather, Sacramento, Stockton, and Tracy, 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, William S. Smittcamp, Joseph B. Weirick, and Wanda L. Rogers (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, 2012. 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
March 31, December 31,
(In thousands, except share amounts) 2013 2012
------------ ------------
(Unaudited)
ASSETS
Cash and due from banks $ 19,297$ 22,405
Interest-earning deposits in other banks 58,472 30,123
Federal funds sold 309 428
------------ ------------
Total cash and cash equivalents 78,078 52,956
Available-for-sale investment securities
(Amortized cost of $357,972 at March 31, 2013 and
$381,074 at December 31, 2012) 367,979 393,965
Loans, less allowance for credit losses of $9,489
at March 31, 2013 and $10,133 at December 31,
2012 381,476 385,185
Bank premises and equipment, net 6,313 6,252
Bank owned life insurance 12,258 12,163
Federal Home Loan Bank stock 3,850 3,850
Goodwill 23,577 23,577
Core deposit intangibles 533 583
Accrued interest receivable and other assets 12,305 11,697
------------ ------------
Total assets $ 886,369$ 890,228
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 226,758$ 240,169
Interest bearing 510,001 511,263
------------ ------------
Total deposits 736,759 751,432
Short-term borrowings -- 4,000
Junior subordinated deferrable interest debentures 5,155 5,155
Accrued interest payable and other liabilities 27,230 11,976
------------ ------------
Total liabilities 769,144 772,563
------------ ------------
Commitments and contingencies
Shareholders' equity:
Preferred stock, no par value, $1,000 per share
liquidation preference; 10,000,000 shares
authorized, Series C, issued and outstanding:
7,000 shares at March 31, 2013 and December 31,
2012 7,000 7,000
Common stock, no par value; 80,000,000 shares
authorized; issued and outstanding: 9,559,446 at
March 31, 2013 and 9,558,746 at December 31, 2012 40,612 40,583
Retained earnings 63,724 62,496
Accumulated other comprehensive income, net of tax 5,889 7,586
------------ ------------
Total shareholders' equity 117,225 117,665
------------ ------------
Total liabilities and shareholders' equity $ 886,369$ 890,228
============ ============
CENTRAL VALLEY COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF INCOME
For the Three Months
Ended March 31,
-------------------------
(In thousands, except share and per share amounts) 2013 2012
------------ ------------
(Unaudited) (Unaudited)
INTEREST INCOME:
Interest and fees on loans $ 5,411$ 6,084
Interest on deposits in other banks 30 18
Interest and dividends on investment securities:
Taxable 401 1,073
Exempt from Federal income taxes 1,338 1,037
------------ ------------
Total interest income 7,180 8,212
------------ ------------
INTEREST EXPENSE:
Interest on deposits 293 481
Interest on junior subordinated deferrable
interest debentures 25 29
Other 17 36
------------ ------------
Total interest expense 335 546
------------ ------------
Net interest income before provision for
credit losses 6,845 7,666
PROVISION FOR CREDIT LOSSES -- 400
------------ ------------
Net interest income after provision for credit
losses 6,845 7,266
------------ ------------
NON-INTEREST INCOME:
Service charges 698 689
Appreciation in cash surrender value of bank
owned life insurance 96 94
Loan placement fees 165 128
Net realized gains on sales and calls of
investment securities 830 347
Federal Home Loan Bank dividends 22 4
Other income 432 398
------------ ------------
Total non-interest income 2,243 1,660
------------ ------------
NON-INTEREST EXPENSES:
Salaries and employee benefits 4,019 4,129
Occupancy and equipment 901 881
Regulatory assessments 143 156
Data processing expense 303 294
Advertising 142 140
Audit and accounting fees 135 128
Legal fees 31 28
Loss on disposal of other real estate owned -- 2
Amortization of core deposit intangibles 50 50
Other expense 1,209 1,112
------------ ------------
Total non-interest expenses 6,933 6,920
------------ ------------
Income before provision for income taxes 2,155 2,006
PROVISION FOR INCOME TAXES 362 293
------------ ------------
Net income $ 1,793$ 1,713
============ ============
Net income $ 1,793$ 1,713
Preferred stock dividends and accretion 87 88
------------ ------------
Net income available to common shareholders $ 1,706$ 1,625
============ ============
Net income per common share:
Basic earnings per common share $ 0.18$ 0.17
============ ============
Weighted average common shares used in basic
computation 9,558,985 9,570,297
============ ============
Diluted earnings per common share $ 0.18$ 0.17
============ ============
Weighted average common shares used in diluted
computation 9,604,841 9,577,432
============ ============
Cash dividends per common share $ 0.05 --
============ ============
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the three months Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31,
ended 2013 2012 2012 2012 2012
---------- ---------- ---------- ---------- ----------
(In thousands, except
share and per share
amounts)
Net interest income $ 6,845$ 7,189$ 7,572$ 7,510$ 7,666
Provision for credit
losses -- 200 -- 100 400
---------- ---------- ---------- ---------- ----------
Net interest income
after provision for
credit losses 6,845 6,989 7,572 7,410 7,266
Total non-interest
income 2,243 1,829 2,284 1,471 1,660
Total non-interest
expense 6,933 6,983 6,655 6,718 6,920
Provision for income
taxes 362 193 745 454 293
---------- ---------- ---------- ---------- ----------
Net income $ 1,793$ 1,642$ 2,456$ 1,709$ 1,713
========== ========== ========== ========== ==========
Net income available
to common
shareholders $ 1,706$ 1,554$ 2,369$ 1,622$ 1,625
========== ========== ========== ========== ==========
Basic earnings per
common share $ 0.18$ 0.16$ 0.25$ 0.17$ 0.17
========== ========== ========== ========== ==========
Weighted average
common shares used
in basic computation 9,558,985 9,586,201 9,602,473 9,592,045 9,570,297
========== ========== ========== ========== ==========
Diluted earnings per
common share $ 0.18$ 0.16$ 0.25$ 0.17$ 0.17
========== ========== ========== ========== ==========
Weighted average
common shares used
in diluted
computation 9,604,841 9,629,300 9,635,339 9,618,976 9,577,432
========== ========== ========== ========== ==========
CENTRAL VALLEY COMMUNITY BANCORP
SELECTED RATIOS
(Unaudited)
As of and for the three Mar. 31, Dec. 31, Sep. 30, Jun. 30, Mar. 31,
months ended 2013 2012 2012 2012 2012
--------- --------- --------- --------- ---------
(Dollars in thousands,
except per share
amounts)
Allowance for credit
losses to total loans 2.43% 2.56% 2.56% 2.45% 2.52%
Nonperforming assets to
total assets 1.24% 1.09% 1.15% 1.48% 1.48%
Total nonperforming
assets $ 11,015$ 9,695$ 10,190$ 12,340$ 12,395
Total nonaccrual loans $ 11,015$ 9,695$ 10,190$ 10,242$ 10,142
Net loan charge offs
(recoveries) $ 644$ 281$ (74)$ 245$ 1,511
Net charge offs
(recoveries) to average
loans (annualized) 0.66% 0.29% (0.07)% 0.24% 1.46%
Book value per share $ 11.53$ 11.58$ 11.50$ 11.08$ 10.82
Tangible book value per
share $ 9.01$ 9.05$ 8.98$ 8.55$ 8.28
Tangible common equity $ 86,115$ 86,505$ 86,276$ 81,999$ 79,422
Interest and dividends on
investment securities
exempt from Federal
income taxes $ 1,338$ 1,275$ 1,118$ 1,078$ 1,037
Net interest margin
(calculated on a fully
tax equivalent basis)
(1) 3.85% 3.95% 4.21% 4.33% 4.37%
Return on average assets
(2) 0.82% 0.74% 1.14% 0.82% 0.82%
Return on average equity
(2) 6.11% 5.56% 8.43% 6.06% 6.19%
Loan to deposit ratio 53.07% 52.61% 54.14% 58.96% 58.05%
Tier 1 leverage - Bancorp 10.73% 10.56% 10.78% 10.70% 10.33%
Tier 1 leverage - Bank 10.55% 10.22% 10.35% 10.60% 10.21%
Tier 1 risk-based capital
- Bancorp 18.65% 18.24% 18.27% 17.29% 16.97%
Tier 1 risk-based capital
- Bank 18.32% 17.67% 17.56% 17.14% 16.78%
Total risk-based capital
- Bancorp 19.93% 19.53% 19.57% 18.58% 18.25%
Total risk based capital
- Bank 19.60% 18.96% 18.86% 18.43% 18.06%
(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
AVERAGE AMOUNTS Ended March 31,
----------------------
(Dollars in thousands) 2013 2012
---------- ----------
Federal funds sold $ 327$ 529
Interest-bearing deposits in other banks 31,249 29,059
Investments 369,440 317,362
Loans (1) 380,075 401,132
Federal Home Loan Bank stock 3,850 2,893
---------- ----------
Earning assets 784,941 750,975
Allowance for credit losses (10,006) (10,977)
Non-accrual loans 10,598 11,548
Other real estate owned -- 871
Other non-earning assets 84,885 83,131
---------- ----------
Total assets $ 870,418$ 835,548
========== ==========
Interest bearing deposits $ 509,914$ 498,971
Other borrowings 7,071 9,155
---------- ----------
Total interest-bearing liabilities 516,985 508,126
Non-interest bearing demand deposits 225,814 205,548
Non-interest bearing liabilities 10,162 11,199
---------- ----------
Total liabilities 752,961 724,873
---------- ----------
Total equity 117,457 110,675
---------- ----------
Total liabilities and equity $ 870,418$ 835,548
========== ==========
---------- ----------
AVERAGE RATES
---------- ----------
Federal funds sold 0.30% --%
Interest-earning deposits in other banks 0.39% 0.25%
Investments 2.63% 3.33%
Loans 5.77% 6.10%
Earning assets 4.02% 4.66%
Interest-bearing deposits 0.23% 0.39%
Other borrowings 2.41% 2.86%
Total interest-bearing liabilities 0.26% 0.43%
Net interest margin (calculated on a fully tax
equivalent basis) (2) 3.85% 4.37%
(1) Average loans do not include non-accrual loans.
(2) Calculated on a fully tax equivalent basis, which includes Federal tax
benefits relating to income earned on municipal bonds totaled $689 and
$534 for the three months ended March 31, 2013 and 2012, respectively.
Source: Central Valley Community Bancorp