CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31, December 31,
(In thousands, except share amounts) 2008 2007
------------ ------------
ASSETS
Cash and due from banks $ 18,061 $ 17,108
Federal funds sold 1,457 14,536
------------ ------------
Total cash and cash equivalents 19,518 31,644
Investment securities:
Available-for-sale investment securities
(Amortized cost of $185,405 and $84,139 at
December 31, 2008 and 2007) 185,718 84,373
Held-to-maturity, at amortized cost 7,040 -
Loans, less allowance for credit losses of $7,223
and $3,887 at December 31, 2008 and 2007 477,015 337,241
Bank premises and equipment, net 6,900 5,767
Bank owned life insurance 10,808 6,723
Federal Home Loan Bank stock 3,140 2,022
Goodwill 23,773 8,934
Core deposit intangibles 2,026 857
Accrued interest receivable and other assets 16,775 6,124
------------ ------------
Total assets $ 752,713 $ 483,685
============ ============
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Non-interest bearing $ 162,106 $ 128,120
Interest bearing 472,952 274,442
------------ ------------
Total deposits 635,058 402,562
Short-term borrowings 6,368 20,000
Long-term debt 19,000 -
Accrued interest payable and other liabilities 16,912 6,929
------------ ------------
Total liabilities 677,338 429,491
------------ ------------
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; outstanding 7,642,280 and 5,975,316
shares at December 31, 2008 and 2007 30,479 13,571
Retained earnings 44,708 40,483
Accumulated other comprehensive income, net of
tax 188 140
------------ ------------
Total shareholders’ equity 75,375 54,194
------------ ------------
Total liabilities and shareholders’ equity $ 752,713 $ 483,685
============ ============
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Years
(In thousands, except per share amounts) Ended December 31,
-------------------
2008 2007
--------- ---------
INTEREST INCOME:
Interest and fees on loans $ 25,631 $ 27,748
Interest on Federal funds sold 251 583
Interest and dividends on investment securities:
Taxable 4,845 3,355
Exempt from Federal income taxes 1,118 880
--------- ---------
Total interest income 31,845 32,566
--------- ---------
INTEREST EXPENSE:
Interest on deposits 6,340 7,894
Other 938 164
--------- ---------
Total interest expense 7,278 8,058
--------- ---------
Net interest income before provision for credit
losses 24,567 24,508
PROVISION FOR CREDIT LOSSES 1,290 480
--------- ---------
Net interest income after provision for credit
losses 23,277 24,028
--------- ---------
NON-INTEREST INCOME:
Service charges 3,350 2,859
Appreciation in cash surrender value of bank owned
life Insurance 268 185
Loan placement fees 111 63
Net realized gains on sales and calls of investment
securities 165 226
Federal Home Loan Bank stock dividends 118 102
Other income 1,178 1,083
--------- ---------
Total non-interest income 5,190 4,518
--------- ---------
NON-INTEREST EXPENSES:
Salaries and employee benefits 11,578 10,829
Occupancy and equipment 2,890 2,618
Other expenses 6,508 5,652
--------- ---------
Total non-interest expenses 20,976 19,099
--------- ---------
Income before provision for income taxes 7,491 9,447
PROVISION FOR INCOME TAXES 2,352 3,167
--------- ---------
Net income $ 5,139 $ 6,280
========= =========
Basic earnings per share $ 0.83 $ 1.05
========= =========
Diluted earnings per share $ 0.79 $ 0.99
========= =========
Cash dividends per share $ 0.10 $ 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 2008 2008 2008 2008 2007
--------- --------- --------- --------- ---------
(In thousands, except
share and per share
amounts)
Net interest income $ 6,969 $ 6,023 $ 5,726 $ 5,849 $ 6,224
Provision for credit
losses 385 635 135 135 120
--------- --------- --------- --------- ---------
Net interest income
after provision
for credit losses 6,584 5,388 5,591 5,714 6,104
Total non-interest income 1,296 1,382 1,274 1,238 1,168
Total non-interest
expense 6,054 4,984 4,966 4,972 4,774
Provision for income
taxes 521 572 584 675 865
--------- --------- --------- --------- ---------
Net income $ 1,305 $ 1,214 $ 1,315 $ 1,305 $ 1,633
========= ========= ========= ========= =========
Basic earnings per share $ 0.19 $ 0.20 $ 0.22 $ 0.22 $ 0.27
========= ========= ========= ========= =========
Weighted average shares
used in basic
computation 6,866,081 6,009,706 5,991,101 5,976,948 5,992,215
========= ========= ========= ========= =========
Diluted earnings per
share $ 0.19 $ 0.19 $ 0.21 $ 0.21 $ 0.26
========= ========= ========= ========= =========
Weighted average shares
used in diluted
computation 7,046,583 6,255,652 6,277,690 6,276,614 6,316,176
========= ========= ========= ========= =========
CENTRAL VALLEY COMMUNITY BANCORP
selected ratios
(Unaudited)
For the three months Dec. 31, Sep. 30, Jun. 30, Mar. 31, Dec. 31,
ended 2008 2008 2008 2008 2007
-------- -------- -------- -------- --------
(Dollars in thousands)
Allowance for credit
losses to total loans 1.49% 1.28% 1.16% 1.14% 1.14%
Nonperforming loans to
total loans 3.25% 0.40% 0.10% 0.03% 0.05%
Total nonperforming
assets $ 15,750 $ 1,419 $ 366 $ 109 $ 179
Net interest margin
(calculated on a fully
tax equivalent basis)
(1) 4.95% 5.19% 5.04% 5.40% 5.81%
Return on average assets
(2) 0.80% 0.93% 1.04% 1.08% 1.36%
Return on average equity
(2) 7.48% 8.82% 9.71% 9.55% 12.10%
(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 For the
(Dollars in thousands) Three Months Ended Years Ended
-------------------- --------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
AVERAGE AMOUNTS 2008 2007 2008 2007
--------- --------- --------- ---------
Investments $ 149,149 $ 84,242 $ 110,634 $ 91,364
Deposits in other banks 297 42 1,318 168
Federal funds sold 19,584 15,349 13,980 11,721
Loans (1) 411,785 336,424 364,285 331,347
Federal Home Loan Bank
stock 2,603 2,009 2,197 1,964
--------- --------- --------- ---------
Earning assets 583,278 438,066 492,379 436,564
Non-accrual loans 9,234 273 2,724 112
Other non-earning assets 61,838 40,400 46,651 40,869
--------- --------- --------- ---------
Total assets $ 654,490 $ 478,739 $ 541,789 $ 477,321
========= ========= ========= =========
Interest bearing deposits $ 400,974 $ 283,903 $ 313,541 $ 282,539
Other borrowings 32,413 1,508 32,526 2,759
--------- --------- --------- ---------
Total interest-bearing
liabilities 433,387 285,411 346,067 285,298
Non-interest bearing
demand deposits 145,776 134,395 131,744 135,152
Non-interest bearing
liabilities 5,463 4,934 5,547 5,117
--------- --------- --------- ---------
Total liabilities 584,626 424,740 483,358 425,567
--------- --------- --------- ---------
Total equity 69,142 53,999 58,251 51,754
--------- --------- --------- ---------
Total liabilities and equity $ 654,490 $ 478,739 $ 541,789 $ 477,321
========= ========= ========= =========
AVERAGE RATES
Investments 6.38% 5.27% 5.88% 5.13%
Deposits in other banks 1.34% 3.23% 2.96% 2.98%
Federal funds sold 0.91% 4.56% 1.80% 4.97%
Loans 6.53% 8.34% 7.06% 8.37%
Earning assets 6.33% 7.60% 6.61% 7.59%
Interest bearing deposits 1.74% 2.74% 2.03% 2.79%
Other borrowings 3.08% 5.57% 2.89% 5.94%
Total interest-bearing
liabilities 1.84% 2.75% 2.11% 2.82%
Net interest margin (calculated
on a fully tax equivalent
basis) 4.95% 5.81% 5.13% 5.74%
(1) Average loans do not include non-accrual loans.
Central Valley Community Bancorp Reports Earnings Results for the Year and Fourth Quarter Ended December 31, 2008
| Source: Central Valley Community Bancorp
FRESNO, CA--(Marketwire - January 28, 2009) - 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 $5,139,000, or $0.79 per diluted share, for the year ended
December 31, 2008, compared to $6,280,000, or $0.99 per diluted share for
2007.
Return on average equity for the year ended December 31, 2008 was 8.82%,
compared to 12.13% for 2007. Return on average assets was 0.95% for year
ended December 31, 2008, compared to 1.32% for 2007.
On November 12, 2008, the Company completed its acquisition of Service 1st
Bancorp with total assets of $224 million (the "Service 1st merger"). The
Company paid cash of $5,972,000 inclusive of a $3,500,000 escrow amount
related to litigation on one Service 1st loan and issued 1,628,397 new
shares of common stock in conjunction with this acquisition, adding
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. The results
of operations for the quarter and year ended December 31, 2008 include the
operating performance of Service 1st since November 12, 2008.
Like many banks, the Company's asset quality has been challenged due to the
continuing economic conditions in California's Central Valley and the
nation. While the legacy Central Valley Community Bank loan portfolio
remained relatively stable, the loans acquired in the Service 1st merger
negatively impacted certain asset quality ratios, as was expected.
Non-accrual loans at December 31, 2008 increased to $15,750,000 or 3.25% of
total loans, of which $14,340,000 related to former Service 1st Bank loans.
This compares to non-accrual loans of $179,000 or 0.05% of total loans at
December 31, 2007. The Company believes the Allowance for Loan and Lease
Losses to be adequate to provide for the probable losses when considered
with the government guarantees, strong collateral positions, and the fair
market value adjustments for the Service 1st loans recorded in connection
with the merger.
During 2008, the Company recorded $740,000 in net loan charge-offs, an
increase of $338,000 from the $402,000 for the same period in 2007. During
2008, the Company increased its provision for credit losses to $1,290,000,
up from $480,000 for 2007. The increase in 2008 is principally due to the
current economic downturn affecting our market area, the increase in the
net charge-offs and the increase in the level of outstanding loans. The
allowance for credit losses as a percentage of total loans was 1.49% at
December 31, 2008, compared to 1.14% at December 31, 2007. The Company is
not involved in any sub-prime mortgage lending activities and had no Other
Real Estate Owned at December 31, 2008, or December 31, 2007.
The Company's annualized net interest margin (fully tax equivalent basis)
was 5.13% for the year ended December 31, 2008, compared to 5.74% for the
same period in 2007. The decrease in margin is a reflection of the 500
basis point 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 year ended December 31, 2008, the effective yield on total earning
assets decreased 98 basis points to 6.61% compared to 7.59% for the same
period in 2007, while the cost of total interest-bearing liabilities
decreased only 71 basis points to 2.11% compared to 2.82% for the same
period in 2007. Over the same periods, the cost of total deposits
decreased 47 basis points to 1.42% compared to 1.89% in 2007. Net interest
income for the year ended December 31, 2008 was $24,567,000, compared to
$24,508,000 for the same period in 2007, an increase of $59,000 or 0.24%.
Total average assets for the year ended December 31, 2008 were
$541,789,000, compared to $477,321,000 for the same period in 2007, an
increase of $64,468,000 or 13.51%. Total average loans were $367,009,000
for 2008, compared to $331,459,000 for the same period in 2007,
representing a 10.73% increase. Total average investments increased to
$125,932,000 for 2008 from $103,253,000 for 2007, representing a 21.96%
increase. Total average deposits increased 6.61% to $445,285,000 for the
year ended December 31, 2008, compared to $417,691,000 for the same period
in 2007. Average interest-bearing deposits increased $31,002,000, while
average non-interest bearing deposits decreased $3,408,000. The Company's
ratio of average non-interest bearing deposits to total deposits continued
to be above industry averages at 29.6% for 2008. Average balances were
impacted slightly by the Service 1st merger in November 2008.
Non-interest income for the year ended December 31, 2008 increased
$672,000, or 14.87% to $5,190,000, compared to $4,518,000 for the same
period in 2007, mainly due to a $491,000 increase in income from customer
service charges, an $83,000 increase in appreciation of cash surrender
value of bank owned life insurance, and a $98,000 increase in other income.
Non-interest expense for the year ended December 31, 2008 increased
$1,877,000, or 9.83% compared to the same period in 2007, primarily due to
a $749,000 increase in salary and benefit expenses, a $272,000 increase in
occupancy and equipment expenses, and a $856,000 increase in other
expenses. The increases in non-interest expense in 2008 reflect the
addition of employees and properties in connection with the Service 1st
merger and ordinary increases in salaries and benefits. In addition,
merger related expenses in 2008 totaled $447,000, and relocation related
expenses were $40,000 related to the Herndon and Fowler office relocation
in Clovis, California from an in-store location to a new expanded
traditional branch location.
On December 30, 2008, the Company received preliminary approval to
participate in the U. S. Treasury Department's Capital Purchase Program
with a preliminary commitment from the Treasury to invest $7 million in the
Company's preferred stock and common stock warrants.
Quarter ended December 31, 2008
For the quarter ended December 31, 2008, the Company reported unaudited
consolidated net income of $1,305,000, or $0.19 per diluted share, compared
to $1,633,000, or $0.26 per diluted share, for the same period in 2007, and
$1,214,000, or $0.19 per diluted share, for the quarter ended September 30,
2008.
Annualized return on average equity for the fourth quarter of 2008 was
7.55%, compared to 12.10% for the same period of 2007. This decrease is
reflective of a decrease in net income and an increase in capital from
retained earnings and the Service 1st merger. Annualized return on average
assets was 0.80% for the fourth quarter of 2008 compared to 1.36% for the
same period in 2007.
In comparing fourth quarter 2008 to fourth quarter 2007, average total
loans increased $84,322,000, or 25.04% to $421,019,000 from $336,697,000
due primarily to the Service 1st merger. During the fourth quarter of
2008, the Company recorded a $385,000 provision for credit losses, compared
to $120,000 for the same period in 2007. The increase in 2008 is
principally due to our ongoing assessment of the overall adequacy of the
allowance for credit losses and the increase in the level of outstanding
loans, both organically and from the Service 1st merger. During the fourth
quarter of 2008, the Company recorded $481,000 in net loan charge-offs
compared to $63,000 for the same period in 2007.
Average total deposits for the fourth quarter of 2008 increased
$128,452,000 or 30.71% to $546,750,000 compared to $418,298,000 for the
same period of 2007 primarily due to the Service 1st merger.
The Company's net interest margin (fully tax equivalent basis) decreased 86
basis points to 4.95% for the three months ended December 31, 2008, from
5.81% for the three months ended December 31, 2007. Net interest income
increased $745,000 or 11.97% to $6,969,000 for the fourth quarter of 2008,
compared to $6,224,000 for the same period in 2007. The decrease in net
interest margin reflects the impact of the 500 basis point decline in
interest rates by the Federal Reserve Bank since September 2007. The
increase in net interest income is primarily due to the Service 1st merger.
Non-interest income increased $128,000 or 10.96% to $1,296,000 for the
fourth quarter of 2008 compared to $1,168,000 for the same period in 2007,
driven primarily by an increase in customer service charges of $82,000 to
$877,000 in the fourth quarter of 2008 compared to $795,000 for the 2007
period. Non-interest expense increased $1,280,000 or 26.81% to $6,054,000
for the fourth quarter of 2008 compared to $4,774,000 for the same period
in 2007 mainly due to increases in salary and occupancy expenses and merger
related expenses and the impact of the Service 1st merger.
"The impact of the overall economy, unprecedented decline in interest rates
and the acquisition of Service 1st Bancorp had an impact on earnings in
2008. In spite of some of these challenges, the Company fared relatively
well when compared to its peers in nearly all key measures of performance.
In addition, we believe the Service 1st merger will prove to be an
important and long-term strategic opportunity for our 29-year-old Company,"
stated Daniel J. Doyle, President and CEO of Central Valley Community
Bancorp and Central Valley Community Bank.
"While the economic climate will continue to present challenges in 2009 for
the markets we serve, we expect our continued focus on asset quality, our
core deposit strength, our loan portfolio diversification and the
additional capital generated from earnings and the TARP Capital Purchase
Program, will allow us to meet the needs of our communities, take advantage
of opportunities, and exceed our peers in performance," 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
fifteen offices in Clovis, Fresno, Kerman, Lodi, Madera, Oakhurst, Prather,
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. 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.