EX-99.1 2 cvcy063014earningsreleasee.htm EXHIBIT 99.1 CVCY 06/30/14 Earnings Release Exhibit

Central Valley Community Bancorp -- page 1


FOR IMMEDIATE RELEASE
Contact: Debbie Nalchajian-Cohen
559-222-1322

CENTRAL VALLEY COMMUNITY BANCORP REPORTS EARNINGS RESULTS FOR THE SIX MONTHS AND QUARTER ENDED JUNE 30, 2014

FRESNO, CALIFORNIA…July 16, 2014… 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 $5,309,000, and diluted earnings per common share of $0.48 for the six months ended June 30, 2014, compared to $3,070,000 and $0.30 per diluted common share for the six months ended June 30, 2013. Unless otherwise noted, material changes in year-over-year balance sheet data and operating performance in dollar (rather than percentage) terms for the six months ended June 30 were the result of the Visalia Community Bank (VCB) acquisition, which closed on July 1, 2013.
Net income increased 72.93%, primarily driven by an increase in net interest income in 2014 compared to 2013. Net interest income during the first six months of 2014 was positively impacted by the collection of nonaccrual loans totaling $1,846,000 which resulted in a recovery of interest income of $861,000.
Non-performing assets decreased by $3,144,000, or 40.43%, to $4,632,000 at June 30, 2014, compared to $7,776,000 at December 31, 2013. During the six months ended June 30, 2014, the Company’s shareholders’ equity increased $10,888,000, or 9.07%. The increase in shareholders’ equity was driven by the retention of earnings net of dividends paid and improvement in unrealized gains on available-for-sale securities recorded in accumulated other comprehensive income (AOCI).

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Central Valley Community Bancorp -- page 2


During the first two quarters of 2014, the Company’s total assets increased 1.31%, and total liabilities increased 0.41% compared to December 31, 2013. The Company declared and paid $1,092,000 in cash dividends to holders of common stock during the first six months of 2014 ($0.10 per share). Annualized return on average equity (ROE) for the six months ended June 30, 2014 was 8.32%, compared to 5.27% for the six months ended June 30, 2013. The increase in ROE in the first six months of 2014 reflects an increase in net income, notwithstanding an increase in capital from an increase in AOCI and an increase in retained earnings as previously discussed. Annualized return on average assets (ROA) was 0.93% and 0.70% for the six months ended June 30, 2014 and 2013, respectively. The increase in ROA is due to an increase in net income, notwithstanding an increase in average assets.
During the six months ended June 30, 2014 the Company recorded a reverse provision for credit losses of $400,000. The Company did not record a provision during the six months ended June 30, 2013. During the six months ended June 30, 2014, the Company recorded $1,501,000 in net loan charge-offs, compared to $532,000 for the six months ended June 30, 2013. The net charge-off ratio, which reflects net charge-offs to average loans, was 0.57% for the six months ended June 30, 2014, compared to 0.27% for the same period in 2013. The majority of the loans charged off during the six months ended June 30, 2014 were previously classified and sufficient funds were held in the allowance for credit losses as of December 31, 2013.
At June 30, 2014, the allowance for credit losses stood at $7,307,000, compared to $9,208,000 at December 31, 2013, a net decrease of $1,901,000 reflecting the net charge offs, the majority of which related to a nonaccrual commercial and industrial loan charged off in the first quarter which was reserved for as of December 31, 2013. The allowance for credit losses as a percentage of total loans was 1.34% at June 30, 2014, and 1.80% at December 31, 2013. Part of the decrease in the ALLL as a percentage of total loans is primarily due to the inclusion of $82,262,000 from VCB loans that were recorded at fair value in connection with the acquisition and therefore have no related allowance. Excluding these VCB loans from the calculation, the allowance for credit losses to total gross loans as of June 30, 2014 was 1.58%. The Company believes the allowance for credit losses is adequate to provide for probable incurred losses inherent within the loan portfolio at June 30, 2014.

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Central Valley Community Bancorp -- page 3


Total non-performing assets were $4,632,000, or 0.40% of total assets as of June 30, 2014, compared to $7,776,000, or 0.68% of total assets as of December 31, 2013. Total non-performing assets as of June 30, 2013 were $10,267,000 or 1.18% of total assets.
The following provides a reconciliation of the change in non-accrual loans for 2014.
(In thousands)
Balances December 31, 2013
 
Additions to Non-accrual Loans
 
Net Pay Downs
 
Transfer to Foreclosed Collateral - OREO
 
Returns to Accrual Status
 
Charge Offs
 
Balances June 30, 2014
Non-accrual loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
335

 
$
129

 
$
(277
)
 
$
—

 
$
(20
)
 
$
(129
)
 
$
38

Real estate
1,935

 
314

 
(995
)
 
(235
)
 
—

 
(183
)
 
836

Equity loans and lines of credit
721

 
97

 
(242
)
 
—

 
—

 
(59
)
 
517

Consumer
—

 
23

 
(1
)
 
—

 
—

 
—

 
22

Restructured loans (non-accruing):
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
1,192

 
—

 
(145
)
 
—

 
—

 
(1,047
)
 
—

Real estate
384

 
—

 
(18
)
 
—

 
—

 
—

 
366

Real estate construction and land development
1,450

 
—

 
(92
)
 
—

 
—

 
—

 
1,358

Equity loans and lines of credit
1,565

 
6

 
(76
)
 
—

 
—

 
—

 
1,495

Consumer
4

 
—

 
—

 
—

 
(4
)
 
—

 
—

Total non-accrual
$
7,586

 
$
569

 
$
(1,846
)
 
$
(235
)
 
$
(24
)
 
$
(1,418
)
 
$
4,632

The Company’s net interest margin (fully tax equivalent basis) was 4.17% for the six months ended June 30, 2014, compared to 3.85% for the six months ended June 30, 2013. The increase in net interest margin in the period-to-period comparison resulted primarily from an increase in the yield on the Company’s investment portfolio, the loan portfolio, and a decrease in the Company’s cost of funds.
For the six months ended June 30, 2014, the effective yield on total earning assets increased 26 basis points to 4.28% compared to 4.02% for the six months ended June 30, 2013, while the cost of total interest-bearing liabilities decreased 7 basis points to 0.19% compared to 0.26% for the six months ended June 30, 2013. The cost of total deposits decreased 5 basis points to 0.12% for the six months ended June 30, 2014, compared to 0.17% for the six months ended June 30, 2013.
For the six months ended June 30, 2014, the Company’s average investment securities, including interest-earning deposits in other banks and Federal funds sold, increased by $113,975,000, or 28.39%, compared to the six months ended June 30, 2013.

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Central Valley Community Bancorp -- page 4


The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, increased to 2.79% for the six months ended June 30, 2014, compared to 2.47% for the six months ended June 30, 2013. The increase in yield in the Company’s investment securities during 2014 resulted primarily from a decrease in the rate of prepayments on mortgage backed securities compared to the same period of 2013. Total average loans, which generally yield higher rates than investment securities, increased $128,458,000, from $394,890,000 for the six months ended June 30, 2013 to $523,348,000 for the six months ended June 30, 2014. The effective yield on average loans increased to 5.80% for the six months ended June 30, 2014, compared to 5.69% for the six months ended June 30, 2013.
Net interest income before the provision for credit losses for the six months ended June 30, 2014 was $20,004,000, compared to $13,723,000 for the six months ended June 30, 2013, an increase of $6,281,000 or 45.77%. Net interest income increased as a result of yield changes, the recovery of $861,000 of foregone interest income from the repayment of loans previously identified as nonaccrual, asset mix changes, and an increase in average earning assets, partially offset by an increase in interest-bearing liabilities, primarily as a result of the VCB acquisition.
Total average assets for the six months ended June 30, 2014 were $1,140,602,000 compared to $874,617,000, for the six months ended June 30, 2013, an increase of $265,985,000 or 30.41%. Total average loans increased $128,458,000, or 32.53% for the six months ended June 30, 2014 compared to the six months ended June 30, 2013. Total average investments, including deposits in other banks and Federal funds sold, increased to $515,443,000 for the six months ended June 30, 2014, from $401,468,000 for the six months ended June 30, 2013, representing an increase of $113,975,000 or 28.39%. Total average deposits increased $255,650,000 or 34.63% to $993,936,000 for the six months ended June 30, 2014, compared to $738,286,000 for the six months ended June 30, 2013. Average interest-bearing deposits increased $133,573,000, or 26.07%, and average non-interest bearing demand deposits increased $122,077,000, or 54.02%, for the six months ended June 30, 2014, compared to the six months ended June 30, 2013. The Company’s ratio of average non-interest bearing deposits to total deposits was 35.02% for the six months ended June 30, 2014, compared to 30.61% for the six months ended June 30, 2013.

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Central Valley Community Bancorp -- page 5


Non-interest income for the six months ended June 30, 2014 decreased $32,000 to $4,021,000, compared to $4,053,000 for the six months ended June 30, 2013, primarily driven by a decrease of $800,000 in net realized gains on sales and calls of investment securities, and a $190,000 decrease in loan placement fees, partially offset by a $259,000 increase in service charge income, a $220,000 increase in interchange fees, a $97,000 increase in Federal Home Loan Bank dividends, and a $209,000 increase in other income.
Non-interest expense for the six months ended June 30, 2014 increased $3,314,000, or 23.41%, to $17,470,000 compared to $14,156,000 for the six months ended June 30, 2013. The net increase year over year was a result of increases in salaries and employee benefits of $1,888,000, increases in occupancy and equipment expenses of $648,000, increases in data processing expenses of $321,000, increases in Internet banking expenses of $77,000, increases in regulatory assessments of $94,000, increases in ATM/Debit card expenses of $92,000, increases in license and maintenance contracts of $59,000, increases in advertising fees of $86,000, and other non-interest expense increases of $458,000. During the six months ended June 30, 2014, other non-interest expenses included increases of $50,000 in armored courier expenses, $3,000 in legal fees, $41,000 in appraisal fees, $33,000 in postage expenses, $21,000 in personnel expenses, $7,000 in donations, and $16,000 in stationery/supplies expenses, as compared to the same period in 2013.
The Company recorded an income tax expense of $1,646,000 for the six months ended June 30, 2014, compared to $550,000 for the six months ended June 30, 2013. The effective tax rate for the first six months of 2014 was 23.67% compared to 15.19% for the six months ended June 30, 2013. The increase in the effective tax rate during 2014 was primarily due to the loss of the tax credits related to the California enterprise zone program, offset by a slight increase in interest income on non-taxable investment securities. Beginning January 1, 2014, tax credits and deductions related to the California enterprise zone program were reduced due to legislative changes affecting the program.
Quarter Ended June 30, 2014
For the quarter ended June 30, 2014, the Company reported unaudited consolidated net income of $2,693,000 and diluted earnings per common share of $0.24, compared to $1,287,000 and $0.12 per diluted share for the same period in 2013. Net income for the immediately trailing quarter ended March 31, 2014 was $2,616,000, or $0.24 per diluted common share.

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Central Valley Community Bancorp -- page 6


The increase in net income during the second quarter of 2014 compared to the same period in 2013 was primarily driven by an increase in net interest income and a reverse provision for credit losses of $400,000, partially offset by increases in non-interest expense.
Annualized return on average equity (ROE) for the second quarter of 2014 was 8.27%, compared to 4.45% for the same period of 2013. The increase in ROE reflects an increase in net income notwithstanding an increase in capital from the retention of earnings net of dividends paid and improvement in unrealized gains on available-for-sale securities recorded in accumulated other comprehensive income (AOCI). Annualized return on average assets (ROA) was 0.93% for the second quarter of 2014 compared to 0.59% for the same period in 2013. This increase is due to an increase in net income, notwithstanding an increase in average assets.
In comparing the second quarter of 2014 to the second quarter of 2013, average total loans increased by $133,171,000, or 33.37%. During the second quarter of 2014, the Company recorded $614,000 in net loan charge-offs compared to $112,000 in net loan recoveries for the same period in 2013. The net charge-off ratio, which reflects annualized net charge-offs (recoveries) to average loans, was 0.46% for the quarter ended June 30, 2014 compared to (0.11)% for the quarter ended June 30, 2013.
The following provides a reconciliation of the change in non-accrual loans for the quarter ended June 30, 2014.
(Dollars in thousands)
Balances March 31, 2014
 
Additions to Non-accrual Loans
 
Net Pay Downs
 
Transfer to Foreclosed Collateral - OREO
 
Returns to Accrual Status
 
Charge Offs
 
Balances June 30, 2014
Non-accrual loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
76

 
$
129

 
$
(18
)
 
$
—

 
$
(20
)
 
$
(129
)
 
$
38

Real estate
$
965

 
$
314

 
$
(25
)
 
$
(235
)
 
$
—

 
$
(183
)
 
$
836

Equity loans and lines of credit
422

 
97

 
(2
)
 
—

 
—

 
—

 
517

Consumer
—

 
23

 
(1
)
 
—

 
—

 
—

 
22

Restructured loans (non-accruing):
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
215

 
—

 
(91
)
 
—

 
—

 
(124
)
 
—

Real estate
375

 
—

 
(9
)
 
—

 
—

 
—

 
366

Real estate construction and land development
1,401

 
—

 
(43
)
 
—

 
—

 
—

 
1,358

Equity loans and lines of credit
1,528

 
6

 
(39
)
 
—

 
—

 
—

 
1,495

Consumer
—


—


—


—


—


—

 
—

Total non-accrual
$
4,982

 
$
569

 
$
(228
)
 
$
(235
)
 
$
(20
)
 
$
(436
)
 
$
4,632


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Central Valley Community Bancorp -- page 7


The Company recorded $235,000 in OREO during the quarter ended June 30, 2014 which was disposed of prior to the end of the quarter.
Average total deposits for the second quarter of 2014 increased $261,866,000, or 35.35%, to $1,002,725,000, compared to $740,859,000 for the same period of 2013.
The Company’s net interest margin (fully tax equivalent basis) increased 25 basis points to 4.09% for the quarter ended June 30, 2014, compared to 3.84% and 4.24% for the quarters ended June 30, 2013 and March 31, 2014, respectively. Net interest income, before provision for credit losses, increased $3,027,000, or 44.01%, to $9,905,000 for the second quarter of 2014, compared to $6,878,000 for the same period in 2013. The increases in net interest margin and in net interest income in the period-to-period comparison resulted primarily from an increase in the yield on investment securities and a decrease in the Company’s cost of funds. Over the same periods, the cost of total deposits decreased 6 basis points to 0.11% compared to 0.17% in 2013.
For the quarter ended June 30, 2014, the Company’s average investment securities, including interest-earning deposits in other banks and Federal funds sold, increased by $114,098,000, or 28.39%, compared to the quarter ended June 30, 2013 and increased by $1,139,000, or 0.22%, compared to the quarter ended March 31, 2014.
The effective yield on average investment securities including interest earning deposits in other banks and Federal funds sold, increased to 2.83% for the quarter ended June 30, 2014, compared to 2.49% for the quarter ended June 30, 2013 and 2.74% for the quarter ended March 31, 2014. Total average loans, which generally yield higher rates than investment securities, increased by $133,171,000 to $532,230,000 for the quarter ended June 30, 2014, from $399,059,000 for the quarter ended June 30, 2013 and increased by $17,851,000 from $514,379,000 for the quarter ended March 31, 2014. The effective yield on average loans decreased to 5.54% for the quarter ended June 30, 2014, compared to 5.61% and 6.08% for the quarters ended June 30, 2013 and March 31, 2014, respectively.
Total average assets for the quarter ended June 30, 2014 were $1,152,451,000 compared to $878,766,000 for the quarter ended June 30, 2013 and $1,128,628,000 for the quarter ended March 31, 2014, an increase of $273,685,000 and $23,823,000, or 31.14% and 2.11%, respectively.

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Central Valley Community Bancorp -- page 8


Total average deposits increased $261,866,000, or 35.35%, to $1,002,725,000 for the quarter ended June 30, 2014, compared to $740,859,000 for the quarter ended June 30, 2013. Total average deposits increased $17,676,000, or 1.79%, for the quarter ended June 30, 2014, compared to $985,049,000 for the quarter ended March 31, 2014. The Company’s ratio of average non-interest bearing deposits to total deposits was 34.66% for the quarter ended June 30, 2014, compared to 30.53% and 35.38% for the quarters ended June 30, 2013 and March 31, 2014, respectively.
Non-interest income increased $217,000, or 11.88%, to $2,044,000 for the second quarter of 2014 compared to $1,827,000 for the same period in 2013. The second quarter of 2014 non-interest income included $64,000 in net realized gains on sales and calls of investment securities compared to $320,000 for the same period in 2013. For the quarter ended June 30, 2014, service charge income increased $149,000 and interchange fee income increased $129,000, compared to the same period in 2013. Loan placement fees decreased $83,000 during the second quarter of 2014, compared to the same period in 2013. Non-interest income for the quarter ended June 30, 2014 increased $67,000 to $2,044,000, compared to $1,977,000 for the quarter ended March 31, 2014.
Non-interest expense for the quarter ended June 30, 2014 increased $1,511,000, or 20.92%, to $8,734,000 compared to $7,223,000 for the quarter ended June 30, 2013. The net increase quarter over quarter was a result of increases in salaries and employee benefits of $871,000, increases in occupancy and equipment of $419,000, increases in data processing expenses of $174,000, partially offset by a decrease in acquisition and integration expenses of $380,000, and decreases in consulting and legal fees. Advertising expenses, audit and accounting fees, ATM/debit card expenses and Internet banking expenses also increased comparing the second quarter of 2014 to the same period in 2013. Non-interest expense for the quarter ended June 30, 2014 decreased $2,000 compared to $8,736,000 for the trailing quarter ended March 31, 2014.
“We are happy to report a very good second quarter in all key financial and asset quality metrics compared to the same quarter in 2013.  Additionally, we are pleased that investors are seeing the benefits of the focused efforts of our team, who strive for consistent earnings and returns to our shareholders,” stated Daniel J. Doyle, President and CEO of Central Valley Community Bancorp and Central Valley Community Bank.

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Central Valley Community Bancorp -- page 9


“The July 1, 2013 merger with Visalia Community Bank has proved valuable to our overall growth this past year.  While the Central Valley of California is showing signs of growth, albeit slower than we would like, we are happy to report that the organic growth in average gross loans in the “legacy” bank increased slightly more than 10% over the same period of 2013 and the average deposits increased 12.40% in the “legacy” bank for that same period.  Net income has been hindered in the current low interest rate environment for loans and securities and there is still slow loan growth in consumer credit and commercial and industrial loans.  Loan increases have primarily come from our agriculture annual lines of credit usage, agriculture related business and commercial real estate. The drought in California will have some impact on certain agricultural yields this year due to less acreage planted, coupled with the cost of water and dependence on pumping ground water for our agricultural borrowers.  While we believe our agricultural borrowers are maximizing their resources for this crop year, water storage continues to be a long term problem and may become a more critical issue in the upcoming years if improved water solutions are not determined and increased rain and snow pack is not realized,” continued Doyle.
“Our succession planning is on schedule and going well with the addition of Jim Ford as President in the first quarter and the recent restructuring of titles and responsibilities within the existing Executive and Senior Management team.  The remainder of 2014 looks promising with opportunities for our Bank, our valued customers and team members, and for our 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 now operates 21 full service offices in Clovis, Exeter, Fresno, Kerman, Lodi, Madera, Merced, Modesto, Oakhurst, Prather, Sacramento, Stockton, Tracy, and Visalia, 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, F. T. “Tommy” Elliott, IV, Steven D. McDonald, Louis McMurray, William S. Smittcamp, and Joseph B. Weirick. Wanda L. Rogers is Director Emeritus.

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Central Valley Community Bancorp -- page 10


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, 2013.  Therefore, the information set forth in such forward-looking statements should be carefully considered when evaluating the business prospects of the Company.

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Central Valley Community Bancorp -- page 11


CENTRAL VALLEY COMMUNITY BANCORP
CONSOLIDATED BALANCE SHEETS
 
 
June 30,
 
December 31,
(In thousands, except share amounts)
 
2014
 
2013
 
 
(Unaudited)
 
 
ASSETS
 
 
 
 
Cash and due from banks
 
$
30,504

 
$
25,878

Interest-earning deposits in other banks
 
36,096

 
85,956

Federal funds sold
 
295

 
218

Total cash and cash equivalents
 
66,895

 
112,052

Available-for-sale investment securities (Amortized cost of $434,162 at June 30, 2014 and $447,108 at December 31, 2013)
 
441,223

 
443,224

Held-to-maturity investment securities (Fair value of $33,666 at June 30, 2014)
 
31,711

 
—

Loans, less allowance for credit losses of $7,307 at June 30, 2014 and $9,208 at December 31, 2013
 
537,848

 
503,149

Bank premises and equipment, net
 
10,540

 
10,541

Other real estate owned
 
—

 
190

Bank owned life insurance
 
20,647

 
19,443

Federal Home Loan Bank stock
 
4,791

 
4,499

Goodwill
 
29,917

 
29,917

Core deposit intangibles
 
1,512

 
1,680

Accrued interest receivable and other assets
 
15,604

 
20,940

Total assets
 
$
1,160,688

 
$
1,145,635

 
 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
Deposits:
 
 
 
 
Non-interest bearing
 
$
351,341

 
$
356,392

Interest bearing
 
657,871

 
647,751

Total deposits
 
1,009,212

 
1,004,143

 
 
 
 
 
Junior subordinated deferrable interest debentures
 
5,155

 
5,155

Accrued interest payable and other liabilities
 
15,390

 
16,294

Total liabilities
 
1,029,757

 
1,025,592

Shareholders’ equity:
 
 
 
 
Common stock, no par value; 80,000,000 shares authorized; issued and outstanding: 10,927,925 at June 30, 2014 and 10,914,680 at December 31, 2013
 
54,066

 
53,981

Retained earnings
 
72,565

 
68,348

Accumulated other comprehensive income (loss), net of tax
 
4,300

 
(2,286
)
Total shareholders’ equity
 
130,931

 
120,043

Total liabilities and shareholders’ equity
 
$
1,160,688

 
$
1,145,635


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Central Valley Community Bancorp -- page 12


CENTRAL VALLEY COMMUNITY BANCORP
CONSOLIDATED STATEMENTS OF INCOME
 
 
For the Three Months
Ended June 30,
 
For the Six Months
Ended June 30,
(In thousands, except share and per share amounts)
 
2014
 
2013
 
2014
 
2013
 
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
INTEREST INCOME:
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
7,278

 
$
5,435

 
$
14,896

 
$
10,846

Interest on deposits in other banks
 
44

 
29

 
97

 
59

Interest and dividends on investment securities:
 
 
 
 
 
 
 
 
Taxable
 
1,439

 
352

 
2,786

 
753

Exempt from Federal income taxes
 
1,434

 
1,398

 
2,836

 
2,736

Total interest income
 
10,195

 
7,214

 
20,615

 
14,394

INTEREST EXPENSE:
 
 
 
 
 
 
 
 
Interest on deposits
 
267

 
312

 
564

 
605

Interest on junior subordinated deferrable interest debentures
 
23

 
24

 
47

 
49

Other
 
—

 
—

 
—

 
17

Total interest expense
 
290

 
336

 
611

 
671

Net interest income before provision for credit losses
 
9,905

 
6,878

 
20,004

 
13,723

PROVISION FOR CREDIT LOSSES
 
(400
)
 
—

 
(400
)
 
—

Net interest income after provision for credit losses
 
10,305

 
6,878

 
20,404

 
13,723

NON-INTEREST INCOME:
 
 
 
 
 
 
 
 
Service charges
 
822

 
673

 
1,630

 
1,371

Appreciation in cash surrender value of bank owned life insurance
 
157

 
97

 
303

 
193

Interchange fees
 
342

 
213

 
629

 
409

Loan placement fees
 
131

 
214

 
189

 
379

Net (loss) gain on disposal of other real estate owned
 
(1
)
 
—

 
63

 
—

Net realized gains on sales and calls of investment securities
 
64

 
320

 
333

 
1,133

Federal Home Loan Bank dividends
 
75

 
32

 
151

 
54

Other income
 
454

 
278

 
723

 
514

Total non-interest income
 
2,044

 
1,827

 
4,021

 
4,053

NON-INTEREST EXPENSES:
 
 
 
 
 
 
 
 
Salaries and employee benefits
 
4,845

 
3,974

 
9,756

 
7,868

Occupancy and equipment
 
1,320

 
901

 
2,450

 
1,802

Data processing expense
 
463

 
289

 
913

 
592

ATM/Debit card expenses
 
160

 
109

 
310

 
218

License & maintenance contracts
 
128

 
100

 
258

 
199

Regulatory assessments
 
193

 
154

 
391

 
297

Advertising
 
153

 
80

 
308

 
222

Audit and accounting fees
 
175

 
136

 
307

 
271

Internet banking expenses
 
96

 
76

 
225

 
148

Acquisition and integration
 
—

 
380

 
—

 
513

Amortization of core deposit intangibles
 
84

 
50

 
168

 
100

Other expense
 
1,117

 
974

 
2,384

 
1,926

Total non-interest expenses
 
8,734

 
7,223

 
17,470

 
14,156

Income before provision for income taxes
 
3,615

 
1,482

 
6,955

 
3,620

PROVISION FOR INCOME TAXES
 
922

 
195

 
1,646

 
550

Net income
 
$
2,693

 
$
1,287

 
$
5,309

 
$
3,070

Preferred stock dividends and accretion
 
—

 
88

 
—

 
175

Net income available to common shareholders
 
$
2,693

 
$
1,199

 
$
5,309

 
$
2,895

Net income per common share:
 
 
 
 
 
 
 
 
Basic earnings per common share
 
$
0.25

 
$
0.13

 
$
0.49

 
$
0.30

Weighted average common shares used in basic computation
 
10,918,065

 
9,587,376

 
10,917,010

 
9,573,257

Diluted earnings per common share
 
$
0.24

 
$
0.12

 
$
0.48

 
$
0.30

Weighted average common shares used in diluted computation
 
10,999,663

 
9,644,938

 
10,996,572

 
9,629,771

Cash dividends per common share
 
$
0.05

 
$
0.05

 
$
0.10

 
$
0.10


- more -

Central Valley Community Bancorp -- page 13


CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
For the three months ended
 
2014
 
2014
 
2013
 
2013
 
2013
(In thousands, except share and per share amounts)
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
9,905

 
$
10,099

 
$
9,192

 
$
10,536

 
$
6,878

Provision for credit losses
 
(400
)
 
—

 
—

 
—

 
—

Net interest income after provision for credit losses
 
10,305

 
10,099

 
9,192

 
10,536

 
6,878

Total non-interest income
 
2,044

 
1,977

 
1,965

 
1,813

 
1,827

Total non-interest expense
 
8,734

 
8,736

 
8,538

 
8,991

 
7,223

Provision for income taxes
 
922

 
724

 
408

 
389

 
195

Net income
 
$
2,693

 
$
2,616

 
$
2,211

 
$
2,969

 
$
1,287

Net income available to common shareholders
 
$
2,693

 
$
2,616

 
$
2,123

 
$
2,882

 
$
1,199

Basic earnings per common share
 
$
0.25

 
$
0.24

 
$
0.19

 
$
0.26

 
$
0.13

Weighted average common shares used in basic computation
 
10,918,065

 
10,915,945

 
10,914,296

 
10,899,086

 
9,587,376

Diluted earnings per common share
 
$
0.24

 
$
0.24

 
$
0.19

 
$
0.26

 
$
0.12

Weighted average common shares used in diluted computation
 
10,999,663

 
10,998,630

 
10,980,390

 
10,958,811

 
9,644,938


CENTRAL VALLEY COMMUNITY BANCORP
SELECTED RATIOS
(Unaudited)
 
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
 
Jun. 30,
As of and for the three months ended
 
2014
 
2014
 
2013
 
2013
 
2013
(Dollars in thousands, except per share amounts)
 
 
 
 
 

 
 
 
 
Allowance for credit losses to total loans
 
1.34
%
 
1.62
%
 
1.80
%
 
1.89
 %
 
2.37
 %
Nonperforming assets to total assets
 
0.40
%
 
0.44
%
 
0.68
%
 
0.75
 %
 
1.18
 %
Total nonperforming assets
 
$
4,632

 
$
4,982

 
$
7,776

 
$
8,146

 
$
10,267

Total nonaccrual loans
 
$
4,632

 
$
4,982

 
$
7,586

 
$
8,022

 
$
10,267

Net loan charge-offs (recoveries)
 
$
614

 
$
887

 
$
524

 
$
(131
)
 
$
(112
)
Net charge-offs (recoveries) to average loans (annualized)
 
0.46
%
 
0.69
%
 
0.41
%
 
(0.10
)%
 
(0.11
)%
Book value per share
 
$
11.98

 
$
11.55

 
$
11.00

 
$
10.98

 
$
10.83

Tangible book value per share
 
$
9.11

 
$
8.66

 
$
8.10

 
$
8.09

 
$
8.34

Tangible common equity
 
$
99,502

 
$
94,655

 
$
88,446

 
$
88,333

 
$
80,482

Interest and dividends on investment securities exempt from Federal income taxes
 
$
1,434

 
$
1,402

 
$
1,449

 
$
1,593

 
$
1,398

Net interest margin (calculated on a fully tax equivalent basis) (1)
 
4.09
%
 
4.24
%
 
3.92
%
 
4.66
 %
 
3.84
 %
Return on average assets (2)
 
0.93
%
 
0.93
%
 
0.79
%
 
1.11
 %
 
0.59
 %
Return on average equity (2)
 
8.27
%
 
8.37
%
 
7.04
%
 
9.87
 %
 
4.45
 %
Loan to deposit ratio
 
54.02
%
 
51.91
%
 
51.02
%
 
54.59
 %
 
54.84
 %
Tier 1 leverage - Bancorp
 
8.93
%
 
8.63
%
 
8.14
%
 
8.86
 %
 
10.41
 %
Tier 1 leverage - Bank
 
8.89
%
 
8.59
%
 
8.09
%
 
8.78
 %
 
10.24
 %
Tier 1 risk-based capital - Bancorp
 
14.73
%
 
14.67
%
 
13.88
%
 
14.41
 %
 
17.35
 %
Tier 1 risk-based capital - Bank
 
14.68
%
 
14.60
%
 
13.79
%
 
14.23
 %
 
17.06
 %
Total risk-based capital - Bancorp
 
15.81
%
 
15.92
%
 
15.13
%
 
15.67
 %
 
18.61
 %
Total risk based capital - Bank
 
15.76
%
 
15.85
%
 
15.04
%
 
15.48
 %
 
18.32
 %
(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.


- more -

Central Valley Community Bancorp -- page 14


CENTRAL VALLEY COMMUNITY BANCORP
AVERAGE BALANCES AND RATES
(Unaudited)
AVERAGE AMOUNTS
 
For the Three Months
Ended June 30,
 
For the Six Months
Ended June 30,
(Dollars in thousands)
 
2014
 
2013
 
2014
 
2013
Federal funds sold
 
$
273

 
$
219

 
$
256

 
$
273

Interest-bearing deposits in other banks
 
53,013

 
28,527

 
60,843

 
29,881

Investments
 
462,724

 
373,166

 
454,344

 
371,314

Loans (1)
 
527,177

 
388,431

 
517,500

 
384,277

Federal Home Loan Bank stock
 
4,714

 
3,826

 
4,607

 
3,838

Earning assets
 
1,047,901

 
794,169

 
1,037,550

 
789,583

Allowance for credit losses
 
(8,356
)
 
(9,524
)
 
(8,787
)
 
(9,763
)
Non-accrual loans
 
5,053

 
10,628

 
5,848

 
10,613

Other real estate owned
 
114

 
—

 
73

 
—

Other non-earning assets
 
107,739

 
83,493

 
105,918

 
84,184

Total assets
 
$
1,152,451

 
$
878,766

 
$
1,140,602

 
$
874,617

 
 
 
 
 
 
 
 
 
Interest bearing deposits
 
$
655,150

 
$
514,702

 
$
645,875

 
$
512,302

Other borrowings
 
5,155

 
5,226

 
5,155

 
6,143

Total interest-bearing liabilities
 
660,305

 
519,928

 
651,030

 
518,445

Non-interest bearing demand deposits
 
347,575

 
226,157

 
348,061

 
225,984

Non-interest bearing liabilities
 
14,368

 
17,008

 
13,928

 
13,623

Total liabilities
 
1,022,248

 
763,093

 
1,013,019

 
758,052

Total equity
 
130,203

 
115,673

 
127,583

 
116,565

Total liabilities and equity
 
$
1,152,451

 
$
878,766

 
$
1,140,602

 
$
874,617

 
 
 
 
 
 
 
 
 
AVERAGE RATES
 
 
 
 
 
 
 
 
Federal funds sold
 
0.25
%
 
0.25
%
 
0.25
%
 
0.25
%
Interest-earning deposits in other banks
 
0.33
%
 
0.40
%
 
0.32
%
 
0.40
%
Investments
 
3.12
%
 
2.65
%
 
3.12
%
 
2.64
%
Loans
 
5.54
%
 
5.61
%
 
5.80
%
 
5.69
%
Earning assets
 
4.20
%
 
4.01
%
 
4.28
%
 
4.02
%
Interest-bearing deposits
 
0.16
%
 
0.24
%
 
0.18
%
 
0.24
%
Other borrowings
 
1.79
%
 
1.84
%
 
1.84
%
 
2.17
%
Total interest-bearing liabilities
 
0.18
%
 
0.26
%
 
0.19
%
 
0.26
%
Net interest margin (calculated on a fully tax equivalent basis) (2)
 
4.09
%
 
3.84
%
 
4.17
%
 
3.85
%
(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 $739 and $720 for the three months ended June 30, 2014 and 2013, respectively. The Federal tax benefits relating to income earned on municipal bonds totaled $1,460 and $1,410 for the six months ended June 30, 2014 and 2013, respectively.