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Acquisition of Visalia Community Bank
 9 Months Ended
Sep. 30, 2013
Business Combinations [Abstract]  
Acquisition of Visalia Community Bank
Acquisition of Visalia Community Bank
 
Effective July 1, 2013, the Company acquired Visalia Community Bank, headquartered in Visalia, California, wherein Visalia Community Bank, with three full-service offices in Visalia and one in Exeter, merged with and into Central Valley Community Bancorp’s subsidiary, Central Valley Community Bank, in a combined cash and stock transaction. Visalia Community Bank’s assets (unaudited) as of July 1, 2013 totaled approximately $197 million. The acquired assets and liabilities were recorded at fair value at the date of acquisition and are reflected in the September 30, 2013 financial statements as such.

Under the terms of the merger agreement, the Company issued an aggregate of approximately 1.263 million shares of its common stock and cash totaling approximately $11.05 million to the former shareholders of Visalia Community Bank. Each Visalia Community Bank common shareholder of record at the effective time of the merger became entitled to receive 2.971 shares of common stock of the Company for each of their former shares of Visalia Community Bank common stock.

In accordance with GAAP guidance for business combinations, the Company recorded $6.2 million of goodwill and $1.4 million of other intangible assets during the quarter ending September 30, 2013. The other intangible assets are primarily related to core deposits and are being amortized using a straight-line method over a period of ten years with no significant residual value. For tax purposes purchase accounting adjustments, including goodwill are all non-taxable and/or non-deductible.

The acquisition was consistent with the Company’s strategy to build a regional presence in Central California. The acquisition offers the Company the opportunity to increase profitability by introducing existing products and services to the acquired customer base as well as add new customers in the expanded region.

The following table summarizes the consideration paid for Visalia Community Bank and the amounts of the assets acquired and liabilities assumed recognized at the acquisition date:
Merger consideration:
 
          Cash
$
11,050,000

          Common stock issued
12,494,000

Fair Value of Total Consideration Transferred
$
23,544,000

 
 
Recognized amounts of identifiable assets acquired and liabilities assumed
 
          Cash and cash equivalents
$
51,779,000

          Loans, net
113,467,000

          Investments
14,818,000

          Core deposit intangible
1,365,000

          Premises and equipment
4,263,000

          Federal Home Loan Bank stock
698,000

  Other real estate owned
263,000

          Deferred taxes and taxes receivable
3,051,000

          Bank owned life insurance
6,786,000

          Other assets
796,000

            Total assets acquired
197,286,000

          Deposits
174,206,000

          Other liabilities
5,735,000

            Total liabilities assumed
179,941,000

          Total identifiable net assets
17,345,000

Goodwill
$
6,199,000



Prior to the end of the one year measurement period for finalizing the purchase price allocation, if information becomes available which would indicate adjustments are required to the purchase price allocation, such adjustments will be included in the purchase price allocation retrospectively.

The fair value of net assets acquired includes fair value adjustments to certain receivables that were not considered impaired as of the acquisition date. The fair value adjustments were determined using discounted contractual cash flows. However, the Company believes that all contractual cash flows related to these financial instruments will be collected. As such, these receivables were not considered impaired at the acquisition date and were not subject to the guidance relating to purchased credit impaired loans, which have shown evidence of credit deterioration since origination. Receivables acquired that were not subject to these requirements include non-impaired loans and customer receivables with a fair value and gross contractual amounts receivable of $110,890,000 and $113,743,000, respectively, on the date of acquisition.

Pro Forma Results of Operations

The following table presents pro forma results of operations information for the periods presented as if the acquisition had occurred on January 1, 2012 after giving effect to certain adjustments. The pro forma results of operations for the nine months ended September 30, 2013 and 2012 include the historical accounts of the Company and Visalia Community Bank and pro forma adjustments as may be required, including the amortization of intangibles with definite lives and the amortization or accretion of any premiums or discounts arising from fair value adjustments for assets acquired and liabilities assumed. The pro forma information is intended for informational purposes only and is not necessarily indicative of the Company’s future operating results or operating results that would have occurred had the acquisition been completed at the beginning of 2012. No assumptions have been applied to the pro forma results of operations regarding possible revenue enhancements, expense efficiencies or asset dispositions.

Pro Forma Results of Operations
 
 
For the Nine Months Ended September 30,
(In thousands, except per share amounts) 
 
 
2013
 
2012
Net interest income
 
 
$
27,581

 
$
28,027

Provision for credit losses
 
 
298

 
1,185

Non-interest income
 
 
6,611

 
7,025

Non-interest expense
 
 
28,619

 
26,332

Income before provision for income taxes
 
 
5,275

 
7,535

Provision for income taxes
 
 
375

 
1,542

Net income
 
 
$
4,900

 
$
5,993

Basic earnings per share
 
 
$
0.46

 
$
0.53

Diluted earnings per share
 
 
$
0.46

 
$
0.53