EX-99.1 2 cvcy92018earningsreleaseex.htm EXHIBIT 99.1 Exhibit

Central Valley Community Bancorp -- page 1


cvcbankcorplogoclra01a01a32.jpg
FOR IMMEDIATE RELEASE

CENTRAL VALLEY COMMUNITY BANCORP REPORTS EARNINGS RESULTS FOR THE NINE MONTHS AND QUARTER ENDED SEPTEMBER 30, 2018, AND INCREASES QUARTERLY DIVIDEND

FRESNO, CALIFORNIA…October 17, 2018… 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 $16,008,000, and fully diluted earnings per common share of $1.16 for the nine months ended September 30, 2018, compared to $13,691,000 and $1.11 per fully diluted common share for the nine months ended September 30, 2017.
THIRD QUARTER FINANCIAL HIGHLIGHTS
•
Net loans increased $11.0 million or 1.23%, and total assets decreased $142.2 million or 8.56% at September 30, 2018 compared to December 31, 2017.
•
Total deposits decreased 10.53% to $1.28 billion at September 30, 2018 compared to December 31, 2017.
•
Total cost of deposits remain at record low levels at 0.10% and 0.06% at September 30, 2018 and 2017, respectively.
•
Average non-interest bearing demand deposit accounts as a percentage of total average deposits was 42.09% and 39.92% for the quarters ended September 30, 2018 and 2017, respectively.
•
Capital positions remain strong at September 30, 2018 with a 11.16% Tier 1 Leverage Ratio; a 15.17% Common Equity Tier 1 Ratio; a 15.64% Tier 1 Risk-Based Capital Ratio; and a 16.51% Total Risk-Based Capital Ratio.
•
The Company increased its quarterly dividend to $0.09 per common share, payable on November 16, 2018 to shareholders of record on November 2, 2018.
“Our financial results for the three months and nine months ended September 30, 2018, confirm that we are successfully executing our Strategic Plan for 2018. With our continual growth in earnings, our Board of

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Directors has increased our quarterly dividend for the third consecutive quarter to $0.09 per share,” stated James M. Ford, President & CEO of Central Valley Community Bank and Central Valley Community Bancorp.
Net income for the nine months ended September 30, 2018 increased 16.92% compared to the same period in 2017, primarily driven by an increase in net interest income and a decrease in provision for income taxes, partially offset by a decrease in net realized gains on sales and calls of investment securities and an increase in non-interest expense compared to the nine months ended September 30, 2017. During the nine months ended September 30, 2018, the Company recorded a $50,000 provision for credit losses, compared to a $1,150,000 reverse provision during the nine months ended September 30, 2017. Net interest income before the provision for credit losses for the nine months ended September 30, 2018 was $46,730,000, compared to $40,672,000 for the nine months ended September 30, 2017, an increase of $6,058,000 or 14.89%. The impact to interest income from the accretion of the loan marks on acquired loans was $906,000 and $806,000 for the nine months ended September 30, 2018 and 2017, respectively. In addition, net interest income before the provision for credit losses for the nine months ended September 30, 2018 was benefited by approximately $355,000 in nonrecurring income from prepayment penalties and payoff of loans previously on nonaccrual status, as compared to a $1,218,000 net benefit for the nine months ended September 30, 2017. Excluding these reversals and benefits, net interest income for the nine months ended September 30, 2018 increased by $6,921,000 compared to the nine months ended September 30, 2017. Approximately, $3,743,000 of the increase in net interest income was attributed to the Folsom Lake Bank (FLB) acquisition completed in 2017, and approximately $3,178,000 from our continued organic growth.
During the nine months ended September 30, 2018, the Company’s shareholders’ equity increased $3,876,000, or 1.85%, compared to December 31, 2017. The increase in shareholders’ equity was driven by the retention of earnings, net of dividends paid, offset by a decrease in net unrealized gains on available-for-sale (AFS) securities recorded, net of estimated taxes, in accumulated other comprehensive income (AOCI).
Return on average equity (ROE) for the nine months ended September 30, 2018 was 10.16%, compared to 10.55% for the nine months ended September 30, 2017. The decrease in ROE was primarily due to the increase in average shareholders’ equity. The Company declared and paid $0.22 and $0.18 per share in cash dividends to holders of common stock during the nine months ended September 30, 2018 and 2017, respectively.

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Central Valley Community Bancorp -- page 3


Annualized return on average assets (ROA) was 1.34% for the nine months ended September 30, 2018 and 1.27% for the nine months ended September 30, 2017. During the nine months ended September 30, 2018, the Company’s total assets decreased 8.56%, and total liabilities decreased 10.06%, compared to December 31, 2017.
Non-performing assets increased by $1,188,000, or 40.34%, to $4,133,000 at September 30, 2018, compared to $2,945,000 at December 31, 2017. During the nine months ended September 30, 2018, the Company recorded $197,000 in net loan recoveries, compared to $740,000 in net recoveries for the nine months September 30, 2017. The net charge-off (recovery) ratio, which reflects annualized net recoveries to average loans, was (0.03)% for the nine months ended September 30, 2018, compared to (0.13)% for the same period in 2017. Total non-performing assets were 0.27% and 0.18% of total assets as of September 30, 2018 and December 31, 2017, respectively.
At September 30, 2018, the allowance for credit losses was $9,025,000, compared to $8,778,000 at December 31, 2017, a net increase of $247,000 reflecting the net recoveries and provision during the period. The allowance for credit losses as a percentage of total loans was 0.99% at September 30, 2018, and 0.97% at December 31, 2017. Total loans includes loans acquired in the acquisitions of FLB on October 1, 2017, Sierra Vista Bank on October 1, 2016 and Visalia Community Bank on July 1, 2013 that, at their respective acquisition dates, were recorded at fair value and did not have a related allowance for credit losses. The recorded value of acquired loans totaled $198,413,000 at September 30, 2018 and $243,712,000 at December 31, 2017. Excluding these acquired loans from the calculation, the allowance for credit losses to total gross loans was 1.26% and 1.34% as of September 30, 2018 and December 31, 2017, respectively, and general reserves associated with non-impaired loans to total non-impaired loans was 1.24% and 1.34%, respectively. The Company believes the allowance for credit losses is adequate to provide for probable incurred credit losses within the loan portfolio at September 30, 2018.
The Company’s net interest margin (fully tax equivalent basis) was 4.40% for the nine months ended September 30, 2018, compared to 4.42% for the nine months ended September 30, 2017. The decrease in net interest margin in the period-to-period comparison resulted primarily from the decrease in the effective yield on average investment securities, and the decrease in the yield on the Company’s loan portfolio, offset by the increase in the effective yield on interest earning deposits in other banks and Federal Funds sold.

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Central Valley Community Bancorp -- page 4


For the nine months ended September 30, 2018, the effective yield on average total earning assets decreased 1 basis point to 4.50% compared to 4.51% for the nine months September 30, 2017, while the cost of average total interest-bearing liabilities increased to 0.18% for the nine months ended September 30, 2018 as compared to 0.14% for the nine months ended September 30, 2017. Over the same periods, the cost of average total deposits increased to 0.08% for the nine months ended September 30, 2018 compared to 0.07% for the same period in 2017.
For the nine months ended September 30, 2018, the Company’s average investment securities, including interest-earning deposits in other banks and Federal funds sold, totaled $537,551,000, a decrease of $18,288,000, or 3.29%, compared to the nine months ended September 30, 2017. The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, decreased to 2.83% for the nine months ended September 30, 2018, compared to 3.12% for the nine months ended September 30, 2017.
Total average loans (including nonaccrual), which generally yield higher rates than investment securities, increased $151,210,000, from $760,652,000 for the nine months ended September 30, 2017 to $911,862,000 for the nine months September 30, 2018. The increase in loans was partially offset by the sale of the Company’s credit card portfolio of approximately $2,504,000 during the second quarter of 2018. The year-over-year loan growth compared to the prior year was primarily due to the acquisition of FLB in 2017. The effective yield on average loans decreased to 5.48% for the nine months ended September 30, 2018, compared to 5.52% for the nine months September 30, 2017 primarily due to competitive pressures in the Company’s lending markets.
Total average assets for the nine months ended September 30, 2018 was $1,589,365,000 compared to $1,440,139,000 for the nine months ended September 30, 2017, an increase of $149,226,000 or 10.36%. During the nine months ended September 30, 2018 and 2017, the average loan-to-deposit ratio was 67.79% and 61.18%, respectively. Total average deposits increased $101,863,000 or 8.19% to $1,345,198,000 for the nine months ended September 30, 2018, compared to $1,243,335,000 for the nine months ended September 30, 2017. Average interest-bearing deposits increased $27,774,000, or 3.62%, and average non-interest bearing demand deposits increased $74,089,000, or 15.53%, for the nine months ended September 30, 2018, compared to the nine months ended September 30, 2017. The Company’s ratio of average non-interest bearing deposits to total deposits was

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Central Valley Community Bancorp -- page 5


40.97% for the nine months September 30, 2018, compared to 38.37% for the nine months September 30, 2017. The year over year growth was primarily driven by the FLB acquisition which closed on October 1, 2017.
Non-interest income for the nine months ended September 30, 2018 decreased by $976,000 to $7,920,000, compared to $8,896,000 for the nine months ended September 30, 2017, primarily driven by a decrease of $1,531,000 in net realized gains on sales and calls of investment securities. A net gain of $462,000 on the sale of the Company’s credit card portfolio, an increase in appreciation in cash surrender value of bank owned life insurance of $72,000, a $36,000 increase in Federal Home Loan Bank dividends, a $31,000 increase in interchange fees, and an increase in loan placement fees of $20,000, were offset by a $65,000 decrease in service charge income.
Non-interest expense for the nine months ended September 30, 2018 increased $2,361,000, or 7.54%, to $33,658,000 compared to $31,297,000 for the nine months ended September 30, 2017. The net increase year over year was primarily attributable to the FLB acquisition, which resulted in increases in salaries and employee benefits of $1,771,000, occupancy and equipment expenses of $927,000, offset by decrease in acquisition and integration expenses of $401,000, and a decrease of $111,000 in directors’ expenses in 2018 compared to 2017.
The Company recorded an income tax provision of $4,934,000 for the nine months September 30, 2018, compared to $5,730,000 for the nine months September 30, 2017. The effective tax rate for the nine months ended September 30, 2018 was 23.56% compared to 29.50% for the nine months ended September 30, 2017. The signing of the Tax Cuts and Jobs Act on December 22, 2017 changed the Company’s federal income tax rate from 35% to 21% effective as of the beginning of 2018.
Quarter Ended September 30, 2018
For the quarter ended September 30, 2018, the Company reported unaudited consolidated net income of $5,752,000 and earnings per diluted common share of $0.42, compared to consolidated net income of $4,494,000 and $0.36 per diluted share for the same period in 2017. The increase in net income during the third quarter of 2018 compared to the same period in 2017 was primarily due to an increase in net interest income of $2,329,000 and a decrease in the provision for income taxes of $317,000, partially offset by a decrease in non-interest income of $91,000 and an increase in total non-interest expenses of $397,000. The effective tax rate decreased to 24.11% from 32.30% for the quarters ended September 30, 2018 and September 30, 2017, respectively, due to the

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Central Valley Community Bancorp -- page 6


prospective change in the marginal 2018 federal tax rate from 35% to 21%. Net income for the immediately trailing quarter ended June 30, 2018 was $4,965,000, or $0.36 per diluted common share.
Annualized return on average equity (ROE) for the third quarter of 2018 was 10.80%, compared to 10.05% for the same period of 2017. The increase in ROE reflects increase in net income, notwithstanding an increase in shareholders’ equity. Annualized return on average assets (ROA) was 1.48% for the third quarter of 2018 compared to 1.26% for the same period in 2017. This increase is due to an increase in net income outpacing an increase in average assets.
In comparing the third quarter of 2018 to the third quarter of 2017, average total loans increased by $143,508,000, or 18.62%. The majority of the loan growth was due to the FLB acquisition. During the third quarter of 2018, the Company recorded net loan recoveries of $105,000 compared to $519,000 for the same period in 2017. The net charge-off (recovery) ratio, which reflects annualized net charge-offs to average loans, was (0.05)% for the quarter ended September 30, 2018 compared to (0.27)% for the quarter ended September 30, 2017.
Average total deposits for the third quarter of 2018 increased $92,525,000 or 7.57% to $1,315,450,000 compared to $1,222,925,000 for the same period of 2017, primarily due to the FLB acquisition. In comparing the third quarter of 2018 to the third quarter of 2017, average borrowed funds decreased $245,000 or (3.36)% to $7,052,000 compared to $7,297,000.
The Company’s net interest margin (fully tax equivalent basis) was 4.53% for the quarter ended September 30, 2018, compared to 4.39% for the quarter ended September 30, 2017. Net interest income, before provision for credit losses, increased $2,329,000, or 17.15%, to $15,907,000 for the third quarter of 2018, compared to $13,578,000 for the same period in 2017. The accretion of the loan marks on acquired loans increased interest income by $316,000 and $189,000 during the quarters ended September 30, 2018 and 2017, respectively. Net interest income during the third quarters of 2018 and 2017 benefited by approximately $180,000 and $100,000, respectively, from prepayment penalties and payoff of loans previously on nonaccrual status. The net interest margin period-to-period comparisons were impacted by a decrease in the yield on the average investment securities and the loan portfolio. Over the same periods, the cost of total deposits increased to 0.10% from 0.06%.

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Central Valley Community Bancorp -- page 7


For the quarter ended September 30, 2018, the Company’s average investment securities, including interest-earning deposits in other banks and Federal funds sold, decreased by $28,721,000, or 5.40%, compared to the quarter ended September 30, 2017, and decreased by $29,300,000, or 5.50%, compared to the quarter ended June 30, 2018.
The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, was 3.05% for the quarter ended September 30, 2018, compared to 3.15% for the quarter ended September 30, 2017 and 2.67% for the quarter ended June 30, 2018. Total average loans, which generally yield higher rates than investment securities, increased by $143,508,000 to $914,285,000 for the quarter ended September 30, 2018, from $770,777,000 for the quarter ended September 30, 2017 and decreased by $3,986,000 from $918,271,000 for the quarter ended June 30, 2018. The effective yield on average loans was 5.53% for the quarter ended September 30, 2018, compared to 5.39% and 5.49% for the quarters ended September 30, 2017 and June 30, 2018, respectively.
Total average assets for the quarter ended September 30, 2018 were $1,555,704,000 compared to $1,427,070,000 for the quarter ended September 30, 2017 and $1,588,644,000 for the quarter ended June 30, 2018, an increase of $128,634,000 and a decrease of $32,940,000, or 9.01% and (2.07)%, respectively.
Total average deposits increased $92,525,000, or 7.57%, to $1,315,450,000 for the quarter ended September 30, 2018, compared to $1,222,925,000 for the quarter ended September 30, 2017. Total average deposits decreased $20,800,000, or 1.56%, for the quarter ended September 30, 2018, compared to $1,336,250,000 for the quarter ended June 30, 2018. The Company’s ratio of average non-interest bearing deposits to total deposits was 42.09% for the quarter ended September 30, 2018, compared to 39.92% and 40.85% for the quarters ended September 30, 2017 and June 30, 2018, respectively.
Non-interest income decreased $91,000, or 3.56%, to $2,463,000 for the third quarter of 2018 compared to $2,554,000 for the same period in 2017. For the quarter ended September 30, 2018, non-interest income included $380,000 net realized gains on sales and calls of investment securities compared to $169,000 for the same period in 2017, a $211,000 increase. During the third quarter 2018, the Company recorded $116,000 of additional deconversion costs against the net gain on the sale of its credit card portfolio recorded in the second quarter of 2018. In addition, the third quarter 2018 loan placement fees decreased $72,000, and service charge

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income decreased $26,000, partially offset by an increase of $3,000 in interchange fees compared to the same period in 2017. On July 12, 2018, the Company closed its Tracy branch office and sold deposits with a balance of $8,205,000, to BAC Community Bank. The Company recorded a gain on the transaction of $85,000. Non-interest income for the quarter ended September 30, 2018 decreased by $223,000 to $2,463,000, compared to $2,686,000 for the quarter ended June 30, 2018. The decrease compared to the trailing quarter was primarily due to the $578,000 gain on the sale of the credit card portfolio recorded in the second quarter, offset by a $298,000 increase in net realized gains on sales and calls of investment securities, a $13,000 increase in service charges, and a $125,000 increase in other income.
Non-interest expense for the quarter ended September 30, 2018 increased $397,000, or 3.82%, to $10,791,000 compared to $10,394,000 for the quarter ended September 30, 2017. The net increase quarter over quarter was a result of an increase in salaries and employee benefits of $398,000, an increase in occupancy and equipment expenses of $203,000, an increase in professional services of $85,000, an increase of $47,000 in amortization of core deposit intangibles, and an increase of $38,000 in advertising expenses, partially offset by a decrease in acquisition and integration expenses of $163,000, a $14,000 decrease in license and maintenance contract expense, and a decrease of $7,000 in regulatory assessments.
Non-interest expense for the quarter ended September 30, 2018 decreased by $708,000 compared to $11,499,000 for the trailing quarter ended June 30, 2018. The decrease compared to the trailing quarter was primarily due to a decrease in salaries and employee benefits of $446,000, a decrease in occupancy and equipment expense of $88,000, a $48,000 decrease in license and maintenance contracts, and a $20,000 decrease in professional services, partially offset by an increase of $39,000 in data processing, and an increase of $25,000 in directors’ expenses.
The Company recorded an income tax provision of $1,827,000 for the quarter ended September 30, 2018, compared to $2,144,000 for the quarter ended September 30, 2017. The effective tax rate for the quarter ended September 30, 2018 was 24.11% compared to 32.30% for the same period in 2017. The decrease in the effective tax rate was the result of the change in the federal rate offset by a sizable decrease in tax exempt interest.

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Central Valley Community Bancorp -- page 9


On October 17, 2018, the Board of Directors of the Company declared an increase in the regular quarterly cash dividend to $0.09 per share on the Company’s common stock. The dividend is payable on November 16, 2018 to shareholders of record as of November 2, 2018.
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 operates 20 full-service offices throughout California’s San Joaquin Valley and Greater Sacramento Region.  Additionally, the Bank maintains Commercial Real Estate, Agribusiness and SBA Lending Departments. Central Valley Investment Services are provided by Raymond James Financial, Inc.
Members of Central Valley Community Bancorp’s and the Bank’s Board of Directors are: Daniel J. Doyle (Chairman), Daniel N. Cunningham (Lead Independent Director), Edwin S. Darden, Jr., F. T. “Tommy” Elliott, IV, James M. Ford, Robert J. Flautt, Gary D. Gall, Steven D. McDonald, Louis C. McMurray, Karen Musson, and William S. Smittcamp. Sidney B. Cox is 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 (“SEC”), including its Annual Report on Form 10-K for the year ended December 31, 2017.  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 10


CENTRAL VALLEY COMMUNITY BANCORP
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
 
September 30,
 
December 31,
 
September 30,
(In thousands, except share amounts)
 
2018
 
2017
 
2017
 
 
 
 
 
 
 
ASSETS
 
 
 
 
 
 
Cash and due from banks
 
$
29,748

 
$
38,286

 
$
26,195

Interest-earning deposits in other banks
 
17,528

 
62,080

 
9,494

Federal funds sold
 
31

 
17

 
—

Total cash and cash equivalents
 
47,307

 
100,383

 
35,689

Available-for-sale investment securities
 
434,697

 
535,281

 
507,591

Equity securities
 
7,184

 
7,423

 
7,486

Loans, less allowance for credit losses of $9,025, $8,778 and $8,916 at September 30, 2018, December 31, 2017, and September 30, 2017, respectively
 
902,852

 
891,901

 
769,810

Bank premises and equipment, net
 
8,869

 
9,398

 
8,920

Bank owned life insurance
 
28,329

 
27,807

 
23,639

Federal Home Loan Bank stock
 
6,843

 
6,843

 
5,594

Goodwill
 
53,777

 
53,777

 
40,311

Core deposit intangibles
 
2,746

 
3,027

 
1,243

Accrued interest receivable and other assets
 
26,822

 
25,815

 
22,743

Total assets
 
$
1,519,426

 
$
1,661,655

 
$
1,423,026

 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
Non-interest bearing
 
$
534,636

 
$
585,039

 
$
494,364

Interest bearing
 
740,893

 
840,648

 
724,021

Total deposits
 
1,275,529

 
1,425,687

 
1,218,385

Junior subordinated deferrable interest debentures
 
5,155

 
5,155

 
5,155

Accrued interest payable and other liabilities
 
25,307

 
21,254

 
18,254

Total liabilities
 
1,305,991

 
1,452,096

 
1,241,794

Shareholders’ equity:
 
 
 
 
 
 
Preferred stock, no par value, $1,000 per share liquidation preference; 10,000,000 shares authorized, none issued and outstanding
 
—

 
—

 
—

Common stock, no par value; 80,000,000 shares authorized; issued and outstanding: 13,796,489, 13,696,722, and 12,212,190, at September 30, 2018, December 31, 2017, and September 30, 2017, respectively
 
104,506

 
103,314

 
72,428

Retained earnings
 
116,255

 
103,419

 
104,399

Accumulated other comprehensive income (loss), net of tax
 
(7,326
)
 
2,826

 
4,405

Total shareholders’ equity
 
213,435

 
209,559

 
181,232

Total liabilities and shareholders’ equity
 
$
1,519,426

 
$
1,661,655

 
$
1,423,026


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Central Valley Community Bancorp -- page 11


CENTRAL VALLEY COMMUNITY BANCORP
CONSOLIDATED INCOME STATEMENTS
(Unaudited)
 
 
For the Three Months Ended,
 
For the Nine Months Ended
 
 
September 30,
 
June 30,
 
September 30,
 
September 30,
(In thousands, except share and per share amounts)
 
2018
 
2018
 
2017
 
2018
 
2017
INTEREST INCOME:
 
 
 
 
 
 
 
 
 
 
Interest and fees on loans
 
$
12,691

 
$
12,519

 
$
10,423

 
$
37,216

 
$
31,287

Interest on deposits in other banks
 
170

 
44

 
53

 
312

 
204

Interest and dividends on investment securities:
 
 
 
 
 
 
 
 
 
 
Taxable
 
2,533

 
2,185

 
1,818

 
7,277

 
4,564

Exempt from Federal income taxes
 
896

 
1,045

 
1,531

 
3,008

 
5,428

Total interest income
 
16,290

 
15,793

 
13,825

 
47,813

 
41,483

INTEREST EXPENSE:
 
 
 
 
 
 
 
 
 
 
Interest on deposits
 
320

 
252

 
200

 
810

 
690

Interest on junior subordinated deferrable interest debentures
 
52

 
52

 
39

 
147

 
108

Other
 
11

 
92

 
8

 
126

 
13

Total interest expense
 
383

 
396

 
247

 
1,083

 
811

Net interest income before provision for credit losses
 
15,907

 
15,397

 
13,578

 
46,730

 
40,672

PROVISION FOR (REVERSAL OF) CREDIT LOSSES
 
—

 
50

 
(900
)
 
50

 
(1,150
)
Net interest income after provision for credit losses
 
15,907

 
15,347

 
14,478

 
46,680

 
41,822

NON-INTEREST INCOME:
 
 
 
 
 
 
 
 
 
 
Service charges
 
739

 
726

 
765

 
2,220

 
2,285

Net realized gains on sales of credit card portfolio
 
(116
)
 
578

 
—

 
462

 
—

Appreciation in cash surrender value of bank owned life insurance
 
175

 
176

 
150

 
522

 
450

Interchange fees
 
381

 
380

 
378

 
1,106

 
1,075

Loan placement fees
 
207

 
173

 
279

 
546

 
526

Net realized gains on sales and calls of investment securities
 
380

 
82

 
169

 
1,277

 
2,808

Federal Home Loan Bank dividends
 
119

 
118

 
98

 
358

 
322

Other income
 
578

 
453

 
715

 
1,429

 
1,430

Total non-interest income
 
2,463

 
2,686

 
2,554

 
7,920

 
8,896

NON-INTEREST EXPENSES:
 
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
 
6,387

 
6,833

 
5,989

 
19,636

 
17,865

Occupancy and equipment
 
1,489

 
1,577

 
1,286

 
4,603

 
3,676

Acquisition and integration expenses
 
—

 
—

 
163

 
217

 
618

Professional services

343


363

 
258


1,144


1,104

Data processing expense
 
409

 
370

 
407

 
1,259

 
1,250

Directors’ expenses
 
158

 
133

 
135

 
381

 
492

ATM/Debit card expenses
 
192

 
176

 
216

 
569

 
553

License and maintenance contracts
 
174

 
222

 
188

 
608

 
590

Regulatory assessments
 
154

 
160

 
161

 
476

 
482

Advertising
 
192

 
188

 
154

 
569

 
484

Internet banking expenses
 
172

 
175

 
181

 
542

 
523

Amortization of core deposit intangibles
 
94

 
93

 
47

 
281

 
141

Other expense
 
1,027

 
1,209

 
1,209

 
3,373

 
3,519

Total non-interest expenses
 
10,791

 
11,499

 
10,394

 
33,658

 
31,297

Income before provision for income taxes
 
7,579

 
6,534

 
6,638

 
20,942

 
19,421

PROVISION FOR INCOME TAXES
 
1,827

 
1,569

 
2,144

 
4,934

 
5,730

Net income
 
$
5,752

 
$
4,965

 
$
4,494

 
$
16,008

 
$
13,691

 
 
 
 
 
 
 
 
 
 
 

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Central Valley Community Bancorp -- page 12


Net income per common share:
 
 
 
 
 
 
 
 
 
 
Basic earnings per common share
 
$
0.42

 
$
0.36

 
$
0.37

 
$
1.17

 
$
1.12

Weighted average common shares used in basic computation
 
13,715,141

 
13,692,358

 
12,208,313

 
13,692,657

 
12,183,363

Diluted earnings per common share
 
$
0.42

 
$
0.36

 
$
0.36

 
$
1.16

 
$
1.11

Weighted average common shares used in diluted computation
 
13,836,828

 
13,823,278

 
12,325,254

 
13,821,828

 
12,315,850

Cash dividends per common share
 
$
0.08

 
$
0.07

 
$
0.06

 
$
0.22

 
$
0.18


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Central Valley Community Bancorp -- page 13


CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
 
 
Sep. 30,
 
Jun. 30,
 
Mar. 31
 
Dec. 31,
 
Sep. 30,
For the three months ended
 
2018
 
2018
 
2018
 
2017
 
2017
(In thousands, except share and per share amounts)
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
15,907

 
$
15,397

 
$
15,426

 
$
15,567

 
$
13,578

Provision for (reversal of) credit losses
 
—

 
50

 
—

 
—

 
(900
)
Net interest income after provision for credit losses
 
15,907

 
15,347

 
15,426

 
15,567

 
14,478

Total non-interest income
 
2,463

 
2,686

 
2,771

 
1,941

 
2,554

Total non-interest expense
 
10,791

 
11,499

 
11,368

 
13,109

 
10,394

Provision for income taxes
 
1,827

 
1,569

 
1,538

 
4,064

 
2,144

Net income
 
$
5,752

 
$
4,965

 
$
5,291

 
$
335

 
$
4,494

Basic earnings per common share
 
$
0.42

 
$
0.36

 
$
0.39

 
$
0.02

 
$
0.37

Weighted average common shares used in basic computation
 
13,715,141

 
13,692,358

 
13,669,976

 
13,533,677

 
12,208,313

Diluted earnings per common share
 
$
0.42

 
$
0.36

 
$
0.38

 
$
0.02

 
$
0.36

Weighted average common shares used in diluted computation
 
13,836,828

 
13,823,278

 
13,804,480

 
13,730,434

 
12,325,254


CENTRAL VALLEY COMMUNITY BANCORP
SELECTED RATIOS
(Unaudited)
 
 
Sept. 30,
 
Jun. 30,
 
Mar. 31,
 
Dec. 31,
 
Sep. 30,
As of and for the three months ended
 
2018
 
2018
 
2018
 
2017
 
2017
(Dollars in thousands, except per share amounts)
 
 
 
 
 

 
 
 
 
Allowance for credit losses to total loans
 
0.99
 %
 
0.95
 %
 
0.96
 %
 
0.97
%
 
1.14
 %
Non-performing assets to total assets
 
0.27
 %
 
0.26
 %
 
0.25
 %
 
0.18
%
 
0.22
 %
Total non-performing assets
 
$
4,133

 
$
4,092

 
$
4,058

 
$
2,945

 
$
3,162

Total nonaccrual loans
 
$
4,133

 
$
4,092

 
$
4,058

 
$
2,875

 
$
2,968

Net loan charge-offs (recoveries)
 
$
(105
)
 
$
(82
)
 
$
(10
)
 
$
138

 
$
(519
)
Net charge-offs (recoveries) to average loans (annualized)
 
(0.05
)%
 
(0.04
)%
 
—
 %
 
0.06
%
 
(0.27
)%
Book value per share
 
$
15.47

 
$
15.32

 
$
15.12

 
$
15.30

 
$
14.84

Tangible book value per share
 
$
11.37

 
$
11.21

 
$
11.00

 
$
11.15

 
$
11.44

Tangible common equity
 
$
156,911

 
$
154,567

 
$
151,232

 
$
152,755

 
$
139,678

Cost of total deposits
 
0.10
 %
 
0.08
 %
 
0.07
 %
 
0.08
%
 
0.06
 %
Interest and dividends on investment securities exempt from Federal income taxes
 
$
896

 
$
1,045

 
$
1,067

 
$
1,464

 
$
1,531

Net interest margin (calculated on a fully tax equivalent basis) (1)
 
4.53
 %
 
4.33
 %
 
4.26
 %
 
4.37
%
 
4.39
 %
Return on average assets (2)
 
1.48
 %
 
1.25
 %
 
1.30
 %
 
0.08
%
 
1.26
 %
Return on average equity (2)
 
10.80
 %
 
9.53
 %
 
10.15
 %
 
0.64
%
 
10.05
 %
Loan to deposit ratio
 
71.49
 %
 
70.60
 %
 
65.96
 %
 
63.18
%
 
63.91
 %
Efficiency ratio
 
58.83
 %
 
64.28
 %
 
61.67
 %
 
64.20
%
 
60.44
 %
Tier 1 leverage - Bancorp
 
11.16
 %
 
10.59
 %
 
10.10
 %
 
9.71
%
 
9.86
 %
Tier 1 leverage - Bank
 
11.06
 %
 
10.44
 %
 
9.89
 %
 
9.46
%
 
9.76
 %
Common equity tier 1 - Bancorp
 
15.17
 %
 
14.35
 %
 
14.01
 %
 
12.90
%
 
13.09
 %
Common equity tier 1 - Bank
 
15.51
 %
 
14.59
 %
 
14.17
 %
 
12.96
%
 
13.35
 %
Tier 1 risk-based capital - Bancorp
 
15.64
 %
 
14.80
 %
 
14.47
 %
 
13.28
%
 
13.48
 %
Tier 1 risk-based capital - Bank
 
15.51
 %
 
14.59
 %
 
14.17
 %
 
12.96
%
 
13.35
 %
Total risk-based capital - Bancorp
 
16.51
 %
 
15.64
 %
 
15.30
 %
 
14.07
%
 
14.39
 %
Total risk based capital - Bank
 
16.37
 %
 
15.43
 %
 
15.01
 %
 
13.74
%
 
14.26
 %
(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)
 
 
For the Three Months Ended
 
For the Nine Months Ended
AVERAGE AMOUNTS
 
September 30,
 
June 30,
 
September 30,
 
September 30,
 
September 30,
(Dollars in thousands)
 
2018
 
2018
 
2017
 
2018
 
2017
Federal funds sold
 
$
22

 
$
35

 
$
87

 
$
39

 
$
45

Interest-bearing deposits in other banks
 
33,939

 
11,037

 
16,316

 
23,509

 
27,232

Investments
 
469,244

 
521,433

 
515,523

 
514,003

 
528,562

Loans (1)
 
910,164

 
914,236

 
767,770

 
907,779

 
757,859

Earning assets
 
1,413,369

 
1,446,741

 
1,299,696

 
1,445,330

 
1,313,698

Allowance for credit losses
 
(9,005
)
 
(8,822
)
 
(9,382
)
 
(8,873
)
 
(9,376
)
Nonaccrual loans
 
4,121

 
4,035

 
3,007

 
4,083

 
2,793

Other non-earning assets
 
147,219

 
146,690

 
133,749

 
148,825

 
133,024

Total assets
 
$
1,555,704

 
$
1,588,644

 
$
1,427,070

 
$
1,589,365

 
$
1,440,139

 
 
 
 
 
 
 
 
 
 
 
Interest bearing deposits
 
$
761,736

 
$
790,396

 
$
734,679

 
$
794,033

 
$
766,259

Other borrowings
 
7,052

 
24,699

 
7,297

 
14,203

 
6,540

Total interest-bearing liabilities
 
768,788

 
815,095

 
741,976

 
808,236

 
772,799

Non-interest bearing demand deposits
 
553,714

 
545,854

 
488,246

 
551,165

 
477,076

Non-interest bearing liabilities
 
20,174

 
19,221

 
18,075

 
19,914

 
17,248

Total liabilities
 
1,342,676

 
1,380,170

 
1,248,297

 
1,379,315

 
1,267,123

Total equity
 
213,028

 
208,474

 
178,773

 
210,050

 
173,016

Total liabilities and equity
 
$
1,555,704

 
$
1,588,644

 
$
1,427,070

 
$
1,589,365

 
$
1,440,139

 
 
 
 
 
 
 
 
 
 
 
AVERAGE RATES
 
 
 
 
 
 
 
 
 
 
Federal funds sold
 
1.95
%
 
1.51
%
 
1.25
%
 
1.79
%
 
1.25
%
Interest-earning deposits in other banks
 
1.99
%
 
1.63
%
 
1.30
%
 
1.77
%
 
1.00
%
Investments
 
3.13
%
 
2.69
%
 
3.21
%
 
2.88
%
 
3.23
%
Loans (3)
 
5.53
%
 
5.49
%
 
5.39
%
 
5.48
%
 
5.52
%
Earning assets
 
4.64
%
 
4.44
%
 
4.46
%
 
4.50
%
 
4.51
%
Interest-bearing deposits
 
0.17
%
 
0.13
%
 
0.11
%
 
0.14
%
 
0.12
%
Other borrowings
 
3.52
%
 
2.33
%
 
2.58
%
 
2.56
%
 
2.47
%
Total interest-bearing liabilities
 
0.20
%
 
0.19
%
 
0.13
%
 
0.18
%
 
0.14
%
Net interest margin (calculated on a fully tax equivalent basis) (2)
 
4.53
%
 
4.33
%
 
4.39
%
 
4.40
%
 
4.42
%
(1)
Average loans do not include nonaccrual loans.
(2)
Calculated on a fully tax equivalent basis, which includes Federal tax benefits relating to income earned on municipal bonds of $238, $278, and $789, for the three months ended September 30, 2018, June 30, 2018, and September 30, 2017, respectively. The Federal tax benefits relating to income earned on municipal bonds totaled $800 and $2,797 for the nine months ended September 30, 2018 and 2017, respectively.
(3)
Loan yield includes loan fees (costs) for the three months ended September 30, 2018, June 30, 2018, and September 30, 2017 of $176, $107, and $(49), respectively. Loan yield includes loan fees for the nine months ended September 30, 2018 and 2017 of $404 and $420, respectively.

CONTACT: Investor Contact:
Dave Kinross
Executive Vice President and Chief Financial Officer
Central Valley Community Bancorp
559-323-3420

Media Contact:
Debbie Nalchajian-Cohen
Marketing Director
Central Valley Community Bancorp
559-222-1322