SUBSCRIBE TO TMCnet
TMCnet - World's Largest Communications and Technology Community

TMC NEWS

TMCNET eNEWSLETTER SIGNUP

Central Valley Community Bancorp Reports Earnings Results for the Quarter Ended March 31, 2019, and Quarterly Dividend
[April 17, 2019]

Central Valley Community Bancorp Reports Earnings Results for the Quarter Ended March 31, 2019, and Quarterly Dividend


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 $5,216,000, and fully diluted earnings per common share of $0.38 for the three months ended March 31, 2019, compared to $5,291,000 and $0.38 per fully diluted common share for the three months ended March 31, 2018.

FIRST QUARTER FINANCIAL HIGHLIGHTS

  • Net loans increased $3.1 million or 0.34%, and total assets increased $26.4 million or 1.72% at March 31, 2019 compared to December 31, 2018.
  • Total deposits increased 0.80% to $1.29 billion at March 31, 2019 compared to December 31, 2018.
  • Total cost of deposits remain at low levels at 0.12% and 0.07% for the quarter ended March 31, 2019 and 2018, respectively.
  • Average non-interest bearing demand deposit accounts as a percentage of total average deposits was 42.10% and 40.01% for the quarters ended March 31, 2019 and 2018, respectively.
  • Capital positions remain strong at March 31, 2019 with a 11.69% Tier 1 Leverage Ratio; a 15.13% Common Equity Tier 1 Ratio; a 15.58% Tier 1 Risk-Based Capital Ratio; and a 16.41% Total Risk-Based Capital Ratio.
  • The Company declared a $0.11 per common share cash dividend, payable on May 17, 2019 to shareholders of record on May 3, 2019.
  • During the quarter ended March 31, 2019, the Company repurchased and retired a total of 97,479 shares at an average price paid per share of $19.20. Since the Company approved the stock repurchased program on July 18, 2018, the Company has repurchased and retired a total of 145,341 shares at an average price paid per share of $19.03.
  • After extensive evaluation, the Company will consolidate the Rancho Cordova and Fair Oaks offices and open a new full-service branch in Gold River during the second quarter of 2019.

"While we experienced modest loan and deposit growth in the first quarter, we have maintained our strong core deposit mix which allows us to continue to deliver our relationship approach to community banking," stated James M. Ford, President & CEO of Central Valley Community Bank and Central Valley Community Bancorp. "With very low levels of nonperforming assets and strong capital levels, we stand ready to meet the needs of our communities." Ford went on to state, "Our plans to further reduce overhead expenses are taking hold and with the consolidation of two branches in the second quarter, we are positioned to further improve delivery and efficiency."

Net income for the three months ended March 31, 2019 decreased 1.42%, primarily driven by an increase in non-interest expense and an increase in the provision for income taxes, partially offset by an increase in net interest income and an increase in net realized gains on sales and calls of investment securities compared to the three months ended March 31, 2018. During the three months ended March 31, 2019, the Company recorded a $25,000 reverse provision for credit losses, compared to no provision during the three months ended March 31, 2018. Net interest income before the provision for credit losses for the three months ended March 31, 2019 was $15,835,000, compared to $15,426,000 for the three months ended March 31, 2018, an increase of $409,000 or 2.65%. The impact to interest income from the accretion of the loan marks on acquired loans was $259,000 and $258,000 for the three months ended March 31, 2019 and 2018, respectively. In addition, net interest income before the provision for credit losses for the three months ended March 31, 2019 was benefited by approximately $127,000 in nonrecurring income from prepayment penalties and payoff of loans previously on nonaccrual status, as compared to a $21,000 in income reversals for the three months ended March 31, 2018. Excluding these reversals and benefits, net interest income for the three months ended March 31, 2019 increased by $261,000 compared to the three months ended March 31, 2018.

During the three months ended March 31, 2019, the Company's shareholders' equity increased $7,717,000, or 3.51%, compared to December 31, 2018. The increase in shareholders' equity was driven by the retention of earnings, net of dividends paid, and an increase 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 three months ended March 31, 2019 was 9.42%, compared to 10.15% for the three months ended March 31, 2018. The decrease in ROE was primarily due to the increase in shareholders' equity compared to last year. The Company declared and paid $0.10 and $0.07 per share in cash dividends to holders of common stock during the three months ended March 31, 2019 and 2018, respectively. Annualized return on average assets (ROA) was 1.35% for the three months ended March 31, 2019 and 1.30% for the three months ended March 31, 2018. During the three months ended March 31, 2019, the Company's total assets increased 1.72%, and total liabilities increased 1.42%, compared to December 31, 2018.

Non-performing assets decreased by $1,192,000, or 43.50%, to $1,548,000 at March 31, 2019, compared to $2,740,000 at December 31, 2018. During the three months ended March 31, 2019, the Company recorded $39,000 in net loan recoveries, compared to $10,000 in net recoveries for the three months ended March 31, 2018. The net charge-off (recovery) ratio, which reflects annualized net recoveries to average loans, was (0.02)% for the three months ended March 31, 2019, compared to 0.00% for the same period in 2018. Total non-performing assets were 0.10% and 0.18% of total assets as of March 31, 2019 and December 31, 2018, respectively.

At March 31, 2019, the allowance for credit losses was $9,118,000, compared to $9,104,000 at December 31, 2018, a net increase of $14,000 reflecting the net recoveries and reverse provision during the period. The allowance for credit losses as a percentage of total loans was 0.99% at both March 31, 2019 and December 31, 2018. Total loans includes loans acquired in the acquisitions of Folsom Lake Bank 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 $175,177,000 at March 31, 2019 and $189,719,000 at December 31, 2018. Excluding these acquired loans from the calculation, the allowance for credit losses to total gross loans was 1.22% and 1.25% as of March 31, 2019 and December 31, 2018, respectively, and general reserves associated with non-impaired loans to total non-impaired loans was 1.22% and 1.25%, respectively. The Company believes the allowance for credit losses is adequate to provide for probable incurred credit losses within the loan portfolio at March 31, 2019.

The Company's net interest margin (fully tax equivalent basis) was 4.63% for the three months ended March 31, 2019, compared to 4.31% for the three months ended March 31, 2018. The increase in net interest margin in the period-to-period comparison resulted from the increase in the effective yield on interest earning deposits in other banks and Federal Funds sold, the increase in the effective yield on average investment securities, and the increase in the yield on the Company's loan portfolio.

For the three months ended March 31, 2019, the effective yield on average total earning assets increased 36 basis points to 4.76% compared to 4.40% for the three months ended March 31, 2018, while the cost of average total interest-bearing liabilities increased to 0.24% for the three months ended March 31, 2019 as compared to 0.15% for the three months ended March 31, 2018. Over the same periods, the cost of average total deposits increased to 0.12% for the three months ended March 31, 2019 compared to 0.07% for the same period in 2018.

For the three months ended March 31, 2019, the Company's average investment securities, including interest-earning deposits in other banks and Federal funds sold, totaled $495,805,000, a decrease of $81,956,000, or 14.19%, compared to the three months March 31, 2018. The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, increased to 3.13% for the three months ended March 31, 2019, compared to 2.77% for the three months ended March 31, 2018.

Total average loans (including nonaccrual), which generally yield higher rates than investment securities, increased $3,207,000, from $902,904,000 for the three months ended March 31, 2018 to $906,111,000 for the three months ended March 31, 2019. 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 effective yield on average loans increased to 5.64% for the three months ended March 31, 2019, compared to 5.42% for the three months ended March 31, 2018.

Total average assets for the three months ended March 31, 2019 was $1,540,721,000 compared to $1,624,504,000 for the three months ended March 31, 2018, a decrease of $83,783,000 or 5.16%. During the three months ended March 31, 2019 and 2018, the loan-to-deposit ratio was 71.32% and 65.96%, respectively. Total average deposits decreased $94,641,000 or 6.83% to $1,290,012,000 for the three months ended March 31, 2019, compared to $1,384,653,000 for the three months ended March 31, 2018. Average interest-bearing deposits decreased $83,847,000, or 10.09%, and average non-interest bearing demand deposits decreased $10,794,000, or 1.95%, for the three months ended March 31, 2019, compared to the three months ended March 31, 2018. The Company's ratio of average non-interest bearing deposits to total deposits was 42.10% for the three months ended March 31, 2019, compared to 40.01% for the three months ended March 31, 2018.

Non-interest income for the three months ended March 31, 2019 increased by $205,000 to $2,976,000, compared to $2,771,000 for the three months ended March 31, 2018, primarily driven by an increase of $237,000 in net realized gains on sales and calls of investment securities and an increase of $62,000 in other income, offset by a decrease in loan placement fees of $27,000 and a decrease in service charge income of $65,000.

Non-interest expense for the three months ended March 31, 2019 increased $299,000, or 2.63%, to $11,667,000 compared to $11,368,000 for the three months ended March 31, 2018. The net increase year over year resulted from increases in information technology of $565,000, salaries and employee benefits of $74,000, directors' expenses of $86,000, and credit card expenses of $53,000, offset by decreases in acquisition and integration expenses of $217,000, professional services of $111,000, data processing expenses of $85,000, and occupancy and equipment expenses of $58,000 in 2019 compared to 2018. The increase in the information technology expenses was a result of the Company outsourcing its network maintenance and IT support during the fourth quarter of 2018. The increase in the directors' expenses was related to the change in the discount rate used to calculate the liability for deferred compensation and split dollar plans.

The Company recorded an income tax provision of $1,953,000 for the three months ended March 31, 2019, compared to $1,538,000 for the three months ended March 31, 2018. The effective tax rate for the three months March 31, 2019 was 27.24% compared to 22.52% for the three months March 31, 2018. The increase in the effective rate was a result of a decrease in tax-exempt interest.

Quarterly Dividend Announcement

On April 17, 2019, the Board of Directors of the Company declared an increase in the regular quarterly cash dividend to $0.11 per share on the Company's common stock. The dividend is payable on May 17, 2019 to shareholders of record as of May 3, 2019.

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 21 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; (3) a decline in economic conditions at the international, national or local level on the Company's results of operations; (4) the Company's ability to continue its internal growth at historical rates; (5) the Company's ability to maintain its net interest margin; (6) the quality of the Company's earning assets; (7) changes in the regulatory environment; (8) fluctuations in the real estate market; (9) changes in business conditions and inflation; (10) changes in securities markets; and (11) 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, 2018. Therefore, the information set forth in such forward-looking statements should be carefully considered when evaluating the business prospects of the Company.





     

CENTRAL VALLEY COMMUNITY BANCORP

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 
March 31, December 31, March 31,
(In thousands, except share amounts) 2019 2018 2018
 
ASSETS
Cash and due from banks $ 29,762 $ 24,954 $ 26,092
Interest-earning deposits in other banks 2,404 6,725 16,016
Federal funds sold 69   48   115  
Total cash and cash equivalents 32,235 31,727 42,223
Available-for-sale investment securities 479,622 463,905 537,389
Equity securities 7,346 7,254 7,296
Loans, less allowance for credit losses of $9,118, $9,104 and $8,788 at March 31, 2019, December 31, 2018, and March 31, 2018, respectively 912,692 909,591 908,701
Bank premises and equipment, net 8,096 8,484 9,429
Bank owned life insurance 29,673 28,502 27,978
Federal Home Loan Bank stock 6,843 6,843 6,843
Goodwill 53,777 53,777 53,777
Core deposit intangibles 2,399 2,572 2,934
Accrued interest receivable and other assets 31,554   25,181   26,427  
Total assets $ 1,564,237   $ 1,537,836   $ 1,622,997  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 550,410 $ 550,657 $ 561,490
Interest bearing 742,154   731,641   829,420  
Total deposits 1,292,564 1,282,298 1,390,910
Short-term borrowings 7,000 10,000 -
Junior subordinated deferrable interest debentures 5,155 5,155 5,155
Accrued interest payable and other liabilities 32,063   20,645   18,989  
Total liabilities 1,336,782   1,318,098   1,415,054  
Shareholders' equity:
Preferred stock, no par value; 10,000,000 shares authorized, none issued and outstanding - - -
Common stock, no par value; 80,000,000 shares authorized; issued and outstanding: 13,680,930, 13,754,965, and 13,752,037, at March 31, 2019, December 31, 2018, and March 31, 2018, respectively 102,395 103,851 103,980
Retained earnings 124,138 120,294 107,544
Accumulated other comprehensive income (loss), net of tax 922   (4,407 ) (3,581 )
Total shareholders' equity 227,455   219,738   207,943  
Total liabilities and shareholders' equity $ 1,564,237   $ 1,537,836   $ 1,622,997  
 

 

CENTRAL VALLEY COMMUNITY BANCORP

CONSOLIDATED INCOME STATEMENTS

(Unaudited)

 
For the Three Months Ended,
March 31,   December 31,   March 31,
(In thousands, except share and per share amounts) 2019 2018 2018
INTEREST INCOME:
Interest and fees on loans $ 12,554 $ 12,720 $ 12,006
Interest on deposits in other banks 150 147 98
Interest and dividends on investment securities:
Taxable 3,023 2,977 2,559
Exempt from Federal income taxes 562   530   1,067
Total interest income 16,289   16,374   15,730
INTEREST EXPENSE:
Interest on deposits 393 343 238
Interest on junior subordinated deferrable interest debentures 57 52 43

Other

4   6   23
Total interest expense 454   401   304
Net interest income before provision for credit losses 15,835 15,973 15,426
PROVISION FOR (REVERSAL OF) CREDIT LOSSES (25 ) -   -
Net interest income after provision for credit losses 15,860   15,973   15,426
NON-INTEREST INCOME:
Service charges 690 766 755
Appreciation in cash surrender value of bank owned life insurance 171 173 171
Interchange fees 343 356 345
Loan placement fees 139 162 166
Net realized gains on sales and calls of investment securities 1,052 37 815
Federal Home Loan Bank dividends 121 232 121
Other income 460   678   398
Total non-interest income 2,976   2,404   2,771
NON-INTEREST EXPENSES:
Salaries and employee benefits 6,490 6,585 6,416
Occupancy and equipment 1,479 1,369 1,537
Acquisition and integration expenses - - 217
Professional services 327 331 438
Data processing expense 395 407 480
Directors' expenses 176 84 90
ATM/Debit card expenses 191 170 201
Information technology 777 492 212
Regulatory assessments 152 143 162
Advertising 202 189 189
Internet banking expenses 194 190 195
Amortization of core deposit intangibles 174 174 94
Other expense 1,110   1,276   1,137
Total non-interest expenses 11,667   11,410   11,368
Income before provision for income taxes 7,169 6,967 6,829
PROVISION FOR INCOME TAXES 1,953   1,686   1,538
Net income $ 5,216   $ 5,281   $ 5,291
 
Net income per common share:
Basic earnings per common share $ 0.38   $ 0.38   $ 0.39
Weighted average common shares used in basic computation 13,646,489   13,721,087   13,669,976
Diluted earnings per common share $ 0.38   $ 0.38   $ 0.38
Weighted average common shares used in diluted computation 13,755,615   13,834,662   13,804,480
Cash dividends per common share $ 0.10   $ 0.09   $ 0.07
 
         

CENTRAL VALLEY COMMUNITY BANCORP

CONDENSED CONSOLIDATED INCOME STATEMENTS

(Unaudited)

 
Mar, 31 Dec. 31, Sep. 30 Jun. 30, Mar. 31
For the three months ended 2019 2018 2018 2018 2018
(In thousands, except share and per share amounts)
Net interest income $ 15,835 $ 15,973 $ 15,907 $ 15,397 $ 15,426
Provision for (reversal of) credit losses (25 ) -   -   50   -
Net interest income after provision for credit losses 15,860 15,973 15,907 15,347 15,426
Total non-interest income 2,976 2,404 2,463 2,686 2,771
Total non-interest expense 11,667 11,410 10,791 11,499 11,368
Provision for income taxes 1,953   1,686   1,827   1,569   1,538
Net income $ 5,216   $ 5,281   $ 5,752   $ 4,965   $ 5,291
Basic earnings per common share $ 0.38   $ 0.38   $ 0.42   $ 0.36   $ 0.39
Weighted average common shares used in basic computation 13,646,489   13,721,087   13,715,141   13,692,358   13,669,976
Diluted earnings per common share $ 0.38   $ 0.38   $ 0.42   $ 0.36   $ 0.38
Weighted average common shares used in diluted computation 13,755,615   13,834,662   13,836,828   13,823,278   13,804,480
 
         

CENTRAL VALLEY COMMUNITY BANCORP

SELECTED RATIOS

(Unaudited)

 
Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31,
As of and for the three months ended 2019 2018 2018 2018 2018
(Dollars in thousands, except per share amounts)
Allowance for credit losses to total loans 0.99 % 0.99 % 0.99 % 0.95 % 0.96 %
Non-performing assets to total assets 0.10 % 0.18 % 0.27 % 0.26 % 0.25 %
Total non-performing assets $ 1,548 $ 2,740 $ 4,133 $ 4,092 $ 4,058
Total nonaccrual loans $ 1,548 $ 2,740 $ 4,133 $ 4,092 $ 4,058
Net loan charge-offs (recoveries) $ (39 ) $ (79 ) $ (105 ) $ (82 ) $ (10 )
Net charge-offs (recoveries) to average loans (annualized) (0.02 )% (0.03 )% (0.05 )% (0.04 )% - %
Book value per share $ 16.63 $ 15.98 $ 15.47 $ 15.32 $ 15.12
Tangible book value per share $ 12.52 $ 11.87 $ 11.37 $ 11.21 $ 11.00
Tangible common equity $ 171,279 $ 163,389 $ 156,911 $ 154,567 $ 151,232
Cost of total deposits 0.12 % 0.10 % 0.10 % 0.08 % 0.07 %
Interest and dividends on investment securities exempt from Federal income taxes $ 562 $ 530 $ 896 $ 1,045 $ 1,067
Net interest margin (calculated on a fully tax equivalent basis) (1) 4.63 % 4.55 % 4.53 % 4.33 % 4.31 %
Return on average assets (2) 1.35 % 1.37 % 1.48 % 1.25 % 1.30 %
Return on average equity (2) 9.42 % 9.82 % 10.80 % 9.53 % 10.15 %
Loan to deposit ratio 71.32 % 71.64 % 71.49 % 70.60 % 65.96 %
Efficiency ratio 63.92 % 60.80 % 58.65 % 62.99 % 62.59 %
Tier 1 leverage - Bancorp 11.69 % 11.48 % 11.16 % 10.59 % 10.10 %
Tier 1 leverage - Bank 11.64 % 11.32 % 11.06 % 10.44 % 9.89 %
Common equity tier 1 - Bancorp 15.13 % 15.13 % 15.17 % 14.35 % 14.01 %
Common equity tier 1 - Bank 15.50 % 15.38 % 15.51 % 14.59 % 14.17 %
Tier 1 risk-based capital - Bancorp 15.58 % 15.59 % 15.64 % 14.80 % 14.47 %
Tier 1 risk-based capital - Bank 15.50 % 15.38 % 15.51 % 14.59 % 14.17 %
Total risk-based capital - Bancorp 16.41 % 16.44 % 16.51 % 15.64 % 15.30 %
Total risk based capital - Bank 16.34 % 16.23 % 16.37 % 15.43 % 15.01 %
(1)   Net Interest Margin is computed by dividing annualized quarterly net interest income by quarterly average interest-bearing assets.
(2) Computed by annualizing quarterly net income.
 
 

CENTRAL VALLEY COMMUNITY BANCORP

AVERAGE BALANCES AND RATES

(Unaudited)

 
For the Three Months Ended
AVERAGE AMOUNTS March 31,   December 31,   March 31,
(Dollars in thousands) 2019 2018 2018
Federal funds sold $ 105 $ 42 $ 61
Interest-bearing deposits in other banks 24,571 25,677 25,458
Investments 471,129 468,410 552,242
Loans (1) 903,415   910,330   898,811  
Earning assets 1,399,220 1,404,459 1,476,572
Allowance for credit losses (9,124 ) (9,074 ) (8,789 )
Nonaccrual loans 2,696 2,586 4,093
Other non-earning assets 147,929   143,965   152,628  
Total assets $ 1,540,721   $ 1,541,936   $ 1,624,504  
 
Interest bearing deposits $ 746,875 $ 740,143 $ 830,722
Other borrowings 5,766   6,179   10,899  
Total interest-bearing liabilities 752,641   746,322   841,621  
Non-interest bearing demand deposits 543,137 559,653 553,931
Non-interest bearing liabilities 23,433   20,859   20,352  
Total liabilities 1,319,211   1,326,834   1,415,904  
Total equity 221,510   215,102   208,600  
Total liabilities and equity $ 1,540,721   $ 1,541,936   $ 1,624,504  
 
AVERAGE RATES            
Federal funds sold 2.40 % 2.20 % 1.51 %
Interest-earning deposits in other banks 2.44 % 2.29 % 1.54 %
Investments 3.17 % 3.12 % 2.83 %
Loans (3) 5.64 % 5.54 % 5.42 %
Earning assets 4.76 % 4.67 % 4.40 %
Interest-bearing deposits 0.21 % 0.18 % 0.12 %
Other borrowings 4.23 % 3.82 % 2.42 %
Total interest-bearing liabilities 0.24 % 0.21 % 0.15 %
Net interest margin (calculated on a fully tax equivalent basis) (2) 4.63 % 4.55 % 4.31 %
(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 $150, $141, and $284, for the three months ended March 31, 2019, December 31, 2018, and March 31, 2018, respectively.
(3) Loan yield includes loan fees (costs) for the three months ended March 31, 2019, December 31, 2018, and March 31, 2018 of $26, $(8), and $121, respectively.


[ Back To TMCnet.com's Homepage ]









Technology Marketing Corporation

35 Nutmeg Drive Suite 340, Trumbull, Connecticut 06611 USA
Ph: 800-243-6002, 203-852-6800
Fx: 203-866-3326

General comments: tmc@tmcnet.com.
Comments about this site: webmaster@tmcnet.com.

STAY CURRENT YOUR WAY

© 2019 Technology Marketing Corporation. All rights reserved | Privacy Policy