CENTRAL VALLEY COMMUNITY BANCORP : REPORTS EARNINGS RESULTS FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2022, AND QUARTERLY DIVIDEND - Form 8-K
July 20, 2022 at 10:04 pm
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CENTRAL VALLEY COMMUNITY BANCORP REPORTS EARNINGS RESULTS FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2022, AND QUARTERLY DIVIDEND
FRESNO, CALIFORNIA - July 20, 2022. 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 $6,542,000, and fully diluted earnings per common share of $0.56 for the quarter ended June 30, 2022, compared to $7,563,000 and $0.60 per fully diluted common share for the quarter ended June 30, 2021.
SECOND QUARTER FINANCIAL HIGHLIGHTS
•Net income for the second quarter of 2022 increased to $6,542,000 or $0.56 per diluted common share, compared to $6,086,000 and $0.51, respectively, in the first quarter of 2022.
•Net loans increased $96.6 million or 9.38%, and total assets decreased $103.9 million or 4.24% at June 30, 2022 compared to December 31, 2021. The net loan increase consisted of an increase of $114.0 million in non-PPP loans, offset by a decrease of $17.4 million in SBA Paycheck Protection Program (PPP) loans.
•Total deposits decreased 0.79% to $2.11 billion at June 30, 2022 compared to December 31, 2021.
•Total cost of deposits remained at low levels at 0.04% and 0.05% for the quarters ended June 30, 2022 and 2021, respectively.
•Average non-interest bearing demand deposit accounts as a percentage of total average deposits was 43.92% and 45.86% for the quarters ended June 30, 2022 and 2021, respectively.
•Non-performing assets were $271,000, net loan recoveries were $9,000, and loans delinquent more than 30 days were $202,000 for the quarter ended June 30, 2022.
•Capital positions remain strong at June 30, 2022 with a 7.89% Tier 1 Leverage Ratio; a 11.99% Common Equity Tier 1 Ratio; a 12.31% Tier 1 Risk-Based Capital Ratio; and a 15.14% Total Risk-Based Capital Ratio.
•The Company declared a $0.12 per common share cash dividend, payable on August 20, 2022 to shareholders of record as of August 5, 2022.
•During the quarter ended June 30, 2022, the Company repurchased and retired a total of 104,888 shares of common stock at an average price paid per share of $22.17.
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Central Valley Community Bancorp -- page 2
"The Company realized several key accomplishments in the second quarter, most notably achieving loan growth, while maintaining well-recognized conservative credit standards," said James J. Kim, President & CEO. "We continue to invest significantly in our technological infrastructure for our journey forward and I'm proud of the advancements made by our team in this area. At the same time, our team has remained focused on delivering the exceptional client service that is driving our growth. As always, we are grateful for the many new clients that joined us this quarter, and who are entrusting us with the honor of being their financial advocates," concluded Kim.
Quarter Ended June 30, 2022
For the quarter ended June 30, 2022, the Company reported unaudited consolidated net income of $6,542,000 and earnings per diluted common share of $0.56, compared to consolidated net income of $7,563,000 and $0.60 per diluted share for the same period in 2021. The decrease in net income during the second quarter of 2022 compared to the same period in 2021 was primarily due to a decrease in the reversal of provision for credit losses of $1,500,000, an increase in total non-interest expenses of $453,000, and a decrease in non-interest income of $1,307,000, offset by an increase in net interest income of $1,729,000 and a decrease in the provision for income taxes of $510,000. The effective tax rate decreased to 23.01% from 24.58% for the quarters ended June 30, 2022 and June 30, 2021, respectively. Net income for the immediately trailing quarter ended March 31, 2022 was $6,086,000, or $0.51 per diluted common share.
Annualized return on average equity (ROE) for the second quarter of 2022 was 14.73%, compared to 12.25% for the same period of 2021. The increase in ROE reflects a decrease in average shareholders' equity compared to the prior year. The decrease in shareholders' equity was primarily driven by an increase in net unrealized loss on available-for-sale (AFS) investment securities, dividends paid, and stock repurchases, offset by the retention of earnings. Annualized return on average assets (ROA) was 1.07% for the second quarter of 2022 compared to 1.36% for the same period in 2021. This decrease was due to a decrease in net income and an increase in average assets.
In comparing the second quarter of 2022 to the second quarter of 2021, total average loans increased by $5,742,000, or 0.53% due to a decrease of $156,132,000 in PPP loans, offset by an increase of $161,874,000 in non-PPP loans. During the second quarter of 2022, the Company recorded net loan recoveries of $9,000 compared to $117,000 net loan charge-offs for the same period in 2021. The net charge-off (recovery) ratio, which reflects annualized net charge-offs (recoveries) to average loans, was less than 0.00% for the quarter ended June 30, 2022 compared to 0.04% for the quarter ended June 30, 2021. During the quarter ended June 30, 2022, the Company did not record a provision for credit losses, compared to a reversal of provision of $1,500,000 for the quarter ended June 30, 2021.
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Central Valley Community Bancorp -- page 3
The Company's net interest margin (fully tax equivalent basis) was 3.48% for the quarter ended June 30, 2022, compared to 3.60% for the quarter ended June 30, 2021. Net interest income, before provision for credit losses, increased $1,729,000, or 9.56%, to $19,810,000 for the second quarter of 2022, compared to $18,081,000 for the same period in 2021. The accretion on loan marks of acquired loans increased interest income by $102,000 and $176,000 during the quarters ended June 30, 2022 and 2021, respectively. Net interest income during the second quarters of 2022 and 2021 benefited by approximately $154,000 and $4,000, respectively, from prepayment penalties and payoff of loans. The net interest margin period-to-period comparisons were impacted by the increase in the yield on the average investment securities, offset by the decrease in the yield on the loan portfolio and the increase in the yield on total interest-bearing liabilities. Over the same periods, the cost of total deposits decreased to 0.04% from 0.05%.
For the quarter ended June 30, 2022, the Company's average investment securities, including interest-earning deposits in other banks and Federal funds sold, increased by $272,165,000, or 27.76%, compared to the quarter ended June 30, 2021, and decreased by $15,386,000, or 1.21%, compared to the quarter ended March 31, 2022. For the quarter ended June 30, 2022, the Company designated $305,902,000 in available-for-sale investment securities as held-to-maturity investment securities. As part of this designation $24,933,000 in unrealized loss was reclassified within Other Comprehensive Income (OCI).
The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, was 2.58% for the quarter ended June 30, 2022, compared to 2.11% for the quarter ended June 30, 2021 and 2.02% for the quarter ended March 31, 2022. Total average loans (including nonaccrual), which generally yield higher rates than investment securities, increased by $5,742,000 to $1,086,167,000 for the quarter ended June 30, 2022, from $1,080,425,000 for the quarter ended June 30, 2021 and increased by $68,478,000 from $1,017,689,000 for the quarter ended March 31, 2022. For the quarter ended June 30, 2022, average PPP loans decreased $156,132,000 while average non-PPP loans increased $161,874,000 compared to the quarter ended June 30, 2021. The effective yield on average loans was 4.76% for the quarter ended June 30, 2022, compared to 5.04% and 4.85% for the quarters ended June 30, 2021 and March 31, 2022, respectively.
Total average assets for the quarter ended June 30, 2022 were $2,441,881,000 compared to $2,227,632,000 for the quarter ended June 30, 2021 and $2,460,025,000 for the quarter ended March 31, 2022, an increase of $214,249,000 or 9.62% and a decrease of $18,144,000 or 0.74%, respectively.
Total average deposits increased $209,732,000, or 10.77%, to $2,157,740,000 for the quarter ended June 30, 2022, compared to $1,948,008,000 for the quarter ended June 30, 2021, and $7,939,000, or 0.37%, compared to $2,149,801,000 for the quarter ended March 31, 2022. The Company's ratio of average non-interest bearing deposits to total deposits was 43.92% for the quarter ended June 30, 2022, compared to 45.86% and 43.77% for the quarters ended June 30, 2021 and March 31, 2022, respectively.
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Central Valley Community Bancorp -- page 4
Non-Interest Income - The following table presents the key components of non-interest income for the current and trailing quarterly periods indicated:
Three months ended
(Dollars in thousands)
June 30, 2022
March 31, 2022
$ Change
% Change
Service charges
$
544
$
539
$
5
0.9
%
Appreciation in cash surrender value of bank owned life insurance
245
242
3
1.2
%
Interchange fees
478
442
36
8.1
%
Loan placement fees
268
299
(31)
(10.4)
%
Net realized (losses) gains on sales and calls of investment securities
(969)
206
(1,175)
(570.4)
%
Federal Home Loan Bank dividends
82
85
(3)
(3.5)
%
Other Income
122
21
101
481.0
%
Total non-interest income
$
770
$
1,834
$
(1,064)
(58.0)
%
The net realized losses on sales of investment securities during the quarter ended June 30, 2022 were primarily responsible for the decrease in total non-interest income, when compared to the quarter ended March 31, 2022, which realized a net gain on the sale of investment securities. This was offset by an increase in other income, which was the result of a decrease in the equity investment loss recognized during the quarter.
The following table presents the key components of non-interest income for the periods indicated:
Three months ended
(Dollars in thousands)
June 30, 2022
June 30, 2021
$ Change
% Change
Service charges
$
544
$
467
$
77
16.5
%
Appreciation in cash surrender value of bank owned life insurance
245
176
69
39.2
%
Interchange fees
478
471
7
1.5
%
Loan placement fees
268
510
(242)
(47.5)
%
Net realized losses on sales and calls of investment securities
(969)
(79)
(890)
1126.6
%
Federal Home Loan Bank dividends
82
83
(1)
(1.2)
%
Other Income
122
449
(327)
(72.8)
%
Total non-interest income
$
770
$
2,077
$
(1,307)
(62.9)
%
The increase in net realized losses on sales of investment securities were primarily responsible for the decrease in total non-interest income when comparing the quarters ended June 30, 2022 and June 30, 2021. Additionally the decrease in other income was the result of an increase in the equity investment loss recognized during the quarter ended June 30, 2022.
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Central Valley Community Bancorp -- page 5
Non-Interest Expense - The following table presents the key components of non-interest expense for the current and trailing quarterly periods indicated:
Three months ended
(Dollars in thousands)
June 30, 2022
March 31, 2022
$ Change
% Change
Salaries and employee benefits
$
7,057
$
6,944
$
113
1.6
%
Occupancy and equipment
1,344
1,162
182
15.7
%
Information Technology
828
758
70
9.2
%
Regulatory assessments
194
222
(28)
(12.6)
%
Data processing expense
548
541
7
1.3
%
Professional services
464
374
90
24.1
%
ATM/Debit card expenses
217
195
22
11.3
%
Internet banking expense
48
21
27
128.6
%
Advertising
138
140
(2)
(1.4)
%
Directors' expenses
48
45
3
6.7
%
Amortization of core deposit intangibles
140
140
-
-
%
Loan related expenses
68
71
(3)
(4.2)
%
Personnel other
59
103
(44)
(42.7)
%
Other expense
930
729
201
27.6
%
Total non-interest expenses
$
12,083
$
11,445
$
638
5.6
%
The increase in occupancy and equipment is the result of a $144,000 increase of non-depreciable computer equipment and FF&E purchased during the quarter ended June 30, 2022.
The following table presents the key components of non-interest expense for the periods indicated:
Three months ended
(Dollars in thousands)
June 30, 2022
June 30, 2021
$ Change
% Change
Salaries and employee benefits
$
7,057
$
6,979
$
78
1.1
%
Occupancy and equipment
1,344
1,201
143
11.9
%
Information Technology
828
611
217
35.5
%
Regulatory assessments
194
172
22
12.8
%
Data processing expense
548
625
(77)
(12.3)
%
Professional services
464
475
(11)
(2.3)
%
ATM/Debit card expenses
217
191
26
13.6
%
Internet banking expense
48
84
(36)
(42.9)
%
Advertising
138
128
10
7.8
%
Directors' expenses
48
113
(65)
(57.5)
%
Amortization of core deposit intangibles
140
173
(33)
(19.1)
%
Loan related expenses
68
74
(6)
(8.1)
%
Personnel other
59
34
25
73.5
%
Other expense
930
770
160
20.8
%
Total non-interest expenses
$
12,083
$
11,630
$
453
3.9
%
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Central Valley Community Bancorp -- page 6
The following table shows the Company's outstanding loan portfolio as of June 30, 2022 and December 31, 2021:
Loan Type (dollars in thousands)
June 30, 2022
% of Total
Loans
December 31, 2021
% of Total
Loans
Commercial:
Commercial and industrial
$
115,037
10.1
%
$
136,847
13.2
%
Agricultural production
41,039
3.6
%
40,860
3.9
%
Total commercial
156,076
13.7
%
177,707
17.1
%
Real estate:
Owner occupied
199,116
17.5
%
212,234
20.4
%
Real estate construction and other land loans
83,561
7.4
%
61,586
5.9
%
Commercial real estate
409,496
36.1
%
369,529
35.6
%
Agricultural real estate
105,330
9.3
%
98,481
9.5
%
Other real estate
89,484
7.9
%
26,084
2.5
%
Total real estate
886,987
78.2
%
767,914
73.9
%
Consumer:
Equity loans and lines of credit
56,759
5.0
%
55,620
5.4
%
Consumer and installment
34,866
3.1
%
36,999
3.6
%
Total consumer
91,625
8.1
%
92,619
9.0
%
Net deferred origination fees
1,276
871
Total gross loans
1,135,964
100.0
%
1,039,111
100.0
%
Allowance for credit losses
(9,873)
(9,600)
Total loans
$
1,126,091
$
1,029,511
The following table shows the Company's loan portfolio allocated by management's internal risk ratings:
Loan Risk Rating (In thousands)
June 30, 2022
March 31, 2022
June 30, 2021
Pass
$
1,089,423
$
960,323
$
1,019,687
Special mention
34,509
39,901
18,710
Substandard
10,756
10,739
32,938
Doubtful
-
-
-
Total
$
1,134,688
$
1,010,963
$
1,071,335
At June 30, 2022, the allowance for credit losses was $9,873,000, compared to $9,600,000 at December 31, 2021, a net increase of $273,000 reflecting the net recoveries during the period. The Company is not required to implement the provisions of the CECL accounting standard until January 1, 2023, and is continuing to account for the allowance for credit losses under the incurred loss model. The allowance for credit losses as a percentage of total loans was 0.87% and 0.92% as of June 30, 2022 and December 31, 2021, respectively. Total loans include 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 $79,386,000 at June 30, 2022 and $93,201,000 at December 31, 2021. Excluding these acquired loans from the calculation, the allowance for credit losses to total gross loans was 0.93% and
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Central Valley Community Bancorp -- page 7
1.01% as of June 30, 2022 and December 31, 2021, respectively, and general reserves associated with non-impaired loans to total non-impaired loans was 0.89% and 0.98%, respectively. As of June 30, 2022, gross loans included $1,137,000 related to PPP loans, which are fully guaranteed by the SBA as compared to $18,553,000.00 at December 31, 2021. Excluding PPP loans and the acquired loans from the calculation, the allowance for credit losses to total gross loans was 0.94% and 1.04% as of June 30, 2022 and December 31, 2021, respectively. The Company believes the allowance for credit losses is adequate to provide for probable incurred credit losses within the loan portfolio at June 30, 2022.
The composition of the deposits at June 30, 2022 and December 31, 2021 is summarized in the table below:
(Dollars in thousands)
June 30, 2022
% of
Total
Deposits
December 31, 2021
% of
Total
Deposits
NOW accounts
$
384,206
18.2
%
$
360,462
17.0
%
MMA accounts
483,267
22.9
%
511,448
24.1
%
Time deposits
87,530
4.2
%
90,030
4.2
%
Savings deposits
219,837
10.4
%
197,273
9.3
%
Total interest-bearing
1,174,840
55.7
%
1,159,213
54.6
%
Non-interest bearing
931,157
44.3
%
963,584
45.4
%
Total deposits
$
2,105,997
100.0
%
$
2,122,797
100.0
%
Six Months EndedJune 30, 2022
Net income for the six months ended June 30, 2022 decreased 16.05%, compared to the six months ended June 30, 2021, driven by no provision for credit losses, a decrease in loan placement fees, an increase in the net realized loss on sales of investment securities, partially offset by an increase in service charge income, and a decrease in the provision for income taxes. During the six months ended June 30, 2022, the Company recorded no provision for credit losses, compared to a $3,300,000 reversal of provision during the six months ended June 30, 2021. Net interest income before the reversal of provision for credit losses for the six months ended June 30, 2022 was $37,407,000, compared to $35,636,000 for the six months ended June 30, 2021, an increase of $1,771,000 or 4.97%. The impact to interest income from the accretion of the loan marks on acquired loans was $324,000 and $349,000 for the six months ended June 30, 2022 and 2021, respectively. In addition, net interest income before the reversal of provision for credit losses for the six months ended June 30, 2022 was adversely impacted by approximately $440,000 in loan prepayment penalties, as compared to $434,000 for the six months ended June 30, 2021. Excluding the loan mark accretion and prepayment penalties, net interest income for the six months ended June 30, 2022 increased by $1,790,000 compared to the six months ended June 30, 2021.
The Company recorded an income tax provision of $3,855,000 for the six months ended June 30, 2022, compared to $4,952,000 for the six months ended June 30, 2021. The effective tax rate for the six months ended June 30, 2022 was 23.39% compared to 24.77% for the six months ended June 30, 2021. The effective tax rate was impacted by the increase in tax-exempt interest, as well as an increase in income from the appreciation in cash surrender value of bank owned life insurance.
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Central Valley Community Bancorp -- page 8
During the six months ended June 30, 2022, the Company's shareholders' equity decreased $84,963,000, or 34.28%, compared to December 31, 2021. The decrease in shareholders' equity was driven by the adverse change in the unrealized position on available-for-sale (AFS) investment securities, and share repurchases, offset by the retention of earnings, net of dividends paid.
Return on average equity (ROE) for the six months ended June 30, 2022 was 12.35%, compared to 12.21% for the six months ended June 30, 2021. The increase in ROE reflects the decrease in average shareholders' equity compared to the prior year. The Company declared and paid $0.24 and $0.23 per share in cash dividends to holders of common stock during the six months ended June 30, 2022 and 2021, respectively. Return on average assets (ROA) was 1.03% for the six months ended June 30, 2022 and 1.39% for the six months ended June 30, 2021. This decrease was due to the decrease in net income. During the six months ended June 30, 2022, the Company's total assets decreased 4.24%, and total liabilities decreased 0.86%, compared to December 31, 2021.
Non-performing assets decreased by $675,000, or 71.35%, to $271,000 at June 30, 2022, compared to $946,000 at December 31, 2021. During the six months ended June 30, 2022, the Company recorded $276,000 in net loan recoveries, compared to $824,000 for the six months ended June 30, 2021. The net charge-off (recovery) ratio, which reflects annualized net charge-offs (recoveries) to average loans, was (0.05)% for the six months ended June 30, 2022, compared to (0.15)% for the same period in 2021. Total non-performing assets were 0.01% and 0.04% of total assets as of June 30, 2022 and December 31, 2021, respectively.
The Company's net interest margin (fully tax equivalent basis) was 3.34% for the six months ended June 30, 2022, compared to 3.67% for the six months ended June 30, 2021. The decrease in net interest margin in the period-to-period comparison resulted from the decrease in the yield on the Company's loan portfolio, and an increase in the balance of average interest-earning assets.
For the six months ended June 30, 2022, the effective yield on average total earning assets decreased 28 basis points to 3.45% compared to 3.73% for the six months ended June 30, 2021, while the cost of average total interest-bearing liabilities increased to 0.20% for the six months ended June 30, 2022 as compared to 0.11% for the six months ended June 30, 2021. Over the same periods, the cost of average total deposits decreased to 0.05% for the six months ended June 30, 2022 compared to 0.06% for the same period in 2021.
For the six months ended June 30, 2022, the Company's average investment securities, including interest-earning deposits in other banks and Federal funds sold, totaled $1,260,144,000, an increase of $341,321,000, or 37.15%, compared to the six months ended June 30, 2021. The effective yield on average investment securities, including interest-earning deposits in other banks and Federal funds sold, increased to 2.30% for the six months ended June 30, 2022, compared to 2.09% for the six months ended June 30, 2021.
Total average loans (including nonaccrual), which generally yield higher rates than investment securities, decreased $28,520,000 to $1,052,117,000 for the six months ended June 30, 2022 from $1,080,637,000 for the six months ended June 30, 2021. The effective yield on average loans decreased to 4.80% for the six months ended June 30, 2022, compared to 5.11% for the six months ended June 30, 2021. Total average PPP loans, which have
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Central Valley Community Bancorp -- page 9
a 1.00% interest rate in addition to loan fees, were $6,820,000 for the six months ended June 30, 2022 as compared to $169,553,000 at June 30, 2021. Excluding PPP loans from total average loans, the effective yield on average loans for the six months ended June 30, 2022 and 2021 was 4.77% and 4.99%, respectively.
Non-Interest Income - The following table presents the key components of non-interest income for the current and trailing periods indicated:
Six months ended
(Dollars in thousands)
June 30, 2022
June 30, 2021
$ Change
% Change
Service charges
$
1,083
$
899
$
184
20.5
%
Appreciation in cash surrender value of bank owned life insurance
487
349
138
39.5
%
Interchange fees
920
841
79
9.4
%
Loan placement fees
567
1,167
(600)
(51.4)
%
Net realized losses on sales and calls of investment securities
(763)
(79)
(684)
865.8
%
Federal Home Loan Bank dividends
167
153
14
9.2
%
Other Income
143
746
(603)
(80.8)
%
Total non-interest income
$
2,604
$
4,076
$
(1,472)
(36.1)
%
Non-Interest Expense - The following table presents the key components of non-interest expense for the periods indicated:
Six months ended
(Dollars in thousands)
June 30, 2022
June 30, 2021
$ Change
% Change
Salaries and employee benefits
$
14,001
$
13,917
$
84
0.6
%
Occupancy and equipment
2,506
2,314
192
8.3
%
Information Technology
1,586
1,170
416
35.6
%
Regulatory assessments
416
333
83
24.9
%
Data processing expense
1,089
1,242
(153)
(12.3)
%
Professional services
838
831
7
0.8
%
ATM/Debit card expenses
412
416
(4)
(1.0)
%
Internet banking expense
69
208
(139)
(66.8)
%
Advertising
278
257
21
8.2
%
Directors' expenses
93
154
(61)
(39.6)
%
Amortization of core deposit intangibles
280
347
(67)
(19.3)
%
Loan related expenses
139
139
-
-
%
Personnel other
162
207
(45)
(21.7)
%
Other expense
1,659
1,483
176
11.9
%
Total non-interest expenses
$
23,528
$
23,018
$
510
2.2
%
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Central Valley Community Bancorp -- page 10
Total average assets for the six months ended June 30, 2022 was $2,450,903,000 compared to $2,166,196,000 for the six months ended June 30, 2021, an increase of $284,707,000 or 13.14%. During the six months ended June 30, 2022 and 2021, the loan-to-deposit ratio was 53.94% and 54.06%, respectively. Total average deposits increased $268,527,000 or 14.24% to $2,153,792,000 for the six months ended June 30, 2022, compared to $1,885,265,000 for the six months ended June 30, 2021. Average interest-bearing deposits increased $193,551,000, or 19.05%, and average non-interest bearing demand deposits increased $74,976,000, or 8.62%, for the six months ended June 30, 2022, compared to the six months ended June 30, 2021. The Company's ratio of average non-interest bearing deposits to total deposits was 43.85% for the six months ended June 30, 2022, compared to 46.11% for the six months ended June 30, 2021.
Capital Management
On July 20, 2022, the Board of Directors of the Company declared a regular quarterly cash dividend of $0.12 per share on the Company's common stock. The dividend is payable on August 20, 2022 to shareholders of record as of August 5, 2022. The Company continues to be well capitalized and expects to maintain adequate capital levels.
Central Valley Community Bancorp trades on the NASDAQ stock exchange under the symbol CVCY. Central Valley Community Bank (CVCB), headquartered in Fresno, California, was founded in 1979 and is the sole subsidiary of Central Valley Community Bancorp. CVCB operates full-service Banking Centers throughout California's San Joaquin Valley and Greater Sacramento region, in addition to CVCB maintaining Commercial, Real Estate, and Agribusiness Lending, as well as Private Business Banking and Cash Management Departments.
Members of Central Valley Community Bancorp's and CVCB's Board of Directors are: Daniel J. Doyle (Chairman), Daniel N. Cunningham (Vice Chairman), F. T. "Tommy" Elliott, IV, Robert J. Flautt, Gary D. Gall, James J. Kim, Andriana D. Majarian, Steven D. McDonald, Louis C. McMurray, Karen A. Musson, Dorothea D. Silva 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, Facebook and LinkedIn.
###
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. 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 in the Central Valley and the Greater Sacramento Region, including the impact of inflation; (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 decline in quality of the Company's earning assets; (7) a decline in credit quality; (8) changes in the regulatory environment; (9) fluctuations in the real estate market; (10) changes in business conditions and inflation; (11) changes in securities markets (12) risks associated with acquisitions, relating to difficulty in integrating combined operations and related negative impact on earnings, and incurrence of substantial expenses; (13) political developments, uncertainties or instability, catastrophic events, acts of war or terrorism, or natural disasters, such as earthquakes, drought, pandemic diseases or extreme weather events, any of which may affect services we use or affect our customers, employees or third parties with which we conduct business; (14) 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, 2021. 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
(Unaudited)
June 30,
December 31,
June 30,
(In thousands, except share amounts)
2022
2021
2021
ASSETS
Cash and due from banks
$
26,579
$
29,412
$
39,346
Interest-earning deposits in other banks
654
134,055
81,320
Total cash and cash equivalents
27,233
163,467
120,666
Available-for-sale investment securities
710,481
1,109,208
952,416
Held-to-maturity investment securities
305,902
-
-
Equity securities
6,832
7,416
7,522
Loans, less allowance for credit losses of $9,873, $9,600, and $10,439 at June 30, 2022, December 31, 2021, and June 30, 2021, respectively
1,126,091
1,029,511
1,059,506
Bank premises and equipment, net
8,060
8,380
8,465
Bank owned life insurance
40,040
39,553
39,062
Federal Home Loan Bank stock
6,169
5,595
5,595
Goodwill
53,777
53,777
53,777
Core deposit intangibles
242
522
835
Accrued interest receivable and other assets
61,394
32,710
32,706
Total assets
$
2,346,221
$
2,450,139
$
2,280,550
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing
$
931,157
$
963,584
$
899,406
Interest bearing
1,174,840
1,159,213
1,079,688
Total deposits
2,105,997
2,122,797
1,979,094
Short-term borrowings
9,324
-
-
Subordinated debentures
39,526
39,454
5,155
Accrued interest payable and other liabilities
28,492
40,043
45,252
Total liabilities
2,183,339
2,202,294
2,029,501
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: 11,717,146, 11,916,651, and 12,329,089, at June 30, 2022, December 31, 2021, and June 30, 2021, respectively
60,975
66,820
75,265
Retained earnings
183,197
173,393
162,910
Accumulated other comprehensive (loss) income, net of tax
(81,290)
7,632
12,874
Total shareholders' equity
162,882
247,845
251,049
Total liabilities and shareholders' equity
$
2,346,221
$
2,450,139
$
2,280,550
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Central Valley Community Bancorp -- page 12
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
For the Three Months Ended,
For the Six Months Ended
June 30,
March 31,
June 30,
June 30,
(In thousands, except share and per-share amounts)
2022
2022
2021
2022
2021
INTEREST INCOME:
Interest and fees on loans
$
12,883
12,161
$
13,556
$
25,044
$
27,321
Interest on deposits in other banks
52
57
29
109
61
Interest and dividends on investment securities:
Taxable
5,651
4,524
3,361
10,175
6,094
Exempt from Federal income taxes
1,879
1,440
1,409
3,319
2,726
Total interest income
20,465
18,182
18,355
38,647
36,202
INTEREST EXPENSE:
Interest on deposits
231
252
252
483
520
Interest on subordinated debentures and borrowings
424
333
22
757
46
Total interest expense
655
585
274
1,240
566
Net interest income before provision for credit losses
19,810
17,597
18,081
37,407
35,636
(REVERSAL OF) PROVISION FOR CREDIT LOSSES
-
-
(1,500)
-
(3,300)
Net interest income after provision for credit losses
19,810
17,597
19,581
37,407
38,936
NON-INTEREST INCOME:
Service charges
544
539
467
1,083
899
Net realized (losses) gains on sales and calls of investment securities
(969)
206
(79)
(763)
(79)
Other income
1,195
1,089
1,689
2,284
3,256
Total non-interest income
770
1,834
2,077
2,604
4,076
NON-INTEREST EXPENSES:
Salaries and employee benefits
7,057
6,944
6,979
14,001
13,917
Occupancy and equipment
1,344
1,162
1,201
2,506
2,314
Other expense
3,682
3,339
3,450
7,021
6,787
Total non-interest expenses
12,083
11,445
11,630
23,528
23,018
Income before provision for income taxes
8,497
7,986
10,028
16,483
19,994
PROVISION FOR INCOME TAXES
1,955
1,900
2,465
3,855
4,952
Net income
$
6,542
$
6,086
$
7,563
$
12,628
$
15,042
Net income per common share:
Basic earnings per common share
$
0.56
$
0.51
$
0.61
$
1.08
$
1.20
Weighted average common shares used in basic computation
11,665,074
11,829,245
12,498,809
11,746,795
12,497,217
Diluted earnings per common share
$
0.56
$
0.51
$
0.60
$
1.07
$
1.20
Weighted average common shares used in diluted computation
11,685,850
11,872,025
12,548,044
11,778,127
12,548,101
Cash dividends per common share
$
0.12
$
0.12
$
0.12
$
0.24
$
0.23
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Central Valley Community Bancorp -- page 13
CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
Jun. 30,
Mar. 31,
Dec. 31,
Sep. 30,
Jun. 30,
For the three months ended
2022
2022
2021
2021
2021
(In thousands, except share and per share amounts)
Net interest income
$
19,810
$
17,597
$
18,708
$
18,210
$
18,081
(Reversal of) provision for credit losses
-
-
(500)
(500)
(1,500)
Net interest income after provision for credit losses
19,810
17,597
19,208
18,710
19,581
Total non-interest income
770
1,834
2,781
2,148
2,077
Total non-interest expense
12,083
11,445
12,762
12,062
11,630
Provision for income taxes
1,955
1,900
2,389
2,275
2,465
Net income
$
6,542
$
6,086
$
6,838
$
6,521
$
7,563
Basic earnings per common share
$
0.56
$
0.51
$
0.57
$
0.54
$
0.61
Weighted average common shares used in basic computation
11,665,074
11,829,245
11,956,045
12,007,689
12,498,809
Diluted earnings per common share
$
0.56
$
0.51
$
0.57
$
0.54
$
0.60
Weighted average common shares used in diluted computation
11,685,850
11,872,025
11,994,590
12,044,896
12,548,044
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
2022
2022
2021
2021
2021
(Dollars in thousands, except per share amounts)
Allowance for credit losses to total loans
0.87
%
0.97
%
0.92
%
0.93
%
0.98
%
Non-performing assets to total assets
0.01
%
0.01
%
0.04
%
0.07
%
0.09
%
Total non-performing assets
$
271
$
292
$
946
$
1,597
$
2,035
Total nonaccrual loans
$
271
$
292
$
946
$
1,597
$
2,035
Total substandard loans
$
10,756
$
10,739
$
8,540
$
23,065
$
32,938
Total special mention loans
$
34,509
$
39,901
$
40,845
$
26,612
$
18,710
Net loan charge-offs (recoveries)
$
(9)
$
(264)
$
(39)
$
(122)
$
117
Net charge-offs (recoveries) to average loans (annualized)
-
%
(0.10)
%
(0.01)
%
(0.05)
%
0.04
%
Book value per share
$
13.90
$
16.31
$
20.80
$
20.57
$
20.36
Tangible book value per share
$
9.29
$
11.70
$
16.24
$
16.03
$
15.93
Tangible common equity
$
108,863
$
137,501
$
193,546
$
192,109
$
196,437
Cost of total deposits
0.04
%
0.05
%
0.05
%
0.05
%
0.05
%
Interest and dividends on investment securities exempt from Federal income taxes
$
1,879
$
1,440
$
1,463
$
1,417
$
1,409
Net interest margin (calculated on a fully tax equivalent basis) (1)
3.48
%
3.19
%
3.39
%
3.47
%
3.60
%
Return on average assets (2)
1.07
%
0.99
%
1.13
%
1.13
%
1.36
%
Return on average equity (2)
14.73
%
10.51
%
11.21
%
10.41
%
12.25
%
Loan to deposit ratio
53.94
%
46.80
%
48.95
%
52.65
%
54.06
%
Efficiency ratio
54.20
%
57.66
%
58.94
%
57.66
%
55.58
%
Tier 1 leverage - Bancorp
7.89
%
7.87
%
8.03
%
8.24
%
8.63
%
Tier 1 leverage - Bank
9.10
%
8.54
%
8.47
%
8.18
%
8.51
%
Common equity tier 1 - Bancorp
11.99
%
12.06
%
12.48
%
12.34
%
13.43
%
Common equity tier 1 - Bank
14.22
%
13.43
%
13.52
%
12.59
%
13.61
%
Tier 1 risk-based capital - Bancorp
12.31
%
12.38
%
12.82
%
12.68
%
13.80
%
Tier 1 risk-based capital - Bank
14.22
%
13.43
%
13.52
%
12.59
%
13.61
%
Total risk-based capital - Bancorp
15.14
%
15.27
%
15.80
%
13.39
%
14.58
%
Total risk based capital - Bank
14.85
%
14.08
%
14.18
%
13.29
%
14.40
%
(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.
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Central Valley Community Bancorp -- page 14
CENTRAL VALLEY COMMUNITY BANCORP
AVERAGE BALANCES AND RATES
(Unaudited)
For the Three Months Ended
For the Six Months Ended
AVERAGE AMOUNTS
June 30,
March 31,
June 30,
June 30,
June 30,
(Dollars in thousands)
2022
2022
2021
2022
2021
Interest-bearing deposits in other banks
$
33,067
$
129,877
$
114,590
81,204
121,848
Investments
1,219,427
1,138,003
865,739
1,178,940
796,975
Loans (1)
1,085,887
1,017,280
1,077,774
1,051,772
1,077,455
Earning assets
2,338,381
2,285,160
2,058,103
2,311,916
1,996,278
Allowance for credit losses
(9,870)
(9,832)
(11,928)
(9,851)
(12,687)
Nonaccrual loans
280
409
2,651
345
3,182
Other non-earning assets
113,090
184,288
178,806
148,493
179,423
Total assets
$
2,441,881
$
2,460,025
$
2,227,632
$
2,450,903
$
2,166,196
Interest bearing deposits
$
1,210,016
$
1,208,838
$
1,054,567
$
1,209,430
$
1,015,879
Other borrowings
78,435
39,474
5,155
59,062
5,155
Total interest-bearing liabilities
1,288,451
1,248,312
1,059,722
1,268,492
1,021,034
Non-interest bearing demand deposits
947,724
940,963
893,441
944,362
869,386
Non-interest bearing liabilities
28,091
39,044
27,510
33,538
29,337
Total liabilities
2,264,266
2,228,319
1,980,673
2,246,392
1,919,757
Total equity
177,615
231,706
246,959
204,511
246,439
Total liabilities and equity
$
2,441,881
$
2,460,025
$
2,227,632
$
2,450,903
$
2,166,196
AVERAGE RATES
Interest-earning deposits in other banks
0.64
%
0.18
%
0.10
%
0.27
%
0.10
%
Investments
2.63
%
2.23
%
2.38
%
2.44
%
2.40
%
Loans (3)
4.76
%
4.85
%
5.04
%
4.80
%
5.11
%
Earning assets
3.60
%
3.29
%
3.65
%
3.45
%
3.73
%
Interest-bearing deposits
0.08
%
0.08
%
0.10
%
0.08
%
0.10
%
Other borrowings
2.16
%
3.37
%
1.71
%
2.56
%
1.78
%
Total interest-bearing liabilities
0.20
%
0.19
%
0.10
%
0.20
%
0.11
%
Net interest margin (calculated on a fully tax equivalent basis) (2)
3.48
%
3.19
%
3.60
%
3.34
%
3.67
%
(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 $499, $383, and $375, for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021, respectively. The Federal tax benefits relating to income earned on municipal bonds totaled $383 and $350 for the six months ended June 30, 2022 and 2021, respectively.
(3) Loan yield includes loan fees for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021 of $490, $264, and $1,821, respectively. Loan yield includes loan fees (costs) for the six months ended June 30, 2022 and 2021 of $264 and $2,068, 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
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Central Valley Community Bancorp published this content on 20 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 July 2022 21:03:05 UTC.
Community West Bancshares, formerly Central Valley Community Bancorp, is a financial services company. The Company is the holding company for Community West Bank (the Bank), the publicly traded community bank (by assets). The principal business activities of the Company are relationship banking, manufactured housing lending and government guaranteed lending. Its personal banking services include checking, savings, personal loans, real estate loans, personal credit cards, online banking, mobile banking, bill pay, Zelle, eStatements, Certificates of Deposit (CDs) & money markets, Visa Debit Cards and IRAs. Its business banking services include business loans, agriculture loans, SBA loans, real estate loans, business credit cards, cash management services, business online banking, merchant card services and others. The Bank operates 27 full-service Banking Centers throughout Central California from Sacramento in the north, throughout the San Joaquin Valley and west to the Coast.