CENTRAL VALLEY COMMUNITY BANCORP Record earnings for 2016 of $15,182,000 and diluted EPS of $1.33 are the highest in the history of the Company.
The Company completed its acquisition of Sierra Vista Bank on October 1, 2016. Consolidated results of operations and balance sheets reflecting the acquisition are presented as of and for the quarter ending December 31, 2016.
Net loans increased $158.80 million or 26.98%, while total assets increased $166.59 million or 13.05% at December 31, 2016 compared to December 31, 2015.
Total deposits increased 12.52% in 2016 to $1.26 billion at year end.
Total cost of funds remain at record low levels at 0.09% in 2016 and 0.08% in 2015.
Capital positions remain strong at December 31, 2016 with a 8.75% Tier 1 Leverage Ratio; a 12.48% Common Equity Tier 1 Ratio; a 12.74% Tier 1 Risk-Based Capital Ratio; and a 13.72% Total Risk-Based Capital Ratio.
Net loan recoveries in the fourth quarter of 2016 were $27,000, compared to $517,000 in the fourth quarter of 2015.
"The financial results for this quarter and for the full year indicate our strategic plan is being successfully implemented by our dedicated team of bankers. One significant part of this quarter's success was the completion of our merger with Sierra Vista Bank, welcoming new team members and customers in the Greater Sacramento market and representing the fourth acquisition in our Company's history," stated James M. Ford, President and CEO of Central Valley Community Bancorp and Central Valley Community Bank.
"With the recent acquisition, our Bank is well-positioned to build upon the strength and business growth opportunities in the Greater Sacramento region. We are additionally optimistic about the continued economic improvement throughout our entire footprint, and we remain focused on our unique brand of relationship banking which has served our Bank well for over 37 years," concluded Ford.
Net income for the year increased 38.47% in 2016 compared to 2015, primarily driven by a decrease in provision for credit losses, as well as an increase in net interest income, partially offset by an increase in non- interest expenses, and an increase in provision for income taxes. During the year ended December 31, 2016, the Company recorded a reverse provision for credit losses of $5,850,000, compared to a $600,000 provision during the year ended December 31, 2015. Net interest income before the provision for credit losses for the year ended December 31, 2016 was $45,580,000, compared to $40,775,000 for the year ended December 31, 2015, an increase of $4,805,000 or 11.78%. Net interest income during 2016 and 2015 benefited by approximately
$586,000 and $424,000, respectively, in nonrecurring income from prepayment penalties and payoff of loans previously on nonaccrual status. Excluding these benefits, net interest income for the year ended December 31, 2016 increased by $4,643,000 compared to the year ended December 31, 2015.
During the year ended December 31, 2016, the Company's shareholders' equity increased $24,710,000, or 17.74%. The increase in shareholders' equity was primarily driven by the issuance of stock in connection with the Sierra Vista Bank acquisition, as well as the retention of earnings, net of dividends paid, partially offset by a decrease in unrealized gains on available-for-sale (AFS) securities recorded in accumulated other comprehensive income (AOCI). The decrease in AOCI was primarily due to an increase in longer term interest rates, which resulted in a decrease in the market value of the Company's available-for-sale investment securities.
Return on average equity (ROE) for the year ended December 31, 2016 was 9.84%, compared to 8.12% for the year ended December 31, 2015. Notwithstanding an increase in shareholders' equity, this increase in ROE
was achieved due to an increase in net income. The Company declared and paid $0.24 per share in cash dividends to holders of common stock during 2016 compared to $0.18 during 2015. Annualized return on average assets (ROA) was 1.15% for the year ended December 31, 2016 and 0.90% for the year ended December 31, 2015. For the year ended December 31, 2016, the Company's total assets increased 13.05%, and total liabilities increased 12.47%, compared to December 31, 2015.
On October 1, 2016, the Company completed the acquisition of Sierra Vista Bank (SVB). With the SVB acquisition, the Company added three full service branches, located in Folsom and Fair Oaks (Sacramento County) and Cameron Park (El Dorado County). The Company's results of operations for the year ended December 31, 2016 include the SVB operations from October 1, 2016. Assets and liabilities acquired included loans of $122,533,000, net of a preliminary fair value mark of $2,494,000; bank premises and equipment of
$586,000; and deposits of $138,236,000. The Company also recorded a core deposit intangible of $508,000, a premium on deposits of $142,000, and goodwill of $10,314,000 in the acquisition. The Company issued an aggregate of approximately 1.059 million shares of its common stock and aggregate cash of $9.47 million to SVB shareholders. Based on the closing price of the Company's common stock on September 30, 2016 of $15.86 per share, the SVB common shareholders received aggregate merger consideration worth approximately $26.26 million.
Non-performing assets increased by $129,000, or 5.35%, to $2,542,000 at December 31, 2016, compared to $2,413,000 at December 31, 2015. During the year ended December 31, 2016, the Company recorded
$5,566,000 in net loan recoveries, compared to $702,000 in net recoveries for the year ended December 31, 2015. The net (recovery) charge-off ratio, which reflects annualized net (recoveries) charge-offs to average loans, was (0.86)% for the year ended December 31, 2016, compared to (0.12)% for the same period in 2015. Total non- performing assets were $2,542,000, or 0.18% of total assets as of December 31, 2016, compared to $2,413,000, or 0.19% of total assets as of December 31, 2015.
At December 31, 2016, the allowance for credit losses was $9,326,000, compared to $9,610,000 at December 31, 2015, a net decrease of $284,000 reflecting the reverse provision of $5,850,000 and the net recoveries during the period. The allowance for credit losses as a percentage of total loans was 1.23% at December 31, 2016, and 1.61% at December 31, 2015. Total loans included loans acquired in the acquisitions of
Sierra Vista Bank on October 1, 2016 and Visalia Community Bank on July 1, 2013 that were recorded at fair value in connection with the acquisitions and do not have a related allowance for credit losses. The value of the acquired loans totaled $168,296,000 at December 31, 2016 and $62,395,000 at December 31, 2015. Excluding these acquired loans from the calculation, the allowance for credit losses to total gross loans was 1.59% and 1.79% as of December 31, 2016 and December 31, 2015, respectively, and general reserves associated with non- impaired loans to total non-impaired loans was 1.55% and 1.79%, respectively. The Company believes the allowance for credit losses is adequate to provide for probable incurred credit losses within the loan portfolio at December 31, 2016.
The Company's net interest margin (fully tax equivalent basis) was 4.09% for the year ended December 31, 2016, compared to 4.01% for the year ended December 31, 2015. The increase in net interest
margin in the period-to-period comparison resulted from an increase in the effective yield on average investment securities, and an increase in the yield on the Company's loan portfolio. Net interest income during 2016 and 2015 benefited by approximately $586,000 and $424,000, respectively, in nonrecurring income from prepayment penalties and payoff of loans previously on nonaccrual status.
For the year ended December 31, 2016, the effective yield on total earning assets increased 8 basis points to 4.18% compared to 4.10% for the year ended December 31, 2015, while the cost of total interest-bearing liabilities remained unchanged at 0.15% for the years ended December 31, 2016 and December 31, 2015. Over the same periods, the cost of total deposits remained unchanged at 0.09% for the years ended December 31, 2016 and December 31, 2015.
For the year ended December 31, 2016, the Company's average investment securities, including interest- earning deposits in other banks and Federal funds sold, totaled $560,860,000, an increase of $31,814,000, or 6.01%, compared to the year ended December 31, 2015. The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, increased to 2.84% for the year ended December 31, 2016, compared to 2.75% for the year ended December 31, 2015.
Total average loans, which generally yield higher rates than investment securities, increased $59,811,000, from $586,762,000 for the year ended December 31, 2015 to $646,573,000 for the year ended December 31,
Central Valley Community Bancorp published this content on 26 January 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 26 January 2017 21:19:18 UTC.
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