Market Overview

Central Valley Community Bancorp Reports Earnings Results for the Nine Months and Quarter Ended September 30, 2017

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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 $13,691,000,
and diluted earnings per common share of $1.11 for the nine months ended
September 30, 2017, compared to $12,575,000 and $1.14 per diluted common
share for the nine months ended September 30, 2016.

THIRD QUARTER FINANCIAL HIGHLIGHTS

  • The Company recorded reverse provisions for credit losses of $900
    thousand and $1 million in the third quarters of 2017 and 2016,
    respectively.
  • Net loans increased $22.51 million or 3.01%, while total assets
    decreased $20.30 million or 1.41% at September 30, 2017 compared to
    December 31, 2016.
  • Total deposits decreased 2.99% in 2017 to $1.22 billion at
    September 30, 2017 compared to December 31, 2016.
  • Total cost of deposits remain at record low levels at 0.06% and 0.09%
    at September 30, 2017 and 2016, respectively.
  • Capital positions remain strong at September 30, 2017 with a 9.86%
    Tier 1 Leverage Ratio; a 13.09% Common Equity Tier 1 Ratio; a 13.48%
    Tier 1 Risk-Based Capital Ratio; and a 14.39% Total Risk-Based Capital
    Ratio.
  • Net loan recoveries in the third quarter of 2017 were $519,000,
    compared to net loan recoveries of $427,000 in the third quarter of
    2016.
  • Net realized gains on sales and calls of investment securities were
    $169 thousand in the third quarter of 2017, compared to $286 thousand
    in the third quarter of 2016.
  • On October 1, 2017, the Company completed the acquisition of Folsom
    Lake Bank headquartered in Folsom, California. As part of the
    acquisition, Folsom Lake Bank (FLB) with three full-service branches
    located in Folsom, Rancho Cordova, and Roseville merged with and into
    Central Valley Community Bank. FLB reported approximately $197.3
    million in assets at September 30, 2017. The results for Folsom Lake
    Bank are not included for the three and nine months ended
    September 30, 2017.

"We are pleased to report the successful completion of our fifth
acquisition with the October 1, 2017 closing of Folsom Lake Bank. Our
Company is excited about the prospects for our Bank, clients and
communities in this growing region," stated James M Ford, President &
CEO of Central Valley Community Bank and Central Valley Community
Bancorp.

"The Company's third quarter financial results reflect an increase in
loans and continued expense management resulting in steady earnings
growth for our shareholders. While the economy in our legacy region of
the San Joaquin Valley remains sluggish, we are optimistic that there
will be improvement in the future. Conversely, our expanded presence
with recent mergers in the Greater Sacramento area shows promise in all
relationship growth categories, igniting enthusiasm with both new and
existing team members," continued Ford.

Net income for the nine months ended September 30, 2017 increased 8.87%
in 2017 compared to 2016, primarily driven by an increase in net
realized gains on sales and calls of investment securities, an increase
in net interest income, offset by an increase in non-interest expense,
and an increase in provision for income taxes. During the nine months
ended September 30, 2017, the Company recorded a reverse provision for
credit losses of $1,150,000, compared to a $5,850,000 reverse provision
during the nine months ended September 30, 2016. Net interest income
before the provision for credit losses for the nine months ended
September 30, 2017 was $40,672,000, compared to $32,806,000 for the nine
months ended September 30, 2016, an increase of $7,866,000 or 23.98%.
Approximately $4,393,000 of the increase in net interest income was
attributed to the Sierra Vista Bank (SVB) acquisition completed in 2016,
and approximately $3,473,000 of the increase was from our continued
organic growth. The impact to interest income from the accretion of the
loan marks on acquired loans was $806,000 and $266,000 for the nine
months ended September 30, 2017 and 2016, respectively. In addition, net
interest income before the provision for credit losses for the nine
months ended September 30, 2017 benefited from approximately $1,218,000
in nonrecurring income from prepayment penalties and payoff of loans
previously on nonaccrual status, as compared to a $501,000 in
nonrecurring income for the nine months ended September 30, 2016.
Excluding these benefits, net interest income for the first nine months
ended September 30, 2017 increased by $7,149,000 compared to the nine
months ended September 30, 2016.

During the nine months ended September 30, 2017, the Company's
shareholders' equity increased $17,199,000, or 10.49%, compared to
December 31, 2016. The increase in shareholders' equity was primarily
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). The increase in AOCI was primarily due to a decrease in
longer term interest rates, which resulted in an increase in the market
value of the Company's AFS securities.

Return on average equity (ROE) for the nine months ended September 30,
2017 was 10.55%, compared to 11.21% for the nine months ended
September 30, 2016. The decrease in ROE was primarily the result of the
increase in shareholders' equity. The Company declared and paid $0.18
per share in cash dividends to holders of common stock for the nine
months ended September 30, 2017 and 2016. Annualized return on average
assets (ROA) was 1.27% for the nine months ended September 30, 2017 and
1.31% for the nine months ended September 30, 2016. During the nine
months ended September 30, 2017, the Company's total assets decreased
1.41%, and total liabilities decreased 2.93%, compared to December 31,
2016.

Non-performing assets increased by $620,000, or 24.39%, to $3,162,000 at
September 30, 2017, compared to $2,542,000 at December 31, 2016. During
the nine months ended September 30, 2017, the Company recorded $740,000
in net loan recoveries, compared to $5,539,000 in net recoveries for the
nine months ended September 30, 2016. The net charge-off (recovery)
ratio, which reflects annualized net recoveries to average loans, was
(0.13)% for the nine months ended September 30, 2017, compared to
(1.20)% for the same period in 2016. Total non-performing assets were
0.22% of total assets as of September 30, 2017, compared to 0.18% of
total assets as of December 31, 2016.

At September 30, 2017, the allowance for credit losses was $8,916,000,
compared to $9,326,000 at December 31, 2016, a net decrease of $410,000
reflecting the reverse provision of $1,150,000 and the net recoveries
during the period. The allowance for credit losses as a percentage of
total loans was 1.14% at September 30, 2017, and 1.23% at December 31,
2016. Total loans includes loans acquired in the acquisitions of SVB 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 value of the
acquired loans totaled $144,586,000 at September 30, 2017 and
$168,296,000 at December 31, 2016. Excluding these acquired loans from
the calculation, the allowance for credit losses to total gross loans
was 1.41% and 1.59% as of September 30, 2017 and December 31, 2016,
respectively, and general reserves associated with non-impaired loans to
total non-impaired loans was 1.41% and 1.55%, 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, 2017.

The Company's net interest margin (fully tax equivalent basis) was 4.43%
for the nine months ended September 30, 2017, compared to 4.05% for the
nine months ended September 30, 2016. The increase in net interest
margin in the period-to-period comparison resulted primarily 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 the nine months ended September 30, 2017 and 2016, also
benefited by approximately $1,218,000 and $501,000, respectively, in
nonrecurring income from prepayment penalties and payoff of loans
previously on nonaccrual status.

For the nine months ended September 30, 2017, the effective yield on
total earning assets increased 37 basis points to 4.51% compared to
4.14% for the nine months ended September 30, 2016, while the cost of
total interest-bearing liabilities decreased slightly to 0.14% for the
quarter ended September 30, 2017 as compared to 0.15% for the quarter
ended September 30, 2016. Over the same periods, the cost of total
deposits decreased to 0.07% for the nine months ended September 30, 2017
compared to 0.08% for the same period in 2016.

For the nine months ended September 30, 2017, the Company's average
investment securities, including interest-earning deposits in other
banks and Federal funds sold, totaled $555,839,000, an increase of
$2,999,000, or 0.54%, compared to the nine months ended September 30,
2016. The effective yield on average investment securities, including
interest earning deposits in other banks and Federal funds sold,
increased to 3.12% for the nine months ended September 30, 2017,
compared to 2.84% for the nine months ended September 30, 2016.

Total average loans (including nonaccrual), which generally yield higher
rates than investment securities, increased $147,271,000, from
$613,381,000 for the nine months ended September 30, 2016 to
$760,652,000 for the nine months ended September 30, 2017. The majority
of the year-over-year loan growth compared to the prior year was due to
the acquisition of SVB in 2016. The effective yield on average loans
increased to 5.52% for the nine months ended September 30, 2017,
compared to 5.29% for the nine months ended September 30, 2016.

Total average assets for the nine months ended September 30, 2017 was
$1,440,139,000 compared to $1,276,214,000 for the nine months ended
September 30, 2016, an increase of $163,925,000 or 12.84%. During the
nine months ended September 30, 2017 and 2016, the average
loan-to-deposit ratio was 61.18% and 55.57%, respectively. Total average
deposits increased $139,580,000 or 12.65% to $1,243,335,000 for the nine
months ended September 30, 2017, compared to $1,103,755,000 for the nine
months ended September 30, 2016. Average interest-bearing deposits
increased $69,360,000, or 9.95%, and average non-interest bearing demand
deposits increased $70,220,000, or 17.26%, for the nine months ended
September 30, 2017, compared to the nine months ended September 30,
2016. The Company's ratio of average non-interest bearing deposits to
total deposits was 38.37% for the nine months ended September 30, 2017,
compared to 36.86% for the nine months ended September 30, 2016. The
balance sheet increases comparing September 30, 2017 to September 30,
2016 were primarily driven by the SVB acquisition which closed on
October 1, 2016.

Non-interest income for the nine months ended September 30, 2017
increased by $1,543,000 to $8,896,000, compared to $7,353,000 for the
nine months ended September 30, 2016, primarily driven by an increase of
$972,000 in net realized gains on sales and calls of investment
securities during the period ended September 30, 2017. A $225,000
increase in service charge income, a $8,000 increase in Federal Home
Loan Bank dividends, and an increase of $258,000 in other income was
offset by a decrease in loan placement fees of $266,000.

Non-interest expense for the nine months ended September 30, 2017
increased $3,289,000, or 11.74%, to $31,297,000 compared to $28,008,000
for the nine months ended September 30, 2016. The net increase year over
year was a result of increases in salaries and employee benefits of
$1,561,000, increases in license and maintenance contracts of $202,000,
increases in occupancy and equipment expenses of $165,000, increases in
professional services of $133,000, increases in data processing expenses
of $105,000, increases in acquisition and integration expenses of
$103,000, increases in ATM/Debit card expenses of $84,000, increases in
advertising expenses of $40,000, increases in amortization of core
deposit intangibles of $39,000, increases in Internet banking expenses
of $26,000, increases in directors' expenses of $18,000, and an increase
in regulatory assessments of $13,000.

The Company recorded an income tax provision of $5,730,000 for the nine
months ended September 30, 2017, compared to $5,426,000 for the nine
months ended September 30, 2016. During the nine months ended
September 30, 2017, the Company adopted ASU 2016-09 "Compensation-Stock
Compensation (Topic 718): Improvements to Employee Share-Based Payment
Accounting" which due to the exercise of stock options in the current
period, resulted in the recognition of $104,000 in excess tax benefits.
The effective tax rate for the nine months ended September 30, 2017 was
29.50% compared to 30.14% for the nine months ended September 30, 2016.

Quarter Ended September 30, 2017

For the quarter ended September 30, 2017, the Company reported unaudited
consolidated net income of $4,494,000 and earnings per diluted common
share of $0.36, compared to consolidated net income of $3,114,000 and
$0.28 per diluted share for the same period in 2016. The increase in net
income during the third quarter of 2017 compared to the same period in
2016 was primarily due to an increase in net interest income of
$2,583,000, and an increase in non-interest income of $419,000,
partially offset by an increase in total non-interest expenses of
$739,000, and an increase in the provision for income taxes of $783,000.
The effective tax rate increased to 32.30% from 30.41% for the quarters
ended September 30, 2017 and September 30, 2016, respectively. The
Company recorded $900,000 and $1,000,000 reverse provisions for credit
losses during the third quarters of 2017 and 2016, respectively. Net
income for the immediately trailing quarter ended June 30, 2017 was
$4,948,000, or $0.40 per diluted common share.

Annualized return on average equity (ROE) for the third quarter of 2017
was 10.05%, compared to 8.01% for the same period of 2016. The increase
in ROE reflects an increase in net income, notwithstanding an increase
in shareholders' equity. Annualized return on average assets (ROA) was
1.26% for the third quarter of 2017 compared to 0.96% for the same
period in 2016. This increase is due to an increase in net income
outpacing an increase in average assets.

In comparing the third quarter of 2017 to the third quarter of 2016,
average total loans increased by $146,493,000, or 23.47%. The majority
of the loan growth was due to the SVB acquisition. During the third
quarter of 2017, the Company recorded net loan recoveries of $519,000
compared to $427,000 for the same period in 2016. The net charge-off
(recovery) ratio, which reflects annualized net charge-offs to average
loans, was (0.27)% for the quarter ended September 30, 2017 compared to
(0.27)% for the quarter ended September 30, 2016.

Average total deposits for the third quarter of 2017 increased
$105,802,000 or 9.47% to $1,222,925,000 compared to $1,117,123,000 for
the same period of 2016.

The Company's net interest margin (fully tax equivalent basis) was 4.43%
for the quarter ended September 30, 2017, compared to 4.01% for the
quarter ended September 30, 2016. Net interest income, before provision
for credit losses, increased $2,583,000, or 23.49%, to $13,578,000 for
the third quarter of 2017, compared to $10,995,000 for the same period
in 2016. The accretion of the loan marks on acquired loans increased
interest income by $189,000 and $95,000 during the quarters ended
September 30, 2017 and 2016, respectively. Net interest income during
the third quarters of 2017 and 2016 benefited by approximately $100,000
and $10,000, respectively, in nonrecurring income from prepayment
penalties and payoff of loans previously on nonaccrual status. The net
interest margin period-to-period comparisons were impacted by an
increase in the yield on the average investment securities and the loan
portfolio. Over the same periods, the cost of total deposits decreased
to 0.06% from 0.09%. The decrease in cost of total deposits is
attributed to the decrease of time certificate deposit with cost yield
of 0.27% compared to 0.37% as of September 30, 2017 and 2016,
respectively.

For the quarter ended September 30, 2017, the Company's average
investment securities, including interest-earning deposits in other
banks and Federal funds sold, decreased by $28,401,000, or 5.07%,
compared to the quarter ended September 30, 2016, and decreased by
$21,565,000, or 3.90%, compared to the quarter ended June 30, 2017.

The effective yield on average investment securities, including interest
earning deposits in other banks and Federal funds sold, increased to
3.15% for the quarter ended September 30, 2017, compared to 2.83% for
the quarter ended September 30, 2016 and decreased as compared to 3.04%
for the quarter ended June 30, 2017. Total average loans, which
generally yield higher rates than investment securities, increased by
$146,493,000 to $770,777,000 for the quarter ended September 30, 2017,
from $624,284,000 for the quarter ended September 30, 2016 and increased
by $5,564,000 from $765,213,000 for the quarter ended June 30, 2017. The
effective yield on average loans was 5.39% for the quarter ended
September 30, 2017, compared to 5.18% and 5.73% for the quarters ended
September 30, 2016 and June 30, 2017, respectively.

Total average assets for the quarter ended September 30, 2017 were
$1,427,070,000 compared to $1,297,207,000 for the quarter ended
September 30, 2016 and $1,443,074,000 for the quarter ended June 30,
2017, an increase of $129,863,000 and a decrease of $16,004,000, or
10.01% and 1.11%, respectively.

Total average deposits increased $105,802,000, or 9.47%, to
$1,222,925,000 for the quarter ended September 30, 2017, compared to
$1,117,123,000 for the quarter ended September 30, 2016. Total average
deposits decreased $24,515,000, or 1.97%, for the quarter ended
September 30, 2017, compared to $1,247,440,000 for the quarter ended
June 30, 2017. The Company's ratio of average non-interest bearing
deposits to total deposits was 39.92% for the quarter ended
September 30, 2017, compared to 36.88% and 37.57% for the quarters ended
September 30, 2016 and June 30, 2017, respectively.

Non-interest income increased $419,000, or 19.63%, to $2,554,000 for the
third quarter of 2017 compared to $2,135,000 for the same period in
2016. The third quarter 2017 non-interest income included $169,000 net
realized gains on sales and calls of investment securities compared to
$286,000 for the same period in 2016. For the quarter ended
September 30, 2017, service charge income increased $82,000, interchange
fees increased $66,000, partially offset by a decrease of $12,000 in
FHLB dividends and a decrease of $68,000 in loan placement fees compared
to the same period in 2016. Non-interest income for the quarter ended
September 30, 2017 decreased by $1,542,000 to $2,554,000, compared to
$4,096,000 for the quarter ended June 30, 2017. The decrease compared to
the trailing quarter was primarily due to a $1,988,000 decrease in net
realized gains on sales and calls of investment securities, and a $4,000
decrease in service charges, partially offset by a $322,000 increase in
other income as a result of favorable legal settlements, and a $2,000
increase in FHLB dividends.

Non-interest expense for the quarter ended September 30, 2017 increased
$739,000, or 7.65%, to $10,394,000 compared to $9,655,000 for the
quarter ended September 30, 2016. The net increase quarter over quarter
was a result of an increase in salaries and employee benefits of
$381,000, a $63,000 increase in license and maintenance contract
expense, an increase of $27,000 in regulatory assessments, an increase
of $13,000 in amortization of core deposit intangibles, and an increase
in data processing expenses of $17,000, partially offset by a decrease
in acquisition and integration expenses of $200,000, a $88,000 decrease
in professional services, and a decrease in directors' expenses of
$28,000. Non-interest expense for the quarter ended September 30, 2017
decreased by $395,000 compared to $10,789,000 for the trailing quarter
ended June 30, 2017. The decrease compared to the trailing quarter was
primarily due to a $292,000 decrease in acquisition and integration
expenses, a $32,000 decrease in salaries and employee benefits, and a
$68,000 decrease in license and maintenance contracts, partially offset
by increases of $75,000 in occupancy and equipment expense, $7,000 in
directors' expenses, and $15,000 in regulatory assessment expenses.

The Company recorded an income tax provision of $2,144,000 for the
quarter ended September 30, 2017, compared to $1,361,000 for the quarter
ended September 30, 2016. The effective tax rate for the quarter ended
September 30, 2017 was 32.30% compared to 30.41% for the same period in
2016.

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
24 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.

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, Gary D. Gall, Steven D. McDonald, Louis McMurray, 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; (7)
the expected cost savings, synergies and other financial benefits for
the acquisition of Folsom Lake Bank might not be realized within the
expected time frames or at all; and (8) 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, 2016. 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)

 
  September 30,   December 31,   September 30,
(In thousands, except share amounts) 2017 2016   2016
 
ASSETS
Cash and due from banks $ 26,195 $ 28,185 $ 23,274
Interest-earning deposits in other banks 9,494 10,368 21,803
Federal funds sold   15     1
Total cash and cash equivalents 35,689 38,568 45,078
Available-for-sale investment securities (Amortized cost of
$507,477, $548,640 and $533,044 at September 30,2017, December 31,
2016 and September 30, 2016, respectively)
515,077 547,749 551,075
Loans, less allowance for credit losses of $8,916, $9,326 and $9,299
at September 30, 2017, December 31, 2016 and September 30, 2016,
respectively
769,810 747,302 620,528
Bank premises and equipment, net 8,920 9,407 8,906
Bank owned life insurance 23,639 23,189 20,377
Federal Home Loan Bank stock 5,594 5,594 4,823
Goodwill 40,311 40,231 29,917
Core deposit intangibles 1,243 1,383 922
Accrued interest receivable and other assets 22,743   29,900     26,149
Total assets $ 1,423,026   $ 1,443,323     $ 1,307,775
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Non-interest bearing $ 494,364 $ 495,815 $ 423,183
Interest bearing 724,021   760,164     704,314
Total deposits 1,218,385 1,255,979 1,127,497
Short-term borrowings 400
Junior subordinated deferrable interest debentures 5,155 5,155 5,155
Accrued interest payable and other liabilities 18,254   17,756     18,801
Total liabilities 1,241,794   1,279,290     1,151,453
Shareholders' equity:
Common stock, no par value; 80,000,000 shares authorized; issued and
outstanding: 12,212,190, 12,143,815, and 11,081,854 at September 30,
2017, December 31, 2016 and September 30, 2016, respectively
72,428 71,645 54,846
Retained earnings 104,399 92,904 91,026
Accumulated other comprehensive income (loss), net of tax 4,405   (516 )   10,450
Total shareholders' equity 181,232   164,033     156,322
Total liabilities and shareholders' equity $ 1,423,026   $ 1,443,323     $ 1,307,775
 

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) 2017 2017 2016 2017   2016
INTEREST INCOME:
Interest and fees on loans $ 10,423 $ 10,774 $ 8,112 $ 31,287 $ 24,208
Interest on deposits in other banks 53 76 71 204 210
Interest and dividends on investment securities:
Taxable 1,818 1,443 1,500 4,564 4,486
Exempt from Federal income taxes   1,531     1,775     1,582     5,428     4,680  
Total interest income   13,825     14,068     11,265     41,483     33,584  
INTEREST EXPENSE:
Interest on deposits 200 245 240 690 690
Interest on junior subordinated deferrable interest debentures 39 36 30 108 88
Other   8     1         13      
Total interest expense   247     282     270     811     778  
Net interest income before provision for credit losses 13,578 13,786 10,995 40,672 32,806
(REVERSAL OF) PROVISION FOR CREDIT LOSSES   (900 )   (150 )   (1,000 )   (1,150 )   (5,850 )
Net interest income after provision for credit losses   14,478     13,936     11,995     41,822     38,656  
NON-INTEREST INCOME:
Service charges 825 829 743 2,452 2,227
Appreciation in cash surrender value of bank owned life insurance 150 152 131 450 411
Interchange fees 378 373 312 1,075 904
Loan placement fees 279 156 347 526 792
Net realized gains on sales and calls of investment securities 169 2,157 286 2,808 1,836
Other-than-temporary impairment loss on investment securities (136 )
Federal Home Loan Bank dividends 98 96 110 322 314
Other income   655     333     206     1,263     1,005  
Total non-interest income   2,554     4,096     2,135     8,896     7,353  
NON-INTEREST EXPENSES:
Salaries and employee benefits 5,989 6,021 5,608 17,865 16,304
Occupancy and equipment 1,286 1,211 1,124 3,676 3,511
Professional services 258 426 346 1,104 971
Data processing expense 407 419 390 1,250 1,145
Directors' expenses 135 128 163 492 474
ATM/Debit card expenses 216 171 159 553 469
License & maintenance contracts 188 256 125 590 388
Regulatory assessments 161 146 134 482 469
Advertising 154 160 131 484 444
Internet banking expenses 181 172 170 523 497
Acquisition and integration expenses 163 455 363 618 515
Amortization of core deposit intangibles 47 47 34 141 102
Other expense   1,209     1,177     908     3,519     2,719  
Total non-interest expenses   10,394     10,789     9,655     31,297     28,008  
Income before provision for income taxes 6,638 7,243 4,475 19,421 18,001
PROVISION FOR INCOME TAXES   2,144     2,295     1,361     5,730     5,426  
Net income $ 4,494   $ 4,948   $ 3,114   $ 13,691   $ 12,575  
Net income per common share:
Basic earnings per common share $ 0.37     0.41   $ 0.28   $ 1.12   $ 1.15  
Weighted average common shares used in basic computation   12,208,313     12,207,570     10,984,141     12,183,363     10,969,633  
Diluted earnings per common share $ 0.36     0.40   $ 0.28   $ 1.11   $ 1.14  
Weighted average common shares used in diluted computation   12,325,254     12,338,884     11,092,674     12,315,850     11,068,045  
Cash dividends per common share $ 0.06   $ 0.06   $ 0.06   $ 0.18   $ 0.18  
 

CENTRAL VALLEY COMMUNITY BANCORP

CONDENSED CONSOLIDATED INCOME STATEMENTS

(Unaudited)

         
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
For the three months ended 2017 2017 2017 2016 2016
(In thousands, except share and per share amounts)
Net interest income $ 13,578 $ 13,786 $ 13,308 $ 12,773 $ 10,995
(Reversal of) provision for credit losses   (900 )   (150 )   (100 )       (1,000 )
Net interest income after provision for credit losses 14,478 13,936 13,408 12,773 11,995
Total non-interest income 2,554 4,096 2,246 2,238 2,135
Total non-interest expense 10,394 10,789 10,113 10,913 9,655
Provision for income taxes   2,144     2,295     1,291     1,492     1,361  
Net income $ 4,494   $ 4,948   $ 4,250   $ 2,606   $ 3,114  
Basic earnings per common share $ 0.37   $ 0.41   $ 0.35   $ 0.21   $ 0.28  
Weighted average common shares used in basic computation   12,208,313     12,207,570     12,167,810     12,129,490     10,984,141  
Diluted earnings per common share $ 0.36   $ 0.40   $ 0.35   $ 0.21   $ 0.28  
Weighted average common shares used in diluted computation   12,325,254     12,338,884     12,317,579     12,254,292     11,092,674  
 

CENTRAL VALLEY COMMUNITY BANCORP

SELECTED RATIOS

(Unaudited)

         
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
As of and for the three months ended 2017 2017 2017 2016 2016
(Dollars in thousands, except per share amounts)
Allowance for credit losses to total loans 1.14 % 1.21 % 1.21 % 1.23 % 1.48 %
Non-performing assets to total assets 0.22 % 0.23 % 0.23 % 0.18 % 0.13 %
Total non-performing assets $ 3,162 $ 3,293 $ 3,341 $ 2,542 $ 1,637
Total nonaccrual loans $ 2,968 $ 3,099 $ 3,079 $ 2,180 $ 1,274
Net loan (recoveries) charge-offs $ (519 ) $ (233 ) $ 12 $ (27 ) $ (427 )
Net (recoveries) charge-offs to average loans (annualized) (0.27 )% (0.12 )% 0.01 % (0.01 )% (0.27 )%
Book value per share $ 14.84 $ 14.51 $ 13.95 $ 13.51 $ 14.11
Tangible book value per share $ 11.44 $ 11.10 $ 10.53 $ 10.08 $ 11.32
Tangible common equity $ 139,678 $ 135,567 $ 128,481 $ 122,419 $ 125,483
Cost of total deposits 0.06 % 0.08 % 0.08 % 0.09 % 0.09 %
Interest and dividends on investment securities exempt from Federal
income taxes
$ 1,531 $ 1,775 $ 2,122 $ 1,780 $ 1,582
Net interest margin (calculated on a fully tax equivalent basis) (1) 4.43 % 4.48 % 4.36 % 4.20 % 4.01 %
Return on average assets (2) 1.26 % 1.37 % 1.70 % 0.72 % 0.96 %
Return on average equity (2) 10.05 % 11.41 % 10.20 % 6.19 % 8.01 %
Loan to deposit ratio 63.91 % 61.75 % 60.32 % 60.24 % 55.86 %
Tier 1 leverage - Bancorp 9.86 % 9.43 % 9.01 % 8.75 % 9.35 %
Tier 1 leverage - Bank 9.76 % 9.33 % 8.92 % 8.64 % 8.40 %
Common equity tier 1 - Bancorp 13.09 % 13.42 % 12.54 % 12.48 % 13.80 %
Common equity tier 1 - Bank 13.35 % 13.69 % 12.80 % 12.59 % 12.93 %
Tier 1 risk-based capital - Bancorp 13.48 % 13.83 % 12.93 % 12.74 % 14.24 %
Tier 1 risk-based capital - Bank 13.35 % 13.69 % 12.80 % 12.59 % 12.93 %
Total risk-based capital - Bancorp 14.39 % 14.83 % 13.89 % 13.72 % 15.39 %
Total risk based capital - Bank 14.26 % 14.69 % 13.76 % 13.57 % 14.10 %
(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 For the Nine Months Ended
AVERAGE AMOUNTS September 30,   June 30,   September 30, September 30,   September 30,
(Dollars in thousands) 2017 2017 2016 2017 2016
Federal funds sold $ 87 $ 37 $ 74 $ 45 $ 150
Interest-bearing deposits in other banks 16,316 28,748 54,618 27,232 53,613
Investments 515,523 524,706 505,635 528,562 499,077
Loans (1) 767,770 762,094 622,955 757,859 610,932
Federal Home Loan Bank stock 5,594   5,594   4,823   5,594   4,825  
Earning assets 1,305,290 1,321,179 1,188,105 1,319,292 1,168,597
Allowance for credit losses (9,382 ) (9,390 ) (9,982 ) (9,376 ) (10,353 )
Nonaccrual loans 3,007 3,119 1,329 2,793 2,449
Other non-earning assets 128,155   128,166   117,755   127,430   115,471  
Total assets $ 1,427,070   $ 1,443,074   $ 1,297,207   $ 1,440,139   $ 1,276,214  
 
Interest bearing deposits $ 734,679 $ 778,750 $ 705,080 $ 766,259 $ 696,899
Other borrowings 7,297   5,387   5,155   6,540   5,155  
Total interest-bearing liabilities 741,976   784,137   710,235   772,799   702,054  
Non-interest bearing demand deposits 488,246 468,690 412,043 477,076 406,856
Non-interest bearing liabilities 18,075   16,842   19,334   17,248   17,756  
Total liabilities 1,248,297   1,269,669   1,141,612   1,267,123   1,126,666  
Total equity 178,773   173,405   155,595   173,016     149,548  
Total liabilities and equity $ 1,427,070   $ 1,443,074   $ 1,297,207   $ 1,440,139   $ 1,276,214  
 
AVERAGE RATES                    
Federal funds sold 1.25 % 1.25 % 0.50 % 1.25 % 0.50 %
Interest-earning deposits in other banks 1.30 % 1.06 % 0.52 % 1.00 % 0.52 %
Investments 3.21 % 3.15 % 3.08 % 3.23 % 3.09 %
Loans (3) 5.39 % 5.73 % 5.18 % 5.52 % 5.29 %
Earning assets 4.51 % 4.57 % 4.10 % 4.51 % 4.14 %
Interest-bearing deposits 0.11 % 0.13 % 0.14 % 0.12 % 0.13 %
Other borrowings 2.58 % 2.75 % 2.33 % 2.47 % 2.28 %
Total interest-bearing liabilities 0.13 % 0.15 % 0.15 % 0.14 % 0.15 %
Net interest margin (calculated on a fully tax equivalent basis) (2) 4.43 % 4.48 % 4.01 % 4.43 % 4.05 %
(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 $789,
$915, and $815, for the three months ended September 30, 2017, June
30, 2017, and September 30, 2016, respectively. The Federal tax
benefits relating to income earned on municipal bonds totaled $2,797
and $2,411 for the nine months ended September 30, 2017 and 2016,
respectively.
(3) Loan yield includes loan fees (costs) for the three months ended
September 30, 2017, June 30, 2017, and September 30, 2016 of $(49),
$25, and $(53), respectively. Loan yield includes loan fees (costs)
for the nine months ended September 30, 2017 and 2016 of $420, and
$(31), respectively.

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