CVCY: Central Valley Community Bancorp (NASDAQ: CVCY)

The Board of Directors of Central Valley Community Bancorp (Company) (NASDAQ: CVCY), the parent company of Central Valley Community Bank (Bank), declared recently unaudited merged net income of $16,994,000.00, and fully diluted earnings for each common share of $1.250 for the nine months finished September 30, 2k19, contrast to $16,008,000.00 and $1.160 for each fully diluted common share for the nine months finished September 30, 2k18.

3RD-QUARTER FINANCIAL HIGHLIGHTS

  • Net loans raised $23.40M or 2.570 percent, and total assets raised $46.30M or 3.01 percent at September 30, 2k19 contrast to December 31, 2k18.
  • Total deposits raised 2.14 percent to $1.310B at September 30, 2k19 contrast to December 31, 2k18.
  • Total cost of deposits remains at low levels at 0.170 percent and 0.10 percent for the quarter finished September 30, 2k19 and 2k18, respectively.
  • Average non-interest bearing demand deposit accounts as a percentage of total average deposits was 43.24 percent and 42.09 percent for the quarters finished September 30, 2k19 and 2k18, respectively.
  • Capital positions remain strong at September 30, 2k19 with a 11.47 percent Tier 1 Leverage Ratio; a 14.84 percent Common Equity Tier 1 Ratio; a 15.28 percent Tier 1 Risk-Based Capital Ratio; and a 16.13 percent Total Risk-Based Capital Ratio.
  • The Company declared a $0.110 for each common share cash dividend, payable on November 15, 2k19 to shareholders of record on November 1, 2k19.
  • During the quarter finished September 30, 2k19, the Company repurchased and stepped down a total of 188,383 shares of common stock at an average price paid for each share of $20.530. During the nine months finished September 30, 2k19, the Company has repurchased and stepped down a total of 508,983 shares at an average price paid for each share of $20.010.

Net income for the nine months finished September 30, 2k19 raised 6.16 percent, mainly driven by a boost in net interest income and a boost in net realized gains on sales and calls of investment securities, partially offset by a boost in non-interest cost and a boost in the provision for income taxes, contrast to the nine months finished September 30, 2k18. During the nine months finished September 30, 2k19, the Company recorded a $525,000.00 provision for credit losses, contrast to a $50,000.00 provision during the nine months finished September 30, 2k18. Net interest income before the provision for credit losses for the nine months finished September 30, 2k19 was $47,985,000.00, contrast to $46,730,000.00 for the nine months finished September 30, 2k18, a boost of $1,255,000.00 or 2.690 percent. The impact to interest income from the accretion of the loan marks on attained loans was $750,000.00 and $906,000.00 for the nine months finished September 30, 2k19 and 2k18, respectively. In addition, net interest income before the provision for credit losses for the nine months finished September 30, 2k19 was benefited by about $593,000.00 in nonrecurring income from prepayment penalties and payoff of loans formerly on nonaccrual status, as contrast to a $355,000.00 in nonrecurring income for the nine months finished September 30, 2k18. Apart From these reversals and benefits, net interest income for the nine months finished September 30, 2k19 raised by $1,017,000.00 contrast to the nine months finished September 30, 2k18.

During the nine months finished September 30, 2k19, the Company’s shareholders’ equity raised $13,444,000.00, or 6.120 percent, contrast to December 31, 2k18. The incline in shareholders’ equity was driven by the retention of earnings, net of dividends paid, and a boost in net unrealized gains on available-for-sale (AFS) securities recorded, net of estimated taxes, in accumulated other comprehensive income (AOCI).

Return on average equity (ROE) for the nine months finished September 30, 2k19 was 9.960 percent, contrast to 10.16 percent for the nine months finished September 30, 2k18. The decline in ROE was mainly because of the incline in shareholders’ equity contrast to the previous year duration. The Company declared and paid $0.320 and $0.220 for each share in cash dividends to holders of common stock during the nine months finished September 30, 2k19 and 2k18, respectively. Annualized return on average assets (ROA) was 1.440 percent for the nine months finished September 30, 2k19 and 1.340 percent for the nine months finished September 30, 2k18. During the nine months finished September 30, 2k19, the Company’s total assets raised 3.01 percent, and total liabilities raised 2.49 percent, contrast to December 31, 2k18.

Non-performing assets reduced by $583,000.00, or 21.28 percent, to $2,157,000.00 at September 30, 2k19, contrast to $2,740,000.00 at December 31, 2k18. During the nine months finished September 30, 2k19, the Company recorded $134,000.00 in net loan charge-offs, contrast to $197,000.00 in net recoveries for the nine months finished September 30, 2k18. The net charge-off (recovery) ratio, which reflects annualized net recoveries to average loans, was 0.020 percent for the nine months finished September 30, 2k19, contrast to (0.030) percent for the similar duration in 2k18. Total non-performing assets were 0.140 percent and 0.180 percent of total assets as of September 30, 2k19 and December 31, 2k18, respectively.

At September 30, 2k19, the allowance for credit losses was $9,495,000.00, contrast to $9,104,000.00 at December 31, 2k18, a net incline of $391,000.00 reflecting the net charge-offs and provision during the duration. The allowance for credit losses as a percentage of total loans was 1.010 percent and 0.990 percent as of September 30, 2k19 and December 31, 2k18, respectively. Total loans includes loans attained 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 attained loans totalled $160,455,000.00 at September 30, 2k19 and $189,719,000.00 at December 31, 2k18. Apart From these attained loans from the calculation, the allowance for credit losses to total gross loans was 1.210 percent and 1.250 percent as of September 30, 2k19 and December 31, 2k18, respectively, and general reserves associated with non-impaired loans to total non-impaired loans was 1.210 percent and 1.250 percent, 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, 2k19.

The Company’s net interest margin (fully tax equivalent basis) was 4.54 percent for the nine months finished September 30, 2k19, contrast to 4.40 percent for the nine months finished September 30, 2k18. The incline in net interest margin in the duration-to-duration comparison resulted from the incline in the effective yield on interest earning deposits in other banks and Federal Funds sold, the incline in the effective yield on average investment securities, and the incline in the yield on the Company’s loan portfolio.

For the nine months finished September 30, 2k19, the effective yield on average total earning assets raised 23 basis points to 4.730 percent contrast to 4.50 percent for the nine months finished September 30, 2k18, while the cost of average total interest-bearing liabilities raised to 0.350 percent for the nine months finished September 30, 2k19 as contrast to 0.180 percent for the nine months finished September 30, 2k18. Over the similar durations, the cost of average total deposits raised to 0.150 percent for the nine months finished September 30, 2k19 contrast to 0.080 percent for the similar duration in 2k18.

For the nine months finished September 30, 2k19, the Company’s average investment securities, counting interest-earning deposits in other banks and Federal funds sold, totalled $492,766,000.00, a decline of $44,785,000.00, or 8.33 percent, contrast to the nine months September 30, 2k18. The effective yield on average investment securities, counting interest-earning deposits in other banks and Federal funds sold, raised to 3.13 percent for the nine months finished September 30, 2k19, contrast to 2.830 percent for the nine months finished September 30, 2k18.

Total average loans (counting nonaccrual), which generally yield higher rates than investment securities, raised $19,574,000.00, from $911,862,000.00 for the nine months finished September 30, 2k18 to $931,436,000.00 for the nine months finished September 30, 2k19. The effective yield on average loans raised to 5.580 percent for the nine months finished September 30, 2k19, contrast to 5.480 percent for the nine months finished September 30, 2k18.

Total average assets for the nine months finished September 30, 2k19 was $1,571,245,000.00 contrast to $1,589,365,000.00 for the nine months finished September 30, 2k18, a decline of $18,120,000.00 or 1.140 percent. During the nine months finished September 30, 2k19 and 2k18, the loan-to-deposit ratio was 71.96 percent and 71.49 percent, respectively. Total average deposits reduced $56,006,000.00 or 4.160 percent to $1,289,192,000.00 for the nine months finished September 30, 2k19, contrast to $1,345,198,000.00 for the nine months finished September 30, 2k18. Average interest-bearing deposits reduced $54,083,000.00, or 6.810 percent, and average non-interest bearing demand deposits reduced $1,923,000.00, or 0.350 percent, for the nine months finished September 30, 2k19, contrast to the nine months finished September 30, 2k18. The Company’s ratio of average non-interest bearing deposits to total deposits was 42.60 percent for the nine months finished September 30, 2k19, contrast to 40.97 percent for the nine months finished September 30, 2k18.

Non-interest income for the nine months finished September 30, 2k19 raised by $3,376,000.00 to $11,296,000.00, contrast to $7,920,000.00 for the nine months finished September 30, 2k18, mainly driven by a boost of $3,919,000.00 in net realized gains on sales and calls of investment securities, and a boost in loan placement fees of $101,000.00, offset by decline in gain on sale of credit card portfolio of $462,000.00, a decline in service charge income of $145,000.00, and a decline of $45,000.00 in other income.

Non-interest cost for the nine months finished September 30, 2k19 raised $1,314,000.00, or 3.90 percent, to $34,972,000.00 contrast to $33,658,000.00 for the nine months finished September 30, 2k18. The net incline year over year resulted from inclines in information technology of $1,376,000.00, salaries and employee benefits of $497,000.00, amortization of core deposit intangible of $240,000.00, directors’ costs of $171,000.00, and telephone costs of $120,000.00, offset by declines in occupancy and equipment costs of $355,000.00, regulatory assessments of $259,000.00, acquisition and integration costs of $217,000.00, professional services of $133,000.00, and operating losses of $112,000.00 in 2k19 contrast to 2k18. The incline in the information technology costs was a result of the Company outsourcing its network maintenance and IT support during the 4th-quarter of 2k18. The incline in the directors’ costs was related to the change in the discount rate used to calculate the liability for deferred compensation and split dollar plans. The decline in regulatory assessments was the result of the Company receiving a portion of its small bank assessment credit. The FDIC automatically applies small bank assessment credits to offset regular deposit insurance assessments for assessment durations where the Deposit Insurance Fund (DIF) reserve ratio is at or above 1.380 percent.

The Company recorded an income tax provision of $6,790,000.00 for the nine months finished September 30, 2k19, contrast to $4,934,000.00 for the nine months finished September 30, 2k18. The effective tax rate for the nine months September 30, 2k19 was 28.55 percent contrast to 23.56 percent for the nine months September 30, 2k18. The incline in the effective rate was a result of a decline in tax-exempt interest.

Quarter finished September 30, 2k19

For the quarter finished September 30, 2k19, the Company stated unaudited merged net income of $5,691,000.00 and earnings for each diluted common share of $0.420, contrast to merged net income of $5,752,000.00 and $0.420 for each diluted share for the similar duration in 2k18. The decline in net income during the 3rd-quarter of 2k19 contrast to the similar duration in 2k18 was mainly because of a boost in the provision for income taxes of $625,000.00, a boost in total non-interest costs of $743,000.00, and a boost in provision for credit losses of $250,000.00, offset by a boost in net interest income of $298,000.00, and a boost in non-interest income of $1,259,000.00. The effective tax rate raised to 30.11 percent from 24.11 percent for the quarters finished September 30, 2k19 and September 30, 2k18, respectively. Net income for the right away trailing quarter finished June 30, 2k19 was $6,087,000.00, or $0.450 for each diluted common share.

Annualized return on average equity (ROE) for the 3rd-quarter of 2k19 was 9.770 percent, contrast to 10.80 percent for the similar duration of 2k18. The decline in ROE reflects decline in net income, notwithstanding a boost in shareholders’ equity. Annualized return on average assets (ROA) was 1.430 percent for the 3rd-quarter of 2k19 contrast to 1.480 percent for the similar duration in 2k18. This decline is because of a decline in net income notwithstanding a boost in average assets.

In comparing the 3rd-quarter of 2k19 to the 3rd-quarter of 2k18, average total loans raised by $34,388,000.00, or 3.760 percent. During the 3rd-quarter of 2k19, the Company recorded net loan charge-offs of $160,000.00 contrast to $(105,000.00) net loan recoveries for the similar duration in 2k18. The net charge-off (recovery) ratio, which reflects annualized net charge-offs to average loans, was 0.070 percent for the quarter finished September 30, 2k19 contrast to (0.050) percent for the quarter finished September 30, 2k18.

Average total deposits for the 3rd-quarter of 2k19 reduced $12,187,000.00 or 0.930 percent to $1,303,263,000.00 contrast to $1,315,450,000.00 for the similar duration of 2k18. In comparing the 3rd-quarter of 2k19 to the 3rd-quarter of 2k18, average borrowed funds raised $15,516,000.00 or 220.02 percent to $22,568,000.00 contrast to $7,052,000.00.

The Company’s net interest margin (fully tax equivalent basis) was 4.50 percent for the quarter finished September 30, 2k19, contrast to 4.53 percent for the quarter finished September 30, 2k18. Net interest income, before provision for credit losses, raised $298,000.00, or 1.870 percent, to $16,205,000.00 for the 3rd-quarter of 2k19, contrast to $15,907,000.00 for the similar duration in 2k18. The accretion of the loan marks on attained loans raised interest income by $299,000.00 and $316,000.00 during the quarters finished September 30, 2k19 and 2k18, respectively. Net interest income during the 3rd-quarters of 2k19 and 2k18 benefited by about $250,000.00 and $180,000.00, respectively, from prepayment penalties and payoff of loans formerly on nonaccrual status. The net interest margin duration-to-duration comparisons were influenced by the incline in the yield on total interest-bearing liabilities; offset by a boost in the yield on the average investment securities and a boost in the yield on the loan portfolio. Over the similar durations, the cost of total deposits raised to 0.170 percent from 0.100 percent.

For the quarter finished September 30, 2k19, the Company’s average investment securities, counting interest-earning deposits in other banks and Federal funds sold, reduced by $16,953,000.00, or 3.370 percent, contrast to the quarter finished September 30, 2k18, and reduced by $10,093,000.00, or 2.030 percent, contrast to the quarter finished June 30, 2k19.

The effective yield on average investment securities, counting interest earning deposits in other banks and Federal funds sold, was 3.070 percent for the quarter finished September 30, 2k19, contrast to 3.050 percent for the quarter finished September 30, 2k18 and 3.170 percent for the quarter finished June 30, 2k19. Total average loans, which generally yield higher rates than investment securities, raised by $34,388,000.00 to $948,673,000.00 for the quarter finished September 30, 2k19, from $914,285,000.00 for the quarter finished September 30, 2k18 and raised by $9,618,000.00 from $939,055,000.00 for the quarter finished June 30, 2k19. The effective yield on average loans was 5.550 percent for the quarter finished September 30, 2k19, contrast to 5.530 percent and 5.550 percent for the quarters finished September 30, 2k18 and June 30, 2k19, respectively.

Total average assets for the quarter finished September 30, 2k19 were $1,588,367,000.00 contrast to $1,555,704,000.00 for the quarter finished September 30, 2k18 and $1,584,122,000.00 for the quarter finished June 30, 2k19, a boost of $32,663,000.00 and a boost of $4,245,000.00, or 2.10 percent and 0.270 percent, respectively.

Total average deposits reduced $12,187,000.00, or 0.930 percent, to $1,303,263,000.00 for the quarter finished September 30, 2k19, contrast to $1,315,450,000.00 for the quarter finished September 30, 2k18. Total average deposits raised $29,104,000.00, or 2.280 percent, for the quarter finished September 30, 2k19, contrast to $1,274,159,000.00 for the quarter finished June 30, 2k19. The Company’s ratio of average non-interest bearing deposits to total deposits was 43.24 percent for the quarter finished September 30, 2k19, contrast to 42.09 percent and 42.45 percent for the quarters finished September 30, 2k18 and June 30, 2k19, respectively.

Non-interest income raised $1,259,000.00, or 51.12 percent, to $3,722,000.00 for the 3rd-quarter of 2k19 contrast to $2,463,000.00 for the similar duration in 2k18. For the quarter finished September 30, 2k19, non-interest income included $1,685,000.00 net realized gains on sales and calls of investment securities contrast to net realized gains of $380,000.00 for the similar duration in 2k18, a $1,305,000.00 incline. During the 3rd-quarter of 2k19 loan placement fees raised $81,000.00, offset by a decline in other income of $168,000.00, and a decline in service charge income of $67,000.00, contrast to the similar duration in 2k18. Credit card deconversion costs, which were deducted from the net gain on the sale of the credit card portfolio, were $116,000.00 during the quarter finished September 30, 2k18. Non-interest income for the quarter finished September 30, 2k19 reduced by $876,000.00 to $3,722,000.00, contrast to $4,598,000.00 for the quarter finished June 30, 2k19. The decline contrast to the trailing quarter was mainly a $774,000.00 decline in net realized gains on sales and calls of investment securities, a $41,000.00 decline in service charges, and a $104,000.00 decline in other income.

Non-interest cost for the quarter finished September 30, 2k19 raised $743,000.00, or 6.890 percent, to $11,534,000.00 contrast to $10,791,000.00 for the quarter finished September 30, 2k18. The net incline quarter over quarter was a result of a boost of $428,000.00 in information technology costs, a boost in salaries and employee benefits of $344,000.00, a boost of $119,000.00 in telephone costs, a boost of $78,000.00 in ATM/debit card costs, a boost of $80,000.00 in amortization of core deposit intangibles, a boost in professional services of $61,000.00, and a boost of $43,000.00 in Internet banking costs, partially offset by a decline of $223,000.00 in regulatory assessments and a decline in occupancy and equipment costs of $172,000.00. The incline in salaries and employee benefits was the result of changes in long-term interest rates used to calculate the liability for deferred compensation plans and resulted in an additional cost of $391,000.00 during the quarter.

Non-interest cost for the quarter finished September 30, 2k19 reduced by $238,000.00 contrast to $11,772,000.00 for the trailing quarter finished June 30, 2k19. The decline contrast to the trailing quarter was mainly because of a decline in regulatory assessments of $203,000.00, a decline in salaries and employee benefits of $181,000.00, and a decline in occupancy and equipment cost of $135,000.00, partially offset by a non-recurring $120,000.00 incline in telephone costs, a $67,000.00 incline in provision for income taxes, and a $75,000.00 incline in other non-interest costs. The decline in salaries and employee benefits of $181,000.00 was the result of reduced salaries, benefits, and interest on deferred compensation plans as a result of the change in the discount rate used to calculate the liability.

The Company recorded an income tax provision of $2,452,000.00 for the quarter finished September 30, 2k19, contrast to $1,827,000.00 for the quarter finished September 30, 2k18. The effective tax rate for the quarter finished September 30, 2k19 was 30.11 percent contrast to 24.11 percent for the similar duration in 2k18. The incline in the effective tax rate was the result of a decline in tax exempt interest.

Quarterly Dividend Declarement

On October 16, 2k19, the Board of Directors of the Company declared a regular quarterly cash dividend of $0.110 for each share on the Company’s common stock. The dividend is payable on November 15, 2k19 to shareholders of record as of November 1, 2k19.