Central Valley Community Bancorp (CVCY)

[Enterprising Investor]

Central Valley Community Bancorp Reports Earnings Results for the Six Months and Quarter Ended June 30, 2013 (7/17/13)

FRESNO, CA--(Marketwired - Jul 17, 2013) - 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 $3,070,000, and diluted earnings per common share of $0.30 for the six months ended June 30, 2013, compared to $3,422,000 and $0.34 per diluted common share for the six months ended June 30, 2012. Net income decreased 10.29%, primarily driven by a decrease in net interest income in 2013 compared to 2012 and increases in non-interest expense offset by increases in non-interest income and lower provision for credit losses. Non-performing assets increased $572,000 or 5.90% to $10,267,000 at June 30, 2013, compared to $9,695,000 at December 31, 2012. The Company had no OREO as of June 30, 2013 or December 31, 2012. During the six months ended June 30, 2013, the Company's shareholders' equity decreased $6,123,000, or 5.20%. The reduction in shareholders' equity was driven by a decrease in accumulated other comprehensive income (AOCI), partially offset by a net increase in retained earnings. The decrease in AOCI was primarily due to increase in longer term interest rates, which resulted in a decrease in the market value of the Company's available-for-sale investment securities. The Company also declared and paid $956,000 in cash dividends to holders of common stock during the first six months of 2013 ($0.10 per share).

On July 1, 2013, the Company announced the completion of the acquisition of Visalia Community Bank (VCB), a company that had, as of March 31, 2013, assets of approximately $203 million. With the VCB acquisition, the Company added four branches in Tulare County. The Company's results of operations for the six months ended June 30, 2013 and its balance sheet as of the same date do not reflect the VCB acquisition.

During the first two quarters of 2013, the Company's total assets decreased 2.12%, total liabilities decreased 1.65%, and shareholders' equity decreased 5.20% compared to December 31, 2012. Annualized return on average equity (ROE) for the six months ended June 30, 2013 was 5.27%, compared to 6.12% for the six months ended June 30, 2012. ROE decreased primarily due to a decrease in net income and an increase in average equity. Despite the decrease in AOCI at June 30, 2013 noted above, average equity for the first half of 2013 increased to $116,565,000 compared to $111,769,000 for the same period in 2012. Annualized return on average assets (ROA) was 0.70% and 0.82% for the six months ended June 30, 2013 and 2012, respectively. The decrease in ROA is primarily due to a decrease in net income.

During the six months ended June 30, 2013, the Company did not record a provision for credit losses, compared to $500,000 for the six months ended June 30, 2012. During the six months ended June 30, 2013, the Company recorded $532,000 in net loan charge-offs, compared to $1,756,000 for the six months ended June 30, 2012. The net charge-off ratio, which reflects net charge-offs to average loans, was 0.27% for the six months ended June 30, 2013, compared to 0.85% for the same period in 2012. The loans charged off during the first two quarters of 2013 were previously classified and sufficient funds were held in the allowance for credit losses as of December 31, 2012.

At June 30, 2013, the allowance for credit losses stood at $9,601,000, compared to $10,133,000 at December 31, 2012, a net decrease of $532,000. The allowance for credit losses as a percentage of total loans was 2.37% at June 30, 2013, and 2.56% at December 31, 2012. The Company believes the allowance for credit losses is adequate to provide for probable incurred losses inherent within the loan portfolio at June 30, 2013.

Total non-performing assets were $10,267,000, or 1.18% of total assets as of June 30, 2013 compared to $9,695,000 or 1.09% of total assets as of December 31, 2012. Total non-performing assets as of June 30, 2012 were $12,340,000 or 1.48% of total assets

http://www.marketwire.com/press-release/central-valley-community-bancorp-reports-earnings-results-six-months-quarter-ended-june-nasdaq-cvcy-1812207.htm