Central Valley Community Bancorp Reports Earnings Results for Third Quarter 2006.CLOVIS, Calif. -- The Board of Directors of Central Valley Community Bancorp (Company) (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CVCY), the parent company of Central Valley Community Bank (Bank), reported today unaudited consolidated net income of $4,768,000, or $0.74 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the nine-month period ended September 30, 2006, compared to $4,376,000, or $0.69 per diluted share in the same period of 2005, representing an increase of 7.25% on a period to period basis. The Company's net interest margin (fully tax equivalent basis) increased 41 basis points from 5.39% for the nine months ended September 30, 2005 to 5.80% for the nine months ended September 30, 2006. Net interest income for the nine months ended September 30, 2006 was $18,114,000, compared to $15,986,000 for the same period in 2005, an increase of $2,128,000 or 13.31%. The increase in net interest income is primarily the result of increased levels of earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin coupled with increases in interest rates. Earning assets increased 4.75% to $427,265,000 from $407,884,000 comparing the nine months ended September 30, 2006 to the same period in 2005. Despite a significant increase in interest expense during the first three quarters of 2006, the Company still maintains a favorable position Noun 1. favorable position - the quality of being at a competitive advantage favourable position, superiority advantage, vantage - the quality of having a superior or more favorable position; "the experience gave him the advantage over me" relative to its peers in interest expense due to the fact that 31.85% of its average deposits are non-interest bearing. Average deposits were $409,815,000 for the nine months ended September 30, 2006 compared to $401,708,000 for the same period in 2005. Non-interest income for the nine months ended September 30, 2006 increased $491,000 or 16.33% compared to the same period in 2005, mainly due to net gains from the sale of assets; increases in EFT eft: see newt. (Electronic Funds Transfer) The transfer of money from one account to another by computer. See ACH. EFT - electronic funds transfer network fees, service charge income, and bank card merchant fees; and net gains from sales of certain investment securities. Non-interest expense for the nine months ended September 30, 2006 increased $1,312,000, or 10.79% compared to the same period in 2005, mainly due to relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. related expenses, salary expenses from an increase in the number of employees, ordinary increases in salaries and benefits, and incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. expenses from newly opened branches. During the nine-month period ended September 30, 2006, the Company consolidated certain of its administrative, support and other office functions from five office buildings into a single location. In connection with this relocation, the Company recorded pre-tax relocation related expenses of $175,000 and a pre-tax gain on sale of real property of $265,000. For the nine months ended September 30, 2006, the Company recorded a provision for credit losses of $600,000, compared to $10,000 for the same period in 2005. The increase in the provision for credit losses was primarily due to a net charge-off Eliminate or write off. The term charge-off is used to describe the process of removing from the records of a company something that was once regarded as an asset but has subsequently become worthless. of $348,000 for a loan in Sacramento during the first quarter of 2006. For the nine-month period ended September 30, 2006, return on average equity was 14.30%, compared to 15.40% for the same period of 2005. This decrease is reflective Refers to light hitting an opaque surface such as a printed page or mirror and bouncing back. See reflective media and reflective LCD. of an increase in capital from retained earnings Retained Earnings The percentage of net earnings not paid out in dividends, but retained by the company to be reinvested in its core business or to pay debt. It is recorded under shareholders equity on the balance sheet. . Return on average assets was 1.37% for the first nine months of 2006, compared to 1.30% for the same period in 2005. Average assets for the nine months ended September 30, 2006 were $465,518,000 compared to $449,324,000 for the same period in 2005. For the quarter ended September 30, 2006, the Company reported net income of $1,669,000, or $0.26 per diluted share, compared to $1,649,000, or $0.26 per diluted share, for the same period in 2005. Return on average equity for the third quarter of 2006 was 14.28%, compared to 16.67% for the same period of 2005. This decrease is reflective of an increase in capital from retained earnings. Return on average assets was 1.43% for the third quarter of 2006 compared to 1.45% for the same period in 2005. In comparing third quarter 2006 to third quarter 2005, total loans continued to grow. Average total loans increased $22,861,000, or 8.03% in the three months ended September 30, 2006, compared to the same period in 2005. Asset quality continues to be strong. The Company had no non-accrual loans at September 30, 2006, compared to one non-accrual loan totaling $591,000 at September 30, 2005. The Company had no Other Real Estate Owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most at September 30, 2006 or September 30, 2005. During the third quarter of 2006, the Company recorded $83,000 in net recoveries of credit losses. Net income for the quarter ended September 30, 2006 reflects a $100,000 pre-tax addition to the allowance for credit losses, compared to $10,000 for the same period in 2005. The increase in 2006 is principally due to the increase in the volume of outstanding loans and our assessment of the overall adequacy of the allowance for credit losses. Average total deposits for the third quarter of 2006 increased slightly to $408,778,000, compared to $406,620,000 for the same period of 2005, while average non-interest bearing deposits increased by 4.71% over the same period. The sluggish growth in core deposits is reflective of the increased interest rate environment with more deposits moving to the equity markets however, core customer relationships were not adversely affected during the periods under review. The Company's net interest margin (fully tax equivalent basis) increased 25 basis points from 5.57% for the three months ended September 30, 2005, to 5.82% for the three months ended September 30, 2006. This increase was due primarily to the increase in total average interest earning assets of $15,560,000 or 3.76%, from $413,458,000 for the third quarter of 2005 to $429,018,000 for the third quarter of 2006, coupled with the recent interest rate increases on the Company's variable-rate Variable-rate A varible-rate agreement, as distinguished from a fixed-rate agreement, calls for an interest rate that may fluctuate over the life of the loan. The rate is often tied to an index that reflects changes in market rates of interest. portfolio loans. Net interest income increased 9.16% for the third quarter of 2006, compared to the same period in 2005. Non-interest income increased 25.97% during the third quarter of 2006 compared to the same period in 2005 primarily due to the pre-tax gain on sale of real property of $265,000. Non-interest expense increased 15.17% for the same periods mainly due to relocation related expenses, salary expenses from an increase in the number of employees, ordinary increases in salaries and benefits, and incremental expenses from newly opened branches. "2006 has been a busy year for the Bank with the opening of the Fresno Downtown office in February, and the scheduled opening of our 11th office in the Sunnyside region of Fresno in November. Additionally, during the quarter the Bank relocated re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. all of its customer service functions, administration and several departments previously located in five separate buildings into our new Financial Drive Corporate office located in north Fresno. The move resulted in certain expenses for the write-down of leases, leasehold improvements Leasehold Improvement Improvements on a leased asset that increase the value of the asset. Notes: A leasehold improvement is classified as an asset that must be depreciated over time. and equipment during the third quarter, which were offset by the gain on the sale of one of the five buildings which was owned by the Bank. We are proud to continue making strides to better serve our customers by adding to branch locations and providing an environment for ongoing growth and expansion," stated Daniel J. Doyle, President and Chief Executive Officer of Central Valley Community Bancorp and Central Valley Community Bank. Central Valley Community Bancorp trades on the NASDAQ stock exchange under the symbol CVCY. Central Valley Community Bank, headquartered in Clovis, California Clovis is a city in Fresno County, California, North East of Fresno. As of 2006, the city had an estimated population of 89,924. History The City of Clovis began as a freight stop along the San Joaquin Valley Railroad. , was founded in 1979 and is the sole subsidiary of Central Valley Community Bancorp. Central Valley Community Bank currently operates ten full-service offices in Clovis, Fresno, Kerman, Madera, Oakhurst, Prather and Sacramento. An eleventh In music or music theory an eleventh is the note eleven scale degrees from the root of a chord and also the interval between the root and the eleventh. Since there are only seven degrees in a diatonic scale the eleventh degree is the same as the subdominant and the interval office is currently scheduled to open in the Sunnyside area of Fresno by the end of 2006. Additionally, the Bank operates Real Estate Lending, SBA SBA abbr. Small Business Administration Noun 1. SBA - an independent agency of the United States government that protects the interests of small businesses and ensures that they receive a fair share of government Lending and Agribusiness agribusiness Agriculture operated by business; specifically, that part of a modern national economy devoted to the production, processing, and distribution of food and fibre products and byproducts. Lending Departments. Investment services are also provided by Investment Centers of America. Members of Central Valley Community Bancorp's and the Bank's Board of Directors are: Daniel N. Cunningham (Chairman), Sidney B. Cox, Edwin S Edwin or Eadwin (both: ĕd`wĭn), 585?–632, king of Northumbria (616–32), The son and heir of Ælla, king of Deira, he was kept from his inheritance by Æthelfrith. . Darden, Jr., Daniel J. Doyle, Steven D. McDonald, Louis McMurray, Wanda L. Rogers, William S William, crown prince of Germany William or Frederick William, 1882–1951, crown prince of Germany, son of William II. In World War I he commanded (1914) an army on the Western Front and was nominal commander in the German attack . Smittcamp, and Joseph B. Weirick. More information about Central Valley Community Bancorp and Central Valley Community Bank can be found at cvcb.com. Forward-looking Statements- Certain matters discussed in this press release constitute forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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; and (7) 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2005. Therefore, the information set forth in such forward-looking statements should be carefully considered when evaluating the business prospects of the Company. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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