Central Valley Community Bancorp Reports Earnings Results for the Six Months and Second Quarter Ended June 30, 2007.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 $3,071,000, or $0.48 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 six-month period ended June 30, 2007, compared to $3,099,000, or $0.48 per diluted share for the same period of 2006. Annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. return on average equity for the first half of 2007 was 12.11%, compared to 13.64% for the same period in 2006. This ratio decrease reflects the fact that 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. improved our balance sheet. Annualized return on average assets was 1.29% for the first half of 2007, compared to 1.33% for the same period in 2006. The Company's net interest margin (fully tax equivalent basis) was 5.68% for the six months ended June 30, 2007, compared to 5.79% for the same period in 2006. The decrease in net interest margin is principally due to an increase in the Company's cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. . In comparing the two periods, the effective yield on total 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 increased 38 basis points, while the cost of total interest bearing liabilities increased 81 basis points and the cost of total deposits increased 56 basis points. The Company has less exposure than many other financial institutions to such interest expense increases, as 32.5% of its average deposits are non-interest bearing. The total cost of deposits for the six months ended June 30, 2007 was 1.86% compared to 1.30% for the same period in 2006. Net interest income for the six months ended June 30, 2007 was $12,098,000, compared to $12,010,000 for the same period in 2006, an increase of $88,000 or 0.73%. Total average assets for the six months ended June 30, 2007 were $477,140,000, compared to $464,666,000 for the same period in 2006. Total average loans were $325,541,000 for the first half of 2007, compared to $299,292,000 for the same period in 2006, an 8.8% increase. Total average investments decreased from $125,760,000 for the first half of 2006 to $108,923,000 for the first half of 2007 as sales, maturities and calls in the portfolio provided funding for loan growth and reduced short-term borrowings. Total average deposits increased 1.8% to $417,678,000 for the six months ended June 30, 2007, compared to $410,342,000 for the same period in 2006. The increase in average deposits is due to a $2,619,000 increase in interest bearing deposits and a $4,717,000 increase in non-interest bearing deposits. Non-interest income for the six months ended June 30, 2007 increased $72,000, or 3.3% compared to the same period in 2006, mainly due to a $152,000 increase in income from service charges and a $58,000 increase in merchant bank card fee income partially offset by a $65,000 decrease in realized gains Realized Gain A gain resulting from selling an asset at a price higher than the original purchase price. Notes: There may be tax consequences for a realized profit. from sales of available-for-sale investment securities, and a $68,000 decrease in brokered loan fees. Non-interest expense for the six months ended June 30, 2007 increased $618,000, or 7.0% compared to the same period in 2006, due to a $171,000 increase in salary expenses from an increase in the number of employees and ordinary increases in salaries and benefits. 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 the two new branches and new corporate headquarters opened in 2006, as well as the opening of the Modesto Loan Production office and the 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. of the Kerman branch in 2007, also contributed to the increase in non-interest expenses. Asset quality continues to be strong. The Company had non-accrual loans totaling $86,000 at June 30, 2007, compared to one non-accrual loan of $29,000 at June 30, 2006. 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 June 30, 2007 or 2006. The Company is not involved in any sub-prime mortgage lending activities and the loan portfolio did not include any sub-prime mortgage loans at June 30, 2007 or 2006. During the first half of 2007, the Company recorded a $240,000 pre-tax addition to the allowance for credit losses, compared to $500,000 for the same period in 2006. During the six months ended June 30, 2007, the Company repurchased 137,900 shares of its common stock for $2,066,000 in open market trading, with $536,000 currently remaining to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. shares as authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: by the Company's Board of Directors. Quarter Ended June 30, 2007 For the quarter ended June 30, 2007, the Company reported unaudited consolidated net income of $1,619,000, or $0.25 per diluted share, compared to $1,669,000, or $0.26 per diluted share, for the same period in 2006. Annualized return on average equity for the second quarter of 2007 was 12.67%, compared to 15.18% for the same period of 2006. 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, partially offset by the repurchase of Company stock. Annualized return on average assets was 1.35% for the second quarter of 2007 compared to 1.45% for the same period in 2006. In comparing second quarter 2007 to second quarter 2006, total loans grew at a double-digit pace. Average total loans increased $30,887,000, or 10.2% in the three months ended June 30, 2007, compared to the same period in 2006. During the second quarter of 2007, the Company recorded $58,000 in net loan charge-offs. Net income for the quarter ended June 30, 2007 reflects a $120,000 pre-tax addition to the allowance for credit losses, compared to $100,000 for the same period in 2006. The increase in 2007 is principally due to the increase in the level of outstanding loans and our assessment of the overall adequacy of the allowance for credit losses. Average total deposits for the second quarter of 2007 increased 4.5% to $421,473,000 compared to $403,209,000 for the same period of 2006. The Company's net interest margin (fully tax equivalent basis) decreased 15 basis points to 5.69% for the three months ended June 30, 2007, from 5.84% for the three months ended June 30, 2006. Net interest income increased 1.4% to $6,130,000 for the second quarter of 2007, compared to $6,045,000 for the same period in 2006. Non-interest income remained relatively flat at $1,116,000 for the second quarter of 2007 compared to $1,146,000 for the same period in 2006. Non-interest expense increased $310,000, or 7.0% for the same periods mainly due to increases in salary and occupancy expenses. "The Company's core deposits remained strong and continued to increase in second quarter 2007 despite competitive pressure on the market due to a significantly higher cost of funds, and the impact of the inverted yield curve Inverted Yield Curve Usually a chart showing long-term debt instruments that have lower yields than short-term debt instruments. It is sometimes referred to as a negative yield curve. in the first half of the year. While it is expected that the pressure will continue for the remainder of the year and have an effect on earnings growth, the Company has been able to consistently maintain a higher net interest margin compared to many peer institutions. Additionally, loan demand has remained strong as growth continues during 2007. The asset quality of our loan portfolio continues to reflect the first-rate quality of our borrowers," stated Daniel J. Doyle, President and Chief Executive Officer of Central Valley Community Bancorp and Central Valley Community Bank. "The geographic growth of the Company in the past several years, including the expansion into Modesto in second quarter 2007, has helped steadily build new relationships for the Company, and that progression is expected to continue," concluded Doyle. 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 twelve offices in Clovis, Fresno, Kerman, Madera, Oakhurst, Prather, Sacramento, and a loan production office in Modesto. Additionally, the Bank operates Commercial 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. Insurance services are offered through Central Valley Community Insurance Services LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control and investment services are 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 www.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, 2006. 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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