EX-99.1 2 cvcy092021earningsreleasee.htm 8-K 3RD QUARTER 2021 EARNINGS RELEASE Document

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FOR IMMEDIATE RELEASE

CENTRAL VALLEY COMMUNITY BANCORP REPORTS EARNINGS RESULTS FOR THE NINE MONTHS AND QUARTER ENDED SEPTEMBER 30, 2021, AND QUARTERLY DIVIDEND

FRESNO, CALIFORNIA…October 20, 2021… 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 $21,563,000, and fully diluted earnings per common share of $1.74 for the nine months ended September 30, 2021, compared to $13,268,000 and $1.05 per fully diluted common share for the nine months ended September 30, 2020.
THIRD QUARTER FINANCIAL HIGHLIGHTS
•Net loans decreased $16.0 million or 1.47%, and total assets increased $344.3 million or 17.18% at September 30, 2021 compared to December 31, 2020. The net loan decrease consisted of a decrease of $128.7 million in SBA Paycheck Protection Program (PPP) loans, offset by an increase of $112.7 million in non-PPP loan growth.
•Total deposits increased 19.47% to $2.06 billion at September 30, 2021 compared to December 31, 2020.
•Total cost of deposits remains at low levels at 0.05% and 0.09% for the quarters ended September 30, 2021 and 2020, respectively.
•Average non-interest bearing demand deposit accounts as a percentage of total average deposits was 45.30% and 48.56% for the quarters ended September 30, 2021 and 2020, respectively.
•Non-performing assets were $1,597,000, net loan recoveries were $122,000, and loans delinquent more than 30 days were $309,000 for the quarter ended September 30, 2021.
•The Company recorded a reversal of provision for credit losses of $500,000 during the quarter ended September 30, 2021.
•Capital positions remain strong at September 30, 2021 with a 8.24% Tier 1 Leverage Ratio; a 12.34% Common Equity Tier 1 Ratio; a 12.68% Tier 1 Risk-Based Capital Ratio; and a 13.39% Total Risk-Based Capital Ratio.
•The Company declared an $0.12 per common share cash dividend, payable on November 19, 2021 to shareholders of record as of November 5, 2021.
•During the quarter ended September 30, 2021, the Company repurchased and retired a total of 344,940 shares of common stock at an average price paid per share of $20.72.
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“I’m pleased to report results for the third quarter 2021 show a continued growth momentum for deposits and non-Paycheck Protection Program (PPP) loans. PPP loan forgiveness is also progressing at a brisk pace, while the focus of our professional bankers remains fixed on fulfilling our commitment to assisting clients with their financial needs,” said James M. Ford, President & CEO. “While we continue to monitor the drought’s effects within our territory, feedback from our business clients remains optimistic as do the growth and performance projections of our nearly 42-year-old community bank. Lastly, the smooth transition to our new President & CEO, James J. Kim, effective November 1, 2021, is well-underway,” concluded Ford.
We are proud to have assisted many of our customers in obtaining SBA Paycheck Protection Program (PPP) loans totaling approximately $295,644,000, and continue to work with our customers on obtaining loan forgiveness from the SBA. Outstanding PPP loans as of September 30, 2021 are as follows:
PPP Loan Vintages (Dollars in thousands)Number of LoansAmountNet Unearned Fees
Round 1 - 202010 $1,465 $26 
Round 2 - 2021331 62,795 1,795 
Total341 $64,260 $1,821 
As of September 30, 2021, PPP loans in the following size categories were outstanding:
PPP Loan Size Categories (Dollars in thousands)Number of LoansAmount
Up to $150,000236 $11,685 
$150,001 to $500,00077 20,465 
$500,001 to $1,000,00018 12,627 
$1,000,001 to $2,000,0009 15,577 
Over $2,000,0001 3,906 
Total341 $64,260 
The following table shows the Company’s loan portfolio allocated by management’s internal risk ratings:
Loan Risk Rating (In thousands)September 30, 2021June 30, 2021September 30, 2020
Pass$1,034,229 $1,019,687 $1,032,142 
Special mention26,612 18,710 43,893 
Substandard23,065 32,938 37,643 
Doubtful— — — 
Total$1,083,906 $1,071,335 $1,113,678 
Based on the Company’s capital levels, conservative underwriting policies, low loan-to-deposit ratio, loan concentration diversification, and suburban geographical marketplace, management expects to be able to manage the economic risks and uncertainties associated with the COVID-19 pandemic and remain adequately capitalized.
Net income for the nine months ended September 30, 2021 increased 62.52%, compared to the nine months ended September 30, 2020, driven by a reversal of provision for credit losses, an increase in net interest income, an increase in loan placement fees, and a decrease in non-interest expense, partially offset by an increase
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in the provision for income taxes, a decrease in net realized gains on sales and calls of investment securities, and a decrease in service charge income. During the nine months ended September 30, 2021, the Company recorded a $3,800,000 reversal of provision for credit losses, compared to a $4,975,000 provision during the nine months ended September 30, 2020. Net interest income before the reversal of provision for credit losses for the nine months ended September 30, 2021 was $53,846,000, compared to $47,646,000 for the nine months ended September 30, 2020, an increase of $6,200,000 or 13.01%. The impact to interest income from the accretion of the loan marks on acquired loans was $579,000 and $1,039,000 for the nine months ended September 30, 2021 and 2020, respectively. In addition, net interest income before the reversal of provision for credit losses for the nine months ended September 30, 2021 was impacted by approximately $438,000 in loan prepayment penalties, as compared to $505,000 for the nine months ended September 30, 2020. Excluding the loan mark accretion and prepayment penalties, net interest income for the nine months ended September 30, 2021 increased by $6,727,000 compared to the nine months ended September 30, 2020.
During the nine months ended September 30, 2021, the Company’s shareholders’ equity increased $1,527,000, or 0.62%, compared to December 31, 2020. The increase in shareholders’ equity was driven by the retention of earnings, net of dividends paid, the decrease in unrealized gains on available-for-sale (AFS) securities, and share repurchases.
Return on average equity (ROE) for the nine months ended September 30, 2021 was 11.60%, compared to 7.78% for the nine months ended September 30, 2020. The increase in ROE reflects the increase in net income, notwithstanding the increase in average shareholders’ equity compared to the prior year. The Company declared and paid $0.35 and $0.33 per share in cash dividends to holders of common stock during the nine months ended September 30, 2021 and 2020, respectively. Annualized return on average assets (ROA) was 1.30% for the nine months ended September 30, 2021 and 0.99% for the nine months ended September 30, 2020. This increase is due to the increase in net income, notwithstanding the increase in average assets. During the nine months ended September 30, 2021, the Company’s total assets increased 17.18%, and total liabilities increased 19.48%, compared to December 31, 2020 due to the Company’s participation in the PPP loan program in addition to organic deposit gathering activities.
Non-performing assets decreased by $1,681,000, or 51.28%, to $1,597,000 at September 30, 2021, compared to $3,278,000 at December 31, 2020. During the nine months ended September 30, 2021, the Company recorded $946,000 in net loan recoveries, compared to $552,000 for the nine months ended September 30, 2020. The net charge-off (recovery) ratio, which reflects annualized net charge-offs (recoveries) to average loans, was (0.12)% for the nine months ended September 30, 2021, compared to (0.07)% for the same period in 2020. Total non-performing assets were 0.07% and 0.16% of total assets as of September 30, 2021 and December 31, 2020, respectively.
At September 30, 2021, the allowance for credit losses was $10,061,000, compared to $12,915,000 at December 31, 2020, a net decrease of $2,854,000 reflecting the reversal of provision for credit losses and net recoveries during the period. The Company’s reversal of provision for credit losses of $3,800,000 during the nine
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months ended September 30, 2021 is primarily due to net loan recoveries and our assessment of the overall adequacy of the allowance for credit losses. The Company is not required to implement the provisions of the CECL accounting standard until January 1, 2023, and is continuing to account for the allowance for credit losses under the incurred loss model. The allowance for credit losses as a percentage of total loans was 0.93% and 1.17% as of September 30, 2021 and December 31, 2020, respectively. Total loans include loans acquired 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 acquired loans totaled $99,020,000 at September 30, 2021 and $127,186,000 at December 31, 2020. Excluding these acquired loans from the calculation, the allowance for credit losses to total gross loans was 1.02% and 1.32% as of September 30, 2021 and December 31, 2020, respectively, and general reserves associated with non-impaired loans to total non-impaired loans was 1.00% and 1.41%, respectively. As of September 30, 2021, gross loans included $64,260,000 related to PPP loans, which are fully guaranteed by the SBA. Excluding PPP loans and the acquired loans from the calculation, the allowance for credit losses to total gross loans was 1.09% and 1.65% as of September 30, 2021 and December 31, 2020, 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, 2021.
The Company’s net interest margin (fully tax equivalent basis) was 3.60% for the nine months ended September 30, 2021, compared to 3.93% for the nine months ended September 30, 2020. The decrease in net interest margin in the period-to-period comparison resulted from the decrease in the effective yield on interest earning deposits in other banks and Federal Funds sold, the decrease in the effective yield on average investment securities, and the increase in the yield on the Company’s loan portfolio.
For the nine months ended September 30, 2021, the effective yield on average total earning assets decreased 38 basis points to 3.66% compared to 4.04% for the nine months ended September 30, 2020, while the cost of average total interest-bearing liabilities decreased to 0.11% for the nine months ended September 30, 2021 as compared to 0.21% for the nine months ended September 30, 2020. Over the same periods, the cost of average total deposits decreased to 0.05% for the nine months ended September 30, 2021 compared to 0.10% for the same period in 2020.
For the nine months ended September 30, 2021, the Company’s average investment securities, including interest-earning deposits in other banks and Federal funds sold, totaled $966,105,000, an increase of $378,890,000, or 64.52%, compared to the nine months ended September 30, 2020. The effective yield on average investment securities, including interest-earning deposits in other banks and Federal funds sold, decreased to 2.11% for the nine months ended September 30, 2021, compared to 2.38% for the nine months ended September 30, 2020.
Total average loans (including nonaccrual), which generally yield higher rates than investment securities, increased $35,028,000 to $1,077,038,000 for the nine months ended September 30, 2021 from $1,042,010,000 for the nine months ended September 30, 2020. The effective yield on average loans increased to 5.04% for the nine
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months ended September 30, 2021, compared to 4.97% for the nine months ended September 30, 2020. Total average PPP loans, which have a 1.00% interest rate in addition to loan fees, were $140,883,000 for the nine months ended September 30, 2021. Excluding PPP loans from total average loans, the effective yield on average loans for the nine months ended September 30, 2021 was 4.90%.
The following table shows the Company’s outstanding loan portfolio as of September 30, 2021 and December 31, 2020.
Loan Type (dollars in thousands)September 30, 2021% of Total
Loans		December 31, 2020% of Total
Loans
Commercial:
Commercial and industrial$184,830 17.0 %$273,994 24.9 %
Agricultural production32,178 3.0 %21,971 2.0 %
Total commercial217,008 20.0 %295,965 26.9 %
Real estate:
Owner occupied210,577 19.4 %208,843 18.9 %
Real estate construction and other land loans65,912 6.1 %55,419 5.0 %
Commercial real estate365,564 33.7 %338,886 30.7 %
Agricultural real estate98,150 9.1 %84,258 7.6 %
Other real estate33,612 3.1 %28,718 2.6 %
Total real estate773,815 71.4 %716,124 64.8 %
Consumer:
Equity loans and lines of credit54,833 5.1 %55,634 5.0 %
Consumer and installment38,250 3.5 %37,236 3.3 %
Total consumer93,083 8.6 %92,870 8.3 %
Net deferred origination fees(409)(2,612)
Total gross loans1,083,497 100.0 %1,102,347 100.0 %
Allowance for credit losses(10,061)(12,915)
Total loans$1,073,436 $1,089,432 
Total average assets for the nine months ended September 30, 2021 was $2,217,411,000 compared to $1,780,716,000 for the nine months ended September 30, 2020, an increase of $436,695,000 or 24.52%. During the nine months ended September 30, 2021 and 2020, the loan-to-deposit ratio was 52.65% and 66.02%, respectively. Total average deposits increased $412,926,000 or 27.20% to $1,931,176,000 for the nine months ended September 30, 2021, compared to $1,518,250,000 for the nine months ended September 30, 2020. Average interest-bearing deposits increased $245,080,000, or 30.59%, and average non-interest bearing demand deposits increased $167,846,000, or 23.40%, for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. The Company’s ratio of average non-interest bearing deposits to total deposits was 45.83% for the nine months ended September 30, 2021, compared to 47.24% for the nine months ended September 30, 2020.
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The composition of the deposits at September 30, 2021 and December 31, 2020 is summarized in the table below.
(Dollars in thousands)September 30, 2021% of
Total
Deposits		December 31, 2020% of
Total
Deposits
NOW accounts$357,602 17.4 %$310,697 18.0 %
MMA accounts482,251 23.4 %341,088 19.8 %
Time deposits89,858 4.4 %89,846 5.2 %
Savings deposits194,132 9.4 %156,190 9.1 %
Total interest-bearing1,123,843 54.6 %897,821 52.1 %
Non-interest bearing934,249 45.4 %824,889 47.9 %
Total deposits$2,058,092 100.0 %$1,722,710 100.0 %

Non-interest income for the nine months ended September 30, 2021 decreased by $4,435,000 to $6,224,000, compared to $10,659,000 for the nine months ended September 30, 2020, primarily driven by a decrease of $4,159,000 in net realized gains on sales and calls of investment securities, a decrease of $557,000 in other income, a decrease in service charge income of $170,000, and a decrease in FHLB dividends of $16,000, partially offset by an increase in loan placement fees of $89,000. Other income for the nine months ended September 30, 2020 included a $463,000 gain related to the collection of tax-exempt life insurance proceeds.
Non-interest expense for the nine months ended September 30, 2021 decreased $225,000, or 0.64%, to $35,080,000 compared to $35,305,000 for the nine months ended September 30, 2020. The net decrease year over year resulted from decreases in salaries and employee benefits of $45,000, Internet banking expenses of $283,000, directors’ expenses of $162,000, professional services of $357,000, advertising expenses of $121,000, ATM/Debit card expenses of $10,000, amortization of software of $43,000, stationary and supplies of $62,000, armored courier of $14,000, and operating losses of $9,000, partially offset by increases in data processing of $357,000, information technology of $257,000, regulatory assessments of $212,000, personnel of $132,000, donations of $39,000, occupancy and equipment expenses of $59,000, general insurance of $20,000, telephone of $14,000, and postage of $9,000 in 2021 compared to 2020. The decrease in total salaries and employee benefits was the result of a decrease of $1,186,000 in officers’ expenses related to the change in the discount rate used to calculate the liability for salary continuation, deferred compensation, and split dollar plans; offset by an increase of approximately $429,000 in salaries and benefits, and a decrease in loan origination costs of $731,000. A portion of the salaries and benefits increase was related to $172,000 paid and/or accrued for severance pay. For the nine months ended September 30, 2021, personnel expense included $151,000 for an executive search firm to find a replacement for our retiring chief executive officer.
The Company recorded an income tax provision of $7,227,000 for the nine months ended September 30, 2021, compared to $4,757,000 for the nine months ended September 30, 2020. The effective tax rate for the nine months ended September 30, 2021 was 25.10% compared to 26.39% for the nine months ended September 30,
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2020. The effective tax rate was affected by the increase in tax-exempt interest, as well as the reversal of provision for credit losses.
Quarter Ended September 30, 2021
For the quarter ended September 30, 2021, the Company reported unaudited consolidated net income of $6,521,000 and earnings per diluted common share of $0.54, compared to consolidated net income of $4,344,000 and $0.35 per diluted share for the same period in 2020. The increase in net income during the third quarter of 2021 compared to the same period in 2020 was primarily due to a decrease in provision for credit losses of $1,100,000, an increase in net interest income of $2,167,000, and an increase in non-interest income of $77,000, partially offset by an increase in total non-interest expenses of $334,000 and an increase in the provision for income taxes of $833,000. The effective tax rate increased to 25.86% from 24.92% for the quarters ended September 30, 2021 and September 30, 2020, respectively. Net income for the immediately trailing quarter ended June 30, 2021 was $7,563,000, or $0.60 per diluted common share.
Annualized return on average equity (ROE) for the third quarter of 2021 was 10.41%, compared to 7.50% for the same period of 2020. The increase in ROE reflects an increase in net income, as well as the increase in average shareholders’ equity compared to the prior year. The increase in shareholders’ equity was driven by the retention of earnings, offset by a decrease in net unrealized gains on available-for-sale (AFS) securities recorded, dividends paid, and stock repurchases. Annualized return on average assets (ROA) was 1.13% for the third quarter of 2021 compared to 0.90% for the same period in 2020. This increase was due to an increase in net income notwithstanding the increase in average assets.
In comparing the third quarter of 2021 to the third quarter of 2020, total average loans decreased by $53,361,000, or 4.75% due to a decrease of $127,267,000 in PPP loans, offset by an increase of $73,906 in non-PPP loans. During the third quarter of 2021, the Company recorded net loan recoveries of $122,000 compared to $120,000 net loan recoveries for the same period in 2020. The net charge-off (recovery) ratio, which reflects annualized net charge-offs (recoveries) to average loans, was (0.05)% for the quarter ended September 30, 2021 compared to (0.04)% for the quarter ended September 30, 2020. During the quarter ended September 30, 2021, the Company recorded a reversal of the provision for credit losses of $500,000, compared to a provision of $600,000 for the quarter ended September 30, 2020.
Average total deposits for the third quarter of 2021 increased $359,414,000 or 21.62% to $2,021,499,000 compared to $1,662,085,000 for the same period of 2020.
The Company’s net interest margin (fully tax equivalent basis) was 3.47% for the quarter ended September 30, 2021, compared to 3.63% for the quarter ended September 30, 2020. Net interest income, before provision for credit losses, increased $2,167,000, or 13.51%, to $18,210,000 for the third quarter of 2021, compared to $16,043,000 for the same period in 2020. The accretion of the loan marks on acquired loans increased interest income by $231,000 and $172,000 during the quarters ended September 30, 2021 and 2020, respectively. Net interest income during the third quarters of 2021 and 2020 benefited by approximately $4,000
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and $52,000, respectively, from prepayment penalties and payoff of loans. The net interest margin period-to-period comparisons were impacted by the decrease in the yield on total interest-bearing liabilities, as well as the increase in the yield on the average investment securities, and the increase in the yield on the loan portfolio. Over the same periods, the cost of total deposits decreased to 0.05% from 0.09%.
For the quarter ended September 30, 2021, the Company’s average investment securities, including interest-earning deposits in other banks and Federal funds sold, increased by $409,167,000, or 62.95%, compared to the quarter ended September 30, 2020, and increased by $78,799,000, or 8.04%, compared to the quarter ended June 30, 2021.
The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, was 2.14% for the quarter ended September 30, 2021, compared to 2.07% for the quarter ended September 30, 2020 and 2.11% for the quarter ended June 30, 2021. Total average loans, which generally yield higher rates than investment securities, decreased by $53,361,000 to $1,069,955,000 for the quarter ended September 30, 2021, from $1,123,316,000 for the quarter ended September 30, 2020 and decreased by $10,470,000 from $1,080,425,000 for the quarter ended June 30, 2021. The effective yield on average loans was 4.91% for the quarter ended September 30, 2021, compared to 4.68% and 5.04% for the quarters ended September 30, 2020 and June 30, 2021, respectively. Excluding PPP loans from the calculation, the effective yield on average loans was 4.73% for the quarter ended September 30, 2021, compared to 5.18% and 4.86% for the quarters ended September 30, 2020 and June 30, 2021, respectively.
Total average assets for the quarter ended September 30, 2021 were $2,318,172,000 compared to $1,928,594,000 for the quarter ended September 30, 2020 and $2,227,632,000 for the quarter ended June 30, 2021, an increase of $389,578,000 or 20.20% and an increase of $90,540,000 or 4.06%, respectively.
Total average deposits increased $359,414,000, or 21.62%, to $2,021,499,000 for the quarter ended September 30, 2021, compared to $1,662,085,000 for the quarter ended September 30, 2020. Total average deposits increased $73,491,000, or 3.77%, for the quarter ended September 30, 2021, compared to $1,948,008,000 for the quarter ended June 30, 2021. The Company’s deposit balances for the quarter ended September 30, 2021 increased through organic growth and PPP loan proceeds retained in customer deposit accounts. The Company’s ratio of average non-interest bearing deposits to total deposits was 45.30% for the quarter ended September 30, 2021, compared to 48.56% and 45.86% for the quarters ended September 30, 2020 and June 30, 2021, respectively.
Non-interest income increased $77,000, or 3.72%, to $2,148,000 for the third quarter of 2021 compared to $2,071,000 for the same period in 2020. During the third quarter of 2021 interchange fees increased $117,000, net realized gains on sales and calls of investment securities increased $60,000, service charge income increased $24,000, Federal Home Loan Bank dividends increased $13,000, and other income increased $12,000, offset by a decrease in loan placement fees of $218,000, compared to the same period in 2020. Non-interest income for the quarter ended September 30, 2021 increased by $71,000 to $2,148,000, compared to $2,077,000 for the quarter ended June 30, 2021. The increase compared to the trailing quarter was primarily a result of a $196,000 increase
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in net realized gains on sales and calls of investment securities, a $71,000 increase in appreciation in cash surrender value of bank-owned life insurance, and a $20,000 increase in service charges, offset by a $175,000 decrease in other income and a $43,000 decrease in loan placement fees.
Non-interest expense for the quarter ended September 30, 2021 increased $334,000, or 2.85%, to $12,062,000 compared to $11,728,000 for the quarter ended September 30, 2020. The net increase quarter over quarter was a result of an increase of $362,000 in salaries and employee benefits, an increase of $297,000 in information technology expenses, an increase of $28,000 in occupancy and equipment expenses, an increase of $72,000 in regulatory assessments, an increase of $67,000 in appraisal fees, an increase $55,000 in ATM/Debit card expenses, an increase of $20,000 in education and training, an increase of $20,000 in mileage and travel, an increase of $13,000 in telephone expenses, an increase of $12,000 in directors’ expenses, an increase of $10,000 in operating losses, an increase of $5,000 in data processing expense, and an increase of $2,000 in amortization of software, partially offset by a decrease of $113,000 in Internet banking expenses, a decrease in professional services of $208,000, a decrease of $38,000 in advertising expenses, a decrease of $18,000 in stationery and supplies, a decrease of $15,000 in armored courier fees, and a decrease of 2,000 in alarm monitoring expenses.
Non-interest expense for the quarter ended September 30, 2021 increased by $432,000 or 3.71% to $12,062,000 compared to $11,630,000 for the trailing quarter ended June 30, 2021. The increase compared to the trailing quarter was primarily due to an increase in professional services of $32,000, an increase in salaries and employee benefits of $112,000, and an increase in ATM/debit card expense of $8,000, partially offset by a decrease in data processing of $26,000, a decrease in personnel expenses of $6,000, a decrease in Internet banking expenses of $30,000, and a $55,000 decrease in other non-interest expenses.
The Company recorded an income tax provision of $2,275,000 for the quarter ended September 30, 2021, compared to $1,442,000 for the quarter ended September 30, 2020, and $2,465,000 for the trailing quarter ended June 30, 2021. The effective tax rate for the quarter ended September 30, 2021 was 25.86% compared to 24.92% for the same period in 2020. The effective tax rate was affected by the reversal of provision for credit losses, which resulted in higher pretax and taxable income, as well as an increase in tax-exempt interest.
Capital Management
On October 20, 2021, the Board of Directors of the Company declared a regular quarterly cash dividend of $0.12 per share on the Company’s common stock. The dividend is payable on November 19, 2021 to shareholders of record as of November 5, 2021. The Company continues to be well capitalized and expects to maintain adequate capital levels.
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 20 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.
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Members of Central Valley Community Bancorp’s and the Bank’s Board of Directors are: Daniel J. Doyle (Chairman), Daniel N. Cunningham (Vice Chairman), F. T. “Tommy” Elliott, IV, James M. Ford, Robert J. Flautt, Gary D. Gall, Steven D. McDonald, Louis C. McMurray, Andriana Majarian, Karen Musson, Dorothea D. Silva, 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, Facebook, and LinkedIn.
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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. 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; (3) a decline in economic conditions in the Central Valley and the Greater Sacramento Region; (4) the Company’s ability to continue its internal growth at historical rates; (5) the Company’s ability to maintain its net interest margin; (6) the decline in quality of the Company’s earning assets; (7) a decline in credit quality; (8) changes in the regulatory environment; (9) fluctuations in the real estate market; (10) changes in business conditions and inflation; (11) changes in securities markets (12) risks associated with acquisitions, relating to difficulty in integrating combined operations and related negative impact on earnings, and incurrence of substantial expenses; (13) political developments, uncertainties or instability, catastrophic events, acts of war or terrorism, or natural disasters, such as earthquakes, drought, pandemic diseases or extreme weather events, any of which may affect services we use or affect our customers, employees or third parties with which we conduct business; (14) the uncertainties related to the Covid-19 pandemic including, but not limited to, the potential adverse effect of the pandemic on the economy, our employees and customers, and our financial performance; (15) the impact of the federal CARES Act and the significant additional lending activities undertaken by the Company in connection with the Small Business Administration’s Paycheck Protection Program enacted thereunder, including risks to the Company with respect to the uncertain application by the Small Business Administration of new borrower and loan eligibility, forgiveness and audit criteria; and (16) 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 for the year ended December 31, 2020. Therefore, the information set forth in such forward-looking statements should be carefully considered when evaluating the business prospects of the Company.
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CENTRAL VALLEY COMMUNITY BANCORP
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30,December 31,September 30,
(In thousands, except share amounts)202120202020
ASSETS
Cash and due from banks$32,634 $34,175 $33,447 
Interest-earning deposits in other banks35,059 36,103 53,563 
Total cash and cash equivalents67,693 70,278 87,010 
Available-for-sale investment securities
1,060,362 710,092 631,854 
Equity securities7,486 7,634 7,655 
Loans, less allowance for credit losses of $10,061, $12,915, and $14,657 at September 30, 2021, December 31, 2020, and September 30, 2020, respectively1,073,436 1,089,432 1,095,232 
Bank premises and equipment, net8,429 8,228 7,257 
Bank owned life insurance39,309 28,713 29,769 
Federal Home Loan Bank stock5,595 5,595 5,595 
Goodwill53,777 53,777 53,777 
Core deposit intangibles662 1,183 1,356 
Accrued interest receivable and other assets31,628 29,164 31,055 
Total assets
$2,348,377 $2,004,096 $1,950,560 
LIABILITIES AND SHAREHOLDERS’ EQUITY 
Deposits:
Non-interest bearing
$934,249 $824,889 $804,893 
Interest bearing
1,123,843 897,821 876,321 
Total deposits
2,058,092 1,722,710 1,681,214 
Junior subordinated deferrable interest debentures5,155 5,155 5,155 
Accrued interest payable and other liabilities38,582 31,210 28,411 
Total liabilities
2,101,829 1,759,075 1,714,780 
Shareholders’ equity:
Preferred stock, no par value; 10,000,000 shares authorized, none issued and outstanding
— — — 
Common stock, no par value; 80,000,000 shares authorized; issued and outstanding: 11,987,804, 12,509,848, and 12,507,658, at September 30, 2021, December 31, 2020, and September 30, 2020, respectively68,265 79,416 79,269 
Retained earnings167,993 150,749 145,045 
Accumulated other comprehensive income, net of tax10,290 14,856 11,466 
Total shareholders’ equity246,548 245,021 235,780 
Total liabilities and shareholders’ equity
$2,348,377 $2,004,096 $1,950,560 
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Central Valley Community Bancorp -- page 12

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)20212021202020212020
INTEREST INCOME:
Interest and fees on loans$13,208 $13,556 $13,190 $40,529 $38,688 
Interest on deposits in other banks28 29 26 89 222 
Interest and dividends on investment securities:
Taxable3,844 3,361 2,771 9,938 8,996 
Exempt from Federal income taxes1,417 1,409 444 4,143 1,015 
Total interest income18,497 18,355 16,431 54,699 48,921 
INTEREST EXPENSE:
Interest on deposits263 252 363 783 1,169 
Interest on junior subordinated deferrable interest debentures24 22 25 70 106 
Total interest expense287 274 388 853 1,275 
Net interest income before provision for credit losses18,210 18,081 16,043 53,846 47,646 
(REVERSAL OF) PROVISION FOR CREDIT LOSSES(500)(1,500)600 (3,800)4,975 
Net interest income after provision for credit losses18,710 19,581 15,443 57,646 42,671 
NON-INTEREST INCOME:
Service charges487 467 463 1,386 1,556 
Appreciation in cash surrender value of bank owned life insurance247 176 178 596 536 
Interchange fees472 471 355 1,313 995 
Loan placement fees467 510 685 1,634 1,545 
Net realized gains (losses) on sales and calls of investment securities117 (79)57 38 4,197 
Federal Home Loan Bank dividends84 83 71 237 253 
Other income274 449 262 1,020 1,577 
Total non-interest income2,148 2,077 2,071 6,224 10,659 
NON-INTEREST EXPENSES:
Salaries and employee benefits7,091 6,979 6,729 21,008 21,053 
Occupancy and equipment1,224 1,201 1,196 3,538 3,479 
Professional services507 475 715 1,338 1,695 
Data processing expense599 625 594 1,841 1,484 
Directors’ expenses152 113 140 306 468 
ATM/Debit card expenses199 191 144 615 625 
Information technology891 611 594 2,061 1,804 
Regulatory assessments219 172 147 552 340 
Advertising129 128 167 386 507 
Internet banking expenses54 84 167 262 545 
Amortization of core deposit intangibles174 173 174 521 521 
Other expense823 878 961 2,652 2,784 
Total non-interest expenses12,062 11,630 11,728 35,080 35,305 
Income before provision for income taxes8,796 10,028 5,786 28,790 18,025 
PROVISION FOR INCOME TAXES2,275 2,465 1,442 7,227 4,757 
Net income$6,521 $7,563 $4,344 $21,563 $13,268 
Net income per common share:
Basic earnings per common share$0.54 $0.61 $0.35 $1.75 $1.06 
Weighted average common shares used in basic computation12,007,689 12,498,809 12,471,070 12,332,248 12,551,480 
Diluted earnings per common share$0.54 $0.60 $0.35 $1.74 $1.05 
Weighted average common shares used in diluted computation12,044,896 12,548,044 12,496,174 12,378,591 12,596,172 
Cash dividends per common share$0.12 $0.12 $0.11 $0.35 $0.33 
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Central Valley Community Bancorp -- page 13

CENTRAL VALLEY COMMUNITY BANCORP
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
Sep 30,Jun. 30,Mar. 31,Dec. 31,Sep. 30,
For the three months ended20212021202120202020
(In thousands, except share and per share amounts)
Net interest income$18,210 $18,081 $17,555 $16,777 $16,043 
(Reversal of) provision for credit losses(500)(1,500)(1,800)(1,700)600 
Net interest income after provision for credit losses18,710 19,581 19,355 18,477 15,443 
Total non-interest income2,148 2,077 1,999 3,138 2,071 
Total non-interest expense12,062 11,630 11,388 12,379 11,728 
Provision for income taxes2,275 2,465 2,487 2,157 1,442 
Net income$6,521 $7,563 $7,479 $7,079 $4,344 
Basic earnings per common share$0.54 $0.61 $0.60 $0.57 $0.35 
Weighted average common shares used in basic computation12,007,689 12,498,809 12,495,606 12,482,250 12,471,070 
Diluted earnings per common share$0.54 $0.60 $0.60 $0.57 $0.35 
Weighted average common shares used in diluted computation12,044,896 12,548,044 12,547,137 12,519,644 12,496,174 

CENTRAL VALLEY COMMUNITY BANCORP
SELECTED RATIOS
(Unaudited)
Sep. 30,Jun. 30,Mar. 31,Dec. 31,Sep. 30,
As of and for the three months ended20212021202120202020
(Dollars in thousands, except per share amounts)
Allowance for credit losses to total loans0.93 %0.98 %1.11 %1.17 %1.32 %
Non-performing assets to total assets0.07 %0.09 %0.17 %0.16 %0.18 %
Total non-performing assets$1,597 $2,035 $3,783 $3,278 $3,458 
Total nonaccrual loans$1,597 $2,035 $3,783 $3,278 $3,458 
Total substandard loans$23,065 $32,938 $34,276 $36,136 $37,643 
Total special mention loans$26,612 $18,710 $39,406 $36,406 $43,893 
Net loan charge-offs (recoveries)$(122)$117 $(941)$42 $(120)
Net charge-offs (recoveries) to average loans (annualized)(0.05)%0.04 %(0.35)%0.02 %(0.04)%
Book value per share$20.57 $20.36 $19.31 $19.59 $18.85 
Tangible book value per share$16.03 $15.93 $14.94 $15.19 $14.44 
Tangible common equity$192,109 $196,437 $187,059 $190,061 $180,647 
Cost of total deposits0.05 %0.05 %0.06 %0.07 %0.09 %
Interest and dividends on investment securities exempt from Federal income taxes$1,417 $1,409 $1,317 $951 $444 
Net interest margin (calculated on a fully tax equivalent basis) (1)3.47 %3.60 %3.76 %3.72 %3.63 %
Return on average assets (2)1.13 %1.36 %1.42 %1.42 %0.90 %
Return on average equity (2)10.41 %12.25 %12.17 %11.95 %7.50 %
Loan to deposit ratio52.65 %54.06 %56.72 %63.99 %66.02 %
Efficiency ratio57.66 %55.58 %56.34 %62.89 %63.58 %
Tier 1 leverage - Bancorp8.24 %8.63 %9.09 %9.28 %9.26 %
Tier 1 leverage - Bank8.18 %8.51 %9.03 %9.23 %9.20 %
Common equity tier 1 - Bancorp12.34 %13.43 %14.38 %14.10 %14.23 %
Common equity tier 1 - Bank12.59 %13.61 %14.68 %14.41 %14.56 %
Tier 1 risk-based capital - Bancorp12.68 %13.80 %14.78 %14.50 %14.65 %
Tier 1 risk-based capital - Bank12.59 %13.61 %14.68 %14.41 %14.56 %
Total risk-based capital - Bancorp13.39 %14.58 %15.76 %15.58 %15.90 %
Total risk based capital - Bank13.29 %14.40 %15.66 %15.48 %15.81 %
(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.
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Central Valley Community Bancorp -- page 14

CENTRAL VALLEY COMMUNITY BANCORP
AVERAGE BALANCES AND RATES
(Unaudited)
For the Three Months EndedFor the Nine Months Ended
AVERAGE AMOUNTSSeptember 30,June 30,September 30,September 30,September 30,
(Dollars in thousands)20212021202020212020
Interest-bearing deposits in other banks
$70,980 $114,590 $98,869 104,705 70,418 
Investments988,148 865,739 551,092 861,400 516,797 
Loans (1)1,068,111 1,077,774 1,120,656 1,074,302 1,040,116 
Earning assets2,127,239 2,058,103 1,770,617 2,040,407 1,627,331 
Allowance for credit losses(10,558)(11,928)(14,261)(11,969)(11,439)
Nonaccrual loans1,844 2,651 2,660 2,736 1,894 
Other non-earning assets199,647 178,806 169,578 186,237 162,930 
Total assets$2,318,172 $2,227,632 $1,928,594 $2,217,411 $1,780,716 
Interest bearing deposits$1,105,757 $1,054,567 $855,033 $1,046,168 $801,088 
Other borrowings5,155 5,155 5,155 5,155 5,155 
Total interest-bearing liabilities1,110,912 1,059,722 860,188 1,051,323 806,243 
Non-interest bearing demand deposits915,742 893,441 807,052 885,008 717,162 
Non-interest bearing liabilities40,998 27,510 29,698 33,266 29,917 
Total liabilities2,067,652 1,980,673 1,696,938 1,969,597 1,553,322 
Total equity250,520 246,959 231,656 247,814 227,394 
Total liabilities and equity$2,318,172 $2,227,632 $1,928,594 $2,217,411 $1,780,716 
AVERAGE RATES
Interest-earning deposits in other banks
0.16 %0.10 %0.11 %0.11 %0.42 %
Investments2.28 %2.38 %2.42 %2.35 %2.65 %
Loans (3)4.91 %5.04 %4.68 %5.04 %4.97 %
Earning assets3.52 %3.65 %3.72 %3.66 %4.04 %
Interest-bearing deposits0.09 %0.10 %0.17 %0.10 %0.19 %
Other borrowings1.71 %1.71 %1.94 %1.81 %2.74 %
Total interest-bearing liabilities0.10 %0.10 %0.18 %0.11 %0.21 %
Net interest margin (calculated on a fully tax equivalent basis) (2)
3.47 %3.60 %3.63 %3.60 %3.93 %
(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 $377, $375, and $118, for the three months ended September 30, 2021, June 30, 2021, and September 30, 2020, respectively. The Federal tax benefits relating to income earned on municipal bonds totaled $1,101 and $269 for the nine months ended September 30, 2021 and 2020, respectively.
(3)    Loan yield includes loan fees (costs) for the three months ended September 30, 2021, June 30, 2021, and September 30, 2020 of $1,076, $1,821, and $658, respectively. Loan yield includes loan fees (costs) for the nine months ended September 30, 2021 and 2020 of $4,966 and $884, respectively.

CONTACT: Investor Contact:
Dave Kinross
Executive Vice President and Chief Financial Officer
Central Valley Community Bancorp
559-323-3420

Media Contact:
Debbie Nalchajian-Cohen
Marketing Director
Central Valley Community Bancorp
559-222-1322