Document

FRESNO, CALIFORNIA... October 19, 2022... 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 $6,384,000, and fully diluted earnings per common share of $0.55 for the quarter ended September 30, 2022, compared to $6,521,000 and $0.54 per fully diluted common share for the quarter ended September 30, 2021.

“The strong 42-year foundation of our Company uniquely positions us to invest in our footprint, while prudently navigating uncertain market conditions, inflation, business confidence, and drought conditions,” continued Kim, “Our team has been a valued partner to our clients and communities in addressing these business challenges. Our commitment to them - and to building Company value for the short and long term - is unwavering.”

For the quarter ended September 30, 2022, the Company reported unaudited consolidated net income of $6,384,000 and earnings per diluted common share of $0.55, compared to consolidated net income of $6,521,000 and $0.54 per diluted share for the same period in 2021. The decrease in net income during the third quarter of 2022 compared to the same period in 2021 was primarily due to a reversal of provision for credit losses recorded in 2021 versus a provision recorded in 2022. This change resulted in a difference of $1,000,000 year over year. Additionally, net income for the period was affected by an increase in total non-interest expenses of $736,000, and a decrease in non-interest income of $668,000, offset by an increase in net interest income of $1,954,000 and a decrease in the provision for income taxes of $313,000. The effective tax rate decreased to 23.51% from 25.86% for the quarters ended September 30, 2022 and September 30, 2021, respectively. Net income for the immediately trailing quarter ended June 30, 2022 was $6,542,000, or $0.56 per diluted common share.

Annualized return on average equity (ROE) for the third quarter of 2022 was 14.42%, compared to 10.41% for the same period of 2021. The increase in ROE reflects a decrease in average shareholders’ equity compared to the prior year. The decrease in shareholders’ equity was primarily driven by an increase in net unrealized loss on available-for-sale (AFS) investment securities, dividends paid, and stock repurchases, offset by the retention of earnings. Annualized return on average assets (ROA) was 1.06% for the third quarter of 2022 compared to 1.13% for the same period in 2021. This decrease was due to a decrease in net income and an increase in average assets.

In comparing the third quarter of 2022 to the third quarter of 2021, total average loans increased by $120,067,000, or 11.22%. This mix includes a decrease of $157,831,000 in PPP loans, and an increase of $277,898,000 in non-PPP loans. During the third quarter of 2022, the Company recorded net loan recoveries of $493,000 compared to $122,000 net loan recoveries for the same period in 2021. The net charge-off (recovery) ratio, which reflects annualized net charge-offs (recoveries) to average loans, was less than (0.17)% for the quarter ended September 30, 2022 compared to (0.05)% for the quarter ended September 30, 2021. During the quarter ended September 30, 2022, the Company recorded a provision of $500,000 for credit losses, compared to a reversal of provision of $500,000 for the quarter ended September 30, 2021.

The Company’s net interest margin (fully tax equivalent basis) was 3.57% for the quarter ended September 30, 2022, compared to 3.47% for the quarter ended September 30, 2021. Net interest income, before provision for credit losses, increased $1,954,000, or 10.73%, to $20,164,000 for the third quarter of 2022, compared to $18,210,000 for the same period in 2021. The accretion on loan marks of acquired loans increased interest income by $121,000 and $231,000 during the quarters ended September 30, 2022 and 2021, respectively. Net interest income during the third quarters of 2022 and 2021 benefited by approximately $92,000 and $4,000, respectively, from prepayment penalties and payoff of loans. The net interest margin period-to-period comparisons were impacted by the increase in the yield on the average investment securities, offset by the decrease in the yield on the loan portfolio and the increase in the yield on total interest-bearing liabilities. Over the same periods, the cost of total deposits decreased to 0.04% from 0.05%.

For the quarter ended September 30, 2022, the Company’s average investment securities, including interest-earning deposits in other banks and Federal funds sold, increased by $42,838,000, or 4.04%, compared to the quarter ended September 30, 2021, and decreased by $150,528,000, or 12.02%, compared to the quarter ended June 30, 2022. This decrease was primarily the result of sales and maturities that occurred late in the second quarter.

The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, was 2.46% for the quarter ended September 30, 2022, compared to 2.14% for the quarter ended September 30, 2021 and 2.58% for the quarter ended June 30, 2022. Total average loans (including nonaccrual), which generally yield higher rates than investment securities, increased by $120,067,000 to $1,190,022,000 for the quarter ended September 30, 2022, from $1,069,955,000 for the quarter ended September 30, 2021 and increased by $103,855,000 from $1,086,167,000 for the quarter ended June 30, 2022. For the quarter ended September 30, 2022, average PPP loans decreased $157,831,000 while average non-PPP loans increased $277,898,000 compared to the quarter ended September 30, 2021. The effective yield on average loans was 4.90% for the quarter ended September 30, 2022, compared to 4.91% and 4.76% for the quarters ended September 30, 2021 and June 30, 2022, respectively.

Total average deposits increased $126,133,000, or 6.24%, to $2,147,632,000 for the quarter ended September 30, 2022, compared to $2,021,499,000 for the quarter ended September 30, 2021, and decreased $10,108,000, or 0.47%, compared to $2,157,740,000 for the quarter ended June 30, 2022. The Company’s ratio of average non-interest bearing deposits to total deposits was 48.50% for the quarter ended September 30, 2022, compared to 45.30% and 43.92% for the quarters ended September 30, 2021 and June 30, 2022, respectively.


	Three months ended
(Dollars in thousands)	September 30, 2022		June 30, 2022		$ Change		% Change
Service charges	$	475	$	544	$	(69)	(12.7)	%
Appreciation in cash surrender value of bank owned life insurance	249		245		4		1.6	%
Interchange fees	432		478		(46)		(9.6)	%
Loan placement fees	155		268		(113)		(42.2)	%

Net realized losses on sales and calls of investment securities	(14)		(969)		955		(98.6)	%
Federal Home Loan Bank dividends	91		82		9		11.0	%
Other Income	92		122		(30)		(24.6)	%
Total non-interest income	$	1,480	$	770	$	710	92.2	%

The following table presents the key components of non-interest income for the periods indicated:


	Three months ended
(Dollars in thousands)	September 30, 2022		September 30, 2021		$ Change		% Change
Service charges	$	475	$	487	$	(12)	(2.5)	%
Appreciation in cash surrender value of bank owned life insurance	249		247		2		0.8	%
Interchange fees	432		472		(40)		(8.5)	%
Loan placement fees	155		467		(312)		(66.8)	%

Net realized (losses) gains on sales and calls of investment securities	(14)		117		(131)		(112.0)	%
Federal Home Loan Bank dividends	91		84		7		8.3	%
Other Income	92		274		(182)		(66.4)	%
Total non-interest income	$	1,480	$	2,148	$	(668)	(31.1)	%

The decrease in loan placement fees were primarily responsible for the decrease in total non-interest income when comparing the quarters ended September 30, 2022 and September 30, 2021. This decrease was also the result of an increase in net realized losses on sales of investment securities and a decrease in other income, which was the from an increase in the equity investment loss recognized during the quarter ended September 30, 2022.

Non-Interest Expense - The following table presents the key components of non-interest expense for the current and trailing quarterly periods indicated:


	Three months ended
(Dollars in thousands)	September 30, 2022		June 30, 2022		$ Change		% Change
Salaries and employee benefits	$	7,500	$	7,057	$	443	6.3	%
Occupancy and equipment	1,363		1,344		19		1.4	%
Information Technology	879		828		51		6.2	%
Regulatory assessments	224		194		30		15.5	%
Data processing expense	560		548		12		2.2	%
Professional services	613		464		149		32.1	%
ATM/Debit card expenses	176		217		(41)		(18.9)	%
Internet banking expense	29		48		(19)		(39.6)	%
Advertising	138		138		—		—	%
Directors’ expenses	91		48		43		89.6	%



Amortization of core deposit intangibles	139		140		(1)		(0.7)	%
Loan related expenses	157		68		89		130.9	%
Personnel other	57		59		(2)		(3.4)	%

Other expense	872		930		(58)		(6.2)	%
Total non-interest expenses	$	12,798	$	12,083	$	715	5.9	%

The following table presents the key components of non-interest expense for the periods indicated:


	Three months ended
(Dollars in thousands)	September 30, 2022		September 30, 2021		$ Change		% Change
Salaries and employee benefits	$	7,500	$	7,091	$	409	5.8	%
Occupancy and equipment	1,363		1,224		139		11.4	%
Information Technology	879		891		(12)		(1.3)	%
Regulatory assessments	224		219		5		2.3	%
Data processing expense	560		599		(39)		(6.5)	%
Professional services	613		507		106		20.9	%
ATM/Debit card expenses	176		199		(23)		(11.6)	%
Internet banking expense	29		54		(25)		(46.3)	%
Advertising	138		129		9		7.0	%
Directors’ expenses	91		152		(61)		(40.1)	%



Amortization of core deposit intangibles	139		174		(35)		(20.1)	%
Loan related expenses	157		77		80		103.9	%
Personnel other	57		28		29		103.6	%

Other expense	872		718		154		21.4	%
Total non-interest expenses	$	12,798	$	12,062	$	736	6.1	%


Loan Type (dollars in thousands)	September 30, 2022		% of Total Loans		December 31, 2021		% of Total Loans
Commercial:
Commercial and industrial	$	147,715	12.1	%	$	136,847	13.2	%
Agricultural production	35,125		2.9	%	40,860		3.9	%
Total commercial	182,840		15.0	%	177,707		17.1	%
Real estate:
Owner occupied	195,272		15.9	%	212,234		20.4	%
Real estate construction and other land loans	97,169		7.9	%	61,586		5.9	%
Commercial real estate	451,588		37.0	%	369,529		35.6	%
Agricultural real estate	115,477		9.4	%	98,481		9.5	%
Other real estate	85,930		7.0	%	26,084		2.5	%
Total real estate	945,436		77.2	%	767,914		73.9	%
Consumer:
Equity loans and lines of credit	60,151		4.9	%	55,620		5.4	%
Consumer and installment	35,546		2.9	%	36,999		3.6	%
Total consumer	95,697		7.8	%	92,619		9.0	%
Net deferred origination fees	1,297				871
Total gross loans	1,225,270		100.0	%	1,039,111		100.0	%
Allowance for credit losses	(10,366)				(9,600)
Total loans	$	1,214,904			$	1,029,511

At September 30, 2022, the allowance for credit losses was $10,366,000, compared to $9,600,000 at December 31, 2021, a net increase of $766,000 reflecting a provision of $500,000 and net recoveries during the period. 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 0.85% and 0.92% as of September 30, 2022 and December 31, 2021, 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 $79,232,000 at September 30, 2022 and $93,201,000 at December 31, 2021. Excluding these acquired loans from the calculation, the allowance for credit losses to total gross loans was 0.90% and 1.01% as of September 30, 2022 and December 31, 2021, respectively, and general reserves associated with non-impaired loans to total non-impaired loans was 0.87% and 0.98%, respectively. As of September 30, 2022, gross loans included $350,000 related to PPP loans, which are fully guaranteed by the SBA as compared to $18,553,000 at December 31, 2021. Excluding PPP loans and the acquired loans from the calculation, the allowance for credit losses to total gross loans was 0.90% and 1.04% as of September 30, 2022 and December 31, 2021, 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, 2022.

The composition of the deposits at September 30, 2022 and December 31, 2021 is summarized in the table below:


(Dollars in thousands)	September 30, 2022		% of Total Deposits		December 31, 2021		% of Total Deposits
NOW accounts	$	358,734	16.8	%	$	360,462	17.0	%
MMA accounts	439,048		20.5	%	511,448		24.1	%
Time deposits	76,120		3.6	%	90,030		4.2	%
Savings deposits	220,564		10.3	%	197,273		9.3	%
Total interest-bearing	1,094,466		51.2	%	1,159,213		54.6	%
Non-interest bearing	1,044,678		48.8	%	963,584		45.4	%
Total deposits	$	2,139,144	100.0	%	$	2,122,797	100.0	%

Net income for the nine months ended September 30, 2022 decreased 11.83%, compared to the nine months ended September 30, 2021, driven by a provision for credit losses, a decrease in loan placement fees, an increase in the net realized loss on sales of investment securities, partially offset by an increase in service charge income, and a decrease in the provision for income taxes. During the nine months ended September 30, 2022, the Company recorded a $500,000 provision for credit losses, compared to a $3,800,000 reversal of provision during the nine months ended September 30, 2021. Net interest income before the provision for credit losses for the nine months ended September 30, 2022 was $57,571,000, compared to $53,846,000 for the nine months ended September 30, 2021, an increase of $3,725,000 or 6.92%. The impact to interest income from the accretion of the loan marks on acquired loans was $445,000 and $579,000 for the nine months ended September 30, 2022 and 2021, respectively. In addition, net interest income before the provision for credit losses for the nine months ended September 30, 2022 was impacted by approximately $562,000 in loan prepayment penalties, as compared to $438,000 for the nine months ended September 30, 2021. Excluding the loan mark accretion and prepayment penalties, net interest income for the nine months ended September 30, 2022 increased by $3,735,000 compared to the nine months ended September 30, 2021.

Return on average equity (ROE) for the nine months ended September 30, 2022 was 12.98%, compared to 11.60% for the nine months ended September 30, 2021. The increase in ROE reflects the decrease in average shareholders’ equity compared to the prior year. The Company declared and paid $0.36 and $0.35 per share in cash dividends to holders of common stock during the nine months ended September 30, 2022 and 2021, respectively. Return on average assets (ROA) was 1.04% for the nine months ended September 30, 2022 and 1.30% for the nine months ended September 30, 2021. This decrease was due to the decrease in net income and an increase in average assets. During the nine months ended September 30, 2022, the Company’s total assets decreased 1.00%, and total liabilities increased 2.93%, compared to December 31, 2021.

Non-performing assets decreased by $695,000, or 73.47%, to $251,000 at September 30, 2022, compared to $946,000 at December 31, 2021. During the nine months ended September 30, 2022, the Company recorded $766,000 in net loan recoveries, compared to $946,000 for the nine months ended September 30, 2021. The net charge-off (recovery) ratio, which reflects annualized net charge-offs (recoveries) to average loans, was (0.09)% for the nine months ended September 30, 2022, compared to (0.12)% for the same period in 2021. Total non-performing assets were 0.01% and 0.04% of total assets as of September 30, 2022 and December 31, 2021, respectively.

For the nine months ended September 30, 2022, the effective yield on average total earning assets decreased 12 basis points to 3.54% compared to 3.66% for the nine months ended September 30, 2021, while the cost of average total interest-bearing liabilities increased to 0.22% for the nine months ended September 30, 2022 as compared to 0.11% for the nine months ended September 30, 2021. Over the same periods, the cost of average total deposits decreased to 0.04% for the nine months ended September 30, 2022 compared to 0.05% for the same period in 2021.

For the nine months ended September 30, 2022, the Company’s average investment securities, including interest-earning deposits in other banks and Federal funds sold, totaled $1,206,839,000, an increase of $240,734,000, or 24.92%, compared to the nine months ended September 30, 2021. The effective yield on average investment securities, including interest-earning deposits in other banks and Federal funds sold, increased

Total average loans (including nonaccrual), which generally yield higher rates than investment securities, increased $21,553,000 to $1,098,591,000 for the nine months ended September 30, 2022 from $1,077,038,000 for the nine months ended September 30, 2021. The effective yield on average loans decreased to 4.84% for the nine months ended September 30, 2022, compared to 5.04% for the nine months ended September 30, 2021. Total average PPP loans, which have a 1.00% interest rate in addition to loan fees, were $4,935,000 for the nine months ended September 30, 2022 as compared to $140,883,000 at September 30, 2021. Excluding PPP loans from total average loans, the effective yield on average loans for the nine months ended September 30, 2022 was immaterially impacted. As of September 30, 2021 the effective yield on average loans was 4.90% after excluding PPP loans.


	Nine months ended
(Dollars in thousands)	September 30, 2022		September 30, 2021		$ Change		% Change
Service charges	$	1,558	$	1,386	$	172	12.4	%
Appreciation in cash surrender value of bank owned life insurance	736		596		140		23.5	%
Interchange fees	1,352		1,313		39		3.0	%
Loan placement fees	722		1,634		(912)		(55.8)	%

Net realized (losses) gains on sales and calls of investment securities	(777)		38		(815)		(2144.7)	%
Federal Home Loan Bank dividends	258		237		21		8.9	%
Other Income	235		1,020		(785)		(77.0)	%
Total non-interest income	$	4,084	$	6,224	$	(2,140)	(34.4)	%

Non-Interest Expense - The following table presents the key components of non-interest expense for the periods indicated:


	Nine months ended
(Dollars in thousands)	September 30, 2022		September 30, 2021		$ Change		% Change
Salaries and employee benefits	$	21,501	$	21,008	$	493	2.3	%
Occupancy and equipment	3,869		3,538		331		9.4	%
Information Technology	2,465		2,061		404		19.6	%
Regulatory assessments	640		552		88		15.9	%
Data processing expense	1,649		1,841		(192)		(10.4)	%
Professional services	1,451		1,338		113		8.4	%
ATM/Debit card expenses	588		615		(27)		(4.4)	%
Internet banking expense	98		262		(164)		(62.6)	%
Advertising	416		386		30		7.8	%
Directors’ expenses	184		306		(122)		(39.9)	%



Amortization of core deposit intangibles	419		521		(102)		(19.6)	%
Loan related expenses	291		216		75		34.7	%
Personnel other	219		236		(17)		(7.2)	%

Other expense	2,536		2,200		336		15.3	%
Total non-interest expenses	$	36,326	$	35,080	$	1,246	3.6	%

Total average assets for the nine months ended September 30, 2022 was $2,438,633,000 compared to $2,217,411,000 for the nine months ended September 30, 2021, an increase of $221,222,000 or 9.98%. During the nine months ended September 30, 2022 and 2021, the loan-to-deposit ratio was 57.28% and 52.65%, respectively. Total average deposits increased $220,541,000 or 11.42% to $2,151,717,000 for the nine months ended September 30, 2022, compared to $1,931,176,000 for the nine months ended September 30, 2021. Average interest-bearing deposits increased $128,385,000, or 12.27%, and average non-interest bearing demand deposits increased $92,156,000, or 10.41%, for the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021. The Company’s ratio of average non-interest bearing deposits to total deposits was 45.41% for the nine months ended September 30, 2022, compared to 45.83% for the nine months ended September 30, 2021.

On September 15, 2022, the Company entered into a $30 million loan agreement with Bell Bank. Initially, payments of interest only are payable in 12 quarterly payments commencing December 31, 2022. Commencing December 31, 2025, 27 equal quarterly principal and interest payments are payable based on the outstanding balance of the loan on August 30, 2025 and an amortization of 48 quarters. A final payment of outstanding principal and accrued interest is due at maturity on September 30, 2032. Variable interest is payable at the Prime Rate (published by the Wall Street Journal) less 50 basis points. The loan is secured by the assets of

the Company and a pledge of the outstanding common stock of Central Valley Community Bank, the Company’s banking subsidiary. The Company may prepay the loan without penalty with one exception. If the loan is prepaid prior to August 30, 2025 with funds received from a financing source other than Bell Bank, the Company will incur a 2% prepayment penalty. The loan contains customary representations, covenants, and events of default.

Central Valley Community Bancorp trades on the NASDAQ stock exchange under the symbol CVCY. Central Valley Community Bank (CVCB), headquartered in Fresno, California, was founded in 1979 and is the sole subsidiary of Central Valley Community Bancorp. CVCB operates full-service Banking Centers throughout California’s San Joaquin Valley and Greater Sacramento region, in addition to CVCB maintaining Commercial, Real Estate, and Agribusiness Lending, as well as Private Business Banking and Cash Management Departments.

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, including the impact of inflation; (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 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, 2021. Therefore, the information set forth in such forward-looking statements should be carefully considered when evaluating the business prospects of the Company.


	September 30,		December 31,		September 30,
(In thousands, except share amounts)	2022		2021		2021

ASSETS
Cash and due from banks	$	32,535	$	29,412	$	32,634
Interest-earning deposits in other banks	9,043		134,055		35,059

Total cash and cash equivalents	41,578		163,467		67,693
Available-for-sale investment securities	668,300		1,109,208		1,060,362
Held-to-maturity investment securities	305,482		—		—
Equity securities	6,544		7,416		7,486
Loans, less allowance for credit losses of $10,366, $9,600, and $10,061 at September 30, 2022, December 31, 2021, and September 30, 2021, respectively	1,214,904		1,029,511		1,073,436
Bank premises and equipment, net	7,909		8,380		8,429

Bank owned life insurance	40,289		39,553		39,309
Federal Home Loan Bank stock	6,169		5,595		5,595
Goodwill	53,777		53,777		53,777
Core deposit intangibles	102		522		662
Accrued interest receivable and other assets	80,644		32,710		31,628
Total assets	$	2,425,698	$	2,450,139	$	2,348,377

LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Non-interest bearing	$	1,044,678	$	963,584	$	934,249
Interest bearing	1,094,466		1,159,213		1,123,843
Total deposits	2,139,144		2,122,797		2,058,092
Short-term borrowings	25,000		—		—

Senior debt and subordinated debentures	69,563		39,454		5,155
Accrued interest payable and other liabilities	33,177		40,043		38,582
Total liabilities	2,266,884		2,202,294		2,101,829
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: 11,732,011, 11,916,651, and 11,987,904, at September 30, 2022, December 31, 2021, and September 30, 2021, respectively	61,262		66,820		68,265

Retained earnings	188,174		173,393		167,993
Accumulated other comprehensive (loss) income, net of tax	(90,622)		7,632		10,290
Total shareholders’ equity	158,814		247,845		246,548
Total liabilities and shareholders’ equity	$	2,425,698	$	2,450,139	$	2,348,377

(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)	2022		2022		2021		2022		2021

INTEREST INCOME:
Interest and fees on loans	$	14,708	12,883		$	13,208	$	39,752	$	40,529
Interest on deposits in other banks	48		52		28		157		89

Interest and dividends on investment securities:
Taxable	4,411		5,651		3,844		14,586		9,938
Exempt from Federal income taxes	1,825		1,879		1,417		5,144		4,143
Total interest income	20,992		20,465		18,497		59,639		54,699
INTEREST EXPENSE:
Interest on deposits	231		231		263		714		783
Interest on subordinated debentures and borrowings	597		424		24		1,354		70

Total interest expense	828		655		287		2,068		853
Net interest income before provision for credit losses	20,164		19,810		18,210		57,571		53,846
PROVISION FOR (REVERSAL OF) CREDIT LOSSES	500		—		(500)		500		(3,800)
Net interest income after provision for credit losses	19,664		19,810		18,710		57,071		57,646
NON-INTEREST INCOME:
Service charges	475		544		487		1,558		1,386






Net realized (losses) gains on sales and calls of investment securities	(14)		(969)		117		(777)		38





Other income	1,019		1,195		1,544		3,303		4,800
Total non-interest income	1,480		770		2,148		4,084		6,224
NON-INTEREST EXPENSES:
Salaries and employee benefits	7,500		7,057		7,091		21,501		21,008
Occupancy and equipment	1,363		1,344		1,224		3,869		3,538














Other expense	3,935		3,682		3,747		10,956		10,534
Total non-interest expenses	12,798		12,083		12,062		36,326		35,080
Income before provision for income taxes	8,346		8,497		8,796		24,829		28,790
PROVISION FOR INCOME TAXES	1,962		1,955		2,275		5,817		7,227
Net income	$	6,384	$	6,542	$	6,521	$	19,012	$	21,563



Net income per common share:
Basic earnings per common share	$	0.55	$	0.56	$	0.54	$	1.62	$	1.75
Weighted average common shares used in basic computation	11,678,532		11,665,074		12,007,689		11,723,790		12,332,248
Diluted earnings per common share	$	0.55	$	0.56	$	0.54	$	1.62	$	1.74
Weighted average common shares used in diluted computation	11,689,323		11,685,850		12,044,896		11,748,693		12,378,591
Cash dividends per common share	$	0.12	$	0.12	$	0.12	$	0.36	$	0.35


	Sep. 30,		Jun. 30,		Mar. 31,		Dec. 31,		Sep. 30,
For the three months ended	2022		2022		2022		2021		2021
(In thousands, except share and per share amounts)
Net interest income	$	20,164	$	19,810	$	17,597	$	18,708	$	18,210
Provision for (reversal of) credit losses	500		—		—		(500)		(500)
Net interest income after provision for credit losses	19,664		19,810		17,597		19,208		18,710
Total non-interest income	1,480		770		1,834		2,781		2,148
Total non-interest expense	12,798		12,083		11,445		12,762		12,062
Provision for income taxes	1,962		1,955		1,900		2,389		2,275
Net income	$	6,384	$	6,542	$	6,086	$	6,838	$	6,521

Basic earnings per common share	$	0.55	$	0.56	$	0.51	$	0.57	$	0.54
Weighted average common shares used in basic computation	11,678,532		11,665,074		11,829,245		11,956,045		12,007,689
Diluted earnings per common share	$	0.55	$	0.56	$	0.51	$	0.57	$	0.54
Weighted average common shares used in diluted computation	11,689,323		11,685,850		11,872,025		11,994,590		12,044,896


	Sep. 30,			Jun. 30,			Mar. 31,			Dec. 31,			Sep. 30,
As of and for the three months ended	2022			2022			2022			2021			2021
(Dollars in thousands, except per share amounts)
Allowance for credit losses to total loans	0.85		%	0.87		%	0.97		%	0.92		%	0.93		%
Non-performing assets to total assets	0.01		%	0.01		%	0.01		%	0.04		%	0.07		%
Total non-performing assets	$	251		$	271		$	292		$	946		$	1,597
Total nonaccrual loans	$	251		$	271		$	292		$	946		$	1,597
Total substandard loans	$	22,657		$	10,756		$	10,739		$	8,540		$	23,065
Total special mention loans	$	30,894		$	34,509		$	39,901		$	40,845		$	26,612
Net loan charge-offs (recoveries)	$	(493)		$	(9)		$	(264)		$	(39)		$	(122)
Net charge-offs (recoveries) to average loans (annualized)	(0.17)		%	—		%	(0.10)		%	(0.01)		%	(0.05)		%
Book value per share	$	13.54		$	13.90		$	16.31		$	20.80		$	20.57
Tangible book value per share	$	8.94		$	9.29		$	11.70		$	16.24		$	16.03
Tangible common equity	$	104,935		$	108,863		$	137,501		$	193,546		$	192,109
Cost of total deposits	0.04		%	0.04		%	0.05		%	0.05		%	0.05		%
Interest and dividends on investment securities exempt from Federal income taxes	$	1,825		$	1,879		$	1,440		$	1,463		$	1,417
Net interest margin (calculated on a fully tax equivalent basis) (1)	3.57		%	3.48		%	3.19		%	3.39		%	3.47		%
Return on average assets (2)	1.06		%	1.07		%	0.99		%	1.13		%	1.13		%
Return on average equity (2)	14.42		%	14.73		%	10.51		%	11.21		%	10.41		%
Loan to deposit ratio	57.28		%	53.94		%	46.80		%	48.95		%	52.65		%
Efficiency ratio	57.20		%	54.20		%	57.66		%	58.94		%	57.66		%
Tier 1 leverage - Bancorp	8.26		%	7.89		%	7.87		%	8.03		%	8.24		%
Tier 1 leverage - Bank	10.73		%	9.10		%	8.54		%	8.47		%	8.18		%
Common equity tier 1 - Bancorp	11.56		%	11.94		%	12.06		%	12.48		%	12.34		%
Common equity tier 1 - Bank	15.41		%	14.15		%	13.43		%	13.52		%	12.59		%
Tier 1 risk-based capital - Bancorp	11.86		%	12.26		%	12.38		%	12.82		%	12.68		%
Tier 1 risk-based capital - Bank	15.41		%	14.15		%	13.43		%	13.52		%	12.59		%
Total risk-based capital - Bancorp	14.54		%	15.07		%	15.27		%	15.80		%	13.39		%
Total risk based capital - Bank	16.03		%	14.78		%	14.08		%	14.18		%	13.29		%


	For the Three Months Ended									For the Nine Months Ended
AVERAGE AMOUNTS	September 30,			June 30,			September 30,			September 30,			September 30,
(Dollars in thousands)	2022			2022			2021			2022			2021

Interest-bearing deposits in other banks	$	6,192		$	33,067		$	70,980		55,925			104,705
Investments	1,095,774			1,219,427			988,148			1,150,914			861,400
Loans (1)	1,189,762			1,085,887			1,068,111			1,098,274			1,074,302
Earning assets	2,291,728			2,338,381			2,127,239			2,305,113			2,040,407
Allowance for credit losses	(9,877)			(9,870)			(10,558)			(9,860)			(11,969)
Nonaccrual loans	260			280			1,844			317			2,736

Other non-earning assets	132,303			113,090			199,647			143,063			186,237
Total assets	$	2,414,414		$	2,441,881		$	2,318,172		$	2,438,633		$	2,217,411

Interest bearing deposits	$	1,105,934		$	1,210,016		$	1,105,757		$	1,174,553		$	1,046,168
Other borrowings	60,794			78,435			5,155			59,646			5,155
Total interest-bearing liabilities	1,166,728			1,288,451			1,110,912			1,234,199			1,051,323
Non-interest bearing demand deposits	1,041,698			947,724			915,742			977,164			885,008
Non-interest bearing liabilities	28,905			28,091			40,998			31,975			33,266
Total liabilities	2,237,331			2,264,266			2,067,652			2,243,338			1,969,597
Total equity	177,083			177,615			250,520			195,295			247,814
Total liabilities and equity	$	2,414,414		$	2,441,881		$	2,318,172		$	2,438,633		$	2,217,411

AVERAGE RATES

Interest-earning deposits in other banks	3.10		%	0.64		%	0.16		%	0.37		%	0.11		%
Investments	2.45		%	2.63		%	2.28		%	2.44		%	2.35		%
Loans (3)	4.90		%	4.76		%	4.91		%	4.84		%	5.04		%
Earning assets	3.72		%	3.60		%	3.52		%	3.54		%	3.66		%
Interest-bearing deposits	0.08		%	0.08		%	0.09		%	0.08		%	0.10		%
Other borrowings	3.93		%	2.16		%	1.71		%	3.03		%	1.81		%
Total interest-bearing liabilities	0.28		%	0.20		%	0.10		%	0.22		%	0.11		%
Net interest margin (calculated on a fully tax equivalent basis) (2)	3.57		%	3.48		%	3.47		%	3.42		%	3.60		%


Loan Risk Rating (In thousands)	September 30, 2022		June 30, 2022		September 30, 2021
Pass	$	1,170,422	$	1,089,423	$	1,034,229
Special mention	30,894		34,509		26,612
Substandard	22,657		10,756		23,065
Doubtful	—		—		—
Total	$	1,223,973	$	1,134,688	$	1,083,906