Central Valley Community Bancorp Reports Earnings Results for the Six Months and Quarter Ended June 30, 2019, Quarterly Dividend, and Announces Stock Repurchase Plan

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 $11,303,000, and fully diluted earnings per common share of $0.83 for the six months ended June 30, 2019, compared to $10,256,000 and $0.74 per fully diluted common share for the six months ended June 30, 2018.

SECOND QUARTER FINANCIAL HIGHLIGHTS

• Net loans increased $41.2 million or 4.53%, and total assets increased $75.4 million or 4.90% at June 30, 2019 compared to December 31, 2018.
• Total deposits increased 0.92% to $1.29 billion at June 30, 2019 compared to December 31, 2018.
• Total cost of deposits remains at low levels at 0.15% and 0.08% for the quarter ended June 30, 2019 and 2018, respectively.
• Average non-interest bearing demand deposit accounts as a percentage of total average deposits was 42.45% and 40.85% for the quarters ended June 30, 2019 and 2018, respectively.
• Capital positions remain strong at June 30, 2019 with a 11.43% Tier 1 Leverage Ratio; a 14.72% Common Equity Tier 1 Ratio; a 15.16% Tier 1 Risk-Based Capital Ratio; and a 16.00% Total Risk-Based Capital Ratio.
• The Company declared a $0.11 per common share cash dividend, payable on August 16, 2019 to shareholders of record on August 2, 2019.
• During the quarter ended June 30, 2019, the Company repurchased and retired a total of 223,121 shares of common stock at an average price paid per share of $19.94. Since the Company approved the stock repurchased program on July 18, 2018, the Company has repurchased and retired a total of 379,382 shares at an average price paid per share of $19.60.
• The Company opened a new banking office in Gold River. The Company closed two banking offices - one in Rancho Cordova and one in Fair Oaks during the second quarter of 2019, and incurred approximately $51,000 in consolidation/closing costs during the quarter.

“This quarter we improved net income, grew loans and enhanced client relationships. With the addition of our new Market Executives in July, we expect this momentum to continue throughout our market area,” stated James M. Ford, President & CEO of Central Valley Community Bank and Central Valley Community Bancorp. “Given our strong capital levels, the Board of Directors authorized a new stock repurchase program for an additional $10 million of common stock.”

Net income for the six months ended June 30, 2019 increased 10.21%, primarily driven by an increase in net interest income and an increase in net realized gains on sales and calls of investment securities, partially offset by an increase in non-interest expense and an increase in the provision for income taxes, compared to the six months ended June 30, 2018. During the six months ended June 30, 2019, the Company recorded a $275,000 provision for credit losses, compared to a $50,000 provision during the six months ended June 30, 2018. Net interest income before the provision for credit losses for the six months ended June 30, 2019 was $31,781,000, compared to $30,823,000 for the six months ended June 30, 2018, an increase of $958,000 or 3.11%. The impact to interest income from the accretion of the loan marks on acquired loans was $451,000 and $590,000 for the six months ended June 30, 2019 and 2018, respectively. In addition, net interest income before the provision for credit losses for the six months ended June 30, 2019 was benefited by approximately $183,000 in nonrecurring income from prepayment penalties and payoff of loans previously on nonaccrual status, as compared to a $175,000 in nonrecurring income for the six months ended June 30, 2018. Excluding these reversals and benefits, net interest income for the six months ended June 30, 2019 increased by $950,000 compared to the six months ended June 30, 2018.

During the six months ended June 30, 2019, the Company’s shareholders’ equity increased $11,942,000, or 5.43%, compared to December 31, 2018. The increase in shareholders’ equity was driven by the retention of earnings, net of dividends paid, and an increase in net unrealized gains on available-for-sale (AFS) securities recorded, net of estimated taxes, in accumulated other comprehensive income (AOCI).

Return on average equity (ROE) for the six months ended June 30, 2019 was 10.06%, compared to 9.84% for the six months ended June 30, 2018. The increase in ROE reflects increase in net income, notwithstanding an increase in shareholders’ equity. The Company declared and paid $0.21 and $0.14 per share in cash dividends to holders of common stock during the six months ended June 30, 2019 and 2018, respectively. Annualized return on average assets (ROA) was 1.45% for the six months ended June 30, 2019 and 1.28% for the six months ended June 30, 2018. During the six months ended June 30, 2019, the Company’s total assets increased 4.90%, and total liabilities increased 4.81%, compared to December 31, 2018.

Non-performing assets decreased by $298,000, or 10.88%, to $2,442,000 at June 30, 2019, compared to $2,740,000 at December 31, 2018. During the six months ended June 30, 2019, the Company recorded $26,000 in net loan recoveries, compared to $92,000 in net recoveries for the six months ended June 30, 2018. The net charge-off (recovery) ratio, which reflects annualized net recoveries to average loans, was (0.01)% for the six months ended June 30, 2019, compared to (0.02)% for the same period in 2018. Total non-performing assets were 0.15% and 0.18% of total assets as of June 30, 2019 and December 31, 2018, respectively.

At June 30, 2019, the allowance for credit losses was $9,405,000, compared to $9,104,000 at December 31, 2018, a net increase of $301,000 reflecting the net recoveries and provision during the period. The allowance for credit losses as a percentage of total loans was 0.98% and 0.99% as of June 30, 2019 and December 31, 2018, respectively. Total loans includes 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 $168,792,000 at June 30, 2019 and $189,719,000 at December 31, 2018. Excluding these acquired loans from the calculation, the allowance for credit losses to total gross loans was 1.19% and 1.25% as of June 30, 2019 and December 31, 2018, respectively, and general reserves associated with non-impaired loans to total non-impaired loans was 1.18% and 1.25%, respectively. The Company believes the allowance for credit losses is adequate to provide for probable incurred credit losses within the loan portfolio at June 30, 2019.

The Company’s net interest margin (fully tax equivalent basis) was 4.56% for the six months ended June 30, 2019, compared to 4.33% for the six months ended June 30, 2018. The increase in net interest margin in the period-to-period comparison resulted from the increase in the effective yield on interest earning deposits in other banks and Federal Funds sold, the increase in the effective yield on average investment securities, and the increase in the yield on the Company’s loan portfolio.

For the six months ended June 30, 2019, the effective yield on average total earning assets increased 32 basis points to 4.75% compared to 4.43% for the six months ended June 30, 2018, while the cost of average total interest-bearing liabilities increased to 0.34% for the six months ended June 30, 2019 as compared to 0.17% for the six months ended June 30, 2018. Over the same periods, the cost of average total deposits increased to 0.14% for the six months ended June 30, 2019 compared to 0.07% for the same period in 2018.

For the six months ended June 30, 2019, the Company’s average investment securities, including interest-earning deposits in other banks and Federal funds sold, totaled $496,076,000, a decrease of $58,933,000, or 10.62%, compared to the six months June 30, 2018. The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, increased to 3.15% for the six months ended June 30, 2019, compared to 2.72% for the six months ended June 30, 2018.

Total average loans (including nonaccrual), which generally yield higher rates than investment securities, increased $12,044,000, from $910,630,000 for the six months ended June 30, 2018 to $922,674,000 for the six months ended June 30, 2019. The effective yield on average loans increased to 5.59% for the six months ended June 30, 2019, compared to 5.46% for the six months ended June 30, 2018.

Total average assets for the six months ended June 30, 2019 was $1,562,541,000 compared to $1,606,475,000 for the six months ended June 30, 2018, a decrease of $43,934,000 or 2.73%. During the six months ended June 30, 2019 and 2018, the loan-to-deposit ratio was 74.20% and 70.60%, respectively. Total average deposits decreased $78,278,000 or 5.75% to $1,282,041,000 for the six months ended June 30, 2019, compared to $1,360,319,000 for the six months ended June 30, 2018. Average interest-bearing deposits decreased $70,404,000, or 8.69%, and average non-interest bearing demand deposits decreased $7,874,000, or 1.43%, for the six months ended June 30, 2019, compared to the six months ended June 30, 2018. The Company’s ratio of average non-interest bearing deposits to total deposits was 42.28% for the six months ended June 30, 2019, compared to 40.42% for the six months ended June 30, 2018.

Non-interest income for the six months ended June 30, 2019 increased by $2,117,000 to $7,574,000, compared to $5,457,000 for the six months ended June 30, 2018, primarily driven by an increase of $2,614,000 in net realized gains on sales and calls of investment securities, an increase of $123,000 in other income, and an increase in loan placement fees of $20,000, offset by decrease in gain on sale of credit card portfolio of $578,000 and a decrease in service charge income of $78,000.

Non-interest expense for the six months ended June 30, 2019 increased $572,000, or 2.50%, to $23,439,000 compared to $22,867,000 for the six months ended June 30, 2018. The net increase year over year resulted from increases in information technology of $948,000, salaries and employee benefits of $153,000, and directors’ expenses of $146,000, offset by decreases in acquisition and integration expenses of $217,000, professional services of $194,000, data processing expenses of $54,000, and occupancy and equipment expenses of $183,000 in 2019 compared to 2018. The increase in the information technology expenses was a result of the Company outsourcing its network maintenance and IT support during the fourth quarter of 2018. The increase in the directors’ expenses was related to the change in the discount rate used to calculate the liability for deferred compensation and split dollar plans.

The Company recorded an income tax provision of $4,338,000 for the six months ended June 30, 2019, compared to $3,107,000 for the six months ended June 30, 2018. The effective tax rate for the six months June 30, 2019 was 27.73% compared to 23.25% for the six months June 30, 2018. The increase in the effective rate was a result of a decrease in tax-exempt interest.

Quarter Ended June 30, 2019

For the quarter ended June 30, 2019, the Company reported unaudited consolidated net income of $6,087,000 and earnings per diluted common share of $0.45, compared to consolidated net income of $4,965,000 and $0.36 per diluted share for the same period in 2018. The increase in net income during the second quarter of 2019 compared to the same period in 2018 was primarily due to an increase in net interest income of $549,000, and an increase in non-interest income of $1,912,000, offset by an increase in the provision for income taxes of $816,000, and an increase in total non-interest expenses of $273,000. The effective tax rate increased to 28.15% from 24.01% for the quarters ended June 30, 2019 and June 30, 2018, respectively. Net income for the immediately trailing quarter ended March 31, 2019 was $5,216,000, or $0.38 per diluted common share.

Annualized return on average equity (ROE) for the second quarter of 2019 was 10.68%, compared to 9.53% for the same period of 2018. The increase in ROE reflects increase in net income, notwithstanding an increase in shareholders’ equity. Annualized return on average assets (ROA) was 1.54% for the second quarter of 2019 compared to 1.25% for the same period in 2018. This increase is due to an increase in net income notwithstanding a decrease in average assets.

In comparing the second quarter of 2019 to the second quarter of 2018, average total loans increased by $20,784,000, or 2.26%. During the second quarter of 2019, the Company recorded net loan charge-off of $13,000 compared to $82,000 net loan recoveries for the same period in 2018. The net charge-off (recovery) ratio, which reflects annualized net charge-offs to average loans, was 0.01% for the quarter ended June 30, 2019 compared to (0.04)% for the quarter ended June 30, 2018.

Average total deposits for the second quarter of 2019 decreased $62,091,000 or 4.65% to $1,274,159,000 compared to $1,336,250,000 for the same period of 2018. In comparing the second quarter of 2019 to the second quarter of 2018, average borrowed funds increased $29,253,000 or 118.44% to $53,952,000 compared to $24,699,000.

The Company’s net interest margin (fully tax equivalent basis) was 4.50% for the quarter ended June 30, 2019, compared to 4.35% for the quarter ended June 30, 2018. Net interest income, before provision for credit losses, increased $549,000, or 3.57%, to $15,946,000 for the second quarter of 2019, compared to $15,397,000 for the same period in 2018. The accretion of the loan marks on acquired loans increased interest income by $192,000 and $332,000 during the quarters ended June 30, 2019 and 2018, respectively. Net interest income during the second quarters of 2019 and 2018 benefited by approximately $56,000 and $196,000, respectively, from prepayment penalties and payoff of loans previously on nonaccrual status. The net interest margin period-to-period comparisons were impacted by an increase in the yield on the average investment securities and the loan portfolio. Over the same periods, the cost of total deposits increased to 0.15% from 0.08%.

For the quarter ended June 30, 2019, the Company’s average investment securities, including interest-earning deposits in other banks and Federal funds sold, decreased by $36,160,000, or 6.79%, compared to the quarter ended June 30, 2018, and increased by $540,000, or 0.11%, compared to the quarter ended March 31, 2019.

The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, was 3.17% for the quarter ended June 30, 2019, compared to 2.67% for the quarter ended June 30, 2018 and 3.13% for the quarter ended March 31, 2019. Total average loans, which generally yield higher rates than investment securities, increased by $20,784,000 to $939,055,000 for the quarter ended June 30, 2019, from $918,271,000 for the quarter ended June 30, 2018 and increased by $32,944,000 from $906,111,000 for the quarter ended March 31, 2019. The effective yield on average loans was 5.55% for the quarter ended June 30, 2019, compared to 5.49% and 5.64% for the quarters ended June 30, 2018 and March 31, 2019, respectively.

Total average assets for the quarter ended June 30, 2019 were $1,584,122,000 compared to $1,588,644,000 for the quarter ended June 30, 2018 and $1,540,721,000 for the quarter ended March 31, 2019, a decrease of $4,522,000 and an increase of $43,401,000, or (0.28)% and 2.82%, respectively.

Total average deposits decreased $62,091,000, or 4.65%, to $1,274,159,000 for the quarter ended June 30, 2019, compared to $1,336,250,000 for the quarter ended June 30, 2018. Total average deposits decreased $15,853,000, or 1.23%, for the quarter ended June 30, 2019, compared to $1,290,012,000 for the quarter ended March 31, 2019. The Company’s ratio of average non-interest bearing deposits to total deposits was 42.45% for the quarter ended June 30, 2019, compared to 40.85% and 42.10% for the quarters ended June 30, 2018 and March 31, 2019, respectively.

Non-interest income increased $1,912,000, or 71.18%, to $4,598,000 for the second quarter of 2019 compared to $2,686,000 for the same period in 2018. For the quarter ended June 30, 2019, non-interest income included $2,459,000 net realized gains on sales and calls of investment securities compared to net realized gains of $82,000 for the same period in 2018, a $2,377,000 increase. During the second quarter of 2019 loan placement fees increased $47,000, other income increased by $61,000, and interchange fees increased $4,000, offset by a decrease in the gain on sale of credit card portfolio of $578,000, and a decrease in service charge income of $13,000 compared to the same period in 2018. Non-interest income for the quarter ended June 30, 2019 increased by $1,622,000 to $4,598,000, compared to $2,976,000 for the quarter ended March 31, 2019. The increase compared to the trailing quarter was primarily a $1,407,000 increase in net realized gains on sales and calls of investment securities, a $23,000 increase in service charges, and a $54,000 increase in other income.

Non-interest expense for the quarter ended June 30, 2019 increased $273,000, or 2.37%, to $11,772,000 compared to $11,499,000 for the quarter ended June 30, 2018. The net increase quarter over quarter was a result of an increase of $383,000 in information technology expenses, an increase of $80,000 in amortization of core deposit intangibles, an increase in salaries and employee benefits of $79,000, and an increase of $10,000 in advertising expenses, partially offset by a decrease in occupancy and equipment expenses of $125,000, a decrease in professional services of $83,000, a decrease of $26,000 in regulatory assessments, and a decrease of $114,000 in operating losses.

Non-interest expense for the quarter ended June 30, 2019 increased by $105,000 compared to $11,667,000 for the trailing quarter ended March 31, 2019. The increase compared to the trailing quarter was primarily due to an increase in salaries and employee benefits of $422,000, and an increase of $17,000 in directors’ expense, partially offset by a $172,000 decrease in information technology expenses, a $71,000 decrease in other non-interest expenses, and a decrease in occupancy and equipment expense of $27,000.

The majority of the $71,000 decrease in other non-interest expenses was comprised of a decrease of $112,000 in credit card operation expenses and a $40,000 decrease in personnel costs, offset by a $24,000 increase in stationery and supplies. The increase in salaries and employee benefits of $422,000 was the result of increased salaries and interest on deferred compensation plans as a result of change in discount rate.

The Company recorded an income tax provision of $2,385,000 for the quarter ended June 30, 2019, compared to $1,569,000 for the quarter ended June 30, 2018. The effective tax rate for the quarter ended June 30, 2019 was 28.15% compared to 24.01% for the same period in 2018. The increase in the effective tax rate was the result of a decrease in tax exempt interest.

Quarterly Dividend Announcement

On July 17, 2019, the Board of Directors of the Company declared an increase in the regular quarterly cash dividend to $0.11 per share on the Company’s common stock. The dividend is payable on August 16, 2019 to shareholders of record as of August 2, 2019.

Stock Repurchase Plan Announcement

The Board of Directors of the Company also approved the adoption of a program to effect repurchases of the Company’s common stock. Under the program, the Company may repurchase up to $10 million of the Company’s outstanding shares of common stock, which represents approximately 3% of the Company’s outstanding shares of common stock, or approximately 479,616 shares based on the closing stock price of the Company’s common stock on July 16, 2019 of $20.85. The share repurchase program will begin on July 22, 2019 and end on July 17, 2020. The shares will be repurchased in open market transactions through brokers, subject to availability. All such transactions will be structured to comply with SEC Rule 10b-18, and all shares repurchased will be retired.

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. Central Valley Investment Services are provided by Raymond James Financial, Inc.

Members of Central Valley Community Bancorp’s and the Bank’s Board of Directors are: Daniel J. Doyle (Chairman), Daniel N. Cunningham (Vice Chairman), Edwin S. Darden, Jr., F. T. “Tommy” Elliott, IV, James M. Ford, Robert J. Flautt, Gary D. Gall, Steven D. McDonald, Louis C. McMurray, Karen Musson, 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 and Facebook.

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. 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; (3) a decline in economic conditions at the international, national or local level on the Company’s results of operations; (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 quality of the Company’s earning assets; (7) changes in the regulatory environment; (8) fluctuations in the real estate market; (9) changes in business conditions and inflation; (10) changes in securities markets; and (11) the other risks set forth in the Company’s reports filed with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K for the year ended December 31, 2018. Therefore, the information set forth in such forward-looking statements should be carefully considered when evaluating the business prospects of the Company.

CENTRAL VALLEY COMMUNITY BANCORP CONSOLIDATED BALANCE SHEETS (Unaudited)
		June 30,					December 31,					June 30,
(In thousands, except share amounts)		2019					2018					2018
ASSETS
Cash and due from banks		$		33,787			$		24,954			$		29,811
Interest-earning deposits in other banks				14,739					6,725					16,812
Federal funds sold				77					48					7
Total cash and cash equivalents				48,603					31,727					46,630
Available-for-sale investment securities				476,211					463,905					484,001
Equity securities				7,458					7,254					7,254
Loans, less allowance for credit losses of $9,405, $9,104 and $8,920 at June 30, 2019, December 31, 2018, and June 30, 2018, respectively				950,806					909,591					925,914
Bank premises and equipment, net				7,742					8,484					9,131
Bank owned life insurance				29,863					28,502					28,154
Federal Home Loan Bank stock				6,062					6,843					6,843
Goodwill				53,777					53,777					53,777
Core deposit intangibles				2,225					2,572					2,840
Accrued interest receivable and other assets				30,480					25,181					25,359
Total assets		$		1,613,227			$		1,537,836			$		1,589,903
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Non-interest bearing		$		558,000			$		550,657			$		554,465
Interest bearing				736,087					731,641					769,746
Total deposits				1,294,087					1,282,298					1,324,211
Short-term borrowings				54,000					10,000					30,000
Junior subordinated deferrable interest debentures				5,155					5,155					5,155
Accrued interest payable and other liabilities				28,305					20,645					19,353
Total liabilities				1,381,547					1,318,098					1,378,719
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: 13,488,983, 13,754,965, and 13,785,591, at June 30, 2019, December 31, 2018, and June 30, 2018, respectively				98,210					103,851					104,226
Retained earnings				128,723					120,294					111,545
Accumulated other comprehensive income (loss), net of tax				4,747					(4,407	)				(4,587	)
Total shareholders’ equity				231,680					219,738					211,184
Total liabilities and shareholders’ equity		$		1,613,227			$		1,537,836			$		1,589,903

CENTRAL VALLEY COMMUNITY BANCORP CONSOLIDATED INCOME STATEMENTS (Unaudited)
		For the Three Months Ended,														For the Six Months Ended
		June 30,				March 31,					June 30,					June 30,
(In thousands, except share and per share amounts)		2019				2019					2018					2019					2018
INTEREST INCOME:
Interest and fees on loans		$	12,955			$		12,554			$		12,519			$		25,509			$		24,525
Interest on deposits in other banks			59					150					44					209					142
Interest and dividends on investment securities:
Taxable			3,337					3,023					2,185					6,360					4,744
Exempt from Federal income taxes			429					562					1,045					991					2,112
Total interest income			16,780					16,289					15,793					33,069					31,523
INTEREST EXPENSE:
Interest on deposits			469					393					252					862					490
Interest on junior subordinated deferrable interest debentures			55					57					52					112					95
Other			310					4					92					314					115
Total interest expense			834					454					396					1,288					700
Net interest income before provision for credit losses			15,946					15,835					15,397					31,781					30,823
PROVISION FOR (REVERSAL OF) CREDIT LOSSES			300					(25	)				50					275					50
Net interest income after provision for credit losses			15,646					15,860					15,347					31,506					30,773
NON-INTEREST INCOME:
Service charges			713					690					726					1,403					1,481
Net realized gains on sale of credit card portfolio		—				—							578			—							578
Appreciation in cash surrender value of bank owned life insurance			190					171					176					361					347
Interchange fees			384					343					380					727					725
Loan placement fees			220					139					173					359					339
Net realized gains on sales and calls of investment securities			2,459					1,052					82					3,511					897
Federal Home Loan Bank dividends			118					121					118					239					239
Other income			514					460					453					974					851
Total non-interest income			4,598					2,976					2,686					7,574					5,457
NON-INTEREST EXPENSES:
Salaries and employee benefits			6,912					6,490					6,833					13,402					13,249
Occupancy and equipment			1,452					1,479					1,577					2,931					3,114
Acquisition and integration expenses		—				—					—					—							217
Professional services			280					327					363					607					801
Data processing expense			401					395					370					796					850
Directors’ expenses			193					176					133					369					223
ATM/Debit card expenses			186					191					176					377					377
Information technology			605					777					222					1,382					434
Regulatory assessments			134					152					160					286					322
Advertising			198					202					188					400					377
Internet banking expenses			199					194					175					393					370
Amortization of core deposit intangibles			173					174					93					347					187
Other expense			1,039					1,110					1,209					2,149					2,346
Total non-interest expenses			11,772					11,667					11,499					23,439					22,867
Income before provision for income taxes			8,472					7,169					6,534					15,641					13,363
PROVISION FOR INCOME TAXES			2,385					1,953					1,569					4,338					3,107
Net income		$	6,087			$		5,216			$		4,965			$		11,303			$		10,256
Net income per common share:
Basic earnings per common share		$	0.45			$		0.38			$		0.36			$		0.84			$		0.75
Weighted average common shares used in basic computation			13,533,724					13,646,489					13,692,358					13,515,752					13,681,229
Diluted earnings per common share		$	0.45			$		0.38			$		0.36			$		0.83			$		0.74
Weighted average common shares used in diluted computation			13,635,834					13,755,615					13,823,278					13,612,866					13,814,087
Cash dividends per common share		$	0.11			$		0.10			$		0.07			$		0.21			$		0.14

CENTRAL VALLEY COMMUNITY BANCORP CONDENSED CONSOLIDATED INCOME STATEMENTS (Unaudited)
		Jun. 30					Mar. 31					Dec. 31,					Sep. 30					Jun. 30,
For the three months ended		2019					2019					2018					2018					2018
(In thousands, except share and per share amounts)
Net interest income		$		15,946			$		15,835			$		15,973			$		15,907			$		15,397
Provision for (reversal of) credit losses				300					(25	)		—					—							50
Net interest income after provision for credit losses				15,646					15,860					15,973					15,907					15,347
Total non-interest income				4,598					2,976					2,404					2,463					2,686
Total non-interest expense				11,772					11,667					11,410					10,791					11,499
Provision for income taxes				2,385					1,953					1,686					1,827					1,569
Net income		$		6,087			$		5,216			$		5,281			$		5,752			$		4,965
Basic earnings per common share		$		0.45			$		0.38			$		0.38			$		0.42			$		0.36
Weighted average common shares used in basic computation				13,533,724					13,646,489					13,721,087					13,715,141					13,692,358
Diluted earnings per common share		$		0.45			$		0.38			$		0.38			$		0.42			$		0.36
Weighted average common shares used in diluted computation				13,635,834					13,755,615					13,834,662					13,836,828					13,823,278

CENTRAL VALLEY COMMUNITY BANCORP SELECTED RATIOS (Unaudited)
		Jun. 30,					Mar. 31,					Dec. 31,					Sept. 30,					Jun. 30,
As of and for the three months ended		2019					2019					2018					2018					2018
(Dollars in thousands, except per share amounts)
Allowance for credit losses to total loans				0.98	%				0.99	%				0.99	%				0.99	%				0.95	%
Non-performing assets to total assets				0.15	%				0.10	%				0.18	%				0.27	%				0.26	%
Total non-performing assets		$		2,442			$		1,548			$		2,740			$		4,133			$		4,092
Total nonaccrual loans		$		2,442			$		1,548			$		2,740			$		4,133			$		4,092
Net loan charge-offs (recoveries)		$		13			$		(39	)		$		(79	)		$		(105	)		$		(82	)
Net charge-offs (recoveries) to average loans (annualized)				0.01	%				(0.02	)%				(0.03	)%				(0.05	)%				(0.04	)%
Book value per share		$		17.18			$		16.63			$		15.98			$		15.47			$		15.32
Tangible book value per share		$		13.02			$		12.52			$		11.87			$		11.37			$		11.21
Tangible common equity		$		175,678			$		171,279			$		163,389			$		156,911			$		154,567
Cost of total deposits				0.15	%				0.12	%				0.10	%				0.10	%				0.08	%
Interest and dividends on investment securities exempt from Federal income taxes		$		429			$		562			$		530			$		896			$		1,045
Net interest margin (calculated on a fully tax equivalent basis) (1)				4.50	%				4.63	%				4.55	%				4.53	%				4.35	%
Return on average assets (2)				1.54	%				1.35	%				1.37	%				1.48	%				1.25	%
Return on average equity (2)				10.68	%				9.42	%				9.82	%				10.80	%				9.53	%
Loan to deposit ratio				74.20	%				71.32	%				71.64	%				71.49	%				70.60	%
Efficiency ratio				63.78	%				63.92	%				60.80	%				58.65	%				62.99	%
Tier 1 leverage - Bancorp				11.43	%				11.69	%				11.48	%				11.16	%				10.59	%
Tier 1 leverage - Bank				11.36	%				11.64	%				11.32	%				11.06	%				10.44	%
Common equity tier 1 - Bancorp				14.72	%				15.13	%				15.13	%				15.17	%				14.35	%
Common equity tier 1 - Bank				15.08	%				15.50	%				15.38	%				15.51	%				14.59	%
Tier 1 risk-based capital - Bancorp				15.16	%				15.58	%				15.59	%				15.64	%				14.80	%
Tier 1 risk-based capital - Bank				15.08	%				15.50	%				15.38	%				15.51	%				14.59	%
Total risk-based capital - Bancorp				16.00	%				16.41	%				16.44	%				16.51	%				15.64	%
Total risk based capital - Bank				15.91	%				16.34	%				16.23	%				16.37	%				15.43	%

(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.

CENTRAL VALLEY COMMUNITY BANCORP AVERAGE BALANCES AND RATES (Unaudited)
		For the Three Months Ended												For the Six Months Ended
AVERAGE AMOUNTS		June 30,				March 31,				June 30,				June 30,				June 30,
(Dollars in thousands)		2019				2019				2018				2019				2018
Federal funds sold		$	119			$	105			$	35			$	112			$	48
Interest-bearing deposits in other banks		11,195				24,571				11,037				17,846				18,208
Investments		485,031				471,129				521,433				478,118				536,753
Loans (1)		936,602				903,415				914,236				920,099				906,566
Earning assets		1,432,947				1,399,220				1,446,741				1,416,175				1,461,575
Allowance for credit losses		(9,234		)		(9,124		)		(8,822		)		(9,179		)		(8,806		)
Nonaccrual loans		2,453				2,696				4,035				2,575				4,064
Other non-earning assets		157,956				147,929				146,690				152,970				149,642
Total assets		$	1,584,122			$	1,540,721			$	1,588,644			$	1,562,541			$	1,606,475
Interest bearing deposits		$	733,291			$	746,875			$	790,396			$	740,045			$	810,449
Other borrowings		53,952				5,766				24,699				29,992				17,837
Total interest-bearing liabilities		787,243				752,641				815,095				770,037				828,286
Non-interest bearing demand deposits		540,868				543,137				545,854				541,996				549,870
Non-interest bearing liabilities		28,078				23,433				19,221				25,766				19,783
Total liabilities		1,356,189				1,319,211				1,380,170				1,337,799				1,397,939
Total equity		227,933				221,510				208,474				224,742				208,536
Total liabilities and equity		$	1,584,122			$	1,540,721			$	1,588,644			$	1,562,541			$	1,606,475
AVERAGE RATES
Federal funds sold		2.40		%		2.40		%		1.78		%		2.39		%		1.61		%
Interest-earning deposits in other banks		2.11		%		2.44		%		1.63		%		2.34		%		1.56		%
Investments		3.20		%		3.17		%		2.69		%		3.18		%		2.76		%
Loans (3)		5.55		%		5.64		%		5.49		%		5.59		%		5.46		%
Earning assets		4.73		%		4.76		%		4.46		%		4.75		%		4.43		%
Interest-bearing deposits		0.26		%		0.21		%		0.13		%		0.23		%		0.12		%
Other borrowings		2.71		%		4.23		%		2.33		%		2.84		%		2.35		%
Total interest-bearing liabilities		0.42		%		0.24		%		0.19		%		0.34		%		0.17		%
Net interest margin (calculated on a fully tax equivalent basis) (2)		4.50		%		4.63		%		4.35		%		4.56		%		4.33		%

(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 $114, $150, and $278, for the three months ended June 30, 2019, March 31, 2019, and June 30, 2018, respectively. The Federal tax benefits relating to income earned on municipal bonds totaled $264 and $562 for the six months ended June 30, 2019 and 2018, respectively.
(3)	Loan yield includes loan fees (costs) for the three months ended June 30, 2019, March 31, 2019, and June 30, 2018 of $(42), $26, and $107, respectively. Loan yield includes loan fees (costs) for the six months ended June 30, 2019 and 2018 of $(16) and $228, respectively.

 

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