Business & Finance
Business and Finance
Business and Finance
Thu, February 16, 2012 Pacific Valley Bank Announces Fourth Quarter 2011 Financial Results
February 16, 2012 09:00 ET
Pacific Valley Bank Announces Fourth Quarter 2011 Financial Results
SALINAS, CA--(Marketwire - Feb 16, 2012) - Pacific Valley Bank (
Fourth Quarter 2011 Financial Highlights:
- Return on Average Assets (ROA); 0.73%
- Net Interest Margin (NIM); 4.27%
- Efficiency Ratio; 82.83%
Year 2011 Financial Highlights:
- Return on Average Assets (ROA); 0.70%
- Net Interest Margin (NIM); 4.36%
- Efficiency Ratio; 79.66%
"2011 has been a very good year for Pacific Valley Bank. Positive earnings were achieved in each quarter as a result of controlling expenses, moderate loan growth and lower provisions for loan losses," stated David B. Warner, President and Chief Executive Officer. "This year of steady earnings has been a great experience for the employees as they see the fruit of their labor and commitment to the bank this past year. Each day we focus on customer service and finding new opportunities to lend money within our community, which is the driving force behind a community bank and our success."
The core earnings of the bank are measured by the interest income plus non-interest income less interest expense. During the current fourth quarter, core earnings of the Bank were $1.71 million, which is lower by comparison to $1.74 million for the same quarter a year ago. The core earnings on a year-to-date basis for the period ending December 31, 2011 were $7.24 million as compared to the same period last year when they were $7.93 million. "The lower core earnings on a year-to-date basis resulted from a reduction in loan interest income from a decline in the interest rate environment, which contributed to a reduction in our net interest income," stated Greg Spear, Chief Financial Officer.
Balance Sheet and Loan Quality Review:
Total assets were $178.20 million at December 31, 2011, which is an increase of $5.88 million from the same period last year when assets were $172.32 million. Our gross loans at December 31, 2011 were $136.41 million, which is an increase of $7.03 million as compared to $129.38 million at December 31, 2010.
The allowance for loan losses as of December 31, 2011 was $3.54 million, which is a decrease from the same quarter last year when it was $4.44 million. The percentage of allowance for loan losses to gross loans outstanding at December 31, 2011 was 2.59% as compared to 3.43% in the same quarter last year. The allowance for loan loss ratio has gradually been coming down since last year due to the charge-off of measured impairments and a gradual improvement in loan quality.
The allowance for loan losses is measured using such factors that take into account current market valuations of our problem loans and qualitative factors for the remaining loans based on various analytics including the trends in non-accruing loans, delinquent loans and net charge-offs. Here are four qualitative measurements we monitor as part of our credit administration oversight; 1) non-accruing loans, which were $5.06 million as of December 31, 2011 as compared to $9.01 million as of December 31, 2010; 2) loans past due from 30 - 89 days, which there were no past due loans as of December 31, 2011 as compared to $977,000 at December 31, 2010; 3) net charge-offs, which were $1.16 million for the year ending December 31, 2011 as compared to $2.43 million for the year ending December 31, 2010; and 4) non-performing assets ratio, which was 3.11% as of December 31, 2011 as compared to 6.12% at December 31, 2010. These qualitative measurements indicate a continued improvement in our loan quality metrics.
The most significant component of our current liquidity position is reflected in our Fed Funds Sold balance, which totals $26.91 million as of December 31, 2011 as compared to $27.96 million as of December 31, 2010. The Bank's liquidity is in a good position to support future loan growth. Deposits grew during the fourth quarter to end at $156.04 million as of December 31, 2011 as compared to $151.40 million in the same quarter a year ago. A significant portion of the deposit growth came from $5.00 million of advances on agriculture lines of credit.
Stockholders' equity at December 31, 2011 was $19.37 million as compared to $18.16 million from the quarter ending December 31, 2010. At December 31, 2011 our Tier 1 capital to average assets ratio was 11.04% and our total risk-based capital ratio was 14.41% as compared to 10.32% and 14.20% as of December 31, 2010, respectively.
Review of Operations:
Interest income for quarter ending December 31, 2011 was $2.10 million as compared to $2.11 million in the same quarter a year ago and on a year-to-date basis through December 31, 2011 the interest income was $8.27 million as compared to the same period last year ending December 31, 2010 when it was $9.29 million. Interest expense during the current quarter was $302,000 as compared to $395,000 in the same quarter a year ago. On a year-to-date basis through December 31, 2011 the interest expense was $1.28 million as compared to the same period last year when it was $1.82 million. Our interest costs continue to benefit from a low rate environment that continues to allow us to gradually reprice maturing deposits into lower rates. The Bank achieved net interest margins of 4.27% and 4.36% for the current quarter and year ending December 31, 2011, respectively. This compares to 4.00% and 4.55% in the same periods ending in 2010.
There were no provisions for loan losses in the fourth quarters ending December 31, 2011 and December 31, 2010. The year-to-date provision for loan losses were $265,000 for year ending December 31, 2011 as compared to $3.20 million for year ending December 31, 2010.
Non-interest expenses during the current quarter totaled $1.42 million and $5.77 million for the period ending December 31, 2011, respectively. This compares to $1.42 million and $6.07 million for the same periods ending in 2010. The improvement in expenses in 2011 came from lower equipment expenses, legal fees and FDIC insurance premiums. Most of our expenses are expected to remain level on a go forward basis. The efficiency ratio, which measures the amount of overhead expense per net interest income plus noninterest income, was 82.83% for the fourth quarter of this year and 79.66% for year-to-date December 31, 2011 as compared to 81.45% and 76.47% for the same periods ending in 2010. The efficiency ratio rose slightly in 2011 due to lower revenue from a drop in interest income.
About Pacific Valley Bank
Pacific Valley Bank is a California State chartered bank that commenced operations in September 2004. Pacific Valley Bank serves three locations; administrative headquarters and branch offices in Salinas, King City and Monterey, California. The Bank offers a broad range of banking products and services, including credit and deposit services to small and medium sized businesses, agriculture related businesses, non-profit organizations, professional service providers and individuals. The Bank serves customers primarily in Monterey County. For more information, visit [ www.pacificvalleybank.com ].
Safe Harbor Statement:
Except for the historical information in this news release, the matters described herein are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that could cause actual results to differ materially. Such risks and uncertainties include: the credit risks of lending activities, including changes in the level and trend of loan delinquencies and charge-offs, results of examinations by our banking regulators, our ability to maintain adequate levels of capital and liquidity, our ability to manage loan delinquency rates, our ability to price deposits to retain existing customers and achieve low-cost deposit growth, manage expenses and lower the efficiency ratio, expand or maintain the net interest margin, mitigate interest rate risk for changes in the interest rate environment, competitive pressures in the banking industry, access to available sources of credit to manage liquidity, the local and national economic environment, and other risks and uncertainties as discussed in Pacific Valley Bank's filings with the FDIC. Accordingly, undue reliance should not be placed on forward-looking statements. These forward-looking statements speak only as of the date of this release. Pacific Valley Bank undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events. Investors are encouraged to read the FDIC filing reports of Pacific Valley Bank which are available on our website; including the most recent filing of the Form 10-K for fiscal year ended December 31, 2010. They contain meaningful cautionary language and discussion why actual results may vary from those anticipated by management.
