Pacific Valley Bank Announces First Quarter 2012 Financial Results

May 02, 2012, 09:00 ET from Pacific Valley Bank

SALINAS, Calif., May 2, 2012 /PRNewswire/ -- Pacific Valley Bank (OTCBB: PVBK) announced first quarter 2012 net income of $309,800 or $0.09 basic earnings per share as compared to the same quarter last year when we reported a net income of $366,900 or $0.11 basic earnings per share.   

First Quarter 2012 Financial Highlights:

             Return on Average Assets (ROA):  0.76%

             Net Interest Margin (NIM):  4.79%

             Efficiency Ratio:  82.80%

"We are pleased with the financial results achieved in the first quarter of this year as we continue our string of six straight profitable quarters. And we also experienced further improvement in the quality of our loan portfolio, including the recovery of $584,000 from loans written-off in a prior year which resulted in an increase to the allowance for loan losses," stated David B. Warner, President and Chief Executive Officer.  "We like the opportunities that we see for growth for our Bank here in Monterey County.  The agricultural industry continues to expand and we are seeing clear signs that the property markets in the area are stabilizing.  It should be noted, we were also honored that The Findley Reports recently recognized Pacific Valley Bank as a Premier Performing bank for 2011."

Balance Sheet and Loan Quality Review:

Total assets were $166.19 million at March 31, 2012, which is a decrease of $1.57 million from the same period last year when assets were $167.76 million.  Our gross loans at March 31, 2012 were $130.10 million, which is an increase of $4.79 million as compared to $125.31 million at March 31, 2011. 

The allowance for loan losses as of March 31, 2012 was $4.12 million, which is a decrease from the same quarter last year when it was $4.34 million.  The percentage of allowance for loan losses to gross loans outstanding at March 31, 2012 was 3.17% as compared to 3.46% in the same quarter last year. 

The allowance for loan losses is measured using such factors that take into account historical loss migration within the portfolio, 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.  Some of the key qualitative factors credit administration monitors include; 1) non-accruing loans, which were $4.30 million as of March 31, 2012 as compared to $5.54 million as of March 31, 2011: 2) loans past due from 30 – 89 days, which were $2.11 million as of March 31, 2012 as compared to $881,000 at March 31, 2011; 3) net recoveries were $584,000 for the quarter ending March 31, 2012 as compared to net charge-offs of $94,800 for the quarter ending March 31, 2011; and 4) non-performing assets ratio, which was 2.82% as of March 31, 2012 as compared to 4.17% at March 31, 2011.  These qualitative factors indicate a level of gradual improvement in our overall loan quality.

A significant component of our current liquidity position is reflected in our Fed Funds Sold balance, which totals $26.36 million as of March 31, 2012 as compared to $25.71 million as of March 31, 2011.  The Bank's liquidity is in a good position to support future loan growth.  Deposits trended down at $143.77 million as of March 31, 2012 as compared to $146.41 million in the same quarter a year ago. 

Stockholders' equity at March 31, 2012 was $19.67 million as compared to $18.52 million from the quarter ending March 31, 2011.  At March 31, 2012 our Tier 1 capital to average assets ratio was 11.93% and our total risk-based capital ratio was 15.88% as compared to 10.91% and 14.64% as of March 31, 2011, respectively.

Review of Operations:

The core earnings of the Bank are measured by the interest income plus non-interest income less interest expense.  During the current first quarter, core earnings of the Bank were $1.86 million, which is higher by comparison to $1.83 million for the same quarter a year ago.  "The Bank's core earnings have been stable for a number of quarters now despite the gradual shrinking of the balance sheet," stated Mr. Warner. 

Interest income for the quarter ending March 31, 2012 was $2.09 million as compared to $2.11 million in the same quarter a year ago.  Interest expense during the current quarter was $275,300 as compared to $331,700 in the same quarter a year ago.  Our interest costs continue to benefit from a low rate environment that allows us to gradually re-price maturing deposits into current lower market rates.  The Bank achieved net interest margins of 4.79% and 4.43% for the quarter-ending periods March 31, 2012 and March 31, 2011, respectively. 

There were no provisions for loan losses in the current quarter and the same quarter a year ago.  The Bank's methodology did not identify the need for a provision for loan loss due to the stability in the credit quality, a recovery of $584,000, which was added to the allowance for loan losses, and management's judgment regarding adequate reserves to cover measured probable losses in our loan portfolio. 

Non-interest expenses during the current quarter totaled $1.54 million for the quarter ending March 31, 2012.  This compares to $1.41 million for the same period ending in 2011.  The higher expenses in the first quarter of 2012 occurred in the areas of compensation, equipment expenses, professional expenses and data processing.  The efficiency ratio, which measures the amount of overhead expense per net interest income plus noninterest income, was 82.80% for the first quarter of this year as compared to 77.21% for the same period ending in 2011.  The efficiency ratio moved higher due to higher expenses from personnel and operations.

Pacific Valley Bank's De-Registration:

Pacific Valley Bank announced recently its intention to take advantage of the "JOBS Act" and the signing of the bill into law by the President and filed Form 15 with the FDIC to voluntarily de-register its securities from periodic filing requirements.  Commenting on the filing, Mr.Warner said "We anticipate that deregistration of our securities will generate significant non-interest expense savings going forward and allow a greater focus of our personnel resources on our customers and profitable growth. The costs savings we anticipate from being able to de-register from periodic filing requirements is exactly the benefit the JOBS Act intended for community banks." Although the Bank's obligation to file certain periodic reports with the FDIC is terminated, the Bank will continue to make financial results available to the public, file Call Reports, be audited annually and issue press releases for the benefit of its shareholders.  Pacific Valley Bank's stock will continue to be traded on the OTC Bulletin Board as stock symbol PVBK.OB.





Y-O-Y Change

Cash and Due From Bank

$       5,537,000

$    -

$       4,740,000

$       (797,000)

Investment Securities





Federal Funds Sold





Loans Outstanding





Loan Loss Reserve





Other Assets





Total Assets

$  167,761,000

$    -

$  166,194,000

$   (1,567,000)

Liabilities and Capital



Y-O-Y Change


$  146,409,000

$    -

$  143,771,000

$   (2,638,000)






Other Liabilities










Total Liaibilities and Capital

$  167,761,000

$    -

$  166,194,000

$   (1,567,000)

Income Statement



Y-O-Y Change

Interest Income

$       2,113,000

$    -

$       2,082,000

$         (31,000)

Interest Expense





Net Interest Income





Provision for Loan Losses





Other Income





Operating Expenses










Net Income

$          367,000

$    -

$          310,000

$         (57,000)




Tier One Leverage Ratio



Total Risk Based Capital Ratio



Return on Assets



Earnings Per Share

$                 0.11

$                 0.09

Efficiency Ratio




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

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, 2011.  They contain meaningful cautionary language and discussion why actual results may vary from those anticipated by management.


David B. Warner, CEO at (831) 771-4323

Greg B. Spear, CFO at (831) 771-4317

SOURCE Pacific Valley Bank