Pacific Valley Bank Announces Fourth Quarter 2013 Financial Results

Pacific Valley Bank Announces Fourth Quarter 2013 Financial Results 
SALINAS, CA -- (Marketwired) -- 02/03/14 --  Pacific Valley Bank
(OTCQB: PVBK) announced its unaudited fourth quarter 2013 net income
of $4,059,000, or $1.13 basic earnings per share, as compared to the
same quarter last year when we reported net income of $484,000, or
$0.13 basic earnings per share. Our net income for the full year 2013
was $5,555,000, or $1.54 basic earnings per share, as compared to the
full year 2012 for which we reported net income of $1,906,000, or
$0.53 basic earnings per share. The fourth quarter of 2013 included a
net tax benefit of $3,830,000 driven principally by the full reversal
of the valuation allowance recorded against the Bank's deferred tax
assets. 
Fourth Quarter 2013 Financial Highlights (annualized): 


 
--  Return on Average Assets (ROAA): 7.91%
--  Net Interest Margin (NIM): 3.86%
--  Efficiency Ratio: 78.68%

  
Full Year 2013 Financial Highlights (annualized): 


 
--  Return on Average Assets (ROAA): 2.90%
--  Net Interest Margin (NIM): 4.25%
--  Efficiency Ratio: 76.97%

  
"This has been another record year in our Bank's history, with
continued strong loan and deposit growth. The fourth quarter of 2013
marks our 13th consecutive quarter of profitability," stated David B.
Warner, President and Chief Executive Officer. "Despite the sustained
soft economy in which we continue to operate, we successfully
expanded and deepened our customer relationships within the
communities we serve -- and Pacific Valley Bank continues to deliver
as a prominent and respected institution in our home Monterey County
markets. Our most valued customers are speaking highly of our
services in the community, contributing to the growth of our 'brand.'
Our ability to generate solid growth in total assets, deposits and
loans throughout the year enabled us to achieve a 6% year-over-year
increase in net interest income, the key revenue driver for the Bank.
More specifically, in comparison to the prior year, interest income
generated by organic loan growth has outpaced the pressure placed on
our interest rate margins by the low-rate environment in which we
continue to operate. Based on a combination of loan growth, economic
factors, and our overall assessment of the asset quality within our
portfolio, we recorded a $200,000 loan loss provision in the fourth
quarter. Despite strong year-over-year deposit growth, our funding
costs have declined slightly -- primarily due to a combination of
favorable changes in our deposit mix and the current interest rate
environment. On a year-over-year basis, operating expenses have risen
9%, driven in part by both director and employee compensation that we
believe will be a benefit to us for the long term. Additionally, but
to a slightly lesser extent, we have experienced an overall increase
in the cost of doing business, principally due to a combination of
asset growth and increased regulatory compliance requirements.
Capital ratios remain very strong and we continue to be well
positioned with funds for additional lending." Mr. Warner continued,
"We have recently strengthened our team of business development
officers by adding experienced local bankers in Monterey and Salinas.
This investment in personnel, we believe, will serve the bank well in
expanding and deepening our lending relationships throughout Monterey
County." 
Balance Sheet Review:
 Total assets were $212.2 million at December
31, 2013, which is an increase of $18.2 million from the same period
last year when assets were $194.0 million. Our gross loans at
December 31, 2013 were $160.2 million, which is an increase of $8.7
million as compared to $151.5 million at December 31, 2012. During
the fourth quarter of 2013, our asset growth included $3.8 million
attributable to the impact of the full reversal of the valuation
allowance recorded against the Bank's deferred tax assets. The Bank
periodically evaluates all available evidence to determine if its
future tax benefits will more likely than not be realized.  
The allowance for loan losses as of December 31, 2013 was $3.4
million, which is generally unchanged from the same period last year.
The percentage of allowance for loan losses to gross loans
outstanding at December 31, 2013 was 2.13% as compared to 2.24% at
December 31, 2012. The allowance for loan loss ratio has gradually
been trending down since the same quarter last year due to net
charge-offs of measured impairments and overall loan growth.  
A significant component of our current liquidity position is
reflected in cash and cash equivalents, which totaled $45.6 million
as of December 31, 2013, and which is $10.1 million higher than the
$35.5 million reported as of December 31, 2012. The Bank's liquidity
is in a solid position and continues to be available to support
future loan growth. Deposits moved higher to $184.8 million as of
December 31, 2013, as compared to $172.1 million at December 31,
2012.  
Stockholders' equity at December 31, 2013 was $26.7 million as
compared to $21.2 million for the period ending December 31, 2012. At
December 31, 2013 our Tier 1 capital to average assets ratio was
11.54% as compared to 11.57% as of December 31, 2012.  
Review of Operations:
 Interest income for the quarter ending
December 31, 2013 was $2.2 million which is slightly lower versus the
same quarter a year ago. The interest income for the full year ending
December 31, 2013 was $8.9 million as compared to the same period
ending December 31, 2012 when it was $8.5 million. The increase in
interest income for the full year of $0.4 million is due in large
part to the recognition of interest income from a previously
classified nonaccrual status loan that was paid off during the first
quarter of 2013. This allowed for the recognition as interest income
of just under $0.3 million of prior interest payments that were
previously applied to principal. Interest expense during the current
quarter was $0.3 million which is generally unchanged from the same
quarter a year ago. The interest expense for the full year ending
December 31, 2013 was $1.0 million which is slightly lower in
comparison to the same period ending December 31, 2012. The Bank
achieved net interest margins of 3.86% and 4.34% for the
quarter-ending periods December 31, 2013 and December 31, 2012,
respectively. On a year-to-date basis, the Bank achieved net interest
margins of 4.25% and 4.51% for the full year periods ending December
31, 2013 and December 31, 2012, respectively.  
There was a $0.2 million provision for loan loss recorded in the
fourth quarter and full year of 2013, versus no such provisions in
the comparable periods of 2012. During the fourth quarter of 2013,
the Bank's methodology identified the need for a provision for loan
loss due to management's judgment regarding adequate reserves to
cover measured probable losses in our loan portfolio. The Bank
continually monitors its loan portfolio and it is therefore possible
that additional loss provisioning may be required in future periods
due to either loan growth or changes in asset quality, or some
combination of both. 
Non-interest expenses totaled $1.6 million for the fourth quarter
ending December 31, 2013. This compares to $1.5 million for the same
period ending in 2012. Non-interest expenses for the full year ending
December 31, 2013 were $6.4 million as compared to the full year
ending December 31, 2012 when they were $5.9 million. The efficiency
ratio, which measures the amount of overhe
ad expense per net interest
income plus noninterest income, was 78.68% for the fourth quarter of
2013 as compared to 75.00% for the same period ending in 2012. On a
year-to-date basis, the Bank's efficiency ratios were 76.97% and
75.12% for the full years ending December 31, 2013 and December 31,
2012, respectively.  


 
                                                                            
                      FINANCIAL HIGHLIGHTS (UNAUDITED)                      
              (in thousands, except per share and ratio data)               
--------------------------------------------------------------------------- 
                                                                            
--------------------------------------------------------------------------- 
Assets                               12/31/2013    9/30/2013    12/31/2012  
--------------------------------------------------------------------------- 
Cash and Cash Equivalents           $     45,580  $    45,924  $     35,536 
Investment Securities                      3,118        3,424         7,030 
Loans Outstanding                        160,236      154,999       151,545 
Loan Loss Reserve                         (3,411)      (3,433)       (3,397)
Other Assets                               6,720        3,017         3,290 
                                    ------------  -----------  ------------ 
Total Assets                        $    212,243  $   203,931  $    194,004 
                                    ============  ===========  ============ 
                                                                            
                                                                            
                                                                            
---------------------------------------------------------------------------- 
Liabilities and Capital               12/31/2013    9/30/2013    12/31/2012  
---------------------------------------------------------------------------- 
Deposits                             $    184,803  $   180,343  $    172,066 
Borrowings                                      -            -             - 
Other Liabilities                             740          938           734 
Equity                                     26,700       22,650        21,204 
                                     ------------  -----------  ------------ 
Total Liabilities and Capital        $    212,243  $   203,931  $    194,004 
                                     ============  ===========  ============ 
                                                                             
Tier One Leverage Ratio                     11.54%       11.50%        11.57%
Book Value Per Share (Basic)         $       7.42  $      6.30  $       5.89 
                                                                             
                                                                             
                                                                             
                         Three Months Ended              Full-Year Ended    
--------------------------------------------------------------------------- 
Income Statement 12/31/2013   9/30/2013  12/31/2012  12/31/2013  12/31/2012 
--------------------------------------------------------------------------- 
Interest Income  $    2,173  $    2,196  $    2,181  $    8,889  $    8,495 
Interest Expense        251         244         253         960       1,034 
                 ----------  ----------  ----------  ----------  ---------- 
Net Interest                                                                
 Income               1,922       1,952       1,928       7,929       7,461 
                 ----------  ----------  ----------  ----------  ---------- 
Provision for                                                               
 Loan Losses            200           -           -         200           - 
Other Income             90         105          77         433         419 
Operating                                                                   
 Expenses             1,583       1,646       1,504       6,436       5,919 
Tax Expense                                                                 
 (Benefit)           (3,830)          -          17      (3,829)         55 
                 ----------  ----------  ----------  ----------  ---------- 
Net Income       $    4,059  $      411  $      484  $    5,555  $    1,906 
                 ==========  ==========  ==========  ==========  ========== 
                                                                            
Annualized                                                                  
 Return on                                                                  
 Average Assets        7.91%       0.83%       1.11%       2.90%       1.12%
Annualized                                                                  
 Return on                                                                  
 Average Equity       70.07%       7.27%       9.18%      25.02%       9.43%
Annualized Net                                                              
 Interest Margin       3.86%       4.05%       4.34%       4.25%       4.51%
Earnings Per                                                                
 Share (Basic)   $     1.13  $     0.11  $     0.13  $     1.54  $     0.53 
Efficiency Ratio      78.68%      80.02%      75.00%      76.97%      75.12%
                                                                            
Note:  Per share amounts for all periods presented have been retroactively  
adjusted for the effect of the Bank's 10% stock dividend that was           
distributed on May 31, 2013.                                                

 
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 contain 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 enviro
nment, 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. 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 Pacific
Valley Bank annual reports which are available on our website.  
Contacts:
David B. Warner
CEO 
(831) 771-4323 
Robert J. Lampert
CFO 
(831) 771-4317 
 
 
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