VALLEY REPUBLIC BANCORP BAKERSFIELD, Calif., Jan. 27, 2021 /PRNewswire/ -- Valley Republic Bancorp (the "Company") (OTCQX: VLLX), the parent company of Valley Republic Bank (the "Bank"), today announced its financial results for the year ended December 31, 2020.
Highlights for the Year Ended 2020 Compared to the Year Ended 2019:
- Net income before tax increased 49.1% to $17.2 million
- Net income after tax increased 28.7% to $12.5 million or $2.99 per share
- Total assets increased 31.6% to $1.236 billion
- Deposits increased 30.8% to $1.084 billion
- Loans increased 35.9% to $849 million
- Shareholder equity increased 22.6% to $95 million
- Book value increased to $22.55 per share
- Return on average assets increased to 1.12%
- Return on average equity increased to 14.86%
- Tier 1 Leverage Ratio 12/31/2020: 10.45% (well capitalized)
Overview:
The Company performed at an exceptionally high level in 2020. The Valley Republic team was able to generate a strong return for our shareholders, demonstrate our unwavering commitment to the communities we serve and safely grow the balance sheet in the face of uncertain economic times. The Bank recognized the seriousness of the COVID-19 pandemic early on and took every possible measure to ensure the small business community had access to all government-sponsored support programs; the team took an unconventional approach by offering these programs to both existing and non-customers. The intentional focus on supporting our local community has resulted in a significant increase in net new relationships. The Bank opened 1,110 new accounts and onboarded well over 100 net new business relationships during 2020.
The Bank also worked closely with existing borrowers who were impacted by the shelter in place mandate, by providing customized loan modifications, depending on individual borrower needs. In total, the Bank processed $76 million in loan deferments. As of the year ended 2020, only three loans totaling $3.9 million remained under some form of deferment; all three loans are secured by 1st Deeds of Trust with LTV estimates of less than 60%. The Bank suffered no loan losses.
Impaired and nonperforming assets at the year ended December 31, 2020 were $4.3 million, or .17%, of the Bank's core loan balance and remained stable and unchanged since the 3rd quarter ended September 30th. The impaired loans are secured by 1st Deeds of Trust with no calculated expected loss. The Bank added $2.3 million to its Allowance for Loan and Lease Losses ("ALLL") during the year. Its ALLL year-end balance of $10.6MM represented 1.25% of total loans outstanding (including Paycheck Protection Program ("PPP") loans, and 1.58% of its core loan balance.
Jack Smith, Chief Credit Officer stated, "We feel very positive about the performance and trajectory of our loan portfolio. The Bank's historically strong underwriting proved itself during a very difficult economic environment. Delinquencies, special mention and substandard loans, impaired and non-performing assets, and loan modification deferrals are all at low levels and have been fully addressed. Throughout 2020, the Bank has continued to emphasize credit underwriting, while adding to lending staff and further strengthening risk management procedures. We have achieved broader geographic and industry diversification and increased our loan loss reserve in relation to total loans as a mitigant to further economic downturn or long-term stresses."
Financial Performance
The Company reported net income before taxes of $4.8 million for the 4th quarter ended December 31, 2020, compared to $3.4 million for the same period last year. The Company reported net income after tax for the 4th quarter ended December 31, 2020 of $3.5 million, compared to $2.4 million for the 4th quarter ended December 31, 2019, an increase of 43.6%. Lower deposit costs, significant loan growth, and a modest increase in service charge and other non-interest income were the primary drivers of the significant increase in earnings. The 4th quarter ended December 31, 2020 results represented basic earnings per share of $0.83, compared to $0.59 for the same quarter last year.
For the twelve months ended December 31, 2020, the Company reported pre-tax income of $17.2 million compared to $11.5 million in the same period last year, an increase of $5.7 million, or 49.1%. Net income after tax for the twelve months ended December 31, 2020 was $12.5 million compared to $9.7 million for the same period in 2019, an increase of 28.7%. The full year results represented basic earnings per share of $2.99, compared to $2.36 one year ago. It should be noted the Company's effective tax rate for 2020 was 27% compared to 15.4% for the same time period last year. The lower tax rate in 2019 was related to the exercise of stock options.
Geraud Smith, President and CEO stated, "2020 provided Valley Republic Bank an opportunity to live out our commitment to our customers, shareholders, employees and the communities we serve. I am so proud of our team for their dedication and hard work and I am truly grateful to our loyal customers and shareholders for their continued trust in our organization."
Growth
Total assets for the year ended December 31st, 2020 were $1.236 billion, which represents a year over year increase of $297 million, or 31.6%. Total deposits increased $255 million, or 30.8%, ending the year at $1.084 billion. Total loans were $849 million as of December 31, 2020, which represents a year over year increase of $224 million, or 35.9%. The Bank's PPP loan balance at December 31st, 2020 was $178 million, down from its peak of $212 million earlier in the year. The reduction in the PPP loan balance is the result of the Bank obtaining loan forgiveness on behalf of its borrowers through the Small Business Administration. Even though much of the Bank's efforts in 2020 were focused on helping its borrowers through various government-sponsored programs, the Bank did achieve year over year core loan growth of 7.4%, or $46.1 million.
Eugene Voiland, Chairman of the Board of Directors added, "Looking back, one cannot really describe how tumultuous 2020 was. Our Bank employees, our Board and our customers demonstrated a remarkable resilience to get through this year as well as we did. The extraordinary support and feedback we received from our customers and many others are the result of Valley Republic's unwavering commitment to the community. There will be challenges ahead, but we will be prepared to meet them."
About Valley Republic Bancorp and Valley Republic Bank
Valley Republic Bancorp is a bank holding company formed in 2016. Valley Republic Bank is a wholly owned subsidiary of Valley Republic Bancorp, headquartered in Bakersfield, California. The Bancorp is subject to the regulatory oversight of the Federal Reserve Bank, and the Bank is subject to the regulatory oversight of the Federal Deposit Insurance Corporation and the California Department of Financial Protection and Innovation. Valley Republic Bank is an insured, state-chartered, non-member bank of the Federal Reserve System. The Bank is in its thirteenth year of operation, having been established in 2009. Valley Republic Bank is a full-service, community bank with three full-service banking offices in Bakersfield, one full- service banking office in Delano, and a loan production office in Fresno. Valley Republic Bank emphasizes professional, high quality banking services provided to a wide range of businesses and professionals. The Bank also provides a full complement of banking services that are available to individuals and non-profit organizations.
Valley Republic Bancorp and Subsidiary | |||
(Unaudited. Dollars in thousands, except per share data.) | December 31, 2020 | December 31, 2019 | |
ASSETS | |||
Cash and Due From Banks | $ 10,735 | $ 15,776 | |
Federal Funds Sold & Interest-Bearing Deposits in Banks | 129,991 | 90,533 | |
Total Cash and Equivalents | 140,726 | 106,309 | |
Debt Securities | 212,317 | 174,461 | |
Loans, Net of Deferred Fees and Costs | 849,226 | 624,768 | |
Allowance for Loan losses | (10,624) | (8,348) | |
Net Loans | 838,602 | 616,420 | |
Premises and Equipment | 6,948 | 7,839 | |
Bank Owned Life Insurance | 13,264 | 10,714 | |
Interest Receivable and Other Assets | 24,153 | 23,342 | |
TOTAL ASSETS | $ 1,236,010 | $ 939,085 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Liabilities | |||
Deposits | |||
Noninterest-Bearing | $ 381,733 | $ 288,387 | |
Interest-Bearing | 702,140 | 540,407 | |
Total Deposits | 1,083,873 | 828,794 | |
Short-Term FHLB Borrowing | 5,000 | - | |
Long-Term Debt, Net of Placement Costs | 39,371 | 19,705 | |
Accrued Interest Payable and Other Liabilities | 12,652 | 13,002 | |
Total Liabilities | 1,140,896 | 861,501 | |
Shareholders' Equity | |||
Common Stock, no Par Value | 48,530 | 47,645 | |
Additional Paid-in Capital | 808 | 726 | |
Retained Earnings | 42,143,000 | 29,612 | |
Accumulated Other Comprehensive Income (Loss) | 3,633,000 | (399) | |
Total Shareholders' Equity | 95,114 | 77,584 | |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ 1,236,010 | $ 939,085 | |
Book Value per Share | $ 22.55 | $ 18.59 | |
Valley Republic Bancorp and Subsidiary | |||||||
(Unaudited. Dollars in thousands, except per share data.) | Quarters Ended December 31, | Year to Date Ended December 31, | |||||
2020 | 2019 | 2020 | 2019 | ||||
INTEREST INCOME | |||||||
Loans (Including Fees and Costs) | $ 9,206 | $ 7,405 | $ 32,835 | $ 28,555 | |||
Debt Securities | 1,038 | 1,083 | 3,696 | 3,740 | |||
Other | 27 | 366 | 353 | 1,841 | |||
Total Interest Income | 10,271 | 8,854 | 36,884 | 34,136 | |||
INTEREST EXPENSE | |||||||
Deposits | 420 | 1,447 | 2,510 | 6,414 | |||
Other | 550 | 300 | 1,586 | 909 | |||
Total Interest Expense | 970 | 1,747 | 4,096 | 7,323 | |||
Net Interest Income | 9,301 | 7,107 | 32,788 | 26,813 | |||
Provision For Loan Losses | 600 | 369 | 2,275 | 1,404 | |||
Net Interest Income After Provision for Loan Losses | 8,701 | 6,738 | 30,513 | 25,409 | |||
NON-INTEREST INCOME | |||||||
Service Charges and Fees on Deposits | 183 | 147 | 660 | 510 | |||
Other Non-Interest Income | 518 | 490 | 1,768 | 1,422 | |||
Gain (Loss) on Sale of Securities | 22 | - | 1,111 | 489 | |||
Total Non-Interest Income | 723 | 637 | 3,539 | 2,421 | |||
NON-INTEREST EXPENSE | |||||||
Salaries and Employee Benefits | 2,801 | 2,614 | 10,016 | 10,342 | |||
Occupancy & Equipment | 501 | 455 | 1,939 | 1,737 | |||
Other | 1,296 | 954 | 4,931 | 4,240 | |||
Total Non-Interest Expense | 4,598 | 4,023 | 16,886 | 16,319 | |||
Income Before Taxes | 4,826 | 3,352 | 17,166 | 11,511 | |||
Income Taxes | 1,312 | 905 | 4,636 | 1,774 | |||
NET INCOME | $ 3,514 | $ 2,447 | $ 12,530 | $ 9,737 | |||
Basic Earnings per Share | $ 0.83 | $ 0.59 | $ 2.99 | $ 2.36 | |||
Certain prior period amounts have been reclassified to conform to the current year presentation.
Company Website: https://www.valleyrepublic.bank/investor-relations
Forward Looking Statements
This news release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended and Valley Republic Bancorp and Valley Republic Bank (together, the "Company") intend for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely.
Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management's views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties and actual results may differ materially from those presented, either expressed or implied, in this news release. Factors that might cause such differences include, but are not limited to: the Company's ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either nationally or locally, in areas in which the Company conducts its operations; changes in interest rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company's operations or business; loss of key personnel; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies.
The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.
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SOURCE Valley Republic Bancorp
