PRESS RELEASE Contact:  Roy Estridge, EVP/CFO
  Valley Commerce Bancorp
  (559) 622-9000

 

VALLEY COMMERCE BANCORP REPORTS STRONG EARNINGS FOR 2011

 

VISALIA, California, February 3, 2012 —

Valley Commerce Bancorp, (OTCBB: VCBP), a bank holding company and the parent company of Valley Business Bank, today announced fourth quarter 2011 net income of $793 thousand, or $0.25 per diluted common share. This compared to net income of $764 thousand, or $0.24 per diluted common share, for the fourth quarter of 2010. For the year ended December 31, 2011 Valley Commerce Bancorp reported earnings of $3.1 million, or $0.97 per diluted common share, compared to net earnings of $2.2 million, or $0.65 per diluted common share, for 2010.

 

Allan W. Stone, President and Chief Executive Officer, remarked, “We are pleased to report that 2011 was the most profitable year in the Company’s history. Our focus is always on producing sustainable core earnings so we were particularly pleased that net interest income increased in 2011. Although the year over year improvement in earnings was mostly attributable to a reduction in the provision for loan losses, we feel that this was made possible by our dedicated efforts to identify, monitor, and resolve the credit weaknesses that were an unfortunate reality of the recession. We anticipate overall positive trends in loan portfolio credit quality going forward.”

 

Stone added, “The lack of loan demand in this post-recession period remains a challenge and we are intensifying our calling, referral and marketing efforts in order to build this vital piece of our business.  In addition, our management team and all our employees continue to work very diligently to prepare our bank to compete and succeed in an ever more challenging community banking environment.  Our improved credit quality and our strong net interest margin give us cause for optimism in the years ahead.  We look forward to continuing to meet the banking needs of our customers as well as providing our shareholders with a safe and sound investment, and we remain fully committed to growing the value of that investment.”

 

Financial Performance Comparisons

 

 

Year 2011 compared to Year 2010

 

  • Net income increased by $941 thousand or 44%
  • Net interest income increased by $384 thousand or 3%
  • The provision for loan losses decreased by $1.5 million or 71%
  • Non-interest income increased $219 thousand or 16%
  • Non-interest expense increased $478 thousand or 5%
  • The allowance for loan and lease losses (ALLL) as a percentage of total loans decreased from 2.78% to 2.38%
  • Non-performing assets as a percentage of total assets decreased from 2.0% to 1.9%

 

Fourth Quarter 2011 compared to Fourth Quarter 2010

 

  • Net income increased by $29 thousand or 4%
  • Net interest income increased by $67 thousand or 2%
  • The provision for loan losses decreased by $25 thousand or 10%
  • Non-interest income increased by $108 thousand or 30%
  • Non-interest expense increased by $194 thousand or 8%

 

 

 

 
 

 

 

Asset Quality

 

Non-performing loans at December 31, 2011 included nonaccrual loans involving eight customer relationships with an aggregate balance of $5.6 million or 2.5% of total loans. This compared with nonaccrual loans involving six customer relationships at December 31, 2010 with an aggregate balance of $6.8 million or 2.8% of total loans. The Company also had $1.1 million in other real estate owned at December 31, 2011 compared to none at December 31, 2010. Total non-performing assets at December 31, 2011 totaled $6.8 million or 1.9% of total assets compared to $6.8 million or 2.0% of total assets at December 31, 2010.

 

The 2011 year end total of non-performing assets was static compared to the prior year end due to charge-offs of non-performing loans being offset by loans transferred to nonaccrual status during 2011, as well as one nonaccrual loan which was transferred to other real estate owned in the fourth quarter of 2011. Net charge-offs for 2011 totaled $1.8 million, or 0.8% of average loans, compared to the 2010 total of $1.6 million or 0.7% of average loans.

 

The Company’s ALLL decreased from $6.7 million at December 31, 2010 to $5.5 million at December 31, 2011 due to loan loss provisions of $600 thousand and net charge-offs of $1.8 million during 2011. The ALLL represents 2.37% of total loans at December 31, 2011 compared to 2.78% at December 31, 2010. The ALLL percentage decreased due to loan charge-offs in 2011 occurring primarily on impaired loans that had been assigned individual loss reserves prior to 2011.

 

The portion of the ALLL relating to specific impaired loans was $528 thousand and $1.8 million at December 31, 2011 and 2010, respectively. Impaired loans totaled $10.8 million and $11.4 million at December 31, 2011 and 2010, respectively. At December 31, 2011 and 2010, impaired loans were comprised of nonaccrual loans included in nonperforming assets and other loans that are not expected to perform in accordance with the original loan agreement.

 

Loans, Investment Securities, Deposits, and Borrowings

 

Net loans (gross loans less the ALLL) were $224.5 million at December 31, 2010, a decrease of $9.8 million or 4% from the $234.3 million at December 31, 2010. The decrease occurred primarily in the categories of commercial and real estate-construction loans. Average gross loans were $232.4 million for 2011 and $243.1 million for 2010, a decrease of $10.8 million or 4%. The decrease in loans resulted primarily from scheduled loan repayments and to a lesser extent loan charge-offs and foreclosures. The Company’s new lending activity in 2011 was focused in the area of commercial real estate.

 

Available-for-sale investment securities increased from $50.8 million at December 31, 2010 to $56.7 million at December 31, 2011. There were $23.6 million of investment security purchases made during 2011 which were offset by normal repayments, maturities, calls, and sales. Gain on sale of investment securities was $290 thousand in 2011 compared to $34 thousand in 2010. The increase in gain resulted from normal portfolio maintenance and repositioning transactions combined with favorable market conditions.

 

Total deposits increased by $21.6 million or 7% from $294.3 million at December 31, 2010 to $315.9 million at December 31, 2011. Average deposits were $294.9 million for the year ended December 31, 2011, a $3.2 million or 1% decrease from the $298.1 million in average total deposits for the year ended December 31, 2010. The decrease in average deposits reflected management’s decision to call $9.2 million in brokered time deposits in the third quarter of 2011.

 

 

 

 
 

  

Shareholders’ Equity

 

Total shareholders’ equity increased by $3.8 million, from $38.7 million at December 31, 2010 to $42.5 million at December 31, 2011. The increase is primarily the result of 2011 earnings and a $856 thousand increase in the market value of investment securities which is included in accumulated other comprehensive income within shareholders’ equity.

 

Book value per common share increased to $12.50 at December 31, 2011 from $11.80 at December 31, 2010. Valley Commerce Bancorp’s Total Risk-Based Capital Ratio increased to 18.9% at December 31, 2011 compared to 17.5% at December 31, 2010.

 

Net Interest Income and Net Interest Margin

 

For the quarter ended December 31, 2011 net interest income totaled $3.6 million, an increase of $67 thousand or 2% from the $3.5 million earned during the fourth quarter of 2010. For the year ended December 31, 2011, net interest income totaled $14.0 million, an increase of $384 thousand or 3% from the 2010 total of $13.6 million. Net interest income increased during the 2011 periods due to an increase in the average balance of investment securities and reduced cost of deposits.

 

Net interest margin was 4.73% and 4.31% for the three-month periods ended December 31, 2011 and 2010, respectively. Net interest margin for the year ended 2011 and 2010 was 4.55% and 4.41%, respectively, an increase of 14 basis points (bps). The improvement reflected the Company’s ability to manage its cost of funds and other components of net interest margin during 2011. The yield earned on loans averaged 6.00% and 6.08% for the years ended December 31, 2011 and 2010, respectively, a decrease of 8 bps. This decrease was offset by a 36 bps decrease in the average rate paid on interest-bearing deposits which was 0.72% and 1.08% for the years ended December 31, 2011 and 2010, respectively, and reflected market-based rate reductions and re-pricing of time deposits to lower rates at maturity. The decrease in cost of funds also reflected the scheduled repayment of term debt and the Company’s call of brokered time deposits, both of which had relatively high interest rates.

 

Key factors in the 2011 net interest margin included a $14.5 million increase in the average balance of investment securities, which resulted in a $289 thousand increase in interest income from investments for the year. In addition, the Company called its remaining brokered deposits in the third quarter of 2011 due to lowered expectations for a rising interest rate environment. Interest paid on brokered deposits in 2011 decreased by $350 thousand compared to 2010.

 

Non-Interest Income

 

For the quarter ended December 31, 2011, non-interest income totaled $465 thousand, an increase of $108 thousand or 30% from the $357 thousand recorded during the fourth quarter of 2010. The increase resulted from gains on sale of investment securities which were $145 thousand in the 2011 period compared to $24 thousand in the 2010 period.

 

For all of 2011, non-interest income totaled $1.6 million, an increase of $219 thousand or 16% from the 2010 total of $1.3 million. The increase in non-interest income for 2011 was attributable to gains on sales of investment securities of $290 thousand in 2011 compared to $34 thousand in 2010. This was partially offset by a $64 thousand or 8% decrease in service charges on deposit accounts that resulted primarily from lower incidence of non-sufficient funds charges.

 

 

 
 

 

 

Non-Interest Expense

 

For the quarter ended December 31, 2011, non-interest expense totaled $2.6 million, an increase of $194 thousand or 8% from the $2.4 million recorded during the fourth quarter of 2010. Salaries and employee benefits expense increased by $131 thousand or 10% from $1.3 million in 2010 to $1.4 million in the fourth quarter of 2011 due to incentive program changes as well as normal personnel and salary changes. In addition, there was a $50 thousand or 40% increase in professional and legal expenses related primarily to the timing of audit billings, a $34 thousand or 68% increase in advertising expense resulting from a more robust advertising program in 2011, and a $34 thousand or 61% increase in expenses related to appraisal and inspection of nonperforming assets. These were offset by a $54 thousand or 77% decrease in FDIC insurance expense which reflected adjustments made to implement FDIC’s revised methodology for calculating insurance premiums and adjust premiums paid in advance to FDIC.

 

For the year ended December 31, 2011, non-interest expense totaled $10.3 million, an increase of $478 thousand or 5% from the $9.8 million recorded during the year ended 2010. Salaries and employee benefit expense increased by $431 thousand or 8% during the period ended December 31, 2011 due to incentive program changes, stock options expense and restricted stock grants, post-retirement benefits expense, and vacation expense, as well as normal personnel and salary changes. In addition, there was a $77 thousand or 38% increase in advertising and business development expense due to a more robust advertising effort in 2011, a $75 thousand or 12% increase in occupancy expense related to upgrade of the Company’s technology platform, and a $63 thousand increase in expenses related to appraisal and inspection of nonperforming assets. These were offset by a $179 thousand or 25% decrease in FDIC insurance expense which reflected adjustments made to implement FDIC’s revised methodology for calculating insurance premiums and adjust premiums paid in advance to FDIC.

OTHER INFORMATION: Valley Commerce Bancorp stock trades on NASDAQ’s Over the Counter Bulletin Board under the symbol VCBP. Valley Business Bank, the wholly owned subsidiary of Valley Commerce Bancorp, is a commercial bank that commenced operations in 1996. Valley Business Bank operates through Business Banking Centers in Visalia, Tulare, and Fresno, California and has branch offices in Woodlake and Tipton, California. Additional information about Valley Business Bank is available from the Bank’s website at http://www.valleybusinessbank.net.

FORWARD-LOOKING STATEMENTS: In addition to historical information, this release includes forward-looking statements, which reflect management's current expectations for Valley Commerce Bancorp’s future financial results, business prospects and business developments. Management's expectations for Valley Commerce Bancorp's future necessarily involve assumptions, estimates and the evaluation of risks and uncertainties. Various factors could cause actual events or results to differ materially from those expectations. The forward-looking statements contained herein represent management's expectations as of the date of this release. Valley Commerce Bancorp undertakes no obligation to release publicly the results of any revisions to the forward-looking statements included herein to reflect events or circumstances after today, or to reflect the occurrence of unanticipated events. For those statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

 
 

VALLEY COMMERCE BANCORP

 

Condensed Consolidated
Balance Sheet

(In thousands except share and per share data) (Unaudited)
  As of December 31, 
   2011   2010 
Assets          
Cash and Due from Banks  $60,421   $32,668 
Available-for-Sale Investment Securities   56,705    50,823 
Loans (net)   224,532    234,304 
Bank Premises and Equipment (net)   8,168    8,511 
Cash Surrender Value of Bank-Owned Life Insurance   7,693    6,627 
Other Real Estate Owned     1,141    —  
Other Assets    7,860    8,488 
TOTAL ASSETS  $366,520   $341,421 
           
Liabilities & Equity          
Non-Interest Bearing Deposits  $128,453   $91,203 
Interest Bearing Deposits   116,373    119,446 
Time Deposits   71,051    83,629 
Total Deposits   315,877    294,278 
FHLB Term Borrowings   1,000    2,562 
Junior Subordinated Deferrable Interest Debentures   3,093    3,093 
Other Liabilities   4,045    2,738 
Total Liabilities   324,015    302,671 
Shareholders’ Equity   42,505    38,750 
TOTAL LIABILITIES & EQUITY  $366,520   $341,421 
           

 

Condensed Consolidated
Statement of Income

(In thousands except share and per share data) (Unaudited)
  Three Months Ended
December 31,
   Years Ended
December 31,
 
   2011   2010   2011   2010 
                 
Interest Income  $3,874   $4,012   $15,643   $16,212 
Interest Expense   317    522    1,666    2,619 
NET INTEREST INCOME   3,557    3,490    13,977    13,593 
  Provision for Loan Losses   225    250    600    2,050 
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES
   3,332    3,240    13,377    11,543 
Non-interest Income   465    357    1,560    1,341 
Non-interest Expense   2,640    2,446    10,256    9,778 
INCOME BEFORE INCOME TAXES   1,157    1,151    4,681    3,106 
Provision  for Income Taxes   364    387    1,577    943 
 
NET INCOME
  $793   $764   $3,104   $2,163 
DIVIDENDS ACCRUED AND DISCOUNT
ACCRETED ON PREFERRED SHARES
  $105   $96   $417   $421 
NET INCOME AVAILABLE
TO COMMON SHAREHOLDERS
  $688   $668   $2,687   $1,742 
 
EARNINGS PER COMMON SHARE – BASIC*
  $0.25   $0.24   $0.97   $0.65 

EARNINGS PER COMMON SHARE – DILUTED*
  $0.25   $0.24   $0.97   $0.65 
 
COMMON SHARES OUTSTANDING – END OF PERIOD
   2,784,543    2,630,480    2,784,543    2,630,480 
*  Earnings per share amounts have been restated for the 5% stock dividend issued in June 2011
                     

 

 

 

 
 

VALLEY COMMERCE BANCORP
SELECTED FINANCIAL INFORMATION
(In thousands, except share and per share data)
(Unaudited)

 

   December 31, 
   2011   2010 
         
CREDIT QUALITY DATA          
Allowance for loan losses  $5,469   $6,699 
Allowance for loan losses as a percentage of total loans   2.37%   2.78%
Non-performing loans  $5,646   $6,822 
Non-performing loans as a percentage of total loans   2.75%   2.83%
Non-performing assets  $8,661   $6,822 
Non-performing assets as a percentage of total assets   1.85%   2.00%
Year-to-date net charge-offs  $1,830   $1,582 
Year-to-date net charge-offs as a percentage of average loans   0.84%   0.65%
           
SHARE AND PER SHARE DATA          
Basic earnings per common share for the quarter  $0.25   $0.24 
Diluted earnings per common share for the quarter  $0.25   $0.24 
Quarterly weighted average common shares outstanding   2,782,447    2,744,550 
Quarterly weighted average diluted common shares outstanding   2,783,450    2,755,274 
Basic earnings per common share, year-to-date  $0.97   $0.65 
Diluted earnings per common share, year-to-date  $0.97   $0.65 
Year-to-date weighted average common shares outstanding   2,768,114    2,698,200 
Year-to-date weighted average diluted common shares outstanding   2,773,519    2,705,070 
Book value per common share  $12.50   $11.80 
Total common shares outstanding   2,784,543    2,630,480 
           
QUARTERLY KEY FINANCIAL RATIOS          
Annualized return on average equity   7.46%   7.76%
Annualized return on average assets   0.92%   0.87%
Net interest margin   4.73%   4.31%
Efficiency ratio   65.63%   63.59%
           
 ANNUAL KEY FINANCIAL RATIOS          
 Return on average equity   7.63%   5.68%
 Return on average assets   0.90%   0.63%
 Net interest margin   4.55%   4.41%
 Efficiency ratio   66.01%   65.48%
 Loan to deposit ratio at year end   71.08%   79.62%
 Total Risk-Based Capital Ratio at year end   18.88%   17.46%

 

 
 


The following information was filed by Valley Commerce Bancorp (VCBP) on Monday, February 6, 2012 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

View differences made from one year to another to evaluate Valley Commerce Bancorp's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 10-K Annual Report to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Valley Commerce Bancorp.

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account