published on April 15, 2020 - 2:46 PM
Written by The Business Journal Staff

Central Valley Community Bancorp released its first quarter earnings report Wednesday, offering one of the first glimpses of how local banks will be touched by the COVID-19 crisis.

Q1 earnings were $6.62 million for the three months ending March 31, compared to $5.21 million for the same period last year.

Despite the increase in revenue, there were signs of harder times to come. Net loans decreased for the quarter by $15 million, or 1.61%. Central Valley Community Bank also recorded a provision for credit losses of $1.37 million in the first quarter “in anticipation of the potential economic effects of the COVID-19 pandemic on our loan portfolio,” according to a news release.

“What began as a quarter with good momentum, coming off a strong year-end 2019, has been disrupted by a global health crisis that has set off an economic crisis which is now our highest priority. Central Valley Community Bank immediately put its pandemic plan into action in late February to adjust to the impact of the COVID-19 pandemic on our communities and our clients,” stated James M. Ford, President & CEO of Central Valley Community Bank and Central Valley Community Bancorp.

Ford went on to state, “We are here for our clients assisting them with loan payment deferrals and maintaining service inside Banking Centers and through Drive-up locations, digital and electronic channels, all the while adhering to the ever-evolving State and Federal guidelines. Central Valley Community Bank is participating in the Paycheck Protection Program launched by the Treasury and the Small Business Administration. We are also serving clients and our communities through refocusing our charitable giving and assistance in these unprecedented times.”

The COVID-19 pandemic has already impacted the local economy in the San Joaquin Valley and greater Sacramento area — the bank’s primary markets.

Central Valley Community Bank’s management team evaluated its exposure to loan losses related to the pandemic, identifying the following industry segments most impacted:

Hospitality
Outstanding loan balance: $74.67 million
Percent of total loan portfolio: 8.04%

Retail
Outstanding balance: $69.12 million
Percent of total portfolio: 7.45%

Assisted living facilities
Outstanding balance: $21.2 million
Percent of total portfolio: 2.28%

Entertainment
Outstanding balance: $20.02 million
Percent of total portfolio: 2.16%

Restaurants
Outstanding balance: $16.2 million
Percent of total portfolio: 1.75%

All together, the bank identified $214.25 million in outstanding loan balances among impacted industry segments, representing just shy of a quarter of the bank’s total loan portfolio.

As of March 31, loan customer requests to defer payments on loans totaling approximately $115 million were granted. As a preferred SBA lender, the bank is participating in the SBA Paycheck Protection Program (PPP) to help provide loans to business customers to provide them with additional working capital. To date, the Company has received client applications of approximately $150 million, “and is working diligently with the SBA to qualify clients to receive PPP loans,” according to a news release.


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