"While under stressful economic times, the bank continues to produce quality net income even after larger provisions for loan losses," said Richard P. Loupe, the bank's chief executive officer. "Our asset quality metrics continue to improve, and the results are acceptable net earnings so far this year."
"While not off the charts, the bank generated a return on common equity for our shareholders in the third quarter of over 5.17%," he said. "We are proud of these results, which are a direct reflection of the quality of our loyal customers."
The bank reported net income available to common shareholders (unaudited) of $.0.13 per common share for the third quarter of 2010, compared to $0.22 per common share in the third quarter of 2009.
Net interest income before provision for loan losses was $2.35 million for the quarter, a slight 1% decrease compared to the third quarter of 2009, Loupe reported. Compared to the first nine months of 2009, the bank increased its loan loss provision/expense by $625,000, or 63% for the first nine months of 2010. Total Allowance for Loan losses stood at $4.2 million or 2.50% of loans at Sept. 30, compared to $4.0 million, or 2.19% of loans at Sept. 30, 2009. Net interest margin was 4.38% for the quarter, compared to 4.24% for the same quarter of last year.
According to the bank's report, total assets as of Sept. 30 were $209.5 million, a decrease of 3.6 % compared to Sept. 30, 2009. From September 2009-September 2010, net loans decreased 9.5% at quarter end. Much of this decrease was the result of borrowers repaying or paying down revolving lines of credit. Even though loans decreased year over year, the bank established a significant number of new commercial and personal banking relationships in 2010.
Valley Community Bank continues to be well capitalized, Loupe said. As of Sept. 30, the bank had a Tier 1 leverage capital ratio of 11.45% and a total risk-based capital ratio of 14.73%. It continues to maintain a very strong liquidity position with more than 17% of its assets in cash and short term AAA rated investments.
Valley Community Bank has branches in Pleasanton, Livermore, San Ramon and San Jose.