Central Valley(CVCY) - 2021 Q4 - Annual Report

Financial Overview - As of December 31, 2021, the consolidated total assets of Central Valley Community Bancorp were approximately $2.45 billion[8]. - The Bank's total loans outstanding were $1.04 billion, with 79.3% of the loan portfolio secured by real estate[9]. - The Bank's total market share of deposits in Fresno, Madera, San Joaquin, and Tulare counties was 3.83% in 2021, up from 3.40% in 2020[9]. - The Bank's commercial and industrial loans outstanding included $18,553,000 in PPP loans[9]. - The Bank operates 20 full-service banking offices across nine counties in California's central valley[9]. - As of December 31, 2021, the Bank had consolidated total assets of approximately $2,450,139,000[8]. - The total loans outstanding were $1,039,111,000, with 79.3% secured by real estate[9]. - The Bank's total market share in other counties (El Dorado, Merced, Placer, Sacramento, and Stanislaus) was less than 1.00% in both 2021 and 2020[12]. Regulatory Compliance - The Company is subject to regulation under the Bank Holding Company Act of 1956 and must obtain prior approval from the Federal Reserve for acquisitions exceeding 5% of voting shares of any bank[15]. - The Company is required to act as a source of financial and managerial strength to its subsidiary banks, committing resources even during financial stress[17]. - The Company must maintain certain capital levels as mandated by the Federal Reserve, impacting its financial flexibility[17]. - The Company is subject to potential increases in FDIC insurance premiums, which could adversely affect earnings and stock value[36]. - The Company has not elected to be treated as a financial holding company and currently has no plans to do so[15]. - The Company and the Bank exceed the minimum capital requirements, with a common equity Tier 1 capital ratio of at least 4.5%[24]. - The Tier 1 leverage ratio is maintained at 4.0% or more, and the total risk-based ratio is at least 8.0%[24]. - The Company must adhere to Federal Reserve policies regarding dividend payments, which may be eliminated or reduced if net income is insufficient[21]. - The Company is subject to increased scrutiny from the Consumer Financial Protection Bureau (CFPB) due to the Dodd-Frank Act, which may impact pricing and practices[35]. - The Company is monitoring legislative developments in California regarding privacy and cybersecurity standards that may affect operations[29]. Capital and Dividends - The Company's ability to pay dividends is influenced by its net income and regulatory policies, with the Federal Reserve advising against dividends if net income is insufficient[21]. - Dividends payable by the Bank to the Company are restricted to the lesser of the Bank's retained earnings or net income for the latest three fiscal years, less dividends paid during that period[21]. - The Bank's ability to pay dividends is influenced by its earnings, capital requirements, and the maintenance of an adequate allowance for credit losses[23]. - The Company and the Bank are required to maintain a "conservation buffer" of at least 2.5% above the required minimum capital levels[24]. Employee and Workforce - Approximately 63% of the Bank's employees are employed at banking centers and loan production offices, with a total of 247 employees as of December 31, 2021[39]. - The average tenure of employees increased to six and one-half years as of December 31, 2021, reflecting a commitment to employee retention[39]. - The Bank's workforce is approximately 72% female, indicating a commitment to diversity and inclusion[39]. - The company aims to create an inclusive workforce with diversified backgrounds and experiences[39]. - The company offers market competitive total rewards programs, including annual bonuses and a matched 401(k) Plan[39]. Risk Management and Security - The Bank is insured by the FDIC, which currently insures deposits up to $250,000 for each deposit insurance ownership category[18]. - The Bank is eligible to accept brokered deposits without limitations, while adequately capitalized institutions face restrictions[20]. - The Bank's loans to directors and insiders must adhere to strict regulatory requirements, including terms comparable to those offered to non-affiliated individuals[20]. - The Bank has adopted a customer information security program to safeguard confidential customer information as required by federal guidelines[29]. - The Company has implemented extensive controls to comply with anti-money laundering regulations, including the USA PATRIOT Act and the Bank Secrecy Act[25]. - The Bank is required to report all blocked transactions to the Office of Foreign Assets Control (OFAC) within 10 business days[28]. - The Company has established policies to comply with the California Consumer Privacy Act (CCPA), enhancing consumer control over personal information[29]. - The Bank's compliance with consumer protection laws may incur additional costs due to heightened regulatory scrutiny[33]. Market Environment - The Bank's primary service area is highly competitive, with numerous banking and credit union offices impacting market dynamics[12]. - The competitive environment is intensified by technological innovations and mergers among financial institutions, affecting operational strategies[12]. - The Bank's business activities are concentrated in California's central valley, exposing it to regional economic trends[11].