CVCY Earnings: December 31, 2020, and Quarterly Dividend

FOR IMMEDIATE RELEASE

CENTRAL VALLEY COMMUNITY BANCORP REPORTS EARNINGS RESULTS FOR THE

YEAR AND QUARTER ENDED DECEMBER 31, 2020, AND QUARTERLY DIVIDEND

FRESNO, CALIFORNIA…January 27, 2021… The Board of Directors of Central Valley Community Bancorp

(Company) (NASDAQ: CVCY), the parent company of Central Valley Community Bank (Bank), reported today

unaudited consolidated net income of $20,347,000, and fully diluted earnings per common share of $1.62 for the

year ended December 31, 2020, compared to $21,443,000 and $1.59 per fully diluted common share for the year

ended December 31, 2019.

FOURTH QUARTER FINANCIAL HIGHLIGHTS

• Net loans increased $155.2 million or 16.61%, and total assets increased $407.3 million or 25.51% at December 31, 2020 compared to December 31, 2019.
• Total deposits increased 29.21% to $1.72 billion at December 31, 2020 compared to December 31, 2019.
• Total cost of deposits remains at low levels at 0.07% and 0.15% for the quarters ended December 31, 2020 and 2019, respectively.
• Average non-interest bearing demand deposit accounts as a percentage of total average deposits was 48.04% and 44.20% for the quarters ended December 31, 2020 and 2019, respectively.
• Non-performingassets were $3,278,000, net loan charge-offs were $42,000, and loans delinquent more than 30 days were $24,000 for the quarter ended December 31, 2020.
• The Company recorded a negative provision for credit losses of $1.7 million during the quarter ended December 31, 2020.
• Capital positions remain strong at December 31, 2020 with a 9.28% Tier 1 Leverage Ratio; a 14.10% Common Equity Tier 1 Ratio; a 14.50% Tier 1 Risk-Based Capital Ratio; and a 15.58% Total Risk-Based Capital Ratio.
• The Company declared an $0.11 per common share cash dividend, payable on February 26, 2021 to shareholders of record on February 12, 2021.
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Central Valley Community Bancorp -- page 2

"The Central Valley team performed extremely well in 2020, in terms of meeting client needs, adapting to the evolving effects of the COVID-19 pandemic and standing strong as an essential service for our communities. This is reflected in the fourth quarter and full year results for our Company," stated James M. Ford, President & CEO of Central Valley Community Bancorp and Central Valley Community Bank.

"Loans and Deposits grew, partly due to our involvement with the SBA Paycheck Protection Program

1. which helped business clients retain talent and endure the impacts of the pandemic," Ford said. "Choosing to extend our PPP participation in 2021, we look forward to its benefits along with improving economic conditions throughout our territory."
   "For over forty years, doing the right thing for our team, clients and communities has served us well," Ford added. "This philosophy and our advanced technologies will continue to ensure that we are well-positioned for the future."
   The Company is closely monitoring the effects of the pandemic on our loan and deposit customers. Our management team is focused on assessing the risks in our loan portfolio and working with our customers to minimize our losses. We have implemented loan programs to allow customers who were required to close or reduce their business operations to defer loan principal and interest payments for up to 90 days. As of December 31, 2020, loan customers with deferred payments of principal, interest or both on loans totaling approximately $25 million were outstanding.
   As a preferred SBA lender, we are participating in the SBA Paycheck Protection Program (PPP) to help provide loans to our business customers to provide them with additional working capital. The Company has worked diligently with the SBA to qualify clients to receive PPP loans. As of December 31, 2020, PPP loans in the following size categories were outstanding:

PPP Loan Size Categories (Dollars in thousands)		Number of			Amount
	Loans
Up to $150,000	726	$	37,256
$150,001 to $500,000	183			48,392
$500,001 to $1,000,000	39			26,892
$1,000,001 to $2,000,000	28			40,071
Over $2,000,000		13			40,305
Total	989	$	192,916

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Central Valley Community Bancorp -- page 3

The SBA PPP fees net of issuance costs to be recognized by the Company over the remaining life of the loans total approximately $3.9 million. The Company has also taken measures to protect the health and safety of its employees by implementing remote work arrangements to the full extent possible, and by adjusting banking center hours and operational measures to promote social distancing. Management is closely monitoring credit metrics. Additional resources have been shifted to credit administration to closely analyze higher risk segments within the loan portfolio, monitor and track loan payment deferrals and customer liquidity, and provide timely reporting to management and the board of directors. The management team continues to analyze economic conditions in our geographic markets and perform stress testing of our investment portfolio as well as our loan portfolio. The following table shows the Company's loan portfolio allocated by management's internal risk ratings:

Loan Risk Rating (In thousands)			December 31,		September		December 31,
		2020		30, 2020			2019
Pass	$	1,032,417	$ 1,032,142	$	879,844
Special mention			36,406	43,893			28,183
Substandard			36,136	37,643			33,838
Doubtful			-		-			-
Total	$	1,104,959	$ 1,113,678	$	941,865

Based on the Company's capital levels, conservative underwriting policies, low loan-to-deposit ratio, loan concentration diversification, and suburban geographical marketplace, management expects to be able to manage the economic risks and uncertainties associated with the COVID-19 pandemic and remain adequately capitalized.

Net income for the year ended December 31, 2020 decreased 5.11%, compared to the year ended December 31, 2019, driven by an increase in the provision for credit losses, a decrease in net realized gains on sales and calls of investment securities, a decrease in service charge income, and an increase in non-interest expense, partially offset by an increase in net interest income, an increase in loan placement fees, and a decrease in the provision for income taxes. During the year ended December 31, 2020, the Company recorded a $3,275,000 provision for credit losses, compared to a $1,025,000 provision during the year ended December 31, 2019. Net interest income before the provision for credit losses for the year ended December 31, 2020 was $64,423,000, compared to $63,772,000 for the year ended December 31, 2019, an increase of $651,000 or 1.02%. The impact to interest income from the accretion of the loan marks on acquired loans was $1,321,000 and $989,000 for the year ended December 31, 2020 and 2019, respectively. In addition, net interest income before

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Central Valley Community Bancorp -- page 4

the provision for credit losses for the year ended December 31, 2020 was benefited by approximately $805,000 in nonrecurring income from prepayment penalties and payoff of loans, as compared to $619,000 in nonrecurring income for the year ended December 31, 2019. Excluding these reversals and benefits, net interest income for the year ended December 31, 2020 decreased by $133,000 compared to the year ended December 31, 2019.

During the year ended December 31, 2020, the Company's shareholders' equity increased $16,893,000, or 7.41%, compared to December 31, 2019. The increase in shareholders' equity was driven by the retention of earnings, net of dividends paid, and an increase in net unrealized gains on available-for-sale (AFS) securities recorded, net of estimated taxes, in accumulated other comprehensive income (AOCI), offset by the decrease in common stock as a result of the share repurchase program.

Return on average equity (ROE) for the year ended December 31, 2020 was 8.85%, compared to 9.39% for the year ended December 31, 2019. The decrease in ROE reflects the decrease in net income, as well as the increase in average shareholders' equity compared to the prior year. The Company declared and paid $0.44 and $0.43 per share in cash dividends to holders of common stock during the year ended December 31, 2020 and 2019, respectively. Annualized return on average assets (ROA) was 1.11% for the year ended December 31, 2020 and 1.36% for the year ended December 31, 2019. This decrease is due to a decrease in net income and an increase in average assets. During the year ended December 31, 2020, the Company's total assets increased 25.51%, and total liabilities increased 28.53%, compared to December 31, 2019 primarily due to the Company's participation in the PPP.

Non-performing assets increased by $1,585,000, or 93.62%, to $3,278,000 at December 31, 2020, compared to $1,693,000 at December 31, 2019. During the year ended December 31, 2020, the Company recorded $510,000 in net loan recoveries, compared to $999,000 in net loan charge-offs for the year ended December 31, 2019. The net charge-off (recovery) ratio, which reflects annualized net charge-offs (recoveries) to average loans, was (0.05)% for the year ended December 31, 2020, compared to 0.11% for the same period in 2019. Total non-performing assets were 0.16% and 0.11% of total assets as of December 31, 2020 and December 31, 2019, respectively.

At December 31, 2020, the allowance for credit losses was $12,915,000, compared to $9,130,000 at December 31, 2019, a net increase of $3,785,000 reflecting the provisioning and net recoveries during the period.

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