Valley Republic Bancorp Announces Record Financial Results for 2017

BAKERSFIELD, Calif., Feb. 9, 2018 /PRNewswire/ -- Valley Republic Bancorp (the "Company") (OTCQX: VLLX), the parent company of Valley Republic Bank (the "Bank") today announced the financial results for the fourth quarter and fiscal year ended December 31, 2017.

Valley Republic Bancorp reported record net income for the year ended December 31, 2017, of $5,247,000, compared to $4,471,000 for the prior year. This represents an increase of $776,000, or 17%, year over year. Basic earnings per share were $1.40 as of December 31, 2017, compared to $1.21 for the prior year.  Pretax earnings were $9,240,000 for the year ended December 31, 2017, compared to $6,637,000 in the prior year, an increase of $2,603,000 or 39%.

Net income for the fourth quarter was $804,000, after a one-time tax expense adjustment of $943,000, compared to $1,159,000 for the same quarter in the prior year, a decrease of $355,000, or -31%.  Basic earnings per share for the fourth quarter of 2017 were $0.21, compared to $0.31 basic earnings per share reported for the same quarter in the prior year. 

According to Bruce Jay, President and Chief Executive Officer, "The December 2017 enactment of the Tax Cuts and Jobs Act required a one-time, non-cash adjustment to earnings in the fourth quarter. This tax reform reduces the highest federal tax rate for corporations from 35% to 21%, beginning in 2018. When tax changes like this occur, generally accepted accounting principles (GAAP) require that Deferred Tax Assets (DTAs) be revalued to reflect the future value of tax benefits. Accordingly, the Company was required to record a one-time expense adjustment of $943,000 to reduce its DTAs. Beginning in 2018, the Company will benefit from substantially lower federal corporate tax rates."

Jay continued, "The material tax-related adjustment makes comparison reporting of operating results more difficult, both quarter over quarter and year over year."  The following table shows the Company's 2017 year to date performance before and after this one-time DTA adjustment, as compared to 2016 performance: 

"The Company's overall performance continues to be exceptional. Loan, deposit and earnings growth were all substantial during 2017", stated Jay.  "We remain focused on our core competencies of supporting and serving our local communities with responsive, relationship-based service."  Total net loans were $441.7 million at December 31, 2017, an increase of $57.2 million, or 15%, compared to $384.5 million at the end of 2016.  Total deposits increased by $84.8 million, or 16%, to $603.3 million at December 31, 2017, compared to $518.5 million at December 31, 2016.  Total assets were $667.6 million at the end of 2017, an increase of $88.5 million, or 15%, compared to $579.1 million at year-end 2016.

Total shareholders' equity at December 31, 2017 was $56,427,000, an increase of $5,948,000, or 12%, compared to $50,479,000 at December 31, 2016. Book value per share was $14.94 at December 31, 2017, compared to $13.60 at the prior year-end, after adjusting for the retroactive effect of the stock dividend declared in December 2017.

Eugene Voiland, Chairman of the Board, stated, "The Board of Directors is pleased with the solid growth and earnings performance of the Bank during 2017.  The Company produced a return on average equity of 11.48% for the year, before the DTA adjustment, and a 9.73% return on equity after the DTA adjustment."  Mr. Voiland continued, "In recognition of the excellent performance of the Company, in the fourth quarter of 2017 the Company declared a 5% stock dividend, payable to shareholders of record as of December 15, 2017." 

About Valley Republic Bancorp and Valley Republic Bank

Valley Republic Bancorp is a bank holding company formed in 2016. Valley Republic Bank, a wholly-owned subsidiary of Valley Republic Bancorp, is a community bank headquartered in Bakersfield, California. The Bancorp is subject to the regulatory oversight of the Federal Reserve Bank, and the Bank is subject to the regulatory oversight of the Federal Deposit Insurance Corporation and the California Department of Business Oversight. Valley Republic Bank is an insured, state-chartered, non-member bank of the Federal Reserve System. The Bank is in its ninth year of operation, having been established in 2009. Valley Republic Bank is a full-service, community bank with three full-service banking offices in Bakersfield and one full-service banking office in Delano. Valley Republic Bank emphasizes professional, high quality banking services provided to a wide range of businesses and professionals. The Bank also provides a full complement of banking services that are available to individuals and non-profit organizations. 

Forward Looking Statements

This news release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended and Valley Republic Bancorp and Valley Republic Bank (together, the "Company") intend for such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Future events are difficult to predict, and the expectations described above are necessarily subject to risk and uncertainty that may cause actual results to differ materially and adversely.

Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional verbs such as "will," "would," "should," "could," or "may." These forward-looking statements are not guarantees of future performance, nor should they be relied upon as representing management's views as of any subsequent date. Forward-looking statements involve significant risks and uncertainties and actual results may differ materially from those presented, either expressed or implied, in this news release. Factors that might cause such differences include, but are not limited to: the Company's ability to successfully execute its business plans and achieve its objectives; changes in general economic and financial market conditions, either nationally or locally, in areas in which the Company conducts its operations; changes in interest rates; continuing consolidation in the financial services industry; new litigation or changes in existing litigation; increased competitive challenges and expanding product and pricing pressures among financial institutions; legislation or regulatory changes which adversely affect the Company's operations or business; loss of key personnel; and changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or other regulatory agencies.

The Company undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

SOURCE Valley Republic Bancorp

Related Links

https://www.valleyrepublicbank.com