What changed in this filing

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Item 1. Financial Statements

2022-11-02 compared with 2022-08-04 · 190 added, 180 removed, 841 unchanged (31% of the section changed)

2 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts) June 30, 2022 December 31, 2021

(In thousands, except share amounts) September 30, 2022 December 31, 2021

Cash and due from banks $ 32,535 $ 29,412

4 unchanged sentences

Equity securities 6,544 7,416

Loans, less allowance for credit losses of $9,873 at June 30, 2022 and $9,600 at December 31, 2021 1,126,091 1,029,511

Loans, less allowance for credit losses of $10,366 at September 30, 2022 and $9,600 at December 31, 2021 1,214,904 1,029,511

Bank premises and equipment, net 7,909 8,380

10 unchanged sentences

Short-term borrowings 25,000 —

Subordinated debentures 39,526 39,454

Senior debt and subordinated debentures 69,563 39,454

Accrued interest payable and other liabilities 33,177 40,043

7 unchanged sentences

issued and outstanding:

11,717,146 at June 30, 2022 and 11,916,651 at December 31, 2021 60,975 66,820

11,732,011 at September 30, 2022 and 11,916,651 at December 31, 2021 61,262 66,820

Retained earnings 188,174 173,393

6 unchanged sentences

For the Three Months

Ended June 30, For the Six Months

Ended June 30,

Ended September 30, For the Nine Months

Ended September 30,

(In thousands, except share and per-share amounts) 2022 2021 2022 2021

11 unchanged sentences

Net interest income before provision for credit losses 20,164 18,210 57,571 53,846

(REVERSAL OF) PROVISION FOR CREDIT LOSSES — ( 1,500 ) — ( 3,300 )

PROVISION FOR (REVERSAL OF) CREDIT LOSSES 500 ( 500 ) 500 ( 3,800 )

Net interest income after provision for credit losses 19,664 18,710 57,071 57,646

4 unchanged sentences

Interchange fees 432 472 1,352 1,313

Net realized losses on sales and calls of investment securities ( 969 ) ( 79 ) ( 763 ) ( 79 )

Net realized (losses) gains on sales and calls of investment securities ( 14 ) 117 ( 777 ) 38

Federal Home Loan Bank dividends 91 84 258 237

29 unchanged sentences

For the Three Months

Ended June 30, For the Six Months

Ended June 30,

Ended September 30, For the Nine Months

Ended September 30,

(In thousands) 2022 2021 2022 2021

2 unchanged sentences

Unrealized losses on securities:

Unrealized holding (losses) gains arising during the period ( 36,332 ) 10,729 ( 116,931 ) ( 2,892 )

Reclassification of net losses included in net income 969 79 763 79

Unrealized holding losses arising during the period ( 24,378 ) ( 3,552 ) ( 141,308 ) ( 6,444 )

Reclassification of net losses (gains) included in net income 14 ( 117 ) 777 ( 38 )

Amortization of net unrealized losses transferred 651 — 1,045 —

Other comprehensive (loss) income, before tax ( 34,969 ) 10,808 ( 115,774 ) ( 2,813 )

Other comprehensive loss, before tax ( 23,713 ) ( 3,669 ) ( 139,486 ) ( 6,482 )

Tax effect 7,010 1,085 41,232 1,916

Total other comprehensive (loss) income ( 24,632 ) 7,612 ( 81,551 ) ( 1,982 )

Total other comprehensive loss ( 16,703 ) ( 2,584 ) ( 98,254 ) ( 4,566 )

Comprehensive (loss) income $ ( 10,319 ) $ 3,937 $ ( 79,242 ) $ 16,997

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

THREE MONTHS ENDED JUNE 30, 2022 AND 2021

THREE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

Common Stock Accumulated

3 unchanged sentences

(In thousands, except share amounts) Shares Amount

Balance, March 31, 2021 12,524,609 $ 79,732 $ 156,851 $ 5,262 $ 241,845

Balance, June 30, 2021 12,329,089 $ 75,265 $ 162,910 $ 12,874 $ 251,049

Net income — — 6,521 — 6,521

Other comprehensive income — — — 7,612 7,612

Restricted stock granted net of forfeitures

20,967 — — — —

Other comprehensive loss — — — ( 2,584 ) ( 2,584 )

Stock issued under employee stock purchase plan

8 unchanged sentences

( 344,940 ) ( 7,158 ) — — ( 7,158 )

Balance, September 30, 2021 11,987,904 $ 68,265 $ 167,993 $ 10,290 $ 246,548

Balance, June 30, 2022 11,717,146 $ 60,975 $ 183,197 $ ( 73,919 ) $ 170,253

Balance, March 31, 2022 11,752,623 $ 62,893 $ 178,054 $ ( 49,287 ) $ 191,660

— — 6,384 — 6,384

Other comprehensive loss — — — ( 16,703 ) ( 16,703 )

Restricted stock granted net of forfeitures

37,781 — — — —

Stock issued under employee stock purchase plan

3,515 53 — — 53

Stock awarded to employees 300 6 — — 6

Stock-based compensation expense

— 143 — — 143

Cash dividend

2 unchanged sentences

11,350 91 — — 91

Repurchase and retirement of common stock

( 104,888 ) ( 2,328 ) — — ( 2,328 )

Balance, June 30, 2022 11,717,146 $ 60,975 $ 183,197 $ ( 73,919 ) $ 170,253

Balance, September 30, 2022 11,732,011 $ 61,262 $ 188,174 $ ( 90,622 ) $ 158,814

CENTRAL VALLEY COMMUNITY BANCORP AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

SIX MONTHS ENDED JUNE 30, 2022 AND 2021

NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021

Common Stock Retained Earnings Accumulated

18 unchanged sentences

21,285 222 — — 222

Balance, June 30, 2021 12,329,089 $ 75,265 $ 162,910 $ 12,874 $ 251,049

Balance, September 30, 2021 11,987,904 $ 68,265 $ 167,993 $ 10,290 $ 246,548

Balance, January 1, 2022 11,916,651 $ 66,820 $ 173,393 $ 7,632 $ 247,845

14 unchanged sentences

( 300,761 ) ( 6,814 ) — — ( 6,814 )

Balance, June 30, 2022 11,717,146 $ 60,975 $ 183,197 $ ( 73,919 ) $ 170,253

Balance, September 30, 2022 11,732,011 $ 61,262 $ 188,174 $ ( 90,622 ) $ 158,814

See notes to unaudited consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months

Ended June 30,

For the Nine Months

Ended September 30,

(In thousands) 2022 2021

2 unchanged sentences

Adjustments to reconcile net income to net cash provided by operating activities:

Net decrease in deferred loan fees 405 1,222

Net (increase) decrease in deferred loan fees ( 419 ) 2,203

Depreciation 586 688

2 unchanged sentences

Stock-based compensation 324 310

(Reversal of) provision for credit losses — ( 3,300 )

Net realized losses on sales and calls of available-for-sale investment securities 763 79

Provision for (reversal of) credit losses 500 ( 3,800 )

Net realized losses (gains) on sales and calls of available-for-sale investment securities 777 ( 38 )

Net gain on disposal of premises and equipment — ( 8 )

17 unchanged sentences

CASH FLOWS FROM FINANCING ACTIVITIES:

Net (decrease) increase in demand, interest bearing and savings deposits ( 14,300 ) 256,426

Net decrease in time deposits ( 2,500 ) ( 42 )

Net increase in demand, interest bearing and savings deposits 30,257 335,370

Net (decrease) increase in time deposits ( 13,910 ) 12

Proceeds from short-term borrowings from Federal Home Loan Bank

Repayments of short-term borrowings to Federal Home Loan Bank ( 2,065,326 ) —

Proceeds of issuance of senior debt 30,000 —

Purchase and retirement of common stock ( 6,814 ) ( 12,000 )

2 unchanged sentences

Cash dividend payments on common stock ( 4,231 ) ( 4,319 )

Net cash (used in) provided by financing activities ( 16,605 ) 248,984

(Decrease) increase in cash and cash equivalents ( 136,234 ) 50,388

Net cash provided by financing activities 60,955 319,444

Decrease in cash and cash equivalents ( 121,889 ) ( 2,585 )

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 163,467 70,278

CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 41,578 $ 67,693

For the Six Months

Ended June 30,

For the Nine Months

Ended September 30,

(In thousands) 2022 2021

15 unchanged sentences

These interim unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s 2021 Annual Report to Shareholders on Form 10-K.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position at June 30, 2022, and the results of its operations and its cash flows for the six month interim periods ended June 30, 2022 and 2021 have been included.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position at September 30, 2022, and the results of its operations and its cash flows for the nine month interim periods ended September 30, 2022 and 2021 have been included.

The results of operations for interim periods are not necessarily indicative of results for the full year.

8 unchanged sentences

The provisions of the update eliminate the probable initial recognition threshold under current GAAP which requires reserves to be based on an incurred loss methodology.

Under CECL, reserves required for financial assets measured at amortized cost will reflect an organization’s estimate of all expected credit losses over the contractual term of the financial asset and thereby require the use of reasonable and supportable forecasts to estimate future credit losses.

Under CECL, reserves required for financial assets measured at amortized cost will reflect an organization’s estimate of all expected credit losses over the weighted average life of the financial asset and thereby require the use of reasonable and supportable forecasts to estimate future credit losses.

Because CECL encompasses all financial assets carried at amortized cost, the requirement that reserves be established based on an organization’s reasonable and supportable estimate of expected credit losses extends to held to maturity (“HTM”) debt securities.

10 unchanged sentences

The Company has also established a project management governance process to manage the implementation across affected disciplines.

An external provider specializing in community bank loss driver and CECL reserving model design as well as other related consulting services has been retained, and we have begun to evaluate potential CECL modeling alternatives.

An external provider specializing in bank loss driver and CECL reserving model design as well as other related consulting services has been retained.

As part of this process, the Company has determined potential loan pool segmentation and sub-segmentation under CECL, as well as begun to evaluate the key economic loss drivers for each segment.

Further, the Company has begun developing internal controls around the CECL process, data, calculations and implementation.

The Company presently plans to generate and evaluate model scenarios under CECL in tandem with its current reserving processes for interim and annual reporting periods during the third quarter of 2022 due to the fact the

Company elected to delay implementation of the CECL process as allowed by FASB.

While the Company is currently unable to reasonably estimate the impact of adopting this new guidance, management expects the impact of adoption will be significantly influenced by the composition and quality of the Company’s loans as well as the economic conditions as of the date of adoption.

Company is currently unable to reasonably estimate the impact of adopting this new guidance, management expects the impact of adoption will be significantly influenced by the composition and quality of the Company’s loans as well as the economic conditions as of the date of adoption.

The Company also anticipates changes to the processes and procedures for calculating the reserve for credit losses and continues to evaluate the potential impact on our consolidated financial statements.

4 unchanged sentences

The Company is in the process of evaluating the provisions of this ASU and its effects on our consolidated financial statements.

The Company believes the adoption of this guidance on activities subsequent to June 30, 2022 through December 31, 2022 will not have a material impact on the consolidated financial statements.

The Company believes the adoption of this guidance on activities subsequent to September 30, 2022 through December 31, 2022 will not have a material impact on the consolidated financial statements.

FASB Accounting Standards Update (ASU) 2022-02 - Financial Instruments-Credit Losses (Subtopic 326).

29 unchanged sentences

The estimated carrying and fair values of the Company’s financial instruments are as follows (in thousands):

June 30, 2022

September 30, 2022

Amount Fair Value

11 unchanged sentences

Deposits 2,139,144 2,063,024 75,157 — 2,138,181

Subordinated debentures 39,526 — — 35,638 35,638

Short-term borrowings 25,000 — 25,000 — 25,000

Senior debt and subordinated debentures 69,563 — — 63,451 63,451

Accrued interest payable 608 — 62 546 608

42 unchanged sentences

Fair value for fixed and variable rate certificates of deposit are estimated using discounted cash flow analyses using interest rates offered at each reporting date by the Company for certificates with similar remaining maturities resulting in a Level 2 classification.

(f) Subordinated Debentures — The fair values of the Company’s Subordinated Debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 3 classification.

(g) Accrued Interest Receivable/Payable — The fair value of accrued interest receivable and payable is based on the fair value hierarchy of the related asset or liability.

(h) Off-Balance Sheet Instruments — Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing.

(f) Short-Term Borrowings — The fair values of the Company’s federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings, generally maturing within ninety days, are based on the market rates for similar types of borrowing arrangements resulting in a Level 2 classification.

(g) Subordinated Debentures and Senior Debt — The fair values of the Company’s Subordinated Debentures and Senior Debt are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 3 classification.

(h) Accrued Interest Receivable/Payable — The fair value of accrued interest receivable and payable is based on the fair value hierarchy of the related asset or liability.

(i) Off-Balance Sheet Instruments — Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties’ credit standing.

The fair value of commitments is not considered significant for financial reporting purposes.

Assets Recorded at Fair Value

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring and non-recurring basis as of June 30, 2022 and December 31, 2021:

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring and non-recurring basis as of September 30, 2022 and December 31, 2021:

Recurring Basis

1 unchanged sentence

Fair Value Measurements Using

June 30, 2022 Fair Value Level 1 Level 2 Level 3

September 30, 2022 Fair Value Level 1 Level 2 Level 3

Available-for-sale debt securities:

27 unchanged sentences

Management evaluates the significance of transfers between levels based upon the nature of the financial instrument and size of the transfer relative to total assets, total liabilities or total earnings.

During the periods ended June 30, 2022 and December 31, 2021, no transfers between levels occurred.

There were no Level 3 assets measured at fair value on a recurring basis at or during the periods ended June 30, 2022 and December 31, 2021.

Also there were no liabilities measured at fair value on a recurring basis at June 30, 2022 or December 31, 2021.

During the periods ended September 30, 2022 and December 31, 2021, no transfers between levels occurred.

There were no Level 3 assets measured at fair value on a recurring basis at or during the periods ended September 30, 2022 and December 31, 2021.

Also there were no liabilities measured at fair value on a recurring basis at September 30, 2022 or December 31, 2021.

Non-recurring Basis

1 unchanged sentence

These include assets and liabilities that are measured at the lower of cost or fair value that were recognized at

fair value which was below cost at June 30, 2022 and December 31, 2021.

As of June 30, 2022, there were no impaired loans measured for impairment using the fair value.

fair value which was below cost at September 30, 2022 and December 31, 2021.

As of September 30, 2022, there were no impaired loans measured for impairment using the fair value.

Those measured at December 31, 2021 were (in thousands):

14 unchanged sentences

The discounted cash flow methods as prescribed by ASC Topic 310 is not a fair value measurement since the discount rate utilized is the loan’s effective interest rate which is not necessarily a market rate.

There were no changes in valuation techniques used during the six months ended June 30, 2022 or the year ended December 31, 2021.

There were no changes in valuation techniques used during the nine months ended September 30, 2022 or the year ended December 31, 2021.

Appraisals for collateral-dependent impaired loans are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company.

Once received, the assumptions and approaches utilized in the appraisal as well as the overall resultin g fair value is compared with independent data sources such as recent market data or industry-wide statistics.

Impaired loans that are measured for impairment using the fair value of the collateral for collateral dependent loans

had a principal balance of $ 292,000 with a valuation allowance of $ 30,000 at December 31, 2021, and a resulting fair value

Impaired loans that are measured for impairment on a non-recurring basis using the fair value of the collateral for collateral dependent loans had a principal balance of $ 292,000 with a valuation allowance of $ 30,000 at December 31, 2021, resulting in a fair value of $262,000.

The valuation allowance represents specific allocations for the allowance for credit losses for impaired loans.

There were no charge-offs related to loans carried at fair value during the six months ended June 30, 2022 and 2021.

Activity related to changes in the allowance for loan losses related to impaired loans for the three months ended June 30, 2022 and 2021 was not considered significant for disclosure purposes.

There were no liabilities measured at fair value on a non-recurring basis at June 30, 2022 or December 31, 2021.

There were no charge-offs related to loans carried at fair value during the nine months ended September 30, 2022.

Activity related to changes in the allowance for loan losses related to impaired loans for the three months ended September 30, 2022 and 2021 was not considered significant for disclosure purposes.

There were no liabilities measured at fair value on a non-recurring basis at September 30, 2022 or December 31, 2021.

The investm ent portfolio consists primarily of U.S.

Government sponsored entity and agency securities collateralized by residential mortgage obligations, private label mortgage and asset backed securities (PLMABS), corporate debt securities, and obligations of states and political subdivisions securities.

As of June 30, 2022, $ 185,061,000 of these securities were held as collateral for borrowing arrangements, pub lic funds, and for other purposes.

The fair value of the available-for-sale investment portfolio reflected a net unrealized loss of $( 80,011,000 ) at June 30, 2022 compared to an unrealized gain of $ 10,835,000 at December 31, 2021.

As of September 30, 2022, $ 177,503,000 of these securities were held as collateral for borrowing arrangements, pub lic funds, and for other purposes.

The fair value of the available-for-sale investment portfolio reflected a net unrealized loss of $( 104,377,000 ) at September 30, 2022 compared to an unrealized gain of $ 10,835,000 at December 31, 2021.

The following table sets forth the carrying values and estimated fair values of our investment securities portfolio at the dates indicated (in thousands):

June 30, 2022

September 30, 2022

Available-for-Sale Securities Amortized Cost Gross

9 unchanged sentences

Total available-for-sale $ 772,677 $ 168 $ ( 104,545 ) $ 668,300

June 30, 2022

September 30, 2022

Held-to-Maturity Securities Amortized Cost Gross

21 unchanged sentences

Total available-for-sale $ 1,098,373 $ 20,373 $ ( 9,538 ) $ 1,109,208

Proceeds and gross realized gains (losses) from the sales or calls of investment securities for the periods ended June 30, 2022 and 2021 are shown below (in thousands):

Proceeds and gross realized gains (losses) from the sales or calls of investment securities for the periods ended September 30, 2022 and 2021 are shown below (in thousands):

For the Three Months

Ended June 30, For the Six Months

Ended June 30,

Ended September 30, For the Nine Months

Ended September 30,

Available-for-Sale Securities 2022 2021 2022 2021

2 unchanged sentences

Gross realized losses from sales or calls ( 14 ) — ( 5,900 ) ( 79 )

During the second quarter of 2022, the Company re-designated certain securities previously classified as available-for-sale to the held-to-maturity classification.

The securities re-designated consisted of obligations of states and political subdivision securities, U.S.

During the second quarter of 2022, the Company designated certain securities previously classified as available-for-sale to the held-to-maturity classification.

The securities designated consisted of obligations of states and political subdivision securities, U.S.

Government sponsored entity and agency securities collateralized by residential mortgage obligations, private label mortgage and asset backed securities, and corporate debt securities with a total carrying value of $ 306.7 million at April 1, 2022.

1 unchanged sentence

As market interest rates or risks associated with an available-for-sale security’s issuer continue to change and impact the actual or perceived values of investment securities, the Company may determine that selling these securities and using proceeds to purchase securities that fit with the Company’s current risk profile is appropriate and beneficial to the Company.

The provision for income taxes includes a $ 226,000 and $ 23,000 income tax benefit from unrealized net losses on securities realized through security sales for the six months ended June 30, 2022 and 2021.

The provision for income taxes includes a $( 230,000 ) and $ 11,000 income (benefit) tax impact from unrealized net losses and gains on securities realized through security sales for the nine months ended September 30, 2022 and 2021.

Investment securities, aggregated by investment category, with unrealized losses as of the dates indicated are summarized and classified according to the duration of the loss period as follows (in thousands):

June 30, 2022

September 30, 2022

Less than 12 Months 12 Months or More Total

13 unchanged sentences

Total available-for-sale $ 434,818 $ ( 62,347 ) $ 233,482 $ ( 42,198 ) $ 668,300 $ ( 104,545 )

June 30, 2022

September 30, 2022

Less than 12 Months 12 Months or More Total

26 unchanged sentences

The discount rate in this analysis is the original yield expected at time of purchase.

As of June 30, 2022, the Company performed an analysis of the investment portfolio to determine whether any of the investments held in the portfolio had an other-than-temporary impairment (OTTI).

The Company evaluated all individual available-for-sale investment securities with an unrealized loss at June 30, 2022 and identified those that had an unrealized loss for at least a consecutive 12 month period, which had an unrealized loss at June 30, 2022 greater than 10 % of the recorded book value on that date, or which had an unrealized loss of more than $ 75,000 .

As of September 30, 2022, the Company performed an analysis of the investment portfolio to determine whether any of the investments held in the portfolio had an other-than-temporary impairment (OTTI).

The Company evaluated all individual available-for-sale investment securities with an unrealized loss at September 30, 2022 and identified those that had an unrealized loss for at least a consecutive 12 month period, which had an unrealized loss at September 30, 2022 greater than 10 % of the recorded book value on that date, or which had an unrealized loss of more than $ 75,000 .

The Company also analyzed any securities that may have been downgraded by credit rating agencies.

For those investment securities that met the evaluation criteria, management obtained and reviewed the most recently published national credit ratings for those investment securities.

There were no OTTI losses recorded during the six months ended June 30, 2022.

There were no OTTI losses recorded during the nine months ended September 30, 2022.

Treasury Securities

At June 30, 2022, the Company held one U.S.

Treasury security which was in a loss position for less than 12 months.

At September 30, 2022, the Company held one U.S.

Treasury security which was in a loss position for more than 12 months.

The unrealized losses on the Company’s investments in U.S.

Treasury securities were caused by interest rate changes.

Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company does not intend to sell, and it is more likely than not that it will not be required to sell those investments until a recovery of fair value, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at September 30, 2022.

Government Agencies

At June 30, 2022, the Company held one U.S.

At September 30, 2022, the Company held one U.S.

Government agency security which was in a loss position for less than 12 months.

Obligations of States and Political Subdivisions

At June 30, 2022, the Company held 98 obligations of states and political subdivision securities of which 86 were in a loss position for less than 12 months and ten have been in a loss position for more than 12 months.

At September 30, 2022, the Company held 97 obligations of states and political subdivision securities of which 73 were in a loss position for less than 12 months and 22 have been in a loss position for more than 12 months.

The unrealized losses on the Company’s investments in obligations of states and political subdivision securities were caused by interest rate changes.

Government Sponsored Entities and Agencies Collateralized by Residential Mortgage Obligations

At June 30, 2022, the Company held 88 U.S.

Government sponsored entity and agency securities collateralized by residential mortgage obligations of which 41 were in a loss position for less than 12 months and four have been in a loss position for more than 12 months.

At September 30, 2022, the Company held 85 U.S.

Government sponsored entity and agency securities collateralized by residential mortgage obligations of which 49 were in a loss position for less than 12 months and 15 have been in a loss position for more than 12 months.

The unrealized losses on the Company’s investments in U.S.

1 unchanged sentence

The contractual cash flows of those investments are guaranteed or supported by an agency or sponsored entity of the U.S.

Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of the Company’s

Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company has the ability to hold and does not intend to sell, and it is more likely than not that it will not be required to sell those investments until a recovery of fair value, which may be maturity, the Company does not consider those investments to be other-than-temporarily impaired at June 30, 2022.

Accordingly, it is expected that the securities would not be settled at a price less than the amortized cost of the Company’s investment.

Private Label Mortgage and Asset Backed Securities

At June 30, 2022, the Company had a total of 96 Private Label Mortgage and Asset Backed Securities (PLMABS).

80 of the PLMABS securities were in a loss position for less than 12 months and 11 have been in loss for more than 12 months at June 30, 2022.

Because the decline in market value is attributable to changes in interest rates and not credit quality, and because the Company has the ability and intent to hold, and it is more likely than not that it will not be required to sell, those investments until a recovery of fair value, which may be the maturity date, the Company does not consider those investments to be other-than-temporarily impaired at June 30, 2022.

At September 30, 2022, the Company had a total of 97 Private Label Mortgage and Asset Backed Securities (PLMABS).

48 of the PLMABS securities were in a loss position for less than 12 months and 45 have been in loss for more than 12 months at September 30, 2022.

The Company continues to monitor these securities for indications that declines in value, if any, may be other-than-temporary.

Corporate Debt Securities

At June 30, 2022, the Company held 13 corporate debt securities of which 11 were in a loss position for less than 12 months and one has been in a loss position for more than 12 months.

At September 30, 2022, the Company held 13 corporate debt securities of which 8 were in a loss position for less than 12 months and 5 have been in a loss position for more than 12 months.

The unrealized loss on the Company’s investments in corporate debt security was caused by interest rate changes.

The amortized cost and estimated fair value of available-for-sale investment securities at June 30, 2022 by contractual maturity is shown below (in thousands).

The amortized cost and estimated fair value of available-for-sale and held-to maturity investment securities at September 30, 2022 by contractual maturity is shown below (in thousands).

Expected maturities will differ from contractual maturities because the issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties.

June 30, 2022

September 30, 2022

Available-for-Sale Securities Amortized Cost Estimated Fair

10 unchanged sentences

Total available-for-sale $ 772,677 $ 668,300

June 30, 2022

September 30, 2022

Held-to-Maturity Securities Amortized Cost Estimated Fair

11 unchanged sentences

Outstanding loans are summarized as follows:

Loan Type (Dollars in thousands) June 30, 2022 % of Total

Loan Type (Dollars in thousands) September 30, 2022 % of Total

Loans December 31, 2021 % of Total

15 unchanged sentences

Total loans $ 1,214,904 $ 1,029,511

At June 30, 2022 and December 31, 2021, loans originated under Small Business Administration (SBA) programs totaling $ 21,074,000 and $ 23,024,000 , respectively, were included in the real estate and commercial categories, of which, $ 16,153,000 or 77 % and $ 17,720,000 or 77 %, respectively, are secured by government guarantees.

At September 30, 2022 and December 31, 2021, loans originated under Small Business Administration (SBA) programs totaling $ 21,090,000 and $ 23,024,000 , respectively, were included in the real estate and commercial categories, of which, $ 16,242,000 or 77 % and $ 17,720,000 or 77 %, respectively, are secured by government guarantees.

In addition, the Company participated in the SBA Paycheck Protection Program (PPP) to help provide loans to our business customers to provide them with additional working capital.

At June 30, 2022, 7 PPP loans totaling $ 1,137,000 were outstanding and included in the commercial and industrial line item above.

At September 30, 2022, two PPP loans totaling $ 350,000 were outstanding and included in the commercial and industrial line item above.

At December 31, 2021, 70 PPP loans totaling $ 18,553,000 were outstanding and included in the commercial and industrial line item above.

7 unchanged sentences

For all portfolio segments, the determination of the general reserve for loans that are not impaired is based on estimates made by management, including but not limited to, consideration of historical losses by portfolio segment (and in certain cases peer data) over the most recent 55 quarters, and qualitative factors including economic trends in the Company’s service areas, industry experience and trends, geographic concentrations, estimated collateral values, the Company’s underwriting policies, the character of the loan portfolio, and probable losses inherent in the portfolio taken as a whole.

The following table shows the summary of activities for the Allowance as of and for the three months ended June 30, 2022 and 2021 by portfolio segment (in thousands):

The following table shows the summary of activities for the Allowance as of and for the three months ended September 30, 2022 and 2021 by portfolio segment (in thousands):

Commercial Real Estate Consumer Unallocated Total

Allowance for credit losses:

Beginning balance, April 01, 2022 $ 1,993 $ 7,048 $ 525 $ 298 $ 9,864

(Reversal) provision charged to operations ( 30 ) ( 54 ) 245 ( 161 ) —

Beginning balance, July 01, 2022 $ 1,973 $ 6,994 $ 769 $ 137 $ 9,873

Provision (reversal) charged to operations 118 418 ( 29 ) ( 7 ) 500

Charge-offs — — ( 20 ) — ( 20 )

Recoveries — — 13 — 13

Ending balance, June 30, 2022 $ 1,973 $ 6,994 $ 769 $ 137 $ 9,873

Ending balance, September 30, 2022 $ 2,091 $ 7,412 $ 733 $ 130 $ 10,366

Allowance for credit losses:

Beginning balance, April 1, 2021 $ 2,483 $ 8,352 $ 888 $ 333 $ 12,056

Reversal charged to operations ( 307 ) ( 1,302 ) 91 18 ( 1,500 )

Beginning balance, July 1, 2021 $ 2,210 $ 7,050 $ 828 $ 351 $ 10,439

Provision (reversal) charged to operations 118 ( 434 ) ( 230 ) 46 ( 500 )

Charge-offs ( 15 ) — ( 19 ) — ( 34 )

Recoveries 21 — 135 — 156

Ending balance, June 30, 2021 $ 2,210 $ 7,050 $ 828 $ 351 $ 10,439

The following table shows the summary of activities for the Allowance as of and for the six months ended June 30, 2022 and 2021 by portfolio segment (in thousands):

Ending balance, September 30, 2021 $ 2,334 $ 6,616 $ 714 $ 397 $ 10,061

The following table shows the summary of activities for the Allowance as of and for the nine months ended September 30, 2022 and 2021 by portfolio segment (in thousands):

Commercial Real Estate Consumer Unallocated Total

1 unchanged sentence

Beginning balance, January 1, 2022 $ 2,011 $ 6,741 $ 568 $ 280 $ 9,600

Reversal charged to operations ( 387 ) 253 277 ( 143 ) —

(Reversal) provision charged to operations ( 269 ) 671 248 ( 150 ) 500

Losses charged to allowance ( 18 ) — ( 120 ) — ( 138 )

Recoveries 367 — 37 — 404

Ending balance, June 30, 2022 $ 1,973 $ 6,994 $ 769 $ 137 $ 9,873

Ending balance, September 30, 2022 $ 2,091 $ 7,412 $ 733 $ 130 $ 10,366

Allowance for credit losses:

Beginning balance, January 1, 2021 $ 2,019 $ 9,174 $ 1,091 $ 631 $ 12,915

Provision (reversal) charged to operations ( 439 ) ( 2,443 ) ( 138 ) ( 280 ) ( 3,300 )

Reversal charged to operations ( 321 ) ( 2,877 ) ( 368 ) ( 234 ) ( 3,800 )

Losses charged to allowance ( 46 ) — ( 215 ) — ( 261 )

Recoveries 682 319 206 — 1,207

Ending balance, June 30, 2021 $ 2,210 $ 7,050 $ 828 $ 351 $ 10,439

The following is a summary of the Allowance by impairment methodology and portfolio segment as of June 30, 2022 and December 31, 2021 (in thousands):

Ending balance, September 30, 2021 $ 2,334 $ 6,616 $ 714 $ 397 $ 10,061

The following is a summary of the Allowance by impairment methodology and portfolio segment as of September 30, 2022 and December 31, 2021 (in thousands):

Commercial Real Estate Consumer Unallocated Total

Allowance for credit losses:

Ending balance, June 30, 2022 $ 1,973 $ 6,994 $ 769 $ 137 $ 9,873

Ending balance, September 30, 2022 $ 2,091 $ 7,412 $ 733 $ 130 $ 10,366

Ending balance:

7 unchanged sentences

collectively evaluated for impairment $ 1,404 $ 6,703 $ 564 $ 280 $ 8,951

The following table shows the ending balances of loans as of June 30, 2022 and December 31, 2021 by portfolio segment and by impairment methodology (in thousands):

The following table shows the ending balances of loans as of September 30, 2022 and December 31, 2021 by portfolio segment and by impairment methodology (in thousands):

Commercial Real Estate Consumer Total

Ending balance, June 30, 2022 $ 156,076 $ 886,987 $ 91,625 $ 1,134,688

Ending balance, September 30, 2022 $ 182,840 $ 884,282 $ 156,851 $ 1,223,973

Ending balance:

8 unchanged sentences

$ 170,621 $ 767,464 $ 91,569 $ 1,029,654

The following table shows the loan portfolio by class allocated by management’s internal risk ratings at June 30, 2022 (in thousands):

The following table shows the loan portfolio by class allocated by management’s internal risk ratings at September 30, 2022 (in thousands):

Pass Special Mention Sub-Standard Doubtful Total

22 unchanged sentences

Total $ 988,855 $ 40,845 $ 8,540 $ — $ 1,038,240

The following table shows an aging analysis of the loan portfolio by class and the time past due at June 30, 2022 (in thousands):

The following table shows an aging analysis of the loan portfolio by class and the time past due at September 30, 2022 (in thousands):

Past Due 60-89

28 unchanged sentences

Total $ 80 $ — $ — $ 80 $ 1,038,160 $ 1,038,240 $ — $ 946

The following table shows information related to impaired loans by class at June 30, 2022 (in thousands):

The following table shows information related to impaired loans by class at September 30, 2022 (in thousands):

Investment Unpaid

30 unchanged sentences

The recorded investment in loans excludes accrued interest receivable and net loan origination fees, due to immateriality.

The following tables present by class, information related to the average recorded investment and interest income recognized on impaired loans for the three months ended June 30, 2022 and 2021 (in thousands).

Three Months Ended June 30, 2022 Three Months Ended June 30, 2021

The following tables present by class, information related to the average recorded investment and interest income recognized on impaired loans for the three months ended September 30, 2022 and 2021 (in thousands).

Three Months Ended September 30, 2022 Three Months Ended September 30, 2021

Investment Interest

2 unchanged sentences

With no related allowance recorded:

Commercial and industrial $ — $ — $ 123 $ —

Total commercial — — 123 —

Real estate construction and other land loans $ — $ — $ 234 $ —

2 unchanged sentences

Equity loans and lines of credit 1,036 24 139 3

Total consumer 1,036 24 139 3

Total with no related allowance recorded 1,036 24 861 3

11 unchanged sentences

Total $ 3,459 $ 75 $ 8,629 $ 153

Six Months Ended June 30, 2022 Six Months Ended June 30, 2021

Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021

Investment Interest

24 unchanged sentences

Total $ 4,070 $ 166 $ 10,022 $ 355

Foregone interest on nonaccrual loans totaled $ 57,000 and $ 72,000 for the six month period ended June 30, 2022 and 2021, respectively.

Foregone interest on nonaccrual loans totaled 53,000 and 34,000 for the three month period ended June 30, 2022 and 2021, respectively.

Foregone interest on nonaccrual loans totaled $ 132,000 and $ 101,000 for the nine month period ended September 30, 2022 and 2021, respectively.

Foregone interest on nonaccrual loans totaled 75,000 and 30,000 for the three month period ended September 30, 2022 and 2021, respectively.

Troubled Debt Restructurings:

As of June 30, 2022 and December 31, 2021, the Company has a recorded investment in troubled debt restructurings (“TDR”) of $ 3,447,000 and $ 7,640,000 , respectively.

The Company has allocated $ 540,000 and $ 538,000 of specific reserves to loans whose terms have been modified in troubled debt restructurings as of June 30, 2022 and December 31, 2021, respectively.

For the six months ended June 30, 2022 and 2021, the terms of certain loans were modified as TDRs.

As of September 30, 2022 and December 31, 2021, the Company has a recorded investment in troubled debt restructurings (“TDR”) of $ 2,415,000 and $ 7,640,000 , respectively.

The Company has allocated $ 525,000 and $ 538,000 of specific reserves to loans whose terms have been modified in troubled debt restructurings as of September 30, 2022 and December 31, 2021, respectively.

For the nine months ended September 30, 2022 and 2021, the terms of certain loans were modified as TDRs.

The modification of the terms of such loans included one or a combination of the following:

3 unchanged sentences

In accordance with such guidance, during 2020 and throughout 2021 the Company offered short-term modifications in response to COVID-19 to borrowers who were current and otherwise not past due.

As of June 30, 2022, there were no such loans remaining on deferral.

During the six months ended June 30, 2022, no loans were modified as troubled debt restructuring.

Troubled Debt Restructurings:

The following table presents loans by class modified as troubled debt restructurings that occurred during the six months ended June 30, 2021 (in thousands):

As of September 30, 2022, there were no such loans remaining on deferral.

During the nine months ended September 30, 2022, no loans were modified as troubled debt restructuring.

The following table presents loans by class modified as troubled debt restructurings that occurred during the nine months ended September 30, 2021 (in thousands):

Troubled Debt Restructurings:

1 unchanged sentence

Commercial and Industrial 1 $ 2,989 $ — $ 2,489 $ 2,489

Real estate-construction and other land loans 1 333 — 333 305

Total 2 $ 3,322 $ — $ 2,822 $ 2,794

(1) Amounts represent the recorded investment in loans before recognizing effects of the TDR, if any.

(2) Principal modification includes principal forgiveness at the time of modification, contingent principal forgiveness granted over the life of the loan based on borrower performance, and principal that has been legally separated and deferred to the end of the loan, with zero percent contractual interest rate.

(3) Balance outstanding after principal modification, if any borrower reduction to recorded investment.

Troubled Debt Restructurings:

A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

There were no defaults on troubled debt restructurings, within twelve months following the modification, during the six months ended June 30, 2022 or June 30, 2021.

There were no defaults on troubled debt restructurings, within twelve months following the modification, during the nine months ended September 30, 2022 or September 30, 2021.

Business combinations involving the Company’s acquisition of the equity interests or net assets of another enterprise give rise to goodwill.

Total goodwill at June 30, 2022, was $ 53,777,000 consisting of $ 8,934,000 , $ 14,643,000 , $ 6,340,000 , $ 10,394,000 , and $ 13,466,000 representing the excess of the cost of Bank of Madera County, Service 1st Bancorp, Visalia Community Bank, Sierra Vista Bank, and Folsom Lake Bank, respectively, over the net of the amounts assigned to assets acquired and liabilities assumed in the transactions accounted for under the acquisition method of accounting.

Total goodwill at September 30, 2022, was $ 53,777,000 consisting of $ 8,934,000 , $ 14,643,000 , $ 6,340,000 , $ 10,394,000 , and $ 13,466,000 representing the excess of the cost of Bank of Madera County, Service 1st Bancorp, Visalia Community Bank, Sierra Vista Bank, and Folsom Lake Bank, respectively, over the net of the amounts assigned to assets acquired and liabilities assumed in the transactions accounted for under the acquisition method of accounting.

The value of goodwill is ultimately derived from the Company’s ability to generate net earnings after the acquisitions and is not deductible for tax purposes.

1 unchanged sentence

For that reason, goodwill is assessed at least annually for impairment.

The Company’s annual goodwill test is completed as of September 30 each year.

Management performed an annual impairment test in the third quarter of 2022 utilizing various qualitative factors.

Management believes these factors are sufficient and comprehensive and as such, no further factors need to be assessed at this time.

Based on management’s analysis performed, no impairment was required.

Goodwill is also tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of the Company below its carrying amount.

No such events or circumstances arose during the first six months of 2022.

No such events or circumstances arose during the first nine months of 2022.

Borrowing Arrangements

As of June 30, 2022 and , the Company had $ 9,324,000 Federal Home Loan Bank (“FHLB”) of San Francisco advances as compared to none at December 31, 2021.

Approximately $ 490,366,000 in loans were pledged under a blanket lien as collateral to the FHLB for the Bank’s remaining borrowing capacity of $ 260,052,000 as of June 30, 2022.

FHLB advances are also secured by investment securities with amortized costs totaling $ 95,000 and $ 112,000 and market values totaling $ 101,000 and $ 117,000 at June 30, 2022 and December 31, 2021, respectively.

The Bank’s credit limit varies according to the amount and composition of the investment and loan portfolios pledged as collateral.

As of June 30, 2022, and December 31, 2021 the Company had no Federal funds purchased.

Subordinated Debentures

As of September 30, 2022 the Company had $ 25,000,000 Federal Home Loan Bank (“FHLB”) of San Francisco advances as compared to none at December 31, 2021.

Approximately $ 472,949,000 in loans were pledged under a blanket lien as collateral to the FHLB for the Bank’s remaining borrowing capacity of $ 277,058,000 as of September 30, 2022.

FHLB advances are also secured by investment securities with amortized costs totaling $ 90,000 and $ 112,000 and market values totaling $ 95,000 and $ 117,000 at September 30, 2022 and December 31, 2021, respectively.

The Bank’s credit limit varies according to the amount and

composition of the investment and loan portfolios pledged as collateral.

As of September 30, 2022, and December 31, 2021 the Company had no Federal funds purchased.

Senior Debt and Subordinated Debentures

The following table summarizes the Company’s subordinated debentures:

(Dollars in thousands) June 30, 2022 December 31, 2021

(Dollars in thousands) September 30, 2022 December 31, 2021

Fixed - floating rate subordinated debentures, due 2031 $ 35,000 $ 35,000

Unamortized debt issuance costs ( 592 ) ( 701 )

Floating rate senior debt bank loan, due 2032 30,000 —

Junior subordinated deferrable interest debentures, due October 2036 5,155 5,155

5 unchanged sentences

Under applicable regulatory guidance, the amount of trust preferred securities that is eligible as Tier 1 capital is limited to 25 % of the Company’s Tier 1 capital on a pro forma basis.

At June 30, 2022, all of the trust preferred securities that have been issued qualify as Tier 1 capital.

At September 30, 2022, all of the trust preferred securities that have been issued qualify as Tier 1 capital.

The trust preferred securities mature on October 7, 2036, are redeemable at the Company’s option, and require quarterly distributions by the Trust to the holder of the trust preferred securities at a variable interest rate which will adjust quarterly to equal the three month LIBOR plus 1.60 %.

7 unchanged sentences

For each January 7, April 7, July 7 or October 7 of each year, the rate will be adjusted to equal the three month LIBOR plus 1.60 %.

As of June 30, 2022, the rate was 2.64 %.

Interest expense recognized by the Company for the six months ended June 30, 2022 and 2021 was $ 47,000 and $ 46,000 , respectively.

As of September 30, 2022, the rate was 2.64 %.

Interest expense recognized by the Company for the nine months ended September 30, 2022 and 2021 was $ 112,000 and $ 70,000 , respectively.

Subordinated Debentures

4 unchanged sentences

The Subordinated Debt is treated as Tier 2 Capital for regulatory purposes.

On September 15, 2022, the Company entered into a $ 30.0 million loan agreement with Bell Bank.

Initially, payments of interest only are payable in 12 quarterly payments commencing December 31, 2022.

Commencing December 31, 2025, 27 equal quarterly principal and interest payments are payable based on the outstanding balance of the loan on August 30, 2025 and an amortization of 48 quarters.

A final payment of outstanding principal and accrued interest is due at maturity on September 30, 2032.

Variable interest is payable at the Prime Rate (published by the Wall Street Journal) less 50 basis points.

The loan is secured by the assets of the Company and a pledge of the outstanding common stock of Central Valley Community Bank, the Company’s banking subsidiary.

The Company may prepay the loan without penalty with one exception.

If the loan is prepaid prior to August 30, 2025 with funds received from a financing source other than Bell Bank, the Company will incur a 2 % prepayment penalty.

The loan contains customary representations, covenants, and events of default.

Interest expense recognized by the Company for the Subordinated and Senior Debt for the nine months ended September 30, 2022 and 2021 was $ 1,056,000 and $ 0 , respectively.

Commitments and Contingencies

4 unchanged sentences

The Company uses the same credit policies in making commitments and conditional obligations as it does for loans.

Commitments to extend credit amounting to $ 325,400,000 and $ 326,108,000 were outstanding at June 30, 2022 and December 31, 2021, respectively.

Commitments to extend credit amounting to $ 319,346,000 and $ 326,108,000 were outstanding at September 30, 2022 and December 31, 2021, respectively.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract unless waived by the Bank.

Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee.

Included in commitments to extend credit are undisbursed lines of credit totaling $ 324,490,000 and $ 325,674,000 at June 30, 2022 and December 31, 2021, respectively.

Included in commitments to extend credit are undisbursed lines of credit totaling $ 318,359,000 and $ 325,674,000 at September 30, 2022 and December 31, 2021, respectively.

Undisbursed lines of credit include credits whereby customers can repay principal and request principal advances during the term of the loan at their discretion and most expire between one and 12 months.

Included in undisbursed lines of credit are commitments for the undisbursed portions of construction loans totaling $ 75,027,000 and $ 93,263,000 as of June 30, 2022 and December 31, 2021, respectively.

Included in undisbursed lines of credit are commitments for the undisbursed portions of construction loans totaling $ 62,355,000 and $ 93,263,000 as of September 30, 2022 and December 31, 2021, respectively.

These commitments are agreements to lend to customers, subject to meeting certain construction progress requirements established in the contracts.

The underlying construction loans have fixed expiration dates.

Standby letters of credit and financial guarantees amounting to $ 910,000 and $ 434,000 were outstanding at June 30, 2022 and December 31, 2021, respectively.

Standby letters of credit and financial guarantees amounting to $ 987,000 and $ 434,000 were outstanding at September 30, 2022 and December 31, 2021, respectively.

Standby letters of credit and financial guarantees are conditional commitments issued by the Company to guarantee the performance of a customer to a third party.

1 unchanged sentence

Standby letters of credit and guarantees carry a one year term or less, many have auto-renewal features.

The fair value of the liability related to these standby letters of credit, which represents the fees received for their issuance, was not significant at June 30, 2022 or December 31, 2021.

The fair value of the liability related to these standby letters of credit, which represents the fees received for their issuance, was not significant at September 30, 2022 or December 31, 2021.

The Company recognizes these fees as revenue over the term of the commitment or when the commitment is used.

1 unchanged sentence

Management does not anticipate any material loss will result from the outstanding commitments to extend credit, standby letters of credit and financial guarantees.

At June 30, 2022 and December 31, 2021, the balance of a contingent allocation for probable loan loss experience on unfunded obligations was $ 115,000 .

At September 30, 2022 and December 31, 2021, the balance of a contingent allocation for probable loan loss experience on unfunded obligations was $ 110,000 and $ 115,000 , respectively.

The contingent allocation for probable loan loss experience on unfunded obligations is calculated by management using an appropriate, systematic, and consistently applied process.

1 unchanged sentence

In 2018, the Company sold its credit card portfolio to a third party vendor.

Part of the sale of the portfolio was to provide a guarantee of certain accounts which, as of June 30, 2022, was $ 2,294,500 .

Part of the sale of the portfolio was to provide a guarantee of certain accounts which, as of September 30, 2022, was $ 2,294,500 .

The Company is subject to legal proceedings and claims which arise in the ordinary course of business.

5 unchanged sentences

Basic Earnings Per Share For the Three Months

Ended June 30, For the Six Months

Ended June 30,

Ended September 30, For the Nine Months

Ended September 30,

(In thousands, except share and per share amounts) 2022 2021 2022 2021

3 unchanged sentences

Diluted Earnings Per Share For the Three Months

Ended June 30, For the Six Months

Ended June 30,

Ended September 30, For the Nine Months

Ended September 30,

(In thousands, except share and per share amounts) 2022 2021 2022 2021

5 unchanged sentences

Diluted earnings per share $ 0.55 $ 0.54 $ 1.62 $ 1.74

No outstanding options awards were anti-dilutive for the six months ended June 30, 2022 and 2021.

No outstanding options awards were anti-dilutive for the nine months ended September 30, 2022 and 2021.

Share-Based Compensation

The Company has three share-based compensation plans as described below.

Share-based compensation cost recognized for those plans was $ 181,000 and $ 210,000 for the six months ended June 30, 2022 and 2021, respectively.

The recognized tax (benefit) expense for the share-based compensation expense, forfeitures of restricted stock, and exercise of stock options, resulted in the recognition of $ 69,000 and $ 46,000 , respectively, for the six months ended June 30, 2022 and 2021.

The Central Valley Community Bancorp 2005 Omnibus Incentive Plan (2005 Plan) was adopted in May 2005 and expired March 16, 2015.

While outstanding arrangements to issue shares under these plans, including options, continue in force until their expiration, no new options will be granted under these plans.

The Company has two share-based compensation plans as described below.

Share-based compensation cost recognized for those plans was $ 324,000 and $ 310,000 for the nine months ended September 30, 2022 and 2021, respectively.

The recognized tax (benefit) expense for the share-based compensation expense, forfeitures of restricted stock, and exercise of stock options, resulted in the recognition of $ 87,000 and $ 50,000 , respectively, for the nine months ended September 30, 2022 and 2021.

The Central Valley Community Bancorp 2015 Omnibus Incentive Plan (2015 Plan) was adopted in May 2015.

4 unchanged sentences

Shares are purchased at the end of each of the three-month offering periods at a 10 percent discount from the lower of the closing market price on the Offering Date (first trading day of each offering period) or the Investment Date (last trading day of each offering period).

The Company reserved 500,000 common shares to be set aside for the ESPP, and there were 438,851 shares available for future purchase under the plan as of June 30, 2022.

The Company reserved 500,000 common shares to be set aside for the ESPP, and there were 435,336 shares available for future purchase under the plan as of September 30, 2022.

Stock Option Plan

5 unchanged sentences

The compensation cost for stock options granted is based on the weighted average grant date fair value per share.

No options to purchase shares of the Company’s common stock were granted during the six months ended June 30, 2022 and 2021.

A summary of the combined activity of the Company’s stock option compensation plans for the six months ended June 30, 2022 follows (in thousands, except per share amounts):

No options to purchase shares of the Company’s common stock were granted during the nine months ended September 30, 2022 and 2021.

A summary of the combined activity of the Company’s stock option compensation plans for the nine months ended September 30, 2022 follows (in thousands, except per share amounts):

Shares Weighted

Exercise Price Weighted

Term (Years) Aggregate

Intrinsic Value

Exercise Price

Options outstanding at December 31, 2021 52,805 $ 9.81

1 unchanged sentence

Options forfeited ( 2,600 ) $ 11.12

Options outstanding at June 30, 2022 12,150 $ 8.02 0.22 $ 79

Options vested or expected to vest at June 30, 2022 12,150 $ 8.02 0.22 $ 79

Options exercisable at June 30, 2022 12,150 $ 8.02 0.22 $ 79

Options outstanding at September 30, 2022 —

Information related to the stock option plan is as follows (in thousands):

For the Three Months

Ended June 30, For the Six Months

Ended June 30,

Ended September 30, For the Nine Months

Ended September 30,

2022 2021 2022 2021

2 unchanged sentences

Excess tax benefit realized for option exercises $ 18 $ 4 $ 87 $ 50

As of June 30, 2022, there was no remaining unrecognized compensation cost related to stock options granted under all plans.

As of September 30, 2022, there was no remaining unrecognized compensation cost related to stock options granted under all plans.

Restricted and Performance Common Stock Awards

4 unchanged sentences

The cost of these awards is recognized over the vesting period of the awards based on the fair value of our common stock on the date of the grant.

The following table summarizes restricted stock and performance award activity for the six months ended June 30, 2022 as follows:

The following table summarizes restricted stock and performance award activity for the nine months ended September 30, 2022 as follows:

Shares Weighted

4 unchanged sentences

Forfeited ( 244 ) $ 20.50

Nonvested outstanding shares at June 30, 2022 49,468 $ 17.26

Nonvested outstanding shares at September 30, 2022 49,215 $ 17.28

The shares awarded to employees and directors under the restricted stock agreements vest on applicable vesting dates only to the extent the recipient of the shares is then an employee or a director of the Company or one of its subsidiaries, and each recipient will forfeit all of the shares that have not vested on the date his or her employment or service is terminated.

Performance common stock awards vest immediately.

As of June 30, 2022, there were 49,468 shares of restricted stock that are nonvested and expected to vest.

As of June 30, 2022, there was $ 813,000 of total unrecognized compensation cost related to nonvested restricted common stock awards.

As of September 30, 2022, there were 49,215 shares of restricted stock that are nonvested and expected to vest.

As of September 30, 2022, there was $ 676,000 of total unrecognized compensation cost related to nonvested restricted common stock awards.

Restricted stock compensation expense is recognized on a straight-line basis over the vesting period.

This cost is expected to be recognized over a weighted-average remaining period of 2.06 years and will be adjusted for subsequent changes in estimated forfeitures.

Restricted common stock awards had an intrinsic value of $ 3,517,000 at June 30, 2022.

Restricted common stock awards had an intrinsic value of $ 3,654,000 at September 30, 2022.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements