| Headline: | Cashmere Valley Bank Reports Quarterly Earnings of $7.3 Million |
| Location: | US |
| Post Date: | Apr 16, 2024 11:05 PM |
| TAG ID: | awire156159 |
| DocID: | 853724 |
| Word Count: | approx. 1936 words |
| Full story: | |
| CASHMERE, WA / ACCESSWIRE / April 16, 2024 / Cashmere Valley Bank (OTCQX:CSHX) ("Bank"), announced quarterly earnings of $7.3 million for the quarter ended March 31, 2024. Diluted earnings per share was $1.87, representing a decrease of $0.12 per share, or 6.0%. "In spite of a challenging environment our core earnings remain strong," said Greg Oakes, President and CEO. "One year ago, our net interest margin was expanding nicely, however, deposit costs have been rapidly increasing and adversely affecting our margin. We are relieved to show slight deposit growth in the quarter; however, the cost of the deposit growth is significant. The inversion in the yield curve creates a tough environment for all financial institutions. We were pleased to navigate through the environment with another quarter of strong earnings." Q1 Highlights The Bank reported the following statement of condition highlights as of March 31, 2024: As of March 31, 2024, gross loans totaled $1.041 billion, representing an increase from March 31, 2023 of $25.2 million. Deposit balances totaled $1.785 billion as of March 31, 2024. Deposit balances decreased $56.3 million, or 3.1%, from March 31, 2023. Deposit balances increased from December 31, 2023 by $11.1 million, or 0.6%. Non-interest deposits totaled $399.0 million as of March 31, 2024, which represents 22.4% of total deposits. Return on assets decreased from 1.51% to 1.44%, due to an increase in assets and the reduction in earnings. Return on equity decreased from 18.7% to 14.4%, due to equity growth and the reduction in earnings. Cash, Cash Equivalents and Restricted Cash Total cash, cash equivalents and restricted cash totaled $138.2 million at March 31, 2024, compared to $110.5 million at March 31, 2023. The $27.7 million increase was primarily due to efforts to retain higher cash balances on overnight funds that are paying approximately 5.40%, and to help insure against further deposit losses. Available borrowing lines from the Federal Home Loan Bank and the Federal Reserve totaled approximately $416.6 million. Investments The investment portfolio totaled $793.6 million at March 31, 2024, an increase of $2.9 million from March 31, 2023. As of March 31, 2024, available for sale securities totaled $655.7 million and held to maturity securities totaled $137.9 million. For the quarter ended March 31, 2024, securities earned 3.94% as compared to 3.17% one year ago. The increase in the earnings rate is attributable to increasing yields on floating rate securities in combination with higher rates on new securities purchases. As of March 31, 2024, unrealized losses on available for sale securities totaled $66.9 million as compared to $76.7 million as of March 31, 2023. A combination of strategies was utilized to achieve this reduction including new investment purchases, sales of securities and interest rate swaps. Loans and Credit Quality Gross loans totaled $1.041 billion as of March 31, 2024, which is an increase of $25.1 million from March 31, 2023. Since March 31, 2023, multifamily loans increased $33.7 million and municipal loans increased $11.5 million, while commercial real estate loans decreased $16.0 million and construction and land development loans decreased $13.1 million. The Bank adopted the Current Expected Credit Losses (CECL) Methodology on January 1, 2023. The allowance for credit losses on loans (ACL) was 1.24% of gross loans as compared to 1.26% one year ago. During the first quarter of 2024, the Bank recorded $264,000 in provision expense on loans, and the allowance totaled $12.9 million. Credit quality remains exceptionally strong with non-performing loans representing 0.23% of gross loans as of March 31, 2024. This is a slight increase from 0.15% as of March 31, 2023. Deposits Deposits totaled $1.78 billion at March 31, 2024. The average cost of deposits increased 138 basis points to 2.01% for the quarter ended March 31, 2024 as compared to 0.63% for the quarter ended March 31, 2023. Equity Tier 1 capital remains strong at 12.4% as of March 31, 2024. Tier 1 capital increased to $259.7 million as of March 31, 2024, which represents an increase from $238.0 million at March 31, 2023. The increase was primarily due to earnings less dividends paid. The first quarter dividend was paid February 5, 2024 at a rate of $0.85 per share. As of March 31, 2024, GAAP capital reflects an increase of $31.9 million from March 31, 2023. As of March 31, 2024, the Bank's GAAP capital ratio was 10.17%. The increase in GAAP capital was primarily due to net income from the prior twelve months and a reduction in unrealized losses, due to sales of securities and a reduction in the treasury yield curve. Earnings Net Interest Income Net interest income totaled $15.6 million in the first quarter of 2024, compared to $17.3 million in the same quarter a year ago. The decrease from the prior year first quarter was attributable to an improvement in yields on earning assets of 70 basis points as compared to an increase of 138 basis points in deposit expenses. Loan interest income increased $2.1 million over the same quarter one year ago as the average yield on loans increased from 4.40% to 4.99%. Interest income on available for sale and held to maturity securities increased $1.2 million from one year ago. The average yield on securities increased to 3.94% as compared to 3.17% one year ago. Interest income from deposits with other financial institutions fell $168,000 due to a decrease in average cash balances with other financial institutions. The net interest margin was 3.12% for the first quarter of 2024 due to significantly higher deposit costs, as compared to 3.42% during the first quarter of 2023. Non-Interest Income Non-interest income totaled $4.7 million in the first quarter of 2024 as compared to $4.5 million in the first quarter of 2023. Non-Interest Expense Non-interest expense totaled $12.0 million in the first quarter of 2024 as compared to $11.8 million in the first quarter of 2023. The Bank's efficiency ratio was 59.0% in the first quarter of 2024 as compared to 54.0% in the first quarter of 2023. About Cashmere Valley Bank Cashmere Valley Bank was established September 24, 1932 and now has 11 retail offices in Chelan, Douglas, Kittitas and Yakima Counties and a municipal lending office in King County. The Bank provides business and personal banking, commercial lending, insurance services through its subsidiary Mitchell, Reed & Schmitten Insurance, investment services, mortgage services, equipment lease financing, auto and marine dealer financing and municipal lending. The success of Cashmere Valley Bank is the result of maintaining a high level of personal service and controlling expenses so our fees and charges offer our customers the best value available. We remain committed to those principles that we feel are best summarized as, "the little Bank with the big circle of friends." Forward-Looking Statements This release may contain certain forward-looking statements that are based on management's current expectations regarding economic, legislative, and regulatory issues that may impact the Bank's earnings in future periods. 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," "intend," "anticipate," "estimate," "will," "would," "should," "could" or "may." Factors that could cause future results to vary materially from current management expectations include, but are not limited to, general economic conditions, economic uncertainty in the United States and abroad, changes in interest rates, deposit flows, real estate values, costs or effects of acquisitions, competition, changes in accounting principles, policies or guidelines, legislation or regulation, and other economic, competitive, governmental, regulatory and technological factors affecting the Bank's operations. The Bank undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events. MEDIA CONTACT: Greg Oakes, CEO, (509) 782-2092 or Mike Lundstrom, CFO, (509) 782-5495 Consolidated Balance Sheets (UNAUDITED) (Dollars in Thousands) Cashmere Valley Bank and Subsidiary March 31, 2024 December 31, 2023 March 31, 2023 Assets Cash and Cash Equivalent: Cash & due from banks $ 21,393 $ 26,619 $ 24,027 Interest bearing deposits 113,141 86,432 82,565 Fed funds sold 3,639 4,085 3,863 Total Cash and Cash Equivalent 138,173 117,136 110,455 Securities available for sale 655,680 650,905 691,926 Securities held to maturity, net of allowance for credit losses of $19, $20 and $347, respectively 137,936 139,775 144,381 Federal Home Loan Bank stock, at cost 2,981 3,008 2,505 Loans held for sale 342 4 4 Loans 1,041,410 1,042,453 1,016,257 Allowance for credit losses (12,947 ) (13,085 ) (12,831 ) Net loans 1,028,463 1,029,368 1,003,426 Premises and equipment 20,510 21,017 19,286 Accrued interest receivable 9,444 9,411 8,486 Other real estate and foreclosed assets 97 97 - Bank Owned Life Insurance 27,009 26,809 26,275 Goodwill 7,576 7,576 7,576 Intangibles 3,291 3,465 3,715 Mortgage servicing rights 2,485 2,536 2,628 Net deferred tax assets 18,695 19,037 21,293 Other assets 13,569 12,594 7,861 Total assets $ 2,066,251 $ 2,042,738 $ 2,049,817 Liabilities and Shareholders' Equity Liabilities Deposits: Non-interest bearing demand $ 398,960 $ 424,380 $ 425,526 Savings and interest-bearing demand 936,416 956,290 1,093,805 Time 449,462 393,097 321,767 Total deposits 1,784,838 1,773,767 1,841,098 Accrued interest payable 2,661 2,216 1,060 Short-term borrowings 54,636 48,858 14,163 Other liabilities 14,008 15,099 15,326 Total liabilities 1,856,143 1,839,940 1,871,647 Shareholders' Equity Common stock (no par value); authorized 10,000,000 shares; Issued and outstanding: 3/31/2024 -- 3,884,186 ; 12/31/2023 -- 3,883,986 ; 3/31/2023 -- 3,883,971 -- -- -- Additional paid-in capital 4,895 4,833 4,660 Treasury stock (16,784 ) (16,784 ) (16,784 ) Retained Earnings 284,062 280,087 263,123 Other comprehensive income (62,491 ) (65,758 ) (72,986 ) Total Cashmere Valley Bank shareholders' equity 209,682 202,378 178,013 Noncontrolling interest 426 420 157 Total shareholders' equity 210,108 202,798 178,170 Total liabilities and shareholders' equity $ 2,066,251 $ 2,042,738 $ 2,049,817 Quarterly Consolidated Statements of Income (UNAUDITED) (Dollars in Thousands) Cashmere Valley Bank & Subsidiary For the quarters ended, March 31, 2024 December 31, 2023 March 31, 2023 Interest Income Loans $ 13,021 $ 12,767 $ 10,953 Fed funds sold and deposits at other financial institutions 1,299 1,087 1,467 Securities available for sale: Taxable 7,220 6,750 5,568 Tax-exempt 277 357 689 Securities held to maturity: Taxable 785 787 804 Tax-exempt 47 46 46 Total interest income 22,649 21,794 19,527 Interest Expense Deposits 6,449 5,163 2,230 Short-term borrowings 609 150 7 Total interest expense 7,058 5,313 2,237 Net interest income 15,591 16,481 17,290 Provision for Credit Losses (54 ) 1,115 605 Net interest income after provision for credit losses 15,366 15,512 17,068 Non-Interest Income Service charges on deposit accounts 460 473 541 Mortgage banking operations 290 374 312 Net gain (loss) on sales of securities available for sale -- (2,560 ) (365 ) Brokerage commissions 369 232 270 Insurance commissions and fees 1,950 2,007 1,863 Net interchange income (expense) 1,166 1,043 1,360 BOLI cash value 200 182 170 Dividends from correspondent banks 34 19 27 Other 257 367 287 Total non-interest income 4,726 2,137 4,465 Non-Interest Expense Salaries and employee benefits 7,069 2,512 7,075 Occupancy and equipment 880 1,025 928 Audits and examinations 183 56 89 State and local business and occupation taxes 335 345 323 FDIC insurance & WA state assessments 244 229 165 Legal and professional fees 242 622 245 Check losses and charge-offs 120 128 117 Low income housing investment losses -- 154 155 Data processing 1,599 1,676 1,539 Product delivery 330 324 314 Other 993 859 807 Total non-interest expense 11,995 7,930 11,757 Income before income taxes 8,376 9,573 9,393 Income Taxes 1,093 1,858 1,670 Net income $ 7,283 $ 7,715 $ 7,723 Net income attributable to noncontrolling interest 6 27 6 Net income attributable to Cashmere Valley Bank $ 7,277 $ 7,688 $ 7,717 Earnings Per Share Basic $ 1.87 $ 1.98 $ 1.99 Diluted $ 1.87 $ 1.98 $ 1.99 SOURCE: Cashmere Valley Bank View the original press release on accesswire.com |
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