Cashmere Valley Bank Reports Quarterly Earnings of $7.7 Million
Cashmere Valley Bank (OTCQX:CSHX) reported quarterly earnings of $7.7 million, or $1.99 diluted earnings per share, for the quarter ending March 31, 2023, reflecting a 27.6% increase year-over-year.
Key highlights include an increase in gross loans to $1.016 billion, though deposit balances fell by 6.2% to $1.84 billion. The bank's net interest income rose to $17.3 million, driven by an improved net interest margin of 3.42%.
Despite strong credit quality with non-performing loans at 0.15%, unrealized losses in the investment portfolio were reported at $76.7 million. Non-interest expense grew to $11.8 million, primarily due to increased salaries. Tier 1 capital improved to $238.0 million.
- Quarterly earnings of $7.7 million, up 27.6% year-over-year.
- Gross loans increased to $1.016 billion, a $44.5 million rise from last year.
- Net interest income rose to $17.3 million, with a net interest margin of 3.42%.
- Tier 1 capital increased to $238.0 million, reflecting strong capital position.
- Deposit balances decreased by $120.9 million, or 6.2%.
- Unrealized losses on available-for-sale securities totaled $76.7 million.
- Non-interest expense increased to $11.8 million, primarily due to a 10.5% rise in salaries and benefits.
CASHMERE, WA / ACCESSWIRE / April 18, 2023 / Cashmere Valley Bank (OTCQX:CSHX) ("Bank"), announced quarterly earnings of
"We are proud to report our first quarter earnings and the improvement these earnings represent," said Greg Oakes, President and CEO. "The benefit of higher rates on our net interest margin is significant. The downside of higher rates is that deposit competition and our costs to retain deposits is starting to increase at a rapid pace. We continue to deploy strategies to attract and retain deposits. In addition, we are continuing to try to unwind the level of unrealized loss in our securities portfolio."
Q1 Highlights
The Bank reported the following statement of condition highlights as of March 31, 2023:
- As of March 31, 2023, gross loans totaled
$1.01 6 billion, representing an increase from March 31, 2022 of$44.5 million . - Deposit balances totaled
$1.84 billion as of March 31, 2023. Deposit balances decreased$120.9 million , or6.2% , from March 31, 2022. Non-interest deposits totaled$425.5 million as of March 31, 2023, which represents23.1% of total deposits.
Cash, Cash Equivalents and Restricted Cash
Total cash, cash equivalents and restricted cash were
Investments
The investment portfolio totaled
As of March 31, 2023, unrealized losses on available for sale securities totaled
Loans and Credit Quality
Gross loans totaled
The Bank adopted the Current Expected Credit Losses (CECL) Methodology on January 1, 2023. As part of the adoption the Bank lowered the Allowance for Credit Losses on Loans balance by
Credit quality remains exceptionally strong with non-performing loans representing
Deposits
Deposits totaled
Equity
Tier 1 capital remains strong. Tier 1 capital increased to
As of March 31, 2023, GAAP capital reflects a decrease of
Earnings
Net Interest Income
Net interest income totaled
Loan interest income increased
Interest income on available for sale and held to maturity securities increased
Interest income from deposits with other financial institutions increased
The net interest margin was
Non-Interest Income
Non-interest income totaled
Non-Interest Expense
Non-interest expense totaled
The primary driver of the increase in non-interest expense has been the increase in salaries and benefits. As compared to the same period one year ago, wages and benefits expense increased
The Bank's efficiency ratio was
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 wholly owned 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, 2023 | December 31, 2022 | March 31, 2022 | ||||||||||
Assets | ||||||||||||
Cash and Cash Equivalent: | ||||||||||||
Cash & due from banks | $ | 24,027 | $ | 27,706 | $ | 24,697 | ||||||
Interest bearing deposits | 82,565 | 142,617 | 54,485 | |||||||||
Fed funds sold | 3,863 | 9,989 | 8,434 | |||||||||
Total Cash and Cash Equivalent | 110,455 | 180,312 | 87,616 | |||||||||
Securities available for sale | 691,926 | 670,077 | 1,060,851 | |||||||||
Securities held to maturity, net of allowance for credit losses of | 144,381 | 146,409 | - | |||||||||
Federal Home Loan Bank stock, at cost | 2,505 | 2,669 | 2,669 | |||||||||
Loans held for sale | 4 | 142 | 910 | |||||||||
Loans | 1,016,257 | 1,005,741 | 971,745 | |||||||||
Allowance for credit losses | (12,831 | ) | (13,746 | ) | (13,707 | ) | ||||||
Net loans | 1,003,426 | 991,995 | 958,038 | |||||||||
Premises and equipment | 19,286 | 18,275 | 17,047 | |||||||||
Accrued interest receivable | 8,486 | 8,199 | 9,237 | |||||||||
Bank Owned Life Insurance | 26,275 | 26,105 | 26,653 | |||||||||
Goodwill | 7,576 | 7,576 | 7,576 | |||||||||
Intangibles | 3,715 | 3,796 | 4,115 | |||||||||
Mortgage servicing rights | 2,628 | 2,685 | 2,744 | |||||||||
Net deferred tax assets | 21,293 | 21,021 | 12,277 | |||||||||
Other assets | 7,861 | 8,501 | 9,774 | |||||||||
Total assets | $ | 2,049,817 | $ | 2,087,762 | $ | 2,199,507 | ||||||
Liabilities and Shareholders' Equity | ||||||||||||
Liabilities | ||||||||||||
Deposits: | ||||||||||||
Non-interest bearing demand | $ | 425,526 | $ | 457,666 | $ | 440,821 | ||||||
Savings and interest-bearing demand | 1,093,805 | 1,228,375 | 1,325,500 | |||||||||
Time | 321,767 | 213,978 | 195,719 | |||||||||
Total deposits | 1,841,098 | 1,900,019 | 1,962,040 | |||||||||
Accrued interest payable | 1,060 | 434 | 363 | |||||||||
Short-term borrowings | 14,163 | 17,166 | 34,887 | |||||||||
Other liabilities | 15,326 | 11,753 | 13,027 | |||||||||
Total liabilities | 1,871,647 | 1,929,372 | 2,010,317 | |||||||||
Shareholders' Equity | ||||||||||||
Common stock (no par value); authorized 10,000,000 shares; | ||||||||||||
Issued and outstanding: 3/31/2023 -- 3,883,971 ; 12/31/2022 -- 3,883,956 ; 3/31/2022 -- 3,883,801 | -- | -- | -- | |||||||||
Additional paid-in capital | 4,660 | 4,540 | 4,393 | |||||||||
Treasury stock | (16,784 | ) | (16,784 | ) | (16,784 | ) | ||||||
Retained Earnings | 263,123 | 259,839 | 243,219 | |||||||||
Other comprehensive income | (72,986 | ) | (89,239 | ) | (41,638 | ) | ||||||
Total Cashmere Valley Bank shareholders' equity | 178,013 | 158,356 | 189,190 | |||||||||
Noncontrolling interests | 157 | 34 | - | |||||||||
Total shareholders' equity | 178,170 | 158,390 | 189,190 | |||||||||
Total liabilities and shareholders' equity | $ | 2,049,817 | $ | 2,087,762 | $ | 2,199,507 | ||||||
| Quarterly Consolidated Statements of Income (UNAUDITED) | ||||||||||||
(Dollars in Thousands) | ||||||||||||
Cashmere Valley Bank & Subsidiary | ||||||||||||
| For the quarters ended, | ||||||||||||
| March 31, 2023 | December 31, 2022 | March 31, 2022 | ||||||||||
Interest Income | ||||||||||||
Loans | $ | 10,953 | $ | 10,641 | $ | 9,197 | ||||||
Fed funds sold and deposits at other financial institutions | 1,467 | 1,190 | 33 | |||||||||
Securities available for sale: | ||||||||||||
Taxable | 5,568 | 4,904 | 3,746 | |||||||||
Tax-exempt | 689 | 1,099 | 1,646 | |||||||||
Securities held to maturity: | ||||||||||||
Taxable | 804 | 773 | - | |||||||||
Tax-exempt | 46 | 41 | - | |||||||||
Total interest income | 19,527 | 18,648 | 14,622 | |||||||||
Interest Expense | ||||||||||||
Deposits | 2,230 | 1,261 | 1,029 | |||||||||
Short-term borrowings | 7 | 12 | 16 | |||||||||
Total interest expense | 2,237 | 1,273 | 1,045 | |||||||||
Net interest income | 17,290 | 17,375 | 13,577 | |||||||||
Provision for Credit Losses | 605 | 307 | 47 | |||||||||
Net interest income after provision for credit losses | 16,685 | 17,068 | 13,530 | |||||||||
Non-Interest Income | ||||||||||||
Service charges on deposit accounts | 541 | 557 | 491 | |||||||||
Mortgage banking operations | 312 | 422 | 755 | |||||||||
Net gain (loss) on sales of securities available for sale | (365 | ) | (1,019 | ) | 135 | |||||||
Brokerage commissions | 270 | 275 | 276 | |||||||||
Insurance commissions and fees | 1,863 | 2,091 | 1,673 | |||||||||
Net interchange income (expense) | 1,360 | 1,204 | 654 | |||||||||
BOLI cash value | 170 | 729 | 168 | |||||||||
Dividends from correspondent banks | 27 | 21 | 25 | |||||||||
Other | 287 | 330 | 311 | |||||||||
Total non-interest income | 4,465 | 4,610 | 4,488 | |||||||||
Non-Interest Expense | ||||||||||||
Salaries and employee benefits | 7,075 | 5,935 | 6,405 | |||||||||
Occupancy and equipment | 928 | 916 | 906 | |||||||||
Audits and examinations | 89 | 103 | 193 | |||||||||
State and local business and occupation taxes | 323 | 360 | 279 | |||||||||
FDIC insurance & WA state assessments | 165 | 171 | 173 | |||||||||
Legal and professional fees | 245 | 223 | 209 | |||||||||
Check losses and charge-offs | 117 | 109 | 133 | |||||||||
Low income housing investment losses | 155 | 151 | 144 | |||||||||
Data processing | 1,539 | 1,479 | 1,283 | |||||||||
Product delivery | 314 | 309 | 323 | |||||||||
Other | 807 | 889 | 979 | |||||||||
Total non-interest expense | 11,757 | 10,645 | 11,027 | |||||||||
Income before income taxes | 9,393 | 11,033 | 6,991 | |||||||||
Income Taxes | 1,670 | 1,344 | 913 | |||||||||
Net income | $ | 7,723 | $ | 9,689 | $ | 6,078 | ||||||
Net income attributable to noncontrolling interest | 6 | - | - | |||||||||
Net income attributable to Cashmere Valley Bank | $ | 7,717 | $ | 9,689 | $ | 6,078 | ||||||
Earnings Per Share | ||||||||||||
Basic | $ | 1.99 | $ | 2.49 | $ | 1.57 | ||||||
Diluted | $ | 1.99 | $ | 2.49 | $ | 1.56 | ||||||
SOURCE: Cashmere Valley Bank
View source version on accesswire.com:
https://www.accesswire.com/750030/Cashmere-Valley-Bank-Reports-Quarterly-Earnings-of-77-Million
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