CASHMERE, WA / ACCESS Newswire / April 22, 2025 / Cashmere Valley Bank (OTCQX: CSHX) ("Bank"), announced quarterly earnings of $6.4 million for the quarter ended March 31, 2025. Diluted earnings per share totaled $1.64, representing a decrease of $0.23 per share, or 12.3%, from prior year.
"We are pleased with our first quarter earnings," said Greg Oakes, President and CEO. "Earnings dropped a bit from a year ago, but that was primarily due to increases in loan loss provision expense and tax expense. Income before taxes and provision expenses increased 4.3%, which provides positive momentum going forward. We are also pleased that the purchase of a property on Grant Road in East Wenatchee continues to progress, and we hope that location will open in 2026."
Q1 Highlights
The Bank reported the following statement of condition highlights as of March 31, 2025:
As of March 31, 2025, gross loans totaled $967.4 million, representing a decrease from March 31, 2024 of $74.0 million, or 7.1%. The Bank has experienced loan growth in 2025 as loan balances have increased $5.0 million since December 31, 2024.
Deposit balances totaled $1.83 billion as of March 31, 2025. Deposit balances increased $44.9 million, or 2.5%, from March 31, 2024. Deposit balances decreased from December 31, 2024 by $8.3 million, or 0.4%. Non-interest deposits totaled $386.9 million as of March 31, 2025, which represented 21.1% of total deposits.
Return on assets decreased from 1.44% to 1.23%, due to an increase in assets and a reduction in earnings.
Return on equity decreased from 14.4% to 11.1%, due to strong equity growth and a reduction in earnings.
Cash, Cash Equivalents and Restricted Cash
Total cash, cash equivalents and restricted cash totaled $186.2 million at March 31, 2025, compared to $138.2 million at March 31, 2024. The $48.0 million increase was primarily due to efforts to retain higher cash balances on overnight funds that are paying approximately 4.40%. Available borrowing lines from the Federal Home Loan Bank and the Federal Reserve totaled approximately $374.5 million.
Investments
The investment portfolio, net of the held to maturity allowance, totaled $879.4 million at March 31, 2025, which represented an increase of $85.7 million from March 31, 2024. As of March 31, 2025, available for sale securities totaled $750.8 million and held to maturity securities, net of the allowance, totaled $128.6 million. For the quarter ended March 31, 2025, securities earned 3.86% as compared to 3.96% one year ago. The decrease in the earnings rate is attributable to decreasing yields on floating rate securities as well as maturities of higher yielding securities.
As of March 31, 2024, unrealized losses on available for sale securities totaled $55.4 million as compared to $66.9 million as of March 31, 2024. A combination of strategies was utilized to achieve this reduction, which included new investment purchases, sales of securities and interest rate swaps.
During the first quarter of 2025, a gain on sale of securities of $130,000 was recorded as part of a securities sale, where the proceeds from the sale were reinvested. Along with the gain on sale, an increase in go-forward interest income was expected with a modest increase in duration.
Loans and Credit Quality
Gross loans totaled $967.4 million as of March 31, 2025, which was a decrease of $74.0 million from March 31, 2024. Since March 31, 2024, significant loan balance reductions were seen in construction and land development loans of $43.2 million, municipal loans of $24.6 million, and dealer loans of $23.8 million. The balance reductions equated to a percentage reduction over the past year of 51.0%, 25.2% and 10.4%, respectively.
The allowance for credit losses on loans (ACL) was 1.28% of gross loans as compared to 1.24% one year ago. During the first quarter of 2025, the Bank recorded $761,000 in provision expense on loans, and the allowance balance totaled $12.4 million.
Credit quality remains strong with non-performing loans representing 0.34% of gross loans as of March 31, 2025. This is a slight increase from 0.23% as of March 31, 2024.
Deposits
Deposits totaled $1.83 billion at March 31, 2025. During the first quarter, the average cost of funds increased 6 basis points as compared to the first quarter of 2024. Certificate of Deposit balances increased $71.5 million over the past twelve months, however, the rate paid on certificates declined during that same period.
Equity
Tier 1 capital remains strong. Tier 1 capital increased to $281.9 million as of March 31, 2025, which represented an increase of 7.9% from $259.7 million at March 31, 2024. The increase was primarily due to earnings less dividends paid. The Bank's semi-annual dividend was paid February 10, 2025 at a rate of $0.90 per share.
As of March 31, 2025, GAAP capital reflected an increase of $30.1 million from March 31, 2024. Unrealized losses decreased $4.7 million during that time period. The Bank's GAAP equity to assets ratio was 11.32% as of March 31, 2025.
Earnings
Net Interest Income
Net interest income totaled $16.2 million in the first quarter of 2025 compared to $15.6 million in the same quarter a year ago. The increase from the prior year was attributable to an improvement in yields on earning assets of 8 basis points to 4.65%, which was partially offset with an increase of 5 basis points on interest-bearing liabilities to 2.06%. Including non-interest bearing deposits the cost of funds totaled 1.63% as of March 31, 2025.
Loan interest income decreased $187,000 due to a reduction in loan balances. Year to date loan yields offset the majority of loan balance reductions. The average yield on loans improved to 5.40% from 5.01% from the same quarter one year ago.
Interest income on available for sale and held to maturity securities increased $605,000, or 7.3%, from one year ago. The increase was primarily related to the increase in securities balances of 10.8% year over year.
Interest income from deposits with other financial institutions increased $659,000 due to an increase in average cash balances with other financial institutions.
The net interest margin was 3.17% for the first quarter of 2025 as compared to 3.12% one year ago.
Non-Interest Income
Non-interest income totaled $5.7 million in the first quarter of 2025 as compared to $4.7 million in the first quarter of 2024. Non-interest income increased $1.0 million primarily from insurance commissions and fees increasing $717,000, and increases in gain on sales from available for sale securities of $130,000.
Non-Interest Expense
Non-interest expense totaled $13.2 million in the first quarter of 2025 as compared to $12.0 million in the first quarter of 2024. Salaries and benefits increased $689,000, or 9.7%, due to increasing wages and significant increases in employee health care insurance costs. Data processing expenses also increased $169,000, or 10.6%.
The Bank's efficiency ratio was 60.2% in the first quarter of 2025 as compared to 59.0% in the first quarter of 2024.
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, 2025 | December 31, 2024 | March 31, 2024 | ||||||||||
Assets | ||||||||||||
Cash and Cash Equivalent: | ||||||||||||
Cash & due from banks | $ | 27,192 | $ | 27,642 | $ | 21,393 | ||||||
Interest bearing deposits | 156,653 | 188,370 | 113,141 | |||||||||
Fed funds sold | 2,342 | 3,909 | 3,639 | |||||||||
Total Cash and Cash Equivalent | 186,187 | 219,921 | 138,173 | |||||||||
Securities available for sale | 750,761 | 716,508 | 655,680 | |||||||||
Securities held to maturity, net of allowance for credit losses of $15, $16 and $19, respectively | 128,589 | 130,254 | 137,936 | |||||||||
Federal Home Loan Bank stock, at cost | 2,848 | 2,846 | 2,981 | |||||||||
Loans held for sale | 7 | 4 | 342 | |||||||||
Loans | 967,398 | 962,369 | 1,041,410 | |||||||||
Allowance for credit losses | (12,391 | ) | (12,748 | ) | (12,947 | ) | ||||||
Net loans | 955,007 | 949,621 | 1,028,463 | |||||||||
Premises and equipment | 19,251 | 19,472 | 20,510 | |||||||||
Accrued interest receivable | 8,842 | 8,952 | 9,444 | |||||||||
Other real estate and foreclosed assets | 97 | 97 | 97 | |||||||||
Bank Owned Life Insurance | 27,862 | 27,647 | 27,009 | |||||||||
Goodwill | 7,579 | 7,579 | 7,576 | |||||||||
Intangibles, net | 2,562 | 2,749 | 3,291 | |||||||||
Mortgage servicing rights | 2,406 | 2,441 | 2,485 | |||||||||
Net deferred tax assets | 16,780 | 18,037 | 18,695 | |||||||||
Other assets | 13,649 | 15,435 | 13,569 | |||||||||
Total assets | $ | 2,122,427 | $ | 2,121,563 | $ | 2,066,251 | ||||||
Liabilities and Shareholders' Equity | ||||||||||||
Liabilities | ||||||||||||
Deposits: | ||||||||||||
Non-interest bearing demand | $ | 386,886 | $ | 395,327 | $ | 398,960 | ||||||
Savings and interest-bearing demand | 921,796 | 940,084 | 936,416 | |||||||||
Time | 521,007 | 502,542 | 449,462 | |||||||||
Total deposits | 1,829,689 | 1,837,953 | 1,784,838 | |||||||||
Accrued interest payable | 2,881 | 2,842 | 2,661 | |||||||||
Borrowings | 35,000 | 36,000 | 54,636 | |||||||||
Other liabilities | 14,627 | 12,601 | 14,008 | |||||||||
Total liabilities | 1,882,197 | 1,889,396 | 1,856,143 | |||||||||
Shareholders' Equity | ||||||||||||
Common stock (no par value); authorized 10,000,000 shares; | ||||||||||||
Issued and outstanding: 3/31/2025 -- 3,897,994 ; 12/31/2024 -- 3,891,000 ; 3/31/2024 -- 3,884,186 | -- | -- | -- | |||||||||
Additional paid-in capital | 5,608 | 5,229 | 4,895 | |||||||||
Treasury stock | (16,784 | ) | (16,784 | ) | (16,784 | ) | ||||||
Retained Earnings | 304,544 | 301,636 | 284,062 | |||||||||
Other comprehensive income | (53,947 | ) | (58,674 | ) | (62,491 | ) | ||||||
Total Cashmere Valley Bank shareholders' equity | 239,421 | 231,407 | 209,682 | |||||||||
Noncontrolling interest | 809 | 760 | 426 | |||||||||
Total shareholders' equity | 240,230 | 232,167 | 210,108 | |||||||||
Total liabilities and shareholders' equity | $ | 2,122,427 | $ | 2,121,563 | $ | 2,066,251 | ||||||
Quarterly Consolidated Statements of Income (UNAUDITED)
(Dollars in Thousands)
Cashmere Valley Bank & Subsidiary
| For the quarters ended, | ||||||||||||
| March 31, 2025 | December 31, 2024 | March 31, 2024 | ||||||||||
Interest Income | ||||||||||||
Loans and leases | $ | 12,834 | $ | 13,102 | $ | 13,021 | ||||||
Fed funds sold and deposits at other financial institutions | 1,958 | 2,037 | 1,299 | |||||||||
Securities available for sale: | ||||||||||||
Taxable | 7,816 | 7,511 | 7,220 | |||||||||
Tax-exempt | 332 | 344 | 277 | |||||||||
Securities held to maturity: | ||||||||||||
Taxable | 762 | 764 | 785 | |||||||||
Tax-exempt | 24 | 24 | 47 | |||||||||
Total interest income | 23,726 | 23,782 | 22,649 | |||||||||
Interest Expense | ||||||||||||
Deposits | 7,111 | 7,348 | 6,449 | |||||||||
Borrowings | 401 | 457 | 609 | |||||||||
Total interest expense | 7,512 | 7,805 | 7,058 | |||||||||
Net interest income | 16,214 | 15,977 | 15,591 | |||||||||
Provision for Credit Losses | 761 | 465 | (54 | ) | ||||||||
Net interest income after provision for credit losses | 15,453 | 15,512 | 15,645 | |||||||||
Non-Interest Income | ||||||||||||
Service charges on deposit accounts | 496 | 541 | 460 | |||||||||
Mortgage banking operations | 351 | 413 | 290 | |||||||||
Net gain (loss) on sales of securities available for sale | 130 | -- | -- | |||||||||
Brokerage commissions | 327 | 317 | 369 | |||||||||
Insurance commissions and fees | 2,667 | 2,402 | 1,950 | |||||||||
Net interchange income | 1,138 | 1,105 | 1,166 | |||||||||
Earnings from Bank Owned Life Insurance | 215 | 220 | 200 | |||||||||
Dividends from correspondent banks | 109 | 102 | 34 | |||||||||
Other | 288 | 276 | 257 | |||||||||
Total non-interest income | 5,721 | 5,376 | 4,726 | |||||||||
Non-Interest Expense | ||||||||||||
Salaries and employee benefits | 7,758 | 7,197 | 7,069 | |||||||||
Occupancy and equipment | 868 | 918 | 880 | |||||||||
Audits and examinations | 247 | 21 | 183 | |||||||||
State and local business and occupation taxes | 358 | 300 | 335 | |||||||||
FDIC insurance & WA state assessments | 268 | 253 | 244 | |||||||||
Legal and professional fees | 247 | 238 | 242 | |||||||||
Check losses and charge-offs | 118 | 127 | 120 | |||||||||
Low-income housing investment losses | 158 | 156 | -- | |||||||||
Data processing | 1,768 | 1,562 | 1,599 | |||||||||
Product delivery | 364 | 326 | 330 | |||||||||
Other | 1,059 | 1,037 | 993 | |||||||||
Total non-interest expense | 13,213 | 12,135 | 11,995 | |||||||||
Income before income taxes | 7,961 | 8,753 | 8,376 | |||||||||
Income Taxes | 1,502 | 1,677 | 1,093 | |||||||||
Net income | $ | 6,459 | $ | 7,076 | $ | 7,283 | ||||||
Net income attributable to noncontrolling interest | 48 | 17 | 6 | |||||||||
Net income attributable to Cashmere Valley Bank | $ | 6,411 | $ | 7,059 | $ | 7,277 | ||||||
Earnings Per Share | ||||||||||||
Basic | $ | 1.65 | $ | 1.81 | $ | 1.87 | ||||||
Diluted | $ | 1.64 | $ | 1.81 | $ | 1.87 | ||||||
SOURCE: Cashmere Valley Bank
View the original press release on ACCESS Newswire
