Cashmere Valley Bank Reports Quarterly Earnings of $5.8 Million | CSHX Stock News

Cashmere Valley Bank (OTCQX:CSHX) ("Bank"), announced quarterly earnings of $5.8 million for the quarter ended March 31, 2026. Diluted earnings per share totaled $1.54, representing a decrease of $0.10 per share, or 6.1%."We saw mixed results in the first quarter," said Greg Oakes, President and CEO. "Loan and deposit totals are both up nicely from year end. We were also very pleased with the results of the tender offers to repurchase common shares, and the tender offers provided liquidity to previous shareholders. Conversely, net income declined from a year ago, which is disappointing. The decrease in net income was primarily due to increases in loan loss provision expense from delinquencies and charge-offs in the indirect dealer and equipment finance portfolios."Q1 HighlightsThe Bank reported the following statement of condition highlights as of March 31, 2026:As of March 31, 2026, gross loans totaled $971.9 million, which represented an increase from March 31, 2025 of $4.5 million, or 0.5%. The Bank experienced loan growth in 2026 as loan balances increased $20.0 million since December 31, 2025.Deposit balances totaled $1.94 billion as of March 31, 2026. Deposit balances increased $113.7 million, or 6.2%, from March 31, 2025. Deposit balances increased from December 31, 2025 by $42.6 million, or 2.2%. Non-interest deposits totaled $407.2 million as of March 31, 2026, which represented 21.0% of total deposits.Return on assets decreased from 1.23% to 1.04%, due to reduced net income in combination with asset growth.Return on equity decreased from 11.1% to 9.0%, due to reduced net income along with an increasing equity base.Tender offers to repurchase shares of the Bank's common stock were completed in January 2026 and April 2026 totaling 327,419 shares, or 8.38%, of the common shares outstanding. Cash paid for the repurchases totaled $24.6 million.Cash, Cash Equivalents and Restricted CashTotal cash, cash equivalents and restricted cash totaled $263.3 million at March 31, 2026, compared to $186.2 million at March 31, 2025. The $77.1 million increase was primarily due to efforts to retain higher cash balances on overnight funds. Available borrowing lines from correspondent banks, the Federal Home Loan Bank and the Federal Reserve totaled approximately $359.1 million.InvestmentsThe investment portfolio, net of the held to maturity allowance, totaled $980.6 million at March 31, 2026, which was an increase of $101.2 million from March 31, 2025. As of March 31, 2026, available for sale securities totaled $858.4 million and held to maturity securities, net of the allowance, totaled $122.1 million. Unrealized losses on available for sale securities decreased from $55.4 million at March 31, 2025 to $42.6 million at March 31, 2026.During the first quarter of 2026, a gain on sale of securities of $55,000 was recorded as part of a securities sale. Proceeds from the securities sale were reinvested into the available for sale securities portfolio as part of an interest rate risk management strategy.Loans and Credit QualityGross loans increased $4.5 million from March 31, 2025, reaching $971.9 million as of March 31, 2026. Gross loan totals increased $20.0 million from December 31, 2025. Since December 31, 2025, commercial and agricultural balances increased $11.1 million, multifamily loans increased $5.5 million and residential adjustable-rate mortgages increased $5.1 million.The allowance for credit losses on loans (ACL) was 1.17% of gross loans as compared to 1.28% one year ago. During the first quarter of 2026, the Bank recorded $1.4 million in provision expense on loans, and the allowance balance totaled $11.4 million. Provision for credit losses in the first quarter of 2025 totaled $761,000.Credit quality remains strong with non-performing loans representing 0.43% of gross loans as of March 31, 2026. This is a slight increase from 0.34% as of March 31, 2025.DepositsDeposits totaled $1.94 billion at March 31, 2026, which represented an increase of $113.7 million, or 6.2%, from the prior year. During the first quarter of 2026, the average cost of funds was unchanged from the prior year at 1.63%. Certificate of Deposit balances increased $77.0 million over the past twelve months.EquityTier 1 capital remains strong. Tier 1 capital increased to $289.9 million as of March 31, 2026, which represented an increase of 2.8% from $281.9 million at March 31, 2025. The Bank's semi-annual dividend was paid February 9, 2026 at a rate of $1.00 per share.As of March 31, 2026, GAAP equity capital decreased $13.3 million from March 31, 2025, or 5.5%. In January 2026 the Bank repurchased 200,000 shares of its common stock at a price of $75.00 per share. The repurchase decreased Tier 1 and GAAP equity by $15.0 million. The Bank's GAAP equity to assets remained strong at 11.27% as of March 31, 2026 as compared to 11.32% as of March 31, 2025.EarningsNet Interest IncomeNet interest income totaled $16.6 million in the first quarter of 2026, compared to $16.2 million in the same quarter a year ago. The increase from the prior year was largely attributable to improving loan rates in combination with growth in investment securities balances and cash on hand.Interest income on available for sale and held to maturity securities increased $467,000, or 5.2%, from one year ago. The increase was due to increasing balances which were partially offset by decreasing yields within the portfolio.Loan interest income increased $322,000 due average loan rates increasing to 5.56% as of March 31, 2026, from 5.40% at March 31, 2025.Interest income from deposits with other financial institutions and federal funds sold increased $101,000 due to an increase in average cash balances with other financial institutions. The increasing balances were partially offset by decreasing yields earned on cash balances as the federal funds rate has decreased 75 basis points in the prior twelve months.The net interest margin was 3.05% for the first quarter of 2026 as compared to 3.17% one year ago, which was largely due to yields on earning assets decreasing 12 basis points.Non-Interest IncomeNon-interest income totaled $5.6 million in the first quarter of 2026 as compared to $5.7 million in the first quarter of 2025. Brokerage commissions from Cashmere Valley Wealth Management decreased $124,000 due to changes in personnel.Non-Interest ExpenseNon-interest expense totaled $13.7 million in the first quarter of 2026 as compared to $13.2 million in the first quarter of 2025. Salaries and benefits increased $308,000, or 4.0%, due to increasing wages. B&O taxes increased $118,000, or 33.0%.The Bank's efficiency ratio was 61.5% in the first quarter of 2026 as compared to 60.2% in the first quarter of 2025.About Cashmere Valley BankCashmere 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 StatementsThis 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 orMike Lundstrom, CFO, (509) 782-5495Consolidated Balance Sheets (UNAUDITED)(Dollars in Thousands)Cashmere Valley Bank and SubsidiaryMarch 31, 2026December 31, 2025March 31, 2025AssetsCash and Cash Equivalent:Cash & due from banks$24,654$31,097$27,192Interest bearing deposits234,279216,434156,653Fed funds sold4,3743,3892,342Total Cash and Cash Equivalent263,307250,920186,187Securities available for sale858,446862,103750,761Securities held to maturity, net of allowance for credit lossesof $12, $13 and $15, respectively122,139123,412128,589Federal Home Loan Bank stock, at cost5,0545,0082,848Loans held for sale3281,1357Loans971,887951,869967,398Allowance for credit losses(11,384)(11,399)(12,391)Net loans960,503940,470955,007Premises and equipment18,90419,23519,251Accrued interest receivable9,1418,8688,842Other real estate and foreclosed assets9714897Bank Owned Life Insurance27,58027,34327,862Goodwill7,6617,5797,579Intangibles, net2,4622,2332,562Mortgage servicing rights2,3552,3822,406Net deferred tax assets13,52513,13716,780Other assets9,4959,33913,649Total assets$2,300,997$2,273,312$2,122,427Liabilities and Shareholders' EquityLiabilitiesDeposits:Non-interest bearing demand$407,167$393,002$382,582Savings and interest-bearing demand938,174927,918926,100Time598,011579,856521,007Total deposits1,943,3521,900,7761,829,689Accrued interest payable2,8673,0732,881Borrowings82,00083,00035,001Other liabilities13,56513,99214,626Total liabilities2,041,7842,000,8411,882,197Shareholders' EquityCommon stock (no par value); authorized 10,000,000 shares;Issued and outstanding: 3/31/2026 -- 3,713,761 ;12/31/2025 -- 3,907,525 ; 3/31/2025 -- 3,897,994------Additional paid-in capital6,6676,2485,608Treasury stock(31,784)(16,784)(16,784)Retained Earnings325,737323,653304,544Other comprehensive income(42,634)(41,823)(53,947)Total Cashmere Valley Bank shareholders' equity257,986271,294239,421Noncontrolling interest1,2271,177809Total shareholders' equity259,213272,471240,230Total liabilities and shareholders' equity$2,300,997$2,273,312$2,122,427Quarterly Consolidated Statements of Income (UNAUDITED)(Dollars in Thousands)Cashmere Valley Bank & SubsidiaryFor the quarters ended,March 31, 2026December 31, 2025March 31, 2025Interest IncomeLoans and leases$13,156$13,408$12,834Fed funds sold and deposits at other financial institutions2,0592,3611,958Securities available for sale:Taxable8,2018,6887,816Tax-exempt449461332Securities held to maturity:Taxable726733762Tax-exempt252524Other interest income--595--Total interest income24,61626,27123,726Interest ExpenseDeposits7,1997,6057,111Borrowings784829401Total interest expense7,9838,4347,512Net interest income16,63317,83716,214Provision for Credit Losses1,424859761Net interest income after provision for credit losses15,20916,97815,453Non-Interest IncomeService charges on deposit accounts527523496Mortgage banking operations376514351Net gain (loss) on sales of securities available for sale55--130Brokerage commissions203330327Insurance commissions and fees2,6352,3302,667Net interchange income1,1131,0631,138Earnings from Bank Owned Life Insurance236242215Dividends from correspondent banks162156109Other297305288Total non-interest income5,6045,4635,721Non-Interest ExpenseSalaries and employee benefits8,0667,7587,758Occupancy and equipment839834868Audits and examinations24129247State and local business and occupation taxes476464358FDIC insurance & WA state assessments303267268Legal and professional fees431264247Net (gain) on foreclosed real estate(94)----Check losses and charge-offs114145118Low-income housing investment losses4566158Data processing1,7521,7871,768Product delivery396354364Other1,0971,0721,059Total non-interest expense13,66613,04013,213Income before income taxes7,1479,4017,961Income Taxes1,3022,2801,502Net income5,8457,1216,459Net income attributable to noncontrolling interest493248Net income attributable to Cashmere Valley Bank$5,796$7,089$6,411Earnings Per ShareBasic$1.55$1.81$1.65Diluted$1.54$1.81$1.64SOURCE: Cashmere Valley BankView the original press release on ACCESS Newswire