Cashmere Valley Bank Reports Annual Earnings of $28.2 Million and Increases Semi-Annual Dividend

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Cashmere Valley Bank (OTCQX:CSHX) reported annual earnings of $28.2 million for 2024, with diluted earnings per share of $7.24, a slight increase from $7.20 in 2023. The bank declared a semi-annual dividend of $0.90 per share, up by $0.05.

Despite challenging rates, the bank saw resumed deposit growth, with total deposits increasing by $64.2 million (3.6%) to $1.8 billion. However, net interest margin decreased to 3.14% from 3.31%, and gross loans declined by $80.1 million (7.7%) to $962.4 million. The bank's efficiency ratio rose from 53.5% to 56.6%, while return on equity decreased from 15.69% to 12.93%.

Shareholders' equity increased 14.5% to $232.2 million, and the bank's GAAP capital ratio improved to 10.94%. Non-performing loans remained stable at 0.34% of gross loans.

Positive

• Annual earnings maintained at $28.2 million with slight EPS increase to $7.24
• Deposit growth resumed with 3.6% increase to $1.8 billion
• Shareholders' equity increased 14.5% to $232.2 million
• Semi-annual dividend increased by $0.05 to $0.90 per share
• Ranked seventh-best bank nationwide by Bank Director magazine

Negative

• Net interest margin declined to 3.14% from 3.31%
• Gross loans decreased by 7.7% to $962.4 million
• Return on equity dropped from 15.69% to 12.93%
• Efficiency ratio worsened from 53.5% to 56.6%
• Net interest income decreased by 3.7% to $63.2 million

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CASHMERE, WA / ACCESS Newswire / January 22, 2025 / Cashmere Valley Bank (OTCQX:CSHX) ("Bank"), announced annual earnings of $28.2 million for the year ended December 31, 2024. Diluted earnings per share was $7.24, which was an increase of $0.04 from the prior year.

On January 21, 2025, the Bank's Board of Directors declared a semi-annual dividend payment of $0.90 per share to shareholders of record on January 31, 2025. The dividend will be paid on February 10, 2025. The dividend rate is an increase of $0.05 per share.

"Despite a challenging rate environment, we consider 2024 a success," said Greg Oakes, President and CEO. "We are pleased that deposit growth has resumed. In spite of the significant costs incurred from obtaining new deposits and retaining our existing deposits, we were able to marginally improve earnings. Our capital, liquidity and interest rate risk positions all improved during the course of the year to better position us for 2025. Increasing our dividend rate is reflective of our confidence in our capital position."

2024 Highlights

The Bank reported the following financial highlights for the period ending December 31, 2024 as compared to December 31, 2023:

• Cashmere Valley Bank was ranked seventh-best bank nationwide and second-best in its asset size based on capital, earnings and asset quality metrics by Bank Director magazine.

• Net income increased slightly to $28.2 million for the year ended December 31, 2024

• Fourth quarter net income totaled $7.1 million, or $1.81 per share.

• Diluted earnings per share increased slightly from the prior year at $7.24 per share as compared to $7.20 in 2023.

• Return on equity decreased from 15.69% in fiscal 2023 to 12.93% for fiscal 2024. The decrease in return on equity was due to an increasing capital base from earnings and a reduction in unrealized losses on available for sale securities.

• Return on assets decreased 3 basis points to 1.36%. While earnings held steady, asset growth occurred during the second half of the year resulting in the reduction.

• The Bank's net interest margin decreased to 3.14% in 2024 as compared to 3.31% a year ago. Retaining and growing deposit balances proved to be expensive throughout the year and significant expense was incurred. While the Bank's yield on assets improved during the year, the improvement could not keep pace with rapidly changing deposit rates.

• The efficiency ratio rose from 53.5% to 56.6%. A significant increase was noted in personnel costs due to the inclusion of a $3.9 million reduction to expense in 2023 for the Employee Tax Retention Credit application.

Cash, Cash Equivalents and Restricted Cash

Cash balances increased $101.8 million to $220.0 million at December 31, 2024 from $118.1 million as of December 31, 2023. Deposit balances stabilized in the early part of the year, then grew throughout the third and fourth quarters. There were also a number of large loan payoffs throughout the year. Proceeds from deposit growth and reductions in the loan portfolio were initially utilized to increase on-hand liquidity. Excess proceeds have been used to purchase available for sale securities.

Investments

The fair value of AFS securities and the book value less allowance for credit losses of HTM securities totaled $846.8 million at December 31, 2024. This represented an increase of $56.1 million from December 31, 2023. There were no available for sale security sales in 2024.

Security purchases totaling $172.5 million were made during 2024. The overwhelming majority of purchases were amortizing asset-backed securities in which portions of principal are returned to the Bank on a monthly basis.

Unrealized losses on available for sale securities decreased $3.9 million during 2024 and totaled $63.4 million as of December 31, 2024.

Loans and Credit Quality

At December 31, 2024 gross loans totaled $962.4 million, representing a decrease of $80.1 million, or 7.7%, from December 31, 2023. Significant loan payoffs adversely affected loan totals. Larger loan payoff activity occurred primarily in the multifamily and municipal loan portfolios. Additionally, loan demand on qualifying projects was soft throughout the year due in part to higher loan rates.

The allowance for credit losses on loans (ACL) was 1.32%, or $12.7 million, as of December 31, 2024 as compared to 1.26%, or $13.1 million, as of December 31, 2023.

The Bank recorded provision expense of $2.0 million in 2024 as compared to $2.9 million in 2023. The decrease in provision expense was largely due to a decrease in charged-off loans. Charged-off loans totaled $3.5 million as compared to $4.5 million in 2023. The majority of charged-off loans came from the equipment finance division which was adversely affected by a recession in long-haul trucking.

Non-performing loan totals were largely unchanged from the prior year. As of December 31, 2024, non-performing loans totaled $3.3 million, or 0.34%, of gross loans as compared to $2.0 million, which represented 0.19% of gross loans as of December 31, 2023.

Deposits

Total deposits were $1.8 billion as of December 31, 2024, which represented an increase of $64.2 million, or 3.6%, from December 31, 2023. Non-interest bearing deposits totaled $395.3 million, which was 21.5% of total deposits. Certificate of deposit balances increased significantly from $393.1 million at December 31, 2023 to $502.5 million as of December 31, 2024. The majority of the increase in CD balances occurred due to three-month and seven-month CD specials offered by the Bank.

Capital

As of December 31, 2024, shareholders' equity totaled $232.2 million, a 14.5% increase from $202.8 million at December 31, 2023. Equity increased due to an improvement in unrealized losses on available for sale securities totaling $7.1 million in combination with annual earnings less dividends paid. At period end, the Bank's GAAP capital to assets ratio was 10.94% as compared to 9.91% one year ago.

Earnings

Net Interest Income

Net interest income totaled $63.2 million for the year ended December 31, 2024 as compared to $65.6 million for the year ended December 31, 2023. The decrease of $2.5 million represented a decline of 3.7%.

Interest income increased $11.8 million, while interest expense increased by $14.2 million. Loan income increased $5.2 million, securities income increased $4.6 million, and fed funds and deposits with other financial institutions increased $2.0 million.

The average yield on earning assets improved from 4.14% to 4.66%, while the Bank's cost of funds increased from 0.91% to 1.68%. The cost of interest-bearing liabilities more than doubled from 1.02% to 2.14%. The significant increases in deposit costs were a result of increases in the interest rate environment and customer expectations.

Non-Interest Income

Non-interest income increased $6.2 million, or 43.7%, as compared to 2023. Losses on sales of available for sale securities improved by $4.8 million as no securities were sold at a loss in 2024. Insurance commission and fees increased $1.0 million in 2024, and brokerage commissions increased $383,000.

Non-Interest Expense

Non-interest expense increased $4.9 million, or 11.6%. In large part, non-interest expense increased primarily due to a $3.9 million Employee Retention Tax Credit (ERTC) application submitted and recorded in 2023. Payment from the IRS for the ERTC remains pending. Salaries and benefits increased $5.2 million, of which $3.9 million was attributed to the ERTC. Occupancy expense decreased $542,000.

The provision for loan losses decreased $971,000 in 2024, as charged-off loans decreased from the prior year.

Federal income tax expense decreased approximately $385,000 from the prior year. The Bank's effective tax rate was 17.1% for 2024 as compared to 18.1% in 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
		December 31, 2024				September 30, 2024				December 31, 2023
Assets
Cash and Cash Equivalent:
Cash & due from banks		$	27,642			$	33,150			$	26,619
Interest bearing deposits			188,370				149,764				87,432
Fed funds sold			3,909				3,982				4,085
Total Cash and Cash Equivalent			219,921				186,896				118,136
Securities available for sale			716,508				711,205				650,905
Securities held to maturity, net of allowance for credit losses of $16, $17 and $20, respectively			130,254				131,558				139,775
Federal Home Loan Bank stock, at cost			2,846				2,891				3,008
Loans held for sale			4				964				4
Loans			962,369				997,119				1,042,453
Allowance for credit losses			(12,748	)			(13,134	)			(13,085	)
Net loans			949,621				983,985				1,029,368
Premises and equipment			19,472				19,645				21,017
Accrued interest receivable			8,952				9,466				9,411
Other real estate and foreclosed assets			97				97				97
Bank Owned Life Insurance			27,647				27,428				26,809
Goodwill			7,579				7,579				7,576
Intangibles			2,749				2,964				3,465
Mortgage servicing rights			2,441				2,460				2,536
Net deferred tax assets			18,037				15,548				19,563
Other assets			15,435				10,152				12,068
Total assets		$	2,121,563			$	2,112,838			$	2,043,738
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Non-interest bearing demand		$	395,327			$	409,407			$	424,380
Savings and interest-bearing demand			940,084				928,238				956,290
Time			502,542				487,341				393,097
Total deposits			1,837,953				1,824,986				1,773,767
Accrued interest payable			2,842				2,991				2,216
Short-term borrowings			36,000				37,000				48,858
Other liabilities			12,601				15,007				15,099
Total liabilities			1,889,396				1,879,984				1,839,940
Shareholders' Equity
Common stock (no par value); authorized 10,000,000 shares;
Issued and outstanding: 12/31/2024 -- 3,891,000 ; 9/30/2024 -- 3,890,990 ; 12/31/2023 -- 3,883,986			--				--				--
Additional paid-in capital			5,229				5,233				4,833
Treasury stock			(16,784	)			(16,784	)			(16,784	)
Retained Earnings			301,636				294,578				280,087
Other comprehensive income			(58,674	)			(50,652	)			(65,758	)
Total Cashmere Valley Bank shareholders' equity			231,407				232,375				202,378
Noncontrolling interest			760				479				420
Total shareholders' equity			232,167				232,854				202,798
Total liabilities and shareholders' equity		$	2,121,563			$	2,112,838			$	2,042,738

Year-to-Date Consolidated Statements of Income (UNAUDITED)
(Dollars in Thousands)
Cashmere Valley Bank & Subsidiary
		For the twelve months ended,
		December 31, 2024				December 31, 2023
Interest Income
Loans		$	52,597			$	47,393
Fed funds sold and deposits at other financial institutions			6,986				4,992
Securities available for sale:
Taxable			29,797				24,548
Tax-exempt			1,313				1,886
Securities held to maturity:
Taxable			3,094				3,151
Tax-exempt			142				184
Total interest income			93,929				82,154
Interest Expense
Deposits			28,524				16,259
Short-term borrowings			2,226				257
Total interest expense			30,750				16,516
Net interest income			63,179				65,638
Provision for Credit Losses			1,971				2,942
Net interest income after provision for credit losses			61,208				62,696
Non-Interest Income
Service charges on deposit accounts			2,045				2,128
Mortgage banking operations			1,565				1,514
Net gain (loss) on sales of securities available for sale			--				(4,818	)
Brokerage commissions			1,382				999
Insurance commissions and fees			8,754				7,720
Net interchange income (expense)			4,571				4,743
BOLI cash value			838				704
Dividends from correspondent banks			255				86
Other			1,147				1,234
Total non-interest income			20,557				14,310
Non-Interest Expense
Salaries and employee benefits			27,584				22,359
Occupancy and equipment			3,471				4,013
Audits and examinations			507				409
State and local business and occupation taxes			1,247				1,346
FDIC insurance & WA state assessments			965				1,017
Legal and professional fees			1,073				1,361
Check losses and charge-offs			509				582
Low income housing investment losses			483				633
Data processing			6,295				6,372
Product delivery			1,380				1,255
Other			4,188				3,411
Total non-interest expense			47,702				42,758
Income before income taxes			34,063				34,248
Income Taxes			5,829				6,214
Net income		$	28,234			$	28,034
Net income attributable to noncontrolling interest			75				50
Net income attributable to Cashmere Valley Bank			28,159				27,984
Earnings Per Share
Basic		$	7.24			$	7.20
Diluted		$	7.24			$	7.20

Quarterly Consolidated Statements of Income (UNAUDITED)
(Dollars in Thousands)
Cashmere Valley Bank & Subsidiary
		For the quarters ended,
		December 31, 2024				September 30, 2024				December 31, 2023
Interest Income
Loans		$	13,102			$	13,210			$	12,767
Fed funds sold and deposits at other financial institutions			2,037				2,193				1,086
Securities available for sale:
Taxable			7,511				7,921				6,750
Tax-exempt			344				348				357
Securities held to maturty:
Taxable			764				759				787
Tax-exempt			24				24				46
Total interest income			23,782				24,455				21,793
Interest Expense
Deposits			7,348				7,561				5,163
Short-term borrowings			457				548				150
Total interest expense			7,805				8,109				5,313
Net interest income			15,977				16,346				16,480
Provision for Credit Losses			465				904				1,115
Net interest income after provision for credit losses			15,512				15,442				15,365
Non-Interest Income
Service charges on deposit accounts			541				543				473
Mortgage banking operations			413				399				374
Net gain (loss) on sales of securities available for sale			--				--				(2,560	)
Brokerage commissions			317				346				232
Insurance commissions and fees			2,402				2,177				2,007
Net interchange income (expense)			1,105				1,169				1,043
BOLI cash value			220				216				182
Dividends from correspondent banks			102				60				19
Other			276				302				367
Total non-interest income			5,376				5,212				2,137
Non-Interest Expense
Salaries and employee benefits			7,197				6,781				2,512
Occupancy and equipment			918				818				1,025
Audits and examinations			21				108				56
State and local business and occupation taxes			300				374				345
FDIC insurance & WA state assessments			253				244				229
Legal and professional fees			238				290				622
Check losses and charge-offs			127				115				128
Low income housing investment losses			156				157				154
Data processing			1,562				1,555				1,676
Product delivery			326				354				324
Other			1,037				1,074				858
Total non-interest expense			12,135				11,870				7,929
Income before income taxes			8,753				8,784				9,573
Income Taxes			1,677				1,587				1,858
Net income		$	7,076			$	7,197			$	7,715
Net income attributable to noncontrolling interest			17				25				27
Net income attributable to Cashmere Valley Bank		$	7,059			$	7,172			$	7,688
Earnings Per Share
Basic		$	1.81			$	1.84			$	1.98
Diluted		$	1.81			$	1.84			$	1.98

SOURCE: Cashmere Valley Bank

View the original press release on ACCESS Newswire

FAQ

What was Cashmere Valley Bank's (CSHX) earnings per share in 2024?

Cashmere Valley Bank reported diluted earnings per share of $7.24 for 2024, slightly up from $7.20 in 2023.

How much did CSHX increase its semi-annual dividend in January 2025?

CSHX increased its semi-annual dividend by $0.05 to $0.90 per share, payable on February 10, 2025.

What was CSHX's deposit growth in 2024?

Total deposits increased by $64.2 million or 3.6% to $1.8 billion in 2024.

How did CSHX's loan portfolio perform in 2024?

CSHX's gross loans decreased by $80.1 million or 7.7% to $962.4 million in 2024.

What was CSHX's net interest margin in 2024?

The bank's net interest margin decreased to 3.14% in 2024 from 3.31% in 2023.