Arizona Tribune - Cashmere Valley Bank Reports Continued Earnings Strength of $7.7 Million for the Third Quarter and $22.1 Million Year to Date

As of September 30, 2025, deposit balances totaled $1.897 billion, an increase of $59.4 million, or 3.2%, from December 31, 2024. From the same period last year, deposit balances increased $72.3 million, or 4.0%.

"Our earnings remain strong and ahead of the prior year," said Greg Oakes, President and CEO. "Our deposit growth was very strong during the third quarter. The broader markets have remained fairly stable this year which has benefitted the Bank. We remain attentive to these markets and the risks we may face if fed funds or treasury interest rates were to change significantly."

Q3 Highlights

The Bank reported the following statement of condition highlights as of September 30, 2025:

• GAAP capital continued to grow totaling $262.2 million at September 30, 2025. Cashmere Valley Bank's equity to assets ratio totaled 11.6% at September 30, 2025. Equity has grown due to earnings and a reduction of accumulated other comprehensive income of $6.0 million over the prior twelve months.

Cash, Cash Equivalents and Restricted Cash

Total cash, cash equivalents and restricted cash totaled $270.0 million at September 30, 2025, compared to $186.9 million at September 30, 2024. Due to the inversion in the treasury yield curve, higher cash balances met management's goal to retain excess liquidity.

Investments

The fair value of the Bank's available for sale investment portfolio totaled $816.4 million at September 30, 2025, which represented an increase of $105.2 million from September 30, 2024. Held to maturity securities, net of allowance, totaled $124.8 million as of September 30, 2025 compared to $131.6 million as of September 30, 2024. Interest income on the securities portfolio increased from prior year by $2.6 million to $28.3 million.

A gain on sale of securities of $130,000 was recorded in the first quarter as part of a repositioning effort within the securities portfolio.

Loans and Credit Quality

Gross loans totaled $964.7 million as of September 30, 2025 which represented an increase of $2.3 million from December 31, 2024 and a decrease of $32.5 million from September 30, 2024. Since December 31, 2024, municipal loans increased $11.4 million and equipment finance loans increased $6.0 million. Year to date, construction and land development loans decreased $14.4 million, commercial loans decreased $14.7 million and real estate loans decreased $6.8 million.

At September 30, 2025, the allowance for credit losses on loans (ACL) was 1.26% of gross loans as compared to 1.32% one year ago. The allowance balance was $12.1 million as of September 30, 2025.

Credit quality remained strong with non-performing loans representing 0.48% of gross loans as of September 30, 2025. This was an increase from 0.28% as of September 30, 2024.

Deposits

Total deposits increased by $72.3 million, or 4.0%, from September 30, 2024. From December 31, 2024 to June 30, 2025 total deposits increased $59.4 million, or 3.2%. Most of the year to date deposit growth occurred during the third quarter. The Bank's cost of funds has decreased two basis points from September 30, 2024 to 1.66%.

Equity

As of September 30, 2025, Tier 1 capital remains strong. Tier 1 capital increased to $294.7 million from $290.3 million at June 30, 2025, due to earnings less dividends paid.

GAAP capital reflected an increase of $29.4 million from September 30, 2024, and an increase of $30.1 million from December 31, 2024. As of September 30, 2025, the Bank's GAAP capital to assets ratio was 11.6% as compared to 11.0% one year ago. GAAP capital levels increased primarily due to Bank earnings and a reduction of $6.0 million in unrealized losses. As of September 30, 2025, the capital effect from unrealized losses on available for sale securities and swaps totaled $44.6 million.

Earnings

Net Interest Income

For the nine months ended September 30, 2025, net interest income totaled $50.4 million compared to $47.2 million in the same period in 2024, which represented an improvement of $3.2 million, or 6.9%. Interest income from available for sale and held to maturity securities improved by $2.6 million, and income from cash increased $939,000. Loan income increased by $458,000 despite decreasing loan balances. Interest income growth was partially offset by an increase in interest expense of $715,000.

For the quarter ending September 30, 2025, net interest income increased $643,000 from the quarter ended June 30, 2025. The increase from the prior quarter was due to additional interest income on cash and securities. These increases were partially offset by an increase in deposit and borrowing costs. The increase in borrowings was related to a $50.0 million borrowing and security purchase transaction completed in April 2025.

The net interest margin was 3.20% for the first nine months of 2025, compared to 3.14% during the first nine months of 2024. For the quarter ending September 30, 2025 the net interest margin was 3.21% as compared to 3.22% in the third quarter of 2024.

Non-Interest Income

Non-interest income totaled $16.6 million in the first nine months of 2025 as compared to $15.2 million in the first nine months of 2024. Net income from the Bank's subsidiary Mitchell, Reed and Schmitten increased $660,000. Earnings on Bank Owned Life Insurance improved $373,000 and a gain on sale of securities of $130,000 was completed.

Non-Interest Expense

Non-interest expense totaled $38.0 million in the first nine months of 2025, as compared to $35.6 million in the first nine months of 2024. Salaries and benefits were the primary drivers of the increase due to investments in personnel along with significant increases in health insurance costs. Year to date salaries and benefits increased $2.2 million, or 10.7%.

The Bank's efficiency ratio was 56.8% in the first nine months of 2025 as compared to 57.0% in the first nine months of 2024.

Income tax expense increased from $4.2 million to $4.6 million. The Bank received full credit from its application for the Employee Tax Retention Credit in 2025. Along with the full principal payment the IRS paid interest on the Bank's overpayment of payroll taxes. Interest of $603,000 reduced the Bank's income tax expense. In 2024, $349,000 was reduced from income tax expense during tax provision calculations related to 2023 income tax expense.

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

Quarterly Consolidated Statements of Income (UNAUDITED)
(Dollars in Thousands)
Cashmere Valley Bank & Subsidiary

Year-to-Date Consolidated Statements of Income (UNAUDITED)
(Dollars in Thousands)
Cashmere Valley Bank & Subsidiary

SOURCE: Cashmere Valley Bank

View the original press release on ACCESS Newswire

A.Williams--AT