Central Valley(CVCY) - 2025 Q2 - Quarterly Report

Financial Performance - Net income for the six months ended June 30, 2025, was $16,125 thousand, compared to a net loss of $2,614 thousand for the same period in 2024, indicating a significant turnaround[16] - Basic earnings per share improved to $0.41 for the three months ended June 30, 2025, compared to a loss of $0.33 in the same period of 2024[16] - For the three months ended June 30, 2025, net income was $7,832,000 compared to a net loss of $6,290,000 for the same period in 2024, representing a significant turnaround[18] - Total comprehensive income for the three months ended June 30, 2025, was $9,784,000, compared to a loss of $3,230,000 in the same period of 2024[18] - Total revenue for the period ending June 30, 2025, reached $6.752 billion, an increase from $6.446 billion in the previous period[67] Asset Growth - Total assets increased to $3,576,811 thousand as of June 30, 2025, compared to $3,521,771 thousand at December 31, 2024, reflecting a growth of 1.6%[14] - Cash and cash equivalents at the end of the period increased to $134,373,000 as of June 30, 2025, up from $109,669,000 in 2024[24] - Cash and due from banks increased to $48,158 thousand as of June 30, 2025, compared to $28,029 thousand at December 31, 2024, a growth of 71.8%[14] - Total deposits increased to $2,994,921 thousand as of June 30, 2025, from $2,910,777 thousand at December 31, 2024, representing a growth of 2.9%[14] Credit Quality - Provision for credit losses decreased to $2,613 thousand for the three months ended June 30, 2025, down from $9,831 thousand in the same period of 2024, a reduction of 73.4%[16] - The allowance for credit losses increased to $28,722,000 as of June 30, 2025, up from $25,803,000 at the end of 2024, indicating a rise of about 7.4%[56] - Nonaccrual loans totaled $6,769,000 as of June 30, 2025, compared to $6,461,000 as of December 31, 2024, showing an increase of approximately 4.8%[66] - The provision for credit losses for the three months ended June 30, 2025, was $2,640,000, reflecting the impact of loan growth and deteriorating economic forecasts[63] Expenses and Income - Total non-interest expenses decreased to $22,296 thousand for the three months ended June 30, 2025, from $28,503 thousand in the same period of 2024, a decline of 21.8%[16] - Non-interest income for the six months ended June 30, 2025, was $4,975 thousand, compared to $3,037 thousand in the same period of 2024, an increase of 63.9%[16] - Interest on deposits decreased to $10,538 thousand for the three months ended June 30, 2025, down from $12,266 thousand in the same period of 2024, a decrease of 14.1%[16] Merger and Acquisition - The merger between Central Valley Community Bancorp and Community West Bancshares was completed on April 1, 2024, with Community West Bank merging into Central Valley Community Bank[36] - The total merger consideration for Community West was approximately $143.7 million, including $140 million in shares issued and $3.7 million in options assumed[39] - The total assets acquired in the recent acquisition amounted to $1,040,939,000, with liabilities assumed at $940,276,000, reflecting a strategic expansion[25] - Goodwill created from the transaction was $43 million, which is nondeductible for tax purposes, reflecting the premium paid over the fair value of net tangible and intangible assets[39] Securities and Investments - The total available-for-sale securities as of June 30, 2025, had an amortized cost of $523,679,000 and an estimated fair value of $469,354,000, indicating a total unrealized loss of $54,430,000[44] - The total held-to-maturity securities amounted to $263.7 million, with gross unrealized losses of $28.6 million as of June 30, 2025[41] - The unrealized gain on securities available for sale was $4,896,000 for the six months ended June 30, 2025, down from $6,248,000 in 2024, reflecting market fluctuations[25] Shareholder Equity - The company issued 7,037,202 shares of common stock due to a business combination, increasing total shareholders' equity significantly[20] - Total shareholders' equity increased to $380,002,000 as of June 30, 2025, up from $362,685,000 at the end of 2024, reflecting growth in retained earnings and comprehensive income[21] - The company declared a cash dividend of $0.12 per share on July 16, 2025, payable on August 15, 2025[133] Loan Portfolio - Total loans outstanding reached $2,399,387 million, with Pass/Watch loans accounting for $2,320,608 million, representing approximately 96.7% of the total[74] - The commercial real estate loans (non-owner occupied) amounted to $938,865,000 as of June 30, 2025, up from $913,165,000 at the end of 2024, a growth of about 2.8%[56] - Loans originated under Small Business Administration (SBA) programs totaled $21,403,000 as of June 30, 2025, with 76% secured by government guarantees[57] - The company reported a net deferred origination cost of $1,514,000 as of June 30, 2025, down from $1,876,000 at the end of 2024[56] Risk Management - The Company reported a significant concentration of credit risk in its banking operations, primarily from loans and leases, which generate the majority of interest and fee income[30] - The company utilizes a probability-weighted, multiple scenario forecast approach for measuring the allowance for credit losses, incorporating macroeconomic scenarios[58] - The company maintains an internal asset classification system to monitor loan performance and potential risks[67]