Central Valley(US:CVCY)2023-08-02 16:00Financial Performance - Net income for the six months ended June 30, 2023, was $13,252 thousand, compared to the previous period [72]. - Net income for Q2 2023 was $6,282,000, compared to $6,542,000 in Q2 2022, reflecting a decrease of 3.97% [81]. - Total interest income for Q2 2023 was $25,987,000, a 27.5% increase from $20,465,000 in Q2 2022 [80]. - Total non-interest income increased to $1,594,000 in Q2 2023 from $770,000 in Q2 2022, representing a significant increase of 106.5% [80]. - The company reported a net cash provided by operating activities of $15,474,000 for the six months ended June 30, 2023, compared to $5,524,000 for the same period in 2022 [86]. - Basic earnings per share for the three months ended June 30, 2023, was $0.54, down from $0.56 in the same period of 2022 [204]. - Diluted earnings per share (EPS) for the three months ended June 30, 2023, was $0.54, compared to $0.56 for the same period in 2022 [223]. Assets and Liabilities - Total average assets for the period were $2,501,524 thousand, compared to $2,441,962 thousand in the previous period, reflecting an increase of approximately 2.4% [41]. - Total assets increased to $2,489,807 thousand as of June 30, 2023, up from $2,422,519 thousand at December 31, 2022, representing a growth of 2.77% [64]. - Total liabilities increased to $2,302,447 thousand from $2,247,859 thousand, reflecting a growth of 2.43% [64]. - Total deposits rose to $2,200,294 thousand, an increase of 4.79% from $2,099,649 thousand at the end of 2022 [64]. - Cash and cash equivalents significantly increased to $128,658 thousand from $31,170 thousand, marking a substantial rise [64]. - Interest-earning deposits in other banks surged to $100,333 thousand from $5,685 thousand, indicating a strong liquidity position [64]. Interest Income and Expenses - Total interest-earning assets amounted to $2,387,046 thousand, generating interest income of $26,361 thousand at an average interest rate of 4.43% [41]. - Net interest income was reported at $20,579 thousand, with a net interest margin of 3.46% [41]. - Total interest expense on other borrowed funds was $2,468,000 for the six months ended June 30, 2023, compared to $757,000 for the same period in 2022 [52]. - The cost of interest-bearing liabilities rose by 156 basis points to 1.76% for the three months ended June 30, 2023, compared to 0.20% for the same period in 2022 [48]. - Cash paid for interest increased significantly to $8,621,000 in Q2 2023 from $1,159,000 in Q2 2022, representing a growth of 642% [87]. Credit Quality and Allowance for Credit Losses - The allowance for credit losses was $15,317 thousand, an increase from $9,870 thousand in the previous period, reflecting a more cautious approach to credit risk [41]. - The allowance for credit losses on loans is $15,463,000, deemed adequate to absorb current expected credit losses in the loan portfolio [51]. - The allowance for credit losses increased to $15,463,000 from $10,848,000, indicating a rise in provisions for potential loan defaults [136]. - The provision for credit losses was $(343) million, including a $(228) million credit for held-to-maturity securities, reflecting expected credit losses in the loan portfolio as of June 30, 2023 [140]. - The company believes the allowance for credit losses appropriately reflects expected credit losses in the loan portfolio as of June 30, 2023 [140]. Loans and Securities - The company reported a total of $1,257,984 thousand in loans, with interest income of $17,382 thousand at an average interest rate of 5.54% [41]. - Loans acquired from Folsom Lake Bank, Sierra Vista Bank, and Visalia Community Bank totaled $67,523,000 as of June 30, 2023 [56]. - The total available-for-sale securities were valued at $619,759,000, down from $648,825,000 as of December 31, 2022, primarily due to unrealized losses [131]. - The total held-to-maturity securities amounted to $304,332,000 with gross unrecognized losses of $30,560,000 as of June 30, 2023 [105]. - The total loan portfolio as of June 30, 2023, was $1,256,304 million, with commercial and industrial loans accounting for $141,662 million [166]. Regulatory and Market Environment - The banking operating environment remains correlated with public trading prices, which could impact the trading prices of the company's common stock [28]. - Regulatory assessments increased by 83.5% to $356,000 in 2023 compared to $194,000 in 2022 [50]. - The Company is subject to various risks including competitive pressure, interest rate changes, and economic conditions in the Central Valley and Greater Sacramento Region [215]. Non-Interest Expenses - Non-interest expenses increased by $1,722,000 or 14.25% to $13,805,000 for the three months ended June 30, 2023, compared to $12,083,000 for the same period in 2022 [54]. - Total non-interest expenses rose to $13,805,000 in Q2 2023, up from $12,083,000 in Q2 2022, an increase of 14.2% [80]. - Total other non-interest expense for the three months ended June 30, 2023, was $4,565,000, an increase from $3,682,000 in the same period of 2022 [181].