Central Valley(US:CVCY)2024-05-14 20:19PART 1: FINANCIAL INFORMATION Financial Statements (Unaudited) Unaudited Q1 2024 results show lower net income and stable assets ahead of the Community West Bancshares merger Consolidated Balance Sheets Total assets slightly decreased to $2.42 billion while shareholders' equity increased to $211.7 million Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | $2,415,624 | $2,433,426 | | Total Loans, net | $1,271,951 | $1,276,144 | | Total Deposits | $2,031,249 | $2,041,612 | | Total Liabilities | $2,203,907 | $2,226,362 | | Total Shareholders' Equity | $211,717 | $207,064 | Consolidated Statements of Income Q1 2024 net income fell to $3.7 million from $7.0 million year-over-year due to lower net interest income Q1 2024 vs Q1 2023 Income Statement (in thousands, except per-share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Interest Income | $19,073 | $21,581 | | Provision for Credit Losses | $575 | $633 | | Non-Interest Income | $1,636 | $1,575 | | Non-Interest Expenses | $15,333 | $13,205 | | Net Income | $3,676 | $6,970 | | Diluted EPS | $0.31 | $0.59 | Consolidated Statements of Cash Flows Net cash increased by $7.2 million, driven by investing inflows that offset financing outflows Cash Flow Summary for Three Months Ended March 31, 2024 (in thousands) | Activity | Cash Flow | | :--- | :--- | | Net Cash from Operating Activities | $3,982 | | Net Cash from Investing Activities | $27,960 | | Net Cash from Financing Activities | $(24,711) | | Net Increase in Cash | $7,231 | Notes to Consolidated Financial Statements Disclosures cover the post-quarter merger, investment portfolio unrealized losses, and credit loss allowances - On April 1, 2024, Central Valley Community Bancorp completed its merger with Community West Bancshares, changing its name to Community West Bancshares; the combined company had approximately $3.5 billion in assets and results will be reported starting in Q2 2024363739 - The allowance for credit losses on loans was $14.66 million as of March 31, 2024, with a provision for credit losses on loans for Q1 2024 of $530,0005961 - As of March 31, 2024, uninsured deposits totaled $803.7 million, down from $821.8 million at the end of 202373 - On April 17, 2024, the Board of Directors declared a cash dividend of $0.12 per share115 Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Net income declined due to a compressed net interest margin and higher merger-related expenses Financial Highlights Q1 2024 featured net income of $3.7 million, a 3.42% net interest margin, and strong capital ratios Q1 2024 Key Metrics | Metric | Value | | :--- | :--- | | Net Income | $3,676,000 | | Diluted EPS | $0.31 | | Net Interest Margin | 3.42% | | Total Assets | $2.42 billion | | Tier 1 Leverage Ratio | 9.34% | | Cash Dividend per Share | $0.12 | - There were no non-performing assets at the end of Q1 2024; net loan charge-offs were $525,000127 Results of Operations Net income fell to $3.7 million from $7.0 million year-over-year, driven by lower net interest income - Net interest margin (fully tax equivalent) decreased by 44 basis points to 3.42% in Q1 2024 from 3.86% in Q1 2023, primarily due to rising funding costs136 - The average interest rate on interest-bearing deposits increased significantly to 1.80% in Q1 2024 from 0.38% in Q1 2023142 - Non-interest expenses rose 16.1% year-over-year, mainly due to $383,000 in acquisition expenses and increased professional services and salaries153154156 Financial Condition The company maintained a stable financial position with strong capital, adequate liquidity, and no nonperforming assets - The loan portfolio has a concentration in commercial real estate, representing 62.2% of total loans as of March 31, 2024164 - There were no nonperforming assets as of March 31, 2024, and December 31, 2023168 Regulatory Capital Ratios (Company) - March 31, 2024 | Ratio | Actual | Minimum for 'Well-Capitalized' | | :--- | :--- | :--- | | Tier 1 Leverage Ratio | 9.34% | 5.00% | | Common Equity Tier 1 Ratio | 12.94% | 6.50% | | Tier 1 Risk-Based Capital Ratio | 13.23% | 8.00% | | Total Risk-Based Capital Ratio | 16.24% | 10.00% | - The company has significant available liquidity, including $110 million in unsecured credit lines and $342.7 million in unused FHLB advances187 Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate risk, which is actively managed and within policy limits Interest Rate Sensitivity Analysis on Net Interest Income | Immediate Rate Shift (bps) | Estimated Change in NII (Year 1) | Estimated Change in NII (Year 2) | | :--- | :--- | :--- | | +200 | +1.27% | +3.03% | | +100 | +1.20% | +2.46% | | -100 | -2.94% | -5.41% | | -200 | -4.40% | -9.70% | Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2024194 - No changes in internal controls over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls195 PART II: OTHER INFORMATION Legal Proceedings The company reported no material legal proceedings during the period - None to report198 Risk Factors The report refers to the company's 2023 Form 10-K for a comprehensive discussion of potential risks - The company directs readers to its 2023 Annual Report on Form 10-K for a full discussion of risk factors199 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or related use of proceeds - None to report200 Defaults Upon Senior Securities The company reported no defaults upon its senior securities - None to report201 Mine Safety Disclosures This item is not applicable to the company's operations - Not applicable202 Other Information The company reported no other material information for the period - None to report203 Exhibits The filing includes required exhibits such as officer certifications and XBRL data files - Exhibits filed include corporate governance documents, officer certifications, and XBRL interactive data files205