CASHMERE, WA / ACCESS Newswire / October 20, 2026 / Cashmere Valley Bank (OTCQX:CSHX) ("Bank"), announced quarterly earnings of $7.4 million for the quarter ended September 30, 2026 as compared to $7.7 million during the third quarter of 2025. Year to date earnings totaled $20.0 million as compared to $22.1 million for the nine months ended September 30, 2025. Year to date diluted earnings per share equaled $5.43, which represented a decrease of $0.23 per share, or 4.1%. Quarterly diluted earnings per share totaled $2.02 in the third quarter, an increase of $0.05 per share, or 2.5%, from the third quarter 2025.

As of September 30, 2026, deposit balances totaled $1.976 billion, an increase of $75.2 million, or 4.0%, from December 31, 2025. From the same period last year, deposit balances increased $78.6 million, or 4.1%.

"I was pleased to see an increase in our earnings over the linked quarter," said Greg Oakes, President and CEO. "In addition to the earnings improvement seen throughout the year, our deposit franchise continues to increase market share. Our share of the market in the Chelan and Douglas County MSA improved 1.63 percentage points to 44.95% as of June 30, 2026, reflecting our team's unequaled customer commitment. I am also pleased to announce that Len Devaisher has started at the Bank as CEO Elect. Len will assume his role as President & CEO after my retirement on December 31, 2026."

Len Devaisher, CEO Elect, commented, "I am thrilled to begin my role with Cashmere Valley Bank. This opportunity was compelling because of the capabilities and culture of the institution and its track record of positively impacting its customers and communities. As shown in this quarter's results, that impact translates into benefits for all of our stakeholders."

Q3 Highlights

The Bank reported the following statement of condition highlights as of September 30, 2026:

• GAAP capital totaled $243.1 million at September 30, 2026. The Bank's equity to assets ratio totaled 10.3% on September 30, 2026. Equity decreased year over year due to share repurchases and an increase in unrealized losses on available for sale securities. Unrealized losses increased from $44.6 million to $62.3 million at the end of the third quarter.

Cash, Cash Equivalents and Restricted Cash

Total cash, cash equivalents and restricted cash totaled $135.1 million at September 30, 2026, compared to $270.0 million at September 30, 2025. Much of the Bank's loan portfolio growth has been funded out of cash on hand.

Investments

The fair value of the Bank's available for sale investment portfolio totaled $810.6 million at September 30, 2026, which represented a decrease of $5.8 million from September 30, 2025. Held to maturity securities, net of allowance, totaled $118.5 million as of September 30, 2026 compared to $124.8 million as of September 30, 2025.

Year to date the Bank recorded $76,000 as a gain on sale of securities and swaps as compared to $130,000 in the prior year to date.

Loans and Credit Quality

Gross loans totaled $1.156 billion as of September 30, 2026 which represented an increase of $202.5 million from December 31, 2025 and an increase of $190.8 million from September 30, 2025. Since December 31, 2025, loan balances have increased for: commercial real estate $41.0 million, dealer loans $33.5 million, municipal loans $31.1 million, adjustable-rate mortgages $18.3 million, commercial loans $14.7 million, and equipment finance loans $10.4 million. This growth has been the result of concerted efforts to increase loan balances as a percentage of our earning assets. With 58.5% loans to deposits as of September 30, 2026, we continue to benefit from a conservative risk profile with plenty of liquidity available to support our customers and communities.

At September 30, 2026, the allowance for credit losses on loans (ACL) was 1.02% of gross loans as compared to 1.26% one year ago. The allowance balance was $11.8 million as of September 30, 2026 as compared to $12.1 million as of September 30, 2025.

Credit quality remained strong with non-performing loans representing 0.23% of gross loans as of September 30, 2026. This was a decrease from 0.48% as of September 30, 2025.

Deposits

Total deposits increased by $78.6 million, or 4.1%, from September 30, 2025. During that time period certificates of deposits increased $33.1 million. Non-maturity deposit balances increased $45.5 million. The Bank's cost of funds decreased six basis points from September 30, 2025 to 1.60%.

Equity

As of September 30, 2026, Tier 1 capital remains strong. As of September 30, 2026, Tier 1 capital decreased slightly to $293.7 million from $294.7 million at September 30, 2025. The decrease was largely a product of share repurchases totaling $24.6 million that were completed in the first and second quarters of 2026.

GAAP capital reflected a decrease of $19.2 million from September 30, 2025, and a decrease of $29.4 million from December 31, 2025. As of September 30, 2026, the Bank's GAAP capital to assets ratio was 10.4% as compared to 11.6% as of September 30, 2025. GAAP capital levels decreased due to stock repurchases and a $17.7 million increase in unrealized losses on available for sale securities. As of September 30, 2026, the capital effect from unrealized losses on available for sale securities and swaps totaled $62.3 million.

Earnings

Net Interest Income

For the nine months ended September 30, 2026, net interest income totaled $52.4 million compared to $50.4 million in the same period in 2025, which represented an improvement of $1.9 million, or 3.8%. Improving loan balances helped to increase loan income by $2.5 million. Interest income from available for sale and held to maturity securities improved by $431,000, while income from cash decreased $582,000. Interest income growth was partially offset by an increase in interest expense of $380,000.

For the quarter ended September 30, 2026, net interest income increased $879,000 from the quarter ended June 30, 2026. The increase from the prior quarter was due to additional interest income from loans. These increases were partially offset by a decrease in income from cash on hand. Deposit and borrowing costs were flat quarter over quarter.

The net interest margin was 3.15% for the first nine months of 2026, compared to 3.20% during the first nine months of 2025. For the quarter ended September 30, 2026 the net interest margin was 3.25% as compared to 3.15% in the third quarter of 2025.

Non-Interest Income

Non-interest income totaled $16.2 million in the first nine months of 2026 as compared to $16.6 million in the first nine months of 2025. As compared to the first three quarters of 2025, net income from the Bank's subsidiary Mitchell, Reed and Schmitten decreased $84,000, earnings on Bank Owned Life Insurance decreased $254,000, and fees generated from Cashmere Valley Wealth Management decreased $536,000.

Non-Interest Expense

Non-interest expense totaled $40.7 million in the first nine months of 2026, as compared to $38.0 million in the first nine months of 2025. Salaries and benefits were the primary drivers of the change. Salaries and benefits increased $1.3 million, or 5.7%. CEO transition costs for recruitment and retention totaled $545,000 in the third quarter. Many of these costs will continue through year end before subsiding. State of Washington B&O taxes increased by $299,000 as compared to first nine months of 2025.

Construction has started in earnest on the new branch facility in East Wenatchee along Grant Rd. This location will be a full-service branch and is expected to open in the first half of 2027.

The Bank's efficiency ratio was 59.3% in the first nine months of 2026 as compared to 56.8% in the first nine months of 2025.

Provision expense for credit losses increased to $3.0 million from $2.1 million year to date. Provision expenses increased in the first quarter as charge-offs were larger than anticipated. Charge-off levels have decreased somewhat since the first quarter; however, loan growth has necessitated an increased provision. Third quarter provision expense totaled $873,000.

Income tax expense increased from $4.6 million for the nine months ended September 30, 2025 to $4.7 million as of September 30, 2026.

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
Len Devaisher, CEO Elect, (509) 665-1081
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