Central Valley Community Bancorp Reports Significant Financial Growth Following Merger with Community West Bancshares

Central Valley Community Bancorp reported significant financial developments in its latest 10-Q filing for the quarter ending September 30, 2024, following its merger with Community West Bancshares on April 1, 2024. The merger has substantially impacted the company's financial metrics, leading to a notable increase in total assets, loans, and deposits.

As of September 30, 2024, total assets reached $3.53 billion, a 45.12% increase from $2.43 billion at the end of 2023. This growth was primarily driven by the acquisition, which added approximately $1.04 billion in assets. Total gross loans surged by 77.96% to $2.30 billion, compared to $1.29 billion at the end of 2023, with acquired loans from the merger accounting for $925.5 million. Excluding these acquired loans, organic loan growth was 6.68%.

Total deposits also saw a substantial rise, increasing by 43.11% to $2.92 billion from $2.04 billion at year-end 2023. The composition of deposits shifted, with interest-bearing deposits growing significantly, reflecting a 69.28% increase to $1.85 billion. The company reported a loan-to-deposit ratio of 78.62%, up from 63.22% at the end of 2023.

In terms of profitability, net income for the three months ended September 30, 2024, was $3.39 million, a decrease from $6.39 million in the same period of 2023. The decline in net income was attributed to increased non-interest expenses, which rose by 105.99% to $27.68 million, largely due to higher salaries and employee benefits, as well as acquisition-related costs. The net interest income before provision for credit losses increased by 47.19% to $30.21 million, driven by a significant rise in interest and fees on loans, which reached $37.42 million, up from $17.69 million in the prior year.

The company’s net interest margin improved to 3.69% for the quarter, compared to 3.47% in the same period of 2023. However, the provision for credit losses increased to $9.89 million for the nine months ended September 30, 2024, compared to $967,000 for the same period in 2023, reflecting the growth in the loan portfolio and economic forecasts.

Shareholders' equity rose to $363.52 million, up 75.56% from $207.06 million at the end of 2023, primarily due to the issuance of common stock related to the merger. The company declared a cash dividend of $0.12 per share, payable on November 22, 2024.

Overall, Central Valley Community Bancorp's financial performance in the third quarter of 2024 reflects the transformative impact of its recent merger, positioning the company for future growth in the Central California banking market.