Pacific Valley Bancorp Reports Strong Second Quarter Results with Double-Digit Balance Sheet Growth and Improved Profitability

Net income was $1.4 million or $0.24 per share for the second quarter, exceeding the quarter ended June 30, 2025, by 52% as higher interest income offset higher non-interest expense. Total assets increased 14.0% over the quarter ended June 30, 2025, to $653 million, total loans increased 9.6% to $547 million, and total deposits increased 14.2% to $560 million.

Net income for the quarter ended June 30, 2026, was $1.4 million, an increase of 21% or $243 thousand from the quarter ended March 31, 2026. The increase was primarily the result of higher loan interest income and lower personnel and data processing expenses, partially offset by higher deposit interest expense. Basic earnings per share for the quarter were $0.24, an increase of 20% when compared to $0.20 per share for the prior quarter.

Net income for the six months ended June 30, 2026 was $2.6 million, an increase of 37.1% or $693 thousand from the six months ended June 30, 2025. The increase was the result of higher loan interest income, overnight funds income and lower borrowing costs, partially offset by higher personnel and premises expense. Personnel expense was elevated due to strategic additions to loan and deposit production personnel.

Net interest margin for the quarter ended June 30, 2026 was 3.82%, compared with 3.75% for the quarter ended March 31, 2026. The increase was the result of higher loan interest income, partially offset by higher money market interest expense. Net interest margin for the six months ended June 30, 2026 was 3.79%, compared with 3.50% for the six months ended June 30, 2025, due to higher loan and overnight funds interest income.

Gross loans grew by 9.6% or $48 million from June 30, 2025 to June 30, 2026, primarily due to increased C&I, land, and CRE loans. Non-performing loans to gross loans for the quarter ended June 30, 2026, was 0.04%, unchanged when compared to 0.04% for the quarter ended June 30, 2025.

The Community Bank Leverage Ratio for the Company's subsidiary, Pacific Valley Bank, has been consistently strong. As of June 30, 2026, the ratio was 12.60%, compared to 12.51% on March 31, 2026, and 13.37% on June 30, 2025. The well capitalized regulatory requirement for this ratio is 8.00%.

We are pleased to report a 52% year-over-year improvement in net income to $1.4 million in the second quarter of 2026 as we maintain growth in loans and deposits over the second quarter of 2025. Loans increased $48 million and deposits increased by $70 million from June 30, 2025. Total deposits grew 17% year-over-year as of June 30, 2026, with 92% of that coming from core deposits. We have made a major investment in loan and deposit production personnel in line with our organic growth strategy. There will be ebbs and flows in profitability as the growth materializes, but our goal is to increase long-term, sustainable performance to drive shareholder value. As we grow, our momentum will increase and our efficiency will improve. I am pleased to see our loans grow by $18 million in the quarter, a 13% annualized rate, along with deposit growth of $23 million, a 17% annualized rate. We are making progress. Our liquidity position remains strong, as our primary liquidity ratio (cash, deposits held in other banks, and securities as a percentage of total assets) was 14.43% on June 30, 2026, compared to 11.04% for the same month a year ago. As of June 30, 2026, on-balance sheet liquidity totaled $94 million and contingent liquidity, which includes borrowing capacity with the Federal Home Loan Bank, the Federal Reserve Bank, correspondent banks and brokered deposits, was $364 million. Our combined on-balance sheet liquidity and contingent liquidity amount to 134% of our uninsured.