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Pacific Valley Bancorp Reports Strong Financial Performance in Q2 2026

Pacific Valley Bancorp (OTC Markets: PVBK), the parent company of Pacific Valley Bank, has recently revealed its financial results for the second quarter of 2026. Marking a notable improvement, the company reported a
52% increase in net income year-over-year, reaching $1.4 million, or $0.24 per share. This surge in profitability is primarily attributed to a significant rise in interest income, which effectively counterbalanced the heightened non-interest expense levels.

In comparison to the same quarter in 2025, total assets surged by an impressive 14% to $653 million, sparked by a 9.6% increase in total loans, which now stand at $547 million, and a healthy 14.2% growth in total deposits, now totaling $560 million.

Financial Highlights

The unaudited results indicate a robust financial foundation for Pacific Valley Bancorp. The net income for the quarter showed an increase of 21% or $243,000 from the previous quarter, driven by higher loan interest income and reduced personnel and data processing expenses. However, this positive outcome was slightly offset by increased interest expenses incurred from deposits. Such scrutiny reveals the prioritization of efficiency in operational costs, a notable focus for the bank's management.

Year-to-Date Performance

For the first half of 2026, the bank's net income reached $2.6 million, representing a 37.1% increase ($693,000) from the previous year, showcasing the bank’s strong trajectory. This growth originates predominantly from enhanced loan interest and overnight funds income, alongside a decline in borrowing costs. Conversely, elevated expenses associated with personnel and premises owing to strategic recruitment efforts slightly curtailed the earnings growth potential.

By examining profitability measures, the net interest margin for the quarter was recorded at 3.82%, a slight improvement from 3.75% from the preceding quarter, mainly due to augmented loan interest income amid escalating borrowing costs. Furthermore, the semi-annual net interest margin increased from 3.50% last year to 3.79% in 2026.

Loan and Deposit Growth

A pivotal highlight in the report is the significant growth in the bank's loan portfolio, which expanded by $48 million over the year. This growth was primarily driven by increases in commercial, industrial (CI), land, and commercial real estate (CRE) loans. Notably, the bank maintained a 0.04% non-performing loan ratio, underscoring the solid quality of its loan portfolio.

On the deposits side, total deposits increased by $70 million year-over-year, with core deposits constituting 92% of the growth. This embrace of core deposits delineates a commitment to stable funding sources as core deposits diminish the bank's reliance on more volatile sources.

Leadership Insights

CEO Anker Fanoe commented on these results, stating, "We are pleased to report a 52% year-over-year improvement in net income as we maintain loan and deposit growth. We have made strategic investments in personnel which align with our organic growth strategy. While we anticipate periodic fluctuations in profitability during this growth phase, our goal remains focused on increasing long-term sustainable performance to deliver value to our shareholders."

Additionally, CFO Steve Leen remarked on the bank's strong liquidity position, revealing a primary liquidity ratio of 14.43% as of June 30, 2026, an uptick from 11.04% year-on-year. This robust liquidity level indicates a buffer for unexpected cash flow requirements, thereby enhancing the bank's resilience against economic uncertainties.

Overall, Pacific Valley Bancorp is navigating through the current financial landscape with an optimistic outlook supported by strong loan growth and rising deposits, delivering sharp performance against challenging market conditions. The institution continues to invest strategically in its workforce to harness future growth opportunities while ensuring the sustainability of its financial trajectory.