Executive Summary

Q2 2024 was the first quarter post-merger close (April 1), and GAAP results were negative due to merger-related items: net loss of $6.29M (-$0.33 diluted EPS) vs income of $3.68M ($0.31) in Q1 and $6.28M ($0.54) in Q2’23, driven by a $9.83M provision for credit losses on acquired loans, elevated merger/conversion expenses, and a $1.97M loss on securities sales .
Core earnings power improved: net interest income rose to $29.06M and NIM expanded 23 bps q/q to 3.65% (12 bps from purchase accounting), supported by loan yields (6.54%) and balance-sheet repositioning; deposit costs stepped up to 1.71% on acquired CDs and fair-value accretion amortization .
Balance sheet scaled materially: assets $3.48B, loans $2.26B, deposits $2.87B; nonperforming assets emerged at $2.81M with ACL/loans at 1.11% following acquisition accounting and provisioning .
Management reiterated near-term integration costs through Q3 2024 with operating efficiencies beginning in Q4 2024; quarterly dividend maintained at $0.12 per share (payable Aug 16, 2024) .
No public Q2 earnings call transcript was available; comparison to Wall Street estimates from S&P Global was unavailable, so we cannot assess beat/miss vs consensus this quarter [functions.ListDocuments: earnings-call-transcript=0] [functions.GetEstimates error].

What Went Well and What Went Wrong

What Went Well

Net interest margin expanded to 3.65% from 3.42% q/q; purchase accounting accretion contributed 12 bps of the 23 bps increase, indicating strengthening core earning-asset yields and accretive merger marks .
Organic loan growth of $49M (8.89% annualized) alongside strategic securities sales ($26M) to fund higher-yielding loans, supporting forward earnings trajectory .
Management tone emphasized a “solid base for sustained growth” post-merger, with planned operating efficiencies from Q4 2024, signaling cost normalization ahead after system integration .

What Went Wrong

GAAP loss driven by a $9.83M provision for credit losses tied to acquired loans and elevated merger/conversion costs; also realized $1.97M loss on AFS securities sales as part of balance sheet repositioning .
Deposit costs inflected higher to 1.71% (from 0.98% in Q1), reflecting the acquired time deposit mix and purchase accounting amortization; average non-interest-bearing mix fell to 37.36% from 45.30% q/q .
Efficiency ratio deteriorated to 93.58% on GAAP (70.76% non-GAAP) due to merger expenses and expanded cost base of the combined bank, compressing near-term profitability metrics (ROAA -0.73%, ROAE -7.39%) .

Financial Results

Income statement and key ratios (oldest → newest)

Metric	Q2 2023	Q4 2023	Q1 2024	Q2 2024
Net interest income ($M)	$20.21	$20.12	$19.07	$29.06
Non-interest income ($M)	$1.59	$2.27	$1.64	$1.40
Total revenue ($M, NII+non-int.)	$21.80	$22.38	$20.71	$30.46
Provision for credit losses ($M)	$(0.34)	$(0.17)	$0.58	$9.83
Non-interest expense ($M)	$13.81	$14.85	$15.33	$28.50
Net income (loss) ($M)	$6.28	$5.89	$3.68	$(6.29)
Diluted EPS ($)	$0.54	$0.50	$0.31	$(0.33)
Net interest margin (FTE) (%)	3.46%	3.52%	3.42%	3.65%
Cost of total deposits (%)	0.88%	0.87%	0.98%	1.71%
Efficiency ratio (GAAP) (%)	65.24%	64.98%	70.07%	93.58%

Note: Total revenue presented as net interest income + total non-interest income (components cited above) .

Non-GAAP snapshot (diluted EPS and efficiency)

Metric	Q2 2023	Q1 2024	Q2 2024
Comparable diluted EPS (non-GAAP)	$0.54	$0.36	$0.41
Comparable efficiency ratio (non-GAAP)	62.40%	70.91%	70.76%
Total merger & conversion related costs, net of taxes ($M)	$0.18	$0.38	$16.43
Loss on sale of investment securities ($M)	$0.04	$0.37	$1.97

Balance sheet and credit KPIs

Metric	Q4 2023	Q1 2024	Q2 2024
Total assets ($B, period-end)	$2.43	$2.42	$3.48
Gross loans ($B, period-end)	$1.29	$1.29	$2.26
Total deposits ($B, period-end)	$2.04	$2.03	$2.87
NIB deposits (% of avg deposits)	46.61%	45.30%	37.36%
Loan-to-deposit ratio (%)	63.33%	63.34%	78.65%
ACL/loans (%)	1.14%	1.14%	1.11%
Nonperforming assets ($M)	$0.00	$0.00	$2.81
ROAA / ROAE (%)	0.98 / 12.78	0.61 / 7.08	-0.73 / -7.39

Loan portfolio mix (period-end)

Loan Type ($M)	Dec 31, 2023 Amount	Dec 31, 2023 %	Jun 30, 2024 Amount	Jun 30, 2024 %
Commercial & industrial	105.47	8.2%	137.13	6.1%
Agricultural production	33.56	2.6%	26.17	1.2%
CRE owner-occupied	215.15	16.7%	308.46	13.7%
CRE non-owner-occupied	539.52	41.9%	889.99	39.4%
Farmland	120.67	9.3%	141.15	6.3%
Multi-family	61.31	4.7%	127.29	5.6%
1-4 family (closed-end)	96.56	7.5%	116.49	5.2%
1-4 family (revolving)	27.65	2.1%	34.75	1.5%
Manufactured housing	—	—	327.56	14.5%
Other consumer	55.61	4.3%	81.25	3.6%
Total gross loans	1,290.80	100.0%	2,256.57	100.0%

Guidance Changes

Metric/Topic	Period	Previous Guidance	Current Guidance	Change
Non-interest expenses (integration)	Q3 2024	Not quantified; elevated during integration	Elevated non-interest expenses expected to continue through Q3 2024 (systems integration)	Maintained qualitative outlook
Expense synergies	Q4 2024 onward	Not previously specified	Operational efficiencies to commence in Q4 2024	New timing detail
Balance sheet repositioning	Ongoing 2024	Reposition to support NIM	Continue selling lower-yielding AFS to fund loan growth to optimize earnings	Maintained
Dividend	Q3 2024	$0.12 per share (Q1 2024)	$0.12 per share declared, payable Aug 16, 2024	Maintained

No numeric revenue/EPS/expense guidance provided in the press release .

Earnings Call Themes & Trends

No public Q2 2024 earnings call transcript was available; themes below reflect management disclosures in the Q2 press release versus prior quarter releases.

Topic	Previous Mentions (Q4 2023, Q1 2024)	Current Period (Q2 2024)	Trend
Merger integration	Announced merger (regulatory approvals) with expected close 4/1/24; highlighted cultural/territory fit	First quarter as combined company; elevated integration costs through Q3; efficiencies Q4	Integration costs near-term, synergies later
NIM and deposit costs	NIM 3.52% in Q4’23; deposit costs 0.87%; rising money market/time CD rates noted	NIM 3.65% (+23 bps q/q; 12 bps PAA); cost of deposits 1.71% post-merger	NIM up; deposit costs up with acquired mix
Balance sheet repositioning	Securities balances reduced in Q4’23; noted sales/maturities	$26M AFS sales to fund loans; AFS down 11% YTD	Continue pivot to loans
Credit quality/ACL	NPAs negligible in Q4’23/Q1’24; ACL/loans ~1.14%	NPAs $2.81M; ACL/loans 1.11%; $9.83M provision on acquired portfolio	Provisioning at close; metrics normalize thereafter
Capital	Well-capitalized: CET1 12.78% (Bancorp) Q4’23	CET1 11.36% (Bancorp) post-merger; still strong	Lower on combo, still robust

Management Commentary

CEO framing on first combined quarter: “this quarter report represents the first quarter for the combined Company… powered by the strength of one of the largest banks headquartered in Central California” .
CFO on earnings bridge and outlook: “As a result of merger-related expenses, overall earnings were significantly reduced… The Company continues to reposition the balance sheet to optimize earnings… elevated non-interest expenses are expected to continue through the third quarter 2024… operational efficiencies will commence in the fourth quarter” .

Q&A Highlights

No Q2 2024 public earnings call transcript or Q&A was available to review; management clarified key items in the press release including: (1) the drivers of the GAAP loss (provision on acquired loans, merger expenses, AFS loss) , (2) NIM expansion and deposit cost dynamics post-merger , and (3) the timing of integration costs and expected efficiencies .

Estimates Context

We attempted to retrieve S&P Global consensus for Q2 2024 (EPS and revenue) but were unable to obtain data due to mapping/limit issues; therefore, a beat/miss vs Wall Street consensus cannot be determined for this quarter [functions.GetEstimates errors].
Where third-party sites reference “revenue,” note that for banks, Street “revenue” typically reflects net interest income plus non-interest income; our analysis relies solely on company disclosures above .

Key Takeaways for Investors

Near-term GAAP results are noisy due to acquisition accounting and one-time integration expenses; however, core earning power is improving (higher NIM, loan yields) as the balance sheet pivots from securities to loans .
Deposit costs reset higher post-merger (1.71%), and NIB mix declined to 37.36%; managing funding mix and CD repricing will be central to margin sustainability in 2H24/2025 .
Provisioning reflects acquired portfolio onboarding (Q2 provision $9.83M); subsequent credit metrics, loss content, and accretion schedules will drive earnings cadence post-Day 2 .
Capital remains strong (Bancorp CET1 11.36%); dividend maintained at $0.12, suggesting confidence in normalized earnings and capital generation beyond integration .
Watch for Q4 2024 efficiency ramp and 2025 run-rate cost base; synergy realization and expense normalization are likely the next catalysts for EPS inflection .
With no published Q2 call transcript and no available S&P consensus this quarter, stock reactions may hinge on investors’ confidence in the path from GAAP loss to non-GAAP/core earnings trajectory and integration execution [functions.ListDocuments: earnings-call-transcript=0] .

Community West Bancshares (CVCY)·Q2 2024 Earnings Summary