CW Bancorp (OTCQX: CWBK), the parent company (“the Company”) of CommerceWest Bank (the “Bank”) reported consolidated net income for the third quarter of 2022 of $4,595,000 or $1.33 a share as compared to $3,576,000 or $0.99 a share for the third quarter of 2021, an EPS increase of 35% and net income for the nine months ended September 30, 2022 of $12,839,000 or $3.68 a share as compared to $10,204,000 or $2.80 a share for the nine months ended September 30, 2021, an EPS increase of 31%.
Key Financial Results for the three months ended September 30, 2022:
- EPS of $1.33 up 35%
- Net income growth of 28%
- ROTE of 27.8% up 39%
- ROA of 1.57% up 41%
- Net interest income up 43%
- Net interest margin up 58%
- Efficiency ratio of 40.63%
- ALLL to total loans ratio (net of PPP loans) of 1.34%
- 51 quarters of consecutive profits
Key Financial Results for the nine months ended September 30, 2022:
- EPS of $3.68 up 31%
- Net income growth of 26%
- ROTE of 25.54% up 28%
- ROA of 1.41% up 24%
- Net interest income up 33%
- Net interest margin up 32%
- Efficiency ratio of 41.14%
- Noninterest-bearing deposits as percent of total deposits at 62%
Mr. Ivo Tjan, Chairman and CEO, commented, “The Company has again delivered double digit growth in earnings per share, net income, net interest margin and return on tangible equity for both the quarter and nine months ended September 30, 2022.” Mr. Tjan continued, “Although it’s a challenging operating environment, our Company is well positioned, with a fortress balance sheet to service our clients during these turbulent times.”
Total assets decreased $183 million as of September 30, 2022, a decrease of 14% as compared to the same period one year ago. Total loans increased $182 million as of September 30, 2022, an increase of 30% over the prior year. Total loans net of PPP loans increased $289 million as of September 30, 2022, an increase of 59%. Cash and due from banks decreased $392 million or 73% from the prior year with the deployment of funds into loans and investment securities. Total investment securities increased $19 million, an increase of 12% from the prior year.
Total deposits decreased $197 million as of September 30, 2022, a decrease of 16% from September 30, 2021. Non-interest-bearing deposits decreased $33 million as of September 30, 2022, a decrease of 5% from the prior year. Interest bearing deposits decreased $164 million as of September 30, 2022, a decrease of 30% from the prior period. Clients are utilizing their available liquidity rather than borrowing against lines of credit due to the increase in interest rates.
Interest income was $10,661,000 for the three months ended September 30, 2022 as compared to $7,379,000 for the three months ended in September 30, 2021, an increase of 44%. Interest expense was $856,000 for the three months ended September 30, 2022 as compared to $525,000 for the three months ended in September 30, 2021, an increase of 63%. Interest expense was up for the quarter due to the rising cost of deposits as well as the cost of subordinated debt. Interest income was $29,552,000 for the nine months ended September 30, 2022 as compared to $22,096,000 for the nine months ended in September 30, 2021, an increase of 34%. Interest expense was $2,120,000 for the nine months ended September 30, 2022 as compared to $1,480,000 for the nine months ended in September 30, 2021, an increase of 43%. The cost of the subordinated debt was the primary reason for the increase in interest expense year over year. The Company was able to offset some of this increase, reducing the cost of deposits during the nine months ended September.
Net interest income for the three months ended September 30, 2022 was $9,805,000 compared to $6,854,000 for the three months ended September 30, 2021, an increase of 43%. The net interest margin increased for the three months ended September 30, 2022. It increased from 2.28% in 2021 to 3.61% in 2022, an increase of 58%. Net interest income for the nine months ended September 30, 2022 was $27,432,000 compared to $20,616,000 for the nine months ended September 30, 2021, an increase of 33%. The net interest margin increased for the nine months ended September 30, 2022. It increased from 2.43% in 2021 to 3.21% in 2022, an increase of 32%.
Provision for loan losses for the three months ended September 30, 2022 was $300,000 as compared to zero for the three months ended September 30, 2021. Provision for loan losses for the nine months ended September 30, 2022 was $800,000 as compared to zero for the nine months ended September 30, 2021. The allowance for loan losses to total loans ratio (net of PPP loans) decreased from 1.74% as of September 30, 2021 to 1.34% as of September 30, 2022.
Non-interest income for the three months ended September 30, 2022 was $1,565,000 compared to $1,490,000 for the same period last year, an increase of 5%. Non-interest income for the nine months ended September 30, 2022 was $4,473,000 compared to $3,880,000 for the same period last year, an increase of 15%.
Non-interest expense for the three months ended September 30, 2022 was $4,659,000 compared to $3,778,000 for the same period last year, an increase of 23%. Non-interest expense for the nine months ended September 30, 2022 was $13,249,000 compared to $10,988,000 for the same period last year, an increase of 21%.
The efficiency ratio for the three months ended September 30, 2022 was 40.63% compared to 44.91% in 2021, which represents a decrease of 10%. The efficiency ratio illustrates that for every dollar made for the three-month period ending September 30, 2022, it cost $0.4063 to make it, as compared to $0.4491 one year ago. The efficiency ratio for the nine months ended September 30, 2022 was 41.14% compared to 44.47% in 2021, which represents a decrease of 7%.
Capital ratio for the Bank remain above the level required for a "well capitalized" institution as designated by regulatory agencies. As of September 30, 2022, the tier 1 leverage ratio was 10.45%, the common equity tier 1 capital ratio was 15.80%, the tier 1 risk-based capital ratio was 15.80% and the total risk-based capital ratio was 17.05%.
CommerceWest Bank is determined to redefine banking for small and medium sized businesses by delivering on customized products and services. Founded in 2001 and headquartered in Irvine, California, the Bank serves businesses throughout the state of California with our digital banking platform. By employing a strategically selected team of experienced professionals, we will provide flexibility, create a complete, safe and sound banking experience for each client. We provide a wide range of commercial banking services, including remote deposit solution, NetBanker online banking, mobile banking, lines of credit, M&A / working capital loans, commercial real estate loans, SBA loans and treasury management services.
Mission Statement: CommerceWest Bank will create a complete banking experience for each client, catering to businesses and their specific banking needs, while accommodating our clients and providing them high-quality, low stress and personally tailored banking and financial services.
Please visit www.cwbk.com to learn more about the bank. “BANK ON THE DIFFERENCE”
Statements concerning future performance, developments or events, expectations for growth and income forecasts, and any other guidance on future periods, constitute forward-looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, loan production, balance sheet management, expanded net interest margin, the ability to control costs and expenses, interest rate changes, financial policies of the United States government and general economic conditions. The Company disclaims any obligation to update any such factors or to publicly announce the results of any revisions to any forward-looking statements contained in this release to reflect future events or developments.
| THIRD QUARTER REPORT - September 30, 2022 (Unaudited) | |||||||||||
| CW BANCORP | % |
||||||||||
| CONSOLIDATED BALANCE SHEET | Increase |
||||||||||
| (dollars in thousands) | Sept 30, 2022 | Sept 30, 2021 | (Decrease) |
||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ |
147,876 |
|
$ |
539,932 |
|
-73 |
% |
|||
| Securities available for sale |
|
124,758 |
|
|
131,085 |
|
-5 |
% |
|||
| Securities held-to-maturity |
|
51,652 |
|
|
26,272 |
|
97 |
% |
|||
| Loans (PPP loans $4,981 and $111,389 at 2022 and 2021, respectively) |
|
786,384 |
|
|
603,987 |
|
30 |
% |
|||
| Less allowance for loan losses |
|
(10,491 |
) |
|
(9,185 |
) |
14 |
% |
|||
| Loans, net |
|
775,893 |
|
|
594,802 |
|
30 |
% |
|||
| Bank premises and equipment, net |
|
5,255 |
|
|
5,941 |
|
-12 |
% |
|||
| Other assets |
|
34,442 |
|
|
25,260 |
|
36 |
% |
|||
| Total assets | $ |
1,139,876 |
|
$ |
1,323,292 |
|
-14 |
% |
|||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Non-interest bearing deposits | $ |
624,102 |
|
$ |
656,849 |
|
-5 |
% |
|||
| Interest bearing deposits |
|
384,256 |
|
|
548,123 |
|
-30 |
% |
|||
| Total deposits |
|
1,008,358 |
|
|
1,204,972 |
|
-16 |
% |
|||
| Subordinated debenture |
|
50,000 |
|
|
32,500 |
|
54 |
% |
|||
| Other liabilities |
|
16,509 |
|
|
12,258 |
|
35 |
% |
|||
|
1,074,867 |
|
|
1,249,730 |
|
-14 |
% |
||||
| Stockholders' equity |
|
65,009 |
|
|
73,562 |
|
-12 |
% |
|||
| Total liabilities and stockholders' equity | $ |
1,139,876 |
|
$ |
1,323,292 |
|
-14 |
% |
|||
| Shares outstanding at end of period |
|
3,352,358 |
|
|
3,497,111 |
|
|||||
| Book value per share | $ |
23.52 |
|
$ |
20.40 |
|
|||||
| Total loans to total deposits |
|
77.99 |
% |
|
50.12 |
% |
|||||
| ALLL to total loans (net of PPP loans) |
|
1.34 |
% |
|
1.74 |
% |
|||||
| Nonperforming assets (non-accrual loans & OREO) | $ |
- |
|
$ |
- |
|
|||||
| COMMERCEWEST BANK CAPITAL RATIOS: | |||||||||||
| Tier 1 leverage ratio |
|
10.45 |
% |
|
7.57 |
% |
|||||
| Common equity tier 1 capital ratio |
|
15.80 |
% |
|
15.38 |
% |
|||||
| Tier 1 risk-based capital ratio |
|
15.80 |
% |
|
15.38 |
% |
|||||
| Total risk-based capital ratio |
|
17.05 |
% |
|
16.63 |
% |
|||||
| CW BANCORP | ||||||||||||||||||||||
| CONSOLIDATED STATEMENT OF INCOME (Unaudited) | Three Months Ended | Increase | For the Nine Months Ended | Increase | ||||||||||||||||||
| (dollars in thousands except share and per share data) | Sept 30, 2022 | Sept 30, 2021 | (Decrease) | Sept 30, 2022 | Sept 30, 2021 | (Decrease) | ||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||||
| Loans | $ |
8,897 |
|
$ |
6,444 |
|
38 |
% |
$ |
25,023 |
|
$ |
19,631 |
|
27 |
% |
||||||
| Investments |
|
1,083 |
|
|
613 |
|
77 |
% |
|
3,170 |
|
|
1,573 |
|
102 |
% |
||||||
| Fed funds sold and other |
|
681 |
|
|
322 |
|
111 |
% |
|
1,359 |
|
|
892 |
|
52 |
% |
||||||
| Total interest income |
|
10,661 |
|
|
7,379 |
|
44 |
% |
|
29,552 |
|
|
22,096 |
|
34 |
% |
||||||
| INTEREST EXPENSE | ||||||||||||||||||||||
| Deposits |
|
383 |
|
|
224 |
|
71 |
% |
|
708 |
|
|
806 |
|
-12 |
% |
||||||
| Subordinated debenture |
|
469 |
|
|
301 |
|
56 |
% |
|
1,406 |
|
|
674 |
|
109 |
% |
||||||
| Other borrowings |
|
4 |
|
|
- |
|
- |
|
|
6 |
|
|
- |
|
- |
|
||||||
| Total interest expense |
|
856 |
|
|
525 |
|
63 |
% |
|
2,120 |
|
|
1,480 |
|
43 |
% |
||||||
| NET INTEREST INCOME BEFORE LOAN LOSS PROVISION |
|
9,805 |
|
|
6,854 |
|
43 |
% |
|
27,432 |
|
|
20,616 |
|
33 |
% |
||||||
| PROVISION FOR LOAN LOSSES |
|
300 |
|
|
- |
|
- |
|
|
800 |
|
|
- |
|
- |
|
||||||
| Non-interest income: | ||||||||||||||||||||||
| NET INTEREST INCOME AFTER LOAN LOSS PROVISION |
|
9,505 |
|
|
6,854 |
|
39 |
% |
|
26,632 |
|
|
20,616 |
|
29 |
% |
||||||
| NON-INTEREST INCOME | ||||||||||||||||||||||
| Service Charges and Fees on Deposits |
|
1,197 |
|
|
1,303 |
|
-8 |
% |
|
3,338 |
|
|
3,276 |
|
2 |
% |
||||||
| Gain on Sale of Loans |
|
- |
|
|
- |
|
- |
|
|
- |
|
|
(4 |
) |
-100 |
% |
||||||
| Other Fees |
|
368 |
|
|
187 |
|
97 |
% |
|
1,135 |
|
|
608 |
|
87 |
% |
||||||
| NON-INTEREST EXPENSE |
|
4,659 |
|
|
3,778 |
|
23 |
% |
|
13,249 |
|
|
10,988 |
|
21 |
% |
||||||
| EARNINGS BEFORE INCOME TAXES |
|
6,411 |
|
|
4,566 |
|
40 |
% |
|
17,856 |
|
|
13,508 |
|
32 |
% |
||||||
| INCOME TAXES |
|
1,816 |
|
|
990 |
|
83 |
% |
|
5,017 |
|
|
3,304 |
|
52 |
% |
||||||
| NET INCOME | $ |
4,595 |
|
$ |
3,576 |
|
28 |
% |
$ |
12,839 |
|
$ |
10,204 |
|
26 |
% |
||||||
| Basic earnings per share | $ |
1.37 |
|
$ |
1.02 |
|
34 |
% |
$ |
3.78 |
|
$ |
2.89 |
|
31 |
% |
||||||
| Diluted earnings per share | $ |
1.33 |
|
$ |
0.99 |
|
35 |
% |
$ |
3.68 |
|
$ |
2.80 |
|
31 |
% |
||||||
| Return on Assets |
|
1.57 |
% |
|
1.12 |
% |
41 |
% |
|
1.41 |
% |
|
1.14 |
% |
24 |
% |
||||||
| Return on Equity |
|
26.55 |
% |
|
19.20 |
% |
38 |
% |
|
24.43 |
% |
|
19.10 |
% |
28 |
% |
||||||
| Return on Tangible Equity |
|
27.79 |
% |
|
20.03 |
% |
39 |
% |
|
25.54 |
% |
|
19.96 |
% |
28 |
% |
||||||
| Efficiency Ratio |
|
40.63 |
% |
|
44.91 |
% |
-10 |
% |
|
41.14 |
% |
|
44.47 |
% |
-7 |
% |
||||||
| CW BANCORP | ||||||||||||||||||
| CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS | ||||||||||||||||||
Three Months Ended Sept 30, |
||||||||||||||||||
2022 |
|
2021 |
||||||||||||||||
Average
|
|
Interest
|
|
Yield /
|
|
Average
|
|
Interest
|
|
Yield /
|
||||||||
(dollars in thousands) |
||||||||||||||||||
| INTEREST EARNING ASSETS | ||||||||||||||||||
| Int Bearing Due from Banks & FFS | $ |
98,275 |
$ |
550 |
2.22 |
% |
$ |
463,009 |
$ |
274 |
0.23 |
% |
||||||
| Investment Securities (1) |
|
182,218 |
|
1,180 |
2.57 |
% |
|
110,904 |
|
687 |
2.46 |
% |
||||||
| Loans |
|
801,866 |
|
8,897 |
4.40 |
% |
|
628,060 |
|
6,444 |
4.07 |
% |
||||||
| FHLB & Other Stocks |
|
6,504 |
|
131 |
7.99 |
% |
|
4,150 |
|
48 |
4.59 |
% |
||||||
| Total interest-earning assets |
|
1,088,863 |
|
10,758 |
3.92 |
% |
|
1,206,123 |
|
7,453 |
2.45 |
% |
||||||
| Noninterest-earning assets |
|
69,884 |
|
62,061 |
||||||||||||||
| Total assets | $ |
1,158,747 |
$ |
1,268,184 |
||||||||||||||
| INTEREST EARNING LIABILITIES | ||||||||||||||||||
| Interest Bearing Deposits | $ |
394,515 |
$ |
383 |
0.39 |
% |
|
517,281 |
|
224 |
0.17 |
% |
||||||
| Other Borrowings |
|
489 |
|
4 |
3.25 |
% |
|
- |
|
- |
0.00 |
% |
||||||
| Subordinated Debenture |
|
50,000 |
|
469 |
3.75 |
% |
|
32,500 |
|
301 |
3.70 |
% |
||||||
| Total interest-earning liabilities |
|
445,004 |
|
856 |
0.76 |
% |
|
549,781 |
|
525 |
0.38 |
% |
||||||
| Noninterest-earning liabilities | ||||||||||||||||||
| Demand Deposits |
|
631,554 |
|
628,001 |
||||||||||||||
| Other Liabilities |
|
13,531 |
|
16,501 |
||||||||||||||
| Shareholders' Equity |
|
68,658 |
|
73,901 |
||||||||||||||
| Total liabilities and shareholder's equity | $ |
1,158,747 |
$ |
1,268,184 |
||||||||||||||
| Net Interest Spread | $ |
9,902 |
3.16 |
% |
$ |
6,928 |
2.07 |
% |
||||||||||
| Net Interest Margin | 3.61 |
% |
2.28 |
% |
||||||||||||||
| Total Deposits | $ |
1,026,069 |
$ |
383 |
0.15 |
% |
$ |
1,145,282 |
$ |
224 |
0.08 |
% |
||||||
| Total Funding Costs | $ |
1,076,558 |
$ |
856 |
0.32 |
% |
$ |
1,177,782 |
$ |
525 |
0.18 |
% |
||||||
| (1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate | ||||||||||||||||||
| CW BANCORP | ||||||||||||||||||
| CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS | ||||||||||||||||||
Nine Months Ended Sept 30, |
||||||||||||||||||
2022 |
2021 |
|||||||||||||||||
Average
|
Interest
|
Yield /
|
Average
|
Interest
|
Yield /
|
|||||||||||||
| (dollars in thousands) | ||||||||||||||||||
| INTEREST EARNING ASSETS | ||||||||||||||||||
| Int Bearing Due from Banks & FFS | $ |
173,418 |
$ |
1,104 |
0.85 |
% |
$ |
399,216 |
$ |
764 |
0.26 |
% |
||||||
| Investment Securities (1) |
|
180,954 |
|
3,469 |
2.56 |
% |
|
90,804 |
|
1,783 |
2.63 |
% |
||||||
| Loans |
|
794,146 |
|
25,023 |
4.21 |
% |
|
650,586 |
|
19,631 |
4.03 |
% |
||||||
| FHLB & Other Stocks |
|
5,645 |
|
255 |
6.04 |
% |
|
3,622 |
|
128 |
4.72 |
% |
||||||
| Total interest-earning assets |
|
1,154,163 |
|
29,851 |
3.46 |
% |
|
1,144,228 |
|
22,306 |
2.61 |
% |
||||||
| Noninterest-earning assets |
|
65,572 |
|
55,666 |
||||||||||||||
| Total assets | $ |
1,219,735 |
$ |
1,199,894 |
||||||||||||||
| INTEREST EARNING LIABILITIES | ||||||||||||||||||
| Interest Bearing Deposits | $ |
434,484 |
$ |
708 |
0.22 |
% |
$ |
466,254 |
$ |
806 |
0.23 |
% |
||||||
| Other Borrowings |
|
612 |
|
6 |
1.31 |
% |
|
14 |
|
- |
0.00 |
% |
||||||
| Subordinated Debenture |
|
50,000 |
|
1,406 |
3.75 |
% |
|
24,074 |
|
674 |
3.73 |
% |
||||||
| Total interest-earning liabilities |
|
485,096 |
|
2,120 |
0.58 |
% |
|
490,342 |
|
1,480 |
0.40 |
% |
||||||
| Noninterest-earning liabilities | ||||||||||||||||||
| Demand Deposits |
|
651,257 |
|
627,543 |
||||||||||||||
| Other Liabilities |
|
13,114 |
|
10,593 |
||||||||||||||
| Shareholders' Equity |
|
70,268 |
|
71,416 |
||||||||||||||
| Total liabilities and shareholder's equity | $ |
1,219,735 |
$ |
1,199,894 |
||||||||||||||
| Net Interest Spread | $ |
27,731 |
2.88 |
% |
$ |
20,826 |
2.21 |
% |
||||||||||
| Net Interest Margin | 3.21 |
% |
2.43 |
% |
||||||||||||||
| Total Deposits | $ |
1,085,741 |
$ |
708 |
0.09 |
% |
$ |
1,093,797 |
$ |
806 |
0.10 |
% |
||||||
| Total Funding Costs | $ |
1,136,353 |
$ |
2,120 |
0.25 |
% |
$ |
1,117,885 |
$ |
1,480 |
0.18 |
% |
||||||
| (1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate | ||||||||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20221027005271/en/
Contacts
Bancorp Contact
Mr. Ivo A. Tjan, CEO
Ms. Leeann Cochran, CFO
Telephone: (866) 521-CWBK
E-mail: InvestorRelations@cwbk.com
Website: www.cwbk.com
"Bank on the Difference"
