CW Bancorp (OTCQX: CWBK), the parent company (“the Company”) of CommerceWest Bank (the “Bank”) reported consolidated net income for the second quarter of 2024 of $3,084,000 or $1.00 per diluted share as compared to $4,214,000 or $1.27 per diluted share for the second quarter of 2023, an EPS decrease of 21% and net income for the six months ended June 30, 2024 of $6,077,000 or $1.96 per diluted share as compared to $8,832,000 or $2.64 per diluted share for the six months ended June 30, 2023, an EPS decrease of 26%.
Key Financial Results for the three months ended June 30, 2024:
- EPS of $1.00
- Return on Assets of 1.14%
- Return on Tangible Equity of 16.77%
- ACL to total loans ratio of 1.60%
- Liquid funds to total deposits ratio of 20%
- No outstanding FRB or FHLB borrowings
- Non-interest-bearing deposits to total deposits of 59%
- Strong leverage ratio of 12.06% and total risk-based capital ratio of 19.67%
- 58 quarters of consecutive profits
Key Financial Results for the six months ended June 30, 2024:
- EPS of $1.96
- Return on Assets of 1.16%
- Return on Tangible Equity of 16.45%
- Deposit Growth of 3% as compared to March 31, 2024
- Total Asset Growth of 2.8% as compared to March 31, 2024
Mr. Ivo Tjan, Chairman and CEO commented, “The Bank had good results with quarter over quarter average deposit growth of 8% or $72 million and a ROTE of 16.77%.” Mr. Tjan continued, “We added some new business development lending staff in June that is contributing to a healthy loan pipeline, which positions us well for loan growth in the second half of 2024. The Bank continues to focus on growing relationships in the California business community.”
Total Assets increased $30.7 million, an increase of 3% from the end of the prior quarter. Total deposits increased $29.4 million as of June 30, 2024, an increase of 3% from March 31, 2024. Non-interest-bearing deposits decreased $4.6 million as of June 30, 2024, a decrease of 1% from the prior quarter. Interest bearing deposits increased $34.0 million as of March 31, 2024, an increase of 9% over the prior quarter.
Total assets decreased $50.9 million as of June 30, 2024, a decrease of 4% as compared to the same period one year ago. Total loans decreased $30.3 million as of June 30, 2024, a decrease of 4% from the prior year. The Bank remains prudent and conservative about credit quality. Cash and due from banks decreased $26.9 million or 11% over the prior year. Total investment securities increased $3.2 million, an increase of 2% from the prior year.
Total deposits decreased $54.4 million as of June 30, 2024, a decrease of 5% from June 30, 2023. Non-interest-bearing deposits decreased $27.1 million as of June 30, 2024, a decrease of 4% from the prior year. Interest bearing deposits decreased $27.3 million as of June 30, 2024, a decrease of 6% over the prior year.
Interest income was $13,344,000 for the three months ended June 30, 2024, as compared to $13,513,000 for the three months ended June 30, 2023, a decrease of 1%. Interest expense was $3,573,000 for the three months ended June 30, 2024, as compared to $3,113,000 for the three months ended June 30, 2023, an increase of 15%. Interest expense was up for the quarter due to the continued increase in the cost of deposits.
Interest income was $25,585,000 for the six months ended June 30, 2024, relatively unchanged as compared to $25,517,000 for the six months ended June 30, 2023. Interest expense was $6,687,000 for the six months ended June 30, 2024, as compared to $5,258,000 for the six months ended June 30, 2023, an increase of 27%. Interest expense was up for the first half of 2024 due to the continued increase in the cost of deposits.
Net interest income for the three months ended June 30, 2024, was $9,771,000 as compared to $10,400,000 for the three months ended June 30, 2023, a decrease of 6%. The net interest margin increased for the three months ended June 30, 2024. It increased from 3.79% in 2023 to 3.82% in 2024, an increase of 1%. Net interest income for the six months ended June 30, 2024, was $18,898,000 as compared to $20,259,000 for the six months ended June 30, 2023, a decrease of 7%. The net interest margin decreased for the six months ended June 30, 2024. It decreased from 3.85% in 2023 to 3.80% in 2024, a decrease of 1%.
Provision for credit losses for the three months ended June 30, 2024, was zero compared to $99,000 for the three months ended June 30, 2023. Provision for credit losses for the six months ended June 30, 2024, was also zero compared to $174,000 for the six months ended June 30, 2023.
Non-interest income for the three months ended June 30, 2024, was $1,219,000 compared to $1,662,000 for the same period last year, a decrease of 27%. Non-interest income for the six months ended June 30, 2024, was $2,427,000 compared to $2,915,000 for the same period last year, a decrease of 17%.
Non-interest expense for the three months ended June 30, 2024, was $6,661,000 compared to $6,041,000 for the same period last year, an increase of 10%. Non-interest expense for the six months ended June 30, 2024, was $12,837,000 compared to $10,908,000 for the same period last year, an increase of 18%.
The efficiency ratio for the three months ended June 30, 2024, was 60.28% compared to 49.83% in 2023, which represents an increase of 21%. The efficiency ratio illustrates that for every dollar made for the three-month period ending June 30, 2024, it cost $0.6028 to make it, as compared to $0.4983 one year ago. The efficiency ratio for the six months ended June 30, 2024, was 59.86% compared to 46.43% in 2023, which represents an increase of 29%.
Capital ratios for the Bank remain above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of June 30, 2024, the tier 1 leverage ratio was 12.06%, the common equity tier 1 capital ratio was 18.41%, the tier 1 risk-based capital ratio was 18.41% and the total risk-based capital ratio was 19.67%.
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.
| SECOND QUARTER REPORT - JUNE 30, 2024 (Unaudited) | |||||||||||
| CW BANCORP | % | ||||||||||
| CONSOLIDATED BALANCE SHEET | Increase | ||||||||||
| (dollars in thousands) | June 30, 2024 | June 30, 2023 | (Decrease) | ||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ |
228,574 |
|
$ |
255,499 |
|
-11 |
% |
|||
| Securities available for sale |
|
121,232 |
|
|
102,357 |
|
18 |
% |
|||
| Securities held-to-maturity |
|
35,037 |
|
|
50,686 |
|
-31 |
% |
|||
| Loans |
|
716,953 |
|
|
747,272 |
|
-4 |
% |
|||
| Less allowance for credit losses (ACL) |
|
(11,489 |
) |
|
(11,042 |
) |
4 |
% |
|||
| Loans, net |
|
705,464 |
|
|
736,230 |
|
-4 |
% |
|||
| Bank premises and equipment, net |
|
3,984 |
|
|
4,683 |
|
-15 |
% |
|||
| Other assets |
|
36,234 |
|
|
31,930 |
|
13 |
% |
|||
| Total assets | $ |
1,130,525 |
|
$ |
1,181,385 |
|
-4 |
% |
|||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Non-interest bearing deposits | $ |
582,750 |
|
$ |
609,859 |
|
-4 |
% |
|||
| Interest bearing deposits |
|
404,226 |
|
|
431,494 |
|
-6 |
% |
|||
| Total deposits |
|
986,976 |
|
|
1,041,353 |
|
-5 |
% |
|||
| Subordinated debenture |
|
50,000 |
|
|
50,000 |
|
0 |
% |
|||
| Other liabilities |
|
13,342 |
|
|
16,370 |
|
-18 |
% |
|||
|
1,050,318 |
|
|
1,107,723 |
|
-5 |
% |
||||
| Stockholders' equity |
|
80,207 |
|
|
73,662 |
|
9 |
% |
|||
| Total liabilities and stockholders' equity | $ |
1,130,525 |
|
$ |
1,181,385 |
|
-4 |
% |
|||
| Shares outstanding at end of period |
|
3,012,375 |
|
|
3,235,711 |
|
|||||
| Book value per share | $ |
29.92 |
|
$ |
26.18 |
|
|||||
| Total loans to total deposits |
|
72.64 |
% |
|
71.76 |
% |
|||||
| ACL to total loans |
|
1.60 |
% |
|
1.49 |
% |
|||||
| Nonperforming assets (non-accrual loans & OREO) | $ |
4,746 |
|
$ |
3,182 |
|
|||||
| COMMERCEWEST BANK CAPITAL RATIOS: | |||||||||||
| Tier 1 leverage ratio |
|
12.06 |
% |
|
10.79 |
% |
|||||
| Common equity tier 1 capital ratio |
|
18.41 |
% |
|
17.94 |
% |
|||||
| Tier 1 risk-based capital ratio |
|
18.41 |
% |
|
17.94 |
% |
|||||
| Total risk-based capital ratio |
|
19.67 |
% |
|
19.20 |
% |
|||||
| CW BANCORP | ||||||||||||||||||||||
| CONSOLIDATED STATEMENT OF INCOME (Unaudited) | Three Months Ended | Increase | For the Six Months Ended | Increase | ||||||||||||||||||
| (dollars in thousands except share and per share data) | June 30, 2024 | June 30, 2023 | (Decrease) | June 30, 2024 | June 30, 2023 | (Decrease) | ||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||||
| Loans | $ |
9,981 |
|
$ |
9,978 |
|
0 |
% |
$ |
19,790 |
|
$ |
19,882 |
|
0 |
% |
||||||
| Investments |
|
1,175 |
|
|
1,027 |
|
14 |
% |
|
2,292 |
|
|
2,185 |
|
5 |
% |
||||||
| Fed funds sold and other |
|
2,188 |
|
|
2,508 |
|
-13 |
% |
|
3,503 |
|
|
3,450 |
|
2 |
% |
||||||
| Total interest income |
|
13,344 |
|
|
13,513 |
|
-1 |
% |
|
25,585 |
|
|
25,517 |
|
0 |
% |
||||||
| INTEREST EXPENSE | ||||||||||||||||||||||
| Deposits |
|
3,104 |
|
|
2,644 |
|
17 |
% |
|
5,749 |
|
|
4,311 |
|
33 |
% |
||||||
| Subordinated debenture |
|
469 |
|
|
469 |
|
0 |
% |
|
938 |
|
|
938 |
|
0 |
% |
||||||
| Other borrowings |
|
- |
|
|
- |
|
- |
|
|
- |
|
|
9 |
|
-100 |
% |
||||||
| Total interest expense |
|
3,573 |
|
|
3,113 |
|
15 |
% |
|
6,687 |
|
|
5,258 |
|
27 |
% |
||||||
| NET INTEREST INCOME BEFORE CREDIT LOSS PROVISION |
|
9,771 |
|
|
10,400 |
|
-6 |
% |
|
18,898 |
|
|
20,259 |
|
-7 |
% |
||||||
| PROVISION FOR CREDIT LOSSES |
|
- |
|
|
99 |
|
-100 |
% |
|
- |
|
|
174 |
|
-100 |
% |
||||||
| Non-interest income: | ||||||||||||||||||||||
| NET INTEREST INCOME AFTER CREDIT LOSS PROVISION |
|
9,771 |
|
|
10,301 |
|
-5 |
% |
|
18,898 |
|
|
20,085 |
|
-6 |
% |
||||||
| NON-INTEREST INCOME | ||||||||||||||||||||||
| Service Charges and Fees on Deposits |
|
927 |
|
|
1,318 |
|
-30 |
% |
|
1,832 |
|
|
2,409 |
|
-24 |
% |
||||||
| Loss on Sale of AFS Securities |
|
- |
|
|
- |
|
- |
|
|
- |
|
|
(166 |
) |
-100 |
% |
||||||
| Other Fees |
|
292 |
|
|
344 |
|
-15 |
% |
|
595 |
|
|
672 |
|
-11 |
% |
||||||
| NON-INTEREST EXPENSE |
|
6,661 |
|
|
6,041 |
|
10 |
% |
|
12,837 |
|
|
10,908 |
|
18 |
% |
||||||
| EARNINGS BEFORE INCOME TAXES |
|
4,329 |
|
|
5,922 |
|
-27 |
% |
|
8,488 |
|
|
12,092 |
|
-30 |
% |
||||||
| INCOME TAXES |
|
1,245 |
|
|
1,708 |
|
-27 |
% |
|
2,411 |
|
|
3,260 |
|
-26 |
% |
||||||
| NET INCOME | $ |
3,084 |
|
$ |
4,214 |
|
-27 |
% |
$ |
6,077 |
|
$ |
8,832 |
|
-31 |
% |
||||||
| Basic earnings per share | $ |
1.02 |
|
$ |
1.29 |
|
-21 |
% |
$ |
1.99 |
|
$ |
2.69 |
|
-26 |
% |
||||||
| Diluted earnings per share | $ |
1.00 |
|
$ |
1.27 |
|
-21 |
% |
$ |
1.96 |
|
$ |
2.64 |
|
-26 |
% |
||||||
| Return on Assets |
|
1.14 |
% |
|
1.45 |
% |
-21 |
% |
|
1.16 |
% |
|
1.57 |
% |
-26 |
% |
||||||
| Return on Equity |
|
16.10 |
% |
|
22.87 |
% |
-30 |
% |
|
15.80 |
% |
|
24.42 |
% |
-35 |
% |
||||||
| Return on Tangible Equity |
|
16.77 |
% |
|
23.85 |
% |
-30 |
% |
|
16.45 |
% |
|
25.49 |
% |
-35 |
% |
||||||
| Efficiency Ratio |
|
60.28 |
% |
|
49.83 |
% |
21 |
% |
|
59.86 |
% |
|
46.43 |
% |
29 |
% |
||||||
| CW BANCORP | |||||||||||||||||
| CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS | |||||||||||||||||
| Three Months Ended June 30, | |||||||||||||||||
2024 |
2023 |
||||||||||||||||
| Average Balance |
Interest Income / Expense |
Yield / Cost |
Average Balance |
Interest Income / Expense |
Yield / Cost |
||||||||||||
| (dollars in thousands) | |||||||||||||||||
| INTEREST EARNING ASSETS | |||||||||||||||||
| Int Bearing Due from Banks & FFS | $ |
150,396 |
$ |
2,049 |
5.48 |
% |
$ |
187,693 |
$ |
2,396 |
5.12 |
% |
|||||
| Investment Securities (1) |
|
156,862 |
|
1,235 |
3.17 |
% |
|
155,438 |
|
1,088 |
2.81 |
% |
|||||
| Loans |
|
721,573 |
|
9,981 |
5.56 |
% |
|
757,153 |
|
9,978 |
5.29 |
% |
|||||
| FHLB & Other Stocks |
|
7,100 |
|
139 |
7.87 |
% |
|
6,983 |
|
112 |
6.43 |
% |
|||||
| Total interest-earning assets |
|
1,035,931 |
|
13,404 |
5.20 |
% |
|
1,107,267 |
|
13,574 |
4.92 |
% |
|||||
| Noninterest-earning assets |
|
48,448 |
|
61,242 |
|||||||||||||
| Total assets | $ |
1,084,379 |
$ |
1,168,509 |
|||||||||||||
| INTEREST EARNING LIABILITIES | |||||||||||||||||
| Interest Bearing Deposits | $ |
380,310 |
$ |
3,104 |
3.28 |
% |
$ |
437,694 |
$ |
2,644 |
2.42 |
% |
|||||
| Other Borrowings |
|
1 |
|
- |
0.00 |
% |
|
- |
|
- |
- |
|
|||||
| Subordinated Debenture |
|
50,000 |
|
469 |
3.75 |
% |
|
50,000 |
|
469 |
3.75 |
% |
|||||
| Total interest-earning liabilities |
|
430,311 |
|
3,573 |
3.34 |
% |
|
487,694 |
|
3,113 |
2.56 |
% |
|||||
| Noninterest-earning liabilities | |||||||||||||||||
| Demand Deposits |
|
563,105 |
|
593,612 |
|||||||||||||
| Other Liabilities |
|
13,933 |
|
13,271 |
|||||||||||||
| Shareholders' Equity |
|
77,030 |
|
73,932 |
|||||||||||||
| Total liabilities and shareholder's equity | $ |
1,084,379 |
$ |
1,168,509 |
|||||||||||||
| Net Interest Spread | $ |
9,831 |
1.86 |
% |
$ |
10,461 |
2.36 |
% |
|||||||||
| Net Interest Margin | 3.82 |
% |
3.79 |
% |
|||||||||||||
| Total Deposits | $ |
943,415 |
$ |
3,104 |
1.32 |
% |
$ |
1,031,306 |
$ |
2,644 |
1.03 |
% |
|||||
| Total Funding Costs | $ |
993,416 |
$ |
3,573 |
1.45 |
% |
$ |
1,081,306 |
$ |
3,113 |
1.15 |
% |
|||||
(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 | |||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||
2024 |
2023 |
||||||||||||||||
| Average Balance |
Interest Income / Expense |
Yield / Cost |
Average Balance |
Interest Income / Expense |
Yield / Cost |
||||||||||||
| (dollars in thousands) | |||||||||||||||||
| INTEREST EARNING ASSETS | |||||||||||||||||
| Int Bearing Due from Banks & FFS | $ |
118,279 |
$ |
3,217 |
5.47 |
% |
$ |
130,527 |
$ |
3,232 |
4.99 |
% |
|||||
| Investment Securities (1) |
|
158,629 |
|
2,412 |
3.06 |
% |
|
164,012 |
|
2,338 |
2.87 |
% |
|||||
| Loans |
|
721,422 |
|
19,790 |
5.52 |
% |
|
768,619 |
|
19,882 |
5.22 |
% |
|||||
| FHLB & Other Stocks |
|
7,100 |
|
286 |
8.10 |
% |
|
6,745 |
|
218 |
6.52 |
% |
|||||
| Total interest-earning assets |
|
1,005,430 |
|
25,705 |
5.14 |
% |
|
1,069,903 |
|
25,670 |
4.84 |
% |
|||||
| Noninterest-earning assets |
|
47,792 |
|
61,144 |
|||||||||||||
| Total assets | $ |
1,053,222 |
$ |
1,131,047 |
|||||||||||||
| INTEREST EARNING LIABILITIES | |||||||||||||||||
| Interest Bearing Deposits | $ |
359,520 |
$ |
5,749 |
3.22 |
% |
$ |
409,825 |
$ |
4,311 |
2.12 |
% |
|||||
| Other Borrowings |
|
1 |
|
- |
0.00 |
% |
|
365 |
|
9 |
4.97 |
% |
|||||
| Subordinated Debenture |
|
50,000 |
|
938 |
3.75 |
% |
|
50,000 |
|
938 |
3.75 |
% |
|||||
| Total interest-earning liabilities |
|
409,521 |
|
6,687 |
3.28 |
% |
|
460,190 |
|
5,258 |
2.30 |
% |
|||||
| Noninterest-earning liabilities | |||||||||||||||||
| Demand Deposits |
|
552,319 |
|
584,658 |
|||||||||||||
| Other Liabilities |
|
14,021 |
|
13,259 |
|||||||||||||
| Shareholders' Equity |
|
77,361 |
|
72,940 |
|||||||||||||
| Total liabilities and shareholder's equity | $ |
1,053,222 |
$ |
1,131,047 |
|||||||||||||
| Net Interest Spread | $ |
19,018 |
1.86 |
% |
$ |
20,412 |
2.54 |
% |
|||||||||
| Net Interest Margin | 3.80 |
% |
3.85 |
% |
|||||||||||||
| Total Deposits | $ |
911,839 |
$ |
5,749 |
1.27 |
% |
$ |
994,483 |
$ |
4,311 |
0.87 |
% |
|||||
| Total Funding Costs | $ |
961,840 |
$ |
6,687 |
1.40 |
% |
$ |
1,044,848 |
$ |
5,258 |
1.01 |
% |
|||||
(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/20240731053378/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"
