CW Bancorp (OTCQX: CWBK), the parent company (“the Company”) of CommerceWest Bank (the “Bank”) reported consolidated net income for the first quarter of 2022 of $4,058,000 or $1.15 a share as compared to $3,647,000 or $0.99 a share for the first quarter of 2021, an EPS increase of 16%.
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Irvine, California Corporate Headquarters (Photo: Business Wire)
Key Financial Results for the three months ended March 31, 2022:
- Net income growth of 11%
- EPS of $1.15 up 16%
- ROTE of 23.45% up 10%
- ROA of 1.27%
- Total asset growth of $106 million up 9%
- Loan growth of $113 million up 17%
- Deposit growth of $88 million up 8%
- Noninterest-bearing deposits as percent of total deposits at 60%
- Loan to deposit ratio of 69%, up 8%
- Cost of deposits of 0.06% down 47%
- Efficiency ratio of 41.73%
- Net interest income up 19%
- Zero nonperforming loans
- ALLL to total loans ratio (net of PPP loans) of 1.28%
- 49 quarters of consecutive profits
Mr. Ivo Tjan, Chairman and CEO said, “The Company had double digit growth in earnings per share, net income, and return on tangible equity for the first quarter of 2022. In an economic environment with a heightened level of uncertainty, we consider this quite an achievement. We continue to demonstrate the strength of the Bank’s business model and our team’s execution, while maintaining a fortress balance sheet.” Mr. Tjan continued, “The team has successfully transitioned PPP loan portfolio forgiveness into higher yielding loans and investment securities increasing the net interest margin year over year by over 8%. The Bank is positioned well to serve the needs of the California business community in 2022.”
Total assets increased $106.0 million as of March 31, 2022, an increase of 9% as compared to the same period one year ago. Total loans increased $113 million as of March 31, 2022, an increase of 17% over the prior year. Total loans net of PPP loans increased $243 million as of March 31, 2022, an increase of 46%. Cash and due from banks decreased $122 million or 29% from the prior year with the deployment of funds into loans and investment securities. Total investment securities increased $105 million, an increase of 137% from the prior year.
Total deposits increased $88 million as of March 31, 2022, an increase of 8% from March 31, 2021. Non-interest-bearing deposits increased $46 million as of March 31, 2022, an increase of 7% over the prior year. Interest bearing deposits increased $43 million as of March 31, 2022, an increase of 10% over the prior period.
Interest income was $9,172,000 for the three months ended March 31, 2022 as compared to $7,568,000 for the three months ended March 31, 2021, an increase of 21%. Interest expense was $636,000 for the three months ended March 31, 2022 as compared to $372,000 for the three months ended March 31, 2021, an increase of 71% due to the Company adding $50 million in subordinated debt during 2021.
Net interest income for the three months ended March 31, 2022 was $8,536,000 as compared to $7,196,000 for the three months ended March 31, 2021, an increase of 19%. The net interest margin increased for the three months ended March 31, 2022. It increased from 2.63% in 2021 to 2.85% in 2022, an increase of 8.37%.
Provision for loan losses for the three months ended March 31, 2022 was $125,000 compared to zero for the three months ended March 31, 2021. The allowance for loan losses (net of PPP loans) to total loans ratio decreased from 1.79% as of March 31, 2021 to 1.28% as of March 31, 2022.
Non-interest income for the three months ended March 31, 2022 was $1,394,000 compared to $1,107,000 for the same period last year, an increase of 26%.
Non-interest expense for the three months ended March 31, 2022 was $4,186,000 compared to $3,499,000 for the same period last year, an increase of 20%.
The efficiency ratio for the three months ended March 31, 2022 was 41.73% compared to 41.78% in 2021, which represents a decrease of 0.13%. The efficiency ratio illustrates that for every dollar made for the three-month period ending March 31, 2022, it cost $0.4173 to make it, as compared to $0.4178 one year ago.
Capital ratios for the Bank remain above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of March 31, 2022, the tier 1 leverage ratio was 8.98%, the common equity tier 1 capital ratio was 15.02%, the tier 1 risk-based capital ratio was 15.02% and the total risk-based capital ratio was 16.27%.
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.
| FIRST QUARTER REPORT - MARCH 31, 2022 (Unaudited) | ||||||||||
| CW BANCORP | % | |||||||||
| CONSOLIDATED BALANCE SHEET | Increase | |||||||||
| (dollars in thousands) | March 31, 2022 | March 31, 2021 | (Decrease) | |||||||
| ASSETS | ||||||||||
| Cash and due from banks | $ |
291,466 |
|
$ |
413,101 |
|
-29% |
|||
| Securities available for sale |
|
139,427 |
|
|
75,354 |
|
85% |
|||
| Securities held-to-maturity |
|
41,910 |
|
|
1,100 |
|
3710% |
|||
| Loans (PPP loans $26,136 and $157,208 at 2022 and 2021, respectively) |
|
794,206 |
|
|
681,543 |
|
17% |
|||
| Less allowance for loan losses |
|
(9,835 |
) |
|
(9,386 |
) |
5% |
|||
| Loans, net |
|
784,371 |
|
|
672,157 |
|
17% |
|||
| Bank premises and equipment, net |
|
5,673 |
|
|
924 |
|
514% |
|||
| Other assets |
|
26,729 |
|
|
20,910 |
|
28% |
|||
| Total assets | $ |
1,289,576 |
|
$ |
1,183,546 |
|
9% |
|||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Non-interest bearing deposits | $ |
693,572 |
|
$ |
648,006 |
|
7% |
|||
| Interest bearing deposits |
|
464,574 |
|
|
421,907 |
|
10% |
|||
| Total deposits |
|
1,158,146 |
|
|
1,069,913 |
|
8% |
|||
| Subordinated debenture |
|
50,000 |
|
|
32,500 |
|
54% |
|||
| Other liabilities |
|
12,076 |
|
|
9,283 |
|
30% |
|||
|
1,220,222 |
|
|
1,111,696 |
|
10% |
||||
| Stockholders' equity |
|
69,354 |
|
|
71,850 |
|
-3% |
|||
| Total liabilities and stockholders' equity | $ |
1,289,576 |
|
$ |
1,183,546 |
|
9% |
|||
| Shares outstanding at end of period |
|
3,425,979 |
|
|
3,558,292 |
|
||||
| Book value per share | $ |
20.24 |
|
$ |
20.19 |
|
||||
| Book value per share excluding unrealized gains & losses | $ |
21.63 |
|
$ |
19.47 |
|
||||
| Total loans to total deposits |
|
68.58 |
% |
|
63.70 |
% |
||||
| ALLL to total loans (net of PPP loans) |
|
1.28 |
% |
|
1.79 |
% |
||||
| Nonperforming assets (non-accrual loans & OREO) | $ |
- |
|
$ |
- |
|
||||
| COMMERCEWEST BANK CAPITAL RATIOS: | ||||||||||
| Tier 1 leverage ratio |
|
8.98 |
% |
|
7.46 |
% |
||||
| Common equity tier 1 capital ratio |
|
15.02 |
% |
|
14.89 |
% |
||||
| Tier 1 risk-based capital ratio |
|
15.02 |
% |
|
14.89 |
% |
||||
| Total risk-based capital ratio |
|
16.27 |
% |
|
16.15 |
% |
||||
| CW BANCORP | ||||||||||
| CONSOLIDATED STATEMENT OF INCOME (Unaudited) | Three Months Ended | Increase | ||||||||
| (dollars in thousands except share and per share data) | March 31, 2022 | March 31, 2021 | (Decrease) | |||||||
| INTEREST INCOME | ||||||||||
| Loans | $ |
7,942 |
|
$ |
6,798 |
|
17% |
|||
| Investments |
|
978 |
|
|
460 |
|
113% |
|||
| Fed funds sold and other |
|
252 |
|
|
310 |
|
-19% |
|||
| Total interest income |
|
9,172 |
|
|
7,568 |
|
21% |
|||
| INTEREST EXPENSE | ||||||||||
| Deposits |
|
167 |
|
|
304 |
|
-45% |
|||
| Subordinated debenture |
|
469 |
|
|
68 |
|
590% |
|||
| Total interest expense |
|
636 |
|
|
372 |
|
71% |
|||
| NET INTEREST INCOME BEFORE LOAN LOSS PROVISION |
|
8,536 |
|
|
7,196 |
|
19% |
|||
| PROVISION FOR LOAN LOSSES |
|
125 |
|
|
- |
|
100% |
|||
| NET INTEREST INCOME AFTER LOAN LOSS PROVISION |
|
8,411 |
|
|
7,196 |
|
17% |
|||
| NON-INTEREST INCOME | ||||||||||
| Service Charges and Fees on Deposits |
|
992 |
|
|
918 |
|
8% |
|||
| Gain on Sale of Loans |
|
- |
|
|
(4 |
) |
-100% |
|||
| Other Fees |
|
402 |
|
|
193 |
|
108% |
|||
| NON-INTEREST EXPENSE |
|
4,186 |
|
|
3,499 |
|
20% |
|||
| EARNINGS BEFORE INCOME TAXES |
|
5,619 |
|
|
4,804 |
|
17% |
|||
| INCOME TAXES |
|
1,561 |
|
|
1,157 |
|
35% |
|||
| NET INCOME | $ |
4,058 |
|
$ |
3,647 |
|
11% |
|||
| Basic earnings per share | $ |
1.18 |
|
$ |
1.02 |
|
16% |
|||
| Diluted earnings per share | $ |
1.15 |
|
$ |
0.99 |
|
16% |
|||
| Return on Assets |
|
1.27 |
% |
|
1.26 |
% |
1% |
|||
| Return on Equity |
|
22.47 |
% |
|
20.50 |
% |
10% |
|||
| Return on Tangible Equity |
|
23.45 |
% |
|
21.40 |
% |
10% |
|||
| Efficiency Ratio |
|
41.73 |
% |
|
41.78 |
% |
0% |
|||
| Cost of Deposits |
|
0.06 |
% |
|
0.11 |
% |
-47% |
|||
| Net Interest Margin |
|
2.85 |
% |
|
2.63 |
% |
8% |
|||
| CW BANCORP | ||||||||||||||||
| CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS | ||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||
2022 |
2021 |
|||||||||||||||
| 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 | $ |
264,578 |
$ |
204 |
0.31% |
$ |
397,579 |
$ |
274 |
0.28% |
||||||
| Investment Securities (1) |
|
177,667 |
|
1,078 |
2.46% |
|
76,221 |
|
526 |
2.80% |
||||||
| Loans |
|
783,759 |
|
7,942 |
4.11% |
|
643,539 |
|
6,798 |
4.28% |
||||||
| FHLB & Other Stocks |
|
4,293 |
|
49 |
4.63% |
|
2,995 |
|
36 |
4.87% |
||||||
| Total interest-earning assets | $ |
1,230,297 |
$ |
9,273 |
3.06% |
$ |
1,120,334 |
$ |
7,634 |
2.76% |
||||||
| Noninterest-earning assets |
|
61,410 |
|
52,229 |
||||||||||||
| Total assets | $ |
1,291,707 |
$ |
1,172,563 |
||||||||||||
| INTEREST EARNING LIABILITIES | ||||||||||||||||
| Interest Bearing Deposits | $ |
483,834 |
$ |
167 |
0.14% |
$ |
456,435 |
$ |
304 |
0.27% |
||||||
| Other Borrowings |
|
1 |
|
- |
0.00% |
|
1 |
|
- |
0.00% |
||||||
| Subordinated Debenture |
|
50,000 |
|
469 |
3.75% |
|
7,222 |
|
68 |
3.75% |
||||||
| Total interest-earning liabilities | $ |
533,835 |
$ |
636 |
0.48% |
$ |
463,658 |
$ |
372 |
0.33% |
||||||
| Noninterest-earning liabilities | ||||||||||||||||
| Demand Deposits |
|
671,349 |
|
629,858 |
||||||||||||
| Other Liabilities |
|
13,276 |
|
7,027 |
||||||||||||
| Shareholders' Equity |
|
73,247 |
|
72,020 |
||||||||||||
| Total liabilities and shareholder's equity | $ |
1,291,707 |
$ |
1,172,563 |
||||||||||||
| Net Interest Spread | $ |
8,637 |
2.58% |
$ |
7,262 |
2.43% |
||||||||||
| Net Interest Margin | 2.85% |
2.63% |
||||||||||||||
| Total Deposits | $ |
1,155,183 |
$ |
167 |
0.06% |
$ |
1,086,293 |
$ |
304 |
0.11% |
||||||
| Total Funding Costs | $ |
1,205,184 |
$ |
636 |
0.21% |
$ |
1,093,516 |
$ |
372 |
0.14% |
||||||
| (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/20220428005245/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"
