CW Bancorp (OTCQX: CWBK), the parent company (“the Company”) of CommerceWest Bank (the “Bank”) reported consolidated net income for the first quarter of 2023 of $4,618,000 or $1.37 per diluted share as compared to $4,058,000 or $1.15 per diluted share for the first quarter of 2022, an EPS increase of 19%.
Key Financial Results for the three months ended March 31, 2023:
- EPS of $1.37 up 19%
- Net income growth of 14%
- ROTE of 27.19% up 16%
- ROA of 1.71% up 35%
- Net interest income of $9.9 million, up 15%
- Net interest margin of 3.91%, up 37%
- Efficiency ratio of 42.81%
- ALLL to total loans ratio (net of PPP loans) of 1.44%
- Liquid funds to total deposits ratio of 15%
- No outstanding FRB or FHLB borrowings
- Non-interest bearing deposits to total deposits of 58%
- Bank tier 1 leverage ratio of 11.36% and total risk based capital ratio of 18.51%
- 53 quarters of consecutive profits
Mr. Ivo A. Tjan, Chairman and CEO commented, “The Company has reported strong results for the first quarter, with a ROA up 35%, a ROTE up 16%, EPS growth of 19%, and net income growth of 14%.” Mr. Tjan added, “We maintained a strong level of liquidity with a low leveraged balance sheet and 58% of our deposits were non-interest bearing. The Bank continues with our fortress balance sheet approach that includes strong capital ratios, a strong liquidity position, a well-diversified deposit base and prudent underwriting standards. We sincerely appreciated the continued loyalty and trust from our clients and look forward to welcoming new client relationships and expanding current relationships in 2023.”
Total asset decreased $150.7 million as of March 31, 2023, a decrease of 12% as compared to the same period one year ago. The Bank’s 2022 business objectives included deleveraging the Bank in order to strengthen capital ratios in anticipation of a recession. Total loans decreased $28.3 million as of March 31, 2023, a decrease of 4% from the prior year. Excluding PPP loans, total loans decreased $6.6 million as of March 31, 2023, a decrease of 1% as compared to the same period one year ago. The Bank remains prudent and conservative about credit quality. Cash and due from banks decreased $99.6 million or 34% from the prior year. Total investment securities decreased $25.9 million, a decrease of 14% from prior year. Total deposits decreased $154.3 million as of March 31, 2023, a decrease of 13% from March 31, 2022. Non-interest-bearing deposits decreased $111.0 million as of March 31, 2023, a decrease of 16% over the prior year. Interest bearing deposits decreased $43.3 million as of March 31, 2023, a decrease of 9% from the prior period.
Interest income was $12,004,000 for the three months ended March 31, 2023, as compared to $9,172,000 for the three months ended March 31, 2022, an increase of 31%. Interest expense was $2,145,000 for the three months ended March 31, 2023, as compared to $636,000 for the three months ended March 31, 2022, an increase of 237%. Interest expense was up for the quarter due to the rising cost of deposits.
Net interest income for the three months ended March 31, 2023, was $9,859,000 compared to $8,536,000 for the three months ended March 31, 2022, an increase of 15%. The net interest margin increased for the three months ended March 31, 2023. It increased from 2.85% in 2022 to 3.91% in 2023, an increase of 37%.
Provision for loan losses for the three months ended March 31, 2023, was $75,000 compared to $125,000 for the three months ended March 31, 2022, a decrease of 40%.
Non-interest income for the three months ended March 31, 2023, was $1,253,000 compared to $1,394,000 for the same period last year, a decrease of 10%.
Non-interest expense for the three months ended March 31, 2023, was $4,867,000 compared to $4,186,000 for the same period last year, an increase of 16%.
The efficiency ratio for the three months ended March 31, 2023, was 42.81% compared to 41.73% in 2022, which represents an increase of 3%. The efficiency ratio illustrates that for every dollar made for the three-month period ending March 31, 2023, it costs $0.4281 to make it, as compared to $0.4173 one year ago.
Capital ratio for the Bank remain above the level required for a "well capitalized" institution as designated by regulatory agencies. As of March 31, 2023, the tier 1 leverage ratio was 11.36%, the common equity tier 1 capital ratio was 17.26%, the tier 1 risk-based capital ratio was 17.26% and the total risk-based capital ratio was 18.51%.
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, 2023 (Unaudited) | |||||||||||
| CW BANCORP | % | ||||||||||
| CONSOLIDATED BALANCE SHEET | Increase | ||||||||||
| (dollars in thousands) | March 31, 2023 | March 31, 2022 | (Decrease) | ||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ |
191,912 |
|
$ |
291,466 |
|
-34 |
% |
|||
| Securities available for sale |
|
104,734 |
|
|
139,427 |
|
-25 |
% |
|||
| Securities held-to-maturity |
|
50,747 |
|
|
41,910 |
|
21 |
% |
|||
| Loans (PPP loans $4,500 and $26,136 at 2023 and 2022, respectively) |
|
765,937 |
|
|
794,206 |
|
-4 |
% |
|||
| Less allowance for credit losses |
|
(10,967 |
) |
|
(9,835 |
) |
12 |
% |
|||
| Loans, net |
|
754,970 |
|
|
784,371 |
|
-4 |
% |
|||
| Bank premises and equipment, net |
|
4,893 |
|
|
5,673 |
|
-14 |
% |
|||
| Other assets |
|
31,615 |
|
|
26,729 |
|
18 |
% |
|||
| Total assets | $ |
1,138,871 |
|
$ |
1,289,576 |
|
-12 |
% |
|||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Non-interest bearing deposits | $ |
582,599 |
|
|
693,572 |
|
-16 |
% |
|||
| Interest bearing deposits |
|
421,277 |
|
|
464,574 |
|
-9 |
% |
|||
| Total deposits |
|
1,003,876 |
|
|
1,158,146 |
|
-13 |
% |
|||
| Subordinated debenture |
|
50,000 |
|
|
50,000 |
|
0 |
% |
|||
| Other liabilities |
|
12,616 |
|
|
12,076 |
|
4 |
% |
|||
|
1,066,492 |
|
|
1,220,222 |
|
-13 |
% |
||||
| Stockholders' equity |
|
72,379 |
|
|
69,354 |
|
4 |
% |
|||
| Total liabilities and stockholders' equity | $ |
1,138,871 |
|
$ |
1,289,576 |
|
-12 |
% |
|||
| Shares outstanding at end of period |
|
3,289,444 |
|
|
3,425,979 |
|
|||||
| Book value per share | $ |
25.17 |
|
$ |
21.63 |
|
|||||
| Total loans to total deposits |
|
76.30 |
% |
|
68.58 |
% |
|||||
| ALLL to total loans (net of PPP loans) |
|
1.44 |
% |
|
1.28 |
% |
|||||
| Nonperforming assets (non-accrual loans & OREO) | $ |
3,263 |
|
$ |
- |
|
|||||
| COMMERCEWEST BANK CAPITAL RATIOS: | |||||||||||
| Tier 1 leverage ratio |
|
11.36 |
% |
|
8.98 |
% |
|||||
| Common equity tier 1 capital ratio |
|
17.26 |
% |
|
15.02 |
% |
|||||
| Tier 1 risk-based capital ratio |
|
17.26 |
% |
|
15.02 |
% |
|||||
| Total risk-based capital ratio |
|
18.51 |
% |
|
16.27 |
% |
|||||
| CW BANCORP | |||||||||||
| CONSOLIDATED STATEMENT OF INCOME (Unaudited) | Three Months Ended | Increase | |||||||||
| (dollars in thousands except share and per share data) | March 31, 2023 | March 31, 2022 | (Decrease) | ||||||||
| INTEREST INCOME | |||||||||||
| Loans | $ |
9,904 |
|
$ |
7,942 |
|
25 |
% |
|||
| Investment securities |
|
1,158 |
|
|
978 |
|
18 |
% |
|||
| Fed funds sold and other |
|
942 |
|
|
252 |
|
274 |
% |
|||
| Total interest income |
|
12,004 |
|
|
9,172 |
|
31 |
% |
|||
| INTEREST EXPENSE | |||||||||||
| Deposits |
|
1,667 |
|
|
167 |
|
898 |
% |
|||
| Subordinated debenture |
|
469 |
|
|
469 |
|
0 |
% |
|||
| Other borrowings |
|
9 |
|
|
- |
|
- |
|
|||
| Total interest expense |
|
2,145 |
|
|
636 |
|
237 |
% |
|||
| NET INTEREST INCOME BEFORE PROVISION |
|
9,859 |
|
|
8,536 |
|
15 |
% |
|||
| PROVISION FOR CREDIT LOSSES |
|
75 |
|
|
125 |
|
-40 |
% |
|||
| NET INTEREST INCOME AFTER CREDIT LOSS PROVISION |
|
9,784 |
|
|
8,411 |
|
16 |
% |
|||
| NON-INTEREST INCOME | |||||||||||
| Service Charges and Fees on Deposits |
|
1,091 |
|
|
992 |
|
10 |
% |
|||
| Loss on Sale of AFS Securities |
|
(166 |
) |
|
- |
|
- |
|
|||
| Other Fees |
|
328 |
|
|
402 |
|
-18 |
% |
|||
| NON-INTEREST EXPENSE |
|
4,867 |
|
|
4,186 |
|
16 |
% |
|||
| EARNINGS BEFORE INCOME TAXES |
|
6,170 |
|
|
5,619 |
|
10 |
% |
|||
| INCOME TAXES |
|
1,552 |
|
|
1,561 |
|
-1 |
% |
|||
| NET INCOME | $ |
4,618 |
|
$ |
4,058 |
|
14 |
% |
|||
| Basic earnings per share | $ |
1.40 |
|
$ |
1.18 |
|
19 |
% |
|||
| Diluted earnings per share | $ |
1.37 |
|
$ |
1.15 |
|
19 |
% |
|||
| Return on Assets |
|
1.71 |
% |
|
1.27 |
% |
35 |
% |
|||
| Return on Equity |
|
26.03 |
% |
|
22.47 |
% |
16 |
% |
|||
| Return on Tangible Equity |
|
27.19 |
% |
|
23.45 |
% |
16 |
% |
|||
| Efficiency Ratio |
|
42.81 |
% |
|
41.73 |
% |
3 |
% |
|||
| CW BANCORP | ||||||||||||||||||
| CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS | ||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||
2023 |
2022 |
|||||||||||||||||
| 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 | $ |
72,725 |
$ |
835 |
4.66 |
% |
$ |
264,578 |
$ |
204 |
0.31 |
% |
||||||
| Investment Securities (1) |
|
172,680 |
|
1,250 |
2.94 |
% |
|
177,667 |
|
1,078 |
2.46 |
% |
||||||
| Loans |
|
780,214 |
|
9,904 |
5.15 |
% |
|
783,759 |
|
7,942 |
4.11 |
% |
||||||
| FHLB & Other Stocks |
|
6,504 |
|
107 |
6.67 |
% |
|
4,293 |
|
49 |
4.63 |
% |
||||||
| Total interest-earning assets |
|
1,032,123 |
|
12,096 |
4.75 |
% |
|
1,230,297 |
|
9,273 |
3.06 |
% |
||||||
| Noninterest-earning assets |
|
61,046 |
|
61,410 |
||||||||||||||
| Total assets | $ |
1,093,169 |
$ |
1,291,707 |
||||||||||||||
| INTEREST EARNING LIABILITIES | ||||||||||||||||||
| Interest Bearing Deposits | $ |
381,648 |
$ |
1,667 |
1.77 |
% |
|
483,834 |
|
167 |
0.14 |
% |
||||||
| Other Borrowings |
|
734 |
|
9 |
4.91 |
% |
|
1 |
|
- |
0.00 |
% |
||||||
| Subordinated Debenture |
|
50,000 |
|
469 |
3.75 |
% |
|
50,000 |
|
469 |
3.75 |
% |
||||||
| Total interest-earning liabilities |
|
432,382 |
|
2,145 |
2.01 |
% |
|
533,835 |
|
636 |
0.48 |
% |
||||||
| Noninterest-earning liabilities | ||||||||||||||||||
| Demand Deposits |
|
575,604 |
|
671,349 |
||||||||||||||
| Other Liabilities |
|
13,247 |
|
13,276 |
||||||||||||||
| Shareholders' Equity |
|
71,936 |
|
73,247 |
||||||||||||||
| Total liabilities and shareholder's equity | $ |
1,093,169 |
$ |
1,291,707 |
||||||||||||||
| Net Interest Spread | $ |
9,951 |
2.74 |
% |
$ |
8,637 |
2.58 |
% |
||||||||||
| Net Interest Margin | 3.91 |
% |
2.85 |
% |
||||||||||||||
| Total Deposits | $ |
957,252 |
$ |
1,667 |
0.71 |
% |
$ |
1,155,183 |
$ |
167 |
0.06 |
% |
||||||
| Total Funding Costs | $ |
1,007,986 |
$ |
2,145 |
0.86 |
% |
$ |
1,205,184 |
$ |
636 |
0.21 |
% |
||||||
| (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/20230427005376/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"
