CW Bancorp (OTCQX: CWBK), the parent company (“the Company”) of CommerceWest Bank (the “Bank”) reported consolidated net income for the fourth quarter of 2022 of $4,521,000 or $1.32 per diluted share as compared to $3,974,000 or $1.11 per diluted share for the fourth quarter of 2021, an EPS increase of 19%. The consolidated net income for the twelve months ended December 31, 2022 was $17,361,000 or $5.00 per diluted share as compared to $14,179,000 or $3.95 per diluted share for the twelve months ended December 31, 2021, an EPS increase of 27%.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230126005241/en/
Corporate Headquarters located in Irvine, California (Photo: Business Wire)
Key Financial Results for the three months ended December 31, 2022:
- EPS of $1.32 up 19%
- Net income of $4.5 million up 14%
- ROTE of 28.01% up 25%
- ROA of 1.60% up 36%
- Net interest income of $9.9 million up 31%
- Net interest margin of 3.74% up 58%
- Efficiency ratio of 41.76%
- ALLL to total loans ratio (net of PPP loans) of 1.38%
- 52 quarters of consecutive profits
Key Financial Results for the twelve months ended December 31, 2022:
- Record net income of $17.4 million up 22%
- Record EPS of $5.00 up 27%
- ROTE of 26.14% up 29%
- ROA of 1.45% up 27%
- Net interest income of $37.3 million up 32%
- Net interest margin of 3.34% up 38%
- Efficiency ratio of 41.30%
Mr. Ivo Tjan, Chairman and CEO commented, “The Company is proud to have achieved record earnings, EPS and ROTE in a period of aggressively rising interest rates and high inflation, while delivering a healthy dividend to our shareholders.” Mr. Tjan added, “We are prepared for a possible economic slowdown or recession by maintaining strong capital ratios and a fortress balance sheet, so we can continue to serve our clients and communities. Our team is also committed to continuously investing in our franchise and innovating to build long term shareholder value. Lastly, I want to thank our amazing employees who make it happen every day. Bank on the Difference!”
Total asset increased $71.9 million as of December 31, 2022, an increase of 5% as compared to the same period one year ago. Total loans increased $26.9 million as of December 31, 2022, an increase of 4% over the prior year. Total loans net of PPP loans increased $76.2 million as of December 31, 2022, an increase of 11% as compared to the same period one year ago. Cash and due from banks increased $40.3 million or 10% from the prior year. Total investment securities decreased $1.9 million, a decrease of 1% from prior year.
Total deposits increased $75.0 million as of December 31, 2022, an increase of 6% from December 31, 2021. Non-interest-bearing deposits decreased $115.2 million as of December 31, 2022, a decrease of 16% from the prior year. Interest-bearing deposits increased $190.3 million as of December 31, 2022, an increase of 36% over the prior year.
Interest income was $11,768,000 for the three months ended December 31, 2022 as compared to $8,113,000 for the three months ended December 31, 2021, an increase of 45%. Interest expense was $1,877,000 for the three months ended December 31, 2022 as compared to $545,000 for the three months ended December 31, 2021, an increase of 244%. 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 $41,320,000 for the twelve months ended December 31, 2022 as compared to $30,209,000 for the twelve months ended December 31, 2021, an increase of 37%. Interest expense was $3,997,000 for the twelve months ended December 31, 2022 as compared to $2,024,000 for the twelve months ended December 31, 2021, an increase of 97%.
Net interest income for the three months ended December 31, 2022 was $9,891,000 compared to $7,568,000 for the three months ended December 31, 2021, an increase of 31%. The net interest margin increased for the three months ended December 31, 2022. It increased from 2.37% in 2021 to 3.74% in 2022, an increase of 58%. Net interest income for the twelve months ended December 31, 2022 was $37,323,000 compared to $28,185,000 for the twelve months ended December 31, 2021, an increase of 32%. The net interest margin increased for the twelve months ended December 31, 2022. It increased from 2.42% in 2021 to 3.34% in 2022, an increase of 38%.
Provision for loan losses for the three months ended December 31, 2022 was $400,000 compared to $525,000 for the three months ended December 31, 2021. Provision for loan losses for the twelve months ended December 31, 2022 was $1,200,000 compared to $525,000 for the twelve months ended December 31, 2021.
Non-interest income for the three months ended December 31, 2022 was $1,589,000 compared to $2,275,000 for the same period last year, a decrease of 30%. Non-interest income for the twelve months ended December 31, 2022 was $6,062,000 compared to $6,155,000 for the same period last year, a decrease of 2%.
Non-interest expense for the three months ended December 31, 2022 was $4,835,000 compared to $4,232,000 for the same period last year, an increase of 14%. Non-interest expense for the twelve months ended December 31, 2022 was $18,083,000 compared to $15,220,000 for the same period last year, an increase of 19%.
The efficiency ratio for the three months ended December 31, 2022 was 41.76% compared to 42.58% in 2021, which represents a decrease of 2%. The efficiency ratio illustrates that for every dollar made for the three-month period ending December 31, 2022, it costs $0.4176 to make it, as compared to $0.4258 one year ago. The efficiency ratio for the twelve months ended December 31, 2022 was 41.30% compared to 43.93% in 2021, which represents a decrease of 6%.
Capital ratio for the Bank remain above the level required for a "well capitalized" institution as designated by regulatory agencies. As of December 31, 2022, the tier 1 leverage ratio was 11.01%, the common equity tier 1 capital ratio was 15.57%, the tier 1 risk-based capital ratio was 15.57% and the total risk-based capital ratio was 16.82%.
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.
| FOURTH QUARTER REPORT - December 31, 2022 (Unaudited) | |||||||||||
| CW BANCORP | % | ||||||||||
| CONSOLIDATED BALANCE SHEET | Increase | ||||||||||
| (dollars in thousands) | Dec 31, 2022 | Dec 31, 2021 | (Decrease) | ||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ |
438,433 |
|
$ |
398,121 |
|
10 |
% |
|||
| Securities available for sale |
|
124,682 |
|
|
150,523 |
|
-17 |
% |
|||
| Securities held-to-maturity |
|
51,613 |
|
|
27,688 |
|
86 |
% |
|||
| Loans (PPP loans $4,527 and $53,818 at 2022 and 2021, respectively) |
|
794,383 |
|
|
767,450 |
|
4 |
% |
|||
| Less allowance for loan losses |
|
(10,892 |
) |
|
(9,710 |
) |
12 |
% |
|||
| Loans, net |
|
783,491 |
|
|
757,740 |
|
3 |
% |
|||
| Bank premises and equipment, net |
|
5,053 |
|
|
5,883 |
|
-14 |
% |
|||
| Other assets |
|
34,574 |
|
|
25,970 |
|
33 |
% |
|||
| Total assets | $ |
1,437,846 |
|
$ |
1,365,925 |
|
5 |
% |
|||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Non-interest bearing deposits | $ |
584,722 |
|
$ |
699,968 |
|
-16 |
% |
|||
| Interest bearing deposits |
|
719,348 |
|
|
529,082 |
|
36 |
% |
|||
| Total deposits |
|
1,304,070 |
|
|
1,229,050 |
|
6 |
% |
|||
| Subordinated debenture |
|
50,000 |
|
|
50,000 |
|
0 |
% |
|||
| Other liabilities |
|
14,156 |
|
|
13,340 |
|
6 |
% |
|||
|
1,368,226 |
|
|
1,292,390 |
|
6 |
% |
||||
| Stockholders' equity |
|
69,620 |
|
|
73,535 |
|
-5 |
% |
|||
| Total liabilities and stockholders' equity | $ |
1,437,846 |
|
$ |
1,365,925 |
|
5 |
% |
|||
| Shares outstanding at end of period |
|
3,314,358 |
|
|
3,437,891 |
|
|||||
| Book value per share | $ |
24.57 |
|
$ |
20.76 |
|
|||||
| Total loans to total deposits |
|
60.92 |
% |
|
62.44 |
% |
|||||
| ALLL to total loans (net of PPP loans) |
|
1.38 |
% |
|
1.36 |
% |
|||||
| Nonperforming assets (non-accrual loans & OREO) | $ |
522 |
|
$ |
- |
|
|||||
| COMMERCEWEST BANK CAPITAL RATIOS: | |||||||||||
| Tier 1 leverage ratio |
|
11.01 |
% |
|
8.38 |
% |
|||||
| Common equity tier 1 capital ratio |
|
15.57 |
% |
|
15.17 |
% |
|||||
| Tier 1 risk-based capital ratio |
|
15.57 |
% |
|
15.17 |
% |
|||||
| Total risk-based capital ratio |
|
16.82 |
% |
|
16.42 |
% |
|||||
| CW BANCORP | ||||||||||||||||||||||
| CONSOLIDATED STATEMENT OF INCOME (Unaudited) | Three Months Ended | Increase | For the Twelve Months Ended | Increase | ||||||||||||||||||
| (dollars in thousands except share and per share data) | Dec 31, 2022 | Dec 31, 2021 | (Decrease) | Dec 31, 2022 | Dec 31, 2021 | (Decrease) | ||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||||
| Loans | $ |
9,543 |
|
$ |
6,865 |
|
39 |
% |
$ |
34,566 |
|
$ |
26,496 |
|
30 |
% |
||||||
| Investments |
|
1,173 |
|
|
917 |
|
28 |
% |
|
4,343 |
|
|
2,490 |
|
74 |
% |
||||||
| Fed funds sold and other |
|
1,052 |
|
|
331 |
|
218 |
% |
|
2,411 |
|
|
1,223 |
|
97 |
% |
||||||
| Total interest income |
|
11,768 |
|
|
8,113 |
|
45 |
% |
|
41,320 |
|
|
30,209 |
|
37 |
% |
||||||
| INTEREST EXPENSE | ||||||||||||||||||||||
| Deposits |
|
1,406 |
|
|
187 |
|
652 |
% |
|
2,114 |
|
|
993 |
|
113 |
% |
||||||
| Subordinated debenture |
|
469 |
|
|
358 |
|
31 |
% |
|
1,875 |
|
|
1,031 |
|
82 |
% |
||||||
| Other borrowings |
|
2 |
|
|
- |
|
100 |
% |
|
8 |
|
|
- |
|
100 |
% |
||||||
| Total interest expense |
|
1,877 |
|
|
545 |
|
244 |
% |
|
3,997 |
|
|
2,024 |
|
97 |
% |
||||||
| NET INTEREST INCOME BEFORE LOAN LOSS PROVISION |
|
9,891 |
|
|
7,568 |
|
31 |
% |
|
37,323 |
|
|
28,185 |
|
32 |
% |
||||||
| PROVISION FOR LOAN LOSSES |
|
400 |
|
|
525 |
|
-24 |
% |
|
1,200 |
|
|
525 |
|
129 |
% |
||||||
| Non-interest income: | ||||||||||||||||||||||
| NET INTEREST INCOME AFTER LOAN LOSS PROVISION |
|
9,491 |
|
|
7,043 |
|
35 |
% |
|
36,123 |
|
|
27,660 |
|
31 |
% |
||||||
| NON-INTEREST INCOME | ||||||||||||||||||||||
| Service Charges and Fees on Deposits |
|
1,137 |
|
|
1,171 |
|
-3 |
% |
|
4,475 |
|
|
4,447 |
|
1 |
% |
||||||
| Gain on Sale of Loans |
|
- |
|
|
- |
|
- |
|
|
- |
|
|
(4 |
) |
-100 |
% |
||||||
| Other Fees |
|
452 |
|
|
1,104 |
|
-59 |
% |
|
1,587 |
|
|
1,712 |
|
-7 |
% |
||||||
| NON-INTEREST EXPENSE |
|
4,835 |
|
|
4,232 |
|
14 |
% |
|
18,083 |
|
|
15,220 |
|
19 |
% |
||||||
| EARNINGS BEFORE INCOME TAXES |
|
6,245 |
|
|
5,086 |
|
23 |
% |
|
24,102 |
|
|
18,595 |
|
30 |
% |
||||||
| INCOME TAXES |
|
1,724 |
|
|
1,112 |
|
55 |
% |
|
6,741 |
|
|
4,416 |
|
53 |
% |
||||||
| NET INCOME | $ |
4,521 |
|
$ |
3,974 |
|
14 |
% |
$ |
17,361 |
|
$ |
14,179 |
|
22 |
% |
||||||
| Basic earnings per share | $ |
1.36 |
|
$ |
1.14 |
|
19 |
% |
$ |
5.14 |
|
$ |
4.03 |
|
27 |
% |
||||||
| Diluted earnings per share | $ |
1.32 |
|
$ |
1.11 |
|
19 |
% |
$ |
5.00 |
|
$ |
3.95 |
|
27 |
% |
||||||
| Return on Assets |
|
1.60 |
% |
|
1.18 |
% |
36 |
% |
|
1.45 |
% |
|
1.15 |
% |
27 |
% |
||||||
| Return on Equity |
|
26.73 |
% |
|
21.48 |
% |
24 |
% |
|
24.99 |
% |
|
19.42 |
% |
29 |
% |
||||||
| Return on Tangible Equity |
|
28.01 |
% |
|
22.42 |
% |
25 |
% |
|
26.14 |
% |
|
20.27 |
% |
29 |
% |
||||||
| Efficiency Ratio |
|
41.76 |
% |
|
42.58 |
% |
-2 |
% |
|
41.30 |
% |
|
43.93 |
% |
-6 |
% |
||||||
| CW BANCORP | ||||||||||||||||||
| CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS | ||||||||||||||||||
Three Months Ended Dec 31, |
||||||||||||||||||
2022 |
2021 |
|||||||||||||||||
Average
|
|
Interest
|
|
Yield /
|
|
Average
|
|
Interest
|
|
Yield /
|
||||||||
(dollars in thousands) |
||||||||||||||||||
| INTEREST EARNING ASSETS | ||||||||||||||||||
| Int Bearing Due from Banks & FFS | $ |
96,413 |
$ |
934 |
3.84 |
% |
$ |
448,609 |
$ |
263 |
0.23 |
% |
||||||
| Investment Securities (1) |
|
175,914 |
|
1,270 |
2.86 |
% |
|
175,383 |
|
1,013 |
2.29 |
% |
||||||
| Loans |
|
782,021 |
|
9,543 |
4.84 |
% |
|
653,534 |
|
6,865 |
4.17 |
% |
||||||
| FHLB & Other Stocks |
|
6,504 |
|
118 |
7.20 |
% |
|
4,177 |
|
68 |
6.46 |
% |
||||||
| Total interest-earning assets |
|
1,060,852 |
|
11,865 |
4.44 |
% |
|
1,281,703 |
|
8,209 |
2.54 |
% |
||||||
| Noninterest-earning assets |
|
59,420 |
|
57,401 |
||||||||||||||
| Total assets | $ |
1,120,272 |
$ |
1,339,104 |
||||||||||||||
| INTEREST EARNING LIABILITIES | ||||||||||||||||||
| Interest Bearing Deposits | $ |
382,777 |
$ |
1,406 |
1.46 |
% |
|
547,808 |
|
187 |
0.14 |
% |
||||||
| Other Borrowings |
|
283 |
|
2 |
2.80 |
% |
|
- |
|
- |
0.00 |
% |
||||||
| Subordinated Debenture |
|
50,000 |
|
469 |
3.75 |
% |
|
38,145 |
|
358 |
3.75 |
% |
||||||
| Total interest-earning liabilities |
|
433,060 |
|
1,877 |
1.72 |
% |
|
585,953 |
|
545 |
0.37 |
% |
||||||
| Noninterest-earning liabilities | ||||||||||||||||||
| Demand Deposits |
|
605,804 |
|
666,004 |
||||||||||||||
| Other Liabilities |
|
14,309 |
|
13,759 |
||||||||||||||
| Shareholders' Equity |
|
67,099 |
|
73,388 |
||||||||||||||
| Total liabilities and shareholder's equity | $ |
1,120,272 |
$ |
1,339,104 |
||||||||||||||
| Net Interest Spread | $ |
9,988 |
2.72 |
% |
$ |
7,664 |
2.17 |
% |
||||||||||
| Net Interest Margin | 3.74 |
% |
2.37 |
% |
||||||||||||||
| Total Deposits | $ |
988,581 |
$ |
1,406 |
0.56 |
% |
$ |
1,213,812 |
$ |
187 |
0.06 |
% |
||||||
| Total Funding Costs | $ |
1,038,864 |
$ |
1,877 |
0.72 |
% |
$ |
1,251,957 |
$ |
545 |
0.17 |
% |
||||||
(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 | ||||||||||||||||||
| Twelve Months Ended Dec 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 | $ |
154,008 |
$ |
2,038 |
1.32 |
% |
$ |
411,665 |
$ |
1,027 |
0.25 |
% |
||||||
| Investment Securities (1) |
|
179,684 |
|
4,739 |
2.64 |
% |
|
112,123 |
|
2,796 |
2.49 |
% |
||||||
| Loans |
|
791,090 |
|
34,566 |
4.37 |
% |
|
651,329 |
|
26,496 |
4.07 |
% |
||||||
| FHLB & Other Stocks |
|
5,862 |
|
373 |
6.36 |
% |
|
3,762 |
|
196 |
5.21 |
% |
||||||
| Total interest-earning assets |
|
1,130,644 |
|
41,716 |
3.69 |
% |
|
1,178,879 |
|
30,515 |
2.59 |
% |
||||||
| Noninterest-earning assets |
|
64,021 |
|
56,104 |
||||||||||||||
| Total assets | $ |
1,194,665 |
$ |
1,234,983 |
||||||||||||||
| INTEREST EARNING LIABILITIES | ||||||||||||||||||
| Interest Bearing Deposits | $ |
421,452 |
$ |
2,114 |
0.50 |
% |
$ |
486,809 |
$ |
993 |
0.20 |
% |
||||||
| Other Borrowings |
|
529 |
|
8 |
1.51 |
% |
|
11 |
|
- |
0.00 |
% |
||||||
| Subordinated Debenture |
|
50,000 |
|
1,875 |
3.75 |
% |
|
27,592 |
|
1,031 |
3.74 |
% |
||||||
| Total interest-earning liabilities |
|
471,981 |
|
3,997 |
0.85 |
% |
|
514,412 |
|
2,024 |
0.39 |
% |
||||||
| Noninterest-earning liabilities | ||||||||||||||||||
| Demand Deposits |
|
639,800 |
|
636,171 |
||||||||||||||
| Other Liabilities |
|
13,415 |
|
11,407 |
||||||||||||||
| Shareholders' Equity |
|
69,469 |
|
72,993 |
||||||||||||||
| Total liabilities and shareholder's equity | $ |
1,194,665 |
$ |
1,234,983 |
||||||||||||||
| Net Interest Spread | $ |
37,719 |
2.84 |
% |
$ |
28,491 |
2.20 |
% |
||||||||||
| Net Interest Margin | 3.34 |
% |
2.42 |
% |
||||||||||||||
| Total Deposits | $ |
1,061,252 |
$ |
2,114 |
0.20 |
% |
$ |
1,122,980 |
$ |
993 |
0.09 |
% |
||||||
| Total Funding Costs | $ |
1,111,781 |
$ |
3,997 |
0.36 |
% |
$ |
1,150,583 |
$ |
2,024 |
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/20230126005241/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"
