IRVINE, Calif.--(BUSINESS WIRE)--CommerceWest Bank (OTCBB: CWBK) reported net income for the three months ended September 30, 2019 of $2,016,000 or $0.52 per common share, compared with net income of $1,576,000 or $0.39 per common share for the three months ended September 30, 2018, an EPS increase of 33%. Net income for the nine months ended September 30, 2019 of $6,094,000 or $1.71 per common share, compared with net income of $4,245,000 or $1.04 per common share for the nine months ended September 30, 2018, an EPS increase of 64%.
Key Financial Results for the three months ended September 30, 2019:
- Net income up 28%
- Record EPS up 33%
- ROA of 1.33%, up 18%
- ROTE of 13.13%, up 22%
- Efficiency ratio of 51.62%
- 39 quarters of consecutive profits
Key Financial Results for the nine months ended September 30, 2019:
- Interest income up 10%
- Net income up 44%
- Record EPS up 64%
- ROA of 1.40%, up 35%
- ROTE of 13.71%, up 40%
- Efficiency ratio of 54.12%
Mr. Ivo A. Tjan, Chairman and CEO, commented, “The Bank had another strong quarter of earnings and returns for shareholders, demonstrating the strength and resilience of our business model despite some negative economic trends.” Mr. Tjan continued, “We had good deposit and loan growth over the prior quarter. Our team continues to be disciplined in managing expenses and focusing on credit quality, which has resulted in reduced costs for the quarter with a fortress balance sheet.”
Total assets increased $45.3 million as of September 30, 2019, an increase of 8% as compared to the same period one year ago. Total loans increased $11.8 million as of September 30, 2019, an increase of 3% over the prior year. Cash and due from banks increased $31.3 million or 38% from the prior year. Total investment securities increased $5.1 million, an increase of 8% from the prior year.
Total deposits increased $41.1 million as of September 30, 2019, an increase of 8% from September 30, 2018. Non-interest-bearing deposits increased $37.8 million as of September 30, 2019, an increase of 15% over the prior year. Interest-bearing deposits increased $3.3 million as of September 30, 2019, an increase of 1% over the prior period.
Interest income was $6,486,000 for the three months ended September 30, 2019 as compared to $6,108,000 for the three months ended September 30, 2018, an increase of 6%. Interest income was $19,386,000 for the nine months ended September 30, 2019 as compared to $17,623,000 for the nine months ended September 30, 2018, an increase of 10%. Interest expense was $1,157,000 for the three months ended September 30, 2019 as compared to $929,000 for the three months ended September 30, 2018, an increase of 25%. Interest expense was $3,398,000 for the nine months ended September 30, 2019 as compared to $2,214,000 for the nine months ended September 30, 2018, an increase of 53%.
Net interest income for the three months ended September 30, 2019 was $5,330,000 as compared to $5,179,000 for the three months ended September 30, 2018, an increase of 3%. The net interest margin decreased for the three months ended September 30, 2019. It decreased from 4.02% in 2018 to 3.78% in 2019, a decrease of 6%. Net interest income for the nine months ended September 30, 2019 was $15,988,000 as compared to $15,409,000 for the nine months ended September 30, 2018, an increase of 4%. The net interest margin decreased for the nine months ended September 30, 2019. It decreased from 4.08% in 2018 to 3.91% in 2019, a decrease of 4%.
Provision for loan losses for the three months ended September 30, 2019 was $210,000 compared to $300,000 for the three months ended September 30, 2018, a decrease of 30%. Provision for loan losses for the nine months ended September 30, 2019 was $520,000 compared to $1,855,000 for the nine months ended September 30, 2018, a decrease of 72%.
Non-interest income for the three months ended September 30, 2019 was $910,000 compared to $634,000 for the same period last year, an increase of 44%. Non-interest income for the nine months ended September 30, 2019 was $2,262,000 compared to $2,018,000 for the same period last year, an increase of 12%.
Non-interest expense for the three months ended September 30, 2019 was $3,254,000 compared to $3,325,000 for the same period last year, a decrease of 2%. Non-interest expense for the nine months ended September 30, 2019 was $9,929,000 compared to $9,857,000 for the same period last year, an increase of 1%.
The Bank’s efficiency ratio for the three months ended September 30, 2019 was 51.62% compared to 56.57% in 2018, which represents a decrease of 9%. The efficiency ratio illustrates that for every dollar the Bank made for the three-month period ending September 30, 2019, the Bank spent $0.52 to make it, as compared to $0.57 one year ago. The Bank’s efficiency ratio for the nine months ended September 30, 2019 was 54.12% compared to 55.94% in 2018, which represents a decrease of 1%.
Capital ratios for the Bank remain well above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of September 30, 2019, the tier 1 leverage ratio was 9.81%, the common equity tier 1 capital ratio was 12.10%, the tier 1 risk based capital ratio was 12.10%, and the total risk-based capital ratio was 13.28%.
CommerceWest Bank is a California-based full service commercial bank with a unique vision and culture of focusing exclusively on the business community. Founded in 2001 and headquartered in Irvine, California, the Bank serves businesses throughout the state with an emphasis on clients in Orange, San Diego, Los Angeles, and Riverside Counties. We are a full service business bank and offer a wide range of commercial banking services, including concierge services, remote deposit solution, online banking, mobile banking, lines of credit, 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, 2019 (Unaudited) | |||||||||||
| % | |||||||||||
| BALANCE SHEET | Increase | ||||||||||
| (dollars in thousands) | September 30, 2019 | September 30, 2018 | (Decrease) | ||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ |
112,934 |
|
$ |
81,614 |
|
38 |
% |
|||
| Investments - available for sale |
|
67,199 |
|
|
62,086 |
|
8 |
% |
|||
| Loans |
|
440,818 |
|
|
429,014 |
|
3 |
% |
|||
| Less allowance for loan losses |
|
(5,493 |
) |
|
(4,600 |
) |
19 |
% |
|||
| Loans, net |
|
435,325 |
|
|
424,414 |
|
3 |
% |
|||
| Bank premises and equipment, net |
|
1,013 |
|
|
427 |
|
137 |
% |
|||
| Other assets |
|
18,719 |
|
|
21,387 |
|
-12 |
% |
|||
| Total assets | $ |
635,190 |
|
$ |
589,928 |
|
8 |
% |
|||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Non-interest-bearing deposits | $ |
289,619 |
|
$ |
251,802 |
|
15 |
% |
|||
| Interest-bearing deposits |
|
275,106 |
|
|
271,816 |
|
1 |
% |
|||
| Total deposits |
|
564,725 |
|
|
523,618 |
|
8 |
% |
|||
| Other liabilities |
|
6,700 |
|
|
5,611 |
|
19 |
% |
|||
|
571,425 |
|
|
529,229 |
|
8 |
% |
||||
| Stockholders' equity |
|
63,765 |
|
|
60,699 |
|
5 |
% |
|||
| Total liabilities and stockholders' equity | $ |
635,190 |
|
$ |
589,928 |
|
8 |
% |
|||
| Shares outstanding at end of period |
|
3,636,048 |
|
|
3,771,038 |
|
|||||
| Book value per share | $ |
17.07 |
|
$ |
16.27 |
|
|||||
| Allowance for loan losses to total loans |
|
1.25 |
% |
|
1.07 |
% |
|||||
| Non-performing assets (non-accrual loans & OREO) | $ |
71 |
|
$ |
1,919 |
|
|||||
| CAPITAL RATIOS: | |||||||||||
| Tier 1 leverage ratio |
|
9.81 |
% |
|
10.53 |
% |
|||||
| Common equity tier 1 capital ratio |
|
12.10 |
% |
|
12.42 |
% |
|||||
| Tier 1 risk-based capital ratio |
|
12.10 |
% |
|
12.42 |
% |
|||||
| Total risk-based capital ratio |
|
13.28 |
% |
|
13.44 |
% |
|||||
| STATEMENT OF EARNINGS | Three Months Ended | Increase | Nine Months Ended | Increase | ||||||||||||||||||
| (dollars in thousands except share and per share data) | Sept 30, 2019 | Sept 30, 2018 | (Decrease) | Sept 30, 2019 | Sept 30, 2018 | (Decrease) | ||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||||
| Loans | $ |
5,397 |
|
$ |
5,494 |
|
-2 |
% |
$ |
16,192 |
|
$ |
15,679 |
|
3 |
% |
||||||
| Investments - available for sale |
|
452 |
|
|
425 |
|
6 |
% |
|
1,339 |
|
|
1,340 |
|
0 |
% |
||||||
| Fed funds sold and other |
|
638 |
|
|
189 |
|
238 |
% |
|
1,855 |
|
|
604 |
|
207 |
% |
||||||
| Total interest income |
|
6,486 |
|
|
6,108 |
|
6 |
% |
|
19,386 |
|
|
17,623 |
|
10 |
% |
||||||
| INTEREST EXPENSE | ||||||||||||||||||||||
| Deposits |
|
1,157 |
|
|
926 |
|
25 |
% |
|
3,398 |
|
|
2,203 |
|
54 |
% |
||||||
| Other borrowed money |
|
- |
|
|
3 |
|
100 |
% |
|
0 |
|
|
11 |
|
-100 |
% |
||||||
| Total interest expense |
|
1,157 |
|
|
929 |
|
25 |
% |
|
3,398 |
|
|
2,214 |
|
53 |
% |
||||||
| NET INTEREST INCOME BEFORE LOAN LOSS PROVISION |
|
5,330 |
|
|
5,179 |
|
3 |
% |
|
15,988 |
|
|
15,409 |
|
4 |
% |
||||||
| PROVISION FOR LOAN LOSSES |
|
210 |
|
|
300 |
|
-30 |
% |
|
520 |
|
|
1,855 |
|
-72 |
% |
||||||
| NET INTEREST INCOME AFTER LOAN LOSS PROVISION |
|
5,120 |
|
|
4,879 |
|
5 |
% |
|
15,469 |
|
|
13,554 |
|
14 |
% |
||||||
| NON-INTEREST INCOME |
|
910 |
|
|
634 |
|
44 |
% |
|
2,262 |
|
|
2,018 |
|
12 |
% |
||||||
| NON-INTEREST EXPENSE |
|
3,254 |
|
|
3,325 |
|
-2 |
% |
|
9,929 |
|
|
9,857 |
|
1 |
% |
||||||
| EARNINGS BEFORE INCOME TAXES |
|
2,776 |
|
|
2,188 |
|
27 |
% |
|
7,801 |
|
|
5,715 |
|
37 |
% |
||||||
| INCOME TAXES |
|
760 |
|
|
612 |
|
24 |
% |
|
1,707 |
|
|
1,470 |
|
16 |
% |
||||||
| NET INCOME | $ |
2,016 |
|
$ |
1,576 |
|
28 |
% |
$ |
6,094 |
|
$ |
4,245 |
|
44 |
% |
||||||
| Basic earnings per share | $ |
0.55 |
|
$ |
0.42 |
|
31 |
% |
$ |
1.80 |
|
$ |
1.12 |
|
61 |
% |
||||||
| Diluted earnings per share | $ |
0.52 |
|
$ |
0.39 |
|
33 |
% |
$ |
1.71 |
|
$ |
1.04 |
|
64 |
% |
||||||
| Return on Assets |
|
1.33 |
% |
|
1.13 |
% |
18 |
% |
|
1.40 |
% |
|
1.04 |
% |
35 |
% |
||||||
| Return on Equity |
|
12.50 |
% |
|
10.24 |
% |
22 |
% |
|
13.04 |
% |
|
9.30 |
% |
40 |
% |
||||||
| Return on Tangible Equity |
|
13.13 |
% |
|
10.78 |
% |
22 |
% |
|
13.71 |
% |
|
9.79 |
% |
40 |
% |
||||||
| Efficiency Ratio |
|
51.62 |
% |
|
56.57 |
% |
-9 |
% |
|
54.12 |
% |
|
55.94 |
% |
-3 |
% |
||||||
| Net Interest Margin |
|
3.78 |
% |
|
4.02 |
% |
-6 |
% |
|
3.91 |
% |
|
4.08 |
% |
-4 |
% |
||||||
