IRVINE, Calif.--(BUSINESS WIRE)--CommerceWest Bank (CWBK) reported net income for the three months ended December 31, 2019 of $2,114,000 or $0.55 per common share, compared with net income of $1,692,000 or $0.43 per common share for the three months ended December 31, 2018, an EPS increase of 28%. Net income for the twelve months ended December 31, 2019 of $8,208,000 or $2.54 per common share, compared with net income of $5,937,000 or $1.47 per common share for the twelve months ended December 31, 2018, an EPS increase of 73%.
Key Financial Results for the three months ended December 31, 2019:
- Record net income up 25%
- Record EPS up 28%
- ROA of 1.35%, up 19%
- ROTE of 13.55%, up 14%
- Efficiency ratio of 49.33%
- 40 quarters of consecutive profits
Key Financial Results for the twelve months ended December 31, 2019:
- Interest income up 8%
- Record net income up 38%
- Record EPS up 73%
- ROA of 1.39%, up 30%
- ROTE of 13.67%, up 33%
- Efficiency ratio of 52.85%
Mr. Ivo A. Tjan, Chairman and CEO commented, “CommerceWest Bank recorded strong results for the fourth quarter of 2019, ending the year with record net income for both the quarter and year.” Mr. Tjan continued, “With these strong results, we will continue to make strategic investments that will allow the company to grow by providing clients with products and services that are delivered seamlessly through a digital platform. Our business model proves that it is possible to grow relationships through a vertical growth strategy and contain costs at the same time. I am proud of our team members and confident we will continue to deliver strong results for our shareholders in the future.”
Total assets increased $85.6 million as of December 31, 2019, an increase of 11% as compared to the same period one year ago. Total loans increased $23.1 million as of December 31, 2019, an increase of 6% over the prior year. Cash and due from banks increased $54.6 million or 18% from the prior year. Total investment securities increased $6.9 million, an increase of 11% from the prior year.
Total deposits increased $78.5 million as of December 31, 2019, an increase of 11% from December 31, 2018. Non-interest-bearing deposits increased $12.3 million as of December 31, 2019, an increase of 5% over the prior year. Interest bearing deposits increased $66.2 million as of December 31, 2019, an increase of 14% over the prior period.
Interest income was $6,649,000 for the three months ended December 31, 2019 as compared to $6,468,000 for the three months ended December 31, 2018, an increase of 3%. Interest income was $26,035,000 for the twelve months ended December 31, 2019 as compared to $24,090,000 for the twelve months ended December 31, 2018, an increase of 8%. Interest expense was $1,007,000 for the three months ended December 31, 2019 as compared to $1,135,000 for the three months ended December 31, 2018, a decrease of 11%. Interest expense was $4,405,000 for the twelve months ended December 31, 2019 as compared to $3,349,000 for the twelve months ended December 31, 2018, an increase of 32%.
Net interest income for the three months ended December 31, 2019 was $5,642,000 as compared to $5,332,000 for the three months ended December 31, 2018, an increase of 6%. The net interest margin decreased for the three months ended December 31, 2019. It decreased from 3.81% in 2018 to 3.75% in 2019, a decrease of 2%. Net interest income for the twelve months ended December 31, 2019 was $21,630,000 as compared to $20,741,000 for the twelve months ended December 31, 2018, an increase of 4%. The net interest margin decreased for the twelve months ended December 31, 2019. It decreased from 4.00% in 2018 to 3.86% in 2019, a decrease of 4%.
Provision for loan losses for the three months ended December 31, 2019 was $350,000 compared to $350,000 for the three months ended December 31, 2018. Provision for loan losses for the twelve months ended December 31, 2019 was $870,000 compared to $2,205,000 for the twelve months ended December 31, 2018, a decrease of 61%.
Non-interest income for the three months ended December 31, 2019 was $888,000 compared to $755,000 for the same period last year, an increase of 18%. Non-interest income for the twelve months ended December 31, 2019 was $3,150,000 compared to $2,773,000 for the same period last year, an increase of 14%.
Non-interest expense for the three months ended December 31, 2019 was $3,266,000 compared to $3,383,000 for the same period last year, a decrease of 3%. Non-interest expense for the twelve months ended December 31, 2019 was $13,195,000 compared to $13,240,000 for the same period last year, a decrease of less than 1%.
The Bank’s efficiency ratio for the three months ended December 31, 2019 was 49.33% compared to 55.74% in 2018, which represents a decrease of 11%. The efficiency ratio illustrates that for every dollar the Bank made for the three-month period ending December 31, 2019, the Bank spent $0.49 to make it, as compared to $0.56 one year ago. The Bank’s efficiency ratio for the twelve months ended December 31, 2019 was 52.85% compared to 55.89% in 2018, which represents a decrease of 5%.
Capital ratios for the Bank remain well above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of December 31, 2019, the tier 1 leverage ratio was 9.67%, the common equity tier 1 capital ratio was 11.17%, the tier 1 risk based capital ratio was 11.17%, and the total risk-based capital ratio was 12.29%.
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 County, 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.
| FOURTH QUARTER REPORT - DECEMBER 31, 2019 (Unaudited) | |||||||||||
| % | |||||||||||
| BALANCE SHEET | Increase | ||||||||||
| (dollars in thousands) | December 31, 2019 | December 31, 2018 | (Decrease) | ||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ |
359,645 |
|
$ |
305,019 |
|
18 |
% |
|||
| Investments - available for sale |
|
68,491 |
|
|
61,610 |
|
11 |
% |
|||
| Loans |
|
441,147 |
|
|
418,075 |
|
6 |
% |
|||
| Less allowance for loan losses |
|
(5,785 |
) |
|
(4,966 |
) |
16 |
% |
|||
| Loans, net |
|
435,362 |
|
|
413,109 |
|
5 |
% |
|||
| Bank premises and equipment, net |
|
815 |
|
|
416 |
|
96 |
% |
|||
| Other assets |
|
19,136 |
|
|
18,134 |
|
6 |
% |
|||
| Total assets | $ |
883,449 |
|
$ |
798,288 |
|
11 |
% |
|||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Non-interest bearing deposits | $ |
268,435 |
|
$ |
256,154 |
|
5 |
% |
|||
| Interest bearing deposits |
|
543,293 |
|
|
477,102 |
|
14 |
% |
|||
| Total deposits |
|
811,728 |
|
|
733,256 |
|
11 |
% |
|||
| Other liabilities |
|
6,864 |
|
|
5,800 |
|
18 |
% |
|||
|
818,592 |
|
|
739,056 |
|
11 |
% |
||||
| Stockholders' equity |
|
64,857 |
|
|
59,232 |
|
9 |
% |
|||
| Total liabilities and stockholders' equity | $ |
883,449 |
|
$ |
798,288 |
|
11 |
% |
|||
| Shares outstanding at end of period |
|
3,631,752 |
|
|
3,642,611 |
|
|||||
| Book value per share | $ |
17.62 |
|
$ |
16.32 |
|
|||||
| Allowance for loan losses to total loans |
|
1.31 |
% |
|
1.19 |
% |
|||||
| Non-performing assets (non-accrual loans & OREO) | $ |
58 |
|
$ |
1,827 |
|
|||||
| CAPITAL RATIOS: | |||||||||||
| Tier 1 leverage ratio |
|
9.67 |
% |
|
9.46 |
% |
|||||
| Common equity tier 1 capital ratio |
|
11.17 |
% |
|
11.49 |
% |
|||||
| Tier 1 risk-based capital ratio |
|
11.17 |
% |
|
11.49 |
% |
|||||
| Total risk-based capital ratio |
|
12.29 |
% |
|
12.54 |
% |
|||||
| STATEMENT OF EARNINGS | Three Months Ended | Increase | Twelve Months Ended | Increase | ||||||||||||||||||
| (dollars in thousands except share and per share data) | Dec 31, 2019 | Dec 31, 2018 | (Decrease) | Dec 31, 2019 | Dec 31, 2018 | (Decrease) | ||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||||
| Loans | $ |
5,650 |
|
$ |
5,455 |
|
4 |
% |
$ |
21,842 |
|
$ |
21,134 |
|
3 |
% |
||||||
| Investments - available for sale |
|
460 |
|
|
435 |
|
6 |
% |
|
1,799 |
|
|
1,775 |
|
1 |
% |
||||||
| Fed funds sold and other |
|
539 |
|
|
577 |
|
-7 |
% |
|
2,394 |
|
|
1,181 |
|
103 |
% |
||||||
| Total interest income |
|
6,649 |
|
|
6,468 |
|
3 |
% |
|
26,035 |
|
|
24,090 |
|
8 |
% |
||||||
| INTEREST EXPENSE | ||||||||||||||||||||||
| Deposits |
|
1,007 |
|
|
1,133 |
|
-11 |
% |
|
4,405 |
|
|
3,336 |
|
32 |
% |
||||||
| Other borrowed money |
|
- |
|
|
3 |
|
100 |
% |
|
- |
|
|
13 |
|
-100 |
% |
||||||
| Total interest expense |
|
1,007 |
|
|
1,135 |
|
-11 |
% |
|
4,405 |
|
|
3,349 |
|
32 |
% |
||||||
| NET INTEREST INCOME BEFORE LOAN LOSS PROVISION |
|
5,642 |
|
|
5,332 |
|
6 |
% |
|
21,630 |
|
|
20,741 |
|
4 |
% |
||||||
| PROVISION FOR LOAN LOSSES |
|
350 |
|
|
350 |
|
0 |
% |
|
870 |
|
|
2,205 |
|
-61 |
% |
||||||
| NET INTEREST INCOME AFTER LOAN LOSS PROVISION |
|
5,291 |
|
|
4,982 |
|
6 |
% |
|
20,760 |
|
|
18,536 |
|
12 |
% |
||||||
| NON-INTEREST INCOME |
|
888 |
|
|
755 |
|
18 |
% |
|
3,150 |
|
|
2,773 |
|
14 |
% |
||||||
| NON-INTEREST EXPENSE |
|
3,266 |
|
|
3,383 |
|
-3 |
% |
|
13,195 |
|
|
13,240 |
|
0 |
% |
||||||
| EARNINGS BEFORE INCOME TAXES |
|
2,915 |
|
|
2,354 |
|
24 |
% |
|
10,716 |
|
|
8,069 |
|
33 |
% |
||||||
| INCOME TAXES |
|
801 |
|
|
662 |
|
21 |
% |
|
2,508 |
|
|
2,132 |
|
18 |
% |
||||||
| NET INCOME | $ |
2,114 |
|
$ |
1,692 |
|
25 |
% |
$ |
8,208 |
|
$ |
5,937 |
|
38 |
% |
||||||
| Basic earnings per share | $ |
0.58 |
|
$ |
0.46 |
|
26 |
% |
$ |
2.69 |
|
$ |
1.58 |
|
70 |
% |
||||||
| Diluted earnings per share | $ |
0.55 |
|
$ |
0.43 |
|
28 |
% |
$ |
2.54 |
|
$ |
1.47 |
|
73 |
% |
||||||
| Return on Assets |
|
1.35 |
% |
|
1.13 |
% |
19 |
% |
|
1.39 |
% |
|
1.07 |
% |
30 |
% |
||||||
| Return on Equity |
|
12.94 |
% |
|
11.28 |
% |
15 |
% |
|
13.02 |
% |
|
9.79 |
% |
33 |
% |
||||||
| Return on Tangible Equity |
|
13.55 |
% |
|
11.89 |
% |
14 |
% |
|
13.67 |
% |
|
10.31 |
% |
33 |
% |
||||||
| Efficiency Ratio |
|
49.33 |
% |
|
55.74 |
% |
-11 |
% |
|
52.85 |
% |
|
55.89 |
% |
-5 |
% |
||||||
| Net Interest Margin |
|
3.75 |
% |
|
3.81 |
% |
-2 |
% |
|
3.86 |
% |
|
4.00 |
% |
-4 |
% |
||||||
