IRVINE, Calif.--(BUSINESS WIRE)--CW Bancorp (OTCQX: CWBK), the parent company (“the Company”) of CommerceWest Bank (the “Bank”) reported consolidated net income for the third quarter of 2024 of $3,131,000 or $1.03 per diluted share as compared to $5,234,000 or $1.61 per diluted share for the third quarter of 2023, an EPS decrease of 36% and net income for the nine months ended September 30, 2024 of $9,208,000 or $2.99 per diluted share as compared to $14,066,000 or $4.26 per diluted share for the nine months ended September 30, 2023, an EPS decrease of 30%.
Key Financial Results for the three months ended September 30, 2024:
- EPS of $1.03
- Return on Assets of 1.11%
- Return on Tangible Equity of 15.64%
- Quarter over quarter loan growth of 5%
- Quarter over quarter deposit growth of 4%
- ACL to total loans ratio of 1.53%
- Liquid funds to total deposits ratio of 19%
- No outstanding FRB or FHLB borrowings
- Non-interest-bearing deposits to total deposits of 56%
- Strong leverage ratio of 11.77% and total risk-based capital ratio of 18.70%
- 59 quarters of consecutive profits
Key Financial Results for the nine months ended September 30, 2024:
- EPS of $2.99
- Return on Assets of 1.14%
- Return on Tangible Equity of 15.88%
- Year over year loan growth of 2%
- Year over year deposit growth of 11%
- Year over year total asset growth of 11%
Mr. Ivo A. Tjan, Chairman and CEO commented, “Our company has demonstrated strong performance this quarter, with robust growth in both loans and deposits, highlighted by double digit increases in deposits and total assets year over year.” Mr. Tjan continued, “In the face of ongoing global and regional economic uncertainty, we remain committed to safeguarding our financial strength. Our fortress like balance sheet, supported by a 1.53% allowance for credit losses, along with our strong liquidity and capital ratios, positions us well for the future. I am proud of our talented team’s dedication to serving the evolving needs of California’s business community.”
Total assets increased $113.9 million as of September 30, 2024, an increase of 11% as compared to the same period one year ago. Total loans increased $18.0 million as of September 30, 2024, an increase of 2% from the prior year. Cash and due from banks increased $86.2 million or 57% over the prior year. Total investment securities increased $6.6 million, an increase of 4% from the prior year.
Total deposits increased $102.3 million as of September 30, 2024, an increase of 11% from September 30, 2023. Non-interest-bearing deposits increased $30.4 million as of September 30, 2024, an increase of 6% from the prior year. Interest bearing deposits increased $71.9 million as of September 30, 2024, an increase of 19% over the prior year.
Interest income was $13,856,000 for the three months ended September 30, 2024, as compared to $13,704,000 for the three months ended September 30, 2023, an increase of 1%. Interest expense was $3,841,000 for the three months ended September 30, 2024, as compared to $3,044,000 for the three months ended September 30, 2023, an increase of 26%.
Interest income was $39,441,000 for the nine months ended September 30, 2024, as compared to $39,221,000 for the nine months ended September 30, 2023, an increase of 1%. Interest expense was $10,527,000 for the nine months ended September 30, 2024, as compared to $8,301,000 for the nine months ended September 30, 2023, an increase of 27%.
Net interest income for the three months ended September 30, 2024, was $10,015,000 as compared to $10,660,000 for the three months ended September 30, 2023, a decrease of 6%. The net interest margin decreased for the three months ended September 30, 2024. It decreased to 3.75% in 2024 from 3.90% in 2023, a decrease of 4%. Net interest income for the nine months ended September 30, 2024, was $28,914,000 as compared to $30,920,000 for the nine months ended September 30, 2023, a decrease of 6%. The net interest margin decreased for the nine months ended September 30, 2024. It decreased to 3.79% in 2024 from 3.87% in 2023, a decrease of 2%.
Provision for credit losses for the three months ended September 30, 2024, was zero compared to a negative provision for credit losses of $1,500,000 during the three months ended September 30, 2023. This provision reversal was primarily due to a $3 million recovery on a previously charged of loan, which resulted in an overfunding of the allowance for credit losses that allowed the Bank to reverse provision expense during the third quarter of 2023. Provision for credit losses for the nine months ended September 30, 2024, was also zero compared to a negative provision for credit losses of $1,326,000 for the nine months ended September 30, 2023.
Non-interest income for the three months ended September 30, 2024, was $1,727,000 compared to $1,918,000 for the same period last year, a decrease of 10%. Non-interest income for the nine months ended September 30, 2024, was $4,154,000 compared to $4,832,000 for the same period last year, a decrease of 14%.
Non-interest expense for the three months ended September 30, 2024, was $7,344,000 compared to $6,812,000 for the same period last year, an increase of 8%. Non-interest expense for the nine months ended September 30, 2024, was $20,182,000 compared to $17,720,000 for the same period last year, an increase of 14%.
The efficiency ratio for the three months ended September 30, 2024, was 62.23% compared to 51.92% in 2023, which represents an increase of 20%. The efficiency ratio illustrates that for every dollar made for the three-month period ending September 30, 2024, it cost $0.6223 to make it, as compared to $0.5192 one year ago. The efficiency ratio for the nine months ended September 30, 2024, was 60.70% compared to 48.35% in 2023, which represents an increase of 26%.
Capital ratios for the Bank remain above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of September 30, 2024, the tier 1 leverage ratio was 11.77%, the common equity tier 1 capital ratio was 17.45%, the tier 1 risk-based capital ratio was 17.45% and the total risk-based capital ratio was 18.70%.
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.
| THIRD QUARTER REPORT - September 30, 2024 (Unaudited) | ||||||||||||
| CW BANCORP | % | |||||||||||
| CONSOLIDATED BALANCE SHEET | Increase | |||||||||||
| (dollars in thousands) | Sept 30, 2024 | Sept 30, 2023 | (Decrease) | |||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ |
237,913 |
|
$ |
151,698 |
|
57 |
% |
||||
| Securities available for sale |
|
126,950 |
|
|
100,171 |
|
27 |
% |
||||
| Securities held-to-maturity |
|
30,509 |
|
|
50,646 |
|
-40 |
% |
||||
| Loans |
|
752,003 |
|
|
734,016 |
|
2 |
% |
||||
| Less allowance for credit losses (ACL) |
|
(11,494 |
) |
|
(11,530 |
) |
0 |
% |
||||
| Loans, net |
|
740,509 |
|
|
722,486 |
|
2 |
% |
||||
| Bank premises and equipment, net |
|
3,801 |
|
|
4,592 |
|
-17 |
% |
||||
| Other assets |
|
35,536 |
|
|
31,698 |
|
12 |
% |
||||
| Total assets | $ |
1,175,218 |
|
$ |
1,061,291 |
|
11 |
% |
||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||
| Non-interest bearing deposits | $ |
578,535 |
|
$ |
548,107 |
|
6 |
% |
||||
| Interest bearing deposits |
|
448,348 |
|
|
376,502 |
|
19 |
% |
||||
| Total deposits |
|
1,026,883 |
|
|
924,609 |
|
11 |
% |
||||
| Subordinated debenture |
|
50,000 |
|
|
50,000 |
|
0 |
% |
||||
| Other liabilities |
|
13,358 |
|
|
13,623 |
|
-2 |
% |
||||
|
1,090,241 |
|
|
988,232 |
|
10 |
% |
|||||
| Stockholders' equity |
|
84,977 |
|
|
73,059 |
|
16 |
% |
||||
| Total liabilities and stockholders' equity | $ |
1,175,218 |
|
$ |
1,061,291 |
|
11 |
% |
||||
| Shares outstanding at end of period |
|
3,000,598 |
|
|
3,177,402 |
|
||||||
| Book value per share | $ |
30.75 |
|
$ |
27.50 |
|
||||||
| Total loans to total deposits |
|
73.23 |
% |
|
79.39 |
% |
||||||
| ACL to total loans |
|
1.53 |
% |
|
1.58 |
% |
||||||
| Nonperforming assets (non-accrual loans & OREO) | $ |
5,678 |
|
$ |
4,177 |
|
||||||
| COMMERCEWEST BANK CAPITAL RATIOS: | ||||||||||||
| Tier 1 leverage ratio |
|
11.77 |
% |
|
11.18 |
% |
||||||
| Common equity tier 1 capital ratio |
|
17.45 |
% |
|
18.43 |
% |
||||||
| Tier 1 risk-based capital ratio |
|
17.45 |
% |
|
18.43 |
% |
||||||
| Total risk-based capital ratio |
|
18.70 |
% |
|
19.68 |
% |
||||||
| CW BANCORP | ||||||||||||||||||||||||
| CONSOLIDATED STATEMENT OF INCOME (Unaudited) | Three Months Ended | Increase | For the Nine Months Ended | Increase | ||||||||||||||||||||
| (dollars in thousands except share and per share data) | Sept 30, 2024 | Sept 30, 2023 | (Decrease) | Sept 30, 2024 | Sept 30, 2023 | (Decrease) | ||||||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||||||
| Loans | $ |
10,044 |
|
$ |
9,988 |
|
1 |
% |
$ |
29,834 |
|
$ |
29,871 |
|
0 |
% |
||||||||
| Investments |
|
1,193 |
|
|
1,016 |
|
17 |
% |
|
3,485 |
|
|
3,200 |
|
9 |
% |
||||||||
| Fed funds sold and other |
|
2,619 |
|
|
2,700 |
|
-3 |
% |
|
6,122 |
|
|
6,150 |
|
0 |
% |
||||||||
| Total interest income |
|
13,856 |
|
|
13,704 |
|
1 |
% |
|
39,441 |
|
|
39,221 |
|
1 |
% |
||||||||
| INTEREST EXPENSE | ||||||||||||||||||||||||
| Deposits |
|
3,372 |
|
|
2,575 |
|
31 |
% |
|
9,121 |
|
|
6,886 |
|
32 |
% |
||||||||
| Subordinated debenture |
|
469 |
|
|
469 |
|
0 |
% |
|
1,406 |
|
|
1,406 |
|
0 |
% |
||||||||
| Other borrowings |
|
- |
|
|
- |
|
- |
|
|
- |
|
|
9 |
|
-100 |
% |
||||||||
| Total interest expense |
|
3,841 |
|
|
3,044 |
|
26 |
% |
|
10,527 |
|
|
8,301 |
|
27 |
% |
||||||||
| NET INTEREST INCOME BEFORE CREDIT LOSS PROVISION |
|
10,015 |
|
|
10,660 |
|
-6 |
% |
|
28,914 |
|
|
30,920 |
|
-6 |
% |
||||||||
| PROVISION FOR CREDIT LOSSES |
|
- |
|
|
(1,500 |
) |
-100 |
% |
|
- |
|
|
(1,326 |
) |
-100 |
% |
||||||||
| Non-interest income: | ||||||||||||||||||||||||
| NET INTEREST INCOME AFTER CREDIT LOSS PROVISION |
|
10,015 |
|
|
12,160 |
|
-18 |
% |
|
28,914 |
|
|
32,246 |
|
-10 |
% |
||||||||
| NON-INTEREST INCOME | ||||||||||||||||||||||||
| Service Charges and Fees on Deposits |
|
1,402 |
|
|
1,482 |
|
-5 |
% |
|
3,234 |
|
|
3,891 |
|
-17 |
% |
||||||||
| Loss on Sale of AFS Securities |
|
- |
|
|
- |
|
- |
|
|
- |
|
|
(166 |
) |
-100 |
% |
||||||||
| Other Fees |
|
325 |
|
|
436 |
|
-25 |
% |
|
920 |
|
|
1,107 |
|
-17 |
% |
||||||||
| NON-INTEREST EXPENSE |
|
7,344 |
|
|
6,812 |
|
8 |
% |
|
20,182 |
|
|
17,720 |
|
14 |
% |
||||||||
| EARNINGS BEFORE INCOME TAXES |
|
4,398 |
|
|
7,266 |
|
-39 |
% |
|
12,886 |
|
|
19,358 |
|
-33 |
% |
||||||||
| INCOME TAXES |
|
1,267 |
|
|
2,032 |
|
-38 |
% |
|
3,678 |
|
|
5,292 |
|
-30 |
% |
||||||||
| NET INCOME | $ |
3,131 |
|
$ |
5,234 |
|
-40 |
% |
$ |
9,208 |
|
$ |
14,066 |
|
-35 |
% |
||||||||
| Basic earnings per share | $ |
1.04 |
|
$ |
1.63 |
|
-36 |
% |
$ |
3.03 |
|
$ |
4.32 |
|
-30 |
% |
||||||||
| Diluted earnings per share | $ |
1.03 |
|
$ |
1.61 |
|
-36 |
% |
$ |
2.99 |
|
$ |
4.26 |
|
-30 |
% |
||||||||
| Return on Assets |
|
1.11 |
% |
|
1.82 |
% |
-39 |
% |
|
1.14 |
% |
|
1.66 |
% |
-31 |
% |
||||||||
| Return on Equity |
|
15.06 |
% |
|
27.66 |
% |
-46 |
% |
|
15.27 |
% |
|
25.53 |
% |
-40 |
% |
||||||||
| Return on Tangible Equity |
|
15.64 |
% |
|
28.83 |
% |
-46 |
% |
|
15.88 |
% |
|
26.64 |
% |
-40 |
% |
||||||||
| Efficiency Ratio |
|
62.23 |
% |
|
51.92 |
% |
20 |
% |
|
60.70 |
% |
|
48.35 |
% |
26 |
% |
||||||||
| CW BANCORP | |||||||||||||||||
| CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS | |||||||||||||||||
| Three Months Ended September 30, | |||||||||||||||||
2024 |
2023 |
||||||||||||||||
| 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 | $ |
182,374 |
$ |
2,480 |
5.41 |
% |
$ |
189,032 |
$ |
2,564 |
5.38 |
% |
|||||
| Investment Securities (1) |
|
157,632 |
|
1,252 |
3.16 |
% |
|
153,564 |
|
1,076 |
2.78 |
% |
|||||
| Loans |
|
720,333 |
|
10,044 |
5.55 |
% |
|
740,542 |
|
9,988 |
5.35 |
% |
|||||
| FHLB & Other Stocks |
|
7,100 |
|
139 |
7.79 |
% |
|
7,100 |
|
136 |
7.60 |
% |
|||||
| Total interest-earning assets |
|
1,067,439 |
|
13,915 |
5.19 |
% |
|
1,090,238 |
|
13,764 |
5.01 |
% |
|||||
| Noninterest-earning assets |
|
57,526 |
|
52,067 |
|||||||||||||
| Total assets | $ |
1,124,965 |
$ |
1,142,305 |
|||||||||||||
| INTEREST EARNING LIABILITIES | |||||||||||||||||
| Interest Bearing Deposits | $ |
422,112 |
$ |
3,372 |
3.18 |
% |
$ |
400,765 |
$ |
2,575 |
2.55 |
% |
|||||
| Other Borrowings |
|
- |
|
- |
- |
|
|
- |
|
- |
- |
|
|||||
| Subordinated Debenture |
|
50,000 |
|
469 |
3.75 |
% |
|
50,000 |
|
469 |
3.75 |
% |
|||||
| Total interest-earning liabilities |
|
472,112 |
|
3,841 |
3.24 |
% |
|
450,765 |
|
3,044 |
2.68 |
% |
|||||
| Noninterest-earning liabilities | |||||||||||||||||
| Demand Deposits |
|
556,290 |
|
600,824 |
|||||||||||||
| Other Liabilities |
|
13,857 |
|
15,639 |
|||||||||||||
| Shareholders' Equity |
|
82,706 |
|
75,077 |
|||||||||||||
| Total liabilities and shareholder's equity | $ |
1,124,965 |
$ |
1,142,305 |
|||||||||||||
| Net Interest Spread | $ |
10,074 |
1.95 |
% |
$ |
10,720 |
2.33 |
% |
|||||||||
| Net Interest Margin | 3.75 |
% |
3.90 |
% |
|||||||||||||
| Total Deposits | $ |
978,402 |
$ |
3,372 |
1.37 |
% |
$ |
1,001,589 |
$ |
2,575 |
1.02 |
% |
|||||
| Total Funding Costs | $ |
1,028,402 |
$ |
3,841 |
1.49 |
% |
$ |
1,051,589 |
$ |
3,044 |
1.15 |
% |
|||||
| (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 | |||||||||||||||||
| Nine Months Ended September 30, | |||||||||||||||||
2024 |
2023 |
||||||||||||||||
| 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 | $ |
139,800 |
$ |
5,697 |
5.44 |
% |
$ |
150,242 |
$ |
5,795 |
5.16 |
% |
|||||
| Investment Securities (1) |
|
158,295 |
|
3,664 |
3.09 |
% |
|
160,491 |
|
3,414 |
2.84 |
% |
|||||
| Loans |
|
721,056 |
|
29,834 |
5.53 |
% |
|
759,157 |
|
29,871 |
5.26 |
% |
|||||
| FHLB & Other Stocks |
|
7,100 |
|
425 |
8.00 |
% |
|
6,865 |
|
355 |
6.91 |
% |
|||||
| Total interest-earning assets |
|
1,026,251 |
|
39,620 |
5.16 |
% |
|
1,076,755 |
|
39,435 |
4.90 |
% |
|||||
| Noninterest-earning assets |
|
52,431 |
|
58,086 |
|||||||||||||
| Total assets | $ |
1,078,682 |
$ |
1,134,841 |
|||||||||||||
| INTEREST EARNING LIABILITIES | |||||||||||||||||
| Interest Bearing Deposits | $ |
380,537 |
$ |
9,121 |
3.20 |
% |
$ |
406,772 |
$ |
6,886 |
2.26 |
% |
|||||
| Other Borrowings |
|
- |
|
- |
- |
|
|
242 |
|
9 |
4.97 |
% |
|||||
| Subordinated Debenture |
|
50,000 |
|
1,406 |
3.75 |
% |
|
50,000 |
|
1,406 |
3.75 |
% |
|||||
| Total interest-earning liabilities |
|
430,537 |
|
10,527 |
3.27 |
% |
|
457,014 |
|
8,301 |
2.43 |
% |
|||||
| Noninterest-earning liabilities | |||||||||||||||||
| Demand Deposits |
|
553,652 |
|
590,106 |
|||||||||||||
| Other Liabilities |
|
13,966 |
|
14,061 |
|||||||||||||
| Shareholders' Equity |
|
80,527 |
|
73,660 |
|||||||||||||
| Total liabilities and shareholder's equity | $ |
1,078,682 |
$ |
1,134,841 |
|||||||||||||
| Net Interest Spread | $ |
29,093 |
1.89 |
% |
$ |
31,134 |
2.47 |
% |
|||||||||
| Net Interest Margin | 3.79 |
% |
3.87 |
% |
|||||||||||||
| Total Deposits | $ |
934,189 |
$ |
9,121 |
1.30 |
% |
$ |
996,878 |
$ |
6,886 |
0.92 |
% |
|||||
| Total Funding Costs | $ |
984,189 |
$ |
10,527 |
1.43 |
% |
$ |
1,047,120 |
$ |
8,301 |
1.06 |
% |
|||||
| (1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate | |||||||||||||||||
