CW Bancorp (OTCQX: CWBK), the parent company (“the Company”) of CommerceWest Bank (the “Bank”) reported consolidated net income for the fourth quarter of 2021 of $3,974,000 or $1.11 a share as compared to $4,976,000 or $1.37 a share for the fourth quarter of 2020, an EPS decrease of 19%. Net income for the twelve months ended December 31, 2021 was $14,179,000 or $3.95 a share as compared to $9,091,000 or $2.48 a share for the twelve months ended December 31, 2020, an EPS increase of 59%.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220127005330/en/
Bank Headquarters in Irvine, California (Photo: Business Wire)
Key Financial Results for the three months ended December 31, 2021:
- ROA of 1.18%
- ROTE of 22.42%
- Total loans excluding PPP loans up 47%
- Noninterest bearing deposit growth up 10%
- Loan to deposit ratio of 62%, up 31%
- Cost of deposits of 0.06% down 60%
- Efficiency ratio of 42.58%
- 48 quarters of consecutive profits
Key Financial Results for the twelve months ended December 31, 2021:
- Net income growth of 56%
- EPS of $3.95 up 59%
- ROA of 1.15% up 4.37%
- ROTE of 20.27% up 39.92%
- Average total asset growth up 50%
- Noninterest-bearing deposits as percent of total deposits at 57%
- Average total deposit growth up 50%
- Fees on deposit accounts up 23%
- Zero nonperforming loans
Mr. Ivo Tjan, Chairman and CEO said, “CommerceWest reported solid results with record net income, record EPS and record total assets. Our Company continues to perform extremely well despite the headwinds related to COVID, inflation and supply chain bottlenecks. Credit quality remains pristine with zero problem loans. We are optimistic about the strength of our business model to acquire new client relationships and create long term shareholder value. I remain especially proud of our team members who continue to persevere everyday through all of the challenges that the global pandemic has brought to all of us.”
Total assets increased $45.5 million as of December 31, 2021, an increase of 3% as compared to the same period one year ago. Total loans increased $176 million as of December 31, 2021, an increase of 30% over the prior year. Total loans net of PPP loans increased $228 million as of December 31, 2021, an increase of 47%. Cash and due from banks decreased $242 million or 38% from the prior year with the deployment of funds into loans and investment securities. Total investment securities increased $101 million, an increase of 132% from the prior year.
Total deposits decreased $13 million as of December 31, 2021, a decrease of 1% from December 31, 2020. Non-interest-bearing deposits increased $62 million as of December 31, 2021, an increase of 10% over the prior year. Interest bearing deposits decreased $75 million as of December 31, 2021, a decrease of 12% over the prior period.
Interest income was $8,113,000 for the three months ended December 31, 2021 as compared to $8,434,000 for the three months ended December 31, 2020, a decrease of 4%. Interest income was $30,209,000 for the twelve months ended December 31, 2021 as compared to $27,908,000 for the twelve months ended December 31, 2020, an increase of 8%. Interest expense was $545,000 for the three months ended December 31, 2021 as compared to $336,000 for the three months ended December 31, 2020, an increase of 62% due to the Company adding $50 million in subordinated debt during 2021. Interest expense was $2,024,000 for the twelve months ended December 31, 2021 as compared to 1,928,000 for the twelve months ended December 31, 2020, an increase of 5%.
Net interest income for the three months ended December 31, 2021 was $7,568,000 as compared to $8,098,000 for the three months ended December 31, 2020, a decrease of 7%. The net interest margin decreased for the three months ended December 31, 2021. It decreased from 3.49% in 2020 to 2.37% in 2021, a decrease of 32.09%, due to PPP loans which are earning 1.00% interest. Net interest income for the twelve months ended December 31, 2021 was $28,185,000 as compared to $25,980,000 for the twelve months ended December 31, 2020, an increase of 8%. The net interest margin decreased for the twelve months ended December 31, 2021. It decreased from 3.34% in 2020 to 2.42% in 2021, a decrease of 27.54% that was largely due to the high levels of excess liquidity held during the year as well as the 1.00% interest rates on PPP loans.
Provision for loan losses for the three months ended December 31, 2021 was $525,000 compared to $750,000 for the three months ended December 31, 2020, a decrease of 30%. Provision for loan losses for the twelve months ended December 31, 2021 was $525,000 compared to $6,593,000 for the twelve months ended December 31, 2020, a decrease of 92%. The allowance for loan losses (net of PPP loans) to total loans ratio decreased from 1.93% as of December 31, 2020 to 1.36% as of December 31, 2021.
Non-interest income for the three months ended December 31, 2021 was $2,275,000 compared to $4,049,000 for the same period last year, a decrease of 44%. During the prior year the Bank recognized a gain on sale of Main Street Lending Program loans of $2.9 million in the fourth quarter. Non-interest income for the twelve months ended December 31, 2021 was $6,155,000 compared to $7,268,000 for the same period last year, a decrease of 15%.
Non-interest expense for the three months ended December 31, 2021 was $4,232,000 compared to $4,416,000 for the same period last year, a decrease of 4%. Non-interest expense for the twelve months ended December 31, 2021 was $15,220.000 compared to $14,408,000 for the same period last year, an increase of 6%.
The efficiency ratio for the three months ended December 31, 2021 was 42.58% compared to 47.74% in 2020, which represents a decrease of 10.81%. The efficiency ratio illustrates that for every dollar made for the three-month period ending December 31, 2021, it cost $0.4258 to make it, as compared to $0.4774 one year ago. The Bank’s efficiency ratio for the twelve months ended December 31, 2021 was 43.93% compared to 47.16% in 2020, which represents a decrease of 6.86%.
Capital ratios for the Bank remain above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of December 31, 2021, the tier 1 leverage ratio was 8.38%, the common equity tier 1 capital ratio was 15.17%, the tier 1 risk-based capital ratio was 15.17% and the total risk-based capital ratio was 16.42%.
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, 2021 (Unaudited) | ||||||||||
| CW BANCORP | % | |||||||||
| CONSOLIDATED BALANCE SHEET | Increase | |||||||||
| (dollars in thousands) | December 31, 2021 | December 31, 2020 | (Decrease) | |||||||
| ASSETS | ||||||||||
| Cash and due from banks | $ |
398,121 |
|
$ |
640,103 |
|
-38% |
|||
| Securities available for sale |
|
150,523 |
|
|
76,913 |
|
96% |
|||
| Securities held-to-maturity |
|
27,688 |
|
|
500 |
|
5438% |
|||
| Loans (PPP loans $53,818 and $106,285 at 2021 and 2020, respectively) |
|
767,450 |
|
|
591,433 |
|
30% |
|||
| Less allowance for loan losses |
|
(9,710 |
) |
|
(9,358 |
) |
4% |
|||
| Loans, net |
|
757,740 |
|
|
582,075 |
|
30% |
|||
| Bank premises and equipment, net |
|
5,883 |
|
|
584 |
|
907% |
|||
| Other assets |
|
25,970 |
|
|
20,287 |
|
28% |
|||
| Total assets | $ |
1,365,925 |
|
$ |
1,320,462 |
|
3% |
|||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
| Non-interest bearing deposits | $ |
699,968 |
|
$ |
637,947 |
|
10% |
|||
| Interest bearing deposits |
|
529,082 |
|
|
604,534 |
|
-12% |
|||
| Total deposits |
|
1,229,050 |
|
|
1,242,481 |
|
-1% |
|||
| Subordinated debenture |
|
50,000 |
|
|
- |
|
100% |
|||
| Other liabilities |
|
13,340 |
|
|
7,773 |
|
72% |
|||
|
1,292,390 |
|
|
1,250,254 |
|
3% |
||||
| Stockholders' equity |
|
73,535 |
|
|
70,208 |
|
5% |
|||
| Total liabilities and stockholders' equity | $ |
1,365,925 |
|
$ |
1,320,462 |
|
3% |
|||
| Shares outstanding at end of period |
|
3,437,891 |
|
|
3,531,996 |
|
||||
| Book value per share | $ |
20.76 |
|
$ |
18.91 |
|
||||
| Total loans to total deposits |
|
62.44 |
% |
|
47.60 |
% |
||||
| ALLL to total loans (net of PPP loans) |
|
1.36 |
% |
|
1.93 |
% |
||||
| Nonperforming assets (non-accrual loans & OREO) | $ |
- |
|
$ |
- |
|
||||
| COMMERCEWEST BANK CAPITAL RATIOS: | ||||||||||
| Tier 1 leverage ratio |
|
8.38 |
% |
|
6.49 |
% |
||||
| Common equity tier 1 capital ratio |
|
15.17 |
% |
|
11.35 |
% |
||||
| Tier 1 risk-based capital ratio |
|
15.17 |
% |
|
11.35 |
% |
||||
| Total risk-based capital ratio |
|
16.42 |
% |
|
12.61 |
% |
||||
| CW BANCORP | ||||||||||||||||||||
| CONSOLIDATED STATEMENT OF INCOME (Unaudited) | Three Months Ended | Increase | Twelve Months Ended | Increase | ||||||||||||||||
| (dollars in thousands except share and per share data) | Dec 31, 2021 | Dec 31, 2020 | (Decrease) | Dec 31, 2021 | Dec 31, 2020 | (Decrease) | ||||||||||||||
| INTEREST INCOME | ||||||||||||||||||||
| Loans | $ |
6,865 |
|
$ |
7,665 |
|
-10% |
$ |
26,496 |
|
$ |
25,119 |
|
5% |
||||||
| Investments |
|
917 |
|
|
459 |
|
100% |
|
2,490 |
|
|
1,841 |
|
35% |
||||||
| Fed funds sold and other |
|
331 |
|
|
310 |
|
7% |
|
1,223 |
|
|
948 |
|
29% |
||||||
| Total interest income |
|
8,113 |
|
|
8,434 |
|
-4% |
|
30,209 |
|
|
27,908 |
|
8% |
||||||
| INTEREST EXPENSE | ||||||||||||||||||||
| Deposits |
|
187 |
|
|
336 |
|
-44% |
|
993 |
|
|
1,924 |
|
-48% |
||||||
| Subordinated debenture |
|
358 |
|
|
- |
|
100% |
|
1,031 |
|
|
- |
|
100% |
||||||
| Other borrowings |
|
- |
|
|
- |
|
- |
|
- |
|
|
4 |
|
-100% |
||||||
| Total interest expense |
|
545 |
|
|
336 |
|
62% |
|
2,024 |
|
|
1,928 |
|
5% |
||||||
| NET INTEREST INCOME BEFORE LOAN LOSS PROVISION |
|
7,568 |
|
|
8,098 |
|
-7% |
|
28,185 |
|
|
25,980 |
|
8% |
||||||
| PROVISION FOR LOAN LOSSES |
|
525 |
|
|
750 |
|
-30% |
|
525 |
|
|
6,593 |
|
-92% |
||||||
| NET INTEREST INCOME AFTER LOAN LOSS PROVISION |
|
7,043 |
|
|
7,348 |
|
-4% |
|
27,660 |
|
|
19,387 |
|
43% |
||||||
| NON-INTEREST INCOME | - |
|||||||||||||||||||
| Service Charges and Fees on Deposits |
|
1,171 |
|
|
1,009 |
|
16% |
|
4,447 |
|
|
3,619 |
|
23% |
||||||
| Gain on Sale of Loans |
|
- |
|
|
2,968 |
|
-100% |
|
(4 |
) |
|
2,968 |
|
-100% |
||||||
| Other Fees |
|
1,104 |
|
|
72 |
|
1433% |
|
1,712 |
|
|
681 |
|
151% |
||||||
| NON-INTEREST EXPENSE |
|
4,232 |
|
|
4,416 |
|
-4% |
|
15,220 |
|
|
14,408 |
|
6% |
||||||
| EARNINGS BEFORE INCOME TAXES |
|
5,086 |
|
|
6,981 |
|
-27% |
|
18,595 |
|
|
12,247 |
|
52% |
||||||
| INCOME TAXES |
|
1,112 |
|
|
2,005 |
|
-45% |
|
4,416 |
|
|
3,156 |
|
40% |
||||||
| NET INCOME | $ |
3,974 |
|
$ |
4,976 |
|
-20% |
$ |
14,179 |
|
$ |
9,091 |
|
56% |
||||||
| Basic earnings per share | $ |
1.14 |
|
$ |
1.41 |
|
-19% |
$ |
4.03 |
|
$ |
2.55 |
|
58% |
||||||
| Diluted earnings per share | $ |
1.11 |
|
$ |
1.37 |
|
-19% |
$ |
3.95 |
|
$ |
2.48 |
|
59% |
||||||
| Return on Assets |
|
1.18 |
% |
|
2.02 |
% |
-41.71% |
|
1.15 |
% |
|
1.10 |
% |
4.37% |
||||||
| Return on Equity |
|
21.48 |
% |
|
29.37 |
% |
-26.85% |
|
19.42 |
% |
|
13.82 |
% |
40.55% |
||||||
| Return on Tangible Equity |
|
22.42 |
% |
|
30.04 |
% |
-25.37% |
|
20.27 |
% |
|
14.49 |
% |
39.92% |
||||||
| Efficiency Ratio |
|
42.58 |
% |
|
47.74 |
% |
-10.81% |
|
43.93 |
% |
|
47.16 |
% |
-6.86% |
||||||
| Cost of Deposits |
|
0.06 |
% |
|
0.15 |
% |
-60.00% |
|
0.09 |
% |
|
0.26 |
% |
-65.97% |
||||||
| Net Interest Margin |
|
2.37 |
% |
|
3.49 |
% |
-32.09% |
|
2.42 |
% |
|
3.34 |
% |
-27.54% |
||||||
| CW BANCORP | ||||||||||||||||
| CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS | ||||||||||||||||
Three Months Ended December 31, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
| 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 | $ |
448,609 |
$ |
263 |
0.23% |
$ |
266,336 |
$ |
274 |
0.41% |
||||||
| Investment Securities (1) |
|
175,383 |
|
1,013 |
2.29% |
|
74,951 |
|
527 |
2.80% |
||||||
| Loans |
|
653,534 |
|
6,865 |
4.17% |
|
583,742 |
|
7,665 |
5.22% |
||||||
| FHLB & Other Stocks |
|
4,177 |
|
68 |
6.46% |
|
2,996 |
|
36 |
4.78% |
||||||
| Total interest-earning assets |
|
1,281,703 |
|
8,209 |
2.54% |
|
928,025 |
|
8,502 |
3.63% |
||||||
| Noninterest-earning assets |
|
57,401 |
|
54,174 |
||||||||||||
| Total assets | $ |
1,339,104 |
$ |
982,199 |
||||||||||||
| INTEREST EARNING LIABILITIES | ||||||||||||||||
| Interest Bearing Deposits | $ |
547,808 |
$ |
187 |
0.14% |
|
424,807 |
|
336 |
0.31% |
||||||
| Subordinated Debenture |
|
38,145 |
|
358 |
3.75% |
|
- |
|
- |
0.00% |
||||||
| Total interest-earning liabilities |
|
585,953 |
|
545 |
0.37% |
|
424,807 |
|
336 |
0.31% |
||||||
| Noninterest-earning liabilities | ||||||||||||||||
| Demand Deposits |
|
666,004 |
|
481,919 |
||||||||||||
| Other Liabilities |
|
13,759 |
|
8,052 |
||||||||||||
| Shareholders' Equity |
|
73,388 |
|
67,421 |
||||||||||||
| Total liabilities and shareholder's equity | $ |
1,339,104 |
$ |
982,199 |
||||||||||||
| Net Interest Spread | $ |
7,664 |
2.17% |
$ |
8,166 |
3.32% |
||||||||||
| Net Interest Margin | 2.37% |
3.49% |
||||||||||||||
| Total Deposits | $ |
1,213,812 |
$ |
187 |
0.06% |
$ |
906,726 |
$ |
336 |
0.15% |
||||||
| Total Funding Costs | $ |
1,251,957 |
$ |
545 |
0.17% |
$ |
906,726 |
$ |
336 |
0.15% |
||||||
| (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 | ||||||||||||||||
| Twelve Months Ended December 31, | ||||||||||||||||
2021 |
2020 |
|||||||||||||||
| 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 | $ |
411,665 |
$ |
1,027 |
0.25% |
$ |
153,479 |
$ |
798 |
0.52% |
||||||
| Investment Securities (1) |
|
112,123 |
|
2,796 |
2.49% |
|
70,967 |
|
2,123 |
2.99% |
||||||
| Loans |
|
651,329 |
|
26,496 |
4.07% |
|
555,967 |
|
25,119 |
4.52% |
||||||
| FHLB & Other Stocks |
|
3,762 |
|
196 |
5.21% |
|
2,992 |
|
150 |
5.01% |
||||||
| Total interest-earning assets |
|
1,178,879 |
|
30,515 |
2.59% |
|
783,405 |
|
28,190 |
3.59% |
||||||
| Noninterest-earning assets |
|
56,104 |
|
40,420 |
||||||||||||
| Total assets | $ |
1,234,983 |
$ |
823,825 |
||||||||||||
| INTEREST EARNING LIABILITIES | ||||||||||||||||
| Interest Bearing Deposits | $ |
486,809 |
$ |
993 |
0.20% |
|
396,460 |
|
1,924 |
0.49% |
||||||
| Other Borrowings | $ |
11 |
$ |
- |
0.00% |
|
252 |
|
4 |
1.59% |
||||||
| Subordinated Debenture |
|
27,592 |
|
1,031 |
3.74% |
|
- |
|
- |
0.00% |
||||||
| Total interest-earning liabilities |
|
514,412 |
|
2,024 |
0.39% |
|
396,712 |
|
1,928 |
0.48% |
||||||
| Noninterest-earning liabilities | ||||||||||||||||
| Demand Deposits |
|
636,171 |
|
354,416 |
||||||||||||
| Other Liabilities |
|
11,407 |
|
6,900 |
||||||||||||
| Shareholders' Equity |
|
72,993 |
|
65,797 |
||||||||||||
| Total liabilities and shareholder's equity | $ |
1,234,983 |
$ |
823,825 |
||||||||||||
| Net Interest Spread | $ |
28,491 |
2.20% |
$ |
26,262 |
3.11% |
||||||||||
| Net Interest Margin | 2.42% |
3.34% |
||||||||||||||
| Total Deposits | $ |
1,122,980 |
$ |
993 |
0.09% |
$ |
750,876 |
$ |
1,924 |
0.26% |
||||||
| Total Funding Costs | $ |
1,150,583 |
$ |
2,024 |
0.18% |
$ |
751,128 |
$ |
1,928 |
0.26% |
||||||
| (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/20220127005330/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"
