CW Bancorp Reports 2022 Full Year Record Earnings of $17.4 million up 22%, Record EPS of $5.00 up 27% and Record ROTE of 26.14% up 29%

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%.

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Corporate Headquarters located in Irvine, California (Photo: Business Wire)

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

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

$

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

 

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