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CW Bancorp Reports Q2 2021 EPS up 189% and ROTE of 17.3%

July 20, 2021 GMT

IRVINE, Calif.--(BUSINESS WIRE)--Jul 20, 2021--

CW Bancorp (OTCQX: CWBK), the parent company (“the Company”) of CommerceWest Bank (the “Bank”) reported consolidated net income for the second quarter of 2021 of $2,981,000 or $0.81 a share as compared to $1,017,000 or $0.28 a share for the second quarter of 2020, an EPS increase of 189%. Net income for the six months ended June 30, 2021 was $6,628,000 or $1.80 a share as compared to $2,140,000 or $0.58 a share for the six months ended June 30, 2020, an EPS increase of 210%.

Key Financial Results for the three months ended June 30, 2021:

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  • Net income growth of 193%
  • EPS of $0.81 up 189%
  • ROA of 1.03% up 102%
  • ROTE of 17.28% up 162%
  • Total asset growth up 27%
  • Noninterest bearing deposit growth up 41%
  • Efficiency ratio of 47.28%
  • Noninterest income up 39%
  • 46 quarters of consecutive profits

Key Financial Results for the six months ended June 30, 2021:

  • Net income growth of 210%
  • EPS of $1.80 up 210%
  • ROA of 1.15% up 85%
  • ROTE of 19.33% up 179%
  • Efficiency ratio of 44.25%
  • Cost of deposit of 0.11% down 71%
  • Zero nonperforming loans
  • ALLL to total loans ratio (net of PPP loans) of 1.71%
  • Noninterest-bearing deposits as percent of total deposits at 61%

Mr. Ivo Tjan, Chairman and CEO said, “The Company had solid performance for the quarter, with net income growth in the triple digits for both the quarter and year to date. In addition, credit quality remains strong. We continue to have good growth in non-interest bearing deposits up 41%, which equates to 61% of our total deposits.” Mr. Tjan continued, “Our digital banking model has been a benefit for our existing clients, new clients and attracting new employees to the Bank. Our company is focused on growing our loan pipeline for the remainder of 2021 to assist businesses with their growth plans, as the local economy continues to reopen. This is an indication of the confidence we have in our future and that of our clients.”

Total assets increased $250 million as of June 30, 2021, an increase of 27% as compared to the same period one year ago. Total loans increased $39 million as of June 30, 2021, an increase of 6% over the prior year. Cash and due from banks increased $180 million or 82% from the prior year. Total investment securities increased $21 million, an increase of 30% from the prior year.

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Total deposits increased $202.7 million as of June 30, 2021, an increase of 24% from June 30, 2020. Non-interest-bearing deposits increased $184.7 million as of June 30, 2021, an increase of 41% over the prior year. Interest bearing deposits increased $18 million as of June 30, 2021, an increase of 5% over the prior period.

Interest income was $7,149,000 for the three months ended June 30, 2021 as compared to $6,568,000 for the three months ended June 30, 2020, an increase of 9%. Interest income was $14,717,000 for the six months ended June 30, 2021 as compared to $12,819,000 for the six months ended June 30, 2020, an increase of 15%. Interest expense was $583,000 for the three months ended June 30, 2021 as compared to $430,000 for the three months ended June 30, 2020, an increase of 36%. Interest expense was $955,000 for the six months ended June 30, 2021 as compared to $1,199,000 for the six months ended June 30, 2020, a decrease of 20%.

Net interest income for the three months ended June 30, 2021 was $6,566,000 as compared to $6,138,000 for the three months ended June 30, 2020, an increase of 7%. The net interest margin decreased for the three months ended June 30, 2021. It decreased from 3.21% in 2020 to 2.38% in 2021, a decrease of 26%, largely due to PPP loans which are earning 1.0% interest. Net interest income for the six months ended June 30, 2021 was $13,762,000 as compared to $11,620,000 for the six months ended June 30, 2020, an increase of 18%. The net interest margin decreased for the six months ended June 30, 2021. It decreased from 3.50% in 2020 to 2.49% in 2021, a decrease of 29%.

There was no provision for loan losses for the three months ended June 30, 2021 compared to $2,450,000 for the three months ended June 30, 2020, a decrease of 100%. The allowance for loan losses (net of PPP loans) to total loans ratio increased from 1.63% as of June 30, 2020 to 1.71% as of June 30, 2021, an increase of 5%.

Non-interest income for the three months ended June 30, 2021 was $1,283,000 compared to $922,000 for the same period last year, an increase of 39%. Non-interest income for the six months ended June 30, 2021 was $2,389,000 compared to $2,071,000 for the same period last year, an increase of 15%.

Non-interest expense for the three months ended June 30, 2021 was $3,711,000 compared to $3,257,000 for the same period last year, an increase of 14%. Non-interest expense for the six months ended June 30, 2021 was $7,209,000 compared to $6,546,000 for the same period last year, an increase of 10%.

The efficiency ratio for the three months ended June 30, 2021 was 47.28% compared to 45.51% in 2020, which represents an increase of 4%. The efficiency ratio illustrates that for every dollar made for the three-month period ending June 30, 2021, it cost $0.47 to make it, as compared to $0.46 one year ago. The Bank’s efficiency ratio for the six months ended June 30, 2021 was 44.25% compared to 47.21% in 2020, which represents a decrease of 6%.

Capital ratios for the Bank remain above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of June 30, 2021, the tier 1 leverage ratio was 8.02%, the common equity tier 1 capital ratio was 15.00%, the tier 1 risk-based capital ratio was 15.00% and the total risk-based capital ratio was 16.25%.

CommerceWest Bank is a California based full-service business bank with a unique vision and culture of focusing exclusively on the business community by delivering on customized products and services. Founded in 2001 and headquartered in Irvine, California, the Bank serves businesses throughout the state of California. We provide a wide range of commercial banking services, including, remote deposit solution, 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 Bankwill 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.

SECOND QUARTER REPORT - JUNE 30, 2021 (Unaudited)
%
CONSOLIDATED BALANCE SHEET Increase
(dollars in thousands) June 30, 2021 June 30, 2020 (Decrease)
 
ASSETS
Cash and due from banks

$

399,278

 

$

219,033

 

82

%

Securities available for sale

 

76,909

 

 

69,054

 

11

%

Securities held-to-maturity

 

13,066

 

 

-

 

100

%

 
Loans

 

650,773

 

 

611,293

 

6

%

Less allowance for loan losses

 

(9,201

)

 

(7,288

)

26

%

Loans, net

 

641,572

 

 

604,005

 

6

%

 
Bank premises and equipment, net

 

5,950

 

 

606

 

882

%

Other assets

 

25,321

 

 

19,728

 

28

%

Total assets

$

1,162,096

 

$

912,426

 

27

%

 
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits

$

633,277

 

$

448,620

 

41

%

Interest bearing deposits

 

410,980

 

 

392,919

 

5

%

Total deposits

 

1,044,257

 

 

841,539

 

24

%

 
Subordinated debenture

 

32,500

 

 

-

 

100

%

Other liabilities

 

12,325

 

 

6,676

 

85

%

 

1,089,082

 

 

848,215

 

28

%

Stockholders' equity

 

73,014

 

 

64,211

 

14

%

Total liabilities and stockholders' equity

$

1,162,096

 

$

912,426

 

27

%

 
Shares outstanding at end of period

 

3,500,092

 

 

3,536,696

 

Book value per share

$

19.99

 

$

17.34

 

Total loans to total deposits

 

62.32

%

 

72.64

%

ALLL to total loans (net of PPP loans)

 

1.71

%

 

1.63

%

Nonperforming assets (non-accrual loans & OREO)

$

-

 

$

-

 

 
COMMERCEWEST BANK CAPITAL RATIOS:
Tier 1 leverage ratio

 

8.02

%

 

7.26

%

Common equity tier 1 capital ratio

 

15.00

%

 

13.08

%

Tier 1 risk-based capital ratio

 

15.00

%

 

13.08

%

Total risk-based capital ratio

 

16.25

%

 

14.34

%

 
CONSOLIDATED STATEMENT OF INCOME (Unaudited) Three Months Ended Increase Six Month Ended Increase
(dollars in thousands except share and per share data) June 30, 2021 June 30, 2020 (Decrease) June 30, 2021 June 30, 2020 (Decrease)
 
INTEREST INCOME
Loans

$

6,389

 

$

5,955

 

7

%

$

13,187

 

$

11,510

 

15

%

Investments

 

501

 

 

453

 

11

%

 

960

 

 

932

 

3

%

Fed funds sold and other

 

259

 

 

160

 

62

%

 

570

 

 

377

 

51

%

Total interest income

 

7,149

 

 

6,568

 

9

%

 

14,717

 

 

12,819

 

15

%

 
INTEREST EXPENSE
Deposits

 

278

 

 

430

 

-35

%

 

583

 

 

1,195

 

-51

%

Subordinated debenture

 

305

 

 

-

 

100

%

 

372

 

 

-

 

100

%

Other borrowings

 

-

 

 

-

 

0

%

 

-

 

 

4

 

-100

%

Total interest expense

 

583

 

 

430

 

36

%

 

955

 

 

1,199

 

-20

%

 
NET INTEREST INCOME BEFORE LOAN LOSS PROVISION

 

6,566

 

 

6,138

 

7

%

 

13,762

 

 

11,620

 

18

%

 
PROVISION FOR LOAN LOSSES

 

-

 

 

2,450

 

-100

%

 

-

 

 

4,593

 

-100

%

 
NET INTEREST INCOME AFTER LOAN LOSS PROVISION

 

6,566

 

 

3,688

 

78

%

 

13,762

 

 

7,027

 

96

%

 
NON-INTEREST INCOME

 

1,283

 

 

922

 

39

%

 

2,389

 

 

2,071

 

15

%

 
NON-INTEREST EXPENSE

 

3,711

 

 

3,257

 

14

%

 

7,209

 

 

6,546

 

10

%

 
EARNINGS BEFORE INCOME TAXES

 

4,138

 

 

1,353

 

206

%

 

8,942

 

 

2,552

 

250

%

 
INCOME TAXES

 

1,157

 

 

336

 

244

%

 

2,314

 

 

412

 

462

%

 
 
NET INCOME

$

2,981

 

$

1,017

 

193

%

$

6,628

 

$

2,140

 

210

%

 
Basic earnings per share

$

0.85

 

$

0.29

 

192

%

$

1.87

 

$

0.60

 

212

%

Diluted earnings per share

$

0.81

 

$

0.28

 

189

%

$

1.80

 

$

0.58

 

210

%

Return on Assets

 

1.03

%

 

0.51

%

102

%

 

1.15

%

 

0.62

%

85

%

Return on Equity

 

16.54

%

 

6.36

%

160

%

 

18.51

%

 

6.62

%

180

%

Return on Tangible Equity

 

17.28

%

 

6.62

%

161

%

 

19.33

%

 

6.93

%

179

%

Efficiency Ratio

 

47.28

%

 

45.51

%

4

%

 

44.25

%

 

47.21

%

-6

%

Cost of Deposits

 

0.11

%

 

0.24

%

-54

%

 

0.11

%

 

0.38

%

-71

%

Net Interest Margin

 

2.38

%

 

3.21

%

-26

%

 

2.49

%

 

3.50

%

-29

%

 

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20210720006278/en/

CONTACT: Bancorp Contact

CW Bancorp

Mr. Ivo A. Tjan, CEO

Telephone: (866) 521-CWBK

E-mail:InvestorRelations@cwbk.com

Website:www.cwbk.com

“Bank on the Difference”

KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA

INDUSTRY KEYWORD: BANKING PROFESSIONAL SERVICES FINANCE

SOURCE: CW Bancorp

Copyright Business Wire 2021.

PUB: 07/20/2021 07:49 PM/DISC: 07/20/2021 07:49 PM

http://www.businesswire.com/news/home/20210720006278/en