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CommerceWest Bank Reports Record Fourth Quarter 2019 EPS of $0.55 up 28% and Record YTD EPS of $2.54 up 73%

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, 2019December 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 EndedIncreaseTwelve Months EndedIncrease
(dollars in thousands except share and per share data) Dec 31, 2019Dec 31, 2018(Decrease)Dec 31, 2019Dec 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

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200129005577/en/

Contacts

Bank Contact
CommerceWest Bank
Mr. Ivo A. Tjan, CEO
Ms. Leeann M. Cochran, CFO
Telephone: (949) 251-6959
Facsimile: (949) 251-6957
E-mail: itjan@cwbk.com or lcochran@cwbk.com
Website: www.cwbk.com
"Bank on the Difference"