IRVINE, Calif., April 26, 2024--(BUSINESS WIRE)--CW Bancorp (OTCQX: CWBK), the parent company ("the Company") of CommerceWest Bank (the "Bank"), reported consolidated net income for the first quarter of 2024 of $2,993,000 or $0.96 per diluted share as compared to $4,618,000 or $1.37 per diluted share for the first quarter of 2023, an EPS decrease of 30%.
Key Financial Results for the three months ended March 31, 2024:
EPS of $0.96
Return on Assets of 1.18%
Return on Tangible Equity of 15.74%
ACL to total loans ratio of 1.61%
Liquid funds to total deposits ratio of 18%
No outstanding FRB or FHLB borrowings
Non-interest-bearing deposits to total deposits of 61%
Strong leverage ratio of 12.58% and total risk-based capital ratio of 19.99%
57 quarters of consecutive profits
Mr. Ivo A. Tjan, Chairman and CEO, commented, "The Bank’s fortress balance sheet remains strong, with strong capital ratios, ample liquidity, and a strong credit loss reserve." Mr. Tjan added, "We are positioned well in the face of higher for longer interest rates, persistent inflationary pressures, and global unrest. Our team is focused in 2024 on acquiring new client relationships and growing existing client relationships by providing them customized and tailor-made solutions."
Total assets decreased $39.1 million as of March 31, 2024, a decrease of 3% as compared to the same period one year ago. Total loans decreased $48.2 million as of March 31, 2024, a decrease of 6% from the prior year. Borrowers have been paying down loans with excess liquidity. This has caused both loan and deposit balances to decrease. In addition, the Bank remains prudent and conservative about credit quality. Cash and due from banks increased $11.4 million or 6% from the prior year. Total investment securities decreased $3.2 million, a decrease of 2% from prior year. Total deposits decreased $46.3 million as of March 31, 2024, a decrease of 5% from March 31, 2023. Non-interest-bearing deposits increased $4.8 million as of March 31, 2024, an increase of 1% over the prior year. Interest bearing deposits decreased $51.1 million as of March 31, 2024, a decrease of 12% from the prior period.
Interest income was $12,242,000 for the three months ended March 31, 2024, as compared to $12,004,000 for the three months ended March 31, 2023, an increase of 2%. Interest expense was $3,114,000 for the three months ended March 31, 2024, as compared to $2,145,000 for the three months ended March 31, 2023, an increase of 45%. Interest expense was up for the quarter due to the rising cost of deposits.
Net interest income for the three months ended March 31, 2024, was $9,128,000 compared to $9,859,000 for the three months ended March 31, 2023, a decrease of 7%. The net interest margin decreased for the three months ended March 31, 2024. It decreased from 3.91% in 2023 to 3.79% in 2024, a decrease of 3%.
The Bank had no provision for credit losses during the three months ended March 31, 2024, compared to $75,000 for the three months ended March 31, 2023, a decrease of 100%.
Non-interest income for the three months ended March 31, 2024, was $1,208,000 compared to $1,253,000 for the same period last year, a decrease of 4%.
Non-interest expense for the three months ended March 31, 2024, was $6,177,000 compared to $4,867,000 for the same period last year, an increase of 27%.
The efficiency ratio for the three months ended March 31, 2024, was 59.42% compared to 42.81% in 2023, which represents an increase of 39%. The efficiency ratio illustrates that for every dollar made for the three-month period ending March 31, 2024, it costs $0.5942 to make it, as compared to $0.4281 one year ago.
Capital ratios for the Bank remain above the level required for a "well capitalized" institution as designated by regulatory agencies. As of March 31, 2024, the tier 1 leverage ratio was 12.58%, the common equity tier 1 capital ratio was 18.74%, the tier 1 risk-based capital ratio was 18.74% and the total risk-based capital ratio was 19.99%.
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.
FIRST QUARTER REPORT - March 31, 2024 (Unaudited)
CW BANCORP
%
CONSOLIDATED BALANCE SHEET
Increase
(dollars in thousands)
March 31, 2024
March 31, 2023
(Decrease)
ASSETS
Cash and due from banks
$
203,263
$
191,912
6
%
Securities available for sale
110,661
104,734
6
%
Securities held to maturity
41,577
50,747
-18
%
Loans
717,692
765,937
-6
%
Less allowance for credit losses (ACL)
(11,562
)
(10,967
)
5
%
Loans, net
706,130
754,970
-6
%
Bank premises and equipment, net
4,199
4,893
-14
%
Other assets
33,988
31,615
8
%
Total assets
$
1,099,818
$
1,138,871
-3
%
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits
$
587,354
582,599
1
%
Interest bearing deposits
370,210
421,277
-12
%
Total deposits
957,564
1,003,876
-5
%
Subordinated debenture
50,000
50,000
0
%
Other liabilities
13,285
12,616
5
%
1,020,849
1,066,492
-4
%
Stockholders' equity
78,969
72,379
9
%
Total liabilities and stockholders' equity
$
1,099,818
$
1,138,871
-3
%
Shares outstanding at end of period
3,049,831
3,289,444
Book value per share
$
29.12
$
25.17
Total loans to total deposits
74.95
%
76.30
%
ACL to total loans
1.61
%
1.44
%
Nonperforming assets (non-accrual loans & OREO)
$
4,648
$
3,263
COMMERCEWEST BANK CAPITAL RATIOS:
Tier 1 leverage ratio
12.58
%
11.36
%
Common equity tier 1 capital ratio
18.74
%
17.26
%
Tier 1 risk-based capital ratio
18.74
%
17.26
%
Total risk-based capital ratio
19.99
%
18.51
%
CW BANCORP
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
Three Months Ended
Increase
(dollars in thousands except share and per share data)
March 31, 2024
March 31, 2023
(Decrease)
INTEREST INCOME
Loans
$
9,809
$
9,904
-1
%
Investment securities
1,117
1,158
-4
%
Fed funds sold and other
1,316
942
40
%
Total interest income
12,242
12,004
2
%
INTEREST EXPENSE
Deposits
2,645
1,667
59
%
Subordinated debenture
469
469
0
%
Other borrowings
-
9
-100
%
Total interest expense
3,114
2,145
45
%
NET INTEREST INCOME BEFORE CREDIT LOSS PROVISION
9,128
9,859
-7
%
PROVISION FOR CREDIT LOSSES
-
75
-100
%
NET INTEREST INCOME AFTER CREDIT LOSS PROVISION
9,128
9,784
-7
%
NON-INTEREST INCOME
Service Charges and Fees on Deposits
905
1,091
-17
%
Loss on Sale of AFS Securities
-
(166
)
-100
%
Other Fees
303
328
-8
%
NON-INTEREST EXPENSE
6,177
4,867
27
%
EARNINGS BEFORE INCOME TAXES
4,159
6,170
-33
%
INCOME TAXES
1,166
1,552
-25
%
NET INCOME
$
2,993
$
4,618
-35
%
Basic earnings per share
$
0.97
$
1.40
-30
%
Diluted earnings per share
$
0.96
$
1.37
-30
%
Return on Assets
1.18
%
1.71
%
-31
%
Return on Equity
15.13
%
26.03
%
-42
%
Return on Tangible Equity
15.74
%
27.19
%
-42
%
Efficiency Ratio
59.42
%
42.81
%
39
%
CW BANCORP
CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS
Three Months Ended March 31,
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
$
86,162
$
1,168
5.45
%
$
72,725
$
835
4.66
%
Investment Securities (1)
160,397
1,177
2.95
%
172,680
1,250
2.94
%
Loans
721,270
9,809
5.47
%
780,214
9,904
5.15
%
FHLB & Other Stocks
7,100
147
8.33
%
6,504
107
6.67
%
Total interest-earning assets
974,929
12,301
5.07
%
1,032,123
12,096
4.75
%
Noninterest-earning assets
48,985
61,046
Total assets
$
1,023,914
$
1,093,169
INTEREST EARNING LIABILITIES
Interest Bearing Deposits
$
338,731
$
2,645
3.14
%
381,648
1,667
1.77
%
Other Borrowings
-
-
0.00
%
734
9
4.91
%
Subordinated Debenture
50,000
469
3.75
%
50,000
469
3.75
%
Total interest-earning liabilities
388,731
3,114
3.22
%
432,382
2,145
2.01
%
Noninterest-earning liabilities
Demand Deposits
541,533
575,604
Other Liabilities
14,107
13,247
Shareholders' Equity
79,543
71,936
Total liabilities and shareholder's equity
$
1,023,914
$
1,093,169
Net Interest Spread
$
9,187
1.85
%
$
9,951
2.74
%
Net Interest Margin
3.79
%
3.91
%
Total Deposits
$
880,264
$
2,645
1.21
%
$
957,252
$
1,667
0.71
%
Total Funding Costs
$
930,264
$
3,114
1.35
%
$
1,007,986
$
2,145
0.86
%
(1)
Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate
Bancorp Contact Mr. Ivo A. Tjan, CEO Ms. Leeann Cochran, CFO Telephone: (866) 521-CWBK E-mail: [email protected] Website: www.cwbk.com "Bank on the Difference"
