CW Bancorp Reports First Quarter 2024 Financial Results

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

 

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The CW Bancorp Stock at the time of publication of the news with a fall of -1,50 % to 29,55USD on Nasdaq OTC stock exchange (20. April 2024, 02:10 Uhr).