CW Bancorp Reports Record First Quarter 2021 with EPS of $0.99 and ROTE of 21.40%

IRVINE, Calif.–(BUSINESS WIRE)–CW Bancorp (OTC: CWBK), the parent company (“the Company”) of CommerceWest Bank (the “Bank”) reported consolidated net income for the first quarter of 2021 of $3,647,000 or $0.99 a share as compared to $1,123,000 or $0.30 a share for the first quarter of 2020, an EPS increase of 230%.

Key Financial Results for the three months ended March 31, 2021:

• Record net income growth of 225%
• Record EPS of $0.99 up 230%
• ROA of 1.26% up 66%
• ROTE of 21.40% up 198%
• Record deposit growth of $503 million up 89%
• Record loan growth of $227 million up 50%
• Record efficiency ratio of 41.78%
• Net interest income up 31%
• Interest expense down 52%
• Cost of funds of 0.14% down 77%
• Zero nonperforming loans
• 45 quarters of consecutive profits
• ALLL to total loans ratio (net of PPP loans) of 1.79%
• Noninterest-bearing deposits as percent of total deposits at 61%

Mr. Ivo Tjan, Chairman and CEO, said, “The Bank has improved its earnings power over the last twelve months and our core earnings reflect this with net interest income growth of 31%, ROA of 1.26% and a ROTE of 21.40%. Our company had strong revenue and balance sheet growth with a unique business model that has boded well for us during a world-wide pandemic and increased usage in online or mobile banking.”

Mr. Tjan continued, “We have stayed true to our business model and kept focused on our core competency. Over the years, the Bank has continued investing in a digital banking platform, both for our clients and for our employees, and it has served us well. We were well ahead of the curve with our digital strategy and believe the banking environment has been forever changed. We look forward to a bright future with continued market share growth in California.”

Total assets increased $546 million as of March 31, 2021, an increase of 86% as compared to the same period one year ago. Total loans increased $227 million as of March 31, 2021, an increase of 50% over the prior year. Cash and due from banks increased $314 million or 318% from the prior year. Total investment securities increased $6.3 million, an increase of 7% from the prior year.

Total deposits increased $502.8 million as of March 31, 2021, an increase of 89% from March 31, 2020. Non-interest-bearing deposits increased $340.7 million as of March 31, 2021, an increase of 111% over the prior year. Interest bearing deposits increased $162.1 million as of March 31, 2021, an increase of 62% over the prior period.

Interest income was $7,568,000 for the three months ended March 31, 2021 as compared to $6,251,000 for the three months ended March 31, 2020, an increase of 21.0%. Interest expense was $372,000 for the three months ended March 31, 2021 as compared to $769,000 for the three months ended March 31, 2020, a decrease of 52%. Ms. Leeann Cochran, Executive Vice President and CFO, commented, “The Bank has been strategic in reducing its cost of funds. We have rolled off high-cost deposit accounts and have grown our non-interest-bearing deposit relationships, which currently make up 61% of the Bank’s total deposits.”

Net interest income for the three months ended March 31, 2021 was $7,196,000 as compared to $5,482,000 for the three months ended March 31, 2020, an increase of 31%. The net interest margin decreased for the three months ended March 31, 2021. It decreased from 3.96% in 2020 to 2.65% in 2021, a decrease of 33%, largely due to PPP loans which are earning 1.0% interest.

There was no provision for loan losses for the three months ended March 31, 2021 compared to $2,143,000 for the three months ended March 31, 2020, a decrease of 100%. The allowance for loan losses (net of PPP loans) to total loans ratio increased from 1.64% as of March 31, 2020 to 1.79% as of March 31, 2021, an increase of 9%.

Non-interest income for the three months ended March 31, 2021 was $1,107,000 compared to $1,149,000 for the same period last year, a decrease of 4%.

Non-interest expense for the three months ended March 31, 2021 was $3,499,000 compared to $3,289,000 for the same period last year, an increase of 6%.

The efficiency ratio for the three months ended March 31, 2021 was 41.78% compared to 49.02% in 2020, which represents a decrease of 15%. The efficiency ratio illustrates that for every dollar made for the three-month period ending March 31, 2021, it cost $0.42 to make it, as compared to $0.49 one year ago.

Capital ratios for the Bank remain above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of March 31, 2021, the tier 1 leverage ratio was 7.46%, the common equity tier 1 capital ratio was 14.89%, the tier 1 risk-based capital ratio was 14.89% and the total risk-based capital ratio was 16.15%.

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 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, 2021 (Unaudited)
										%
CONSOLIDATED BALANCE SHEET										Increase
(dollars in thousands)		March 31, 2021				March 31, 2020				(Decrease)
ASSETS
Cash and due from banks		$	413,101			$	98,797			318	%
Securities available for sale			75,354				70,115			7	%
Securities held-to-maturity			1,100				–			0	%
Loans			681,543				454,916			50	%
Less allowance for loan losses			(9,386	)			(7,473	)		26	%
Loans, net			672,157				447,443			50	%
Bank premises and equipment, net			924				694			33	%
Other assets			20,910				20,143			4	%
Total assets		$	1,183,546			$	637,192			86	%
LIABILITIES AND STOCKHOLDERS’ EQUITY
Non-interest bearing deposits		$	648,006			$	307,262			111	%
Interest bearing deposits			421,907				259,860			62	%
Total deposits			1,069,913				567,122			89	%
Subordinated debenture			32,500				–			0	%
Other liabilities			9,283				6,458			44	%
			1,111,696				573,580			94	%
Stockholders’ equity			71,850				63,612			13	%
Total liabilities and stockholders’ equity		$	1,183,546			$	637,192			86	%
Shares outstanding at end of period			3,558,292				3,568,199
Book value per share		$	19.47			$	17.24
Total loans to total deposits			63.70	%			80.21	%
ALLL to total loans (net of PPP loans)			1.79	%			1.64	%
Nonperforming assets (non-accrual loans & OREO)		$	–			$	53
COMMERCEWEST BANK CAPITAL RATIOS
Tier 1 leverage ratio			7.46	%			9.82	%
Common equity tier 1 capital ratio			14.89	%			11.63	%
Tier 1 risk-based capital ratio			14.89	%			11.63	%
Total risk-based capital ratio			16.15	%			12.88	%

CONSOLIDATED STATEMENT OF INCOME (Unaudited)		Three Months Ended								Increase
(dollars in thousands except share and per share data)		Mar 31, 2021				Mar 31, 2020				(Decrease)
INTEREST INCOME
Loans		$	6,798			$	5,438			25	%
Investment securities			460				479			-4	%
Fed funds sold and other			310				334			-7	%
Total interest income			7,568				6,251			21	%
INTEREST EXPENSE
Deposits			304				765			-60	%
Subordinated debenture			68				0			–
Other borrowings			–				4			-100	%
Total interest expense			372				769			-52	%
NET INTEREST INCOME BEFORE LOAN LOSS PROVISION			7,196				5,482			31	%
PROVISION FOR LOAN LOSSES			–				2,143			-100	%
NET INTEREST INCOME AFTER LOAN LOSS PROVISION			7,196				3,339			116	%
NON-INTEREST INCOME			1,107				1,149			-4	%
NON-INTEREST EXPENSE			3,499				3,289			6	%
EARNINGS BEFORE INCOME TAXES			4,804				1,199			301	%
INCOME TAXES			1,157				76			1422	%
NET INCOME		$	3,647			$	1,123			225	%
Basic earnings per share		$	1.02			$	0.31			229	%
Diluted earnings per share		$	0.99			$	0.30			230	%
Return on Assets			1.26	%			0.76	%		66	%
Return on Equity			20.50	%			6.85	%		199	%
Return on Tangible Equity			21.40	%			7.18	%		198	%
Efficiency Ratio			41.78	%			49.02	%		-15	%
Cost of Funds			0.14	%			0.60	%		-77	%
Net Interest Margin			2.65	%			3.96	%		-33	%

 

Contacts

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”