Business Wire | Jul 20, 2021 07:49PM EDT

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

Jul. 20, 2021

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:

* 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.

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) ASSETSCash 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' EQUITYNon-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' $ 1,162,096 $ 912,426 27 %equity 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 1.71 % 1.63 %loans)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 EndedIncreaseSix Month EndedIncrease(dollars in thousands except share and per share data)June 30, 2021June 30, 2020(Decrease)June 30, 2021June 30, 2020(Decrease)INTEREST INCOMELoans$

6,389

$

5,955

7

%

$

13,187

$

11,510

15

%

Investments501

453

11

%

960

932

3

%

Fed funds sold and other259

160

62

%

570

377

51

%

Total interest income7,149

6,568

9

%

14,717

12,819

15

%

INTEREST EXPENSEDeposits278

430

-35

%

583

1,195

-51

%

Subordinated debenture305

-

100

%

372

-

100

%

Other borrowings-

-

0

%

-

4

-100

%

Total interest expense583

430

36

%

955

1,199

-20

%

NET INTEREST INCOME BEFORE LOAN LOSS PROVISION6,566

6,138

7

%

13,762

11,620

18

%

PROVISION FOR LOAN LOSSES-

2,450

-100

%

-

4,593

-100

%

NET INTEREST INCOME AFTER LOAN LOSS PROVISION6,566

3,688

78

%

13,762

7,027

96

%

NON-INTEREST INCOME1,283

922

39

%

2,389

2,071

15

%

NON-INTEREST EXPENSE3,711

3,257

14

%

7,209

6,546

10

%

EARNINGS BEFORE INCOME TAXES4,138

1,353

206

%

8,942

2,552

250

%

INCOME TAXES1,157

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 Assets1.03

%

0.51

%

102

%

1.15

%

0.62

%

85

%

Return on Equity16.54

%

6.36

%

160

%

18.51

%

6.62

%

180

%

Return on Tangible Equity17.28

%

6.62

%

161

%

19.33

%

6.93

%

179

%

Efficiency Ratio47.28

%

45.51

%

4

%

44.25

%

47.21

%

-6

%

Cost of Deposits0.11

%

0.24

%

-54

%

0.11

%

0.38

%

-71

%

Net Interest Margin2.38

%

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"