Business Wire | Oct 20, 2021 04:07PM EDT

CW Bancorp Reports Q3 2021 EPS $0.99 up 83% and ROTE of 20.03%

Oct. 20, 2021

IRVINE, Calif.--(BUSINESS WIRE)--Oct. 20, 2021--CW Bancorp (OTCQX: CWBK), the parent company ("the Company") of CommerceWest Bank (the "Bank"), reported consolidated net income for the third quarter of 2021 of $3,576,000 or $0.99 a share as compared to $1,975,000 or $0.54 a share for the third quarter of 2020, an EPS increase of 83%. Net income for the nine months ended September 30, 2021 was $10,204,000 or $2.80 a share as compared to $4,115,000 or $1.12 a share for the nine months ended September 30, 2020, an EPS increase of 150%.

Key Financial Results for the three months ended September 30, 2021:

* Net income growth of 81% * EPS of $0.99 up 83% * ROA of 1.12% up 30.09% * ROTE of 20.03% up 59.85% * Total asset growth up 41% * Total loans excluding PPP loans up 17% * Noninterest bearing deposit growth up 41% * Efficiency ratio of 44.91% * Noninterest income up 28% * 47 quarters of consecutive profits

Key Financial Results for the nine months ended September 30, 2021:

* Net income growth of 148% * EPS of $2.80 up 150% * ROA of 1.14% up 60.14% * ROTE of 19.96% up 125.78% * Efficiency ratio of 44.47% * Cost of deposit of 0.10% down 67.15% * Zero nonperforming loans * ALLL to total loans ratio (net of PPP loans) of 1.74% * Noninterest-bearing deposits as percent of total deposits at 55%

Mr. Ivo Tjan, Chairman and CEO, said, "The Company had another solid quarter with net income up 81% for the quarter and up 148% year to date. Return on tangible equity was 20.03% for the quarter and 19.96% year to date. Our results demonstrate that if you focus on the right business model and execute on lowering your efficiency ratio, your profitability can improve even with a zero interest rate environment. We have a strong pipeline entering the 4th quarter and plan to continue to take market share in California."

Total assets increased $386 million as of September 30, 2021, an increase of 41% as compared to the same period one year ago. Total loans decreased $11 million as of September 30, 2021, a decrease of 2% over the prior year. Total loans net of PPP loans increased $76 million as of September 30, 2021, an increase of 17%. Cash and due from banks increased $301 million or 126% from the prior year. Total investment securities increased $85 million, an increase of 119% from the prior year.

Total deposits increased $339 million as of September 30, 2021, an increase of 39% from September 30, 2020. Non-interest-bearing deposits increased $191 million as of September 30, 2021, an increase of 41% over the prior year. Interest bearing deposits increased $148.7 million as of September 30, 2021, an increase of 37% over the prior period.

Interest income was $7,379,000 for the three months ended September 30, 2021 as compared to $6,656,000 for the three months ended September 30, 2020, an increase of 11%. Interest income was $22,096,000 for the nine months ended September 30, 2021 as compared to $19,475,000 for the nine months ended September 30, 2020, an increase of 13%. Interest expense was $525,000 for the three months ended September 30, 2021 as compared to $361,000 for the three months ended September 30, 2020, an increase of 45%. Interest expense was $1,480,000 for the nine months ended September 30, 2021 as compared to $1,560,000 for the nine months ended September 30, 2020, a decrease of 5%.

Net interest income for the three months ended September 30, 2021 was $6,854,000 as compared to $6,295,000 for the three months ended September 30, 2020, an increase of 9%. The net interest margin decreased for the three months ended September 30, 2021. It decreased from 2.91% in 2020 to 2.28% in 2021, a decrease of 21.65%, largely due to PPP loans which are earning 1.00% interest. Net interest income for the nine months ended September 30, 2021 was $20,616,000 as compared to $17,915,000 for the nine months ended September 30, 2020, an increase of 15%. The net interest margin decreased for the nine months ended September 30, 2021. It decreased from 3.28% in 2020 to 2.43% in 2021, a decrease of 25.81%.

There was no provision for loan losses for the three months ended September 30, 2021 compared to $1,250,000 for the three months ended September 30, 2020, a decrease of 100%. The allowance for loan losses (net of PPP loans) to total loans ratio decreased from 1.89% as of September 30, 2020 to 1.74% as of September 30, 2021, a decrease of 8%.

Non-interest income for the three months ended September 30, 2021 was $1,490,000 compared to $1,161,000 for the same period last year, an increase of 28%. Non-interest income for the nine months ended September 30, 2021 was $3,880,000 compared to $3,232,000 for the same period last year, an increase of 20%.

Non-interest expense for the three months ended September 30, 2021 was $3,778,000 compared to $3,492,000 for the same period last year, an increase of 8%. Non-interest expense for the nine months ended September 30, 2021 was $10,988.000 compared to $10,038,000 for the same period last year, an increase of 9%.

The efficiency ratio for the three months ended September 30, 2021 was 44.91% compared to 46.35% in 2020, which represents a decrease of 3.10%. The efficiency ratio illustrates that for every dollar made for the three-month period ending September 30, 2021, it cost $0.4491 to make it, as compared to $0.4635 one year ago. The Bank's efficiency ratio for the nine months ended September 30, 2021 was 44.47% compared to 46.91% in 2020, which represents a decrease of 5.21%.

Capital ratios for the Bank remain above the levels required for a "well capitalized" institution as designated by regulatory agencies. As of September 30, 2021, the tier 1 leverage ratio was 7.57%, the common equity tier 1 capital ratio was 15.38%, the tier 1 risk-based capital ratio was 15.38% and the total risk-based capital ratio was 16.63%.

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 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.

THIRD QUARTER REPORT - SEPTEMBER 30, 2021 (Unaudited) %CONSOLIDATED BALANCE SHEET Increase(dollars in thousands) September 30, September 30, (Decrease) 2021 2020 ASSETSCash and due from banks $ 539,932 $ 238,537 126%

Securities available for sale 131,085 71,899 82%

Securities held-to-maturity 26,272 - 100%

Loans 603,987 614,432 -2%

Less allowance for loan losses (9,185 ) (8,543 ) 8%

Loans, net 594,802 605,889 -2%

Bank premises and equipment, net 5,941 562 957%

Other assets 25,260 20,854 21%

Total assets $ 1,323,292 $ 937,741 41%

LIABILITIES AND STOCKHOLDERS'EQUITYNon-interest bearing deposits $ 656,849 $ 466,301 41%

Interest bearing deposits 548,123 399,420 37%

Total deposits 1,204,972 865,721 39%

Subordinated debenture 32,500 - 100%

Other liabilities 12,258 6,385 92%

1,249,730 872,106 43%

Stockholders' equity 73,562 65,635 12%

Total liabilities and stockholders' $ 1,323,292 $ 937,741 41%equity Shares outstanding at end of period 3,497,111 3,531,996

Book value per share $ 20.40 $ 17.70

Total loans to total deposits 51.12 % 70.97 %

ALLL to total loans (net of PPP 1.74 % 1.89 %loans)Nonperforming assets (non-accrual $ - $ - loans & OREO) COMMERCEWEST BANK CAPITAL RATIOS:Tier 1 leverage ratio 7.57 % 6.53 %

Common equity tier 1 capital ratio 15.38 % 11.44 %

Tier 1 risk-based capital ratio 15.38 % 11.44 %

Total risk-based capital ratio 16.63 % 12.69 %

CONSOLIDATED STATEMENT OF INCOME (Unaudited)(dollars in thousands except share and per share data)Three Months Ended

Increase

Nine Months Ended

Increase

Sept 30, 2021

Sept 30, 2020

(Decrease)

Sept 30, 2021

Sept 30, 2020

(Decrease)

INTEREST INCOMELoans$

6,444

$

5,944

8%

$

19,631

$

17,454

12%

Investments613

450

36%

1,573

1,382

14%

Fed funds sold and other322

262

23%

892

639

40%

Total interest income7,379

6,656

11%

22,096

19,475

13%

INTEREST EXPENSEDeposits224

361

-38%

806

1,556

-48%

Subordinated debenture301

-

100%

674

-

100%

Other borrowings-

-

-

-

4

-100%

Total interest expense525

361

45%

1,480

1,560

-5%

NET INTEREST INCOME BEFORE LOAN LOSS PROVISION6,854

6,295

9%

20,616

17,915

15%

PROVISION FOR LOAN LOSSES-

1,250

-100%

-

5,843

-100%

NET INTEREST INCOME AFTER LOAN LOSS PROVISION6,854

5,045

36%

20,616

12,072

71%

NON-INTEREST INCOME1,490

1,161

28%

3,880

3,232

20%

NON-INTEREST EXPENSE3,778

3,492

8%

10,988

10,038

9%

EARNINGS BEFORE INCOME TAXES4,566

2,714

68%

13,508

5,266

157%

INCOME TAXES990

739

34%

3,304

1,151

187%

NET INCOME$

3,576

$

1,975

81%

$

10,204

$

4,115

148%

Basic earnings per share$

1.02

$

0.56

82%

$

2.89

$

1.15

152%

Diluted earnings per share$

0.99

$

0.54

83%

$

2.80

$

1.12

150%

Return on Assets1.12

%

0.86

%

30.09%

1.14

%

0.71

%

60.14%

Return on Equity19.20

%

11.99

%

60.13%

19.10

%

8.42

%

126.88%

Return on Tangible Equity20.03

%

12.53

%

59.85%

19.96

%

8.84

%

125.78%

Efficiency Ratio44.91

%

46.35

%

-3.10%

44.47

%

46.91

%

-5.21%

Cost of Deposits0.08

%

0.17

%

-52.94%

0.10

%

0.30

%

-67.15%

Net Interest Margin2.28

%

2.91

%

-21.65%

2.43

%

3.28

%

-25.81%

View source version on businesswire.com: https://www.businesswire.com/news/home/20211020005974/en/

CONTACT: Bancorp Contact Mr. Ivo A. Tjan, CEO Ms. Leeann Cochran, CFO Telephone: (866) 521-CWBK E-mail: InvestorRelations@cwbk.com Website: www.cwbk.com "Bank on the Difference"