CommerceWest Bank Reports Net Income Growth Year Over Year Of 134% With A Fortress Balance Sheet, Total Risk Based Capital Of 21.87% And Strong Liquidity

CommerceWest Bank (OTCBB: CWBK) announced today its financial results for the twelve months ended December 31, 2010. Net income for the twelve months ended December 31, 2010 was $546,000 or $0.12 per basic common share and $0.12 per diluted common share, as compared to a loss of $1.6 million or $(0.43) per basic common share and $(0.43) per diluted common share for the twelve months ended December 31, 2009, an increase of 128%.

Financial performance highlights for the twelve months ended December 31, 2010:
  • Income of $546,000 for the year
  • 28% increase in non-interest income year over year
  • A fortress balance sheet, with a tier 1 leverage ratio of 12.38% and total risk based capital ratio of 21.87%
  • 4.36% provision for loan losses as a percent of total loans on the CommerceWest Bank portfolio
  • 63% decrease in nonperforming loans from 12/31/09
  • Strong liquidity with a liquidity position to total assets ratio of 40%
  • Fully integrated and consolidated bank acquisition

Mr. Ivo Tjan, Chairman and CEO, said, “The Bank’s management team has done a great job in completing our bank acquisition integration, increasing our liquidity, fortifying our balance sheet and reducing non performance loans during 2010. The Bank is cautiously optimistic about continuing these trends into 2011 and is focused on developing new client relationships and providing more products or services to our existing clients in 2011,” said Mr. Tjan. “Our vision and culture is clear, so it’s back to basics for us to focus on executing our business plan for 2011. The Bank will continue its fortress balance sheet approach with an emphasis on deploying our strong liquidity to support businesses with their growth plans in 2011 and beyond.”

Total assets decreased $46.6 million as of December 31, 2010, a decrease of 13% as compared to the same period one year ago. Total loans decreased $67.7 million as of December 31, 2010, a decrease of 30% over the prior year. Cash on hand increased $10.3 million or 19%. Total investments increased $16.8 million or 37%, as the Bank shifted focus within earning assets from loans to investments in 2010.

Total deposits decreased $39.9 million as of December 31, 2010, a decrease of 13% from December 31, 2009. The Bank reduced borrowings outstanding by 92% during the fourth quarter, with little impact on the Bank’s liquidity position. The Bank’s liquidity position to total assets ratio improved from 24% at the end of September to 40% on December 31. Stockholders’ equity on December 31, 2010 was $43.2 million, an increase of 2% as compared to stockholders’ equity of $42.5 million on December 31, 2009.

Provision for loan losses for the twelve months ended December 31, 2010 was $2.8 million compared to $8.6 million for the twelve months ended December 31, 2009, a decrease of 67%. The Bank ended the year with an allowance for loan losses of $4.6 million as compared to $4.0 million at the end of 2009, an increase year over year of 16%. In addition, the Bank’s allowance for loan losses as a percent of total loans was 4.36% for the CommerceWest Bank portfolio on December 31, 2010 as compared to 3.21% on December 31, 2009, an increase of 36%.

Non-interest income for the twelve months ended December 31, 2010 was $1.7 million compared to $1.3 million for the same period last year, an increase of 28%.

Capital ratios for the Bank remain above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of December 31, 2010, the leverage ratio, tier 1 capital ratio, and total risk-based capital ratio was 12.38%, 20.60% and 21.87%, respectively.

CommerceWest Bank is headquartered at 2111 Business Center Drive in Irvine, CA, with Regional Offices in Orange County, Riverside County, Los Angeles County and San Diego County. We are a full service business bank and offer a wide range of commercial banking services, including, concierge services, remote deposit solution, full-service internet banking, lines of credit, term loans, commercial real estate lending, SBA lending, and full cash management.

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.
       
 
FOURTH QUARTER REPORT - DECEMBER 31, 2010 (Unaudited)            
   
BALANCE SHEET December 31, Increase
(dollars in thousands) 2010 2009 (Decrease)
 
ASSETS
Cash and due from banks 65,430 55,138 19 %
Securities 62,233 45,393 37 %
 
Loans 158,372 226,044 -30 %
Less allowance for loan losses   (4,627 )   (4,000 ) 16 %
Loans, net 153,745 222,044 -31 %
 
Bank premises and equipment, net 789 756 4 %
Other assets   20,299     25,809   -21 %
Total assets   302,496     349,140   -13 %
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits 67,683 93,694 -28 %
Interest bearing deposits   189,700     203,557   -7 %
Total deposits 257,383 297,251 -13 %
Total borrowings 500 6,500 -92 %
Other liabilities   1,459     2,926   -50 %
259,342 306,677 -15 %
Stockholders' equity   43,154     42,463   2 %
Total liabilities and stockholders' equity   302,496     349,140   -13 %
                   
STATEMENT OF EARNINGS For the Twelve Months Ended Increase
(dollars in thousands except share and per share data) Dec 31, 2010 Dec 31, 2009 (Decrease)
 
Interest income 15,730 17,433 -10 %
Interest expense   3,326     3,300   1 %
Net interest income 12,404 14,133 -12 %
Provision for loan losses 2,840 8,601 -67 %
Other non-interest income 1,690 1,317 28 %
Other non-interest expense   10,708     9,740   10 %
Earnings before income taxes 546 (2,891 ) 119 %
Income taxes   -     (1,297 ) -100 %
Net earnings   546     (1,594 ) 134 %
 
Basic earnings per share $ 0.12 $ (0.43 ) 128 %
Diluted earnings per share $ 0.12 $ (0.43 ) 128 %
 
 

FINANCIAL RATIOS:
Return on Assets (annualized) 0.17 % -0.55 % 131 %
Return on Equity (annualized) 1.25 % -4.25 % 129 %
Efficiency Ratio 74.64 % 60.57 % 23 %
Net Interest Margin 4.39 % 5.28 % -17 %
 

CAPITAL RATIOS:
Tier 1 leverage ratio 12.38 % 10.49 % 18 %
Tier 1 risk-based capital ratio 20.60 % 14.66 % 41 %
Total risk-based capital ratio 21.87 % 15.91 % 37 %
 

Copyright Business Wire 2010

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