CommerceWest Bank Reports Net Interest Income Up 19%, Deposit Growth Of 11% And Loan Growth Of 29%

CommerceWest Bank ( OTCBB: CWBK) reported net income for the three months ended September 30, 2014 of $1,347,000 or $0.32 per common share, compared with net income of $1,270,000 or $0.28 per common share for the three months ended September 30, 2013, an EPS increase of 14%. Net income for the nine months ended September 30, 2014 was $3,871,000 or $0.89 per common share, compared with net income of $4,180,000 or $0.93 per common share for the nine months ended September 30, 2013, an EPS decrease of 4%.

Key Financial Results:
  • Earnings per common share of $0.32, up 14% for the quarter
  • Net interest income of $3.6 million, up 19% for the quarter
  • Net interest margin of 4.43% for the quarter, up from 4.16%, an increase of 6%
  • Total asset growth of $32 million, up 9%
  • Loan growth of $61 million, up 29%
  • Deposit growth of $31.7 million, up 11%
  • Non-interest bearing deposit growth of $37.3 million, up 25%
  • Strong capital ratios with a Leverage Ratio of 13.11% and a Total Risk Based Capital Ratio of 18.25%
  • Zero nonperforming loans

Mr. Ivo Tjan, Chairman and CEO commented, "The team continues to deliver solid financial results and metrics. We have improved our interest income by 15%, while reducing interest expense by 20%, which expanded our net interest margin to 4.43% from 4.16%. Our asset quality remains strong with loans growing 29%, while total deposits grew 11%." Mr. Tjan continued, "This quarter we completed investments in infrastructure and adding new team members to focus on growing our client base in Southern California. We are positioned well to continue to execute on our organic growth strategy and assist the business community with their business plans."

Total assets increased $32 million as of September 30, 2014, an increase of 9% as compared to the same period one year ago. Total loans increased $61 million as of September 30, 2014, an increase of 29% over the prior year. Cash and due from banks decreased $7.1 million or 11% from the prior year. Total investment securities decreased $21 million or 31% from the prior year.

Total deposits increased $31.7 million as of September 30, 2014, an increase of 11% from September 30, 2013. Non-interest bearing deposits grew $37.3 million as of September 30, 2014, an increase of 25% over the prior year. Non-interest bearing deposits as a percent of total deposits were 57% as of September 30, 2014 as compared to 50% one year ago.

Stockholders' equity on September 30, 2014 was $53.9 million, an increase of 1% as compared to stockholders' equity of $53.5 million a year ago.

Interest income was $3,916,000 for the quarter ended September 30, 2014 as compared to $3,404,000 for the quarter ended September 30, 2013, an increase of 15%. Interest expense was $296,000 for the quarter ended September 30, 2014 as compared to $370,000 for the quarter ended September 30, 2013, a decrease of 20%. Interest income was $11,379,000 for the nine months ended September 30, 2014 as compared to $9,798,000 for the nine months ended September 30, 2013, an increase of 16%. Interest expense was $920,000 for the nine months ended September 30, 2014 as compared to $1,163,000 for the nine months ended September 30, 2013, a decrease of 21%.

Net interest income for the three months ended September 30, 2014 was $3,620,000 as compared to $3,034,000 for the three months ended September 30, 2013, an increase of 19%. The net interest margin increased for the third quarter of 2014, which increased from 4.16% in 2013 to 4.43% in 2014, an increase of 6%. Net interest income for the nine months ended September 30, 2014 was $10,459,000 as compared to $8,635,000 for the nine months ended September 30, 2013, an increase of 21%. The net interest margin increased for the nine months ended September 30, 2014. It increased from 4.06% in 2013 to 4.39% in 2014, an increase of 8%.

Provision for loan losses for the three months ended September 30, 2014 was $125,000 compared to zero for the three months ended September 30, 2013. Provision for loan losses for the nine months ended September 30, 2014 was $455,000 compared to $210,000 for the nine months ended September 30, 2013, an increase of 117%.

Non-interest income for the three months ended September 30, 2014 was $706,000 compared to $799,000 for the same period last year, a decrease of 12%. Non-interest income for the nine months ended September 30, 2014 was $2,248,000 compared to $3,973,000 for the same period last year, a decrease of 43%.

Non-interest expense for the three months ended September 30, 2014 was $2,854,000 compared to $2,563,000 for the same period last year, an increase of 11%. Non-interest expense for the nine months ended September 30, 2014 was $8,381,000 compared to $8,218,000 for the same period last year, an increase of 2%.

The Bank's efficiency ratio for the three months ended September 30, 2014 was 64.65% compared to 64.97% in 2013, which represents a decrease of less than one percent. The Bank's efficiency ratio for the nine months ended September 30, 2014 was 65.73% compared to 63.55% in 2013, which represents an increase of 3%. The efficiency ratio illustrates, that for every dollar the Bank made for the nine month period ending September 30, 2014, the Bank spent $0.66 to make it, as compared to $0.64 one year ago.

Capital ratios for the Bank remain well above the levels required for a "well capitalized" institution as designated by regulatory agencies. As of September 30, 2014, the leverage ratio was 13.11%, the tier 1 capital ratio was 17.01%, and the total risk-based capital ratio was 18.25%.

CommerceWest Bank is a California based commercial bank with a unique vision and culture of focusing exclusively on the business community. Founded in 2001 and headquartered at 2111 Business Center Drive in Irvine, CA, with Regional Offices in Orange 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, online banking, lines of credit, working capital loans, commercial real estate lending, SBA lending, and cash 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.
       
THIRD QUARTER REPORT - SEPTEMBER 30, 2014 (Unaudited)
   
BALANCE SHEET Increase
(dollars in thousands) Sept 30, 2014 Sept 30, 2013 (Decrease)
 
ASSETS
Cash and due from banks 57,353 64,438 -11 %
Securities 45,687 66,683 -31 %
Loans 269,515 208,998 29 %
Less allowance for loan losses (3,412 ) (3,065 ) 11 %
Loans, net 266,103 205,933 29 %
 
Bank premises and equipment, net 575 450 28 %
Other assets 16,505   16,678   -1 %
Total assets 386,223   354,182   9 %
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interesting bearing deposits 186,437 149,116 25 %
Interest bearing deposits 143,023   148,619   -4 %
Total deposits 329,460 297,735 11 %
Other liabilities 2,844   2,952   -4 %
332,304 300,687 11 %
Stockholders' equity 53,919   53,495   1 %
Total liabilities and stockholders' equity 386,223   354,182   9 %
 
CAPITAL RATIOS:
Tier 1 leverage ratio 13.11 % 14.41 % -9 %
Tier 1 risk-based capital ratio 17.01 % 19.85 % -14 %
Total risk-based capital ratio 18.25 % 21.10 % -14 %
 
           
STATEMENT OF EARNINGS Three Months Ended Increase
(dollars in thousands except share and per share data) Sept 30, 2014   Sept 30, 2013   (Decrease)
 
Interest income 3,916 3,404 15 %
Interest expense   296     370   -20 %
Net interest income 3,620 3,034 19 %
Provision for loan losses 125 - -
Non-interest income 706 799 -12 %
Non-interest expense   2,854     2,563   11 %
Earnings before income taxes 1,347 1,270 6 %
Income taxes   -     -   0 %
Net income   1,347     1,270   6 %
 
Basic earnings per share $ 0.33 $ 0.29 14 %
Diluted earnings per share $ 0.32 $ 0.28 14 %
Return on Assets (annualized) 1.40 % 1.45 % -3 %
Return on Equity (annualized) 9.92 % 9.58 % 4 %
Efficiency Ratio 64.65 % 64.97 % 0 %
Net Interest Margin 4.43 % 4.16 % 6 %
 

Copyright Business Wire 2010

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