CW Bancorp Reports 2021 Full Year Record Earnings of $14.2 million, EPS of $3.95 and ROTE of 20.27%

Rhea-AI Summary

CW Bancorp (CWBK) reported Q4 2021 net income of $3,974,000 ($1.11/share), down 19% from Q4 2020. However, 2021 full-year net income grew 56% to $14,179,000 ($3.95/share). Key metrics include a return on assets (ROA) of 1.18% and a return on tangible equity (ROTE) of 22.42%. Loan growth was robust, with a 47% increase in loans (excluding PPP loans) and a decrease in non-performing loans. Despite challenges from COVID-19 and inflation, the bank reported an efficiency ratio of 42.58%. Total assets climbed 3% year-over-year, showcasing the bank's effective management during adverse conditions.

Positive

• Full-year net income increased 56% to $14.2 million.
• Earnings per share (EPS) rose 59% to $3.95.
• Total loans increased 47%, signaling strong growth.
• Non-interest bearing deposits grew by 10%.
• Efficiency ratio improved to 42.58%, showing cost management success.
• Zero non-performing loans reflect strong credit quality.

Negative

• Q4 net income decreased by 19% year-over-year.
• Non-interest income fell 44% in Q4 due to prior gains.
• Interest income decreased by 4% in Q4 compared to last year.

IRVINE, Calif.--(BUSINESS WIRE)-- CW Bancorp (OTCQX: CWBK), the parent company (“the Company”) of CommerceWest Bank (the “Bank”) reported consolidated net income for the fourth quarter of 2021 of $3,974,000 or $1.11 a share as compared to $4,976,000 or $1.37 a share for the fourth quarter of 2020, an EPS decrease of 19%. Net income for the twelve months ended December 31, 2021 was $14,179,000 or $3.95 a share as compared to $9,091,000 or $2.48 a share for the twelve months ended December 31, 2020, an EPS increase of 59%.

Bank Headquarters in Irvine, California (Photo: Business Wire)

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

• ROA of 1.18%
• ROTE of 22.42%
• Total loans excluding PPP loans up 47%
• Noninterest bearing deposit growth up 10%
• Loan to deposit ratio of 62%, up 31%
• Cost of deposits of 0.06% down 60%
• Efficiency ratio of 42.58%
• 48 quarters of consecutive profits

Key Financial Results for the twelve months ended December 31, 2021:

• Net income growth of 56%
• EPS of $3.95 up 59%
• ROA of 1.15% up 4.37%
• ROTE of 20.27% up 39.92%
• Average total asset growth up 50%
• Noninterest-bearing deposits as percent of total deposits at 57%
• Average total deposit growth up 50%
• Fees on deposit accounts up 23%
• Zero nonperforming loans

Mr. Ivo Tjan, Chairman and CEO said, “CommerceWest reported solid results with record net income, record EPS and record total assets. Our Company continues to perform extremely well despite the headwinds related to COVID, inflation and supply chain bottlenecks. Credit quality remains pristine with zero problem loans. We are optimistic about the strength of our business model to acquire new client relationships and create long term shareholder value. I remain especially proud of our team members who continue to persevere everyday through all of the challenges that the global pandemic has brought to all of us.”

Total assets increased $45.5 million as of December 31, 2021, an increase of 3% as compared to the same period one year ago. Total loans increased $176 million as of December 31, 2021, an increase of 30% over the prior year. Total loans net of PPP loans increased $228 million as of December 31, 2021, an increase of 47%. Cash and due from banks decreased $242 million or 38% from the prior year with the deployment of funds into loans and investment securities. Total investment securities increased $101 million, an increase of 132% from the prior year.

Total deposits decreased $13 million as of December 31, 2021, a decrease of 1% from December 31, 2020. Non-interest-bearing deposits increased $62 million as of December 31, 2021, an increase of 10% over the prior year. Interest bearing deposits decreased $75 million as of December 31, 2021, a decrease of 12% over the prior period.

Interest income was $8,113,000 for the three months ended December 31, 2021 as compared to $8,434,000 for the three months ended December 31, 2020, a decrease of 4%. Interest income was $30,209,000 for the twelve months ended December 31, 2021 as compared to $27,908,000 for the twelve months ended December 31, 2020, an increase of 8%. Interest expense was $545,000 for the three months ended December 31, 2021 as compared to $336,000 for the three months ended December 31, 2020, an increase of 62% due to the Company adding $50 million in subordinated debt during 2021. Interest expense was $2,024,000 for the twelve months ended December 31, 2021 as compared to 1,928,000 for the twelve months ended December 31, 2020, an increase of 5%.

Net interest income for the three months ended December 31, 2021 was $7,568,000 as compared to $8,098,000 for the three months ended December 31, 2020, a decrease of 7%. The net interest margin decreased for the three months ended December 31, 2021. It decreased from 3.49% in 2020 to 2.37% in 2021, a decrease of 32.09%, due to PPP loans which are earning 1.00% interest. Net interest income for the twelve months ended December 31, 2021 was $28,185,000 as compared to $25,980,000 for the twelve months ended December 31, 2020, an increase of 8%. The net interest margin decreased for the twelve months ended December 31, 2021. It decreased from 3.34% in 2020 to 2.42% in 2021, a decrease of 27.54% that was largely due to the high levels of excess liquidity held during the year as well as the 1.00% interest rates on PPP loans.

Provision for loan losses for the three months ended December 31, 2021 was $525,000 compared to $750,000 for the three months ended December 31, 2020, a decrease of 30%. Provision for loan losses for the twelve months ended December 31, 2021 was $525,000 compared to $6,593,000 for the twelve months ended December 31, 2020, a decrease of 92%. The allowance for loan losses (net of PPP loans) to total loans ratio decreased from 1.93% as of December 31, 2020 to 1.36% as of December 31, 2021.

Non-interest income for the three months ended December 31, 2021 was $2,275,000 compared to $4,049,000 for the same period last year, a decrease of 44%. During the prior year the Bank recognized a gain on sale of Main Street Lending Program loans of $2.9 million in the fourth quarter. Non-interest income for the twelve months ended December 31, 2021 was $6,155,000 compared to $7,268,000 for the same period last year, a decrease of 15%.

Non-interest expense for the three months ended December 31, 2021 was $4,232,000 compared to $4,416,000 for the same period last year, a decrease of 4%. Non-interest expense for the twelve months ended December 31, 2021 was $15,220.000 compared to $14,408,000 for the same period last year, an increase of 6%.

The efficiency ratio for the three months ended December 31, 2021 was 42.58% compared to 47.74% in 2020, which represents a decrease of 10.81%. The efficiency ratio illustrates that for every dollar made for the three-month period ending December 31, 2021, it cost $0.4258 to make it, as compared to $0.4774 one year ago. The Bank’s efficiency ratio for the twelve months ended December 31, 2021 was 43.93% compared to 47.16% in 2020, which represents a decrease of 6.86%.

Capital ratios for the Bank remain above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of December 31, 2021, the tier 1 leverage ratio was 8.38%, the common equity tier 1 capital ratio was 15.17%, the tier 1 risk-based capital ratio was 15.17% and the total risk-based capital ratio was 16.42%.

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 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, 2021 (Unaudited)
CW BANCORP										%
CONSOLIDATED BALANCE SHEET										Increase
(dollars in thousands)		December 31, 2021				December 31, 2020				(Decrease)
ASSETS
Cash and due from banks		$	398,121			$	640,103			-38%
Securities available for sale			150,523				76,913			96%
Securities held-to-maturity			27,688				500			5438%
Loans (PPP loans $53,818 and $106,285 at 2021 and 2020, respectively)			767,450				591,433			30%
Less allowance for loan losses			(9,710	)			(9,358	)		4%
Loans, net			757,740				582,075			30%
Bank premises and equipment, net			5,883				584			907%
Other assets			25,970				20,287			28%
Total assets		$	1,365,925			$	1,320,462			3%
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits		$	699,968			$	637,947			10%
Interest bearing deposits			529,082				604,534			-12%
Total deposits			1,229,050				1,242,481			-1%
Subordinated debenture			50,000				-			100%
Other liabilities			13,340				7,773			72%
			1,292,390				1,250,254			3%
Stockholders' equity			73,535				70,208			5%
Total liabilities and stockholders' equity		$	1,365,925			$	1,320,462			3%
Shares outstanding at end of period			3,437,891				3,531,996
Book value per share		$	20.76			$	18.91
Total loans to total deposits			62.44	%			47.60	%
ALLL to total loans (net of PPP loans)			1.36	%			1.93	%
Nonperforming assets (non-accrual loans & OREO)		$	-			$	-
COMMERCEWEST BANK CAPITAL RATIOS:
Tier 1 leverage ratio			8.38	%			6.49	%
Common equity tier 1 capital ratio			15.17	%			11.35	%
Tier 1 risk-based capital ratio			15.17	%			11.35	%
Total risk-based capital ratio			16.42	%			12.61	%

CW BANCORP
CONSOLIDATED STATEMENT OF INCOME (Unaudited)		Three Months Ended								Increase		Twelve Months Ended								Increase
(dollars in thousands except share and per share data)		Dec 31, 2021				Dec 31, 2020				(Decrease)		Dec 31, 2021				Dec 31, 2020				(Decrease)
INTEREST INCOME
Loans		$	6,865			$	7,665			-10%		$	26,496			$	25,119			5%
Investments			917				459			100%			2,490				1,841			35%
Fed funds sold and other			331				310			7%			1,223				948			29%
Total interest income			8,113				8,434			-4%			30,209				27,908			8%
INTEREST EXPENSE
Deposits			187				336			-44%			993				1,924			-48%
Subordinated debenture			358				-			100%			1,031				-			100%
Other borrowings			-				-			-			-				4			-100%
Total interest expense			545				336			62%			2,024				1,928			5%
NET INTEREST INCOME BEFORE LOAN LOSS PROVISION			7,568				8,098			-7%			28,185				25,980			8%
PROVISION FOR LOAN LOSSES			525				750			-30%			525				6,593			-92%
NET INTEREST INCOME AFTER LOAN LOSS PROVISION			7,043				7,348			-4%			27,660				19,387			43%
NON-INTEREST INCOME																				-
Service Charges and Fees on Deposits			1,171				1,009			16%			4,447				3,619			23%
Gain on Sale of Loans			-				2,968			-100%			(4	)			2,968			-100%
Other Fees			1,104				72			1433%			1,712				681			151%
NON-INTEREST EXPENSE			4,232				4,416			-4%			15,220				14,408			6%
EARNINGS BEFORE INCOME TAXES			5,086				6,981			-27%			18,595				12,247			52%
INCOME TAXES			1,112				2,005			-45%			4,416				3,156			40%
NET INCOME		$	3,974			$	4,976			-20%		$	14,179			$	9,091			56%
Basic earnings per share		$	1.14			$	1.41			-19%		$	4.03			$	2.55			58%
Diluted earnings per share		$	1.11			$	1.37			-19%		$	3.95			$	2.48			59%
Return on Assets			1.18	%			2.02	%		-41.71%			1.15	%			1.10	%		4.37%
Return on Equity			21.48	%			29.37	%		-26.85%			19.42	%			13.82	%		40.55%
Return on Tangible Equity			22.42	%			30.04	%		-25.37%			20.27	%			14.49	%		39.92%
Efficiency Ratio			42.58	%			47.74	%		-10.81%			43.93	%			47.16	%		-6.86%
Cost of Deposits			0.06	%			0.15	%		-60.00%			0.09	%			0.26	%		-65.97%
Net Interest Margin			2.37	%			3.49	%		-32.09%			2.42	%			3.34	%		-27.54%

CW BANCORP
CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS
		Three Months Ended December 31,
		2021								2020
		Average Balance			Interest Income / Expense			Yield / Cost		Average Balance			Interest Income / Expense			Yield / Cost
		(dollars in thousands)
INTEREST EARNING ASSETS
Int Bearing Due from Banks & FFS		$	448,609		$	263		0.23%		$	266,336		$	274		0.41%
Investment Securities (1)			175,383			1,013		2.29%			74,951			527		2.80%
Loans			653,534			6,865		4.17%			583,742			7,665		5.22%
FHLB & Other Stocks			4,177			68		6.46%			2,996			36		4.78%
Total interest-earning assets			1,281,703			8,209		2.54%			928,025			8,502		3.63%
Noninterest-earning assets			57,401								54,174
Total assets		$	1,339,104							$	982,199
INTEREST EARNING LIABILITIES
Interest Bearing Deposits		$	547,808		$	187		0.14%			424,807			336		0.31%
Subordinated Debenture			38,145			358		3.75%			-			-		0.00%
Total interest-earning liabilities			585,953			545		0.37%			424,807			336		0.31%
Noninterest-earning liabilities
Demand Deposits			666,004								481,919
Other Liabilities			13,759								8,052
Shareholders' Equity			73,388								67,421
Total liabilities and shareholder's equity		$	1,339,104							$	982,199
Net Interest Spread					$	7,664		2.17%					$	8,166		3.32%
Net Interest Margin								2.37%								3.49%
Total Deposits		$	1,213,812		$	187		0.06%		$	906,726		$	336		0.15%
Total Funding Costs		$	1,251,957		$	545		0.17%		$	906,726		$	336		0.15%
(1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate

CW BANCORP
CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS
		Twelve Months Ended December 31,
		2021								2020
		Average Balance			Interest Income / Expense			Yield / Cost		Average Balance			Interest Income / Expense			Yield / Cost
		(dollars in thousands)
INTEREST EARNING ASSETS
Int Bearing Due from Banks & FFS		$	411,665		$	1,027		0.25%		$	153,479		$	798		0.52%
Investment Securities (1)			112,123			2,796		2.49%			70,967			2,123		2.99%
Loans			651,329			26,496		4.07%			555,967			25,119		4.52%
FHLB & Other Stocks			3,762			196		5.21%			2,992			150		5.01%
Total interest-earning assets			1,178,879			30,515		2.59%			783,405			28,190		3.59%
Noninterest-earning assets			56,104								40,420
Total assets		$	1,234,983							$	823,825
INTEREST EARNING LIABILITIES
Interest Bearing Deposits		$	486,809		$	993		0.20%			396,460			1,924		0.49%
Other Borrowings		$	11		$	-		0.00%			252			4		1.59%
Subordinated Debenture			27,592			1,031		3.74%			-			-		0.00%
Total interest-earning liabilities			514,412			2,024		0.39%			396,712			1,928		0.48%
Noninterest-earning liabilities
Demand Deposits			636,171								354,416
Other Liabilities			11,407								6,900
Shareholders' Equity			72,993								65,797
Total liabilities and shareholder's equity		$	1,234,983							$	823,825
Net Interest Spread					$	28,491		2.20%					$	26,262		3.11%
Net Interest Margin								2.42%								3.34%
Total Deposits		$	1,122,980		$	993		0.09%		$	750,876		$	1,924		0.26%
Total Funding Costs		$	1,150,583		$	2,024		0.18%		$	751,128		$	1,928		0.26%
(1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220127005330/en/

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"

Source: CW Bancorp

FAQ

What are the Q4 2021 earnings for CWBK?

CWBK reported Q4 2021 net income of $3,974,000, or $1.11 per share, a 19% decrease from Q4 2020.

How did CWBK perform in 2021 compared to 2020?

CWBK's net income for the full year 2021 was $14,179,000, up 56% from $9,091,000 in 2020.

What is the loan growth percentage for CWBK in 2021?

CWBK experienced a 47% increase in loans excluding PPP loans in 2021.

What was the efficiency ratio for CWBK in Q4 2021?

The efficiency ratio for CWBK in Q4 2021 was 42.58%, down from 47.74% in Q4 2020.

What factors impacted CWBK's Q4 2021 performance?

CWBK's Q4 performance was impacted by a 19% decline in net income and a 4% drop in interest income.