CW Bancorp Reports 2022 Full Year Record Earnings of $17.4 million up 22%, Record EPS of $5.00 up 27% and Record ROTE of 26.14% up 29%

Rhea-AI Summary

CW Bancorp (OTCQX: CWBK) reported a significant increase in its consolidated net income for Q4 2022, reaching $4.5 million or $1.32 per diluted share, up 14% year-over-year. For the full year, net income totaled $17.4 million, reflecting a 22% increase, with EPS growing 27% to $5.00. Key metrics include a return on average tangible equity (ROTE) of 28.01%, a return on assets (ROA) of 1.60%, and a net interest margin of 3.74%, which rose 58% from 2021. Despite a 30% decline in non-interest income, the bank maintained strong capital ratios, positioning itself to navigate potential economic challenges effectively.

Positive

• Record net income of $17.4 million, up 22%
• Record EPS of $5.00, up 27%
• Return on average tangible equity (ROTE) of 28.01%, up 25%
• Return on assets (ROA) of 1.60%, up 36%
• Net interest income of $37.3 million, up 32%
• Net interest margin of 3.74%, up 58%
• 52 consecutive quarters of profitability

Negative

• Non-interest income decreased by 30% in Q4 2022
• Non-interest income for the year decreased by 2%
• Non-interest expense increased by 14% in Q4 2022

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 2022 of $4,521,000 or $1.32 per diluted share as compared to $3,974,000 or $1.11 per diluted share for the fourth quarter of 2021, an EPS increase of 19%. The consolidated net income for the twelve months ended December 31, 2022 was $17,361,000 or $5.00 per diluted share as compared to $14,179,000 or $3.95 per diluted share for the twelve months ended December 31, 2021, an EPS increase of 27%.

Corporate Headquarters located in Irvine, California (Photo: Business Wire)

Key Financial Results for the three months ended December 31, 2022:

• EPS of $1.32 up 19%
• Net income of $4.5 million up 14%
• ROTE of 28.01% up 25%
• ROA of 1.60% up 36%
• Net interest income of $9.9 million up 31%
• Net interest margin of 3.74% up 58%
• Efficiency ratio of 41.76%
• ALLL to total loans ratio (net of PPP loans) of 1.38%
• 52 quarters of consecutive profits

Key Financial Results for the twelve months ended December 31, 2022:

• Record net income of $17.4 million up 22%
• Record EPS of $5.00 up 27%
• ROTE of 26.14% up 29%
• ROA of 1.45% up 27%
• Net interest income of $37.3 million up 32%
• Net interest margin of 3.34% up 38%
• Efficiency ratio of 41.30%

Mr. Ivo Tjan, Chairman and CEO commented, “The Company is proud to have achieved record earnings, EPS and ROTE in a period of aggressively rising interest rates and high inflation, while delivering a healthy dividend to our shareholders.” Mr. Tjan added, “We are prepared for a possible economic slowdown or recession by maintaining strong capital ratios and a fortress balance sheet, so we can continue to serve our clients and communities. Our team is also committed to continuously investing in our franchise and innovating to build long term shareholder value. Lastly, I want to thank our amazing employees who make it happen every day. Bank on the Difference!”

Total asset increased $71.9 million as of December 31, 2022, an increase of 5% as compared to the same period one year ago. Total loans increased $26.9 million as of December 31, 2022, an increase of 4% over the prior year. Total loans net of PPP loans increased $76.2 million as of December 31, 2022, an increase of 11% as compared to the same period one year ago. Cash and due from banks increased $40.3 million or 10% from the prior year. Total investment securities decreased $1.9 million, a decrease of 1% from prior year.

Total deposits increased $75.0 million as of December 31, 2022, an increase of 6% from December 31, 2021. Non-interest-bearing deposits decreased $115.2 million as of December 31, 2022, a decrease of 16% from the prior year. Interest-bearing deposits increased $190.3 million as of December 31, 2022, an increase of 36% over the prior year.

Interest income was $11,768,000 for the three months ended December 31, 2022 as compared to $8,113,000 for the three months ended December 31, 2021, an increase of 45%. Interest expense was $1,877,000 for the three months ended December 31, 2022 as compared to $545,000 for the three months ended December 31, 2021, an increase of 244%. Interest expense was up for the quarter due to the rising cost of deposits as well as the cost of subordinated debt. Interest income was $41,320,000 for the twelve months ended December 31, 2022 as compared to $30,209,000 for the twelve months ended December 31, 2021, an increase of 37%. Interest expense was $3,997,000 for the twelve months ended December 31, 2022 as compared to $2,024,000 for the twelve months ended December 31, 2021, an increase of 97%.

Net interest income for the three months ended December 31, 2022 was $9,891,000 compared to $7,568,000 for the three months ended December 31, 2021, an increase of 31%. The net interest margin increased for the three months ended December 31, 2022. It increased from 2.37% in 2021 to 3.74% in 2022, an increase of 58%. Net interest income for the twelve months ended December 31, 2022 was $37,323,000 compared to $28,185,000 for the twelve months ended December 31, 2021, an increase of 32%. The net interest margin increased for the twelve months ended December 31, 2022. It increased from 2.42% in 2021 to 3.34% in 2022, an increase of 38%.

Provision for loan losses for the three months ended December 31, 2022 was $400,000 compared to $525,000 for the three months ended December 31, 2021. Provision for loan losses for the twelve months ended December 31, 2022 was $1,200,000 compared to $525,000 for the twelve months ended December 31, 2021.

Non-interest income for the three months ended December 31, 2022 was $1,589,000 compared to $2,275,000 for the same period last year, a decrease of 30%. Non-interest income for the twelve months ended December 31, 2022 was $6,062,000 compared to $6,155,000 for the same period last year, a decrease of 2%.

Non-interest expense for the three months ended December 31, 2022 was $4,835,000 compared to $4,232,000 for the same period last year, an increase of 14%. Non-interest expense for the twelve months ended December 31, 2022 was $18,083,000 compared to $15,220,000 for the same period last year, an increase of 19%.

The efficiency ratio for the three months ended December 31, 2022 was 41.76% compared to 42.58% in 2021, which represents a decrease of 2%. The efficiency ratio illustrates that for every dollar made for the three-month period ending December 31, 2022, it costs $0.4176 to make it, as compared to $0.4258 one year ago. The efficiency ratio for the twelve months ended December 31, 2022 was 41.30% compared to 43.93% in 2021, which represents a decrease of 6%.

Capital ratio for the Bank remain above the level required for a "well capitalized" institution as designated by regulatory agencies. As of December 31, 2022, the tier 1 leverage ratio was 11.01%, the common equity tier 1 capital ratio was 15.57%, the tier 1 risk-based capital ratio was 15.57% and the total risk-based capital ratio was 16.82%.

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, 2022 (Unaudited)
CW BANCORP										%
CONSOLIDATED BALANCE SHEET										Increase
(dollars in thousands)		Dec 31, 2022				Dec 31, 2021				(Decrease)
ASSETS
Cash and due from banks		$	438,433			$	398,121			10	%
Securities available for sale			124,682				150,523			-17	%
Securities held-to-maturity			51,613				27,688			86	%
Loans (PPP loans $4,527 and $53,818 at 2022 and 2021, respectively)			794,383				767,450			4	%
Less allowance for loan losses			(10,892	)			(9,710	)		12	%
Loans, net			783,491				757,740			3	%
Bank premises and equipment, net			5,053				5,883			-14	%
Other assets			34,574				25,970			33	%
Total assets		$	1,437,846			$	1,365,925			5	%
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits		$	584,722			$	699,968			-16	%
Interest bearing deposits			719,348				529,082			36	%
Total deposits			1,304,070				1,229,050			6	%
Subordinated debenture			50,000				50,000			0	%
Other liabilities			14,156				13,340			6	%
			1,368,226				1,292,390			6	%
Stockholders' equity			69,620				73,535			-5	%
Total liabilities and stockholders' equity		$	1,437,846			$	1,365,925			5	%
Shares outstanding at end of period			3,314,358				3,437,891
Book value per share		$	24.57			$	20.76
Total loans to total deposits			60.92	%			62.44	%
ALLL to total loans (net of PPP loans)			1.38	%			1.36	%
Nonperforming assets (non-accrual loans & OREO)		$	522			$	-
COMMERCEWEST BANK CAPITAL RATIOS:
Tier 1 leverage ratio			11.01	%			8.38	%
Common equity tier 1 capital ratio			15.57	%			15.17	%
Tier 1 risk-based capital ratio			15.57	%			15.17	%
Total risk-based capital ratio			16.82	%			16.42	%

CW BANCORP
CONSOLIDATED STATEMENT OF INCOME (Unaudited)		Three Months Ended								Increase			For the Twelve Months Ended								Increase
(dollars in thousands except share and per share data)		Dec 31, 2022				Dec 31, 2021				(Decrease)			Dec 31, 2022				Dec 31, 2021				(Decrease)
INTEREST INCOME
Loans		$	9,543			$	6,865			39	%		$	34,566			$	26,496			30	%
Investments			1,173				917			28	%			4,343				2,490			74	%
Fed funds sold and other			1,052				331			218	%			2,411				1,223			97	%
Total interest income			11,768				8,113			45	%			41,320				30,209			37	%
INTEREST EXPENSE
Deposits			1,406				187			652	%			2,114				993			113	%
Subordinated debenture			469				358			31	%			1,875				1,031			82	%
Other borrowings			2				-			100	%			8				-			100	%
Total interest expense			1,877				545			244	%			3,997				2,024			97	%
NET INTEREST INCOME BEFORE LOAN LOSS PROVISION			9,891				7,568			31	%			37,323				28,185			32	%
PROVISION FOR LOAN LOSSES			400				525			-24	%			1,200				525			129	%
Non-interest income:
NET INTEREST INCOME AFTER LOAN LOSS PROVISION			9,491				7,043			35	%			36,123				27,660			31	%
NON-INTEREST INCOME
Service Charges and Fees on Deposits			1,137				1,171			-3	%			4,475				4,447			1	%
Gain on Sale of Loans			-				-			-				-				(4	)		-100	%
Other Fees			452				1,104			-59	%			1,587				1,712			-7	%
NON-INTEREST EXPENSE			4,835				4,232			14	%			18,083				15,220			19	%
EARNINGS BEFORE INCOME TAXES			6,245				5,086			23	%			24,102				18,595			30	%
INCOME TAXES			1,724				1,112			55	%			6,741				4,416			53	%
NET INCOME		$	4,521			$	3,974			14	%		$	17,361			$	14,179			22	%
Basic earnings per share		$	1.36			$	1.14			19	%		$	5.14			$	4.03			27	%
Diluted earnings per share		$	1.32			$	1.11			19	%		$	5.00			$	3.95			27	%
Return on Assets			1.60	%			1.18	%		36	%			1.45	%			1.15	%		27	%
Return on Equity			26.73	%			21.48	%		24	%			24.99	%			19.42	%		29	%
Return on Tangible Equity			28.01	%			22.42	%		25	%			26.14	%			20.27	%		29	%
Efficiency Ratio			41.76	%			42.58	%		-2	%			41.30	%			43.93	%		-6	%

CW BANCORP
CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS
		Three Months Ended Dec 31,
		2022									2021
		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		$	96,413		$	934		3.84	%		$	448,609		$	263		0.23	%
Investment Securities (1)			175,914			1,270		2.86	%			175,383			1,013		2.29	%
Loans			782,021			9,543		4.84	%			653,534			6,865		4.17	%
FHLB & Other Stocks			6,504			118		7.20	%			4,177			68		6.46	%
Total interest-earning assets			1,060,852			11,865		4.44	%			1,281,703			8,209		2.54	%
Noninterest-earning assets			59,420									57,401
Total assets		$	1,120,272								$	1,339,104
INTEREST EARNING LIABILITIES
Interest Bearing Deposits		$	382,777		$	1,406		1.46	%			547,808			187		0.14	%
Other Borrowings			283			2		2.80	%			-			-		0.00	%
Subordinated Debenture			50,000			469		3.75	%			38,145			358		3.75	%
Total interest-earning liabilities			433,060			1,877		1.72	%			585,953			545		0.37	%
Noninterest-earning liabilities
Demand Deposits			605,804									666,004
Other Liabilities			14,309									13,759
Shareholders' Equity			67,099									73,388
Total liabilities and shareholder's equity		$	1,120,272								$	1,339,104
Net Interest Spread					$	9,988		2.72	%					$	7,664		2.17	%
Net Interest Margin								3.74	%								2.37	%
Total Deposits		$	988,581		$	1,406		0.56	%		$	1,213,812		$	187		0.06	%
Total Funding Costs		$	1,038,864		$	1,877		0.72	%		$	1,251,957		$	545		0.17	%

(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 Dec 31,
		2022									2021
		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		$	154,008		$	2,038		1.32	%		$	411,665		$	1,027		0.25	%
Investment Securities (1)			179,684			4,739		2.64	%			112,123			2,796		2.49	%
Loans			791,090			34,566		4.37	%			651,329			26,496		4.07	%
FHLB & Other Stocks			5,862			373		6.36	%			3,762			196		5.21	%
Total interest-earning assets			1,130,644			41,716		3.69	%			1,178,879			30,515		2.59	%
Noninterest-earning assets			64,021									56,104
Total assets		$	1,194,665								$	1,234,983
INTEREST EARNING LIABILITIES
Interest Bearing Deposits		$	421,452		$	2,114		0.50	%		$	486,809		$	993		0.20	%
Other Borrowings			529			8		1.51	%			11			-		0.00	%
Subordinated Debenture			50,000			1,875		3.75	%			27,592			1,031		3.74	%
Total interest-earning liabilities			471,981			3,997		0.85	%			514,412			2,024		0.39	%
Noninterest-earning liabilities
Demand Deposits			639,800									636,171
Other Liabilities			13,415									11,407
Shareholders' Equity			69,469									72,993
Total liabilities and shareholder's equity		$	1,194,665								$	1,234,983
Net Interest Spread					$	37,719		2.84	%					$	28,491		2.20	%
Net Interest Margin								3.34	%								2.42	%
Total Deposits		$	1,061,252		$	2,114		0.20	%		$	1,122,980		$	993		0.09	%
Total Funding Costs		$	1,111,781		$	3,997		0.36	%		$	1,150,583		$	2,024		0.18	%

(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/20230126005241/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 were CW Bancorp's earnings for Q4 2022?

CW Bancorp reported earnings of $4.5 million, or $1.32 per diluted share for Q4 2022.

How did CW Bancorp perform in 2022?

In 2022, CW Bancorp achieved record net income of $17.4 million with an EPS of $5.00.

What is the net interest margin for CW Bancorp?

The net interest margin for CW Bancorp increased to 3.74% for Q4 2022.

What is the future outlook for CW Bancorp?

CW Bancorp maintains strong capital ratios to navigate potential economic challenges.