CW Bancorp Reports Q1 2023 Earnings of $4.6 million up 14%, EPS of $1.37 up 19% and  ROTE of 27.19% up 16%

Rhea-AI Summary

CW Bancorp (CWBK) reported a consolidated net income of $4,618,000 for Q1 2023, translating to $1.37 per diluted share, marking a 19% increase compared to $1.15 in Q1 2022. Key financial highlights include a net income growth of 14%, return on average tangible equity (ROTE) at 27.19% (up 16%), and a return on assets (ROA) of 1.71% (up 35%). The bank's net interest income rose 15% to $9.9 million, with a net interest margin of 3.91%, up 37%. However, total assets decreased by 12%, total loans fell by 4%, and deposits dropped 13% compared to the same period last year.

Positive

• EPS increased by 19% to $1.37
• Net income grew 14% to $4.618 million
• ROTE improved to 27.19%, up 16%
• ROA increased to 1.71%, up 35%
• Net interest income rose 15% to $9.9 million
• Net interest margin expanded 37% to 3.91%
• 53 consecutive quarters of profitability

Negative

• Total assets decreased by 12% to $1.138 billion
• Total loans fell by 4% to $765.9 million
• Deposits decreased by 13% to $1.004 billion
• Non-interest income declined by 10% to $1.253 million
• Non-interest expense rose 16% to $4.867 million
• Efficiency ratio increased to 42.81% from 41.73%

IRVINE, Calif.--(BUSINESS WIRE)-- CW Bancorp (OTCQX: CWBK), the parent company (“the Company”) of CommerceWest Bank (the “Bank”) reported consolidated net income for the first quarter of 2023 of $4,618,000 or $1.37 per diluted share as compared to $4,058,000 or $1.15 per diluted share for the first quarter of 2022, an EPS increase of 19%.

Key Financial Results for the three months ended March 31, 2023:

• EPS of $1.37 up 19%
• Net income growth of 14%
• ROTE of 27.19% up 16%
• ROA of 1.71% up 35%
• Net interest income of $9.9 million, up 15%
• Net interest margin of 3.91%, up 37%
• Efficiency ratio of 42.81%
• ALLL to total loans ratio (net of PPP loans) of 1.44%
• Liquid funds to total deposits ratio of 15%
• No outstanding FRB or FHLB borrowings
• Non-interest bearing deposits to total deposits of 58%
• Bank tier 1 leverage ratio of 11.36% and total risk based capital ratio of 18.51%
• 53 quarters of consecutive profits

Mr. Ivo A. Tjan, Chairman and CEO commented, “The Company has reported strong results for the first quarter, with a ROA up 35%, a ROTE up 16%, EPS growth of 19%, and net income growth of 14%.” Mr. Tjan added, “We maintained a strong level of liquidity with a low leveraged balance sheet and 58% of our deposits were non-interest bearing. The Bank continues with our fortress balance sheet approach that includes strong capital ratios, a strong liquidity position, a well-diversified deposit base and prudent underwriting standards. We sincerely appreciated the continued loyalty and trust from our clients and look forward to welcoming new client relationships and expanding current relationships in 2023.”

Total asset decreased $150.7 million as of March 31, 2023, a decrease of 12% as compared to the same period one year ago. The Bank’s 2022 business objectives included deleveraging the Bank in order to strengthen capital ratios in anticipation of a recession. Total loans decreased $28.3 million as of March 31, 2023, a decrease of 4% from the prior year. Excluding PPP loans, total loans decreased $6.6 million as of March 31, 2023, a decrease of 1% as compared to the same period one year ago. The Bank remains prudent and conservative about credit quality. Cash and due from banks decreased $99.6 million or 34% from the prior year. Total investment securities decreased $25.9 million, a decrease of 14% from prior year. Total deposits decreased $154.3 million as of March 31, 2023, a decrease of 13% from March 31, 2022. Non-interest-bearing deposits decreased $111.0 million as of March 31, 2023, a decrease of 16% over the prior year. Interest bearing deposits decreased $43.3 million as of March 31, 2023, a decrease of 9% from the prior period.

Interest income was $12,004,000 for the three months ended March 31, 2023, as compared to $9,172,000 for the three months ended March 31, 2022, an increase of 31%. Interest expense was $2,145,000 for the three months ended March 31, 2023, as compared to $636,000 for the three months ended March 31, 2022, an increase of 237%. Interest expense was up for the quarter due to the rising cost of deposits.

Net interest income for the three months ended March 31, 2023, was $9,859,000 compared to $8,536,000 for the three months ended March 31, 2022, an increase of 15%. The net interest margin increased for the three months ended March 31, 2023. It increased from 2.85% in 2022 to 3.91% in 2023, an increase of 37%.

Provision for loan losses for the three months ended March 31, 2023, was $75,000 compared to $125,000 for the three months ended March 31, 2022, a decrease of 40%.

Non-interest income for the three months ended March 31, 2023, was $1,253,000 compared to $1,394,000 for the same period last year, a decrease of 10%.

Non-interest expense for the three months ended March 31, 2023, was $4,867,000 compared to $4,186,000 for the same period last year, an increase of 16%.

The efficiency ratio for the three months ended March 31, 2023, was 42.81% compared to 41.73% in 2022, which represents an increase of 3%. The efficiency ratio illustrates that for every dollar made for the three-month period ending March 31, 2023, it costs $0.4281 to make it, as compared to $0.4173 one year ago.

Capital ratio for the Bank remain above the level required for a "well capitalized" institution as designated by regulatory agencies. As of March 31, 2023, the tier 1 leverage ratio was 11.36%, the common equity tier 1 capital ratio was 17.26%, the tier 1 risk-based capital ratio was 17.26% and the total risk-based capital ratio was 18.51%.

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.

FIRST QUARTER REPORT - March 31, 2023 (Unaudited)
CW BANCORP										%
CONSOLIDATED BALANCE SHEET										Increase
(dollars in thousands)		March 31, 2023				March 31, 2022				(Decrease)
ASSETS
Cash and due from banks		$	191,912			$	291,466			-34	%
Securities available for sale			104,734				139,427			-25	%
Securities held-to-maturity			50,747				41,910			21	%
Loans (PPP loans $4,500 and $26,136 at 2023 and 2022, respectively)			765,937				794,206			-4	%
Less allowance for credit losses			(10,967	)			(9,835	)		12	%
Loans, net			754,970				784,371			-4	%
Bank premises and equipment, net			4,893				5,673			-14	%
Other assets			31,615				26,729			18	%
Total assets		$	1,138,871			$	1,289,576			-12	%
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits		$	582,599				693,572			-16	%
Interest bearing deposits			421,277				464,574			-9	%
Total deposits			1,003,876				1,158,146			-13	%
Subordinated debenture			50,000				50,000			0	%
Other liabilities			12,616				12,076			4	%
			1,066,492				1,220,222			-13	%
Stockholders' equity			72,379				69,354			4	%
Total liabilities and stockholders' equity		$	1,138,871			$	1,289,576			-12	%
Shares outstanding at end of period			3,289,444				3,425,979
Book value per share		$	25.17			$	21.63
Total loans to total deposits			76.30	%			68.58	%
ALLL to total loans (net of PPP loans)			1.44	%			1.28	%
Nonperforming assets (non-accrual loans & OREO)		$	3,263			$	-
COMMERCEWEST BANK CAPITAL RATIOS:
Tier 1 leverage ratio			11.36	%			8.98	%
Common equity tier 1 capital ratio			17.26	%			15.02	%
Tier 1 risk-based capital ratio			17.26	%			15.02	%
Total risk-based capital ratio			18.51	%			16.27	%

CW BANCORP
CONSOLIDATED STATEMENT OF INCOME (Unaudited)		Three Months Ended								Increase
(dollars in thousands except share and per share data)		March 31, 2023				March 31, 2022				(Decrease)
INTEREST INCOME
Loans		$	9,904			$	7,942			25	%
Investment securities			1,158				978			18	%
Fed funds sold and other			942				252			274	%
Total interest income			12,004				9,172			31	%
INTEREST EXPENSE
Deposits			1,667				167			898	%
Subordinated debenture			469				469			0	%
Other borrowings			9				-			-
Total interest expense			2,145				636			237	%
NET INTEREST INCOME BEFORE PROVISION			9,859				8,536			15	%
PROVISION FOR CREDIT LOSSES			75				125			-40	%
NET INTEREST INCOME AFTER CREDIT LOSS PROVISION			9,784				8,411			16	%
NON-INTEREST INCOME
Service Charges and Fees on Deposits			1,091				992			10	%
Loss on Sale of AFS Securities			(166	)			-			-
Other Fees			328				402			-18	%
NON-INTEREST EXPENSE			4,867				4,186			16	%
EARNINGS BEFORE INCOME TAXES			6,170				5,619			10	%
INCOME TAXES			1,552				1,561			-1	%
NET INCOME		$	4,618			$	4,058			14	%
Basic earnings per share		$	1.40			$	1.18			19	%
Diluted earnings per share		$	1.37			$	1.15			19	%
Return on Assets			1.71	%			1.27	%		35	%
Return on Equity			26.03	%			22.47	%		16	%
Return on Tangible Equity			27.19	%			23.45	%		16	%
Efficiency Ratio			42.81	%			41.73	%		3	%

CW BANCORP
CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS
		Three Months Ended March 31,
		2023									2022
		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		$	72,725		$	835		4.66	%		$	264,578		$	204		0.31	%
Investment Securities (1)			172,680			1,250		2.94	%			177,667			1,078		2.46	%
Loans			780,214			9,904		5.15	%			783,759			7,942		4.11	%
FHLB & Other Stocks			6,504			107		6.67	%			4,293			49		4.63	%
Total interest-earning assets			1,032,123			12,096		4.75	%			1,230,297			9,273		3.06	%
Noninterest-earning assets			61,046									61,410
Total assets		$	1,093,169								$	1,291,707
INTEREST EARNING LIABILITIES
Interest Bearing Deposits		$	381,648		$	1,667		1.77	%			483,834			167		0.14	%
Other Borrowings			734			9		4.91	%			1			-		0.00	%
Subordinated Debenture			50,000			469		3.75	%			50,000			469		3.75	%
Total interest-earning liabilities			432,382			2,145		2.01	%			533,835			636		0.48	%
Noninterest-earning liabilities
Demand Deposits			575,604									671,349
Other Liabilities			13,247									13,276
Shareholders' Equity			71,936									73,247
Total liabilities and shareholder's equity		$	1,093,169								$	1,291,707
Net Interest Spread					$	9,951		2.74	%					$	8,637		2.58	%
Net Interest Margin								3.91	%								2.85	%
Total Deposits		$	957,252		$	1,667		0.71	%		$	1,155,183		$	167		0.06	%
Total Funding Costs		$	1,007,986		$	2,145		0.86	%		$	1,205,184		$	636		0.21	%
(1) Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate

 

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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 the earnings per share for CW Bancorp in Q1 2023?

The earnings per share for Q1 2023 were $1.37.

How much did CW Bancorp's net income increase in Q1 2023?

CW Bancorp's net income increased by 14% to $4.618 million.

What is the net interest margin for CW Bancorp for Q1 2023?

The net interest margin for Q1 2023 was 3.91%, a 37% increase.

How did total loans and deposits change for CW Bancorp in Q1 2023?

Total loans decreased by 4% and deposits fell by 13% compared to Q1 2022.

What is the return on assets (ROA) for CW Bancorp in Q1 2023?

The return on assets for Q1 2023 was 1.71%, reflecting a 35% increase.