CW Bancorp Reports Q2 2022 EPS of $1.20 up 48% and ROTE of 25.93% up 50%

Rhea-AI Summary

CW Bancorp (CWBK) reported a strong financial performance for Q2 2022, with net income of $4.19 million ($1.20 per share), a 48% increase year-over-year. For the first half of 2022, net income reached $8.24 million ($2.35 per share), up 31%. Key metrics included a 40% growth in net income for Q2, a return on tangible equity (ROTE) of 25.93%, and a return on assets (ROA) of 1.39%. Deposits increased by $38 million (4%), while total loans surged by $151 million (23%). The efficiency ratio improved to 41%, marking 50 consecutive quarters of profit.

Positive

• Net income increased 48% year-over-year for Q2 2022.
• EPS rose to $1.20, a 48% increase compared to Q2 2021.
• Total loans increased by $151 million (23%) year-over-year.
• First half net income growth of 24% with EPS up 31%.
• Efficiency ratio improved to 41%.

Negative

• Provision for loan losses increased to $375,000 for Q2 2022 from zero in Q2 2021.
• Total interest expense rose 32% for the six months ended June 30, 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 second quarter of 2022 of $4,186,000 or $1.20 a share as compared to $2,981,000 or $0.81 a share for the second quarter of 2021, an EPS increase of 48% and net income for the six months ended June 30, 2022 of $8,244,000 or $2.35 a share as compared to $6,628,000 or $1.80 a share for the six months ended June 30, 2021, an EPS increase of 31%.

(Graphic: Business Wire)

Key Financial Results for the three months ended June 30, 2022:

• Net income growth of 40%
• EPS of $1.20 up 48%
• ROTE of 25.93% up 50%
• ROA of 1.39% up 35%
• Net interest income up 38%
• Net interest margin up 34%
• Cost of deposits of 0.06% down 45%
• Efficiency ratio of 41%
• ALLL to total loans ratio (net of PPP loans) of 1.29%
• 50 quarters of consecutive profits

Key Financial Results for the six months ended June 30, 2022:

• Net income growth of 24%
• EPS of $2.35 up 31%
• ROTE of 24.82% up 28%
• ROA of 1.33% up 16%
• Total asset growth of $49 million up 4%
• Loan growth of $151 million up 23%
• Deposit growth of $38 million up 4%
• Noninterest-bearing deposits as percent of total deposits at 63%

Mr. Ivo Tjan, Chairman and CEO commented, “Our team achieved double digit growth in earnings per share, net income, net interest margin and return on tangible equity for both the quarter and for the first six months of 2022 in a challenging economic environment. We continue to demonstrate the strength of the Bank’s business model, digital banking strategy and our team’s execution; while maintaining a fortress balance sheet.” Mr. Tjan continued, “We are positioned well to continue to service our clients in California during this economic cycle. The company recorded our 50^th quarter of consecutive profits and posted a strong 41% efficiency ratio.”

Total assets increased $49.0 million as of June 30, 2022, an increase of 4% as compared to the same period one year ago. Total loans increased $152 million as of June 30, 2022, an increase of 23% over the prior year. Total loans net of PPP loans increased $249 million as of June 30, 2022, an increase of 46%. Cash and due from banks decreased $201 million or 50% from the prior year with the deployment of funds into loans and investment securities. Total investment securities increased $92 million, an increase of 103% from the prior year.

Total deposits increased $38 million as of June 30, 2022, an increase of 4% from June 30, 2021. Non-interest-bearing deposits increased $47 million as of June 30, 2022, an increase of 7% over the prior year. Interest bearing deposits decreased $10 million as of June 30, 2022, a decrease of 2% over the prior period.

Interest income was $9,720,000 for the three months ended June 30, 2022 as compared to $7,149,000 for the three months ended June 30, 2021, an increase of 36%. Interest expense was $629,000 for the three months ended June 30, 2022 as compared to $583,000 for the three months ended June 30, 2021, an increase of 8% due to the Company adding $17.5 million in subordinated debt in the fourth quarter of 2021. Interest income was $18,892,000 for the six months ended June 30, 2022 as compared to $14,717,000 for the six months ended June 30, 2021, an increase of 28%. Interest expense was $1,265,000 for the six months ended June 30, 2022 as compared to $955,000 for the six months ended June 30, 2021, an increase of 32%. Reductions in the cost of deposits were offset by increased funding costs related to subordinated debt.

Net interest income for the three months ended June 30, 2022 was $9,091,000 as compared to $6,566,000 for the three months ended June 30, 2021, an increase of 38%. The net interest margin increased for the three months ended June 30, 2022. It increased from 2.41% in 2021 to 3.22% in 2022, an increase of 34%. Net interest income for the six months ended June 30, 2022 was $17,627,000 as compared to $13,762,000 for the six months ended June 30, 2021, an increase of 28%. The net interest margin increased for the six months ended June 30, 2022. It increased from 2.52% in 2021 to 3.03% in 2022, an increase of 20%.

Provision for loan losses for the three months ended June 30, 2022 was $375,000 compared to zero for the three months ended June 30, 2021. Provision for loan losses for the six months ended June 30, 2022 was $500,000 compared to zero for the six months ended June 30, 2021. The allowance for loan losses (net of PPP loans) to total loans ratio decreased from 1.71% as of June 30, 2021 to 1.29% as of June 30, 2022.

Non-interest income for the three months ended June 30, 2022 was $1,515,000 compared to $1,283,000 for the same period last year, an increase of 18%. Non-interest income for the six months ended June 30, 2022 was $2,909,000 compared to $2,389,000 for the same period last year, an increase of 22%.

Non-interest expense for the three months ended June 30, 2022 was $4,404,000 compared to $3,711,000 for the same period last year, an increase of 19%. Non-interest expense for the six months ended June 30, 2022 was $8,590,000 compared to $7,209,000 for the same period last year, an increase of 19%.

The efficiency ratio for the three months ended June 30, 2022 was 41.14% compared to 47.28% in 2021, which represents a decrease of 13%. The efficiency ratio illustrates that for every dollar made for the three-month period ending June 30, 2022, it cost $0.4114 to make it, as compared to $0.4728 one year ago. The efficiency ratio for the six months ended June 30, 2022 was 41.43% compared to 44.25% in 2021, which represents a decrease of 6%.

Capital ratios for the Bank remain above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of June 30, 2022, the tier 1 leverage ratio was 9.81%, the common equity tier 1 capital ratio was 15.19%, the tier 1 risk-based capital ratio was 15.19% and the total risk-based capital ratio was 16.44%.

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.

SECOND QUARTER REPORT - JUNE 30, 2022 (Unaudited)
CW BANCORP										%
CONSOLIDATED BALANCE SHEET										Increase
(dollars in thousands)		June 30, 2022				June 30, 2021				(Decrease)
ASSETS
Cash and due from banks		$	197,912			$	399,278			-50	%
Securities available for sale			130,597				76,909			70	%
Securities held-to-maturity			51,750				13,066			296	%
Loans (PPP loans $26,136 and $157,208 at 2022 and 2021, respectively)			802,284				650,773			23	%
Less allowance for loan losses			(10,210	)			(9,201	)		11	%
Loans, net			792,074				641,572			23	%
Bank premises and equipment, net			5,460				5,950			-8	%
Other assets			33,120				25,321			31	%
Total assets		$	1,210,913			$	1,162,096			4	%
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits		$	680,488			$	633,277			7	%
Interest bearing deposits			401,408				410,980			-2	%
Total deposits			1,081,896				1,044,257			4	%
Subordinated debenture			50,000				32,500			54	%
Other liabilities			12,746				12,325			3	%
			1,144,642				1,089,082			5	%
Stockholders' equity			66,271				73,014			-9	%
Total liabilities and stockholders' equity		$	1,210,913			$	1,162,096			4	%
Shares outstanding at end of period			3,371,667				3,500,092
Book value per share		$	22.48			$	19.99
Total loans to total deposits			74.16	%			62.32	%
ALLL to total loans (net of PPP loans)			1.29	%			1.71	%
Nonperforming assets (non-accrual loans & OREO)		$	19			$	-
COMMERCEWEST BANK CAPITAL RATIOS:
Tier 1 leverage ratio			9.81	%			8.02	%
Common equity tier 1 capital ratio			15.19	%			15.00	%
Tier 1 risk-based capital ratio			15.19	%			15.00	%
Total risk-based capital ratio			16.44	%			16.25	%

CW BANCORP
CONSOLIDATED STATEMENT OF INCOME (Unaudited)		Three Months Ended								Increase			For the Six Months Ended								Increase
(dollars in thousands except share and per share data)		June 30, 2022				June 30, 2021				(Decrease)			June 30, 2022				June 30, 2021				(Decrease)
INTEREST INCOME
Loans		$	8,184			$	6,389			28	%		$	16,126			$	13,187			22	%
Investments			1,110				501			122	%			2,088				960			118	%
Fed funds sold and other			426				259			64	%			678				570			19	%
Total interest income			9,720				7,149			36	%			18,892				14,717			28	%
INTEREST EXPENSE
Deposits			159				278			-43	%			325				583			-44	%
Subordinated debenture			469				305			54	%			938				372			152	%
Other borrowings			1				-			-				2				-			-
Total interest expense			629				583			8	%			1,265				955			32	%
NET INTEREST INCOME BEFORE LOAN LOSS PROVISION			9,091				6,566			38	%			17,627				13,762			28	%
PROVISION FOR LOAN LOSSES			375				-			-				500				-			-
Non-interest income:
NET INTEREST INCOME AFTER LOAN LOSS PROVISION			8,716				6,566			33	%			17,127				13,762			24	%
NON-INTEREST INCOME
Service Charges and Fees on Deposits			1,149				1,096			5	%			2,141				2,389			-10	%
Gain on Sale of Loans			-				-			-				-				-			-
Other Fees			366				187			96	%			768				-			-
NON-INTEREST EXPENSE			4,404				3,711			19	%			8,590				7,209			19	%
EARNINGS BEFORE INCOME TAXES			5,827				4,138			41	%			11,446				8,942			28	%
INCOME TAXES			1,641				1,157			42	%			3,202				2,314			38	%
NET INCOME		$	4,186			$	2,981			40	%		$	8,244			$	6,628			24	%
Basic earnings per share		$	1.23			$	0.85			45	%		$	2.41			$	1.87			29	%
Diluted earnings per share		$	1.20			$	0.81			48	%		$	2.35			$	1.80			31	%
Return on Assets			1.39	%			1.03	%		35	%			1.33	%			1.15	%		16	%
Return on Equity			24.76	%			16.54	%		50	%			23.74	%			18.51	%		28	%
Return on Tangible Equity			25.93	%			17.28	%		50	%			24.82	%			19.33	%		28	%
Efficiency Ratio			41.14	%			47.28	%		-13	%			41.43	%			44.25	%		-6	%

CW BANCORP
CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS
	Three Months Ended June 30,
	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	$	159,229		$	351		0.88	%		$	336,339		$	215		0.26	%
Investment Securities (1)		182,926			1,208		2.65	%			84,905			570		2.69	%
Loans		796,615			8,184		4.12	%			680,331			6,389		3.77	%
FHLB & Other Stocks		6,115			75		4.92	%			3,708			44		4.76	%
Total interest-earning assets		1,144,885			9,818		3.44	%			1,105,283			7,218		2.62	%
Noninterest-earning assets		64,204									52,592
Total assets	$	1,209,089								$	1,157,875
INTEREST EARNING LIABILITIES
Interest Bearing Deposits	$	426,084		$	159		0.15	%			424,375			278		0.26	%
Other Borrowings		1,341			1		0.30	%			42			-		0.00	%
Subordinated Debenture		50,000			469		3.77	%			32,500			305		3.77	%
Total interest-earning liabilities		477,425			629		0.53	%			456,917			583		0.51	%
Noninterest-earning liabilities
Demand Deposits		651,306									620,731
Other Liabilities		12,533									7,961
Shareholders' Equity		67,825									72,266
Total liabilities and shareholder's equity	$	1,209,089								$	1,157,875
Net Interest Spread				$	9,189		2.91	%					$	6,635		2.11	%
Net Interest Margin							3.22	%								2.41	%
Total Deposits	$	1,077,390		$	159		0.06	%		$	1,045,106		$	278		0.11	%
Total Funding Costs	$	1,128,731		$	629		0.22	%		$	1,077,648		$	583		0.22	%
(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
	Six Months Ended June 30,
	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	$	211,612		$	554		0.53	%		$	366,790		$	490		0.27	%
Investment Securities (1)		180,311			2,288		2.56	%			80,587			1,096		2.74	%
Loans		790,223			16,126		4.12	%			662,037			13,187		4.02	%
FHLB & Other Stocks		5,209			124		4.80	%			3,353			80		4.81	%
Total interest-earning assets		1,187,355			19,092		3.24	%			1,112,767			14,853		2.69	%
Noninterest-earning assets		62,333									52,410
Total assets	$	1,249,688								$	1,165,177
INTEREST EARNING LIABILITIES
Interest Bearing Deposits	$	454,800		$	325		0.14	%		$	440,317		$	583		0.27	%
Other Borrowings		675			2		0.60	%			22			-		0.00	%
Subordinated Debenture		50,000			938		3.75	%			19,861			372		3.75	%
Total interest-earning liabilities		505,475			1,265		0.50	%			460,200			955		0.42	%
Noninterest-earning liabilities
Demand Deposits		661,272									625,278
Other Liabilities		12,902									7,494
Shareholders' Equity		70,039									72,205
Total liabilities and shareholder's equity	$	1,249,688								$	1,165,177
Net Interest Spread				$	17,827		2.74	%					$	13,898		2.27	%
Net Interest Margin							3.03	%								2.52	%
Total Deposits	$	1,116,072		$	325		0.06	%		$	1,065,595		$	583		0.11	%
Total Funding Costs	$	1,166,747		$	1,265		0.22	%		$	1,085,478		$	955		0.18	%
(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 net income and EPS for CW Bancorp for Q2 2022?

CW Bancorp reported a net income of $4.19 million and an EPS of $1.20 for Q2 2022.

How much did total loans increase for CW Bancorp by June 30, 2022?

Total loans for CW Bancorp increased by $151 million, or 23%, year-over-year by June 30, 2022.

What is the efficiency ratio for CW Bancorp as of June 30, 2022?

The efficiency ratio for CW Bancorp improved to 41% as of June 30, 2022.

What was the growth in net income for the first half of 2022 for CW Bancorp?

CW Bancorp's net income grew by 24% for the first half of 2022.

What was the provision for loan losses for CW Bancorp in Q2 2022?

The provision for loan losses for CW Bancorp in Q2 2022 was $375,000.