CW Bancorp Reports Q3 2022 EPS of $1.33 up 35% and ROTE of 27.8% up 39%

Rhea-AI Summary

CW Bancorp (OTCQX: CWBK) reported a strong performance for Q3 2022, with net income of $4,595,000 ($1.33/share), up 35% from $3,576,000 ($0.99/share) in Q3 2021. For the nine months ended September 30, 2022, net income rose by 26% to $12,839,000 ($3.68/share). Key metrics include a 43% increase in net interest income and a significant rise in net interest margin to 3.61%. Total loans saw a 30% growth, while total assets decreased by 14%. The efficiency ratio improved, signaling better cost management, despite a rise in interest expenses due to increased deposit costs.

Positive

• Q3 2022 EPS increased by 35% to $1.33
• Net income grew 28% in Q3 2022
• ROTE rose 39% to 27.8%
• Net interest income up 43% in Q3 2022
• Net interest margin increased by 58% to 3.61%

Negative

• Total assets decreased by 14% year-over-year
• Total deposits declined by 16% compared to Q3 2021
• Interest expense increased by 63% in Q3 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 third quarter of 2022 of $4,595,000 or $1.33 a share as compared to $3,576,000 or $0.99 a share for the third quarter of 2021, an EPS increase of 35% and net income for the nine months ended September 30, 2022 of $12,839,000 or $3.68 a share as compared to $10,204,000 or $2.80 a share for the nine months ended September 30, 2021, an EPS increase of 31%.

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

• EPS of $1.33 up 35%
• Net income growth of 28%
• ROTE of 27.8% up 39%
• ROA of 1.57% up 41%
• Net interest income up 43%
• Net interest margin up 58%
• Efficiency ratio of 40.63%
• ALLL to total loans ratio (net of PPP loans) of 1.34%
• 51 quarters of consecutive profits

Key Financial Results for the nine months ended September 30, 2022:

• EPS of $3.68 up 31%
• Net income growth of 26%
• ROTE of 25.54% up 28%
• ROA of 1.41% up 24%
• Net interest income up 33%
• Net interest margin up 32%
• Efficiency ratio of 41.14%
• Noninterest-bearing deposits as percent of total deposits at 62%

Mr. Ivo Tjan, Chairman and CEO, commented, “The Company has again delivered double digit growth in earnings per share, net income, net interest margin and return on tangible equity for both the quarter and nine months ended September 30, 2022.” Mr. Tjan continued, “Although it’s a challenging operating environment, our Company is well positioned, with a fortress balance sheet to service our clients during these turbulent times.”

Total assets decreased $183 million as of September 30, 2022, a decrease of 14% as compared to the same period one year ago. Total loans increased $182 million as of September 30, 2022, an increase of 30% over the prior year. Total loans net of PPP loans increased $289 million as of September 30, 2022, an increase of 59%. Cash and due from banks decreased $392 million or 73% from the prior year with the deployment of funds into loans and investment securities. Total investment securities increased $19 million, an increase of 12% from the prior year.

Total deposits decreased $197 million as of September 30, 2022, a decrease of 16% from September 30, 2021. Non-interest-bearing deposits decreased $33 million as of September 30, 2022, a decrease of 5% from the prior year. Interest bearing deposits decreased $164 million as of September 30, 2022, a decrease of 30% from the prior period. Clients are utilizing their available liquidity rather than borrowing against lines of credit due to the increase in interest rates.

Interest income was $10,661,000 for the three months ended September 30, 2022 as compared to $7,379,000 for the three months ended in September 30, 2021, an increase of 44%. Interest expense was $856,000 for the three months ended September 30, 2022 as compared to $525,000 for the three months ended in September 30, 2021, an increase of 63%. 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 $29,552,000 for the nine months ended September 30, 2022 as compared to $22,096,000 for the nine months ended in September 30, 2021, an increase of 34%. Interest expense was $2,120,000 for the nine months ended September 30, 2022 as compared to $1,480,000 for the nine months ended in September 30, 2021, an increase of 43%. The cost of the subordinated debt was the primary reason for the increase in interest expense year over year. The Company was able to offset some of this increase, reducing the cost of deposits during the nine months ended September.

Net interest income for the three months ended September 30, 2022 was $9,805,000 compared to $6,854,000 for the three months ended September 30, 2021, an increase of 43%. The net interest margin increased for the three months ended September 30, 2022. It increased from 2.28% in 2021 to 3.61% in 2022, an increase of 58%. Net interest income for the nine months ended September 30, 2022 was $27,432,000 compared to $20,616,000 for the nine months ended September 30, 2021, an increase of 33%. The net interest margin increased for the nine months ended September 30, 2022. It increased from 2.43% in 2021 to 3.21% in 2022, an increase of 32%.

Provision for loan losses for the three months ended September 30, 2022 was $300,000 as compared to zero for the three months ended September 30, 2021. Provision for loan losses for the nine months ended September 30, 2022 was $800,000 as compared to zero for the nine months ended September 30, 2021. The allowance for loan losses to total loans ratio (net of PPP loans) decreased from 1.74% as of September 30, 2021 to 1.34% as of September 30, 2022.

Non-interest income for the three months ended September 30, 2022 was $1,565,000 compared to $1,490,000 for the same period last year, an increase of 5%. Non-interest income for the nine months ended September 30, 2022 was $4,473,000 compared to $3,880,000 for the same period last year, an increase of 15%.

Non-interest expense for the three months ended September 30, 2022 was $4,659,000 compared to $3,778,000 for the same period last year, an increase of 23%. Non-interest expense for the nine months ended September 30, 2022 was $13,249,000 compared to $10,988,000 for the same period last year, an increase of 21%.

The efficiency ratio for the three months ended September 30, 2022 was 40.63% compared to 44.91% in 2021, which represents a decrease of 10%. The efficiency ratio illustrates that for every dollar made for the three-month period ending September 30, 2022, it cost $0.4063 to make it, as compared to $0.4491 one year ago. The efficiency ratio for the nine months ended September 30, 2022 was 41.14% compared to 44.47% in 2021, which represents a decrease of 7%.

Capital ratio for the Bank remain above the level required for a "well capitalized" institution as designated by regulatory agencies. As of September 30, 2022, the tier 1 leverage ratio was 10.45%, the common equity tier 1 capital ratio was 15.80%, the tier 1 risk-based capital ratio was 15.80% and the total risk-based capital ratio was 17.05%.

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.

THIRD QUARTER REPORT - September 30, 2022 (Unaudited)
CW BANCORP										%
CONSOLIDATED BALANCE SHEET										Increase
(dollars in thousands)		Sept 30, 2022				Sept 30, 2021				(Decrease)
ASSETS
Cash and due from banks		$	147,876			$	539,932			-73	%
Securities available for sale			124,758				131,085			-5	%
Securities held-to-maturity			51,652				26,272			97	%
Loans (PPP loans $4,981 and $111,389 at 2022 and 2021, respectively)			786,384				603,987			30	%
Less allowance for loan losses			(10,491	)			(9,185	)		14	%
Loans, net			775,893				594,802			30	%
Bank premises and equipment, net			5,255				5,941			-12	%
Other assets			34,442				25,260			36	%
Total assets		$	1,139,876			$	1,323,292			-14	%
LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits		$	624,102			$	656,849			-5	%
Interest bearing deposits			384,256				548,123			-30	%
Total deposits			1,008,358				1,204,972			-16	%
Subordinated debenture			50,000				32,500			54	%
Other liabilities			16,509				12,258			35	%
			1,074,867				1,249,730			-14	%
Stockholders' equity			65,009				73,562			-12	%
Total liabilities and stockholders' equity		$	1,139,876			$	1,323,292			-14	%
Shares outstanding at end of period			3,352,358				3,497,111
Book value per share		$	23.52			$	20.40
Total loans to total deposits			77.99	%			50.12	%
ALLL to total loans (net of PPP loans)			1.34	%			1.74	%
Nonperforming assets (non-accrual loans & OREO)		$	-			$	-
COMMERCEWEST BANK CAPITAL RATIOS:
Tier 1 leverage ratio			10.45	%			7.57	%
Common equity tier 1 capital ratio			15.80	%			15.38	%
Tier 1 risk-based capital ratio			15.80	%			15.38	%
Total risk-based capital ratio			17.05	%			16.63	%

CW BANCORP
CONSOLIDATED STATEMENT OF INCOME (Unaudited)		Three Months Ended								Increase			For the Nine Months Ended								Increase
(dollars in thousands except share and per share data)		Sept 30, 2022				Sept 30, 2021				(Decrease)			Sept 30, 2022				Sept 30, 2021				(Decrease)
INTEREST INCOME
Loans		$	8,897			$	6,444			38	%		$	25,023			$	19,631			27	%
Investments			1,083				613			77	%			3,170				1,573			102	%
Fed funds sold and other			681				322			111	%			1,359				892			52	%
Total interest income			10,661				7,379			44	%			29,552				22,096			34	%
INTEREST EXPENSE
Deposits			383				224			71	%			708				806			-12	%
Subordinated debenture			469				301			56	%			1,406				674			109	%
Other borrowings			4				-			-				6				-			-
Total interest expense			856				525			63	%			2,120				1,480			43	%
NET INTEREST INCOME BEFORE LOAN LOSS PROVISION			9,805				6,854			43	%			27,432				20,616			33	%
PROVISION FOR LOAN LOSSES			300				-			-				800				-			-
Non-interest income:
NET INTEREST INCOME AFTER LOAN LOSS PROVISION			9,505				6,854			39	%			26,632				20,616			29	%
NON-INTEREST INCOME
Service Charges and Fees on Deposits			1,197				1,303			-8	%			3,338				3,276			2	%
Gain on Sale of Loans			-				-			-				-				(4	)		-100	%
Other Fees			368				187			97	%			1,135				608			87	%
NON-INTEREST EXPENSE			4,659				3,778			23	%			13,249				10,988			21	%
EARNINGS BEFORE INCOME TAXES			6,411				4,566			40	%			17,856				13,508			32	%
INCOME TAXES			1,816				990			83	%			5,017				3,304			52	%
NET INCOME		$	4,595			$	3,576			28	%		$	12,839			$	10,204			26	%
Basic earnings per share		$	1.37			$	1.02			34	%		$	3.78			$	2.89			31	%
Diluted earnings per share		$	1.33			$	0.99			35	%		$	3.68			$	2.80			31	%
Return on Assets			1.57	%			1.12	%		41	%			1.41	%			1.14	%		24	%
Return on Equity			26.55	%			19.20	%		38	%			24.43	%			19.10	%		28	%
Return on Tangible Equity			27.79	%			20.03	%		39	%			25.54	%			19.96	%		28	%
Efficiency Ratio			40.63	%			44.91	%		-10	%			41.14	%			44.47	%		-7	%

CW BANCORP
CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS
		Three Months Ended Sept 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		$	98,275		$	550		2.22	%		$	463,009		$	274		0.23	%
Investment Securities (1)			182,218			1,180		2.57	%			110,904			687		2.46	%
Loans			801,866			8,897		4.40	%			628,060			6,444		4.07	%
FHLB & Other Stocks			6,504			131		7.99	%			4,150			48		4.59	%
Total interest-earning assets			1,088,863			10,758		3.92	%			1,206,123			7,453		2.45	%
Noninterest-earning assets			69,884									62,061
Total assets		$	1,158,747								$	1,268,184
INTEREST EARNING LIABILITIES
Interest Bearing Deposits		$	394,515		$	383		0.39	%			517,281			224		0.17	%
Other Borrowings			489			4		3.25	%			-			-		0.00	%
Subordinated Debenture			50,000			469		3.75	%			32,500			301		3.70	%
Total interest-earning liabilities			445,004			856		0.76	%			549,781			525		0.38	%
Noninterest-earning liabilities
Demand Deposits			631,554									628,001
Other Liabilities			13,531									16,501
Shareholders' Equity			68,658									73,901
Total liabilities and shareholder's equity		$	1,158,747								$	1,268,184
Net Interest Spread					$	9,902		3.16	%					$	6,928		2.07	%
Net Interest Margin								3.61	%								2.28	%
Total Deposits		$	1,026,069		$	383		0.15	%		$	1,145,282		$	224		0.08	%
Total Funding Costs		$	1,076,558		$	856		0.32	%		$	1,177,782		$	525		0.18	%
(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
		Nine Months Ended Sept 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		$	173,418		$	1,104		0.85	%		$	399,216		$	764		0.26	%
Investment Securities (1)			180,954			3,469		2.56	%			90,804			1,783		2.63	%
Loans			794,146			25,023		4.21	%			650,586			19,631		4.03	%
FHLB & Other Stocks			5,645			255		6.04	%			3,622			128		4.72	%
Total interest-earning assets			1,154,163			29,851		3.46	%			1,144,228			22,306		2.61	%
Noninterest-earning assets			65,572									55,666
Total assets		$	1,219,735								$	1,199,894
INTEREST EARNING LIABILITIES
Interest Bearing Deposits		$	434,484		$	708		0.22	%		$	466,254		$	806		0.23	%
Other Borrowings			612			6		1.31	%			14			-		0.00	%
Subordinated Debenture			50,000			1,406		3.75	%			24,074			674		3.73	%
Total interest-earning liabilities			485,096			2,120		0.58	%			490,342			1,480		0.40	%
Noninterest-earning liabilities
Demand Deposits			651,257									627,543
Other Liabilities			13,114									10,593
Shareholders' Equity			70,268									71,416
Total liabilities and shareholder's equity		$	1,219,735								$	1,199,894
Net Interest Spread					$	27,731		2.88	%					$	20,826		2.21	%
Net Interest Margin								3.21	%								2.43	%
Total Deposits		$	1,085,741		$	708		0.09	%		$	1,093,797		$	806		0.10	%
Total Funding Costs		$	1,136,353		$	2,120		0.25	%		$	1,117,885		$	1,480		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 CW Bancorp's earnings per share for Q3 2022?

CW Bancorp reported earnings per share of $1.33 for Q3 2022.

How much did net income grow for CW Bancorp in Q3 2022?

Net income for Q3 2022 increased by 28% to $4,595,000.

What is the net interest margin reported by CW Bancorp for Q3 2022?

The net interest margin for Q3 2022 was reported at 3.61%, a 58% increase year-over-year.

How has the total loan amount changed for CW Bancorp as of September 30, 2022?

Total loans increased by 30% year-over-year as of September 30, 2022.

What is the current efficiency ratio for CW Bancorp?

The efficiency ratio for CW Bancorp improved to 40.63% in Q3 2022, down from 44.91% in Q3 2021.