Pacific West Bank (PWBO) Announces Third Quarter 2022 Earnings

Rhea-AI Summary

Pacific West Bank reported a third-quarter net income of $523 thousand, or $0.20 per diluted share, marking a 31.5% increase from the previous quarter. For the first nine months of 2022, net income reached $1.3 million, or $0.48 per diluted share. Key financial highlights include $20.1 million in core loan commitments, deposits rising by $18.5 million (7.9%), and total assets growing to $291.3 million. The bank reported no non-accrual loans, with a net interest margin increase to 4.03% due to higher interest rates. However, a $3.7 million negative adjustment to equity was noted.

Positive

• Net income for Q3 2022 increased by $125 thousand, or 31.5%.
• Deposits grew by $18.5 million, or 7.9% in Q3 2022.
• Gross interest income increased by $284 thousand, or 10.2% compared to the prior quarter.
• Loan interest income for the first nine months grew by $1.5 million, or 30.5% compared to 2021.
• Investment interest income surged by $696 thousand, or 145.3% year-over-year.
• Total assets increased by 6.0% compared to year-end 2021.

Negative

• Loan fees recognized showed a negative variance of $1.0 million, or 53.4% from 2021.
• An accounting adjustment of $3.7 million negatively impacted equity due to market value adjustments.

PORTLAND, Ore., Oct. 27, 2022 /PRNewswire/ -- Pacific West Bank ("Bank") today announced third quarter net income of $523 thousand or $0.20 per diluted share and net income for the first nine months of the year of $1.3 million or $0.48 per diluted share.

 Third Quarter 2022 Results:

• Net income grew by $125 thousand, or 31.5% when compared to prior quarter.
• $20.1 million in core loan commitments originated during the quarter.
• Deposits grew $18.5 million, or 7.9%.
• Gross interest income grew by $284 thousand, or 10.2% compared to prior quarter.
• Total assets as of quarter-end were $291.3 million.
• There were no non-accrual loans or past-due loans greater than 30-days as of quarter-end.
• Capital levels as of September 30, 2022, remained strong with a leverage ratio of 11.30%.

"Net interest income growth was strong during the third quarter driven by both loan growth and higher interest rates," said Terry Peterson, Chief Executive Officer. "Our results reflect the accelerating endorsement from the Portland business community that demands local decisioning from experienced bankers, delivering a client-focused service model." 

Loan interest income for the first nine months of 2022 grew by $1.5 million, or 30.5%, when compared to the same period in 2021. Investment interest income for the first nine months of 2022 grew by $696 thousand, or 145.3%, when compared to the same period in 2021. Year-to-date loan fees recognized show a negative variance of $1.0 million, or 53.4%, from 2021 due to non-recurring fees related to the Bank's participation in the Small Business Administration's Payment Protection Program (PPP).

Total assets were $291.3 million as of September 30, 2022, a 6.0% increase compared to year-end 2021. Investments increased by 41.9%, or $15.1 million, as excess cash balances were deployed into debt securities. Core loans, net of PPP totaled $196.0 million, an increase of $22.6 million, or 13.1%, compared to year-end 2021 totals. Loan growth was driven by $60.3 million in loan commitments originated in the first nine months of 2022. During the third quarter of 2022, core loans grew by $13.1 million, or by 7.2%. There were no loans past-due greater than 30 days, or on non-accrual status as of September 30, 2022. The Bank continues to diligently monitor the loan portfolio as market interest rates increase.

As index interest rates have risen, there has been improvement in net interest margin by 52 basis points, from 3.51% for the first nine months of 2021, compared to 4.03% for the first nine months of 2022. The increase in margin was partially driven by earnings from investments, which were up 145.3% when compared to the same period in 2021. While the rise in index interest rates has improved the Bank's earnings and net interest margin, the change has also caused a negative accounting adjustment to equity of $3.7 million, due to marking the investment portfolio to market value. These adjustments are being experienced industry wide, and the Bank does not expect to realize any losses related to this accounting adjustment.

Deposits totaled $250.6 million as of September 30, 2022, which represents an increase of $18.5 million, or 7.9%, compared to $232.1 million as of June 30, 2022. The Bank continues to focus on growing non-interest-bearing deposits, which grew $11.7 million, or 13%, during the quarter. Deposit growth for the first nine months of 2022 was 8.37%, or $19.3 million. Rising market index interest rates have caused headwinds for deposit growth and have caused the cost of funds to increase during the quarter.

"During the quarter we were proud to promote seasoned bankers to leadership positions in the Bank, including Jim Wilcox as Director of Commercial Real Estate, Eric Deisler and Andy Bennett as Commercial Lending Team Leads, and Kyle Baisch as Commercial Banking Team Lead," said Jason Wessling, President and CFO. "Our growth has provided an opportunity to promote talented leaders within our organization."  

About Pacific West Bank: Information about the Bank's stock is available through the over-the-counter marketplace at www.otcmarkets.com  (symbol PWBO).

Pacific West Bank was formed in 2004 by Portland businesspeople to deliver loan and deposit product solutions through experienced and professional bankers to businesses, nonprofits, professionals, and individuals. The Bank serves the greater Portland Metro area with offices strategically located in Downtown Portland, Lake Oswego, and West Linn.

Certain statements in this release may be deemed to be "forward-looking statements." Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement.

 

Balance Sheets
(amounts in 000s, except per share data and ratios)
			September 30				% Change		December 31		% Change
			2022		2021		YOY		2021		YTD
ASSETS
	Cash & due from banks		$          30,903		$         44,456		-30.5 %		$            28,040		10.2 %
	Investments - CD		2,485		2,685		-7.4 %		2,685		-7.4 %
	Investments -  Debt Securities		51,091		36,236		41.0 %		35,994		41.9 %
	Investments - Correspondent Stock		1,030		954		7.9 %		954		7.9 %
	Gross loans net of fees		196,091		182,957		7.2 %		195,527		0.3 %
	Allowance for loan losses		(2,525)		(1,975)		27.8 %		(2,225)		13.5 %
		Net loans	193,566		180,982		7.0 %		193,302		0.1 %
	Premises and equipment, net		4,140		4,570		-9.4 %		4,451		-7.0 %
	Deferred tax asset, net		1,450		1,337		8.5 %		1,525		-4.9 %
	BOLI		4,208		4,077		3.2 %		4,104		2.5 %
	Other assets		2,415		1,392		73.5 %		3,637		-33.6 %
		Total Assets	$        291,288		$       276,688		5.3 %		$          274,693		6.0 %
LIABILITIES
	Deposits		$        250,623		$       233,738		7.2 %		$          231,263		8.4 %
	Borrowed funds		5,000		5,000		0.0 %		5,000		0.0 %
	Other liabilities		2,738		2,999		-8.7 %		3,306		-17.2 %
		Total Liabilities	258,361		241,738		6.9 %		239,569		7.8 %
STOCKHOLDERS' EQUITY			32,927		34,951		-5.8 %		35,124		-6.3 %
		Total Liabilities and Stockholders' Equity	$        291,288		$       276,688		5.3 %		$          274,693		6.0 %
Shares outstanding at end-of-period			2,665,535		2,659,516				2,662,566
Book value per share			$            12.35		$           13.14				$              13.19
Allowance for loan losses to total loans			1.29 %		1.08 %				1.14 %
Non-performing assets (non-accrual loans & OREO)			$                    -		$                24				$                   18
Leverage Ratio			11.30 %		12.55 %				12.11 %

 

Statements of Net Income
(amounts in 000s, except per share data and ratios)
			Three Months Ended						Nine Months Ended
			9/30/2022		6/30/2022		% Change		9/30/2022		9/30/2021		% Change
INTEREST INCOME
	Loans Interest Income		$   2,279		$   2,146		6.2 %		$   6,456		$   4,949		30.5 %
	Investments & due from banks		660		312		111.5 %		1,175		479		145.3 %
	Loan fee income		131		328		-60.1 %		870		1,868		-53.4 %
		Total interest income	3,069		2,786		10.2 %		8,501		7,297		16.5 %
INTEREST EXPENSE			257		122		111.4 %		492		426		15.5 %
NET INTEREST INCOME BEFORE  LOAN LOSS PROVISION			2,812		2,664		5.6 %		8,009		6,871		16.6 %
PROVISION FOR LOAN LOSSES			50		100		-50.0 %		300		300		0.0 %
NET INTEREST INCOME AFTER LOAN LOSS PROVISION			2,762		2,564		7.7 %		7,709		6,571		17.3 %
NON-INTEREST INCOME			157		71		119.5 %		299		207		44.3 %
NON-INTEREST EXPENSE			2,172		2,008		8.2 %		6,158		5,020		22.7 %
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES			747		628		18.9 %		1,851		1,758		5.2 %
PROVISION (BENEFIT) FOR INCOME TAXES			224		230		-2.8 %		576		453		27.0 %
NET INCOME (LOSS)			$      523		$      398		31.5 %		$   1,275		$   1,305		-2.3 %
Earnings per share - Basic			$     0.20		$     0.15				$     0.48		$     0.49
Earnings per share - Diluted			$     0.20		$     0.15				$     0.48		$     0.49
Return on average equity			6.12 %		4.71 %				4.97 %		5.38 %
Return on average assets			0.69 %		0.59 %				0.61 %		0.68 %
Net interest margin			3.96 %		4.17 %				4.03 %		3.51 %
Efficiency ratio			75 %		76 %				74 %		71 %

 

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SOURCE Pacific West Bank

FAQ

What was Pacific West Bank's net income for Q3 2022?

Pacific West Bank reported a net income of $523 thousand or $0.20 per diluted share for Q3 2022.

How did the deposits change for Pacific West Bank in Q3 2022?

Deposits increased by $18.5 million, or 7.9%, reaching $250.6 million as of September 30, 2022.

What is the total asset value of Pacific West Bank as of September 30, 2022?

Total assets were reported at $291.3 million as of September 30, 2022.

What growth did Pacific West Bank see in loan interest income for 2022?

Loan interest income for the first nine months of 2022 grew by $1.5 million, or 30.5%, compared to the same period in 2021.

What negative impacts were reported in Pacific West Bank's financials?

Pacific West Bank experienced a negative accounting adjustment to equity of $3.7 million due to marking the investment portfolio to market value.