CommerceWest Bank Announces 12% Increase in Net Income for the Quarter and Year, and EPS growth of 16% for the Year

IRVINE, Calif., Oct. 26, 2017 /PRNewswire/ -- CommerceWest Bank (OTCBB: CWBK) reported net income for the three months ended September 30, 2017 of $1,345,000 or $0.33 per common share, compared with net income of $1,202,000 or $0.29 per common share for the three months ended September 30, 2016, an EPS increase of 14%.  Net income for the nine months ended September 30, 2017 was $3,932,000 or $0.96 per common share, compared with net income of $3,511,000 or $0.83 per common share for the nine months ended September 30, 2016, an EPS increase of 16%.

Key Financial Results for the three months ended September 30, 2017:

• Interest income up 7%
• Non-interest expense down 1%
• Net income up 12%
• EPS up 14%
• Return on Equity up 13%
• Efficiency ratio of 55.51%
• 19% deposit growth year over year
• 17% asset growth year over year

Key Financial Results for the nine months ended September 30, 2017:

• Interest income up 9%
• Net interest income up 7%
• Non-interest expense down 2%
• Net income up 12%
• EPS up 16%
• Return on Equity up 11%
• Efficiency ratio of 53.60%

Mr. Ivo Tjan, Chairman and CEO commented on the financial results, "Solid business fundamentals and a purpose driven culture continue be the foundation of our operating strength and resonates well with our clients."  Mr. Tjan stated further, "Our results for the third quarter were highlighted by double digit net income growth of 12%, 19% deposit and 17% asset growth compared to a year ago, while maintaining strong credit quality and prudent reserves as a model of our fortress balance sheet approach.  The team believes that the results for the quarter could have been even better.  The Bank's reduced net loan production resulted in compression of the Bank's net interest margin, having had to deploy cash in lower yielding earning assets versus making loans.  The Bank is optimistic that we will have positive loan growth in the fourth quarter, compared to the first three quarters of the year, as the loan pipeline is solid and loan payoffs and paydowns have slowed."

Total assets increased $83.7 million as of September 30, 2017, an increase of 17% as compared to the same period one year ago. Total loans decreased $10.3 million as of September 30, 2017, a decrease of 3% over the prior year.   While loan production has been solid, the Bank has experienced a heightened level of loan prepayments during 2017.  Cash and due from banks increased $76.9 million or 136% from the prior year.  Total investment securities increased $14.7 million, an increase of 32% from the prior year.

Total deposits increased $79.4 million as of September 30, 2017, an increase of 19% from September 30, 2016.  Non-interest-bearing deposits increased $15.3 million as of September 30, 2017, an increase of 6% over the prior year.  Interest bearing deposits increased $64.0 million as of September 30, 2017, an increase of 35% over the prior period. 

Stockholders' equity on September 30, 2017 was $60.8 million, a decrease of 2% as compared to stockholders' equity of $62.0 million a year ago.

Interest income was $5,289,000 for the three months ended September 30, 2017 as compared to $4,923,000 for the three months ended September 30, 2016, an increase of 7%.  Interest income was $15,392,000 for the nine months ended September 30, 2017 as compared to $14,069,000 for the nine months ended September 30, 2016, an increase of 9%.  Interest expense was $514,000 for the three months ended September 30, 2017 as compared to $283,000 for the three months ended September 30, 2016, an increase of 82%.  Interest expense was $1,172,000 for the nine months ended September 30, 2017 as compared to $830,000 for the nine months ended September 30, 2016, an increase of 41%.

Net interest income for the three months ended September 30, 2017 was $4,775,000 as compared to $4,640,000 for the three months ended September 30, 2016, an increase of 3%.  Net interest income for the nine months ended September 30, 2017 was $14,220,000 as compared to $13,239,000 for the nine months ended September 30, 2016, an increase of 7%.   The net interest margin decreased for the three months ended September 30, 2017.  It decreased from 4.18% in 2016 to 3.75% in 2017, a decrease of 10%.  The net interest margin decreased for the nine months ended September 30, 2017. It decreased from 4.15% in 2016 to 4.03% in 2017, a decrease of 3%.

Provision for loan losses for the three months ended September 30, 2017 was $175,000 compared to $75,000 for the three months ended September 30, 2016, an increase of 133%.  Provision for loan losses for the nine months ended September 30, 2017 was $1,030,000 compared to $175,000 for the nine months ended September 30, 2016, an increase of 489%. 

Non-interest income for the three months ended September 30, 2017 was $678,000 compared to $515,000 for the same period last year, an increase of 32%.  Non-interest income for the nine months ended September 30, 2017 was $2,146,000 compared to $1,763,000 for the same period last year, an increase of 22%.  The Bank collected approximately $652,000 in prepayment penalty fee income on loans during the nine months ended September 30, 2017 as compared to $37,000 for the nine months ended September 30, 2016.

Non-interest expense for the three months ended September 30, 2017 was $3,095,000 compared to $3,138,000 for the same period last year, a decrease of 1%.  Non-interest expense for the nine months ended September 30, 2017 was $8,957,000 compared to $9,142,000 for the same period last year, a decrease of 2%.

The Bank's efficiency ratio for the three months ended September 30, 2017 was 55.51% compared to 59.67% in 2016, which represents a decrease of 7%.   The Bank's efficiency ratio for the nine months ended September 30, 2017 was 53.60% compared to 60.31% in 2016, which represents a decrease of 11%.  The efficiency ratio illustrates, that for every dollar the Bank made for the nine-month period ending September 30, 2017, the Bank spent $0.54 to make it, as compared to $0.60 one year ago. 

Capital ratios for the Bank remain well above the levels required for a "well capitalized" institution as designated by regulatory agencies.  As of September 30, 2017, the tier 1 leverage ratio was 10.39%, the common equity tier 1 capital ratio was 14.03%, the tier 1 risk based capital ratio was 14.03%, and the total risk-based capital ratio was 15.03%.

CommerceWest Bank is a California based full service commercial bank with a unique vision and culture of focusing exclusively on the business community.  Founded in 2001 and headquartered in Irvine, California.  The Bank serves businesses throughout the state with an emphasis on clients in Orange County, San Diego, Los Angeles, and Riverside Counties.   We are a full service business bank and offer a wide range of commercial banking services, including concierge services, remote deposit solution, online banking, mobile banking, lines of credit, working capital loans, commercial real estate loans, SBA loans, and cash 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.

SOURCE CommerceWest Bank