CommerceWest Bank Reports Record Second Quarter 2019 Earnings of $0.57 Per Share, an Increase Of 128%

CommerceWest Bank (OTCBB: CWBK) The Bank reported net income for the three months ended June 30, 2019 of $2,200,000 or $0.57 per common share, compared with net income of $1,032,000 or $0.25 per common share for the three months ended June 30, 2018, an EPS increase of 128%. Net income for the six months ended June 30, 2019 of $4,078,000 or $1.06 per common share, compared with net income of $2,669,000 or $0.65 per common share for the six months ended June 30, 2018, an EPS increase of 63%.

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CommerceWest Bank Corporate Headquarters (Photo: Business Wire)

Key Financial Results for the three months ended June 30, 2019:

• Interest income up 13%
• Net interest income up 6%
• Net income up 113%
• EPS up 128%
• ROA of 1.53%
• ROE of 14.04%
• ROTE of 14.76%
• Efficiency ratio of 53.18%
• 38 quarters of consecutive profits

Key Financial Results for the six months ended June 30, 2019:

• Interest income up 12%
• Net interest income up 4%
• Net income up 53%
• EPS up 63%
• ROA of 1.44%
• ROE of 13.33%
• ROTE of 14.02%
• Noninterest-bearing deposits as percent of total deposits at 50%
• Deposit growth of $31.7 million or 7%

Mr. Ivo Tjan, Chairman and CEO commented on the financial results, "We had record second quarter and first half earnings, demonstrating again the strength of our business model. The Bank had 128% EPS growth for the quarter and 63% EPS growth for the first half of the year. There are headwinds on the horizon due to heightened global macroeconomic, geopolitical and interest rate uncertainties. Our clients are being cautious about additional expansion, while we remain committed to maintaining credit quality. Those facts, together with competition for quality credits, has slowed loan growth.” Mr. Tjan continued, “With the current mixed economic trends, we continue to be confident in growing quality deposit and loan relationships throughout 2019.”

Total assets increased $35.7 million as of June 30, 2019, an increase of 6% as compared to the same period one year ago. Total loans decreased $20.2 million as of June 30, 2019, a decrease of 5% from the prior year. Cash and due from banks increased $53.5 million or 154% from the prior year. Total investment securities increased $2.1 million, an increase of 3% from the prior year.

Total deposits increased $31.7 million as of June 30, 2019, an increase of 7% from June 30, 2018. Non-interest-bearing deposits increased $9.8 million as of June 30, 2019, an increase of 4% over the prior year. Interest bearing deposits increased $21.9 million as of June 30, 2019, an increase of 9% over the prior period.

Interest income was $6,661,000 for the three months ended June 30, 2019 as compared to $5,900,000 for the three months ended June 30, 2018, an increase of 13%. Interest income was $12,900,000 for the six months ended June 30, 2019 as compared to $11,515,000 for the six months ended June 30, 2018, an increase of 12%. Interest expense was $1,147,000 for the three months ended June 30, 2019 as compared to $715,000 for the three months ended June 30, 2018, an increase of 60%. Interest expense was $2,241,000 for the six months ended June 30, 2019 as compared to $1,285,000 for the six months ended June 30, 2018, an increase of 74%.

Net interest income for the three months ended June 30, 2019 was $5,514,000 as compared to $5,185,000 for the three months ended June 30, 2018, an increase of 6%. The net interest margin decreased for the three months ended June 30, 2019. It decreased from 4.16% in 2018 to 4.03% in 2019, a decrease of 3%. Net interest income for the six months ended June 30, 2019 was $10,659,000 as compared to $10,230,000 for the six months ended June 30, 2018, an increase of 4%. The net interest margin decreased for the six months ended June 30, 2019. It decreased from 4.11% in 2018 to 3.97% in 2019, a decrease of 3%.

Provision for loan losses for the three months ended June 30, 2019 was $180,000 compared to $1,200,000 for the three months ended June 30, 2018, a decrease of 85%. Provision for loan losses for the six months ended June 30, 2019 was $310,000 compared to $1,555,000 for the six months ended June 30, 2018, a decrease of 80%.

Non-interest income for the three months ended June 30, 2019 was $679,000 compared to $706,000 for the same period last year, a decrease of 4%. Non-interest income for the six months ended June 30, 2019 was $1,352,000 compared to $1,384,000 for the same period last year, a decrease of 2%.

Non-interest expense for the three months ended June 30, 2019 was $3,326,000 compared to $3,280,000 for the same period last year, an increase of 1%. Non-interest expense for the six months ended June 30, 2019 was $6,676,000 compared to $6,532,000 for the same period last year, an increase of 2%.

The Bank’s efficiency ratio for the three months ended June 30, 2019 was 53.18% compared to 55.11% in 2018, which represents a decrease of 4%. The efficiency ratio illustrates that for every dollar the Bank made for the three-month period ending June 30, 2019, the Bank spent $0.53 to make it, as compared to $0.55 one year ago. The Bank’s efficiency ratio for the six months ended June 30, 2019 was 55.42% compared to 55.62% in 2018, which represents a decrease of less than one percent.

Capital ratios for the Bank remain well above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of June 30, 2019, the tier 1 leverage ratio was 10.14%, the common equity tier 1 capital ratio was 12.68%, the tier 1 risk based capital ratio was 12.68%, and the total risk-based capital ratio was 13.86%.

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.

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