IRVINE, Calif.--()--CommerceWest Bank (OTCBB: CWBK) reported earnings for the three months ended June 30, 2012 of $1,016,000 or $0.24 per basic common share and $0.23 per diluted common share, compared with net income of $343,000 or $0.08 per basic common share and $0.08 per diluted common share for the three months ended June 30, 2011, an increase of 200% and 188% respectively. The bank reported earnings for the six months ended June 30, 2012 of $1,598,000 million or $0.37 per basic common share and $0.36 per diluted common share, compared with net income of $725,000 or $0.16 per basic common share and $0.16 per diluted common share for the six months ended June 30, 2011, an increase of 131% and 125% respectively.
Financial performance highlights for the three months ended June 30, 2012 as compared to the three months ended June 30, 2011:
- Earnings growth of 195%
- Return on average assets of 1.30%, an increase of 189%
- Non-interest income growth of 79%
- Non-interest expense reduction of 10%
- Cost of funds reduced 22%
- Loan growth of 19%
- Nonperforming assets reduced 75%, from 1.40% to 0.34% of total assets
- Non-interest bearing deposit growth of 30%
- A fortress balance sheet, with a tier 1 leverage ratio of 13.38% and total risk based capital ratio of 22.07%
- No TARP
Financial performance highlights for the three months ended June 30, 2012 as compared to the three months ended March 31, 2012:
- Earnings growth of 74%
- Non-interest income growth of 19%
- Non-interest expense reduction of 8%
- Nonperforming assets reduced 57%, from 0.83% to 0.34% of total assets
- Asset growth of 5%
- Loan growth of 8%
- Non-interest bearing deposit growth of 12%
- Total deposit growth of 7%
Mr. Ivo Tjan, Chairman and CEO stated, "The team has again demonstrated the strength of our business model, core competency and ability to grow with profitability. Our team members are talented, passionate and will continue the mission to build the best business banking franchise in California. Our proven business model has allowed us to materially improve asset quality, while at the same time growing core deposits and total loans. The Bank continues to execute on our strategic approach of balancing between offense and defense, which resulted in a 75% reduction in non-performing assets, 19% growth in loans, a 30% increase in non-interest bearing deposits and a 37% increase in non-interest income year over year; while at the same time reducing non-interest expense by 11%. Our results for the second quarter were highlighted by strong earnings growth of 195% as compared to the same three month period one year ago and 120% earnings growth for the six months ended June 30, 2012, as compared to the same six month period one year ago."
Mr. Tjan continued, "As we stated earlier in the year, the runway is clear and we have begun to execute on delivering results for our shareholders and clients. We are confident in our future and our ability to grow the franchise value by managing growth with profitability, which focuses on top line revenue, fee income generation, quality loan growth, expanding the mixture in non-interest bearing deposits and increasing core earnings."
Total assets increased $13.8 million as of June 30, 2012, an increase of 4% as compared to the same period one year ago. Total loans increased $26.1 million as of June 30, 2012, an increase of 19% over the prior year. Cash and due from banks decreased $10.7 million or 17% from the prior year. Total investment securities decreased $7.5 million or 8% from the prior year.
Total deposits increased $11 million as of June 30, 2012, an increase of 4% from June 30, 2011. Non-interest bearing deposits grew $22.2 million as of June 30, 2012, an increase of 30% over the prior year.
Stockholders’ equity on June 30, 2012 was $46.7 million, an increase of 5% as compared to stockholders’ equity of $44.5 million a year ago.
Total nonperforming assets decreased $3.3 million as of June 30, 2012, a decrease of 75% as compared to the same period one year ago, from 1.40% to 0.34% of total assets. Provision for loan losses for the three months ended June 30, 2012 was $75,000 compared to $60,000 for the three months ended June 30, 2012, an increase of 25%. Provision for loan losses for the six months ended June 30, 2012 was $195,000 compared to $160,000 for the six months ended June 30, 2012, an increase of 22%.
Non-interest income for the three months ended June 30, 2012 was $945,000 compared to $529,000 for the same period last year, an increase of 79%. Non-interest income for the six months ended June 30, 2012 was $1,737,000 compared to $1,267,000 for the same period last year, an increase of 37%.
Non-interest expense for the three months ended June 30, 2012 was $2,332,000 compared to $2,579,000 for the same period last year, a decrease of 10%. Non-interest expense for the six months ended June 30, 2012 was $4,857,000 compared to $5,429,000 for the same period last year, a decrease of 11%.
The Bank’s efficiency ratio for the three months ended June 30, 2012 was 59.01% compared to 83.78% in 2011, which represents a decrease of 30%. The efficiency ratio illustrates, that for every dollar the Bank made for the three month period ending June 30, 2012, the Bank spent $0.59 to make it, as compared to $0.84 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 June 30, 2012, the leverage ratio was 13.38%, the tier 1 capital ratio was 20.82%, and the total risk-based capital ratio was 22.07%.
CommerceWest Bank is headquartered at 2111 Business Center Drive in Irvine, CA, with Regional Offices in Orange County, Riverside County, Los Angeles County and San Diego County. We are a full service business bank and offer a wide range of commercial banking services, including concierge services, remote deposit solution, full-service internet banking, lines of credit, term loans, commercial real estate lending, SBA lending, and full cash management.
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, 2012 (Unaudited)|
|(dollars in thousands)||June 30, 2012||June 30, 2011||(Decrease)|
|Cash and due from banks||51,371||62,063||-17||%|
|Less allowance for loan losses||(3,081||)||(3,967||)||-22||%|
|Bank premises and equipment, net||380||740||-49||%|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Non-interesting bearing deposits||95,872||73,698||30||%|
|Interest bearing deposits||182,585||193,752||-6||%|
|Total liabilities and stockholders' equity||327,632||313,835||4||%|
|Tier 1 leverage ratio||13.38||%||12.94||%||3||%|
|Tier 1 risk-based capital ratio||20.82||%||21.01||%||-1||%|
|Total risk-based capital ratio||22.07||%||22.27||%||-1||%|
|STATEMENT OF EARNINGS||Three Months Ended||Increase||Six Months Ended||Increase|
|(dollars in thousands except share and per share data)||June 30, 2012||June 30, 2011||(Decrease)||June 30, 2012||June 30, 2011||(Decrease)|
|Net interest income||2,478||2,454||1||%||4,913||5,047||-3||%|
|Provision for loan losses||75||60||25||%||195||160||22||%|
|Earnings before income taxes||1,016||344||195||%||1,598||725||120||%|
|Basic earnings per share||$||0.24||$||0.08||200||%||$||0.37||$||0.16||131||%|
|Diluted earnings per share||$||0.23||$||0.08||188||%||$||0.36||$||0.16||125||%|
|Return on Assets (annualized)||1.30||%||0.45||%||189||%||1.05||%||0.48||%||119||%|
|Return on Equity (annualized)||8.76||%||3.10||%||183||%||6.89||%||3.33||%||107||%|
|Net Interest Margin||3.71||%||3.68||%||1||%||3.74||%||3.82||%||-2||%|