Irvine, California – July 27, 2017 – CommerceWest Bank reported net income for the three months ended June 30, 2017 of $1,078,000 or $0.26 per common share, compared with net income of $1,256,000 or $0.30 per common share for the three months ended June 30, 2016, an EPS decrease of 13%. Net income for the six months ended June 30, 2017 was $2,587,000 or $0.63 per common share, compared with net income of $2,309,000 or $0.55 per common share for the six months ended June 30, 2016, an EPS increase of 15%.
Key Financial Results for the three months ended June 30, 2017:
- – Interest income up 11%
- – Net interest income up 10%
- – Non-interest expense down 4%
- – Efficiency ratio of 51.78%
- – 6% loan growth year over year
- – 11% deposit growth year over year
- – 9% asset growth year over year
- Key Financial Results for the six months ended June 30, 2017:
- – Net interest income up 10%
- – Net income up 12%
- – Diluted EPS up 15%
- – Return on Assets up 4%
- – Return on Equity up 9%
- – Efficiency ratio of 52.64%
- – Net interest margin of 4.19%, up 1%
– Key Financial Results for the six months ended June 30, 2017:
“We continued to produce good performance metrics for the quarter and year, with increased interest income of 11% and loan and deposit growth of 6% and 11% respectively. The Bank had one loan relationship reclassified to nonaccrual during the quarter, which is the reason for the increase in provision expense,” said Chairman and CEO Ivo A. Tjan. “We remain committed to improving our efficiency, investing in forward thinking products, risk management and generating strong financial results,” continued Mr. Tjan.
Total assets increased $47.3 million as of June 30, 2017, an increase of 9% as compared to the same period one year ago. Total loans increased $21.2 million as of June 30, 2017, an increase of 6% over the prior year. Cash and due from banks increased $26.5 million or 29% from the prior year. Total investment securities decreased $1.1 million from the prior year, a decrease of 2% from the prior year.
Total deposits increased $47.4 million as of June 30, 2017, an increase of 11% from June 30, 2016. Non-interest bearing deposits increased $6.4 million as of June 30, 2017, an increase of 2% over the prior year. Interest bearing deposits increased $40.9 million as of June 30, 2017, an increase of 24% over the prior period.
Stockholders’ equity on June 30, 2017 was $60.6 million, a decrease of 2% as compared to stockholders’ equity of $62.0 million a year ago.
Interest income was $5,104,000 for the three months ended June 30, 2017 as compared to $4,612,000 for the three months ended June 30, 2016, an increase of 11%. Interest income was $10,103,000 for the six months ended June 30, 2017 as compared to $9,146,000 for the six months ended June 30, 2016, an increase of 10%. Interest expense was $349,000 for the three months ended June 30, 2017 as compared to $278,000 for the three months ended June 30, 2016, an increase of 26%. Interest expense was $658,000 for the six months ended June 30, 2017 as compared to $547,000 for the six months ended June 30, 2016, an increase of 20%.
Net interest income for the three months ended June 30, 2017 was $4,755,000 as compared to $4,334,000 for the three months ended June 30, 2016, an increase of 10%. Net interest income for the six months ended June 30, 2017 was $9,445,000 as compared to $8,599,000 for the six months ended June 30, 2016, an increase of 10%. The net interest margin decreased for the three months ended June 30, 2017. It decreased from 4.18% in 2016 to 4.11% in 2017, a decrease of 2%. The net interest margin increased for the six months ended June 30, 2017. It increased from 4.13% in 2016 to 4.19% in 2017, an increase of 1%.
Provision for loan losses for the three months ended June 30, 2017 was $755,000 compared to $75,000 for the three months ended June 30, 2016, an increase of 907%. Provision for loan losses for the six months ended June 30, 2017 was $855,000 compared to $100,000 for the six months ended June 30, 2016, an increase of 755%. The Bank had a loan relationship transfer to nonaccrual during the quarter, totaling $2.7 million. The Bank has made prudent reserves for this relationship during the quarter.
Non-interest income for the three months ended June 30, 2017 was $518,000 compared to $694,000 for the same period last year, a decrease of 25%. Non-interest income for the six months ended June 30, 2017 was $1,468,000 compared to $1,248,000 for the same period last year, an increase of 18%. The Bank collected approximately $516,000 in prepayment penalty fee income on loans during the six months ended June 30, 2017 as compared to $37,000 for the six months ended June 30, 2016.
Non-interest expense for the three months ended June 30, 2017 was $2,792,000 compared to $2,910,000 for the same period last year, a decrease of 4%. Non-interest expense for the six months ended June 30, 2017 was $5,862,000 compared to $6,004,000 for the same period last year, a decrease of 2%.
The Bank’s efficiency ratio for the three months ended June 30, 2017 was 51.78% compared to 58.17% in 2016, which represents a decrease of 11%. The Bank’s efficiency ratio for the six months ended June 30, 2017 was 52.64% compared to 60.65% in 2016, which represents a decrease of 14%. The efficiency ratio illustrates, that for every dollar the Bank made for the six-month period ending June 30, 2017, the Bank spent $0.53 to make it, as compared to $0.61 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, 2017, the tier 1 leverage ratio was 11.31%, the common equity tier 1 capital ratio was 13.87%, the tier 1 risk based capital ratio was 13.87%, and the total risk-based capital ratio was 15.12%.
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.