IRVINE, CA
Financial performance highlights for the six months ended June
30, 2008 included:
-- Net income of $1,424,000 for the six months ended June 30, 2008 or
$0.45 per basic common share and $0.43 per diluted common share
-- Pretax preprovision profit up 1% year over year
-- Allowance for loan losses as a percent of total loans of 1.67% at June
30, 2008, up 20% year over year
-- Total deposit growth of $25.1 million, an increase of 14% year over
year
-- Total asset growth of $15.9 million, an increase of 7% year over year
-- Return on asset of 1.15%
-- Soliciting shareholder approval of a stock buy back program of up to
317,200 shares
CommerceWest Bank (OTCBB: CWBK) reported earnings for the three
months ended June 30, 2008 of $703,000 or $0.22 per basic common
share and $0.21 per diluted common share, compared with net income
of $778,000 or $0.25 per basic common share and $0.23 per diluted
common share for the three months ended June 30, 2007. Net income
for the six months ended June 30, 2008 of $1,424,000 or $0.45 per
basic common share and $0.43 per diluted common share, compared
with net income of $1,566,000 or $0.49 per basic common share and
$0.46 per diluted common share for the six months ended June 30,
2007.
"Our performance, during one of the toughest economic cycles in
history, is very strong," said Chairman and CEO, Ivo A. Tjan. "The
Bank's year to date pretax preprovision profit (revenue less
noninterest expense) is actually up 1% year over year. CommerceWest
Bank continued to strengthen its franchise during the second
quarter by our commitment to credit quality, expense management and
control of our cost of funds."
"Our financial strength puts us in a unique position to benefit
from the current credit crisis," said Chairman Ivo Tjan. "As other
institutions struggle, we will continue to benefit from
opportunities in this environment to gain new business
relationships and increase our market share. We are committed to
enhancing shareholder value by deploying our assets
strategically."
Interest income was $3,455,000 for the three months ended June
30, 2008 as compared to $4,037,000 for the three months ended June
30, 2007, a decrease of 14%. Net interest income before provision
for loan losses for the three months ended June 30, 2008 was
$2,587,000, a decrease of $28,000 or 1%, compared to the same
period in 2007. This decrease resulted from a $582,000 decrease in
interest income offset by a $554,000 decrease in interest expense.
Interest income was $7,371,000 for the six months ended June 30,
2008 as compared to $7,914,000 for the six months ended June 30,
2007, a decrease of 7%. Net interest income before provision for
loan losses for the six months ended June 30, 2008 was $5,279,000,
an increase of $109,000 or 2%, compared to the same period in 2007.
This increase resulted from a $543,000 decrease in interest income
offset by a $652,000 decrease in interest expense.
The net interest margin for the three months ended June 30, 2008
was 4.42% as compared to 4.87% for the three months ended June 30,
2007 a 45 basis point or 9% decrease. The net interest margin for
the six months ended June 30, 2008 was 4.51% as compared to 4.88%
for the six months ended June 30, 2007 a 37 basis point or 8%
decrease.
Provision for loan losses for the three months ended June 30,
2008 was $310,000 compared to $185,000 for the three months ended
June 30, 2007, an increase of 68%. Provision for loan losses for
the six months ended June 30, 2008 was $580,000 compared to
$273,000 for the six months ended June 30, 2007, an increase of
112%. The Bank's allowance for loan losses as a percent of total
loans was 1.67% on June 30, 2008 as compared to 1.39% on June 30,
2007, an increase of 20%. "The Bank's credit risk is diversified.
We do not have a concentration in any one industry and we have also
stayed out of the home mortgage, land development, and construction
lending businesses," said Chairman Ivo Tjan. "We have stayed true
to our business model, lending to small and midsized
businesses."
Non-interest income for the three months ended June 30, 2008 was
$523,000 compared to $594,000 for the same period last year, a
decrease of 12%. Non-interest income for the six months ended June
30, 2008 was $1,028,000 compared to $1,049,000 for the same period
last year, a decrease of 2%. Non-interest expense for the three
months ended June 30, 2008 was $1,730,000 compared to $1,788,000
for the same period last year, a decrease of 3%. Non-interest
expense for the six months ended June 30, 2008 was $3,554,000
compared to $3,493,000 for the same period last year, an increase
of 2%. "The Bank continues to focus on efficient processes and
systems," said CFO Leeann M. Cochran. "This focus has kept
operating costs down. We have expanded our market presence, and at
the same time, kept our total head count unchanged over the last
three years."
Total asset growth as of June 30, 2008 was $15.9 million, an
increase of 7% as compared to the prior period. Total investment
securities growth as of June 30, 2008 was $16.8 million, an
increase of 26% over the prior period. Total loans decreased $6.5
million as of June 30, 2008, a decrease of 4%. "The decrease in
loans outstanding was by design," said Chairman Ivo Tjan. "The
Bank's management has taken a fortress balance sheet approach to
managing its assets. The Bank has reviewed outstanding credits,
anticipating an economic downturn, beginning in late 2005. If the
credit quality wasn't there, the loan was not made." Total deposits
increased $25.1 million as of June 30, 2008, an increase of 14%
from June 30, 2007. Stockholders' equity as of June 30, 2008 was
$33.4 million, an increase of 12% as compared to June 30, 2007.
Return on assets was 1.15% for the six months ended June 30,
2008 compared to 1.37% for the six months ended June 30, 2007, a
decrease of 16%. Return on equity was 8.59% for the six months
ended June 30, 2008 compared to 10.71% for the six months ended
June 30, 2007, a decrease of 20%.
The Bank's efficiency ratio for the three months ended June 30,
2008 was 55.62% compared to 55.72% in 2007, which represents a
slight decrease of ten basis points. The Bank's efficiency ratio
for the six months ended June 30, 2008 was 56.60% compared to
56.18% in 2007, which represents an increase of 1%. The efficiency
ratio illustrates, that for every dollar the Bank made for the six
month period ending June 30, 2008, the Bank spent $0.57 to make it,
as compared to $0.56 one year ago.
"The Bank is currently soliciting shareholder approval of a
stock buy back program. We believe in our institution and its
future," said Chairman Ivo Tjan. "By having the availability to
repurchase shares, we would like to restore confidence in the
financial markets for our stock."
"We expect to have reduced competition in the future," said CFO
Cochran. "As a well capitalized, profitable institution, we expect
to see a benefit to our financial performance in future earnings
periods."
Capital ratios for the Bank remain above the levels required for
a "well capitalized" institution as designated by regulatory
agencies.
CommerceWest Bank is headquartered at 2111 Business Center Drive
in Irvine, CA, with Regional Offices in Orange County at 4685
MacArthur Court in Newport Beach, CA, in the Inland Empire at 1611
Pomona Road in Corona, CA, in South Los Angeles at 19300 South
Hamilton Avenue in Gardena, CA. We offer a wide range of commercial
banking services, including full cash management, concierge
services, remote deposit solution, full-service internet banking,
lines of credit, term loans, commercial real estate lending, SBA
lending and mortgage, property management, title, and escrow 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.
SECOND QUARTER REPORT - JUNE 30, 2008 (Unaudited)
BALANCE SHEET June 30, Increase
(dollars in thousands) 2008 2007 (Decrease)
--------- --------- --------
ASSETS
Cash and due from banks 15,166 8,584 77%
Securities 80,585 63,781 26%
Federal funds sold 2,080 2,250 -8%
Loans 138,495 145,012 -4%
Less allowance for loan
losses (2,313) (2,012) 15%
--------- ---------
Loans, net 136,182 143,000 -5%
Bank premises and equipment,
net 822 928 -11%
Other assets 9,901 10,248 -3%
--------- ---------
Total assets 244,736 228,791 7%
========= =========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Non-interest bearing deposits 67,092 66,734 1%
Interest bearing deposits 132,399 107,621 23%
--------- ---------
Total deposits 199,491 174,355 14%
Total borrowings 10,000 23,554 -58%
Other liabilities 1,831 1,022 79%
--------- ---------
211,322 198,931 6%
Stockholders' equity 33,414 29,860 12%
--------- ---------
Total liabilities and
stockholders' equity 244,736 228,791 7%
========= =========
STATEMENT OF EARNINGS
(dollars in thousands except share and per share data)
For the Six Months Ended
June 30, June 30, Increase
2008 2007 (Decrease)
--------- --------- --------
Interest income 7,371 7,914 -7%
Interest expense 2,092 2,744 -24%
--------- ---------
Net interest income 5,279 5,170 2%
Provision for loan losses 580 273 112%
Other non-interest income 1,028 1,049 -2%
Other non-interest expense 3,554 3,493 2%
--------- ---------
Earnings before income taxes 2,173 2,453 -11%
Income taxes 749 887 -16%
--------- ---------
Net earnings 1,424 1,566 -9%
========= =========
Actual common shares
outstanding at end of
period 3,172,768 3,172,768 0%
Average common shares
outstanding 3,172,768 3,172,768 0%
Average common shares &
equivalents outstanding 3,286,160 3,397,106 -3%
Basic earnings per share $ 0.45 $ 0.49 -8%
Diluted earnings per share $ 0.43 $ 0.46 -7%
Return on Assets (annualized) 1.15% 1.37%
Return on Equity (annualized) 8.59% 10.71%
Efficiency Ratio 56.60% 56.18%
Gross nonperforming assets
as a % of total loans 0.51% 0.13%
Allowance for loan losses
as % of total loans 1.67% 1.39%
Bank Contact CommerceWest Bank, N.A. Mr. Ivo A. Tjan CEO
Telephone: (949) 251-6959 Facsimile: (949) 251-6957 Email: Email
Contact Website: www.cwbk.com "Bank on the Difference"
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