CW Bancorp (OTCQX: CWBK), the parent company (“the Company”) of CommerceWest Bank (the “Bank”) reported consolidated net income for the second quarter of 2024 of $3,084,000 or $1.00 per diluted share as compared to $4,214,000 or $1.27 per diluted share for the second quarter of 2023, an EPS decrease of 21% and net income for the six months ended June 30, 2024 of $6,077,000 or $1.96 per diluted share as compared to $8,832,000 or $2.64 per diluted share for the six months ended June 30, 2023, an EPS decrease of 26%.

Key Financial Results for the three months ended June 30, 2024:

  • EPS of $1.00
  • Return on Assets of 1.14%
  • Return on Tangible Equity of 16.77%
  • ACL to total loans ratio of 1.60%
  • Liquid funds to total deposits ratio of 20%
  • No outstanding FRB or FHLB borrowings
  • Non-interest-bearing deposits to total deposits of 59%
  • Strong leverage ratio of 12.06% and total risk-based capital ratio of 19.67%
  • 58 quarters of consecutive profits

Key Financial Results for the six months ended June 30, 2024:

  • EPS of $1.96
  • Return on Assets of 1.16%
  • Return on Tangible Equity of 16.45%
  • Deposit Growth of 3% as compared to March 31, 2024
  • Total Asset Growth of 2.8% as compared to March 31, 2024

Mr. Ivo Tjan, Chairman and CEO commented, “The Bank had good results with quarter over quarter average deposit growth of 8% or $72 million and a ROTE of 16.77%.” Mr. Tjan continued, “We added some new business development lending staff in June that is contributing to a healthy loan pipeline, which positions us well for loan growth in the second half of 2024. The Bank continues to focus on growing relationships in the California business community.”

Total Assets increased $30.7 million, an increase of 3% from the end of the prior quarter. Total deposits increased $29.4 million as of June 30, 2024, an increase of 3% from March 31, 2024. Non-interest-bearing deposits decreased $4.6 million as of June 30, 2024, a decrease of 1% from the prior quarter. Interest bearing deposits increased $34.0 million as of March 31, 2024, an increase of 9% over the prior quarter.

Total assets decreased $50.9 million as of June 30, 2024, a decrease of 4% as compared to the same period one year ago. Total loans decreased $30.3 million as of June 30, 2024, a decrease of 4% from the prior year. The Bank remains prudent and conservative about credit quality. Cash and due from banks decreased $26.9 million or 11% over the prior year. Total investment securities increased $3.2 million, an increase of 2% from the prior year.

Total deposits decreased $54.4 million as of June 30, 2024, a decrease of 5% from June 30, 2023. Non-interest-bearing deposits decreased $27.1 million as of June 30, 2024, a decrease of 4% from the prior year. Interest bearing deposits decreased $27.3 million as of June 30, 2024, a decrease of 6% over the prior year.

Interest income was $13,344,000 for the three months ended June 30, 2024, as compared to $13,513,000 for the three months ended June 30, 2023, a decrease of 1%. Interest expense was $3,573,000 for the three months ended June 30, 2024, as compared to $3,113,000 for the three months ended June 30, 2023, an increase of 15%. Interest expense was up for the quarter due to the continued increase in the cost of deposits.

Interest income was $25,585,000 for the six months ended June 30, 2024, relatively unchanged as compared to $25,517,000 for the six months ended June 30, 2023. Interest expense was $6,687,000 for the six months ended June 30, 2024, as compared to $5,258,000 for the six months ended June 30, 2023, an increase of 27%. Interest expense was up for the first half of 2024 due to the continued increase in the cost of deposits.

Net interest income for the three months ended June 30, 2024, was $9,771,000 as compared to $10,400,000 for the three months ended June 30, 2023, a decrease of 6%. The net interest margin increased for the three months ended June 30, 2024. It increased from 3.79% in 2023 to 3.82% in 2024, an increase of 1%. Net interest income for the six months ended June 30, 2024, was $18,898,000 as compared to $20,259,000 for the six months ended June 30, 2023, a decrease of 7%. The net interest margin decreased for the six months ended June 30, 2024. It decreased from 3.85% in 2023 to 3.80% in 2024, a decrease of 1%.

Provision for credit losses for the three months ended June 30, 2024, was zero compared to $99,000 for the three months ended June 30, 2023. Provision for credit losses for the six months ended June 30, 2024, was also zero compared to $174,000 for the six months ended June 30, 2023.

Non-interest income for the three months ended June 30, 2024, was $1,219,000 compared to $1,662,000 for the same period last year, a decrease of 27%. Non-interest income for the six months ended June 30, 2024, was $2,427,000 compared to $2,915,000 for the same period last year, a decrease of 17%.

Non-interest expense for the three months ended June 30, 2024, was $6,661,000 compared to $6,041,000 for the same period last year, an increase of 10%. Non-interest expense for the six months ended June 30, 2024, was $12,837,000 compared to $10,908,000 for the same period last year, an increase of 18%.

The efficiency ratio for the three months ended June 30, 2024, was 60.28% compared to 49.83% in 2023, which represents an increase of 21%. The efficiency ratio illustrates that for every dollar made for the three-month period ending June 30, 2024, it cost $0.6028 to make it, as compared to $0.4983 one year ago. The efficiency ratio for the six months ended June 30, 2024, was 59.86% compared to 46.43% in 2023, which represents an increase of 29%.

Capital ratios for the Bank remain above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of June 30, 2024, the tier 1 leverage ratio was 12.06%, the common equity tier 1 capital ratio was 18.41%, the tier 1 risk-based capital ratio was 18.41% and the total risk-based capital ratio was 19.67%.

CommerceWest Bank is determined to redefine banking for small and medium sized businesses by delivering on customized products and services. Founded in 2001 and headquartered in Irvine, California, the Bank serves businesses throughout the state of California with our digital banking platform. By employing a strategically selected team of experienced professionals, we will provide flexibility, create a complete, safe and sound banking experience for each client. We provide a wide range of commercial banking services, including remote deposit solution, NetBanker online banking, mobile banking, lines of credit, M&A / working capital loans, commercial real estate loans, SBA loans and treasury 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, 2024 (Unaudited) CW BANCORP % CONSOLIDATED BALANCE SHEET Increase (dollars in thousands) June 30, 2024 June 30, 2023 (Decrease) ASSETS Cash and due from banks

$

228,574

 

$

255,499

 

-11

%

Securities available for sale

 

121,232

 

 

102,357

 

18

%

Securities held-to-maturity

 

35,037

 

 

50,686

 

-31

%

Loans

 

716,953

 

 

747,272

 

-4

%

Less allowance for credit losses (ACL)

 

(11,489

)

 

(11,042

)

4

%

Loans, net

 

705,464

 

 

736,230

 

-4

%

Bank premises and equipment, net

 

3,984

 

 

4,683

 

-15

%

Other assets

 

36,234

 

 

31,930

 

13

%

Total assets

$

1,130,525

 

$

1,181,385

 

-4

%

LIABILITIES AND STOCKHOLDERS' EQUITY Non-interest bearing deposits

$

582,750

 

$

609,859

 

-4

%

Interest bearing deposits

 

404,226

 

 

431,494

 

-6

%

Total deposits

 

986,976

 

 

1,041,353

 

-5

%

Subordinated debenture

 

50,000

 

 

50,000

 

0

%

Other liabilities

 

13,342

 

 

16,370

 

-18

%

 

1,050,318

 

 

1,107,723

 

-5

%

Stockholders' equity

 

80,207

 

 

73,662

 

9

%

Total liabilities and stockholders' equity

$

1,130,525

 

$

1,181,385

 

-4

%

Shares outstanding at end of period

 

3,012,375

 

 

3,235,711

 

Book value per share

$

29.92

 

$

26.18

 

Total loans to total deposits

 

72.64

%

 

71.76

%

ACL to total loans

 

1.60

%

 

1.49

%

Nonperforming assets (non-accrual loans & OREO)

$

4,746

 

$

3,182

 

COMMERCEWEST BANK CAPITAL RATIOS: Tier 1 leverage ratio

 

12.06

%

 

10.79

%

Common equity tier 1 capital ratio

 

18.41

%

 

17.94

%

Tier 1 risk-based capital ratio

 

18.41

%

 

17.94

%

Total risk-based capital ratio

 

19.67

%

 

19.20

%

CW BANCORP             CONSOLIDATED STATEMENT OF INCOME (Unaudited)   Three Months Ended   Increase   For the Six Months Ended   Increase (dollars in thousands except share and per share data)   June 30, 2024   June 30, 2023   (Decrease)   June 30, 2024   June 30, 2023   (Decrease)             INTEREST INCOME             Loans  

$

9,981

 

 

$

9,978

 

 

0

%

 

$

19,790

 

 

$

19,882

 

 

0

%

Investments  

 

1,175

 

 

 

1,027

 

 

14

%

 

 

2,292

 

 

 

2,185

 

 

5

%

Fed funds sold and other  

 

2,188

 

 

 

2,508

 

 

-13

%

 

 

3,503

 

 

 

3,450

 

 

2

%

Total interest income  

 

13,344

 

 

 

13,513

 

 

-1

%

 

 

25,585

 

 

 

25,517

 

 

0

%

            INTEREST EXPENSE             Deposits  

 

3,104

 

 

 

2,644

 

 

17

%

 

 

5,749

 

 

 

4,311

 

 

33

%

Subordinated debenture  

 

469

 

 

 

469

 

 

0

%

 

 

938

 

 

 

938

 

 

0

%

Other borrowings  

 

-

 

 

 

-

 

 

-

 

 

 

-

 

 

 

9

 

 

-100

%

Total interest expense  

 

3,573

 

 

 

3,113

 

 

15

%

 

 

6,687

 

 

 

5,258

 

 

27

%

            NET INTEREST INCOME BEFORE CREDIT LOSS PROVISION  

 

9,771

 

 

 

10,400

 

 

-6

%

 

 

18,898

 

 

 

20,259

 

 

-7

%

            PROVISION FOR CREDIT LOSSES  

 

-

 

 

 

99

 

 

-100

%

 

 

-

 

 

 

174

 

 

-100

%

Non-interest income:                         NET INTEREST INCOME AFTER CREDIT LOSS PROVISION  

 

9,771

 

 

 

10,301

 

 

-5

%

 

 

18,898

 

 

 

20,085

 

 

-6

%

            NON-INTEREST INCOME             Service Charges and Fees on Deposits  

 

927

 

 

 

1,318

 

 

-30

%

 

 

1,832

 

 

 

2,409

 

 

-24

%

Loss on Sale of AFS Securities  

 

-

 

 

 

-

 

 

-

 

 

 

-

 

 

 

(166

)

 

-100

%

Other Fees  

 

292

 

 

 

344

 

 

-15

%

 

 

595

 

 

 

672

 

 

-11

%

            NON-INTEREST EXPENSE  

 

6,661

 

 

 

6,041

 

 

10

%

 

 

12,837

 

 

 

10,908

 

 

18

%

            EARNINGS BEFORE INCOME TAXES  

 

4,329

 

 

 

5,922

 

 

-27

%

 

 

8,488

 

 

 

12,092

 

 

-30

%

            INCOME TAXES  

 

1,245

 

 

 

1,708

 

 

-27

%

 

 

2,411

 

 

 

3,260

 

 

-26

%

                        NET INCOME  

$

3,084

 

 

$

4,214

 

 

-27

%

 

$

6,077

 

 

$

8,832

 

 

-31

%

            Basic earnings per share  

$

1.02

 

 

$

1.29

 

 

-21

%

 

$

1.99

 

 

$

2.69

 

 

-26

%

Diluted earnings per share  

$

1.00

 

 

$

1.27

 

 

-21

%

 

$

1.96

 

 

$

2.64

 

 

-26

%

Return on Assets  

 

1.14

%

 

 

1.45

%

 

-21

%

 

 

1.16

%

 

 

1.57

%

 

-26

%

Return on Equity  

 

16.10

%

 

 

22.87

%

 

-30

%

 

 

15.80

%

 

 

24.42

%

 

-35

%

Return on Tangible Equity  

 

16.77

%

 

 

23.85

%

 

-30

%

 

 

16.45

%

 

 

25.49

%

 

-35

%

Efficiency Ratio  

 

60.28

%

 

 

49.83

%

 

21

%

 

 

59.86

%

 

 

46.43

%

 

29

%

CW BANCORP CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS   Three Months Ended June 30,

2024

2023

AverageBalance InterestIncome /Expense Yield /Cost AverageBalance InterestIncome /Expense Yield /Cost (dollars in thousands) INTEREST EARNING ASSETS Int Bearing Due from Banks & FFS

$

150,396

$

2,049

5.48

%

$

187,693

$

2,396

5.12

%

Investment Securities (1)

 

156,862

 

1,235

3.17

%

 

155,438

 

1,088

2.81

%

Loans

 

721,573

 

9,981

5.56

%

 

757,153

 

9,978

5.29

%

FHLB & Other Stocks

 

7,100

 

139

7.87

%

 

6,983

 

112

6.43

%

Total interest-earning assets

 

1,035,931

 

13,404

5.20

%

 

1,107,267

 

13,574

4.92

%

  Noninterest-earning assets

 

48,448

 

61,242

Total assets

$

1,084,379

$

1,168,509

    INTEREST EARNING LIABILITIES Interest Bearing Deposits

$

380,310

$

3,104

3.28

%

$

437,694

$

2,644

2.42

%

Other Borrowings

 

1

 

-

0.00

%

 

-

 

-

-

 

Subordinated Debenture

 

50,000

 

469

3.75

%

 

50,000

 

469

3.75

%

Total interest-earning liabilities

 

430,311

 

3,573

3.34

%

 

487,694

 

3,113

2.56

%

  Noninterest-earning liabilities Demand Deposits

 

563,105

 

593,612

Other Liabilities

 

13,933

 

13,271

Shareholders' Equity

 

77,030

 

73,932

Total liabilities and shareholder's equity

$

1,084,379

$

1,168,509

  Net Interest Spread

$

9,831

1.86

%

$

10,461

2.36

%

Net Interest Margin

3.82

%

3.79

%

  Total Deposits

$

943,415

$

3,104

1.32

%

$

1,031,306

$

2,644

1.03

%

Total Funding Costs

$

993,416

$

3,573

1.45

%

$

1,081,306

$

3,113

1.15

%

(1) 

  Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate CW BANCORP CONSOLIDATED AVERAGE BALANCE SHEET and YIELD ANALYSIS   Six Months Ended June 30,

2024

2023

AverageBalance InterestIncome /Expense Yield /Cost AverageBalance InterestIncome /Expense Yield /Cost (dollars in thousands) INTEREST EARNING ASSETS Int Bearing Due from Banks & FFS

$

118,279

$

3,217

5.47

%

$

130,527

$

3,232

4.99

%

Investment Securities (1)

 

158,629

 

2,412

3.06

%

 

164,012

 

2,338

2.87

%

Loans

 

721,422

 

19,790

5.52

%

 

768,619

 

19,882

5.22

%

FHLB & Other Stocks

 

7,100

 

286

8.10

%

 

6,745

 

218

6.52

%

Total interest-earning assets

 

1,005,430

 

25,705

5.14

%

 

1,069,903

 

25,670

4.84

%

  Noninterest-earning assets

 

47,792

 

61,144

Total assets

$

1,053,222

$

1,131,047

    INTEREST EARNING LIABILITIES Interest Bearing Deposits

$

359,520

$

5,749

3.22

%

$

409,825

$

4,311

2.12

%

Other Borrowings

 

1

 

-

0.00

%

 

365

 

9

4.97

%

Subordinated Debenture

 

50,000

 

938

3.75

%

 

50,000

 

938

3.75

%

Total interest-earning liabilities

 

409,521

 

6,687

3.28

%

 

460,190

 

5,258

2.30

%

  Noninterest-earning liabilities Demand Deposits

 

552,319

 

584,658

Other Liabilities

 

14,021

 

13,259

Shareholders' Equity

 

77,361

 

72,940

Total liabilities and shareholder's equity

$

1,053,222

$

1,131,047

  Net Interest Spread

$

19,018

1.86

%

$

20,412

2.54

%

Net Interest Margin

3.80

%

3.85

%

  Total Deposits

$

911,839

$

5,749

1.27

%

$

994,483

$

4,311

0.87

%

Total Funding Costs

$

961,840

$

6,687

1.40

%

$

1,044,848

$

5,258

1.01

%

(1)

  Amounts calculated on a fully taxable equivalent basis using the current statutory federal tax rate

 

Bancorp Contact Mr. Ivo A. Tjan, CEO Ms. Leeann Cochran, CFO Telephone: (866) 521-CWBK E-mail: InvestorRelations@cwbk.com Website: www.cwbk.com "Bank on the Difference"