CommerceWest Bank Reports Net Income Growth of 24% for Second Quarter 2016

IRVINE, Calif., July 25, 2016 /PRNewswire/ -- CommerceWest Bank (OTCBB: CWBK) reported net income for the three months ended June 30, 2016 of $1,256,000 or $0.30 per common share, compared with net income of $1,011,000 or $0.24 per common share for the three months ended June 30, 2015, an EPS increase of 25%.  Net income for the six months ended June 30, 2016 was $2,309,000 or $0.55 per common share, compared with net income of $2,012,000 or $0.48 per common share for the six months ended June 30, 2015, an EPS increase of 15%.     

Key Financial Results for the three months ended June 30, 2016:

• Interest income of $4.6 million, up 9%
• Net interest income of $4.3 million, up 10%
• Diluted earnings per share growth of 25%
• Efficiency ratio of 58.17%
• Solid capital ratios with total risk-based capital ratio of 16.30%
• Non-interest expense reduction of 7%
• 26 quarters of consecutive profits

Key Financial Results for the six months ended June 30, 2016:

• Diluted earnings per share growth of 15%
• Net interest income of $8.6 million, up 11%
• Total loan growth of $55.1 million, up 18%
• Non-interest bearing deposit growth of $41.9 million, up 19%
• Total asset growth of $45.1 million, up 10%
• Zero non-performing loans

Mr. Ivo Tjan, Chairman and CEO said, "CommerceWest Bank produced another solid quarter of double digit loan, deposit, and net income growth.  Second quarter results reflect our continued effort to execute on our business improvement process, which helped sustain the upward earnings trajectory in a period of market uncertainty.  Proactive expense management drove an efficiency ratio of 58.17% for the second quarter, a decrease of 672 basis points from the same period last year. We remain one of California's strongest banks and will continue to meet the financial needs of our clients and communities we serve."   

Total assets increased $45.1 million as of June 30, 2016, an increase of 10% as compared to the same period one year ago. Total loans increased $55.1 million as of June 30, 2016, an increase of 18% over the prior year.  Cash and due from banks decreased $15.7 million or 15% from the prior year. Total investment securities increased $7.3 million from the prior year, an increase of 19% from the prior year.

Total deposits increased $38.9 million as of June 30, 2016, an increase of 10% from June 30, 2015. Non-interest bearing deposits grew $41.9 million as of June 30, 2016, an increase of 19% over the prior year. Non-interest bearing deposits as a percent of total deposits were 61% as of June 30, 2016 as compared to 56% one year ago.

Stockholders' equity on June 30, 2016 was $62.0 million, an increase of 10% as compared to stockholders' equity of $56.5 million a year ago.

Interest income was $4,612,000 for the three months ended June 30, 2016 as compared to $4,242,000 for the three months ended June 30, 2015, an increase of 9%.  Interest income was $9,146,000 for the six months ended June 30, 2016 as compared to $8,338,000 for the six months ended June 30, 2015, an increase of 10%.  Interest expense was $278,000 for the three months ended June 30, 2016 as compared to $312,000 for the three months ended June 30, 2015, a decrease of 11%.  Interest expense was $547,000 for the six months ended June 30, 2016 as compared to $609,000 for the six months ended June 30, 2015, a decrease of 10%.

Net interest income for the three months ended June 30, 2016 was $4,334,000 as compared to $3,930,000 for the three months ended June 30, 2015, an increase of 10%.  The net interest margin decreased for the three months ended June 30, 2016. It decreased from 4.45% in 2015 to 4.18% in 2016, a decrease of 6%.  Net interest income for the six months ended June 30, 2016 was $8,599,000 as compared to $7,729,000 for the six months ended June 30, 2015, an increase of 11%.  The net interest margin decreased for the six months ended June 30, 2016. It decreased from 4.46% in 2015 to 4.13% in 2016, a decrease of 7%. 

Provision for loan losses for the three months ended June 30, 2016 was $75,000 compared to zero for the three months ended June 30, 2015.  Provision for loan losses for the six months ended June 30, 2016 was $100,000 as compared to $181,000 for the six months ended June 30, 2015, a decrease of 45%.  As of June 30, 2016, the Bank had no non-accrual loans and no OREO.  The non-performing asset to total asset ratio was zero at the end of the quarter.

Other income for the three months ended June 30, 2016 was $694,000 compared to $807,000 for the same period last year, a decrease of 14%.   Other income for the six months ended June 30, 2016 was $1,248,000 compared to $1,671,000 for the same period last year, a decrease of 25%.  

Non-interest expense for the three months ended June 30, 2016 was $2,910,000 compared to $3,117,000 for the same period last year, a decrease of 7%.  Non-interest expense for the six months ended June 30, 2016 was $6,004,000 compared to $6,142,000 for the same period last year, a decrease of 2%.

The Bank's efficiency ratio for the three months ended June 30, 2016 was 58.17% compared to 64.89% in 2015, which represents a decrease of 10%.   The Bank's efficiency ratio for the six months ended June 30, 2016 was 60.65% compared to 64.25% in 2015, which represents a decrease of 6%.  The efficiency ratio illustrates, that for every dollar the Bank made for the three month period ending June 30, 2016, the Bank spent $0.58 to make it, as compared to $0.65 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, 2016, the tier 1 leverage ratio was 12.68%, the common equity tier 1 capital ratio was 15.10%, the tier 1 risk based capital ratio was 15.10%, and the total risk-based capital ratio was 16.30%.

CommerceWest Bank is a California based commercial bank with a unique vision and culture of focusing exclusively on the small to mid-size business community. Founded in 2001 and headquartered at 2111 Business Center Drive in Irvine, CA. The Bank serves businesses throughout California with an emphasis on clients in Orange, 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, lines of credit, working capital loans, commercial real estate lending, SBA lending, and cash 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.

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SOURCE CommerceWest Bank

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