Irvine, California – January 29, 2019 – CommerceWest Bank reported record net income for the three months ended December 31, 2018 of $1,692,000 or $0.43 per common share, compared with net income of $1,073,000 or $0.27 per common share for the three months ended December 31, 2017, an EPS increase of 59%. The Bank also reported record net income for the twelve months ended December 31, 2018 of $5,937,000 or $1.47 per common share, compared with net income of $5,005,000 or $1.22 per common share for the twelve months ended December 31, 2017, an EPS increase of 20%.
Key Financial Results for the three months ended December 31, 2018:
- Interest income up 19%
- Net interest income up 9%
- Noninterest income up 10%
- Net income up 58%
- EPS up 59%
- ROA of 1.13%, up 51%
- ROE of 11.28%, up 62%
- Efficiency ratio of 55.74%
- Loan growth up 8%
- 36 quarters of consecutive profits
Key Financial Results for the twelve months ended December 31, 2018:
- Interest income up 16%
- Net interest income up 9%
- Net income up 19%
- EPS up 20%
- Net interest margin of 4.00%
Mr. Ivo Tjan, Chairman and CEO, commented on the financial results, “CommerceWest Bank had strong results for 2018, posting record net income of $5.9 million and record earnings per share, up 59% for the quarter and up 20% for the year.” Mr. Tjan continued, “We are continuing with our fortress balance sheet approach. The Bank is focused on core growth, strategic technology investment with sound asset management practices, as we move forward into 2019. I would like to thank our talented team and shareholders for their support in 2018 and look forward to achieving even greater success in the coming year.”
Ms. Leeann Cochran, EVP and CFO said, “We are pleased with the trends on return on assets and return on equity for the quarter of 1.13% and 11.28%. Loans are up 8% and deposits are up 4% year over year.”
Total assets increased $28.8 million as of December 31, 2018, an increase of 4% as compared to the same period one year ago. Total loans increased $32.7 million as of December 31, 2018, an increase of 8% over the prior year. Cash and due from banks increased $3.7 million or 1% from the prior year. Total investment securities decreased $6.7 million, a decrease of 10% from the prior year.
Total deposits increased $28.8 million as of December 31, 2018, an increase of 4% from December 31, 2017. Non-interest-bearing deposits decreased $75.2 as of December 31, 2018, a decrease of 23% over the prior year. Interest bearing deposits increased $104.0 million as of December 31, 2018, an increase of 28% over the prior period.
Interest income was $6,468,000 for the three months ended December 31, 2018 as compared to $5,452,000 for the three months ended December 31, 2017, an increase of 19%. Interest income was $24,090,000 for the twelve months ended December 31, 2018 as compared to $20,844,000 for the twelve months ended December 31, 2017, an increase of 16%. Interest expense was $1.1 million for the three months ended December 31, 2018 as compared to $570,000 for the three months ended December 31, 2017, an increase of 99%. Interest expense was $3,349,000 for the twelve months ended December 31, 2018 as compared to $1,742,000 for the twelve months ended December 31, 2017, an increase of 92%.
Net interest income for the three months ended December 31, 2018 was $5,332,000 as compared to $4,882,000 for the three months ended December 31, 2017, an increase of 9%. The net interest margin increased for the three months ended December 31, 2018. It increased from 3.68% in 2017 to 3.81% in 2018, an increase of 4%. Net interest income for the twelve months ended December 31, 2018 was $20,741,000 as compared to $19,102,000 for the twelve months ended December 31, 2017, an increase of 9%. The net interest margin increased for the twelve months ended December 31, 2018. It increased from 3.93% in 2017 to 4.00% in 2018, an increase of 2%.
Provision for loan losses for the three months ended December 31, 2018 was $350,000 compared to $225,000 for the three months ended December 31, 2017, an increase of 56%. Provision for loan losses for the twelve months ended December 31, 2018 was $2,205,000 compared to $1,255,000 for the twelve months ended December 31, 2017, an increase of 76%.
Non-interest income for the three months ended December 31, 2018 was $755,000 compared to $686,000 for the same period last year, an increase of 10%. Non-interest income for the twelve months ended December 31, 2018 was $2,773,000 compared to $2,832,000 for the same period last year, a decrease of 2%.
Non-interest expense for the three months ended December 31, 2018 was $3,383,000 compared to $3,205,000 for the same period last year, an increase of 6%. Non-interest expense for the twelve months ended December 31, 2018 was $13,240,000 compared to $12,162,000 for the same period last year, an increase of 9%.
The Bank’s efficiency ratio for the three months ended December 31, 2018 was 55.74% compared to 56.20% in 2017, which represents a decrease of 1%. The efficiency ratio illustrates that for every dollar the Bank made for the three-month period ending December 31, 2018, the Bank spent $0.55 to make it, as compared to $0.56 one year ago. The Bank’s efficiency ratio for the twelve months ended December 31, 2018 was 55.89% compared to 54.26% in 2017, which represents an increase of 3%.
Capital ratios for the Bank remain well above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of December 31, 2018, the tier 1 leverage ratio was 9.46%, the common equity tier 1 capital ratio was 11.49%, the tier 1 risk based capital ratio was 11.49%, and the total risk-based capital ratio was 12.54%.
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 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.