SOURCE: CommerceWest Bank

January 23, 2008 22:25 ET

CommerceWest Bank Reports Double Digit Annual Earnings, EPS and Revenue Growth

IRVINE, CA--(Marketwire - January 23, 2008) - CommerceWest Bank (OTCBB: CWBK) reported record earnings for the twelve months ended December 31, 2007 of $3,098,000 or $0.98 per basic common share and $0.92 per diluted common share, compared with net income of $2,764,000 or $0.87 per basic common share and $0.83 per diluted common share for the twelve months ended December 31, 2006.

Financial Performance highlights for the year ended December 31, 2007 included:

--  Net income of $3,098,000 for the twelve months ended December 31, 2007
    as compared to $2,764,000 for the twelve months ended December 31, 2006, an
    increase of 12%.
    
--  Earnings per basic common share for the twelve months ended December
    31, 2007 were $0.98 compared to $0.87 in 2006 an increase of 13%.  Earnings
    per diluted common share for the twelve months ended December 31, 2007 were
    $0.92 compared to $0.83 in 2006, an increase of 11%.
    
--  Net interest income plus non-interest income was $18.1 million for the
    twelve months ended December 31, 2007 compared to $15.8 million in 2006, an
    increase of 15%.
    

"Navigating the banking industry in 2007 was interesting to say the least," commented Chairman and CEO, Ivo A. Tjan. "For those involved in the subprime sector some different words might even come to mind. But without ties to the mortgage or construction arenas, I am pleased to report that CommerceWest Bank enjoyed solid financial performance, a distinctive accomplishment in today's market turmoil."

Interest income was $16,079,000 for the twelve months ended December 31, 2007 as compared to $13,818,000 for the twelve months ended December 31, 2006, an increase of 16%. Net interest income before provision for loan losses for the twelve months ended December 31, 2007 was $10,684,000, an increase of $633,000 or 6%, compared to the same period in 2006. This increase resulted from a $2,261,000 increase in interest income, offset by a $1,638,000 increase in interest expense.

The net interest margin for the twelve months ended December 31, 2007 was 4.93% as compared to 5.60% for the twelve months ended December 31, 2006 a 68 basis point or 12% decrease.

Provision for loan losses for the twelve months ended December 31, 2007 was $813,000 compared to $515,000 for the twelve month period ended December 31, 2006, an increase of 58%. The Bank's allowance for loan losses as a percent of total loans was 1.65% on December 31, 2007 as compared to 1.31% on December 31, 2006, an increase of 29%.

Non-interest income for the twelve months ended December 31, 2007 was $2,016,000 compared to $1,977,000 for the same period last year, an increase of 2%. Gross revenue was $18,095,000 for the twelve months ended December 31, 2007 as compared to $15,795,000 for the twelve months ended December 31, 2006, an increase of 15%.

Non-interest expense for the twelve months ended December 31, 2007 was $7,015,000 compared to $6,858,000 for the same period last year, an increase of 2%. "Managing expense growth continues to be a key component of the Bank's financial success, especially with increased pressure on the net interest margin," commented Chief Financial Officer, Leeann M. Cochran.

Loan growth for the period ended December 31, 2007 was $3.0 million, an increase of 2% over the prior year. Investment securities growth for the period ended December 31, 2007 was $16.9 million, an increase of 19% over the prior year. Deposits declined $9.0 million for the period ended December 31, 2007, a decrease of 4% from the period ended December 31, 2006.

Return on assets was 1.34% for the twelve months ended December 31, 2007 compared to 1.42% for the twelve months ended December 31, 2006, a decrease of 6%. Return on equity was 10.20% for the twelve months ended December 31, 2007 compared to 10.37% for the twelve months ended December 31, 2006, a decrease of 2%.

The Bank's efficiency ratio for the twelve months ended December 31, 2007 was 55.24% compared to 56.95% in 2006, which represents a decrease of 3%. The efficiency ratio illustrates, that for every dollar the Bank made for the twelve month period ending December 31, 2007, the Bank spent $0.55 to make it, as compared to $0.57 one year ago.

"Our business banking model was built around the simple realization that trying to be all things to all people -- never really works out well in the end," stated Chairman Tjan. "Since our inceptions more than six years ago, we have weathered some turbulent market conditions and this simple realization has proved to be the glue of our unwavering foundation. By adhering to our original strategy, we have avoided the pitfalls that are now plaguing other financial institutions."

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 and in the South Los Angeles area 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 solutions, full-service internet banking, lines of credit, term loans, commercial real estate lending, SBA lending, and treasury management.

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.

ANNUAL REPORT - DECEMBER 31, 2007 (Unaudited)


BALANCE SHEET                               December 31,         Increase
(dollars in thousands)                    2007         2006     (Decrease)
                                      -----------  -----------  ----------

ASSETS
Cash and due from banks                     4,260        9,825         -57%
Securities                                104,126       87,203          19%
Federal funds sold                          1,135       13,010         -91%

Loans                                     136,005      133,034           2%
  Less allowance for loan losses           (2,243)      (1,740)         29%
                                      -----------  -----------
Loans, net                                133,762      131,294           2%

Bank premises and equipment, net              829          907          -9%
Other assets                                9,933        9,372           6%
                                      -----------  -----------
     Total assets                         254,045      251,611           1%
                                      ===========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits              78,396      114,583         -32%
Interest bearing deposits                 122,418       95,271          28%
                                      -----------  -----------
     Total deposits                       200,814      209,854          -4%
Total borrowings                           18,177       12,321          48%
Other liabilities                           2,773          943         194%
                                      -----------  -----------
                                          221,764      223,118          -1%
Stockholders' equity                       32,281       28,493          13%
                                      -----------  -----------
     Total liabilities and
      stockholders' equity                254,045      251,611           1%
                                      ===========  ===========


STATEMENT OF EARNINGS                   For the Years Ended
(dollars in thousands except share       Dec 31,     Dec 31,     Increase
 and per share data)                      2007        2006      (Decrease)
                                      -----------  -----------  ----------

Interest income                            16,079       13,818          16%
Interest expense                            5,395        3,757          44%
                                      -----------  -----------
Net interest income                        10,684       10,061           6%
Provision for loan losses                     813          515          58%
Other non-interest income                   2,016        1,977           2%
Other non-interest expense                  7,015        6,858           2%
                                      -----------  -----------
Earnings before income taxes                4,872        4,665           4%
Income taxes                                1,774        1,901          -7%
                                      -----------  -----------
Net earnings                                3,098        2,764          12%
                                      ===========  ===========

Actual common shares outstanding at
 end of period                          3,172,768    3,172,768           0%
Average common shares outstanding       3,172,768    3,163,007           0%
Average common shares & equivalents
 outstanding                            3,356,020    3,349,000           0%
Basic earnings per share              $      0.98  $      0.87          13%
Diluted earnings per share            $      0.92  $      0.83          11%
Return on Assets (annualized)                1.34%        1.42%         -6%
Return on Equity (annualized)               10.20%       10.37%         -2%
Efficiency Ratio                            55.24%       56.95%         -3%


Contact Information

  • Bank Contact
    CommerceWest Bank, N.A.
    Mr. Ivo A. Tjan, CEO
    E-mail: Email Contact
    Ms. Leeann M. Cochran, CFO
    E-mail: Email Contact
    Telephone: (949) 251-6959
    Facsimile: (949) 251-6957
    Website: www.cwbk.com
    "Bank on the Difference"