SOURCE: CommerceWest Bank

October 22, 2008 18:07 ET

CommerceWest Bank Reports Financial Results for Third Quarter and Year to Date

IRVINE, CA--(Marketwire - October 22, 2008) - CommerceWest Bank (OTCBB: CWBK)

Financial performance highlights for the nine months ended September 30, 2008:

--  Net income of $1,973,000 for the nine months ended September 30, 2008
    or $0.62 per basic common share and $0.60 per diluted common share
--  Allowance for loan losses as a percent of total loans of 1.65%, up 17%
    year over year
--  Return on assets of 1.08%
--  No exposure to FNMA or FHLMC preferred stock
--  "Well" capitalized as designated by regulatory agencies
    

Selected Financial Data                          For the Three Months Ended
                                                    Sept 30,     June 30,
(dollars in thousands)                                2008         2008
                                                  -----------  -----------

Interest income                                         3,292        3,455
Interest expense                                          840          868
Net interest income                                     2,452        2,587
Provision for loan losses                                 295          310
Net earnings                                              549          703
Gross nonperforming loans as a % of total loans          0.67%        0.51%
Net interest margin                                      4.42%        4.42%

CommerceWest Bank (OTCBB: CWBK) reported earnings for the three months ended September 30, 2008 of $549,000 or $0.17 per basic common share and $0.17 per diluted common share, compared with net income of $907,000 or $0.29 per basic common share and $0.27 per diluted common share for the three months ended September 30, 2007. Net income for the three months ended June 30, 2008 was $703,000 or $0.22 per basic common share and $0.21 per diluted common share. Net income for the nine months ended September 30, 2008 of $1,973,000 or $0.62 per basic common share and $0.60 per diluted common share, compared with net income of $2,473,000 or $0.78 per basic common share and $0.73 per diluted common share for the nine months ended September 30, 2007.

"We are pleased to announce another solid quarter. The Bank continues to outperform its peer group. We are positioned well in this unprecedented economic environment to grow our client base by assisting businesses today who are experiencing issues with their current banking relationships," said Chairman and CEO Ivo A. Tjan. "Management is focused on maintaining strong credit quality, net interest margin, and optimal efficiency by executing our proven business model. The Bank has been very deliberate about its growth strategy over the last several quarters. We believe now is the time to pursue growth in market share. Despite the economy, we believe the next several quarters will present some good opportunities for the bank to grow its client base."

"The Bank has substantial capital to weather the current economic turbulence," commented Chairman and CEO Ivo Tjan. "The Bank's Board and Management are committed to creating long term shareholder value."

Interest income was $3,292,000 for the three months ended September 30, 2008 as compared to $4,054,000 for the three months ended September 30, 2007, a decrease of 19%. Net interest income before provision for loan losses for the three months ended September 30, 2008 was $2,452,000, a decrease of $254,000 or 9%, compared to the same period in 2007. This decrease resulted from a $762,000 decrease in interest income offset by a $508,000 decrease in interest expense. Interest income was $10,663,000 for the nine months ended September 30, 2008 as compared to $11,968,000 for the nine months ended September 30, 2007, a decrease of 11%. Net interest income before provision for loan losses for the nine months ended September 30, 2008 was $7,731,000, a decrease of $145,000 or 2%, compared to the same period in 2007. This decrease resulted from a $1,305,000 decrease in interest income offset by a $1,160,000 decrease in interest expense.

The net interest margin for the three months ended September 30, 2008 was 4.42% as compared to 5.05% for the three months ended September 30, 2007 a 63 basis point or 13% decrease. The net interest margin for the three months ended September 30, 2008 was unchanged from the second quarter of 2008. The net interest margin for the nine months ended September 30, 2008 was 4.48% as compared to 4.93% for the nine months ended September 30, 2007 a 45 basis point or 9% decrease.

Provision for loan losses for the three months ended September 30, 2008 was $295,000 compared to $39,000 for the three months ended September 30, 2007, an increase of 656%. Provision for loan losses for the three months ended September 30, 2008 decreased 5% compared to the three months ended June 30, 2008. Provision for loan losses for the nine months ended September 30, 2008 was $875,000 compared to $312,000 for the nine months ended September 30, 2007, an increase of 180%. The Bank's allowance for loan losses was $2.3 million on September 30, 2008, up 14% from September 30, 2007. The Bank's allowance for loan losses as a percent of total loans was 1.65% on September 30, 2008 as compared to 1.41% on September 30, 2007, an increase of 17%. The Bank's allowance for loan losses as a percent of total loans was 1.67% on June 30, 2008.

Non-interest income for the three months ended September 30, 2008 was $453,000 compared to $516,000 for the same period last year, a decrease of 12%. Non-interest income for the three months ended September 30, 2008 decreased 13% from the three months ended June 30, 2008. Non-interest income for the nine months ended September 30, 2008 was $1,481,000 compared to $1,565,000 for the same period last year, a decrease of 5%. Non-interest expense for the three months ended September 30, 2008 was $1,776,000 compared to $1,738,000 for the same period last year, an increase of 2%. Non-interest expense for the three months ended September 30, 2008 increased 3% from the three months ended June 30, 2008. Non-interest expense for the nine months ended September 30, 2008 was $5,330,000 compared to $5,231,000 for the same period last year, an increase of 2%.

Total asset growth as of September 30, 2008 was $5.7 million, an increase of 2% as compared to the prior period. Total investment securities growth as of September 30, 2008 was $12.7 million, an increase of 19% over the prior period. Total loans decreased $4.5 million as of September 30, 2008, a decrease of 3%. Total deposits decreased $4.1 million as of September 30, 2008, a decrease of 2% from September 30, 2007. Stockholders' equity as of September 30, 2008 was $33.6 million, an increase of 7% as compared to September 30, 2007.

Return on assets was 1.08% for the nine months ended September 30, 2008 compared to 1.45% for the nine months ended September 30, 2007, a decrease of 26%. Return on equity was 7.87% for the nine months ended September 30, 2008 compared to 11.07% for the nine months ended September 30, 2007, a decrease of 29%.

The Bank's efficiency ratio for the three months ended September 30, 2008 was 61.15% compared to 53.92% in 2007, which represents an increase of 13%. The Bank's efficiency ratio for the nine months ended September 30, 2008 was 58.04% compared to 55.41% in 2007, which represents an increase of 5%. The efficiency ratio illustrates, that for every dollar the Bank made for the nine month period ending September 30, 2008, the Bank spent $0.58 to make it, as compared to $0.55 one year ago.

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 Los Angeles at 19300 South Hamilton Avenue in Gardena, CA. We offer a wide range of commercial banking services, including, concierge services, remote deposit solution, full-service internet banking, lines of credit, term loans, commercial real estate lending, SBA lending, full cash management 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.

THIRD QUARTER REPORT - SEPTEMBER 30, 2008 (Unaudited)


BALANCE SHEET                                   September 30,    Increase
(dollars in thousands)                          2008     2007   (Decrease)
                                              -------  -------  ----------

ASSETS
Cash and due from banks                         8,094    7,449           9%
Securities                                     78,115   65,415          19%
Federal funds sold                                355    4,210         -92%

Loans                                         139,405  143,944          -3%
   Less allowance for loan losses              (2,309)  (2,027)         14%
                                              -------  -------
Loans, net                                    137,096  141,917          -3%

Bank premises and equipment, net                  768      885         -13%
Other assets                                   10,903    9,736          12%
                                              -------  -------
      Total assets                            235,331  229,612           2%
                                              =======  =======

LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits                  61,821   73,288         -16%
Interest bearing deposits                     125,413  118,092           6%
                                              -------  -------
      Total deposits                          187,234  191,380          -2%
Total borrowings                               13,441    5,500         144%
Other liabilities                               1,103    1,488         -26%
                                              -------  -------
                                              201,778  198,368           2%
Stockholders' equity                           33,553   31,244           7%
                                              -------  -------
      Total liabilities and stockholders'
       equity                                 235,331  229,612           2%
                                              =======  =======


STATEMENT OF EARNINGS

(dollars in         For the Three                 For the Nine
 thousands except   Months Ended                 Months Ended
 share and per    Sept 30,  Sept 30,  Increase Sept 30,  Sept 30, Increase
 share data)        2008      2007   (Decrease)  2008      2007  (Decrease)
                  --------  --------  -------  --------  --------  -------

Interest income      3,292     4,054      -19%   10,663    11,968      -11%
Interest expense       840     1,348      -38%    2,932     4,092      -28%
                  --------  --------           --------  --------
Net interest
 income              2,452     2,706       -9%    7,731     7,876       -2%
Provision for loan
 losses                295        39      656%      875       312      180%
Other non-interest
 income                453       516      -12%    1,481     1,565       -5%
Other non-interest
 expense             1,776     1,738        2%    5,330     5,231        2%
                  --------  --------           --------  --------
Earnings before
 income taxes          834     1,445      -42%    3,007     3,898      -23%
Income taxes           285       538      -47%    1,034     1,425      -27%
                  --------  --------           --------  --------
Net earnings           549       907      -39%    1,973     2,473      -20%
                  ========  ========           ========  ========

Basic earnings per
 share            $   0.17  $   0.29      -41% $   0.62  $   0.78      -21%
Diluted earnings
 per share        $   0.17  $   0.27      -37% $   0.60  $   0.73      -18%
Return on Assets
 (annualized)         0.93%     1.61%              1.08%     1.45%
Return on Equity
 (annualized)         6.46%    11.76%              7.87%    11.07%
Efficiency Ratio     61.15%    53.92%             58.04%    55.41%
Gross nonperforming
 loans as a % of
 total loans                                       0.67%     0.15%

Contact Information

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