SOURCE: CommerceWest Bank

May 03, 2007 09:00 ET

CommerceWest Bank Reports Q1 2007 Earnings, EPS Growth of 53% Revenue up 30%, Net Earnings Growth of 54%

IRVINE, CA--(Marketwire - May 3, 2007) - CommerceWest Bank (OTCBB: CWBK)

Financial Performance highlights for the quarter ended March 31, 2007 included:

--  Net income of $788,000 for the three months ended March 31, 2007 as
    compared to $513,000 for the three months ended March 31, 2006, an increase
    of 53.6%.
    
--  Earnings per basic common share for the three months ended March 31,
    2007 were $0.25 compared to $0.16 in 2006, an increase of 56.3%. Earnings
    per diluted common share for the three months ended March 31, 2007 were
    $0.23 compared to $0.15 in 2006, an increase of 53.3%.
    
--  Gross revenue of $4.3 million for the three months ended March 31,
    2007 compared to $3.3 million in 2006, an increase of 29.8%.
    
--  Return on average assets for the three months ended March 31, 2007 was
    1.38% compared to 1.24% in 2006, an increase of 11.3%.
    
--  Return on average equity for the three months ended March 31, 2007 was
    11.00% compared to 8.16% in 2006, an increase of 34.8%.
    
--  The Bank's efficiency ratio for the three months ended March 31, 2007
    was 56.67% compared to 63.19% in 2006, which represents a decrease of
    10.3%.
    
--  Total asset growth of 33.1%, $233.2 million as of March 31, 2007 as
    compared to $175.3 million one year ago, and an increase of $57.9 million.
    
--  Total loan growth of 23.8%, $136.1 million as of March 31, 2007 as
    compared to $109.9 million one year ago, an increase of $26.2 million.
    
--  Total deposit growth of 31.1%, $183.9 million as of March 31, 2007
    compared to $140.3 million as of March 31, 2006, an increase of $43.6
    million.
    

CommerceWest Bank (OTCBB: CWBK) reported strong earnings for the three months ended March 31, 2007 of $788,000 or $0.25 per basic common share and $0.23 per diluted common share, compared with net income of $513,000 or $0.16 per basic common share and $0.15 per diluted common share for the three months ended March 31, 2006.

"We are again pleased with our financial results for Q1 of 2007. The bank is focused on expanding our existing and new markets for 2007. CommerceWest has the infrastructure, technology and people to execute the next 5-year plan of our growth strategy. Our business banking focus includes lines of credit, term loans, working capital loans, and non-interest bearing demand deposit accounts. This is the uniqueness of our organization; it is our core strength, as well as the culture established by management that will help create long term franchise value for our shareholders," commented Chairman and CEO Ivo Tjan.

Interest income was $3,846,000 for the quarter ended March 31, 2007 as compared to $2,849,000 for the quarter ended March 31, 2006, an increase of 35.0%. Net interest income before provision for loan losses for the three months ended March 31, 2007 was $2,524,000, an increase of $339,000 or 15.5%, compared to the same period in 2006. This increase resulted from a $997,000 increase in interest income, partially offset by a $658,000 increase in interest expense.

The net interest margin declined for the Q1 of 2007, which decreased from 5.81% in 2006 to 4.88% in 2007, a 93 basis point or 16.0% decrease. The net interest margin for the Q1 of 2007 declined 20 basis points, or 3.9% from the net interest margin of 5.08% for the fourth quarter of 2006. "We have continued to reposition the Bank's balance sheet, specifically our loan and investment portfolio, for a future rates down environment," said Chairman and CEO Ivo Tjan. "We have also invested in some tax advantaged investment securities that, while having a drag on the net interest margin, improve the Bank's after-tax net income," added Executive Vice President and CFO, Leeann Cochran.

Non-interest income for the quarter ended March 31, 2007 was $485,000 as compared to $489,000 for the quarter ended March 31, 2006, a decrease of 82 basis points. Gross revenue was $4,331,000 for the quarter ended March 31, 2007 as compared to $3,338,000 for the quarter ended March 31, 2006, an increase of 29.8%.

Stock option expense for the quarter ended March 31, 2007 was $64,000 as compared to $81,000 for the quarter ended March 31, 2006, a decrease of 21%. Pretax income for the three months ended March 31, 2007 was $1,217,000, an increase of $363,000 or 42.5% from last year's pretax income of $854,000.

Loan growth for the period ended March 31, 2007 was $26.2 million, an increase of 23.8% over the prior year. Deposit growth for the period ended March 31, 2007 was $43.6 million, an increase of 31.1% over the period ended March 31, 2006. The Bank's allowance for loan losses as a percent of total loans was 1.34% on March 31, 2007 as compared to 1.23% on March 31, 2006, an increase of 8.9%.

Return on assets was 1.38% for the quarter ended March 31, 2007 compared to 1.24% for the quarter ended March 31, 2006, an increase of 11.3%. Return on equity was 11.00% for the quarter ended March 31, 2007 compared to 8.16% for the quarter ended March 31, 2006, an increase of 34.8%.

The Bank's efficiency ratio for the three months ended March 31, 2007 was 56.67% compared to 63.19% in 2006, which represents a decrease of 10.3%.

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 Business Centers 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, nationwide commercial real estate lending, SBA lending and mortgage, and corporate financial 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.

                            COMMERCEWEST BANK
                  UNAUDITED FINANCIAL HIGHLIGHTS TABLES

(in 000's except share data)
                                                Three Months Ended
Income Statement Data                                March 31,
---------------------                     -------------------------------
                                            2007       2006       Change
                                          ---------  ---------  ---------
Interest income                           $   3,846  $   2,849      34.99%
Interest expense                              1,322        664      99.10
                                          ---------  ---------  ---------
Net interest income                           2,524      2,185      15.51
Provision for loan losses                        88        130     (32.31)
Non-interest income                             485        489      (0.82)
Non-interest expense                          1,640      1,609       1.93
                                          ---------  ---------  ---------
Pre-tax income before stock options           1,281        935      37.01
Stock option expense                             64         81     (20.99)
                                          ---------  ---------  ---------
Pre-tax income                                1,217        854      42.51
Income tax expense                              429        341      25.81
                                          ---------  ---------  ---------
Net income                                $     788  $     513      53.61%
                                          =========  =========  =========

Per Common Share Data
---------------------

Earnings per share - basic                $    0.25  $    0.16      56.25
Earnings per share - diluted              $    0.23  $    0.15      53.33

Selected Financial Ratios
-------------------------

Return on average assets                       1.38%      1.24%     11.29
Return on average equity                      11.00%      8.16%     34.80
Net interest margin                            4.88%      5.81%    (16.01)
Efficiency ratio                              56.67%     63.19%    (10.32)


                                                  Actual Balances
                                               as of March 31, 2007
                                          -------------------------------
Consolidated Balance Sheet                   2007       2006     Change
--------------------------                ---------  ---------  ---------
Assets

Total cash and cash equivalents           $  13,132  $   6,290     108.78 %
Fed funds sold                                2,685      1,550      73.23
Securities available for sale                72,697     49,564      46.67
Loans                                       136,119    109,942      23.81
Allowance for loan losses                     1,828      1,355      34.91
                                          ---------  ---------  ---------
Net Loans                                   134,291    108,587      23.67
Other assets                                 10,447      9,315      12.15
                                          ---------  ---------  ---------
Total Assets                              $ 233,252  $ 175,306      33.05
                                          =========  =========  =========

Liabilities and Stockholders' Equity

Non-interest bearing                      $  76,655  $  57,696      32.86
Interest-bearing                             57,282     50,149      14.22
Time                                         50,040     32,405      54.42
                                          ---------  ---------  ---------
  Total Deposits                            183,977    140,250      31.18
Total Borrowings                             18,614      7,543     146.77
Other Liabilities                             1,174      2,061     (43.04)
                                          ---------  ---------  ---------
  Total Liabilities                         203,765    149,854      35.98
Total Stockholders' Equity                   29,487     25,452      15.85
                                          ---------  ---------  ---------
Total Liabilities and Stockholders'
 Equity                                   $ 233,252  $ 175,306      33.05
                                          =========  =========  =========

Allowance for loan losses as a percent of
 total loans                                   1.34%      1.23%
Nonperforming loans as a percent of total
 assets                                        0.09%      0.10%

Contact Information


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