SOURCE: CommerceWest Bank

May 01, 2006 23:50 ET

CommerceWest Bank Reports Record Quarterly Earnings

IRVINE, CA -- (MARKET WIRE) -- May 1, 2006 -- CommerceWest Bank (OTC BB: CWBK)

--  Gross revenue of $3,338,000 for the quarter ended March 31, 2006 as
    compared to $2,142,000 for the quarter ended March 31, 2005, an increase of
    55.8%.
    
--  Net interest margin of 5.77% for the quarter ended March 31, 2006
    compared to 4.94% for the quarter ended March 31, 2005, an increase of
    16.8%.
    
--  Total loan growth of 37.3%, $109.9 million, as of March 31, 2006 as
    compared to $80.1 million one year ago, an increase of $29.9 million.
    
--  Total deposit growth of 42.2%, $139.9 million as of March 31, 2006
    compared to $98.3 million as of March 31, 2005, an increase of $41.6
    million.
    
--  Net income growth of 579.0%, $550,000 for the quarter ended March 31,
    2006 as compared to $81,000 for the quarter ended March 31, 2005.
    
CommerceWest Bank (OTC BB: CWBK) reported earnings for the three months ended March 31, 2006 with net income of $550,000 or $0.18 per basic common share and $0.16 per diluted common share, compared with net income of $81,000 or $0.03 per basic common share and $0.03 per diluted common share for the three months ended March 31, 2005.

Pretax income for the three months ended March 31, 2006 was $916,000, an increase of $835,000 or 1030.9% from last year's pretax income of $81,000. Net income for the three months ended March 31, 2006 produced a return on average assets of 1.32%, compared to 0.27% in 2005, which represents an increase of 388.9%. Return on average equity for the three months ended March 31, 2006 was 8.58%, compared to 1.83% in 2005, which represents an increase of 368.9%. "The overwhelming majority of banks today attempt to be all things to all people and, by attempting to do everything equally well, do nothing exceptionally well. That's the first of our many differences. Our proven vision and culture has demonstrated our ability to deliver service to existing clients and grow the bank's client base," said Chairman and CEO Ivo Tjan. "We achieved double digit growth year over year in Revenue, Net Interest Margin, Net Income, Loan and Deposit growth. The focus in 2006 is to grow our client base in Orange County, Inland Empire and South Bay areas."

The Bank implemented SFAS 123(R), "Share-Based Payment," in the first quarter of 2006. SFAS 123(R) requires the expensing of stock options. The impact of implementation of this accounting pronouncement reduced first quarter earnings, on an after-tax basis, by $65,335, or $0.02 per diluted common share.

Total assets as of March 31, 2006 were $175.2 million, compared to $123.9 million as of March 31, 2005, an increase of $51.3 million or 41.5%.

Net interest income before the provision for loan losses for the three months ended March 31, 2006 was $2,247,000, an increase of $873,000 or 63.5%, compared to the same period in 2005. This increase resulted from a $1,145,000 increase in interest income, partially offset by a $272,000 increase in interest expense. Net interest margin remains strong in the first quarter of 2006, which increased from 4.94% in 2005 to 5.77% in 2006, an 83 basis points or 16.8% increase. The Bank's efficiency ratio for the three months ended March 31, 2006 was 61.8% compared to 67.7% in 2005, which represents a decrease of 8.7%.

Non-interest income was $489,000 in the first quarter of 2006, an increase of $51,000 or 11.8%, compared to the same period in 2005. Non-interest expense increased $464,000 or 37.9% in the first quarter of 2006, as compared to the same period in 2005 with salaries, occupancy, data processing and marketing expenses having the largest increases.

Capital ratios for the Bank remain above the levels required for a "well capitalized" institution as designated by regulatory agencies. As of March 31, 2006, the Tier 1 capital ratio, total risk-based capital ratio and leverage ratio was 19.4%, 20.5% and 15.9%, respectively.

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 Bay area at 19300 South Hamilton Avenue in Gardena, CA. We offer a wide range of commercial banking services, including cash management, concierge services, full-service internet banking, lines of credit, term loans, nation wide commercial real estate lending, SBA Lending and Escrow 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.

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.


                                                 Three Months Ended
(in 000's except share data)                          March 31,
                                          --------------------------------
                                            2006        2005       Change
                                          --------    --------    --------
Income Statement Data
---------------------
Interest income                           $  2,849    $  1,704        67.2%
Interest expense                               602         330        82.4
                                          --------    --------    --------
Net interest income                          2,247       1,374        63.5
Provision for loan losses                      130         505       (74.3)
Non-interest income                            489         438        11.6
Non-interest expense                         1,609       1,226        31.2
                                          --------    --------    --------
Pre-tax income before stock options            997          81      1130.9
Stock option expense                            81           -       100.0
                                          --------    --------    --------
Pre-tax income                                 916          81      1030.9
Income tax expense                             366           -       100.0
                                          --------    --------    --------
Net income                                $    550    $     81       579.0%
                                          ========    ========    ========

Selected Financial Ratios
-------------------------
Return on average assets                      1.32%       0.27%      388.9%
Return on average equity                      8.58%       1.83%      368.9
Net interest margin                           5.77%       4.94%       16.8
Efficiency ratio                              61.8%       67.7%       (8.7)

Per Common Share Data
---------------------
Earnings per share - basic                $   0.18    $   0.03       500.0
Earnings per share - diluted              $   0.16    $   0.03       433.3
Ending shareholders' equity                   8.17        5.65        44.6

Capital Ratios
--------------
Tier 1 risk-based                             19.4        19.3         0.6
Total risk-based                              20.5        20.2         1.5
Leverage                                      15.9        15.1         5.1




Balance Sheet Data                          2006        2005
------------------                        --------    --------
Total assets                              $175,194    $123,851
Total loans                                109,942      80,049
Total deposits                             139,887      98,327
Allowance for loan losses                    1,355         740
Investment Securities                       49,564      30,963
Shareholders' equity                        25,703      17,706

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"