SOURCE: CommerceWest Bank

April 29, 2008 22:18 ET

CommerceWest Bank Reports Solid First Quarter Financial Results

IRVINE, CA--(Marketwire - April 29, 2008) - CommerceWest Bank (OTCBB: CWBK) reported earnings for the three months ended March 31, 2008 of $721,000 or $0.23 per basic common share and $0.22 per diluted common share, compared with net income of $788,000 or $0.25 per basic common share and $0.23 per diluted common share for the three months ended March 31, 2007.

Interest income was $3,916,000 for the three months ended March 31, 2008 as compared to $3,846,000 for the three months ended March 31, 2007, an increase of 2%. Net interest income before provision for loan losses for the three months ended March 31, 2008 was $2,692,000, an increase of $168,000 or 7%, compared to the same period in 2007. This increase resulted from a $70,000 increase in interest income and a $98,000 decrease in interest expense. "Growing net interest income at a time when many of our peers are experiencing declines, is a very strong result for CommerceWest Bank," says Chairman and CEO Ivo A. Tjan.

The net interest margin for the three months ended March 31, 2008 was 4.60% as compared to 4.88% for the three months ended March 31, 2007 a 28 basis point or 6% decrease. The Bank's net interest margin for the fourth quarter of 2007 was 4.90%. "The Bank is proud of its asset liability management. In an economic environment where interest rates declined 300 basis points in six months, Bank management has been able to successfully navigate through the downturn and manage margin compression," said CEO Ivo Tjan. "Beginning more than two years ago, the Bank began offering fixed rate loans and placing floors on variable rate loans, in anticipation of a declining rate environment." "Over the course of the last two years, the Bank has also positioned the investment portfolio for rates down interest rate protection," said CFO, Leeann M. Cochran.

Provision for loan losses for the three months ended March 31, 2008 was $270,000 compared to $88,000 for the three months ended March 31, 2007, an increase of 207%. The Bank's allowance for loan losses as a percent of total loans was 1.62% on March 31, 2008 as compared to 1.34% on March 31, 2007, an increase of 21%. "The Bank is very comfortable with its current level of allowance for loan losses with non-performing loans as a percent of total loans at 0.14%," said CEO Ivo Tjan. "The Bank's balance sheet is strategically positioned to withstand the current turbulent economic environment."

Non-interest income for the three months ended March 31, 2008 was $505,000 compared to $485,000 for the same period last year, an increase of 4%. Non-interest expense for the three months ended March 31, 2008 was $1,824,000 compared to $1,704,000 for the same period last year, an increase of 7%. "We have made some strategic investments in the first quarter of 2008, namely, opening a Regional Office in Los Angeles. We believe there is a great opportunity for us in this region and also that it is, strategically, the right move for the long term success of the organization. We are growing the CommerceWest Bank franchise which ultimately will increase shareholder value over time. We expect to see the fruit of this investment within the next nine to twelve months. We believe with our business model that we are among the best positioned in our industry to prosper and grow," stated CEO Ivo Tjan.

Total asset growth for the period ended March 31, 2008 was $17.1 million, an increase of 7% as compared to the prior period. Total investment securities growth for the period ended March 31, 2008 was $13.7 million, an increase of 19% over the prior period. Total deposits increased $22.0 million for the period ended March 31, 2008, an increase of 12% from the period ended March 31, 2007. Stockholders' equity for the period ended March 31, 2008 was $33.5 million, an increase of 13% as compared to the prior period.

Return on assets was 1.17% for the three months ended March 31, 2008 compared to 1.38% for the three months ended March 31, 2007, a decrease of 15%. Return on equity was 8.77% for the three months ended March 31, 2008 compared to 11.00% for the three months ended March 31, 2007, a decrease of 20%.

The Bank's efficiency ratio for the three months ended March 31, 2008 was 57.55% compared to 56.67% in 2007, which represents an increase of 2%. The efficiency ratio illustrates, that for every dollar the Bank made for the three month period ending March 31, 2008, the Bank spent $0.58 to make it, as compared to $0.57 one year ago.

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, in South Los Angeles at 19300 South Hamilton Avenue in Gardena, CA, and Los Angeles at 301 E. Foothill Boulevard in Arcadia, CA. We offer a wide range of commercial banking services, including full cash management, concierge services, remote deposit solution, full-service internet banking, lines of credit, term loans, commercial real estate lending, SBA lending and mortgage, property management, title, and escrow cash 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.

FIRST QUARTER REPORT - MARCH 31, 2008 (Unaudited)


BALANCE SHEET                                March 31,           Increase
(dollars in thousands)                   2008         2007      (Decrease)
                                     -----------  -----------  -----------

ASSETS
Cash and due from banks                   20,274       13,132           54%
Securities                                86,388       72,697           19%
Federal funds sold                            10        2,685         -100%

Loans                                    135,763      136,119            0%
  Less allowance for loan losses          (2,195)      (1,828)          20%
                                     -----------  -----------
Loans, net                               133,568      134,291           -1%

Bank premises and equipment, net             881          898           -2%
Other assets                               9,202        9,549           -4%
                                     -----------  -----------
     Total assets                        250,323      233,252            7%
                                     ===========  ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Non-interest bearing deposits             80,384       76,655            5%
Interest bearing deposits                125,630      107,322           17%
                                     -----------  -----------
     Total deposits                      206,014      183,977           12%
Total borrowings                          10,000       18,614          -46%
Other liabilities                            847        1,174          -28%
                                     -----------  -----------
                                         216,861      203,765            6%
Stockholders' equity                      33,462       29,487           13%
                                     -----------  -----------
     Total liabilities and
      stockholders' equity               250,323      233,252            7%
                                     ===========  ===========



STATEMENT OF EARNINGS
(dollars in thousands except        For the Three Months Ended   Increase
 share and per share data)          Mar 31, 2008  Mar 31, 2007  (Decrease)
                                     -----------  -----------  -----------

Interest income                            3,916        3,846            2%
Interest expense                           1,224        1,322           -7%
                                     -----------  -----------
Net interest income                        2,692        2,524            7%
Provision for loan losses                    270           88          207%
Other non-interest income                    505          485            4%
Other non-interest expense                 1,824        1,704            7%
                                     -----------  -----------
Earnings before income taxes               1,103        1,217           -9%
Income taxes                                 382          429          -11%
                                     -----------  -----------
Net earnings                                 721          788           -9%
                                     ===========  ===========

Actual common shares outstanding at
 end of period                         3,172,768    3,172,768            0%
Average common shares outstanding      3,172,768    3,172,768            0%
Average common shares & equivalents
 outstanding                           3,291,566    3,395,308           -3%
Basic earnings per share             $      0.23  $      0.25           -8%
Diluted earnings per share           $      0.22  $      0.23           -4%
Return on Assets (annualized)               1.17%        1.38%         -15%
Return on Equity (annualized)               8.77%       11.00%         -20%
Efficiency Ratio                           57.55%       56.67%           2%

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"