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CommerceWest Bank Reports Second Quarter Financial Results

^{Published on 2010-08-05 14:05:38 - Market Wire}
 

IRVINE, Calif.--([ BUSINESS WIRE ])--CommerceWest Bank (OTCBB: CWBK) announced today its financial results for the three and six months ended June 30, 2010. The company reported earnings for the three months ended June 30, 2010 of $68,000 or $0.02 per basic common share and $0.02 per diluted common share, as compared to a loss of $2.6 million or $(0.84) per basic common share and $(0.83) per diluted common share for the three months ended June 30, 2009 an increase of 102%. Net income for the six months ended June 30, 2010 was $502,000 or $0.11 per basic common share and $0.11 per diluted common share, as compared to a loss of $2.3 million or $(0.74) per basic common share and $(0.73) per diluted common share for the six months ended June 30, 2009 an increase of 115%.

"This is allowing us to focus more on opportunities to grow deposits and loans through new profitable client relationships and increase our cross sell of products to our existing clients."

aWe have finalized the consolidation of Discovery Banka™s administrative office and two regional offices in the first half of 2010, which should provide us with better operating efficiencies going forward,a stated Chairman and CEO Ivo Tjan. aThe bank continues to practice its fortress balance sheet approach, by maintaining one of the strongest capital ratios and loan loss reserve percentages for a California bank. We saw positive trends for both the 1^st and 2^nd quarters in 2010, with increased revenues, reduced expenses, increased non-interest income, lower loan loss provision expense and profitability. The Bank has completed the majority of its deleveraging strategy, rolling off non-core high interest rate certificates of deposit or transactional deposit accounts from Discovery Bank.a Mr. Tjan continued, aThis is allowing us to focus more on opportunities to grow deposits and loans through new profitable client relationships and increase our cross sell of products to our existing clients.a

Total asset growth of $55.2 million as of June 30, 2010, an increase of 22% as compared to the same period one year ago. Total loans increased $53.2 million as of June 30, 2010, an increase of 39% over the prior year. Total deposits increased $56.5 million as of June 30, 2010, an increase of 29% from June 30, 2009. Stockholdersa™ equity on June 30, 2010 was $43.7 million, an increase of 35% as compared to stockholdersa™ equity of $32.4 million on June 30, 2009.

Interest income was $3,928,000 for the three months ended June 30, 2010 as compared to $3,597,000 for the three months ended June 30, 2009, an increase of 9%. Interest income was $8,280,000 for the six months ended June 30, 2010 as compared to $7,071,000 for the six months ended June 30, 2009, an increase of 17%.

Net interest income before provision for loan losses for the three months ended June 30, 2010 was $3,119,000, an increase of $160,000 or 5%, compared to the same period in 2009. This increase resulted from a $331,000 increase in interest income partially offset by a $171,000 increase in interest expense. Net interest income before provision for loan losses for the six months ended June 30, 2010 was $6,609,000, an increase of $812,000 or 14%, compared to the same period in 2009. This increase resulted from a $1,209,000 increase in interest income partially offset by a $397,000 increase in interest expense.

The net interest margin for the three months ended June 30, 2010 was 4.50% as compared to 5.23% for the three months ended June 30, 2009 a 73basis pointor 14% decrease. The net interest margin for the six months ended June 30, 2010 was 4.51% as compared to 5.20% for the six months ended June 30, 2009 a 69basis pointor 13% decrease.

Provision for loan losses for the three months ended June 30, 2010 was $900,000 compared to $5,445,000 for the three months ended June 30, 2009, a decrease of 83%. Provision for loan losses for the six months ended June 30, 2010 was $1,525,000 compared to $6,170,000 for the six months ended June 30, 2009, a decrease of 75%.

The Banka™s allowance for loan losses as a percent of total loans was 3.91% for the CommerceWest Bank portfolio on June 30, 2010 as compared to 2.71% on June 30, 2009, an increase of 44%.

Non-interest income for the three months ended June 30, 2010 was $308,000 compared to a loss of $517,000 for the same period last year. Other than temporary impairment losses recognized during the second quarter of 2009 were $400,000. Non-interest income for the six months ended June 30, 2010 was $866,000 compared to a loss of $53,000 for the same period last year. Other than temporary impairment losses recognized for the six months ended June 30, 2009 were $900,000 as the Bank wrote down its position in trust preferred securities. Non-interest expense for the three months ended June 30, 2010 was $2,708,000 compared to $1,539,000 for the same period last year, an increase of 76%. Non-interest expense for the six months ended June 30, 2010 was $5,448,000 compared to $3,629,000 for the same period last year, an increase of 50%.

The Banka™s efficiency ratio for the three months ended June 30, 2010 was 79.02% compared to 63.02% in 2009, which represents an increase of 25%. The Banka™s efficiency ratio for the six months ended June 30, 2010 was 72.88% compared to 63.18% in 2009, which represents an increase of 15%.

The efficiency ratio illustrates, that for every dollar the Bank made for the six month period ending June 30, 2010, the Bank spent $0.73 to make it, as compared to $0.63 one year ago.

Capital ratios for the Bank remain above the levels required for a awell capitalizeda institution as designated by regulatory agencies. As of June 30, 2010, the leverage ratio, tier 1 capital ratio, and total risk-based capital ratio was 12.40%, 17.91% and 19.17%, respectively.

CommerceWest Bank is headquartered at 2111 Business Center Drive in Irvine, CA, with Regional Offices in Orange County, Riverside County, Los Angeles County and San Diego County. We are a full service business bank and 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, and full cash 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. aBANK ON THE DIFFERENCEa

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.