CW Bancorp (OTCQX: CWBK), the parent company (“the Company”) of CommerceWest Bank (the “Bank”) reported consolidated net income for the second quarter of 2022 of $4,186,000 or $1.20 a share as compared to $2,981,000 or $0.81 a share for the second quarter of 2021, an EPS increase of 48% and net income for the six months ended June 30, 2022 of $8,244,000 or $2.35 a share as compared to $6,628,000 or $1.80 a share for the six months ended June 30, 2021, an EPS increase of 31%.

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Key Financial Results for the three months ended June 30, 2022:

• Net income growth of 40%
• EPS of $1.20 up 48%
• ROTE of 25.93% up 50%
• ROA of 1.39% up 35%
• Net interest income up 38%
• Net interest margin up 34%
• Cost of deposits of 0.06% down 45%
• Efficiency ratio of 41%
• ALLL to total loans ratio (net of PPP loans) of 1.29%
• 50 quarters of consecutive profits

Key Financial Results for the six months ended June 30, 2022:

• Net income growth of 24%
• EPS of $2.35 up 31%
• ROTE of 24.82% up 28%
• ROA of 1.33% up 16%
• Total asset growth of $49 million up 4%
• Loan growth of $151 million up 23%
• Deposit growth of $38 million up 4%
• Noninterest-bearing deposits as percent of total deposits at 63%

Mr. Ivo Tjan, Chairman and CEO commented, “Our team achieved double digit growth in earnings per share, net income, net interest margin and return on tangible equity for both the quarter and for the first six months of 2022 in a challenging economic environment. We continue to demonstrate the strength of the Bank’s business model, digital banking strategy and our team’s execution; while maintaining a fortress balance sheet.” Mr. Tjan continued, “We are positioned well to continue to service our clients in California during this economic cycle. The company recorded our 50^th quarter of consecutive profits and posted a strong 41% efficiency ratio.”

Total assets increased $49.0 million as of June 30, 2022, an increase of 4% as compared to the same period one year ago. Total loans increased $152 million as of June 30, 2022, an increase of 23% over the prior year. Total loans net of PPP loans increased $249 million as of June 30, 2022, an increase of 46%. Cash and due from banks decreased $201 million or 50% from the prior year with the deployment of funds into loans and investment securities. Total investment securities increased $92 million, an increase of 103% from the prior year.

Total deposits increased $38 million as of June 30, 2022, an increase of 4% from June 30, 2021. Non-interest-bearing deposits increased $47 million as of June 30, 2022, an increase of 7% over the prior year. Interest bearing deposits decreased $10 million as of June 30, 2022, a decrease of 2% over the prior period.

Interest income was $9,720,000 for the three months ended June 30, 2022 as compared to $7,149,000 for the three months ended June 30, 2021, an increase of 36%. Interest expense was $629,000 for the three months ended June 30, 2022 as compared to $583,000 for the three months ended June 30, 2021, an increase of 8% due to the Company adding $17.5 million in subordinated debt in the fourth quarter of 2021. Interest income was $18,892,000 for the six months ended June 30, 2022 as compared to $14,717,000 for the six months ended June 30, 2021, an increase of 28%. Interest expense was $1,265,000 for the six months ended June 30, 2022 as compared to $955,000 for the six months ended June 30, 2021, an increase of 32%. Reductions in the cost of deposits were offset by increased funding costs related to subordinated debt.

Net interest income for the three months ended June 30, 2022 was $9,091,000 as compared to $6,566,000 for the three months ended June 30, 2021, an increase of 38%. The net interest margin increased for the three months ended June 30, 2022. It increased from 2.41% in 2021 to 3.22% in 2022, an increase of 34%. Net interest income for the six months ended June 30, 2022 was $17,627,000 as compared to $13,762,000 for the six months ended June 30, 2021, an increase of 28%. The net interest margin increased for the six months ended June 30, 2022. It increased from 2.52% in 2021 to 3.03% in 2022, an increase of 20%.

Provision for loan losses for the three months ended June 30, 2022 was $375,000 compared to zero for the three months ended June 30, 2021. Provision for loan losses for the six months ended June 30, 2022 was $500,000 compared to zero for the six months ended June 30, 2021. The allowance for loan losses (net of PPP loans) to total loans ratio decreased from 1.71% as of June 30, 2021 to 1.29% as of June 30, 2022.

Non-interest income for the three months ended June 30, 2022 was $1,515,000 compared to $1,283,000 for the same period last year, an increase of 18%. Non-interest income for the six months ended June 30, 2022 was $2,909,000 compared to $2,389,000 for the same period last year, an increase of 22%.

Non-interest expense for the three months ended June 30, 2022 was $4,404,000 compared to $3,711,000 for the same period last year, an increase of 19%. Non-interest expense for the six months ended June 30, 2022 was $8,590,000 compared to $7,209,000 for the same period last year, an increase of 19%.

The efficiency ratio for the three months ended June 30, 2022 was 41.14% compared to 47.28% in 2021, which represents a decrease of 13%. The efficiency ratio illustrates that for every dollar made for the three-month period ending June 30, 2022, it cost $0.4114 to make it, as compared to $0.4728 one year ago. The efficiency ratio for the six months ended June 30, 2022 was 41.43% compared to 44.25% in 2021, which represents a decrease of 6%.

Capital ratios for the Bank remain above the levels required for a “well capitalized” institution as designated by regulatory agencies. As of June 30, 2022, the tier 1 leverage ratio was 9.81%, the common equity tier 1 capital ratio was 15.19%, the tier 1 risk-based capital ratio was 15.19% and the total risk-based capital ratio was 16.44%.

CommerceWest Bank is determined to redefine banking for small and medium sized businesses by delivering on customized products and services. Founded in 2001 and headquartered in Irvine, California, the Bank serves businesses throughout the state of California with our digital banking platform. By employing a strategically selected team of experienced professionals, we will provide flexibility, create a complete, safe and sound banking experience for each client. We provide a wide range of commercial banking services, including remote deposit solution, NetBanker online banking, mobile banking, lines of credit, M&A / working capital loans, commercial real estate loans, SBA loans and treasury 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.

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