Commencement Bancorp Inc Announces First Quarter Financials
Commencement Bancorp, Inc. (OTCQX:CBWA) reported quarterly net income of $983 thousand, or $0.24 per share, for the quarter ending March 31, 2022, compared to $1.6 million and $0.38 per share for first quarter 2021. As expected, the Bank experienced a reduction in loan balances from Paycheck Protection Program (PPP) payoffs, and corresponding loan fees were recorded at a slower speed compared to first quarter 2021. Still, first quarter 2022 neared $1 million in net income and recognized a slight improvement in net interest margin.
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Total assets were $550 million on March 31, 2022, compared to $579 million one year earlier. Total loan balances remained stable at $345 million, while PPP loan balances fell $96 million from first quarter 2021 to first quarter 2022. Core loans (not including PPP) grew by 9% annualized during first quarter and 8% from the prior period. The portfolio remained well-diversified at 72% commercial real estate, 24% commercial, and 4% consumer and other.
In first quarter, the Bank recognized a 5% increase in total deposits compared to year-end 2021 (19% annualized) in the amount of $22.4 million, a reflection of new relationships and organic growth. Compared to one year earlier, time deposits experienced a 50% decrease while non-time deposits increased 8%. Interest expense decreased 48% from the prior year, as cost of funds dropped to 0.19% from 0.36%. Non-interest expense increased 4% from the prior period, affected by inflation and adjustments to salary and benefit expense.
The first in a series of expected rate increases occurred in March 2022, when the Federal Open Market Committee raised the targeted Federal Funds rate from 0% - 0.25% to 0.25% - 0.50%. Prime followed suit at 3.50%. The Bank anticipates improvement in variable and adjustable loan rates, as well as an opportunity to improve loan pricing, which has been limited due to competition and the low-rate environment. The Bank is well positioned for a rising rate environment and Management will continue to watch market rate changes.
“First quarter experienced an uptick in loan funding and the Bank is headed into second quarter with a robust pipeline. I am pleased to announce that Nigel L. English joined our team during first quarter 2022 as president and chief operating officer. Nigel’s experience and positive community connections will provide new market opportunities and leadership for the Bank’s projected growth initiatives. Our team has never been stronger nor our reputation so solid. We have a lot to look forward to,” said John Manolides, Chief Executive Officer.
2022 First Quarter Financial Highlights:
- Total assets grew to $550 million.
- Core loans (not including PPP) grew by 9% annualized in the first quarter and 8% from prior year.
- Total deposits increased 19% annualized in the first quarter 2022. Total deposits decreased 5% from prior period, including a 50% decrease in time deposits. Non-time deposits increased 8% in that period.
- Net income of $983 thousand, or $0.24 per share, was earned for the quarter ending March 31, 2022. Net interest income was $3.95 million.
- Nonperforming assets to total assets remained stable at 0.5%.
About Commencement Bancorp, Inc.
Commencement Bancorp, Inc. is the holding company for Commencement Bank, headquartered in Tacoma, Washington. Commencement Bank was formed in 2006 to provide traditional, reliable, and sustainable banking in Pierce, King, and Thurston counties and the surrounding areas. Their team of experienced banking experts focuses on personal attention, flexible service, and building strong relationships with customers through state-of-the-art technology as well as traditional delivery systems. As a local bank, Commencement Bank is deeply committed to the community. For more information, please visit www.commencementbank.com. For information related to the trading of CBWA, please visit www.otcmarkets.com.
For further discussion, please contact the following:
John E. Manolides, Chief Executive Officer | 253-284-1802
Nigel L. English, President & Chief Operating Officer | 253-284-1801
Thomas L. Dhamers, Executive Vice President & Chief Financial Officer | 253-284-1803