2022 Third Quarter Financials:

• Total assets were $554 million for quarter-end September 30, 2022.
• Total loans increased $44.2 million, or 13%, compared to one year earlier. Loan growth was recorded at 14.5% year-to-date.
• Total deposits were $502.3 million for third quarter, an increase of 6% year-to-date.
• Non-interest bearing deposits increased 22% year-to-date, and 21% compared to September 2021. A 3% increase was recorded from second quarter 2022 to third quarter 2022.
• Net income was a record high of $1.8 million for third quarter 2022 compared to $1.5 million one year earlier. Year-to-date earnings of $3.9MM, 29% higher than year-to-date earnings as of September 2021.
• Earnings per share was $0.45 compared to $0.34 one year earlier.
• Return on average assets increased to 1.24% for the quarter compared to 1.04% for third quarter 2021.
• The Bank remains well capitalized with a Tier 1 Risk Based Capital ratio of 13.69%.

TACOMA, WA / ACCESSWIRE / November 4, 2022 / Commencement Bancorp, Inc. (OTCQX:CBWA) reported a quarterly net income of $1.8 million, or $0.45 earnings per share, for the quarter ending September 30, 2022. This represents an increase of 22% compared to $1.5 million for third quarter 2021, and 63% compared to $1.1 million in the preceding quarter. Total interest income benefitted from the rapid rate increases by the Federal Open Market Committee (FOMC), while interest expense decreased 38% year-over-year. Pre-provision net interest income was $5.1 million compared to $4.4 million one year prior, a 16% increase. Non-interest income benefitted from one, non-recurring receipt of a death benefit from a Bank Owned Life Insurance (BOLI) payout. Non-interest expense increased from additional staffing for operational purposes and future staffing increases for strategic initiatives are anticipated.

Total assets were $554 million for third quarter 2022, compared to $548 million one year prior. Net of Paycheck Protection Program (PPP) balances, loans grew 18.2% from $323.7 million, ending third quarter at $395.8 million. The forgiveness of PPP loans is near completion, and funds have been steadily redeployed into higher-yielding, traditional commercial and consumer loans. Loan production remained strong throughout the year.

Quarter-end deposits were $502 million, a slight increase from third quarter 2021. Non-interest-bearing deposits increased 21% from one year prior, representing 35% of total deposits. This increase reflects the success in generating new deposit relationships. Time deposits decreased 38%, resulting in an overall improvement in the deposit portfolio mix and lower cost of funds.

Regulatory capital remains well-capitalized on strong earnings. Expansion of the securities portfolio throughout 2021, coupled with the FOMC rate increases in 2022, has impacted Other Comprehensive Income; however, no losses have been recognized.

The net interest margin increased 37 basis points to 3.68% from 3.31% one year prior. Year-to-date, the net interest margin increased 55 basis points. The Bank is well positioned for a rising rate environment and has benefitted from the recent FOMC rate increases. Cost of funds has remained favorable but funding competition on rates is increasing.

Nonperforming assets to total assets were 0.53%, and the Bank's Texas Ratio, a measurement of problem loans and bank-owned properties to capital, remained at 4.7%. Based on the growth in the loan portfolio, a $75K provision to the Allowance for Loan and Lease Losses was recorded in third quarter 2022, the first for the year.

"This has been a tremendous quarter for Commencement with the highest recorded net income in the Bank's history. Our team continues to gain momentum as we head into the home stretch of 2022 and we remain focused on taking advantage of the market opportunities in front of us," said John Manolides, Chief Executive Officer.

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

Forward-Looking Statement Safe Harbor: This news release contains comments or information that constitutes forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Forward-looking statements describe Commencement Bancorp, Inc.'s projections, estimates, plans and expectations of future results and can be identified by words such as "believe," "intend," "estimate," "likely," "anticipate," "expect," "looking forward," and other similar expressions. They are not guarantees of future performance. Actual results may differ materially from the results expressed in these forward-looking statements, which because of their forward-looking nature, are difficult to predict. Investors should not place undue reliance on any forward-looking statement, and should consider factors that might cause differences including but not limited to the degree of competition by traditional and nontraditional competitors, declines in real estate markets, an increase in unemployment or sustained high levels of unemployment; changes in interest rates; greater than expected costs to integrate acquisitions, adverse changes in local, national and international economies; changes in the Federal Reserve's actions that affect monetary and fiscal policies; changes in legislative or regulatory actions or reform, including without limitation, the Dodd-Frank Wall Street Reform and Consumer Protection Act; demand for products and services; changes to the quality of the loan portfolio and our ability to succeed in our problem-asset resolution efforts; the impact of technological advances; changes in tax laws; and other risk factors. Commencement Bancorp, Inc. undertakes no obligation to publicly update or clarify any forward-looking statement to reflect the impact of events or circumstances that may arise after the date of this release.

SOURCE: Commencement Bancorp, Inc. (WA)