GOLETA, Calif., Jan. 26, 2010 (GLOBE NEWSWIRE) -- Community West Bancshares (Nasdaq:CWBC), parent company of Community West Bank, today reported net income of $97,000 for the fourth quarter of 2009, compared to $61,000 in the fourth quarter a year ago. For the full year, Community West reported a net loss of $5.8 million, compared to net income of $1.5 million for 2008. The loan loss provision for the year was $18.7 million compared to $5.3 million in 2008.

"Community West posted a solid quarter with respect to strong deposit growth, controlled operating costs, an expanding net interest margin, and stabilization in credit quality," stated Lynda J. Nahra, President and Chief Executive Officer. "The ongoing margin improvement, along with cost reductions we implemented at the beginning of 2009, continues to enhance our positive operating earnings. While we continued to see stress in our lending environment, overall asset quality improved with reductions in nonaccrual loans and other real estate owned."

Fourth Quarter 2009 Highlights

  • Net interest margin improved 6 basis points to 4.18% compared to 3Q09, and improved 69 basis points compared to 4Q08.
  • Nonperforming loans decreased by $1.6 million from the prior quarter to $16.2 million, or 2.62% of total loans.
  • Nonperforming assets improved to 2.63% of total assets compared to 3.12% in the previous quarter.
  • Allowance for loan losses increased to 2.67% of total loans held for investment and 85% of non-performing loans compared to 2.62% of total loans held for investment and 75% of non-performing loans in the previous quarter.
  •  Total deposits increased by 12% with interest bearing demand deposits more than doubling.
  •  The efficiency ratio improved to 63.4 % from 65.6% in 3Q09 and 76.1% in 4Q08.

For the fourth quarter of 2009, including the $262,000 preferred stock dividend, the net loss available to common shareholders was $165,000, or $0.03 per diluted share, compared to net income available to common shareholders of $26,000, or $0.00 per diluted share in the fourth quarter a year ago. For the full year, the net loss available to common shareholders was $6.8 million, or $1.15 per diluted share, compared to net income available to common shareholders of $1.4 million, or $0.24 per diluted share a year ago. 

Credit Quality

"Credit quality stabilized during the fourth quarter with nonperforming loans declining $1.6 million during the quarter to $16.2 million, or 2.62% of total loans at year end, compared to $17.8 million or 2.93% of total loans three months earlier," said Nahra. "Additionally, other real estate owned (OREO) decreased substantially during the quarter, further reducing nonperforming assets." OREO and other repossessed assets declined to $1.8 million at December 31, 2009 compared to $3.3 million three months earlier and up from $1.1 million a year ago. 

Nonperforming assets were $18.0 million, or 2.63% of total assets at December 31, 2009, compared to $21.1 million, or 3.12% at the end of the preceding quarter, and $18.0 million, or 2.75% a year ago. Nonperforming assets include all nonperforming loans and OREO. 

The loan loss provision was $2.8 million during the fourth quarter of 2009 compared to $2.6 million in the preceding quarter and $1.4 million in the fourth quarter a year ago. For the year, the loan loss provision was $18.7 million compared to $5.3 million in 2008. The allowance for loan losses totaled $13.7 million at quarter-end, equal to 2.67% of total loans held for investment, compared to 2.62% at September 30, 2009 and 1.61% at December 31, 2008.

Net charge-offs were $2.3 million for the fourth quarter and $2.7 million for the preceding quarter. In the fourth quarter a year ago, net charge-offs totaled $566,000. Net charge-offs for the full year in 2009 were $12.3 million compared to $2.3 million in 2008. 

Balance Sheet

"The modest increase in total loans is generated from an increase in real estate loans offsetting declines in commercial and SBA loans," said Charles G. Baltuskonis, EVP and Chief Financial Officer.  Net loans increased 4% on a year-over-year basis to $603 million as of December 31, 2009.   

Real estate loans outstanding increased 16% to $202 million at December 31, 2009, compared to $175 million a year ago. Real estate loans now comprise 33% of the total loan portfolio, compared to 30% a year earlier. Manufactured housing loans increased 3% from year ago levels to $196 million and represent 32% of total loans.  Commercial loans were down 17% compared to a year ago and now represent 10% of the total loan portfolio and SBA loans increased 5% from a year ago and now represent 22% of the total loan portfolio.  Other installment loans increased 15% from year ago levels and now represent 3% of the total loan portfolio. 

Total assets increased 4% to $684 million at December 31, 2009, compared to $657 million a year earlier. Total deposits increased 12% to $531 million at December 31, 2009. Core deposits increased substantially to $246 million at year-end, compared to $107 million a year earlier while certificates of deposit decreased to $285 million, from $368 million a year earlier. 

Shareholders' equity was $60.3 million at December 31, 2009, compared to $66.6 million a year earlier. Book value per common share was $7.74 at year-end compared to $8.84 a year ago.

Net Interest Margin

Community West's net interest margin was 4.18% for the fourth quarter of 2009, a six basis point improvement compared to the preceding quarter and a 69 basis point improvement compared to a year ago. "Our strong net interest margin is driven by a continued decline in funding costs and our success in building core deposits," said Baltuskonis. For 2009 the net interest margin improved 19 basis points to 3.91% from 3.72% in 2008.

Income Statement Review

Net interest income for the fourth quarter increased 27% to $7.1 million compared to $5.6 million for the fourth quarter of 2008. Non-interest income increased 24% to $1.0 million for the quarter, compared to $829,000 for the fourth quarter a year ago. The increase in non-interest income was primarily due to a $200,000 increase in loan fees compared to the year ago quarter. 

Non-interest expenses were $5.1 million in the fourth quarter of 2009, compared to $4.9 million, in the fourth quarter of 2008. "While we had another good quarter of managing controllable operating expenses, collection and legal costs, including charges related to acquire real estate, remained high," said Baltuskonis.  

For the full year, net interest income increased 11% to $26.0 million, compared to $23.3 million in 2008. Non-interest income was $4.4 million in 2009 compared to $5.1 million in 2008. The decrease in non-interest income for the year was largely due to a $655,000 decrease in gain on sale of loans over the prior year.

Non-interest expenses increased to $21.5 million in 2009 compared to $20.5 million in 2008. The decrease in salaries and employment benefits of $1.5 million was offset by the $1.2 million increase in FDIC assessment as well as additional charges related to non-performing loans.

The efficiency ratio improved to 63.4 % in the fourth quarter of 2009 from 65.6% in the prior quarter and 76.1% in the fourth quarter a year ago. For the year, the efficiency ratio improved to 70.7% from 72.3% in 2008, reflecting ongoing efforts to improve operations and control costs. The efficiency ratio, calculated by dividing noninterest expense by net interest income and noninterest income, measures overhead costs as a percentage of total revenues.

Capital Management

Community West Bank continues to meet the well capitalized thresholds for regulatory purposes with a Total risk-based capital ratio of 12.20%, Tier 1 risk-based capital ratio of 10.93% and Tier 1 leverage ratio of 8.81% at December 31, 2009. 

Company Overview

Community West Bancshares is a financial services company with headquarters in Goleta, California. The Company is the holding company for Community West Bank, which has five full-service California branch banking offices, in Goleta, Ventura, Santa Maria, Santa Barbara and Westlake Village. The principal business activities of the Company are Relationship banking, Mortgage lending and SBA lending.

Safe Harbor Disclosure

This release contains forward-looking statements that reflect management's current views of future events and operations. These forward-looking statements are based on information currently available to the Company as of the date of this release. It is important to note that these forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including, but not limited to, the ability of the Company to implement its strategy and expand its lending operations.

 

COMMUNITY WEST BANCSHARES                    
CONDENSED CONSOLIDATED INCOME STATEMENTS              
(unaudited)                    
(in 000's, except per share data)                    
                     
    Three Months Ended   Twelve Months Ended
    December 31,   September 30,   December 31,   December 31,   December 31,
    2009   2009   2008   2009   2008
                     
Interest income   $10,108   $10,378   $10,805   $40,903   $45,532
Interest expense   3,058   3,467   5,234   14,945   22,223
Net interest income   7,050   6,911   5,571   25,958   23,309
Provision for loan losses   2,788   2,592   1,408   18,678   5,264
Net interest income after                    
provision for loan losses   4,262   4,319   4,163   7,280   18,045
Non-interest income   1,029   966   829   4,418   5,081
Non-interest expenses   5,124   5,165   4,869   21,479   20,516
                     
Income (Loss) before income taxes   167   120   123   (9,781)   2,610
Provision for income taxes   70   51   62   (4,018)   1,129
                     
NET INCOME (LOSS)   $97   $69   $61   $(5,763)   $1,481
                     
Preferred stock dividends   262   261   35   1,046   35
                     
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS    $(165)    $(192)    $26    $(6,809)   $1,446 
                     
                     
Earnings (Loss) per common share:                  
Basic   $(0.03)   $(0.03)   $0.00   $(1.15)   $0.24
Diluted   (0.03)   (0.03)   0.00   (1.15)   0.24
                     
Weighted average shares:                    
Basic   5,915   5,915   5,915   5,915   5,913
Diluted   5,915   5,915   5,915   5,915   5,941

 

 

COMMUNITY WEST BANCSHARES

CONDENSED CONSOLIDATED INCOME STATEMENTS
(unaudited)
(in 000's, except per share data)

 

  December 31, September 30, December 31,
  2009 2009 2008
       
Cash and cash equivalents $5,511 $8,679 $12,253
Interest-earning deposits in other financial institutions 640 832 812
Investment securities 40,348 40,411 37,975
Loans:      
Commercial 61,810 62,433 74,895
Real estate 202,400 191,046 174,708
SBA 139,118 142,166 132,182
Manufactured housing 195,656 193,165 190,838
Other installment 18,189 17,636 15,793
Total loans 617,173 606,446 588,416
       
Loans, net      
Held for sale 102,574 99,611 131,786
Held for investment 514,599 506,835 456,630
Less: Allowance (13,733) (13,274) (7,341)
Net held for investment 500,866 493,561 449,289
NET LOANS 603,440 593,172 581,075
       
Other assets 34,277 31,258 24,866
       
TOTAL ASSETS $684,216 $674,352 $656,981
       
Deposits      
Non-interest-bearing $37,703 $38,569 $35,080
Interest-bearing 191,905 160,925 57,474
Savings 16,396 16,507 14,718
CDs over 100K 173,594 175,629 138,330
CDs under 100K 111,794 138,067 229,837
Total Deposits 531,392 529,697 475,439
FHLB and FRB advances 89,000 80,000 110,000
Other liabilities 3,517 4,331 4,924
TOTAL LIABILITIES 623,909 614,028 590,363
       
Stockholders' equity 60,307 60,324 66,618
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   

$684,216

$674,352  $656,981
       
Shares outstanding 5,915 5,915 5,915
       
Book value per common share $7.74 $7.75 $8.84

 

 

 

 
                 

ADDITIONAL FINANCIAL INFORMATION

                 
(Dollars in thousands except per share amounts)(Unaudited)                  
  Quarter Ended   Quarter Ended   Quarter Ended   Twelve Months Ended
PERFORMANCE MEASURES AND RATIOS Dec . 31,
2009
  Sept . 30,
2009
  Dec. 31,
2008
  Dec. 31, 2009   Dec. 31, 2008
Return on average common equity 0.83%   0.59%   0.47%   -12.02%   2.88%
Return on average assets 0.06%   0.04%   0.04%   -0.85%   0.23%
Efficiency ratio 63.00%   66.00%   76.00%   71.00%   72.26%
Net interest margin 4.18%   4.12%   3.49%   3.91%   3.72%
                   
  Quarter Ended   Quarter Ended   Quarter Ended   Twelve Months Ended
AVERAGE BALANCES Dec . 31,
2009
  Sept . 30,
2009
  Dec. 31,
2008
  Dec. 31,
2009
  Dec. 31,
2008
Average assets $681,201   $676,625   $647,530   $675,672   $640,993
Average earning assets 669,248   664,934   634,313   663,151   626,187
Average total loans 611,512   606,066   577,561   605,741   568,861
Average deposits 531,453   504,029   486,682   502,173   476,395
Average equity (including preferred stock) 61,187   61,196   53,706   62,353   51,895
Average common equity (excluding preferred stock) 46,683   46,760   51,881   47,947   51,431
                   
EQUITY ANALYSIS Dec. 31, 2009   Sept. 30, 2009   Dec .31, 2008        
Total equity $60,307   $60,324   $66,618        
Less: senior preferred stock 14,540   14,473   14,300        
Total common equity $45,767   $45,851   $52,318        
                   
Common stock outstanding 5,915   5,915   5,915        
Book value per common share $7.74   $7.75   $8.84        
                   
ASSET QUALITY Dec. 31, 2009   Sept. 30, 2009   Dec. 31, 2008        
Nonperforming loans (NPLs) $16,177   $17,770   $16,903        
Nonperforming loans/total loans 2.62%   2.93%   2.87%        
REO and other repossessed assets $1,822   $3,281   $1,146        
Nonperforming assets $17,999   $21,051   $18,049        
Nonperforming assets/total assets 2.63%   3.12%   2.75%        
Net loan charge-offs in the quarter $2,329   $2,737   $566        
Net charge-offs in the quarter/total loans 0.38%   0.45%   0.10%        
                   
Allowance for loan losses $13,733   $13,274   $7,341        
Plus: Allowance for undisbursed loan commitments 501   560   97        
Total allowance for credit losses $14,234   $13,834   $7,438        
Total allowance for loan losses/total loans held for investment 2.67%   2.62%   1.61%        
Total allowance for loan losses/nonperforming loans 85%   75%   43%        
                   
Tier 1 leverage ratio 8.81%   8.89%   10.28%        
Tier 1 risk-based capital ratio 10.93%   11.17%   12.45%        
Total risk-based capital ratio 12.20%   12.44%   13.70%        
                   
  Quarter Ended   Quarter Ended   Quarter Ended        
INTEREST SPREAD ANALYSIS Dec. 31, 2009   Sept. 30, 2009   Dec. 31, 2008        
Yield on interest-bearing deposits 1.92%   2.19%   3.59%        
Yield on total loans 6.29%   6.49%   7.10%        
Yield on investments 3.37%   3.86%   4.18%        
Yield on earning assets 5.99%   6.19%   6.78%        
                   
Cost of deposits 1.77%   2.02%   3.32%        
Cost of FHLB advances 3.65%   3.95%   4.51%        
Cost of Federal Reserve borrowings 0.50%   0.50%   0.00%        
Cost of interest-bearing liabilities 2.10%   2.38%   3.76%        

 

 

 

 

Community West Bancshares 
Charles G. Baltuskonis, EVP & CFO 
805.692.5281 
www.communitywestbank.com