GOLETA, Calif., April 21, 2011 (GLOBE NEWSWIRE) -- Community West Bancshares ("Community West"), (Nasdaq:CWBC), parent company of Community West Bank, today reported net income of $595,000 in the first quarter of 2011 (1Q11), compared to net income of $51,000 in the first quarter a year ago (1Q10). The loan loss provision in 1Q11 was $983,000 compared to $3.1 million in 1Q10.
"Strong operating results and continued core deposit growth contributed to improved earnings and net interest margin expansion for the first quarter compared to the first quarter a year ago," stated Lynda J. Nahra, President and Chief Executive Officer. "Our changing deposit mix reflects continuing growth in customer relationships and the determined efforts of our staff."
1Q11 Financial Highlights
- Net income applicable to common stockholders was $333,000, or $0.05 per diluted common share.
- Net interest margin was 4.53% in 1Q11, a 5 basis point improvement compared to 1Q10.
- Core deposits increased by 24.9% compared to a year ago.
- Nonperforming loans were $23.6 million, or 4.06% of total loans at March 31, 2011.
- The total allowance for loan losses/total loans held for investment was 2.62% at March 31, 2011, compared to 2.60% at December 31, 2010.
- Community West Bank's Total risk-based capital ratio was 13.11%, Tier 1 risk-based capital ratio was 11.84% and Tier 1 leverage ratio was 9.41% at March 31, 2011.
In 1Q11, including the $262,000 preferred stock dividends, the net income applicable to common stockholders was $333,000, or $0.05 per diluted share, compared to a net loss applicable to common stockholders of $211,000, or $0.04 per diluted share, in 1Q10.
Credit Quality
Nonperforming loans totaled $23.6 million, or 4.06% of total loans at March 31, 2011, compared to $12.7 million or 2.13% of total loans three months earlier and $17.7 million, or 2.93% of total loans a year ago. The increase compared to the prior quarter-end is primarily related to one loan relationship that totals $8.5 million. The loan relationship is real estate secured and a current appraisal indicates that the indebtedness is well secured by the underlying collateral. The real property is currently listed for sale at a price in excess of the amount of the principal and interest currently outstanding on the loan. The relationship was classified as nonperforming as marketing and sale of the property has been protracted in relationship to the original expectation of the Bank and the borrower.
Of the $23.6 million in total nonperforming loans, $17.8 million or 75.3% were real estate loans, $3.5 million or 14.8% were SBA loans, $1.6 million or 6.8% were manufactured housing loans, $689,000 or 2.9% were commercial loans and $30,000 or 0.1% were other installment loans.
"The manufactured housing portfolio continues to perform well with very little delinquencies. As of March 31, 2011, less than 1% of manufactured housing loans are nonperforming," said Nahra.
The loan loss provision was $983,000 in 1Q11 compared to $1.3 million in 4Q10 and $3.1 million in 1Q10. The allowance for loan losses totaled $13.2 million at quarter-end, equal to 2.62% of total loans held for investment, compared to 2.60% at December 31, 2010 and 2.84% a year ago.
Community West had net charge-offs of $1.1 million in 1Q11 compared to $1.4 million in 4Q10 and $2.4 million in 1Q10.
Income Statement Review
First quarter net interest income was $7.1 million compared to $7.3 million in 1Q10. In 1Q11, the net interest margin was 4.53% compared to 4.57% in 4Q10 and 4.48% in 1Q10.
Non-interest income was $738,000 in 1Q11, compared to $839,000 in 1Q10. The decrease was due to a decline in loan origination fees and referral fees on SBA 504 loans.
Higher costs, including losses and writedowns on foreclosed real estate and repossessed assets, were primarily responsible for non-interest expenses climbing to $5.8 million, in 1Q11from $5.0 million in 1Q10.
Balance Sheet
New loan demand continues to remain somewhat soft, particularly in the commercial and SBA loan sectors. Also, the Company has experienced some early loan payoffs. As a result, total loans decreased from a year ago to $580.9 million at March 31, 2011 compared to $602.9 million at March 31, 2010.
Commercial real estate loans outstanding decreased 3.6%, or $6.2 million, from year ago levels to $181.0 million at March 31, 2011, and comprise 31.2% of the total loan portfolio. Manufactured housing loans were down slightly from year ago levels to $192.9 million and represent 33.2% of total loans. Commercial loans were down 14.5% compared to a year ago and now represent 8.5% of the total loan portfolio and SBA loans decreased 10.2% from a year ago and now represent 21.0% of the total loan portfolio.
Total deposits were $527.6 million at March 31, 2011 compared to $540.1 million a year earlier. Non-interest-bearing accounts increased 21.2% to $48.0 million at March 31, 2011 compared to $39.6 million a year ago. Interest-bearing accounts increased 27.1% to $281.0 million compared to $221.1 million a year ago. Core deposits, defined as non-interest-bearing, interest-bearing and savings accounts, increased 24.9% to $350.8 million at March 31, 2011, compared to $280.9 million a year earlier while certificates of deposit decreased 31.8% over the same period to $176.8 million, compared to $259.2 million a year earlier.
"Core deposits grew $32.2 million for the quarter and $69.9 million for the past 12 months, which is largely attributable to the continued success of our Lasting Impressions' money market account," said Charles G. Baltuskonis, EVP and Chief Financial Officer.
Total assets were $665.5 million at quarter-end, compared to $677.7 million a year earlier. Stockholders' equity was $62.2 million at quarter-end, compared to $60.2 million a year earlier and book value per common share was $7.92 at quarter-end compared to $7.70 a year earlier.
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, Santa Barbara, Santa Maria, Ventura 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 | |||
March 31, 2011 |
December 31, 2010 |
March 31, 2010 |
|
Interest income | $ 9,330 | $ 9,862 | $ 9,942 |
Interest expense | 2,261 | 2,419 | 2,647 |
Net interest income | 7,069 | 7,443 | 7,295 |
Provision for loan losses | 983 | 1,279 | 3,074 |
Net interest income after provision for loan losses | 6,086 | 6,164 | 4,221 |
Non-interest income | 738 | 1,220 | 839 |
Non-interest expenses | 5,809 | 5,588 | 4,971 |
Income before income taxes | 1,015 | 1,796 | 89 |
Provision for income taxes | 420 | 739 | 38 |
NET INCOME | $ 595 | $ 1,057 | $ 51 |
Preferred stock dividends | 262 | 262 | 262 |
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS | $ 333 | $ 795 | $ (211) |
Earnings (Loss) per common share: | |||
Basic | $ 0.06 | $ 0.13 | $ (0.04) |
Diluted | 0.05 | 0.11 | (0.04) |
COMMUNITY WEST BANCSHARES | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(unaudited) | |||
(in 000's, except per share data) | |||
March 31, 2011 |
December 31, 2010 |
March 31, 2010 |
|
Cash and cash equivalents | $ 15,264 | $ 6,226 | $ 14,812 |
Interest-earning deposits in other financial institutions | 290 | 290 | 475 |
Investment securities | 39,028 | 40,235 | 37,745 |
Loans: | |||
Commercial | 49,413 | 57,369 | 57,795 |
Commercial real estate | 181,043 | 173,906 | 174,844 |
SBA | 122,119 | 128,721 | 136,044 |
Manufactured housing | 192,920 | 194,682 | 197,267 |
Single family real estate | 12,478 | 13,739 | 14,722 |
HELOC | 20,728 | 20,273 | 20,650 |
Consumer | 408 | 379 | 408 |
Mortgage loans held for sale | 1,758 | 4,865 | 1,161 |
Total loans | 580,867 | 593,934 | 602,891 |
Loans, net | |||
Held for sale | 77,440 | 82,320 | 95,976 |
Held for investment | 503,427 | 511,614 | 506,915 |
Less: Allowance | (13,172) | (13,302) | (14,409) |
Net held for investment | 490,255 | 498,312 | 492,506 |
NET LOANS | 567,695 | 580,632 | 588,482 |
Other assets | 43,262 | 40,221 | 36,152 |
TOTAL ASSETS | $ 665,539 | $ 667,604 | $ 677,666 |
Deposits | |||
Non-interest-bearing | $ 47,951 | $ 35,767 | $ 39,566 |
Interest-bearing | 280,989 | 262,431 | 221,116 |
Savings | 21,844 | 20,371 | 20,181 |
CDs over 100K | 137,423 | 163,118 | 179,803 |
CDs under 100K | 39,410 | 48,206 | 79,433 |
Total Deposits | 527,617 | 529,893 | 540,099 |
Other borrowings | 71,872 | 72,081 | 74,000 |
Other liabilities | 3,807 | 3,988 | 3,385 |
TOTAL LIABILITIES | 603,296 | 605,962 | 617,484 |
Stockholders' equity | 62,243 | 61,642 | 60,182 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 665,539 | $ 667,604 | $ 677,666 |
Shares outstanding | 5,981 | 5,916 | 5,915 |
Book value per common share | $ 7.92 | $ 7.92 | $ 7.70 |
ADDITIONAL FINANCIAL INFORMATION | |||
(Dollars in thousands except per share amounts)(Unaudited) | |||
PERFORMANCE MEASURES AND RATIOS |
Quarter Ended Mar. 31, 2011 |
Quarter Ended Dec. 31, 2010 |
Quarter Ended Mar. 31, 2010 |
Return on average common equity | 4.98% | 8.98% | 0.44% |
Return on average assets | 0.35% | 0.63% | 0.03% |
Efficiency ratio | 74.41% | 64.50% | 61.11% |
Net interest margin | 4.53% | 4.57% | 4.48% |
AVERAGE BALANCES |
Quarter Ended Mar. 31, 2011 |
Quarter Ended Dec. 31, 2010 |
Quarter Ended Mar. 31, 2010 |
Average assets | $ 672,504 | $ 676,475 | $ 682,062 |
Average earning assets | 633,204 | 646,180 | 660,939 |
Average total loans | 587,193 | 599,071 | 610,137 |
Average deposits | 534,008 | 535,258 | 535,137 |
Average equity (including preferred stock) | 62,638 | 61,837 | 61,009 |
Average common equity (excluding preferred stock) | 47,808 | 47,074 | 46,439 |
EQUITY ANALYSIS | Mar. 31, 2011 | Dec. 31, 2010 | Mar. 31, 2010 |
Total equity | $ 62,243 | $ 61,642 | $ 60,182 |
Less: senior preferred stock | 14,874 | 14,807 | 14,607 |
Total common equity | $ 47,369 | $ 46,835 | $ 45,575 |
Common stock outstanding | 5,981 | 5,916 | 5,915 |
Book value per common share | $ 7.92 | $ 7.92 | $ 7.70 |
ASSET QUALITY | Mar. 31, 2011 | Dec. 31, 2010 | Mar. 31, 2010 |
Nonperforming loans (NPLs) | $ 23,583 | $ 12,671 | $ 17,655 |
Nonperforming loans/total loans | 4.06% | 2.13% | 2.93% |
REO and repossessed assets | $ 9,664 | $ 8,478 | $ 3,700 |
Less: SBA-guaranteed amounts | 2,743 | 1,725 | 1,196 |
Net REO and repossessed assets | $ 6,921 | $ 6,753 | $ 2,504 |
Nonperforming assets (net) | 30,504 | 19,424 | 20,159 |
Nonperforming assets/total assets | 4.58% | 2.91% | 2.97% |
Net loan charge-offs in the quarter | $ 1,113 | $ 1,372 | $ 2,398 |
Net charge-offs in the quarter/total loans | 0.19% | 0.23% | 0.40% |
Allowance for loan losses | $ 13,172 | $ 13,302 | $ 14,409 |
Plus: Allowance for undisbursed loan commitments | 229 | 194 | 370 |
Total allowance for credit losses | $ 13,401 | $ 13,496 | $ 14,779 |
Total allowance for loan losses/total loans held for investment | 2.62% | 2.60% | 2.84% |
Total allowance for loan losses/nonperforming loans | 55.85% | 104.98% | 81.61% |
Community West Bancshares | |||
Tier 1 leverage ratio | 9.22% | 9.08% | 8.78% |
Tier 1 risk-based capital ratio | 11.60% | 11.40% | 11.13% |
Total risk-based capital ratio | 14.34% | 14.16% | 12.40% |
Community West Bank | |||
Tier 1 leverage ratio | 9.41% | 9.24% | 8.69% |
Tier 1 risk-based capital ratio | 11.84% | 11.61% | 11.01% |
Total risk-based capital ratio | 13.11% | 12.87% | 12.28% |
INTEREST SPREAD ANALYSIS | Mar. 31, 2011 | Dec. 31, 2010 | Mar. 31, 2010 |
Yield on interest-bearing deposits | 1.39% | 1.42% | 1.69% |
Yield on total loans | 6.25% | 6.33% | 6.34% |
Yield on investments | 2.56% | 2.60% | 3.54% |
Yield on earning assets | 5.98% | 6.06% | 6.10% |
Cost of deposits | 1.27% | 1.31% | 1.56% |
Cost of FHLB advances | 2.63% | 2.75% | 3.19% |
Cost of interest-bearing liabilities | 1.64% | 1.68% | 1.85% |