updated 4/21/2011 9:16:14 AM ET 2011-04-21T13:16:14

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%
CONTACT: Charles G. Baltuskonis, EVP & CFO
         805.692.5821
         www.communitywestbank.com

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