Exhibit 99.1
445 Pine Avenue, Goleta, CA 93117
FOR IMMEDIATE RELEASE
| Contact: | Charles G. Baltuskonis, EVP/CFO |
| E-mail: | cbaltuskonis@communitywestbank.com |
| URL: | www.communitywest.com |
Community West Bancshares Reports 2008 Q3 Results
Goleta, California, October 20, 2008 – Community West Bancshares (Company) (NASDAQ: CWBC), parent company of Community West Bank, today reported net income of $675,000, or $.11 per share diluted, for the quarter ended September 30, 2008 (2008 Q3), compared to net income of $963,000, or $.16 per share diluted, for the quarter ended September 30, 2007 (2007 Q3). For the nine months ended September 30, 2008, the Company reported net income of $1,420,000, or $.24 per share diluted, compared to $3,041,000, or $.50 per share diluted, for the nine months ended September 30, 2007.
Net Interest Income
Net interest income for 2008 Q3 compared to 2007 Q3 decreased by $379,000, primarily because the decline in the net interest margin, which decreased by 79 basis points, to 3.60% for 2008 Q3 from 4.39% for 2007 Q3, exceeded the net interest income related to the Company’s new business.
Total interest income for 2008 Q3 compared to 2007 Q3 decreased by $694,000. A $2,105,000 decrease is attributed to lower interest rates as the prime rate at end of 2008 Q3 was 275 basis points less than at end of 2007 Q3. This is partially offset by a $1,411,000 increase attributed to the comparative growth in interest-earning assets, primarily in the commercial lending, SBA and manufactured housing portfolios.
Interest expense on deposits for 2008 Q3 compared to 2007 Q3 decreased by $290,000. A $1,196,000 decrease is attributed to lower interest rates and is partially offset by a $906,000 increase attributed to interest-bearing deposit growth. Interest expense on borrowings decreased by $25,000.
Provision for Loan Losses
The Company recorded a $652,000 loan loss provision for 2008 Q3 compared to $547,000 for 2007 Q3, reflecting management’s assessment of increased credit risk for the Company related to the current California and national economic slowdown. The heightened provision, particularly related to the nine months ended September 30, 2008, is primarily a result of increased qualitative factors which reflect the aforementioned economic circumstances. Nonaccrual loans increased slightly from $11.6 million at June 30, 2008 to $12.0 million at September 30, 2008.
Non-Interest Income and Non-Interest Expenses
Non-interest income was substantially unchanged from 2007 Q3 compared to 2008 Q3.
Non-interest expenses were unchanged from 2007 Q3 compared to 2008 Q3.
BALANCE SHEET
The Company’s total assets increased $30.3 million to $640.2 million at September 30, 2008 compared to $609.9 million at December 31, 2007. Net loans increased by $23.1 million and combined liquid assets and investment securities increased by a net of $5.4 million.
On the funding side, as of September 30, 2008, deposits increased by $49.2 million while FHLB advances decreased by $20.5 million compared to December 31, 2007.
CAPITAL
As of September 30, 2008, the Company had $51.1 million in total shareholders’ equity, or 7.99% of consolidated total assets, and book value per share was $8.64.
DIVIDEND POLICY
The Board of Directors announced that they will not pay a dividend this quarter. Currently, the Company is focused on preserving capital due to the turbulence in the financial markets, and will continue to review the dividend policy on a quarterly basis.
COMMENTS FROM PRESIDENT AND CHIEF EXECUTIVE OFFICER
Lynda J. Nahra, President and Chief Executive Officer, noted: “We continue to work our way through these unprecedented financial markets and, while the sluggish economy has pressured our results, we continue to see our core business lines performing well. We remain committed to diligently ensuring the credit quality of our loan portfolio.”
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, with loans originating throughout the country.
See enclosed financial tables
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.
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| CONDENSED CONSOLIDATED INCOME STATEMENTS | | | | | | | | | | | | |
| (unaudited) | | | | | | | | | | | | |
| (in 000's, except per share data) | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | Quarter Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| | | | | | | | | | | | | |
| Interest income | | $ | 11,336 | | | $ | 12,030 | | | $ | 34,727 | | | $ | 34,702 | |
| Interest expense | | | 5,562 | | | | 5,877 | | | | 16,989 | | | | 16,810 | |
| Net interest income | | | 5,774 | | | | 6,153 | | | | 17,738 | | | | 17,892 | |
| Provision for loan losses | | | 652 | | | | 547 | | | | 3,856 | | | | 769 | |
| Net interest income after provision for loan losses | | | 5,122 | | | | 5,606 | | | | 13,882 | | | | 17,123 | |
| | | | | | | | | | | | | | | | | |
| Non-interest income | | | 1,198 | | | | 1,212 | | | | 4,252 | | | | 3,789 | |
| Non-interest expenses | | | 5,154 | | | | 5,154 | | | | 15,647 | | | | 15,656 | |
| Income before income taxes | | | 1,166 | | | | 1,664 | | | | 2,487 | | | | 5,256 | |
| Provision for income taxes | | | 491 | | | | 701 | | | | 1,067 | | | | 2,215 | |
| | | | | | | | | | | | | | | | | |
| NET INCOME | | $ | 675 | | | $ | 963 | | | $ | 1,420 | | | $ | 3,041 | |
| | | | | | | | | | | | | | | | | |
| Earnings per share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.11 | | | $ | 0.16 | | | $ | 0.24 | | | $ | 0.52 | |
| Diluted | | | 0.11 | | | | 0.16 | | | | 0.24 | | | | 0.50 | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares: | | | | | | | | | | | | | | | | |
| Basic | | | 5,915 | | | | 5,877 | | | | 5,912 | | | | 5,852 | |
| Diluted | | | 5,918 | | | | 6,009 | | | | 5,955 | | | | 6,027 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Selected average balance sheet items | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Average assets | | $ | 651,732 | | | $ | 571,087 | | | $ | 638,788 | | | $ | 553,929 | |
| Average gross loans | | | 577,682 | | | | 500,213 | | | | 565,942 | | | | 483,914 | |
| Average deposits | | | 491,533 | | | | 415,206 | | | | 472,942 | | | | 401,227 | |
| COMMUNITY WEST BANCSHARES | | | | | | |
| CONDENSED CONSOLIDATED BALANCE SHEETS | | | | | | |
| (unaudited) | |
| (in 000's, except per share data) | | | | | | |
| | | | | | | |
| | | September 30 | | | December 31 | |
| | | 2008 | | | 2007 | |
| | | | | | | |
| Cash and cash equivalents | | $ | 15,136 | | | $ | 9,289 | |
| Interest-earning deposits in other financial institutions | | | 660 | | | | 778 | |
| Investment securities | | | 37,983 | | | | 38,281 | |
| Loans: | | | | | | | | |
| Held for sale | | | 118,396 | | | | 110,415 | |
| Held for investment | | | 450,366 | | | | 433,162 | |
| Less: Allowance | | | (6,499 | ) | | | (4,412 | ) |
| Net held for investment | | | 443,867 | | | | 428,750 | |
| NET LOANS | | | 562,263 | | | | 539,165 | |
| | | | | | | | | |
| Other assets | | | 24,142 | | | | 22,337 | |
| | | | | | | | | |
| TOTAL ASSETS | | $ | 640,184 | | | $ | 609,850 | |
| | | | | | | | | |
| Deposits | | $ | 482,895 | | | $ | 433,739 | |
| FHLB advances | | | 100,500 | | | | 121,000 | |
| Other liabilities | | | 5,667 | | | | 4,952 | |
| TOTAL LIABILITIES | | | 589,062 | | | | 559,691 | |
| | | | | | | | | |
| Stockholders' equity | | | 51,122 | | | | 50,159 | |
| | | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 640,184 | | | $ | 609,850 | |
| | | | | | | | | |
| Shares outstanding | | | 5,915 | | | | 5,895 | |
| | | | | | | | | |
| Book value per share | | $ | 8.64 | | | $ | 8.51 | |
