FOR IMMEDIATE RELEASE
| Contact: | Charles G. Baltuskonis, EVP/CFO |
| E-mail: | cbaltuskonis@communitywestbank.com |
| URL: | www.communitywest.com |
Community West Bancshares Reports 2009 Q1 Results
Goleta, California, April 24, 2009 – Community West Bancshares (Company) (NASDAQ: CWBC), parent company of Community West Bank, today reported a net loss of $6,729,000 for the quarter ended March 31, 2009 (2009 Q1), compared to net income of $997,000 for the quarter ended March 31, 2008 (2008 Q1).
Net Interest Income
Net interest income for the comparative quarter ended March 31, 2009 decreased by $398,000, primarily because the Company’s net interest margin decreased by 52 basis points, to 3.56% for 2009 Q1 from 4.08% for 2008 Q1.
Total interest income for the comparative quarter ended March 31, 2009 decreased by $1,794,000. A $2,513,000 decrease is attributed to lower interest rates and is partially offset by a $719,000 increase attributed to loan growth.
Interest expense on deposits for the comparative quarter decreased by $1,137,000. A $1,412,000 decrease is attributed to lower interest rates and is partially offset by a $275,000 increase attributed to deposit growth. Interest expense on borrowings decreased $259,000, primarily due to lower interest rates.
Provision for Loan Losses
The Company recorded a substantially higher comparable loan loss provision for 2009 Q1, reflecting the effect of increases in experienced loss frequency and severity on the provision calculation. During 2009 Q1, the Company experienced some deterioration and downgrades to specific loans in its portfolio, including net charge-offs of $6.5 million, generally related to the current economic circumstances. A major component of the allowance calculation relates to historical loan losses. The Company has experienced elevated levels of loan losses over the past four quarters thereby resulting in a significantly higher allowance requirement. The migration of the losses through the loan portfolio has resulted in a calculated increase in the allowance of $7.3 million at December 31, 2008 to $13.4 million at March 31, 2009. This increase is directly related to the effect of historical loan losses on our estimate of losses inherent in the portfolio as of the balance sheet date and does not necessarily reflect expected future losses. In addition, non-performing loans significantly decreased from $16.9 million at December 31, 2008 to $8.7 million at March 31, 2009, due to a combination of charge-offs, upgrades and payoffs.
Non-Interest Income and Non-Interest Expenses
Non-interest income decreased by $246,000 to 2009 Q1 compared to 2008 Q1, primarily from lower loan fees.
Non-interest expenses increased by $627,000 to 2009 Q1 compared to 2008 Q1. The increases were primarily attributable to the reserve on undisbursed loans, FDIC insurance assessment and expenses related to special assets.
BALANCE SHEET
The Company’s total assets increased $12.8 million to $669.8 million at March 31, 2009 compared to $657.0 million at December 31, 2008. Net loans increased by $4.7 million and combined liquid assets and investment securities increased by a net of $1.6 million.
On the funding side, as of March 31, 2009, deposits increased by $9.6 million while FHLB and FRB advances increased by $10.0 million compared to December 31, 2008.
CAPITAL
As of March 31, 2009, the Company had $59.8 million in total shareholders’ equity, or 8.92% of consolidated total assets, and book value per common share was $7.68. The Company and Community West Bank continue to operate at capital levels in excess of the “well capitalized” benchmarks.
COMMENTS FROM PRESIDENT AND CHIEF EXECUTIVE OFFICER
Lynda J. Nahra, President and Chief Executive Officer, noted: “As our markets and the economy continued to be plagued by economic instability, we continued to build our allowance and focus on our overall balance sheet strength. In addition, we made the strategic decision to discontinue SBA lending east of the Rocky Mountains. While no assurances can be made, we believe that actions taken, combined with the fact that our non-accrual loans have declined significantly, better position the Company to manage through these turbulent times."
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.
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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COMMUNITY WEST BANCSHARES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in 000's, except per share data)
| | | March 31 | | | December 31 | |
| | | 2009 | | | 2008 | |
| | | | | | | |
| Cash and cash equivalents | | $ | 12,820 | | | $ | 12,253 | |
| Interest-earning deposits in other financial institutions | | | 591 | | | | 812 | |
| Investment securities | | | 39,241 | | | | 37,975 | |
| Loans: | | | | | | | | |
| Held for sale | | | 99,581 | | | | 131,786 | |
| Held for investment | | | 499,582 | | | | 456,630 | |
| Less: Allowance | | | (13,414 | ) | | | (7,341 | ) |
| Net held for investment | | | 486,168 | | | | 449,289 | |
| NET LOANS | | | 585,749 | | | | 581,075 | |
| | | | | | | | | |
| Other assets | | | 31,407 | | | | 24,866 | |
| | | | | | | | | |
| TOTAL ASSETS | | $ | 669,808 | | | $ | 656,981 | |
| | | | | | | | | |
| Deposits | | $ | 485,015 | | | $ | 475,439 | |
| FHLB and FRB advances | | | 120,000 | | | | 110,000 | |
| Other liabilities | | | 5,015 | | | | 4,924 | |
| TOTAL LIABILITIES | | | 610,030 | | | | 590,363 | |
| | | | | | | | | |
| Stockholders' equity | | | 59,778 | | | | 66,618 | |
| | | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 669,808 | | | $ | 656,981 | |
| | | | | | | | | |
| Shares outstanding | | | 5,915 | | | | 5,915 | |
| | | | | | | | | |
| Book value per common share | | $ | 7.68 | | | $ | 8.84 | |
| | | | | | | | | |
| |
| | | | | | | | | |
| Non-accrual loans | | $ | 8,714 | | | $ | 16,903 | |
COMMUNITY WEST BANCSHARES
CONDENSED CONSOLIDATED INCOME STATEMENTS
(unaudited)
(in 000's, except per share data)
| | | Quarter Ended March 31, | |
| | | 2009 | | | 2008 | |
| | | | | | | |
| Interest income | | $ | 10,217 | | | $ | 12,011 | |
| Interest expense | | | 4,454 | | | | 5,850 | |
| Net interest income | | | 5,763 | | | | 6,161 | |
| Provision for loan losses | | | 12,555 | | | | 673 | |
| Net interest income after provision for loan losses | | | (6,792 | ) | | | 5,488 | |
| | | | | | | | | |
| Non-interest income | | | 1,168 | | | | 1,414 | |
| Non-interest expenses | | | 5,807 | | | | 5,180 | |
| Income before income taxes | | | (11,431 | ) | | | 1,722 | |
| Provision for income taxes | | | (4,702 | ) | | | 725 | |
| | | | | | | | | |
| NET INCOME (LOSS) | | $ | (6,729 | ) | | $ | 997 | |
| | | | | | | | | |
| Preferred stock dividends | | | 261 | | | | - | |
| | | | | | | | | |
| NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | | $ | (6,990 | ) | | $ | 997 | |
| | | | | | | | | |
| | | | | | | | | |
| Earnings (loss) per share: | | | | | | | | |
| Basic | | $ | (1.18 | ) | | $ | 0.17 | |
| Diluted | | | (1.18 | ) | | | 0.17 | |
| | | | | | | | | |
| Weighted average shares: | | | | | | | | |
| Basic | | | 5,915 | | | | 5,909 | |
| Diluted | | | 5,915 | | | | 5,975 | |
| | | | | | | | | |
| | | | | | | | | |
| |
| Selected average balance sheet items | | | | | | | | |
| | | | | | | | | |
| Average assets | | $ | 672,740 | | | $ | 622,725 | |
| Average gross loans | | | 599,574 | | | | 552,683 | |
| Average deposits | | | 484,930 | | | | 450,575 | |
