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 Q3 Results
Goleta, California, October 19, 2009 – Community West Bancshares (Company) (NASDAQ: CWBC), parent company of Community West Bank, today reported net income of $69,000 for the quarter ended September 30, 2009 (2009 Q3), compared to net income of $675,000 for the quarter ended September 30, 2008 (2008 Q3). For the nine months ended September 30, 2009, the Company reported a net loss of $(5,860,000) compared to net income of $1,420,000 for the nine months ended September 30, 2008. Net income per diluted share available to common shareholders, after the preferred stock dividends, was $(.03) for 2009 Q3 compared to $.11 for 2008 Q3.
Net Interest Income
Net interest income for the comparative quarter ended September 30, 2009 increased by $1,137,000, as the Company’s net interest margin increased by 52 basis points, to 4.12% for 2009 Q3 from 3.60% for 2008 Q3.
Total interest income for the comparative quarter ended September 30, 2009 decreased by $958,000. A $1,321,000 decrease is attributed to lower interest rates and is partially offset by a $363,000 increase attributed to loan growth.
Interest expense on deposits for the comparative quarter decreased by $1,769,000. $1,641,000 of the decrease is attributed to lower interest rates. Interest expense on borrowings decreased $326,000, primarily due to lower interest rates.
Provision for Loan Losses
The Company recorded a $2,592,000 loan loss provision in 2009 Q3, reflecting the detailed evaluation of its loan portfolio in the context of the overall challenging economic environment which has persisted for the last year. While a substantial part of the deterioration and downgrades to specific loans in its portfolio was recognized in 2009 Q1, there continues to be ongoing credit problems primarily relating to business loans, elevating the component of the allowance calculation related to historical loan losses. In general, the Company has experienced elevated levels of loan losses over the past year thereby resulting in a significantly higher allowance requirement. The migration of the losses through the loan portfolio resulted in a calculated increase in the allowance from $7.3 million at December 31, 2008 to $13.3 million at September 30, 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 dates and does not necessarily reflect expected future losses. In addition, non-accrual loans slightly increased from $16.9 million at December 31, 2008 to $17.8 million at September 30, 2009.
Non-Interest Income and Non-Interest Expenses
Non-interest income decreased by $232,000 in 2009 Q3 compared to 2008 Q3, primarily because 2008 Q3 included gains on loan sales.
Non-interest expenses were flat in the comparative quarters. While salaries and employee benefits decreased by $498,000, this was offset primarily by an increase of $301,000 in the FDIC deposit insurance assessment and expenses related to disposals of foreclosed assets and an increase in the reserve on undisbursed loans.
BALANCE SHEET
The Company’s total assets increased $17.4 million to $674.4 million at September 30, 2009 compared to $657.0 million at December 31, 2008. Net loans increased by $12.1 million and combined liquid assets and investment securities decreased by a net of $1.1 million.
On the funding side, as of September 30, 2009, deposits increased by $54.3 million while FHLB and FRB advances decreased by $30.0 million compared to December 31, 2008.
CAPITAL
As of September 30, 2009, the Company had $60.3 million in total shareholders’ equity, or 8.95% of consolidated total assets, and book value per common share was $7.75. 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: “Our 2009 ongoing margin improvement and Q1 cost reductions continue to enhance our positive operating earnings. With the banking and operating environment still unsettled, our resources are remaining focused on credit quality and our overall balance sheet strength."
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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CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in 000's, except per share data)
| | | September 30 | | | December 31 | |
| | | 2009 | | | 2008 | |
| | | | | | | |
| Cash and cash equivalents | | $ | 8,679 | | | $ | 12,253 | |
| Interest-earning deposits in other financial institutions | | | 832 | | | | 812 | |
| Investment securities | | | 40,411 | | | | 37,975 | |
| Loans: | | | | | | | | |
| Held for sale | | | 99,611 | | | | 131,786 | |
| Held for investment | | | 506,835 | | | | 456,630 | |
| Less: Allowance | | | (13,274 | ) | | | (7,341 | ) |
| Net held for investment | | | 493,561 | | | | 449,289 | |
| NET LOANS | | | 593,172 | | | | 581,075 | |
| | | | | | | | | |
| Other assets | | | 31,258 | | | | 24,866 | |
| | | | | | | | | |
| TOTAL ASSETS | | $ | 674,352 | | | $ | 656,981 | |
| | | | | | | | | |
| Deposits | | $ | 529,697 | | | $ | 475,439 | |
| FHLB and FRB advances | | | 80,000 | | | | 110,000 | |
| Other liabilities | | | 4,331 | | | | 4,924 | |
| TOTAL LIABILITIES | | | 614,028 | | | | 590,363 | |
| | | | | | | | | |
| Stockholders' equity | | | 60,324 | | | | 66,618 | |
| | | | | | | | | |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 674,352 | | | $ | 656,981 | |
| | | | | | | | | |
| Shares outstanding | | | 5,915 | | | | 5,915 | |
| | | | | | | | | |
| Book value per common share | | $ | 7.75 | | | $ | 8.84 | |
| | | | | | | | | |
| | |
| | | | | | | | | |
| Non-accrual loans, net | | $ | 17,770 | | | $ | 16,903 | |
CONDENSED CONSOLIDATED INCOME STATEMENTS
(unaudited)
(in 000's, except per share data)
| | | Quarter Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2009 | | | 2008 | | | 2009 | | | 2008 | |
| | | | | | | | | | | | | |
| Interest income | | $ | 10,378 | | | $ | 11,336 | | | $ | 30,795 | | | $ | 34,727 | |
| Interest expense | | | 3,467 | | | | 5,562 | | | | 11,887 | | | | 16,989 | |
| Net interest income | | | 6,911 | | | | 5,774 | | | | 18,908 | | | | 17,738 | |
| Provision for loan losses | | | 2,592 | | | | 652 | | | | 15,890 | | | | 3,856 | |
| Net interest income (loss) after provision for loan losses | | | 4,319 | | | | 5,122 | | | | 3,018 | | | | 13,882 | |
| | | | | | | | | | | | | | | | | |
| Non-interest income | | | 966 | | | | 1,198 | | | | 3,389 | | | | 4,252 | |
| Non-interest expenses | | | 5,165 | | | | 5,154 | | | | 16,355 | | | | 15,647 | |
| Income (loss) before income taxes | | | 120 | | | | 1,166 | | | | (9,948 | ) | | | 2,487 | |
| Provision (benefit) for income taxes | | | 51 | | | | 491 | | | | (4,088 | ) | | | 1,067 | |
| | | | | | | | | | | | | | | | | |
| NET INCOME (LOSS) | | $ | 69 | | | $ | 675 | | | $ | (5,860 | ) | | $ | 1,420 | |
| | | | | | | | | | | | | | | | | |
| Preferred stock dividends | | | 261 | | | | - | | | | 784 | | | | - | |
| | | | | | | | | | | | | | | | | |
| NET INCOME (LOSS) AVAILABLE TO | | | | | | | | | | | | | | | | |
| COMMON SHAREHOLDERS | | $ | (192 | ) | | $ | 675 | | | $ | (6,644 | ) | | $ | 1,420 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Earnings (loss) per common share: | | | | | | | | | | | | | | | | |
| Basic | | $ | (0.03 | ) | | $ | 0.11 | | | $ | (1.12 | ) | | $ | 0.24 | |
| Diluted | | | (0.03 | ) | | | 0.11 | | | | (1.12 | ) | | | 0.24 | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares: | | | | | | | | | | | | | | | | |
| Basic | | | 5,915 | | | | 5,915 | | | | 5,915 | | | | 5,912 | |
| Diluted | | | 5,915 | | | | 5,918 | | | | 5,915 | | | | 5,955 | |
| | | | | | | | | | | | | | | | | |
| | |
| Selected average balance sheet items | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Average assets | | $ | 676,625 | | | $ | 651,732 | | | $ | 673,820 | | | $ | 638,788 | |
| Average gross loans | | | 606,066 | | | | 577,682 | | | | 603,802 | | | | 565,942 | |
| Average deposits | | | 504,029 | | | | 491,533 | | | | 492,316 | | | | 472,942 | |
