Community West Bancshares (CWBC) 8-K Results of Operations and Financial Condition

EXHIBIT 99.1

Community West Bancshares Earns $1.3 Million in First Quarter; Book Value Per Common Share Increases to $7.71; Increases Quarterly Cash Dividend 17% to $0.035 Per Common Share

GOLETA, Calif., April 29, 2016 (GLOBE NEWSWIRE) -- Community West Bancshares (Community West or the Company), (NASDAQ:CWBC), parent company of Community West Bank (Bank), today reported net income of $1.3 million in the first quarter of 2016 (1Q16) compared to net income of $1.9 million in the fourth quarter of 2015 (4Q15) and $1.8 million in the first quarter a year ago (1Q15).  

“During the first quarter of the year, we continued to achieve solid operating results, with earnings of $1.3 million and diluted earnings per common share of $0.15,” stated Martin E. Plourd, President and Chief Executive Officer. “Driving our results were ongoing improvements in credit quality, double-digit, 12-month annualized loan growth and strong capital.  We believe our San Luis Obispo location will generate more growth as the year progresses.  Additionally, we were able to increase our quarterly cash dividend by 17%.” 

1Q16 Financial Highlights

• Nonaccrual loans, net, decreased 54.3% to $4.8 million at March 31, 2016, compared to $10.5 million a year ago, representing the lowest level since 3Q07.
• Net income available to common stockholders for 1Q16 was $1.3 million, or $0.15 per diluted share, compared to $1.6 million, or $0.19 per diluted share, for 1Q15. 
• Annualized return on average assets was 0.83%.
• Annualized return on average common equity was 8.23%.
• Net interest margin was 4.45%.
• Net loans increased 11.2% to $540.2 million at March 31, 2016, compared to $485.8 million a year ago.
• Total deposits increased 10.2% to $546.1 million at March 31, 2016, compared to $495.7 million a year ago.
• Book value per common share was $7.71 at March 31, 2016, compared to $7.50 a year ago. 
• The Bank continues to be well-capitalized per banking regulations with its total risk-based capital ratio at 13.84% and Tier 1 leverage ratio at 10.55% at March 31, 2016.
• Received approvals to open a full-service branch office in San Luis Obispo and to relocate its existing full-service branch in Santa Maria to a more desirable business location.

Income Statement

“We continue to generate higher than industry average loan yields with our diversified lending platform, which contributed to our net interest margin remaining in the mid-4% range,” said Charles G. Baltuskonis, Executive Vice President and Chief Financial Officer.  First quarter net interest margin was 4.45% compared to 4.65% in 1Q15.  The net interest margin was 4.90% for 4Q15 primarily due to one large nonaccrual loan relationship that was paid off during that quarter and previously recognized interest was recorded, increasing the yield on earning assets by 47 basis points.

The Bank’s first quarter net interest income was $6.7 million, a 9.9% decrease compared to $7.5 million in the preceding quarter but a 5.8% increase compared to $6.4 million in 1Q15.  Non-interest income was $579,000 in 1Q16, a 7.6% increase compared to $538,000 in 4Q15 and a 20.6% increase compared to $480,000 in 1Q15.

First quarter non-interest expenses totaled $5.3 million, compared to $5.1 million in 4Q15 and $4.8 million in 1Q15.  The increase is largely due to the business development of the Bank’s Northern region, consisting of San Luis Obispo and north Santa Barbara counties.

Balance Sheet

Community West’s total assets were $622.8 million at March 31, 2016, a 0.2% increase compared to three months earlier and a 8.8% increase compared to one year ago.  Net loans increased modestly to $540.2 million at March 31, 2016, compared to $536.5 million at December 31, 2015, and increased 11.2% compared to $485.8 million a year ago.  During 1Q16, net loan growth was lessened by the payoff of five loan relationships totaling $11.9 million.  Commercial real estate loans outstanding were up 13.7% from year ago levels to $185.5 million at March 31, 2016, and comprise 33.9% of the total loan portfolio.  Manufactured housing loans were up 7.2% from year ago levels to $182.0 million and represent 33.3% of total loans.  Commercial loans increased 45.2% from year ago levels to $107.4 million and represent 19.6% of the total loan portfolio and SBA loans decreased 25.7% from a year ago to $42.9 million and represent 7.8% of the total loan portfolio.

Deposits totaled $546.1 million at March 31, 2016, up modestly compared to $544.3 million at December 31, 2015 and grew 10.2% compared to $495.7 million a year earlier.  Core deposits, defined as non-interest-bearing checking, interest-bearing checking, money market accounts, savings accounts and retail certificates of deposit totaled $405.5 million at March 31, 2016 and comprise 74.3% of total deposits, compared to $394.3 million, or 79.5% of total deposits, a year ago. 

Stockholders’ equity was $62.4 million at March 31, 2016, compared to $61.9 million at December 31, 2015, and $67.5 million a year ago as preferred stock of $6.0 million was redeemed.  Book value per common share improved to $7.71 at March 31, 2016 compared to $7.55 at December 31, 2015, and $7.50 a year ago. 

Credit Quality

“As a result of strong asset quality, including the solid loan loss reserves already in place, we recorded a negative provision for loan losses in the last nine quarters and net loan loss recoveries in eight of the past nine quarters,” said Plourd.  The negative loan loss provision was $247,000 in 1Q16, compared to $277,000 in 4Q15, and $968,000 in 1Q15.  Net loan recoveries were $150,000 in 1Q16 compared to $181,000 in 4Q15 and $366,000 in 1Q15.

The allowance for loan losses was $6.8 million at March 31, 2016, or 1.41% of total loans held for investment, compared to 1.44% at December 31, 2015, and 1.69% a year ago.  Net nonaccrual loans decreased 4.1% to $4.8 million, or 0.88% of total loans at March 31, 2016, compared to $5.0 million, or 0.92% of total loans, three months earlier, and decreased 54.3% compared to $10.5 million, or 2.13% of total loans, a year ago. 

Of the $4.8 million in net nonaccrual loans, $2.3 million were commercial real estate loans, $1.5 million were manufactured housing loans, $398,000 were SBA loans, $308,000 were home equity loans, $274,000 were single family real estate loans and $44,000 were commercial loans.

Other assets acquired through foreclosure totaled $176,000 at March 31, 2016, compared to $198,000 three months earlier and $320,000 a year earlier.  Nonaccrual loans plus other assets acquired through foreclosure, net of SBA/USDA guarantees, totaled $5.0 million, or 0.80% of total assets, at March 31, 2016, compared to $5.2 million, or 0.84% of total assets, three months earlier and $10.8 million, or 1.89% of total assets, a year ago. 

Increases Cash Dividend to $0.035 Per Common Share

The Company’s Board of Directors declared a quarterly cash dividend of $0.035 per common share, payable May 31, 2016 to common shareholders of record on May 12, 2016.  This represents $0.14 per annum, which is a 17% increase over the current dividend rate.

Stock Repurchase Program
On August 31, 2015, the Company announced that the Board of Directors authorized a common stock repurchase program of up to $3 million.  As of March 31, 2016, 111,253 shares had been repurchased at an average per share cost of $6.99.

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 and one loan production office in San Luis Obispo. The principal business activities of the Company are Relationship business banking, Manufactured Housing 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,			December 31,			March 31,
		2016			2015			2015
Interest income
Loans, including fees	$	7,175		$	7,886		$	6,712
Investment securities and other		269			249			305
Total interest income		7,444			8,135			7,017
Interest expense
Deposits		651			622			605
Other borrowings and convertible debt		72			51			61
Total interest expense		723			673			666
Net interest income		6,721			7,462			6,351
Provision for loan losses		(247	)		(277	)		(968	)
Net interest income after provision for loan losses		6,968			7,739			7,319
Non-interest income
Other loan fees		275			225			175
Document processing fees		115			102			92
Service charges		90			99			73
Other		99			112			140
Total non-interest income		579			538			480
Non-interest expenses
Salaries and employee benefits		3,452			3,175			3,115
Occupancy, net		486			519			445
Professional services		179			257			248
Loan servicing and collection		179			114			89
Data processing		171			145			119
Depreciation		149			109			91
FDIC assessment		97			90			71
Advertising and marketing		81			118			80
Stock-based compensation		80			79			42
Other		462			485			471
Total non-interest expenses		5,336			5,091			4,771
Income before provision for income taxes		2,211			3,186			3,028
Provision for income taxes		928			1,335			1,258
Net Income		1,283			1,851			1,770
Dividends and accretion on preferred stock		-			44			140
Discount on partial redemption of preferred stock		-			-			(19	)
Net income available to common stockholders	$	1,283		$	1,807		$	1,649
Earnings per share:
Basic	$	0.16		$	0.22		$	0.20
Diluted	$	0.15		$	0.21		$	0.19

COMMUNITY WEST BANCSHARES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in 000's, except per share data)
	March 31,			December 31,			March 31,
		2016			2015			2015
Cash and cash equivalents	$	2,499		$	2,789		$	1,689
Time and interest-earning deposits in other financial institutions		26,538			32,829			33,857
Investment securities		35,633			30,466			31,054
Loans:
Commercial		107,386			107,510			73,938
Commercial real estate		185,458			179,491			163,163
SBA		42,890			47,880			57,718
Manufactured housing		182,018			177,891			169,752
Single family real estate		17,919			19,073			15,349
HELOC		10,885			10,934			13,130
Other		425			683			26
Total loans		546,981			543,462			493,076
Loans, net
Held for sale		61,897			64,488			63,724
Held for investment		485,084			478,974			429,352
Less: Allowance for loan losses		(6,819	)		(6,916	)		(7,275	)
Net held for investment		478,265			472,058			422,077
NET LOANS		540,162			536,546			485,801
Other assets		17,923			18,583			19,870
TOTAL ASSETS	$	622,755		$	621,213		$	572,271
Deposits
Non-interest-bearing demand	$	70,587		$	76,469		$	71,278
Interest-bearing demand		250,404			250,509			265,000
Savings		14,294			13,690			15,283
Certificates of deposit ($250,000 or more)		67,995			66,722			132,396
Other certificates of deposit		142,795			136,948			11,713
Total deposits		546,075			544,338			495,670
Other borrowings		10,500			10,500			5,000
Other liabilities		3,741			4,431			4,098
TOTAL LIABILITIES		560,316			559,269			504,768
Stockholders' equity		62,439			61,944			67,503
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
	$	622,755		$	621,213		$	572,271
Shares outstanding		8,103			8,206			8,204
Book value per common share	$	7.71		$	7.55		$	7.50

ADDITIONAL FINANCIAL INFORMATION
(Dollars in thousands except per share amounts)(Unaudited)
	Three Months Ended			Three Months Ended			Three Months Ended
PERFORMANCE MEASURES AND RATIOS	Mar. 31, 2016			Dec. 31, 2015			Mar. 31, 2015
Return on average common equity		8.23	%		11.96	%		11.78	%
Return on average assets		0.83	%		1.19	%		1.27	%
Efficiency ratio		73.10	%		63.64	%		69.84	%
Net interest margin		4.45	%		4.90	%		4.65	%
	Three Months Ended			Three Months Ended			Three Months Ended
AVERAGE BALANCES	Mar. 31, 2016			Dec. 31, 2015			Mar. 31, 2015
Average assets	$	618,283		$	614,688		$	564,336
Average earning assets		607,872			603,921			553,940
Average total loans		543,555			537,917			493,959
Average deposits		540,539			537,269			481,531
Average equity (including preferred stock)		62,678			63,334			67,218
Average common equity (excluding preferred stock)		62,678			61,395			60,934
EQUITY ANALYSIS	Mar. 31, 2016			Dec. 31, 2015			Mar. 31, 2015
Total equity	$	62,439		$	61,944		$	67,503
Less: senior preferred stock		-			-			(5,995	)
Total common equity	$	62,439		$	61,944		$	61,508
Common stock outstanding		8,103			8,206			8,204
Book value per common share	$	7.71		$	7.55		$	7.50
ASSET QUALITY	Mar. 31, 2016			Dec. 31, 2015			Mar. 31, 2015
Nonaccrual loans, net	$	4,807		$	5,013		$	10,482
Nonaccrual loans, net/total loans		0.88	%		0.92	%		2.13	%
Other assets acquired through foreclosure, net	$	176		$	198		$	320
Nonaccrual loans plus other assets acquired through foreclosure, net	$	4,983		$	5,211		$	10,802
Nonaccrual loans plus other assets acquired through foreclosure, net/total assets		0.80	%		0.84	%		1.89	%
Net loan (recoveries)/charge-offs in the quarter	$	(150	)	$	(181	)	$	(366	)
Net (recoveries)/charge-offs in the quarter/total loans		-0.03	%		-0.03	%		-0.07	%
Allowance for loan losses	$	6,819		$	6,916		$	7,275
Plus: Reserve for undisbursed loan commitments		74			61			37
Total allowance for credit losses	$	6,893		$	6,977		$	7,312
Allowance for loan losses/total loans held for investment		1.41	%		1.44	%		1.69	%
Allowance for loan losses/nonaccrual loans, net		141.86	%		137.96	%		69.40	%
Community West Bank *
Tier 1 leverage ratio		10.55	%		10.38	%		11.72	%
Tier 1 risk-based capital ratio		12.59	%		12.45	%		14.51	%
Total risk-based capital ratio		13.84	%		13.70	%		15.77	%
INTEREST SPREAD ANALYSIS	Mar. 31, 2016			Dec. 31, 2015			Mar. 31, 2015
Yield on total loans		5.31	%		5.82	%		5.51	%
Yield on investments		2.58	%		2.60	%		3.48	%
Yield on interest earning deposits		0.57	%		0.32	%		0.30	%
Yield on earning assets		4.93	%		5.34	%		5.14	%
Cost of interest-bearing deposits		0.56	%		0.53	%		0.58	%
Cost of total deposits		0.48	%		0.46	%		0.51	%
Cost of borrowings		2.76	%		2.31	%		2.06	%
Cost of interest-bearing liabilities		0.61	%		0.57	%		0.63	%
* Capital ratios are preliminary until the Call Report is filed.

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

The Cereghino Group
IR CONTACT: 206-388-5785