Community West Bancshares Presents
Year 2000 in review
A Disclaimer
This presentation 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 presentation (5/24/01). 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. Furthermore, as previously noted, the company will have
certain restrictions on its operations based upon an enforcement letter
from the office of the comptroller and currency relating to securitization
activities that were discontinued in 1999.
Community West Bancshares
- - Management
- Michael Alexander, Chairman of the Board
- William Peeples, Vice Chairman of the Board
- Lew Stone, President & CEO
- Lynda Radke, Senior Vice President & CFO
- - Staff
- 265 employees total
Community West Bancshares
- - Subsidiaries
- 100% Goleta national bank
- Lynda Nahra, President & CEO
- 100% Palomar Community Bank
- Richard Sanborn, President & CEO
- 10% ePacific
- Doug King, President & CEO
Palomar Community Bank Sale Strategy
- - Purchased for 1,376,373 shares at a current market value of $6M
- - Definitive agreement for $10.5M in cash
- - Anticipated close Q3 2001
- - 2M charge included in 2000 earnings
- - Provide cash to pay off debt
- - Provide resources for potential future stock buybacks or cash dividends
- - Eliminate goodwill and other intangibles that drag on earnings
- - Increases tangible book value from $5.34 to $5.90 at 12/31/00
Overview From Past to Present
- - 1989-1998: 38% compounded Earning Per Share (EPS)
- - 1998 - 1999: Restatement Issues
- - 2000: Return to record profit of $2.6M
Recent Developments
- - Settled lawsuit regarding the 1998 restatement
- Settled in mediation for $7,000,000 in cash
- Will increase book value by $.48 to $.50 per share in the second
quarter
- - Stock buyback announced today
- Resumption of 1998 stock buyback
- Allows for the purchase of stock
Our Profit Centers
- - Relationship Banking Division
- - Mortgage Division
- - Small Business Administration and Other Guaranteed Government Lending
- - Consumer Finance
- - Short-term Consumer Lending
The Relationship Banking Division
Branch Locations and Staffing
- - Goleta: 17 employees
- - Ventura: 14 employees
- - 31 employees total
Target Markets
- - Mid Market Companies $1-$10 million
- - Manufactures, Wholesalers, Distributors, Technology Companies, Service
Companies, Retailers
- - Geographical Markets
- Santa Barbara County
- Ventura County
Services Consisting Of:
- - All Typical Deposit Products
- - Courier Service
- - Merchant Services
- - Automated Clearing House (ACH)
- - Lock Box Service (Remittance Banking)
- - Account Reconciliation
- - On-line Banking
- - Image Statements
Deposits
As of 4/30/01
Loan Products
- - Business Lines of Credit
- - Working Capital Loans
- - Standby Letters of Credit
- - Construction Loans
- - Real Estate Mini Perms
- - Consumer Loans (including Mobile Home Loans)
Loan Products (Cont)
- - Business Term Loans
- - Equipment Loans
- - International Banking
- - Tract/Land Development Loans
- - Residential Equity Lines of Credit
Partners
- - First American Trust - Trust Services
- - Golden West Financial - Leasing Services
Loan Total
Avg. Outstanding
Relationship Banking:
How We Make Money
- - Interest Income
- - Service Charges
- - Loan Fee Income
- - Other Fee Income
- - Reducing Non-interest Expense
Future Growth Directions
- - Continued growth in loans and deposits
- - Replace high cost deposits with demand deposits
- - Continue increasing Net Interest Margin (currently over 6%)
- - Loans are generally not sold into the secondary market
The Mortgage Division
Mortgage Department Staffing
- - Employees
- 16 Retail Agents
- 3 Underwriters
- 1 Secondary Market Person
- 20 Total Employees
- - Offices
- Santa Barbara
- Solvang
- Ventura
Mortgage Division Overview
- - Originate wide spectrum of retail mortgage products
- Fixed/Variable Rate - Residential/Commercial
- Home Equity Lines - Purchase Money/Refi's
- 2nd TD's
- - All loans are sold within a month to investors such as Citibank, Bank of
America, Fannie Mae and RFC
- - Projected volume for 2001 of $250 million
How We Make Money
- - Loan Origination Fees
- - Processing Fees
- - Loan Interest Charges
- - Gain on Loan Sales
The Small Business Administration (SBA) Division
SBA Division Overview
- - An experienced staff of 33
- 9 sales people in the west coast
- 5 sales people in the south east
- 19 underwriters and administrative staff
16 loan production offices in 10 states
- - Approved SBA lender since 1989
- - In 2000 we were the 25th largest SBA lender in the US
- - Currently have preferred lender status in 16 districts
SBA Program Overview
- - Description of loans offered
- - Projected volume in 2001 is $75 million
SBA Loan Production History
How We Make Money
- - Selling loans on the secondary market
- - Premium income and servicing income
- - Interest yield on loans held for sale and held to maturity
National Presence
Consumer Finance Division
History
- - 1994 HUD Title One Loans
- - 1995 Fannie Mae Approved
- - 1996 High Loan to Value (HLTV) - Retail
- - 1997 High Loan to Value - Wholesale
- - 1998 First Securitization ($81 million)
- - 1999 Second Securitization ($122 million)
- - 2000 Sub Prime
Staffing
- - Anaheim
- Operations 22
- Sales 10
- - Goleta
- Operations 22
- Sales 2
- - Total 56
Underwriting Experience
- - Management - Average of 19 years
- - Underwriters - Average of 11 years
Program Overview
- - Loans originated through a network of 150 brokers to borrowers in 49 states
- - Loans are underwritten to an investor's specific guidelines
- - Sold to investors such as RFC and Irwin Home Equity within one month
How We Make Money
- - Document Preparation Fees
- $300/loan
- - Interest Income
- 13 1/2 %/Yr. on amounts held for sale
- - Gain on Sale Premiums
- 2.5% on amount sold per month
Future Growth Directions
- - Diversification in products
- - Sub-Prime
- - "A-" Product
Short Term Consumer Division
Program Overview
- - Joint venture with ePacific & ACE cash express
(NASDAQ:AACE)
- - Loans originated through 1,076 retail ACE locations throughout the nation
- - Loans average $278 and are for original terms of 2 weeks
- - 95% of loan sold to ACE after funding
How We Make Money
- - Interest income
- Annualized yield of 443% APR
Future Growth Directions
- - Currently originating an average of 120,000 loans per month
- - Anticipated volume of 1,400,000 loans in 2001
- - Projected adding 100 additional offices which will offer this product in
2001
- - Beginning July 1, 2001 our profit participation percentage will increase
from 5% to 10%
A Disclaimer
This presentation 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 presentation (5/24/01). 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. Furthermore, as previously noted, the company will have
certain restrictions on its operations based upon an enforcement letter
from the office of the comptroller and currency relating to securitization
activities that were discontinued in 1999.