EXHIBIT 99.1
PRESS RELEASE ISSUED ON NOVEMBER 12, 1999
FRIDAY NOVEMBER 12, 9:08 PM EASTERN TIME
COMPANY PRESS RELEASE
COMMUNITY WEST BANCSHARES RECEIVES AND IMMEDIATELY RESPONDS TO REGULATORY
NOTIFICATION
GOLETA, Calif.--(BUSINESS WIRE)--Nov. 12, 1999--Lew Stone, president & CEO of
Community West Bancshares (the ``company'') (Nasdaq: CWBC), announced that its
subsidiary, Goleta National Bank (the ``bank''), has been notified by the Office
of the Comptroller of the Currency (OCC) that, based upon its determination that
the bank did not properly calculate the amount of regulatory capital required to
be held in respect to residual interests the bank holds as part of loan
securitizations completed by the bank in the fourth quarter of 1998 and the
second quarter of 1999, the bank does not meet its minimum capital levels and is
currently deemed to be significantly undercapitalized pursuant to the prompt
corrective action provisions of the Federal Deposit Insurance Act.
John Markel, chairman of the board of the company, said: ``Soon after receiving
this formal notice, at a special meeting of the board of directors of company,
members of the board agreed to furnish funds to the company to provide capital
to the bank to correct this regulatory issue. It was felt that this issue
should be immediately and constructively dealt with.
``Based upon our revised calculations, this action alone should bring the bank
back to the level of being adequately capitalized. I truly appreciate the
prompt and significant response from our board, and hope that our shareholders
also recognize our insistence on protecting their investment in the company.''
Based on discussions between representatives of the company and the OCC, the
company anticipates that, upon the bank's receipt of this additional capital as
anticipated, the OCC will be willing to reclassify the bank as adequately
capitalized, which could occur as early as Tuesday, Nov. 16.
This reclassification by the OCC would terminate any restrictions on the bank
that are applicable while the bank's capital classification for prompt
corrective action purposes is below adequately capitalized. Those restrictions
include restrictions on asset growth and expansion, the bank's ability to pay
dividends and certain deposit-taking activities, as well as various other
restrictions.
If the proposed capital infusion does not occur, the bank would remain subject
to the prompt corrective action provisions applicable to significantly
undercapitalized depository institutions, including the restriction on making
dividend payments to the company.
The company faces a maturity date of Jan. 4, 2000, on approximately $4 million
of indebtedness that it will be unable to pay in the absence of dividends from
the bank, a new capital infusion from investors, or a source to refinance the
debt. There can be no assurance that such a refinancing will be available or
achievable on commercially reasonable terms.
Stone said: ``It is important for everyone to understand that we have properly
accounted for these transactions under generally accepted accounting principles.
However, the OCC notified us that substantially more capital was required to be
held for these securitizations for regulatory capital purposes.
``In addition to the new capital infusion proposed by our directors, we are
taking other steps to raise our capital levels, such as selling certain loan
assets.''
The company and bank will amend any regulatory reports for Dec. 31, 1998, and
the first two quarters of 1999, to reflect the OCC's assessment of the bank's
capital levels and capital classification category for those periods.
The company also will amend its Form 10-K for 1998, and first and second quarter
1999 Form 10-Qs to reflect these developments and adjustments to its regulatory
capital levels and classification status, and until such amendments are filed
with the Securities and Exchange Commission, the discussion therein regarding
the bank's regulatory capital should not be relied upon.
Community West Bancshares is a technology and financial services company with
headquarters in Goleta.
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 and are not guarantees of future performance or events. To the
contrary, these forward-looking statements involve known and unknown risks and
uncertainties and are dependent on future events and circumstances, many of
which are beyond the control of the company. These factors include, without
limitation, adverse trends in loan payment delinquencies; asset quality or
earnings; the adverse effects of competition on deposits and earnings; movements
in market interest rates that reduce the company's margins or the fair value of
the financial instruments it holds; national or regional economic slowdowns or
recessions that increase the risk of loan defaults and credit losses; the
ability of the company and the bank to raise capital or sell assets;
restrictions and limitations imposed on the company's and bank's operations by
banking laws and regulators; and many other factors, some of which are described
in the company's Annual Report on Form 10-K for the year ended Dec. 31, 1998.
Accordingly, the company's actual results may differ materially from those in
the forward-looking statements. The company disclaims any obligation to update
any such factors or to publicly announce the results of any revisions to any of
the forward-looking statements included herein to reflect future events or
circumstances.
Contact:
Community West Bancshares, Goleta
Randy Shaffer, 805/692-1862
805/692-8902 (fax)
http://www.communitywest.com