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EXHIBIT 99.1
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COMMUNITY WEST
BANCSHARES
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445 PINE AVENUE, GOLETA, CA 93117
FOR IMMEDIATE RELEASE
CONTACT: CHARLES G. BALTUSKONIS, EVP/CFO
PHONE: 805-692-5821
E-MAIL: CBALTUSKONIS@COMMUNITYWESTBANK.COM
URL: HTTP://WWW.COMMUNITYWESTBANK.COM
SYMBOL: CWBC (NASDAQ)
COMMUNITY WEST BANCSHARES ANNOUNCES CONTINUED RECORD OPERATING EARNINGS FOR 2005
THIRD QUARTER AND NINE-MONTH PERIOD
NET INCOME FOR 2005 THIRD QUARTER IS $2,151,000, OR $.37 PER SHARE (BASIC), AND
INCLUDES AN INCOME TAX CREDIT OF $914,000, OR $.16 PER SHARE (BASIC), RELATED TO
RESOLUTION OF POTENTIAL INCOME TAX ISSUES; NET INCOME FOR 2004 THIRD QUARTER WAS
$967,000, OR $.17 PER SHARE (BASIC)
NET INTEREST INCOME INCREASES BY 29% FOR THIRD QUARTER
BOOK VALUE PER SHARE INCREASES TO $7.16
ASSETS INCREASE TO $414 MILLION
QUARTERLY DIVIDEND OF $.05 PER SHARE DECLARED
Goleta, California, October 25, 2005 - Community West Bancshares (Company) today
announced record operating results for the third quarter and first nine months
of 2005.
EARNINGS SUMMARY
For the quarter ended September 30, 2005 (2005 Q3), the Company recorded net
income of $2,151,000, or $.37 per share (basic, and $.36 per share diluted),
compared to net income of $967,000, or $.17 per share (basic, and $.16 per share
diluted), for the quarter ended September 30, 2004 (2004 Q3). For 2005 Q3, net
income includes an income tax credit related to resolution of potential tax
issues of $914,000, or $.16 per share (basic, and $.15 per share diluted).
For the nine months ended September 30, 2005, the Company recorded net income of
$4,248,000, or $.74 per share (basic, and $.72 per share diluted), compared to
net income of $2,881,000, or $.50 per share (basic, and $.49 per share diluted),
for the nine months ended September 30, 2004. As mentioned, the results for the
nine months ended September 30, 2005 include an income tax credit of $914,000,
or $.16 per share (basic, and $.15 per share diluted).
NET INTEREST INCOME
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Net interest income for the comparative three and nine-month periods increased
by $1,108,000 and $3,561,000, or 29% and 35%, respectively.
Total interest income for the comparative three-month period increased by
$1,940,000. $1,237,000 of the increase is attributed to the continued strong
growth in interest-earning assets, primarily in the commercial lending, SBA and
manufactured housing portfolios, partially offset by the decrease in securitized
loans; and, $703,000 of the increase is attributed to higher interest rates.
Total interest income for the comparative nine-month period increased by
$4,979,000. $3,055,000 of the increase is attributed to the net growth in
interest-earning assets; and, $1,924,000 of the increase is attributed to higher
interest rates.
Interest expense on deposits for the comparative three-month period increased by
$759,000. $328,000 of the increase is attributed to interest-bearing deposit
growth, particularly the popular Preferred Money Market account; and, $431,000
is attributed to higher interest rates. Interest expense on borrowings increased
$73,000.
Interest expense on deposits for the comparative nine-month period increased by
$1,670,000. $840,000 of the increase is attributed to interest-bearing deposit
growth and $830,000 is attributed to increased interest rates. Interest expense
on borrowings decreased $252,000, substantially all of which was volume-related.
The Company continues to benefit from the paydowns of the relatively high-rate,
securitized bonds, thus serving to reduce the Company's cost of funds. The
Company intends to exercise its right to call the remainder of the bonds payable
and expects such call to be effective by no later than the first quarter 2006.
PROVISION FOR LOAN LOSSES
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Overall, the general portfolio credit quality continues to be relatively stable
and the majority of the net negative provision for loan losses is attributable
to the Company's securitized loan portfolio volume decrease and favorable loss
experience.
NON-INTEREST INCOME AND NON-INTEREST EXPENSES
Non-interest income decreased slightly from 2004 Q 3 to 2005 Q 3, as the Company
recorded declines in gains from loan sales and loan servicing fees and an
increase in other loan fees. Non-interest income for the nine-month period
decreased from $8.0 million in 2004 to $5.7 million in 2005, as the Company
recorded declines in gains from loan sales, loan servicing fees and other loan
fees.
The Company continues to manage non-interest expenses. There was an increase in
such expenses for the comparative 2005 Q 3 period due primarily to loan
volume-related commissions, the preparation for the new Santa Barbara branch
office and technology conversion costs.
PROVISION FOR INCOME TAXES
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The effective income tax rate for 2005 Q 3 is less than the effective income tax
rate in other periods presented as a tax reserve of $914,000, or $.16 per share
(basic), related to the resolution of potential tax issues has been reversed due
to the resolution in this quarter of the uncertainty.
BALANCE SHEET
The Company's total assets increased to $414.4 million, or $49.2 million, at
September 30, 2005 compared to $365.2 million at December 31, 2004. Net loans
increased by $63.7 million and combined liquid assets and investment securities
decreased by a net of $15.9 million.
On the funding side in 2005, deposits have increased by $19.2 million while
other borrowings have increased by $26.1 million in total.
CAPITAL
As of September 30, 2005, the Company had $41.1 million in total shareholders'
equity, or 9.93% of consolidated total assets, and book value per share was
$7.16.
DIVIDEND DECLARED
The Board of Directors announced that they have declared a quarterly dividend of
$.05 per common share, payable November 18, 2005 to shareholders of record as of
the close of business on November 4, 2005. At this quarterly rate, the annual
dividend is equivalent to $.20 per common share.
COMMENTS FROM PRESIDENT AND CHIEF EXECUTIVE OFFICER
Lynda J. Nahra, President and Chief Executive Officer, noted: "We continue to be
pleased with our asset growth, credit quality and expanding net interest margin
in an extremely challenging interest rate environment, and the overall execution
of our strategic initiatives. After a successful opening in May 2005 of our
full-service Santa Maria branch office, on October 11, 2005, we opened another
new branch office in downtown Santa Barbara. We all continue to remain focused
on our business model and core competencies, and in providing the highest
quality service to our diverse client base."
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 four full-service branch banking offices, in Goleta, Ventura, Santa
Maria and Santa Barbara. The principal business activities of the Company are
Relationship banking, Mortgage lending and SBA lending, with loans originating
in California, Alabama, Colorado, Florida, Georgia, North Carolina, Oregon,
South Carolina, Tennessee and Washington.
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.
COMMUNITY WEST BANCSHARES
CONDENSED CONSOLIDATED INCOME STATEMENTS
(unaudited)
(in 000's, except share and per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
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2005 2004 2005 2004
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Interest income $ 7,651 $ 5,711 $ 21,096 $ 16,117
Interest expense 2,786 1,954 7,256 5,838
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Net interest income 4,865 3,757 13,840 10,279
Provision for loan losses (39) 186 396 251
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Net interest income after
provision for loan losses 4,904 3,571 13,444 10,028
Non-interest income 1,996 2,157 5,681 8,029
Non-interest expenses 4,799 4,086 13,461 13,162
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Income before income taxes 2,101 1,642 5,664 4,895
Provision for income taxes (50) 675 1,416 2,014
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NET INCOME $ 2,151 $ 967 $ 4,248 $ 2,881
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Earnings per share:
Basic $ 0.37 $ 0.17 $ 0.74 $ 0.50
Diluted 0.36 0.16 0.72 0.49
Weighted average shares:
Basic 5,745,150 5,719,647 5,743,827 5,713,765
Diluted 5,930,565 5,868,973 5,924,866 5,844,209
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Selected average balance sheet items
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Average assets $ 405,545 $ 341,963 $ 382,143 $ 325,674
Average gross loans 347,398 282,412 327,324 268,624
COMMUNITY WEST BANCSHARES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in 000's, except share and per share data)
September 30, December 31,
2005 2004
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Cash and cash equivalents $ 12,629 $ 30,205
Interest-earning deposits in other financial institutions 533 647
Investment securities 30,147 28,352
Loans:
Held for sale 54,111 45,988
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Held for investment 287,788 224,938
Less: Allowance (3,222) (2,785)
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Net held for investment 284,566 222,153
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Securitized loans 16,284 23,474
Less: Allowance (723) (1,109)
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Net securitized loans 15,561 22,365
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NET LOANS 354,238 290,506
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Other assets 16,808 15,493
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TOTAL ASSETS $ 414,355 $ 365,203
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Deposits $ 303,769 $ 284,568
Repurchase agreements - 13,672
FHLB advances 54,500 10,500
Bonds payable 9,704 13,910
Other liablities 5,256 4,984
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TOTAL LIABILITIES 373,229 327,634
Stockholders' equity 41,126 37,569
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 414,355 $ 365,203
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Shares outstanding 5,745,514 5,729,869
Book value per share $ 7.16 $ 6.56
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Nonaccrual loans $ 7,183 $ 8,350
SBA guaranteed portion (4,563) (5,287)
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Nonaccrual loans, net $ 2,620 $ 3,063
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