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EXHIBIT 99.1
Community West Bancshares Reports Second Quarter Results
GOLETA, Calif., July 26, 2011 (GLOBE NEWSWIRE) -- Community West Bancshares ("Community West"), (Nasdaq:CWBC), parent company of Community West Bank, today reported a net loss of $220,000 in the second quarter of 2011 (2Q11), compared to a net loss of $62,000 in the second quarter a year ago (2Q10). The loan loss provision was $3.2 million in 2Q11 compared to $2.9 million in 2Q10. Community West earned $375,000 in the first six months of 2011 compared to a net loss of $11,000 in the first six months of 2010.
"We continue to build reserves while working our way through this difficult credit cycle," stated William R. Peeples, Chairman, Interim President and Chief Executive Officer of Community West Bancshares. "The 2011 local and regional economy remains challenging and our top priority is to focus our diligent efforts on reducing and resolving non-performing assets."
2Q11 Financial Results
- Net loss applicable to common stockholders was $482,000, or $0.08 per diluted common share.
- Net interest margin was 4.58% in 2Q11, a 5 basis point improvement compared to 1Q11 and an 11 basis point improvement compared to 2Q10.
- Core deposits increased by 19.2% compared to a year ago, and now make up 68.8% of total deposits.
- Nonperforming loans were $29.7 million, or 5.23% of total loans at June 30, 2011.
- The total allowance for loan losses as a percentage of total loans held for investment was 3.09% at June 30, 2011, compared to 2.62% at March 31, 2011.
- The allowance for loan losses equaled 51.3% of all nonperforming loans at June 30, 2011.
- Community West Bank's Total risk-based capital ratio was 13.39%, Tier 1 risk-based capital ratio was 12.12% and Tier 1 leverage ratio was 9.59% at June 30, 2011.
Including $262,000 of preferred stock dividends, the net loss applicable to common stockholders was $482,000, or $0.08 per diluted share in 2Q11, compared to a net loss applicable to common stockholders of $324,000, or $0.05 per diluted share, in 2Q10.
Credit Quality
Nonperforming loans totaled $29.7 million, or 5.23% of total loans at June 30, 2011, compared to $23.6 million, or 4.06% of total loans at March 31, 2011 and $14.6 million, or 2.41% of total loans at June 30, 2010. The increase in the past quarter is primarily due to one real estate relationship of $5.2 million, which was classified as an impaired loan during 2Q11 and a corresponding reserve of $1.3 million was recorded during the quarter.
Of the $29.7 million in total nonperforming loans, $22.5 million or 75.6% were real estate loans, $3.8 million or 12.7% were SBA loans, $2.7 million or 9.2% were manufactured housing loans, $711,000 or 2.4% were commercial loans and $29,000 or 0.1% were other installment loans.
Net nonperforming assets totaled $36.8 million, or 5.71% of total assets, compared to $30.5 million, or 4.58% of total assets at March 31, 2011, and $19.5 million, or 2.90% of total assets, a year earlier. The loan loss provision was $3.2 million in 2Q11 compared to $983,000 in 1Q11 and $2.9 million in 2Q10. In the first six months of 2011, the loan loss provision was $4.1 million compared to $5.9 million in the first six months of 2010. The allowance for loan losses totaled $15.2 million at quarter-end, equal to 3.09% of total loans held for investment, compared to 2.62% at March 31, 2011 and 2.70% a year ago.
Community West had net charge-offs of $1.1 million in 2Q11, which was the same as in the preceding quarter. Net charge-offs were $3.4 million in 2Q10.
Income Statement Review
Second quarter net interest income was $7.1 million compared to $7.2 million in 2Q10. In the first six months of 2011, net interest income was $14.2 million compared to $14.5 million in the first six months of 2010. In 2Q11, the net interest margin was 4.58% compared to 4.53% in 1Q11 and 4.47% in 2Q10. In the first six months of 2011, the net interest margin was 4.55% compared to 4.47% in the first six months of 2010.
Non-interest income was $815,000 in 2Q11, compared to $933,000 in 2Q10. In the first half of 2011, non-interest income was $1.6 million compared to $1.8 million in the first half of 2010. The decrease was due to a decline in loan origination fees and referral fees on SBA 504 loans.
Non-interest expenses were $5.1 million in 2Q11 compared to $5.4 million in 2Q10. The reduction was partially due to a $305,000 reduction in loss on real estate owned during the second quarter. In the first six months of the year, non-interest expenses were $10.9 million compared to $10.4 million in the first six months of 2010.
Balance Sheet
Net loans decreased from a year ago to $553.4 million at June 30, 2011 compared to $590.8 million at June 30, 2010, partly due to softening loan demand and some early loan payoffs.
Commercial real estate loans outstanding decreased 2.6%, or $4.6 million, from year ago levels to $173.4 million at June 30, 2011, and comprise 30.5% of the total loan portfolio. Manufactured housing loans were down slightly from year ago levels to $193.1 million and represent 33.9% of total loans. Commercial loans were down 16.3% compared to a year ago and now represent 8.3% of the total loan portfolio and SBA loans decreased 10.7% from a year ago and now represent 21.2% of the total loan portfolio.
"Core deposits grew $56.7 million over the past 12 months, and now comprise 68.8% of total deposits. This growth is largely attributable to the continued success of our Lasting Impressions money market account," said Charles G. Baltuskonis, Executive Vice President and Chief Financial Officer.
Total deposits were $511.1 million at June 30, 2011 compared to $539.0 million a year earlier. Non-interest-bearing accounts increased 52.2% to $54.4 million at June 30, 2011 compared to $35.7 million a year ago. Interest-bearing accounts increased 15.6% to $275.1 million compared to $237.9 million a year ago. Core deposits, defined as non-interest-bearing checking, interest-bearing checking, money market accounts and savings accounts, increased 19.2% to $351.9 million at June 30, 2011, compared to $295.2 million a year earlier while certificates of deposit decreased 34.7% over the same period to $159.3 million, compared to $243.8 million a year earlier.
Total assets were $643.8 million at quarter-end, compared to $671.5 million a year earlier. Stockholders' equity was $61.8 million at quarter-end, compared to $59.9 million a year earlier and book value per common share was $7.84 at quarter-end compared to $7.64 a year earlier.
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. The principal business activities of the Company are Relationship banking, Mortgage 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 | Six Months Ended | ||||
June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
June 30, 2011 |
June 30, 2010 |
|
Interest income | |||||
Loans | $ 8,865 | $ 9,044 | $ 9,323 | $ 17,909 | $ 18,857 |
Investment securities and other | 271 | 286 | 380 | 557 | 788 |
Total interest income | 9,136 | 9,330 | 9,703 | 18,466 | 19,645 |
Interest expense | |||||
Deposits | 1,472 | 1,670 | 1,958 | 3,142 | 4,017 |
Other borrowings and convertible debentures | 578 | 591 | 514 | 1,169 | 1,102 |
Total interest expense | 2,050 | 2,261 | 2,472 | 4,311 | 5,119 |
Net interest income | 7,086 | 7,069 | 7,231 | 14,155 | 14,526 |
Provision for loan losses | 3,157 | 983 | 2,872 | 4,140 | 5,946 |
Net interest income after provision for loan losses |
3,929 | 6,086 | 4,359 | 10,015 | 8,580 |
Non-interest income | |||||
Other loan fees | 411 | 230 | 494 | 641 | 846 |
Other | 404 | 508 | 439 | 912 | 926 |
Total non-interest income | 815 | 738 | 933 | 1,553 | 1,772 |
Non-interest expenses | |||||
Salaries and employee benefits | 2,707 | 3,109 | 2,858 | 5,816 | 5,866 |
Occupancy and equipment expenses | 494 | 505 | 510 | 999 | 1,009 |
FDIC assessment | 222 | 302 | 323 | 524 | 648 |
Professional services | 236 | 215 | 239 | 451 | 442 |
Loss on sale and write-down of foreclosed real estate and repossessed assets |
199 | 459 | 504 | 658 | 566 |
Other operating expenses | 1,257 | 1,219 | 963 | 2,476 | 1,837 |
Total non-interest expenses | 5,115 | 5,809 | 5,397 | 10,924 | 10,368 |
Income (loss) before income taxes | (371) | 1,015 | (105) | 644 | (16) |
Provision for income taxes | (151) | 420 | (43) | 269 | (5) |
NET INCOME (LOSS) | $ (220) | $ 595 | $ (62) | $ 375 | $ (11) |
Preferred stock dividends | 262 | 262 | 262 | 524 | 524 |
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS |
$ (482) | $ 333 | $ (324) | $ (149) | $ (535) |
Earnings (Loss) per common share: | |||||
Basic | $ (0.08) | $ 0.06 | $ (0.05) | $ (0.02) | $ (0.09) |
Diluted | $ (0.08) | $ 0.05 | $ (0.05) | $ (0.02) | $ (0.09) |
COMMUNITY WEST BANCSHARES | |||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(unaudited) | |||
(in 000's, except per share data) | |||
June 30, 2011 |
December 31, 2010 |
June 30, 2010 |
|
Cash and cash equivalents | $ 7,536 | $ 6,226 | $ 5,749 |
Interest-earning deposits in other financial institutions | 240 | 290 | 475 |
Investment securities | 38,903 | 40,235 | 36,909 |
Loans: | |||
Commercial | 47,194 | 57,369 | 56,381 |
Commercial real estate | 173,434 | 173,906 | 177,994 |
SBA | 120,340 | 128,721 | 134,736 |
Manufactured housing | 193,060 | 194,682 | 198,194 |
Single family real estate | 11,745 | 13,739 | 14,043 |
HELOC | 20,983 | 20,273 | 20,676 |
Consumer | 329 | 379 | 368 |
Mortgage loans held for sale | 1,597 | 4,865 | 2,199 |
Total loans | 568,682 | 593,934 | 604,591 |
Loans, net | |||
Held for sale | 76,144 | 82,320 | 92,798 |
Held for investment | 492,538 | 511,614 | 511,793 |
Less: Allowance | (15,237) | (13,302) | (13,837) |
Net held for investment | 477,301 | 498,312 | 497,956 |
NET LOANS | 553,445 | 580,632 | 590,754 |
Other assets | 43,707 | 40,221 | 37,597 |
TOTAL ASSETS | $ 643,831 | $ 667,604 | $ 671,484 |
Deposits | |||
Non-interest-bearing | $ 54,386 | $ 35,767 | $ 35,728 |
Interest-bearing | 275,144 | 262,431 | 237,934 |
Savings | 22,343 | 20,371 | 21,555 |
CDs over 100K | 127,505 | 163,118 | 174,228 |
CDs under 100K | 31,756 | 48,206 | 69,577 |
Total Deposits | 511,134 | 529,893 | 539,022 |
Other borrowings | 67,862 | 72,081 | 69,000 |
Other liabilities | 2,997 | 3,988 | 3,570 |
TOTAL LIABILITIES | 581,993 | 605,962 | 611,592 |
Stockholders' equity | 61,838 | 61,642 | 59,892 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 643,831 | $ 667,604 | $ 671,484 |
Shares outstanding | 5,984 | 5,916 | 5,915 |
Book value per common share | $ 7.84 | $ 7.92 | $ 7.64 |
ADDITIONAL FINANCIAL INFORMATION | |||||
(Dollars in thousands except per share amounts)(Unaudited) | |||||
Quarter Ended | Quarter Ended | Quarter Ended | Six Months Ended | ||
PERFORMANCE MEASURES AND RATIOS | Jun. 30, 2011 | Mar. 31, 2011 | Jun. 30, 2010 | Jun. 30, 2011 | Jun. 30, 2010 |
Return on average common equity | -1.83% | 4.98% | -0.54% | 1.57% | -0.05% |
Return on average assets | -0.13% | 0.35% | -0.04% | 0.11% | 0.00% |
Efficiency ratio | 64.74% | 74.41% | 66.11% | 69.54% | 63.62% |
Net interest margin | 4.58% | 4.53% | 4.47% | 4.55% | 4.47% |
Quarter Ended | Quarter Ended | Quarter Ended | Six Months Ended | ||
AVERAGE BALANCES | Jun. 30, 2011 | Mar. 31, 2011 | Jun. 30, 2010 | Jun. 30, 2011 | Jun. 30, 2010 |
Average assets | $ 659,131 | $ 672,504 | $ 674,718 | $ 665,782 | $ 678,378 |
Average earning assets | 620,776 | 633,204 | 649,069 | 626,952 | 654,987 |
Average total loans | 574,059 | 587,193 | 603,219 | 580,585 | 606,673 |
Average deposits | 523,119 | 534,008 | 542,720 | 528,536 | 538,984 |
Average equity (including preferred stock) | 62,915 | 62,638 | 60,704 | 62,778 | 60,855 |
Average common equity (excluding preferred stock) | 48,018 | 47,808 | 46,066 | 47,915 | 46,251 |
EQUITY ANALYSIS | Jun. 30, 2011 | Mar. 31, 2011 | Jun. 30, 2010 | ||
Total equity | $ 61,838 | $ 62,243 | $ 59,892 | ||
Less: senior preferred stock | 14,941 | 14,874 | 14,674 | ||
Total common equity | $ 46,897 | $ 47,369 | $ 45,218 | ||
Common stock outstanding | 5,984 | 5,981 | 5,915 | ||
Book value per common share | $ 7.84 | $ 7.92 | $ 7.64 | ||
ASSET QUALITY | Jun. 30, 2011 | Mar. 31, 2011 | Jun. 30, 2010 | ||
Nonperforming loans (NPLs) | $ 29,724 | $ 23,583 | $ 14,574 | ||
Nonperforming loans/total loans | 5.23% | 4.06% | 2.41% | ||
REO and repossessed assets | $ 10,319 | $ 9,664 | $ 6,265 | ||
Less: SBA-guaranteed amounts | 3,274 | 2,743 | 1,333 | ||
Net REO and repossessed assets | $ 7,045 | $ 6,921 | $ 4,932 | ||
Nonperforming assets (net) | 36,769 | 30,504 | 19,506 | ||
Nonperforming assets/total assets | 5.71% | 4.58% | 2.90% | ||
Net loan charge-offs in the quarter | $ 1,092 | $ 1,113 | $ 3,444 | ||
Net charge-offs in the quarter/total loans | 0.19% | 0.19% | 0.57% | ||
Allowance for loan losses | $ 15,237 | $ 13,172 | $ 13,837 | ||
Plus: Allowance for undisbursed loan commitments | 260 | 229 | 226 | ||
Total allowance for credit losses | $ 15,497 | $ 13,401 | $ 14,063 | ||
Total allowance for loan losses/total loans held for investment | 3.09% | 2.62% | 2.70% | ||
Total allowance for loan losses/nonperforming loans | 51.26% | 55.85% | 94.94% | ||
ADDITIONAL FINANCIAL INFORMATION | |||||
(Dollars in thousands except per share amounts)(Unaudited) | |||||
Jun. 30, 2011 | Mar. 31, 2011 | Jun. 30, 2010 | |||
Community West Bancshares | |||||
Tier 1 leverage ratio | 9.35% | 9.22% | 8.84% | ||
Tier 1 risk-based capital ratio | 11.82% | 11.60% | 11.03% | ||
Total risk-based capital ratio | 14.60% | 14.34% | 12.30% | ||
Community West Bank | |||||
Tier 1 leverage ratio | 9.59% | 9.41% | 8.80% | ||
Tier 1 risk-based capital ratio | 12.12% | 11.84% | 10.97% | ||
Total risk-based capital ratio | 13.39% | 13.11% | 12.23% | ||
INTEREST SPREAD ANALYSIS | Jun. 30, 2011 | Mar. 31, 2011 | Jun. 30, 2010 | ||
Yield on interest-bearing deposits | 1.25% | 1.39% | 1.56% | ||
Yield on total loans | 6.19% | 6.25% | 6.20% | ||
Yield on investments | 2.36% | 2.56% | 3.40% | ||
Yield on earning assets | 5.90% | 5.98% | 6.00% | ||
Cost of deposits | 1.13% | 1.27% | 1.45% | ||
Cost of FHLB advances | 2.60% | 2.63% | 2.96% | ||
Cost of interest-bearing liabilities | 1.52% | 1.64% | 1.73% |
CONTACT: Charles G. Baltuskonis, EVP & CFO 805.692.5821 www.communitywestbank.com