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Community West Bancshares Achieves Profitability And Earns $613,000 In Third Quarter, Results Highlight Success Of Operational Restructuring Plan

Stocks in this article: CWBC

Community West Bancshares (Community West or the Company), (NASDAQ:CWBC), parent company of Community West Bank (Bank), today reported net income of $613,000 in the third quarter of 2012 (3Q12) compared to a net loss of $591,000 in the second quarter of 2012 (2Q12) and a net loss of $2.3 million in the third quarter a year ago (3Q11). In the first nine months of 2012, Community West reported net income of $841,000 compared to a net loss of $1.9 million in the first nine months a year ago.

“We continued to make meaningful progress with strengthening the balance sheet and returning the organization to sustainable profitability during the third quarter, with strong net interest income and improved operating efficiencies,” stated Martin E. Plourd, President and Chief Executive Officer. “Our efforts have been focused on refining our core banking strategy while streamlining the Company’s balance sheet and diligently working to improve asset quality and reduce problem assets.”

3Q12 Financial Highlights

  • Net interest margin was 4.65% in 3Q12, compared to 4.78% in 2Q12 and up from 4.38% in 3Q11.
  • Nonaccrual loans were $33.3 million, or 7.0% of total loans at September 30, 2012, up slightly from $32.8 million, or 6.7% of total loans at June 30, 2012.
  • Net real estate owned (REO) and repossessed assets, after subtracting the SBA guarantee, was $3.8 million at September 30, 2012 compared to $2.1 million three months earlier and $4.8 million a year earlier.
  • The total allowance for loan losses equaled 3.65% of total loans held for investment at September 30, 2012, compared to 3.59% at June 30, 2012 and 2.94% a year ago.
  • Community West Bank’s capital ratios continue to strengthen - Total risk-based capital ratio was 13.89% and Tier 1 leverage ratio was 9.84% at September 30, 2012, an increase compared to Total risk-based capital ratio of 13.41% and Tier 1 leverage ratio of 9.38% at June 30, 2012. The Bank’s regulatory agreement requires that ratios of 12% and 9%, respectively, be maintained.

Including $253,000 of dividends and accretion on preferred stock, the net income applicable to common stockholders in 3Q12 was $360,000, or $0.06 per diluted share, compared to a net loss applicable to common stockholders in 2Q12 of $859,000, or $0.14 per diluted share, and a net loss applicable to common stockholders in 3Q11 of $2.6 million, or $0.43 per diluted share. Book value per common share was $5.93 at September 30, 2012, compared to $5.87 at June 30, 2012 and $7.41 at September 30, 2011.

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