GOLETA, Calif., April 29, 2016 (GLOBE NEWSWIRE) -- Community West Bancshares (Community West or the Company), (NASDAQ:CWBC), parent company of Community West Bank (Bank), today reported net income of $1.3 million in the first quarter of 2016 (1Q16) compared to net income of $1.9 million in the fourth quarter of 2015 (4Q15) and $1.8 million in the first quarter a year ago (1Q15).  

"During the first quarter of the year, we continued to achieve solid operating results, with earnings of $1.3 million and diluted earnings per common share of $0.15," stated Martin E. Plourd, President and Chief Executive Officer. "Driving our results were ongoing improvements in credit quality, double-digit, 12-month annualized loan growth and strong capital.  We believe our San Luis Obispo location will generate more growth as the year progresses.  Additionally, we were able to increase our quarterly cash dividend by 17%." 

1Q16 Financial Highlights
  • Nonaccrual loans, net, decreased 54.3% to $4.8 million at March 31, 2016, compared to $10.5 million a year ago, representing the lowest level since 3Q07.
  • Net income available to common stockholders for 1Q16 was $1.3 million, or $0.15 per diluted share, compared to $1.6 million, or $0.19 per diluted share, for 1Q15. 
  • Annualized return on average assets was 0.83%.
  • Annualized return on average common equity was 8.23%.
  • Net interest margin was 4.45%.
  • Net loans increased 11.2% to $540.2 million at March 31, 2016, compared to $485.8 million a year ago.
  • Total deposits increased 10.2% to $546.1 million at March 31, 2016, compared to $495.7 million a year ago.
  • Book value per common share was $7.71 at March 31, 2016, compared to $7.50 a year ago. 
  • The Bank continues to be well-capitalized per banking regulations with its total risk-based capital ratio at 13.84% and Tier 1 leverage ratio at 10.55% at March 31, 2016.
  • Received approvals to open a full-service branch office in San Luis Obispo and to relocate its existing full-service branch in Santa Maria to a more desirable business location.

Income Statement

"We continue to generate higher than industry average loan yields with our diversified lending platform, which contributed to our net interest margin remaining in the mid-4% range," said Charles G. Baltuskonis, Executive Vice President and Chief Financial Officer.  First quarter net interest margin was 4.45% compared to 4.65% in 1Q15.  The net interest margin was 4.90% for 4Q15 primarily due to one large nonaccrual loan relationship that was paid off during that quarter and previously recognized interest was recorded, increasing the yield on earning assets by 47 basis points.

The Bank's first quarter net interest income was $6.7 million, a 9.9% decrease compared to $7.5 million in the preceding quarter but a 5.8% increase compared to $6.4 million in 1Q15.  Non-interest income was $579,000 in 1Q16, a 7.6% increase compared to $538,000 in 4Q15 and a 20.6% increase compared to $480,000 in 1Q15.

First quarter non-interest expenses totaled $5.3 million, compared to $5.1 million in 4Q15 and $4.8 million in 1Q15.  The increase is largely due to the business development of the Bank's Northern region, consisting of San Luis Obispo and north Santa Barbara counties.

Balance Sheet

Community West's total assets were $622.8 million at March 31, 2016, a 0.2% increase compared to three months earlier and a 8.8% increase compared to one year ago.  Net loans increased modestly to $540.2 million at March 31, 2016, compared to $536.5 million at December 31, 2015, and increased 11.2% compared to $485.8 million a year ago.  During 1Q16, net loan growth was lessened by the payoff of five loan relationships totaling $11.9 million.  Commercial real estate loans outstanding were up 13.7% from year ago levels to $185.5 million at March 31, 2016, and comprise 33.9% of the total loan portfolio.  Manufactured housing loans were up 7.2% from year ago levels to $182.0 million and represent 33.3% of total loans.  Commercial loans increased 45.2% from year ago levels to $107.4 million and represent 19.6% of the total loan portfolio and SBA loans decreased 25.7% from a year ago to $42.9 million and represent 7.8% of the total loan portfolio.

Deposits totaled $546.1 million at March 31, 2016, up modestly compared to $544.3 million at December 31, 2015 and grew 10.2% compared to $495.7 million a year earlier.  Core deposits, defined as non-interest-bearing checking, interest-bearing checking, money market accounts, savings accounts and retail certificates of deposit totaled $405.5 million at March 31, 2016 and comprise 74.3% of total deposits, compared to $394.3 million, or 79.5% of total deposits, a year ago. 

Stockholders' equity was $62.4 million at March 31, 2016, compared to $61.9 million at December 31, 2015, and $67.5 million a year ago as preferred stock of $6.0 million was redeemed.  Book value per common share improved to $7.71 at March 31, 2016 compared to $7.55 at December 31, 2015, and $7.50 a year ago. 

Credit Quality

"As a result of strong asset quality, including the solid loan loss reserves already in place, we recorded a negative provision for loan losses in the last nine quarters and net loan loss recoveries in eight of the past nine quarters," said Plourd.  The negative loan loss provision was $247,000 in 1Q16, compared to $277,000 in 4Q15, and $968,000 in 1Q15.  Net loan recoveries were $150,000 in 1Q16 compared to $181,000 in 4Q15 and $366,000 in 1Q15.

The allowance for loan losses was $6.8 million at March 31, 2016, or 1.41% of total loans held for investment, compared to 1.44% at December 31, 2015, and 1.69% a year ago.  Net nonaccrual loans decreased 4.1% to $4.8 million, or 0.88% of total loans at March 31, 2016, compared to $5.0 million, or 0.92% of total loans, three months earlier, and decreased 54.3% compared to $10.5 million, or 2.13% of total loans, a year ago. 

Of the $4.8 million in net nonaccrual loans, $2.3 million were commercial real estate loans, $1.5 million were manufactured housing loans, $398,000 were SBA loans, $308,000 were home equity loans, $274,000 were single family real estate loans and $44,000 were commercial loans.

Other assets acquired through foreclosure totaled $176,000 at March 31, 2016, compared to $198,000 three months earlier and $320,000 a year earlier.  Nonaccrual loans plus other assets acquired through foreclosure, net of SBA/USDA guarantees, totaled $5.0 million, or 0.80% of total assets, at March 31, 2016, compared to $5.2 million, or 0.84% of total assets, three months earlier and $10.8 million, or 1.89% of total assets, a year ago. 

Increases Cash Dividend to $0.035 Per Common Share

The Company's Board of Directors declared a quarterly cash dividend of $0.035 per common share, payable May 31, 2016 to common shareholders of record on May 12, 2016.  This represents $0.14 per annum, which is a 17% increase over the current dividend rate.

Stock Repurchase ProgramOn August 31, 2015, the Company announced that the Board of Directors authorized a common stock repurchase program of up to $3 million.  As of March 31, 2016, 111,253 shares had been repurchased at an average per share cost of $6.99.

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 and one loan production office in San Luis Obispo. The principal business activities of the Company are Relationship business banking, Manufactured Housing 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  
    March 31,   December 31,   March 31,  
      2016       2015       2015    
               
Interest income              
Loans, including fees   $   7,175     $   7,886     $   6,712    
Investment securities and other       269         249         305    
Total interest income       7,444         8,135         7,017    
Interest expense              
Deposits       651         622         605    
Other borrowings and convertible debt       72         51         61    
Total interest expense       723         673         666    
Net interest income       6,721         7,462         6,351    
Provision for loan losses       (247 )       (277 )       (968 )  
Net interest income after provision for loan losses       6,968         7,739         7,319    
Non-interest income              
Other loan fees       275         225         175    
Document processing fees       115         102         92    
Service charges       90         99         73    
Other       99         112         140    
Total non-interest income       579         538         480    
Non-interest expenses              
Salaries and employee benefits        3,452         3,175         3,115    
Occupancy, net       486         519         445    
Professional services       179         257         248    
Loan servicing and collection       179         114         89    
Data processing       171         145         119    
Depreciation        149         109         91    
FDIC assessment       97         90         71    
Advertising and marketing       81         118         80    
Stock-based compensation       80         79         42    
Other        462         485         471    
Total non-interest expenses       5,336         5,091         4,771    
Income before provision for income taxes       2,211         3,186         3,028    
Provision for income taxes       928         1,335         1,258    
Net Income       1,283         1,851         1,770    
Dividends and accretion on preferred stock        -         44         140    
Discount on partial redemption of preferred stock       -         -         (19 )  
Net income available to common stockholders   $   1,283     $   1,807     $   1,649    
Earnings per share:              
Basic   $   0.16     $   0.22     $   0.20    
Diluted   $   0.15     $   0.21     $   0.19    
               

 
COMMUNITY WEST BANCSHARES                
CONDENSED CONSOLIDATED BALANCE SHEETS                
(unaudited)                
(in 000's, except per share data)                
                 
    March 31,   December 31,   March 31,    
      2016       2015       2015      
                 
Cash and cash equivalents   $   2,499     $   2,789     $   1,689      
Time and interest-earning deposits in other financial institutions       26,538         32,829         33,857      
Investment securities       35,633         30,466         31,054      
Loans:                
Commercial       107,386         107,510         73,938      
Commercial real estate       185,458         179,491         163,163      
SBA       42,890         47,880         57,718      
Manufactured housing       182,018         177,891         169,752      
Single family real estate       17,919         19,073         15,349      
HELOC       10,885         10,934         13,130      
Other       425         683         26      
Total loans       546,981         543,462         493,076      
                 
Loans, net                
Held for sale       61,897         64,488         63,724      
Held for investment       485,084         478,974         429,352      
Less: Allowance for loan losses       (6,819 )       (6,916 )       (7,275 )    
Net held for investment       478,265         472,058         422,077      
NET LOANS       540,162         536,546         485,801      
                 
Other assets       17,923         18,583         19,870      
                 
TOTAL ASSETS   $   622,755     $   621,213     $   572,271      
                 
Deposits                
Non-interest-bearing demand   $   70,587     $   76,469     $   71,278      
Interest-bearing demand       250,404         250,509         265,000      
Savings       14,294         13,690         15,283      
Certificates of deposit ($250,000 or more)       67,995         66,722         132,396      
Other certificates of deposit       142,795         136,948         11,713      
Total deposits       546,075         544,338         495,670      
Other borrowings       10,500         10,500         5,000      
Other liabilities       3,741         4,431         4,098      
  TOTAL LIABILITIES       560,316         559,269         504,768      
                 
Stockholders' equity       62,439         61,944         67,503      
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                
  $   622,755     $   621,213     $   572,271      
                 
Shares outstanding       8,103         8,206         8,204      
                 
Book value per common share   $   7.71     $   7.55     $   7.50      
                 

 
ADDITIONAL FINANCIAL INFORMATION            
(Dollars in thousands except per share amounts)(Unaudited)            
  Three Months Ended   Three Months Ended   Three Months Ended  
PERFORMANCE MEASURES AND RATIOS Mar. 31, 2016   Dec. 31, 2015   Mar. 31, 2015  
Return on average common equity    8.23 %     11.96 %     11.78 %  
Return on average assets    0.83 %     1.19 %     1.27 %  
Efficiency ratio   73.10 %     63.64 %     69.84 %  
Net interest margin   4.45 %     4.90 %     4.65 %  
             
  Three Months Ended   Three Months Ended   Three Months Ended  
AVERAGE BALANCES Mar. 31, 2016   Dec. 31, 2015   Mar. 31, 2015  
Average assets $   618,283     $   614,688     $   564,336    
Average earning assets     607,872         603,921         553,940    
Average total loans     543,555         537,917         493,959    
Average deposits     540,539         537,269         481,531    
Average equity (including preferred stock)     62,678         63,334         67,218    
Average common equity (excluding preferred stock)     62,678         61,395         60,934    
             
EQUITY ANALYSIS Mar. 31, 2016   Dec. 31, 2015   Mar. 31, 2015  
Total equity $   62,439     $   61,944     $   67,503    
Less: senior preferred stock     -          -          (5,995 )  
Total common equity $   62,439     $   61,944     $   61,508    
             
Common stock outstanding     8,103         8,206         8,204    
Book value per common share $   7.71     $   7.55     $   7.50    
             
ASSET QUALITY Mar. 31, 2016   Dec. 31, 2015   Mar. 31, 2015  
Nonaccrual loans, net $   4,807     $   5,013     $   10,482    
Nonaccrual loans, net/total loans   0.88 %     0.92 %     2.13 %  
Other assets acquired through foreclosure, net $   176     $   198     $   320    
             
Nonaccrual loans plus other assets acquired through foreclosure, net $   4,983     $   5,211     $   10,802    
Nonaccrual loans plus other assets acquired through foreclosure, net/total assets   0.80 %     0.84 %     1.89 %  
Net loan (recoveries)/charge-offs in the quarter $   (150 )   $   (181 )   $   (366 )  
Net (recoveries)/charge-offs in the quarter/total loans    -0.03 %     -0.03 %     -0.07 %  
             
Allowance for loan losses $   6,819     $   6,916     $   7,275    
Plus: Reserve for undisbursed loan commitments     74         61         37    
Total allowance for credit losses $   6,893     $   6,977     $   7,312    
Allowance for loan losses/total loans held for investment   1.41 %     1.44 %     1.69 %  
Allowance for loan losses/nonaccrual loans, net   141.86 %     137.96 %     69.40 %  
             
Community West Bank *            
Tier 1 leverage ratio   10.55 %     10.38 %     11.72 %  
Tier 1 risk-based capital ratio   12.59 %     12.45 %     14.51 %  
Total risk-based capital ratio   13.84 %     13.70 %     15.77 %  
             
INTEREST SPREAD ANALYSIS Mar. 31, 2016   Dec. 31, 2015   Mar. 31, 2015  
Yield on total loans   5.31 %     5.82 %     5.51 %  
Yield on investments   2.58 %     2.60 %     3.48 %  
Yield on interest earning deposits   0.57 %     0.32 %     0.30 %  
Yield on earning assets   4.93 %     5.34 %     5.14 %  
             
Cost of interest-bearing deposits   0.56 %     0.53 %     0.58 %  
Cost of total deposits   0.48 %     0.46 %     0.51 %  
Cost of borrowings   2.76 %     2.31 %     2.06 %  
Cost of interest-bearing liabilities   0.61 %     0.57 %     0.63 %  
             
* Capital ratios are preliminary until the Call Report is filed.            
             

Contact: Charles G. Baltuskonis, EVP & CFO805.692.5821www.communitywestbank.comThe Cereghino GroupIR CONTACT: 206-388-5785