GOLETA, Calif., April 28, 2017 (GLOBE NEWSWIRE) -- Community West Bancshares (Community West or the Company), (NASDAQ:CWBC), parent company of Community West Bank (Bank), today reported net income of $1.4 million, or $0.16 per diluted share, in the first quarter of 2017 (1Q17) compared to $1.3 million, or $0.16 per diluted share, in the fourth quarter of 2016 (4Q16) and $1.3 million, or $0.15 per diluted share, the first quarter of 2016 (1Q16). 

"We made excellent progress with executing on our growth strategies during the first quarter of 2017," stated Martin E. Plourd, President and Chief Executive Officer.  "During the first quarter we relocated our Santa Maria branch to a better location and opened a new branch in Oxnard.  The strong loan growth of 6% was a result of our expansion in San Luis Obispo and Ventura counties.  Net income increased nearly 6% year-over-year, despite this investment in growing our franchise.  We also maintained a healthy net interest margin, further improved our asset quality and maintained our previous momentum with robust loan growth.  We remain focused on competing for business in our local markets and expanding our franchise through organic growth."

First Quarter 2017 Financial Highlights
  • Net income was $1.4 million, or $0.16 per diluted share. 
  • Return on average assets was 0.76%.
  • Return on average common equity was 8.28%.
  • Net interest margin was 4.45%.
  • Net loans increased 6.0% to $660.8 million at March 31, 2017, compared to $623.4 million three months earlier and increased 22.3% compared to $540.2 million a year ago.
  • Total assets increased 20.2% to $748.3 million at March 31, 2017, compared to $622.8 million a year ago.
  • Nonaccrual loans, net, decreased 52.1% to $2.3 million, or 0.34% of net loans at March 31, 2017, compared to $4.8 million, or 0.88% of net loans, a year ago, representing the lowest level since 3Q07.
  • Non-interest-bearing deposits increased 45.3% to $102.6 million at March 31, 2017, compared to $70.6 million a year ago.
  • Book value per common share increased 6.6% to $8.22 at March 31, 2017, compared to $7.71 a year ago. 
  • The Bank continues to be well-capitalized per banking regulations with its total risk-based capital ratio at 11.60% and Tier 1 leverage ratio at 9.41% at March 31, 2017.

Income Statement

"Our net interest margin remained healthy at 4.45%," said Susan C. Thompson, Executive Vice President and Chief Financial Officer.  First quarter net interest margin was 4.45% compared to 4.63% in 4Q16, which included 12bp of one time interest items, and 4.45% in 1Q16. 

Net interest income for 1Q17 was $7.8 million, which was unchanged compared to the preceding quarter and a 15.7% increase compared to $6.7 million in 1Q16.  Non-interest income increased 19.1% to $641,000 in 1Q17, compared to $538,000 in 4Q16 and 10.7% compared to $579,000 in 1Q16. 

Non-interest expenses totaled $5.9 million in 1Q17, compared to $5.3 million in 1Q16 and unchanged from the preceding quarter.  The increase is largely due to costs associated with the business development of the Bank's Northern region, consisting of San Luis Obispo and north Santa Barbara counties and the addition of the Oxnard location in the Southern region. 

Balance Sheet

"The loan portfolio increased again during the quarter, with good production in targeted loan types, including an increase in commercial real estate loans," said Plourd.  "The regional economy remains solid and we continue to see potential for strong loan growth."

Net loans increased 6.0% to $660.8 million at March 31, 2017, compared to $623.4 million at December 31, 2016, and increased 22.3% compared to $540.2 million a year ago.  Commercial real estate loans outstanding were up 63.8% from year ago levels to $303.8 million at March 31, 2017, and comprise 45.4% of the total loan portfolio.  Manufactured housing loans were up 11.2% from year ago levels to $202.3 million and represent 30.3% of total loans.  Commercial loans decreased 3.5% from year ago levels to $103.6 million and represent 15.5% of the total loan portfolio and SBA loans decreased 13.6% from a year ago to $37.0 million and represent 5.5% of the total loan portfolio.

Total assets were $748.3 million at March 31, 2017, a 5.3% increase compared to $710.6 million three months earlier and a 20.2% increase compared to $622.8 million one year ago.  Deposits increased 4.6% to $640.1 million at March 31, 2017, compared to $612.2 million at December 31, 2016, and grew 17.2% compared to $546.1 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 $456.1 million at March 31, 2017 and comprise 71.2% of total deposits, compared to $405.5 million, or 74.3% of total deposits, a year ago. 

Stockholders' equity was $66.6 million at March 31, 2017, compared to $65.3 million at December 31, 2016, and $62.4 million a year ago.  Book value per common share improved to $8.22 at March 31, 2017, compared to $8.07 at December 31, 2016, and $7.71 a year ago. 

Credit Quality

"Due to strong loan growth, we recorded a provision for loan losses for the fourth consecutive quarter," said Plourd.  The loan loss provision was $144,000 in 1Q17, compared to $116,000 in 4Q16, and a credit to provision of $247,000 in 1Q16.  Net loan recoveries were $177,000 in 1Q17 compared to $158,000 in 4Q16 and $150,000 in 1Q16.

The allowance for loan losses was $7.8 million at March 31, 2017, or 1.28% of total loans held for investment, compared to 1.31% at December 31, 2016, and 1.41% a year ago.  Net nonaccrual loans decreased to $2.3 million, or 0.34% of total loans at March 31, 2017, compared to $2.4 million, or 0.38% of total loans, three months earlier, and decreased 52.1% compared to $4.8 million, or 0.88% of total loans, a year ago.

Of the $2.3 million in net nonaccrual loans, $740,000 were manufactured housing loans, $546,000 were commercial loans, $368,000 were home equity loans, $212,000 were SBA 504 1st loans, $188,000 were single family real estate loans, $137,000 were commercial real estate loans and $111,000 were SBA 7A loans.

Other assets acquired through foreclosure totaled $145,000 at March 31, 2017, compared to $137,000 three months earlier and $176,000 a year earlier.   

Cash Dividend Declared

The Company's Board of Directors increased its quarterly cash dividend by 14.3% to $0.04 per common share, payable May 31, 2017 to common shareholders of record on May 12, 2017.  The current annualized yield, based on the closing price of CWBC shares of $10.20 on March 31, 2017, was 1.6%.

Stock Repurchase Program

On 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, 2017, 187,569 shares (none in 1Q17) had been cumulatively repurchased (last repurchase was in 3Q16) at an average price of $7.25 per share.

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, the largest publicly traded community bank serving California's Central Coast area of Ventura, Santa Barbara and San Luis Obispo counties.  Community West Bank has seven full-service California branch banking offices, in Goleta, Santa Barbara, Santa Maria, Ventura, Westlake Village, San Luis Obispo and Oxnard. The principal business activities of the Company are Relationship business banking, Manufactured Housing lending and Government Guaranteed lending.

Industry Accolades

In April 2017, Community West was awarded a "Super Premier" rating by The Findley Reports, the highest ranking for a community bank.  For 50 years, The Findley Reports has been recognizing the financial performance of banking institutions in California and the Western United States.  In making their selections, The Findley Reports focuses on these four ratios: growth, return on beginning equity, net operating income as a percentage of average assets, and loan losses as a percentage of gross loans.

In September 2016, Community West was named to Sandler O'Neill and Partners Bank and Thrift Sm-All Stars - Class of 2016.  This award recognized Community West as one of the top 27 best performing small capitalization institutions from a list of publicly traded banks and thrifts in the U.S. with market capitalizations less than $2.5 billion.  In making their selections, Sandler focused on growth, profitability, credit quality and capital strength.

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,
     2017   2016   2016
             
Interest income            
Loans, including fees   $   8,442   $   8,280   $   7,175  
Investment securities and other       261       302       269  
Total interest income       8,703       8,582       7,444  
Interest expense            
Deposits       858       763       651  
Other borrowings and convertible debt       71       57       72  
Total interest expense       929       820       723  
Net interest income       7,774       7,762       6,721  
Provision (credit) for loan losses       144       116       (247 )
Net interest income after provision for loan losses       7,630       7,646       6,968  
Non-interest income            
Other loan fees       303       215       275  
Document processing fees       133       115       115  
Service charges       96       95       90  
Other       109       113       99  
Total non-interest income       641       538       579  
Non-interest expenses            
Salaries and employee benefits        3,931       3,628       3,452  
Occupancy, net       645       633       486  
Professional services       179       220       179  
Data processing       168       280       171  
Depreciation        163       192       149  
Advertising and marketing       156       169       81  
FDIC assessment       110       106       97  
Loan servicing and collection       106       11       179  
Stock-based compensation       84       77       80  
Other        381       554       462  
Total non-interest expenses       5,923       5,870       5,336  
Income before provision for income taxes       2,348       2,314       2,211  
Provision for income taxes       992       974       928  
Net income   $   1,356   $   1,340   $   1,283  
Earnings per share:            
Basic   $   0.17   $   0.16   $   0.16  
Diluted   $   0.16   $   0.16   $   0.15  

 
COMMUNITY WEST BANCSHARES            
CONDENSED CONSOLIDATED BALANCE SHEETS            
(unaudited)            
(in 000's, except per share data)            
             
    March 31,   December 31,   March 31,
      2017       2016       2016  
             
Cash and cash equivalents   $   1,811     $   2,401     $   2,499  
Time and interest-earning deposits in other financial institutions       28,366         31,715         26,538  
Investment securities       35,389         31,683         35,633  
Loans:            
Commercial       103,581         105,290         107,386  
Commercial real estate       303,795         272,142         185,458  
SBA       37,036         36,488         42,890  
Manufactured housing       202,332         194,222         182,018  
Single family real estate       11,728         12,750         17,919  
HELOC       10,462         10,292         10,885  
Other       (388 )       (365 )       425  
Total loans       668,546         630,819         546,981  
             
Loans, net            
Held for sale       59,811         61,416         61,897  
Held for investment       608,735         569,403         485,084  
Less: Allowance for loan losses       (7,785 )       (7,464 )       (6,819 )
Net held for investment       600,950         561,939         478,265  
NET LOANS       660,761         623,355         540,162  
             
Other assets       21,973         21,418         17,923  
             
TOTAL ASSETS   $   748,300     $   710,572     $   622,755  
             
Deposits            
Non-interest-bearing demand   $   102,553     $   100,372     $   70,587  
Interest-bearing demand       262,008         253,023         250,404  
Savings       14,072         14,007         14,294  
Certificates of deposit ($250,000 or more)       80,293         77,509         67,995  
Other certificates of deposit       181,204         167,325         142,795  
Total deposits       640,130         612,236         546,075  
Other borrowings       37,000         29,000         10,500  
Other liabilities       4,603         4,000         3,741  
TOTAL LIABILITIES       681,733         645,236         560,316  
             
Stockholders' equity       66,567         65,336         62,439  
             
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY            
  $   748,300     $   710,572     $   622,755  
             
Shares outstanding       8,103         8,096         8,103  
             
Book value per common share   $   8.22     $   8.07     $   7.71  

 
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, 2017   Dec. 31, 2016   Mar. 31, 2016
Return on average common equity    8.28 %     8.17 %     8.23 %
Return on average assets    0.76 %     0.78 %     0.83 %
Efficiency ratio   70.39 %     70.72 %     73.10 %
Net interest margin   4.45 %     4.63 %     4.45 %
           
  Three Months Ended   Three Months Ended   Three Months Ended
AVERAGE BALANCES Mar. 31, 2017   Dec. 31, 2016   Mar. 31, 2016
Average assets $   721,630     $   679,201     $   618,283  
Average earning assets     708,751         666,280         607,872  
Average total loans     650,784         607,989         543,555  
Average deposits     626,876         598,197         540,539  
Average common equity     66,381         65,247         62,678  
           
EQUITY ANALYSIS Mar. 31, 2017   Dec. 31, 2016   Mar. 31, 2016
Total common equity $   66,567     $   65,336     $   62,439  
Common stock outstanding     8,103         8,096         8,103  
           
Book value per common share $   8.22     $   8.07     $   7.71  
           
ASSET QUALITY Mar. 31, 2017   Dec. 31, 2016   Mar. 31, 2016
Nonaccrual loans, net $   2,302     $   2,375     $   4,807  
Nonaccrual loans, net/total loans   0.34 %     0.38 %     0.88 %
Other assets acquired through foreclosure, net $   145     $   137     $   176  
           
Nonaccrual loans plus other assets acquired through foreclosure, net $   2,447     $   2,512     $   4,983  
Nonaccrual loans plus other assets acquired through foreclosure, net/total assets   0.33 %     0.35 %     0.80 %
Net loan (recoveries)/charge-offs in the quarter $   (177 )   $   (158 )   $   (150 )
Net (recoveries)/charge-offs in the quarter/total loans    (0.03 %)     (0.03 %)     (0.03 %)
           
Allowance for loan losses $   7,785     $   7,464     $   6,819  
Plus: Reserve for undisbursed loan commitments     113         125         74  
Total allowance for credit losses $   7,898     $   7,589     $   6,893  
Allowance for loan losses/total loans held for investment   1.28 %     1.31 %     1.41 %
Allowance for loan losses/nonaccrual loans, net   338.18 %     314.27 %     141.86 %
           
Community West Bank *          
Tier 1 leverage ratio   9.41 %     10.08 %     10.55 %
Tier 1 capital ratio   10.38 %     11.04 %     12.59 %
Total capital ratio   11.60 %     12.27 %     13.84 %
           
INTEREST SPREAD ANALYSIS Mar. 31, 2017   Dec. 31, 2016   Mar. 31, 2016
Yield on total loans   5.26 %     5.42 %     5.31 %
Yield on investments   2.48 %     3.23 %     2.58 %
Yield on interest earning deposits   0.74 %     0.43 %     0.57 %
Yield on earning assets   4.98 %     5.12 %     4.93 %
           
Cost of interest-bearing deposits   0.66 %     0.60 %     0.56 %
Cost of total deposits   0.56 %     0.54 %     0.48 %
Cost of borrowings   1.20 %     2.00 %     2.76 %
Cost of interest-bearing liabilities   0.68 %     0.63 %     0.61 %
           
* Capital ratios are preliminary until the Call Report is filed.          
           

Transmitted on Globe Newswire on April 28, 2017 at 6:00 a.m. PDT.

Contact: Susan C.Thompson, EVP & CFO805.692.5821www.communitywestbank.com