Community West Bancshares (Community West or the Company), (NASDAQ:
CWBC), parent company of Community West Bank (the “Bank”), today
reported net income increased to $2.9 million, or $0.33 per diluted
share, for the third quarter of 2020 (3Q20), compared to $1.2
million, or $0.14 per diluted share, for the second quarter of 2020
(2Q20), and compared to $2.2 million, or $0.25 per diluted share,
for the third quarter of 2019 (3Q19). For the first nine months of
2020, net income increased 7.1% to $5.6 million, or $0.66 per
diluted share, compared to $5.2 million, or $0.61 per diluted
share, for the first nine months of 2019.
Third Quarter 2020 Financial
Highlights:
- Net income of $2.9 million, or
$0.33 per diluted share, in 3Q20, compared to $1.2 million, or
$0.14 per diluted share in 2Q20, and $2.2 million, or $0.25 per
diluted share in 3Q19.
- Net interest income was $9.6
million for the quarter, compared to $8.8 million for both 2Q20 and
3Q19, respectively.
- Provision for loan losses was
$113,000 for the quarter, compared to $762,000 for 2Q20, and a
credit to the provision for loan losses of $75,000 for 3Q19. The
resulting allowance was 1.24% of total loans held for investment at
September 30, 2020 (1.37% of total loans held for investment at
September 30, 2020 excluding the $75.7 million of Paycheck
Protection Program (“PPP”) loans which are 100% guaranteed by the
Small Business Administration (“SBA”)).*
- Net interest margin was 3.76% for
3Q20, compared to 3.72% for 2Q20, and 4.10% for 3Q19.
- Total demand deposits increased
$41.2 million to $545.2 million at September 30, 2020, compared to
$504.1 million at June 30, 2020, and increased $97.2 million
compared to $448.0 million at September 30, 2019. Total demand
deposits represented 72.8% of total deposits at September 30, 2020,
compared to 67.2% at June 30, 2020, and 58.8% at September 30,
2019.
- Total loans were $854.5 million at
September 30, 2020, compared to $856.0 million at June 30, 2020,
and $789.5 million at September 30, 2019.
- Book value per common share
increased to $10.23 at September 30, 2020, compared to $9.93 at
June 30, 2020, and $9.40 at September 30, 2019.
- Total risked-based capital improved
to 12.21% for the Bank at September 30, 2020, compared to 11.63% at
June 30, 2020 and 11.18% at September 30, 2019.
- Net non-accrual loans were $2.3
million at September 30, 2020 compared to $2.6 million and at June
30, 2020, and $5.5 million at September 30, 2019.
- Other assets acquired through
foreclosure, net, was $2.7 million at September 30, 2020 and at
June 30, 2020, compared to $317,000 at September 30, 2019.
*Non GAAP
COVID-19 Pandemic Update
“We produced strong earnings for the third
quarter, with solid top and bottom line results, core deposit
growth and a slightly expanded net interest margin,” stated Martin
E. Plourd, President and Chief Executive Officer. “Additionally, we
generated 517 SBA PPP loans totaling $75.7 million to our clients
since the program’s inception in April to the conclusion of the
program on August 8, 2020. We are now starting to process
applications for PPP loan forgiveness for clients. We anticipate
the timing of such forgiveness to occur during the fourth quarter
2020 and 2021.”
“The effect of the pandemic on our employees,
clients and communities remains our primary concern,” Plourd
continued. “Since the start of the pandemic, we have maintained all
branch activity, taking conservative measures to keep our
employees, clients, and communities safe. We remain focused on
assessing the risks in our loan portfolio and working with our
clients to minimize losses, and have implemented a loan
modification program to assist clients impacted by the pandemic
with loan deferrals. The Bank initially granted 90 or 180 day
deferral requests under the Disaster Relief Program beginning in
April. By late May, as our local markets began easing restrictions,
including the reopening of some businesses, the volume of requests
had significantly diminished. At that time, we reverted to a
standard 90-day payment deferral, with a longer term considered an
exception and requiring additional approval. As a result, we have a
mixture of payment deferral terms, with a significant portion of
loans coming off deferrals each week. We are carefully monitoring
these clients closely to make sure payments resume on schedule,”
said Plourd.
The table below shows the breakdown of current
deferrals by loan type:
|
October 20, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
Loan segment |
Count |
|
Balance |
|
Count |
|
Balance |
|
Count |
|
Balance |
|
|
|
(in thousands) |
|
|
|
(in thousands) |
|
|
|
(in thousands) |
Manufactured housing |
74 |
$ |
10,593 |
|
116 |
$ |
15,984 |
|
142 |
$ |
19,903 |
Commercial real estate |
37 |
|
74,969 |
|
60 |
|
104,492 |
|
78 |
|
124,629 |
Commercial |
16 |
|
6,590 |
|
24 |
|
8,520 |
|
36 |
|
10,825 |
SBA |
0 |
|
0 |
|
0 |
|
0 |
|
1 |
|
17 |
HELOC |
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
0 |
Single family real estate |
3 |
|
716 |
|
3 |
|
717 |
|
5 |
|
1,027 |
Consumer |
0 |
|
0 |
|
0 |
|
0 |
|
0 |
|
0 |
Total pandemic deferments |
130 |
$ |
92,868 |
|
203 |
$ |
129,713 |
|
262 |
$ |
156,401 |
“Additionally, we are optimistic with the loan
resumption progress, as approximately 88% of loans have resumed
payments as deferral periods end,” Plourd continued.
The table below reflects the high risk industry
loans by type at September 30, 2020. The industries in our markets
most heavily impacted include retail, healthcare, hospitality,
schools and energy. The Company’s management team continues to
evaluate the loans related to the affected industries and at
September 30, 2020, the Bank’s loans to these industries were $185
million, which is 21.7% of its $854.5 million loan portfolio.
Of the selected industry loans, $1.6 million or
0.86% are on non-accrual. Also, of the selected industries loans,
the classified loans are $17.1 million or 9.26%. The Bank has
accommodated $75.2 million of these loans with payment deferrals or
40.65% of the selected industries. Additional detail by industry at
September 30, 2020 is included in the table below.
Sectors Under Focus (Excluding PPP Loans) |
As of 9/30/20 (in thousands) |
|
Loans Outstanding (includes $11 million of
guarantees) |
|
$ Non-accrual |
% Non-accrual |
|
$ Classified |
% Classified |
|
$ Deferrals |
% Deferral |
Healthcare |
$ |
49,080 |
$ |
1,571 |
3.20 |
% |
$ |
1,928 |
3.93 |
% |
$ |
12,181 |
24.82 |
% |
Senior/Assted Living Facilities |
$ |
23,219 |
$ |
0 |
0.00 |
% |
$ |
0 |
0.00 |
% |
$ |
0 |
0.00 |
% |
Medical Offices |
$ |
18,736 |
$ |
0 |
0.00 |
% |
$ |
283 |
1.51 |
% |
$ |
9,736 |
51.96 |
% |
General Healthcare |
$ |
7,125 |
$ |
1,571 |
22.05 |
% |
$ |
1,644 |
23.07 |
% |
$ |
2,445 |
34.32 |
% |
Hospitality |
$ |
54,844 |
$ |
2 |
0.00 |
% |
$ |
5,366 |
9.78 |
% |
$ |
39,842 |
72.65 |
% |
Lodging |
$ |
40,505 |
$ |
0 |
0.00 |
% |
$ |
2,609 |
6.44 |
% |
$ |
34,534 |
85.26 |
% |
Restaurants |
$ |
11,025 |
$ |
2 |
0.02 |
% |
$ |
2,757 |
25.01 |
% |
$ |
5,308 |
48.15 |
% |
RV-Mobile Home Parks |
$ |
3,314 |
$ |
0 |
0.00 |
% |
$ |
0 |
0.00 |
% |
$ |
0 |
0.00 |
% |
Retail Commercial Real Estate |
$ |
57,173 |
$ |
21 |
0.04 |
% |
$ |
9,701 |
16.97 |
% |
$ |
20,360 |
35.61 |
% |
Retail Services |
$ |
22,033 |
$ |
0 |
0.00 |
% |
$ |
19 |
0.09 |
% |
$ |
2,827 |
12.83 |
% |
Schools |
$ |
1,189 |
$ |
0 |
0.00 |
% |
$ |
0 |
0.00 |
% |
$ |
0 |
0.00 |
% |
Energy |
$ |
681 |
$ |
0 |
0.00 |
% |
$ |
114 |
16.74 |
% |
$ |
0 |
0.00 |
% |
Total |
$ |
185,000 |
$ |
1,594 |
0.86 |
% |
$ |
17,128 |
9.26 |
% |
$ |
75,210 |
40.65 |
% |
Income Statement
Net interest income was $9.6 million in 3Q20
compared to $8.8 million in both 2Q20 and in 3Q19, primarily due to
decreased deposit costs. In the first nine months of 2020, net
interest income increased 5.0% to $26.8 million, compared to $25.5
million in the first nine months of 2019.
Non-interest income increased 111% to $1.4
million in 3Q20, compared to $640,000 in 2Q20, and increased 109%
compared to $647,000 in 3Q19. Other loan fees were $539,000 for
3Q20, a 90.5% increase compared to 2Q20, and a 78.5% increase
compared to 3Q19. Gain on sale of loans was $424,000 in 3Q20
compared to $97,000 in the preceding quarter. There were no gains
on sales of loans in 3Q19. Non-interest income increased 51.4% to
$2.9 million in the first nine months of 2020 compared to $1.9
million in the first nine months of 2019.
Net interest margin was 3.76% in 3Q20, compared
to 3.72% in 2Q20, and 4.10% in 3Q19. “Our continued focus on
reducing our cost of funds contributed to the net interest margin
expansion during the third quarter,” said Susan C. Thompson,
Executive Vice President and Chief Financial Officer. “The
Company’s cost of funds for 3Q20 improved 31 basis points to 0.83%
compared to 1.14% for 2Q20 and improved by 93 basis points compared
to 3Q19.” In the first nine months of 2020, the net interest margin
was 3.81%, compared to 4.06% in the prior year period.
The Company recorded a provision for loan losses
of $113,000 in 3Q20. This compares to a provision for loan losses
of $762,000 in 2Q20, and a credit to the provision for loan losses
of $75,000 in 3Q19. In the first nine months of 2020, the provision
for loan losses totaled $1.3 million, compared to $45,000 in the
first nine months of 2019. The increase in the provision in the
year-to-date period was to reflect the estimated losses due to the
current economic uncertainties resulting from the pandemic
currently masked by loan deferrals, PPP loans and other stimulus
subsidies.
Non-interest expense totaled $6.7 million in
3Q20, compared to $7.0 million in the preceding quarter and $6.5
million in 3Q19. In the first nine months of 2020, non-interest
expense was $20.5 million, compared to $19.9 million in the first
nine months of 2019.
Balance Sheet
Total assets were down slightly to $1.04 billion
at September 30, 2020, compared to $1.06 billion at June 30, 2020,
and increased $138.8 million, or 15.4%, compared to $903.3 million
at September 30, 2019. Total loans were $854.5 million at September
30, 2020, compared to $856.0 million at June 30, 2020, and
increased $65.0 million, or 8.2% compared to $789.5 million at
September 30, 2019.
Commercial real estate loans outstanding (which
include SBA 504, construction and land) were up modestly from year
ago levels to $394.5 million at September 30, 2020 and comprise
46.2% of the total loan portfolio. Manufactured housing loans were
up 8.8% from year ago levels to $275.5 million and represent 32.2%
of total loans. SBA PPP loans originated during 2Q20 and 3Q20 were
$75.7 million at September 30, 2020 and represent 8.9% of total
loans. Commercial loans (which include agriculture loans) were down
23.6% from year ago levels to $84.1 million and represent 9.8% of
the total loan portfolio. The majority of this decrease was in the
agriculture portfolio as the Company has switched its production
focus from on-balance sheet to off-balance sheet Farmer Mac
loans.
Total deposits were $749.2 million at September
30, 2020, compared to $750.2 million at June 30, 2020, and $761.7
million at September 30, 2019. Non-interest-bearing demand deposits
were $190.1 million at September 30, 2020, a slight decrease
compared to $192.8 million at June 30, 2020, and a $75.8 million
increase compared to $114.4 million at September 30, 2019.
Interest-bearing demand deposits increased $43.8 million to $355.1
million at September 30, 2020, compared to $311.3 million at June
30, 2020, and increased $21.4 million compared to $333.7 million at
September 30, 2019. Certificates of deposit, which include brokered
deposits, decreased $42.8 million during the quarter to $185.4
million at September 30, 2020, compared to $228.2 million at June
30, 2020 and decreased $112.8 million compared to $298.1 million at
September 30, 2019. The reduction in deposits was due to divesting
of some high-priced municipal and brokered certificate of deposits
funding to lower cost funding sources.
Stockholders’ equity increased to $86.7 million
at September 30, 2020, compared to $84.1 million at June 30, 2020,
and $79.6 million at September 30, 2019. Book value per
common share increased to $10.23 at September 30, 2020, compared to
$9.93 at June 30, 2020, and $9.40 at September 30, 2019. In an
abundance of caution, the Company drew down $10 million on its line
of credit in 1Q20, which can be down streamed to the Bank as
additional capital if needed in the future.
Credit Quality
“We are closely monitoring credit metrics and
performing stress testing on our loan portfolio. In addition,
resources have been reallocated to credit administration to closely
analyze higher risk segments within the portfolio, as well as
monitor and track loan payment deferrals and client liquidity,”
said Plourd. “Based on our capital levels, company resources,
current economic climate, and underwriting policies, we expect to
be able to manage the economic risks and uncertainties associated
with the COVID-19 pandemic and remain adequately capitalized.”
The Company recorded a provision for loan losses
of $113,000 in 3Q20. This compares to a provision for loan losses
of $762,000 in 2Q20, and a credit to the provision for loan losses
of $75,000 in 3Q19. The allowance for credit losses, including the
reserve for undisbursed loans, was $10.3 million, or 1.24% of total
loans held for investment, at September 30, 2020. The allowance for
loan losses was 1.37% of total loans held for investment at
September 30, 2020 when excluding the $75.7 million of PPP loans,
which are 100% guaranteed by the SBA. Net non-accrual loans, plus
net other assets acquired through foreclosure, were $5.0 million at
September 30, 2020, compared to $5.3 million at June 30, 2020, and
$5.8 million at September 30, 2019.
Net non-accrual loans totaled $2.3 million at
September 30, 2020, compared to $2.6 million at June 30, 2020, and
$5.5 million at September 30, 2019. Of the $2.3 million of net
non-accrual loans at September 30, 2020, $1.5 million were
commercial loans, $0.6 million were manufactured housing loans,
$0.1 million were commercial real estate loans and $0.1 million
were SBA loans.
There was $2.7 million in other assets acquired
through foreclosure as of September 30, 2020 and at June 30, 2020.
This compares to $317,000 of other assets acquired through
foreclosure at September 30, 2019. The majority of this balance
relates to one property in the amount of $2.5 million.
Cash Dividend Declared
The Company’s Board of Directors declared a cash
dividend of $0.05 per common share, payable November 30, 2020 to
common shareholders of record on November 13, 2020.
Stock Repurchase Program
The Company did not repurchase shares during the
third quarter of 2020, leaving $1.4 million available under the
previously announced repurchase program. The Company has suspended
its repurchase program until further notice.
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, San
Luis Obispo, Oxnard and Paso Robles. The principal business
activities of the Company are Relationship Banking, Manufactured
Housing lending and Government Guaranteed lending.
Industry
Accolades
In April 2020, Community West Bank was awarded a
“Premier” rating by The Findley Reports. For 51 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. We are also rated 5 star Superior by Bauer
Financial.
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 |
|
Nine Months Ended |
|
|
September 30, |
|
June 30, |
|
September 30, |
September 30, |
September 30, |
|
|
|
2020 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
10,909 |
|
|
$ |
10,585 |
|
|
$ |
11,306 |
|
|
$ |
32,158 |
|
|
$ |
32,754 |
|
Investment securities and other |
|
|
207 |
|
|
|
192 |
|
|
|
413 |
|
|
|
710 |
|
|
|
1,357 |
|
Total interest income |
|
|
11,116 |
|
|
|
10,777 |
|
|
|
11,719 |
|
|
|
32,868 |
|
|
|
34,111 |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
1,046 |
|
|
|
1,500 |
|
|
|
2,615 |
|
|
|
4,668 |
|
|
|
7,642 |
|
Other borrowings |
|
|
518 |
|
|
|
496 |
|
|
|
306 |
|
|
|
1,404 |
|
|
|
950 |
|
Total interest expense |
|
|
1,564 |
|
|
|
1,996 |
|
|
|
2,921 |
|
|
|
6,072 |
|
|
|
8,592 |
|
Net interest income |
|
|
9,552 |
|
|
|
8,781 |
|
|
|
8,798 |
|
|
|
26,796 |
|
|
|
25,519 |
|
Provision (credit) for loan losses |
|
|
113 |
|
|
|
762 |
|
|
|
(75 |
) |
|
|
1,267 |
|
|
|
45 |
|
Net interest income after provision for loan losses |
|
|
9,439 |
|
|
|
8,019 |
|
|
|
8,873 |
|
|
|
25,529 |
|
|
|
25,474 |
|
Non-interest income |
|
|
|
|
|
|
|
|
|
|
Other loan fees |
|
|
539 |
|
|
|
283 |
|
|
|
302 |
|
|
|
1,163 |
|
|
|
883 |
|
Gains from loan sales, net |
|
|
424 |
|
|
|
97 |
|
|
|
- |
|
|
|
711 |
|
|
|
- |
|
Document processing fees |
|
|
152 |
|
|
|
108 |
|
|
|
96 |
|
|
|
384 |
|
|
|
307 |
|
Service charges |
|
|
75 |
|
|
|
62 |
|
|
|
129 |
|
|
|
271 |
|
|
|
407 |
|
Other |
|
|
162 |
|
|
|
90 |
|
|
|
120 |
|
|
|
413 |
|
|
|
346 |
|
Total non-interest income |
|
|
1,352 |
|
|
|
640 |
|
|
|
647 |
|
|
|
2,942 |
|
|
|
1,943 |
|
Non-interest expenses |
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
4,402 |
|
|
|
4,574 |
|
|
|
4,254 |
|
|
|
13,374 |
|
|
|
12,953 |
|
Occupancy, net |
|
|
751 |
|
|
|
776 |
|
|
|
788 |
|
|
|
2,285 |
|
|
|
2,338 |
|
Professional services |
|
|
460 |
|
|
|
559 |
|
|
|
341 |
|
|
|
1,402 |
|
|
|
1,127 |
|
Data processing |
|
|
258 |
|
|
|
260 |
|
|
|
215 |
|
|
|
801 |
|
|
|
640 |
|
Depreciation |
|
|
205 |
|
|
|
206 |
|
|
|
219 |
|
|
|
619 |
|
|
|
650 |
|
FDIC assessment |
|
|
123 |
|
|
|
133 |
|
|
|
(15 |
) |
|
|
400 |
|
|
|
309 |
|
Advertising and marketing |
|
|
145 |
|
|
|
265 |
|
|
|
187 |
|
|
|
563 |
|
|
|
546 |
|
Stock-based compensation |
|
|
71 |
|
|
|
95 |
|
|
|
90 |
|
|
|
251 |
|
|
|
282 |
|
Other |
|
|
307 |
|
|
|
135 |
|
|
|
385 |
|
|
|
759 |
|
|
|
1,096 |
|
Total non-interest expenses |
|
|
6,722 |
|
|
|
7,003 |
|
|
|
6,464 |
|
|
|
20,454 |
|
|
|
19,941 |
|
Income before provision for income taxes |
|
|
4,069 |
|
|
|
1,656 |
|
|
|
3,056 |
|
|
|
8,017 |
|
|
|
7,476 |
|
Provision for income taxes |
|
|
1,209 |
|
|
|
496 |
|
|
|
902 |
|
|
|
2,399 |
|
|
|
2,232 |
|
Net income |
|
$ |
2,860 |
|
|
$ |
1,160 |
|
|
$ |
2,154 |
|
|
$ |
5,618 |
|
|
$ |
5,244 |
|
Earnings per share: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.34 |
|
|
$ |
0.14 |
|
|
$ |
0.25 |
|
|
$ |
0.66 |
|
|
$ |
0.62 |
|
Diluted |
|
$ |
0.33 |
|
|
$ |
0.14 |
|
|
$ |
0.25 |
|
|
$ |
0.66 |
|
|
$ |
0.61 |
|
|
|
|
|
|
|
|
|
|
|
|
COMMUNITY WEST BANCSHARES |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(unaudited) |
(in 000's, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
September 30, |
June 30, |
|
September 30, |
|
December 31, |
|
|
|
2020 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
4,974 |
|
|
$ |
4,679 |
|
|
$ |
1,758 |
|
|
$ |
2,539 |
|
Interest-earning deposits in other financial institutions |
|
|
124,590 |
|
|
|
142,823 |
|
|
|
54,489 |
|
|
|
80,122 |
|
Investment securities |
|
|
23,562 |
|
|
|
24,221 |
|
|
|
28,707 |
|
|
|
25,563 |
|
Loans: |
|
|
|
|
|
|
|
|
Commercial |
|
|
84,133 |
|
|
|
95,114 |
|
|
|
110,153 |
|
|
|
101,485 |
|
Commercial real estate |
|
|
394,547 |
|
|
|
392,789 |
|
|
|
392,288 |
|
|
|
385,642 |
|
SBA |
|
|
12,547 |
|
|
|
13,013 |
|
|
|
17,018 |
|
|
|
14,777 |
|
Paycheck Protection Program (PPP) |
|
|
75,683 |
|
|
|
75,149 |
|
|
|
- |
|
|
|
- |
|
Manufactured housing |
|
|
275,472 |
|
|
|
267,343 |
|
|
|
253,229 |
|
|
|
257,247 |
|
Single family real estate |
|
|
10,232 |
|
|
|
11,078 |
|
|
|
11,936 |
|
|
|
11,668 |
|
HELOC |
|
|
3,857 |
|
|
|
3,918 |
|
|
|
4,847 |
|
|
|
4,531 |
|
Other (1) |
|
|
(2,001 |
) |
|
|
(2,375 |
) |
|
|
(14 |
) |
|
|
213 |
|
Total loans |
|
|
854,470 |
|
|
|
856,029 |
|
|
|
789,457 |
|
|
|
775,563 |
|
|
|
|
|
|
|
|
|
|
Loans, net |
|
|
|
|
|
|
|
|
Held for sale |
|
|
32,562 |
|
|
|
35,090 |
|
|
|
44,816 |
|
|
|
42,046 |
|
Held for investment |
|
|
821,908 |
|
|
|
820,939 |
|
|
|
744,641 |
|
|
|
733,517 |
|
Less: Allowance for loan losses |
|
|
(10,197 |
) |
|
|
(10,008 |
) |
|
|
(8,868 |
) |
|
|
(8,717 |
) |
Net held for investment |
|
|
811,711 |
|
|
|
810,931 |
|
|
|
735,773 |
|
|
|
724,800 |
|
NET LOANS |
|
|
844,273 |
|
|
|
846,021 |
|
|
|
780,589 |
|
|
|
766,846 |
|
|
|
|
|
|
|
|
|
|
Other assets |
|
|
44,700 |
|
|
|
43,103 |
|
|
|
37,609 |
|
|
|
38,800 |
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
1,042,099 |
|
|
$ |
1,060,847 |
|
|
$ |
903,252 |
|
|
$ |
913,870 |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
Non-interest-bearing demand |
|
$ |
190,133 |
|
|
$ |
192,806 |
|
|
$ |
114,366 |
|
|
$ |
110,843 |
|
Interest-bearing demand |
|
|
355,111 |
|
|
|
311,266 |
|
|
|
333,679 |
|
|
|
314,278 |
|
Savings |
|
|
18,555 |
|
|
|
17,862 |
|
|
|
15,481 |
|
|
|
15,689 |
|
Certificates of deposit ($250,000 or more) |
|
|
81,426 |
|
|
|
86,046 |
|
|
|
90,298 |
|
|
|
96,431 |
|
Other certificates of deposit |
|
|
103,955 |
|
|
|
142,178 |
|
|
|
207,848 |
|
|
|
213,693 |
|
Total deposits |
|
|
749,180 |
|
|
|
750,158 |
|
|
|
761,672 |
|
|
|
750,934 |
|
Other borrowings |
|
|
190,103 |
|
|
|
210,103 |
|
|
|
45,000 |
|
|
|
65,000 |
|
Other liabilities |
|
|
16,099 |
|
|
|
16,493 |
|
|
|
16,984 |
|
|
|
15,958 |
|
TOTAL LIABILITIES |
|
|
955,382 |
|
|
|
976,754 |
|
|
|
823,656 |
|
|
|
831,892 |
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
86,717 |
|
|
|
84,093 |
|
|
|
79,596 |
|
|
|
81,978 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
$ |
1,042,099 |
|
|
$ |
1,060,847 |
|
|
$ |
903,252 |
|
|
$ |
913,870 |
|
|
|
|
|
|
|
|
|
|
Common shares outstanding |
|
|
8,473 |
|
|
|
8,472 |
|
|
|
8,467 |
|
|
|
8,472 |
|
|
|
|
|
|
|
|
|
|
Book value per common share |
|
$ |
10.23 |
|
|
$ |
9.93 |
|
|
$ |
9.40 |
|
|
$ |
9.68 |
|
|
|
|
|
|
|
|
|
|
(1) Includes consumer, other loans, securitized loans, and deferred
fees |
|
|
|
|
|
|
|
|
|
ADDITIONAL FINANCIAL INFORMATION |
(Dollars and shares in thousands except per share
amounts)(Unaudited) |
|
|
Three MonthsEnded |
|
Three MonthsEnded |
|
Three MonthsEnded |
|
Nine MonthsEnded |
|
Nine MonthsEnded |
PERFORMANCE MEASURES AND RATIOS |
September 30,2020 |
|
June 30,2020 |
|
September 30,2019 |
|
September 30,2020 |
|
September 30,2019 |
Return on average common equity |
|
13.33 |
% |
|
|
5.57 |
% |
|
|
10.85 |
% |
|
|
13.45 |
% |
|
|
9.03 |
% |
Return on average assets |
|
1.09 |
% |
|
|
0.48 |
% |
|
|
0.97 |
% |
|
|
1.16 |
% |
|
|
0.81 |
% |
Efficiency ratio |
|
61.65 |
% |
|
|
74.33 |
% |
|
|
68.44 |
% |
|
|
68.78 |
% |
|
|
72.61 |
% |
Net interest margin |
|
3.76 |
% |
|
|
3.72 |
% |
|
|
4.10 |
% |
|
|
3.81 |
% |
|
|
4.06 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three MonthsEnded |
|
Three MonthsEnded |
|
Three MonthsEnded |
|
Nine MonthsEnded |
Nine MonthsEnded |
AVERAGE BALANCES |
September 30, 2020 |
|
June 30,2020 |
|
September 30,2019 |
|
September 30,2020 |
|
September 30,2019 |
Average assets |
$ |
1,044,807 |
|
|
$ |
978,250 |
|
|
$ |
877,505 |
|
|
$ |
970,099 |
|
|
$ |
867,322 |
|
Average earning assets |
|
1,011,765 |
|
|
|
949,149 |
|
|
|
850,948 |
|
|
|
939,959 |
|
|
|
841,391 |
|
Average total loans |
|
854,273 |
|
|
|
839,625 |
|
|
|
788,965 |
|
|
|
827,244 |
|
|
|
778,425 |
|
Average deposits |
|
733,486 |
|
|
|
745,644 |
|
|
|
735,545 |
|
|
|
732,449 |
|
|
|
726,356 |
|
Average common equity |
|
85,328 |
|
|
|
83,757 |
|
|
|
78,763 |
|
|
|
83,972 |
|
|
|
77,633 |
|
|
|
|
|
|
|
|
|
|
|
EQUITY ANALYSIS |
September 30,2020 |
|
June 30,2020 |
|
September 30,2019 |
|
|
|
|
Total common equity |
$ |
86,717 |
|
|
$ |
84,093 |
|
|
$ |
79,596 |
|
|
|
|
|
Common stock outstanding |
|
8,473 |
|
|
|
8,472 |
|
|
|
8,467 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value per common share |
$ |
10.23 |
|
|
$ |
9.93 |
|
|
$ |
9.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY |
September 30,2020 |
|
June 30,2020 |
|
September 30,2019 |
|
|
|
|
Nonaccrual loans, net |
$ |
2,258 |
|
|
$ |
2,640 |
|
|
$ |
5,476 |
|
|
|
|
|
Nonaccrual loans, net/total loans |
|
0.26 |
% |
|
|
0.31 |
% |
|
|
0.69 |
% |
|
|
|
|
Other assets acquired through foreclosure, net |
$ |
2,707 |
|
|
$ |
2,707 |
|
|
$ |
317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual loans plus other assets acquired through foreclosure,
net |
$ |
4,965 |
|
|
$ |
5,347 |
|
|
$ |
5,793 |
|
|
|
|
|
Nonaccrual loans plus other assets acquired through foreclosure,
net/total assets |
|
0.48 |
% |
|
|
0.50 |
% |
|
|
0.64 |
% |
|
|
|
|
Net loan (recoveries)/charge-offs in the quarter |
$ |
(76 |
) |
|
$ |
(79 |
) |
|
$ |
(69 |
) |
|
|
|
|
Net (recoveries)/charge-offs in the quarter/total loans |
|
(0.01 |
%) |
|
|
(0.01 |
%) |
|
|
(0.01 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
$ |
10,197 |
|
|
$ |
10,008 |
|
|
$ |
8,868 |
|
|
|
|
|
Plus: Reserve for undisbursed loan commitments |
|
92 |
|
|
|
91 |
|
|
|
81 |
|
|
|
|
|
Total allowance for credit losses |
$ |
10,289 |
|
|
$ |
10,099 |
|
|
$ |
8,949 |
|
|
|
|
|
Allowance for loan losses/total loans held for investment |
|
1.24 |
% |
|
|
1.22 |
% |
|
|
1.19 |
% |
|
|
|
|
Allowance for loan losses/total loans held for investment excluding
PPP loans |
|
1.37 |
% |
|
|
1.34 |
% |
|
|
1.19 |
% |
|
|
|
|
Allowance for loan losses/nonaccrual loans, net |
|
451.59 |
% |
|
|
379.09 |
% |
|
|
161.94 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Community West Bank * |
|
|
|
|
|
|
|
|
|
Community bank leverage ratio |
|
8.79 |
% |
|
|
8.94 |
% |
|
N/A |
|
|
|
|
|
Tier 1 leverage ratio |
|
8.79 |
% |
|
|
8.94 |
% |
|
|
9.02 |
% |
|
|
|
|
Tier 1 capital ratio |
|
10.96 |
% |
|
|
10.38 |
% |
|
|
10.04 |
% |
|
|
|
|
Total capital ratio |
|
12.21 |
% |
|
|
11.63 |
% |
|
|
11.18 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST SPREAD ANALYSIS |
September 30,2020 |
|
June 30,2020 |
|
September 30,2019 |
|
|
|
|
Yield on total loans |
|
5.08 |
% |
|
|
5.07 |
% |
|
|
5.69 |
% |
|
|
|
|
Yield on investments |
|
1.89 |
% |
|
|
1.88 |
% |
|
|
3.06 |
% |
|
|
|
|
Yield on interest earning deposits |
|
0.23 |
% |
|
|
0.29 |
% |
|
|
2.14 |
% |
|
|
|
|
Yield on earning assets |
|
4.37 |
% |
|
|
4.57 |
% |
|
|
5.46 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of interest-bearing deposits |
|
0.77 |
% |
|
|
1.06 |
% |
|
|
1.69 |
% |
|
|
|
|
Cost of total deposits |
|
0.57 |
% |
|
|
0.81 |
% |
|
|
1.41 |
% |
|
|
|
|
Cost of borrowings |
|
0.98 |
% |
|
|
1.50 |
% |
|
|
2.64 |
% |
|
|
|
|
Cost of interest-bearing liabilities |
|
0.83 |
% |
|
|
1.14 |
% |
|
|
1.76 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Capital ratios are preliminary until the Call Report is
filed. |
|
|
|
|
|
|
|
|
|
|
Contact:Susan C. Thompson, EVP &
CFO805.692.5821www.communitywestbank.com
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