Community West Bancshares (Community West or the Company), (NASDAQ:
CWBC), parent company of Community West Bank (the “Bank”), today
reported net income of $2.6 million, or $0.31 per diluted share,
for the fourth quarter of 2020 (4Q20), compared to $2.9 million, or
$0.33 per diluted share, for the third quarter of 2020 (3Q20), and
$2.7 million, or $0.32 per diluted share, for the fourth quarter of
2019 (4Q19). For the full year 2020, net income increased 3.5% to
$8.2 million, or $0.97 per diluted share, compared to $8.0 million,
or $0.93 per diluted share, in 2019.
Fourth Quarter & Year over Year 2020
Financial Highlights:
- Net income of $2.6 million, or
$0.31 per diluted share in 4Q20, compared to $2.9 million, or $0.33
per diluted share in 3Q20, and $2.7 million, or $0.32 per diluted
share in 4Q19.
- Net interest income was $9.8
million for the quarter, compared to $9.6 million for 3Q20 and $8.8
million in 4Q19.
- A provision credit for loan losses
of $44,000 for the quarter, compared to a provision for loan losses
of $113,000 for 3Q20, and a provision credit for loan losses of
$210,000 for 4Q19. Total provision for 2020 was $2.1 million
compared to 2019 which was a provision credit of $165,000. The
resulting allowance was 1.23% of total loans held for investment at
December 31, 2020, and 1.35% of total loans held for investment
excluding the $69.5 million of Paycheck Protection Program (“PPP”)
loans at December 31, 2020, which are 100% guaranteed by the Small
Business Administration (“SBA”).*
- Net interest margin improved to
4.13% for 4Q20, compared to 3.76% for 3Q20, and 4.07% for
4Q19.
- Total demand deposits increased
$34.7 million to $579.9 million at December 31, 2020, compared to
$545.2 million at September 30, 2020, and increased $154.8 million
compared to $425.1 million at December 31, 2019. Total demand
deposits represented 75.7% of total deposits at December 31, 2020,
compared to 72.8% at September 30, 2020, and 56.6% at December 31,
2019.
- Total loans were $857.6 million at
December 31, 2020, compared to $854.5 million at September 30,
2020, and $775.6 million at December 31, 2019.
- Book value per common share
increased to $10.50 at December 31, 2020, compared to $10.23 at
September 30, 2020, and $9.68 at December 31, 2019.
- The Bank’s community bank leverage
ratio (CBLR) improved to 9.29% at December 31, 2020, compared to
8.79% at September 30, 2020. The CBLR ratio was adopted on January
1, 2020 and did not apply at December 31, 2019.
- Net non-accrual loans were $3.7
million at December 31, 2020 compared to $2.3 million at September
30, 2020, and $2.4 million at December 31, 2019.
- Other assets acquired through
foreclosure, net, was $2.6 million at December 31, 2020 compared to
$2.7 million at September 30, 2020, and $2.5 million at December
31, 2019.
*Non GAAP
COVID-19 Pandemic Update“Our
fourth quarter and year end results reflect solid operating
performance, with strong core deposit growth, improved operating
efficiencies and an expanded net interest margin,” stated Martin E.
Plourd, President and Chief Executive Officer. “Part of our success
in 2020 included our participation in the SBA’s PPP program. During
the year, we generated 521 SBA PPP loans totaling $76.6 million to
our clients since the program’s inception in April to the
conclusion of the original program. At December 31, 2020 we had 501
loans totaling $69.5 million. As of January 15, 2021, we had 26
loans for $9.3 million forgiven by the SBA. We have another 47
requests for forgiveness submitted to us for $17.9 million and plan
to circulate the one-page forgiveness application to our remaining
borrowers with loans of $150,000 or less by the end of the month.
We have $1.6 million in net unrecognized fees related to the PPP
that would be recognized as income once the loans are paid off or
forgiven by the SBA. Our expectation is to see the first round of
PPP funding forgiven by the end of the second quarter of 2021. As
these loans are forgiven, we expect to use the liquidity to pursue
new opportunities in our market, including strategies to improve
loan growth, fund the second round of PPP loans and further reduce
wholesale funding.”
The Consolidated Appropriations Act (CAA) was
signed into law on December 27, 2020, providing additional COVID-19
stimulus relief, and it includes $284 billion for another round of
PPP lending. The program offers new loans for companies that did
not receive a PPP loan in 2020, and also “second draw” loans
targeted at hard-hit businesses that have already spent their
initial PPP proceeds. “We started offering this new round to our
customers earlier this month with the same ‘client first’ strategy
utilized in the first round. We took a conservative approach,
putting our clients first, as opposed to opening the application
process to both clients and non-clients. This allowed us to focus
our resources on our clients and deliver an unparalleled experience
during a very stressful time. Our Relationship Managers worked with
each client through the entire process. This approach, and our
client’s spreading the word to others, helped us to further build
the Bank’s positive reputation. After assisting our clients, the
Bank took applications from others who were not sufficiently
assisted by their current bank. While we are still early in the
second round, we anticipate successfully helping our customers as
we did with the initial round of PPP funding,” said Plourd.
“Since the start of the pandemic, we have used
conservative measures to keep our employees, clients, and
communities safe,” said William F. Filippin, Chief Credit and Chief
Administrative Officer. “We maintained all branch activity
throughout the pandemic, while working with clients who are
experiencing hardship. We remain focused on assessing the risks in
our loan portfolio and working with our clients to minimize losses,
and implemented an initial loan modification program to assist
clients impacted by the pandemic with loan deferrals. The Bank
initially granted 90-day or 180-day deferral requests in April of
2020. By late May, as our local markets began easing restrictions,
we reverted to a standard 90-day payment deferral, with a longer
term considered an exception, requiring additional approval. As a
result, we have a mixture of payment deferral terms. 93% of
deferred loans have now resumed payment.”
At the peak in July 2020, the Company had 269
loans on payment deferral for a total of $158.5 million. As of
January 15, 2021, 9 loans remained on deferral for a total of $2.7
million. With the passage of The Economic Aid Act, the Company
modified and extended its payment deferral program. The new program
is for 90 days. To date, the Company has received very few requests
for an additional payment deferral. The new requests have been from
commercial or manufactured housing loan borrowers.
The table below shows the breakdown of deferrals
by loan type:
| |
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
| Loan
segment |
Count |
Balance |
|
Count |
Balance |
|
Count |
Balance |
|
|
|
(in thousands) |
|
|
(in thousands) |
|
|
(in thousands) |
|
Manufactured housing |
8 |
$ |
1,261 |
|
116 |
$ |
15,984 |
|
142 |
$ |
19,903 |
| Commercial real estate |
2 |
|
2,082 |
|
60 |
|
104,492 |
|
78 |
|
124,629 |
| Commercial |
3 |
|
1,767 |
|
24 |
|
8,520 |
|
36 |
|
10,825 |
| SBA |
- |
|
- |
|
- |
|
- |
|
1 |
|
17 |
| HELOC |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
| Single family real estate |
- |
|
- |
|
3 |
|
717 |
|
5 |
|
1,027 |
| Consumer |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
Total pandemic deferments |
13 |
$ |
5,111 |
|
203 |
$ |
129,713 |
|
262 |
$ |
156,401 |
“While the quantity of loan deferral requests
has tapered off significantly since the onset of the pandemic, we
continue to see clients experiencing financial hardship,” said
Filippin. “New deferral requests are being granted based on
stricter parameters including proof of financial hardship that can
be validated, compared to earlier in the pandemic when they were
offered with fewer restrictions in place. We continue to risk rate
the deferred portfolio at ‘watch’ or worse status depending on the
credit, and monitor frequently. The credit will remain in this risk
rating after payments resume and until the borrower’s capacity to
maintain payments has been validated.” The table below reflects the
high-risk industry loans by type at December 31, 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 December 31, 2020, the Bank’s loans to
these industries were $179.2 million, which is 20.9% of its $857.6
million loan portfolio.
Of the selected industry loans, $3.0 million, or
1.66%, are on non-accrual. Also, of the selected industries loans,
the classified loans are $16.9 million, or 9.43%. The Bank has
accommodated $2.1 million, or 1.16%, of these loans with payment
deferrals in the selected industries. Additional detail by industry
at December 31, 2020 is included in the table below.
|
Sectors Under Focus (Excluding PPP Loans) |
|
As of 12/31/20 (in thousands) |
|
|
Loans Outstanding |
|
$ Non-accrual |
% Non-accrual |
|
$ Classified |
% Classified |
|
$ Deferrals |
% Deferral |
|
Healthcare |
|
$ |
51,532 |
$ |
1,483 |
2.88 |
% |
$ |
1,827 |
3.55 |
% |
$ |
0 |
0.00 |
% |
|
Senior/Assted Living Facilities |
|
$ |
23,306 |
$ |
0 |
0.00 |
% |
$ |
0 |
0.00 |
% |
$ |
0 |
0.00 |
% |
|
Medical Offices |
|
$ |
19,306 |
$ |
0 |
0.00 |
% |
$ |
277 |
1.43 |
% |
$ |
0 |
0.00 |
% |
|
General Healthcare |
|
$ |
8,920 |
$ |
1,483 |
16.63 |
% |
$ |
1,550 |
17.38 |
% |
$ |
0 |
0.00 |
% |
|
Hospitality |
|
$ |
51,458 |
$ |
1,471 |
2.86 |
% |
$ |
5,321 |
10.34 |
% |
$ |
1,469 |
2.85 |
% |
|
Lodging |
|
$ |
40,546 |
$ |
1,469 |
3.62 |
% |
$ |
2,593 |
6.39 |
% |
$ |
1,469 |
3.62 |
% |
|
Restaurants |
|
$ |
10,912 |
$ |
2 |
0.02 |
% |
$ |
2,729 |
25.00 |
% |
$ |
0 |
0.00 |
% |
|
Retail Commercial Real Estate |
|
$ |
56,692 |
$ |
16 |
0.03 |
% |
$ |
9,610 |
16.95 |
% |
$ |
614 |
1.08 |
% |
|
Retail Services |
|
$ |
17,628 |
$ |
0 |
0.00 |
% |
$ |
18 |
0.10 |
% |
$ |
0 |
0.00 |
% |
|
Schools |
|
$ |
1,182 |
$ |
0 |
0.00 |
% |
$ |
0 |
0.00 |
% |
$ |
0 |
0.00 |
% |
|
Energy |
|
$ |
680 |
$ |
0 |
0.00 |
% |
$ |
114 |
16.74 |
% |
$ |
0 |
0.00 |
% |
|
Total |
|
$ |
179,172 |
$ |
2,969 |
1.66 |
% |
$ |
17 |
0.01 |
% |
$ |
2,082 |
1.16 |
% |
Income StatementNet interest
income increased 2.5% to $9.8 million in 4Q20, compared to $9.6
million in 3Q20, and increased 10.8% compared to $8.8 million in
4Q19. For the year 2020, net interest income increased 6.5% to
$36.6 million compared to $34.4 million in 2019.
Non-interest income decreased to $970,000 in
4Q20, compared to $1.4 million in 3Q20, and $1.7 million in 4Q19.
Other loan fees were $383,000 for 4Q20, compared to $539,000 in
3Q20, and $500,000 in 4Q19. Gain on sale of loans was $209,000 in
4Q20, compared to $424,000 in 3Q20, and $765,000 in 4Q19.
Non-interest income increased 8.5% to $3.9 million for the year,
compared to $3.6 million for 2019 primarily from loan fees. Service
charge fee income for 2020 declined 37.6%, compared to 2019,
primarily due to the Company’s adherence with the Cares Act
initiative to waive certain transaction fees. The Company is
uncertain as to when these transaction fees will be reinstated.
Net interest margin was 4.13% for 4Q20, a
37-basis point improvement compared to 3Q20, and a 6-basis point
improvement compared to 4Q19. “Our continued focus on reducing our
cost of funds contributed to the net interest margin expansion
during the fourth quarter,” said Susan C. Thompson, Executive Vice
President and Chief Financial Officer. “During the third and fourth
quarters of 2020, we aggressively repriced our higher priced
funding and will continue to look for opportunities for further
reduction while interest rates remain low. We anticipate our net
interest margin will remain stabilized as we move forward into
2021.” The cost of funds for 4Q20 improved 14 basis points to
0.69%, compared to 3Q20, and improved by 95 basis points compared
to 4Q19. For the year 2020, the net interest margin was 3.89%,
compared to 4.06% in 2019. For both 4Q20 and the year of 2020 the
net interest margin was impacted negatively by 6 basis points,
respectively, due to the Company’s participation in PPP
lending.
The Company recorded a provision credit for loan
losses of $44,000 in 4Q20. This compares to a provision for loan
losses of $113,000 in 3Q20, and a provision credit for loan losses
of $210,000 in 4Q19. For the year, the provision for loan losses
totaled $1.2 million, compared to a provision credit for loan
losses of $165,000 in 2019. The increase in the provision for the
year was to reflect the estimated losses due to the current
economic uncertainties resulting from the pandemic that may be
currently masked by loan deferrals, PPP loans and other stimulus
subsidies.
Non-interest expense totaled $7.1 million in
4Q20, compared to $6.7 million in 3Q20, and $6.8 million in 4Q19.
For the year, non-interest expense was $27.5 million, compared to
$26.8 million in 2019. The Company has implemented strategic
initiatives focusing on expense control and improvement in
operating efficiency, which will continue through 2021.
Balance SheetTotal assets
decreased to $975.4 million at December 31, 2020, compared to $1.04
billion, or 6.4%, at September 30, 2020, and increased $61.6
million, or 6.7%, compared to $913.9 million at December 31, 2019.
Total loans increased modestly to $857.6 million at December 31,
2020, compared to $854.5 million, or 0.4%, at September 30, 2020,
and increased $82.0 million, or 10.6%, compared to $775.6 million
at December 31, 2019.
Commercial real estate loans outstanding (which
include SBA 504, construction and land) were up 4.3% from year ago
levels to $402.1 million at December 31, 2020, and comprise 46.9%
of the total loan portfolio. Manufactured housing loans were up
9.0% from year ago levels to $280.3 million, and represent 32.7% of
total loans. SBA PPP loans were $69.5 million at December 31, 2020,
and represent 8.1% of total loans. Commercial loans (which include
agriculture loans) were down 20.3% from year ago levels to $80.9
million, and represent 9.4% of the total loan portfolio. The
majority of this decrease was in the agriculture portfolio as the
Company switched its production focus from on-balance sheet to
off-balance sheet Farmer Mac loans. In early 2020 when the Pandemic
started, commercial lending in our markets materially slowed as
“Shelter in Place” orders forced business closures. The slower
commercial loan trend continued through most of 2020. During this
time, the Company’s manufactured housing loan division continued
with strong production levels and had a record year. During
December and into the first part of 2021, loan production
opportunities have increased as capital levels have improved, and
as clients are taking advantage of historically low interest
rates.
Total deposits were $766.2 million at December
31, 2020, compared to $749.2 million at September 30, 2020, and
$750.9 million at December 31, 2019. Non-interest-bearing demand
deposits were $181.8 million at December 31, 2020, a slight
decrease compared to $190.1 million at September 30, 2020, and a
$71.0 million increase compared to $110.8 million at December 31,
2019. Interest-bearing demand deposits increased $43.0 million to
$398.1 million at December 31, 2020, compared to $355.1 million at
September 30, 2020, and increased $83.8 million compared to $314.3
million at December 31, 2019. “Demand deposit growth has been
strong, as consumers and businesses continue to build cash
reserves, and federal programs such as the PPP also contributed to
deposit growth,” said Thompson. “We have been effective at
attracting new deposit clients to the Bank, resulting from our
success with PPP lending and other relationship management
focus.”
Certificates of deposit, which include brokered
deposits, decreased $17.9 million during the quarter to $167.5
million at December 31, 2020, compared to $185.4 million at
September 30, 2020, and decreased $142.6 million compared to $310.1
million at December 31, 2019. The reduction in these deposits was
due to divesting some high-priced municipal and brokered deposits
to lower cost, core funding.
Stockholders’ equity increased to $89.0 million
at December 31, 2020, compared to $86.7 million at September 30,
2020, and $82.0 million at December 31, 2019. Book value per common
share increased to $10.50 at December 31, 2020, compared to $10.23
at September 30, 2020, and $9.68 at December 31, 2019. The increase
in capital will be utilized to grow the balance sheet and support
dividends.
Credit QualityAt December 31,
2020, overall asset quality reflected some improvement due to
positive loan risk rating migrations during 4Q20. Total classified
loans increased for the year due to proactive risk rating of loans
showing financial stress during the pandemic, while non-accrual
loans increased due to one legacy loan of $1.5 million. Although
criticized, classified and non-accrual loans increased during the
year, the increase was determined not to be systemic or indicative
of broader risk within the portfolio. All loans rated “Watch” or
worse are monitored monthly and proactive measures are taken when
any signs of deterioration to the credit are discovered.
“We continue to closely monitor all credit
quality metrics,” said Plourd. “Although the full impact of the
COVID-19 pandemic is still uncertain, with our capital levels and
focus on credit quality within our portfolio, we expect to manage
the economic risks and remain well capitalized.”
The Company recorded a provision credit for loan
losses of $44,000 in 4Q20. This compares to a provision for loan
losses of $113,000 in 3Q20, and a provision credit for loan losses
of $210,000 in 4Q19. 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 December 31, 2020. Net non-accrual
loans, plus net other assets acquired through foreclosure, were
$6.3 million at December 31, 2020, compared to $5.0 million at
September 30, 2020, and $4.9 million at December 31, 2019.
Net non-accrual loans totaled $3.7 million at
December 31, 2020, compared to $2.3 million at September 30, 2020,
and $2.4 million at December 31, 2019. Of the $3.7 million of net
non-accrual loans at December 31, 2020, $1.5 million were
commercial real estate loans, $1.4 million were commercial loans,
$0.6 million were manufactured housing loans, $0.1 million were
single family real estate loans and $0.1 million were SBA
loans.
There was $2.6 million in other assets acquired
through foreclosure as of December 31, 2020, compared to $2.7
million at September 30, 2020, and $2.5 million at December 31,
2019. The majority of this balance relates to one property in the
amount of $2.4 million.
Cash Dividend DeclaredThe
Company’s Board of Directors increased its quarterly cash dividend
by 20%, to $0.06 per common share, payable February 26, 2021 to
common shareholders of record on February 9, 2021.
Stock Repurchase ProgramThe
Company has reinstated its previously suspended stock repurchase
program.
Company OverviewCommunity 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 AccoladesIn 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 DisclosureThis
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 |
|
Twelve Months Ended |
|
|
|
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
|
December 31, |
|
|
|
|
2020 |
|
|
|
2020 |
|
|
2019 |
|
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest
income |
|
|
|
|
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
10,790 |
|
|
$ |
10,909 |
|
$ |
11,136 |
|
|
$ |
42,948 |
|
$ |
43,890 |
|
|
Investment securities and other |
|
|
196 |
|
|
|
207 |
|
|
492 |
|
|
|
906 |
|
|
1,849 |
|
|
Total interest income |
|
|
10,986 |
|
|
|
11,116 |
|
|
11,628 |
|
|
|
43,854 |
|
|
45,739 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
815 |
|
|
|
1,046 |
|
|
2,413 |
|
|
|
5,483 |
|
|
10,055 |
|
|
Other borrowings |
|
|
378 |
|
|
|
518 |
|
|
377 |
|
|
|
1,782 |
|
|
1,327 |
|
|
Total interest expense |
|
|
1,193 |
|
|
|
1,564 |
|
|
2,790 |
|
|
|
7,265 |
|
|
11,382 |
|
| Net interest
income |
|
|
9,793 |
|
|
|
9,552 |
|
|
8,838 |
|
|
|
36,589 |
|
|
34,357 |
|
| Provision (credit) for loan
losses |
|
|
(44 |
) |
|
|
113 |
|
|
(210 |
) |
|
|
1,223 |
|
|
(165 |
) |
|
Net interest income after provision for loan losses |
|
|
9,837 |
|
|
|
9,439 |
|
|
9,048 |
|
|
|
35,366 |
|
|
34,522 |
|
| Non-interest
income |
|
|
|
|
|
|
|
|
|
|
|
Other loan fees |
|
|
383 |
|
|
|
539 |
|
|
500 |
|
|
|
1,546 |
|
|
1,383 |
|
|
Gains from loan sales, net |
|
|
209 |
|
|
|
424 |
|
|
765 |
|
|
|
920 |
|
|
765 |
|
|
Document processing fees |
|
|
129 |
|
|
|
152 |
|
|
116 |
|
|
|
513 |
|
|
423 |
|
|
Service charges |
|
|
83 |
|
|
|
75 |
|
|
160 |
|
|
|
354 |
|
|
567 |
|
|
Other |
|
|
166 |
|
|
|
162 |
|
|
123 |
|
|
|
579 |
|
|
469 |
|
|
Total non-interest income |
|
|
970 |
|
|
|
1,352 |
|
|
1,664 |
|
|
|
3,912 |
|
|
3,607 |
|
| Non-interest
expenses |
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
4,594 |
|
|
|
4,402 |
|
|
4,141 |
|
|
|
17,968 |
|
|
17,094 |
|
|
Occupancy, net |
|
|
751 |
|
|
|
751 |
|
|
750 |
|
|
|
3,036 |
|
|
3,088 |
|
|
Professional services |
|
|
399 |
|
|
|
460 |
|
|
552 |
|
|
|
1,801 |
|
|
1,679 |
|
|
Data processing |
|
|
254 |
|
|
|
258 |
|
|
236 |
|
|
|
1,055 |
|
|
876 |
|
|
Depreciation |
|
|
202 |
|
|
|
205 |
|
|
214 |
|
|
|
821 |
|
|
864 |
|
|
FDIC assessment |
|
|
165 |
|
|
|
123 |
|
|
118 |
|
|
|
565 |
|
|
427 |
|
|
Advertising and marketing |
|
|
110 |
|
|
|
145 |
|
|
228 |
|
|
|
673 |
|
|
774 |
|
|
Stock-based compensation |
|
|
68 |
|
|
|
71 |
|
|
100 |
|
|
|
319 |
|
|
382 |
|
|
Other |
|
|
526 |
|
|
|
307 |
|
|
475 |
|
|
|
1,285 |
|
|
1,571 |
|
|
Total non-interest expenses |
|
|
7,069 |
|
|
|
6,722 |
|
|
6,814 |
|
|
|
27,523 |
|
|
26,755 |
|
| Income before provision for
income taxes |
|
|
3,738 |
|
|
|
4,069 |
|
|
3,898 |
|
|
|
11,755 |
|
|
11,374 |
|
| Provision for income
taxes |
|
|
1,111 |
|
|
|
1,209 |
|
|
1,179 |
|
|
|
3,510 |
|
|
3,411 |
|
| Net
income |
|
$ |
2,627 |
|
|
$ |
2,860 |
|
$ |
2,719 |
|
|
$ |
8,245 |
|
$ |
7,963 |
|
| Earnings per
share: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.31 |
|
|
$ |
0.34 |
|
$ |
0.32 |
|
|
$ |
0.97 |
|
$ |
0.94 |
|
|
Diluted |
|
$ |
0.31 |
|
|
$ |
0.33 |
|
$ |
0.32 |
|
|
$ |
0.97 |
|
$ |
0.93 |
|
| COMMUNITY WEST
BANCSHARES |
|
|
|
|
|
|
| CONDENSED CONSOLIDATED
BALANCE SHEETS |
|
|
|
|
|
|
| (unaudited) |
|
|
|
|
|
|
| (in 000's, except per share
data) |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
December 31, |
|
September 30, |
|
December 31, |
|
|
|
|
2020 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
1,587 |
|
|
$ |
4,974 |
|
|
$ |
2,539 |
|
| Interest-earning deposits in
other financial institutions |
|
|
58,953 |
|
|
|
124,590 |
|
|
|
80,122 |
|
| Investment securities |
|
|
22,043 |
|
|
|
23,562 |
|
|
|
25,563 |
|
| Loans: |
|
|
|
|
|
|
|
Commercial |
|
|
80,851 |
|
|
|
84,133 |
|
|
|
101,485 |
|
|
Commercial real estate |
|
|
402,148 |
|
|
|
394,547 |
|
|
|
385,642 |
|
|
SBA |
|
|
11,851 |
|
|
|
12,547 |
|
|
|
14,777 |
|
|
Paycheck Protection Program (PPP) |
|
|
69,542 |
|
|
|
75,683 |
|
|
|
- |
|
|
Manufactured housing |
|
|
280,284 |
|
|
|
275,472 |
|
|
|
257,247 |
|
|
Single family real estate |
|
|
10,358 |
|
|
|
10,232 |
|
|
|
11,668 |
|
|
HELOC |
|
|
3,861 |
|
|
|
3,857 |
|
|
|
4,531 |
|
|
Other (1) |
|
|
(1,318 |
) |
|
|
(2,001 |
) |
|
|
213 |
|
| Total loans |
|
|
857,577 |
|
|
|
854,470 |
|
|
|
775,563 |
|
| |
|
|
|
|
|
|
| Loans, net |
|
|
|
|
|
|
|
Held for sale |
|
|
31,229 |
|
|
|
32,562 |
|
|
|
42,046 |
|
|
Held for investment |
|
|
826,348 |
|
|
|
821,908 |
|
|
|
733,517 |
|
|
Less: Allowance for loan losses |
|
|
(10,194 |
) |
|
|
(10,197 |
) |
|
|
(8,717 |
) |
|
Net held for investment |
|
|
816,154 |
|
|
|
811,711 |
|
|
|
724,800 |
|
|
NET LOANS |
|
|
847,383 |
|
|
|
844,273 |
|
|
|
766,846 |
|
| |
|
|
|
|
|
|
| Other assets |
|
|
45,469 |
|
|
|
44,700 |
|
|
|
38,800 |
|
| |
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
975,435 |
|
|
$ |
1,042,099 |
|
|
$ |
913,870 |
|
| |
|
|
|
|
|
|
| Deposits |
|
|
|
|
|
|
|
Non-interest-bearing demand |
|
$ |
181,837 |
|
|
$ |
190,133 |
|
|
$ |
110,843 |
|
|
Interest-bearing demand |
|
|
398,101 |
|
|
|
355,111 |
|
|
|
314,278 |
|
|
Savings |
|
|
18,736 |
|
|
|
18,555 |
|
|
|
15,689 |
|
|
Certificates of deposit ($250,000 or more) |
|
|
30,536 |
|
|
|
81,426 |
|
|
|
96,431 |
|
|
Other certificates of deposit |
|
|
136,975 |
|
|
|
103,955 |
|
|
|
213,693 |
|
| Total deposits |
|
|
766,185 |
|
|
|
749,180 |
|
|
|
750,934 |
|
| Other borrowings |
|
|
105,000 |
|
|
|
190,103 |
|
|
|
65,000 |
|
| Other liabilities |
|
|
15,243 |
|
|
|
16,099 |
|
|
|
15,958 |
|
|
TOTAL LIABILITIES |
|
|
886,428 |
|
|
|
955,382 |
|
|
|
831,892 |
|
| |
|
|
|
|
|
|
| Stockholders’ equity |
|
|
89,007 |
|
|
|
86,717 |
|
|
|
81,978 |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| TOTAL LIABILITIES AND
STOCKHOLDERS’ EQUITY |
|
$ |
975,435 |
|
|
$ |
1,042,099 |
|
|
$ |
913,870 |
|
| |
|
|
|
|
|
|
| Common shares outstanding |
|
|
8,473 |
|
|
|
8,473 |
|
|
|
8,472 |
|
| |
|
|
|
|
|
|
| Book value per common
share |
|
$ |
10.50 |
|
|
$ |
10.23 |
|
|
$ |
9.68 |
|
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| (1) Includes consumer, other
loans, securitized loans, and deferred fees |
|
|
|
|
|
|
| ADDITIONAL FINANCIAL
INFORMATION |
|
|
|
|
|
|
|
|
|
| (Dollars in thousands except
per share amounts)(Unaudited) |
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Three Months Ended |
|
Three Months Ended |
|
Twelve Months Ended |
|
Twelve Months Ended |
| PERFORMANCE MEASURES
AND RATIOS |
December 31, 2020 |
|
September 30, 2020 |
|
December 31, 2019 |
|
December 31, 2020 |
|
December 31, 2019 |
|
Return on average common equity |
|
11.85 |
% |
|
|
13.33 |
% |
|
|
13.35 |
% |
|
|
9.70 |
% |
|
|
10.15 |
% |
| Return on average assets |
|
1.07 |
% |
|
|
1.09 |
% |
|
|
1.21 |
% |
|
|
0.85 |
% |
|
|
0.91 |
% |
| Efficiency ratio |
|
65.68 |
% |
|
|
61.65 |
% |
|
|
64.88 |
% |
|
|
67.96 |
% |
|
|
70.47 |
% |
| Net interest margin |
|
4.13 |
% |
|
|
3.76 |
% |
|
|
4.07 |
% |
|
|
3.89 |
% |
|
|
4.06 |
% |
|
|
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Three Months Ended |
|
Three Months Ended |
|
Twelve Months Ended |
Twelve Months Ended |
| AVERAGE
BALANCES |
December 31, 2020 |
|
September 30, 2020 |
|
December 31, 2019 |
|
December 31, 2020 |
|
December 31, 2019 |
| Average assets |
$ |
977,736 |
|
|
$ |
1,044,807 |
|
|
$ |
887,902 |
|
|
$ |
972,019 |
|
|
$ |
872,509 |
|
| Average earning assets |
|
944,073 |
|
|
|
1,011,765 |
|
|
|
862,350 |
|
|
|
940,993 |
|
|
|
846,673 |
|
| Average total loans |
|
845,620 |
|
|
|
854,273 |
|
|
|
779,698 |
|
|
|
831,863 |
|
|
|
778,745 |
|
| Average deposits |
|
726,223 |
|
|
|
733,486 |
|
|
|
725,029 |
|
|
|
730,884 |
|
|
|
726,022 |
|
| Average common equity |
|
88,171 |
|
|
|
85,328 |
|
|
|
80,825 |
|
|
|
85,027 |
|
|
|
78,437 |
|
| |
|
|
|
|
|
|
|
|
|
| EQUITY
ANALYSIS |
December 31, 2020 |
|
September 30, 2020 |
|
December 31, 2019 |
|
|
|
|
| Total common equity |
$ |
89,007 |
|
|
$ |
86,717 |
|
|
$ |
81,978 |
|
|
|
|
|
| Common stock outstanding |
|
8,473 |
|
|
|
8,473 |
|
|
|
8,472 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Book value per common
share |
$ |
10.50 |
|
|
$ |
10.23 |
|
|
$ |
9.68 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| ASSET
QUALITY |
December 31, 2020 |
|
September 30, 2020 |
|
December 31, 2019 |
|
|
|
|
| Nonaccrual loans, net |
$ |
3,665 |
|
|
$ |
2,258 |
|
|
$ |
2,389 |
|
|
|
|
|
| Nonaccrual loans, net/total
loans |
|
0.43 |
% |
|
|
0.26 |
% |
|
|
0.31 |
% |
|
|
|
|
| Other assets acquired through
foreclosure, net |
$ |
2,614 |
|
|
$ |
2,707 |
|
|
$ |
2,524 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Nonaccrual loans plus other
assets acquired through foreclosure, net |
$ |
6,279 |
|
|
$ |
4,965 |
|
|
$ |
4,913 |
|
|
|
|
|
| Nonaccrual loans plus other
assets acquired through foreclosure, net/total assets |
|
0.64 |
% |
|
|
0.48 |
% |
|
|
0.54 |
% |
|
|
|
|
| Net loan
(recoveries)/charge-offs in the quarter |
$ |
(41 |
) |
|
$ |
(76 |
) |
|
$ |
(58 |
) |
|
|
|
|
| Net (recoveries)/charge-offs
in the quarter/total loans |
|
(0.00 |
%) |
|
|
(0.01 |
%) |
|
|
(0.01 |
%) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Allowance for loan losses |
$ |
10,194 |
|
|
$ |
10,197 |
|
|
$ |
8,717 |
|
|
|
|
|
| Plus: Reserve for undisbursed
loan commitments |
|
92 |
|
|
|
92 |
|
|
|
85 |
|
|
|
|
|
| Total allowance for credit
losses |
$ |
10,286 |
|
|
$ |
10,289 |
|
|
$ |
8,802 |
|
|
|
|
|
| Allowance for loan
losses/total loans held for investment |
|
1.23 |
% |
|
|
1.24 |
% |
|
|
1.19 |
% |
|
|
|
|
| Allowance for loan
losses/total loans held for investment excluding PPP loans |
|
1.35 |
% |
|
|
1.37 |
% |
|
|
1.19 |
% |
|
|
|
|
| Allowance for loan
losses/nonaccrual loans, net |
|
278.14 |
% |
|
|
451.59 |
% |
|
|
364.88 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Community West Bank
* |
|
|
|
|
|
|
|
|
|
| Community bank leverage
ratio |
|
9.29 |
% |
|
|
8.79 |
% |
|
N/A |
|
|
|
|
|
| Tier 1 leverage ratio |
|
9.29 |
% |
|
|
8.79 |
% |
|
|
9.06 |
% |
|
|
|
|
| Tier 1 capital ratio |
|
11.02 |
% |
|
|
10.96 |
% |
|
|
10.28 |
% |
|
|
|
|
| Total capital ratio |
|
12.27 |
% |
|
|
12.21 |
% |
|
|
11.41 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| INTEREST SPREAD
ANALYSIS |
December 31, 2020 |
|
September 30, 2020 |
|
December 31, 2019 |
|
|
|
|
| Yield on total loans |
|
5.08 |
% |
|
|
5.08 |
% |
|
|
5.67 |
% |
|
|
|
|
| Yield on investments |
|
2.46 |
% |
|
|
1.89 |
% |
|
|
3.47 |
% |
|
|
|
|
| Yield on interest earning
deposits |
|
0.15 |
% |
|
|
0.23 |
% |
|
|
1.66 |
% |
|
|
|
|
| Yield on earning assets |
|
4.63 |
% |
|
|
4.37 |
% |
|
|
5.35 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| Cost of interest-bearing
deposits |
|
0.60 |
% |
|
|
0.77 |
% |
|
|
1.57 |
% |
|
|
|
|
| Cost of total deposits |
|
0.45 |
% |
|
|
0.57 |
% |
|
|
1.32 |
% |
|
|
|
|
| Cost of borrowings |
|
1.03 |
% |
|
|
0.98 |
% |
|
|
2.31 |
% |
|
|
|
|
| Cost of interest-bearing
liabilities |
|
0.69 |
% |
|
|
0.83 |
% |
|
|
1.64 |
% |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
| * Capital ratios are
preliminary until the Call Report is filed. |
|
|
|
|
|
|
|
|
|
Transmitted on Globe Newswire on February 1, 2021 at 6:00 a.m.
PST.
| Contact: |
Susan C.
Thompson, EVP & CFO |
| |
805.692.5821 |
| |
www.communitywestbank.com |
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