Community West Bancshares (Community West or the Company), (NASDAQ:
CWBC), parent company of Community West Bank (the “Bank”), today
reported net income increased 15.4% to $3.0 million, or $0.35 per
diluted share, for the first quarter of 2021 (1Q21), compared to
$2.6 million, or $0.31 per diluted share, for the fourth quarter of
2020 (4Q20), and increased 87.5% compared to $1.6 million, or $0.19
per diluted share, for the first quarter of 2020 (1Q20).
“We started the year with solid operating
performance, higher net interest income and an expanding net
interest margin, fueled by loan originations and core deposit
growth,” stated Martin E. Plourd, President and Chief Executive
Officer. “We continue to generate profitable operations, which
sustains our ability to increase dividends. We believe the increase
was warranted as evidenced by our last three quarters performance.
Our focus in 2021 remains on deploying excess liquidity through
increased lending activity, while maintaining our strong net
interest margin, lowering overall expenses and managing asset
quality.”
First Quarter 2021 Financial
Highlights:
- Net income was $3.0 million, or
$0.35 per diluted share in 1Q21, compared to $2.6 million, or $0.31
per diluted share in 4Q20, and $1.6 million, or $0.19 per diluted
share in 1Q20.
- Net interest income increased to
$10 million for the quarter, compared to $9.8 million for 4Q20 and
$8.5 million in 1Q20.
- A provision credit for loan losses
of $173,000 for the quarter, compared to a provision credit for
loan losses of $44,000 for 4Q20, and a provision for loan losses of
$392,000 for 1Q20. The resulting allowance was 1.19% of total loans
held for investment at March 31, 2021, and 1.34% of total loans
held for investment excluding the $94.5 million of Paycheck
Protection Program (“PPP”) loans at March 31, 2021, which are 100%
guaranteed by the Small Business Administration (“SBA”).*
- Net interest margin improved to
4.19% for 1Q21, compared to 4.13% for 4Q20, and 3.97% for
1Q20.
- Total demand deposits increased
$57.2 million to $637.1 million at March 31, 2021, compared to
$579.9 million at December 31, 2020, and increased $229.1 million
compared to $408 million at March 31, 2020. Total demand deposits
represented 79.2% of total deposits at March 31, 2021, compared to
75.7% at December 31, 2020, and 57.3% at March 31, 2020.
- Total loans increased $30.2 million
to $887.8 million at March 31, 2021, compared to $857.6 million at
December 31, 2020, and increased $105.8 million compared to $782
million at March 31, 2020.
- Book value per common share
increased to $10.77 at March 31, 2021, compared to $10.50 at
December 31, 2020, and $9.82 at March 31, 2020.
- The Bank’s community bank leverage
ratio (CBLR) was 8.97% at March 31, 2021, compared to 9.29% at
December 31, 2020, and 9.21% at March 31, 2020.
- Net non-accrual loans decreased by
51.3% to $1.8 million at March 31, 2021, compared to $3.7 million
at December 31, 2020, and $2.6 million at March 31, 2020.
- Other assets acquired through
foreclosure, net, was $2.6 million at March 31, 2021 and December
31, 2020, respectively, and $2.7 million at March 31, 2020.
- Awarded a “Super Premier
Performance” rating by The Findley Reports.
*Non GAAP
COVID-19 Pandemic & PPP loan
Update
“Part of our success in the first quarter of
2021, and also in 2020, included our participation in the SBA’s PPP
program,” said Plourd. “In 2020, we generated 521 SBA PPP loans
totaling $76.6 million to our clients. As of March 31,
2021, we had 266 loans totaling $46.4 million remaining from the
first round in 2020. During the first quarter of 2021, $22.8
million of the PPP loans made in 2020 were forgiven by the SBA. We
recognized $0.8 million of income in net fees related to the
forgiven PPP loans during 1Q21 and have $0.8 million remaining in
net unrecognized fees related to the 2020 PPP loans that will be
recognized as income through amortization or once the loans are
paid/forgiven by the SBA. We expect the remainder of
the 2020 PPP loans to be forgiven by the end of 2Q21.
Also as these loans are forgiven, we will use the liquidity to
pursue new opportunities, including strategies to improve loan
growth, fund the second round of PPP loans and further reduce
funding costs.”
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. On March 30, 2021, the PPP expiration date for Round 2
was extended to May 31, 2021 via the PPP Extension Act of 2021. 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 of funding to our clients in
January with the same “client first” strategy utilized in the first
round,” said Plourd. “We are focused on delivering an exceptional
client experience during a very stressful time. This approach, and
our client’s spreading the word to others, helped us to further
build the Bank’s strong reputation. After assisting our clients,
the Bank takes applications from others who were not sufficiently
assisted by their current bank, and as a result are able to add new
client relationships, not just lending
transactions.”
“Since January, we have originated an additional
393 PPP loans for $48.1 million with anticipated fees of $2.0
million that will be recognized over the earlier of 5 years or loan
forgiveness. As these borrowers are not required to make payments
for 10 months, it is likely that a significant portion of the
borrowing base may wait to seek forgiveness until early 2022,” said
Plourd.
“From the onset of the pandemic, we maintained
all branch activity, while working with clients who were
experiencing hardship,” said William F. Filippin, Chief Credit and
Chief Administrative Officer. “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 beginning 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. 99.6% as a percentage of the dollar amount
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
March 31, 2021, 5 loans remained on deferral for a total of $1.4
million. Of the $1.4 million, 3 loans for $1.2 million were new
deferrals in 2021. 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:
|
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Pandemic Deferments |
|
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|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
Loan segment |
Count |
Balance |
|
Count |
Balance |
|
Count |
Balance |
|
|
|
(in thousands) |
|
|
(in thousands) |
|
|
(in thousands) |
|
Manufactured housing |
2 |
|
$ |
207 |
|
8 |
|
$ |
1,261 |
|
116 |
|
$ |
15,984 |
|
Commercial real estate |
1 |
|
|
1,094 |
|
2 |
|
|
2,082 |
|
60 |
|
|
104,492 |
|
Commercial |
2 |
|
|
84 |
|
3 |
|
|
1,767 |
|
24 |
|
|
8,520 |
|
SBA |
- |
|
|
- |
|
- |
|
|
- |
|
- |
|
|
- |
|
HELOC |
- |
|
|
- |
|
- |
|
|
- |
|
- |
|
|
- |
|
Single family real estate |
- |
|
|
- |
|
- |
|
|
- |
|
3 |
|
|
717 |
|
Consumer |
- |
|
|
- |
|
- |
|
|
- |
|
- |
|
|
- |
|
Total pandemic deferments |
5 |
|
$ |
1,385 |
|
13 |
|
$ |
5,111 |
|
203 |
|
$ |
129,713 |
|
|
|
|
|
|
|
|
|
|
|
Issued in year 2021 loan count 3 balance $1.2 million. |
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“While the quantity of loan deferral requests
has tapered off significantly since the onset of the pandemic, we
continue to see clients experiencing some level of 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 March 31, 2021. 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 March 31, 2021, the Bank’s loans to these industries were
$172.4 million, which is 19.4% of its $887.8 million loan
portfolio.
Of the selected industry loans, $8.8 million, or
5.10%, are on non-accrual. Also, of the selected industry loans,
the classified loans are $15.0 million, or 8.77%. The Bank has
accommodated $1.1 million, or 0.66%, of these loans with payment
deferrals in the selected industries. Additional detail by industry
at March 31, 2021 is included in the table below.
|
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|
Sectors Under Focus (Excluding PPP Loans) |
As of 03/31/21(in thousands) |
|
Loans Outstanding |
|
|
$ Non-accrual |
% Non-accrual |
|
|
$ Classified |
% Classified |
|
|
$ Deferrals |
% Deferral |
Healthcare |
$ |
51,586 |
|
$ |
- |
0.00 |
% |
|
$ |
2,240 |
4.34 |
% |
|
$ |
50 |
0.10 |
% |
Senior/Assted Living Facilities |
|
23,420 |
|
|
- |
0.00 |
% |
|
|
- |
0.00 |
% |
|
|
- |
0.00 |
% |
Medical Offices |
|
19,137 |
|
|
- |
0.00 |
% |
|
|
270 |
1.41 |
% |
|
|
- |
0.00 |
% |
General Healthcare |
|
9,029 |
|
|
- |
0.00 |
% |
|
|
1,970 |
21.82 |
% |
|
|
50 |
0.55 |
% |
Hospitality |
|
50,699 |
|
|
1,429 |
2.82 |
% |
|
|
5,243 |
10.34 |
% |
|
|
1,094 |
2.16 |
% |
Lodging |
|
40,425 |
|
|
1,427 |
3.53 |
% |
|
|
2,542 |
6.29 |
% |
|
|
- |
0.00 |
% |
Restaurants |
|
10,274 |
|
|
2 |
0.02 |
% |
|
|
2,701 |
26.29 |
% |
|
|
1,094 |
10.65 |
% |
Retail Commercial Real Estate |
54,394 |
|
|
7,362 |
13.53 |
% |
|
|
7,498 |
13.78 |
% |
|
|
- |
0.00 |
% |
Retail Services |
|
13,783 |
|
|
- |
0.00 |
% |
|
|
18 |
0.13 |
% |
|
|
- |
0.00 |
% |
Schools |
|
1,166 |
|
|
- |
0.00 |
% |
|
|
- |
0.00 |
% |
|
|
- |
0.00 |
% |
Energy |
|
763 |
|
|
- |
0.00 |
% |
|
|
114 |
14.93 |
% |
|
|
- |
0.00 |
% |
Total |
$ |
172,390 |
|
$ |
8,791 |
5.10 |
% |
|
$ |
15,112 |
8.77 |
% |
|
$ |
1,144 |
0.66 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Statement
Net interest income improved to $10.0 million in
1Q21, compared to $9.8 million in 4Q20, and compared to $8.5
million in 1Q20.
Non-interest income decreased to $897,000 in
1Q21, compared to $970,000 in 4Q20, and $950,000 in 1Q20. Other
loan fees were $313,000 for 1Q21, compared to $383,000 in 4Q20, and
$341,000 in 1Q20. Gain on sale of loans was $118,000 in 1Q21,
compared to $209,000 in 4Q20, and $190,000 in 1Q20. Service charge
fee income for 1Q21 declined 50.0%, compared to 1Q20, primarily due
to the Company’s adherence with the Cares Act initiative to waive
certain transaction fees. The Company anticipates these transaction
fees will be reinstated later in 2021. Farmer Mac loan origination
fees increased by 47% to $81,000 in 1Q21 from $55,000 in 1Q20.
Net interest margin was 4.19% for 1Q21, a
6-basis point improvement compared to 4Q20, and a 22-basis point
improvement compared to 1Q20. “Our lower cost of funds rate
contributed to the net interest margin expansion during the first
quarter,” said Susan C. Thompson, Executive Vice President and
Chief Financial Officer. “We will continue to focus on repricing
higher priced funding with lower cost alternatives and will
continue to look for opportunities for further reduction while
interest rates remain low. We anticipate our net interest margin
will remain relatively stable as we continue to receive SBA PPP
loan payoffs and shift to replacing them with higher yielding
assets.” The cost of funds for 1Q21 improved 11 basis points to
0.58%, compared to 4Q20, and improved by 93 basis points compared
to 1Q20. PPP loans including fees accounted for 9 basis points of
1Q21 net interest margin, and reduced 4Q20 net interest margin by 6
basis points.
“Due to the change in loan mix in the first
quarter as well as $212,000 of net loan recoveries, we recorded a
provision credit for loan losses of $173,000 during 1Q21. This
compares to a provision credit for loan losses of $44,000 in 4Q20
and a provision for loan losses of $392,000 in 1Q20. We feel that
we are well positioned as we navigate through the pandemic, with
loan loss reserves, excluding PPP loans, of 1.34% at March 31,
2021.”
Non-interest expense totaled $6.9 million in
1Q21, compared to $7.1 million in 4Q20, and $6.7 million in 1Q20.
The Company has implemented strategic initiatives focusing on
expense control and improvement in operating efficiency, including
a recent reduction in full time employees and a branch closure
during 2Q20, and will continue to look for opportunities to be more
efficient.
Balance Sheet
Total assets increased $42.6 million, or 4.4%,
to $1.02 billion at March 31, 2021, compared to $975.4 million at
December 31, 2020, and increased $92.8 million, or 10.0%, compared
to $925.2 million at March 31, 2020. Total loans increased $30.2
million, or 3.5%, to $887.8 million at March 31, 2021, compared to
$857.6 million at December 31, 2020, and increased $105.9 million,
or 13.5%, compared to $782 million at March 31, 2020.
“Loan growth was robust during the quarter, with
strong growth in the commercial real estate and manufactured
housing loan portfolios, in addition to new PPP loans,” said
Thompson. As we have a decline in COVID-19 cases and the re-opening
of our local markets, the Bank has recognized an increase in loan
opportunities from our clients and prospects. With this re-opening,
we also expect to see an increase in credit line utilization back
to pre-pandemic levels. Commercial real estate loans outstanding
(which include SBA 504, construction and land) were up 4.1% from
year ago levels to $407.3 million at March 31, 2021, and comprise
45.9% of the total loan portfolio. Manufactured housing loans were
up 8% from year ago levels to $284.6 million, and represent 32.1%
of total loans. SBA PPP loans were $94.5 million at March 31, 2021,
and represent 10.6% of total loans. Commercial loans (which include
agriculture loans) were down 21.1% from year ago levels to $77.6
million, and represent 8.7% 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. During 1Q21, loan production
opportunities have increased as capital levels have improved, and
as clients took advantage of historically low interest rates.
Total deposits increased $38.3 million, or 5.0%,
to $804.5 million at March 31, 2021, compared to $766.2 million at
December 31, 2020, and increased $92.9 million, or 13.1% compared
to $711.6 million at March 31, 2020. Non-interest-bearing demand
deposits were $196.6 million at March 31, 2021, a $14.8 million
increase compared to $181.8 million at December 31, 2020, and a
$75.3 million increase compared to $121.3 million at March 31,
2020. Interest-bearing demand deposits increased $42.4 million to
$440.5 million at March 31, 2021, compared to $398.1 million at
December 31, 2020, and increased $153.8 million compared to $286.7
million at March 31, 2020. “Demand deposit balances remained at
record levels, with a second round of PPP and two additional
federal stimulus payments contributing to strong quarterly 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 $20.0 million during the quarter to $147.5
million at March 31, 2021, compared to $167.5 million at December
31, 2020, and decreased $140.0 million compared to $287.6 million
at March 31, 2020. The strategic reduction in CDs was due to
divesting some high-priced municipal and brokered deposits to lower
cost, core funding.
Stockholders’ equity increased to $91.8 million
at March 31, 2021, compared to $89.0 million at December 31, 2020,
and $83.2 million at March 31, 2020. Book value per
common share increased to $10.77 at March 31, 2021, compared to
$10.50 at December 31, 2020, and $9.82 at March 31, 2020. The
increase in capital will be utilized to grow the balance sheet and
support dividends.
Credit Quality
“We continue to closely monitor all credit
quality, with most asset quality metrics improving during 1Q21,”
said Plourd. “While the full impact of the COVID-19 pandemic is
still uncertain, with our capital levels and focus on credit
quality, we expect to mitigate the economic risks and remain well
capitalized.”
At March 31, 2021, asset quality reflected
improvement due to positive loan risk rating migrations during the
first quarter. Total classified loans increased year-over-year due
to proactive risk rating of loans showing financial stress during
the pandemic, while non-accrual loans, net decreased year over
year. Although criticized and classified 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.
After recognizing $212,000 of net loan
recoveries, the Company recorded a provision credit for loan losses
of $173,000 in 1Q21. This compares to a provision credit for loan
losses of $44,000 in 4Q20, and a provision for loan losses of
$392,000 in 1Q20. The allowance for credit losses, including the
reserve for undisbursed loans, was $10.3 million, or 1.20% of total
loans held for investment, at March 31, 2021, and 1.35% of total
loans held for investment excluding PPP loans. Net non-accrual
loans, plus net other assets acquired through foreclosure, improved
to $4.4 million at March 31, 2021, a 30.2% decrease compared to
$6.3 million at December 31, 2020, and an 18.5% decrease compared
to $5.4 million at March 31, 2020. The decrease during 1Q21 related
primarily to the return to accrual of one borrowing
relationship.
Net non-accrual loans improved to $1.8 million
at March 31, 2021, compared to $3.7 million at December 31, 2020,
and $2.6 million at March 31, 2020. Of the $1.8 million of net
non-accrual loans at March 31, 2021, $1.4 were SBA 504 loans, $0.2
million were manufactured housing loans, $0.1 were single family
real estate loans and $0.1 were SBA loans.
There was $2.6 million in other assets acquired
through foreclosure as of March 31, 2021 and December 31, 2020,
respectively, and $2.7 million at March 31, 2020. The majority of
this balance relates to one property in the amount of $2.3
million.
Cash Dividend Declared
The Company’s Board of Directors declared a
quarterly cash dividend of $0.07 per common share, payable May 31,
2021 to common shareholders of record on May 10,
2021.
Stock Repurchase Program
The Company has authorized $4.5 million under
the repurchase program and has $1.4 million remaining for
repurchases. The Company did not repurchase stock during the
quarter.
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 2021, Community West Bank was awarded a
“Super Premier Performance” rating by The Findley Reports. For 52
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.
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COMMUNITY WEST BANCSHARES |
|
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|
CONDENSED CONSOLIDATED INCOME STATEMENTS |
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
(in 000's, except per share data) |
|
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|
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|
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|
Three Months Ended |
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
|
Interest income |
|
|
|
|
|
|
|
Loans, including fees |
|
$ |
10,856 |
|
|
$ |
10,790 |
|
|
$ |
10,664 |
|
Investment securities and other |
|
|
199 |
|
|
|
196 |
|
|
|
311 |
|
Total interest income |
|
|
11,055 |
|
|
|
10,986 |
|
|
|
10,975 |
|
|
|
|
|
|
|
|
|
Deposits |
|
|
742 |
|
|
|
815 |
|
|
|
2,122 |
|
Other borrowings |
|
|
271 |
|
|
|
378 |
|
|
|
390 |
|
Total interest expense |
|
|
1,013 |
|
|
|
1,193 |
|
|
|
2,512 |
|
Net interest income |
|
|
10,042 |
|
|
|
9,793 |
|
|
|
8,463 |
|
Provision (credit) for loan losses |
|
|
(173 |
) |
|
|
(44 |
) |
|
|
392 |
|
Net interest income after provision for loan losses |
|
|
10,215 |
|
|
|
9,837 |
|
|
|
8,071 |
|
Non-interest income |
|
|
|
|
|
|
|
Other loan fees |
|
|
313 |
|
|
|
383 |
|
|
|
341 |
|
Gains from loan sales, net |
|
|
118 |
|
|
|
209 |
|
|
|
190 |
|
Document processing fees |
|
|
106 |
|
|
|
129 |
|
|
|
124 |
|
Service charges |
|
|
67 |
|
|
|
83 |
|
|
|
134 |
|
Other |
|
|
293 |
|
|
|
166 |
|
|
|
161 |
|
Total non-interest income |
|
|
897 |
|
|
|
970 |
|
|
|
950 |
|
Non-interest expenses |
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
4,565 |
|
|
|
4,594 |
|
|
|
4,398 |
|
Occupancy, net |
|
|
779 |
|
|
|
751 |
|
|
|
758 |
|
Professional services |
|
|
340 |
|
|
|
399 |
|
|
|
383 |
|
Data processing |
|
|
340 |
|
|
|
254 |
|
|
|
283 |
|
Depreciation |
|
|
205 |
|
|
|
202 |
|
|
|
208 |
|
FDIC assessment |
|
|
91 |
|
|
|
165 |
|
|
|
144 |
|
Advertising and marketing |
|
|
183 |
|
|
|
110 |
|
|
|
153 |
|
Stock-based compensation |
|
|
68 |
|
|
|
68 |
|
|
|
85 |
|
Other |
|
|
289 |
|
|
|
526 |
|
|
|
317 |
|
Total non-interest expenses |
|
|
6,860 |
|
|
|
7,069 |
|
|
|
6,729 |
|
Income before provision for income taxes |
|
|
4,252 |
|
|
|
3,738 |
|
|
|
2,292 |
|
Provision for income taxes |
|
|
1,231 |
|
|
|
1,111 |
|
|
|
694 |
|
Net income |
|
$ |
3,021 |
|
|
$ |
2,627 |
|
|
$ |
1,598 |
|
Earnings per share: |
|
|
|
|
|
|
|
Basic |
|
$ |
0.36 |
|
|
$ |
0.31 |
|
|
$ |
0.19 |
|
Diluted |
|
$ |
0.35 |
|
|
$ |
0.31 |
|
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
COMMUNITY WEST BANCSHARES |
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
(in 000's, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
|
2021 |
|
|
|
2020 |
|
|
|
2020 |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,607 |
|
|
$ |
1,587 |
|
|
$ |
3,002 |
|
Interest-earning deposits in other financial institutions |
|
|
71,128 |
|
|
|
58,953 |
|
|
|
86,663 |
|
Investment securities |
|
|
21,570 |
|
|
|
22,043 |
|
|
|
23,909 |
|
Loans: |
|
|
|
|
|
|
Commercial |
|
|
77,579 |
|
|
|
80,851 |
|
|
|
98,365 |
|
Commercial real estate |
|
|
407,336 |
|
|
|
402,148 |
|
|
|
391,207 |
|
SBA |
|
|
11,566 |
|
|
|
11,851 |
|
|
|
13,330 |
|
Paycheck Protection Program (PPP) |
|
|
94,507 |
|
|
|
69,542 |
|
|
|
- |
|
Manufactured housing |
|
|
284,583 |
|
|
|
280,284 |
|
|
|
263,484 |
|
Single family real estate |
|
|
10,845 |
|
|
|
10,358 |
|
|
|
11,191 |
|
HELOC |
|
|
3,846 |
|
|
|
3,861 |
|
|
|
4,196 |
|
Other (1) |
|
|
(2,414 |
) |
|
|
(1,318 |
) |
|
|
223 |
|
Total loans |
|
|
887,848 |
|
|
|
857,577 |
|
|
|
781,996 |
|
|
|
|
|
|
|
|
Loans, net |
|
|
|
|
|
|
Held for sale |
|
|
29,767 |
|
|
|
31,229 |
|
|
|
39,458 |
|
Held for investment |
|
|
858,081 |
|
|
|
826,348 |
|
|
|
742,538 |
|
Less: Allowance for loan losses |
|
|
(10,233 |
) |
|
|
(10,194 |
) |
|
|
(9,167 |
) |
Net held for investment |
|
|
847,848 |
|
|
|
816,154 |
|
|
|
733,371 |
|
NET LOANS |
|
|
877,615 |
|
|
|
847,383 |
|
|
|
772,829 |
|
|
|
|
|
|
|
|
Other assets |
|
|
45,102 |
|
|
|
45,469 |
|
|
|
38,805 |
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
1,018,022 |
|
|
$ |
975,435 |
|
|
$ |
925,208 |
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
Non-interest-bearing demand |
|
$ |
196,617 |
|
|
$ |
181,837 |
|
|
$ |
121,293 |
|
Interest-bearing demand |
|
|
440,502 |
|
|
|
398,101 |
|
|
|
286,736 |
|
Savings |
|
|
19,858 |
|
|
|
18,736 |
|
|
|
16,016 |
|
Certificates of deposit ($250,000 or more) |
|
|
20,072 |
|
|
|
30,536 |
|
|
|
93,615 |
|
Other certificates of deposit |
|
|
127,472 |
|
|
|
136,975 |
|
|
|
193,939 |
|
Total deposits |
|
|
804,521 |
|
|
|
766,185 |
|
|
|
711,599 |
|
Other borrowings |
|
|
105,000 |
|
|
|
105,000 |
|
|
|
115,000 |
|
Other liabilities |
|
|
16,710 |
|
|
|
15,243 |
|
|
|
15,448 |
|
TOTAL LIABILITIES |
|
|
926,231 |
|
|
|
886,428 |
|
|
|
842,047 |
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
91,791 |
|
|
|
89,007 |
|
|
|
83,161 |
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
$ |
1,018,022 |
|
|
$ |
975,435 |
|
|
$ |
925,208 |
|
|
|
|
|
|
|
|
Common shares outstanding |
|
|
8,524 |
|
|
|
8,473 |
|
|
|
8,472 |
|
|
|
|
|
|
|
|
Book value per common share |
|
$ |
10.77 |
|
|
$ |
10.50 |
|
|
$ |
9.82 |
|
|
|
|
|
|
|
|
(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 |
PERFORMANCE MEASURES AND RATIOS |
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
Return on average common equity |
|
13.48% |
|
|
|
11.85% |
|
|
|
7.76% |
|
Return on
average assets |
|
1.22% |
|
|
|
1.07% |
|
|
|
0.73% |
|
Efficiency
ratio |
|
62.71% |
|
|
|
65.68% |
|
|
|
71.49% |
|
Net interest
margin |
|
4.19% |
|
|
|
4.13% |
|
|
|
3.97% |
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Three Months
Ended |
|
Three Months
Ended |
AVERAGE BALANCES |
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
Average
assets |
$ |
1,004,611 |
|
|
$ |
977,736 |
|
|
$ |
886,418 |
|
Average
earning assets |
|
972,945 |
|
|
|
944,073 |
|
|
|
858,064 |
|
Average
total loans |
|
875,766 |
|
|
|
845,620 |
|
|
|
787,537 |
|
Average
deposits |
|
792,502 |
|
|
|
726,223 |
|
|
|
718,205 |
|
Average
common equity |
|
90,906 |
|
|
|
88,171 |
|
|
|
82,815 |
|
|
|
|
|
|
|
EQUITY ANALYSIS |
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
Total common
equity |
$ |
91,791 |
|
|
$ |
89,007 |
|
|
$ |
83,161 |
|
Common stock
outstanding |
|
8,524 |
|
|
|
8,473 |
|
|
|
8,472 |
|
|
|
|
|
|
|
Book value
per common share |
$ |
10.77 |
|
|
$ |
10.50 |
|
|
$ |
9.82 |
|
|
|
|
|
|
|
ASSET QUALITY |
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
Nonaccrual
loans, net |
$ |
1,825 |
|
|
$ |
3,665 |
|
|
$ |
2,645 |
|
Nonaccrual
loans, net/total loans |
|
0.21% |
|
|
|
0.43% |
|
|
|
0.34% |
|
Other assets
acquired through foreclosure, net |
$ |
2,572 |
|
|
$ |
2,614 |
|
|
$ |
2,707 |
|
|
|
|
|
|
|
Nonaccrual
loans plus other assets acquired through foreclosure, net |
$ |
4,397 |
|
|
$ |
6,279 |
|
|
$ |
5,352 |
|
Nonaccrual
loans plus other assets acquired through foreclosure, net/total
assets |
|
0.43% |
|
|
|
0.64% |
|
|
|
0.58% |
|
Net loan
(recoveries)/charge-offs in the quarter |
$ |
(212 |
) |
|
$ |
(41 |
) |
|
$ |
(58 |
) |
Net
(recoveries)/charge-offs in the quarter/total loans |
|
(0.02% |
) |
|
|
(0.00% |
) |
|
|
(0.01% |
) |
|
|
|
|
|
|
Allowance
for loan losses |
$ |
10,233 |
|
|
$ |
10,194 |
|
|
$ |
9,167 |
|
Plus:
Reserve for undisbursed loan commitments |
|
82 |
|
|
|
92 |
|
|
|
76 |
|
Total
allowance for credit losses |
$ |
10,315 |
|
|
$ |
10,286 |
|
|
$ |
9,243 |
|
Allowance
for loan losses/total loans held for investment |
|
1.19% |
|
|
|
1.23% |
|
|
|
1.23% |
|
Allowance
for loan losses/total loans held for investment excluding PPP
loans |
|
1.34% |
|
|
|
1.35% |
|
|
|
1.23% |
|
Allowance
for loan losses/nonaccrual loans, net |
|
560.71% |
|
|
|
278.14% |
|
|
|
346.58% |
|
|
|
|
|
|
|
Community West Bank * |
|
|
|
|
|
Community
bank leverage ratio** |
|
8.97% |
|
|
|
9.29% |
|
|
|
9.21% |
|
Tier 1
leverage ratio |
|
8.97% |
|
|
|
9.29% |
|
|
|
9.21% |
|
Tier 1
capital ratio |
|
11.28% |
|
|
|
11.02% |
|
|
|
10.42% |
|
Total
capital ratio |
|
12.53% |
|
|
|
12.27% |
|
|
|
11.60% |
|
|
|
|
|
|
|
INTEREST SPREAD ANALYSIS |
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
Yield on
total loans |
|
5.03% |
|
|
|
5.08% |
|
|
|
5.45% |
|
Yield on
investments |
|
2.51% |
|
|
|
2.46% |
|
|
|
2.56% |
|
Yield on
interest earning deposits |
|
0.22% |
|
|
|
0.15% |
|
|
|
1.22% |
|
Yield on
earning assets |
|
4.61% |
|
|
|
4.63% |
|
|
|
5.14% |
|
|
|
|
|
|
|
Cost of
interest-bearing deposits |
|
0.50% |
|
|
|
0.60% |
|
|
|
1.42% |
|
Cost of
total deposits |
|
0.38% |
|
|
|
0.45% |
|
|
|
1.19% |
|
Cost of
borrowings |
|
1.05% |
|
|
|
1.03% |
|
|
|
2.29% |
|
Cost of
interest-bearing liabilities |
|
0.58% |
|
|
|
0.69% |
|
|
|
1.51% |
|
|
|
|
|
|
|
* Capital ratios are
preliminary until the Call Report is filed. |
**The decrease in 1Q21
resulted from increased average assets which include |
SBA PPP loans at 100%
versus prior periods for which a portion of these loans were |
pledged to the
Paycheck Protection Program Liquidity Fund and qualified for
exclusion. |
|
|
|
|
|
|
Contact: |
Susan C.
Thompson, EVP & CFO |
|
805.692.5821 |
|
www.communitywestbank.com |
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