Community West Bancshares -CWBC- Announces 32% Increase in Third Quarter Net Income; Earnings Per Share to $.16 for Third Quarter and $.30 for Year To Date.Business Editors GOLETA, Calif.--(BUSINESS WIRE)--Oct. 22, 2003 Community West Bancshares (Nasdaq:CWBC CWBC Constant-Weight Binary Code ) (Company) today announced operating results for the third quarter of 2003. Earnings Summary The Company recorded net income of $885,000, or $.16 per share (basic, and $.15 per share diluted), for the three months ended September 30, 2003 (2003 Q 3), compared to net income of $672,000, or $.12 per share (basic and diluted), for the three months ended September 30, 2002 (2002 Q 3). This represents a 32% increase for 2003 Q 3 net income compared to 2002 Q 3, and a 78% sequential increase compared to the three months ended June 30, 2003 (2003 Q 2). For the nine months ended September 30, 2003, the Company recorded net income of $1,731,000, or $.30 per share (basic and diluted), compared to net loss of $(2,249,000), or $(.40) per share (basic and diluted), for the nine months ended September 30, 2002. 2003 Q 3 Compared to 2002 Q 3 Net interest income after provision for loan losses decreased to $2,524,000 for 2003 Q 3 from $3,326,000 for 2002 Q 3. Net interest income before provision for loan losses decreased to $2,822,000 for 2003 Q 3 from $4,506,000 for 2002 Q 3. There was a general decline in interest rates and a product mix change in the quarterly comparison, which have narrowed the Company's net interest margin, but the primary reason for the margin decrease is the termination of the high-yield, short-term consumer lending Consumer lending or consumer loans refers to any type of loan product that is not a mortgage; such as a car, boat, manufactured home, home equity loan, home equity line of credit, signature loan, signature line of credit, recreational vehicle, or Certificate of Deposit loans. business. While the net interest margin compressed, the provision for loan losses was $298,000 for 2003 Q 3 compared to $1,180,000 for 2002 Q 3. During fiscal 2002 and continuing on to fiscal 2003, the credit quality has substantially improved, primarily due to the Company's tightened credit underwriting standards and the discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. of certain loan products. This includes high loan-to-value (HLTV HLTV High Loan to Value HLTV Half-Life Television HLTV Half Life True Voice ) and subprime lending  This article or section may deal primarily with the U.S. and may not present a worldwide view. loans, discontinued in the second quarter of 2002, and
short-term consumer loans, formally discontinued as of December 31,
2002. In addition, the securitized securitizedOf, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. loan portfolio continues to stabilize and pay down. Also, the Company experienced a record mortgage volume in 2003 Q 3, which contributed to a comparative increase in non-interest income. The aforementioned product discontinuance, and the centralization cen·tral·ize v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es v.tr. 1. To draw into or toward a center; consolidate. 2. of the support functions of the Small Business Administration (SBA SBA abbr. Small Business Administration Noun 1. SBA - an independent agency of the United States government that protects the interests of small businesses and ensures that they receive a fair share of government ) and Mortgage Lending Division of Goleta National Bank (Bank), which commenced in 2002 Q 2, along with an ongoing internal cost reduction emphasis, contributed to a decrease in non-interest expenses to $4,196,000 in 2003 Q 3 from $4,919,000 in 2002 Q 3. 2003 Nine Months Compared to 2002 Nine Months Net interest income after provision for loan losses decreased to $7,149,000 for the nine months ended September 30, 2003 from $7,670,000 for the nine months ended September 30, 2002. The provision for loan losses decreased to $1,006,000 for the nine months ended September 30, 2003 from $4,731,000 for the nine months ended September 30, 2002. The Company's non-interest expenses decreased to $12,722,000 for the nine months ended September 30, 2003 from $20,384,000 for the nine months ended September 30, 2002. The primary improvement reasons are basically the same as those detailed above for the quarterly comparison, and the 2002 non-interest expenses also include a $1,788,000 writedown for impairment of SBA interest only strips and servicing assets and a $1,340,000 lower of cost or market lower of cost or market A method for determining an asset's value such that either the original cost or the current replacement cost, whichever is lowest, is used for financial reporting purposes. provision on loans held for sale. Lynda Nahra, President and Chief Executive Officer of the Bank, noted: "Despite the continued difficult interest rate environment for the banking industry, our profit improvement initiatives that we commenced in 2002, and the focus of our team on our business model and core competencies A core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. as we continue to focus on the Company's primary business units, namely Relationship Banking, SBA Lending and Mortgage Lending." Capital As of September 30, 2003, the Company had $33,862,000 in equity capital, or 11.16% of consolidated total assets, and book value per share was $5.94. Additionally, the Bank had a very strong risk-based capital ratio Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. of 14.28% as of September 30, 2003. Company Overview Community West Bancshares is a financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. company with headquarters in Goleta, California “Goleta” redirects here. For the genus of jumping spiders, see Goleta (spider). Goleta (IPA: /ɡəʊleta/ in English or /ɡolɛta/ in Spanish) is a city located in southern Santa Barbara County, California, USA. . The Company is the holding company for Goleta National Bank, which has two full service branches, one in Goleta and one in Ventura, California Incorporated in 1866, the city of San Buenaventura (usually referred to as Ventura) is the county seat of Ventura County, California. Ventura has a population of 106,744.[1] Ventura is accessible via U.S. . The Bank is one of the nation's largest SBA lenders with loan production offices located in California, Florida, Georgia, Nevada, North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , Oregon, South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. and Washington. The principal business activities of the Company are Relationship Banking, SBA Lending and Mortgage Lending. See financial tables below. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Disclosure This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. 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. Furthermore, the Company has certain restrictions placed on its operations by the Office of the Comptroller of the Currency The Office of the Comptroller of the Currency (or OCC) was established by the National Currency Act of 1863 and serves to charter, regulate, and supervise all national banks and the federal branches and agencies of foreign banks in the United States. (OCC OCC See: Options Clearing Corporation OCC See Options Clearing Corporation (OCC). ) until the OCC deems that the Bank has substantially complied with, and releases therefrom there·from adv. From that place, time, or thing. Adv. 1. therefrom - from that circumstance or source; "atomic formulas and all compounds thence constructible"- W.V. , the Consent Order, issued and signed on October 28, 2002.
COMMUNITY WEST BANCSHARES
CONDENSED CONSOLIDATED INCOME STATEMENT
(unaudited)
(in 000's, except share and per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
Interest income $5,020 $7,677 $15,398 $22,878
Interest expense 2,198 3,171 7,243 10,477
Net interest income 2,822 4,506 8,155 12,401
Provision for loan losses 298 1,180 1,006 4,731
Net interest income after
provision for loan losses 2,524 3,326 7,149 7,670
Non-interest income 3,013 2,752 8,199 8,837
Non-interest expenses 4,196 4,919 12,722 20,384
Income (loss) before income
taxes 1,341 1,159 2,626 (3,877)
Provision (benefit) for income
taxes 456 487 895 (1,628)
NET INCOME (LOSS) $885 $672 $1,731 $(2,249)
Earnings per share:
Basic $0.16 $0.12 $0.30 $(0.40)
Diluted 0.15 0.12 0.30 (0.40)
Weighted average shares:
Basic 5,692,732 5,690,224 5,691,069 5,690,224
Diluted 5,773,400 5,695,301 5,738,139 5,690,224
COMMUNITY WEST BANCSHARES
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)
(in 000's, except share and per share data)
September 30, 2003 December 31, 2002
Cash and cash equivalents $20,746 $31,094
Interest bearing deposits in
other financial institutions 5,990 2,277
Investments 14,998 6,824
Loans:
Held for sale 50,900 43,284
Held for investment 156,069 142,327
Less: Allowance (2,652) (3,379)
Net held for investment 153,417 138,948
Securitized loans 44,325 66,195
Less: Allowance (2,111) (2,571)
Net securitized loans 42,214 63,624
NET LOANS 246,531 245,856
Other assets 15,191 21,159
TOTAL ASSETS $303,456 $307,210
Deposits $222,715 $219,083
Bonds payable 32,151 50,473
Repurchase agreements 10,716 -
Other liabilities 4,012 5,567
TOTAL LIABILITIES 269,594 275,123
Stockholders' equity 33,862 32,087
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $303,456 $307,210
Shares outstanding 5,698,769 5,690,224
Book value per share $5.94 $5.64
Nonaccrual loans $7,623 $13,965
SBA guaranteed portion (4,206) (8,143)
Nonaccrual loans, net $3,417 $5,822
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