Community West Bancshares Announces Increase in First Quarter Net Income to $0.06 Per Share.Business Editors GOLETA, Calif.--(BUSINESS WIRE)--April 24, 2003 Community West Bancshares (Company) today announced operating results for the first quarter of 2003. Earnings and Operations The Company recorded net income of $348,000, or $.06 per share (basic and diluted), for the quarter ended March 31, 2003 (2003 Q 1), compared to net loss of $(949,000), or $(.17) per share (basic and diluted), for the quarter ended March 31, 2002 (2002 Q 1). Net interest income after provision for loan losses increased to $2,217,000 for 2003 Q 1 from $1,398,000 for 2002 Q 1. Net interest income before provision for loan losses decreased to $2,561,000 for 2003 Q 1 from $3,674,000 for 2002 Q 1. There was a general decline in interest rates 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 $344,000 for 2003 Q 1 compared to $2,276,000 for 2002 Q 1. 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. 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 (Goleta or Bank), along with internal cost reduction programs, contributed to a decrease in non-interest expenses to $4,355,000 in 2003 Q 1 from $6,409,000 in 2002 Q 1. As previously announced, commencing in 2003 Q 1, the Company significantly expanded its SBA lending division by acquiring a group of seasoned SBA lending professionals, enabling the bank to have an expanded presence in Northern California Northern California, sometimes referred to as NorCal, is the northern portion of the U.S. state of California. The region contains the San Francisco Bay Area, the state capital, Sacramento; as well as the substantial natural beauty of the redwood forests, the northern , specifically the Sacramento and Bay areas. This group is expected to contribute positively to net income by the second half of fiscal 2003. Included in the 2003 Q 1 non-interest expenses is $241,000 related to the start-up of this SBA business. Lynda Nahra, President of Goleta, noted: "Our profit improvement initiatives that we started in 2002 are continuing to have a favorable impact on our operating results. 2003 Q 1 is the third consecutive profitable quarter. We continue to show benefits from prudent credit risk management and overall cost containment cost containment, 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. . While we remain cautious on the outlook for the rest of 2003, this performance gives us confidence in our strategic plan and leaves the Company well-positioned for the eventual national economic recovery." As previously announced, as of December 31, 2002, Goleta ceased making short-term consumer loans through its agent, ACE Cash Express (ACE). As part of that agreement, ACE agreed to indemnify To compensate for loss or damage; to provide security for financial reimbursement to an individual in case of a specified loss incurred by the person. Insurance companies indemnify their policyholders against damage caused by such things as fire, theft, and flooding, which 100%, instead of the prior 90%, of Goleta's losses and expenses incurred after November 1, 2002 from certain third-party claims regarding such loans, including pending and future legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. . To replace such assets, and as part of its strategic plan, the Company plans to continue to focus on its presence in Relationship Banking and periodically retain for its own portfolio more SBA loans, particularly the guaranteed portions. In addition, the Company is methodically working on ways to improve its net interest margin, including the short-term investing in government-agency guaranteed securities. These initiatives, in conjunction with our continued focus on controlling expenses, are intended to enhance the Company's overall operating performance. Capital As of March 31, 2003, the Company had $32,442,000 in equity capital, or 10.94% of consolidated total assets. Additionally, Goleta 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 13.94% as of March 31, 2003. Book value per share of the Company as of March 31, 2003 was $5.70. 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. . Goleta 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, Small Business Administration (SBA) Lending and Mortgage Lending. 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 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 Goleta has substantially complied with the Consent Order, issued by the OCC on October 28, 2002 and signed by Goleta, and releases Goleta therefrom.
COMMUNITY WEST BANCSHARES
CONDENSED CONSOLIDATED INCOME STATEMENT
(unaudited)
(in 000's, except share and per share data)
Quarter Ended March 31
2003 2002
Interest income $5,179 $7,538
Interest expense 2,618 3,864
Net interest income 2,561 3,674
Provision for loan losses 344 2,276
Net interest income after provision
for loan losses 2,217 1,398
Non-interest income 2,669 3,375
Non-interest expenses 4,355 6,409
Income (loss) before income taxes 531 (1,636)
Provision (benefit) for income taxes 183 (687)
NET INCOME (LOSS) $348 $(949)
Earnings per share:
Basic $0.06 $(0.17)
Diluted 0.06 (0.17)
Weighted average shares:
Basic 5,690,224 5,690,224
Diluted 5,711,031 5,690,224
COMMUNITY WEST BANCSHARES
CONDENSED CONSOLIDATED BALANCE SHEET
(unaudited)
(in 000's, except share and per share data)
March 31, December
2003 31, 2002
Cash and cash equivalents $22,183 $33,371
Investments 17,494 6,824
Loans:
Held for sale 41,947 43,284
Held for investment 144,143 142,327
Less: Allowance (2,744) (3,379)
Net held for investment 141,399 138,948
Securitized loans 59,095 66,195
Less: Allowance (2,354) (2,571)
Net securitized loans 56,741 63,624
NET LOANS 240,087 245,856
Other assets 16,668 21,159
TOTAL ASSETS $296,432 $307,210
Deposits $215,753 $219,083
Bonds payable 44,423 50,473
Other liablities 3,814 5,567
TOTAL LIABILITIES 263,990 275,123
Stockholders' equity 32,442 32,087
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $296,432 $307,210
Shares outstanding 5,690,224 5,690,224
Book value per share $5.70 $5.64
Nonaccrual loans $12,623 $13,965
SBA guaranteed portion (7,014) (8,143)
Nonaccrual loans, net $5,609 $5,822
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