Community West Bancshares Announces Operating Earnings of $978,000 for 2005 Q1, an Increase of 12%; Quarterly Dividend Increased by 25% to $.05 Per Share.GOLETA, Calif. -- Community West Bancshares (Company) (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CWBC CWBC Constant-Weight Binary Code ) today announced operating results for the first quarter of calendar 2005. EARNINGS SUMMARY For the quarter ended March 31, 2005 (2005 Q1), the Company recorded net income of $978,000, or $.17 per share (basic, and $.16 per share diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. ), compared to net income of $874,000, or $.15 per share (basic and diluted), for the quarter ended March 31, 2004 (2004 Q1), a 12% comparative increase. Net Interest Income Net interest income for the comparative three-month period increased by $1,104,000. Total interest income for the comparative three-month period increased by $1,225,000. Eight hundred ninety thousand dollars of the increase is attributed to the growth in interest-earning assets, primarily in the commercial lending and manufactured housing Manufactured housing (also known as prefab housing) is a type of housing unit that is largely assembled in factories and then transported to sites of use. In the United States, the term "manufactured home" specifically refers to a house built entirely in a protected portfolios, partially offset by the continued decrease in securitized securitized Of, 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. loans; and $335,000 of the increase is attributed to increased interest rates. Interest expense on deposits for the comparative three-month period increased by $355,000. Two hundred twenty-one thousand dollars of the increase is attributed to interest-bearing deposit growth, and $134,000 is attributed to increased interest rates. Interest expense on borrowings decreased $234,000, substantially all of which was volume-related. The Company continues to benefit from the paydowns of the relatively high-rate, securitized bonds, thus serving to reduce the Company's cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. . Provision for Loan Losses Overall, the general portfolio credit quality continues to be relatively stable and, in addition, the securitized loan portfolio continues to stabilize stabilize See peg. and pay down. Non-Interest Income and Non-Interest Expenses Non-interest income decreased from $2.5 million for 2004 Q1 to $1.8 million for 2005 Q1. The Company experienced declines in gains from loan sales, certain fee income categories and had lower loan servicing Loan servicing is the process by which a mortgage bank or subservicing firm collects the timely payment of interest and principal from borrowers. The level of service varies depending on the type loan and the terms negotiated between the firm and the investor seeking their services. fees, primarily due to fewer 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 loan sales compared to last year, which would add to the servicing asset, and increased loan prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. rates, which serve to decrease the servicing asset. The Company continues to control non-interest expenses and there was only a modest increase in the comparative periods. BALANCE SHEET The Company's total assets increased to $371.0 million, or $5.8 million, at March 31, 2005 compared to $365.2 million at December 31, 2004. Net loans increased by $18.8 million, and combined liquid assets Cash, or property immediately convertible to cash, such as Securities, notes, life insurance policies with cash surrender values, U.S. savings bonds, or an account receivable. and investment securities decreased by a net of $13.2 million. On the funding side in 2005, deposits have decreased by $9.9 million, while other borrowings have increased by $13.8 million in total. CAPITAL As of March 31, 2005, the Company had $38.4 million in equity capital, or 10.36% of consolidated total assets, and book value per share was $6.69. DIVIDEND INCREASED The Board of Directors announced that they have declared a quarterly dividend of $.05 per common share, payable May 19, 2005 to shareholders of record as of the close of business on May 5, 2005. At this quarterly rate, the annual dividend is equivalent to $.20 per common share and represents a 25% increase in the payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. rate. COMMENTS FROM PRESIDENT AND CHIEF EXECUTIVE OFFICER Lynda J. Nahra, President and Chief Executive Officer, noted: "We started the 2005 year off with solid results and we are extremely pleased with the overall execution of our strategic initiatives. We will continue to be focused 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):
v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. our Santa Maria Santa Maria, city, Brazil Santa Maria (sän`tə mərē`ə), city (1991 pop. 217,592), Rio Grande do Sul state, S Brazil. It is a major railroad terminus and the site of an important military base. mortgage and commercial lending office to our new location and will open the full-service branch on May 2, 2005." 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. The Company is the holding company for Community West Bank, which has two full-service branch offices, in Goleta and Ventura, with a third location, in Santa Maria, Calif., scheduled to open on May 2, 2005. The principal business activities of the Company are Relationship banking, Mortgage lending and SBA lending, with loans originating in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , Alabama Alabama, indigenous people of North America Alabama (ăləbăm`ə), indigenous people of North America whose language belongs to the Muskogean branch of the Hokan-Siouan linguistic stock (see Native American languages). , Colorado, Florida, Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. , 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. , Tennessee and Washington. 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.
COMMUNITY WEST BANCSHARES
CONDENSED CONSOLIDATED INCOME STATEMENT
(unaudited)
(in 000s, except share and per share data)
Quarter Ended March 31,
--------------------------------
2005 2004
--------------- ----------------
Interest income $6,328 $5,103
Interest expense 2,060 1,939
--------------- ----------------
Net interest income 4,268 3,164
Provision for loan losses 170 95
--------------- ----------------
Net interest income after provision
for loan losses 4,098 3,069
Non-interest income 1,825 2,492
Non-interest expenses 4,257 4,076
--------------- ----------------
Income before income taxes 1,666 1,485
Provision for income taxes 688 611
--------------- ----------------
NET INCOME $978 $874
=============== ================
Earnings per share:
Basic $0.17 $0.15
Diluted 0.16 0.15
Weighted average shares:
Basic 5,741,274 5,707,415
Diluted 5,955,102 5,834,439
Selected average balance sheet items
-------------------------------------
Average assets $359,886 $310,156
Average gross loans 307,659 253,970
COMMUNITY WEST BANCSHARES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in 000s, except share and per share data)
March 31, December 31,
2005 2004
---------------- -----------------
Cash and cash equivalents $15,274 $30,205
Interest-earning deposits in other
financial institutions 639 647
Investment securities 30,119 28,352
Loans:
Held for sale 42,608 45,988
---------------- -----------------
Held for investment 249,404 224,938
Less: Allowance (2,964) (2,785)
---------------- -----------------
Net held for investment 246,440 222,153
---------------- -----------------
Securitized loans 21,406 23,474
Less: Allowance (1,122) (1,109)
---------------- -----------------
Net securitized loans 20,284 22,365
---------------- -----------------
NET LOANS 309,332 290,506
---------------- -----------------
Other assets 15,614 15,493
---------------- -----------------
TOTAL ASSETS $370,978 $365,203
================ =================
Deposits $274,659 $284,568
Repurchase agreements 10,629 13,672
FHLB advances 28,500 10,500
Bonds payable 12,726 13,910
Other liabilities 6,044 4,984
---------------- -----------------
TOTAL LIABILITIES 332,558 327,634
Stockholders' equity 38,420 37,569
---------------- -----------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
$370,978 $365,203
================ =================
Shares outstanding 5,745,014 5,729,869
Book value per share $6.69 $6.56
Nonaccrual loans $8,461 $8,350
SBA guaranteed portion (5,867) (5,287)
---------------- -----------------
Nonaccrual loans, net $2,594 $3,063
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