Community West Bancshares Announces Record Operating Earnings for 2005 Second Quarter and Six-Month Period.GOLETA, Calif. -- Community West Bancshares (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 ): --Net Interest Income Increases by 43% for Second Quarter --Assets Increase to $393 Million --Dividend of $.05 Per Share Declared Community West Bancshares (Company) (NASDAQ:CWBC) today announced record operating results for the second quarter and first six months of 2005. EARNINGS SUMMARY For the quarter ended June June: see month. 30, 2005 (2005 Q 2), the Company recorded net income of $1,119,000, or $.19 per share (basic and 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 $1,040,000, or $.18 per share (basic and diluted), for the quarter ended June 30, 2004 (2004 Q 2), an 8% comparative increase. For the six months ended June 30, 2005, the Company recorded net income of $2,097,000, or $.37 per share (basic, and $.35 per share diluted), compared to net income of $1,914,000, or $.34 per share (basic, and $.33 per share diluted), for the six months ended June 30, 2004, a 10% comparative increase. The 2005 Q 2 and six-month record results were achieved despite a discretionary management decision to sell 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 7(a) loans and grow the Company's loan portfolio. Net Interest Income Net interest income for the comparative three- and six-month periods increased by $1,406,000 and $2,452,000, or 43% and 38%, respectively. Total interest income for the comparative three-month period increased by $1,872,000. $874,000 of the increase is attributed to the continued strong 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 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, $998,000 of the increase is attributed to higher interest rates. Total interest income for the comparative six-month period increased by $3,039,000. $1,649,000 of the increase is attributed to the net growth in interest-earning assets; and, $1,390,000 of the increase is attributed to higher interest rates. Interest expense on deposits for the comparative three-month period increased by $556,000. $275,000 of the increase is attributed to interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid deposit growth, particularly the popular Preferred Money Market account; and, $281,000 is attributed to higher interest rates. Interest expense on borrowings decreased $90,000, substantially all of which was volume-related. Interest expense on deposits for the comparative six-month period increased by $912,000. $524,000 of the increase is attributed to interest-bearing deposit growth and $388,000 is attributed to increased interest rates. Interest expense on borrowings decreased $325,000, substantially all of which was volume-related. The Company continues to benefit, although at a somewhat lesser pace, 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. The majority of the net provision for loan losses is attributable to the volume increase in the Company's loan portfolio. Non-Interest Income and Non-Interest Expenses Non-interest income decreased from $3.4 million for 2004 Q 2 to $1.9 million for 2005 Q 2. Non-interest income for the comparative six-month period decreased from $5.9 million in 2004 to $3.7 million in 2005. The Company recorded declines in gains from loan sales, certain fee income categories and 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. The Company continues to successfully manage non-interest expenses and there was a decrease in such expenses for both the three- and six-month comparative periods. BALANCE SHEET The Company's total assets increased to $392.8 million, or $27.6 million, at June 30, 2005, compared to $365.2 million at December December: see month. 31, 2004. Net loans increased by $42.3 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 $15.6 million. On the funding side in 2005, deposits have decreased by $2.4 million while other borrowings have increased by $26.6 million in total. CAPITAL As of June 30, 2005, the Company had $39.3 million in equity capital, or 10.00% of consolidated total assets, and book value per share was $6.84. DIVIDEND DECLARED The Board of Directors announced that they have declared a regular quarterly dividend of $.05 per common share, payable August 19, 2005, to shareholders of record as of the close of business on August 5, 2005. At this quarterly rate, the annual dividend is equivalent to $.20 per common share. COMMENTS FROM PRESIDENT AND CHIEF EXECUTIVE OFFICER Lynda J. Nahra, President and Chief Executive Officer, noted: "We continue to be pleased with our asset growth and expanding net interest margin, non-interest expense management and the overall execution of our strategic initiatives. In May 2005, we opened our full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. 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. office, and it has been extremely well-received in the business community. We remain 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):
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 three full-service banking offices, in Goleta, Ventura and Santa Maria. 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 Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. , 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 Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. 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 STATEMENTS
(unaudited)
(in 000's, except share and per share data)
Three Months Six Months
Ended June 30, Ended June 30,
------------------------------------
2005 2004 2005 2004
------------------------------------
Interest income $7,117 $5,245 $13,445 $10,406
Interest expense 2,411 1,945 4,471 3,884
------------------------------------
Net interest income 4,706 3,300 8,974 6,522
Provision for loan losses 264 (30) 434 65
------------------------------------
Net interest income after
provision for loan losses 4,442 3,330 8,540 6,457
Non-interest income 1,861 3,438 3,685 5,871
Non-interest expenses 4,406 5,000 8,662 9,075
------------------------------------
Income before income taxes 1,897 1,768 3,563 3,253
Provision for income taxes 778 728 1,466 1,339
------------------------------------
NET INCOME $1,119 $1,040 $2,097 $1,914
====================================
Earnings per share:
Basic $ 0.19 $ 0.18 $ 0.37 $ 0.34
Diluted 0.19 0.18 0.35 0.33
Weighted average shares:
Basic 5,745,014 5,714,168 5,743,154 5,710,792
Diluted 5,945,231 5,834,584 5,940,594 5,834,421
----------------------------------------------------------------------
Selected average balance sheet items
Average assets $380,600 $324,790 $370,287 $317,460
Average gross loans 326,538 269,278 317,162 261,643
COMMUNITY WEST BANCSHARES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in 000's, except share and per share data)
June 30, Dec. 31,
2005 2004
-----------------------
Cash and cash equivalents $13,545 $30,205
Interest-earning deposits in other
financial institutions 640 647
Investment securities 29,437 28,352
Loans:
Held for sale 47,385 45,988
-----------------------
Held for investment 270,578 224,938
Less: Allowance (3,102) (2,785)
-----------------------
Net held for investment 267,476 222,153
-----------------------
Securitized loans 18,848 23,474
Less: Allowance (898) (1,109)
-----------------------
Net securitized loans 17,950 22,365
-----------------------
NET LOANS 332,811 290,506
-----------------------
Other assets 16,365 15,493
-----------------------
TOTAL ASSETS $392,798 $365,203
=======================
Deposits $282,208 $284,568
Repurchase agreements 3,065 13,672
FHLB advances 50,500 10,500
Bonds payable 11,134 13,910
Other liabilities 6,592 4,984
------------------------
TOTAL LIABILITIES 353,499 327,634
Stockholders' equity 39,299 37,569
------------------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $392,798 $365,203
========================
Shares outstanding 5,745,014 5,729,869
Book value per share $6.84 $6.56
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Nonaccrual loans $7,476 $8,350
SBA guaranteed portion (4,981) (5,287)
------------------------
Nonaccrual loans, net $2,495 $3,063
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