Community West Bancshares (“Community West” or the “Company”),
(NASDAQ: CWBC), parent company of Community West Bank (the “Bank”),
today reported net income of $3.5 million, or $0.39 per diluted
share, for the third quarter of 2022, compared to $2.6 million, or
$0.30 diluted share, for the preceding quarter, and $3.6 million,
or $0.41 per diluted share, for the third quarter of 2021. For the
first nine months of 2022, the Company reported net income of $10.1
million, or $1.13 per diluted share, compared to $10.2 million, or
$1.17 per diluted share, for the first nine months of 2021.
Earnings for the third quarter of 2022 were
impacted by a one-time $132,000 recovery related to a prior OREO
expense, and a $298,000 provision expense for loan losses. This
compared to a $252,000 provision expense recorded during the
preceding quarter.
The Company’s Board of Directors declared a
quarterly cash dividend of $0.075 per common share, payable
November 30, 2022, to common shareholders of record on November 14,
2022.
“Our third quarter operating results reflect
strong growth in the loan portfolio and continued net interest
margin expansion,” stated Martin E. Plourd, President & Chief
Executive Officer of Community West Bancshares. “Loan growth has
really started to materialize, with total loans increasing 3.6%
during the quarter, or 14.5% annually, primarily reflecting
increases in the C&I, commercial real estate and manufactured
housing portfolios. Additionally, our net interest margin improved
substantially on a linked quarter basis, improving 38 basis points
to 4.39%, as we took advantage of interest rate increases enacted
by the Federal Reserve and invested cash balances into higher
yielding loans and securities. We remain well positioned for
additional rising interest rates, which should allow us to maintain
our strong net interest margin, and ample on-balance sheet
liquidity to support loan demand and temper rising deposit
costs.”
Third Quarter 2022 Financial
Highlights:
- Net income was $3.5 million, or $0.39 per diluted share in the
third quarter 2022, compared to $2.6 million, or $0.30 per diluted
share in second quarter 2022, and $3.6 million, or $0.41 per
diluted share in third quarter 2021.
- Net interest income increased to $11.9 million for third
quarter 2022, compared to $11.0 million in second quarter 2022 and
$10.9 million in third quarter 2021.
- Net interest margin improved to 4.39% for the third quarter
2022, compared to 4.01% in second quarter 2022, and 3.97% in third
quarter 2021.
- Return on average assets was 1.25% for the third quarter 2022,
compared to 0.93% in second quarter 2022, and 1.28% in third
quarter 2021.
- Return on average equity was 12.65% for the third quarter 2022,
compared to 9.92% in second quarter 2022, and 14.77% in third
quarter 2021.
- The Company recorded a provision for loan losses of $298,000
for third quarter 2022, compared to a provision of $252,000 for
second quarter 2022, and a provision of $7,000 for third quarter
2021.
- The Allowance for Loan Losses (“ALL”) was 1.20% of total loans
held for investment at September 30, 2022, compared to 1.22% at
June 30, 2022, and 1.19% at September 30, 2021.
- Net non-accrual loans improved to $239,000 at September 30,
2022, compared to $379,000 at June 30, 2022, and $1.7 million at
September 30, 2021.
- Total loans increased by $33.0 million to $945.7 million at
September 30, 2022, compared to $912.7 million, at June 30, 2022,
and increased $55.1 million compared to $890.6 million, at
September 30, 2021.
- Stockholders’ equity increased $2.7 million to $109.8 million
at September 30, 2022, compared to $107.1 million at June 30, 2022,
and $98.8 million at September 30, 2021. During the quarter, the
Company had a $307,000 increase in Accumulated Other Comprehensive
Income (“AOCI”) related to an increase in the unrealized loss on
available for sale securities reflecting the increase in market
interest rates during the quarter.
- Non-interest-bearing demand deposits increased $6.4 million to
$243.1 million at September 30, 2022, compared to $236.7 million at
June 30, 2022, and increased $23.3 million compared to $219.8
million at September 30, 2021.
- Book value per common share increased to $12.54 at September
30, 2022, compared to $12.25 at June 30, 2022, and $11.46 at
September 30, 2021.
- The Bank’s Tier 1 leverage ratio was 9.83% at September 30,
2022, compared to 9.30% at June 30, 2022, and 8.59% at
September 30, 2021.
Income Statement
Net interest income increased 8.3% to $11.9
million in the third quarter 2022, compared to $11.0 million in the
preceding quarter and increased 9.1% compared to $10.9 million in
third quarter 2021. Interest income from loans increased 6.6% or
$738,000 compared to the prior quarter due to increased average
balances and loan yields. Interest income from securities and
interest-earning deposits increased 36.4% or $210,000 compared to
the prior quarter primarily due to increased average security
balances and higher earning-deposit yields because of increased
market rates. Total interest expense for the quarter increased
5.00% or $35,000 compared to the prior quarter due to increased
rates on interest-bearing demand deposits.
Net interest margin was 4.39% for third quarter
2022, a 38 basis point increase compared to second quarter 2022,
and a 42 basis point increase compared to third quarter 2021. “Our
net interest margin for the third quarter benefitted from strong
net interest income generation, solid loan growth and rising
interest rates. New loans that carry a higher interest rate are
replacing lower rate PPP loans, which is helping our net interest
margin,” said Richard Pimentel, Chief Financial Officer. The yield
on loans for the third quarter 2022 increased 11 basis points to
5.03% compared to 4.92% for the second 2022 quarter because of
increased loan rates on new originations and the impact of higher
market rates. The yield on federal funds and interest-earning
deposits increased 128 bps to 2.09% for the third quarter 2022 due
to increases in rates earned for overnight deposits and rates money
market deposits. The cost of funds for the third quarter increased
2 basis points to 0.30%, compared to 0.28% for the preceding
quarter due to changes in portfolio mix.
Non-interest income for the third quarter 2022
decreased $179,000 to $872,000 compared to $1.1 million in second
quarter 2022 as a result of lower loan fees and less gain-on-sale
of loans. Other loan fees were $292,000 for the third quarter 2022
compared to $377,000 in second quarter 2022. Gain on sale of loans
was $49,000 in the third quarter 2022 compared to $136,000 in the
second quarter of 2022 as a result of less sales during the
quarter. Non-interest income increased 14.4% to $3.2 million in the
first nine months of 2022 compared to $2.8 million in the first
nine months of 2021. The increase was primarily due to a $549,000
BOLI policy payout and a $992,000 recapture of expenses from a
lawsuit settlement related to a foreclosed asset during the first
quarter of 2022.
Non-interest expense decreased $502,000 to $7.6
million in third quarter 2022 compared to $8.1 million in the
second quarter of 2022 primarily due to lower salaries and benefits
and reductions in all other expense. Salaries and employee benefits
decreased $158,000 compared to second quarter 2022 due to lower
costs related to vacation, procurement, contract labor and employee
relations expense. Other non-interest expense decreased $283,000
compared to the second quarter due to lower OREO expense.
Balance Sheet
Total assets decreased $18.6 million, or 1.7%,
to $1.09 billion at September 30, 2022, compared to $1.11 billion,
at June 30, 2022, and decreased $47.3 million, or 4.2%, compared to
$1.14 billion, at September 30, 2021. Total interest-earning
deposits in other financial institutions decreased $50.4 million to
$49.5 million at September 30, 2022, compared to June 30, 2022, as
excess cash balances were deployed into higher yielding loans.
Total investment securities were $59.9 million at quarter end,
compared to $60.5 million in the prior quarter. Total loans
increased by $33.0 million, or 3.6%, to $945.7 million at September
30, 2022, compared to $912.7 million, at June 30, 2022, and
increased $55.1 million, or 6.2%, compared to $890.6 million, at
September 30, 2021. Total loans, excluding PPP loans,
increased $34.1 million during the quarter and increased $89.4
million compared to September 30, 2021.
Commercial real estate loans outstanding (which
include SBA 504, construction and land) were up 15.0% from year ago
levels to $544.4 million at September 30, 2022, and comprise 57.6%
of the total loan portfolio. Manufactured housing loans were up
6.0% from year ago levels to $310.0 million and represent 32.8% of
total loans. Commercial loans (which include agriculture loans)
were up 6.1% from year ago levels to $70.8 million and represent
7.5% of the total loan portfolio. As of September 30, 2022, the
Company had seven PPP loans totaling $1.8 million remaining on its
balance sheet from both the first and second rounds of PPP funding.
PPP loans of $1.8 million represent less than one percent of total
loans at September 30, 2022, down from $2.9 million at June 30,
2022, and $36.1 million at September 30, 2021.
Total deposits decreased $42.5 million, or 4.7%,
to $852.2 million at September 30, 2022, compared to $894.7 million
at June 30, 2022, and decreased $79.8 million, or 8.6%,
compared to $931.9 million at September 30, 2021.
Non-interest-bearing demand deposits were $243.1 million at
September 30, 2022, a $6.4 million increase compared to $236.7
million at June 30, 2022, and a $23.3 million increase compared to
$219.8 million at September 30, 2021. Higher cost interest-bearing
demand deposits decreased $36.4 million to $439.5 million at
September 30, 2022, compared to $475.9 million at June 30, 2022,
and decreased $68.6 million compared to $508.0 million at September
30, 2021. Certificates of deposit, which include brokered deposits,
decreased $10.7 million during the quarter to $145.8 million at
September 30, 2022, compared to $156.5 million at June 30, 2022,
and decreased $37.1 million compared to $182.9 million at September
30, 2021.
Stockholders’ equity increased to $109.8 million
at September 30, 2022, compared to $107.1 million at June 30, 2022,
and $98.8 million at September 30, 2021. Book value per common
share increased to $12.54 at September 30, 2022, compared to $12.25
at June 30, 2022, and $11.46 at September 30, 2021.
Credit Quality
“Credit quality metrics continue to improve,
with a substantial decrease in net-nonaccrual loans compared to a
year ago,” said William F. Filippin, Chief Credit Officer. At
September 30, 2022, asset quality reflected improvement due to
positive loan risk rating migrations during the third quarter.
Total classified loans and net non-accrual loans decreased
year-over-year due to improvements in the loan portfolio and
payoffs in these categories. All loans rated “Watch” or worse are
monitored monthly and proactive measures are taken when any signs
of deterioration to the credit are discovered.
The Company recorded a provision expense of
$298,000 in the third quarter 2022, compared to a provision expense
of $252,000 in second quarter 2022, and a provision expense of
$7,000 in third quarter 2021. The allowance for loan losses was
$11.1 million, or 1.20% of total loans held for investment, at
September 30, 2022. Net non-accrual loans, plus net other assets
acquired through foreclosure, decreased 5.3% to $2.5 million at
September 30, 2022, compared to $2.6 million at June 30, 2022, and
decreased 42.3% compared to $4.3 million at
September 30, 2021.
Net non-accrual loans improved substantially to
$239,000 as of September 30, 2022, compared to $379,000 at June 30,
2022, and $1.7 million at September 30, 2021. Of the $239,000
of net non-accrual loans at September 30, 2022, $153,000 were
single family loans and $85,000 were manufactured housing
loans.
There was $2.3 million in other assets acquired
through foreclosure as of September 30, 2022, and at June 30, 2022.
This compared to $2.6 million at September 30, 2021. The OREO
balance relates to one property in the net amount of $2.3
million.
Stock Repurchase Program
On August 27, 2021, the Company announced that
its Board of Directors had extended the stock repurchase plan until
August 31, 2023. The Company did not repurchase shares during the
third quarter of 2022, leaving $1.4 million available under the
previously announced repurchase program.
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 May of 2022, Community West was ranked #125
on the American Banker Magazine’s list of Top 200 Publicly Traded
Community Banks and Thrifts based on three-year average return on
equity as of December 31, 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.
Community West Bank is rated 5-star Superior by Bauer
Financial.
Safe Harbor Disclosure
This release contains certain forward-looking
statements about the Company and the Bank that are intended to be
covered by the safe harbor for “forward-looking statements”
provided by the Private Securities Litigation Reform Act of 1995.
Statements that are not historical or current facts, including
statements about future financial and operational results,
expectations, or intentions are forward-looking statements. Such
statements 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 and
are subject to significant risks, contingencies, and uncertainties,
many of which are difficult to predict and are generally beyond our
control including, but not limited to, risks from the COVID-19
pandemic, the strength of the United States economy in general and
of the local economies in which we conduct operations, the effect
of, and changes in, trade, monetary and fiscal policies and laws,
including changes in interest rate policies of the Board of
Governors of the Federal Reserve System, inflation, weather,
natural disasters, climate change, increased unemployment,
deterioration in credit quality of our loan portfolio and/or the
value of the collateral securing the repayment of those loans,
reduction in the value of our investment securities, the costs and
effects of litigation and of adverse outcomes of such litigation,
the cost and ability to attract and retain key employees, a breach
of our operational or security systems, policies or procedures
including cyber-attacks on us or third party vendors or service
providers, regulatory or legal developments, United States tax
policies, including our effective income tax rate, and our ability
to implement and execute our business plan and strategy and expand
our operations as provided therein. Actual results may differ
materially from those set forth or implied in the forward-looking
statements as a result of a variety of factors including the risk
factors contained in documents filed by the Company with the
Securities and Exchange Commission and are available in the
“Investor Relations” section of our website,
https://www.communitywest.com/sec-filings/documents/default.aspx.
The Company is under no obligation (and expressly disclaims any
obligation) to update or alter such forward-looking statements,
whether as a result of new information, future events, or
otherwise, except as required by law.
COMMUNITY WEST BANCSHARES |
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
(in 000's,
except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30, |
|
June
30, |
|
March
31, |
|
September
30, |
|
2022 |
|
2022 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
1,806 |
|
|
$ |
2,361 |
|
|
$ |
2,043 |
|
|
$ |
2,129 |
|
Interest-earning deposits in other financial institutions |
|
49,489 |
|
|
|
99,915 |
|
|
|
191,145 |
|
|
|
184,806 |
|
Investment
securities |
|
59,909 |
|
|
|
60,513 |
|
|
|
21,805 |
|
|
|
23,608 |
|
Loans: |
|
|
|
|
|
|
|
Commercial |
|
70,811 |
|
|
|
67,681 |
|
|
|
70,480 |
|
|
|
66,713 |
|
Commercial real estate |
|
544,373 |
|
|
|
516,514 |
|
|
|
492,181 |
|
|
|
473,338 |
|
SBA |
|
6,955 |
|
|
|
7,922 |
|
|
|
8,403 |
|
|
|
9,589 |
|
Paycheck Protection Program (PPP) |
|
1,810 |
|
|
|
2,920 |
|
|
|
7,504 |
|
|
|
36,109 |
|
Manufactured housing |
|
309,989 |
|
|
|
305,749 |
|
|
|
299,969 |
|
|
|
292,476 |
|
Single family real estate |
|
8,943 |
|
|
|
9,038 |
|
|
|
8,824 |
|
|
|
8,659 |
|
HELOC |
|
3,373 |
|
|
|
3,380 |
|
|
|
3,475 |
|
|
|
3,717 |
|
Other (1) |
|
(560 |
) |
|
|
(532 |
) |
|
|
(528 |
) |
|
|
(6 |
) |
Total
loans |
|
945,694 |
|
|
|
912,672 |
|
|
|
890,308 |
|
|
|
890,595 |
|
|
|
|
|
|
|
|
|
Loans,
net |
|
|
|
|
|
|
|
Held for sale |
|
22,096 |
|
|
|
23,124 |
|
|
|
24,193 |
|
|
|
24,400 |
|
Held for investment |
|
923,598 |
|
|
|
889,548 |
|
|
|
866,115 |
|
|
|
866,195 |
|
Less: Allowance for loan losses |
|
(11,113 |
) |
|
|
(10,866 |
) |
|
|
(10,547 |
) |
|
|
(10,283 |
) |
Net held for investment |
|
912,485 |
|
|
|
878,682 |
|
|
|
855,568 |
|
|
|
855,912 |
|
NET LOANS |
|
934,581 |
|
|
|
901,806 |
|
|
|
879,761 |
|
|
|
880,312 |
|
|
|
|
|
|
|
|
|
Other
assets |
|
42,493 |
|
|
|
42,233 |
|
|
|
41,849 |
|
|
|
44,735 |
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
$ |
1,088,278 |
|
|
$ |
1,106,828 |
|
|
$ |
1,136,603 |
|
|
$ |
1,135,590 |
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
Non-interest-bearing demand |
$ |
243,100 |
|
|
$ |
236,696 |
|
|
$ |
226,073 |
|
|
$ |
219,826 |
|
Interest-bearing demand |
|
439,455 |
|
|
|
475,869 |
|
|
|
504,209 |
|
|
|
508,020 |
|
Savings |
|
23,865 |
|
|
|
25,626 |
|
|
|
24,239 |
|
|
|
21,202 |
|
Certificates of deposit ($250,000 or more) |
|
9,909 |
|
|
|
8,688 |
|
|
|
13,197 |
|
|
|
15,956 |
|
Other certificates of deposit |
|
135,860 |
|
|
|
147,785 |
|
|
|
158,022 |
|
|
|
166,938 |
|
Total
deposits |
|
852,189 |
|
|
|
894,664 |
|
|
|
925,740 |
|
|
|
931,942 |
|
Other
borrowings |
|
110,000 |
|
|
|
90,000 |
|
|
|
90,000 |
|
|
|
90,000 |
|
Other
liabilities |
|
16,268 |
|
|
|
15,022 |
|
|
|
16,035 |
|
|
|
14,881 |
|
TOTAL LIABILITIES |
|
978,457 |
|
|
|
999,686 |
|
|
|
1,031,775 |
|
|
|
1,036,823 |
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
109,821 |
|
|
|
107,142 |
|
|
|
104,828 |
|
|
|
98,767 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
$ |
1,088,278 |
|
|
$ |
1,106,828 |
|
|
$ |
1,136,603 |
|
|
$ |
1,135,590 |
|
|
|
|
|
|
|
|
|
Common
shares outstanding |
|
8,755 |
|
|
|
8,744 |
|
|
|
8,682 |
|
|
|
8,616 |
|
|
|
|
|
|
|
|
|
Book value
per common share |
$ |
12.54 |
|
|
$ |
12.25 |
|
|
$ |
12.07 |
|
|
$ |
11.46 |
|
|
|
|
|
|
|
|
|
(1) Includes
consumer, other loans, securitized loans, and deferred fees |
|
|
|
|
|
|
|
COMMUNITY WEST BANCSHARES |
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED INCOME STATEMENTS |
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
(in 000's,
except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September
30, |
|
September
30, |
September
30, |
September
30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
Interest income |
|
|
|
|
|
|
|
Loans, including fees |
$ |
11,867 |
|
$ |
11,576 |
|
$ |
34,190 |
|
$ |
33,865 |
|
Investment securities and other |
|
787 |
|
|
259 |
|
|
1,670 |
|
|
676 |
|
Total interest income |
|
12,654 |
|
|
11,835 |
|
|
35,860 |
|
|
34,541 |
|
|
|
|
|
|
|
|
|
Deposits |
|
528 |
|
|
708 |
|
|
1,598 |
|
|
2,221 |
|
Other borrowings |
|
203 |
|
|
198 |
|
|
593 |
|
|
663 |
|
Total interest expense |
|
731 |
|
|
906 |
|
|
2,191 |
|
|
2,884 |
|
Net
interest income |
|
11,923 |
|
|
10,929 |
|
|
33,669 |
|
|
31,657 |
|
Provision
(credit) for loan losses |
|
298 |
|
|
7 |
|
|
266 |
|
|
(207 |
) |
Net interest income after provision (credit) for loan losses |
|
11,625 |
|
|
10,922 |
|
|
33,403 |
|
|
31,864 |
|
Non-interest income |
|
|
|
|
|
|
|
Other loan fees |
|
292 |
|
|
383 |
|
|
915 |
|
|
1,006 |
|
Gains from loan sales, net |
|
49 |
|
|
118 |
|
|
245 |
|
|
366 |
|
Document processing fees |
|
114 |
|
|
145 |
|
|
337 |
|
|
389 |
|
Service charges |
|
114 |
|
|
77 |
|
|
295 |
|
|
218 |
|
Other |
|
303 |
|
|
317 |
|
|
1,422 |
|
|
830 |
|
Total non-interest income |
|
872 |
|
|
1,040 |
|
|
3,214 |
|
|
2,809 |
|
Non-interest expenses |
|
|
|
|
|
|
|
Salaries and employee benefits |
|
4,752 |
|
|
4,478 |
|
|
14,527 |
|
|
13,422 |
|
Occupancy, net |
|
1,046 |
|
|
802 |
|
|
3,064 |
|
|
2,361 |
|
Professional services |
|
653 |
|
|
434 |
|
|
1,687 |
|
|
1,204 |
|
Data processing |
|
302 |
|
|
292 |
|
|
919 |
|
|
964 |
|
Depreciation |
|
173 |
|
|
191 |
|
|
535 |
|
|
594 |
|
FDIC assessment |
|
131 |
|
|
127 |
|
|
466 |
|
|
339 |
|
Advertising and marketing |
|
196 |
|
|
189 |
|
|
687 |
|
|
536 |
|
Stock-based compensation |
|
71 |
|
|
63 |
|
|
257 |
|
|
189 |
|
Other |
|
286 |
|
|
284 |
|
|
551 |
|
|
780 |
|
Total non-interest expenses |
|
7,610 |
|
|
6,860 |
|
|
22,693 |
|
|
20,389 |
|
Income
before provision for income taxes |
|
4,887 |
|
|
5,102 |
|
|
13,924 |
|
|
14,284 |
|
Provision
for income taxes |
|
1,409 |
|
|
1,467 |
|
|
3,851 |
|
|
4,077 |
|
Net
income |
$ |
3,478 |
|
$ |
3,635 |
|
$ |
10,073 |
|
$ |
10,207 |
|
Earnings per share: |
|
|
|
|
|
|
|
Basic |
$ |
0.40 |
|
$ |
0.42 |
|
$ |
1.16 |
|
$ |
1.19 |
|
Diluted |
$ |
0.39 |
|
$ |
0.41 |
|
$ |
1.13 |
|
$ |
1.17 |
|
COMMUNITY WEST BANCSHARES |
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED INCOME STATEMENTS |
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
(in 000's,
except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
September
30, |
June
30, |
|
March
31, |
|
December
31, |
September
30, |
|
2022 |
|
2022 |
|
2022 |
|
2021 |
|
2021 |
Interest income |
|
|
|
|
|
|
|
|
|
Loans, including fees |
$ |
11,867 |
|
$ |
11,129 |
|
$ |
11,194 |
|
|
$ |
11,258 |
|
$ |
11,576 |
Investment securities and other |
|
787 |
|
|
577 |
|
|
306 |
|
|
|
279 |
|
|
259 |
Total interest income |
|
12,654 |
|
|
11,706 |
|
|
11,500 |
|
|
|
11,537 |
|
|
11,835 |
|
|
|
|
|
|
|
|
|
|
Deposits |
|
528 |
|
|
500 |
|
|
570 |
|
|
|
614 |
|
|
708 |
Other borrowings |
|
203 |
|
|
196 |
|
|
194 |
|
|
|
206 |
|
|
198 |
Total interest expense |
|
731 |
|
|
696 |
|
|
764 |
|
|
|
820 |
|
|
906 |
Net
interest income |
|
11,923 |
|
|
11,010 |
|
|
10,736 |
|
|
|
10,717 |
|
|
10,929 |
Provision
(credit) for loan losses |
|
298 |
|
|
252 |
|
|
(284 |
) |
|
|
26 |
|
|
7 |
Net interest income after provision (credit) for loan losses |
|
11,625 |
|
|
10,758 |
|
|
11,020 |
|
|
|
10,691 |
|
|
10,922 |
Non-interest income |
|
|
|
|
|
|
|
|
|
Other loan fees |
|
292 |
|
|
377 |
|
|
246 |
|
|
|
343 |
|
|
383 |
Gains from loan sales, net |
|
49 |
|
|
136 |
|
|
60 |
|
|
|
109 |
|
|
118 |
Document processing fees |
|
114 |
|
|
122 |
|
|
101 |
|
|
|
123 |
|
|
145 |
Service charges |
|
114 |
|
|
93 |
|
|
88 |
|
|
|
84 |
|
|
77 |
Other |
|
303 |
|
|
323 |
|
|
796 |
|
|
|
285 |
|
|
317 |
Total non-interest income |
|
872 |
|
|
1,051 |
|
|
1,291 |
|
|
|
944 |
|
|
1,040 |
Non-interest expenses |
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
4,752 |
|
|
4,910 |
|
|
4,865 |
|
|
|
4,884 |
|
|
4,478 |
Occupancy, net |
|
1,046 |
|
|
1,021 |
|
|
997 |
|
|
|
893 |
|
|
802 |
Professional services |
|
653 |
|
|
635 |
|
|
399 |
|
|
|
441 |
|
|
434 |
Data processing |
|
302 |
|
|
307 |
|
|
310 |
|
|
|
251 |
|
|
292 |
Depreciation |
|
173 |
|
|
179 |
|
|
183 |
|
|
|
186 |
|
|
191 |
FDIC assessment |
|
131 |
|
|
164 |
|
|
171 |
|
|
|
146 |
|
|
127 |
Advertising and marketing |
|
196 |
|
|
233 |
|
|
258 |
|
|
|
198 |
|
|
189 |
Stock-based compensation |
|
71 |
|
|
94 |
|
|
92 |
|
|
|
129 |
|
|
63 |
Other |
|
286 |
|
|
569 |
|
|
(304 |
) |
|
|
478 |
|
|
284 |
Total non-interest expenses |
|
7,610 |
|
|
8,112 |
|
|
6,971 |
|
|
|
7,606 |
|
|
6,860 |
Income
before provision for income taxes |
|
4,887 |
|
|
3,697 |
|
|
5,340 |
|
|
|
4,029 |
|
|
5,102 |
Provision
for income taxes |
|
1,409 |
|
|
1,062 |
|
|
1,380 |
|
|
|
1,135 |
|
|
1,467 |
Net
income |
$ |
3,478 |
|
$ |
2,635 |
|
$ |
3,960 |
|
|
$ |
2,894 |
|
$ |
3,635 |
Earnings per share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.40 |
|
$ |
0.30 |
|
$ |
0.46 |
|
|
$ |
0.34 |
|
$ |
0.42 |
Diluted |
$ |
0.39 |
|
$ |
0.30 |
|
$ |
0.45 |
|
|
$ |
0.33 |
|
$ |
0.41 |
|
Three Months Ended |
|
Three Months Ended |
|
Three Months Ended |
|
September 30, 2022 |
|
June 30, 2022 |
|
September 30, 2021 |
|
Average Balance |
Interest |
Average Yield/Cost |
|
Average Balance |
Interest |
Average Yield/Cost |
|
Average Balance |
Interest |
Average Yield/Cost |
Interest-Earning Assets |
|
|
|
|
|
|
|
|
|
|
|
Federal funds sold and interest-earning deposits |
$ |
76,265 |
|
$ |
401 |
2.09 |
% |
|
$ |
149,710 |
|
$ |
302 |
0.81 |
% |
|
$ |
182,182 |
|
$ |
73 |
0.16 |
% |
Investment
securities |
|
65,148 |
|
|
386 |
2.35 |
% |
|
|
45,243 |
|
|
275 |
2.44 |
% |
|
|
27,552 |
|
|
186 |
2.68 |
% |
Loans
(1) |
|
935,169 |
|
|
11,867 |
5.03 |
% |
|
|
907,088 |
|
|
11,129 |
4.92 |
% |
|
|
882,058 |
|
|
11,576 |
5.21 |
% |
Total earnings assets |
|
1,076,582 |
|
|
12,654 |
4.66 |
% |
|
|
1,102,041 |
|
|
11,706 |
4.26 |
% |
|
|
1,091,792 |
|
|
11,835 |
4.30 |
% |
Nonearning Assets |
|
|
|
|
|
|
|
|
|
|
|
Cash and due
from banks |
|
2,177 |
|
|
|
|
|
2,193 |
|
|
|
|
|
2,162 |
|
|
|
Allowance
for loan losses |
|
(11,031 |
) |
|
|
|
|
(10,765 |
) |
|
|
|
|
(10,174 |
) |
|
|
Other
assets |
|
38,022 |
|
|
|
|
|
37,435 |
|
|
|
|
|
39,818 |
|
|
|
Total assets |
$ |
1,105,750 |
|
|
|
|
$ |
1,130,904 |
|
|
|
|
$ |
1,123,598 |
|
|
|
Interest-Bearing Liabilities |
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing demand deposits |
$ |
465,317 |
|
$ |
325 |
0.28 |
% |
|
$ |
495,821 |
|
$ |
273 |
0.22 |
% |
|
$ |
499,301 |
|
$ |
411 |
0.33 |
% |
Savings
deposits |
|
25,133 |
|
|
14 |
0.22 |
% |
|
|
25,402 |
|
|
16 |
0.25 |
% |
|
|
21,335 |
|
|
18 |
0.33 |
% |
Time
deposits |
|
151,130 |
|
|
189 |
0.50 |
% |
|
|
164,687 |
|
|
211 |
0.51 |
% |
|
|
188,512 |
|
|
279 |
0.59 |
% |
Total
interest-bearing deposits |
|
641,580 |
|
|
528 |
0.33 |
% |
|
|
685,910 |
|
|
500 |
0.29 |
% |
|
|
709,148 |
|
|
708 |
0.40 |
% |
Other
borrowings |
|
90,764 |
|
|
203 |
0.89 |
% |
|
|
90,000 |
|
|
196 |
0.87 |
% |
|
|
90,000 |
|
|
198 |
0.87 |
% |
Total
interest-bearing liabilities |
$ |
732,344 |
|
$ |
731 |
0.40 |
% |
|
$ |
775,910 |
|
$ |
696 |
0.36 |
% |
|
$ |
799,148 |
|
$ |
906 |
0.45 |
% |
Noninterest-Bearing Liabilities |
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing demand deposits |
|
248,538 |
|
|
|
|
|
232,849 |
|
|
|
|
|
211,017 |
|
|
|
Other
liabilities |
|
15,789 |
|
|
|
|
|
15,646 |
|
|
|
|
|
15,797 |
|
|
|
Stockholders' equity |
|
109,079 |
|
|
|
|
|
106,499 |
|
|
|
|
|
97,636 |
|
|
|
Total Liabilities and Stockholders' Equity |
$ |
1,105,750 |
|
|
|
|
$ |
1,130,904 |
|
|
|
|
|
1,123,598 |
|
|
|
Net interest
income and margin |
|
$ |
11,923 |
4.39 |
% |
|
|
$ |
11,010 |
4.01 |
% |
|
|
$ |
10,929 |
3.97 |
% |
Net interest
spread |
|
|
4.26 |
% |
|
|
|
3.90 |
% |
|
|
|
3.85 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
total deposits |
|
|
0.24 |
% |
|
|
|
0.22 |
% |
|
|
|
0.31 |
% |
Cost of
funds |
|
|
0.30 |
% |
|
|
|
0.28 |
% |
|
|
|
0.36 |
% |
|
Nine Months Ended |
|
Nine Months Ended |
|
September 30, 2022 |
|
September 30, 2021 |
|
AverageBalance |
Interest |
AverageYield/Cost |
|
AverageBalance |
Interest |
AverageYield/Cost |
Interest-Earning Assets |
|
|
|
|
|
|
|
Federal funds sold and interest-earning deposits |
$ |
143,455 |
|
$ |
812 |
0.76 |
% |
|
$ |
115,265 |
|
$ |
146 |
0.17 |
% |
Investment
securities |
|
45,903 |
|
|
858 |
2.50 |
% |
|
|
26,792 |
|
|
530 |
2.64 |
% |
Loans
(1) |
|
912,414 |
|
|
34,190 |
5.01 |
% |
|
|
883,280 |
|
|
33,865 |
5.13 |
% |
Total earnings assets |
|
1,101,772 |
|
|
35,860 |
4.35 |
% |
|
|
1,025,337 |
|
|
34,541 |
4.50 |
% |
Nonearning Assets |
|
|
|
|
|
|
|
Cash and due
from banks |
|
2,177 |
|
|
|
|
|
2,148 |
|
|
|
Allowance
for loan losses |
|
(10,805 |
) |
|
|
|
|
(10,221 |
) |
|
|
Other
assets |
|
38,195 |
|
|
|
|
|
39,904 |
|
|
|
Total assets |
$ |
1,131,339 |
|
|
|
|
$ |
1,057,168 |
|
|
|
Interest-Bearing Liabilities |
|
|
|
|
|
|
|
Interest-bearing demand deposits |
$ |
493,332 |
|
$ |
917 |
0.25 |
% |
|
$ |
449,019 |
|
$ |
1,359 |
0.40 |
% |
Savings
deposits |
|
24,827 |
|
|
47 |
0.25 |
% |
|
|
20,244 |
|
|
58 |
0.38 |
% |
Time
deposits |
|
163,666 |
|
|
634 |
0.52 |
% |
|
|
182,267 |
|
|
804 |
0.59 |
% |
Total
interest-bearing deposits |
|
681,825 |
|
|
1,598 |
0.31 |
% |
|
|
651,530 |
|
|
2,221 |
0.46 |
% |
Other
borrowings |
|
90,257 |
|
|
593 |
0.88 |
% |
|
|
95,806 |
|
|
663 |
0.93 |
% |
Total
interest-bearing liabilities |
$ |
772,082 |
|
$ |
2,191 |
0.38 |
% |
|
$ |
747,336 |
|
$ |
2,884 |
0.52 |
% |
Noninterest-Bearing Liabilities |
|
|
|
|
|
|
|
Noninterest-bearing demand deposits |
|
236,531 |
|
|
|
|
|
199,861 |
|
|
|
Other
liabilities |
|
16,352 |
|
|
|
|
|
15,822 |
|
|
|
Stockholders' equity |
|
106,374 |
|
|
|
|
|
94,149 |
|
|
|
Total Liabilities and Stockholders' Equity |
$ |
1,131,339 |
|
|
|
|
$ |
1,057,168 |
|
|
|
Net interest
income and margin |
|
$ |
33,669 |
4.09 |
% |
|
|
$ |
31,657 |
4.13 |
% |
Net interest
spread |
|
|
3.97 |
% |
|
|
|
3.98 |
% |
|
|
|
|
|
|
|
|
Cost of
total deposits |
|
|
0.23 |
% |
|
|
|
0.35 |
% |
Cost of
funds |
|
|
0.29 |
% |
|
|
|
0.41 |
% |
ADDITIONAL FINANCIAL INFORMATION |
|
|
|
|
|
|
|
|
|
(Dollars and
shares in thousands except per share amounts)(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Three Months
Ended |
|
Three Months
Ended |
|
Nine Months
Ended |
|
Nine Months
Ended |
PERFORMANCE MEASURES AND RATIOS |
September 30, 2022 |
|
June 30, 2022 |
|
September 30, 2021 |
|
September 30, 2022 |
|
September 30, 2021 |
Return on average common equity |
|
12.65 |
% |
|
|
9.92 |
% |
|
|
14.77 |
% |
|
|
12.66 |
% |
|
|
14.49 |
% |
Return on
average assets |
|
1.25 |
% |
|
|
0.93 |
% |
|
|
1.28 |
% |
|
|
1.19 |
% |
|
|
1.29 |
% |
Efficiency
ratio |
|
59.48 |
% |
|
|
67.26 |
% |
|
|
57.31 |
% |
|
|
61.53 |
% |
|
|
59.16 |
% |
Net interest
margin |
|
4.39 |
% |
|
|
4.01 |
% |
|
|
3.97 |
% |
|
|
4.09 |
% |
|
|
4.13 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
Three Months
Ended |
Three Months
Ended |
|
Nine Months
Ended |
|
Nine Months
Ended |
AVERAGE BALANCES |
September 30, 2022 |
|
June 30, 2022 |
|
September 30, 2021 |
|
September 30, 2022 |
|
September 30, 2021 |
Average
assets |
$ |
1,105,750 |
|
|
$ |
1,130,904 |
|
|
$ |
1,123,598 |
|
|
$ |
1,131,339 |
|
|
$ |
1,057,168 |
|
Average
earning assets |
|
1,076,582 |
|
|
|
1,102,041 |
|
|
|
1,091,792 |
|
|
|
1,101,772 |
|
|
|
1,025,337 |
|
Average
total loans |
|
935,169 |
|
|
|
907,088 |
|
|
|
882,058 |
|
|
|
912,414 |
|
|
|
883,280 |
|
Average
deposits |
|
890,118 |
|
|
|
918,759 |
|
|
|
920,165 |
|
|
|
918,356 |
|
|
|
851,391 |
|
Average
common equity |
|
109,079 |
|
|
|
106,499 |
|
|
|
97,636 |
|
|
|
106,374 |
|
|
|
94,149 |
|
|
|
|
|
|
|
|
|
|
|
EQUITY ANALYSIS |
September 30, 2022 |
|
June 30, 2022 |
|
September 30, 2021 |
|
|
|
|
Total common
equity |
$ |
109,821 |
|
|
$ |
107,142 |
|
|
$ |
98,767 |
|
|
|
|
|
Common stock
outstanding |
|
8,755 |
|
|
|
8,744 |
|
|
|
8,616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book value
per common share |
$ |
12.54 |
|
|
$ |
12.25 |
|
|
$ |
11.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSET QUALITY |
September 30, 2022 |
|
June 30, 2022 |
|
September 30, 2021 |
|
|
|
|
Nonaccrual
loans, net |
$ |
239 |
|
|
$ |
379 |
|
|
$ |
1,742 |
|
|
|
|
|
Nonaccrual
loans, net/total loans |
|
0.03 |
% |
|
|
0.04 |
% |
|
|
0.20 |
% |
|
|
|
|
Other assets
acquired through foreclosure, net |
$ |
2,250 |
|
|
$ |
2,250 |
|
|
$ |
2,572 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual
loans plus other assets acquired through foreclosure, net |
$ |
2,489 |
|
|
$ |
2,629 |
|
|
$ |
4,314 |
|
|
|
|
|
Nonaccrual
loans plus other assets acquired through foreclosure, net/total
assets |
|
0.23 |
% |
|
|
0.24 |
% |
|
|
0.38 |
% |
|
|
|
|
Net loan
(recoveries)/charge-offs in the quarter |
$ |
51 |
|
|
$ |
(66 |
) |
|
$ |
(36 |
) |
|
|
|
|
Net
(recoveries)/charge-offs in the quarter/total loans |
|
0.01 |
% |
|
|
(0.01 |
%) |
|
|
(0.00 |
%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance
for loan losses |
$ |
11,113 |
|
|
$ |
10,866 |
|
|
$ |
10,283 |
|
|
|
|
|
Plus:
Reserve for undisbursed loan commitments |
|
96 |
|
|
|
94 |
|
|
|
106 |
|
|
|
|
|
Total
allowance for credit losses |
$ |
11,209 |
|
|
$ |
10,960 |
|
|
$ |
10,389 |
|
|
|
|
|
Allowance
for loan losses/total loans held for investment |
|
1.20 |
% |
|
|
1.22 |
% |
|
|
1.19 |
% |
|
|
|
|
Allowance
for loan losses/total loans held for investment excluding PPP
loans |
|
1.21 |
% |
|
|
1.23 |
% |
|
|
1.24 |
% |
|
|
|
|
Allowance
for loan losses/nonaccrual loans, net |
|
4649.79 |
% |
|
|
2867.02 |
% |
|
|
590.34 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Community West Bank * |
|
|
|
|
|
|
|
|
|
Community
bank leverage ratio |
N/A |
|
N/A |
|
|
8.59 |
% |
|
|
|
|
Tier 1
leverage ratio |
|
9.83 |
% |
|
|
9.30 |
% |
|
|
8.59 |
% |
|
|
|
|
Tier 1
capital ratio |
|
11.30 |
% |
|
|
11.07 |
% |
|
|
10.93 |
% |
|
|
|
|
Total
capital ratio |
|
12.46 |
% |
|
|
12.22 |
% |
|
|
12.11 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST SPREAD ANALYSIS |
September 30, 2022 |
|
June 30, 2022 |
|
September 30, 2021 |
|
|
|
|
Yield on
total loans |
|
5.03 |
% |
|
|
4.92 |
% |
|
|
5.21 |
% |
|
|
|
|
Yield on
investments |
|
2.35 |
% |
|
|
2.44 |
% |
|
|
2.68 |
% |
|
|
|
|
Yield on
interest earning deposits |
|
2.09 |
% |
|
|
0.81 |
% |
|
|
0.16 |
% |
|
|
|
|
Yield on
earning assets |
|
4.66 |
% |
|
|
4.26 |
% |
|
|
4.30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
interest-bearing deposits |
|
0.33 |
% |
|
|
0.29 |
% |
|
|
0.40 |
% |
|
|
|
|
Cost of
total deposits |
|
0.24 |
% |
|
|
0.22 |
% |
|
|
0.31 |
% |
|
|
|
|
Cost of
borrowings |
|
0.89 |
% |
|
|
0.87 |
% |
|
|
0.87 |
% |
|
|
|
|
Cost of
interest-bearing liabilities |
|
0.40 |
% |
|
|
0.36 |
% |
|
|
0.45 |
% |
|
|
|
|
Cost of
funds |
|
0.30 |
% |
|
|
0.28 |
% |
|
|
0.36 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Capital
ratios are preliminary until the Call Report is filed. |
|
|
|
|
|
|
|
|
|
Contact: |
Richard
Pimentel, EVP & CFO |
|
805.692.4410 |
|
www.communitywestbank.com |
Community West Bancshares (NASDAQ:CWBC)
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