U.S. markets close in 5 hours 46 minutes
  • S&P 500

    4,367.71
    +9.98 (+0.23%)
     
  • Dow 30

    34,119.09
    +148.62 (+0.44%)
     
  • Nasdaq

    14,751.03
    +37.12 (+0.25%)
     
  • Russell 2000

    2,188.93
    +6.72 (+0.31%)
     
  • Crude Oil

    70.26
    -0.03 (-0.04%)
     
  • Gold

    1,774.60
    +10.80 (+0.61%)
     
  • Silver

    22.53
    +0.33 (+1.49%)
     
  • EUR/USD

    1.1727
    0.0000 (-0.00%)
     
  • 10-Yr Bond

    1.3190
    +0.0100 (+0.76%)
     
  • GBP/USD

    1.3653
    -0.0007 (-0.05%)
     
  • USD/JPY

    109.2900
    -0.1300 (-0.12%)
     
  • BTC-USD

    42,657.82
    -1,376.70 (-3.13%)
     
  • CMC Crypto 200

    1,068.79
    +4.94 (+0.46%)
     
  • FTSE 100

    6,989.20
    +85.29 (+1.24%)
     
  • Nikkei 225

    29,839.71
    -660.34 (-2.17%)
     

Community West Bancshares Earns $2.6 Million, or $0.31 Per Diluted Share, in 4Q20 and $8.2 Million, or $0.97 Per Diluted Share, for the Year; Increases Quarterly Cash Dividend by 20% to $0.06 Per Common Share

  • Oops!
    Something went wrong.
    Please try again later.
·24 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

GOLETA, Calif., Feb. 01, 2021 (GLOBE NEWSWIRE) -- Community West Bancshares (Community West or the Company), (NASDAQ: CWBC), parent company of Community West Bank (the “Bank”), today reported net income of $2.6 million, or $0.31 per diluted share, for the fourth quarter of 2020 (4Q20), compared to $2.9 million, or $0.33 per diluted share, for the third quarter of 2020 (3Q20), and $2.7 million, or $0.32 per diluted share, for the fourth quarter of 2019 (4Q19). For the full year 2020, net income increased 3.5% to $8.2 million, or $0.97 per diluted share, compared to $8.0 million, or $0.93 per diluted share, in 2019.

Fourth Quarter & Year over Year 2020 Financial Highlights:

  • Net income of $2.6 million, or $0.31 per diluted share in 4Q20, compared to $2.9 million, or $0.33 per diluted share in 3Q20, and $2.7 million, or $0.32 per diluted share in 4Q19.

  • Net interest income was $9.8 million for the quarter, compared to $9.6 million for 3Q20 and $8.8 million in 4Q19.

  • A provision credit for loan losses of $44,000 for the quarter, compared to a provision for loan losses of $113,000 for 3Q20, and a provision credit for loan losses of $210,000 for 4Q19. Total provision for 2020 was $2.1 million compared to 2019 which was a provision credit of $165,000. The resulting allowance was 1.23% of total loans held for investment at December 31, 2020, and 1.35% of total loans held for investment excluding the $69.5 million of Paycheck Protection Program (“PPP”) loans at December 31, 2020, which are 100% guaranteed by the Small Business Administration (“SBA”).*

  • Net interest margin improved to 4.13% for 4Q20, compared to 3.76% for 3Q20, and 4.07% for 4Q19.

  • Total demand deposits increased $34.7 million to $579.9 million at December 31, 2020, compared to $545.2 million at September 30, 2020, and increased $154.8 million compared to $425.1 million at December 31, 2019. Total demand deposits represented 75.7% of total deposits at December 31, 2020, compared to 72.8% at September 30, 2020, and 56.6% at December 31, 2019.

  • Total loans were $857.6 million at December 31, 2020, compared to $854.5 million at September 30, 2020, and $775.6 million at December 31, 2019.

  • Book value per common share increased to $10.50 at December 31, 2020, compared to $10.23 at September 30, 2020, and $9.68 at December 31, 2019.

  • The Bank’s community bank leverage ratio (CBLR) improved to 9.29% at December 31, 2020, compared to 8.79% at September 30, 2020. The CBLR ratio was adopted on January 1, 2020 and did not apply at December 31, 2019.

  • Net non-accrual loans were $3.7 million at December 31, 2020 compared to $2.3 million at September 30, 2020, and $2.4 million at December 31, 2019.

  • Other assets acquired through foreclosure, net, was $2.6 million at December 31, 2020 compared to $2.7 million at September 30, 2020, and $2.5 million at December 31, 2019.

*Non GAAP

COVID-19 Pandemic Update
“Our fourth quarter and year end results reflect solid operating performance, with strong core deposit growth, improved operating efficiencies and an expanded net interest margin,” stated Martin E. Plourd, President and Chief Executive Officer. “Part of our success in 2020 included our participation in the SBA’s PPP program. During the year, we generated 521 SBA PPP loans totaling $76.6 million to our clients since the program’s inception in April to the conclusion of the original program. At December 31, 2020 we had 501 loans totaling $69.5 million. As of January 15, 2021, we had 26 loans for $9.3 million forgiven by the SBA. We have another 47 requests for forgiveness submitted to us for $17.9 million and plan to circulate the one-page forgiveness application to our remaining borrowers with loans of $150,000 or less by the end of the month. We have $1.6 million in net unrecognized fees related to the PPP that would be recognized as income once the loans are paid off or forgiven by the SBA. Our expectation is to see the first round of PPP funding forgiven by the end of the second quarter of 2021. As these loans are forgiven, we expect to use the liquidity to pursue new opportunities in our market, including strategies to improve loan growth, fund the second round of PPP loans and further reduce wholesale funding.”

The Consolidated Appropriations Act (CAA) was signed into law on December 27, 2020, providing additional COVID-19 stimulus relief, and it includes $284 billion for another round of PPP lending. The program offers new loans for companies that did not receive a PPP loan in 2020, and also “second draw” loans targeted at hard-hit businesses that have already spent their initial PPP proceeds. “We started offering this new round to our customers earlier this month with the same ‘client first’ strategy utilized in the first round. We took a conservative approach, putting our clients first, as opposed to opening the application process to both clients and non-clients. This allowed us to focus our resources on our clients and deliver an unparalleled experience during a very stressful time. Our Relationship Managers worked with each client through the entire process. This approach, and our client’s spreading the word to others, helped us to further build the Bank’s positive reputation. After assisting our clients, the Bank took applications from others who were not sufficiently assisted by their current bank. While we are still early in the second round, we anticipate successfully helping our customers as we did with the initial round of PPP funding,” said Plourd.

“Since the start of the pandemic, we have used conservative measures to keep our employees, clients, and communities safe,” said William F. Filippin, Chief Credit and Chief Administrative Officer. “We maintained all branch activity throughout the pandemic, while working with clients who are experiencing hardship. We remain focused on assessing the risks in our loan portfolio and working with our clients to minimize losses, and implemented an initial loan modification program to assist clients impacted by the pandemic with loan deferrals. The Bank initially granted 90-day or 180-day deferral requests in April of 2020. By late May, as our local markets began easing restrictions, we reverted to a standard 90-day payment deferral, with a longer term considered an exception, requiring additional approval. As a result, we have a mixture of payment deferral terms. 93% of deferred loans have now resumed payment.”

At the peak in July 2020, the Company had 269 loans on payment deferral for a total of $158.5 million. As of January 15, 2021, 9 loans remained on deferral for a total of $2.7 million. With the passage of The Economic Aid Act, the Company modified and extended its payment deferral program. The new program is for 90 days. To date, the Company has received very few requests for an additional payment deferral. The new requests have been from commercial or manufactured housing loan borrowers.

The table below shows the breakdown of deferrals by loan type:

December 31, 2020

September 30, 2020

June 30, 2020

Loan segment

Count

Balance

Count

Balance

Count

Balance

(in thousands)

(in thousands)

(in thousands)

Manufactured housing

8

$

1,261

116

$

15,984

142

$

19,903

Commercial real estate

2

2,082

60

104,492

78

124,629

Commercial

3

1,767

24

8,520

36

10,825

SBA

-

-

-

-

1

17

HELOC

-

-

-

-

-

-

Single family real estate

-

-

3

717

5

1,027

Consumer

-

-

-

-

-

-

Total pandemic deferments

13

$

5,111

203

$

129,713

262

$

156,401

“While the quantity of loan deferral requests has tapered off significantly since the onset of the pandemic, we continue to see clients experiencing financial hardship,” said Filippin. “New deferral requests are being granted based on stricter parameters including proof of financial hardship that can be validated, compared to earlier in the pandemic when they were offered with fewer restrictions in place. We continue to risk rate the deferred portfolio at ‘watch’ or worse status depending on the credit, and monitor frequently. The credit will remain in this risk rating after payments resume and until the borrower’s capacity to maintain payments has been validated.” The table below reflects the high-risk industry loans by type at December 31, 2020. The industries in our markets most heavily impacted include retail, healthcare, hospitality, schools and energy. The Company’s management team continues to evaluate the loans related to the affected industries, and at December 31, 2020, the Bank’s loans to these industries were $179.2 million, which is 20.9% of its $857.6 million loan portfolio.

Of the selected industry loans, $3.0 million, or 1.66%, are on non-accrual. Also, of the selected industries loans, the classified loans are $16.9 million, or 9.43%. The Bank has accommodated $2.1 million, or 1.16%, of these loans with payment deferrals in the selected industries. Additional detail by industry at December 31, 2020 is included in the table below.

Sectors Under Focus (Excluding PPP Loans)

As of 12/31/20 (in thousands)

Loans Outstanding

$ Non-accrual

% Non-accrual

$ Classified

% Classified

$ Deferrals

% Deferral

Healthcare

$

51,532

$

1,483

2.88

%

$

1,827

3.55

%

$

0

0.00

%

Senior/Assted Living Facilities

$

23,306

$

0

0.00

%

$

0

0.00

%

$

0

0.00

%

Medical Offices

$

19,306

$

0

0.00

%

$

277

1.43

%

$

0

0.00

%

General Healthcare

$

8,920

$

1,483

16.63

%

$

1,550

17.38

%

$

0

0.00

%

Hospitality

$

51,458

$

1,471

2.86

%

$

5,321

10.34

%

$

1,469

2.85

%

Lodging

$

40,546

$

1,469

3.62

%

$

2,593

6.39

%

$

1,469

3.62

%

Restaurants

$

10,912

$

2

0.02

%

$

2,729

25.00

%

$

0

0.00

%

Retail Commercial Real Estate

$

56,692

$

16

0.03

%

$

9,610

16.95

%

$

614

1.08

%

Retail Services

$

17,628

$

0

0.00

%

$

18

0.10

%

$

0

0.00

%

Schools

$

1,182

$

0

0.00

%

$

0

0.00

%

$

0

0.00

%

Energy

$

680

$

0

0.00

%

$

114

16.74

%

$

0

0.00

%

Total

$

179,172

$

2,969

1.66

%

$

17

0.01

%

$

2,082

1.16

%

Income Statement
Net interest income increased 2.5% to $9.8 million in 4Q20, compared to $9.6 million in 3Q20, and increased 10.8% compared to $8.8 million in 4Q19. For the year 2020, net interest income increased 6.5% to $36.6 million compared to $34.4 million in 2019.

Non-interest income decreased to $970,000 in 4Q20, compared to $1.4 million in 3Q20, and $1.7 million in 4Q19. Other loan fees were $383,000 for 4Q20, compared to $539,000 in 3Q20, and $500,000 in 4Q19. Gain on sale of loans was $209,000 in 4Q20, compared to $424,000 in 3Q20, and $765,000 in 4Q19. Non-interest income increased 8.5% to $3.9 million for the year, compared to $3.6 million for 2019 primarily from loan fees. Service charge fee income for 2020 declined 37.6%, compared to 2019, primarily due to the Company’s adherence with the Cares Act initiative to waive certain transaction fees. The Company is uncertain as to when these transaction fees will be reinstated.

Net interest margin was 4.13% for 4Q20, a 37-basis point improvement compared to 3Q20, and a 6-basis point improvement compared to 4Q19. “Our continued focus on reducing our cost of funds contributed to the net interest margin expansion during the fourth quarter,” said Susan C. Thompson, Executive Vice President and Chief Financial Officer. “During the third and fourth quarters of 2020, we aggressively repriced our higher priced funding and will continue to look for opportunities for further reduction while interest rates remain low. We anticipate our net interest margin will remain stabilized as we move forward into 2021.” The cost of funds for 4Q20 improved 14 basis points to 0.69%, compared to 3Q20, and improved by 95 basis points compared to 4Q19. For the year 2020, the net interest margin was 3.89%, compared to 4.06% in 2019. For both 4Q20 and the year of 2020 the net interest margin was impacted negatively by 6 basis points, respectively, due to the Company’s participation in PPP lending.

The Company recorded a provision credit for loan losses of $44,000 in 4Q20. This compares to a provision for loan losses of $113,000 in 3Q20, and a provision credit for loan losses of $210,000 in 4Q19. For the year, the provision for loan losses totaled $1.2 million, compared to a provision credit for loan losses of $165,000 in 2019. The increase in the provision for the year was to reflect the estimated losses due to the current economic uncertainties resulting from the pandemic that may be currently masked by loan deferrals, PPP loans and other stimulus subsidies.

Non-interest expense totaled $7.1 million in 4Q20, compared to $6.7 million in 3Q20, and $6.8 million in 4Q19. For the year, non-interest expense was $27.5 million, compared to $26.8 million in 2019. The Company has implemented strategic initiatives focusing on expense control and improvement in operating efficiency, which will continue through 2021.

Balance Sheet
Total assets decreased to $975.4 million at December 31, 2020, compared to $1.04 billion, or 6.4%, at September 30, 2020, and increased $61.6 million, or 6.7%, compared to $913.9 million at December 31, 2019. Total loans increased modestly to $857.6 million at December 31, 2020, compared to $854.5 million, or 0.4%, at September 30, 2020, and increased $82.0 million, or 10.6%, compared to $775.6 million at December 31, 2019.

Commercial real estate loans outstanding (which include SBA 504, construction and land) were up 4.3% from year ago levels to $402.1 million at December 31, 2020, and comprise 46.9% of the total loan portfolio. Manufactured housing loans were up 9.0% from year ago levels to $280.3 million, and represent 32.7% of total loans. SBA PPP loans were $69.5 million at December 31, 2020, and represent 8.1% of total loans. Commercial loans (which include agriculture loans) were down 20.3% from year ago levels to $80.9 million, and represent 9.4% of the total loan portfolio. The majority of this decrease was in the agriculture portfolio as the Company switched its production focus from on-balance sheet to off-balance sheet Farmer Mac loans. In early 2020 when the Pandemic started, commercial lending in our markets materially slowed as “Shelter in Place” orders forced business closures. The slower commercial loan trend continued through most of 2020. During this time, the Company’s manufactured housing loan division continued with strong production levels and had a record year. During December and into the first part of 2021, loan production opportunities have increased as capital levels have improved, and as clients are taking advantage of historically low interest rates.

Total deposits were $766.2 million at December 31, 2020, compared to $749.2 million at September 30, 2020, and $750.9 million at December 31, 2019. Non-interest-bearing demand deposits were $181.8 million at December 31, 2020, a slight decrease compared to $190.1 million at September 30, 2020, and a $71.0 million increase compared to $110.8 million at December 31, 2019. Interest-bearing demand deposits increased $43.0 million to $398.1 million at December 31, 2020, compared to $355.1 million at September 30, 2020, and increased $83.8 million compared to $314.3 million at December 31, 2019. “Demand deposit growth has been strong, as consumers and businesses continue to build cash reserves, and federal programs such as the PPP also contributed to deposit growth,” said Thompson. “We have been effective at attracting new deposit clients to the Bank, resulting from our success with PPP lending and other relationship management focus.”

Certificates of deposit, which include brokered deposits, decreased $17.9 million during the quarter to $167.5 million at December 31, 2020, compared to $185.4 million at September 30, 2020, and decreased $142.6 million compared to $310.1 million at December 31, 2019. The reduction in these deposits was due to divesting some high-priced municipal and brokered deposits to lower cost, core funding.

Stockholders’ equity increased to $89.0 million at December 31, 2020, compared to $86.7 million at September 30, 2020, and $82.0 million at December 31, 2019. Book value per common share increased to $10.50 at December 31, 2020, compared to $10.23 at September 30, 2020, and $9.68 at December 31, 2019. The increase in capital will be utilized to grow the balance sheet and support dividends.

Credit Quality
At December 31, 2020, overall asset quality reflected some improvement due to positive loan risk rating migrations during 4Q20. Total classified loans increased for the year due to proactive risk rating of loans showing financial stress during the pandemic, while non-accrual loans increased due to one legacy loan of $1.5 million. Although criticized, classified and non-accrual loans increased during the year, the increase was determined not to be systemic or indicative of broader risk within the portfolio. All loans rated “Watch” or worse are monitored monthly and proactive measures are taken when any signs of deterioration to the credit are discovered.

“We continue to closely monitor all credit quality metrics,” said Plourd. “Although the full impact of the COVID-19 pandemic is still uncertain, with our capital levels and focus on credit quality within our portfolio, we expect to manage the economic risks and remain well capitalized.”

The Company recorded a provision credit for loan losses of $44,000 in 4Q20. This compares to a provision for loan losses of $113,000 in 3Q20, and a provision credit for loan losses of $210,000 in 4Q19. The allowance for credit losses, including the reserve for undisbursed loans, was $10.3 million, or 1.24% of total loans held for investment, at December 31, 2020. Net non-accrual loans, plus net other assets acquired through foreclosure, were $6.3 million at December 31, 2020, compared to $5.0 million at September 30, 2020, and $4.9 million at December 31, 2019.

Net non-accrual loans totaled $3.7 million at December 31, 2020, compared to $2.3 million at September 30, 2020, and $2.4 million at December 31, 2019. Of the $3.7 million of net non-accrual loans at December 31, 2020, $1.5 million were commercial real estate loans, $1.4 million were commercial loans, $0.6 million were manufactured housing loans, $0.1 million were single family real estate loans and $0.1 million were SBA loans.

There was $2.6 million in other assets acquired through foreclosure as of December 31, 2020, compared to $2.7 million at September 30, 2020, and $2.5 million at December 31, 2019. The majority of this balance relates to one property in the amount of $2.4 million.

Cash Dividend Declared
The Company’s Board of Directors increased its quarterly cash dividend by 20%, to $0.06 per common share, payable February 26, 2021 to common shareholders of record on February 9, 2021.

Stock Repurchase Program
The Company has reinstated its previously suspended stock 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 April 2020, Community West Bank was awarded a “Premier” rating by The Findley Reports. For 51 years, The Findley Reports has been recognizing the financial performance of banking institutions in California and the Western United States. In making their selections, The Findley Reports focuses on these four ratios: growth, return on beginning equity, net operating income as a percentage of average assets, and loan losses as a percentage of gross loans. We are also rated 5 star Superior by Bauer Financial.

Safe Harbor 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.


COMMUNITY WEST BANCSHARES

CONDENSED CONSOLIDATED INCOME STATEMENTS

(unaudited)

(in 000's, except per share data)

Three Months Ended

Twelve Months Ended

December 31,

September 30,

December 31,

December 31,

December 31,

2020

2020

2019

2020

2019

Interest income

Loans, including fees

$

10,790

$

10,909

$

11,136

$

42,948

$

43,890

Investment securities and other

196

207

492

906

1,849

Total interest income

10,986

11,116

11,628

43,854

45,739

Deposits

815

1,046

2,413

5,483

10,055

Other borrowings

378

518

377

1,782

1,327

Total interest expense

1,193

1,564

2,790

7,265

11,382

Net interest income

9,793

9,552

8,838

36,589

34,357

Provision (credit) for loan losses

(44

)

113

(210

)

1,223

(165

)

Net interest income after provision for loan losses

9,837

9,439

9,048

35,366

34,522

Non-interest income

Other loan fees

383

539

500

1,546

1,383

Gains from loan sales, net

209

424

765

920

765

Document processing fees

129

152

116

513

423

Service charges

83

75

160

354

567

Other

166

162

123

579

469

Total non-interest income

970

1,352

1,664

3,912

3,607

Non-interest expenses

Salaries and employee benefits

4,594

4,402

4,141

17,968

17,094

Occupancy, net

751

751

750

3,036

3,088

Professional services

399

460

552

1,801

1,679

Data processing

254

258

236

1,055

876

Depreciation

202

205

214

821

864

FDIC assessment

165

123

118

565

427

Advertising and marketing

110

145

228

673

774

Stock-based compensation

68

71

100

319

382

Other

526

307

475

1,285

1,571

Total non-interest expenses

7,069

6,722

6,814

27,523

26,755

Income before provision for income taxes

3,738

4,069

3,898

11,755

11,374

Provision for income taxes

1,111

1,209

1,179

3,510

3,411

Net income

$

2,627

$

2,860

$

2,719

$

8,245

$

7,963

Earnings per share:

Basic

$

0.31

$

0.34

$

0.32

$

0.97

$

0.94

Diluted

$

0.31

$

0.33

$

0.32

$

0.97

$

0.93



COMMUNITY WEST BANCSHARES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in 000's, except per share data)

December 31,

September 30,

December 31,

2020

2020

2019

Cash and cash equivalents

$

1,587

$

4,974

$

2,539

Interest-earning deposits in other financial institutions

58,953

124,590

80,122

Investment securities

22,043

23,562

25,563

Loans:

Commercial

80,851

84,133

101,485

Commercial real estate

402,148

394,547

385,642

SBA

11,851

12,547

14,777

Paycheck Protection Program (PPP)

69,542

75,683

-

Manufactured housing

280,284

275,472

257,247

Single family real estate

10,358

10,232

11,668

HELOC

3,861

3,857

4,531

Other (1)

(1,318

)

(2,001

)

213

Total loans

857,577

854,470

775,563

Loans, net

Held for sale

31,229

32,562

42,046

Held for investment

826,348

821,908

733,517

Less: Allowance for loan losses

(10,194

)

(10,197

)

(8,717

)

Net held for investment

816,154

811,711

724,800

NET LOANS

847,383

844,273

766,846

Other assets

45,469

44,700

38,800

TOTAL ASSETS

$

975,435

$

1,042,099

$

913,870

Deposits

Non-interest-bearing demand

$

181,837

$

190,133

$

110,843

Interest-bearing demand

398,101

355,111

314,278

Savings

18,736

18,555

15,689

Certificates of deposit ($250,000 or more)

30,536

81,426

96,431

Other certificates of deposit

136,975

103,955

213,693

Total deposits

766,185

749,180

750,934

Other borrowings

105,000

190,103

65,000

Other liabilities

15,243

16,099

15,958

TOTAL LIABILITIES

886,428

955,382

831,892

Stockholders’ equity

89,007

86,717

81,978

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

975,435

$

1,042,099

$

913,870

Common shares outstanding

8,473

8,473

8,472

Book value per common share

$

10.50

$

10.23

$

9.68

(1) Includes consumer, other loans, securitized loans, and deferred fees



ADDITIONAL FINANCIAL INFORMATION

(Dollars in thousands except per share amounts)(Unaudited)

Three Months Ended

Three Months Ended

Three Months Ended

Twelve Months Ended

Twelve Months Ended

PERFORMANCE MEASURES AND RATIOS

December 31, 2020

September 30, 2020

December 31, 2019

December 31, 2020

December 31, 2019

Return on average common equity

11.85

%

13.33

%

13.35

%

9.70

%

10.15

%

Return on average assets

1.07

%

1.09

%

1.21

%

0.85

%

0.91

%

Efficiency ratio

65.68

%

61.65

%

64.88

%

67.96

%

70.47

%

Net interest margin

4.13

%

3.76

%

4.07

%

3.89

%

4.06

%

Three Months Ended

Three Months Ended

Three Months Ended

Twelve Months Ended

Twelve Months Ended

AVERAGE BALANCES

December 31, 2020

September 30, 2020

December 31, 2019

December 31, 2020

December 31, 2019

Average assets

$

977,736

$

1,044,807

$

887,902

$

972,019

$

872,509

Average earning assets

944,073

1,011,765

862,350

940,993

846,673

Average total loans

845,620

854,273

779,698

831,863

778,745

Average deposits

726,223

733,486

725,029

730,884

726,022

Average common equity

88,171

85,328

80,825

85,027

78,437

EQUITY ANALYSIS

December 31, 2020

September 30, 2020

December 31, 2019

Total common equity

$

89,007

$

86,717

$

81,978

Common stock outstanding

8,473

8,473

8,472

Book value per common share

$

10.50

$

10.23

$

9.68

ASSET QUALITY

December 31, 2020

September 30, 2020

December 31, 2019

Nonaccrual loans, net

$

3,665

$

2,258

$

2,389

Nonaccrual loans, net/total loans

0.43

%

0.26

%

0.31

%

Other assets acquired through foreclosure, net

$

2,614

$

2,707

$

2,524

Nonaccrual loans plus other assets acquired through foreclosure, net

$

6,279

$

4,965

$

4,913

Nonaccrual loans plus other assets acquired through foreclosure, net/total assets

0.64

%

0.48

%

0.54

%

Net loan (recoveries)/charge-offs in the quarter

$

(41

)

$

(76

)

$

(58

)

Net (recoveries)/charge-offs in the quarter/total loans

(0.00

%)

(0.01

%)

(0.01

%)

Allowance for loan losses

$

10,194

$

10,197

$

8,717

Plus: Reserve for undisbursed loan commitments

92

92

85

Total allowance for credit losses

$

10,286

$

10,289

$

8,802

Allowance for loan losses/total loans held for investment

1.23

%

1.24

%

1.19

%

Allowance for loan losses/total loans held for investment excluding PPP loans

1.35

%

1.37

%

1.19

%

Allowance for loan losses/nonaccrual loans, net

278.14

%

451.59

%

364.88

%

Community West Bank *

Community bank leverage ratio

9.29

%

8.79

%

N/A

Tier 1 leverage ratio

9.29

%

8.79

%

9.06

%

Tier 1 capital ratio

11.02

%

10.96

%

10.28

%

Total capital ratio

12.27

%

12.21

%

11.41

%

INTEREST SPREAD ANALYSIS

December 31, 2020

September 30, 2020

December 31, 2019

Yield on total loans

5.08

%

5.08

%

5.67

%

Yield on investments

2.46

%

1.89

%

3.47

%

Yield on interest earning deposits

0.15

%

0.23

%

1.66

%

Yield on earning assets

4.63

%

4.37

%

5.35

%

Cost of interest-bearing deposits

0.60

%

0.77

%

1.57

%

Cost of total deposits

0.45

%

0.57

%

1.32

%

Cost of borrowings

1.03

%

0.98

%

2.31

%

Cost of interest-bearing liabilities

0.69

%

0.83

%

1.64

%

* Capital ratios are preliminary until the Call Report is filed.


Transmitted on Globe Newswire on February 1, 2021 at 6:00 a.m. PST.


Contact:

Susan C. Thompson, EVP & CFO

805.692.5821

www.communitywestbank.com