Community West Bancshares Reports Full Year Earnings and Declares Quarterly Cash Dividend of $0.08 Per Common Share
- None.
- None.
Insights
The financial results reported by Community West Bancshares show a significant decrease in net income year-over-year, from $13.4 million in 2022 to $7.3 million in 2023 and a decrease in quarterly net income from $3.4 million in Q4 2022 to $479,000 in Q4 2023. This decline is a critical indicator of the company's financial health and may influence investor sentiment. The reported decrease in net interest income due to higher deposit costs and expenses related to a pending merger is of particular interest, as it suggests margin compression—a common concern in the banking sector when interest rates rise.
Additionally, the merger with Central Valley Community Bancorp is a strategic move that could potentially lead to cost synergies and expanded market presence. However, mergers also carry integration risks which must be monitored. The reported regulatory approval of the merger indicates progress, but the impact on the stock will depend on the execution of the merger and the realization of the anticipated benefits.
The dividend declaration, despite reduced earnings, reflects a commitment to shareholder returns but also warrants a review of the company's dividend policy and sustainability in light of the lower earnings. The unchanged book value per common share suggests a stable equity position, which is a positive note for shareholders.
The banking industry is facing headwinds from rising interest rates, which can increase deposit costs and compress net interest margins, as evidenced by Community West's financials. The bank's focus on relationship banking, manufactured housing lending and government-guaranteed lending may provide some insulation against these pressures due to niche market positioning. However, the significant increase in non-accrual loans, from $211,000 at the end of 2022 to $4 million at the end of 2023, signals potential asset quality issues that could affect future profitability and require close monitoring by investors.
The merger with Central Valley Community Bancorp could enhance the bank's competitive position in the California market, potentially leading to increased market share and operational efficiencies. The strategic alignment of both banks in terms of values and corporate culture may facilitate the integration process and mitigate some risks associated with the merger.
The reported increase in the cost of funds and the decrease in net interest margin reflect broader economic trends, such as the Federal Reserve's interest rate hikes to combat inflation. These macroeconomic factors directly impact banks' interest income and expense structures. Community West's performance must be analyzed within this context, as their ability to navigate the rising rate environment will be crucial for long-term sustainability.
Furthermore, the increase in wholesale deposits and certificates of deposit suggests a shift in the bank's funding strategy, potentially to lock in rates before further increases. This move could affect liquidity and interest rate risk management. The Tier 1 leverage ratio, which remains well-capitalized, provides some comfort regarding the bank's capital adequacy amidst economic uncertainties.
GOLETA, Calif., Jan. 26, 2024 (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
The Company’s Board of Directors declared a quarterly cash dividend of
“While 2023 proved to be a challenging year for our industry, we are pleased with our 2023 operating results as we continue benefiting from the tremendous efforts our team has put into this organization,” stated Martin E. Plourd, President & Chief Executive Officer. “Steady loan growth during the year was a result of focused efforts by our team of bankers, and asset quality continues to reflect minimal delinquencies. Our earnings for the year reflected lower net interest income, which was impacted by higher deposit costs and higher expenses associated with our pending merger, partially offset by higher asset yields.”
Recent Events
On October 10, 2023, the Company announced the signing of an Agreement of Reorganization and Merger with Central Valley Community Bancorp (“Central Valley”), (NASDAQ: “CVCY”), headquartered in Fresno, California, together with its banking subsidiary, Central Valley Community Bank (“CVCB”)., pursuant to which the companies will combine in an all-stock merger transaction. Under the terms of the agreement, Community West Bancshares will merge with and into Central Valley Community Bancorp and Community West Bank will merge with and into Central Valley Community Bank.
We are pleased to report the merger with Central Valley has received all customary regulatory approvals and final preparations for a second quarter close are underway. We look forward to merging with the professional bankers at Central Valley to create further shareholder value as we serve our clients and markets in California from the Sierras to the sea.
“Since opening in 1989, Community West Bank has become the premier community bank serving Ventura, Santa Barbara, and San Luis Obispo Counties. Combining forces with Central Valley is the next logical step in our growth strategy, particularly as both banks share so many fundamental values and practices,” said Plourd. “Both companies are equally committed to our communities, clients and employees, and both have fostered the same essential corporate culture focused on client advocacy by professional bankers and a legacy of deeply rooted stability.”
Fourth Quarter 2023 Financial Highlights:
- Net income was
$479,000 , or$0.05 per diluted share in the fourth quarter 2023, compared to$2.3 million , or$0.25 per diluted share in third quarter 2023, and$3.4 million , or$0.38 per diluted share in fourth quarter 2022. - Net interest margin was
3.87% for the fourth quarter 2023, compared to3.98% in third quarter 2023, and4.58% in fourth quarter 2022. - Return on average assets was
0.18% for the fourth quarter 2023, compared to0.83% in third quarter 2023, and1.24% in fourth quarter 2022. - Return on average common equity was
1.63% for the fourth quarter 2023, compared to7.72% in third quarter 2023, and11.98% in fourth quarter 2022. - The Allowance for Credit Losses (“ACL”) was
1.31% of total loans held for investment at December 31, 2023, compared to1.30% at September 30, 2023, and1.15% at December 31, 2022. - Net non-accrual loans were
$4.0 million at December 31, 2023, compared to$3.2 million at September 30, 2023, and$211,000 at December 31, 2022. - The Bank’s uninsured deposits totaled approximately
22% of total deposits at December 31, 2023, and21% at September 30, 2023. - Book value per common share was
$13.10 at December 31, 2023, compared to$13.11 at September 30, 2023, and$12.80 at December 31, 2022. - The Bank’s capital position remains well-capitalized with a Tier 1 leverage ratio* of
10.88% at December 31, 2023, compared to10.84% at September 30, 2023, and10.34% at December 31, 2022.
* Capital Ratios are preliminary.
Income Statement
Total interest income increased
For the year, total interest income increased
Net interest income decreased
The yield on earning assets was
Non-interest income for the fourth quarter 2023 decreased
Total non-interest income for the year decreased
Non-interest expenses increased
Income tax expenses decreased
Balance Sheet
Total assets decreased
Total loans increased
Other assets increased
Total deposits decreased
Total borrowings were
Stockholders’ equity increased to
Credit Quality
The Company recorded a provision for credit loss expense of
Net non-accrual loans were
There was
Stock Repurchase Program
On August 30, 2023, the Company announced that its Board of Directors has extended the stock repurchase plan until August 31, 2025. The Company did not repurchase shares during the fourth quarter of 2023, leaving
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 (by assets) 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.
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, which may cause actual results, performance, or achievements to differ materially from those expressed in such statements, including, but not limited to, the following: deterioration in 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 the interest rate policies of the Board of Governors of the Federal Reserve System; continued high inflation; disruptions in credit and capital markets and government policies that could lead to a tightening of credit and an increase in credit losses; our ability to attract and retain deposits and other sources of funding and liquidity, the impact of bank failures in 2023 and other adverse developments to financial institutions and the general reaction by bank customers and by investors in the capital markets regarding the stability and ability of banks to meet ongoing liquidity demands; the effect of international conflicts and the potential involvement of the United States in such conflicts; weather, natural disasters, and 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, including those involving real estate; reduction in the value of our investment securities; risks from the continuing COVID-19 pandemic; 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, including any requirement to increase capital levels imposed by law or regulation; 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.
Additional Information about the Proposed Transaction and Where to Find It
Investors and security holders are urged to carefully review and consider each of Central Valley and Community West public filings with the Securities Exchange Commission (“SEC”), including but not limited to their respective Annual Reports on Form 10-K, its Proxy Statements, Current Reports on Form 8-K and Quarterly Reports on Form 10-Q. Central Valley’s documents filed with the SEC may be obtained free of charge at Central Valley’s website at www.cvcb.com or at the SEC’s website at www.sec.gov. Central Valley’s documents may also be obtained free of charge from Central Valley by requesting them in writing to Central Valley Community Bancorp, 7100 N. Financial Drive, Suite 101, Fresno, California 93720; Attention: Corporate Secretary, or by telephone at (559)298-1775. Community West documents filed with the SEC may be obtained free of charge at Community West’s website at www.communitywestbank.com or at the SEC’s website at www.sec.gov. Community West documents may also be obtained free of charge from Community West by requesting them in writing to Community West Bancshares, 445 Pine Avenue, Goleta, California 93117, or by telephone at (805) 692-5821; Attention Corporate Secretary.
Central Valley has filed a registration statement on Form S-4 with the SEC which was declared effective on or about December 27, 2023 and which includes a joint proxy statement/prospectus which was distributed to the shareholders of Central Valley and Community West in connection with their vote on the merger. Before making any voting or investment decision, investors and security holders of Central Valley and Community West are urged to carefully read the entire joint proxy statement/prospectus, as well as any amendments or supplements thereto, because it contains important information about the proposed transaction. Investors and security holders are able to obtain the joint proxy statement/prospectus free of charge from the SEC’s website or from Central Valley or Community West by writing to the applicable address provided in the paragraph above.
The directors, executive officers and certain other members of management and employees at Central Valley and Community West may be deemed participants in the solicitation of proxies in favor of the merger from their respective shareholders. Information about the directors and executive officers of Central Valley is included in the proxy statement for its 2023 Annual Meeting of Shareholders, which was filed with the SEC on March 31, 2023. Information about the directors and executive officers of Community West is included in the proxy statement for its 2023 Annual Meeting of Shareholders, which was filed with the SEC on April 17, 2023.
| COMMUNITY WEST BANCSHARES | |||||||||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||||||||
| (unaudited) | |||||||||||||||
| (in 000's, except per share data) | |||||||||||||||
| December 31, | September 30, | December 31, | |||||||||||||
| 2023 | 2023 | 2022 | |||||||||||||
| Cash and cash equivalents | $ | 1,471 | $ | 1,855 | $ | 1,379 | |||||||||
| Interest-earning deposits in other financial institutions | 70,727 | 138,764 | 63,311 | ||||||||||||
| Investment securities | 17,749 | 17,591 | 29,470 | ||||||||||||
| Loans: | |||||||||||||||
| Commercial | 58,437 | 51,968 | 74,929 | ||||||||||||
| Commercial real estate | 560,373 | 556,945 | 545,317 | ||||||||||||
| SBA | 6,034 | 6,169 | 6,855 | ||||||||||||
| Paycheck Protection Program (PPP) | 160 | 192 | 1,773 | ||||||||||||
| Manufactured housing | 330,358 | 325,068 | 315,825 | ||||||||||||
| Single family real estate | 10,327 | 10,590 | 8,678 | ||||||||||||
| HELOC | 2,556 | 2,556 | 2,613 | ||||||||||||
| Other (1) | (773 | ) | (806 | ) | (648 | ) | |||||||||
| Total loans | 967,472 | 952,682 | 955,342 | ||||||||||||
| Loans, net | |||||||||||||||
| Held for sale | 16,648 | 18,435 | 21,033 | ||||||||||||
| Held for investment | 950,824 | 934,247 | 934,309 | ||||||||||||
| Less: Allowance for credit losses | (12,451 | ) | (12,135 | ) | (10,765 | ) | |||||||||
| Net held for investment | 938,373 | 922,112 | 923,544 | ||||||||||||
| NET LOANS | 955,021 | 940,547 | 944,577 | ||||||||||||
| Other assets | 43,015 | 41,542 | 52,765 | ||||||||||||
| TOTAL ASSETS | $ | 1,087,983 | $ | 1,140,299 | $ | 1,091,502 | |||||||||
| Deposits | |||||||||||||||
| Non-interest-bearing demand | $ | 168,603 | $ | 190,817 | $ | 216,494 | |||||||||
| Interest-bearing demand | 377,530 | 456,808 | 428,173 | ||||||||||||
| Savings | 16,257 | 16,905 | 23,490 | ||||||||||||
| Certificates of deposit ( | 13,892 | 14,911 | 6,693 | ||||||||||||
| Other certificates of deposit | 276,656 | 236,652 | 200,234 | ||||||||||||
| Total deposits | 852,938 | 916,093 | 875,084 | ||||||||||||
| Other borrowings | 100,000 | 90,000 | 90,000 | ||||||||||||
| Other liabilities | 18,801 | 18,144 | 13,768 | ||||||||||||
| TOTAL LIABILITIES | 971,739 | 1,024,237 | 978,852 | ||||||||||||
| Stockholders' equity | 116,244 | 116,062 | 112,650 | ||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||
| $ | 1,087,983 | $ | 1,140,299 | $ | 1,091,502 | ||||||||||
| Common shares outstanding | 8,875 | 8,850 | 8,798 | ||||||||||||
| Book value per common share | $ | 13.10 | $ | 13.11 | $ | 12.80 | |||||||||
| (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 | ||||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||||
| 2023 | 2023 | 2023 | 2023 | 2022 | ||||||||||||||||||
| Interest income | ||||||||||||||||||||||
| Loans, including fees | $ | 13,575 | $ | 13,331 | $ | 13,161 | $ | 12,489 | $ | 12,467 | ||||||||||||
| Investment securities and other | 1,094 | 1,222 | 1,554 | 1,096 | 811 | |||||||||||||||||
| Total interest income | 14,669 | 14,553 | 14,715 | 13,585 | 13,278 | |||||||||||||||||
| Deposits | 4,302 | 3,830 | 3,751 | 2,277 | 913 | |||||||||||||||||
| Other borrowings | 226 | 204 | 247 | 278 | 224 | |||||||||||||||||
| Total interest expense | 4,528 | 4,034 | 3,998 | 2,555 | 1,137 | |||||||||||||||||
| Net interest income | 10,141 | 10,519 | 10,717 | 11,030 | 12,141 | |||||||||||||||||
| Provision for credit losses | 386 | 43 | 12 | (722 | ) | (461 | ) | |||||||||||||||
| Net interest income after provision for credit losses | 9,755 | 10,476 | 10,705 | 11,752 | 12,602 | |||||||||||||||||
| Non-interest income | ||||||||||||||||||||||
| Other loan fees | 241 | 248 | 286 | 169 | 246 | |||||||||||||||||
| Gains from loan sales, net | 61 | 24 | 56 | 30 | 12 | |||||||||||||||||
| Document processing fees | 84 | 88 | 102 | 78 | 85 | |||||||||||||||||
| Service charges | 156 | 149 | 167 | 154 | 143 | |||||||||||||||||
| Other | 336 | 572 | 535 | 331 | 278 | |||||||||||||||||
| Total non-interest income | 878 | 1,081 | 1,146 | 762 | 764 | |||||||||||||||||
| Non-interest expenses | ||||||||||||||||||||||
| Salaries and employee benefits | 5,741 | 5,114 | 5,302 | 5,448 | 4,853 | |||||||||||||||||
| Occupancy, net | 1,054 | 1,093 | 1,135 | 1,098 | 1,116 | |||||||||||||||||
| Professional services | 1,286 | 672 | 851 | 919 | 1,236 | |||||||||||||||||
| Data processing | 332 | 349 | 377 | 349 | 346 | |||||||||||||||||
| Depreciation | 184 | 180 | 183 | 180 | 176 | |||||||||||||||||
| FDIC assessment | 224 | 331 | 276 | 182 | 111 | |||||||||||||||||
| Advertising and marketing | 255 | 179 | 282 | 210 | 234 | |||||||||||||||||
| Other | 618 | 445 | 448 | 448 | 507 | |||||||||||||||||
| Total non-interest expenses | 9,694 | 8,363 | 8,854 | 8,834 | 8,579 | |||||||||||||||||
| Income before provision for income taxes | 939 | 3,194 | 2,997 | 3,680 | 4,787 | |||||||||||||||||
| Provision for income taxes | 460 | 942 | 876 | 1,216 | 1,411 | |||||||||||||||||
| Net income | $ | 479 | $ | 2,252 | $ | 2,121 | $ | 2,464 | $ | 3,376 | ||||||||||||
| Earnings per share: | ||||||||||||||||||||||
| Basic | $ | 0.05 | $ | 0.25 | $ | 0.24 | $ | 0.28 | $ | 0.38 | ||||||||||||
| Diluted | $ | 0.05 | $ | 0.25 | $ | 0.24 | $ | 0.27 | $ | 0.38 | ||||||||||||
| COMMUNITY WEST BANCSHARES | ||||||||||||||||
| CONDENSED CONSOLIDATED INCOME STATEMENTS | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| (in 000's, except per share data) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Interest income | ||||||||||||||||
| Loans, including fees | $ | 13,575 | $ | 12,467 | $ | 52,556 | $ | 46,657 | ||||||||
| Investment securities and other | 1,094 | 811 | 4,966 | 2,481 | ||||||||||||
| Total interest income | 14,669 | 13,278 | 57,522 | 49,138 | ||||||||||||
| Deposits | 4,302 | 913 | 14,160 | 2,511 | ||||||||||||
| Other borrowings | 226 | 224 | 955 | 817 | ||||||||||||
| Total interest expense | 4,528 | 1,137 | 15,115 | 3,328 | ||||||||||||
| Net interest income | 10,141 | 12,141 | 42,407 | 45,810 | ||||||||||||
| Provision for credit losses | 386 | (461 | ) | (281 | ) | (195 | ) | |||||||||
| Net interest income after provision for credit losses | 9,755 | 12,602 | 42,688 | 46,005 | ||||||||||||
| Non-interest income | ||||||||||||||||
| Other loan fees | 241 | 246 | 944 | 1,161 | ||||||||||||
| Gains from loan sales, net | 61 | 12 | 171 | 257 | ||||||||||||
| Document processing fees | 84 | 85 | 352 | 422 | ||||||||||||
| Service charges | 156 | 143 | 626 | 438 | ||||||||||||
| Other | 336 | 278 | 1,774 | 1,700 | ||||||||||||
| Total non-interest income | 878 | 764 | 3,867 | 3,978 | ||||||||||||
| Non-interest expenses | ||||||||||||||||
| Salaries and employee benefits | 5,741 | 4,853 | 21,605 | 19,637 | ||||||||||||
| Occupancy, net | 1,054 | 1,116 | 4,380 | 4,180 | ||||||||||||
| Professional services | 1,286 | 1,236 | 3,728 | 2,923 | ||||||||||||
| Data processing | 332 | 346 | 1,407 | 1,265 | ||||||||||||
| Depreciation | 184 | 176 | 727 | 711 | ||||||||||||
| FDIC assessment | 224 | 111 | 1,013 | 577 | ||||||||||||
| Advertising and marketing | 255 | 234 | 926 | 921 | ||||||||||||
| Other | 618 | 507 | 1,959 | 1,058 | ||||||||||||
| Total non-interest expenses | 9,694 | 8,579 | 35,745 | 31,272 | ||||||||||||
| Income before provision for income taxes | 939 | 4,787 | 10,810 | 18,711 | ||||||||||||
| Provision for income taxes | 460 | 1,411 | 3,494 | 5,262 | ||||||||||||
| Net income | $ | 479 | $ | 3,376 | $ | 7,316 | $ | 13,449 | ||||||||
| Earnings per share: | ||||||||||||||||
| Basic | $ | 0.05 | $ | 0.38 | $ | 0.83 | $ | 1.54 | ||||||||
| Diluted | $ | 0.05 | $ | 0.38 | $ | 0.81 | $ | 1.51 | ||||||||
| COMMUNITY WEST BANCSHARES | ||||||||||||||||||||||||||||
| Average Balance, Average Yield Earned, and Average Rate Paid | ||||||||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||||||
| (in 000's) | ||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | ||||||||||||||||||||||||||
| 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 | $ | 60,851 | $ | 775 | 5.05 | % | $ | 70,564 | $ | 903 | 5.08 | % | $ | 48,512 | $ | 415 | 3.39 | % | ||||||||||
| Investment securities | 22,348 | 319 | 5.66 | % | 22,568 | 319 | 5.61 | % | 54,022 | 396 | 2.91 | % | ||||||||||||||||
| Loans (1) | 957,403 | 13,575 | 5.63 | % | 955,609 | 13,331 | 5.53 | % | 949,007 | 12,467 | 5.21 | % | ||||||||||||||||
| Total earnings assets | 1,040,602 | 14,669 | 5.59 | % | 1,048,741 | 14,553 | 5.51 | % | 1,051,541 | 13,278 | 5.01 | % | ||||||||||||||||
| Nonearning Assets | ||||||||||||||||||||||||||||
| Cash and due from banks | 1,729 | 2,114 | 2,145 | |||||||||||||||||||||||||
| Allowance for credit losses | (12,138 | ) | (12,107 | ) | (11,204 | ) | ||||||||||||||||||||||
| Other assets | 37,162 | 35,121 | 36,432 | |||||||||||||||||||||||||
| Total assets | $ | 1,067,355 | $ | 1,073,869 | $ | 1,078,914 | ||||||||||||||||||||||
| Interest-Bearing Liabilities | ||||||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 377,720 | $ | 1,972 | 2.07 | % | $ | 388,385 | $ | 1,908 | 1.95 | % | $ | 442,313 | $ | 591 | 0.53 | % | ||||||||||
| Savings deposits | 16,120 | 15 | 0.37 | % | 17,797 | 13 | 0.29 | % | 22,801 | 13 | 0.23 | % | ||||||||||||||||
| Time deposits | 260,016 | 2,315 | 3.53 | % | 242,794 | 1,909 | 3.12 | % | 152,249 | 309 | 0.81 | % | ||||||||||||||||
| Total interest-bearing deposits | 653,856 | 4,302 | 2.61 | % | 648,976 | 3,830 | 2.34 | % | 617,363 | 913 | 0.59 | % | ||||||||||||||||
| Other borrowings | 91,313 | 226 | 0.98 | % | 90,217 | 204 | 0.90 | % | 92,391 | 224 | 0.96 | % | ||||||||||||||||
| Total interest-bearing liabilities | $ | 745,169 | $ | 4,528 | 2.41 | % | $ | 739,193 | $ | 4,034 | 2.17 | % | $ | 709,754 | $ | 1,137 | 0.64 | % | ||||||||||
| Noninterest-Bearing Liabilities | ||||||||||||||||||||||||||||
| Noninterest-bearing demand deposits | 185,871 | 200,804 | 241,759 | |||||||||||||||||||||||||
| Other liabilities | 19,564 | 18,209 | 15,555 | |||||||||||||||||||||||||
| Stockholders' equity | 116,751 | 115,663 | 111,846 | |||||||||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 1,067,355 | $ | 1,073,869 | $ | 1,078,914 | ||||||||||||||||||||||
| Net interest income and margin | $ | 10,141 | 3.87 | % | $ | 10,519 | 3.98 | % | $ | 12,141 | 4.58 | % | ||||||||||||||||
| Net interest spread | 3.18 | % | 3.34 | % | 4.37 | % | ||||||||||||||||||||||
| Cost of total deposits | 2.03 | % | 1.79 | % | 0.42 | % | ||||||||||||||||||||||
| Cost of funds | 1.93 | % | 1.70 | % | 0.47 | % | ||||||||||||||||||||||
| (1) Includes nonaccrual and held for sale loans. | ||||||||||||||||||||||||||||
| COMMUNITY WEST BANCSHARES | |||||||||||||||||||||
| Average Balance, Average Yield Earned, and Average Rate Paid | |||||||||||||||||||||
| (unaudited) | |||||||||||||||||||||
| (in 000's) | |||||||||||||||||||||
| Twelve Months Ended | Twelve Months Ended | ||||||||||||||||||||
| December 31, 2023 | December 31, 2022 | ||||||||||||||||||||
| Average Balance | Interest | Average Yield/Cost | Average Balance | Interest | Average Yield/Cost | ||||||||||||||||
| Interest-Earning Assets | |||||||||||||||||||||
| Federal funds sold and interest-earning deposits | $ | 76,314 | $ | 3,699 | 4.85 | % | $ | 119,524 | $ | 1,226 | 1.03 | % | |||||||||
| Investment securities | 24,265 | 1,267 | 5.22 | % | 47,949 | 1,255 | 2.62 | % | |||||||||||||
| Loans (1) | 954,492 | 52,556 | 5.51 | % | 921,638 | 46,657 | 5.06 | % | |||||||||||||
| Total earnings assets | 1,055,071 | 57,522 | 5.45 | % | 1,089,111 | 49,138 | 4.51 | % | |||||||||||||
| Nonearning Assets | |||||||||||||||||||||
| Cash and due from banks | 1,959 | 2,169 | |||||||||||||||||||
| Allowance for credit losses | (12,184 | ) | (10,906 | ) | |||||||||||||||||
| Other assets | 36,928 | 37,751 | |||||||||||||||||||
| Total assets | $ | 1,081,774 | $ | 1,118,125 | |||||||||||||||||
| Interest-Bearing Liabilities | |||||||||||||||||||||
| Interest-bearing demand deposits | $ | 395,328 | $ | 7,004 | 1.77 | % | $ | 480,472 | $ | 1,508 | 0.31 | % | |||||||||
| Savings deposits | 19,133 | 53 | 0.28 | % | 24,317 | 60 | 0.25 | % | |||||||||||||
| Time deposits | 241,633 | 7,103 | 2.94 | % | 160,788 | 943 | 0.59 | % | |||||||||||||
| Total interest-bearing deposits | 656,094 | 14,160 | 2.16 | % | 665,577 | 2,511 | 0.38 | % | |||||||||||||
| Other borrowings | 92,838 | 955 | 1.03 | % | 90,795 | 817 | 0.90 | % | |||||||||||||
| Total interest-bearing liabilities | $ | 748,932 | $ | 15,115 | 2.02 | % | $ | 756,372 | $ | 3,328 | 0.44 | % | |||||||||
| Noninterest-Bearing Liabilities | |||||||||||||||||||||
| Noninterest-bearing demand deposits | 199,968 | 237,849 | |||||||||||||||||||
| Other liabilities | 18,046 | 16,151 | |||||||||||||||||||
| Stockholders' equity | 114,828 | 107,753 | |||||||||||||||||||
| Total Liabilities and Stockholders' Equity | $ | 1,081,774 | $ | 1,118,125 | |||||||||||||||||
| Net interest income and margin | $ | 42,407 | 4.02 | % | $ | 45,810 | 4.21 | % | |||||||||||||
| Net interest spread | 3.43 | % | 4.07 | % | |||||||||||||||||
| Cost of total deposits | 1.65 | % | 0.28 | % | |||||||||||||||||
| Cost of funds | 1.59 | % | 0.33 | % | |||||||||||||||||
| (1) Includes nonaccrual and held for sale loans. | |||||||||||||||||||||
| ADDITIONAL FINANCIAL INFORMATION | |||||||||||||||||||||
| (Dollars and shares 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, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||||||||||||||
| Return on average common equity | 1.63 | % | 7.72 | % | 11.98 | % | 6.37 | % | 12.48 | % | |||||||||||
| Return on average assets | 0.18 | % | 0.83 | % | 1.24 | % | 0.68 | % | 1.20 | % | |||||||||||
| Efficiency ratio | 87.98 | % | 72.09 | % | 66.48 | % | 77.25 | % | 62.81 | % | |||||||||||
| Net interest margin | 3.87 | % | 3.98 | % | 4.58 | % | 4.02 | % | 4.21 | % | |||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | Twelve Months Ended | Twelve Months Ended | |||||||||||||||||
| AVERAGE BALANCES | December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||||||||||||||
| Average assets | $ | 1,067,355 | $ | 1,073,869 | $ | 1,078,914 | $ | 1,081,774 | $ | 1,118,125 | |||||||||||
| Average earning assets | 1,040,602 | 1,048,741 | 1,051,541 | 1,055,071 | 1,089,111 | ||||||||||||||||
| Average total loans | 957,403 | 955,609 | 949,007 | 954,492 | 921,638 | ||||||||||||||||
| Average deposits | 839,727 | 849,780 | 859,122 | 856,062 | 903,426 | ||||||||||||||||
| Average common equity | 116,751 | 115,663 | 111,846 | 114,828 | 107,753 | ||||||||||||||||
| EQUITY ANALYSIS | December 31, 2023 | September 30, 2023 | December 31, 2022 | ||||||||||||||||||
| Total common equity | $ | 116,244 | $ | 116,062 | $ | 112,650 | |||||||||||||||
| Common stock outstanding | 8,875 | 8,850 | 8,798 | ||||||||||||||||||
| Book value per common share | $ | 13.10 | $ | 13.11 | $ | 12.80 | |||||||||||||||
| ASSET QUALITY | December 31, 2023 | September 30, 2023 | December 31, 2022 | ||||||||||||||||||
| Nonaccrual loans, net | $ | 4,007 | $ | 3,195 | $ | 211 | |||||||||||||||
| Nonaccrual loans, net/total loans | 0.41 | % | 0.34 | % | 0.02 | % | |||||||||||||||
| Other assets acquired through foreclosure, net | $ | 982 | $ | 1,511 | $ | 2,250 | |||||||||||||||
| Nonaccrual loans plus other assets acquired through foreclosure, net | $ | 4,989 | $ | 4,706 | $ | 2,461 | |||||||||||||||
| Nonaccrual loans plus other assets acquired through foreclosure, net/total assets | 0.46 | % | 0.41 | % | 0.23 | % | |||||||||||||||
| Net loan (recoveries)/charge-offs in the quarter | $ | 25 | $ | (45 | ) | $ | (113 | ) | |||||||||||||
| Net (recoveries)/charge-offs in the quarter/total loans | 0.00 | % | (0.00 | %) | (0.01 | %) | |||||||||||||||
| Allowance for credit losses - loans | $ | 12,451 | $ | 12,135 | $ | 10,765 | |||||||||||||||
| Plus: Reserve for undisbursed loan commitments | 458 | 424 | 94 | ||||||||||||||||||
| Allowance for credit losses - loans / total loans held for investment | $ | 12,909 | $ | 12,559 | $ | 10,859 | |||||||||||||||
| Allowance for credit losses - loans | 1.31 | % | 1.30 | % | 1.15 | % | |||||||||||||||
| Allowance for credit losses/nonaccrual loans, net | 310.73 | % | 379.81 | % | 5101.90 | % | |||||||||||||||
| Community West Bank * | |||||||||||||||||||||
| Tier 1 leverage ratio | 10.88 | % | 10.84 | % | 10.34 | % | |||||||||||||||
| Tier 1 capital ratio | 11.88 | % | 12.09 | % | 11.44 | % | |||||||||||||||
| Total capital ratio | 13.08 | % | 13.27 | % | 12.56 | % | |||||||||||||||
| INTEREST SPREAD ANALYSIS | December 31, 2023 | September 30, 2023 | December 31, 2022 | ||||||||||||||||||
| Yield on total loans | 5.63 | % | 5.53 | % | 5.21 | % | |||||||||||||||
| Yield on investments | 5.66 | % | 5.61 | % | 2.91 | % | |||||||||||||||
| Yield on interest earning deposits | 5.05 | % | 5.08 | % | 3.39 | % | |||||||||||||||
| Yield on earning assets | 5.59 | % | 5.51 | % | 5.01 | % | |||||||||||||||
| Cost of interest-bearing deposits | 2.61 | % | 2.34 | % | 0.59 | % | |||||||||||||||
| Cost of total deposits | 2.03 | % | 1.79 | % | 0.42 | % | |||||||||||||||
| Cost of borrowings | 0.98 | % | 0.90 | % | 0.96 | % | |||||||||||||||
| Cost of interest-bearing liabilities | 2.41 | % | 2.17 | % | 0.64 | % | |||||||||||||||
| Cost of funds | 1.93 | % | 1.70 | % | 0.47 | % | |||||||||||||||
| * Capital ratios are preliminary until the Call Report is filed. | |||||||||||||||||||||
Contact:
Richard Pimentel, EVP & CFO
805.692.4410
www.communitywestbank.com
FAQ
What was Community West Bancshares' net income for the year ended December 31, 2023?
What was the net income for the year ended December 31, 2022?
What was the impact of the pending merger with Central Valley Community Bancorp on the earnings?
What is the quarterly cash dividend declared by the company?
When is the merger with Central Valley expected to close?
