STOCK TITAN
  1. Home
  2. News
  3. CWBC

Community West Bancshares Earnings Up 88% to $3.0 Million, or $0.35 Per Diluted Share, in 1Q21 Compared to 1Q20; Increases Quarterly Cash Dividend by 17% to $0.07 Per Common Share

Rhea-AI Impact
(No impact)
Rhea-AI Sentiment
(Neutral)
Tags
dividends earnings

GOLETA, Calif., May 03, 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 increased 15.4% to $3.0 million, or $0.35 per diluted share, for the first quarter of 2021 (1Q21), compared to $2.6 million, or $0.31 per diluted share, for the fourth quarter of 2020 (4Q20), and increased 87.5% compared to $1.6 million, or $0.19 per diluted share, for the first quarter of 2020 (1Q20).

“We started the year with solid operating performance, higher net interest income and an expanding net interest margin, fueled by loan originations and core deposit growth,” stated Martin E. Plourd, President and Chief Executive Officer. “We continue to generate profitable operations, which sustains our ability to increase dividends. We believe the increase was warranted as evidenced by our last three quarters performance. Our focus in 2021 remains on deploying excess liquidity through increased lending activity, while maintaining our strong net interest margin, lowering overall expenses and managing asset quality.”

First Quarter 2021 Financial Highlights:

  • Net income was $3.0 million, or $0.35 per diluted share in 1Q21, compared to $2.6 million, or $0.31 per diluted share in 4Q20, and $1.6 million, or $0.19 per diluted share in 1Q20.
  • Net interest income increased to $10 million for the quarter, compared to $9.8 million for 4Q20 and $8.5 million in 1Q20.
  • A provision credit for loan losses of $173,000 for the quarter, compared to a provision credit for loan losses of $44,000 for 4Q20, and a provision for loan losses of $392,000 for 1Q20. The resulting allowance was 1.19% of total loans held for investment at March 31, 2021, and 1.34% of total loans held for investment excluding the $94.5 million of Paycheck Protection Program (“PPP”) loans at March 31, 2021, which are 100% guaranteed by the Small Business Administration (“SBA”).*
  • Net interest margin improved to 4.19% for 1Q21, compared to 4.13% for 4Q20, and 3.97% for 1Q20.
  • Total demand deposits increased $57.2 million to $637.1 million at March 31, 2021, compared to $579.9 million at December 31, 2020, and increased $229.1 million compared to $408 million at March 31, 2020. Total demand deposits represented 79.2% of total deposits at March 31, 2021, compared to 75.7% at December 31, 2020, and 57.3% at March 31, 2020.
  • Total loans increased $30.2 million to $887.8 million at March 31, 2021, compared to $857.6 million at December 31, 2020, and increased $105.8 million compared to $782 million at March 31, 2020.
  • Book value per common share increased to $10.77 at March 31, 2021, compared to $10.50 at December 31, 2020, and $9.82 at March 31, 2020.
  • The Bank’s community bank leverage ratio (CBLR) was 8.97% at March 31, 2021, compared to 9.29% at December 31, 2020, and 9.21% at March 31, 2020.
  • Net non-accrual loans decreased by 51.3% to $1.8 million at March 31, 2021, compared to $3.7 million at December 31, 2020, and $2.6 million at March 31, 2020.
  • Other assets acquired through foreclosure, net, was $2.6 million at March 31, 2021 and December 31, 2020, respectively, and $2.7 million at March 31, 2020.
  • Awarded a “Super Premier Performance” rating by The Findley Reports.

*Non GAAP

COVID-19 Pandemic & PPP loan Update

“Part of our success in the first quarter of 2021, and also in 2020, included our participation in the SBA’s PPP program,” said Plourd. “In 2020, we generated 521 SBA PPP loans totaling $76.6 million to our clients.   As of March 31, 2021, we had 266 loans totaling $46.4 million remaining from the first round in 2020. During the first quarter of 2021, $22.8 million of the PPP loans made in 2020 were forgiven by the SBA. We recognized $0.8 million of income in net fees related to the forgiven PPP loans during 1Q21 and have $0.8 million remaining in net unrecognized fees related to the 2020 PPP loans that will be recognized as income through amortization or once the loans are paid/forgiven by the SBA.   We expect the remainder of the 2020 PPP loans to be forgiven by the end of 2Q21.   Also as these loans are forgiven, we will use the liquidity to pursue new opportunities, including strategies to improve loan growth, fund the second round of PPP loans and further reduce funding costs.”  

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. On March 30, 2021, the PPP expiration date for Round 2 was extended to May 31, 2021 via the PPP Extension Act of 2021. 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 of funding to our clients in January with the same “client first” strategy utilized in the first round,” said Plourd. “We are focused on delivering an exceptional client experience during a very stressful time. This approach, and our client’s spreading the word to others, helped us to further build the Bank’s strong reputation. After assisting our clients, the Bank takes applications from others who were not sufficiently assisted by their current bank, and as a result are able to add new client relationships, not just lending transactions.”  

“Since January, we have originated an additional 393 PPP loans for $48.1 million with anticipated fees of $2.0 million that will be recognized over the earlier of 5 years or loan forgiveness. As these borrowers are not required to make payments for 10 months, it is likely that a significant portion of the borrowing base may wait to seek forgiveness until early 2022,” said Plourd.

“From the onset of the pandemic, we maintained all branch activity, while working with clients who were experiencing hardship,” said William F. Filippin, Chief Credit and Chief Administrative Officer. “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 beginning 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. 99.6% as a percentage of the dollar amount 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 March 31, 2021, 5 loans remained on deferral for a total of $1.4 million. Of the $1.4 million, 3 loans for $1.2 million were new deferrals in 2021. 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:

          
Pandemic Deferments         
          
 March 31, 2021 December 31, 2020 September 30, 2020 
Loan segmentCountBalance CountBalance CountBalance 
  (in thousands)  (in thousands)  (in thousands) 
Manufactured housing2 $207 8 $1,261 116 $15,984 
Commercial real estate1  1,094 2  2,082 60  104,492 
Commercial2  84 3  1,767 24  8,520 
SBA-  - -  - -  - 
HELOC-  - -  - -  - 
Single family real estate-  - -  - 3  717 
Consumer-  - -  - -  - 
Total pandemic deferments5 $ 1,385 13 $ 5,111 203 $ 129,713 
          
Issued in year 2021 loan count 3 balance $1.2 million.       
          

“While the quantity of loan deferral requests has tapered off significantly since the onset of the pandemic, we continue to see clients experiencing some level of 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 March 31, 2021. 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 March 31, 2021, the Bank’s loans to these industries were $172.4 million, which is 19.4% of its $887.8 million loan portfolio.

Of the selected industry loans, $8.8 million, or 5.10%, are on non-accrual. Also, of the selected industry loans, the classified loans are $15.0 million, or 8.77%. The Bank has accommodated $1.1 million, or 0.66%, of these loans with payment deferrals in the selected industries. Additional detail by industry at March 31, 2021 is included in the table below.

          
Sectors Under Focus (Excluding PPP Loans)
As of 03/31/21
(in thousands)		 Loans Outstanding   $ Non-accrual% Non-accrual  $ Classified% Classified  $ Deferrals% Deferral
Healthcare$51,586 $-0.00% $2,2404.34% $500.10%
Senior/Assted Living Facilities 23,420  -0.00%  -0.00%  -0.00%
Medical Offices 19,137  -0.00%  2701.41%  -0.00%
General Healthcare 9,029  -0.00%  1,97021.82%  500.55%
Hospitality 50,699  1,4292.82%  5,24310.34%  1,0942.16%
Lodging 40,425  1,4273.53%  2,5426.29%  -0.00%
Restaurants 10,274  20.02%  2,70126.29%  1,09410.65%
Retail Commercial Real Estate54,394  7,36213.53%  7,49813.78%  -0.00%
Retail Services 13,783  -0.00%  180.13
Stock CWBC logo
Community West Bancshares

NASDAQ:CWBC

CWBC Rankings

#3355 Ranked by Market Cap
#2800 Ranked by Stock Gains
#1177 Ranked by Dividends

CWBC Latest News

CWBC Stock Data

328.34M
11.44M
12.73%
35.01%
0.39%
Commercial Banking
Finance and Insurance
Link
United States of America
FRESNO

About CWBC

at community west bank, we believe that local deposits should work locally. we have full-service branches in goleta, santa barbara, santa maria, ventura and westlake village, in addition to a san luis obispo loan production office, making loans to businesses, individuals and non-profit organizations. as a locally owned and managed business bank on california’s central coast, we appreciate the opportunity to serve you. we are the bankers you want on your side, providing the financing, services and trusted advice that businesses need in order to succeed. let’s work together. member fdic. equal housing lender.