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Community West Bancshares Reports Second Quarter 2023 Earnings of $2.1 Million, or $0.24 Per Diluted Share; Declares Quarterly Cash Dividend of $0.08 Per Common Share

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Community West Bancshares reports net income of $2.1 million for Q2 2023, compared to $2.5 million in Q1 2023. The company declares a quarterly cash dividend of $0.08 per common share. Net interest income decreases, while total loans and total deposits show slight changes.
Positive
  • Net income for Q2 2023 was $2.1 million, a decrease from $2.5 million in Q1 2023.
  • The company declared a quarterly cash dividend of $0.08 per common share.
  • Net interest income decreased from $11.0 million in Q1 2023 to $10.7 million in Q2 2023.
  • Total loans increased by $4.8 million to $956.3 million in Q2 2023.
  • Total deposits decreased by $9.1 million to $911.7 million in Q2 2023.
Negative
  • None.

GOLETA, Calif., July 28, 2023 (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 $2.1 million, or $0.24 per diluted share, for the second quarter of 2023, compared to $2.5 million, or $0.27 per diluted share, for the preceding quarter, and $2.6 million, or $0.30 per diluted share, for the second quarter of 2022. For the first six months of 2023, the Company reported net income of $4.6 million, or $0.51 per diluted share, compared to $6.6 million, or $0.74 per diluted share, for the first six months of 2022.

The Company’s Board of Directors declared a quarterly cash dividend of $0.08 per common share, payable August 31, 2023, to common shareholders of record on August 12, 2023.

“Our second quarter 2023 and year to date results highlight a bolstered balance sheet and display a strong level of capital in what has been a challenging six months for the banking industry,” stated Martin E. Plourd, President & Chief Executive Officer. “Operating results for the second quarter of 2023 reflect lower net interest income, which was impacted by higher deposit costs that were partially offset by higher asset yields due to loan repricing and new loan growth. We continue to focus on funding our balance sheet primarily through core deposits. At the same time, we are well positioned to capitalize on new market opportunities as they may arise, as we continue to navigate through the volatility and uncertainty in the banking industry and the overall economic environment.”

Second Quarter 2023 Financial Highlights:

  • Net income was $2.1 million, or $0.24 per diluted share in the second quarter 2023, compared to $2.5 million, or $0.27 per diluted share in first quarter 2023, and $2.6 million, or $0.30 per diluted share in second quarter 2022.
  • Net interest income was $10.7 million in the second quarter 2023, compared to $11.0 million in first quarter 2023, and $11.0 million in second quarter 2022.
  • Net interest margin was 3.99% for the second quarter 2023, compared to 4.25% in first quarter 2023, and 4.01% in second quarter 2022.
  • Return on average assets was 0.77% for the second quarter 2023, compared to 0.92% in first quarter 2023, and 0.93% in second quarter 2022.
  • Return on average common equity was 7.47% for the second quarter 2023, compared to 8.84% in first quarter 2023, and 9.92% in second quarter 2022.
  • The Company recorded a provision for credit loss expense of $12,000 for second quarter 2023, compared to a negative provision for credit losses of $722,000 for first quarter 2023, and a provision for loan losses of $252,000 for second quarter 2022.
  • The ACL was 1.30% of total loans held for investment at June 30, 2023 and at March 31, 2023, and 1.22% at June 30, 2022.  
  • Net non-accrual loans decreased to $974,000 at June 30, 2023, compared to $1.6 million at March 31, 2023, and increased compared to $379,000 at June 30, 2022.
  • Total loans increased $4.8 million to $956.3 million at June 30, 2023, compared to $951.5 million at March 31, 2023, and increased $43.6 million compared to $912.7 million at June 30, 2022.
  • Total deposits decreased by $9.1 million during the quarter to $911.7 million at June 30, 2023, compared to $920.8 million at March 31, 2023. Non-interest-bearing demand deposits decreased $9.7 million to $195.6 million at June 30, 2023, compared to $205.3 million at March 31, 2023.
  • The Bank’s uninsured or uncollateralized deposits totaled approximately 18% of total deposits at June 30, 2023, and 22% at March 31, 2023.
  • Available borrowing capacity from FHLB and FRB was $172.1 million at June 30, 2023.
  • Stockholders’ equity increased $1.2 million to $113.9 million at June 30, 2023, compared to $112.8 million at March 31, 2023, and increased $6.8 million compared to $107.1 million at June 30, 2022.
  • Book value per common share increased to $12.88 at June 30, 2023, compared to $12.77 at March 31, 2023, and $12.25 at June 30, 2022.
  • The Bank’s capital position remains well-capitalized with a Tier 1 leverage ratio* of 10.39% at June 30, 2023, compared to 10.46% at March 31, 2023, and 9.30% at June 30, 2022.

* Capital Ratios are preliminary.

Income Statement

Total interest income increased $1.1 million in the second quarter 2023 to $14.7 million, compared to $13.6 million in the preceding quarter, and increased by $3.0 million compared to $11.7 million in the second quarter of 2022. Interest income from loans increased $672,000 to $13.2 million compared to the prior quarter. Interest income from securities and interest-earning deposits increased $458,000 to $1.6 million compared to the prior quarter, primarily due to increased average interest-earning deposit balances and higher yields due to increased market rates. Total interest expenses for the quarter increased $1.4 million to $4.0 million compared to the prior quarter due to increased average balances and higher rates paid on interest-bearing demand deposits and time deposits. The increase in deposit expense was largely due to deposit mix changes during the quarter. Net interest income decreased to $10.7 million in the second quarter 2023, compared to $11.0 million in both the preceding quarter and in second quarter 2022. In the first six months of 2023, net interest income remained unchanged from the first six months of 2022 at $21.7 million.

Net interest margin was 3.99% for second quarter 2023, a twenty-six basis point decrease compared to first quarter 2023, and a two- basis point decrease compared to second quarter 2022. The yield on loans for the second quarter 2023 increased twenty-two basis points to 5.54%, compared to 5.32% for first quarter 2023, resulting from increased loan rates on new originations, loan prepayment revenue and the impact of higher market rates. The yield on federal funds and interest-earning deposits increased forty-seven basis-points to 4.88% for the second quarter 2023 due to increases in rates earned for overnight deposits and money market deposits due to increases in the federal funds rate. The yield on investment securities increased seventy-seven basis points to 5.26% during the quarter due to higher rates earned on investments from variable rate securities and short-term investments in US Treasury securities. The cost of funds for the second quarter increased fifty-six basis-points to 1.65%, compared to 1.09% for the preceding quarter due to higher rates paid on deposit accounts and changes in the portfolio mix, primarily due to the impact from wholesale funding taken during the first quarter in response to events in the banking industry. Net interest margin was 3.99% for the second quarter 2023, a two basis-point decrease compared to the second quarter 2022. The yield on earning assets increased to 5.47% for the second quarter 2023 compared to 4.26% in the second quarter 2022. The increase was due to a sixty-two-basis point increase in loan yields due to increased average balances and increased rates on new originations due to higher market rates. The yield on federal funds and interest-earning deposits increased to 4.88% for the second quarter 2023 compared to 0.81% in the second quarter of 2022 due to increases in rates earned for overnight deposits and money market deposits due to increases in the federal funds rate. The increase in earning assets was offset by an increase in total cost of funds. The cost of funds increased to 1.65% for the second quarter 2023 compared to 0.28% in the second quarter of 2022. The increase was mainly due to increased rates paid on interest-bearing demand accounts and increased balances and rates on time deposits. The cost of interest-bearing deposits increased seventy-seven basis-points to 2.21%, compared to 1.44% in the previous quarter. The increase was due to higher average balances and costs for time deposits. During the first six months of 2023, the net interest margin increased nineteen basis points to 4.12%, compared to the first six months of 2022. The increase is due to higher average balances and yields from loans, higher yields on federal funds and interest-earning deposits partially offset by higher average balances and costs from time deposits and higher costs from interest-bearing deposits.

Non-interest income for the second quarter 2023 increased $384,000 to $1.1 million compared to $762,000 in first quarter 2023. The increase was primarily due to an increase in other income that included a $255,000 gain from the sale of the Bank’s one OREO property. Other loan fees were $286,000 for the second quarter 2023 compared to $169,000 in first quarter 2023. Gain on sale of loans increased $26,000 to $56,000 in the second quarter 2023 compared to $30,000 in the first quarter of 2023 as a result of higher sales during the quarter. Total non-interest income decreased $434,000 to $1.9 million in the first six months of 2023, compared to $2.3 million in the first six months of 2022. The decrease was primarily due to a $253,000 decrease in other non-interest income, $110,000 in lower gain on loan sales and $211,000 less in loan and document processing fees.   The decrease in other non-interest income was primarily caused by a $550,000 BOLI policy payout in the first six months of 2022 and a $53,000 increase in loan servicing revenue partially offset by a $150,000 net increase in OFA and OREO gains.

Non-interest expenses increased $20,000 to $8.9 million in the second quarter 2023 compared to $8.8 million in first quarter 2023. The increase was primarily due to a $94,000 increase in FDIC assessment rates, and a $72,000 increase in advertising and marketing costs. The increases were partially offset by lower professional fees of $68,000 due to less consulting expense during the quarter and lower stock-based compensation expense of $172,000. In the first six months of 2023, non-interest expense was $17.7 million, compared to $15.1 million in the first six months of 2022. The increase over the six-month period in the prior year was due to a $655,000 increase in salaries and benefits due to merit increases and wage competition, a $736,000 increase in professional services and a $631,000 increase in other expenses. The increase in other expenses is primarily related to $992,000 collection and legal expense recovery in the first six months of 2022 and an $87,000 net increase in costs for dues and subscriptions partially offset by $476,000 less in OFA and OREO expense.

Income tax expense decreased $340,000 to $876,000 in the second quarter of 2023 compared to $1.2 million in the first quarter of 2023. The prior quarter included a one-time deferred tax expense adjustment of $158,000. The effective tax rate for the second quarter of 2023 was 29.2% compared to 33.0% in the first quarter of 2023.

Balance Sheet

Total assets decreased $36.2 million, or 3.1%, to $1.13 billion at June 30, 2023, compared to $1.17 billion at March 31, 2023, and increased $24.6 million, or 2.2%, compared to $1.11 billion, at June 30, 2022. Total interest-earning deposits in other financial institutions decreased $37.6 million to $128.8 million at June 30, 2023, compared to $166.3 million at March 31, 2023, and increased $28.8 million compared to $99.9 million at June 30, 2022. Total investment securities were $17.2 million at quarter end, compared to $18.2 million in the prior quarter.

Total loans increased $4.8 million, or 0.5%, to $956.3 million at June 30, 2023, compared to $951.5 million at March 31, 2023, and increased $43.6 million, or 4.8%, compared to $912.7 million at June 30, 2022. Commercial real estate loans outstanding (which include SBA 504, construction and land) increased $4.3 million during the quarter to $559.7 million at June 30, 2023, compared to $555.3 million at March 31, 2023, and increased $43.2 million compared to $516.5 million at June 30, 2022. Manufactured housing loans increased $5.8 million during the quarter to $321.1 million at June 30, 2023, compared to $315.3 million at March 31, 2023, and increased $15.4 million compared to $305.7 million at June 30, 2022. Commercial loans decreased $6.4 million during the quarter to $56.0 million at June 30, 2023, compared to $62.5 million at March 31, 2023, and decreased $11.6 million compared to $67.7 million at June 30, 2022.

Other assets decreased $2.5 million to $40 million on June 30, 2023, compared to $42.1 million on March 31, 2023 and decreased $2.7 million compared to $42.2 million at June 30, 2022. The decrease was due to the sale of the $2.3 million OREO property in the second quarter of 2023.

Total deposits decreased $9.1 million to $911.7 million on June 30, 2023, compared to $920.8 million at March 31, 2023, and increased $17.1 million, or 1.9%, compared to $894.7 million at June 30, 2022. Non-interest-bearing demand deposits were $195.6 million at June 30, 2023, a $9.7 million decrease compared to $205.3 million at March 31, 2023, and a $41.1 million decrease compared to $236.7 million at June 30, 2022. Interest-bearing demand deposits increased $22.8 million to $460.6 million at June 30, 2023, compared to $437.8 million at March 31, 2023, and decreased $15.3 million compared to $475.9 million at June 30, 2022. Certificates of deposit, which include brokered deposits, decreased $19.8 million during the quarter to $237.0 million at June 30, 2023, compared to $256.8 million at March 31, 2023, and increased $80.5 million compared to $156.5 million at June 30, 2022.

Total borrowings decreased $25.0 million to $90.0 million at June 30, 2023, compared to $115.0 million at March 31, 2023, and were unchanged compared to June 30, 2022. The decrease during the quarter was due to a $15 million decrease in FHLB overnight advances and repaying $10 million in balances drawn against the Company’s line of credit.  

Stockholders’ equity increased to $113.9 million at June 30, 2023, compared to $112.8 million at March 31, 2023, and $107.1 million at June 30, 2022. Book value per common share increased to $12.88 at June 30, 2023, compared to $12.77 at March 31, 2023, and $12.25 at June 30, 2022.

Credit Quality

The Company recorded a provision for credit loss expense of $12,000 in the second quarter of 2023, compared to a negative provision for credit loss expense of $722,000 in first quarter 2023, and a provision expense of $252,000 in second quarter 2022. The total allowance for credit losses was $12.1 million, or 1.30% of total loans held for investment, at June 30, 2023. Net non-accrual loans, plus net other assets acquired through foreclosure, were down $2.8 million to $1.0 million at June 30, 2023, compared to $3.8 million at March 31, 2023, and $2.6 million at June 30, 2022.

Net non-accrual loans were $974,000 as of June 30, 2023, compared to $1.6 million at March 31, 2023, and $379,000 at June 30, 2022. Of the $974,000 of net non-accrual loans at June 30, 2023, $748,000 were manufactured housing loans, $144,000 were single family loans and $82,000 were agriculture loans.

There was $65,000 in other assets acquired through foreclosure as of June 30, 2023, compared to $2.3 million at March 31, 2023 and at June 30, 2022.

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 second quarter of 2023, 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 (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 recent bank failures 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, 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.



COMMUNITY WEST BANCSHARES        
CONDENSED CONSOLIDATED BALANCE SHEETS        
(unaudited)        
(in 000's, except per share data)        
         
 June 30, March 31, December 31,June 30, 
  2023   2023   2022   2022  
         
Cash and cash equivalents$1,801  $1,533  $1,379  $2,361  
Interest-earning deposits in other financial institutions 128,754   166,342   63,311   99,915  
Investment securities 17,241   18,225   29,470   60,513  
Loans:        
Commercial 56,047   62,477   74,929   67,681  
Commercial real estate 559,677   555,339   545,317   516,514  
SBA 6,324   6,418   6,855   7,922  
Paycheck Protection Program (PPP) 225   684   1,773   2,920  
Manufactured housing 321,127   315,326   315,825   305,749  
Single family real estate 10,529   9,582   8,678   9,038  
HELOC 2,556   2,557   2,613   3,380  
Other (1) (235)  (890)  (648)  (532) 
Total loans 956,250   951,493   955,342   912,672  
         
Loans, net        
Held for sale 19,126   21,045   21,033   23,124  
Held for investment 937,124   930,448   934,309   889,548  
Less: Allowance for credit losses (12,148)  (12,065)  (10,765)  (10,866) 
Net held for investment 924,976   918,383   923,544   878,682  
NET LOANS 944,102   939,428   944,577   901,806  
         
Other assets 39,532   42,055   52,765   42,233  
         
TOTAL ASSETS$1,131,430  $1,167,583  $1,091,502  $1,106,828  
         
Deposits        
Non-interest-bearing demand$195,612  $205,324  $216,494  $236,696  
Interest-bearing demand 460,597   437,770   428,173   475,869  
Savings 18,548   20,929   23,490   25,626  
Certificates of deposit ($250,000 or more) 10,328   6,268   6,693   8,688  
Other certificates of deposit 226,639   250,513   200,234   147,785  
Total deposits 911,724   920,804   875,084   894,664  
Other borrowings 90,000   115,000   90,000   90,000  
Other liabilities 15,765   18,990   13,768   15,022  
TOTAL LIABILITIES 1,017,489   1,054,794   978,852   999,686  
         
Stockholders' equity 113,941   112,789   112,650   107,142  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        
$1,131,430  $1,167,583  $1,091,502  $1,106,828  
         
Common shares outstanding 8,849   8,835   8,798   8,744  
         
Book value per common share$12.88  $12.77  $12.80  $12.25  
         
(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 
  June 30, March 31, December 31,September 30,June 30, 
   2023  2023   2022   2022  2022 
Interest income           
Loans, including fees $13,161 $12,489  $12,467  $11,867 $11,129 
Investment securities and other  1,554  1,096   811   787  577 
Total interest income  14,715  13,585   13,278   12,654  11,706 
            
Deposits  3,751  2,277   913   528  500 
Other borrowings  247  278   224   203  196 
Total interest expense  3,998  2,555   1,137   731  696 
Net interest income  10,717  11,030   12,141   11,923  11,010 
Provision for credit losses  12  (722)  (461)  298  252 
Net interest income after provision for credit losses  10,705  11,752   12,602   11,625  10,758 
Non-interest income           
Other loan fees  286  169   246   292  377 
Gains from loan sales, net  56  30   12   49  136 
Document processing fees  102  78   85   114  122 
Service charges  167  154   143   114  93 
Other  535  331   278   303  323 
Total non-interest income  1,146  762   764   872  1,051 
Non-interest expenses           
Salaries and employee benefits  5,228  5,202   4,821   4,752  4,910 
Occupancy, net  1,135  1,098   1,116   1,046  1,021 
Professional services  851  919   1,236   653  635 
Data processing  377  349   346   302  307 
Depreciation  183  180   176   173  179 
FDIC assessment  276  182   111   131  164 
Advertising and marketing  282  210   234   196  233 
Stock-based compensation  74  246   32   71  94 
Other  448  448   507   286  569 
Total non-interest expenses  8,854  8,834   8,579   7,610  8,112 
Income before provision for income taxes  2,997  3,680   4,787   4,887  3,697 
Provision for income taxes  876  1,216   1,411   1,409  1,062 
Net income $2,121 $2,464  $3,376  $3,478 $2,635 
Earnings per share:           
Basic $0.24 $0.28  $0.38  $0.40 $0.30 
Diluted $0.24 $0.27  $0.38  $0.39 $0.30 
            



COMMUNITY WEST BANCSHARES         
CONDENSED CONSOLIDATED INCOME STATEMENTS         
(unaudited)         
(in 000's, except per share data)         
          
  Three Months Ended Six Months Ended 
  June 30, June 30, June 30, June 30, 
   2023  2022  2023   2022  
          
Interest income         
Loans, including fees $13,161 $11,129 $25,650  $22,323  
Investment securities and other  1,554  577  2,650   883  
Total interest income  14,715  11,706  28,300   23,206  
          
Deposits  3,751  500  6,028   1,070  
Other borrowings  247  196  525   390  
Total interest expense  3,998  696  6,553   1,460  
Net interest income  10,717  11,010  21,747   21,746  
Provision for credit losses  12  252  (710)  (32) 
Net interest income after provision for credit losses  10,705  10,758  22,457   21,778  
Non-interest income         
Other loan fees  286  377  455   623  
Gains from loan sales, net  56  136  86   196  
Document processing fees  102  122  180   223  
Service charges  167  93  321   181  
Other  535  323  866   1,119  
Total non-interest income  1,146  1,051  1,908   2,342  
Non-interest expenses         
Salaries and employee benefits  5,228  4,910  10,430   9,775  
Occupancy, net  1,135  1,021  2,233   2,018  
Professional services  851  635  1,770   1,034  
Data processing  377  307  726   617  
Depreciation  183  179  363   362  
FDIC assessment  276  164  458   335  
Advertising and marketing  282  233  492   491  
Stock-based compensation  74  94  320   186  
Other  448  569  896   265  
Total non-interest expenses  8,854  8,112  17,688   15,083  
Income before provision for income taxes  2,997  3,697  6,677   9,037  
Provision for income taxes  876  1,062  2,092   2,442  
Net income $2,121 $2,635 $4,585  $6,595  
Earnings per share:         
Basic $0.24 $0.30 $0.52  $0.76  
Diluted $0.24 $0.30 $0.51  $0.74  
          



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 
 June 30, 2023 March 31, 2023 June 30, 2022 
 Average BalanceInterestAverage Yield/Cost Average BalanceInterestAverage Yield/Cost Average BalanceInterestAverage Yield/Cost 
  Interest-Earning Assets            
Federal funds sold and interest-earning deposits$100,860 $1,2264.88% $73,179 $7954.41% $149,710 $3020.81% 
Investment securities 25,002  3285.26%  27,213  3014.49%  45,243  2752.44% 
Loans (1) 952,694  13,1615.54%  952,192  12,4895.32%  907,088  11,1294.92% 
Total earnings assets 1,078,556  14,7155.47%  1,052,584  13,5855.23%  1,102,041  11,7064.26% 
  Nonearning Assets            
Cash and due from banks 2,021     1,976     2,193    
Allowance for credit losses (12,015)    (12,479)    (10,765)   
Other assets 36,747     38,716     37,435    
        Total assets$1,105,309    $1,080,797    $1,130,904    
  Interest-Bearing Liabilities            
Interest-bearing demand deposits$398,061 $1,8261.84% $417,662 $1,2981.26% $495,821 $2730.22% 
Savings deposits 19,476  120.25%  23,230  120.21%  25,402  160.25% 
Time deposits 262,182  1,9132.93%  200,875  9671.95%  164,687  2110.51% 
Total interest-bearing deposits 679,719  3,7512.21%  641,767  2,2771.44%  685,910  5000.29% 
Other borrowings 93,571  2471.06%  96,333  2781.17%  90,000  1960.87% 
Total interest-bearing liabilities$773,290 $3,9982.07% $738,100 $2,5551.40% $775,910 $6960.36% 
  Noninterest-Bearing Liabilities            
Noninterest-bearing demand deposits 201,536     211,940     232,849    
Other liabilities 16,626     17,766     15,646    
Stockholders' equity 113,857     112,991     106,499    
Total Liabilities and Stockholders' Equity$1,105,309    $1,080,797    $1,130,904    
Net interest income and margin $10,7173.99%  $11,0304.25%  $11,0104.01% 
Net interest spread  3.40%   3.83%   3.90% 
             
Cost of total deposits  1.71%   1.08%   0.22% 
Cost of funds  1.65%   1.09%   0.28% 
             
(1) Includes nonaccrual and held for sale loans.            
             



COMMUNITY WEST BANCSHARES        
Average Balance, Average Yield Earned, and Average Rate Paid      
(unaudited)        
(in 000's)        
 Six Months Ended Six Months Ended 
 June 30, 2023 June 30, 2022 
 Average BalanceInterestAverage Yield/Cost Average BalanceInterestAverage Yield/Cost 
  Interest-Earning Assets        
Federal funds sold and interest-earning deposits$87,096 $2,0214.68% $177,607 $4110.47% 
Investment securities 26,102  6294.86%  36,121  4722.64% 
Loans (1) 952,444  25,6505.43%  900,849  22,3235.00% 
Total earnings assets 1,065,642  28,3005.36%  1,114,577  23,2064.20% 
  Nonearning Assets        
Cash and due from banks 1,998     2,177    
Allowance for credit losses (12,246)    (10,691)   
Other assets 37,727     38,282    
        Total assets$1,093,121    $1,144,345    
  Interest-Bearing Liabilities        
Interest-bearing demand deposits$407,807 $3,1231.55% $507,572 $5920.24% 
Savings deposits 21,343  250.24%  24,670  330.27% 
Time deposits 231,698  2,8802.51%  170,038  4450.53% 
Total interest-bearing deposits 660,848  6,0281.84%  702,280  1,0700.31% 
Other borrowings 94,945  5251.12%  90,000  3900.87% 
Total interest-bearing liabilities$755,793 $6,5531.75% $792,280 $1,4600.37% 
  Noninterest-Bearing Liabilities        
Noninterest-bearing demand deposits 206,709     230,428    
Other liabilities 17,193     16,638    
Stockholders' equity 113,426     104,999    
Total Liabilities and Stockholders' Equity$1,093,121    $1,144,345    
Net interest income and margin $21,7474.12%  $21,7463.93% 
Net interest spread  3.61%   3.83% 
         
Cost of total deposits $21,7471.40%  $21,7460.23% 
Cost of funds  1.37%   0.29% 
         
(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 Six Months EndedSix Months Ended 
PERFORMANCE MEASURES AND RATIOSJune 30, 2023 March 31, 2023 June 30, 2022 June 30, 2023
 June 30, 2022 
Return on average common equity 7.47%  8.84%  9.92%  8.15%  12.67% 
Return on average assets 0.77%  0.92%  0.93%  0.85%  1.16% 
Efficiency ratio 74.64%  73.94%  67.26%  74.77%  62.62% 
Net interest margin 3.99%  4.25%  4.01%  4.12%  3.93% 
          
 Three Months Ended Three Months Ended Three Months Ended Twelve Months EndedSix Months Ended 
AVERAGE BALANCESJune 30, 2023 March 31, 2023 June 30, 2022 December 31, 2022
 June 30, 2022 
Average assets$1,105,309  $1,080,797  $1,130,904  $1,093,121  $1,144,345  
Average earning assets 1,078,556   1,052,584   1,102,041   1,065,642   1,114,577  
Average total loans 952,694   952,192   907,088   952,444   900,849  
Average deposits 881,255   853,707   918,759   867,557   932,708  
Average common equity 113,857   112,991   106,499   113,426   104,999  
          
EQUITY ANALYSISJune 30, 2023 March 31, 2023 June 30, 2022    
Total common equity$113,941  $112,789  $107,142     
Common stock outstanding 8,849   8,835   8,744     
          
Book value per common share$12.88  $12.77  $12.25     
          
ASSET QUALITYJune 30, 2023 March 31, 2023 June 30, 2022    
Nonaccrual loans, net$974  $1,592  $379     
Nonaccrual loans, net/total loans 0.10%  0.17%  0.04%    
Other assets acquired through foreclosure, net$65  $2,250  $2,250     
          
Nonaccrual loans plus other assets acquired through foreclosure, net$1,039  $3,842  $2,629     
Nonaccrual loans plus other assets acquired through foreclosure, net/total assets 0.09%  0.33%  0.24%    
Net loan (recoveries)/charge-offs in the quarter$(98) $(96) $(66)    
Net (recoveries)/charge-offs in the quarter/total loans (0.01%)  (0.01%)  (0.01%)    
          
Allowance for credit losses$12,148  $12,065  $10,866     
Plus: Reserve for undisbursed loan commitments 427   400   94     
Total allowance for credit losses$12,575  $12,465  $10,960     
Allowance for credit losses/total loans held for investment 1.30%  1.30%  1.22%    
Allowance for credit losses/nonaccrual loans, net 1247.23%  757.85%  2867.02%    
          
Community West Bank *         
Tier 1 leverage ratio 10.39%  10.46%  9.30%    
Tier 1 capital ratio 11.91%  11.82%  11.07%    
Total capital ratio 13.09%  13.00%  12.23%    
          
INTEREST SPREAD ANALYSISJune 30, 2023 March 31, 2023 June 30, 2022    
Yield on total loans 5.54%  5.32%  4.92%    
Yield on investments 5.26%  4.49%  2.44%    
Yield on interest earning deposits 4.88%  4.41%  0.81%    
Yield on earning assets 5.47%  5.23%  4.26%    
          
Cost of interest-bearing deposits 2.21%  1.44%  0.29%    
Cost of total deposits 1.71%  1.08%  0.22%    
Cost of borrowings 1.06%  1.17%  0.87%    
Cost of interest-bearing liabilities 2.07%  1.40%  0.36%    
Cost of funds 1.65%  1.09%  0.28%    
          
* 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 Q2 2023?

Community West Bancshares reported net income of $2.1 million for Q2 2023.

What is the quarterly cash dividend declared by Community West Bancshares?

Community West Bancshares declared a quarterly cash dividend of $0.08 per common share.

How did net interest income change in Q2 2023 compared to Q1 2023?

Net interest income decreased from $11.0 million in Q1 2023 to $10.7 million in Q2 2023.

What was the change in total loans in Q2 2023?

Total loans increased by $4.8 million to $956.3 million in Q2 2023.

What was the change in total deposits in Q2 2023?

Total deposits decreased by $9.1 million to $911.7 million in Q2 2023.

Community West Bancshares

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