EXHIBIT 99.1

Community West Bancshares 3Q2018 Earnings Increase 52.4% Year-Over-Year to $2.4 Million; Book Value Per Common Share Increases to $9.13; Declares Quarterly Cash Dividend of $0.05 Per Common Share

GOLETA, Calif., Oct. 26, 2018 (GLOBE NEWSWIRE) -- Community West Bancshares (Community West or the Company), (NASDAQ: CWBC), parent company of Community West Bank (Bank), today reported net income increased 52.4% to $2.4 million, or $0.27 per diluted share, in the third quarter of 2018 (3Q18), compared to $1.6 million, or $0.18 per diluted share in the third quarter of 2017 (3Q17) and increased 26.9% when compared to $1.9 million, or $0.21 per diluted share, the second quarter of 2018 (2Q18). 

In the first nine months of 2018, net income increased 35.5% to $6.1 million, or $0.69 per diluted share, compared to $4.5 million, or $0.52 per diluted share, in the first nine months of 2017.

“Our record third quarter financial results reflect the stability and strength of our Central California banking franchise and the lower corporate tax rates enacted last year,” stated Martin E. Plourd, President and Chief Executive Officer.  “We are pleased with these results as they demonstrate the continued successful execution of our strategic expansion within our three county footprint.  These expansion initiatives position the bank to provide an unparalleled service delivery experience.” 

Third Quarter 2018 Financial Highlights

  • Net income increased 52.4% to $2.4 million, or $0.27 per diluted share, in 3Q18, compared to $1.6 million, or $0.18 per diluted share in 3Q17.
  • Return on average common equity improved to 12.57%, up from 10.26% for 2Q18 and 8.88% for 3Q17.
  • Return on average assets increased to 1.08%, up from 0.90% for 2Q18 and 0.78% for 3Q17.
  • Total deposits increased to $719.9 million at September 30, 2018, compared to $702.6 million at June 30, 2018, and increased $22.8 million, or 3.3% compared to $697.2 million at September 30, 2017. 
  • Core deposits which include non-interest bearing checking, interest bearing checking, money market, savings and retail certificates of deposit increased to $508.0 million at September 30, 2018, compared to $500.2 million at June 30, 2018 and $476.2 million at September 30, 2018.
  • Total loans were $753.7 million at September 30, 2018, compared to $759.9 million at June 30, 2018, and increased $31.1 million compared to $722.7 million at September 30, 2017. 
  • Net interest margin for 3Q18 was 4.02%, compared to 4.06% for 2Q18 and 4.27% for 3Q17.
  • Book value per common share increased to $9.13 at September 30, 2018, compared to $8.90 at June 30, 2018 and $8.54 at September 30, 2017. 
  • The Bank continues to be well-capitalized per banking regulations with its total capital ratio at 10.79%, its Tier 1 capital ratio at 9.64% and Tier 1 leverage ratio at 8.23% at September 30, 2018.

Income Statement

Third quarter net interest income increased to $8.6 million, compared to $8.3 million in 2Q2018 and $8.4 million in 3Q17.  During the first nine months of 2018, net interest income increased to $25.3 million, compared to $24.2 million in the first nine months of 2017.

Non-interest income was $641,000 in 3Q18, compared to $688,000 in 2Q18 and $716,000 in 3Q17.  In the first nine months of 2018, non-interest income was $2.0 million, compared to $2.1 million in the first nine months of 2017.

“Our net interest margin continued to compress during the third quarter as a result of the flat yield curve and increased competition for core deposits in our markets,” said Susan C. Thompson, Executive Vice President and Chief Financial Officer.  “Margin is expected to continue compressing throughout the cycle until rates stabilize.”  Third quarter net interest margin was 4.02% compared to 4.06% in 2Q18 and 4.27% in 3Q17.  In the first nine months of the year, net interest margin was 4.11% compared to 4.36% in the first nine months a year ago.  

Non-interest expenses totaled $6.4 million in 3Q18, which was unchanged compared to a year ago.  Non-interest expenses totaled $6.3 million in 2Q18.  In the first nine months of 2018, non-interest expenses totaled $19.2 million, compared to $18.3 million in the first nine months of 2017.  This increase reflects increased salary, employee benefits and occupancy costs as the result of the bank’s expansion.

Balance Sheet

Total loans were $753.7 million at September 30, 2018, compared to $759.9 million at June 30, 2018, and increased $31.1 million compared to $722.7 million at September 30, 2017.  “While total loans declined slightly during the third quarter, they were negatively impacted by the payoff of two large commercial real estate loans totaling $14.5 million.  Manufactured housing, commercial real estate and commercial loan categories experienced the most growth during the past year,” said Plourd.

Commercial real estate loans outstanding (which include SBA 504, construction and land) were up 2.7% from year ago levels to $353.1 million at September 30, 2018 and comprise 46.9% of the total loan portfolio.  Manufactured housing loans were up 10.8% from year ago levels to $240.0 million and represent 31.8% of total loans.  Commercial loans increased 6.1% from year ago levels to $119.3 million and represent 15.8% of the total loan portfolio.

Total deposits increased to $719.9 million at September 30, 2018, compared to $702.6 million at June 30, 2018, and increased $22.8 million, or 3.3% compared to $697.2 million at September 30, 2017. 

Total assets were $854.7 million at September 30, 2018, compared to $865.1 million at June 30, 2018 and increased $25.6 million, or 3.1%, compared to $829.2 million at September 30, 2017.  Stockholders’ equity improved to $75.6 million at September 30, 2018, compared to $73.4 million at June 30, 2018, and $69.8 million at September 30, 2017.  Book value per common share was $9.13 at September 30, 2018, compared to $8.90 at June 30, 2018, and $8.54 at September 30, 2017. 

Credit Quality

“Credit quality remained strong during the third quarter with net nonaccrual loans down to 0.50% of total loans, net recoveries of $94,000 and no foreclosed assets remaining on the books,” said Thompson.  The provision for 3Q2018 was a credit of $197,000 compared to a provision for loan losses of $117,000 in 2Q18 and a provision for loan losses of $159,000 in 3Q17.  The allowance for loan losses was $8.5 million at September 30, 2018, or 1.21% of total loans held for investment, compared to 1.22% at June 30, 2018, and 1.25% a year ago.  Net nonaccrual loans were $3.8 million at September 30, 2018, compared to $3.7 million at June 30, 2017, and $1.8 million at September 30, 2017.  

Of the $3.8 million in net nonaccrual loans, $2.3 million were commercial loans primarily from one relationship and not systemic to the portfolio, $527,000 were commercial agricultural loans, $292,000 were manufactured housing loans, $203,000 were home equity loans, $165,000 was one single-family real estate loan, $155,000 were SBA 7A loans and $107,000 was one commercial real estate loans.

There were no other assets acquired through foreclosure as of September 30, 2018.  This compares to other assets acquired through foreclosure of $213,000 three months earlier and $486,000 a year ago.

Cash Dividend Declared

The Company’s Board of Directors declared a cash dividend of $0.05 per common share, payable November 30, 2018 to common shareholders of record on November 15, 2018.  The current annualized yield, based on the closing price of CWBC shares of $12.00 on September 28, 2018, was 1.7%.

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 eight full-service California branch banking offices in Goleta, Santa Barbara, Santa Maria, Ventura, Westlake Village, 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 2018, Community West was awarded a “Premier” rating by The Findley Reports.  For 50 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.

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 Nine Months Ended
  September 30, June 30, September 30, September 30,September 30,
  2018 2018 2017 20182017
          
Interest income         
Loans, including fees $  10,612  $  10,020 $  9,340 $  30,283 $  26,570
Investment securities and other    589     381    355    1,307    894
Total interest income    11,201     10,401    9,695    31,590    27,464
Interest expense         
Deposits    2,222     1,708    1,185    5,373    2,984
Other borrowings    351     382    134    928    294
Total interest expense    2,573     2,090    1,319    6,301    3,278
Net interest income    8,628     8,311    8,376    25,289    24,186
Provision (credit) for loan losses    (197)    117    159    (224)   423
Net interest income after provision for loan losses    8,825     8,194    8,217    25,513    23,763
Non-interest income         
Other loan fees    379     323    354    998    999
Document processing fees    120     130    146    367    430
Service charges    113     122    118    351    326
Other    29     113    98    252    299
Total non-interest income    641     688    716    1,968    2,054
Non-interest expenses         
Salaries and employee benefits     4,147     4,042    3,839    12,338    11,566
Occupancy, net    778     741    754    2,303    2,085
Professional services    326     301    281    931    759
Data processing    201     206    192    619    525
Depreciation     199     186    168    552    519
FDIC assessment    169     164    172    547    461
Advertising and marketing    154     163    137    487    488
Stock-based compensation    81     87    283    284    454
Other     347     367    561    1,131    1,460
Total non-interest expenses    6,402     6,257    6,387    19,192    18,317
Income before provision for income taxes    3,064     2,625    2,546    8,289    7,500
Provision for income taxes    695     758    992    2,239    3,034
Net income $  2,369  $  1,867 $  1,554 $  6,050 $  4,466
Earnings per share:         
Basic $  0.29  $  0.23 $  0.19 $  0.73 $  0.55
Diluted $  0.27  $  0.21 $  0.18 $  0.69 $  0.52
          

 

COMMUNITY WEST BANCSHARES        
CONDENSED CONSOLIDATED BALANCE SHEETS        
(unaudited)        
(in 000's, except per share data)        
         
  September 30, June 30, September 30, December 31,
  2018 2018 2017 2017
         
Cash and cash equivalents $  2,317  $  3,385  $  2,356  $  3,651 
Time and interest-earning deposits in other financial institutions    45,436     50,977     49,215     42,218 
Investment securities    33,421     33,720     38,117     36,348 
Loans:        
Commercial    119,270     118,263     112,399     111,459 
Commercial real estate    353,136     364,679     343,770     354,617 
SBA    21,057     22,724     30,944     26,219 
Manufactured housing    240,010     234,598     216,572     223,115 
Single family real estate    11,153     10,682     10,022     10,346 
HELOC    9,446     9,502     9,656     9,422 
Other    (331)    (558)    (668)    (569)
Total loans    753,741     759,890     722,695     734,609 
         
Loans, net        
Held for sale    50,944     52,886     58,561     55,094 
Held for investment    702,797     707,004     664,134     679,515 
Less: Allowance for loan losses    (8,519)    (8,622)    (8,312)    (8,420)
Net held for investment    694,278     698,382     655,822     671,095 
 NET LOANS    745,222     751,268     714,383     726,189 
         
Other assets    28,313     25,777     25,079     24,909 
         
 TOTAL ASSETS $  854,709  $  865,127  $  829,150  $  833,315 
         
Deposits        
Non-interest-bearing demand $  105,580  $  107,168  $  116,170  $  108,500 
Interest-bearing demand    267,046     260,708     266,835     256,717 
Savings    14,385     14,515     14,619     14,085 
Certificates of deposit ($250,000 or more)    92,934     88,752     81,160     81,985 
Other certificates of deposit    239,997     231,460     218,370     238,397 
Total deposits    719,942     702,603     697,154     699,684 
Other borrowings    50,000     81,843     55,843     56,843 
Other liabilities    9,210     7,233     6,387     6,718 
    TOTAL LIABILITIES    779,152     791,679     759,384     763,245 
         
Stockholders' equity    75,557     73,448     69,766     70,070 
         
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        
 $  854,709  $  865,127  $  829,150  $  833,315 
         
Shares outstanding    8,275     8,254     8,169     8,193 
         
Book value per common share $  9.13  $  8.90  $  8.54  $  8.55 
         

 

ADDITIONAL FINANCIAL INFORMATION     
(Dollars in thousands except per share amounts)(Unaudited)     
 Three Months Ended Three Months Ended Three Months Ended
PERFORMANCE MEASURES AND RATIOSSep. 30, 2018 Jun. 30, 2018 Sep. 30, 2017
Return on average common equity  12.57%  10.26%  8.88%
Return on average assets  1.08%  0.90%  0.78%
Efficiency ratio 69.07%  69.53%  70.25%
Net interest margin 4.02%  4.06%  4.27%
      
 Three Months Ended Three Months Ended Three Months Ended
AVERAGE BALANCESSep. 30, 2018 Jun. 30, 2018 Sep. 30, 2017
Average assets$  867,174  $  836,394  $  792,279 
Average earning assets   852,083     820,854     778,412 
Average total loans   755,146     750,575     708,244 
Average deposits   734,391     704,251     687,794 
Average common equity   74,799     72,993     69,438 
      
EQUITY ANALYSISSep. 30, 2018 Jun. 30, 2018 Sep. 30, 2017
Total common equity$  75,557  $  73,448  $  69,766 
Common stock outstanding   8,275     8,254     8,169 
      
Book value per common share$  9.13  $  8.90  $  8.54 
      
ASSET QUALITYSep. 30, 2018 Jun. 30, 2018 Sep. 30, 2017
Nonaccrual loans, net$  3,755  $  3,704  $  1,837 
Nonaccrual loans, net/total loans 0.50%  0.49%  0.25%
Other assets acquired through foreclosure, net$  -   $  213  $  486 
      
Nonaccrual loans plus other assets acquired through foreclosure, net$  3,755  $  3,917  $  2,323 
Nonaccrual loans plus other assets acquired through foreclosure, net/total assets 0.44%  0.45%  0.28%
Net loan (recoveries)/charge-offs in the quarter$  (94) $  (47) $  (159)
Net (recoveries)/charge-offs in the quarter/total loans  (0.01%)  (0.01%)  (0.02%)
      
Allowance for loan losses$  8,519  $  8,622  $  8,312 
Plus: Reserve for undisbursed loan commitments   80     97     96 
Total allowance for credit losses$  8,599  $  8,719  $  8,408 
Allowance for loan losses/total loans held for investment 1.21%  1.22%  1.25%
Allowance for loan losses/nonaccrual loans, net 226.87%  232.78%  452.48%
      
Community West Bank *     
Tier 1 leverage ratio 8.23%  8.88%  8.90%
Tier 1 capital ratio 9.64%  10.11%  10.26%
Total capital ratio 10.79%  11.29%  11.48%
      
INTEREST SPREAD ANALYSISSep. 30, 2018 Jun. 30, 2018 Sep. 30, 2017
Yield on total loans 5.58%  5.35%  5.23%
Yield on investments 3.77%  2.74%  2.60%
Yield on interest earning deposits 1.54%  1.49%  1.10%
Yield on earning assets 5.22%  5.08%  4.94%
      
Cost of interest-bearing deposits 1.41%  1.16%  0.44%
Cost of total deposits 1.20%  0.97%  0.68%
Cost of borrowings 2.79%  2.90%  1.79%
Cost of interest-bearing liabilities 1.51%  1.30%  0.87%
      
* Capital ratios are preliminary until the Call Report is filed.     
      

Contact:                           Susan C. Thompson, EVP & CFO
                                         805.692.5821
                                         www.communitywestbank.com

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