CalWest Bancorp Announces Financial Results as of September 30, 2012

IRVINE, Calif.--()--CalWest Bancorp (OTCBB: CALW), the holding company for South County Bank N.A., today announced the consolidated financial results as of the third quarter 2012. Year-to-date, the Company has recorded a net loss of ($588,000); which compares to a net loss of ($394,000) for the same period prior year.

Significant items for the period ending September 30, 2012 include:

  • A loan loss provision of $850,000, relating to one $2.6 million loan, was recorded in September, 2012. The loan had been paying as-agreed since origination in 2007, until payments abruptly ended. While negotiations are underway to restructure the repayment of the loan, it was prudent to record the provision based on the deterioration of the commercial real estate collateral. At quarter-end, the Bank’s total allowance for loan losses reached 6.36% of total average loans.
  • Total assets reached $151.6 million, an increase of 4% since December 31, 2011.
  • Non-performing loans reversed its previous positive trend and increased to $9.1 million, or 6% of total assets, largely the result of the loan noted above that caused the loan loss provision in the quarter. The level of non-performing loans still compares favorably to the $9.4 million in non-performing loans a year ago.
  • Loans past-due remain low at 0.01% of total performing loans, an improvement from 0.84% at the beginning of the year.
  • Other Real Estate Owned Assets remained at $700,000, down from $1.0 million as of September 30, 2011; representing a 31.0% reduction in OREO assets.
  • Total deposits have increased $7.2 million since the beginning of the year, with non-interest bearing deposits remaining at 34.5% of total deposits. The Bank’s current and contingent liquidity continues to be strong.
  • The cost of deposits continued to decline, reaching 0.46%, down from 0.67% a year ago, resulting from an increase in core deposits and less reliance on wholesale funding.
  • Non-interest income increased slightly to $1.5 million up from $1.4 million as of September 30, 2011.
  • Operating expenses decreased 13%, from the same period a year ago.
  • The total risk-based capital ratio and the leverage capital ratio ended the quarter at 12.84% and 6.00% respectively, up from 12.16% and 5.98% respectively as of September 30, 2011. Despite the large loan loss provision the leverage capital ratio only decreased 25 basis points compared to the previous quarter-end.

“While we are obviously disappointed in the temporary reversal of our positive trends, the Bank remains on-course with respect to working through its non-performing loans, maintaining a high degree of liquidity and originating new loans,” said the Bank’s newly appointed CEO, Glenn Gray. He further noted, “The prolonged effects from the economic recession along with significant reductions in real estate values continue to create a cautious attitude amongst business owners, however we are finding new quality opportunities to grow the bank organically. As a result, the bank will be expanding its team of Relationship Managers as we approach next year.”

CalWest Bancorp is the parent company of South County Bank, a community Bank recognized for its exemplary service to entrepreneurs, high net worth individuals and non-profit organizations located throughout Southern California. The Bank serves the business community through its four branches located in Rancho Santa Margarita, Irvine, Huntington Beach and Redlands.

Forward Looking Comments: The statements contained in this release that are not historical facts are forward-looking statements based on management’s current expectations and beliefs concerning future developments and their potential effects on the Bank. There can be no assurance that future developments affecting the Bank will be those anticipated by management. Actual results may differ from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties.

CalWest Bancorp Financial Summary                
  UNAUDITED   UNAUDITED
At or For the Three Months At or For the Nine Months
Ended September 30, Ended September 30,
  2012       2011     2012       2011  
Summary of Operations: (In thousands $)
Interest income $ 1,190 $ 1,455 $ 3,985 $ 4,535
Interest expense   207     289     664     947  
Net interest income 983 1,166 3,321 3,588
Provision for loan losses   850     -     850     189  
Net interest income (loss) after provision for loan losses 133 1,166 2,471 3,399
Non-interest income 615 770 1,528 1,465
Non-interest expense   1,505     1,636     4,585     5,256  
Income before income taxes (757 ) 300 (586 ) (392 )
Income taxes   -     -     2     2  
Net income (loss) $ (757 ) $ 300   $ (588 ) $ (394 )
 
Per Share Data: (Not in thousands $)
Income (Loss) per share - basic $ (0.31 ) $ 0.12 $ (0.24 ) $ (0.16 )
Average shares outstanding - basic 2,415,530 2,413,730 2,415,530 2,413,730
 
Balance Sheet Summary: (In thousands $)
Total assets $ 151,591 $ 154,381 $ 151,591 $ 154,381
Cash and Due From $ 6,339 $ 5,334 $ 6,339 $ 5,334
Investment securities $ 52,242 $ 42,748 $ 52,242 $ 42,748
Fed Funds Sold $ 17,740 $ 21,410 $ 17,740 $ 21,410
Loans, net of deferred fees $ 70,288 $ 79,196 $ 70,288 $ 79,196
Allowance for loan losses ("ALL") $ 4,470 $ 3,916 $ 4,470 $ 3,916
Other Real Estate Owned $ 700 $ 1,015 $ 700 $ 1,015
Non-Interest Bearing Deposits $ 48,694 $ 48,841 $ 48,694 $ 48,841
Interest Bearing Deposits $ 92,289 $ 93,947 $ 92,289 $ 93,947
Total deposits $ 140,983 $ 142,788 $ 140,983 $ 142,788
Total shareholders' equity $ 5,666 $ 6,325 $ 5,666 $ 6,325
 
Selected Data (In thousands $) and Ratios:
Non-performing Loans $ 9,062 $ 9,383 $ 9,062 $ 9,383
30 - 120 Days Delinquent Loans $ 69 $ 68 $ 69 $ 68
Texas Ratio 70.03 % 75.18 % 70.03 % 75.18 %
Return on average assets -2.00 % 0.38 % -0.78 % -0.50 %
Return on average shareholders equity -53.44 % 9.49 % -20.76 % -12.46 %
Net interest margin 2.98 % 3.00 % 2.98 % 3.00 %
Cost of Deposits 0.46 % 0.67 % 0.46 % 0.67 %

ALL to loans ratios

6.36 % 4.94 % 6.36 % 4.94 %
Net loans to deposits ratio 46.69 % 52.72 % 46.69 % 52.72 %
Bank leverage capital ratio 6.00 % 5.98 % 6.00 % 5.98 %
Bank total risk based capital ratio 12.84 % 12.16 % 12.84 % 12.16 %
Employees (full time equivalent) (Not in thousands) 34 38 34 38

Contacts

CalWest Bancorp
Najam Saiduddin
EVP / Chief Financial Officer
949.766.3006
nsaiduddin@southcountybank.com

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Contacts

CalWest Bancorp
Najam Saiduddin
EVP / Chief Financial Officer
949.766.3006
nsaiduddin@southcountybank.com