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California
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77-0446957
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(State or other jurisdiction of incorporation
or organization)
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(I.R.S. Employer Identification No.)
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445 Pine Avenue, Goleta, California
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93117
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(Address of principal executive offices)
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(Zip code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, No Par Value
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Nasdaq Global Market
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer (Do not check if smaller reporting company)
o
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Smaller reporting company
x
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ITEM 1
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BUSINESS
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ITEM 1A.
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RISK FACTORS
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·
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the amount of capital we must maintain;
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·
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the types of activities in which we can engage;
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the types and amounts of investments we can make;
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the locations of our offices;
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insurance of our deposits and the premiums paid for the insurance; and
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how much cash we must set aside as reserves for deposits.
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a reduction in our ability to generate or originate revenue-producing assets as a result of compliance with heightened capital standards;
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an increase in the cost of operations due to greater regulatory oversight, supervision and examination of banks and bank holding companies, and higher deposit insurance premiums;
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a limitation on our ability to expand consumer product and service offerings due to anticipated stricter consumer protection laws and regulations.
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eliminates the federal prohibitions on paying interest on demand deposits, thus allowing businesses to have interest-bearing checking accounts. Depending on competitive responses, this significant change to existing law could have an adverse impact on our interest expense;
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broadens the base for FDIC insurance assessments. Assessments will now be based on the average consolidated total assets less tangible equity capital of a financial institution;
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permanently increases the maximum amount of deposit insurance for banks, savings institutions and credit unions to $250,000 per depositor, retroactive to January 1, 2008, and noninterest-bearing transaction accounts had unlimited deposit insurance through December 31, 2012, at which time the unlimited deposit insurance expired;
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requires publicly traded companies to give shareholders a non-binding vote on executive compensation and so-called “golden parachute” payments in certain circumstances;
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allows stockholders to nominate their own candidates using a company's proxy materials in accordance with SEC regulations;
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directs the Federal Reserve Board to promulgate rules prohibiting excessive compensation paid to bank holding company executives; and
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creates a new Consumer Financial Protection Bureau with broad powers to supervise and enforce consumer protection laws. The Consumer Financial Protection Bureau has broad rule-making authority for a wide range of consumer protection laws that apply to all banks and savings institutions, including the authority to prohibit “unfair, deceptive or abusive” acts and practices. The Consumer Financial Protection Bureau has examination and enforcement authority over all banks and savings institutions with more than $10 billion in assets. Institutions with $10 billion or less in assets, like our Company, will continued to be examined for compliance with the consumer laws by their primary bank regulators.
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a reduction in our ability to generate or originate revenue-producing assets as a result of compliance with heightened capital standards;
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an increase in the cost of operations due to greater regulatory oversight, supervision and examination of banks and bank holding companies, and higher deposit insurance premiums;
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a limitation on our ability to raise capital through the use of trust preferred securities as these securities may no longer be included as Tier 1 capital going forward; and
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a limitation on our ability to expand consumer product and service offerings due to anticipated stricter consumer protection laws and regulations.
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loan delinquencies may increase;
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problem assets and foreclosures may increase;
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demand for our products and services may decline; and
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collateral for loans made by us, especially real estate, may decline in value, in turn reducing customers’ borrowing power, and reducing the value of assets and collateral associated with our existing loans.
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future results could be adversely affected due to the theft, destruction, loss, misappropriation or release of confidential data or intellectual property;
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operational or business delays resulting from the disruption of IT systems and subsequent clean-up and mitigation activities; and
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negative publicity resulting in reputation or brand damage with customers, partners or industry peers.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2
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PROPERTIES
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ITEM 3
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LEGAL PROCEEDINGS
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ITEM 4
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NOT APPLICABLE
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ITEM 5
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MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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2012 Quarters
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2011 Quarters
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Fourth
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Third
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Second
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First
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Fourth
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Third
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Second
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First
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Stock Price Range:
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High
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$ | 3.50 | $ | 3.07 | $ | 2.85 | $ | 2.72 | $ | 2.60 | $ | 3.90 | $ | 4.66 | $ | 4.95 | ||||||||||||||||
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Low
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$ | 2.50 | $ | 2.20 | $ | 2.05 | $ | 1.27 | $ | 1.36 | $ | 1.88 | $ | 3.38 | $ | 3.59 | ||||||||||||||||
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Common Dividends
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Declared
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$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.00 | ||||||||||||||||
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Plan Category
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Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights
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Weighted-average
exercise price of
outstanding
options, warrants
and rights
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Number of securities
remaining available for future
issuance under equity
compensation plans
(excluding securities
reflected in column (a))
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(a)
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(b)
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(c)
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Plans approved by shareholders
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447,075 | $ | 5.38 | 162,500 | ||||||||
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Plans not approved by shareholders
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Total
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447,075 | $ | 5.38 | 162,500 | ||||||||
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ITEM 6
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SELECTED FINANCIAL DATA
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Year Ended December 31,
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2012
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2011
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2010
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2009
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2008
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(in thousands, except per share data and ratios)
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Interest income
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$ | 31,309 | $ | 36,512 | $ | 39,234 | $ | 40,903 | $ | 45,532 | ||||||||||
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Interest expense
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5,949 | 8,250 | 9,957 | 14,945 | 22,223 | |||||||||||||||
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Net interest income
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25,360 | 28,262 | 29,277 | 25,958 | 23,309 | |||||||||||||||
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Provision for loan losses
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4,281 | 14,591 | 8,743 | 18,678 | 5,264 | |||||||||||||||
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Net interest income after provision for loan
losses
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21,079 | 13,671 | 20,534 | 7,280 | 18,045 | |||||||||||||||
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Non-interest income
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4,219 | 3,144 | 4,015 | 4,418 | 5,081 | |||||||||||||||
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Non-interest expenses
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22,125 | 23,223 | 20,991 | 21,479 | 20,516 | |||||||||||||||
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Income (loss) before income taxes
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3,173 | (6,408 | ) | 3,558 | (9,781 | ) | 2,610 | |||||||||||||
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Provision (benefit) for income taxes
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- | 4,077 | 1,467 | (4,018 | ) | 1,129 | ||||||||||||||
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NET INCOME (LOSS)
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$ | 3,173 | $ | (10,485 | ) | $ | 2,091 | $ | (5,763 | ) | $ | 1,481 | ||||||||
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Dividends and accretion on preferred stock
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1,046 | 1,047 | 1,047 | 1,046 | 35 | |||||||||||||||
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NET INCOME (LOSS) APPLICABLE TO
COMMON STOCKHOLDERS
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$ | 2,127 | $ | (11,532 | ) | $ | 1,044 | $ | (6,809 | ) | $ | 1,446 | ||||||||
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PER COMMON SHARE DATA:
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Income (loss) per share – Basic
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$ | 0.36 | $ | (1.93 | ) | $ | 0.18 | $ | (1.15 | ) | $ | 0.24 | ||||||||
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Weighted average shares used in income
per share calculation – Basic
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5,990 | 5,980 | 5,915 | 5,915 | 5,913 | |||||||||||||||
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Income (loss) per share – Diluted
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$ | 0.31 | $ | (1.93 | ) | $ | 0.18 | $ | (1.15 | ) | $ | 0.24 | ||||||||
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Weighted average shares used in income per
share calculation – Diluted
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8,233 | 5,980 | 6,833 | 5,915 | 5,941 | |||||||||||||||
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Book value per common share
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$ | 6.29 | $ | 5.94 | $ | 7.92 | $ | 7.74 | $ | 8.84 | ||||||||||
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BALANCE SHEET:
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Net loans
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$ | 449,201 | $ | 532,716 | $ | 580,632 | $ | 603,440 | $ | 581,075 | ||||||||||
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Total assets
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532,101 | 633,348 | 667,604 | 684,216 | 656,981 | |||||||||||||||
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Total deposits
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434,220 | 511,262 | 529,893 | 531,392 | 475,439 | |||||||||||||||
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Total liabilities
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479,052 | 582,722 | 605,962 | 623,909 | 590,363 | |||||||||||||||
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Total stockholders' equity
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53,049 | 50,626 | 61,642 | 60,307 | 66,618 | |||||||||||||||
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OPERATING AND CAPITAL RATIOS:
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Return on average equity
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6.22 | % | (16.98 | )% | 3.42 | % | (9.24 | )% | 2.85 | % | ||||||||||
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Return on average assets
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0.55 | (1.60 | ) | 0.31 | (0.85 | ) | 0.23 | |||||||||||||
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Dividend payout ratio
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- | - | - | - | 49.07 | |||||||||||||||
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Equity to assets ratio
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9.97 | 7.99 | 9.23 | 8.81 | 10.14 | |||||||||||||||
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Tier 1 leverage ratio
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9.72 | 7.91 | 9.08 | 8.81 | 10.28 | |||||||||||||||
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Tier 1 risk-based capital ratio
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12.81 | 10.08 | 11.40 | 10.93 | 12.45 | |||||||||||||||
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Total risk-based capital ratio
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15.98 | 12.92 | 14.16 | 12.20 | 13.70 | |||||||||||||||
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ITEM 7.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
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§
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The provision for loan losses decreased from $14.6 million for 2011 to $4.3 million for 2012, resulting from net charge-offs decreasing from $12.6 million for 2011 to $5.1 million for 2012 and net loans held for investment decreasing from $455.4 million in 2011 to $380.5 million in 2012. The ratio of Allowance for loan losses to loans held for investment increased from 3.24% at December 31, 2011 to 3.66% at December 31, 2012.
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§
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No income tax provision for 2012 compared to an income tax provision of $4.1 million for 2011 due to the recognition of a deferred tax valuation allowance of $6.7 million in 2011.
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§
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A decrease in net interest income of $2.9 million, or 10.3%, from $28.3 million for 2011 to $25.4 million for 2012.
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§
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Interest income declined by $5.2 million, or 14.3%, from $36.5 million for 2011 to $31.3 million for 2012, primarily from lower average interest-earning assets of $539.9 million for 2012 compared to $617.0 million in 2011.
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§
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Interest expense declined $2.3 million, or 27.9%, from $8.2 million for 2011 to $5.9 million for 2012, resulting from a combination of lower average interest-bearing liabilities of $475.1 million for 2012 compared to $540.8 million for 2011, and lower yields on interest-bearing liabilities of 1.25% for 2012 compared to 1.53% for 2011.
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§
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The combination of the decline in rates paid on deposits and borrowings and the decline in yields on interest-earning assets resulted in a margin improvement of 0.12% from 4.58% for 2011 to 4.70% for 2012.
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§
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Non-interest income increased $1.1 million, or 34.2%, from $3.1 million in 2011 to $4.2 million in 2012, primarily from the sale of $10.1 million in SBA loans with the resulting gain of $973,000, the sale of $2.5 million of guaranteed USDA loans, generating a net gain of $277,000, and the sale of $4.0 million of investment securities resulting in a gain of $121,000.
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§
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Non-interest expenses decreased $1.1 million, or 4.7%, from $23.2 million in 2011 to $22.1 million in 2012, primarily from a $1.5 million decrease in loss on sale and write-down of foreclosed real estate and repossessed assets, offset by an FHLB advance prepayment fee of $431,000 from the prepayment of $22 million of FHLB advances and an $426,000 increase in professional fees.
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Closed remaining out-of-state (CO, OR, UT and WA) SBA lending operations in February 2012;
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Sold $10.1 million of guaranteed SBA loans in March 2012, generating a net gain of $973,000 and $2.5 million of guaranteed USDA loans in September 2012, generating a net gain of $277,000;
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Prepaid $5 million of FHLB advances in March 2012 and another $17 million in April 2012;
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·
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Sold $4 million of investment securities in March 2012 at a net gain of $121,000; and
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Sold $9.0 million in REO and repossessed assets in 2012.
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Take appropriate steps to fully utilize the Company’s financial and managerial resources to serve as a source of strength to the Bank, including taking steps to ensure the Bank’s compliance with the OCC Agreement and any other supervisory action taken by the Bank’s federal and state regulators;
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Refrain from declaring or paying dividends absent prior regulatory approval;
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Refrain from taking dividends or any form of payment from the Bank representing a reduction in the Bank’s capital absent prior regulatory approval;
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Refrain from incurring, increasing or guaranteeing any debt or repurchasing or redeeming any shares of its stock absent prior regulatory approval;
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Develop and submit for regulatory approval a written capital plan to maintain sufficient capital on a consolidated basis, which capital plan should, at a minimum, address, consider and include current and future capital requirements on a consolidated basis and compliance with federal regulations and guidelines; the adequacy of the Bank’s capital, the sources and timing of funds necessary to fulfill future capital requirements; and the requirements of federal law that the Company serve as a source of strength to the Bank. The FRB accepted the capital plan on July 10, 2012;
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Develop and submit for regulatory approval a cash flow projection of the Company’s planned sources and uses of cash for debt service, operating expenses and other purposes. The FRB accepted the cash flow projection on July 10, 2012;
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Comply with appropriate regulatory notice and approval requirements when appointing any new directors or senior executive officers or changing the responsibilities of any senior executive officer and comply with the limitations on indemnification and severance payments set forth in Section 18(k) of the Federal Deposit Insurance Act (12 USC 1828(i)) and Part 359 of the FDIC’s implementing regulations; and
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Furnish written progress reports to the FRB detailing the form and manner of any actions taken to secure compliance with the Regulatory Agreement.
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Year Ended December 31,
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2012 vs. 2011
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2011 vs. 2010
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Amount of
Increase
(Decrease)
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Percent of
Increase
(Decrease)
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Amount of
Increase
(Decrease)
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Percent of
Increase
(Decrease)
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INTEREST INCOME
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(dollars in thousands)
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Loans
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$ | (4,945 | ) | (14.0 | )% | $ | (2,374 | ) | (6.3 | )% | ||||||
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Investment securities and other
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(258 | ) | (24.0 | )% | (348 | ) | (24.4 | )% | ||||||||
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Total interest income
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(5,203 | ) | (14.3 | )% | (2,722 | ) | (6.9 | )% | ||||||||
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INTEREST EXPENSE
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Deposits
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(1,821 | ) | (30.6 | )% | (1,646 | ) | (21.7 | )% | ||||||||
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Other borrowings and convertible debentures
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(480 | ) | (20.9 | )% | (61 | ) | (2.6 | )% | ||||||||
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Total interest expense
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(2,301 | ) | (27.9 | )% | (1,707 | ) | (17.1 | )% | ||||||||
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NET INTEREST INCOME
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(2,902 | ) | (10.3 | )% | (1,015 | ) | (3.5 | )% | ||||||||
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Provision for loan losses
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(10,310 | ) | (70.7 | )% | 5,848 | 66.9 | % | |||||||||
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
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7,408 | 54.2 | % | (6,863 | ) | (33.4 | )% | |||||||||
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NON-INTEREST INCOME
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Other loan fees
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(256 | ) | (18.6 | )% | (585 | ) | (29.8 | )% | ||||||||
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Gains from loan sales, net
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1,290 | 348.6 | % | (97 | ) | (20.8 | )% | |||||||||
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Document processing fees, net
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(11 | ) | (2.6 | )% | (126 | ) | (23.2 | )% | ||||||||
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Loan servicing fees, net
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(32 | ) | (10.7 | )% | (28 | ) | (8.5 | )% | ||||||||
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Service charges
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(95 | ) | (18.8 | )% | (26 | ) | (4.9 | )% | ||||||||
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Gains from sale of available-for-sale securities
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121 | 100.0 | % | - | - | |||||||||||
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Other
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58 | 33.9 | % | (9 | ) | (5.0 | )% | |||||||||
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Total non-interest income
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1,075 | 34.2 | % | (871 | ) | (21.7 | )% | |||||||||
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NON-INTEREST EXPENSES
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Salaries and employee benefits
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(264 | ) | (2.2 | )% | (7 | ) | (0.1 | )% | ||||||||
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Occupancy and equipment expenses
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(140 | ) | (7.1 | )% | (36 | ) | (1.8 | )% | ||||||||
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FDIC assessment
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385 | 40.2 | % | (253 | ) | (20.9 | )% | |||||||||
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Professional services
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426 | 40.3 | % | 241 | 29.5 | % | ||||||||||
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Advertising and marketing
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(28 | ) | (7.1 | )% | 94 | 31.2 | % | |||||||||
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Depreciation
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(68 | ) | (18.2 | )% | (51 | ) | (12.0 | )% | ||||||||
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Loss on sale and write-down of foreclosed real estate and repossessed assets
|
(1,493 | ) | (58.9 | )% | 1,382 | 120.1 | % | |||||||||
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Data processing
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4 | 0.8 | % | (8 | ) | (1.5 | )% | |||||||||
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Other
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80 | 2.2 | % | 870 | 32.0 | % | ||||||||||
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Total non-interest expenses
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(1,098 | ) | (4.7 | )% | 2,232 | 10.6 | % | |||||||||
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Income (loss) before provision for income taxes
|
9,581 | (9,966 | ) | |||||||||||||
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Provision for income taxes
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(4,077 | ) | 2,610 | |||||||||||||
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NET INCOME (LOSS)
|
$ | 13,658 | $ | (12,576 | ) | |||||||||||
|
Dividends and accretion on preferred stock
|
(1 | ) | - | |||||||||||||
|
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS
|
$ | 13,659 | $ | (12,576 | ) | |||||||||||
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2012 versus 2011
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2011 versus 2010
|
|||||||||||||||||||||||
| Total |
Change due to
|
Total |
Change due to
|
|||||||||||||||||||||
|
change
|
Rate | Volume |
change
|
Rate | Volume | |||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
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Investment securities and other
|
$ | (258 | ) | $ | 478 | $ | (736 | ) | $ | (348 | ) | $ | (343 | ) | $ | (5 | ) | |||||||
|
Loans, net
|
(4,945 | ) | (426 | ) | (4,519 | ) | (2,374 | ) | (299 | ) | (2,075 | ) | ||||||||||||
|
Total interest-earning assets
|
(5,203 | ) | 52 | (5,255 | ) | (2,722 | ) | (642 | ) | (2,080 | ) | |||||||||||||
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Interest-bearing demand
|
(1,055 | ) | (1,054 | ) | (1 | ) | (235 | ) | (734 | ) | 499 | |||||||||||||
|
Savings
|
(64 | ) | (9 | ) | (55 | ) | (58 | ) | (81 | ) | 23 | |||||||||||||
|
Time certificates of deposit
|
(702 | ) | (100 | ) | (602 | ) | (1,353 | ) | (107 | ) | (1,246 | ) | ||||||||||||
|
Other borrowings
|
(480 | ) | 402 | (882 | ) | (61 | ) | 100 | (161 | ) | ||||||||||||||
|
Total interest-bearing liabilities
|
(2,301 | ) | (761 | ) | (1,540 | ) | (1,707 | ) | (822 | ) | (885 | ) | ||||||||||||
|
Net interest income
|
$ | (2,902 | ) | $ | 813 | $ | (3,715 | ) | $ | (1,015 | ) | $ | 180 | $ | (1,195 | ) | ||||||||
|
Year Ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Interest income
|
$ | 31,309 | $ | 36,512 | $ | 39,234 | ||||||
|
Interest expense
|
5,949 | 8,250 | 9,957 | |||||||||
|
Net interest income
|
$ | 25,360 | $ | 28,262 | $ | 29,277 | ||||||
|
Net interest margin
|
4.70 | % | 4.58 | % | 4.50 | % | ||||||
|
Allowance
12/31/11
|
Provision
|
Charge-offs
|
Recoveries
|
Net Charge-offs
|
Allowance
12/31/12
|
|||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
|
Manufactured housing
|
$ | 4,629 | $ | 4,824 | $ | (3,652 | ) | $ | 144 | $ | (3,508 | ) | $ | 5,945 | ||||||||||
|
Commercial real estate
|
3,528 | 30 | (1,687 | ) | 756 | (931 | ) | 2,627 | ||||||||||||||||
|
Commercial
|
2,734 | 116 | (656 | ) | 131 | (525 | ) | 2,325 | ||||||||||||||||
|
SBA
|
3,877 | (1,358 | ) | (623 | ) | 837 | 214 | 2,733 | ||||||||||||||||
|
HELOC
|
349 | 311 | (76 | ) | 50 | (26 | ) | 634 | ||||||||||||||||
|
Single family real estate
|
150 | 356 | (314 | ) | 6 | (308 | ) | 198 | ||||||||||||||||
|
Consumer
|
3 | 2 | (8 | ) | 5 | (3 | ) | 2 | ||||||||||||||||
|
Total
|
$ | 15,270 | $ | 4,281 | $ | (7,016 | ) | $ | 1,929 | $ | (5,087 | ) | $ | 14,464 | ||||||||||
|
Allowance
12/31/10
|
Provision
|
Charge-offs
|
Recoveries
|
Net Charge-offs
|
Allowance
12/31/11
|
|||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
|
Manufactured housing
|
$ | 4,168 | $ | 3,384 | $ | (2,996 | ) | $ | 73 | $ | (2,923 | ) | $ | 4,629 | ||||||||||
|
Commercial real estate
|
2,532 | 5,215 | (4,224 | ) | 5 | (4,219 | ) | 3,528 | ||||||||||||||||
|
Commercial
|
2,094 | 2,718 | (2,153 | ) | 75 | (2,078 | ) | 2,734 | ||||||||||||||||
|
SBA
|
3,753 | 2,755 | (2,930 | ) | 299 | (2,631 | ) | 3,877 | ||||||||||||||||
|
HELOC
|
547 | (197 | ) | (1 | ) | - | (1 | ) | 349 | |||||||||||||||
|
Single family real estate
|
135 | 786 | (788 | ) | 17 | (771 | ) | 150 | ||||||||||||||||
|
Consumer
|
73 | (70 | ) | - | - | - | 3 | |||||||||||||||||
|
Total
|
$ | 13,302 | $ | 14,591 | $ | (13,092 | ) | $ | 469 | $ | (12,623 | ) | $ | 15,270 | ||||||||||
|
Year Ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Other loan fees
|
$ | 1,124 | $ | 1,380 | $ | 1,965 | ||||||
|
Gains from loan sales, net
|
1,660 | 370 | 467 | |||||||||
|
Document processing fees, net
|
407 | 418 | 544 | |||||||||
|
Loan servicing fees, net
|
268 | 300 | 328 | |||||||||
|
Service charges
|
410 | 505 | 531 | |||||||||
|
Gains from sale of available-for-sale securities
|
121 | - | - | |||||||||
|
Other
|
229 | 171 | 180 | |||||||||
|
Total non-interest income
|
$ | 4,219 | $ | 3,144 | $ | 4,015 | ||||||
|
Year Ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Salaries and employee benefits
|
$ | 11,552 | $ | 11,816 | $ | 11,823 | ||||||
|
Occupancy and equipment expenses
|
1,829 | 1,969 | 2,005 | |||||||||
|
FDIC assessment
|
1,342 | 957 | 1,210 | |||||||||
|
Professional services
|
1,484 | 1,058 | 817 | |||||||||
|
Advertising and marketing
|
367 | 395 | 301 | |||||||||
|
Depreciation
|
306 | 374 | 425 | |||||||||
|
Loss on sale and write-down of foreclosed real estate and repossessed
assets
|
1,040 | 2,533 | 1,151 | |||||||||
|
Data processing
|
533 | 529 | 537 | |||||||||
|
Other
|
3,672 | 3,592 | 2,722 | |||||||||
|
Total non-interest expenses
|
$ | 22,125 | $ | 23,223 | $ | 20,991 | ||||||
|
Year Ended December 31,
|
Average
Assets
|
Total
Non-Interest
Expenses
|
Salaries and
Employee
Benefits
|
Occupancy and
Depreciation
Expenses
|
Efficiency
Ratio
|
|||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||
|
2012
|
$ | 580,964 | 3.81 | % | 1.99 | % | 0.37 | % | 75 | % | ||||||||||
|
2011
|
$ | 653,822 | 3.55 | % | 1.81 | % | 0.36 | % | 74 | % | ||||||||||
|
2010
|
$ | 676,776 | 3.10 | % | 1.75 | % | 0.36 | % | 63 | % | ||||||||||
|
December 31,
|
||||||||||||||||||||||||
|
2012
|
2011
|
2010
|
||||||||||||||||||||||
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
|||||||||||||||||||
|
ASSETS
|
(dollars in thousands)
|
|||||||||||||||||||||||
|
Cash and due from banks
|
$ | 27,656 | 4.8 | % | $ | 16,440 | 2.5 | % | $ | 11,748 | 1.7 | % | ||||||||||||
|
Time and interest-earning deposits in other financial institutions
|
3,653 | 0.6 | % | 317 | - | 607 | 0.1 | % | ||||||||||||||||
|
Federal funds sold
|
907 | 0.2 | % | 927 | 0.1 | % | 1,748 | 0.3 | % | |||||||||||||||
|
Investment securities available-for-sale
|
16,542 | 2.8 | % | 23,857 | 3.7 | % | 19,776 | 2.9 | % | |||||||||||||||
|
Investment securities held-to-maturity
|
13,393 | 2.3 | % | 15,279 | 2.3 | % | 18,435 | 2.7 | % | |||||||||||||||
|
Federal Reserve Bank & Federal Home Loan Bank stock
|
5,159 | 0.9 | % | 5,977 | 0.9 | % | 6,741 | 1.0 | % | |||||||||||||||
|
Loans held for sale, net
|
62,906 | 10.8 | % | 76,951 | 11.8 | % | 90,560 | 13.4 | % | |||||||||||||||
|
Loans held for investment, net
|
422,159 | 72.7 | % | 480,012 | 73.4 | % | 499,018 | 73.7 | % | |||||||||||||||
|
Servicing rights
|
732 | 0.1 | % | 717 | 0.1 | % | 875 | 0.1 | % | |||||||||||||||
|
Foreclosed real estate and repossessed assets
|
3,869 | 0.7 | % | 8,462 | 1.3 | % | 4,745 | 0.7 | % | |||||||||||||||
|
Premises and equipment, net
|
3,070 | 0.5 | % | 3,006 | 0.5 | % | 3,103 | 0.5 | % | |||||||||||||||
|
Other assets
|
20,918 | 3.6 | % | 21,877 | 3.4 | % | 19,420 | 2.9 | % | |||||||||||||||
|
TOTAL ASSETS
|
$ | 580,964 | 100.0 | % | $ | 653,822 | 100.0 | % | $ | 676,776 | 100.0 | % | ||||||||||||
|
LIABILITIES
|
||||||||||||||||||||||||
|
Deposits:
|
||||||||||||||||||||||||
|
Non-interest-bearing demand
|
$ | 52,196 | 9.0 | % | $ | 50,144 | 7.6 | % | $ | 39,025 | 5.8 | % | ||||||||||||
|
Interest-bearing demand
|
280,831 | 48.3 | % | 280,950 | 43.0 | % | 232,540 | 34.3 | % | |||||||||||||||
|
Savings
|
17,683 | 3.0 | % | 20,701 | 3.2 | % | 19,452 | 2.9 | % | |||||||||||||||
|
Time certificates of $100,000 or more
|
99,831 | 17.2 | % | 124,397 | 19.0 | % | 173,860 | 25.7 | % | |||||||||||||||
|
Other time certificates
|
28,774 | 5.0 | % | 43,580 | 6.7 | % | 72,576 | 10.7 | % | |||||||||||||||
|
Total deposits
|
479,315 | 82.5 | % | 519,772 | 79.5 | % | 537,453 | 79.4 | % | |||||||||||||||
|
Other borrowings
|
47,942 | 8.2 | % | 71,175 | 10.9 | % | 76,138 | 11.3 | % | |||||||||||||||
|
Other liabilities
|
2,652 | 0.5 | % | 1,116 | 0.2 | % | 2,053 | 0.3 | % | |||||||||||||||
|
Total liabilities
|
529,909 | 91.2 | % | 592,063 | 90.6 | % | 615,644 | 91.0 | % | |||||||||||||||
|
STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||
|
Preferred stock
|
15,193 | 2.6 | % | 14,931 | 2.3 | % | 14,668 | 2.2 | % | |||||||||||||||
|
Common stock
|
33,440 | 5.8 | % | 33,370 | 5.1 | % | 33,121 | 4.9 | % | |||||||||||||||
|
Retained earnings
|
2,369 | 0.4 | % | 13,311 | 2.0 | % | 13,161 | 1.9 | % | |||||||||||||||
|
Accumulated other comprehensive income
|
53 | - | 147 | - | 182 | - | ||||||||||||||||||
|
Total stockholders' equity
|
51,055 | 8.8 | % | 61,759 | 9.4 | % | 61,132 | 9.0 | % | |||||||||||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 580,964 | 100.0 | % | $ | 653,822 | 100.0 | % | $ | 676,776 | 100.0 | % | ||||||||||||
|
Year Ended December 31,
|
||||||||||||
|
Interest-earning assets:
|
2012
|
2011
|
2010
|
|||||||||
|
(dollars in thousands)
|
||||||||||||
|
Federal funds sold and interest-earning deposits:
|
||||||||||||
|
Average outstanding
|
$ | 4,561 | $ | 1,245 | $ | 2,355 | ||||||
|
Interest income
|
12 | 10 | 23 | |||||||||
|
Average yield
|
0.27 | % | 0.81 | % | 1.00 | % | ||||||
|
Investment securities:
|
||||||||||||
|
Average outstanding
|
$ | 35,093 | $ | 45,113 | $ | 44,952 | ||||||
|
Interest income
|
807 | 1,067 | 1,402 | |||||||||
|
Average yield
|
2.30 | % | 2.37 | % | 3.12 | % | ||||||
|
Gross loans:
|
||||||||||||
|
Average outstanding
|
$ | 500,273 | $ | 570,684 | $ | 603,141 | ||||||
|
Interest income
|
30,490 | 35,435 | 37,809 | |||||||||
|
Average yield
|
6.09 | % | 6.21 | % | 6.27 | % | ||||||
|
Total interest-earning assets:
|
||||||||||||
|
Average outstanding
|
$ | 539,927 | $ | 617,042 | $ | 650,448 | ||||||
|
Interest income
|
31,309 | 36,512 | 39,234 | |||||||||
|
Average yield
|
5.80 | % | 5.92 | % | 6.03 | % | ||||||
|
Interest-bearing liabilities:
|
||||||||||||
|
Interest-bearing demand deposits:
|
||||||||||||
|
Average outstanding
|
$ | 280,831 | $ | 280,950 | $ | 232,540 | ||||||
|
Interest expense
|
1,839 | 2,894 | 3,130 | |||||||||
|
Average effective rate
|
0.65 | % | 1.03 | % | 1.35 | % | ||||||
|
Savings deposits:
|
||||||||||||
|
Average outstanding
|
$ | 17,683 | $ | 20,701 | $ | 19,452 | ||||||
|
Interest expense
|
325 | 389 | 447 | |||||||||
|
Average effective rate
|
1.84 | % | 1.88 | % | 2.30 | % | ||||||
|
Time certificates of deposit:
|
||||||||||||
|
Average outstanding
|
$ | 128,605 | $ | 167,977 | $ | 246,436 | ||||||
|
Interest expense
|
1,966 | 2,668 | 4,020 | |||||||||
|
Average effective rate
|
1.53 | % | 1.59 | % | 1.63 | % | ||||||
|
Other borrowings:
|
||||||||||||
|
Average outstanding
|
$ | 40,090 | $ | 63,299 | $ | 72,926 | ||||||
|
Interest expense
|
1,102 | 1,590 | 2,071 | |||||||||
|
Average effective rate
|
2.75 | % | 2.51 | % | 2.84 | % | ||||||
|
Convertible debentures:
|
||||||||||||
|
Average outstanding
|
$ | 7,852 | $ | 7,876 | $ | 3,212 | ||||||
|
Interest expense
|
717 | 709 | 289 | |||||||||
|
Average effective rate
|
9.13 | % | 9.00 | % | 9.00 | % | ||||||
|
Total interest-bearing liabilities:
|
||||||||||||
|
Average outstanding
|
$ | 475,061 | $ | 540,803 | $ | 574,566 | ||||||
|
Interest expense
|
5,949 | 8,250 | 9,957 | |||||||||
|
Average effective rate
|
1.25 | % | 1.53 | % | 1.73 | % | ||||||
|
Net interest income
|
$ | 25,360 | $ | 28,262 | $ | 29,277 | ||||||
|
Net interest spread
|
4.55 | % | 4.39 | % | 4.30 | % | ||||||
|
Average net margin
|
4.70 | % | 4.58 | % | 4.50 | % | ||||||
|
|
·
|
Average yields and rates are derived by dividing interest income by the average balances of interest-earning assets and by dividing interest expense by the average balances of interest-bearing liabilities for the periods indicated. Amounts outstanding are averages of daily balances during the applicable periods.
|
|
|
·
|
Nonaccrual loans are included in the average balance of loans outstanding.
|
|
|
·
|
Net interest income is the difference between the interest and fees earned on loans and investments and the interest expense paid on deposits and other liabilities. The amount by which interest income will exceed interest expense depends on the volume or balance of earning assets compared to the volume or balance of interest-bearing deposits and liabilities and the interest rate earned on those interest-earning assets compared to the interest rate paid on those interest-bearing liabilities.
|
|
|
·
|
Net interest margin is net interest income expressed as a percentage of average earning assets. It is used to measure the difference between the average rate of interest earned on assets and the average rate of interest that must be paid on liabilities used to fund those assets. To maintain its net interest margin, the Company must manage the relationship between interest earned and paid.
|
|
December 31,
|
||||||||||||||||||||||||||||||||||||||||
|
In Years
|
2012
|
2011
|
2010
|
2009
|
2008
|
|||||||||||||||||||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||||||||||||||
|
Fixed
|
Variable
|
Fixed
|
Variable
|
Fixed
|
Variable
|
Fixed
|
Variable
|
Fixed
|
Variable
|
|||||||||||||||||||||||||||||||
|
Less than One
|
$ | 19,274 | $ | 31,754 | $ | 19,822 | $ | 53,168 | $ | 20,542 | $ | 62,708 | $ | 20,571 | $ | 81,132 | $ | 16,405 | $ | 78,005 | ||||||||||||||||||||
|
One to Five
|
73,550 | 100,061 | 85,870 | 126,661 | 85,103 | 121,569 | 87,062 | 130,364 | 87,034 | 82,298 | ||||||||||||||||||||||||||||||
|
Over Five
|
40,027 | 199,303 | 56,085 | 206,596 | 81,915 | 222,363 | 111,243 | 187,200 | 137,632 | 187,525 | ||||||||||||||||||||||||||||||
|
Total
|
$ | 132,851 | $ | 331,118 | $ | 161,777 | $ | 386,425 | $ | 187,560 | $ | 406,640 | $ | 218,876 | $ | 398,696 | $ | 241,071 | $ | 347,828 | ||||||||||||||||||||
| 28.6 | % | 71.4 | % | 29.5 | % | 70.5 | % | 31.6 | % | 68.4 | % | 35.4 | % | 64.6 | % | 40.9 | % | 59.1 | % | |||||||||||||||||||||
|
December 31,
|
||||||||||||||||||||
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||
|
Loan Balance
|
Loan Balance
|
Loan Balance
|
Loan Balance
|
Loan Balance
|
||||||||||||||||
|
Commercial
|
$ | 37,266 | $ | 42,058 | $ | 57,369 | $ | 61,810 | $ | 74,895 | ||||||||||
|
Commercial real estate
|
126,677 | 168,812 | 173,906 | 180,688 | 160,540 | |||||||||||||||
|
SBA
|
86,389 | 112,012 | 129,004 | 139,541 | 132,707 | |||||||||||||||
|
Manufactured housing
|
177,391 | 189,331 | 194,682 | 195,656 | 190,838 | |||||||||||||||
|
Single family real estate
|
9,939 | 11,779 | 13,722 | 14,793 | 9,765 | |||||||||||||||
|
HELOC
|
17,852 | 20,719 | 20,273 | 17,902 | 15,191 | |||||||||||||||
|
Consumer
|
232 | 312 | 379 | 286 | 602 | |||||||||||||||
|
Mortgage loans held for sale
|
8,223 | 3,179 | 4,865 | 6,896 | 4,361 | |||||||||||||||
|
Gross Loans
|
463,969 | 548,202 | 594,200 | 617,572 | 588,899 | |||||||||||||||
|
Less:
|
||||||||||||||||||||
|
Allowance for loan losses
|
14,464 | 15,270 | 13,302 | 13,733 | 7,341 | |||||||||||||||
|
Deferred fees/costs
|
(128 | ) | (109 | ) | (195 | ) | (228 | ) | (326 | ) | ||||||||||
|
Discount on SBA loans
|
432 | 325 | 461 | 627 | 809 | |||||||||||||||
|
Net Loans
|
$ | 449,201 | $ | 532,716 | $ | 580,632 | $ | 603,440 | $ | 581,075 | ||||||||||
|
Percentage to Gross Loans:
|
||||||||||||||||||||
|
Commercial
|
7.0 | % | 7.7 | % | 9.6 | % | 10.0 | % | 12.7 | % | ||||||||||
|
Commercial real estate
|
28.3 | % | 30.8 | % | 29.3 | % | 29.2 | % | 27.3 | % | ||||||||||
|
SBA
|
18.6 | % | 20.4 | % | 21.7 | % | 22.6 | % | 22.5 | % | ||||||||||
|
Manufactured housing
|
38.2 | % | 34.6 | % | 32.8 | % | 31.7 | % | 32.4 | % | ||||||||||
|
Single family real estate
|
2.2 | % | 2.1 | % | 2.3 | % | 2.4 | % | 1.7 | % | ||||||||||
|
HELOC
|
3.9 | % | 3.8 | % | 3.4 | % | 2.9 | % | 2.6 | % | ||||||||||
|
Consumer
|
- | - | 0.1 | % | 0.1 | % | 0.1 | % | ||||||||||||
|
Mortgage loans held for sale
|
1.8 | % | 0.6 | % | 0.8 | % | 1.1 | % | 0.7 | % | ||||||||||
| 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||
|
December 31,
|
||||||||||||||||||||
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
|
Commercial
|
$ | 10,678 | $ | 19,505 | $ | 14,956 | $ | 16,065 | $ | 17,940 | ||||||||||
|
Commercial real estate
|
1,675 | 5,486 | 3,420 | 6,595 | 4,376 | |||||||||||||||
|
SBA
|
1,285 | 4,710 | 815 | 1,133 | 6,526 | |||||||||||||||
|
HELOC
|
3,977 | 5,473 | 7,383 | 7,992 | 8,333 | |||||||||||||||
|
Consumer
|
- | 1 | 40 | 4 | - | |||||||||||||||
|
Standby letters of credit
|
552 | 552 | 552 | 543 | 552 | |||||||||||||||
|
Total commitments
|
$ | 18,167 | $ | 35,727 | $ | 27,166 | $ | 32,332 | $ | 37,727 | ||||||||||
|
Year Ended December 31,
|
||||||||||||||||||||
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
|
Average gross loans, held for investment,
|
$ | 437,367 | $ | 493,733 | $ | 512,581 | $ | 504,918 | $ | 448,522 | ||||||||||
|
Gross loans at end of year, held for investment
|
394,971 | 470,683 | 511,614 | 514,599 | 456,630 | |||||||||||||||
|
Allowance for loan losses, beginning of year
|
$ | 15,270 | $ | 13,302 | $ | 13,733 | $ | 7,341 | $ | 4,412 | ||||||||||
|
Loans charged off:
|
||||||||||||||||||||
|
Commercial (including SBA)
|
1,279 | 5,083 | 5,683 | 8,613 | 1,499 | |||||||||||||||
|
Commercial real estate
|
1,687 | 4,224 | 1,192 | 1,972 | 263 | |||||||||||||||
|
Manufactured housing
|
3,652 | 2,996 | 2,202 | 1,574 | 298 | |||||||||||||||
|
HELOC
|
76 | 1 | 458 | - | - | |||||||||||||||
|
Consumer
|
8 | - | 1 | 117 | 27 | |||||||||||||||
|
Single family real estate
|
314 | 788 | 186 | 161 | 372 | |||||||||||||||
|
Total
|
7,016 | 13,092 | 9,722 | 12,437 | 2,459 | |||||||||||||||
|
Recoveries of loans previously charged off
|
||||||||||||||||||||
|
Commercial (including SBA)
|
968 | 374 | 459 | 141 | 106 | |||||||||||||||
|
Commercial real estate
|
756 | 5 | 8 | - | - | |||||||||||||||
|
Manufactured housing
|
144 | 73 | 43 | - | 2 | |||||||||||||||
|
HELOC
|
50 | - | 8 | - | - | |||||||||||||||
|
Consumer
|
5 | - | 24 | 3 | - | |||||||||||||||
|
Single family real estate
|
6 | 17 | 6 | 7 | 16 | |||||||||||||||
|
Total
|
1,929 | 469 | 548 | 151 | 124 | |||||||||||||||
|
Net loans charged off
|
5,087 | 12,623 | 9,174 | 12,286 | 2,335 | |||||||||||||||
|
Provision for loan losses
|
4,281 | 14,591 | 8,743 | 18,678 | 5,264 | |||||||||||||||
|
Allowance for loan losses, end of year
|
$ | 14,464 | $ | 15,270 | $ | 13,302 | $ | 13,733 | $ | 7,341 | ||||||||||
|
Ratios:
|
||||||||||||||||||||
|
Net loan charge-offs to average gross loans held for investment
|
1.16 | % | 2.56 | % | 1.79 | % | 2.43 | % | 0.52 | % | ||||||||||
|
Net loan charge-offs to loans at end of period
|
1.29 | % | 2.68 | % | 1.79 | % | 2.39 | % | 0.51 | % | ||||||||||
|
Allowance for loan losses to loans held for investment at end of period
|
3.66 | % | 3.24 | % | 2.60 | % | 2.67 | % | 1.61 | % | ||||||||||
|
Net loan charge-offs to allowance for loan losses at beginning of period
|
33.3 | % | 94.9 | % | 66.80 | % | 167.36 | % | 52.92 | % | ||||||||||
|
Net loan charge-offs to provision for loan losses
|
118.8 | % | 86.5 | % | 104.92 | % | 65.78 | % | 44.36 | % | ||||||||||
|
December 31,
|
||||||||||||||||||||||||||||||||||||||||
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||||||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||||||||||||||||||
|
Balance at end of period
applicable to
:
|
Amount
|
Percent
of loans
in each
category
to total
loans
|
Amount
|
Percent
of loans
in each
category
to total
loans
|
Amount
|
Percent
of loans
in each
category
to total
loans
|
Amount
|
Percent
of loans
in each
category
to total
loans
|
Amount
|
Percent
of
loans
in each
category
to total
loans
|
||||||||||||||||||||||||||||||
|
Manufactured housing
|
$ | 5,945 | 38.2 | % | $ | 4,629 | 34.6 | % | $ | 4,168 | 32.8 | % | $ | 2,255 | 31.7 | % | $ | 1,659 | 32.4 | % | ||||||||||||||||||||
|
Commercial real estate
|
2,627 | 28.3 | % | 3,528 | 30.8 | % | 2,532 | 29.3 | % | 2,843 | 29.2 | % | 1,470 | 27.3 | % | |||||||||||||||||||||||||
|
Commercial
|
2,325 | 7.0 | % | 2,734 | 7.7 | % | 2,094 | 9.6 | % | 3,448 | 10.0 | % | 1,428 | 12.7 | % | |||||||||||||||||||||||||
|
SBA
|
2,733 | 18.6 | % | 3,877 | 20.4 | % | 3,753 | 21.7 | % | 4,837 | 22.6 | % | 2,556 | 22.5 | % | |||||||||||||||||||||||||
|
HELOC
|
634 | 3.9 | % | 349 | 3.8 | % | 547 | 3.4 | % | 124 | 2.9 | % | 104 | 2.6 | % | |||||||||||||||||||||||||
|
Single family real estate
|
198 | 2.2 | % | 150 | 2.1 | % | 135 | 2.3 | % | 143 | 2.4 | % | 113 | 1.7 | % | |||||||||||||||||||||||||
|
Consumer
|
2 | - | 3 | - | 73 | 0.1 | % | 83 | 0.1 | % | 11 | 0.1 | % | |||||||||||||||||||||||||||
|
Mortgage loans held for sale
|
- | 1.8 | % | - | 0.6 | % | - | 0.8 | % | - | 1.1 | % | - | 0.7 | % | |||||||||||||||||||||||||
|
Total
|
$ | 14,464 | 100.0 | % | $ | 15,270 | 100.0 | % | $ | 13,302 | 100.0 | % | $ | 13,733 | 100.0 | % | $ | 7,341 | 100.0 | % | ||||||||||||||||||||
|
Without Specific
Valuation
Allowance
|
With Specific
Valuation
Allowance
|
Valuation
Allowance
|
Impaired
Loans, net
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Manufactured housing
|
$ | 4,687 | $ | 5,748 | $ | 1,103 | $ | 9,332 | ||||||||
|
Commercial real estate:
|
||||||||||||||||
|
Commercial real estate
|
10,615 | - | - | 10,615 | ||||||||||||
|
SBA 504 1st
|
774 | 519 | 4 | 1,289 | ||||||||||||
|
Construction
|
- | - | - | - | ||||||||||||
|
Commercial
|
49 | 5,044 | 569 | 4,524 | ||||||||||||
|
SBA
|
1,238 | 503 | 58 | 1,683 | ||||||||||||
|
Consumer
|
121 | 349 | 60 | 410 | ||||||||||||
|
Total
|
$ | 17,484 | $ | 12,163 | $ | 1,794 | $ | 27,853 | ||||||||
|
Without Specific
Valuation
Allowance
|
With Specific
Valuation
Allowance
|
Valuation
Allowance
|
Impaired
Loans, net
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Manufactured housing
|
$ | 390 | $ | - | $ | - | $ | 390 | ||||||||
|
Commercial real estate:
|
||||||||||||||||
|
Commercial real estate
|
11,523 | 8,135 | 206 | 19,452 | ||||||||||||
|
SBA 504 1st
|
7,164 | - | - | 7,164 | ||||||||||||
|
Construction
|
4,746 | - | - | 4,746 | ||||||||||||
|
Commercial
|
6,029 | - | - | 6,029 | ||||||||||||
|
SBA
|
1,815 | 91 | 42 | 1,864 | ||||||||||||
|
Consumer
|
11 | - | - | 11 | ||||||||||||
|
Total
|
$ | 31,678 | $ | 8,226 | $ | 248 | $ | 39,656 | ||||||||
|
Average
Investment in
Impaired Loans
|
Interest Income
Recognized
|
|||||||
|
(in thousands)
|
||||||||
|
Manufactured housing
|
$ | 8,374 | $ | 333 | ||||
|
Commercial real estate:
|
||||||||
|
Commercial real estate
|
17,552 | 315 | ||||||
|
SBA 504 1st
|
3,897 | 159 | ||||||
|
Construction
|
4,808 | 108 | ||||||
|
Commercial
|
5,540 | 292 | ||||||
|
SBA
|
1,800 | 176 | ||||||
|
Consumer
|
584 | 23 | ||||||
|
Total
|
$ | 42,555 | $ | 1,406 | ||||
|
Year Ended December 31,
|
||||||||||||||||||||
|
2012
|
2011
|
2010
|
2009
|
2008
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
|
Impaired loans without specific valuation allowances
|
$ | 17,484 | $ | 31,678 | $ | 13,285 | $ | 13,699 | $ | 8,043 | ||||||||||
|
Impaired loans with specific valuation allowances
|
12,163 | 8,226 | 1,703 | 716 | 523 | |||||||||||||||
|
Specific valuation allowance related to impaired loans
|
(1,794 | ) | (248 | ) | (362 | ) | (622 | ) | (151 | ) | ||||||||||
|
Impaired loans, net
|
$ | 27,853 | $ | 39,656 | $ | 14,626 | $ | 13,793 | $ | 8,415 | ||||||||||
|
Average investment in impaired loans
|
$ | 42,555 | $ | 34,852 | $ | 15,591 | $ | 9,058 | $ | 9,612 | ||||||||||
|
Year Ended December 31,
|
||||||||||||||||||||
| 2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
|
Nonaccrual loans
|
$ | 29,643 | $ | 42,343 | $ | 34,950 | $ | 40,265 | $ | 28,821 | ||||||||||
|
Guaranteed portion of loans included above
|
(7,218 | ) | (13,673 | ) | (22,279 | ) | (24,088 | ) | (11,918 | ) | ||||||||||
|
Nonaccrual loans, net
|
$ | 22,425 | $ | 28,670 | $ | 12,671 | $ | 16,177 | $ | 16,903 | ||||||||||
|
Troubled debt restructured loans
|
$ | 19,931 | $ | 17,885 | $ | 11,088 | $ | 7,013 | $ | 5,408 | ||||||||||
|
Loans 30 through 89 days past due with interest accruing
|
$ | 521 | $ | 3,114 | $ | 2,586 | $ | 17,686 | $ | 11,974 | ||||||||||
|
Allowance for loan losses to gross loans held for investment
|
3.66 | % | 3.24 | % | 2.60 | % | 2.67 | % | 1.61 | % | ||||||||||
|
Interest income recognized on impaired loans
|
$ | 1,406 | $ | 1,643 | $ | 381 | $ | 426 | $ | 12 | ||||||||||
|
Interest foregone on nonaccrual loans and troubled debt restructured loans outstanding
|
2,692 | 2,920 | 2,344 | 2,109 | 1,707 | |||||||||||||||
|
Gross interest income on impaired and nonaccrual loans
|
$ | 4,098 | $ | 4,563 | $ | 2,725 | $ | 2,535 | $ | 1,719 | ||||||||||
|
Year Ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Balance, beginning of year, net
|
$ | 6,701 | $ | 8,478 | $ | 1,822 | ||||||
|
Transfers to foreclosed real estate and repossessed assets
|
7,208 | 7,320 | 11,438 | |||||||||
|
Proceeds from sale of foreclosed real estate and repossessed assets
|
(10,980 | ) | (6,564 | ) | (3,631 | ) | ||||||
|
Losses on sale of foreclosed real estate and repossessed assets, net
|
(1,040 | ) | (2,533 | ) | (1,151 | ) | ||||||
|
Balance, end of year, net
|
$ | 1,889 | $ | 6,701 | $ | 8,478 | ||||||
|
December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
Available-for-sale securities
|
(in thousands)
|
|||||||||||
|
U.S. Government agency: Notes
|
$ | 1,988 | $ | 2,486 | $ | - | ||||||
|
U.S. Government agency: MBS
|
171 | 4,672 | 5,678 | |||||||||
|
U.S. Government agency: CMO
|
9,845 | 16,430 | 17,664 | |||||||||
|
Total
|
$ | 12,004 | $ | 23,588 | $ | 23,342 | ||||||
|
December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
Held-to-maturity securities
|
(in thousands)
|
|||||||||||
|
U.S. Government agency: MBS
|
$ | 12,036 | $ | 15,335 | $ | 16,893 | ||||||
|
Total
|
$ | 12,036 | $ | 15,335 | $ | 16,893 | ||||||
|
Total Amount
|
Less than One Year
|
One to Five Years
|
Five to
Ten Years
|
|||||||||||||||||||||||||||||
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
|||||||||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||||||||||
|
Available-for-sale securities
|
||||||||||||||||||||||||||||||||
|
U. S. Government:
|
||||||||||||||||||||||||||||||||
|
Agency: Notes
|
$ | 1,988 | 1.03 | % | $ | 1,988 | 1.03 | % | $ | - | - | $ | - | - | ||||||||||||||||||
|
Agency: MBS
|
171 | 2.66 | % | - | - | - | - | 171 | 2.66 | % | ||||||||||||||||||||||
|
Agency: CMO
|
9,845 | 0.81 | % | 2,925 | 1.06 | % | 6,920 | 0.70 | % | - | - | |||||||||||||||||||||
|
Total
|
$ | 12,004 | 0.87 | % | $ | 4,913 | 1.05 | % | $ | 6,920 | 0.70 | % | $ | 171 | 2.66 | % | ||||||||||||||||
|
Held-to-maturity securities
|
||||||||||||||||||||||||||||||||
|
U.S. Government:
|
||||||||||||||||||||||||||||||||
|
Agency: MBS
|
$ | 12,036 | 3.39 | % | $ | - | - | $ | 4,051 | 4.44 | % | $ | 7,985 | 2.86 | % | |||||||||||||||||
|
Total
|
$ | 12,036 | 3.39 | % | $ | - | - | $ | 4,051 | 4.44 | % | $ | 7,985 | 2.86 | % | |||||||||||||||||
|
Total
Capital
|
Tier 1
Capital
|
Risk-Weighted
Assets
|
Adjusted Average
Assets
|
Total Risk-Based Capital
Ratio
|
Tier 1 Risk-Based Capital
Ratio
|
Tier 1 Leverage
Ratio
|
||||||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||||||
|
December 31, 2012
|
||||||||||||||||||||||||||||
|
CWBC (Consolidated)
|
$ | 66,076 | $ | 52,941 | $ | 413,378 | $ | 544,778 | 15.98 | % | 12.81 | % | 9.72 | % | ||||||||||||||
|
Capital in excess of
well capitalized
|
$ | 24,738 | $ | 28,138 | $ | 25,702 | ||||||||||||||||||||||
|
CWB
|
$ | 63,089 | $ | 57,808 | $ | 413,199 | $ | 540,985 | 15.27 | % | 13.99 | % | 10.69 | % | ||||||||||||||
|
Capital in excess of
well capitalized
|
$ | 21,769 | $ | 33,016 | $ | 30,759 | ||||||||||||||||||||||
|
December 31, 2011
|
||||||||||||||||||||||||||||
|
CWBC (Consolidated)
|
$ | 64,647 | $ | 50,423 | $ | 500,462 | $ | 637,752 | 12.92 | % | 10.08 | % | 7.91 | % | ||||||||||||||
|
Capital in excess of
well capitalized
|
$ | 14,601 | $ | 20,395 | $ | 18,535 | ||||||||||||||||||||||
|
CWB
|
$ | 59,018 | $ | 52,650 | $ | 500,173 | $ | 637,434 | 11.80 | % | 10.53 | % | 8.26 | % | ||||||||||||||
|
Capital in excess of
well capitalized
|
$ | 9,001 | $ | 22,640 | $ | 20,778 | ||||||||||||||||||||||
|
Minimum capital ratios required for CWB by the OCC Agreement
|
12.00 | % | 9.00 | % | ||||||||||||||||||||||||
|
Well capitalized ratios
|
10.00 | % | 6.00 | % | 5.00 | % | ||||||||||||||||||||||
|
Adequately capitalized ratios
|
8.00 | % | 4.00 | % | 4.00 | % | ||||||||||||||||||||||
|
|
·
|
Tier 1 capital at least equal to 9.00% of adjusted total assets, and
|
|
|
·
|
Total risk-based capital at least equal to 12.00% of risk weighted assets
|
|
|
·
|
Lag Risk
– lag risk results from the inherent timing difference between the repricing of the Company’s adjustable rate assets and liabilities. For instance, certain loans tied to the prime rate index may only reprice on a quarterly basis. However, at a community bank such as CWB, when rates are rising, funding sources tend to reprice more slowly than the loans. Therefore, for CWB, the effect of this timing difference is generally favorable during a period of rising interest rates and unfavorable during a period of declining interest rates. This lag can produce some short-term volatility, particularly in times of numerous prime rate changes.
|
|
|
·
|
Repricing Risk
– repricing risk is caused by the mismatch in the maturities / repricing periods between interest-earning assets and interest-bearing liabilities. If CWB was perfectly matched, the net interest margin would expand during rising rate periods and contract during falling rate periods. This is so since loans tend to reprice more quickly than do funding sources. Typically, since CWB is somewhat asset sensitive, this would also tend to expand the net interest margin during times of interest rate increases. However, the margin relationship is somewhat dependent on the shape of the yield curve.
|
|
|
·
|
Basis Risk
– item pricing tied to different indices may tend to react differently, however, most of CWB’s variable products are priced off the prime rate.
|
|
|
·
|
Prepayment Risk
– prepayment risk results from borrowers paying down / off their loans prior to maturity. Prepayments on fixed-rate products increase in falling interest rate environments and decrease in rising interest rate environments. Since a majority of CWB’s loan originations are adjustable rate and set based on prime, and there is little lag time on the reset, CWB does not experience significant prepayments. However, CWB does have more prepayment risk on manufactured housing loans and its mortgage-backed investment securities.
|
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2012
|
2011
|
2010
|
||||||||||||||||||||||
|
Average
Balance
|
Percent
of Total
|
Average
Balance
|
Percent
of Total
|
Average
Balance
|
Percent
of Total
|
|||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||
|
Noninterest-bearing demand
|
$ | 52,196 | 10.9 | % | $ | 50,144 | 9.7 | % | $ | 39,025 | 7.3 | % | ||||||||||||
|
Interest-bearing demand
|
280,831 | 58.6 | % | 280,950 | 54.1 | % | 232,540 | 43.3 | % | |||||||||||||||
|
Savings
|
17,683 | 3.7 | % | 20,701 | 3.9 | % | 19,452 | 3.6 | % | |||||||||||||||
|
TCD’s of $100,000 or more
|
99,831 | 20.8 | % | 124,397 | 23.9 | % | 173,860 | 32.3 | % | |||||||||||||||
|
Other TCD’s
|
28,774 | 6.0 | % | 43,580 | 8.4 | % | 72,576 | 13.5 | % | |||||||||||||||
|
Total Deposits
|
$ | 479,315 | 100.0 | % | $ | 519,772 | 100.0 | % | $ | 537,453 | 100.0 | % | ||||||||||||
|
December 31
,
|
||||||||||||||||
|
2012
|
2011
|
|||||||||||||||
|
TCD's over
$100,000
|
Other
TCD’s
|
TCD's over
$100,000
|
Other
TCD’s
|
|||||||||||||
|
(in thousands
)
|
||||||||||||||||
|
Less than three months
|
$ | 15,427 | $ | 1,762 | $ | 21,171 | $ | 3,295 | ||||||||
|
Over three months through six months
|
9,990 | 1,515 | 12,498 | 6,730 | ||||||||||||
|
Over six months through twelve months
|
15,870 | 3,341 | 28,377 | 2,799 | ||||||||||||
|
Over twelve months through five years
|
39,423 | 7,470 | 66,208 | 11,065 | ||||||||||||
|
Total
|
$ | 80,710 | $ | 14,088 | $ | 128,254 | $ | 23,889 | ||||||||
|
Total
|
< 1 Year
|
1-3 Years
|
3-5 Years
|
Over 5
Years
|
||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||
|
FHLB borrowing (includes interest expense on fixed rate borrowings)
|
$ | 35,570 | $ | 4,133 | $ | 31,437 | $ | - | $ | - | ||||||||||
|
Time certificates of deposits
|
94,798 | 47,905 | 35,662 | 11,231 | - | |||||||||||||||
|
Operating lease obligations
|
3,252 | 916 | 1,524 | 812 | - | |||||||||||||||
|
Purchase obligations for service providers
|
1,119 | 518 | 599 | 2 | - | |||||||||||||||
|
Commitments to extend credit
|
17,614 | 11,628 | 1,759 | 276 | 3,951 | |||||||||||||||
|
Standby letters of credit
|
552 | 552 | - | - | - | |||||||||||||||
|
Total
|
$ | 152,905 | $ | 65,652 | $ | 70,981 | $ | 12,321 | $ | 3,951 | ||||||||||
|
|
§
|
making or acquiring loans or other extensions of credit for its own account or for the account of others;
|
|
|
§
|
servicing loans and other extensions of credit;
|
|
|
§
|
performing functions or activities that may be performed by a trust company in the manner authorized by federal or state law under certain circumstances;
|
|
|
§
|
leasing personal and real property or acting as agent, broker, or adviser in leasing such property in accordance with various restrictions imposed by FRB regulations;
|
|
|
§
|
acting as investment or financial advisor;
|
|
|
§
|
providing management consulting advise under certain circumstances;
|
|
|
§
|
providing support services, including courier services and printing and selling MICR-encoded items;
|
|
|
§
|
acting as a principal, agent or broker for insurance under certain circumstances;
|
|
|
§
|
making equity and debt investments in corporations or projects designed primarily to promote community welfare or jobs for residents;
|
|
|
§
|
providing financial, banking or economic data processing and data transmission services;
|
|
|
§
|
owning, controlling or operating a savings association under certain circumstances;
|
|
|
§
|
selling money orders, travelers’ checks and U.S. Savings Bonds;
|
|
|
§
|
providing securities brokerage services, related securities credit activities pursuant to Regulation T and other incidental activities;
|
|
|
§
|
underwriting and dealing in obligations of the U.S., general obligations of states and their political subdivisions and other obligations authorized for state member banks under federal law.
|
|
|
·
|
the customer must obtain or provide some additional credit, property or services from or to CWB other than a loan, discount, deposit or trust services;
|
|
|
·
|
the customer must obtain or provide some additional credit, property or service from or to CWBC or any subsidiaries; or
|
|
|
·
|
the customer must not obtain some other credit, property or services from competitors, except reasonable requirements to assure soundness of credit extended.
|
|
|
§
|
assets (exclusive of goodwill and other intangible assets) would be 1.25 times its liabilities (exclusive of deferred taxes, deferred income and other deferred credits); and
|
|
|
§
|
current assets would be at least equal to current liabilities.
|
|
|
·
|
the creation of an independent accounting oversight board;
|
|
|
·
|
auditor independence provisions that restrict non-audit services that accountants may provide to their audit clients;
|
|
|
·
|
additional corporate governance and responsibility measures, including the requirement that the chief executive officer and chief financial officer of a public company certify financial statements;
|
|
|
·
|
the forfeiture of bonuses or other incentive-based compensation and profits from the sale of an issuer’s securities by directors and senior officers in the twelve month period following initial publication of any financial statements that later require restatement;
|
|
|
·
|
an increase in the oversight of, and enhancement of certain requirements relating to, audit committees of public companies and how they interact with CWBC’s independent auditors;
|
|
|
·
|
requirements that audit committee members must be independent and are barred from accepting consulting, advisory or other compensatory fees from the issuer;
|
|
|
·
|
requirements that companies disclose whether at least one member of the audit committee is a “financial expert’ (as such term is defined by the SEC) and if not discussed, why the audit committee does not have a financial expert;
|
|
|
·
|
expanded disclosure requirements for corporate insiders, including accelerated reporting of stock transactions by insiders and a prohibition on insider trading during pension blackout periods;
|
|
|
·
|
a prohibition on personal loans to directors and officers, except certain loans made by insured financial institutions on non-preferential terms and in compliance with other bank regulatory requirements;
|
|
|
·
|
disclosure of a code of ethics and filing a Form 8-K for a change or waiver of such code;
|
|
|
·
|
a range of enhanced penalties for fraud and other violations; and
|
|
|
·
|
expanded disclosure and certification relating to an issuer’s disclosure controls and procedures and internal controls over financial reporting.
|
|
Adequately
Capitalized
|
Well
Capitalized
|
Required for CWB by OCC
(1)
|
CWB
|
CWBC
(consolidated)
|
||||||||||||||||
|
(greater than or equal to)
|
||||||||||||||||||||
|
Total risk-based capital
|
8.00 | % | 10.00 | % | 12.00 | % | 15.27 | % | 15.98 | % | ||||||||||
|
Tier 1 risk-based capital ratio
|
4.00 | % | 6.00 | % | 13.99 | % | 12.81 | % | ||||||||||||
|
Tier 1 leverage capital ratio
|
4.00 | % | 5.00 | % | 9.00 | % | 10.69 | % | 9.72 | % | ||||||||||
|
|
·
|
Tier 1 capital at least equal to 9.00% of adjusted total assets; and
|
|
|
·
|
Total risk-based capital at least equal to 12.00% of risk weighted assets.
|
|
|
§
|
“well capitalized” if it has a total risk-based capital ratio of 10% or more, has a Tier 1 risk-based capital ratio of 6% or more, has a leverage capital ratio of 5% or more and is not subject to specified requirements to meet and maintain a specific capital level for any capital measure;
|
|
|
§
|
“adequately capitalized” if it has a total risk-based capital ratio of 8% or more, a Tier 1 risk-based capital ratio of 4% or more and a leverage capital ratio of 4% or more (3% under certain circumstances) and does not meet the definition of “well capitalized”;
|
|
|
§
|
“undercapitalized” if it has a total risk-based capital ratio that is less than 8%, a Tier 1 risk-based capital ratio that is less than 4%, or a leverage capital ratio that is less than 4% (3% under certain circumstances)
|
|
|
§
|
“significantly undercapitalized” if it has a total risk-based capital ratio that is less than 6%, a Tier 1 risk-based capital ratio that is less than 3% or a leverage capital ratio that is less than 3%; and
|
|
|
§
|
“critically undercapitalized” if it has a ratio of tangible equity to total assets that is equal to or less than 2%
|
|
Capital Group
|
Supervisory Subgroup
|
||
|
A
|
B
|
C
|
|
|
1.Well Capitalized
|
I
|
II
|
III
|
|
2.Adequately Capitalized
|
|||
|
3.Undercapitalized
|
III
|
IV
|
|
|
Initial Base Assessment Rates
|
||||||
|
Risk Category
|
||||||
|
I*
|
||||||
|
Annual Rates (in basis points)
|
Minimum
|
Maximum
|
II
|
III
|
IV
|
Large & Highly Complex Institutions
|
|
5
|
9
|
14
|
23
|
35
|
5-35
|
|
|
Total Base Assessment Rates*
|
||||||||||||||||||||
|
Risk
Category
I
|
Risk
Category
II
|
Risk
Category
III
|
Risk
Category
IV
|
Large
&
Highly
Complex
Institutions
|
||||||||||||||||
|
Initial base assessment rate
|
5 – 9 | 14 | 23 | 35 | 5 - 35 | |||||||||||||||
|
Unsecured debt adjustment**
|
-4.5 – 0 | -5 – 0 | -5 – 0 | -5 – 0 | -5 – 0 | |||||||||||||||
|
Brokered deposit adjustment
|
N/A | 0 – 10 | 0 – 10 | 0 – 10 | 0 – 10 | |||||||||||||||
|
Total base assessment rate
|
2.5 – 9 | 9 – 24 | 18 – 33 | 30 – 45 | 2.5 – 45 | |||||||||||||||
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
|
Interest Rate Sensitivity
|
200 bp increase
|
200 bp decrease
|
||||||||||||||
|
2012
|
2011
|
2012
|
2011
|
|||||||||||||
|
(dollars in thousands)
|
||||||||||||||||
|
Anticipated impact over the next twelve months:
|
||||||||||||||||
|
Net interest income (NII)
|
$ | 157 | $ | 979 | $ | - | $ | - | ||||||||
| 0.69 | % | 3.5 | % | - | - | |||||||||||
|
Economic value of equity (EVE)
|
$ | (9,596 | ) | $ | (7,936 | ) | $ | - | $ | - | ||||||
| (12.2 | %) | (11.8 | %) | - | - | |||||||||||
|
/s/ Ernst & Young LLP
|
|
Community West Bancshares
|
||||||||
|
|
|
|
||||||
|
December 31,
|
December 31,
|
|||||||
|
|
2012
|
2011
|
||||||
|
(in thousands, except shares)
|
||||||||
|
Assets
|
||||||||
|
Cash and due from banks
|
$ | 27,866 | $ | 22,654 | ||||
|
Federal funds sold
|
25 | 25 | ||||||
|
Cash and cash equivalents
|
27,891 | 22,679 | ||||||
|
Time and interest-bearing deposits in other financial institutions
|
3,653 | 240 | ||||||
|
Investment securities available-for-sale, at fair value; amortized cost of $11,944 at December 31, 2012 and $23,350 at December 31, 2011
|
12,004 | 23,588 | ||||||
|
Investment securities held-to-maturity, at amortized cost; fair value of $12,765 at December 31, 2012 and $16,067 at December 31, 2011
|
12,036 | 15,335 | ||||||
|
Federal Home Loan Bank stock, at cost
|
3,283 | 4,214 | ||||||
|
Federal Reserve Bank stock, at cost
|
1,373 | 1,343 | ||||||
|
Loans:
|
||||||||
|
Loans held for sale, at lower of cost or fair value
|
68,694 | 77,303 | ||||||
|
Loans held for investment, net of allowance for loan losses of $14,464 at December 31, 2012 and $15,270 at December 31, 2011
|
380,507 | 455,413 | ||||||
|
Total loans
|
449,201 | 532,716 | ||||||
|
Foreclosed real estate and repossessed assets
|
1,889 | 6,701 | ||||||
|
Premises and equipment, net
|
3,068 | 3,090 | ||||||
|
Other assets
|
17,703 | 23,442 | ||||||
|
Total assets
|
$ | 532,101 | $ | 633,348 | ||||
|
Liabilities
|
||||||||
|
Deposits:
|
||||||||
|
Non-interest-bearing demand
|
$ | 53,605 | $ | 49,894 | ||||
|
Interest-bearing demand
|
269,466 | 289,796 | ||||||
|
Savings
|
16,351 | 19,429 | ||||||
|
Time certificates
|
94,798 | 152,143 | ||||||
|
Total deposits
|
434,220 | 511,262 | ||||||
|
Other borrowings
|
34,000 | 61,000 | ||||||
|
Convertible debentures
|
7,852 | 7,852 | ||||||
|
Other liabilities
|
2,980 | 2,608 | ||||||
|
Total liabilities
|
479,052 | 582,722 | ||||||
|
Stockholders' equity
|
||||||||
|
Preferred stock, no par value; 10,000,000 shares authorized; 15,600 shares issued and outstanding
|
15,341 | 15,074 | ||||||
|
Common stock, no par value; 20,000,000 shares authorized; 5,994,510 and 5,989,510 shares issued and outstanding at December 31, 2012 and December 31, 2011, respectively
|
33,555 | 33,422 | ||||||
|
Retained earnings
|
4,118 | 1,991 | ||||||
|
Accumulated other comprehensive income, net
|
35 | 139 | ||||||
|
Total stockholders' equity
|
53,049 | 50,626 | ||||||
|
Total liabilities and stockholders' equity
|
$ | 532,101 | $ | 633,348 | ||||
|
Community West Bancshares
|
||||||||||||
|
Consolidated Statements of Operations
|
|
|
|
|||||||||
|
Year Ended December 31,
|
||||||||||||
|
(in thousands, except per share amounts)
|
2012
|
2011
|
2010
|
|||||||||
|
Interest income
|
||||||||||||
|
Loans
|
$ | 30,490 | $ | 35,435 | $ | 37,809 | ||||||
|
Investment securities and other
|
819 | 1,077 | 1,425 | |||||||||
|
Total interest income
|
31,309 | 36,512 | 39,234 | |||||||||
|
Interest expense
|
||||||||||||
|
Deposits
|
4,130 | 5,951 | 7,597 | |||||||||
|
Other borrowings and convertible debentures
|
1,819 | 2,299 | 2,360 | |||||||||
|
Total interest expense
|
5,949 | 8,250 | 9,957 | |||||||||
|
Net interest income
|
25,360 | 28,262 | 29,277 | |||||||||
|
Provision for loan losses
|
4,281 | 14,591 | 8,743 | |||||||||
|
Net interest income after provision for loan losses
|
21,079 | 13,671 | 20,534 | |||||||||
|
Non-interest income
|
||||||||||||
|
Other loan fees
|
1,124 | 1,380 | 1,965 | |||||||||
|
Gains from loan sales, net
|
1,660 | 370 | 467 | |||||||||
|
Document processing fees
|
407 | 418 | 544 | |||||||||
|
Loan servicing, net
|
268 | 300 | 328 | |||||||||
|
Service charges
|
410 | 505 | 531 | |||||||||
|
Gains from sale of available-for-sale securities
|
121 | - | - | |||||||||
|
Other
|
229 | 171 | 180 | |||||||||
|
Total non-interest income
|
4,219 | 3,144 | 4,015 | |||||||||
|
Non-interest expenses
|
||||||||||||
|
Salaries and employee benefits
|
11,552 | 11,816 | 11,823 | |||||||||
|
Occupancy and equipment expenses
|
1,829 | 1,969 | 2,005 | |||||||||
|
FDIC assessment
|
1,342 | 957 | 1,210 | |||||||||
|
Professional services
|
1,484 | 1,058 | 817 | |||||||||
|
Advertising and marketing
|
367 | 395 | 301 | |||||||||
|
Depreciation and amortization
|
306 | 374 | 425 | |||||||||
|
Loss on sale and write-down of foreclosed real estate and repossessed assets
|
1,040 | 2,533 | 1,151 | |||||||||
|
Data processing
|
533 | 529 | 537 | |||||||||
|
Other operating expenses
|
3,672 | 3,592 | 2,722 | |||||||||
|
Total non-interest expenses
|
22,125 | 23,223 | 20,991 | |||||||||
|
Income (loss) before provision for income taxes
|
3,173 | (6,408 | ) | 3,558 | ||||||||
|
Provision for income taxes
|
- | 4,077 | 1,467 | |||||||||
|
Net income (loss)
|
$ | 3,173 | $ | (10,485 | ) | $ | 2,091 | |||||
|
Dividends and accretion on preferred stock
|
1,046 | 1,047 | 1,047 | |||||||||
|
Net income (loss) applicable to common stockholders
|
$ | 2,127 | $ | (11,532 | ) | $ | 1,044 | |||||
|
Earnings (loss) per common share:
|
||||||||||||
|
Basic
|
$ | 0.36 | $ | (1.93 | ) | $ | 0.18 | |||||
|
Diluted
|
$ | 0.31 | $ | (1.93 | ) | $ | 0.18 | |||||
|
Basic weighted average number of common shares outstanding
|
5,990 | 5,980 | 5,915 | |||||||||
|
Diluted weighted average number of common shares outstanding
|
8,233 | 5,980 | 6,833 | |||||||||
|
Community West Bancshares
|
||||||||||||
|
Consolidated Statements of Comprehensive Income
|
|
|
|
|||||||||
|
Year Ended December 31,
|
||||||||||||
|
(in thousands)
|
2012
|
2011
|
2010
|
|||||||||
|
Net income (loss)
|
$ | 3,173 | $ | (10,485 | ) | $ | 2,091 | |||||
|
Other comprehensive loss, net of tax:
|
||||||||||||
|
Unrealized gain (loss) on securities available-for-sale, net of tax of $4 , $26 and $0 for 2012, 2011, and 2010 respectively
|
(5 | ) | (40 | ) | 1 | |||||||
|
Realized gain on sale of available-for-sale securities included in earnings, net of tax of $69
|
(99 | ) | - | - | ||||||||
|
Comprehensive income (loss)
|
$ | 3,069 | $ | (10,525 | ) | $ | 2,092 | |||||
|
|
Preferred
|
Common Stock
|
Retained
|
Accumulated
Other
Comprehensive
|
Total
Stockholders’
|
|||||||||||||||||||
| Stock | Shares | Amount | Earnings | Income (Loss) | Equity | |||||||||||||||||||
|
(in thousands)
|
|
|||||||||||||||||||||||
|
Balances at December 31, 2009
|
$ | 14,540 | 5,915 | $ | 33,110 | $ | 12,479 | $ | 178 | $ | 60,307 | |||||||||||||
|
Stock option expense, recognized in earnings
|
19 | 19 | ||||||||||||||||||||||
|
Conversion of debentures
|
1 | 4 | 4 | |||||||||||||||||||||
|
Comprehensive income:
|
||||||||||||||||||||||||
|
Net income
|
2,091 | 2,091 | ||||||||||||||||||||||
|
Other comprehensive income (loss)
|
1 | 1 | ||||||||||||||||||||||
|
Dividends and accretion on preferred stock
|
267 | (1,047 | ) | (780 | ) | |||||||||||||||||||
|
Balances at December 31, 2010
|
$ | 14,807 | 5,916 | $ | 33,133 | $ | 13,523 | $ | 179 | $ | 61,642 | |||||||||||||
|
Stock option expense, recognized in earnings
|
33 | 33 | ||||||||||||||||||||||
|
Conversion of debentures
|
66 | 231 | 231 | |||||||||||||||||||||
|
Exercise of stock options
|
8 | 25 | 25 | |||||||||||||||||||||
|
Comprehensive income:
|
||||||||||||||||||||||||
|
Net loss
|
(10,485 | ) | (10,485 | ) | ||||||||||||||||||||
|
Other comprehensive income (loss)
|
(40 | ) | (40 | ) | ||||||||||||||||||||
|
Dividends and accretion on preferred stock
|
267 | (1,047 | ) | (780 | ) | |||||||||||||||||||
|
Balances at December 31, 2011
|
$ | 15,074 | 5,990 | $ | 33,422 | $ | 1,991 | $ | 139 | $ | 50,626 | |||||||||||||
|
Stock option expense, recognized in earnings
|
117 | 117 | ||||||||||||||||||||||
|
Exercise of stock options
|
5 | 16 | 16 | |||||||||||||||||||||
|
Comprehensive income:
|
||||||||||||||||||||||||
|
Net income
|
3,173 | 3,173 | ||||||||||||||||||||||
|
Other comprehensive income (loss)
|
(104 | ) | (104 | ) | ||||||||||||||||||||
|
Dividends and accretion on preferred stock
|
267 | (1,046 | ) | (779 | ) | |||||||||||||||||||
|
Balances at December 31, 2012
|
$ | 15,341 | 5,995 | $ | 33,555 | $ | 4,118 | $ | 35 | $ | 53,049 | |||||||||||||
|
Community West Bancshares
|
||||||||||||
|
|
||||||||||||
|
Year Ended December 31,
|
||||||||||||
|
|
2012
|
2011
|
2010
|
|||||||||
|
(in thousands)
|
||||||||||||
|
Cash flows from operating activities:
|
||||||||||||
|
Net income (loss)
|
$ | 3,173 | $ | (10,485 | ) | $ | 2,091 | |||||
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||||||
|
Provision for loan losses
|
4,281 | 14,591 | 8,743 | |||||||||
|
Depreciation and amortization
|
306 | 374 | 425 | |||||||||
|
Deferred income taxes
|
(98 | ) | 5,625 | (1,071 | ) | |||||||
|
Stock-based compensation
|
117 | 33 | 19 | |||||||||
|
Net amortization of discounts and premiums for investment securities
|
(17 | ) | (60 | ) | (146 | ) | ||||||
|
Loss (gain) on:
|
||||||||||||
|
Sale and write-down of foreclosed real estate and repossessed assets
|
1,161 | 2,533 | 1,151 | |||||||||
|
Sale of loans held for sale
|
(1,660 | ) | (370 | ) | (467 | ) | ||||||
|
Sale of available-for-sale securities
|
(121 | ) | - | - | ||||||||
|
Loan originated for sale and principal collections, net
|
(4,752 | ) | 1,920 | 2,332 | ||||||||
|
Changes in:
|
||||||||||||
|
Servicing rights, net of amortization
|
(106 | ) | 157 | 216 | ||||||||
|
Other assets
|
8,117 | (6,683 | ) | 574 | ||||||||
|
Other liabilities
|
(316 | ) | (1,418 | ) | 471 | |||||||
|
Net cash provided by operating activities
|
10,085 | 6,217 | 14,338 | |||||||||
|
Cash flows from investing activities:
|
||||||||||||
|
Purchase of available-for-sale securities
|
(1,998 | ) | (9,269 | ) | (17,402 | ) | ||||||
|
Principal pay downs and maturities of available-for-sale securities
|
9,439 | 9,029 | 11,881 | |||||||||
|
Proceeds from sale of available-for-sale securities
|
4,137 | - | - | |||||||||
|
Purchase of held-to-maturity securities
|
- | (1,388 | ) | (1,521 | ) | |||||||
|
Purchase of Federal Reserve stock
|
(30 | ) | (21 | ) | - | |||||||
|
Redemptions of Federal Home Loan Bank stock
|
931 | 817 | 629 | |||||||||
|
Principal pay downs and maturities of held-to-maturity securities
|
3,264 | 2,934 | 7,302 | |||||||||
|
Loan originations and principal collections, net
|
78,317 | 24,455 | 762 | |||||||||
|
Proceeds from sale of foreclosed real estate and repossessed assets
|
8,985 | 6,564 | 3,631 | |||||||||
|
Net (increase) decrease in time deposits in other financial institutions
|
(3,413 | ) | 50 | 350 | ||||||||
|
Purchase of premises and equipment, net
|
(284 | ) | (549 | ) | (61 | ) | ||||||
|
Net cash provided by investing activities
|
99,348 | 32,622 | 5,571 | |||||||||
|
Cash flows from financing activities:
|
||||||||||||
|
Dividends and accretion on preferred stock
|
(195 | ) | (780 | ) | (780 | ) | ||||||
|
Exercise of stock options
|
16 | 25 | - | |||||||||
|
Net (decrease) increase in demand deposits and savings accounts
|
(19,697 | ) | 40,550 | 72,565 | ||||||||
|
Net decrease in time certificates of deposit
|
(57,345 | ) | (59,181 | ) | (74,064 | ) | ||||||
|
Proceeds for issuance of convertible debentures
|
- | - | 8,085 | |||||||||
|
Proceeds from Federal Home Loan Bank and FRB advances
|
- | 11,000 | 39,000 | |||||||||
|
Repayment of Federal Home Loan Bank and FRB advances
|
(27,000 | ) | (14,000 | ) | (64,000 | ) | ||||||
|
Net cash used in financing activities
|
(104,221 | ) | (22,386 | ) | (19,194 | ) | ||||||
|
Net increase in cash and cash equivalents
|
5,212 | 16,453 | 715 | |||||||||
|
Cash and cash equivalents, beginning of year
|
22,679 | 6,226 | 5,511 | |||||||||
|
Cash and cash equivalents, end of period
|
$ | 27,891 | $ | 22,679 | $ | 6,226 | ||||||
|
Supplemental Disclosure of Cash Flow Information:
|
||||||||||||
|
Cash paid for interest
|
$ | 6,103 | $ | 8,319 | $ | 10,079 | ||||||
|
Cash paid for income taxes
|
910 | 1,941 | 841 | |||||||||
|
Supplemental Disclosure of Noncash Investing Activity:
|
||||||||||||
|
Transfers to foreclosed real estate and repossessed assets
|
7,329 | 7,320 | 11,438 | |||||||||
|
Supplemental Disclosure of Noncash Financing Activity:
|
||||||||||||
|
Preferred stock dividends declared, not paid
|
584 | - | - | |||||||||
|
1.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
|
·
|
Concentrations of credit
|
|
|
·
|
International risk
|
|
|
·
|
Trends in volume, maturity, and composition
|
|
|
·
|
Off-balance sheet
|
|
|
·
|
Volume and trend in delinquency
|
|
|
·
|
Economic conditions
|
|
|
·
|
Outside exams
|
|
|
·
|
Geographic distance
|
|
|
·
|
Policy and procedures
|
|
|
·
|
Staff experience and ability
|
|
|
·
|
Commercial Real Estate, Commercial, SBA, HELOC, Single Family Residential, and Consumer – Migration analysis combined with risk rating is used to determine the required allowance for all non-impaired loans. In addition, the migration results are adjusted based upon the qualitative factors previously discussed that affect this specific portfolio category. Reserves on impaired loans are determined based upon the individual characteristics of the loan.
|
|
|
·
|
Manufactured Housing – The allowance is calculated on the basis of loss history and risk rating, which is primarily a function of delinquency. In addition, the migration results are adjusted based upon the qualitative factors previously discussed that affect this specific portfolio.
|
|
|
·
|
The expected future cash flows are estimated and then discounted at the effective interest rate.
|
|
|
·
|
The value of the underlying collateral net of selling costs. Selling costs are estimated based on industry standards, the Company’s actual experience or actual costs incurred as appropriate. When evaluating real estate collateral, the Company typically uses appraisals or valuations, no more than twelve months old at time of evaluation. When evaluating non-real estate collateral securing the loan, the Company will use audited financial statements or appraisals no more than twelve months old at time of evaluation. Additionally for both real estate and non-real estate collateral, the Company may use other sources to determine value as deemed appropriate.
|
|
|
·
|
The loan’s observable market price.
|
|
Building and improvements
|
31.5 years
|
|
|
Furniture and equipment
|
5 – 10 years
|
|
|
Electronic equipment and software
|
3 – 5 years
|
|
2.
|
INVESTMENT SECURITIES
|
|
December 31, 2012
|
||||||||||||||||
|
Gross
|
Gross
|
|||||||||||||||
|
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
|
Available-for-sale securities
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
|
(in thousands)
|
||||||||||||||||
|
U.S. Government agency: Notes
|
$ | 1,998 | $ | - | $ | (10 | ) | $ | 1,988 | |||||||
|
U.S. Government agency: MBS
|
163 | 8 | - | 171 | ||||||||||||
|
U.S. Government agency: CMO
|
9,783 | 62 | - | 9,845 | ||||||||||||
|
Total
|
$ | 11,944 | $ | 70 | $ | (10 | ) | $ | 12,004 | |||||||
|
Held-to-maturity securities
|
||||||||||||||||
|
U.S. Government agency: MBS
|
$ | 12,036 | $ | 729 | $ | - | $ | 12,765 | ||||||||
|
Total
|
$ | 12,036 | $ | 729 | $ | - | $ | 12,765 | ||||||||
|
December 31, 2011
|
||||||||||||||||
|
Gross
|
Gross
|
|||||||||||||||
|
Amortized
|
Unrealized
|
Unrealized
|
Fair
|
|||||||||||||
|
Available-for-sale securities
|
Cost
|
Gains
|
Losses
|
Value
|
||||||||||||
|
(in thousands)
|
||||||||||||||||
|
U.S. Government agency: Notes
|
$ | 2,496 | $ | - | $ | ( 10 | ) | $ | 2,486 | |||||||
|
U.S. Government agency: MBS
|
4,486 | 186 | - | 4,672 | ||||||||||||
|
U.S. Government agency: CMO
|
16,368 | 66 | (4 | ) | 16,430 | |||||||||||
|
Total
|
$ | 23,350 | $ | 252 | $ | (14 | ) | $ | 23,588 | |||||||
|
Held-to-maturity securities
|
||||||||||||||||
|
U.S. Government agency: MBS
|
$ | 15,335 | $ | 732 | $ | - | $ | 16,067 | ||||||||
|
Total
|
$ | 15,335 | $ | 732 | $ | - | $ | 16,067 | ||||||||
|
Total Amount
|
Less than One Year
|
One to Five Years
|
Five to
Ten Years
|
|||||||||||||||||||||||||||||
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
Amount
|
Yield
|
|||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||
| Available-for-sale securities | ||||||||||||||||||||||||||||||||
| U. S. Government: | ||||||||||||||||||||||||||||||||
|
Agency: Notes
|
$ | 1,988 | 1.03 | % | $ | 1,988 | 1.03 | % | $ | - | - | $ | - | - | ||||||||||||||||||
|
Agency: MBS
|
171 | 2.66 | % | - | - | - | - | 171 | 2.66 | % | ||||||||||||||||||||||
|
Agency: CMO
|
9,845 | 0.81 | % | 2,925 | 1.06 | % | 6,920 | 0.70 | % | - | - | |||||||||||||||||||||
|
Total
|
$ | 12,004 | 0.87 | % | $ | 4,913 | 1.05 | % | $ | 6,920 | 0.70 | % | $ | 171 | 2.66 | % | ||||||||||||||||
|
Held-to-maturity securities
|
||||||||||||||||||||||||||||||||
|
U.S. Government:
|
||||||||||||||||||||||||||||||||
|
Agency: MBS
|
$ | 12,036 | 3.39 | % | $ | - | - | $ | 4,051 | 4.44 | % | $ | 7,985 | 2.86 | % | |||||||||||||||||
|
Total
|
$ | 12,036 | 3.39 | % | $ | - | - | $ | 4,051 | 4.44 | % | $ | 7,985 | 2.86 | % | |||||||||||||||||
|
Fair Value
|
$ | 12,765 | $ | - | $ | 4,314 | $ | 8,451 | ||||||||||||||||||||||||
|
December 31, 2012
|
Less than 12 months
|
More than 12 months
|
Total
|
|||||||||||||||||||||
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
|
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
|||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
|
Available-for-sale securities
|
||||||||||||||||||||||||
|
U.S. Government agency: Notes
|
$ | 1,988 | $ | 10 | $ | - | $ | - | $ | 1,988 | $ | 10 | ||||||||||||
|
U.S. Government agency: CMO
|
876 | 1 | 411 | 1 | 1,287 | 2 | ||||||||||||||||||
|
Total
|
$ | 2,864 | $ | 11 | $ | 411 | $ | 1 | $ | 3,275 | $ | 12 | ||||||||||||
|
December 31, 2011
|
Less than 12 months
|
More than 12 months
|
Total
|
|||||||||||||||||||||
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
|
Value
|
Losses
|
Value
|
Losses
|
Value
|
Losses
|
|||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
|
Available-for-sale securities
|
||||||||||||||||||||||||
|
U.S. Government agency: Notes
|
$ | 2,486 | $ | 10 | $ | - | $ | - | $ | 2,486 | $ | 10 | ||||||||||||
|
U.S. Government agency: CMO
|
4,275 | 4 | - | - | 4,275 | 4 | ||||||||||||||||||
|
Total
|
$ | 6,761 | $ | 14 | $ | - | $ | - | $ | 6,761 | $ | 14 | ||||||||||||
|
3.
|
LOAN SALES AND SERVICING
|
|
Year Ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Beginning balance
|
$ | 419 | $ | 492 | $ | 623 | ||||||
|
Adjustment to fair value (included in Loan servicing, net)
|
7 | (73 | ) | (131 | ) | |||||||
|
Ending balance
|
$ | 426 | $ | 419 | $ | 492 | ||||||
|
December 31, 2012
|
||||
|
Weighted-Average Constant Prepayment Rate
|
5.13 | % | ||
|
Weighted-Average Life (in years)
|
6 | |||
|
Weighted-Average Discount Rate
|
12.61 | % | ||
|
December 31, 2012
|
||||
|
(in thousands)
|
||||
|
Discount Rate
|
||||
|
Increase in fair value from 100 basis points (“bps”) decrease
|
13 | |||
|
Decrease in fair value from 100 bps increase
|
(12 | ) | ||
|
Constant Prepayment Rate
|
||||
|
Increase in fair value from 10% decrease
|
6 | |||
|
Decrease in fair value from 10% increase
|
(6 | ) | ||
|
Year Ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Beginning balance
|
$ | 625 | $ | 782 | $ | 998 | ||||||
|
Amortization (included in Loan servicing, net)
|
(242 | ) | (157 | ) | (216 | ) | ||||||
|
Ending balance
|
$ | 383 | $ | 625 | $ | 782 | ||||||
|
Year Ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Beginning balance
|
$ | - | $ | - | $ | - | ||||||
|
Additions through loan sales
|
349 | - | - | |||||||||
|
Adjustment to fair value (included in Loan servicing, net)
|
(1 | ) | - | - | ||||||||
|
Ending balance
|
$ | 348 | $ | - | $ | - | ||||||
|
December 31, 2012
|
||||
|
Weighted-Average Constant Prepayment Rate
|
4.56 | % | ||
|
Weighted-Average Life (in years)
|
9 | |||
|
Weighted-Average Discount Rate
|
13.51 | % | ||
|
December 31, 2012
|
||||
|
(in thousands)
|
||||
|
Discount Rate
|
||||
|
Increase in fair value from 100 basis points (“bps”) decrease
|
15 | |||
|
Decrease in fair value from 100 bps increase
|
(14 | ) | ||
|
Constant Prepayment Rate
|
||||
|
Increase in fair value from 10% decrease
|
6 | |||
|
Decrease in fair value from 10% increase
|
(6 | ) | ||
|
4.
|
LOANS HELD FOR INVESTMENT
|
|
December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
(in thousands)
|
||||||||
|
Manufactured housing
|
$ | 177,391 | $ | 189,331 | ||||
|
Commercial real estate
|
126,677 | 168,812 | ||||||
|
Commercial
|
32,496 | 42,058 | ||||||
|
SBA
|
30,688 | 37,888 | ||||||
|
HELOC
|
17,852 | 20,719 | ||||||
|
Single family real estate
|
9,939 | 11,779 | ||||||
|
Consumer
|
232 | 312 | ||||||
| 395,275 | 470,899 | |||||||
|
Less:
|
||||||||
|
Allowance for loan losses
|
14,464 | 15,270 | ||||||
|
Deferred costs, net
|
(128 | ) | (109 | ) | ||||
|
Discount on SBA loans
|
432 | 325 | ||||||
|
Loans held for investment, net
|
$ | 380,507 | $ | 455,413 | ||||
|
30-59
Days Past
Due
|
60-89
Days
Past
Due
|
Greater
Than 90
Days Past
Due
|
Total
Past Due
|
Current
|
Total
Financing
Receivables
|
Recorded
Investment
> 90 Days
and
Accruing
|
||||||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||
|
Manufactured housing
|
$ | 467 | $ | 258 | $ | 417 | $ | 1,142 | $ | 176,249 | $ | 177,391 | $ | - | ||||||||||||||
|
Commercial real estate:
|
||||||||||||||||||||||||||||
|
Commercial real estate
|
- | - | 830 | 830 | 81,682 | 82,512 | - | |||||||||||||||||||||
|
504 1st TD
|
- | - | - | - | 34,502 | 34,502 | - | |||||||||||||||||||||
|
Land
|
- | - | - | - | 4,556 | 4,556 | - | |||||||||||||||||||||
|
Construction
|
- | - | - | - | 5,107 | 5,107 | - | |||||||||||||||||||||
|
Commercial
|
40 | - | 132 | 172 | 32,324 | 32,496 | - | |||||||||||||||||||||
|
SBA
|
713 | - | 6,069 | 6,782 | 23,906 | 30,688 | - | |||||||||||||||||||||
|
HELOC
|
- | - | - | - | 17,852 | 17,852 | - | |||||||||||||||||||||
|
Single family real estate
|
32 | - | 12 | 44 | 9,895 | 9,939 | 12 | |||||||||||||||||||||
|
Consumer
|
- | - | - | - | 232 | 232 | ||||||||||||||||||||||
|
Total
|
$ | 1,252 | $ | 258 | $ | 7,460 | $ | 8,970 | $ | 386,305 | $ | 395,275 | $ | 12 | ||||||||||||||
|
30-59
Days
Past Due
|
60-89
Days
Past Due
|
Greater
Than 90
Days Past
Due
|
Total
Past Due
|
Current
|
Total
Financing
Receivables
|
Recorded
Investment
> 90 Days
and
Accruing
|
||||||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||||
|
Manufactured housing
|
$ | 2,279 | $ | 519 | $ | 902 | $ | 3,700 | $ | 185,631 | $ | 189,331 | $ | - | ||||||||||||||
|
Commercial real estate:
|
||||||||||||||||||||||||||||
|
Commercial real estate
|
247 | - | 3,718 | 3,965 | 104,260 | 108,225 | - | |||||||||||||||||||||
|
504 1st TD
|
300 | - | 2,068 | 2,368 | 34,958 | 37,326 | - | |||||||||||||||||||||
|
Land
|
- | - | - | - | 5,230 | 5,230 | - | |||||||||||||||||||||
|
Construction
|
- | - | 1,519 | 1,519 | 16,512 | 18,031 | - | |||||||||||||||||||||
|
Commercial
|
115 | 18 | 1,881 | 2,014 | 40,044 | 42,058 | 510 | |||||||||||||||||||||
|
SBA
|
629 | 53 | 9,332 | 10,014 | 27,874 | 37,888 | - | |||||||||||||||||||||
|
HELOC
|
258 | - | 75 | 333 | 20,386 | 20,719 | 74 | |||||||||||||||||||||
|
Single family real estate
|
41 | 7 | 944 | 992 | 10,787 | 11,779 | - | |||||||||||||||||||||
|
Consumer
|
- | - | - | - | 312 | 312 | - | |||||||||||||||||||||
|
Total
|
$ | 3,869 | $ | 597 | $ | 20,439 | $ | 24,905 | $ | 445,994 | $ | 470,899 | $ | 584 | ||||||||||||||
|
Year Ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Balance, beginning of year
|
$ | 15,270 | $ | 13,302 | $ | 13,733 | ||||||
|
Loans charged off
|
(7,016 | ) | (13,092 | ) | (9,722 | ) | ||||||
|
Recoveries on loans previously charged off
|
1,929 | 469 | 548 | |||||||||
|
Net charge-offs
|
(5,087 | ) | (12,623 | ) | (9,174 | ) | ||||||
|
Provision for loan losses
|
4,281 | 14,591 | 8,743 | |||||||||
|
Balance, end of year
|
$ | 14,464 | $ | 15,270 | $ | 13,302 | ||||||
|
Allowance
12/31/11
|
Provision
|
Charge-offs
|
Recoveries
|
Net Charge-offs
|
Allowance
12/31/12
|
|||||||||||||||||||
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||
|
Manufactured housing
|
$ | 4,629 | $ | 4,824 | $ | (3,652 | ) | $ | 144 | $ | (3,508 | ) | $ | 5,945 | ||||||||||
|
Commercial real estate
|
3,528 | 30 | (1,687 | ) | 756 | (931 | ) | 2,627 | ||||||||||||||||
|
Commercial
|
2,734 | 116 | (656 | ) | 131 | (525 | ) | 2,325 | ||||||||||||||||
|
SBA
|
3,877 | (1,358 | ) | (623 | ) | 837 | 214 | 2,733 | ||||||||||||||||
|
HELOC
|
349 | 311 | (76 | ) | 50 | (26 | ) | 634 | ||||||||||||||||
|
Single family real estate
|
150 | 356 | (314 | ) | 6 | (308 | ) | 198 | ||||||||||||||||
|
Consumer
|
3 | 2 | (8 | ) | 5 | (3 | ) | 2 | ||||||||||||||||
|
Total
|
$ | 15,270 | $ | 4,281 | $ | (7,016 | ) | $ | 1,929 | $ | (5,087 | ) | $ | 14,464 | ||||||||||
|
Allowance
12/31/10
|
Provision
|
Charge-offs
|
Recoveries
|
Net Charge-offs
|
Allowance
12/31/11
|
|||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||
|
Manufactured housing
|
$ | 4,168 | $ | 3,384 | $ | (2,996 | ) | $ | 73 | $ | (2,923 | ) | $ | 4,629 | ||||||||||
|
Commercial real estate
|
2,532 | 5,215 | (4,224 | ) | 5 | (4,219 | ) | 3,528 | ||||||||||||||||
|
Commercial
|
2,094 | 2,718 | (2,153 | ) | 75 | (2,078 | ) | 2,734 | ||||||||||||||||
|
SBA
|
3,753 | 2,755 | (2,930 | ) | 299 | (2,631 | ) | 3,877 | ||||||||||||||||
|
HELOC
|
547 | (197 | ) | (1 | ) | - | (1 | ) | 349 | |||||||||||||||
|
Single family real estate
|
135 | 786 | (788 | ) | 17 | (771 | ) | 150 | ||||||||||||||||
|
Consumer
|
73 | (70 | ) | - | - | - | 3 | |||||||||||||||||
|
Total
|
$ | 13,302 | $ | 14,591 | $ | (13,092 | ) | $ | 469 | $ | (12,623 | ) | $ | 15,270 | ||||||||||
|
Loans
Collectively
Evaluated
|
Allowance
For Loan
Losses
|
Loans
Individually
Evaluated
|
Allowance
For loan
Losses
|
Total Loans Held
for Investment
|
Total
Allowance
for Loan
Losses
|
|||||||||||||||||||
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||
|
Manufactured housing
|
$ | 166,956 | $ | 4,842 | $ | 10,435 | $ | 1,103 | $ | 177,391 | $ | 5,945 | ||||||||||||
|
Commercial real estate
|
114,769 | 2,623 | 11,908 | 4 | 126,677 | 2,627 | ||||||||||||||||||
|
Commercial
|
27,403 | 1,756 | 5,093 | 569 | 32,496 | 2,325 | ||||||||||||||||||
|
SBA
|
28,947 | 2,675 | 1,741 | 58 | 30,688 | 2,733 | ||||||||||||||||||
|
HELOC
|
17,583 | 585 | 269 | 49 | 17,852 | 634 | ||||||||||||||||||
|
Single family real estate
|
9,738 | 187 | 201 | 11 | 9,939 | 198 | ||||||||||||||||||
|
Consumer
|
232 | 2 | - | - | 232 | 2 | ||||||||||||||||||
|
Total
|
$ | 365,628 | $ | 12,670 | $ | 29,647 | $ | 1,794 | $ | 395,275 | $ | 14,464 | ||||||||||||
|
Loans
Collectively
Evaluated
|
Allowance
For Loan
Losses
|
Loans
Individually
Evaluated
|
Allowance
For loan
Losses
|
Total Loans Held
for Investment
|
Total
Allowance
for Loan
Losses
|
|||||||||||||||||||
|
|
|
(in thousands)
|
|
|
||||||||||||||||||||
|
Manufactured housing
|
$ | 188,942 | $ | 4,629 | $ | 389 | $ | - | $ | 189,331 | $ | 4,629 | ||||||||||||
|
Commercial real estate
|
137,243 | 3,322 | 31,569 | 206 | 168,812 | 3,528 | ||||||||||||||||||
|
Commercial
|
36,029 | 2,734 | 6,029 | - | 42,058 | 2,734 | ||||||||||||||||||
|
SBA
|
35,981 | 3,835 | 1,907 | 42 | 37,888 | 3,877 | ||||||||||||||||||
|
HELOC
|
20,719 | 349 | - | - | 20,719 | 349 | ||||||||||||||||||
|
Single family real estate
|
11,779 | 150 | - | - | 11,779 | 150 | ||||||||||||||||||
|
Consumer
|
301 | 3 | 11 | - | 312 | 3 | ||||||||||||||||||
|
Total
|
$ | 430,994 | $ | 15,022 | $ | 39,905 | $ | 248 | $ | 470,899 | $ | 15,270 | ||||||||||||
|
Year Ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Impaired loans without specific valuation allowances
|
$ | 17,484 | $ | 31,678 | $ | 13,285 | ||||||
|
Impaired loans with specific valuation allowances
|
12,163 | 8,226 | 1,703 | |||||||||
|
Specific valuation allowance related to impaired loans
|
(1,794 | ) | (248 | ) | (362 | ) | ||||||
|
Impaired loans, net
|
$ | 27,853 | $ | 39,656 | $ | 14,626 | ||||||
|
Without Specific
Valuation
Allowance
|
With Specific
Valuation
Allowance
|
Valuation
Allowance
|
Impaired Loan, net
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Manufactured housing
|
$ | 4,687 | $ | 5,748 | $ | 1,103 | $ | 9,332 | ||||||||
|
Commercial real estate:
|
||||||||||||||||
|
Commercial real estate
|
10,615 | - | - | 10,615 | ||||||||||||
|
SBA 504 1st
|
774 | 519 | 4 | 1,289 | ||||||||||||
|
Construction
|
- | - | - | - | ||||||||||||
|
Commercial
|
49 | 5,044 | 569 | 4,524 | ||||||||||||
|
SBA
|
1,238 | 503 | 58 | 1,683 | ||||||||||||
|
Consumer
|
121 | 349 | 60 | 410 | ||||||||||||
|
Total
|
$ | 17,484 | $ | 12,163 | $ | 1,794 | $ | 27,853 | ||||||||
|
Without Specific
Valuation
Allowance
|
With Specific
Valuation
Allowance
|
Valuation
Allowance
|
Impaired Loan, net
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Manufactured housing
|
$ | 390 | $ | - | $ | - | $ | 390 | ||||||||
|
Commercial real estate:
|
||||||||||||||||
|
Commercial real estate
|
11,523 | 8,135 | 206 | 19,452 | ||||||||||||
|
SBA 504 1st
|
7,164 | - | - | 7,164 | ||||||||||||
|
Construction
|
4,746 | - | - | 4,746 | ||||||||||||
|
Commercial
|
6,029 | - | - | 6,029 | ||||||||||||
|
SBA
|
1,815 | 91 | 42 | 1,864 | ||||||||||||
|
Consumer
|
11 | - | - | 11 | ||||||||||||
|
Total
|
$ | 31,678 | $ | 8,226 | $ | 248 | $ | 39,656 | ||||||||
|
Year Ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Average investment in impaired loans
|
$ | 42,555 | $ | 34,852 | $ | 15,591 | ||||||
|
Interest income recognized on impaired loans
|
$ | 1,406 | $ | 1,643 | $ | 381 | ||||||
|
Average
Investment in
Impaired Loans
|
Interest Income
Recognized
|
|||||||
|
(in thousands)
|
||||||||
|
Manufactured housing
|
$ | 8,374 | $ | 333 | ||||
|
Commercial real estate:
|
||||||||
|
Commercial real estate
|
17,552 | 315 | ||||||
|
SBA 504 1st
|
3,897 | 159 | ||||||
|
Land
|
- | - | ||||||
|
Construction
|
4,808 | 108 | ||||||
|
Commercial
|
5,540 | 292 | ||||||
|
SBA
|
1,800 | 176 | ||||||
|
Consumer
|
584 | 23 | ||||||
|
Total
|
$ | 42,555 | $ | 1,406 | ||||
|
Year Ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Nonaccrual loans
|
$ | 29,643 | $ | 42,343 | $ | 34,950 | ||||||
|
Guaranteed portion of loans included above
|
(7,218 | ) | (13,673 | ) | (22,279 | ) | ||||||
|
Nonaccrual loans, net
|
$ | 22,425 | $ | 28,670 | $ | 12,671 | ||||||
|
Troubled debt restructured loans
|
$ | 19,931 | $ | 17,885 | $ | 11,088 | ||||||
|
Loans 30 through 89 days past due with interest accruing
|
$ | 521 | $ | 3,114 | $ | 2,586 | ||||||
|
Interest income recognized on impaired loans
|
$ | 1,406 | $ | 1,643 | $ | 381 | ||||||
|
Interest foregone on nonaccrual loans and troubled debt restructured loans outstanding
|
$ | 2,692 | $ | 2,920 | $ | 2,344 | ||||||
|
Year Ended December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
(in thousands)
|
||||||||
|
Manufactured housing
|
$ | 7,542 | $ | 3,397 | ||||
|
Commercial real estate:
|
||||||||
|
Commercial real estate
|
10,615 | 12,716 | ||||||
|
SBA 504 1st
|
490 | 3,148 | ||||||
|
Land
|
- | - | ||||||
|
Construction
|
- | 4,746 | ||||||
|
Commercial
|
1,945 | 2,031 | ||||||
|
SBA
|
1,442 | 1,659 | ||||||
|
HELOC
|
269 | 29 | ||||||
|
Single family real estate
|
121 | 944 | ||||||
|
Consumer
|
1 | - | ||||||
|
Nonaccrual loans, net
|
$ | 22,425 | $ | 28,670 | ||||
|
Pass
|
Special Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
| (in thousands) | ||||||||||||||||||||
|
Manufactured housing
|
$ | 164,269 | $ | - | $ | 13,122 | $ | - | $ | 177,391 | ||||||||||
|
Commercial real estate:
|
||||||||||||||||||||
|
Commercial real estate
|
63,793 | 6,478 | 12,241 | - | 82,512 | |||||||||||||||
|
SBA 504 1st
|
31,385 | 1,461 | 1,656 | - | 34,502 | |||||||||||||||
|
Land
|
3,333 | 300 | 923 | - | 4,556 | |||||||||||||||
|
Construction
|
5,107 | - | - | - | 5,107 | |||||||||||||||
|
Commercial
|
27,015 | 997 | 4,413 | 71 | 32,496 | |||||||||||||||
|
SBA
|
16,302 | 1,514 | 2,504 | 54 | 20,374 | |||||||||||||||
|
HELOC
|
9,432 | 245 | 8,175 | - | 17,852 | |||||||||||||||
|
Single family real estate
|
9,622 | - | 317 | - | 9,939 | |||||||||||||||
|
Consumer
|
231 | - | 1 | - | 232 | |||||||||||||||
|
Total
|
$ | 330,489 | $ | 10,995 | $ | 43,352 | $ | 125 | $ | 384,961 | ||||||||||
|
SBA guarantee
|
- | - | 7,551 | 2,763 | 10,314 | |||||||||||||||
|
Total
|
$ | 330,489 | $ | 10,995 | $ | 50,903 | $ | 2,888 | $ | 395,275 | ||||||||||
|
Pass
|
Special Mention
|
Substandard
|
Doubtful
|
Total
|
||||||||||||||||
| (in thousands) | ||||||||||||||||||||
|
Manufactured housing
|
$ | 183,893 | $ | - | $ | 5,438 | $ | - | $ | 189,331 | ||||||||||
|
Commercial real estate:
|
||||||||||||||||||||
|
Commercial real estate
|
74,083 | 11,273 | 22,869 | - | 108,225 | |||||||||||||||
|
SBA 504 1st
|
28,699 | 349 | 8,278 | - | 37,326 | |||||||||||||||
|
Land
|
3,932 | 1,298 | - | - | 5,230 | |||||||||||||||
|
Construction
|
4,868 | - | 9,935 | 3,228 | 18,031 | |||||||||||||||
|
Commercial
|
29,360 | 3,578 | 7,756 | 1,364 | 42,058 | |||||||||||||||
|
SBA
|
19,510 | 397 | 2,470 | 34 | 22,411 | |||||||||||||||
|
HELOC
|
15,068 | 4,614 | 1,037 | - | 20,719 | |||||||||||||||
|
Single family real estate
|
10,718 | - | 1,061 | - | 11,779 | |||||||||||||||
|
Consumer
|
298 | - | 11 | 3 | 312 | |||||||||||||||
|
Total
|
$ | 370,429 | $ | 21,509 | $ | 58,855 | $ | 4,629 | $ | 455,422 | ||||||||||
|
SBA guarantee
|
- | - | 8,541 | 6,936 | 15,477 | |||||||||||||||
|
Total
|
$ | 370,429 | $ | 21,509 | $ | 67,396 | $ | 11,565 | $ | 470,899 | ||||||||||
|
Book
Balance
(thousands)
|
Effect on
Allowance
for Loan
Loss
(thousands)
|
Book
Balance of
Loans with
Rate
Reduction
(thousands)
|
Average
Rate
Reduction
(bps)
|
Book
Balance of
Loans with
Term
Extension
(thousands)
|
Average
Extension
(months)
|
|||||||||||||||||||
|
Manufactured Housing
|
$ | 5,224 | $ | 664 | $ | 277 | 315 | $ | 5,224 | 151 | ||||||||||||||
|
504 1
st
TD
|
489 | 5 | - | - | 489 | 228 | ||||||||||||||||||
|
RE Commercial
|
830 | 61 | - | - | 830 | 70 | ||||||||||||||||||
|
HELOC
|
203 | 36 | - | - | 203 | 30 | ||||||||||||||||||
|
Commercial
|
49 | 6 | - | - | 49 | 70 | ||||||||||||||||||
|
SBA
|
117 | 26 | - | - | 117 | 57 | ||||||||||||||||||
|
Single family real estate
|
80 | 11 | - | - | 80 | 180 | ||||||||||||||||||
|
Total
|
$ | 6,992 | $ | 809 | $ | 277 | 315 | $ | 6,992 | 145 | ||||||||||||||
|
Book
Balance
(thousands)
|
Effect on
Allowance for
Loan Loss
(thousands)
|
Number of
Loans
|
||||||||||
|
Manufactured Housing
|
$ | 202 | $ | 5 | 4 | |||||||
|
Total
|
$ | 202 | $ | 5 | 4 | |||||||
|
5.
|
FAIR VALUE MEASUREMENT
|
|
Fair value measurements at December 31, 2012 using
|
||||||||||||||||
|
Quoted prices in
active markets for
identical assets
|
Significant other
observable inputs
|
Significant
unobservable
inputs
|
||||||||||||||
|
Description
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Investment securities available-for-sale
|
$ | 12,004 | $ | - | $ | 12,004 | $ | - | ||||||||
|
Interest only strips (included in other assets)
|
426 | - | 426 | |||||||||||||
|
Servicing asset (included in other assets)
|
348 | 348 | ||||||||||||||
|
Total
|
$ | 12,778 | $ | - | $ | 12,004 | $ | 774 | ||||||||
|
Fair value measurements at December 31, 2011 using
|
||||||||||||||||
|
Quoted prices in
active markets for
identical assets
|
Significant other
observable inputs
|
Significant
unobservable
inputs
|
||||||||||||||
|
Description
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Investment securities available-for-sale
|
$ | 23,588 | $ | - | $ | 23,588 | $ | - | ||||||||
|
Interest only strips (included in other assets)
|
419 | - | - | 419 | ||||||||||||
|
Total
|
$ | 24,007 | $ | - | $ | 23,588 | $ | 419 | ||||||||
|
Fair value measurements at December 31, 2012 using
|
||||||||||||||||
|
Quoted prices in
active markets for
identical assets
|
Significant other
observable inputs
|
Significant
unobservable
inputs
|
||||||||||||||
|
Description
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Impaired loans
|
$ | 27,853 | $ | - | $ | 17,430 | $ | 10,423 | ||||||||
|
Loans held for sale
|
72,514 | - | 72,514 | |||||||||||||
|
Foreclosed real estate and repossessed assets
|
1,889 | - | 1,889 | |||||||||||||
|
Total
|
$ | 102,256 | $ | - | $ | 91,833 | $ | 10,423 | ||||||||
|
Fair value measurements at December 31, 2011 using
|
||||||||||||||||
|
Quoted prices in
active markets for
identical assets
|
Significant other
observable inputs
|
Significant
unobservable
inputs
|
||||||||||||||
|
Description
|
Total
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Impaired loans
|
$ | 39,656 | $ | - | $ | 23,490 | $ | 16,166 | ||||||||
|
Loans held for sale
|
79,545 | - | 79,545 | - | ||||||||||||
|
Foreclosed real estate and repossessed assets
|
6,701 | - | 6,701 | - | ||||||||||||
|
Total
|
$ | 125,902 | $ | - | $ | 109,736 | $ | 16,166 | ||||||||
|
6.
|
PREMISES AND EQUIPMENT
|
|
December 31,
|
||||||||
|
2012
|
2011
|
|||||||
|
(in thousands)
|
||||||||
|
Furniture, fixtures and equipment
|
$ | 8,311 | $ | 8,242 | ||||
|
Building and land
|
1,408 | 1,407 | ||||||
|
Leasehold improvements
|
2,591 | 2,546 | ||||||
| 12,310 | 12,195 | |||||||
|
Less: accumulated depreciation and amortization
|
(9,242 | ) | (9,105 | ) | ||||
|
Premises and equipment, net
|
$ | 3,068 | $ | 3,090 | ||||
|
(in thousands)
|
||||
|
2013
|
$ | 916 | ||
|
2014
|
813 | |||
|
2015
|
711 | |||
|
2016
|
642 | |||
|
2017
|
170 | |||
|
Thereafter
|
- | |||
|
Total
|
$ | 3,252 | ||
|
December 31,
|
||||||||||||||||
|
2012
|
2011
|
|||||||||||||||
|
Balance
|
Interest
Expense
|
Balance
|
Interest
Expense
|
|||||||||||||
|
(dollars in thousands)
|
||||||||||||||||
|
Noninterest bearing deposits
|
$ | 53,605 | $ | - | $ | 49,894 | $ | - | ||||||||
|
Interest bearing deposits:
|
||||||||||||||||
|
NOW accounts
|
20,120 | 73 | 23,401 | 281 | ||||||||||||
|
Money market deposit accounts
|
249,346 | 1,766 | 266,395 | 2,613 | ||||||||||||
|
Savings deposits
|
16,351 | 325 | 19,429 | 389 | ||||||||||||
|
Time certificates of $100,000 or more
|
80,710 | 1,609 | 113,336 | 2,123 | ||||||||||||
|
Other time deposits
|
14,088 | 357 | 38,807 | 545 | ||||||||||||
|
Total deposits
|
$ | 434,220 | $ | 4,130 | $ | 511,262 | $ | 5,951 | ||||||||
|
(in thousands)
|
||||
|
2013
|
47,905 | |||
|
2014
|
17,340 | |||
|
2015
|
18,322 | |||
|
2016
|
7,755 | |||
|
2017
|
3,476 | |||
|
Total
|
$ | 94,798 | ||
|
8.
|
BORROWINGS
|
|
December 31, 2012
|
||||||||
|
Amount
|
Interest
Rates
|
|||||||
|
(dollars in thousands)
|
||||||||
|
Due within one year
|
$ | 4,000 | 3.81 | % | ||||
|
After one year but within three years
|
30,000 | 2.68%-2.88 | % | |||||
|
Total
|
$ | 34,000 | - | |||||
|
December 31, 2011
|
||||||||
|
Amount
|
Interest
Rates
|
|||||||
|
(dollars in thousands)
|
||||||||
|
Due within one year
|
$ | 9,000 | 1.08%-1.85 | % | ||||
|
After one year but within three years
|
42,000 | 0.62%-3.81 | % | |||||
|
After three years but within five years
|
10,000 | 2.74%-2.75 | % | |||||
|
Total
|
$ | 61,000 | - | |||||
|
Financial information pertaining to advances from FHLB:
|
2012 | 2011 | ||||||
|
(dollars in thousands)
|
||||||||
|
Weighted average interest rate, end of the year
|
2.89 | % | 2.34 | % | ||||
|
Weighted average interest rate during the year
|
2.75 | % | 2.51 | % | ||||
|
Average balance of advances from FHLB
|
$ | 40,090 | $ | 63,299 | ||||
|
Maximum amount outstanding at any month end
|
$ | 61,000 | $ | 65,000 | ||||
|
Year Ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||
|
Net income (loss)
|
$ | 3,173 | $ | (10,485 | ) | $ | 2,091 | |||||
|
Less: Preferred stock dividends
|
1,046 | 1,047 | 1,047 | |||||||||
|
Net income (loss) applicable to common shareholders
|
$ | 2,127 | $ | (11,532 | ) | $ | 1,044 | |||||
|
Add: Debenture interest expense and costs, net of income taxes
|
$ | 430 | $ | - | $ | 176 | ||||||
|
Net income for diluted calculation of earnings (loss) per common share
|
$ | 2,557 | $ | (11,532 | ) | $ | 1,220 | |||||
|
Basic weighted average number of common shares outstanding
|
5,990 | 5,980 | 5,915 | |||||||||
|
Dilutive weighted average number of common shares outstanding
|
8,233 | 5,980 | 6,833 | |||||||||
|
Earnings (loss) per common share:
|
||||||||||||
|
Basic
|
$ | 0.36 | $ | (1.93 | ) | $ | 0.18 | |||||
|
Diluted
|
$ | 0.31 | $ | (1.93 | ) | $ | 0.18 | |||||
|
10.
|
STOCK-BASED COMPENSATION
|
|
|
Year Ended December 31,
|
|||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
Annual dividend yield
|
- | - | - | |||||||||
|
Expected volatility
|
69.0 | % | 63.1 | % | 61.4 | % | ||||||
|
Risk free interest rate
|
1.05 | % | 1.45 | % | 2.7 | % | ||||||
|
Expected life (in years)
|
5.8 | 6.4 | 6.3 | |||||||||
|
Year Ended December 31,
|
||||||||||||||||||||||||
|
2012
Option
Shares
|
2012
Weighted
Average
Exercise
Price
|
2011
Option
Shares
|
2011
Weighted
Average
Exercise
Price
|
2010
Option
Shares
|
2010
Weighted
Average
Exercise
Price
|
|||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||||||
|
Total options as of January 1,
|
377 | $ | 6.76 | 429 | $ | 7.15 | 460 | $ | 7.29 | |||||||||||||||
|
Granted
|
147 | 2.92 | 72 | 2.22 | 24 | 3.33 | ||||||||||||||||||
|
Canceled
|
(72 | ) | 7.68 | (117 | ) | 5.61 | (55 | ) | 6.69 | |||||||||||||||
|
Exercised
|
(5 | ) | 3.25 | (7 | ) | 3.38 | - | - | ||||||||||||||||
|
Total options at December 31,
|
447 | $ | 5.38 | 377 | $ | 6.76 | 429 | $ | 7.15 | |||||||||||||||
|
Total vested options as of December 31,
|
278 | $ | 7.00 | 275 | $ | 8.04 | 338 | $ | 7.50 | |||||||||||||||
|
|
Year Ended December 31,
|
|||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||
|
Intrinsic value of options exercised
|
$ | - | $ | 3 | $ | - | ||||||
|
Cash received from the exercise of options
|
16 | 25 | - | |||||||||
|
Weighted-average grant-date fair value of options
|
1.97 | 1.76 | - | |||||||||
|
Unvested Stock Option Shares
|
Number of
Option Shares
|
Weighted-
Average
Grant-Date
Fair Value
|
||||||
|
( in thousands, except per share data)
|
||||||||
|
Unvested stock options at January 1, 2012
|
102 | $ | 1.53 | |||||
|
Granted
|
147 | 1.77 | ||||||
|
Vested
|
(66 | ) | 1.89 | |||||
|
Forfeited
|
(14 | ) | 2.19 | |||||
|
Total unvested stock options at December 31, 2012
|
169 | $ | 1.55 | |||||
|
11.
|
STOCKHOLDERS’ EQUITY
|
|
Year Ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
(in thousands)
|
||||||||||||
|
Current:
|
||||||||||||
|
Federal
|
$ | (98 | ) | $ | (1,545 | ) | $ | 1,873 | ||||
|
State
|
- | (3 | ) | 665 | ||||||||
| (98 | ) | (1,548 | ) | 2,538 | ||||||||
|
Deferred:
|
||||||||||||
|
Federal
|
1,072 | (372 | ) | (792 | ) | |||||||
|
State
|
347 | (689 | ) | (279 | ) | |||||||
| 1,419 | (1,061 | ) | (1,071 | ) | ||||||||
|
(Decrease) increase in deferred tax asset valuation allowance
|
(1,321 | ) | 6,686 | - | ||||||||
|
Total provision for income taxes
|
$ | - | $ | 4,077 | $ | 1,467 | ||||||
|
Year Ended December 31,
|
||||||||||||
|
2012
|
2011
|
2010
|
||||||||||
|
Federal income tax at statutory rate
|
34.0 | % | (34.0 | %) | 34.0 | % | ||||||
|
State franchise tax, net of federal benefit
|
7.2 | (7.2 | ) | 7.2 | ||||||||
|
Other
|
- | 0.5 | - | |||||||||
|
(Benefit) provision related to deferred tax asset valuation allowance
|
(41.2 | ) | 104.3 | - | ||||||||
| 0.0 | % | 63.6 | % | 41.2 | % | |||||||
|
2012
|
2011
|
|||||||
|
Deferred tax assets:
|
(in thousands)
|
|||||||
|
Allowance for loan losses
|
$ | 5,681 | $ | 6,736 | ||||
|
State net operating loss
|
595 | 564 | ||||||
|
Other
|
510 | 1,081 | ||||||
| 6,786 | 8,381 | |||||||
|
Deferred tax liabilities:
|
||||||||
|
Deferred state taxes
|
(691 | ) | (808 | ) | ||||
|
Depreciation
|
(145 | ) | (139 | ) | ||||
|
Other
|
(377 | ) | (442 | ) | ||||
| (1,213 | ) | (1,389 | ) | |||||
|
Net deferred taxes before allowance
|
5,573 | 6,992 | ||||||
|
Valuation allowance for deferred tax asset
|
(5,365 | ) | (6,686 | ) | ||||
|
Net deferred taxes
|
$ | 208 | $ | 306 | ||||
|
13.
|
EMPLOYEE BENEFIT PLAN
|
|
14.
|
FAIR VALUES OF FINANCIAL INSTRUMENTS
|
|
December 31,
|
||||||||||||||||
|
2012
|
2011
|
|||||||||||||||
|
Carrying
Amount
|
Estimated
Fair Value
|
Carrying
Amount
|
Estimated
Fair Value
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Assets:
|
||||||||||||||||
|
Cash and cash equivalents
|
$ | 27,891 | $ | 27,891 | $ | 22,679 | $ | 22,679 | ||||||||
|
Time deposits in other financial institutions
|
3,653 | 3,653 | 240 | 240 | ||||||||||||
|
Federal Reserve and Federal Home Loan Bank stock
|
4,656 | 4,656 | 5,557 | 5,557 | ||||||||||||
|
Investment securities
|
24,040 | 24,769 | 38,923 | 39,655 | ||||||||||||
|
Loans
|
449,201 | 467,622 | 532,716 | 512,524 | ||||||||||||
|
Liabilities:
|
||||||||||||||||
|
Deposits (other than time deposits)
|
339,422 | 339,422 | 359,119 | 359,119 | ||||||||||||
|
Time deposits
|
94,798 | 96,404 | 152,143 | 154,484 | ||||||||||||
|
Other borrowings
|
41,852 | 43,238 | 68,852 | 70,975 | ||||||||||||
|
15.
|
REGULATORY MATTERS
|
|
|
·
|
Closed remaining out-of-state (CO, OR, UT and WA) SBA lending operations in February 2012;
|
|
|
·
|
Sold $10.1 million of guaranteed SBA loans in March 2012, generating a net gain of $973,000 and $2.5 million of guaranteed USDA loans in September 2012, generating a net gain of $277,000;
|
|
|
·
|
Prepaid $5 million of FHLB advances in March 2012 and another $17 million in April 2012;
|
|
|
·
|
Sold $4 million of investment securities in March 2012 at a net gain of $121,000; and
|
|
|
·
|
Sold $9.0 million in REO and repossessed assets in 2012.
|
|
|
·
|
Take appropriate steps to fully utilize the Company’s financial and managerial resources to serve as a source of strength to the Bank, including taking steps to ensure the Bank’s compliance with the OCC Agreement and any other supervisory action taken by the Bank’s federal and state regulators;
|
|
|
·
|
Refrain from declaring or paying dividends absent prior regulatory approval;
|
|
|
·
|
Refrain from taking dividends or any form of payment from the Bank representing a reduction in the Bank’s capital absent prior regulatory approval;
|
|
|
·
|
Refrain from incurring, increasing or guaranteeing any debt or repurchasing or redeeming any shares of its stock absent prior regulatory approval;
|
|
|
·
|
Develop and submit for regulatory approval a written capital plan to maintain sufficient capital on a consolidated basis, which capital plan should, at a minimum, address, consider and include current and future capital requirements on a consolidated basis and compliance with federal regulations and guidelines; the adequacy of the Bank’s capital, the sources and timing of funds necessary to fulfill future capital requirements; and the requirements of federal law that the Company serve as a source of strength to the Bank. The FRB accepted the capital plan on July 10, 2012;
|
|
|
·
|
Develop and submit for regulatory approval a cash flow projection of the Company’s planned sources and uses of cash for debt service, operating expenses and other purposes. The FRB accepted the cash flow projection on July 10, 2012;
|
|
|
·
|
Comply with appropriate regulatory notice and approval requirements when appointing any new directors or senior executive officers or changing the responsibilities of any senior executive officer and comply with the limitations on indemnification and severance payments set forth in Section 18(k) of the Federal Deposit Insurance Act (12 USC 1828(i)) and Part 359 of the FDIC’s implementing regulations; and
|
|
|
·
|
Furnish written progress reports to the FRB detailing the form and manner of any actions taken to secure compliance with the Regulatory Agreement.
|
|
Total
Capital
|
Tier 1
Capital
|
Risk-
Weighted
Assets
|
Adjusted
Average
Assets
|
Total
Risk-
Based
Capital
Ratio
|
Tier 1
Risk-
Based
Capital
Ratio
|
Tier 1
Leverage
Ratio
|
||||||||||||||||||||||
|
(dollars in thousands)
|
||||||||||||||||||||||||||||
|
December 31, 2012
|
||||||||||||||||||||||||||||
|
CWBC (Consolidated)
|
$ | 66,076 | $ | 52,941 | $ | 413,378 | $ | 544,778 | 15.98 | % | 12.81 | % | 9.72 | % | ||||||||||||||
|
Capital in excess of well capitalized
|
$ | 24,738 | $ | 28,138 | $ | 25,702 | ||||||||||||||||||||||
|
CWB
|
$ | 63,089 | $ | 57,808 | $ | 413,199 | $ | 540,985 | 15.27 | % | 13.99 | % | 10.69 | % | ||||||||||||||
|
Capital in excess of well capitalized
|
$ | 21,769 | $ | 33,016 | $ | 30,759 | ||||||||||||||||||||||
|
December 31, 2011
|
||||||||||||||||||||||||||||
|
CWBC (Consolidated)
|
$ | 64,647 | $ | 50,423 | $ | 500,462 | $ | 637,752 | 12.92 | % | 10.08 | % | 7.91 | % | ||||||||||||||
|
Capital in excess of well capitalized
|
$ | 14,601 | $ | 20,395 | $ | 18,535 | ||||||||||||||||||||||
|
CWB
|
$ | 59,018 | $ | 52,650 | $ | 500,173 | $ | 637,434 | 11.80 | % | 10.53 | % | 8.26 | % | ||||||||||||||
|
Capital in excess of well capitalized
|
$ | 9,001 | $ | 22,640 | $ | 20,778 | ||||||||||||||||||||||
|
Minimum capital ratios required for CWB by the OCC
|
12.00 | % | 9.00 | % | ||||||||||||||||||||||||
|
Well capitalized ratios
|
10.00 | % | 6.00 | % | 5.00 | % | ||||||||||||||||||||||
|
Minimum capital ratios
|
8.00 | % | 4.00 | % | 4.00 | % | ||||||||||||||||||||||
|
|
·
|
Tier 1 capital at least equal to nine percent (9.00%) of adjusted total assets, and
|
|
|
·
|
Total risk-based capital at least equal to twelve percent (12.00%) of risk weighted assets
|
|
16.
|
COMMITMENTS AND CONTINGENCIES
|
|
CWB
|
CWBC
|
Eliminations
|
Consolidated
|
|||||||||||||
|
Assets
|
(in thousands)
|
|||||||||||||||
|
Cash, due from banks and interest-earning deposits
|
$ | 27,895 | $ | 3,704 | $ | (55) a | $ | 31,544 | ||||||||
|
FHLB and FRB stock
|
4,656 | 4,656 | ||||||||||||||
|
Investments
|
24,040 | 24,040 | ||||||||||||||
|
Total loans
|
449,201 | 449,201 | ||||||||||||||
|
Foreclosed real estate and repossessed assets
|
1,889 | 1,889 | ||||||||||||||
|
Premises and equipment, net
|
3,068 | 3,068 | ||||||||||||||
|
Other assets
|
17,526 | 177 | 17,703 | |||||||||||||
|
Investment in subsidiary
|
- | 57,881 | (57,881) b | - | ||||||||||||
|
Total assets
|
$ | 528,275 | $ | 61,762 | $ | (57,936 | ) | $ | 532,101 | |||||||
|
Liabilities
|
||||||||||||||||
|
Deposits
|
$ | 434,275 | $ | - | $ | (55) a | $ | 434,220 | ||||||||
|
Other borrowings
|
34,000 | 7,852 | 41,852 | |||||||||||||
|
Other liabilities
|
2,084 | 896 | 2,980 | |||||||||||||
|
Total liabilities
|
470,359 | 8,748 | (55 | ) | 479,052 | |||||||||||
|
Stockholders’ equity
|
||||||||||||||||
|
Preferred Stock
|
- | 15,341 | 15,341 | |||||||||||||
|
Common Stock
|
45,769 | 33,555 | (45,769) b | 33,555 | ||||||||||||
|
Accumulated other comprehensive income
|
35 | - | 35 | |||||||||||||
|
Retained earnings
|
12,112 | 4,118 | (12,112) b | 4,118 | ||||||||||||
|
Total stockholders’ equity
|
57,916 | 53,014 | (57,881 | ) | 53,049 | |||||||||||
|
Total liabilities and stockholders’ equity
|
$ | 528,275 | $ | 61,762 | $ | (57,936 | ) | $ | 532,101 | |||||||
|
CWB
|
CWBC
|
Eliminations
|
Consolidated
|
|||||||||||||
|
(in thousands)
|
||||||||||||||||
|
Interest income
|
$ | 31,302 | $ | 15 | $ | (8) c | $ | 31,309 | ||||||||
|
Interest Expense
|
5,240 | 717 | (8) c | 5,949 | ||||||||||||
|
Net interest income
|
26,062 | (702 | ) | - | 25,360 | |||||||||||
|
Provision for loan losses
|
4,281 | - | - | 4,281 | ||||||||||||
|
Net Interest Income after provision for loan losses
|
21,781 | (702 | ) | - | 21,079 | |||||||||||
|
Equity in undistributed subsidiary net income
|
- | 4,168 | (4,168) d | - | ||||||||||||
|
Non- interest income
|
4,219 | - | 4,219 | |||||||||||||
|
Non-interest expenses
|
21,832 | 293 | - | 22,125 | ||||||||||||
|
Loss before income taxes
|
4,168 | 3,173 | (4,168 | ) | 3,173 | |||||||||||
|
Provision (benefit) for income taxes
|
- | - | - | - | ||||||||||||
|
Net income
|
$ | 4,168 | $ | 3,173 | $ | (4,168 | ) | $ | 3,173 | |||||||
|
18.
|
COMMUNITY WEST BANCSHARES FINANCIAL STATEMENTS (PARENT COMPANY ONLY)
|
|
December 31,
|
||||||||
|
Balance Sheets
|
2012
|
2011
|
||||||
|
Assets
|
(in thousands)
|
|||||||
|
Cash and equivalents
|
$ | 3,704 | $ | 5,411 | ||||
|
Investment in subsidiary
|
57,881 | 52,713 | ||||||
|
Other assets
|
177 | 492 | ||||||
|
Total assets
|
$ | 61,762 | $ | 58,616 | ||||
|
Liabilities and stockholders’ equity
|
||||||||
|
Convertible debentures
|
$ | 7,852 | $ | 7,852 | ||||
|
Other liabilities
|
896 | 277 | ||||||
|
Total liabilities
|
8,748 | 8,129 | ||||||
|
Preferred stock
|
15,341 | 15,074 | ||||||
|
Common stock
|
33,555 | 33,422 | ||||||
|
Retained earnings
|
4,118 | 1,991 | ||||||
|
Total stockholders’ equity
|
53,014 | 50,487 | ||||||
|
Total liabilities and stockholders' equity
|
$ | 61,762 | $ | 58,616 | ||||
|
Year Ended December 31,
|
||||||||||||
|
Statement of Operations
|
2012
|
2011
|
2010
|
|||||||||
|
(in thousands)
|
||||||||||||
|
Total income
|
$ | 15 | $ | 64 | $ | 40 | ||||||
|
Total expense
|
1,010 | 1,105 | 812 | |||||||||
|
Equity in undistributed subsidiaries: Net income (loss) from subsidiaries
|
4,168 | (9,859 | ) | 2,553 | ||||||||
|
Income (loss) before income tax provision
|
3,173 | (10,900 | ) | 1,781 | ||||||||
|
Benefit for income taxes
|
- | (415 | ) | (310 | ) | |||||||
|
Net income (loss)
|
$ | 3,173 | $ | (10,485 | ) | $ | 2,091 | |||||
|
Dividends and accretion on preferred stock
|
1,046 | 1,047 | 1,047 | |||||||||
|
Net income (loss) applicable to common stockholders
|
$ | 2,127 | $ | (11,532 | ) | $ | 1,044 | |||||
|
Year Ended December 31,
|
||||||||||||
|
Statements of Cash Flows
|
2012
|
2011
|
2010
|
|||||||||
|
(in thousands)
|
||||||||||||
|
Cash flows from operating activities:
|
||||||||||||
|
Net income (loss)
|
$ | 3,173 | $ | (10,485 | ) | $ | 2,091 | |||||
| Adjustments to reconcile net income to cash used in operating activities: | ||||||||||||
|
Equity in undistributed (income) loss from subsidiaries
|
(4,168 | ) | 9,859 | (2,553 | ) | |||||||
|
Stock-based compensation
|
117 | 33 | 19 | |||||||||
|
Net change in other liabilities
|
35 | (124 | ) | 233 | ||||||||
|
Net change in other assets
|
315 | (16 | ) | (473 | ) | |||||||
|
Net cash (used in) provided by operating activities
|
(528 | ) | (733 | ) | (683 | ) | ||||||
|
Cash flows from investing activities:
|
||||||||||||
|
Investments in subsidiaries
|
(1,000 | ) | - | (700 | ) | |||||||
|
Net cash used in investing activities
|
(1,000 | ) | - | (700 | ) | |||||||
|
Cash flows from financing activities:
|
||||||||||||
|
Preferred stock dividend
|
(262 | ) | (1,047 | ) | (1,047 | ) | ||||||
|
Accretion of discount on preferred stock
|
67 | 267 | 267 | |||||||||
|
Proceeds from issuance of convertible debentures
|
- | - | 8,085 | |||||||||
|
Proceeds from issuance of common stock
|
16 | 25 | - | |||||||||
|
Net cash provided by (used in) financing activities
|
(179 | ) | (755 | ) | 7,305 | |||||||
|
Net increase (decrease) in cash and cash equivalents
|
(1,707 | ) | (1,488 | ) | 5,922 | |||||||
|
Cash and cash equivalents at beginning of year
|
5,411 | 6,899 | 977 | |||||||||
|
Cash and cash equivalents, at end of year
|
$ | 3,704 | $ | 5,411 | $ | 6,899 | ||||||
|
19.
|
QUARTERLY FINANCIAL DATA (unaudited)
|
|
Year Ended December 31, 2012
|
||||||||||||||||||||
| Q4 | Q3 | Q2 | Q1 |
Totals
|
||||||||||||||||
|
(in thousands, except share data)
|
||||||||||||||||||||
|
Interest income
|
$ | 7,442 | $ | 7,512 | $ | 8,034 | $ | 8,321 | $ | 31,309 | ||||||||||
|
Interest expense
|
1,276 | 1,403 | 1,477 | 1,793 | 5,949 | |||||||||||||||
|
Net interest income
|
6,166 | 6,109 | 6,557 | 6,528 | 25,360 | |||||||||||||||
|
Provision for loan losses
|
(895 | ) | 1,293 | 1,900 | 1,983 | 4,281 | ||||||||||||||
|
Net interest income after provision for loan losses
|
7,061 | 4,816 | 4,657 | 4,545 | 21,079 | |||||||||||||||
|
Gains from sale of available-for-sale securities
|
- | - | - | 121 | 121 | |||||||||||||||
|
Non-interest income
|
761 | 1,057 | 513 | 1,767 | 4,098 | |||||||||||||||
|
Non-interest expenses
|
5,490 | 5,260 | 5,761 | 5,614 | 22,125 | |||||||||||||||
|
Income (loss) before income taxes
|
2,332 | 613 | (591 | ) | 819 | 3,173 | ||||||||||||||
|
Provision (benefit) for income taxes
|
- | - | - | - | - | |||||||||||||||
|
NET INCOME (LOSS)
|
2,332 | 613 | (591 | ) | 819 | 3,173 | ||||||||||||||
|
Dividends and accretion on preferred stock
|
263 | 253 | 268 | 262 | 1,046 | |||||||||||||||
|
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS
|
$ | 2,069 | $ | 360 | $ | (859 | ) | $ | 557 | $ | 2,127 | |||||||||
|
Earnings (loss) per common share:
|
||||||||||||||||||||
|
Basic
|
$ | 0.35 | $ | 0.06 | $ | (0.14 | ) | $ | 0.09 | $ | 0.36 | |||||||||
|
Diluted
|
$ | 0.26 | $ | 0.06 | $ | (0.14 | ) | $ | 0.08 | $ | 0.31 | |||||||||
|
Cash dividends per common share
|
- | - | - | - | - | |||||||||||||||
|
Weighted average common shares:
|
||||||||||||||||||||
|
Basic
|
5,990 | 5,990 | 5,990 | 5,990 | 5,990 | |||||||||||||||
|
Diluted
|
8,237 | 8,233 | 5,990 | 8,233 | 8,233 | |||||||||||||||
|
Year Ended December 31, 2011
|
||||||||||||||||||||
| Q4 | Q3 | Q2 | Q1 |
Totals
|
||||||||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||||
|
Interest income
|
$ | 9,278 | $ | 8,768 | $ | 9,136 | $ | 9,330 | $ | 36,512 | ||||||||||
|
Interest expense
|
1,950 | 1,989 | 2,050 | 2,261 | 8,250 | |||||||||||||||
|
Net interest income
|
7,328 | 6,779 | 7,086 | 7,069 | 28,262 | |||||||||||||||
|
Provision for loan losses
|
5,940 | 4,511 | 3,157 | 983 | 14,591 | |||||||||||||||
|
Net interest income after provision for loan losses
|
1,388 | 2,268 | 3,929 | 6,086 | 13,671 | |||||||||||||||
|
Non-interest income
|
790 | 801 | 815 | 738 | 3,144 | |||||||||||||||
|
Non-interest expenses
|
5,314 | 6,985 | 5,115 | 5,809 | 23,223 | |||||||||||||||
|
Income (loss) before income taxes
|
(3,136 | ) | (3,916 | ) | (371 | ) | 1,015 | (6,408 | ) | |||||||||||
|
Provision (benefit) for income taxes
|
5,417 | (1,609 | ) | (151 | ) | 420 | 4,077 | |||||||||||||
|
NET INCOME (LOSS)
|
(8,553 | ) | (2,307 | ) | (220 | ) | 595 | (10,485 | ) | |||||||||||
|
Dividends and accretion on preferred stock
|
262 | 261 | 262 | 262 | 1,047 | |||||||||||||||
|
NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS
|
$ | (8,815 | ) | $ | (2,568 | ) | $ | (482 | ) | $ | 333 | $ | (11,532 | ) | ||||||
|
Earnings (loss) per common share:
|
||||||||||||||||||||
|
Basic
|
$ | (1.47 | ) | $ | (0.43 | ) | $ | (0.08 | ) | $ | 0.06 | $ | (1.93 | ) | ||||||
|
Diluted
|
$ | (1.47 | ) | $ | (0.43 | ) | $ | (0.08 | ) | $ | 0.05 | $ | (1.93 | ) | ||||||
|
Cash dividends per common share
|
- | - | - | - | - | |||||||||||||||
|
Weighted average common shares:
|
||||||||||||||||||||
|
Basic
|
5,990 | 5,988 | 5,982 | 5,960 | 5,980 | |||||||||||||||
|
Diluted
|
5,990 | 5,988 | 5,982 | 8,245 | 5,980 | |||||||||||||||
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
|
ITEM 9A
.
|
CONTROLS AND PROCEDURES
|
|
ITEM 9B.
|
OTHER INFORMATION
|
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
|
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
|
Report of Independent Registered Public Accounting Firm
|
F-1
|
|
Consolidated Balance Sheets as of December 31, 2012 and 2011
|
F-2
|
|
Consolidated Statements of Operations for each of the three years in the period ended December 31, 2012
|
F-3
|
|
Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 2012
|
F-4
|
|
Consolidated Statements of Stockholders' Equity for each of the three years in the period ended December 31, 2012
|
F-5
|
|
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2012
|
F-6
|
|
Notes to Consolidated Financial Statements
|
F-7
|
|
3.1
|
Articles of Incorporation (3)
|
|
3.2
|
Amended and Restated Articles of Incorporation (11)
|
|
3.3
|
Second Amended and Restated Articles of Incorporation (14)
|
|
3.4
|
Bylaws (3)
|
|
3.5
|
Certificate of Amendment of Bylaws (11)
|
|
3.6
|
Certificate of Determination of Fixed Rate Cumulative Perpetual Preferred Stock, Series A (11)
|
|
4.1
|
Common Stock Certificate (2)
|
|
4.2
|
Warrant to Purchase 521,158 shares of Common Stock, dated December 19, 2008, issued to the United States Department of the Treasury (12)
|
|
4.3
|
Form of Debenture (13)
|
|
4.4
|
Form of Subscription Certificate (13)
|
|
10.1*
|
1997 Stock Option Plan and Form of Stock Option Agreement (1)
|
|
10.3*
|
Salary Continuation Agreement between Goleta National Bank and Llewellyn Stone,
President and CEO (3)
|
|
10.9
|
Indemnification Agreement between the Company and Lynda Nahra, dated December 20, 2001 (4)
|
|
10.17
|
Indemnification Agreement between the Company and Charles G. Baltuskonis, dated March 18, 2003 (5)
|
|
10.21
|
Assistant Secretary’s Certificate of Adoption of Amendment No. 1 to Community West Bancshares 1997 Stock Option Plan (6)
|
|
10.22*
|
Community West Bancshares 2006 Stock Option Plan (7)
|
|
10.23*
|
Community West Bancshares 2006 Stock Option Plan form of Stock Option Agreement (7)
|
|
10.24*
|
Employment and Confidentiality Agreement date January 1, 2007 among Community West Bank, Community West Bancshares and Lynda J. Nahra (8)
|
|
10.25*
|
Employment and Confidentiality Agreement date July 1, 2007 among Community West Bank, Community West Bancshares and Charles G. Baltuskonis (9)
|
|
10.27*
|
Employment and Confidentiality Agreement, dated September 5, 2008, among Community West Bank, Community West Bancshares and Richard M. Favor (10)
|
|
10.28
|
Letter Agreement, dated December 19, 2008, between Community West Bancshares and the United States Department of the Treasury, and the Securities Purchase Agreement - Standard Terms attached thereto and incorporated therein (12)
|
|
10.29
|
Letter Agreement, dated December 19, 2008, between Community West Bancshares and the United States Department of the Treasury regarding the Number of Director Positions (12)
|
|
10.30*
|
Agreement, dated December 19, 2008, between Community West Bancshares and Lynda Nahra regarding modifications to Benefit Plans (12)
|
|
10.31*
|
Agreement, dated December 19, 2008, between Community West Bancshares and Charles Baltuskonis regarding modifications to Benefit Plans (12)
|
|
10.32*
|
Agreement, dated December 19, 2008, between Community West Bancshares and Richard Favor regarding modifications to Benefit Plans (12)
|
|
10.33
|
Waiver of Lynda Nahra, dated December 19, 2008, waiving claims against Community West Bancshares and the United States Department of the Treasury as a result of modifications to Benefit Plans (12)
|
|
10.34
|
Waiver of Charles Baltuskonis, dated December 19, 2008, waiving claims against Community West Bancshares and the United States Department of the Treasury as a result of modifications to Benefit Plans (12)
|
|
10.35
|
Waiver of Richard Favor, dated December 19, 2008, waiving claims against Community West Bancshares and the United States Department of the Treasury as a result of modifications to Benefit Plans (12)
|
|
10.36*
|
Employment and Confidentiality Agreement, dated November 2, 2011, by and among Community West Bank, Community West Bancshares and Martin E. Plourd (15)
|
|
21
|
Subsidiaries of the Registrant (7)
|
|
Consent of Ernst & Young LLP **
|
|
Certification of the Chief Executive Officer **
|
|
Certification of the Chief Financial Officer **
|
|
Certification pursuant to 18 U.S.C. Section 1350 **
|
|
101.INS
|
XBRL Instance Document***
|
|
101.SCH
|
XBRL Schema Document***
|
|
101.CAL
|
XBRL Calculation Linkbase Document***
|
|
101.DEF
|
XBRL Definition Linkbase Document***
|
|
101.LAB
|
XBRL Label Linkbase Document***
|
|
101.PRE
|
XXBRL Presentation Linkbase Document***
|
|
(1)
|
Incorporated by reference from the Registrant's Registration Statement on Form S-8 filed with the Commission on December 31, 1997.
|
|
(2)
|
Incorporated by reference from the Registrant's Amendment to Registration Statement on Form 8-A filed with the Commission on March 12, 1998.
|
|
(3)
|
Incorporated by reference from the Registrant's Annual Report on Form 10-K filed with the Commission on March 26, 1998.
|
|
(4)
|
Incorporated by reference from the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2001 filed by the Registrant with the Commission on April 16, 2002.
|
|
(5)
|
Incorporated by reference from the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2002 filed with the Commission on March 31, 2003.
|
|
(6)
|
Incorporated by reference from the Registrant’s Registration Statement on Form S-8 (File No 333-129898) filed with the Commission on November 22, 2005.
|
|
(7)
|
Incorporated by reference from Registrant’s Annual Report on Form 10-K for the year ended December 31, 2006 filed with the Commission on March 26, 2007.
|
|
(8)
|
Incorporated by reference from the Registrant’s Form 8-K filed with the Commission on February 28, 2007
|
|
(9)
|
Incorporated by reference from the Registrant’s Form 8-K filed with the Commission on July 2, 2007
|
|
(10)
|
Incorporated by reference from Registrant’s Form 8-K filed with the Commission on September 10, 2008
|
|
(11)
|
Incorporated by reference from the Registrant’s Form 8-K filed with the Commission on December 18, 2008
|
|
(12)
|
Incorporated by reference from the Registrant’s Form 8-K filed with the Commission on December 24, 2008
|
|
(13)
|
Incorporated by reference from the Registrant's Amendment No. 2 to Registration Statement on Form S-1 filed with the Commission on April 30, 2010.
|
|
(14)
|
Incorporated by reference from the Registrant's Form 8-K filed with the Commission on June 6, 2011.
|
|
(15)
|
Incorporated by reference from the Registrant's Form 8-K filed with the Commission on November 3, 2011.
|
|
*
|
Indicates a management contract or compensatory plan or arrangement.
|
|
**
|
Filed herewith.
|
|
***
|
Furnished herewith.
|
| COMMUNITY WEST BANCSHARES | ||
| (Registrant) | ||
|
Date: March 29, 2013
|
By: |
/s/ William R. Peeples
|
|
William R. Peeples
|
||
|
Chairman of the Board
|
||
|
Signature
|
Title
|
Date
|
||
|
/s/ William R. Peeples
|
Director and Chairman of the Board
|
March 29, 2013
|
||
|
William R. Peeples
|
||||
|
/s/ Martin E. Plourd
|
President and Chief Executive Officer
|
March 29, 2013
|
||
|
Martin E. Plourd
|
(Principal Executive Officer)
|
|||
|
/s/ Charles G. Baltuskonis
|
Executive Vice President and
|
March 29, 2013
|
||
|
Charles G. Baltuskonis
|
Chief Financial Officer
|
|||
|
(Principal Financial and Accounting Officer)
|
||||
|
/s/ Robert H. Bartlein
|
Director
|
March 29, 2013
|
||
|
Robert H. Bartlein
|
||||
|
/s/ Jean W. Blois
|
Director
|
March 29, 2013
|
||
|
Jean W. Blois
|
||||
|
/s/ John D. Illgen
|
Director and Secretary of the Board
|
March 29, 2013
|
||
|
John D. Illgen
|
||||
|
/s/ Eric Onnen
|
Director
|
March 29, 2013
|
||
|
Eric Onnen
|
||||
|
/s/ Moharram Shereef
|
Director
|
March 29, 2013
|
||
|
Moharram Shereef
|
||||
|
/s/ James R. Sims Jr.
|
Director
|
March 29, 2013
|
||
|
James R. Sims Jr.
|
||||
|
/s/ Kirk B. Stovesand
|
Director
|
March 29, 2013
|
||
|
Kirk B. Stovesand
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
| FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
|---|
| DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
|---|
No information found
No Customers Found
No Suppliers Found
Price
Yield
| Owner | Position | Direct Shares | Indirect Shares |
|---|