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CW

Community West Bancshares (CWBC)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered sequential improvement: net income rose to $8.293M and diluted EPS to $0.44, with net interest margin expanding to 4.04% and cost of total deposits declining to 1.45% .
  • Versus S&P Global consensus, EPS was a small miss at $0.45 vs $0.464 (−3.0%); revenue modestly beat at $34.834M vs $34.737M (+0.3%)*.
  • Capital remained strong (Tier 1 leverage 9.36%, CET1 11.39%, TRBC 13.82%) and the $0.12 dividend was maintained (declared April 16; payable May 16) .
  • Management emphasized merger integration momentum, deposit stability, and technology investments; noted macro volatility tied to “shifting tariff policies,” but expressed confidence in continued progress .

What Went Well and What Went Wrong

What Went Well

  • EPS improved sequentially to $0.44 and net income to $8.293M; net interest margin rose to 4.04% and total deposit costs fell to 1.45% .
  • Loan growth and deposit stability supported results, with average loans up sequentially and non-interest income rising to $2.611M; CFO: “another quarter of solid financial performance… well-positioned to continue building on this momentum” .
  • Capital ratios and liquidity remained robust (Total risk-based capital 13.82%; liquidity sources ~$1.283B) .

What Went Wrong

  • Non-interest expense ticked up q/q by $282K, driven by salaries/benefits, professional services, and IT; management cited payroll resets, severance, audit/consulting, and digital product investments .
  • Mix shift toward interest-bearing deposits persisted vs prior year (avg non-interest bearing deposits 34.30% vs 45.30% YoY), pressuring funding costs despite sequential improvement .
  • EPS came in slightly below S&P Global consensus ($0.45 vs $0.464); some lingering merger-related non-core costs remained (non-GAAP EPS $0.45 vs GAAP $0.44)* .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Net Income ($USD Millions)$3.385 $6.895 $8.293
Diluted EPS (GAAP, $)$0.18 $0.36 $0.44
Net Interest Margin (%)3.69% 3.95% 4.04%
Cost of Total Deposits (%)1.69% 1.49% 1.45%
Net Interest Income ($USD Millions)$30.214 $32.024 $32.182
Non-Interest Income ($USD Millions)$1.105 $2.303 $2.611
Non-Interest Expense ($USD Millions)$27.677 $23.188 $23.470
Provision for Credit Losses ($USD Millions)$(0.518) $1.224 $(0.041)
ROAA (%)0.38% 0.78% 0.94%
ROAE (%)3.84% 7.55% 8.97%

Q1 2025 vs Estimates (S&P Global):

MetricConsensusActualSurprise
Primary EPS ($)0.464*0.45*−3.0%*
Revenue ($USD Millions)34.737*34.834*+0.3%*
# EPS Estimates5*——
# Revenue Estimates4*——
Target Price ($)24.0*——
# Target Price Estimates3*——
Values retrieved from S&P Global.*

Loan Portfolio Composition

Loan Type ($USD Millions)Dec 31, 2024 AmountDec 31, 2024 %Mar 31, 2025 AmountMar 31, 2025 %
Commercial & Industrial$143.422 6.1% $146.736 6.2%
Agricultural Production$37.323 1.6% $28.045 1.2%
Construction & Land$67.869 2.9% $71.075 3.0%
CRE – Owner Occupied$323.188 13.8% $325.838 13.9%
CRE – Non-Owner Occupied$913.165 39.1% $923.589 39.3%
Farmland$139.815 6.0% $137.587 5.9%
Multifamily$133.595 5.7% $143.524 6.1%
1–4 Family (Closed-End)$123.445 5.3% $121.751 5.2%
1–4 Family (Revolving)$35.421 1.5% $32.477 1.4%
Manufactured Housing$322.263 13.8% $319.211 13.6%
Other Installment$92.839 4.0% $95.180 4.1%
Total Gross Loans$2,334.221 100.0% $2,346.897 100.0%

Deposit Mix

Deposits ($USD Millions)Dec 31, 2024 AmountDec 31, 2024 %Mar 31, 2025 AmountMar 31, 2025 %
NOW$470.548 16.2% $422.834 14.4%
MMA$843.145 29.0% $865.973 29.6%
Time Deposits$443.284 15.2% $453.460 15.5%
Savings$172.976 5.9% $174.123 5.9%
Total Interest-Bearing$1,929.953 66.3% $1,916.390 65.4%
Non-Interest Bearing$980.824 33.7% $1,012.548 34.6%
Total Deposits$2,910.777 100.0% $2,928.938 100.0%

Credit Quality KPIs

KPIQ3 2024Q4 2024Q1 2025
Non-Performing Assets ($USD Millions)$3.250 $6.461 $6.936
NPA / Total Assets (%)0.09% 0.18% 0.20%
Nonaccrual Loans ($USD Millions)$3.250 $6.461 $6.936
ACL / Total Loans (%)1.08% 1.11% 1.11%
Net Charge-Offs (Recoveries), $USD Thousands$(162) $59 $(125)
Net Charge-Offs (Annualized %)(0.03)% 0.01% (0.02)%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Dividend (Cash per Share)Q1 declaration (payable May 16, 2025)$0.12 (declared Jan 22; payable Feb 21, 2025) $0.12 (declared Apr 16; payable May 16, 2025) Maintained
Revenue, Margins, OpEx, Tax rate2025Not providedNot providedN/A

Earnings Call Themes & Trends

Note: No Q1 2025 earnings call transcript was available in the document set searched.

TopicPrevious Mentions (Q-2: Q3 2024)Previous Mentions (Q-1: Q4 2024)Current Period (Q1 2025)Trend
Net Interest MarginNIM 3.69%; funding costs elevated NIM up to 3.95%; improved deposit costs NIM 4.04%; further improvement Improving sequentially
Deposit Mix & CostCost of deposits 1.69%; non-interest DDA 37.16% Cost of deposits 1.49%; non-interest DDA 36.02% Cost of deposits 1.45%; non-interest DDA 34.30% Costs easing; DDA mix slightly lower YoY
Merger SynergiesHeightened costs during integration Core conversion complete; cost savings begin Continued momentum; earnings and NIM improved Integration benefits accruing
Technology Investments—Cost savings emerge post-integration IT spend increased to enhance digital products Investing for digital capabilities
Tariffs/Macro——“Capital market volatility driven by shifting tariff policies” Macro watch item introduced
Credit QualitySubstandard loans $39.637M Substandard loans $44.294M Substandard loans $47.605M; net recoveries in Q1 Slightly higher substandard; recoveries helpful

Management Commentary

  • CEO James J. Kim: “Backed by more than four decades of conservative business practices, deposit stability and enduring client relationships, the Company remains a safe and stable financial partner… Even amid capital market volatility driven by shifting tariff policies, our team’s unwavering focus on client success continues to define and differentiate us” .
  • CEO Kim on strategic progress: “We recently celebrated two major milestones: 45 years… and the one-year anniversary of the largest merger in the Company’s history” .
  • CFO Shannon Livingston: “The Company’s first-quarter results reflect sequential improvement in both earnings and net interest margin… well-positioned to continue building on this momentum” .
  • Prior quarter context: “Core system integration completion… allowed… cost savings strategies” .

Q&A Highlights

  • No Q1 2025 earnings call transcript was found; Q&A highlights and any guidance clarifications are unavailable based on the documents searched.

Estimates Context

  • EPS: Q1 2025 Primary EPS came in at $0.45 vs consensus $0.464 (−3.0% miss); note the company reported GAAP diluted EPS of $0.44 and non-GAAP comparable EPS of $0.45, which aligns with S&P’s “actual” .
  • Revenue: Q1 2025 revenue exceeded consensus by ~$0.10M ($34.834M actual vs $34.737M est, +0.3%)*.
  • Coverage: 5 EPS estimates, 4 revenue estimates; Target Price consensus $24 from 3 estimates*.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Sequential earnings and NIM expansion signal positive core trajectory; deposit costs continue to ease modestly, supporting margin resilience .
  • Mix shift toward interest-bearing deposits vs prior year warrants monitoring despite sequential improvement in cost of funds .
  • Credit metrics are stable-to-improving (net recoveries, ACL coverage at 1.11%), though substandard balances rose sequentially; watch asset quality in CRE and multifamily exposures .
  • Merger integration benefits are flowing through, with cost actions and scale supporting efficiency; continued IT investments should enhance digital capabilities longer-term .
  • Dividend maintained at $0.12 with strong capital ratios, reinforcing shareholder return and balance sheet strength .
  • Small EPS miss vs consensus offset by revenue beat; estimate models may adjust slightly around deposit mix, fee income cadence, and non-core expenses*.
  • Macro commentary on tariffs introduces a new watch item; funding competition and rate path remain key drivers of 2025 NIM and loan growth .

Non-GAAP Notes

  • Q1 2025 comparable diluted EPS was $0.45 vs GAAP $0.44, primarily excluding ~$285K merger/conversion-related costs and tax effects .
  • Comparable efficiency ratio improved to 66.64% vs 67.46% GAAP for Q1 2025 .