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Community West Bancshares Posts $8.6 Million Loss

Regulators issue a consent order to the parent company of Goleta-based Community West Bank

The parent company of Goleta-based Community West Bank reported an $8.6 million loss in the fourth quarter, and bank regulators have handed the bank a consent order.

Community West Bancshares said it was impacted by a $6.7 million valuation allowance against net deferred tax assets and a $5.9 million loan-loss provision. That provision was a $4.6 million higher than the year prior.

For the full year, Community West had a net loss of $10.5 million compared with net income of $2.1 million in 2010.

The bank is tasked with implementing a three-year plan to boost its total risk-based capital ratio to 12 percent as well as forming a management succession plan to fix the board’s “deficiencies.”

“The continuing high level of non-performing assets and related credit costs have adversely affected our operating results, leading us to conclude that recording a valuation allowance for the deferred tax asset was appropriate at this time,” CEO Martin Plourd said in a statement. “This is a timing, non-cash item, and can be recovered when the company achieves profits which offset the tax timing differences. Improving our asset quality through aggressive management of our problem assets remains the primary focus for Community West.” 

In the fourth quarter of 2010, Community West Bancshares reported a $1.1 million net income. Former CEO Lynda Nahra left the bank last year for Pacific Western Bank.

Noozhawk business writer Alex Kacik can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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