================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
------------
Date of Report (Date of earliest event reported): February 7, 2000
COMMUNITY WEST BANCSHARES
(Exact Name of Registrant as Specified in Charter)
CALIFORNIA 0-23575 77-0446957
(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification Number)
5638 HOLLISTER AVENUE
GOLETA, CA 93117
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (805) 692-1862
<PAGE>
ITEM 5. OTHER EVENTS.
Attached hereto as Exhibit 20 and 99 and incorporated by reference herein
are a press release and presentation on the strategic direction of the Company
for fiscal year 2000.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(C) EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ------------ ------------------------------------------------
<C> <S>
(20) Press Release on Strategic Directions for Fiscal
Year 2000
(99) Strategic Directions for Fiscal Year 2000
Presentation
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated as of February 7, 2000.
COMMUNITY WEST BANCSHARES
By: /S/ Lynda Pullon Radke
---------------------------------------------------
Lynda Pullon Radke
Senior Vice President and Chief Financial Officer
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
SEQUENTIALLY
NUMBERED
EXHIBIT NO. DOCUMENT PAGE
- ------------ ------------
<C> <S> <C>
(20) Press Release on Strategic Directions for Fiscal Year 2000 3
(99) Presentation on Strategic Directions for Fiscal Year 2000 5
</TABLE>
<PAGE>
--------
NEWS
RELEASE
--------
COMMUNITY WEST BANCSHARES
5638 HOLLISTER AVENUE , GOLETA, CA 93117
FOR IMMEDIATE RELEASE
CONTACT: LYNDA RADKE
PHONE: 805-692-1862
FAX: 805-692-5835
URL: HTTP://WWW.COMMUNITYWEST.COM
SYMBOL: CWBC
COMMUNITY WEST BANCSHARES OUTLINES STRATEGIC DIRECTIONS
AND FINANCIAL PROJECTIONS FOR YEAR 2000
Goleta, California, February 7, 2000 - Community West Bancshares has outlined
its strategic directions and key business areas along with a range of revenue
projections for Year 2000. John Markel, Chairman of the Board, explained,
"Given the recent uncertainty surrounding Community West, we believe it is
imperative that our shareholders, and the rest of the investment community,
fully understand that we are a strong and very diverse organization. Within our
subsidiaries, Goleta National Bank and Palomar Community Bank, we have multiple
business units that each generate significant revenues. In 2000 and beyond, we
expect the Company to again begin producing the levels of consistent annualized
revenue and growth that our long term shareholders have enjoyed in prior years."
The Company also indicated that results for the year ended December 31, 1999,
would be released as soon as the annual audit is completed. Lew Stone,
President and CEO, said, "Early indications lead us to believe that final
results for last year now appear to be somewhat better than originally indicated
in a prior release. However, we do not believe it would be prudent to release
those results until the completion of the audit."
The Company intends to concentrate on its core business segments: Commercial
banking through its two subsidiaries, Goleta National Bank and Palomar Community
Bank; SBA lending through its offices in the Western and South Eastern United
States; wholesale and retail real estate lending through its Mortgage Banking
Division; and origination and sales of a variety of loan products through its
Alternative Mortgage Division.
In addition, the Company is seeking a buyer of a significant portion of its
ownership in ePacific.com. A sale of a portion of this asset allows Community
West to retain an investment in the e-commerce subsidiary, while relieving the
Company of the requirement to consolidate ePacific.com into Community West's
financial results.
Markel said, "While we continue to believe that ePacific.com's potential is very
exciting, we cannot continue to subject Community West to the costs associated
with technology startups. We have consistently stated that ePacific.com would
need to provide its own financing going forward, and therefore we expect that
our venture funding will come to an end as of the end of the 1st quarter of this
year. We are currently exploring other venture capital opportunities for
ePacific.com. We will retain an investment in ePacific.com, to insure that our
long term shareholders will have the opportunity to benefit from ePacific.com's
future."
<PAGE>
Markel said, "In addition, so that everyone can have all of the underlying
information, we are today filing an 8-K with the Securities and Exchange
Commission, that will include the entire presentation of our expectations. We
believe this move is both prudent and in the spirit of both current and proposed
SEC disclosure guidelines." The presentation reviews all of the Company's
product lines, setting forth expansion plans in such areas as SBA lending and
Alternative Mortgage production. In addition, the core commercial banking plans
include better penetration of the small to mid-sized business lending area, and
reducing deposit costs by moving from time deposits to a better mix of demand
deposits. The Company intends to continue its focus on the origination and
sales of loans and the generation of non-interest income, both areas in which
the Company excels.
The presentation also summarizes the Company's expectations for the year 2000.
The Company expects total revenue from all areas to be between $49 million and
$52 million and after-tax earnings before considering ePacific.com of between $4
million and $5 million. The effect of ePacific.com on the earnings of the
Company is not yet known, because of the issue of timing of the sale of a
portion of the subsidiary. Markel said, "We are letting our shareholders and
the investment community know how we expect the Company to perform this year;
that we expect the Company to excel in its product and geographic niches."
For those people not familiar with how to access SEC documents on the Internet,
they are also welcome to contact the Company to obtain a copy of the 8-K filing.
Community West Bancshares is a financial services company with headquarters in
Goleta, California. The Company has three subsidiaries. Palomar Community Bank
has a full service branch located in Escondido, California. ePacific.com
Incorporated provides proprietary technology platforms for the issuance and use
of card technology to make payments and establish loyalty programs, and has the
ability to settle transactions via ATM and POS networks, the automated
clearinghouse system, and the Internet. Goleta National Bank has two full
service branches, one in Goleta and one in Ventura, California, and loan
production offices located in Alabama, California, Florida, Georgia, South
Carolina, North Carolina, Tennessee, Oregon, Washington, and Nevada.
SAFE HARBOR DISCLOSURE
This release contains forward-looking statements that reflect management's
current views of future events and operations. These forward-looking statements
are based on information currently available to the Company as of the date of
this release. It is important to note that these forward-looking statements are
not guarantees of future performance and involve risks and uncertainties,
including but not limited to, the ability of the Company to implement its
strategy, expand its lending operations, and obtain investment capital for its
subsidiary corporation, ePacific.com. Furthermore, as previously noted, the
Company expects to have certain restrictions placed on its operations during
2000 by the Office of the Comptroller of the Currency relating to securitization
activities of the prior year that have now been discontinued. The Company has
attempted to incorporate these items, such as restrictions on the use of
brokered deposits, into its presentation and projections.
<PAGE>
Community West Bancshares Presents
Strategic Directions and Projections for the Fiscal Year 2000
A Disclaimer
This presentation contains forward-looking statements that reflect
management's current views of future events and operations. These
forward-looking statements are based on information currently available to the
Company as of the date of this presentation (2/7/00). It is important to note
that these forward-looking statements are not guarantees of future performance
and involve risks and uncertainties, including but not limited to, the ability
of the Company to implement its strategy, expand its lending operations, and
obtain investment capital for its subsidiary corporation ePacific.com.
Furthermore, as previously noted, the Company expects to have certain
restrictions on its operations during FY2000 based upon an enforcement letter
from the Office of the Comptroller of the Currency relating to securitization
activities of the prior year that have now been discontinued. The Company
has attempted to incorporate these items, such as restrictions on the use of
brokered deposits, into its presentation and projections.
Community West Bancshares
- - Management
- John Markel, Chairman
- Lew Stone, President & CEO
- Don Solsby, Exec. VP
- Lynda Radke, CFO
- - Staff
- 320 Employees Total
Community West Bancshares
- - Subsidiaries
- Goleta National Bank
- Palomar Community Bank
- ePacific
Community West Bancshares
<PAGE>
- - Principal Businesses
- Core Banking
- Small Business Administration (SBA) Loans
- High Loan to Value (HLTV) Loans
- Mortgage Loans (Retail and Wholesale)
Overview from Past to Present
- - 1989-1998 - 38% compounded Earning per Share (EPS)
- - 1998-1999 Restatement Issues
- Securitization Issue
- Palomar Restatement Issue
- Financing vs. Gain on Sale Issue
Overview - Today's Presentation
- - Strategic Statements
- Focus on Consistent and Growth-Oriented Shareholder Earnings into the
Future
- Focus on Continued Increase of Fee Income versus the conventional
Community Bank Focus on Interest Income.
- Focus on Primary Fee Income Generators
- SBA Loans with National Presence
- HLTV Loans on a Flow Basis
Overview - Today's Presentation (Cont)
- - Core Bank Division
- - Retail/Wholesale Mortgage Division
- - SBA Division
Overview - Today's Presentation (Cont)
- - Alternative Mortgage Division (HLTV)
- - Epacific Division
- - Financial Projections for FY 2000
<PAGE>
The Core Banking Division
Banks Consisting of:
- - Goleta National Bank - $80M (core) Assets
- Goleta CA
- Ventura CA
- - Palomar Community Bank - $70M Assets
- Escondido (North San Diego, CA)
Target Markets
- - Mid Market Companies $1-$10 Million
- - Manufactures, Wholesaler's, Distributors, Technology Companies, Service
Companies, Retailers
- - Geographical Area
- Santa Barbara County
- Ventura County
- San Diego County
Services Consisting of:
- Account Analysis
- Account Reconciliation
- Positive Pay
- Lock Box Services
- Courier service
- On-Line Banking
- Merchant Services
- Cash Management
- Automated Clearing House (ACH)
- Concentration Accounts
- All Typical Deposit Products
Loan Products
- Business Lines of Credit
- Business Term Loans
<PAGE>
- Working Capital Loans
- Equipment Loans
- Standby Letters of Credit
- International Banking
- Construction Loans
- Tract/Land Development Loans
- Real Estate Mini Perms
- Residential Equity Lines of Credit
- Consumer Loans
Palomar Community Bank - Purchase Strategy
- - Area Demographics Similar to Ventura
- - Large Number of Mid-Market Businesses
- - Increasing per-capita Income
- - Available Liquidity
- - Exchange Loan Participation
- - Spread Administrative Costs over Larger Base
- - Entry into Faster Growing Market
Core Bank -
How We Make Money
- - Interest Income
- - Service Charges
- - Loan Fee Income
- - Other Fee Income
- - Reducing Non-Interest Expense
Year 2000 Goals
- - 15% Growth in Loans and Deposits
- - Replace High Cost Deposits with Demand Deposits
- - Continue Increase in Net Interest Margin (Palomar)
Palomar Net Interest Margin FY99
<PAGE>
During the period between April 1999 and October 1999, Palomar's net interest
margin increased while Palomar's cost of funds decreased:
<TABLE>
<CAPTION>
<S> <C> <C>
Month Net Interest Margin Cost of Funds
- --------- -------------------- --------------
April 3.54% 4.27%
May 3.63% 4.24%
June 3.16% 4.21%
July 3.23% 4.13%
August 4.16% 4.04%
September 4.13% 4.02%
October 4.21% 4.02%
</TABLE>
The Retail/Wholesale Mortgage Division
Mortgage Department Overview
- - Employees
- 16 Retail Agents
- 3 Underwriters
- 1 Secondary Market Person
- 20 Total Employees
- - Offices
- Santa Barbara
- Ventura
- Bakersfield
- Solvang
- Escondido
What We Do
- - Originate Wide Spectrum of Retail Mortgage Products
- Fixed/Variable Rate
- Residential/Commercial
- Home Equity Lines
- Purchase Money/Refi's
<PAGE>
- 2nd TD's
- - Origination, Underwriting, Processing, Funding, Shipping
- - Wholesale/ Secondary Marketing
How We Make Money
- - Loan Origination Fees
- - Processing Fees
- - Loan Interest Charges
- - Gain on Loan Sales
- - FY2000 Est. : $223M in Loans Closed
Year 2000 Goals
- - Improved Closing Ratio
- - Increased Average Deal Size
- - Increased Mobile Home Lending
- - Increased Volume of Commercial Property Lending
The Small Business Administration (SBA) Division
SBA Division Overview
- - Introduction/Description of staff
- - Loan Production Offices
- - Description of Processing Function
SBA Program Overview (cont.)
- - Description of loans offered
<PAGE>
- - Funding Level for year 2000
- - Anticipated Program Changes in Year 2000
SBA Loan Production History
Annual SBA loan production increased 409% from 1995 to 1999, and loan production
for 2000 is projected to grow 67% from 1999:
<TABLE>
<CAPTION>
<S> <C>
Dollar Volume
Year ($Millions)
- ---- -----------
1995 11,000
1996 18,000
1997 29,000
1998 36,000
1999 45,000
2000 (Proj.) 75,000
</TABLE>
How We Make Money
- - Selling Loans on the Secondary Market
- - Premium income and servicing income
- - Interest yield on loans held for sale
- - Interest yield on 25% retention
National Presence
SBA has expanded to the following 17 locations in 10 states:
* Seattle, WA * Las Vegas, NV
* Sacramento, CA * Denver, CO
* San Francisco, CA * Nashville, TN
* Fresno, CA * Birmingham, AL
* Santa Barbara, CA * Atlanta, GA
* Los Angeles, CA * Columbia, SC
* Santa Ana, CA * Jacksonville, FL
* San Diego, CA * Miami, FL
* Portland, OR
<PAGE>
Expansion Efforts
- - Current Employees
- - Small Business Market Opportunity
- - Market Strategy and Competition
- - PLP Campaign
- - Challenges in year 2000
Growth Projections
Alternative Mortgage Products Division
History
- - 1994 HUD Title I Loans
- - 1995 Fannie Mae Approved
- - 1996 High Loan to Value (HLTV) - Retail
- - 1997 High Loan to Value - Wholesale
- - 1998 First Securitization ($81 Million)
- - 1999 Second Securitization ($122 Million)
Anaheim CA Operation
- - Business Development Staff
- - Underwriting and Processing of Loans
- - Document Preparation
- - Pre-Funding Setup and Review
Goleta Operation
- - Correspondent Underwriting and Processing
- - Quality Control
- - Compliance
<PAGE>
- - Broker and Correspondent Control
- - Funding
- - Shipping
- - Whole Loan Sales
Staffing
- - Anaheim
- Operations 22
- Sales 10
- - Goleta
- Operations 22
- Sales 2
- - Total 56
Sources of Business
- - Retail
- - Wholesale
- - Correspondent
Underwriting Experience
- - Management - Average of 19 Years
- - Underwriters - Average of 11 Years
Underwriting Parameters
- - Prescribed Guidelines
- - Exception to Guidelines
- Management Approval
- Tracking
Underwriting Summary
- - Minimum Risk Score (FICO) of 640
- - Maximum CLTV of 125%
- - Maximum Loan Amount $75,000
<PAGE>
- - Maximum Debt to Income Ratio (50%)
Underwriting Summary (Cont.)
- - Minimum monthly disposable Income
- $1,500 for DTI ratio of <45%
- $2,000 for DTI ratio of 45.01% - 50%
- - Minimum 12 Month Mortgage Credit History
- - No 30 Day Delinquencies
- - No Prior Bankruptcies Allowed
- - Two years full verifiable income
How We Make Money
- - Document Preparation Fees
- $300/Unit (1 Unit = 1 Loan)
- - Interest Income
- 13 1/2 %/Yr on Amounts Held for Sale
- - Gain on Sale Premiums
- 2.5% on Amount sold per Month
Budget Projections (FY2000)
- - Total Units (Loans) 4020
- - Dollar Volume $140,700,000
- - Average Units/Mo. 335
- - Average Flow ($/Mo.) $ 11,725,000
Business Risks and Mitigation
- - Risks with Previous Securitization Model
- Residual Asset Issues
- Capitalization Issues
- - Limited Number of Investors
- - Limited Product Lines
- - Mitigation of Risk
- Stricter Underwriting Guidelines
- Implement Flow Model with Forward Commitments
<PAGE>
Transition From Securitization to Whole Loan Sales (Flow Model)
- - File Preparation
- - Secondary Marketing
- - Revised Underwriter Guidelines
- - Establish Flow Relationships
Future Growth Directions
- - Diversification in Products
- - Sub-Prime Whole Loan Sales
- Equity Firsts and Seconds
- Purchase Money
- - "A-" Product
- 100% CLTV
ePacific.com Division
Overview
- - Currently operational payment transaction processing system
- - Presently focused on niche markets particularly Internet processing arena
- - Currently generating small revenues in various niche markets
- - Ultimate opportunity to become a leading network such as Interlink, Star,
and Cirrus
How Card-based Transactions Work
Most consumers are unaware of how transactions are processed. They swipe cards
to pay for products and services and receive bills about a month later. The
transaction processing system that allows this to occur involves a complex web
of participants.
<PAGE>
Issuers are financial institutions that issue debit or credit cards, maintain
consumer accounts, provide on-going cardholder services, and authorize and
report transactions. Each issuer agrees to abide by the operating rules
established by the networks such as Visa, MasterCard, Star, Cirrus, etc.
Networks require issuers to be financial institutions that are bound by banking
laws.
- - Acquiring Bank
Acquirers are financial institutions that sponsor the capture of ATM and Point
of Sale (POS) transactions and the transmission of requests to networks. They
assure that the ATM or POS machines will interact properly with the networks.
- - Third Party Processors (TPP)
Acquirers often use third-party transaction processing services to support
terminal operations and to provide transaction authorization services. A third
party processor may own the ATM and or POS terminal it operates. A merchant that
owns its own terminals may contract with a third party processor to support its
terminal operations.
- -
- - Networks
Networks, like Visa and MasterCard, Plus and Cirrus for ATMs, and Maestro and
Interlink for POS transactions, process transactions, settle and aggregate funds
daily. Issuers and acquirers may opt to participate in more than one network
and therefore, issue cards with multiple network marks. Networks are
responsible for creating a recognizable brand name and providing transaction
settlement services (fees and cash). They also create and enforce the network
rules.
The ePacific Solution
ePacific's system takes the place of many functions typically performed by
other transaction processing organizations. It acts as a private network to
receive incoming authorization requests and send outgoing approval codes. The
Company:
- - Issues its own cards
- - Acquires information from the ATM and POS machines
- - Processes transactions conducted between consumers and merchants
- - Acts as network to settle and aggregate funds transfer.
Card Transaction Processing Platform
- - Internet Based Payment
- - Reward Payment and Tracking
- - Compensation Disbursement
- - ATM and Funds Transfer
- - Other Opportunities
<PAGE>
PINPAD Internet Purchase
EP's PINPAD software (patent pending) is a significant component of EP's
Internet payment system. PINPAD not only increases the real and perceived
security of Internet transactions, it also helps e-merchants reduce costly fraud
and chargebacks that are an unfortunate reality associated with credit card
purchases. Chargebacks occur when consumers, denying that they agreed to
purchase something, contact their issuing bank to reverse the charge, and the
issuing bank charges the purchase back to the merchant. With PINPAD, consumers
are required to enter their secret PIN number. As a result, fraud is virtually
impossible - consumers are simultaneously protected and held accountable.
PINPAD creates an electronic version of a bank's ATM personal identification
number (PIN) entry hardware on the consumer's computer screen. It enables
cardholders to enter a PIN number in addition to their debit card number when
shopping online, thereby reducing the chances of fraudulent transactions and
opening up Internet shopping to people who cannot or will not shop with credit
cards.
Internet merchants planning to accept the EP payment option must first install a
small piece of code into their checkout process. The code creates the special
pop-up window at the end of a consumer's checkout process. At that time, the
consumer enters his secret PIN code which is transmitted only to EP's server,
not to the merchant. The PINPAD software captures and transmits the data to EP
where it is matched with database records. If the consumer's PIN matches
records in the database, EP sends an approval authorization to the merchant.
Market
- - Gartner Group projected online sales to be $20 billion by the end of 2000
- - Experts predict that 61 million consumers will shop for goods online by
the end of 2002
- - Currently 16 million purchase goods online
- - Internet user demographic profile is shifting to middle America
<TABLE>
<CAPTION>
Competition Comparison Internet-based Payments
Bank Target Broad Base Broad Base
Acct Market of Merchant Pin Number ATM of Cards on
Competitor Required Teenagers Participation Authorization Accessible the Market
- -------------------- -------- ----------- ------------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
ePacific.com
(ePacific.com) No Yes No Yes Yes No
-------- ----------- ------------- ------------- ----------- ----------
DoughNet Yes Yes
(doughnet.com) Parent Yes No Password No No
-------- ----------- ------------- ------------- ----------- ----------
RocketCash Yes Yes
(rocketcash.com) Parent Yes No Password No No
-------- ----------- ------------- ------------- ----------- ----------
Icanbuy Yes Yes
(icanbuy.com) Parent Yes No Password No No
-------- ----------- ------------- ------------- ----------- ----------
Pocketcard Yes
(pocketcard.com) Parent Yes No No No No
-------- ----------- ------------- ------------- ----------- ----------
Zowi's Cobalt Card Yes
(zowi.com) Yes Yes No Password No No
-------- ----------- ------------- ------------- ----------- ----------
Z-Cash Yes
(z-cash.com) Yes? Yes No Password No No
-------- ----------- ------------- ------------- ----------- ----------
Credit Card Issuers Yes No Yes No Yes Yes
- -------------------- -------- ----------- ------------- ------------- ----------- ----------
</TABLE>
<PAGE>
Sales and Marketing Strategy
- - Poised for full-scale entry into transaction processing
- - Card circulation
- - Achieve market acceptance of cards
- - Acceptance of Logo
- - Internet merchant acceptance
- - Market the ePacific's Private Network
Card Acceptance
- - Why are ePacific's cards attractive?
- Card can be used at any ATM
- Can be used at any merchant's place of business that accepts the card
- New consumers may not have credit cards but have money
- Lower transaction fees than credit cards
- Reduced chargeback costs
Strategic Alliances
- - ACE Cash Express 700,000 PayDay loans per year
- - Thomas Cook to issue compensation cards to Cruise Line Employees
- - A La Carte International loyalty program
Community West Strategic Directions Regarding ePacific
- - ePacific Opportunity remains. However, its Development Continues to
Produce Losses
<PAGE>
- - ePacific is currently seeking Venture Funding to Continue Development
- - Community West Bancshares will need to reduce its Majority Ownership of
ePacific to Eliminate Consolidation of ePacific on-going Losses.
- - CW expects its Venture Funding to ePacific to be completed as of Q1 End.
- - CW will retain a Minority Ownership position in ePacific.com, so that long
term shareholders will have the opportunity to benefit from ePacific.com's
future
FY2000
Financial Projections
Basic Assumptions
- - Previously Securitized Loans
- Prepayments of $2,500,000 per month vs. experience
- Loan Loss reserves at 2% per year vs current experience at 1.3% loan loss
Basic Assumptions (Cont.)
- - Loans Held for Sale
- Sell all Bulk HLTV loans held for sale in the first six months at book
value
- Include historical loan loss reserves for any HLTV loans past 90days
- Retain average balance of $10M - $15M in flow HLTV loans awaiting sale
Basic Assumptions (Cont.)
- - SBA Division
- Gross Sales increase to $60,000,000 in FY2000
- Increase in Portfolio Loans from un-guaranteed portion
- Consistent Costs with Q4, 1999
Assumptions (Cont.)
- - Balance Sheet
- Payoff of high-interest CD's as loan sales occur
<PAGE>
- Interest Income Calculated directly from Existing Assets
- - Mortgage Division
- Performance similar to second half of 1999
Assumptions (Cont)
- - Alternative Mortgages Div.
- Six-mo. Ramp-up period for shift from bulk sales to flow sales
- Flow volume ramps from $10M/mo to $15m/mo
- Cash Premium (Gain) of 2.5% plus documentation and loan orig. fees
- - ePacific Division
- No Negative Earnings Impact after 1st Quarter
Projected Range of Results - Interest Income
<TABLE>
<CAPTION>
FY 2000 LOW-END TO REASONABLE EXPECTED EARNINGS RANGES
<S> <C> <C>
Total Interest Income $34,500,000 $35,400,000
Total Interest Expense $16,000,000 $16,100,000
---------------------------
Net Interest Income $18,500,000 $19,300,000
Loan Loss Provision (GNB) $ 600,000 $ 550,000
Valuation Allowance for Secur. $ 2,900,000 $ 3,000,000
---------------------------
Total Loan Loss Provision $ 3,500,000 $ 3,550,000
Total Interest Based Income $15,000,000 $15,750,000
</TABLE>
Projected Range of Results -
Fee Income
<TABLE>
<CAPTION>
FY 2000 LOW-END TO REASONABLE EXPECTED EARNINGS RANGES
<S> <C> <C>
Gross profit on sale of SBA Loans $ 5,500,000 $ 6,050,000
Gross profit on sale of Mortgages $ 500,000 $ 600,000
Gross profit on sale of HLTV Loans $ 3,600,000 $ 3,800,000
HLTV Loan and Doc Fees $ 1,300,000 $ 1,500,000
Other Loan and Doc Fees $ 3,800,000 $ 4,000,000
Service Charges $ 400,000 $ 500,000
-------------------------
Total Fee-Based Income $15,100,000 $16,450,000
Ratio of Fee Income to Total
Interest-Based Income 1.01 1.04
</TABLE>
<PAGE>
Projected Range of Results - Net Income/EPS (Pre-ePacific)
<TABLE>
<CAPTION>
FY 2000 LOW-END TO REASONABLE EXPECTED EARNINGS RANGES
<S> <C> <C>
Total Other Expenses (Salaries, Benefits,
Rent, Depreciation, Etc.) $ 23,500,000 $ 23,500,000
Net Pre-Tax Income $ 6,600,000 $ 8,700,000
Taxes -$2,772,000 -$3,654,000
--------------------------
GNB Net (Pre ePacific Impact) $ 3,828,000 $ 5,046,000
Community West Admn. Impact -$580,000 -$580,000
Palomar (Pre-Pooling) Net $ 600,000 $ 650,000
--------------------------
CWBC Net (Pre-Goodwill, Pre-ePacific) $ 3,848,000 $ 5,116,000
Total Shares Outstanding (Fully Diluted) 6,100,000 $ 6,100,000
CWBC Net (Pre-Goodwill, Pre-ePacific) $ 0.63 $ 0.84
Palomar (Goodwill Writedown) -$0.06 -$0.06
--------------------------
CWBC Net (Pre-ePacific) EPS $ 0.57 $ 0.78
</TABLE>
A Disclaimer
This presentation contains forward-looking statements that reflect
management's current views of future events and operations. These
forward-looking statements are based on information currently available to the
Company as of the date of this presentation (2/7/00). It is important to note
that these forward-looking statements are not guarantees of future performance
and involve risks and uncertainties, including but not limited to, the ability
of the Company to implement its strategy, expand its lending operations, and
obtain investment capital for its subsidiary corporation ePacific.com.
Furthermore, as previously noted, the Company will have certain restrictions on
its operations during FY2000 based upon an enforcement letter from the Office of
the Comptroller of the Currency relating to securitization activities of the
prior year that have now been discontinued. The Company has attempted to
incorporate these items, such as restrictions on the use of brokered deposits,
into its presentation and projections.
<PAGE>
