Community West Restates Results To Correct Capital Miscalculations
Community West Bancshares in Goleta, Calif., which has been hampered by loan securitization problems, reported Monday that it lost $1.65 million in 1999 and that it has revised its 1998 earnings downward 84%.The $325 million-asset company was on its way to record earnings in 1999. Then the Office of the Comptroller of the Currency found last fall that its lead subsidiary, Goleta National Bank, had miscalculated its Tier 1 capital in connection with two loan securitizations, completed in the fourth quarter of 1998 and the second quarter of last year. That left Community West "significantly undercapitalized," the OCC said.
Community West, the holding company of Palomar Community Bank in Escondido, Calif., initially reported that its 1998 earnings were a record $2.9 million. It now says it earned just $454,000.
Company chairman John D. Markel said Community West has resolved all its outstanding issues with the OCC now that it has properly stated its 1998 and 1999 earnings. It expects to report per-share earnings of 37 cents to 40 cents when it issues its first-quarter results this month or in early May, he said.
- John Reosti
Downey, a Calif. Thrift, Doubles Profits on Cost Cuts, Loan Growth
A combination of cost-cutting and growth in its loan portfolio helped Downey Financial Corp. more than double its first-quarter earnings.The Newport Beach, Calif., company said Monday that net income in the quarter was $27.4 million, or 97 cents a share, compared with $12.3 million or 44 cents a share the year earlier.
The $10 billion-asset thrift company's results included a $5.6 million after-tax gain from the sale of its automobile-lending subsidiary. President and chief executive officer Daniel D. Rosenthal said in a press release that profits were up 68%, not counting proceeds from the sale.
Net interest income was $62.8 million on loans of $9.3 billion, up 28.2%. Operating expenses were pared by $885,000, to $35.4 million.
Downey Financial's primary subsidiary is the 104-branch Downey Savings and Loan Association.
- John Reosti