On Monday, Keefe, Bruyette & Woods adjusted their price target on shares of Community West Bancshares (NASDAQ:CWBC), bringing it down to $22.00 from the previous $23.00. The firm has chosen to maintain a 'Market Perform' rating for the stock.
This change comes in the wake of the company's first-quarter results for 2024, which fell short of both the firm's and the consensus expectations. The underperformance was attributed to a combination of lower net interest income (NII) and a slight increase in expenses.
The company's net interest margin (NIM) saw a decline of 10 basis points, settling at 3.42%. Despite this decrease, Community West Bancshares still boasts a relatively low total deposit cost of 0.98%, which remains notable within the industry. On the credit side, the bank reported robust metrics for the quarter. Nonperforming assets (NPAs) stayed at $0, and there was a quarter-over-quarter reduction in special mention loans.
The recently completed acquisition of Central Valley Community Bancorp (NASDAQ:CVCY) by Community West Bancshares, which was finalized on April 1, 2024, is expected to influence the upcoming second-quarter results. These will be the first results reflecting the combined entity's performance.
Following the first-quarter outcomes and the recent acquisition, Keefe, Bruyette & Woods has revised its earnings estimates for Community West Bancshares. The firm has lowered its earnings projections for the years 2024 and 2025 to $2.50 and $2.80, respectively.
The updated price target of $22.00 is a reflection of these revised expectations and the latest financial data from the company.
InvestingPro Insights
In light of the recent adjustments by Keefe, Bruyette & Woods, a glance at the real-time data from InvestingPro provides additional context to Community West Bancshares' (NASDAQ:CWBC) financial health. The company's market capitalization stands at $341.55 million, with a price-to-earnings (P/E) ratio of 21.29, which adjusts to a more favorable 15.36 when looking at the last twelve months as of Q1 2024. Despite a minor 0.04% revenue growth during the same period, the company's commitment to shareholder returns is evident from its maintained dividend payments for 13 consecutive years, yielding a notable 2.65% as of the latest data.
InvestingPro Tips highlight that while the company suffers from weak gross profit margins, analysts have a positive outlook, predicting profitability for the current year. Moreover, the company has been profitable over the last twelve months, indicating a potential for resilience in its financial performance. For readers looking to delve deeper into the financial intricacies of CWBC, there are additional InvestingPro Tips available at https://www.investing.com/pro/CWBC. To enhance your investing strategy with these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With these tools at hand, investors can make more informed decisions aligned with the latest market data and expert analysis.
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