Community West Bancshares in Goleta, Calif., said that a litigation settlement concerning its sale of residential-mortgage loans will reduce its second-quarter profit.
The $572 million-asset Community West on Friday said it has agreed to pay $7.5 million to settle claims by Residential Funding Co. in Minneapolis that
The settlement will reduce Community West's second-quarter net income by $4.2 million, and reduce earnings per share and book value per share by 51 cents. Community West said insurance will recover some of the loss.
CWB's Tier 1 leverage ratio as of March 31, adjusted for the settlement, would have been 10.97%.
Residential Funding has filed similar lawsuits against other banks, which remain pending in courts in New York and Minnesota.