EX-99.1 2 cwbc092024earningsrelease.htm EX-99.1 Document

cwbclogo.jpg
FOR IMMEDIATE RELEASE
COMMUNITY WEST BANCSHARES REPORTS EARNINGS RESULTS
FOR THE QUARTER ENDED SEPTEMBER 30, 2024, AND QUARTERLY DIVIDEND

FRESNO, CALIFORNIA...October 24, 2024...The Board of Directors of Community West Bancshares (“Company”) (NASDAQ: CWBC), the parent company of Community West Bank (“Bank”), reported today unaudited consolidated net income of $3,385,000, and diluted earnings per share of $0.18 for the three months ended September 30, 2024, compared to $6,390,000 and $0.54 per diluted common share for the three months ended September 30, 2023.
THIRD QUARTER FINANCIAL HIGHLIGHTS
•Net income during the third quarter increased to $3.4 million, or $0.18 per diluted common share, compared to a net loss of $6.3 million and $0.33, respectively, in the second quarter of 2024. The loss during the second quarter and reduced net income for the third quarter was attributable to merger-related expenses, including a provision for current expected credit losses (CECL) for the acquired loan portfolio during the second quarter. In addition, the Company realized a loss on sale of securities in both the second and third quarter. See Non-GAAP financial measures below.
•The amortized cost of available-for-sale investment securities decreased $115.7 million or 17.3% at September 30, 2024 compared to December 31, 2023. During the year-to-date period, the Company received $64.2 million in proceeds from the sale of available-for-sale investment securities, with the remaining decrease due to normal pay downs, calls and maturities. Proceeds were used to fund loan growth as part of strategic repositioning of the balance sheet to improve future earnings.
•Total gross loans of $2.3 billion at September 30, 2024 increased by 77.96% or $1.0 billion compared to December 31, 2023 largely due to the Central Valley Community Bancorp/Community West Bancshares merger (“merger”), which the fair value of the acquired loans totaled $920.1 million. Excluding the acquired loans, gross loans increased by $86.2 million and 6.68% during the year-to-date period.
•Total assets increased by $1.1 billion or 45.12% at September 30, 2024 compared to December 31, 2023, largely as a result of the merger.
•Total deposits of $2.9 billion at September 30, 2024 increased by 43.11% or $880.1 million compared to December 31, 2023, primarily due to the merger, which the fair value of the acquired deposits totaled $844.0 million. Excluding the merger, deposits increased $36.0 million or 1.77%.
•Total cost of deposits decreased to 1.69% for the quarter ended September 30, 2024 compared to 1.71% for the quarter ended June 30, 2024.
•Average non-interest bearing demand deposit accounts as a percentage of total average deposits was 37.16% and 37.36% for the quarters ended September 30, 2024 and June 30, 2024, respectively.
•Net interest margin increased to 3.69% for the quarter ended September 30, 2024, from 3.65% for the quarter ended June 30, 2024.
•There were $3.3 million non-performing assets for the quarter ended September 30, 2024 as the result of the acquired loans from the merger. Net loan recoveries were $162,000 and loans delinquent 30 days and more were $6.5 million for the quarter ended September 30, 2024.
- more -

Community West Bancshares -- page 2
•Capital positions remain strong at September 30, 2024 with a 9.38% Tier 1 Leverage Ratio; a 11.12% Common Equity Tier 1 Ratio; a 11.30% Tier 1 Risk-Based Capital Ratio; and a 13.55% Total Risk-Based Capital Ratio.
•The Company declared a $0.12 per common share cash dividend, payable on November 22, 2024 to shareholders of record as of November 8, 2024.

“The current year has been transformative for our Company, including the April 1 closing of the largest merger in our history, uniting an expanded team of experienced community bankers and, during the third quarter, combining two core bank systems into one. Each milestone, marked by the efforts and sacrifices of our team, has built a foundation for growth and opportunity for the Company. The new Community West Bank proudly operates as one of the premier community banks headquartered in Central California, under one brand, with an inspired team focused on building relationships by exceeding the expectations of clients, communities and shareholders,” shared James J. Kim, President and CEO of the Bank and CEO of the Company.

“With much of the merger-related expenses behind us, we look forward to operating results reflecting the efficiencies and synergies implemented over the last two quarters. We head into the year’s final quarter optimistic about the future we can build with our enhanced infrastructure that we have heavily invested in, our balance sheet position, and the team of bankers committed to the success of our clients,” added Shannon Livingston, Executive Vice President and Chief Financial Officer.

Results of Operations
Three months endedNine months ended
September 30,
June 30,
September 30,
September 30,
(In thousands, except share and per-share amounts) 20242024202320242023
Net interest income before (credit) provision for credit losses$30,214 $29,057 $20,527 $78,343 $62,313 
(Credit) provision for credit losses(518)9,831 186 9,889 476 
Net interest income after (credit) provision for credit losses30,732 19,226 20,341 68,454 61,837 
Total non-interest income1,105 1,400 1,583 4,142 4,752 
Total non-interest expenses27,677 28,503 13,436 71,513 40,446 
Income (loss) before provision for income taxes4,160 (7,877)8,488 1,083 26,143 
Provision (benefit) for income taxes775 (1,587)2,098 312 6,501 
Net income (loss)$3,385 $(6,290)$6,390 $771 $19,642 

Statement Regarding use of Non-GAAP Financial Measures
In this press release, Community West Bancshares’s financial results are presented in accordance with GAAP and refer to certain non-GAAP financial measures. Management believes that presentation of operating results using non-GAAP financial measures provides useful supplemental information to investors and facilitates the analysis of the Company’s core operating results and comparison of operating results across reporting periods. Management also uses non-GAAP financial measures to establish budgets and manage the Company’s business. A reconciliation of the GAAP financial measures to comparable non-GAAP financial measures is presented below.




- more -

Community West Bancshares -- page 3

Reconciliation of GAAP and Non-GAAP Financial Measures
For the Three Months EndedFor the Nine Months
 Ended September 30,
September 30,
June 30,
September 30,
September 30,
September 30,
(In thousands, except share and per-share amounts)20242024202320242023
NET INCOME (LOSS):
Net income (loss) (GAAP)$3,385 $(6,290)$6,390 $771 $19,642 
Merger and conversion related costs:
Provision for credit losses on acquired non purchased credit deteriorated (PCD) loans— 10,877 — 10,877 — 
Personnel and severance547 2,985 — 3,532 — 
Professional services229 1,698 365 2,241 610 
Data processing and technology1,975 693 — 2,668 — 
Other457 180 — 706 — 
Total merger and conversion related costs3,208 16,433 365 20,024 610 
Accretion of fair value marks, net(1,490)(1,022)(70)(4,260)(209)
Loss on sale of investment securities1,853 1,974 39 4,199 296 
Income tax benefit of non-core items(1,263)(3,311)(90)(5,769)(152)
Comparable net income (non-GAAP)$5,693 $7,784 $6,634 $14,965 $20,187 
DILUTED EARNINGS PER SHARE:
Weighted average diluted shares18,965,434 18,937,036 11,755,758 16,575,361 11,745,606 
Diluted earnings (loss) per share (GAAP)$0.18 $(0.33)$0.54 $0.05 $1.67 
Comparable diluted earnings per share (non-GAAP)$0.30 $0.41 $0.56 $0.90 $1.72 
RETURN ON AVERAGE ASSETS
Average assets$3,541,444 $3,468,433 $2,502,985 $3,078,175 $2,474,977 
Return on average assets (GAAP)0.38 %(0.73)%1.02 %0.38 %1.06 %
Comparable return on average assets (non-GAAP)0.64 %0.90 %1.06 %0.90 %1.09 %
RETURN ON AVERAGE EQUITY
Average stockholders' equity$353,018 $334,809 $187,979 $300,879 $185,002 
Return on average equity (GAAP)3.84 %(7.39)%13.60 %3.84 %14.16 %
Comparable return on average equity (non-GAAP)6.45 %9.30 %14.12 %9.95 %21.82 %
EFFICIENCY RATIO
Non-interest expense (GAAP)$27,677 $28,503 $13,436 $71,513 $40,446 
Merger-related non-interest expenses(3,208)(5,556)(365)(9,147)(610)
Non-interest expense (non-GAAP)24,469 22,947 13,071 62,366 39,836 
Net interest income30,214 29,057 20,527 78,343 62,313 
Non-interest income1,105 1,400 1,583 4,142 4,752 
Loss on sale of investment securities1,853 1,974 39 4,199 296 
Non-interest income (non-GAAP)$2,958 $3,374 $1,622 $8,341 $5,048 
Efficiency ratio (GAAP)88.37 %93.58 %60.77 %86.70 %60.31 %
Comparable efficiency ratio (non-GAAP)73.76 %70.76 %59.01 %71.95 %59.14 %

- more -

Community West Bancshares -- page 4
For the quarter ended September 30, 2024, the Company reported unaudited consolidated net income of $3,385,000 and diluted earnings per common share of $0.18, compared to consolidated net loss of $6,290,000 and $0.33 per fully diluted share for the trailing quarter, and consolidated net income of $6,390,000 and $0.54 per diluted share for the same period in 2023. The earnings for the period was impacted by an increase in total non-interest expenses of $14,241,000, partially offset by an increase in net interest income before provision for credit losses of $9,687,000 and a credit to the provision for credit losses of $518,000. The increase in non-interest expense as compared to the prior year’s quarter was primarily due to merger and acquisition expenses and additional operating expenses of the merger as of April 1, 2024.

For the nine months ended September 30, 2024, the Company reported unaudited consolidated net income of $771,000 and diluted earnings per common share of $0.05, compared to consolidated net income of $19,642,000 and $1.67 per diluted share for the same period in 2023. The earnings for the period were impacted by a provision for credit losses of $9,889,000 and an increase in total non-interest expense of $31,067,000, partially offset by an increase in net interest income before provision for credit losses of $16,030,000 and a decrease in the provision for income taxes of $6,189,000. Increases in non-interest expenses for the year-to-date period were impacted by merger and acquisition expenses and the additional operating expenses of the merger.

Annualized return on average equity (ROAE) for the quarter ended September 30, 2024 was 3.84%, compared to 13.60% for the same period of 2023. The decrease in ROAE is reflective of the reduced earnings due to merger and acquisition expenses. Annualized return on average assets (ROAA) was 0.38% for the quarter ended September 30, 2024 compared to 1.02% for the same period in 2023.

The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, was 3.24% for the quarter ended September 30, 2024, compared to 3.26% for the quarter ended September 30, 2023 and 3.21% for the quarter ended June 30, 2024. The effective yield on average investment securities, including interest earning deposits in other banks and Federal funds sold, was 3.17% for the nine months ended September 30, 2024, compared to 3.14% for the nine months ended September 30, 2023.

Total average loans increased by $1,013,749,000 to $2,280,045,000 for the quarter ended September 30, 2024, from $1,266,296,000 for the quarter ended September 30, 2023 and increased by $51,582,000 from $2,228,463,000 for the quarter ended June 30, 2024. The increase was primarily due to the merger, in which loans with a fair value of $920,100,000 were recorded on the balance sheet as of April 1, 2024. The effective yield on average loans was 6.53% for the quarter ended September 30, 2024, compared to 5.54% and 6.54% for the quarters ended September 30, 2023 and June 30, 2024, respectively. Total average loans increased by $609,310,000 to $1,870,819,000 for the nine months ended September 30, 2024, from $1,261,509,000 for the nine months ended September 30, 2023. The effective yield on average loans was 6.57% for the nine months ended September 30, 2024, compared to 5.50% for the nine months ended September 30, 2023.

The Company’s net interest margin (fully tax equivalent basis) was 3.69% for the quarter ended September 30, 2024, compared to 3.47% for the quarter ended September 30, 2023 and 3.65% for the quarter ended June 30, 2024. Net interest income, before provision for credit losses, increased by $9,687,000 or 47.19%, to $30,214,000 for the third quarter of 2024, compared to $20,527,000 for the same period in 2023. Over the last year, the Company's yield on interest earning assets has increased from 4.46% for the quarter ended September 30, 2023 to 5.52% for the quarter ended September 30, 2024. Additionally, the Company has been impacted by higher costs on interest-bearing liabilities, in which the cost of total deposits increased to 1.69% from 0.90% when comparing the quarters ended September 30, 2024 and 2023. The increase in the cost of deposits is primarily attributed to volume and rate increases in the money market and time deposit portfolios from both acquired deposits from the merger and the Company’s existing base.

- more -

Community West Bancshares -- page 5
The Company’s net interest margin (fully tax equivalent basis) was 3.69% for the nine months ended September 30, 2024, compared to 3.59% for the nine months ended September 30, 2023. Net interest income, before provision for credit losses, increased $16,030,000 or 25.72%, to $78,343,000 for the nine months ended September 30, 2024, compared to $62,313,000 for the same period in 2023. The accretion on loan marks of acquired loans increased interest income by $6,497,000 and $209,000 during the nine months ended September 30, 2024 and 2023, respectively. Net interest income during the nine months ended September 30, 2024 and 2023 benefited by approximately $3,000 and $87,000, respectively, from prepayment penalties and payoff of loans.


Non-Interest Income - The following tables present the key components of non-interest income for the periods indicated:
Three months ended
September 30,June 30,
(Dollars in thousands)20242024$ Change% Change
Service charges478 $480 $(2)(0.4)%
Appreciation in cash surrender value of bank owned life insurance349 347 2 0.6 %
Interchange fees602 635 (33)(5.2)%
Loan placement fees251 244 7 2.9 %
Net realized losses on sales and calls of investment securities(1,853)(1,974)121 (6.1)%
Federal Home Loan Bank dividends238 160 78 48.8 %
Other income1,040 1,508 (468)(31.0)%
Total non-interest income$1,105 $1,400 $(295)(21.1)%

Three months ended September 30,
(Dollars in thousands)20242023$ Change% Change
Service charges$478 $376 $102 27.1 %
Appreciation in cash surrender value of bank owned life insurance349 260 89 34.2 %
Interchange fees602 450 152 33.8 %
Loan placement fees251 119 132 110.9 %
Net realized losses on sales and calls of investment securities(1,853)(39)(1,814)4651.3 %
Federal Home Loan Bank dividends238 134 104 77.6 %
Other income1,040 283 757 267.5 %
Total non-interest income$1,105 $1,583 $(478)(30.2)%

- more -

Community West Bancshares -- page 6
Nine months ended September 30,
(Dollars in thousands)20242023$ Change% Change
Service charges$1,342 $1,132 $210 18.6 %
Appreciation in cash surrender value of bank owned life insurance971 763 208 27.3 %
Interchange fees1,642 1,353 289 21.4 %
Loan placement fees661 415 246 59.3 %
Net realized losses on sales and calls of investment securities(4,199)(296)(3,903)1318.6 %
Federal Home Loan Bank dividends555 349 206 59.0 %
Other income3,170 1,036 2,134 206.0 %
Total non-interest income$4,142 $4,752 $(610)(12.8)%

The decrease in total non-interest income as compared to prior periods was due to net realized losses on sales of investment securities. Proceeds from sales of securities were used to fund loan growth as part of strategic repositioning of the balance sheet. The increase in other income for the quarter ended September 30, 2024 and year-to-date compared to prior year was primarily due to income from other investments, net loan servicing income, and an increase in credit card merchant fees.

Non-Interest Expense - The following table presents the key components of non-interest expense for the periods indicated:
Three months ended
September 30,June 30,
(Dollars in thousands)20242024$ Change% Change
Salaries and employee benefits$13,710 $13,451 $259 1.9 %
Occupancy and equipment2,687 2,423 264 10.9 %
Information technology1,878 1,522 356 23.4 %
Regulatory assessments437 632 (195)(30.9)%
Data processing expense1,288 1,037 251 24.2 %
Professional services861 701 160 22.8 %
ATM/Debit card expenses546 418 128 30.6 %
Advertising261 289 (28)(9.7)%
Directors’ expenses193 189 4 2.1 %
Merger and acquisition expense3,208 5,556 (2,348)(42.3)%
Loan related expenses 260 134 126 94.0 %
Personnel other53 50 3 6.0 %
Amortization of core deposit intangibles251 250 1 0.4 %
Other expense2,044 1,851 193 10.4 %
Total non-interest expenses$27,677 $28,503 $(826)(2.9)%

- more -

Community West Bancshares -- page 7
Three months ended September 30,
(Dollars in thousands)20242023$ Change% Change
Salaries and employee benefits$13,710 $7,474 $6,236 83.4 %
Occupancy and equipment2,687 1,490 1,197 80.3 %
Information technology1,878 915 963 105.2 %
Regulatory assessments437 358 79 22.1 %
Data processing expense1,288 680 608 89.4 %
Professional services861 477 384 80.5 %
ATM/Debit card expenses546 192 354 184.4 %
Advertising261 133 128 96.2 %
Directors’ expenses193 150 43 28.7 %
Merger and acquisition expense3,208 365 2,843 778.9 %
Loan related expenses 260 106 154 145.3 %
Personnel other53 51 2 3.9 %
Amortization of core deposit intangibles251 — 251 — %
Other expense2,044 1,045 999 95.6 %
Total non-interest expenses$27,677 $13,436 $14,241 106.0 %


Nine months ended September 30,
(Dollars in thousands)20242023$ Change% Change
Salaries and employee benefits$35,800 $23,483 $12,317 52.5 %
Occupancy and equipment6,653 4,012 2,641 65.8 %
Information technology4,422 2,697 1,725 64.0 %
Regulatory assessments1,391 924 467 50.5 %
Data processing expense3,010 1,949 1,061 54.4 %
Professional services2,187 1,466 721 49.2 %
ATM/Debit card expenses1,178 569 609 107.0 %
Advertising701 382 319 83.5 %
Directors’ expenses551 464 87 18.8 %
Merger and acquisition expense9,147 610 8,537 1399.5 %
Loan related expenses 486 393 93 23.7 %
Personnel other233 373 (140)(37.5)%
Amortization of core deposit intangibles501 68 433 636.8 %
Other expense5,253 3,056 2,197 71.9 %
Total non-interest expenses$71,513 $40,446 $31,067 76.8 %

The increase in both quarter-to-date and year-to-date non-interest expense categories was due to the merger that was completed on April 1, 2024 in which the Company added 131 full-time equivalent employees, including temporary employees to assist with systems integrations, and seven banking centers on the central coast of California. Integration of the core systems were completed during August 2024.


- more -

Community West Bancshares -- page 8

Balance Sheet Summary
Total assets for the period ended September 30, 2024 increased $1,097,872,000 or 45.12%, compared to the period ended December 31, 2023. Total average assets for the quarter ended September 30, 2024 were $3,541,444,000 compared to $2,502,985,000 for the quarter ended September 30, 2023 and $3,468,433,000 for the quarter ended June 30, 2024, an increase of $1,038,459,000 or 41.49% and an increase of $73,011,000 or 2.99%, respectively. As a result of the merger on April 1, the Company recorded goodwill of approximately $42.6 million and core deposit intangibles of $10.0 million.

For the quarter ended September 30, 2024, the Company’s average investment securities decreased by $115,994,000, or 11.47%, compared to the quarter ended September 30, 2023, and decreased by $39,777,000, or 4.25%, compared to the quarter ended June 30, 2024. This decrease was the result of sales and maturities of available for sale (AFS) securities, partially offset by improvements in the unrealized loss position of the remaining AFS securities.

In comparing the quarter ended September 30, 2024 to the quarters ended June 30, 2024 and September 30, 2023, total average gross loans increased by $51,582,000 or 2.31% and increased $1,013,749,000 or 80.06%, respectively.

The following table shows the Company’s outstanding loan portfolio composition as of September 30, 2024 and December 31, 2023:
September 30, 2024
December 31, 2023
Loan Type (dollars in thousands)Amount% of TotalAmount% of Total
Commercial:
Commercial and industrial$143,876 6.3 %$105,466 8.2 %
Agricultural production16,940 0.7 %33,556 2.6 %
Total commercial160,816 7.0 %139,022 10.8 %
Real estate:
Construction & other land loans85,135 3.7 %33,472 2.6 %
Commercial real estate - owner occupied308,472 13.4 %215,146 16.7 %
Commercial real estate - non-owner occupied902,393 39.3 %539,522 41.9 %
Farmland138,544 6.0 %120,674 9.3 %
Multi-family residential131,013 5.7 %61,307 4.7 %
1-4 family - close-ended125,405 5.5 %96,558 7.5 %
1-4 family - revolving35,482 1.5 %27,648 2.1 %
Total real estate1,726,444 75.1 %1,094,327 84.8 %
Consumer:
Manufactured housing320,786 14.0 %— — %
Other installment87,133 3.8 %55,606 4.3 %
Total consumer407,919 17.8 %55,606 4.3 %
Net deferred origination costs1,964 0.1 %1,842 0.1 %
Total gross loans2,297,143 100.0 %1,290,797 100.0 %
Allowance for credit losses(24,891)(14,653)
Total loans$2,272,252 $1,276,144 


- more -

Community West Bancshares -- page 9
Total average deposits increased $723,867,000 or 32.74%, to $2,934,951,000 for the quarter ended September 30, 2024, compared to $2,211,084,000 for the quarter ended September 30, 2023, and increased $51,083,000, or 1.77%, compared to $2,883,868,000 for the quarter ended June 30, 2024. The Company’s ratio of average non-interest bearing deposits to total deposits was 37.16% for the quarter ended September 30, 2024, compared to 44.54% and 37.36% for the quarters ended September 30, 2023 and June 30, 2024, respectively.

The composition of deposits at September 30, 2024 and December 31, 2023 is summarized in the table below:
September 30, 2024
December 31, 2023
(Dollars in thousands)Amount% of TotalAmount% of Total
NOW accounts$344,036 11.8 %$251,334 12.3 %
MMA accounts879,445 30.1 %497,043 24.4 %
Time deposits443,932 15.2 %162,085 7.9 %
Savings deposits177,859 6.1 %179,609 8.8 %
Total interest-bearing1,845,272 63.2 %1,090,071 53.4 %
Non-interest bearing1,076,423 36.8 %951,541 46.6 %
Total deposits$2,921,695 100.0 %$2,041,612 100.0 %

The Company has significant liquidity, both on and off-balance sheet, to meet customer demand. During the year-to-date period, the Company’s cash and cash equivalents increased $95,285,000 to $149,013,000 compared to $53,728,000 at December 31, 2023. The Company had $132,508,000, net of discount, in short-term borrowings at September 30, 2024 compared to $80,000,000 at December 31, 2023.

At September 30, 2024 and December 31, 2023, the Company had the following sources of primary and secondary liquidity:

Liquidity Sources (in thousands)
September 30, 2024
December 31, 2023
Cash and cash equivalents$149,013 $53,728 
Unpledged investment securities419,171 574,633 
Excess pledged securities28,433 116,740 
FHLB borrowing availability565,283 307,483 
FRB Bank Term Funding Program (BTFP) availability (1)— 1,174 
Unsecured lines of credit availability110,000 110,000 
Funds available through FRB discount window3,958 4,448 
Total$1,275,858 $1,168,206 
(1) The BFTP was discontinued by the FRB as of March 2024. No further advances are available under this program.











- more -

Community West Bancshares -- page 10
Credit Quality
During the third quarter of 2024, the Company recorded net loan recoveries of $162,000 compared to $194,000 in net charge-offs for the same period in 2023. The net charge-off ratio reflects annualized net recoveries to average loans was (0.03)% for the quarter ended September 30, 2024, compared to annualized net charge-offs of 0.06% for the quarter ended September 30, 2023. During the quarter ended September 30, 2024, the Company recorded a credit to the provision of $211,000 for credit losses on loans, compared to a $265,000 provision for the quarter ended September 30, 2023. In addition to the provision of credit losses on loans, for the quarter ended September 30, 2024, the Company recorded credits to the provision for credit losses on held-to-maturity securities and unfunded loan commitments totaling $307,000 for the quarter ended September 30, 2024. The credits to provisions for credit losses on loans, unfunded commitments and held-to-maturity securities were due to improvements in the economic scenarios as compared to the prior quarter.

The following table shows the Company’s loan portfolio, net of deferred costs, allocated by management’s internal risk ratings:
Loan Risk Rating (In thousands)September 30, 2024% of TotalJune 30, 2024% of TotalSeptember 30, 2023% of Total
Pass$2,228,707 97.0 %$2,191,348 97.1 %$1,233,700 96.7 %
Special mention28,799 1.3 %25,576 1.1 %16,966 1.3 %
Substandard39,637 1.7 %39,647 1.8 %24,740 2.0 %
Doubtful— — — 
Total$2,297,143 100.0 %$2,256,571 100.0 %$1,275,406 100.0 %
At September 30, 2024, the allowance for credit losses for loans was $24,891,000, compared to $14,653,000 at December 31, 2023, a net increase of $10,238,000 reflecting a provision for loan losses of $9,821,000, an increase in the allowance for PCD loans of $821,000, and net charge-offs during the period. The year-to-date provision was due to the acquisition of loans from the merger as of April 1, 2024. The allowance for credit losses as a percentage of total loans was 1.08% and 1.14% as of September 30, 2024 and December 31, 2023, respectively. The Company believes the allowance for credit losses is adequate to provide for expected credit losses within the loan portfolio at September 30, 2024.
Cash Dividend Declared
On October 23, 2024, the Board of Directors of the Company declared a regular quarterly cash dividend of $0.12 per share on the Company’s common stock. The dividend is payable on November 22, 2024 to shareholders of record as of November 8, 2024. The Company continues to be well capitalized and expects to maintain adequate capital levels.









- more -

Community West Bancshares -- page 11
Company Overview
Effective on April 1, 2024, Central Valley Community Bancorp completed its merger transaction with Community West Bancshares. Shortly thereafter Community West Bank, a wholly owned subsidiary of Community West Bancshares, merged with and into Central Valley Community Bank, a wholly-owned
subsidiary of Central Valley Community Bancorp, with Central Valley Community Bank being the surviving banking institution. Effective with these mergers, the corporate names of Central Valley Community Bancorp and Central Valley Community Bank were changed to Community West Bancshares and Community West Bank, respectively.

Community West Bancshares (“Company”) (NASDAQ: CWBC) and its wholly owned subsidiary, Community West Bank (“Bank”), are headquartered in Fresno, California. The Company was established in 1979 with the vision to help businesses and communities by exceeding expectations at every opportunity, and opened its first Banking Center on January 10, 1980. Today, the Bank operates full-service Banking Centers throughout Central California and maintains a variety of departments supporting Commercial Lending, Agribusiness, SBA, Residential Construction and Mortgage, Manufactured Housing, Private Banking and Cash Management.

Members of the Company and Bank Board of Directors are: Daniel J. Doyle (Chairman), Robert H. Bartlein (Vice Chairman), James J. Kim (CEO of the Company and President and CEO of the Bank), Martin E. Plourd (President of the Company and Director of the Bank), Suzanne M. Chadwick, Daniel N. Cunningham, Tom L. Dobyns, F.T. “Tommy” Elliott IV, Robert J. Flautt, James W. Lokey, Andriana D. Majarian, Steven D. McDonald, Dorothea D. Silva, William S. Smittcamp and Kirk B. Stovesand. Louis C. McMurray is Director Emeritus.

More information about Community West Bancshares and Community West Bank can be found at www.communitywestbank.com. Also, follow the Company on LinkedIn, X and Facebook.

###
- more -

Community West Bancshares -- page 12

Forward-looking Statements- Certain matters set forth herein constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including forward-looking statements relating to the Company’s current business plans and expectations regarding future operating results. Forward-looking statements may include, but are not limited to, the use of forward-looking language, such as “likely result in,” “expects,” “anticipates,” “estimates,” “forecasts,” “projects,” “intends to,” or may include other similar words or phrases, such as “believes,” “plans,” “trend,” “objective,” “continues,” “remains,” or similar expressions, or future or conditional verbs, such as “will,” “would,” “should,” “could,” “may,” “might,” “can,” or similar verbs. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance or achievements to differ materially from those projected. These risks and uncertainties, some of which are beyond our control, include, but are not limited to: current and future business, economic and market conditions in the United States generally or in the communities we serve, including the effects of declines in property values and overall slowdowns in economic growth should these events occur; inflationary pressures and changes in the interest rate environment that reduce our margins and yields, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make, whether held in the portfolio or in the secondary market; effects of and changes in trade, monetary and fiscal policies and laws, including the interest rate policies of the Federal Open Market Committee of the Federal Reserve Board; geopolitical and domestic political developments that can increase levels of political and economic unpredictability, contribute to rising energy and commodity prices, and increase the volatility of financial markets; changes in the level of nonperforming assets and charge offs and other credit quality measures, and their impact on the adequacy of our allowance for credit losses and our provision for credit losses;factors that can impact the performance of our loan portfolio, including real estate values and liquidity in our primary market areas, the financial health of our commercial borrowers, and the success of construction projects that we finance; our ability to achieve loan growth and attract deposits in our market area, the impact of the cost of deposits and our ability to retain deposits; liquidity issues, including fluctuations in the fair value and liquidity of the securities we hold for sale and our ability to raise additional capital, if necessary; continued or increasing competition from other financial institutions, credit unions, and non-bank financial services companies, many of which are subject to different regulations than we are; challenges arising from unsuccessful attempts to expand into new geographic markets, products, or services; restraints on the ability of Community West Bank to pay dividends to us, which could limit our liquidity; increased capital requirements imposed by banking regulators, which may require us to raise capital at a time when capital is not available on favorable terms or at all; inaccuracies in our assumptions about future events, which could result in material differences between our financial projections and actual financial performance; changes in our management personnel or our inability to retain, motivate and hire qualified management personnel; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems; disruptions, security breaches, or other adverse events affecting the third-party vendors who perform several of our critical processing functions; an inability to keep pace with the rate of technological advances due to a lack of resources to invest in new technologies; risks related to the merger, including, among others, the expected business expansion may be less successful as projected; the integration of each party’s management, personnel and operations may not be successfully achieved or may be materially delayed or may be more costly or difficult than expected, deposit attrition, customer or employee loss and/or revenue loss as a result of the merger, and expenses related to the merger may be greater than expected; natural disasters, such as earthquakes, drought, pandemic diseases (such as the coronavirus) or extreme weather events, any of which may affect services we use or affect our customers, employees or third parties with which we conduct business; compliance with governmental and regulatory requirements, relating to banking, consumer protection, securities and tax matters; and our ability to the manage the foregoing.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this report. Because of these risks and other uncertainties, our actual future results, performance or achievement, or industry results, may be materially different from the results indicated by the forward looking statements in this report. In addition, our past results of operations are not necessarily indicative of our future results. You should not rely on any forward looking statements, which represent our beliefs, assumptions and estimates only as of the dates on which they were made, as predictions of future events. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

- more -

Community West Bancshares -- page 13
COMMUNITY WEST BANCSHARES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30,
December 31,
September 30,
(In thousands, except share amounts)202420232023
ASSETS
Cash and due from banks$44,418 $30,017 $27,558 
Interest-earning deposits in other banks104,595 23,711 47,017 
Total cash and cash equivalents149,013 53,728 74,575 
Available-for-sale debt securities, at fair value, net of allowance for credit losses of $0, with an amortized cost of $553,963 at September 30, 2024, $669,646 at December 31, 2023, and $694,732 at September 30, 2023
503,964 597,196 593,430 
Held-to-maturity debt securities, at amortized cost less allowance for credit losses of $857, $1,051 and $281 at September 30, 2024, December 31, 2023, and September 30, 2023 respectively301,920 302,442 303,451 
Equity securities, at fair value6,790 6,649 6,354 
Loans, less allowance for credit losses of $24,891, $14,653, and $15,534 at September 30, 2024, December 31, 2023, and September 30, 2023, respectively 2,272,252 1,276,144 1,259,877 
Bank premises and equipment, net23,524 14,042 9,703 
Bank owned life insurance51,515 41,572 41,301 
Federal Home Loan Bank stock10,978 7,136 7,136 
Goodwill96,379 53,777 53,777 
Core deposit intangibles9,518 — — 
Accrued interest receivable and other assets105,445 80,740 85,755 
Total assets$3,531,298 $2,433,426 $2,435,359 
LIABILITIES AND SHAREHOLDERS’ EQUITY 
Deposits:
Non-interest bearing$1,076,423 $951,541 $990,508 
Interest bearing1,845,272 1,090,071 1,158,334 
Total deposits2,921,695 2,041,612 2,148,842 
Short-term borrowings132,508 80,000 — 
Senior debt and subordinated debentures69,853 69,744 69,708 
Accrued interest payable and other liabilities43,727 35,006 35,159 
Total liabilities3,167,783 2,226,362 2,253,709 
Shareholders’ equity:
Preferred stock, no par value; 10,000,000 shares authorized, none issued and outstanding
— — — 
Common stock, no par value; 80,000,000 shares authorized; issued and outstanding: 18,945,593, 11,818,039, and 11,814,883 at September 30, 2024, December 31, 2023 and September 30, 2023, respectively 207,164 62,550 62,338 
Retained earnings205,362 210,548 206,073 
Accumulated other comprehensive loss, net of tax(49,011)(66,034)(86,761)
Total shareholders’ equity363,515 207,064 181,650 
Total liabilities and shareholders’ equity$3,531,298 $2,433,426 $2,435,359 

- more -

Community West Bancshares -- page 14
COMMUNITY WEST BANCSHARES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)    
For the Three Months EndedFor the Nine Months Ended
September 30,June 30,September 30,September 30,September 30,
(In thousands, except share and per-share amounts)20242024202320242023
INTEREST INCOME:
Interest and fees on loans$37,422 $36,197 $17,692 $91,919 $51,851 
Interest on deposits in other banks1,537 1,076 1,481 3,044 2,930 
Interest and dividends on investment securities:
Taxable4,954 5,328 5,900 15,782 17,612 
Exempt from Federal income taxes1,372 1,396 1,393 4,164 4,203 
Total interest income45,285 43,997 26,466 114,909 76,596 
INTEREST EXPENSE:
Interest on deposits12,493 12,266 5,015 29,778 10,890 
Interest on short-term borrowings1,660 1,758 — 4,039 661 
Interest on senior debt and subordinated debentures918 916 924 2,749 2,732 
Total interest expense15,071 14,940 5,939 36,566 14,283 
Net interest income before (credit) provision for credit losses30,214 29,057 20,527 78,343 62,313 
(CREDIT) PROVISION FOR CREDIT LOSSES(518)9,831 186 9,889 476 
Net interest income after (credit) provision for credit losses30,732 19,226 20,341 68,454 61,837 
NON-INTEREST INCOME: 
Service charges478 480 376 1,342 1,132 
Net realized losses on sales and calls of investment securities(1,853)(1,974)(39)(4,199)(296)
Other income2,480 2,894 1,246 6,999 3,916 
Total non-interest income1,105 1,400 1,583 4,142 4,752 
NON-INTEREST EXPENSES:
Salaries and employee benefits13,710 13,451 7,474 35,800 23,483 
Occupancy and equipment2,687 2,423 1,490 6,653 4,012 
Other expense11,280 12,629 4,472 29,060 12,951 
Total non-interest expenses27,677 28,503 13,436 71,513 40,446 
Income (loss) before provision for income taxes4,160 (7,877)8,488 1,083 26,143 
PROVISION (BENEFIT) FOR INCOME TAXES775 (1,587)2,098 312 6,501 
Net income (loss)$3,385 $(6,290)$6,390 $771 $19,642 
Net income (loss) per common share:
Basic earnings (loss) per common share$0.18 $(0.33)$0.54 $0.05 $1.67 
Weighted average common shares used in basic computation18,843,606 18,814,020 11,742,334 16,478,049 11,723,233 
Diluted earnings (loss) per common share$0.18 $(0.33)$0.54 $0.05 $1.67 
Weighted average common shares used in diluted computation18,965,434 18,937,036 11,755,758 16,575,361 11,745,606 
Cash dividends per common share$0.12 $0.12 $0.12 $0.36 $0.36 
- more -

Community West Bancshares -- page 15
COMMUNITY WEST BANCSHARES
CONDENSED CONSOLIDATED INCOME STATEMENTS
(Unaudited)
Sep. 30,Jun. 30,Mar. 31,Dec. 31,Sep. 30,
For the three months ended20242024202420232023
(In thousands, except share and per share amounts)
Net interest income$30,214 $29,057 $19,073 $20,115 $20,527 
(Credit) provision for credit losses(518)9,831 575 (168)186 
Net interest income after (credit) provision for credit losses30,732 19,226 18,498 20,283 20,341 
Total non-interest income1,105 1,400 1,636 2,267 1,583 
Total non-interest expense27,677 28,503 15,333 14,854 13,436 
Provision (benefit) for income taxes775 (1,587)1,125 1,803 2,098 
Net income (loss)$3,385 $(6,290)$3,676 $5,893 $6,390 
Basic earnings (loss) per common share$0.18 $(0.33)$0.31 $0.50 $0.54 
Weighted average common shares used in basic computation18,843,606 18,814,020 11,750,528 11,745,548 11,742,334 
Diluted earnings (loss) per common share$0.18 $(0.33)$0.31 $0.50 $0.54 
Weighted average common shares used in diluted computation18,965,434 18,937,036 11,790,231 11,774,085 11,755,758 

COMMUNITY WEST BANCSHARES
SELECTED RATIOS
(Unaudited)
Sep. 30,Jun. 30,Mar. 31,Dec. 31,Sep. 30,
As of and for the three months ended20242024202420232023
(Dollars in thousands, except per share amounts)
Allowance for credit losses to total loans1.08 %1.11 %1.14 %1.14 %1.22 %
Non-performing assets to total assets0.09 %0.08 %— %— %— %
Total non-performing assets$3,250 $2,806 $— $— $— 
Total nonaccrual loans$3,250 $2,806 $— $— $— 
Total substandard loans$39,637 $39.647 $18,968 $20,301 $24,740 
Total special mention loans$28,799 $25.576 $5,595 $9,000 $16,966 
Net loan charge-offs (recoveries)$(162)$41 $525 $(170)$194 
Net charge-offs (recoveries) to average loans (annualized)(0.03)%0.01 %0.16 %(0.05)%0.06 %
Book value per share$19.19 $18.49 $17.89 $17.52 $15.37 
Tangible book value per share (1)$13.60 $12.89 $13.35 $12.97 $10.82 
Total equity$363,515 $350,242 $211,717 $207,064 $181,650 
Tangible common equity (1)$257,618 $244,044 $157,935 $153,287 $127,872 
Cost of total deposits1.69 %1.71 %0.98 %0.87 %0.90 %
Interest and dividends on investment securities exempt from Federal income taxes$1,372 $1,396 $1,396 $1,398 $1,393 
Net interest margin (calculated on a fully tax equivalent basis) (2)3.69 %3.65 %3.42 %3.52 %3.47 %
Return on average assets (3)0.38 %(0.73)%0.61 %0.98 %1.02 %
Return on average equity (3)3.84 %(7.39)%7.08 %12.78 %13.60 %
Loan to deposit ratio78.62 %78.65 %63.34 %63.33 %59.35 %
Efficiency ratio88.37 %93.58 %74.04 %66.37 %60.77 %
Tier 1 leverage - Bancorp9.38 %9.14 %9.34 %9.18 %8.70 %
Tier 1 leverage - Bank11.24 %11.03 %11.95 %11.75 %11.21 %
Common equity tier 1 - Bancorp11.12 %11.36 %12.94 %12.78 %12.51 %
Common equity tier 1 - Bank13.55 %13.94 %16.94 %16.76 %16.50 %
Tier 1 risk-based capital - Bancorp11.30 %11.55 %13.24 %13.07 %12.81 %
Tier 1 risk-based capital - Bank13.55 %13.94 %16.94 %16.76 %16.50 %
Total risk-based capital - Bancorp13.55 %13.87 %16.25 %16.08 %15.81 %
Total risk based capital - Bank14.53 %14.96 %17.92 %17.74 %17.47 %
(1) Non-GAAP measure. Tangible common equity equals totals shareholder’s equity ($363,515) minus goodwill and core deposit intangible ($105,897). Tangible book value per share equals tangible common equity total ($257,618) divided by shares outstanding 18,945,593.
(2) Net Interest Margin is computed by dividing annualized quarterly net interest income by quarterly average interest-bearing assets.
(3) Computed by annualizing quarterly net income.
- more -

Community West Bancshares -- page 16
COMMUNITY WEST BANCSHARES
SCHEDULE OF AVERAGE BALANCES AND AVERAGE YIELDS AND RATES
(Unaudited)

 
For the Three Months Ended
September 30, 2024
For the Three Months Ended
June 30, 2024
For the Three Months Ended
September 30, 2023
(Dollars in thousands)Average
Balance		Interest
Income/
Expense		Average
Interest
Rate		Average
Balance		Interest
Income/
Expense		Average
Interest
Rate		Average
Balance		Interest
Income/
Expense		Average
Interest
Rate
ASSETS      
Interest-earning deposits in other banks$118,906 $1,537 5.17 %$84,395 $1,076 5.10 %$109,199 $1,481 5.42 %
Securities
Taxable securities645,319 4,954 3.07 %681,934 5,328 3.13 %755,630 5,900 3.12 %
Non-taxable securities (1)250,105 1,736 2.78 %253,267 1,767 2.79 %255,788 1,764 2.76 %
Total investment securities895,424 6,690 2.99 %935,201 7,095 3.03 %1,011,418 7,664 3.03 %
Total securities and interest-earning deposits1,014,330 8,227 3.24 %1,019,596 8,171 3.21 %1,120,617 9,145 3.26 %
Loans (2) (3)2,278,313 37,422 6.53 %2,226,858 36,197 6.54 %1,266,296 17,692 5.54 %
Total interest-earning assets3,292,643 $45,649 5.52 %3,246,454 $44,368 5.50 %2,386,913 $26,837 4.46 %
Allowance for credit losses(25,040)  (26,194)(15,300)  
Non-accrual loans1,732   1,605 —   
Cash and due from banks32,303   26,624 28,680   
Bank premises and equipment21,602   21,074 11,461   
Other assets218,204   198,870 91,231   
Total average assets$3,541,444   $3,468,433 $2,502,985   
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Interest-bearing liabilities:      
Savings and NOW accounts$476,620 $249 0.21 %$502,333 $239 0.19 %$454,151 $169 0.15 %
Money market accounts887,843 6,501 2.91 %816,224 5,696 2.81 %576,866 2,846 1.96 %
Time certificates of deposit479,944 5,743 4.76 %487,779 6,331 5.22 %195,155 2,000 4.07 %
Total interest-bearing deposits1,844,407 12,493 2.69 %1,806,336 12,266 2.73 %1,226,172 5,015 1.62 %
Other borrowed funds202,676 2,578 5.09 %207,108 2,674 5.16 %69,691 924 5.30 %
Total interest-bearing liabilities2,047,083 $15,071 2.93 %2,013,444 $14,940 2.98 %1,295,863 $5,939 1.82 %
Non-interest bearing demand deposits1,090,544   1,077,532 984,912   
Other liabilities50,799   42,648 34,231   
Shareholders’ equity353,018   334,809 187,979   
Total average liabilities and shareholders’ equity$3,541,444   $3,468,433 $2,502,985   
Interest income and rate earned on average earning assets $45,649 5.52 %$44,368 5.50 % $26,837 4.46 %
Interest expense and interest cost related to average interest-bearing liabilities 15,071 2.93 %14,940 2.98 % 5,939 1.82 %
Net interest income and net interest margin (4) $30,578 3.69 %$29,428 3.65 % $20,898 3.47 %

(1)    Calculated on a fully tax equivalent basis, which includes Federal tax benefits relating to income earned on municipal bonds totaling $365, $371, and $371 at September 30, 2024, June 30, 2024, and September 30, 2023, respectively.
(2)    Loan interest income includes loan (costs) fees of $(294), $(72), and $8 at September 30, 2024, June 30, 2024, and September 30, 2023, respectively.
(3)    Average loans do not include non-accrual loans but do include interest income recovered from previously charged off loans.
(4)    Net interest margin is computed by dividing net interest income by total average interest-earning assets.
















Community West Bancshares -- page 17
 For the Nine Months Ended
September 30, 2024		For the Nine Months Ended
September 30, 2023
(Dollars in thousands)Average
Balance		Interest
Income/
Expense		Average
Interest
Rate		Average
Balance		Interest
Income/
Expense		Average
Interest
Rate
ASSETS      
Interest-earning deposits in other banks$75,457 $3,044 5.36 %$74,780 $2,930 5.22 %
Securities
Taxable securities680,516 15,782 3.08 %768,187 17,612 3.06 %
Non-taxable securities (1)252,516 5,271 2.77 %256,615 5,321 2.76 %
Total investment securities933,032 21,053 3.00 %1,024,802 22,933 2.98 %
Total securities and interest-earning deposits1,008,489 24,097 3.17 %1,099,582 25,863 3.14 %
Loans (2) (3)1,869,985 91,919 6.57 %1,261,509 51,851 5.50 %
Total interest-earning assets2,878,474 $116,016 5.38 %2,361,091 $77,714 4.40 %
Allowance for credit losses(21,872)  (13,852)
Non-accrual loans834   — 
Cash and due from banks28,107  27,577 
Bank premises and equipment18,974  9,654 
Other assets173,658  90,507 
Total average assets$3,078,175   $2,474,977 
LIABILITIES AND SHAREHOLDERS’ EQUITY   
Interest-bearing liabilities:   
Savings and NOW accounts$459,852 $714 0.21 %$485,329 $422 0.12 %
Money market accounts726,613 15,070 2.77 %531,226 6,105 1.54 %
Time certificates of deposit367,266 13,994 5.09 %163,611 4,363 3.57 %
Total interest-bearing deposits1,553,731 29,778 2.56 %1,180,166 10,890 1.23 %
Other borrowed funds168,684 6,788 5.35 %87,741 3,393 5.16 %
Total interest-bearing liabilities1,722,415 $36,566 2.83 %1,267,907 $14,283 1.51 %
Non-interest bearing demand deposits1,018,611   988,620 
Other liabilities36,270   33,448 
Shareholders’ equity300,879   185,002 
Total average liabilities and shareholders’ equity$3,078,175   $2,474,977 
Interest income and rate earned on average earning assets $116,016 5.38 %$77,714 4.40 %
Interest expense and interest cost related to average interest-bearing liabilities 36,566 2.83 %14,283 1.51 %
Net interest income and net interest margin (4) $79,450 3.69 %$63,431 3.59 %

(1)    Calculated on a fully tax equivalent basis, which includes Federal tax benefits relating to income earned on municipal bonds totaling $1,107 and $1,118 at September 30, 2024 and September 30, 2023, respectively.
(2)    Loan interest income includes loan (costs) fees of $(505) and $27 at September 30, 2024 and September 30, 2023, respectively.
(3)    Average loans do not include non-accrual loans but do include interest income recovered from previously charged off loans.
(4)    Net interest margin is computed by dividing net interest income by total average interest-earning assets.


CONTACTS: Investor Contact:                     Media Contact:
Shannon Livingston                    Debbie Nalchajian-Cohen
Executive Vice President, Chief Financial Officer        Public Relations
Community West Bancshares                Community West Bancshares
916-235-4617                    559-222-1322