Community West Bancshares Earnings Increase 31% to $4.0 Million, or $0.45 Per Diluted Share, in 1Q22 Compared to 1Q21; Declares Increased Quarterly Cash Dividend of $0.075 Per Common Share

About this update from Community West Bancshares

GOLETA, Calif. , April 29, 2022 (GLOBE NEWSWIRE) -- Community West Bancshares (“ Community West” or the “Company”), (NASDAQ: CWBC), parent company of Community West Bank (the “Bank”), today reported net income increased 31.1% to $4.0 million , or $0.45 per diluted share, for the first quarter of 2022, compared to $3.0 million , or $0.35 diluted share, for the first quarter of 2021, and increased 36.8% compared to $2.9 million , or $0.33 per diluted share, for the fourth quarter of 2021. The increase in earnings during the first quarter of 2022, compared to the fourth quarter of 2021, included a $549,000 tax exempt payout on a bank owned life insurance (“BOLI”) policy and collection and legal expense recovery of $992,000 as a result of a legal settlement. Results for the first quarter of 2022 reflect lower interest and fees on Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans compared to the prior quarter and the year ago quarter, due to slowing PPP loan forgiveness as the program nears its conclusion. The Company’s Board of Directors declared a quarterly cash dividend of $0.075 per common share, payable May 31, 2022 to common shareholders of record on May 13, 2022 . “We generated solid earnings for the first quarter, highlighted by top-and bottom-line revenue growth, steady year-over-year deposit growth and improved operating efficiencies,” stated Martin E. Plourd , Chief Executive Officer. “Return on average assets, return on average common equity and our efficiency ratio all improved as we continue to deepen our presence throughout California’s Central Coast . The success of our client outreach during the current quarter, including the new banking relationships brought over throughout the PPP process, generated increased income. Our net interest margin also improved on a linked quarter basis, primarily due to higher yields on interest earning assets. With the recent and anticipated rate increases by the Federal Reserve , we anticipate continued improvement in our net interest margin in future periods.” First Quarter 2022 Financial Highlights: Net income increased 36.8% to $4.0 million , or $0.45 per diluted share in the first quarter, compared to $2.9 million , or $0.33 per diluted share in fourth quarter 2021, and increased 31.1% compared to $3.0 million , or $0.35 per diluted share in first quarter 2021. Net interest income was $10.7 million for first quarter 2022 and fourth quarter 2021, and $10.0 million in first quarter 2021. Net interest margin was 3.86% for the first quarter, compared to 3.77% in fourth quarter 2021, and 4.19% in first quarter 2021. Return on Average Assets was 1.39%, compared to 0.99% in fourth quarter 2021, and 1.22% in first quarter 2021. Return on Average Equity was 15.52%, compared to 11.42% in fourth quarter 2021, and 13.48% in first quarter 2021. The Company recorded a negative provision for loan loss expense for the first quarter of $284,000 compared to a provision expense of $26,000 in the prior quarter, and a $173,000 negative provision expense in the first quarter of 2021. The Allowance for Loan Losses (“ALL”) was 1.22% of total loans held for investment at March 31, 2022 , and 1.23% of total loans held for investment, excluding the $7.5 million of Paycheck Protection Program (“PPP”) loans which are 100% guaranteed by the Small Business Administration (“SBA”).* Non-interest-bearing demand deposits increased $16.2 million to $226.1 million at March 31, 2022 , compared to $209.9 million at December 31, 2021 , and increased $29.5 million compared to $196.6 million at March 31, 2021 . Book value per common share increased to $12.07 at March 31, 2022 , compared to $11.72 at December 31, 2021 , and $10.77 at March 31, 2021 . The Bank’s Tier 1 leverage ratio was 8.88% at March 31, 2022 , compared to 8.56% at December 31, 2021 , and 8.97% at March 31, 2021 . Net non-accrual loans improved to $536,000 at March 31, 2022 , compared to $565,000 at December 31, 2021 , and $1 .8 million at March 31, 2021 . *Non GAAP Income Statement Net interest income totaled $10.7 million in first quarter 2022, and in the preceding quarter, and was $10.0 million in first quarter of 2021. The Company recognized $399,000 of income in net fees related to PPP loans during first quarter, compared to $552,000 of income in net fees during fourth quarter 2021, and $1.1 million in the first quarter 2021. As of March 31, 2022 , there was $107,000 remaining in net unrecognized fees related to PPP loans that will be recognized as income through amortization or once the loans are paid off or forgiven by the SBA. Net interest margin was 3.86% for first quarter 2022, a nine-basis point increase compared to the fourth quarter of 2021, and a 33-basis point contraction compared to first quarter of 2021. “Higher yields on loans and proactive deposit cost management contributed to net interest margin expansion for the first quarter of 2022,” said Richard Pimentel , Chief Financial Officer. The cost of funds for the first quarter decreased one-basis point to 0.30%, compared to 0.31% for the fourth quarter, and improved by 16-basis points compared to 0.46% for the first quarter of 2021. PPP loans, including fees, accounted for 10 basis points of net interest margin for the first quarter compared to 10-basis points in the fourth quarter, and 9 basis points in the first quarter of 2021. Non-interest income totaled $1.3 million in first quarter, compared to $944,000 in fourth quarter, and $897,000 in first quarter of 2021. The increase during first quarter 2022 included a $549,000 tax exempt payout on a BOLI policy. Other loan fees were $246,000 for first quarter, compared to $343,000 in fourth quarter and $313,000 in first quarter of 2021. Gain on sale of loans was $60,000 in first quarter, compared to $109,000 in fourth quarter of 2021 and $118,000 in first quarter of 2021. Non-interest expense totaled $7.0 million in first quarter, compared to $7.7 million in fourth quarter, and $6.9 million in first quarter of 2021. The decrease in non-interest expense for first quarter 2022, compared to the prior quarter, reflects collection and legal expense recovery of $992,000 as a result of a legal settlement. Salaries and employee benefits, the Company’s largest component of non-interest expense, decreased $19,000 compared to fourth quarter 2021, and increased $300,000 compared to first quarter 2021. The Company’s efficiency ratio improved to 57.97% for first quarter, compared to 65.23% for fourth quarter 2021, and 62.71% for first quarter 2021. The Company continues to focus on expense control and gaining efficiencies through use of technology and process improvement. Balance Sheet Total assets decreased $20.4 million , or 1.8%, to $1.14 billion at March 31, 2022 , compared to $1.16 billion , at December 31, 2021 , and increased $118.6 million , or 11.6%, compared to $1.02 billion , at March 31, 2021 . Total loans decreased by $1.8 million , to $890.3 million at March 31, 2022 , compared to $892.1 million , at December 31, 2021 , and increased $2.5 million compared to $887.8 million , at March 31, 2021 . Total loans, excluding PPP loans, increased $12.0 million during the quarter and increased $89.5 million compared to March 31, 2021 . Commercial real estate loans outstanding (which include SBA 504, construction and land) were up 20.8% from year ago levels to $492.2 million at March 31, 2022 , and comprise 55.3% of the total loan portfolio. Manufactured housing loans were up 5.4% from year ago levels to $300.0 million and represent 33.7% of total loans. Commercial loans (which include agriculture loans) were down 9.2% from year ago levels to $70.5 million and represent 7.9% of the total loan portfolio. As of March 31, 2022 , the Company had 35 PPP loans totaling $7.5 million remaining on its balance sheet from both the first and second rounds of PPP funding. PPP loans of $7.5 million represent less than one percent of total loans at March 31, 2022 , down from $21.3 million at December 31, 2021 , and $94.5 million at March 31, 2021 . Total deposits decreased $24.4 million , or 2.6%, to $925.7 million at March 31, 2022 , compared to $950.1 million at December 31, 2021 , and increased $121.2 million , or 15.1%, compared to $804.5 million at March 31, 2021 . Non-interest-bearing demand deposits were $226.1 million at March 31, 2022 , a $16.2 million increase compared to $209.9 million at December 31, 2021 , and a $29.5 million increase compared to $196.6 million at March 31, 2021 . Interest-bearing demand deposits decreased $33.3 million to $504.2 million at March 31, 2022 , compared to $537.5 million at December 31, 2021 , and increased $63.7 million compared to $440.5 million at March 31, 2021 . Certificates of deposit, which include brokered deposits, decreased $7.8 million during the quarter to $171.2 million at March 31, 2022 , compared to $179.1 million at December 31, 2021 , and increased $23.7 million compared to $147.5 million at March 31, 2021 . Stockholders’ equity increased to $104.8 million at March 31, 2022 , compared to $101.4 million at December 31, 2021 , and $91.8 million at March 31, 2021 . Book value per common share increased to $12.07 at March 31, 2022 , compared to $11.72 at December 31, 2021 , and $10.77 at March 31, 2021 . Credit Quality “Credit quality metrics continue to improve during the quarter, with a substantial decrease in net-nonaccrual loans compared to a year ago,” said Plourd. “We continue to closely monitor our loan portfolio and have elevated credit monitoring structures in place. Our conservative loan grading system for managing potential problem loans early has helped to keep us from incurring losses, and is reflective in our historic low loss ratio.” At March 31, 2022 , asset quality reflected improvement due to positive loan risk rating migrations during the first quarter. Total classified loans and net non-accrual loans decreased year-over-year due to improvements in the loan portfolio and payoffs in these categories. All loans rated “Watch” or worse are monitored monthly and proactive measures are taken when any signs of deterioration to the credit are discovered. Net loan recoveries totaled $427,000 during the first quarter of 2022, compared to net loan recoveries of $96,000 in the preceding quarter and net loan recoveries of $212,000 in first quarter 2021. The Company recorded a negative provision expense of $284,000 in first quarter compared to a provision expense of 26,000 in fourth quarter 2021, and a negative provision expense of $173,000 in first quarter 2021. The allowance for loan losses was $10.5 million , or 1.22% of total loans held for investment, at March 31, 2022 , and 1.23% of total loans held for investment excluding PPP loans. Net non-accrual loans, plus net other assets acquired through foreclosure, decreased 5.1% to $2.9 million at March 31, 2022 , compared to $3.1 million at December 31, 2021 , and decreased 33.5% compared to $4.4 million at March 31, 2021 . There was $536,000 in net non-accrual loans as of March 31, 2022 , compared to $565,000 at December 31, 2021 , and $1.8 million at March 31, 2021 . Of the $536,000 of net non-accrual loans at March 31, 2022 , $1,000 were SBA 504 loans, $286,000 were manufactured housing loans, and $249,000 were single family real estate loans. There was $2.4 million in other assets acquired through foreclosure as of March 31, 2022 , compared to $2.5 million at December 31, 2021 , and $2.6 million at March 31, 2021 . The majority of this balance relates to one property in the amount of $2.3 million . Stock Repurchase Program On August 27, 2021 , the Company announced that its Board of Directors had extended the stock repurchase plan until August 31, 2023 . The Company did not repurchase shares during the first quarter of 2022, leaving $1.4 million available under the previously announced repurchase program. Company Overview Community West Bancshares is a financial services company with headquarters in Goleta, California . The Company is the holding company for Community West Bank , the largest publicly traded community bank serving California’s Central Coast area of Ventura , Santa Barbara and San Luis Obispo counties. Community West Bank has seven full-service California branch banking offices in Goleta , Santa Barbara , Santa Maria , Ventura , San Luis Obispo , Oxnard and Paso Robles . The principal business activities of the Company are Relationship Banking, Manufactured Housing lending and Government Guaranteed lending. Industry Accolades Community West was named to Piper Sandler’s Bank and Thrift Sm-All Stars – Class of 2021. This award recognized Community West as one of the top 35 best performing small capitalization institutions from a list of publicly traded banks and thrifts in the U.S. with market capitalizations less than $2.5 billion . Community West Bank was awarded a “Super Premier Performance” rating by The Findley Reports. For 52 years, The Findley Reports has been recognizing the financial performance of banking institutions in California and the Western United States . Community West Bank is rated 5-star Superior by Bauer Financial. Safe Harbor Disclosure This release contains certain forward-looking statements about the Company and the Bank that are intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. Statements that are not historical or current facts, including statements about future financial and operational results, expectations, or intentions are forward-looking statements. Such statements 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 and are subject to significant risks, contingencies, and uncertainties, many of which are difficult to predict and are generally beyond our control including, but not limited to, risks from the COVID-19 pandemic, the strength of the United States economy in general and of the local economies in which we conduct operations, the effect of, and changes in, trade, monetary and fiscal policies and laws, including changes in interest rate policies of the Board of Governors of the Federal Reserve System , inflation, weather, natural disasters, climate change, increased unemployment, deterioration in credit quality of our loan portfolio and/or the value of the collateral securing the repayment of those loans, reduction in the value of our investment securities, the costs and effects of litigation and of adverse outcomes of such litigation, the cost and ability to attract and retain key employees, a breach of our operational or security systems, policies or procedures including cyber-attacks on us or third party vendors or service providers, regulatory or legal developments, United States tax policies, including our effective income tax rate, and our ability to implement and execute our business plan and strategy and expand our operations as provided therein. Actual results may differ materially from those set forth or implied in the forward-looking statements as a result of a variety of factors including the risk factors contained in documents filed by the Company with the Securities and Exchange Commission and are available in the “Investor Relations” section of our website, https://www.communitywest.com/sec-filings/documents/default.aspx . The Company is under no obligation (and expressly disclaims any obligation) to update or alter such forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. COMMUNITY WEST BANCSHARES CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in 000's, except per share data) March 31 , December 31 , March 31 , 2022 2021 2021 Cash and cash equivalents $ 2,043 $ 1,621 $ 2,607 Interest-earning deposits in other financial institutions 191,145 206,754 71,128 Investment securities 21,805 22,774 21,570 Loans: Commercial 70,480 72,423 77,579 Commercial real estate 492,181 480,801 407,336 SBA 8,403 8,580 11,566 Paycheck Protection Program (PPP) 7,504 21,317 94,507 Manufactured housing 299,969 297,363 284,583 Single family real estate 8,824 8,663 10,845 HELOC 3,475 3,579 3,846 Other (1) (528 ) (643 ) (2,414 ) Total loans 890,308 892,083 887,848 Loans, net Held for sale 24,193 23,408 29,767 Held for investment 866,115 868,675 858,081 Less: Allowance for loan losses (10,547 ) (10,404 ) (10,233 ) Net held for investment 855,568 858,271 847,848 NET LOANS 879,761 881,679 877,615 Other assets 41,849 44,224 45,102 TOTAL ASSETS $ 1,136,603 $ 1,157,052 $ 1,018,022 Deposits Non-interest-bearing demand $ 226,073 $ 209,893 $ 196,617 Interest-bearing demand 504,209 537,508 440,502 Savings 24,239 23,675 19,858 Certificates of deposit ( $250,000 or more) 13,197 17,612 20,072 Other certificates of deposit 158,022 161,443 127,472 Total deposits 925,740 950,131 804,521 Other borrowings 90,000 90,000 105,000 Other liabilities 16,035 15,546 16,710 TOTAL LIABILITIES 1,031,775 1,055,677 926,231 Stockholders' equity 104,828 101,375 91,791 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,136,603 $ 1,157,052 $ 1,018,022 Common shares outstanding 8,682 8,650 8,524 Book value per common share $ 12.07 $ 11.72 $ 10.77 (1) Includes consumer, other loans, securitized loans, and deferred fees COMMUNITY WEST BANCSHARES CONDENSED CONSOLIDATED INCOME STATEMENTS (unaudited) (in 000's, except per share data) Three Months Ended March 31 , December September June 30 , March 31 , 2022 31, 2021 30, 2021 2021 2021 Interest income Loans, including fees $ 11,194 $ 11,258 $ 11,576 $ 11,433 $ 10,856 Investment securities and other 306 279 259 218 199 Total interest income 11,500 11,537 11,835 11,651 11,055 Deposits 570 614 708 771 742 Other borrowings 194 206 198 194 271 Total interest expense 764 820 906 965 1,013 Net interest income 10,736 10,717 10,929 10,686 10,042 Provision (credit) for loan losses (284 ) 26 7 (41 ) (173 ) Net interest income after provision for loan losses 11,020 10,691 10,922 10,727 10,215 Non-interest income Other loan fees 246 343 383 310 313 Gains from loan sales, net 60 109 118 130 118 Document processing fees 101 123 145 138 106 Service charges 88 84 77 74 67 Other 796 285 317 220 293 Total non-interest income 1,291 944 1,040 872 897 Non-interest expenses Salaries and employee benefits 4,865 4,884 4,478 4,379 4,565 Occupancy, net 997 893 802 780 779 Professional services 399 441 434 430 340 Data processing 310 251 292 332 340 Depreciation 183 186 191 198 205 FDIC assessment 171 146 127 121 91 Advertising and marketing 258 198 189 164 183 Stock-based compensation 92 129 63 58 68 Other (304 ) 478 284 207 289 Total non-interest expenses 6,971 7,606 6,860 6,669 6,860 Income before provision for income taxes 5,340 4,029 5,102 4,930 4,252 Provision for income taxes 1,380 1,135 1,467 1,379 1,231 Net income $ 3,960 $ 2,894 $ 3,635 $ 3,551 $ 3,021 Earnings per share: Basic $ 0.46 $ 0.34 $ 0.42 $ 0.42 $ 0.36 Diluted $ 0.45 $ 0.33 $ 0.41 $ 0.41 $ 0.35 Three Months Ended Three Months Ended Three Months Ended March 31, 2022 December 31, 2021 March 31, 2021 AverageBalance Interest AverageYield/Cost AverageBalance Interest AverageYield/Cost AverageBalance Interest AverageYield/Cost Interest-Earning Assets Federal funds sold and interest-earning deposits $ 205,815 $ 109 0.21 % $ 210,293 $ 85 0.16 % $ 71,287 $ 39 0.22 % Investment securities 26,897 197 2.97 % 27,661 194 2.78 % 25,892 160 2.51 % Loans (1) 894,539 11,194 5.08 % 888,519 11,258 5.03 % 875,766 10,856 5.03 % Total earnings assets 1,127,251 11,500 4.14 % 1,126,473 11,537 4.06 % 972,945 11,055 4.61 % Nonearning Assets Cash and due from banks 2,161 2,154 2,076 Allowance for loan losses (10,615 ) (10,314 ) (10,230 ) Other assets 39,138 39,596 39,820 Total assets $ 1,157,935 $ 1,157,909 $ 1,004,611 Interest-Bearing Liabilities Interest-bearing demand deposits $ 519,454 $ 319 0.25 % $ 523,212 $ 343 0.26 % $ 410,615 $ 481 0.48 % Savings deposits 23,931 16 0.27 % 22,248 18 0.32 % 19,327 21 0.44 % Time deposits 175,448 235 0.54 % 181,638 253 0.55 % 173,541 240 0.56 % Total interest-bearing deposits 718,833 570 0.32 % 727,098 614 0.34 % 603,483 742 0.50 % Other borrowings 90,000 194 0.87 % 90,003 206 0.91 % 105,000 271 1.05 % Total interest-bearing liabilities $ 808,833 $ 764 0.38 % $ 817,101 $ 820 0.40 % $ 708,483 $ 1,013 0.58 % Noninterest-Bearing Liabilities Noninterest-bearing demand deposits 227,980 223,503 189,019 Other liabilities 17,640 16,726 16,203 Stockholders' equity 103,482 100,579 90,906 Total Liabilities and Stockholders' Equity $ 1,157,935 $ 1,157,909 1,004,611 Net interest income and margin $ 10,736 3.86 % $ 10,717 3.77 % $ 10,042 4.19 % Net interest spread 3.76 % 3.66 % 4.04 % Cost of total deposits 0.24 % 0.26 % 0.38 % Cost of funds 0.30 % 0.31 % 0.46 % ADDITIONAL FINANCIAL INFORMATION (Dollars and shares in thousands except per share amounts)(Unaudited) Three Months Ended Three Months Ended Three Months Ended PERFORMANCE MEASURES AND RATIOS March 31 , 2022 December 31 ,2021 March 31 ,2021 Return on average common equity 15.52 % 11.42 % 13.48 % Return on average assets 1.39 % 0.99 % 1.22 % Efficiency ratio 57.97 % 65.23 % 62.71 % Net interest margin 3.86 % 3.77 % 4.19 % Three Months Ended Three Months Ended Three Months Ended AVERAGE BALANCES March 31 ,2022 December 31 ,2021 March 31 ,2021 Average assets $ 1,157,935 $ 1,157,909 $ 1,004,611 Average earning assets 1,127,251 1,126,473 972,945 Average total loans 894,539 888,519 875,766 Average deposits 946,813 950,601 792,502 Average common equity 103,482 100,579 90,906 EQUITY ANALYSIS March 31 ,2022 December 31 ,2021 March 31 ,2021 Total common equity $ 104,828 $ 101,375 $ 91,791 Common stock outstanding 8,682 8,650 8,524 Book value per common share $ 12.07 $ 11.72 $ 10.77 ASSET QUALITY March 31 ,2022 December 31 ,2021 March 31 ,2021 Nonaccrual loans, net $ 536 $ 565 $ 1,825 Nonaccrual loans, net/total loans 0.06 % 0.06 % 0.21 % Other assets acquired through foreclosure, net $ 2,389 $ 2,518 $ 2,572 Nonaccrual loans plus other assets acquired through foreclosure, net $ 2,925 $ 3,083 $ 4,397 Nonaccrual loans plus other assets acquired through foreclosure, net/total assets 0.26 % 0.27 % 0.43 % Net loan (recoveries)/charge-offs in the quarter $ (427 ) $ (96 ) $ (212 ) Net (recoveries)/charge-offs in the quarter/total loans (0.05 %) (0.01 %) (0.02 %) Allowance for loan losses $ 10,547 $ 10,404 $ 10,233 Plus: Reserve for undisbursed loan commitments 90 94 82 Total allowance for credit losses $ 10,637 $ 10,498 $ 10,315 Allowance for loan losses/total loans held for investment 1.22 % 1.20 % 1.19 % Allowance for loan losses/total loans held for investment excluding PPP loans 1.23 % 1.23 % 1.34 % Allowance for loan losses/nonaccrual loans, net 1966.82 % 1842.50 % 560.71 % Community West Bank * Community bank leverage ratio N/A N/A 8.97 % Tier 1 leverage ratio 8.88 % 8.56 % 8.97 % Tier 1 capital ratio 11.33 % 11.02 % 11.28 % Total capital ratio 12.50 % 12.19 % 12.53 % INTEREST SPREAD ANALYSIS March 31 ,2022 December 31 ,2021 March 31 ,2021 Yield on total loans 5.08 % 5.03 % 5.03 % Yield on investments 2.97 % 2.78 % 2.51 % Yield on interest earning deposits 0.21 % 0.16 % 0.22 % Yield on earning assets 4.14 % 4.06 % 4.61 % Cost of interest-bearing deposits 0.32 % 0.34 % 0.50 % Cost of total deposits 0.24 % 0.26 % 0.38 % Cost of borrowings 0.87 % 0.91 % 1.05 % Cost of interest-bearing liabilities 0.38 % 0.40 % 0.58 % Cost of funds 0.30 % 0.31 % 0.46 % * Capital ratios are preliminary until the Call Report is filed. Contact: Richard Pimentel , EVP & CFO805.692.4410 www.communitywestbank.com Source: Community West Bancshares

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