Community West Bancshares Earns $2.2 Million, or $0.25 Per Diluted Share, in 3Q19; Results Highlighted by Net Interest Margin Expansion; Declares Quarterly Cash Dividend of $0.055 Per Common Share

About this update from Community West Bancshares

GOLETA, Calif. , Oct. 25, 2019 (GLOBE NEWSWIRE) -- Community West Bancshares ( Community West or the Company), (NASDAQ: CWBC), parent company of Community West Bank (Bank), today reported earnings of $2.2 million , or $0.25 per diluted share, for the third quarter of 2019 (3Q19), compared to $1.6 million , or $0.18 per diluted share, in 2Q19, and $2.4 million , or $0.27 per diluted share, in 3Q18. In the first nine months of 2019, net income was $5.2 million , or $0.61 per diluted share, compared to $6.1 million , or $0.69 per diluted share, in the first nine months of 2018. “We delivered solid third quarter results, fueled by growing revenues and an expanding net interest margin,” stated Martin E. Plourd , President and Chief Executive Officer. “Loan growth remains steady, with a 5% increase in the loan portfolio compared to a year ago, and strong total demand deposits, which increased 20% year-over-year as we continue to improve our core funding position. We will continue to focus on high quality earnings growth, while managing our operating efficiencies and expanding our brand throughout California’s Central Coast .” Third Quarter 2019 Financial Highlights: Net income was $2.2 million , or $0.25 per diluted share, in 3Q19, compared to $1.6 million , or $0.18 per diluted share in 2Q19, and $2.4 million , or $0.27 per diluted share in 3Q18. Net interest margin improved to 4.10% for 3Q19, compared to 4.07% for 2Q19 and 4.02% for 3Q18. Total non-interest expense was $6.5 million in 3Q19, compared to $6.8 million in 2Q19 and $6.4 million in 3Q18. Total demand deposits decreased slightly to $448.0 million at September 30, 2019 , compared to $456.3 million at June 30, 2019 , and increased $75.4 million compared to $372.6 million at September 30, 2018 . Total loans increased to $789.5 million at September 30, 2019 , compared to $788.9 million at June 30, 2019 , and increased $35.7 million compared to $753.7 million at September 30, 2018 . Book value per common share increased to $9.40 at September 30, 2019 , compared to $9.19 at June 30, 2019 , and $9.13 at September 30, 2018 . Provision (credit) for loan losses was ( $75,000 ) for the quarter, compared to a provision for loan losses of $177,000 for 2Q19, and a credit for loan losses of ( $197,000 ) for 3Q18. Total risked based capital improved to 11.18% for the Bank at September 30, 2019 , compared to 10.67% at June 30, 2019 and 10.79% at September 30, 2018 . Net nonaccrual loans totaled $5.5 million at September 30, 2019 , compared to $3.0 million at June 30, 2019 , and $3.8 million at September 30, 2018 . Other real estate owned was $317,000 at September 30, 2019 , compared to $1.1 million at June 30, 2019 , and zero at September 30, 2018 . Income Statement Third quarter net interest income increased to $8.8 million , compared to $8.5 million in 2Q19 and $8.6 million in 3Q18. For 3Q19, net interest income benefited by both collection of interest on previously impaired loans and a net decrease in the cost of funds. In the first nine months of 2019, net interest income was $25.5 million , compared to $25.3 million in the first nine months of 2018. Non-interest income was $647,000 in 3Q19, compared to $692,000 in 2Q19 and $641,000 in 3Q18. Non-interest income was $1.9 million in the first nine months of 2019, compared to $2.0 million in the first nine months of 2018. “The continued improvement in the margin for the current quarter was due, in part, to our on-going efforts to reduce our cost of funds,” said Susan C. Thompson , Executive Vice President and Chief Financial Officer. Third quarter net interest margin improved to 4.10%, from 4.07% in 2Q19, and 4.02% in 3Q18. In the first nine months of 2019, the net interest margin was 4.06%, compared to 4.11% in the prior year period. Non-interest expenses totaled $6.5 million in 3Q19, compared to $6.8 million in the preceding quarter and $6.4 million in 3Q18. In the first nine months of 2019, non-interest expense was $19.9 million , compared to $19.2 million in the first nine months of 2018. Balance Sheet Total loans increased modestly to $789.5 million at September 30, 2019 , compared to $788.9 million at June 30, 2019 , and increased $35.8 million , or 4.7%, compared to $753.7 million at September 30, 2018 . Commercial real estate loans outstanding (which include SBA 504, construction and land) were up 11.1% from year ago levels to $392.3 million at September 30, 2019 and comprise 49.7% of the total loan portfolio. Manufactured housing loans were up 5.5% from year ago levels to $253.2 million and represent 32.1% of total loans. Commercial loans (which include agriculture loans) were down 7.6% from year ago levels to $110.2 million and represent 13.9% of the total loan portfolio. Total deposits decreased slightly to $761.7 million at September 30, 2019 , compared to $765.1 million at June 30, 2019 , and increased $41.8 million , or 5.8% compared to $719.9 million at September 30, 2018 . Non-interest-bearing demand deposits increased $1.9 million , or 1.7% to $114.4 million at September 30, 2019 compared to $112.5 million at June 30, 2019 and increased $8.8 million compared to $105.6 million at September 30, 2018 . Interest-bearing demand deposits decreased to $333.7 million compared to $343.8 million at June 30, 2019 but increased $66.6 million compared to $267.0 million at September 30, 2018 . Certificates of deposit, which include broker deposits increased $5.6 million to $298.1 million at September 30, 2019 compared to $292.5 million at June 30, 2019 and decreased $34.8 million compared to $332.9 million at September 30, 2018 as the Company divests itself from wholesale funding. Total assets were $903.3 million at September 30, 2019 , compared to $905.6 million at June 30, 2019 and increased $48.6 million , or 5.7%, compared to $854.7 million at September 30, 2018 . Stockholders’ equity increased to $79.6 million at September 30, 2019 , compared to $77.8 million at June 30, 2019 , and $75.6 million at September 30, 2018 . Book value per common share increased to $9.40 at September 30, 2019 , compared to $9.19 at June 30, 2019 , and $9.13 at September 30, 2018 . Credit Quality The Company recorded a credit to its provision for loan losses of ( $75,000 ) in 3Q19. This compares to a provision for loan losses of $177,000 in 2Q19 and credit to the provision for loan losses of ( $197,000 ) in 3Q18. The allowance for loan losses, including the reserve for undisbursed loans, was $8.9 million at September 30, 2019 , or 1.19% of total loans held for investment, compared to 1.20% at June 30, 2019 , and 1.21% a year ago. Net nonaccrual loans plus net other assets acquired through foreclosure were $5.8 million at September 30, 2019 , compared to $4.1 million at June 30, 2019 , and $3.8 million at September 30, 2018 . At September 30, 2019 , net nonaccrual loans consisted of $4.7 million of commercial loans including commercial agriculture, $0.3 million of manufactured housing loans, $0.4 million of SBA loans, and $0.1 million of commercial real estate loans. There was $317,000 in other assets acquired through foreclosure as of September 30, 2019 . This compares to $1.1 million of other assets acquired through foreclosure at June 30, 2019 , and no other assets acquired through foreclosure a year ago. Cash Dividend Declared The Company’s Board of Directors declared a cash dividend of $0.055 per common share, payable November 29, 2019 to common shareholders of record on November 14, 2019 . The current annualized yield, based on the closing price of CWBC shares of $9.89 on September 30, 2019 , was 2.17%. Stock Repurchase Program The Company, under the Board of Directors authorized common stock repurchase program of up to $4.5 million , bought back 10,233 shares during 3Q19. As of September 30, 2019 , 350,189 shares had been repurchased at an average price of $8.71 per share. 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 eight full-service California branch banking offices in Goleta , Santa Barbara , Santa Maria , Ventura , Westlake Village , 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 In April 2019 , Community West was awarded a “Premier” rating by The Findley Reports. For 51 years, The Findley Reports has been recognizing the financial performance of banking institutions in California and the Western United States. In making their selections, The Findley Reports focuses on these four ratios: growth, return on beginning equity, net operating income as a percentage of average assets, and loan losses as a percentage of gross loans. Safe Harbor Disclosure This release contains forward-looking statements that 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 risks and uncertainties, including, but not limited to, the ability of the Company to implement its strategy and expand its lending operations. COMMUNITY WEST BANCSHARES CONDENSED CONSOLIDATED INCOME STATEMENTS (unaudited) (in 000's, except per share data) Three Months Ended Nine Months Ended September 30 , June 30 , September 30 , September 30 , September 30 , 2019 2019 2018 2019 2018 Interest income Loans, including fees $ 11,306 $ 10,907 $ 10,612 $ 32,754 $ 30,283 Investment securities and other 413 460 589 1,357 1,307 Total interest income 11,719 11,367 11,201 34,111 31,590 Interest expense Deposits 2,615 2,583 2,222 7,642 5,373 Other borrowings 306 286 351 950 928 Total interest expense 2,921 2,869 2,573 8,592 6,301 Net interest income 8,798 8,498 8,628 25,519 25,289 Provision (credit) for loan losses (75 ) 177 (197 ) 45 (224 ) Net interest income after provision for loan losses 8,873 8,321 8,825 25,474 25,513 Non-interest income Other loan fees 302 323 379 883 998 Service charges 129 139 113 407 351 Document processing fees 96 124 120 307 367 Other 120 106 29 346 252 Total non-interest income 647 692 641 1,943 1,968 Non-interest expenses Salaries and employee benefits 4,254 4,318 4,147 12,953 12,338 Occupancy, net 788 768 778 2,338 2,303 Professional services 341 405 326 1,127 931 Data processing 215 201 201 640 619 Depreciation 219 218 199 650 552 Advertising and marketing 187 230 154 546 487 FDIC assessment (15 ) 154 169 309 547 Stock-based compensation 90 97 81 282 284 Other 385 369 347 1,096 1,131 Total non-interest expenses 6,464 6,760 6,402 19,941 19,192 Income before provision for income taxes 3,056 2,253 3,064 7,476 8,289 Provision for income taxes 902 673 695 2,232 2,239 Net income $ 2,154 $ 1,580 $ 2,369 $ 5,244 $ 6,050 Earnings per share: Basic $ 0.25 $ 0.19 $ 0.29 $ 0.62 $ 0.73 Diluted $ 0.25 $ 0.18 $ 0.27 $ 0.61 $ 0.69 COMMUNITY WEST BANCSHARES CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in 000's, except per share data) September 30 , June 30 , September 30 , December 31 , 2019 2019 2018 2018 Cash and interest-earning deposits in other financial institutions $ 56,347 $ 57,181 $ 47,753 $ 56,915 Investment securities 28,707 30,414 33,421 32,353 Loans: Commercial 110,153 108,599 119,270 118,518 Commercial real estate 392,288 391,293 353,136 365,809 SBA 17,018 17,560 21,057 19,077 Manufactured housing 253,229 253,250 240,010 247,114 Single family real estate 11,936 11,575 11,153 11,261 HELOC 4,847 6,696 9,446 6,756 Other (14 ) (65 ) (331 ) (292 ) Total loans 789,457 788,908 753,741 768,243 Loans, net Held for sale 44,816 45,447 50,944 48,355 Held for investment 744,641 743,461 702,797 719,888 Less: Allowance for loan losses (8,868 ) (8,887 ) (8,519 ) (8,691 ) Net held for investment 735,773 734,574 694,278 711,197 NET LOANS 780,589 780,021 745,222 759,552 Other assets 37,609 37,951 28,313 28,471 TOTAL ASSETS $ 903,252 $ 905,567 $ 854,709 $ 877,291 Deposits Non-interest-bearing demand $ 114,366 $ 112,463 $ 105,580 $ 108,161 Interest-bearing demand 333,679 343,841 267,046 270,431 Savings 15,481 16,264 14,385 14,641 Certificates of deposit ( $250,000 or more) 90,298 90,170 92,934 93,439 Other certificates of deposit 207,848 202,373 239,997 229,334 Total deposits 761,672 765,111 719,942 716,006 Other borrowings 45,000 46,000 50,000 75,000 Other liabilities 16,984 16,627 9,210 10,134 TOTAL LIABILITIES 823,656 827,738 779,152 801,140 Stockholders' equity 79,596 77,829 75,557 76,151 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 903,252 $ 905,567 $ 854,709 $ 877,291 Common shares outstanding 8,467 8,465 8,275 8,533 Book value per common share $ 9.40 $ 9.19 $ 9.13 $ 8.92 ADDITIONAL FINANCIAL INFORMATION (Dollars in thousands except per share amounts)(Unaudited) Three Months Ended Three Months Ended Three Months Ended Nine Months Ended PERFORMANCE MEASURES AND RATIOS September 30, 2019 June 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Return on average common equity 10.85 % 8.18 % 12.57 % 9.03 % 11.07 % Return on average assets 0.97 % 0.73 % 1.08 % 0.81 % 96.00 % Efficiency ratio 68.44 % 73.56 % 69.07 % 72.61 % 70.41 % Net interest margin 4.10 % 4.07 % 4.02 % 4.06 % 4.11 % Three Months Ended Three Months Ended Three Months Ended Nine Months Ended AVERAGE BALANCES September 30, 2019 June 30, 2019 September 30, 2018 September 30, 2019 September 30, 2018 Average assets $ 877,505 $ 864,583 $ 867,174 $ 867,322 $ 838,955 Average earning assets 850,948 838,104 852,083 841,391 823,607 Average total loans 788,965 777,828 755,146 778,425 747,518 Average deposits 735,545 726,366 734,391 726,356 713,790 Average common equity 78,763 77,432 74,799 77,633 73,087 EQUITY ANALYSIS September 30, 2019 June 30, 2019 September 30, 2018 Total common equity $ 79,596 $ 77,829 $ 75,557 Common stock outstanding 8,467 8,465 8,275 Book value per common share $ 9.40 $ 9.19 $ 9.13 ASSET QUALITY September 30, 2019 June 30, 2019 September 30, 2018 Nonaccrual loans, net $ 5,476 $ 3,016 $ 3,755 Nonaccrual loans, net/total loans 0.69 % 0.38 % 0.50 % Other assets acquired through foreclosure, net $ 317 $ 1,074 $ - Nonaccrual loans plus other assets acquired through foreclosure, net $ 5,793 $ 4,090 $ 3,755 Nonaccrual loans plus other assets acquired through foreclosure, net/total assets 0.64 % 0.45 % 0.44 % Net loan (recoveries)/charge-offs in the quarter $ (69 ) $ (62 ) $ (94 ) Net (recoveries)/charge-offs in the quarter/total loans (0.01 %) (0.01 %) (0.01 %) Allowance for loan losses $ 8,868 $ 8,887 $ 8,519 Plus: Reserve for undisbursed loan commitments 81 81 80 Total allowance for credit losses $ 8,949 $ 8,968 $ 8,599 Allowance for loan losses/total loans held for investment 1.19 % 1.20 % 1.21 % Allowance for loan losses/nonaccrual loans, net 161.94 % 294.66 % 226.87 % Community West Bank * Tier 1 leverage ratio 9.02 % 8.66 % 8.23 % Tier 1 capital ratio 10.04 % 9.53 % 9.64 % Total capital ratio 11.18 % 10.67 % 10.79 % INTEREST SPREAD ANALYSIS September 30, 2019 June 30, 2019 September 30, 2018 Yield on total loans 5.69 % 5.62 % 5.58 % Yield on investments 3.06 % 3.89 % 3.77 % Yield on interest earning deposits 2.14 % 1.89 % 1.54 % Yield on earning assets 5.46 % 5.44 % 5.22 % Cost of interest-bearing deposits 1.69 % 1.70 % 1.41 % Cost of total deposits 1.41 % 1.43 % 1.20 % Cost of borrowings 2.64 % 2.64 % 2.79 % Cost of interest-bearing liabilities 1.76 % 1.76 % 1.51 % * Capital ratios are preliminary until the Call Report is filed. Contact: Susan C. Thompson , EVP & CFO805.692.5821 www.communitywestbank.com Source: Community West Bancshares

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