Community West Bancshares Earns $2.6 Million, or $0.30 Per Diluted Share, in Second Quarter 2022; Declares Quarterly Cash Dividend of $0.075 Per Common Share

About this update from Community West Bancshares

GOLETA, Calif. , July 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 of $2.6 million , or $0.30 per diluted share, for the second quarter of 2022, compared to $3.6 million , or $0.41 diluted share, for the second quarter of 2021, and $4.0 million , or $0.45 per diluted share, for the first quarter of 2022. For the first six months of 2022, the Company reported net income of $6.6 million , or $0.74 per diluted share, compared to $6.6 million , or $0.76 per diluted share, for the first six months of 2021. Earnings for the second quarter of 2022 were impacted by a $252,000 provision for loan losses as a result of quarterly loan growth. This compared to a $284,000 negative provision expense recorded during the preceding quarter. Preceding quarter results were also enhanced by 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 loan legal settlement. Results for the second quarter of 2022 compared to the year ago quarter reflect lower interest and fees on Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans, due to lower PPP loan forgiveness as the program nears its conclusion. The PPP interest and fees recognized in the second quarter of 2022 were $146,000 compared to $1.1 million in the second quarter of 2021. The Company’s Board of Directors declared a quarterly cash dividend of $0.075 per common share, payable August 31, 2022 to common shareholders of record on August 12, 2022 . “Our earnings for the second quarter included strong loan growth and net interest income expansion, as we continue to broaden our presence throughout California’s Central Coast ,” stated Martin E. Plourd , President & Chief Executive Officer of Community West Bancshares . “Total loans increased 2.5% during the quarter, or 10% annually, reflecting increases in the commercial real estate and manufactured housing loan portfolios. Additionally, our net interest margin improved substantially on a linked quarter basis improving 15 basis points to 4.01% as we took advantage of interest rate increases enacted by the Federal Reserve and invested cash balances into higher yielding securities. We remain well positioned to benefit further from any anticipated rate increases in the months ahead.” Second Quarter 2022 Financial Highlights: Net income was $2.6 million , or $0.30 per diluted share in the second quarter, compared to $4.0 million , or $0.45 per diluted share in first quarter 2022, and $3.6 million , or $0.41 per diluted share in second quarter 2021. Net interest income was $11.0 million for second quarter 2022, and $10.7 million in first quarter 2022 and second quarter 2021. Net interest margin was 4.01% for the second quarter, compared to 3.86% in first quarter 2022, and 4.24% in second quarter 2021. Return on average assets was 0.92%, compared to 1.39% in first quarter 2022, and 1.37% in second quarter 2021. Return on average equity was 9.92%, compared to 15.52% in first quarter 2022, and 15.18% in second quarter 2021. The Company recorded a provision for loan losses of $252,000 for second quarter 2022, compared to a negative provision expense of $284,000 for first quarter 2022, and a negative provision expense of $41,000 in second quarter of 2021. The Allowance for Loan Losses (“ALL”) was 1.22% of total loans held for investment at June 30, 2022 , and 1.23% of total loans held for investment, excluding the $2.9 million of SBA PPP loans which are 100% guaranteed by the SBA.* Non-interest-bearing demand deposits increased $10.6 million to $236.7 million at June 30, 2022 , compared to $226 .1 million at March 31, 2022 , and increased $34.4 million compared to $202.3 million at June 30, 2021 . Book value per common share increased to $12.32 at June 30, 2022 , compared to $12.07 at March 31, 2022 , and $11.11 at June 30, 2021 . The Bank’s Tier 1 leverage ratio was 9.30% at June 30, 2022 , compared to 8.88% at March 31, 2022 , and 8.94% at June 30, 2021 . Net non-accrual loans improved to $379,000 at June 30, 2022 , compared to $536,000 at March 31, 2022 , and $1 .8 million at June 30, 2021 . *Non GAAP Income Statement Net interest income totaled $11.0 million in second quarter 2022, compared to $10.7 million in both the preceding quarter and the second quarter of 2021. The Company recognized $146,000 of income in interest and net fees related to PPP loans during the second quarter, compared to $399,000 of income in interest and net fees during first quarter 2022, and $1.1 million for second quarter 2021. As of June 30, 2022 , there was $17,000 remaining in net unrecognized fees related to PPP loans that will be recognized as income through amortization or once the loans are either paid off or forgiven by the SBA. In the first six months of 2022, net interest income increased 4.9% to $21.7 million , compared to $20.7 million in the first six months of 2021. Net interest margin was 4.01% for second quarter 2022, a 15-basis point increase compared to first quarter 2022, and a 23-basis point contraction compared to second quarter 2021. “During the second quarter, we continued deploying excess cash into securities and higher yielding cash equivalents, which had a significant impact on net interest margin compared to the prior quarter,” said Richard Pimentel , Chief Financial Officer. Lower deposit rates also contributed to net interest margin expansion during the quarter, primarily due to the shifting deposit mix and outflows of higher costing deposits. The cost of funds for the second quarter decreased 2-basis points to 0.28%, compared to 0.30% for the preceding quarter, and improved by 13-basis points compared to 0.41% for the second quarter of 2021. PPP loans, including fees, accounted for 3-basis points of net interest margin for the second quarter compared to 10-basis points in first quarter 2022, and 10-basis points in second quarter 2021. In the first six months of 2022, the net interest margin was 3.93%, compared to 4.22% in the first six months of 2021. Non-interest income totaled $1.1 million in second quarter 2022, compared to $1.3 million in first quarter 2022, and $872,000 in second quarter 2021. Other income was $323,000 in the second quarter 2022 compared to $796,000 in the first quarter 2022. The decline in other income was due to a $549,000 tax exempt payout on a BOLI policy that was paid in the first quarter partially offset by a $104,000 gain from the sale of a previously foreclosed asset. Other loan fees were $377,000 for the second quarter, compared to $246,000 in first quarter 2022 and $310,000 in second quarter 2021. Gain on sale of loans was $136,000 in the second quarter, compared to $60,000 in the first quarter of 2022 and $130,000 in second quarter 2021. Non-interest income increased 32.4% to $2.3 million in the first six months of 2022, compared to $1.8 million in the first six months of 2021. The increase was primarily due to the BOLI policy payout and gain on sale of a previously foreclosed asset during the first quarter discussed above partially offset by $52,000 in lower gain on sale and $22,000 less in loan and document processing fees. Non-interest expense totaled $8.1 million in second quarter 2022, compared to $7.0 million in the first quarter of 2022, and $6.7 million in the second quarter of 2021. Non-interest expense for the prior quarter reflects a 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, increased $45,000 compared to first quarter 2022, and increased $531,000 compared to second quarter 2021 due to increased pressure on wages and benefits as a result of increased inflation and low unemployment. The Company’s efficiency ratio was 67.26% for second quarter, compared to 57.97% for first quarter 2022, and 57.70% for second quarter 2021. In the first six months of 2022, non-interest expense was $15.1 million , compared to $13.5 million in the first six months of 2021. Balance Sheet Total assets decreased $29.8 million , or 2.6%, to $1.11 billion at June 30, 2022 , compared to $1.14 billion , at March 31, 2022 , and increased $43.8 million , or 4.1%, compared to $1.06 billion , at June 30, 2021 . Total interest-earning deposits in other financial institutions decreased $91.2 million to $100 million at June 30, 2022 as excess cash balances were deployed into higher yielding securities and loans. Total investment securities increased $38.7 million to $60.5 million . Total loans increased by $22.4 million , to $912.7 million at June 30, 2022 , compared to $890.3 million , at March 31, 2022 , and increased $19.4 million compared to $893.3 million , at June 30, 2021 . Total loans, excluding PPP loans, increased $26.9 million during the quarter and increased $87.6 million compared to June 30, 2021 . Commercial real estate loans outstanding (which include SBA 504, construction and land) were up 16.3% from year ago levels to $516.5 million at June 30, 2022 , and comprise 56.6% of the total loan portfolio. Manufactured housing loans were up 6.7% from year ago levels to $305.7 million and represent 33.5% of total loans. Commercial loans (which include agriculture loans) were down 1.3% from year ago levels to $67.7 million and represent 7.4% of the total loan portfolio. As of June 30, 2022 , the Company had ten PPP loans totaling $2.9 million remaining on its balance sheet from both the first and second rounds of PPP funding. PPP loans of $2.9 million represent less than one percent of total loans at June 30, 2022 , down from $7.5 million at March 31, 2022 , and $71.1 million at June 30, 2021 . Total deposits decreased $31.1 million , or 3.4%, to $894.7 million at June 30, 2022 , compared to $925.7 million at March 31, 2022 , and increased $30.1 million , or 3.5%, compared to $864.6 million at June 30, 2021 . Non-interest-bearing demand deposits were $236.7 million at June 30, 2022 , a $10.6 million increase compared to $226.1 million at March 31, 2022 , and a $34.4 million increase compared to $202.3 million at June 30, 2021 . Higher cost interest-bearing demand deposits decreased $28.3 million to $475.9 million at June 30, 2022 , compared to $504.2 million at March 31, 2022 , and increased $26.2 million compared to $449.6 million at June 30, 2021 . Certificates of deposit, which include brokered deposits, decreased $14.7 million during the quarter to $156.5 million at June 30, 2022 , compared to $171.2 million at March 31, 2022 , and decreased $36.5 million compared to $192.9 million at June 30, 2021 . Stockholders’ equity increased to $107.1 million at June 30, 2022 , compared to $104.8 million at March 31, 2022 , and $95.5 million at June 30, 2021 . Book value per common share increased to $12.32 at June 30, 2022 , compared to $12.07 at March 31, 2022 , and $11.11 at June 30, 2021 . Credit Quality “Credit quality metrics continue to improve, 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 conservative credit monitoring structures in place during all credit cycles.” At June 30, 2022 , asset quality reflected improvement due to positive loan risk rating migrations during the second 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 $66,000 during the second quarter of 2022, compared to net loan recoveries of $427,000 in the preceding quarter and net loan recoveries of $48,000 in second quarter 2021. The Company recorded a provision expense of $252,000 in the second quarter, compared to a negative provision expense of $284,000 in first quarter 2022, and a negative provision expense of $41,000 in second quarter 2021. The allowance for loan losses was $10.9 million , or 1.22% of total loans held for investment, at June 30, 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 10.1% to $2.7 million at June 30, 2022 , compared to $2.9 million at March 31, 2022 , and decreased 39.8% compared to $4.4 million at June 30, 2021 . There was $379,000 in net non-accrual loans as of June 30, 2022 , compared to $536,000 at March 31, 2022 , and $1.8 million at June 30, 2021 . Of the $379,000 of net non-accrual loans at June 30, 2022 , $138,000 were manufactured housing loans, and $241,000 were single family real estate loans. There was $2.3 million in other assets acquired through foreclosure as of June 30, 2022 , compared to $2.4 million at March 31, 2022 , and $2.6 million at June 30, 2021 . The OREO balance relates to one property in the net 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 second 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 In May of 2022, Community West was ranked #125 on the American Banker Magazine’s list of Top 200 Publicly Traded Community Banks and Thrifts based on three-year average return on equity as of December 31, 2021 . 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) June 30 , March 31 , December 31 , June 30 , 2022 2022 2021 2021 Cash and cash equivalents $ 2,361 $ 2,043 $ 1,621 $ 2,638 Interest-earning deposits in other financial institutions 99,915 191,145 206,754 109,642 Investment securities 60,513 21,805 22,774 23,247 Loans: Commercial 67,681 70,480 72,423 68,537 Commercial real estate 516,514 492,181 480,801 444,127 SBA 7,922 8,403 8,580 10,732 Paycheck Protection Program (PPP) 2,920 7,504 21,317 71,106 Manufactured housing 305,749 299,969 297,363 286,552 Single family real estate 9,038 8,824 8,663 10,513 HELOC 3,380 3,475 3,579 3,685 Other (1) (532 ) (528 ) (643 ) (1,983 ) Total loans 912,672 890,308 892,083 893,269 Loans, net Held for sale 23,124 24,193 23,408 27,252 Held for investment 889,548 866,115 868,675 866,017 Less: Allowance for loan losses (10,866 ) (10,547 ) (10,404 ) (10,240 ) Net held for investment 878,682 855,568 858,271 855,777 NET LOANS 901,806 879,761 881,679 883,029 Other assets 42,233 41,849 44,224 44,472 TOTAL ASSETS $ 1,106,828 $ 1,136,603 $ 1,157,052 $ 1,063,028 Deposits Non-interest-bearing demand $ 236,696 $ 226,073 $ 209,893 $ 202,293 Interest-bearing demand 475,869 504,209 537,508 449,649 Savings 25,626 24,239 23,675 19,700 Certificates of deposit ( $250,000 or more) 8,688 13,197 17,612 19,791 Other certificates of deposit 147,785 158,022 161,443 173,145 Total deposits 894,664 925,740 950,131 864,578 Other borrowings 90,000 90,000 90,000 90,000 Other liabilities 15,022 16,035 15,546 12,993 TOTAL LIABILITIES 999,686 1,031,775 1,055,677 967,571 Stockholders' equity 107,142 104,828 101,375 95,457 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,106,828 $ 1,136,603 $ 1,157,052 $ 1,063,028 Common shares outstanding 8,695 8,682 8,650 8,589 Book value per common share $ 12.32 $ 12.07 $ 11.72 $ 11.11 (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 Six Months Ended June 30 , June 30 , June 30 , June 30 , 2022 2021 2022 2021 Interest income Loans, including fees $ 11,129 $ 11,433 $ 22,323 $ 22,289 Investment securities and other 577 218 883 417 Total interest income 11,706 11,651 23,206 22,706 Deposits 500 771 1,070 1,513 Other borrowings 196 194 390 465 Total interest expense 696 965 1,460 1,978 Net interest income 11,010 10,686 21,746 20,728 Provision (credit) for loan losses 252 (41 ) (32 ) (214 ) Net interest income after provision for loan losses 10,758 10,727 21,778 20,942 Non-interest income Other loan fees 377 310 623 623 Gains from loan sales, net 136 130 196 248 Document processing fees 122 138 223 244 Service charges 93 74 181 141 Other 323 220 1,119 513 Total non-interest income 1,051 872 2,342 1,769 Non-interest expenses Salaries and employee benefits 4,910 4,379 9,775 8,944 Occupancy, net 1,021 780 2,018 1,559 Professional services 635 430 1,034 770 Data processing 307 332 617 672 Depreciation 179 198 362 403 FDIC assessment 164 121 335 212 Advertising and marketing 233 164 491 347 Stock-based compensation 94 58 186 126 Other 569 207 265 496 Total non-interest expenses 8,112 6,669 15,083 13,529 Income before provision for income taxes 3,697 4,930 9,037 9,182 Provision for income taxes 1,062 1,379 2,442 2,610 Net income $ 2,635 $ 3,551 $ 6,595 $ 6,572 Earnings per share: Basic $ 0.30 $ 0.42 $ 0.76 $ 0.77 Diluted $ 0.30 $ 0.41 $ 0.74 $ 0.76 COMMUNITY WEST BANCSHARES CONDENSED CONSOLIDATED INCOME STATEMENTS (unaudited) (in 000's, except per share data) Three Months Ended June 30 , March 31 , December 31 , September 30 , June 30 , 2022 2022 2021 2021 2021 Interest income Loans, including fees $ 11,129 $ 11,194 $ 11,258 $ 11,576 $ 11,433 Investment securities and other 577 306 279 259 218 Total interest income 11,706 11,500 11,537 11,835 11,651 Deposits 500 570 614 708 771 Other borrowings 196 194 206 198 194 Total interest expense 696 764 820 906 965 Net interest income 11,010 10,736 10,717 10,929 10,686 Provision (credit) for loan losses 252 (284 ) 26 7 (41 ) Net interest income after provision for loan losses 10,758 11,020 10,691 10,922 10,727 Non-interest income Other loan fees 377 246 343 383 310 Gains from loan sales, net 136 60 109 118 130 Document processing fees 122 101 123 145 138 Service charges 93 88 84 77 74 Other 323 796 285 317 220 Total non-interest income 1,051 1,291 944 1,040 872 Non-interest expenses Salaries and employee benefits 4,910 4,865 4,884 4,478 4,379 Occupancy, net 1,021 997 893 802 780 Professional services 635 399 441 434 430 Data processing 307 310 251 292 332 Depreciation 179 183 186 191 198 FDIC assessment 164 171 146 127 121 Advertising and marketing 233 258 198 189 164 Stock-based compensation 94 92 129 63 58 Other 569 (304 ) 478 284 207 Total non-interest expenses 8,112 6,971 7,606 6,860 6,669 Income before provision for income taxes 3,697 5,340 4,029 5,102 4,930 Provision for income taxes 1,062 1,380 1,135 1,467 1,379 Net income $ 2,635 $ 3,960 $ 2,894 $ 3,635 $ 3,551 Earnings per share: Basic $ 0.30 $ 0.46 $ 0.34 $ 0.42 $ 0.42 Diluted $ 0.30 $ 0.45 $ 0.33 $ 0.41 $ 0.41 Three Months Ended Three Months Ended Three Months Ended June 30, 2022 March 31, 2022 June 30, 2021 Average Balance Interest Average Yield/Cost Average Balance Interest Average Yield/Cost Average Balance Interest Average Yield/Cost Interest-Earning Assets Federal funds sold and interest-earning deposits $ 149,710 $ 302 0.81 % $ 205,815 $ 109 0.21 % $ 91,106 $ 33 0.15 % Investment securities 45,243 275 2.44 % 26,897 197 2.97 % 26,914 185 2.76 % Loans (1) 907,088 11,129 4.92 % 894,539 11,194 5.08 % 891,948 11,433 5.14 % Total earnings assets 1,102,041 11,706 4.26 % 1,127,251 11,500 4.14 % 1,009,968 11,651 4.63 % Nonearning Assets Cash and due from banks 2,193 2,161 2,204 Allowance for loan losses (10,765 ) (10,615 ) (10,261 ) Other assets 37,435 39,138 40,075 Total assets $ 1,130,904 $ 1,157,935 $ 1,041,986 Interest-Bearing Liabilities Interest-bearing demand deposits $ 495,821 $ 273 0.22 % $ 519,454 $ 319 0.25 % $ 436,167 $ 466 0.43 % Savings deposits 25,402 16 0.25 % 23,931 16 0.27 % 20,047 19 0.38 % Time deposits 164,687 211 0.51 % 175,448 235 0.54 % 184,584 286 0.62 % Total interest-bearing deposits 685,910 500 0.29 % 718,833 570 0.32 % 640,798 771 0.48 % Other borrowings 90,000 196 0.87 % 90,000 194 0.87 % 92,582 194 0.84 % Total interest-bearing liabilities $ 775,910 $ 696 0.36 % $ 808,833 $ 764 0.38 % $ 733,380 $ 965 0.53 % Noninterest-Bearing Liabilities Noninterest-bearing demand deposits 232,849 227,980 199,306 Other liabilities 15,646 17,640 15,449 Stockholders' equity 106,499 103,482 93,851 Total Liabilities and Stockholders' Equity $ 1,130,904 $ 1,157,935 1,041,986 Net interest income and margin $ 11,010 4.01 % $ 10,736 3.86 % $ 10,686 4.24 % Net interest spread 3.90 % 3.76 % 4.10 % Cost of total deposits 0.22 % 0.24 % 0.37 % Cost of funds 0.28 % 0.30 % 0.41 % Six Months Ended Six Months Ended June 30, 2022 June 30, 2021 Average Balance Interest Average Yield/Cost Average Balance Interest Average Yield/Cost Interest-Earning Assets Federal funds sold and interest-earning deposits $ 177,607 $ 411 0.47 % $ 81,251 $ 72 0.18 % Investment securities 36,121 472 2.64 % 26,406 345 2.63 % Loans (1) 900,849 22,323 5.00 % 883,902 22,289 5.09 % Total earnings assets 1,114,577 23,206 4.20 % 991,559 22,706 4.62 % Nonearning Assets Cash and due from banks 2,177 2,140 Allowance for loan losses (10,691 ) (10,245 ) Other assets 38,282 39,948 Total assets $ 1,144,345 $ 1,023,402 Interest-Bearing Liabilities Interest-bearing demand deposits $ 507,572 $ 592 0.24 % $ 423,461 $ 947 0.45 % Savings deposits 24,670 33 0.27 % 19,689 40 0.41 % Time deposits 170,038 445 0.53 % 179,093 526 0.59 % Total interest-bearing deposits 702,280 1,070 0.31 % 622,243 1,513 0.49 % Other borrowings 90,000 390 0.87 % 98,757 465 0.95 % Total interest-bearing liabilities $ 792,280 $ 1,460 0.37 % $ 721,000 $ 1,978 0.55 % Noninterest-Bearing Liabilities Noninterest-bearing demand deposits 230,428 194,191 Other liabilities 16,638 15,824 Stockholders' equity 104,999 92,387 Total Liabilities and Stockholders' Equity $ 1,144,345 $ 1,023,402 Net interest income and margin $ 21,746 3.93 % $ 20,728 4.22 % Net interest spread 3.83 % 4.07 % Cost of total deposits 0.23 % 0.37 % Cost of funds 0.29 % 0.44 % ADDITIONAL FINANCIAL INFORMATION (Dollars and shares in thousands except per share amounts)(Unaudited) Three Months Ended Three Months Ended Three Months Ended Six Months Ended Six Months Ended PERFORMANCE MEASURES AND RATIOS June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Return on average common equity 9.92 % 15.52 % 15.18 % 12.67 % 14.35 % Return on average assets 0.93 % 1.39 % 1.37 % 1.16 % 1.29 % Efficiency ratio 67.26 % 57.97 % 57.70 % 62.62 % 60.14 % Net interest margin 4.01 % 3.86 % 4.24 % 3.93 % 4.22 % Three Months Ended Three Months Ended Three Months Ended Six Months Ended Six Months Ended AVERAGE BALANCES June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Average assets $ 1,130,904 $ 1,157,935 $ 1,041,986 $ 1,144,345 $ 1,023,402 Average earning assets 1,102,041 1,127,251 1,009,968 1,114,577 991,559 Average total loans 907,088 894,539 891,948 900,849 883,902 Average deposits 918,759 946,813 840,104 932,708 816,434 Average common equity 106,499 103,482 93,851 104,999 92,387 EQUITY ANALYSIS June 30, 2022 March 31, 2022 June 30, 2021 Total common equity $ 107,142 $ 104,828 $ 95,457 Common stock outstanding 8,695 8,682 8,589 Book value per common share $ 12.32 $ 12.07 $ 11.11 ASSET QUALITY June 30, 2022 March 31, 2022 June 30, 2021 Nonaccrual loans, net $ 379 $ 536 $ 1,797 Nonaccrual loans, net/total loans 0.04 % 0.06 % 0.20 % Other assets acquired through foreclosure, net $ 2,250 $ 2,389 $ 2,572 Nonaccrual loans plus other assets acquired through foreclosure, net $ 2,629 $ 2,925 $ 4,369 Nonaccrual loans plus other assets acquired through foreclosure, net/total assets 0.24 % 0.26 % 0.41 % Net loan (recoveries)/charge-offs in the quarter $ (66 ) $ (427 ) $ (48 ) Net (recoveries)/charge-offs in the quarter/total loans (0.01 %) (0.05 %) (0.01 %) Allowance for loan losses $ 10,866 $ 10,547 $ 10,240 Plus: Reserve for undisbursed loan commitments 94 90 78 Total allowance for credit losses $ 10,960 $ 10,637 $ 10,318 Allowance for loan losses/total loans held for investment 1.22 % 1.22 % 1.18 % Allowance for loan losses/total loans held for investment excluding PPP loans 1.23 % 1.23 % 1.29 % Allowance for loan losses/nonaccrual loans, net 2867.02 % 1966.82 % 569.84 % Community West Bank * Community bank leverage ratio N/A N/A 8.94 % Tier 1 leverage ratio 9.30 % 8.88 % 8.94 % Tier 1 capital ratio 11.07 % 11.32 % 11.21 % Total capital ratio 12.22 % 12.49 % 12.46 % INTEREST SPREAD ANALYSIS June 30, 2022 March 31, 2022 June 30, 2021 Yield on total loans 4.92 % 5.08 % 5.14 % Yield on investments 2.44 % 2.97 % 2.76 % Yield on interest earning deposits 0.81 % 0.21 % 0.15 % Yield on earning assets 4.26 % 4.14 % 4.63 % Cost of interest-bearing deposits 0.29 % 0.32 % 0.48 % Cost of total deposits 0.22 % 0.24 % 0.37 % Cost of borrowings 0.87 % 0.87 % 0.84 % Cost of interest-bearing liabilities 0.36 % 0.38 % 0.53 % Cost of funds 0.28 % 0.30 % 0.41 % * Capital ratios are preliminary until the Call Report is filed. Contact: Richard Pimentel , EVP & CFO 805.692.4410 www.communitywestbank.com Source: Community West Bancshares

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