Community West Bancshares Earns $2.7 Million, or $0.32 Per Diluted Share, in 4Q19, and $8.0 Million, or $0.93 Per Diluted Share for The Year, Declares Quarterly Cash Dividend of $0.055 Per Common Share

About this update from Community West Bancshares

GOLETA, Calif. , Jan. 24, 2020 (GLOBE NEWSWIRE) -- Community West Bancshares ( Community West or the Company), (NASDAQ: CWBC), parent company of Community West Bank (Bank), today reported net income increased to $2.7 million , or $0.32 per diluted share, for the fourth quarter of 2019 (4Q19), compared to $2.2 million , or $0.25 per diluted share, in 3Q19, and $1.4 million , or $0.16 per diluted share, in 4Q18. For the full year 2019, net income increased 7.5% to $8.0 million , or $0.93 per diluted share, compared to $7.4 million , or $0.88 per diluted share, in 2018. “We ended the year producing solid earnings for the fourth quarter and full year of 2019, highlighted by top-line revenue growth, steady year-over-year loan and deposit growth, and above industry-average net interest margin of 4.07% for the fourth quarter of 2019,” said Martin E. Plourd , President and Chief Executive Officer. “Although the growth of the bank has slowed in 2019, our performance metrics improved at quarter-end. 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 of Ventura , Santa Barbara and San Luis Obispo Counties, with our long-term goal to deliver consistent earnings performance for our shareholders. We anticipate loan growth to remain muted in 2020 and will look to profitable lines of business, within our bank’s risk tolerance.” Fourth Quarter 2019 Financial Highlights: Net income was $2.7 million , or $0.32 per diluted share, in 4Q19, compared to $2.2 million , or $0.25 per diluted share in 3Q19, and $1.4 million , or $0.16 per diluted share in 4Q18. Net interest margin of 4.07% for 4Q19, compared to 4.10% for 3Q19 and 3.97% for 4Q18. Total deposits were $750.9 million at December 31, 2019 , compared to $761.7 million at September 30, 2019 , and increased compared to $716.0 million at December 31, 2018 . Total demand deposits represented 56.6% of total deposits at December 31, 2019 . Total loans decreased $13.9 million during the quarter to $775.6 million at December 31, 2019 , compared to $789.5 million at September 30, 2019 , and increased compared to $768.2 million at December 31, 2018 . Book value per common share increased to $9.68 at December 31, 2019 , compared to $9.40 at September 30, 2019 , and $8.92 at December 31, 2018 . Provision (credit) for loan losses was ( $210,000 ) for the quarter, compared to a credit for loan losses of ( $75,000 ) for 3Q19, and a provision for loan losses of $238,000 for 4Q18. Total risked based capital improved to 11.41% for the Bank at December 31, 2019 , compared to 11.18% at September 30, 2019 and 10.83% at December 31, 2018 . Net nonaccrual loans improved to $2.4 million at December 31, 2019 , compared to $5.5 million at September 30, 2019 , and $3.4 million at December 31, 2018 . Other assets acquired through foreclosure, net was $2.5 million at December 31, 2019 , compared to $317,000 at September 30, 2019 , and zero at December 31, 2018 . Income Statement Net interest income was $8.8 million in 4Q19 and 3Q19 and increased compared to $8.4 million in 4Q18. For 4Q19, net interest income benefited from a net decrease in the cost of funds. For the year, net interest income increased to $34.4 million , compared to $33.6 million in 2018. “A key component of our business strategy was to grow non-interest income. Additionally with the disruption in the agriculture industry we shifted our agriculture lending from on-balance sheet products to making agriculture loans that could be sold,” said Plourd. “This shift resulted in loan sale gains of $765,000 during the quarter. While we anticipate continued focus on this strategy in future quarters, we don’t anticipate the same level of activity and resulting gains as we experienced in 4Q19.” Non-interest income increased to $1.7 million in 4Q19, compared to $647,000 in 3Q19 and $660,000 in 4Q18. Non-interest income was $3.6 million for the year 2019, compared to $2.6 million in 2018. “Our reduced cost of funds rate has helped to sustain our net interest margin year-over-year despite the three interest rate reductions during the second half of 2019,” said Susan C. Thompson , Executive Vice President and Chief Financial Officer. Fourth quarter net interest margin was 4.07%, compared to 4.10% in 3Q19, and improved 13 basis points compared to 3.97% in 4Q18. For the year, the net interest margin was 4.06%, compared to 4.07% in 2018. Non-interest expenses totaled $6.8 million in 4Q19, compared to $6.5 million in the preceding quarter and $6.8 million in 4Q18. For the full year 2019, non-interest expense was $26.8 million , compared to $26.0 million in 2018. Balance Sheet “We have been actively managing both sides of the balance sheet, adhering to strict underwriting standards with loan originations and replacing higher cost funding,” said Thompson. Total assets increased modestly to $913.9 million at December 31, 2019 , compared to $903.3 million at September 30, 2019 and increased $36.6 million , or 4.2%, compared to $877.3 million at December 31, 2018 . Total loans decreased to $775.6 million at December 31, 2019 , compared to $789.5 million at September 30, 2019 , and increased modestly compared to $768.2 million at December 31, 2018 . Commercial real estate loans outstanding (which include SBA 504, construction and land) were up 5.4% from year ago levels to $385.6 million at December 31, 2019 and comprise 49.7% of the total loan portfolio. Manufactured housing loans were up 4.1% from year ago levels to $257.2 million and represent 33.2% of total loans. Commercial loans (which include agriculture loans) were down 14.4% from year ago levels to $101.5 million and represent 13.1% of the total loan portfolio. Total deposits decreased to $750.9 million at December 31, 2019 , compared to $761.7 million at September 30, 2019 , and increased $34.9 million , or 4.9% compared to $716.0 million at December 31, 2018 . Non-interest-bearing demand deposits decreased $3.6 million to $110.8 million at December 31, 2019 compared to $114.4 million at September 30, 2019 and increased $2.6 million compared to $108.2 million at December 30, 2018 . Interest-bearing demand deposits decreased to $314.3 million compared to $333.7 million at September 30, 2019 but increased $43.9 million compared to $270.4 million at December 31, 2018 . Certificates of deposit, which include broker deposits increased $12.0 million during the quarter to $310.1 million at December 31, 2019 compared to $298.1 million at September 30, 2019 and decreased $12.6 million compared to $322.8 million at December 31, 2018 as the Company divests itself from higher priced funding. Stockholders’ equity increased to $82.0 million at December 31, 2019 , compared to $79.6 million at September 30, 2019 , and $76.2 million at December 31, 2018 . Book value per common share increased to $9.68 at December 31, 2019 , compared to $9.40 at September 30, 2019 , and $8.92 at December 31, 2018 . Credit Quality The Company recorded a credit to its provision for loan losses of ( $210,000 ) in 4Q19. This compares to a credit to the provision for loan losses of ( $75,000 ) in 3Q19 and a provision for loan losses of $238,000 in 4Q18. The allowance for loan losses, including the reserve for undisbursed loans, was $8.8 million , or 1.19% of total loans held for investment, at December 31, 2019 . Net nonaccrual loans plus net other assets acquired through foreclosure were $4.9 million at December 31, 2019 , compared to $5.8 million at September 30, 2019 , and $3.4 million at December 31, 2018 . Net nonaccrual loans totaled $2.4 million at December 31, 2019 , compared to $5.5 million at September 30, 2019 and $3.4 million a year ago. Of the $2.4 million of net nonaccrual loans at December 31, 2019 , $1.6 million were commercial loans, $0.6 million were manufactured housing loans, $0.1 million were SBA loans, and $0.1 million were commercial real estate loans. There was $2.5 million in other assets acquired through foreclosure as of December 31, 2019 . This compares to $317,000 of other assets acquired through foreclosure at September 30, 2019 , and no other assets acquired through foreclosure a year prior. Cash Dividend Declared The Company’s Board of Directors declared a cash dividend of $0.055 per common share, payable February 28, 2020 to common shareholders of record on February 11, 2020 . The current annualized yield, based on the closing price of CWBC shares of $11.10 on December 31, 2019 , was 1.94%. Stock Repurchase Program The Company repurchased a total of 99,983 shares during the first three quarters of 2019 and did not repurchase any shares of its common stock in the fourth quarter of 2019, 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 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 Twelve Months Ended December 31 , September 30 , December 31 , December 31 , December 31 , 2019 2019 2018 2019 2018 Interest income Loans, including fees $ 11,136 $ 11,306 $ 10,582 $ 43,890 $ 40,865 Investment securities and other 492 413 459 1,849 1,766 Total interest income 11,628 11,719 11,041 45,739 42,631 Interest expense Deposits 2,413 2,615 2,329 10,055 7,702 Other borrowings 377 306 358 1,327 1,286 Total interest expense 2,790 2,921 2,687 11,382 8,988 Net interest income 8,838 8,798 8,354 34,357 33,643 Provision (credit) for loan losses (210 ) (75 ) 238 (165 ) 14 Net interest income after provision for loan losses 9,048 8,873 8,116 34,522 33,629 Non-interest income Other loan fees 500 302 350 1,383 1,348 Gains from loan sales, net 765 - - 765 - Service charges 160 129 108 567 459 Document processing fees 116 96 122 423 489 Other 123 120 80 469 332 Total non-interest income 1,664 647 660 3,607 2,628 Non-interest expenses Salaries and employee benefits 4,141 4,254 3,991 17,094 16,329 Occupancy, net 750 788 829 3,088 3,132 Professional services 552 341 425 1,679 1,356 Data processing 236 215 233 876 852 Depreciation 214 219 212 864 764 Advertising and marketing 228 187 198 774 685 FDIC assessment 118 (15 ) 223 427 770 Stock-based compensation 100 90 194 382 478 Other 475 385 542 1,571 1,673 Total non-interest expenses 6,814 6,464 6,847 26,755 26,039 Income before provision for income taxes 3,898 3,056 1,929 11,374 10,218 Provision for income taxes 1,179 902 570 3,411 2,809 Net income $ 2,719 $ 2,154 $ 1,359 $ 7,963 $ 7,409 Earnings per share: Basic $ 0.32 $ 0.25 $ 0.16 $ 0.94 $ 0.89 Diluted $ 0.32 $ 0.25 $ 0.16 $ 0.93 $ 0.88 COMMUNITY WEST BANCSHARES CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in 000's, except per share data) December 31 , September 30 , December 31 , 2019 2019 2018 Cash and interest-earning deposits in other financial institutions $ 82,661 $ 56,347 $ 56,915 Investment securities 25,563 28,707 32,353 Loans: Commercial 101,485 110,153 118,518 Commercial real estate 385,642 392,288 365,809 SBA 14,777 17,018 19,077 Manufactured housing 257,247 253,229 247,114 Single family real estate 11,668 11,936 11,261 HELOC 4,531 4,847 6,756 Other 213 (14 ) (292 ) Total loans 775,563 789,457 768,243 Loans, net Held for sale 42,046 44,816 48,355 Held for investment 733,517 744,641 719,888 Less: Allowance for loan losses (8,717 ) (8,868 ) (8,691 ) Net held for investment 724,800 735,773 711,197 NET LOANS 766,846 780,589 759,552 Other assets 38,800 37,609 28,471 TOTAL ASSETS $ 913,870 $ 903,252 $ 877,291 Deposits Non-interest-bearing demand $ 110,843 $ 114,366 $ 108,161 Interest-bearing demand 314,278 333,679 270,431 Savings 15,689 15,481 14,641 Certificates of deposit ( $250,000 or more) 96,431 90,298 93,439 Other certificates of deposit 213,693 207,848 229,334 Total deposits 750,934 761,672 716,006 Other borrowings 65,000 45,000 75,000 Other liabilities 15,958 16,984 10,134 TOTAL LIABILITIES 831,892 823,656 801,140 Stockholders' equity 81,978 79,596 76,151 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 913,870 $ 903,252 $ 877,291 Common shares outstanding 8,472 8,467 8,533 Book value per common share $ 9.68 $ 9.40 $ 8.92 ADDITIONAL FINANCIAL INFORMATION (Dollars in thousands except per share amounts)(Unaudited) Three Months Ended Three Months Ended Three Months Ended Twelve Months Ended PERFORMANCE MEASURES AND RATIOS December 31, 2019 September 30, 2019 December 31, 2018 December 31, 2019 December 31, 2018 Return on average common equity 13.35 % 10.85 % 7.06 % 10.15 % 10.02 % Return on average assets 1.21 % 0.97 % 0.63 % 0.91 % 0.88 % Efficiency ratio 64.88 % 68.44 % 75.96 % 70.47 % 71.79 % Net interest margin 4.07 % 4.10 % 3.97 % 4.06 % 4.07 % Three Months Ended Three Months Ended Three Months Ended Twelve Months Ended AVERAGE BALANCES December 31, 2019 September 30, 2019 December 31, 2018 December 31, 2019 December 31, 2018 Average assets $ 887,902 $ 877,505 $ 852,892 $ 872,509 $ 842,468 Average earning assets 862,350 850,948 834,259 846,673 826,292 Average total loans 779,698 788,965 764,411 778,745 751,775 Average deposits 725,029 735,545 717,205 726,022 714,651 Average common equity 80,825 78,763 76,334 78,437 73,906 EQUITY ANALYSIS December 31, 2019 September 30, 2019 December 31, 2018 Total common equity $ 81,978 $ 79,596 $ 76,151 Common stock outstanding 8,472 8,467 8,533 Book value per common share $ 9.68 $ 9.40 $ 8.92 ASSET QUALITY December 31, 2019 September 30, 2019 December 31, 2018 Nonaccrual loans, net $ 2,389 $ 5,476 $ 3,378 Nonaccrual loans, net/total loans 0.31 % 0.69 % 0.44 % Other assets acquired through foreclosure, net $ 2,524 $ 317 $ - Nonaccrual loans plus other assets acquired through foreclosure, net $ 4,913 $ 5,793 $ 3,378 Nonaccrual loans plus other assets acquired through foreclosure, net/total assets 0.54 % 0.64 % 0.39 % Net loan (recoveries)/charge-offs in the quarter $ (58 ) $ (69 ) $ 66 Net (recoveries)/charge-offs in the quarter/total loans (0.01 %) (0.01 %) 0.01 % Allowance for loan losses $ 8,717 $ 8,868 $ 8,691 Plus: Reserve for undisbursed loan commitments 85 81 73 Total allowance for credit losses $ 8,802 $ 8,949 $ 8,764 Allowance for loan losses/total loans held for investment 1.19 % 1.19 % 1.21 % Allowance for loan losses/nonaccrual loans, net 364.88 % 161.94 % 257.28 % Community West Bank * Tier 1 leverage ratio 9.06 % 9.02 % 8.57 % Tier 1 capital ratio 10.28 % 10.04 % 9.68 % Total capital ratio 11.41 % 11.18 % 10.83 % INTEREST SPREAD ANALYSIS December 31, 2019 September 30, 2019 December 31, 2018 Yield on total loans 5.67 % 5.69 % 5.49 % Yield on investments 3.47 % 3.06 % 2.52 % Yield on interest earning deposits 1.66 % 2.14 % 2.70 % Yield on earning assets 5.35 % 5.46 % 5.25 % Cost of interest-bearing deposits 1.57 % 1.69 % 1.52 % Cost of total deposits 1.32 % 1.41 % 1.29 % Cost of borrowings 2.31 % 2.64 % 2.87 % Cost of interest-bearing liabilities 1.64 % 1.76 % 1.63 % * 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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