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Sierra BancorpCommunity West Bancshares STABILITY in Uncertain Times ANNUAL REPORT 2020 Community West Bancshares remained stable and weathered the uncertainty of 2020. Community West produced strong earnings in 2020, with solid top and bottom line results, core deposit growth and an expanded net interest margin. The effect of the pandemic on our employees, clients and communities remained our primary concern throughout the year. Since the start of the pandemic, we worked together as a team to maintain all branch activity, taking conservative measures to keep our employees and clients safe, without compromising the level of service our clients expect and deserve. We focused on assessing the risks in our loan portfolio and working with our clients affected by the pandemic, granting appropriate loan modifications. We are very proud of Community West’s financial performance, closing out 2020 with a net income of $8.2 million, up from 2019’s record of $8.0 million. Our total assets ended the year at $975 million – up $62 million over 2019 – and total loans grew $82 million, year over year. All production areas posted very solid numbers in 2020. Our total deposits for the year ended at $766 million, up $15 million over 2019, and here’s the good news: our bank was able to reduce and replace a significant portion of our high-cost CDs, including brokered deposits, by a total of $132 million – primarily with low-cost core deposits which grew by $155 million. To say we had a good year is an understatement; we had another record year! Throughout 2020, Community West Bank generated 517 Paycheck Protection Program (PPP) loans, which are 100% guaranteed by the Small Business Administration (SBA), totaling $75.7 million to our clients. We expect to see the first round of PPP funding forgiven by the end of the second quarter of 2021. As these loans are forgiven, we expect to use the liquidity to pursue new opportunities in our market, including strategies to improve loan growth, fund the second round of PPP loans and further reduce high-cost wholesale funding. In April 2020, Community West Bank was again awarded a “Premier” rating by The Findley Reports. For over 50 years, Findley has recognized the financial performance of banking institutions in California and the western United States, focusing on 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. Community West Bank is also rated 5-star Superior by Bauer Financial. It is an honor to be recognized so favorably. Our bank is well positioned to serve the families and businesses which make up the communities along California’s Central Coast. With seven branch offices - from Oxnard in the south to Paso Robles in the north – Community West Bank is the largest publicly traded and only community bank headquartered and serving all of Ventura, Santa Barbara and San Luis Obispo counties. We appreciate the support from you, our shareholders, as we continue to expand Community West Bank’s capabilities in providing personal service and trusted advice to our clients. William R. Peeples Chairman of the Board Martin E. Plourd President/Chief Executive Officer What makes Community West Bank different is not what we do, but why we do it. Community West Bank first opened its doors in 1989 as Goleta National Bank, with a single office at 5827 Hollister Avenue, and has grown to seven full-service banking offices throughout Ventura, Santa Barbara and San Luis Obispo counties. What makes Community West Bank different is not so much what we do, but why we do it. The Founders of our bank had a simple and enduring vision: To serve our community and customers like no other bank. We remain committed to that vision – being the bank of choice in the communities we serve – and firmly believe that local deposits should be put to work locally. Community West Bank provides financing to businesses, families and nonprofit organizations throughout California’s Central Coast, supporting job creation, economic vitality and vibrant local communities. Please check us out at www.CommunityWestBank.com. MANUFACTURED HOME LENDING For over 20 years, Community West Bank has been a premier manufactured home loans lender in coastal California communities from San Diego to San Francisco. For those who are looking to purchase or refinance a manufactured home, we have loans to fit their needs and a staff who focuses exclusively on manufactured home financing. We have developed strong relationships with California’s manufactured home dealers in order to serve the new home market. Community West Bank holds more than 2,000 manufactured home loans in over 300 California mobile home parks. AGRICULTURAL LENDING Community West Bank fulfills the financing needs of our farm, ranch and agribusiness clients with Farmer Mac mortgage loans with long-term fixed rates for land acquisition, loans to refinance existing debt and financing for capital improvements. Our goal is to encourage growth throughout the agricultural sector – on California’s Central Coast and statewide. A commitment to responsive personal service make us stand out from other banks. We take pride in the portfolio of very satisfied clients who have managed to make their Ag businesses thrive with the funding they received from us. GOVERNMENT GUARANTEED LENDING Community West Bank offers U.S. Small Business Administration (SBA) loan programs, as well as the U.S. Department of Agriculture (USDA) Business & Industry loan program for businesses in rural areas. Since 1989, we have provided local businesses with over $700 million in funding for commercial space, expansion and capital improvements through government guaranteed lending programs, earning the “Preferred Lender” designation by the SBA. This special status allows us to expedite the processing of loan applications for rapid closing with in-house approvals. COMMUNITY INVOLVEMENT Community West Bank employees volunteer hundreds of hours annually to local non-profits in the communities in which they live and work, and our bank provides consistent financial support in the form of donations, sponsorships and grants to organizations throughout the Central Coast, from Ventura County to Paso Robles. Please refer to the Community Involvement section of this annual report. RELATIONSHIP BANKING Community West Bank provides a full range of convenient and secure treasury management services, including mobile banking apps for businesses and personal customers, payment processing services, payroll services, positive pay, lockbox services, remote deposit capture, ACH processing, business credit cards and online banking with bill pay. Our banking services and deposit accounts are designed to contribute to the smooth and efficient operation of our clients’ businesses. And clients count on Community West Bankers to provide the responsive financing and trusted advice local businesses need to nurture and sustain their growth. What sets us apart is the level of personal service, flexibility and attention to detail our bankers provide to customers. It was true when Goleta National Bank first opened its doors over 30 years ago, and remains true at Community West Bank today. That is the foundation for our continued success. “The Point Market has had a great relationship with Community West Bank for 25 years. They make banking easy so we can focus on growing our business.” ——— Jeremy Jewell Vice President, Operations Jordan Price Marketing Director The Point Markets “WE COUNT ON financing that fits our needs. We love the open space and rolling hills that make Paso Robles special. Thanks to our partnership with Community West Bank, we can see our dreams for our ranch realized.” –Dennis and Teresa Harrah Owners, Harrah Ranch THE COMMUNITY COUNTS ON US “We love the open space and rolling hills that make Paso Robles special. Thanks to our partnership with Community West Bank, we can see our dreams for our ranch realized.” ——— Dennis and Teresa Harrah Owners, Harrah Ranch “At Draughtsmen Aleworks we count on Community West Bank to serve our banking needs and help to build a stronger community.” ——— Tami Snow, Co-owner, Draughtsmen Aleworks “At Primary Medical we count on Community West Bank to support our business growth and to share our values in community stewardship.” ——— Dr. Maria Barrell & Dr. Edward Banman, Primary Medical COMMUNITY INVOLVEMENT Community West Bank employees proudly support non-profit and community organizations throughout Ventura, Santa Barbara and San Luis Obispo counties. Achievement House Alpha Resource Center of Santa Barbara American Cancer Society American Heart Association Arroyo Grande Community Hospital Foundation Atascadero Kiwanis Bishop Diego Garcia High School California LULAC Foundation Central Coast Alliance United for Sustainable Economy Central Coast Economic Forecast Child Development Resources of Ventura County Children’s Creative Project Clinicas del Camino Real COLAB Ventura County Community Health Centers of the Central Coast Cottage Children’s Medical Center Court Appointed Special Advocates of SLO County (CASA) Dos Pueblos High School Athletics Dos Pueblos Little League El Camino Elementary School El Camino Homeless Organization (ECHO) Economic Vitality Corporation of SLO County Fairview Gardens Food Bank Coalition of San Luis Obispo County Food From the Heart French Hospital Foundation Girsh Park Goleta Valley Chamber of Commerce Good Samaritan Shelter Habitat for Humanity, San Luis Obispo County Housing Trust Fund of Ventura County Jack’s Helping Hand kidSTREAM Children’s Museum Marian Regional Medical Center Foundation Meals That Connect Mid-State Fair Montessori Center School National Association of Women Business Owners (NAWBO) Old Spanish Days Fiesta Old Yeller Ranch Rescue One805.org Oxnard College Foundation Page Youth Center Paso Robles Chamber of Commerce Paso Robles Housing Authority Paso Robles Rotary Club Foundation Paso Robles Youth Arts Foundation Rotary Club San Luis Obispo Daybreak San Luis Obispo Chamber of Commerce San Luis Obispo Symphony San Marcos High School Santa Barbara Athletic Roundtable Santa Barbara Courthouse Legacy Foundation Santa Barbara Family YMCA Santa Barbara Police Foundation Santa Barbara Zoological Gardens Scholarship Foundation of Santa Barbara Science and Engineering Council of Santa Barbara Solvang Senior Center St. John’s Healthcare Foundation Studios on the Park Teddy Bear Cancer Foundation Temple Beth Torah UCSB Economic Forecast Project United Boys & Girls Clubs of Santa Barbara County Unity Shoppe Ventura County Contractors Association Ventura County Medical Resource Foundation Westmont College Foundation Young Professionals Networking Group 2020 Financials Snapshot Net interest income after provision for loan losses 35,366 34,522 33,629 Results of Operations: Interest income Interest expense Net interest income Provision (credit) for loan losses Non-interest income Non-interest expenses Income before income taxes Provision (benefit) for income taxes Net income Per Share Data: Income per common share - basic Weighted average shares outstanding - basic Income per common share - diluted Weighted average shares outstanding - diluted Book value per common share Selected Balance Sheet Data: Net loans Total assets Total deposits Total liabilities YEAR ENDED DECEMBER 31, 2020 2019 2018 2017 2016 (in thousands, except per share amounts) $43,854 $45,739 $42,631 $37,391 $32,216 7,265 36,589 1,223 11,382 34,357 (165) 8,988 33,643 14 3,912 27,523 11,755 3,510 $8,245 $0.97 8,473 $0.97 8,543 $10.50 3,607 26,755 11,374 3,411 7,963 $0.94 8,472 $0.93 8,579 $9.68 2,628 26,039 10,218 2,809 7,409 $0.89 8,288 $0.88 8,451 $8.92 4,729 3,127 32,662 29,089 411 32,251 2,757 24,545 10,463 5,548 4,915 $0.60 8,146 $0.57 8,589 $8.55 (48) 29,137 2,253 22,548 8,842 3,613 5,229 $0.64 8,114 $0.62 8,444 $8.07 847,383 766,846 759,552 726,189 623,355 975,435 913,870 877,291 833,315 710,572 766,185 750,934 716,006 699,684 612,236 886,428 831,892 801,140 763,245 645,236 Total stockholders' equity 89,007 81,978 76,151 70,070 65,336 Selected Financial and Liquidity Ratios: Return on average stockholders' equity Return on average assets Equity to assets ratio Community Banking Leverage Ratio Tier 1 leverage ratio Common Equity Tier 1 ratio Tier 1 risk-based capital ratio Total risk-based capital ratio 9.70% 0.85% 9.12% 9.29% 9.57% 11.40% 11.40% 12.65% 10.15% 0.91% 8.97% — 9.33% 10.60% 10.60% 11.73% 10.02% 0.88% 8.68% — 8.96% 10.10% 10.10% 11.26% 7.16% 0.64% 8.41% — 8.72% 9.96% 9.96% 11.17% 8.19% 0.81% 9.19% — 9.64% 10.57% 10.57% 11.80% LOCATIONS CORPORATE HEADQUARTERS 445 Pine Avenue Goleta, CA 93117 (805) 692-5821 www.communitywest.com BRANCHES Goleta 5827 Hollister Avenue Goleta, CA 93117 (805) 683-4944 Oxnard 300 E. Esplanade Drive Oxnard, CA 93036 (805) 597-4140 Paso Robles 541 Spring Street Paso Robles, CA 93446 (805) 597-7778 San Luis Obispo 4464 Broad Street San Luis Obispo, CA 93401 (805) 597-3655 Santa Barbara 1501 State Street Santa Barbara, CA 93101 (805) 962-7420 Santa Maria 122 E. Betteravia Road Santa Maria, CA 93454 (805) 938-1690 Ventura 1463 S. Victoria Avenue Ventura, CA 93003 (805) 650-1901 CORPORATE INFORMATION Investor Relations Contact Martin E. Plourd Annual Meeting The Annual Meeting of Shareholders of Community West Bancshares will be held remotely on May 27, 2021 at 6:30 pm PDT Transfer Agent & Registrar Computershare Trust Company 462 South 4th Street, Suite 1600 Louisville KY 40202 Independent Auditors RSM US LLP 10845 Griffith Peak Drive, Suite 450 Las Vegas, NV 89135 Corporate Counsel Duane Morris LLP 865 S. Figueroa Street, Suite 3100 Los Angeles, CA 90017-5450 Corporate Headquarters Goleta Branch Oxnard Branch Paso Robles Branch San Luis Obispo Branch Santa Barbara Branch Santa Maria Branch Ventura Branch BOARD OF DIRECTORS William R. Peeples Chairman of the Board, Community West Bancshares Private Investor Martin E. Plourd President and Chief Executive Officer Robert H. Bartlein Chairman of the Board, Community West Bank President and CEO, Bartlein & Co. Jean W. Blois Independent Consultant Former Mayor, City of Goleta Dana L. Boutain Certified Public Accountant Managing Director, CBIZ Suzanne Chadwick Retired Bank Executive Tom L. Dobyns Retired Bank CEO John D. Illgen Modeling and Simulation Consultant James W. Lokey Retired Bank Chairman and CEO Shereef Moharram Attorney Partner, Price, Postel & Parma LLP Christopher R. Raffo Farmer and Former Community Bank Equity Broker Kirk B. Stovesand Certified Public Accountant Partner, Walpole & Co. EXECUTIVE MANAGEMENT TEAM Martin E. Plourd President and CEO William F. Filippin Executive Vice President Chief Credit Officer and Chief Administrative Officer T. Joseph Stronks Executive Vice President Chief Operating Officer Interim Chief Risk Officer Susan C. Thompson Executive Vice President Chief Financial Officer SENIOR MANAGEMENT TEAM Jonathan Apilado Senior Vice President Controller Jason Bietz Senior Vice President Deputy Chief Credit Officer Clay Dickens Senior Vice President Senior Loan Consultant Luis Garcia-Moreira Senior Vice President Treasury Management Manager James Gray Senior Vice President Manufactured Housing Division Manager Cynthia Hooper Senior Vice President Risk and CRA Officer Laura Maffei Senior Vice President Regional Agriculture Loan Manager Janie Marlborough Senior Vice President Director of Credit Risk Management Kevin Moon Senior Vice President Director of Marketing and Product Development Jennifer Ofner Senior Vice President Director of Human Resources Brian Schwabecher Senior Vice President Chief Banking Officer Michael Will Senior Vice President Director of Credit Operations and Legal Review Corporate Headquarters 445 Pine Avenue Goleta, CA 93117 (805) 692-5821 Fax (805) 692-5835 www.communitywest.com { a
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