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2023 ReportPeers and competitors of Community West Bancshares:
Eagle Bancorp Montana IncWest is Best 2022 A N N U A L R E P O R T Dedicated to the West Coast COMMUNITY WEST BANK DELIVERED RECORD EARNINGS IN 2022, AS WELL AS GROWTH IN TOTAL LOANS, NON-INTEREST DEMAND DEPOSITS AND NET INTEREST MARGIN. T hroughout 2022, the lingering challenges of the COVID-19 pandemic and global forces led to rising interest rates and persistent anticipation of a looming recession. Community West started the year focused on deploying excess liquidity through increased lending activity, which resulted in solid organic loan growth. Our net interest margin improved and we benefitted from higher loan yields and interest rate increases enacted by the Federal Reserve, as new loans with higher interest rates replaced lower rate SBA Paycheck Protection Program (PPP) loans, and existing variable rate loans were repriced. Non-interest expense rose in 2022 over the prior year due to an increase in salaries and benefits, brought about by wage competition. Additionally, a $1.3 million increase in professional services was due to costs related to enhancing our internal control structure and procedures for financial reporting as required for institutions over $1 billion in total assets, and to support strategic and technology initiatives. Credit quality metrics remained strong, with a decrease in net-nonaccrual loans compared to the previous year. 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 were monitored monthly and proactive measures were taken when any signs of deterioration to the credit were discovered. In May 2022, Community West Bank 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. It is an honor to be recognized so favorably. Our bank is well situated to serve the families, businesses and non-profit organizations which make up the communities along the Central Coast of California. 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. As one of the last remaining community banks along California’s Central Coast, Community West delivered excellent full year 2022 financial results. Highlights include: Net income was another record at $13.4 million, or $1.51 per diluted share, compared to $13.1 million, or $1.50 per diluted share in 2021. Total loans increased $63.3 million, or 7.1%, compared to December 31, 2021. Non-interest-bearing demand deposits grew by $6.6 million to $216.5 million. Stockholders’ equity increased $11.3 million to $112.7 million. Book value per common share rose to $12.80 at December 31, 2022, compared to $11.72 at December 31, 2021. we believe we are operating from a position of strength and we will continue to work to create value for our shareholders, our clients and our communities. We appreciate the support from you, our shareholders, as we expand Community West Bank’s capabilities in providing personal service and trusted advice to our clients. Sincerely, A T A S William R. Peeples Martin E. Plourd Chairman of the Board Chief Executive Officer C A D E R O M O N A R C H S I N G O LETA V A L L E Y A perfect day at the Pismo Beach Pier. A Clear Vision T he Founders of our bank had a clear vision: To serve our community and customers like no other bank; to be a positive, reliable and consistent financial resource. Community West Bank remains committed to that powerful vision – being the bank of choice in the communities we serve – and we believe that local deposits should be put to work locally. Community West Bank provides financing, deposit services and convenient treasury management to local businesses, families and non-profit organizations throughout California’s central and south coast, supporting economic vitality, job growth and healthy communities. We first opened our doors as Goleta National Bank in 1989, with an office at 5827 Hollister Avenue – which remains open today – and Community West Bank has grown to seven full-service banking offices throughout Ventura, Santa Barbara and San Luis Obispo counties. We focus on four core competencies: Relationship Banking Manufactured Home Lending Agricultural Lending Government Guaranteed Lending S A N T A M AR I A P A S O R O B L E S The San Luis Obispo branch of Community West Bank. Agricultural Lending Community West Bank supports farm, ranch and agribusiness clients with Farmer Mac mortgage loans, offering long-term fixed rates for land acquisition, loans to refinance existing debt and financing for capital improvements. Our goal is to encourage growth in the agricultural sector throughout California. We understand that the challenges faced by agricultural clients are different from our other business clients. Community West Bank has dedicated staff and resources focused specifically on serving agricultural clients, and we take pride in our portfolio of loans to satisfied clients who have thriving Ag businesses. Government Guaranteed Lending Since 1989, Community West Bank has provided growing 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 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. Please check us out at www.CommunityWestBank.com. Relationship Banking Our business clients count on Community West Bank to provide the responsive community banking service, tailored financing, cash management, deposit services and trusted advice to help them thrive. What sets us apart from larger financial institutions is the level of personal service our bankers provide. That is the foundation upon which Community West Bank has been built and is the key to our continued success. “Let’s Work Together” is our bank’s slogan and embodies the approach of Community West Bank: experienced banking managers, loan officers and staff offer personal service, assisting each client with their specific financial needs. We provide well guided local lending decisions based on firsthand knowledge of the communities we serve. From revolving lines of credit, term loans and commercial real estate financing, to agribusiness financing, equipment loans and SBA loans, we offer financing solutions for local businesses. 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. Manufactured Home Lending The high cost of housing in California coastal communities has given rise to many mobile home parks as a way for communities to provide affordable housing alternatives. Community West Bank’s manufactured housing financing program has helped to facilitate home ownership for many who would not otherwise have the opportunity, as well as for seniors downsizing from traditional ‘stick built’ homes. Our manufactured home lending strategy has contributed to the bank’s earnings and a strong net interest margin. Community West Bank originates loans on existing and new manufactured homes in approved mobile home parks in our primary lending areas of Santa Barbara, San Luis Obispo, and Ventura Counties, as well as in coastal communities from San Francisco to San Diego. For those who are purchasing a manufactured home, we offer financing 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 to better serve the new home market. Manufactured home loans are retained in the bank’s portfolio and Community West Bank holds more than 2,000 manufactured home loans in over 300 California mobile home parks. S A N T A Y N E Z V A L L E Y N O I T P E P O I N T C N O C The Strength of the West A true community-based bank is a reliable resource, helping to facilitate the dreams and knows that Community West Bank sees beyond numbers to the true value local businesses bring— businesses in our advertising which can count on us to support them. Sunstone Winery serving the financial needs of its clients. In 2022, Community West Bank featured local seeing what really counts in our community. A&M Flower Growers counts on responsive agribusiness financing with competitive rates; Community West Bank is an approved lender for Farmer Mac loans. What counts most to Best Western Plus South Coast Inn is the people: the employees and relationships that make it memorable. Solarponics counts on providing a solution that is going to benefit the entire community. Djamila Cabugos of Sunstone Winery Albert Castaneda, Jr. of A&M Flower Growers G O L E TA M O R R O B A Y The City of Santa Barbara at dusk. C A M A R I L L O Kristian Emrich of Solarponics Nicole Weland of Best Western Plus South Coast Inn with Dave Hall of Community West Bank. Community Involvement 2022 Financials Snapshot Community West Bank employees proudly support non-profit and community organizations throughout Ventura, Santa Barbara and San Luis Obispo counties. 805 AgKids Affordable Housing Paso Robles American Cancer Society American Heart Association Bishop Diego Garcia High School Boys & Girls Clubs Boy Scouts, Los Padres Council Cal Lutheran University Cal Lutheran Center for Nonprofit Leadership Central Coast Alliance United for Sustainable Economy Central Coast Economic Forecast Central Coast Junior Golf Ceylon International Film Festival Children’s Creative Project City of Oxnard – Cinco de Mayo Committee City of Oxnard – Fiesta Patrias Committee City of Goleta Clean Up COLAB Ventura County Commemorative Air Force Cottage Children’s Medical Center Cottage Hospital Foundation Court Appointed Special Advocates of SLO County (CASA) Dos Pueblos High School Foundation El Camino Homeless Organization (ECHO) Elings Park Foundation Estrella Warbirds Museum Farm Bureau Fiestas Patrias First Tee Food Bank Coalition of San Luis Obispo County Food From the Heart French Hospital Foundation Gala Pride & Diversity Center Goleta Lions Club Goleta Rotary Club Goleta Valley Cottage Hospital Foundation Goleta Valley Historical Museum Grower Shipper Association Habitat for Humanity Housing Trust Fund of Santa Barbara County Housing Trust Fund of Ventura County Interface Children and Family Services Kellogg School PTA Lemon Festival Lobero Theater Los Alamos Valley Men’s Club Lumina Alliance Make A Wish Ventura County Meals That Connect Museum of Ventura County National Association of Women Business Owners (NAWBO) North San Luis Obispo County Concert Association Ojai Rotary Club Old Spanish Days Fiesta One805.org Paso Robles Chamber of Commerce Paso Robles Main Street Association Paso Robles Pioneer Day Paso Robles Rotary Club Foundation Paso Robles Youth Arts Center Planned Parenthood Rebozo Festival Rio Mesa Girls Volleyball Rotary Club San Luis Obispo Daybreak Salvation Army San Luis Obispo Chamber of Commerce San Luis Obispo Museum of Art San Marcos High School Alumni Foundation Santa Barbara Carriage and Western Art Museum Santa Barbara Community Animal Services Santa Barbara County Food Bank Santa Barbara Courthouse Legacy Foundation Santa Barbara Family YMCA Santa Barbara Foresters Santa Barbara Historical Museum Santa Barbara International Film Festival Santa Barbara Police Foundation Santa Barbara South Coast Chamber of Commerce Santa Barbara Zoological Gardens Scholarship Foundation of Santa Barbara Science and Engineering Council of Santa Barbara Shelter Box USA Solvang Senior Center South Coast Railroad Museum Students for Eco-Education and Agriculture St. Vincent’s Success Charities Temple Beth Torah Transitions Mental Health Association UCSB Advisory Board UCSB Economic Forecast Project United Boys & Girls Clubs of Santa Barbara County Unity Shoppe Ventura County Arts Events Ventura Art & Street Painting Festival Ventura County Child Development Resources Ventura County Contractors Association Ventura County Fair Ventura County Medical Resource Foundation Vitalant Blood Services Walk with Sally Warrior Angels Rescue Women’s Economic Ventures Women’s Fund of Santa Barbara Westmont College Foundation Young Professionals Networking Group Year Ended December 31, 2022 2021 2020 2019 2018 (in thousands, except per share amounts) $49,138 $46,078 $43,854 $45,739 $42,631 Results of Operations: Interest income Interest expense Net interest income Provision (credit) for loan losses Net interest income after provision for loan losses Non-interest income Non-interest expenses Income before income taxes Provision (benefit) for income taxes 3,328 45,810 (195) 46,005 3,978 31,272 18,711 5,262 3,704 42,374 (181) 42,555 3,753 27,995 18,313 5,212 Net income $13,449 $13,101 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 $1.54 8,722 $1.51 8,892 $12.80 $1.53 8,568 $1.50 8,723 $11.72 7,265 36,589 1,223 35,366 3,912 27,523 11,755 3,510 $8,245 $0.97 8,473 $0.97 8,543 $10.50 11,382 34,357 (165) 34,522 3,607 26,755 11,374 3,411 7,963 $0.94 8,472 $0.93 8,579 $9.68 Selected Balance Sheet Data: Net loans Total assets Total deposits Total liabilities Total stockholders' equity 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 944,577 881,679 847,383 766,846 1,091,502 1,157,052 975,435 913,870 875,084 978,852 112,650 12.48% 1.20% 10.32% N/A 10.34% 11.44% 11.44% 12.56% 950,131 766,185 750,934 716,006 1,055,677 886,428 831,892 801,140 101,375 89,007 81,978 76,151 13.68% 1.21% 8.76% N/A 8.56% 11.02% 11.02% 12.19% 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% 8,988 33,643 14 33,629 2,628 26,039 10,218 2,809 7,409 $0.89 8,288 $0.88 8,451 $8.92 759,552 877,291 Board of Directors Management Team Executive Management Team Senior Management Team Martin E. Plourd Chief Executive Officer William F. Filippin President Chief Credit Officer Richard Pimentel Executive Vice President Chief Financial Officer T. Joseph Stronks Executive Vice President Chief Operating Officer Chief Risk Officer Director Emeritus Jean Blois Former Mayor City of Goleta Corporate Information Clay Dickens Senior Vice President Senior Loan Consultant Nicole Keefe Senior Vice President, Deputy Chief Risk Officer Luis Garcia-Moreira Senior Vice President Treasury Management Manager James Gray Senior Vice President Manufactured Housing Division Manager Laura Maffei Senior Vice President Regional Agriculture Loan Manager Kevin Moon Senior Vice President Director of Marketing & Product Development Jennifer Ofner Senior Vice President Director of Human Resources Brian Schwabecher Senior Vice President Chief Banking Officer Michael Will Senior Vice President Senior Legal Counsel Investor Relations Contact Martin E. Plourd Transfer Agent Computershare P.O. Box 43006 Providence, RI 02940-3078 Independent Auditors RSM US LLP 44 Montgomery Street, Suite 3900 San Francisco, CA 94104 Corporate Counsel Duane Morris LLP 865 S. Figueroa Street, Suite 3100 Los Angeles, CA 90017-5450 Annual Meeting The Annual Meeting of Shareholders of Community West Bancshares will be held on May 25, 2023 at 6:30pm PDT at La Cumbre Country Club, 4015 Via Laguna, Santa Barbara, CA. William R. Peeples Chairman of the Board, Community West Bancshares Private Investor Martin E. Plourd Chief Executive Officer Robert H. Bartlein Chairman of the Board, Community West Bank President and CEO, Bartlein & Co. William F. Filippin President, Community West Bank Martin Alwin Senior Analyst, PL Capital Advisors, LLC 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. Celina L. Zacarias Senior Director of Community & Government Relations California State University Channel Islands Corporate Headquarters 445 Pine Avenue Goleta, CA 93117 (805) 692-5821 www.communitywest.com 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 Executive Management Team Martin E. Plourd Chief Executive Officer William F. Filippin President Chief Credit Officer T. Joseph Stronks Executive Vice President Chief Operating Officer Chief Risk Officer Richard Pimentel Executive Vice President Chief Financial Officer Corporate Headquarters 445 Pine Avenue Goleta, CA 93117 (805) 692-5821 Fax (805) 692-5835 www.communitywest.com { a
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