Part I [ITEM 1 - DESCRIPTION OF BUSINESS](index=5&type=section&id=ITEM%201%20-%20DESCRIPTION%20OF%20BUSINESS) Community West Bancshares, a bank holding company, expanded its Central California footprint via a 2024 merger, offering diverse commercial banking services with a real estate-heavy loan portfolio, operating under extensive federal and state regulations [General Overview](index=5&type=section&id=General) Central Valley Community Bancorp merged with Community West Bancshares on April 1, 2024, adopting its name and operating as a bank holding company with **$3.52 billion** in total assets - Central Valley Community Bancorp completed its merger with Community West Bancshares on April 1, 2024, and changed its name to Community West Bancshares[15](index=15&type=chunk) - The company is a registered bank holding company for its wholly-owned subsidiary, Community West Bank[16](index=16&type=chunk) Company Snapshot (as of Dec 31, 2024) | Metric | Value | | :--- | :--- | | Consolidated Total Assets | ~$3.52 billion | | Full-time Equivalent Employees (as of Mar 1, 2025) | 346 | [The Bank's Operations](index=5&type=section&id=The%20Bank) Community West Bank operates 26 California offices, offering diverse commercial banking services, with its **$2.33 billion** loan portfolio heavily concentrated (**74.3%**) in real estate as of December 31, 2024 - The Bank operates 26 full-service banking offices in California, offering commercial banking, real estate, agribusiness, and SBA lending services[21](index=21&type=chunk) Loan Portfolio Composition (as of Dec 31, 2024) | Loan Category | Amount (in thousands) | | :--- | :--- | | Total Loans | $2,334,221 | | Commercial and Industrial | $143,422 | | Agricultural Land and Production | $37,323 | | Real Estate | $1,736,498 | | Consumer | $415,102 | - The loan portfolio is heavily concentrated in real estate, with loans secured by real estate comprising approximately **74.3% of the total portfolio** held for investment at year-end 2024[24](index=24&type=chunk) - The bank's business is primarily concentrated in Fresno, Kern, Madera, Merced, Placer, Sacramento, San Joaquin, San Luis Obispo, Santa Barbara, Stanislaus, Tulare, and Ventura Counties in California, making its performance dependent on the local economy and real estate markets[24](index=24&type=chunk) [Competition](index=6&type=section&id=Competition) Operating in a highly competitive California banking market, the company competes with large national banks and non-bank entities through personalized service, holding a relatively small market share - The banking business in California is highly competitive, dominated by a few major banks with significant advantages in advertising and asset allocation[25](index=25&type=chunk) Deposit Market Share (2024) | County Group | Market Share | | :--- | :--- | | Fresno, Madera, San Joaquin, Tulare | 4.10% | | San Luis Obispo, Santa Barbara, Ventura | 1.61% | | Other Counties (Kern, Merced, Placer, etc.) | < 1.00% | - Competition has intensified due to technological innovation, allowing non-depository institutions to offer traditional banking products, and legislative changes permitting interstate banking[29](index=29&type=chunk)[30](index=30&type=chunk) [Human Capital Resources](index=7&type=section&id=Human%20Capital%20Resources) As of December 31, 2024, the company employed 346 full-time staff (**72% female**, **4.58 years** average tenure), fostering teamwork and offering competitive benefits to attract and retain talent Workforce Demographics (as of Dec 31, 2024) | Metric | Value | | :--- | :--- | | Total Employees | 356 | | Full-time Employees | 346 | | Female Workforce | 72% | | Male Workforce | 28% | | Average Tenure | 4.58 years | - The company offers a comprehensive benefits package, including an Employee Stock Ownership Plan, a matched 401(k) Plan, healthcare benefits, paid time off, and an education reimbursement program to attract and retain employees[34](index=34&type=chunk) [Supervision and Regulation](index=7&type=section&id=Supervision%20and%20Regulation) The company and its bank subsidiary operate under extensive federal and state regulations, primarily for depositor protection, covering capital, lending, dividends, and consumer privacy - The Company is regulated by the Federal Reserve, while the Bank is regulated by the California Department of Financial Protection and Innovation (DFPI) and the FDIC[18](index=18&type=chunk)[37](index=37&type=chunk) - Federal and state banking laws impose a comprehensive system of supervision intended primarily for the protection of the FDIC's Deposit Insurance Fund and bank customers, not shareholders[38](index=38&type=chunk) - The regulatory framework subjects the company to regular examinations that assess compliance, capital levels, asset quality, management, earnings, and liquidity[39](index=39&type=chunk) [ITEM 1A - RISK FACTORS](index=17&type=section&id=ITEM%201A%20-%20RISK%20FACTORS) The company faces diverse risks including economic downturns in its agriculture-dependent Central California markets, interest rate fluctuations, credit risks from real estate and agribusiness lending, cybersecurity threats, and intense competition [General Economic, Market, Investment Risks](index=17&type=section&id=General%20Economic%2C%20Market%2C%20Investment%20Risks) The company's performance is highly dependent on Central California's agriculture-reliant economy, facing risks from inflation, Federal Reserve policy changes, heightened liquidity scrutiny, and unrealized losses in its securities portfolio - The company's banking operations are principally in Central California, a region largely dependent on agriculture. A downturn in the agricultural economy could have a material adverse effect on the business[112](index=112&type=chunk) - Recent bank failures have led to increased focus on liquidity management, the composition of deposits (especially uninsured amounts), and interest rate risk. An inability to manage these factors could materially harm financial condition[116](index=116&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) - As of December 31, 2024, the company had a net unrealized loss of **$59,221,000** on its available-for-sale investment securities portfolio, which totaled **$785,058,000**, or **22.3% of total assets**[122](index=122&type=chunk) [Risks Related to Lending Activities](index=19&type=section&id=Risks%20Related%20to%20our%20Lending%20Activities) Lending risks include agribusiness (**1.6% of portfolio**) and a significant concentration (**74.3%**) in California real estate loans, alongside higher-risk commercial loans (**6.1%**) and dependence on the SBA program - At December 31, 2024, **74.3% of the total loan portfolio** (**$1.74 billion**) consisted of real estate related loans concentrated in California, exposing the company to risks from local economic conditions and real estate value fluctuations[127](index=127&type=chunk) - Agribusiness loans, totaling **$37.3 million** (**1.6% of the portfolio**), present unique risks related to commodity prices, weather, and government regulations[126](index=126&type=chunk) - The SBA lending program is an important part of the business and is dependent on the U.S. federal government. Loss of SBA Preferred Lender status or changes to the program could materially harm financial results[130](index=130&type=chunk) [Credit Risks](index=21&type=section&id=Credit%20Risks) The company faces inherent credit risk, with its **1.11%** allowance for credit losses potentially insufficient, and increased non-performing assets (**0.18% of total assets**) posing a threat to net income - The allowance for credit losses on loans was **1.11% of total loans** at December 31, 2024. This allowance is an estimate and may be insufficient to cover actual future losses, which could materially affect financial results[134](index=134&type=chunk) Non-Performing Assets (NPA) Trend | Metric | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Non-performing loans to total loans | 0.28% | 0.00% | | Non-performing assets to total assets | 0.18% | 0.00% | - Lending to small and mid-sized businesses may increase credit risk, as these borrowers are often more vulnerable to adverse economic conditions[139](index=139&type=chunk) [Strategic Risks](index=23&type=section&id=Strategic%20Risks) Strategic risks include inability to sustain growth, integration challenges and dilution from acquisitions, potential goodwill impairment, and uncertainties associated with branch expansion and new business lines - The company may not be able to sustain its historical rate of asset growth due to economic conditions, competition, or an inability to find suitable acquisition candidates[145](index=145&type=chunk) - Future acquisitions involve significant risks, including integration challenges, loss of key employees, and unforeseen liabilities that could negatively affect the organization[146](index=146&type=chunk)[147](index=147&type=chunk) - Goodwill from past acquisitions is reviewed for impairment annually. A future impairment charge could have a material adverse effect on financial condition and results of operations[150](index=150&type=chunk) [ITEM 1C - CYBERSECURITY](index=31&type=section&id=ITEM%201C%20-%20CYBERSECURITY) The company manages cybersecurity risks through a formal Information Security Program and Incident Response Plan, overseen by the ISO and Board, with ongoing third-party assessments and increasing regulatory scrutiny - The company manages cybersecurity risk through a formal Information Security Program, which includes a dedicated Cybersecurity Incident Response Plan (CIRP)[194](index=194&type=chunk) - The Information Security Officer (ISO) oversees the program, reporting to the Senior Risk Officer and providing annual reports to the Board of Directors. The Board has ultimate oversight of cybersecurity-related risk[198](index=198&type=chunk)[201](index=201&type=chunk) - The company is subject to new SEC rules requiring disclosure of material cybersecurity incidents within four business days of determination[204](index=204&type=chunk) - To date, risks from cybersecurity threats have not materially affected the company, though it has experienced incidents in the past[203](index=203&type=chunk) Part II [ITEM 5 - MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](index=33&type=section&id=ITEM%205%20-%20MARKET%20FOR%20COMMON%20EQUITY%2C%20RELATED%20STOCKHOLDER%20MATTERS%20AND%20ISSUER%20PURCHASES%20OF%20EQUITY%20SECURITIES) The company's common stock trades on Nasdaq (**CWBC**), paid **$0.48** dividends in 2024, with future dividends subject to regulatory policy, and utilizes equity compensation plans - The company's common stock is listed on the Nasdaq Capital Market under the ticker symbol **CWBC**[213](index=213&type=chunk) Dividend Information | Year | Cash Dividend per Share | | :--- | :--- | | 2024 | $0.48 | | 2023 | $0.48 | - The company's ability to pay dividends is influenced by Federal Reserve policy, which requires that holding companies act as a source of strength to their banking subsidiaries and generally pay dividends only out of recent income[214](index=214&type=chunk) - No shares were repurchased under publicly announced plans during the fourth quarter of 2024[218](index=218&type=chunk)[219](index=219&type=chunk) [ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=36&type=section&id=ITEM%207-%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) The 2024 merger significantly increased assets and loans but sharply reduced net income to **$7.7 million** due to **$20.5 million** in merger-related expenses, while net interest margin improved and capital ratios remained strong [Overview](index=36&type=section&id=Overview) The 2024 merger significantly boosted assets and loans but reduced net income to **$7.7 million** due to one-time expenses, while net interest margin improved and capital ratios remained strong Key Financial Highlights (2024 vs. 2023) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net Income | $7,666,000 | $25,536,000 | | Diluted EPS | $0.45 | $2.17 | | Total Assets | $3.52 billion | $2.43 billion | | Net Loans | $2.33 billion | $1.29 billion | | Total Deposits | $2.91 billion | $2.04 billion | | Net Interest Margin | 3.76% | 3.58% | | Return on Average Assets (ROA) | 0.24% | 1.04% | | Return on Average Equity (ROE) | 2.42% | 13.81% | - The decrease in 2024 net income was primarily due to merger-related expenses of **$20,491,000**, which included a one-time provision of **$10,877,000** for expected credit losses on the acquired loan portfolio[236](index=236&type=chunk) - Capital ratios remain strong, with a Tier 1 Leverage Ratio of **9.17%** and a Total Risk-Based Capital Ratio of **13.58%** at December 31, 2024[237](index=237&type=chunk) [Results of Operations](index=40&type=section&id=Results%20of%20Operations) Net income for 2024 decreased to **$7.7 million** due to a **$39.4 million** surge in non-interest expenses and an **$11.1 million** provision for credit losses, despite a **33.9%** increase in net interest income Consolidated Results of Operations (in thousands) | Metric | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net Interest Income | $110,367 | $82,429 | $79,566 | | Provision for Credit Losses | $11,113 | $309 | $995 | | Total Non-interest Income | $6,445 | $7,020 | $5,054 | | Total Non-interest Expenses | $94,701 | $55,300 | $48,484 | | Net Income | $7,666 | $25,536 | $26,645 | - Non-interest expenses increased by **$39.4 million** (**71.25%**) in 2024, driven by the merger. Key increases were in salaries and benefits (**+$17.1M**), merger-related expenses (**+$8.4M**), and occupancy (**+$3.8M**)[241](index=241&type=chunk)[285](index=285&type=chunk) - Net interest income before provision for credit losses increased by **$27.9 million** (**33.9%**) in 2024, primarily due to increased loan volume and rates from the merger. This includes **$9.8 million** from the accretion of loan marks on acquired loans[239](index=239&type=chunk)[276](index=276&type=chunk) - The company's efficiency ratio deteriorated to **81.07%** in 2024 from **61.82%** in 2023, primarily due to the surge in merger-related operating expenses[252](index=252&type=chunk) [Financial Condition](index=47&type=section&id=FINANCIAL%20CONDITION) As of December 31, 2024, total assets grew **44.7%** to **$3.52 billion** due to the merger, with strong capital ratios and robust liquidity despite a decrease in the investment portfolio Balance Sheet Summary (in thousands) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Total cash and cash equivalents | $120,398 | $53,728 | | Total loans, net | $2,308,418 | $1,276,144 | | Goodwill | $96,828 | $53,777 | | **Total Assets** | **$3,521,771** | **$2,433,426** | | **Liabilities & Equity** | | | | Total deposits | $2,910,777 | $2,041,612 | | Borrowings | $133,442 | $80,000 | | **Total Liabilities** | **$3,159,086** | **$2,226,362** | | **Total Shareholders' Equity** | **$362,685** | **$207,064** | - The loan to deposit ratio increased to **80.19%** at year-end 2024 from **63.22%** at year-end 2023[249](index=249&type=chunk) - The allowance for credit losses (ACL) increased to **$25.8 million** (**1.11% of loans**) from **$14.7 million** (**1.14% of loans**) in 2023, primarily due to a one-time provision of **$10.9 million** for acquired non-PCD loans[338](index=338&type=chunk)[340](index=340&type=chunk) - The company's liquidity position is strong, with liquid assets of **$604.1 million** and available borrowing capacity of approximately **$576.6 million** from the FHLB and **$110 million** from correspondent banks[254](index=254&type=chunk)[375](index=375&type=chunk) [ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=62&type=section&id=ITEM%207A-%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is interest rate volatility, managed by ALCO, with **58.09%** of loans adjustable-rate; simulation models show NII is relatively neutral to rate changes within policy limits - The company's primary market risk is interest rate volatility, which impacts net interest income. This risk is managed by the Asset/Liability Committee (ALCO)[387](index=387&type=chunk)[390](index=390&type=chunk) - As of December 31, 2024, approximately **58.09%** of the loan portfolio consisted of adjustable-rate loans[388](index=388&type=chunk)[403](index=403&type=chunk) Interest Rate Sensitivity Analysis (as of Dec 31, 2024) | Hypothetical Rate Change | Estimated Change in NII (Year 1) | Estimated Change in MVE | | :--- | :--- | :--- | | Up 200 bps | +2.11% | -2.80% | | Up 100 bps | +2.37% | +0.20% | | Down 100 bps | -2.14% | -1.90% | | Down 200 bps | -3.38% | -3.40% | [ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](index=66&type=section&id=ITEM%208%20-%20FINANCIAL%20STATEMENTS%20AND%20SUPPLEMENTARY%20DATA) This section presents the company's audited consolidated financial statements for 2024 and 2023, including balance sheets, income statements, and comprehensive notes detailing accounting policies, the 2024 merger, and key financial components [Consolidated Financial Statements](index=70&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements show total assets at **$3.52 billion** (up from **$2.43 billion** in 2023) and net income of **$7.7 million** (down from **$25.5 million**) for 2024, reflecting merger impacts Consolidated Balance Sheet Highlights (in thousands) | | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Total cash and cash equivalents | $120,398 | $53,728 | | Total loans, net | $2,308,418 | $1,276,144 | | Goodwill | $96,828 | $53,777 | | **Total Assets** | **$3,521,771** | **$2,433,426** | | **Liabilities & Equity** | | | | Total deposits | $2,910,777 | $2,041,612 | | Borrowings | $133,442 | $80,000 | | **Total Liabilities** | **$3,159,086** | **$2,226,362** | | **Total Shareholders' Equity** | **$362,685** | **$207,064** | Consolidated Income Statement Highlights (in thousands) | | 2024 | 2023 | | :--- | :--- | :--- | | Net Interest Income | $110,367 | $82,429 | | Provision for Credit Losses | $11,113 | $309 | | Non-interest Income | $6,445 | $7,020 | | Non-interest Expenses | $94,701 | $55,300 | | **Net Income** | **$7,666** | **$25,536** | [Notes to Consolidated Financial Statements](index=76&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail accounting policies, the 2024 merger (**$43.1 million** goodwill), loan portfolio analysis (non-accrual loans at **$6.46 million**), and confirm the company's well-capitalized status - The company adopted the CECL methodology for credit losses on January 1, 2023, resulting in a **$3.7 million** decrease to retained earnings[470](index=470&type=chunk)[471](index=471&type=chunk) - The merger with Community West Bancshares on April 1, 2024, involved total consideration of **$143.7 million** and resulted in the creation of **$43.1 million** in goodwill[531](index=531&type=chunk)[532](index=532&type=chunk)[535](index=535&type=chunk) - Nonaccrual loans increased to **$6.46 million** as of December 31, 2024, from zero at the end of 2023[562](index=562&type=chunk)[563](index=563&type=chunk) Company Regulatory Capital Ratios (Dec 31, 2024) | Ratio | Actual | Minimum Requirement | | :--- | :--- | :--- | | Tier 1 Leverage | 9.17% | 4.00% | | Common Equity Tier 1 | 11.15% | 4.50% | | Tier 1 Risk-Based Capital | 11.33% | 6.00% | | Total Risk-Based Capital | 13.58% | 8.00% | [ITEM 9A - CONTROLS AND PROCEDURES](index=122&type=section&id=ITEM%209A%20-%20CONTROLS%20AND%20PROCEDURES) Management and independent auditors concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2024, with no material changes reported - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[686](index=686&type=chunk) - Management concluded that the company's internal control over financial reporting was effective as of December 31, 2024[688](index=688&type=chunk) - The independent auditor, Moss Adams LLP, issued an unqualified report on the effectiveness of the company's internal control over financial reporting[689](index=689&type=chunk) Part III [ITEMS 10-14](index=124&type=section&id=ITEMS%2010-14) Information for Items 10-14, covering directors, executive compensation, security ownership, and related transactions, is incorporated by reference from the forthcoming 2025 Proxy Statement - Information regarding directors, executive officers, corporate governance, executive compensation, security ownership, related transactions, and principal accounting fees is incorporated by reference from the forthcoming 2025 Proxy Statement[695](index=695&type=chunk)[698](index=698&type=chunk)[699](index=699&type=chunk) Part IV [ITEM 15 - EXHIBITS AND FINANCIAL STATEMENT SCHEDULES](index=124&type=section&id=ITEM%2015%20EXHIBITS%20AND%20FINANCIAL%20STATEMENT%20SCHEDULES) This section lists financial statements, schedules, and exhibits filed with the 10-K, including merger agreements, corporate documents, and various certifications - The financial statements are located in Part II, Item 8 of this report[703](index=703&type=chunk) - A comprehensive list of exhibits is provided, including the Agreement and Plan of Reorganization and Merger with Community West Bancshares, various employment agreements, and certifications required by the Sarbanes-Oxley Act[705](index=705&type=chunk)

[Financial Highlights](index=1&type=section&id=FINANCIAL%20HIGHLIGHTS) Community West Bancshares reported a transformative year in 2024, marked by a significant merger, with Q4 2024 net income rising to $6.9 million driven by an improved net interest margin of 3.95% and lower deposit costs - President and CEO James J. Kim described 2024 as a "**transformative chapter**" due to a merger that enhanced the company's team, expertise, territory, and technology offerings[3](index=3&type=chunk) Q4 2024 Key Performance Indicators | Metric | Value | Change vs. Q3 2024 | | :--- | :--- | :--- | | Net Income | $6.9 million | Increased from $3.4 million | | Diluted EPS | $0.36 | Increased from $0.18 | | Gross Loans | +$37.1 million | 6.46% annualized growth | | Cost of Deposits | 1.49% | Decreased from 1.69% | | Net Interest Margin | 3.95% | Increased from 3.69% | Capital Ratios as of December 31, 2024 | Ratio | Value | | :--- | :--- | | Tier 1 Leverage Ratio | 9.17% | | Common Equity Tier 1 Ratio | 11.15% | | Tier 1 Risk-Based Capital Ratio | 11.33% | | Total Risk-Based Capital Ratio | 13.58% | - A cash dividend of **$0.12 per common share** was declared, payable on February 21, 2025, to shareholders of record as of February 7, 2025[4](index=4&type=chunk) [Results of Operations](index=2&type=section&id=Results%20of%20Operations) The company's financial performance in Q4 2024 showed significant improvement over the prior quarter, driven by higher net interest income and reduced merger-related expenses, though full-year 2024 net income was substantially lower than 2023 due to a large provision for credit losses and merger-related non-interest expenses [Net Income and Earnings Per Share (EPS)](index=2&type=section&id=Net%20Income%20and%20Earnings%20Per%20Share) For Q4 2024, consolidated net income was $6.9 million ($0.36 diluted EPS), compared to $3.4 million ($0.18 diluted EPS) in Q3 2024, with full-year 2024 net income of $7.7 million ($0.45 diluted EPS) representing a steep decline from $25.5 million ($2.17 diluted EPS) in 2023 due to a large provision for credit losses and increased non-interest expenses from the merger Net Income and Diluted EPS Comparison | Period | Net Income (in thousands) | Diluted EPS | | :--- | :--- | :--- | | Q4 2024 | $6,895 | $0.36 | | Q3 2024 | $3,385 | $0.18 | | Q4 2023 | $5,893 | $0.50 | Full Year Net Income and Diluted EPS | Period | Net Income (in thousands) | Diluted EPS | | :--- | :--- | :--- | | FY 2024 | $7,666 | $0.45 | | FY 2023 | $25,536 | $2.17 | - The decrease in full-year 2024 earnings was primarily driven by a provision for credit losses of **$11.1 million** and a **$39.4 million** increase in non-interest expenses, largely from merger and acquisition activities[10](index=10&type=chunk) [Net Interest Income and Margin](index=4&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest margin (NIM) on a fully tax equivalent basis improved to 3.95% in Q4 2024, driven by a higher yield on interest-earning assets (5.59%) and a decrease in the cost of deposits to 1.49%, resulting in Q4 2024 net interest income of $32.0 million Net Interest Margin (NIM) Trend | Period | Net Interest Margin (FTE) | | :--- | :--- | | Q4 2024 | 3.95% | | Q3 2024 | 3.69% | | Q4 2023 | 3.52% | - The yield on interest-earning assets increased to **5.59%** in Q4 2024 from **4.51%** in Q4 2023, while the cost of total deposits increased to **1.49%** from **0.87%** over the same period[15](index=15&type=chunk) - Net interest income in Q4 2024 was positively impacted by approximately **24 basis points** (**$1.9 million**) from the net accretion of fair value marks on acquired loans[15](index=15&type=chunk) [Non-Interest Income](index=5&type=section&id=Non-Interest%20Income) Total non-interest income for Q4 2024 was $2.3 million, a significant increase from $1.1 million in Q3 2024 due to the absence of losses on sales of securities, though full-year non-interest income decreased to $6.4 million from $7.0 million in 2023 primarily due to higher net realized losses on investment securities sales Non-Interest Income Comparison (in thousands) | Period | Total Non-Interest Income | Net Realized Losses on Securities | | :--- | :--- | :--- | | Q4 2024 | $2,303 | $0 | | Q3 2024 | $1,105 | $(1,853) | | Q4 2023 | $2,267 | $(424) | - The increase in non-interest income in Q4 2024 compared to the trailing quarter was due to the absence of losses on security sales[18](index=18&type=chunk) - For the full year 2024, net realized losses on sales of investment securities increased by **363.0%** to **$4.2 million**, which was the primary driver for the **8.2%** decline in total annual non-interest income[18](index=18&type=chunk) [Non-Interest Expense](index=7&type=section&id=Non-Interest%20Expense) Total non-interest expense decreased to $23.2 million in Q4 2024 from $27.7 million in Q3 2024, reflecting the materialization of cost savings after systems integration, while full-year 2024 non-interest expenses surged 71.2% to $94.7 million, driven by $9.6 million in direct merger expenses and higher operating costs Non-Interest Expense Comparison (in thousands) | Period | Total Non-Interest Expense | Merger & Acquisition Expense | | :--- | :--- | :--- | | Q4 2024 | $23,188 | $467 | | Q3 2024 | $27,677 | $3,208 | | Q4 2023 | $14,854 | $581 | - Cost savings began to materialize in Q4 2024 in salaries, IT, data processing, and professional services following the completion of systems integration and re-branding[21](index=21&type=chunk) - For the full year 2024, merger and acquisition expenses were **$9.6 million**, a **707.2%** increase from **$1.2 million** in 2023[21](index=21&type=chunk) [GAAP to Non-GAAP Reconciliation](index=3&type=section&id=Reconciliation%20of%20GAAP%20and%20Non-GAAP%20Financial%20Measures) The company provided non-GAAP metrics to exclude merger-related costs and security sale losses, offering a view of core performance, with Q4 2024 comparable non-GAAP net income at $7.2 million ($0.38 per share) and an efficiency ratio of 66.19% Q4 2024 GAAP vs. Non-GAAP (in thousands) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Net Income | $6,895 | $330 | $7,225 | | Diluted EPS | $0.36 | $0.02 | $0.38 | Full Year 2024 GAAP vs. Non-GAAP (in thousands) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Net Income | $7,666 | $17,392 | $25,058 | | Diluted EPS | $0.45 | $1.01 | $1.46 | [Financial Position](index=8&type=section&id=Financial%20Position) As of December 31, 2024, total assets stood at $3.52 billion, a 45% increase from year-end 2023 primarily due to the merger, with gross loans growing to $2.33 billion and total deposits increasing to $2.91 billion, while maintaining significant liquidity of $1.28 billion [Balance Sheet Summary](index=8&type=section&id=Balance%20Sheet%20Summary) Total assets increased by $1.09 billion (45%) to $3.52 billion at December 31, 2024, compared to the prior year-end, largely as a result of the merger on April 1, 2024, which added approximately $43 million in goodwill and $10.0 million in core deposit intangibles Total Assets Comparison (in thousands) | Date | Total Assets | | :--- | :--- | | Dec 31, 2024 | $3,521,771 | | Sep 30, 2024 | $3,531,298 | | Dec 31, 2023 | $2,433,426 | - The merger on April 1, 2024, resulted in the recording of approximately **$43 million** in goodwill and **$10.0 million** in core deposit intangibles[22](index=22&type=chunk) [Loan Portfolio](index=9&type=section&id=Loan%20Portfolio) Total gross loans reached $2.33 billion at December 31, 2024, an 81% increase from $1.29 billion a year prior, with the growth fueled by the merger and a significant shift in the loan mix towards consumer loans, which now represent 17.8% of the portfolio Loan Portfolio Composition (in thousands) | Loan Type | Dec 31, 2024 | % of Total | Dec 31, 2023 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Commercial | $180,745 | 7.7% | $139,022 | 10.8% | | Real Estate | $1,736,498 | 74.3% | $1,094,327 | 84.8% | | Consumer | $415,102 | 17.8% | $55,606 | 4.3% | | **Total Gross Loans** | **$2,334,221** | **99.9%** | **$1,290,797** | **100.0%** | [Deposit Composition](index=9&type=section&id=Deposit%20Composition) Total deposits grew to $2.91 billion at December 31, 2024, from $2.04 billion at the end of 2023, with the composition shifting as non-interest-bearing deposits decreased to 33.7% of total deposits from 46.6% a year ago, while interest-bearing deposits increased proportionally Deposit Composition (in thousands) | Deposit Type | Dec 31, 2024 | % of Total | Dec 31, 2023 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Non-interest bearing | $980,824 | 33.7% | $951,541 | 46.6% | | Interest-bearing | $1,929,953 | 66.3% | $1,090,071 | 53.4% | | **Total Deposits** | **$2,910,777** | **100.0%** | **$2,041,612** | **100.0%** | - The ratio of average non-interest bearing deposits to total average deposits was **36.02%** for Q4 2024, down from **46.61%** in Q4 2023[25](index=25&type=chunk) [Liquidity and Capital](index=10&type=section&id=Liquidity%20and%20Capital) The company maintained a strong liquidity position with total available sources of $1.28 billion as of December 31, 2024, an increase from $1.17 billion at year-end 2023, with capital ratios remaining well above regulatory requirements Primary and Secondary Liquidity Sources (in thousands) | Source | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $120,398 | $53,728 | | Unpledged investment securities | $403,669 | $574,633 | | FHLB borrowing availability | $576,556 | $307,483 | | Unsecured lines of credit | $110,000 | $110,000 | | **Total** | **$1,284,317** | **$1,168,206** | [Credit Quality](index=10&type=section&id=Credit%20Quality) Credit quality remains stable, with net loan charge-offs of only $59,000 in Q4 2024, while the allowance for credit losses (ACL) increased to $25.8 million from $14.7 million a year ago, primarily due to the provision for loans acquired in the merger Allowance for Credit Losses (ACL) | Metric | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | ACL for Loans (in thousands) | $25,803 | $14,653 | | ACL as % of Total Loans | 1.11% | 1.14% | - The year-to-date provision for loan losses of **$10.8 million** was primarily due to the acquisition of loans from the merger as of April 1, 2024[30](index=30&type=chunk) - Substandard loans increased to **$44.3 million** (**1.9%** of total) at year-end 2024, up from **$20.3 million** (**1.7%** of total) at year-end 2023[30](index=30&type=chunk) [Shareholder Information](index=11&type=section&id=Shareholder%20Information) The Board of Directors declared a quarterly cash dividend, demonstrating confidence in the company's capital position and ongoing financial stability [Dividend Declaration](index=11&type=section&id=Cash%20Dividend%20Declared) On January 22, 2025, the Board of Directors declared a regular quarterly cash dividend of $0.12 per share on the company's common stock, payable on February 21, 2025, to shareholders of record as of February 7, 2025, affirming the company remains well capitalized - A regular quarterly cash dividend of **$0.12 per share** was declared[32](index=32&type=chunk) Dividend Schedule | Event | Date | | :--- | :--- | | Declaration Date | January 22, 2025 | | Record Date | February 7, 2025 | | Payment Date | February 21, 2025 | [Company Overview](index=11&type=section&id=Company%20Overview) Effective April 1, 2024, Central Valley Community Bancorp merged with Community West Bancshares, with the combined entity adopting the Community West Bancshares and Community West Bank names, operating full-service centers throughout Central California and offering a range of commercial, agricultural, and retail banking services - On April 1, 2024, Central Valley Community Bancorp completed its merger with Community West Bancshares, with the surviving entities being renamed Community West Bancshares and Community West Bank[33](index=33&type=chunk) - The company is headquartered in Fresno, California and operates full-service Banking Centers throughout Central California, specializing in Commercial Lending, Agribusiness, SBA, and various mortgage services[34](index=34&type=chunk) [Financial Statements and Schedules](index=12&type=section&id=Financial%20Statements%20and%20Schedules) This section contains the detailed, unaudited consolidated financial statements and supporting schedules for Community West Bancshares, including the Balance Sheets, Statements of Income, Selected Ratios, and Average Balances and Yields for the periods ended December 31, 2024 [Forward-looking Statements](index=12&type=section&id=Forward-looking%20Statements) This section outlines potential risks and uncertainties that could cause actual results to differ from forward-looking statements, including economic conditions, interest rate changes, credit quality, competition, merger integration challenges, and regulatory changes - The report contains forward-looking statements subject to risks including economic conditions, interest rate fluctuations, credit quality, competition, and risks related to the successful integration of the recent merger[37](index=37&type=chunk) [Consolidated Balance Sheets](index=13&type=section&id=COMMUNITY%20WEST%20BANCSHARES%20CONSOLIDATED%20BALANCE%20SHEETS) The consolidated balance sheet as of December 31, 2024, shows total assets of $3.52 billion, total liabilities of $3.16 billion, and total shareholders' equity of $362.7 million, compared to total assets of $2.43 billion and shareholders' equity of $207.1 million at year-end 2023 Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | $3,521,771 | $2,433,426 | | Total Loans, net | $2,308,418 | $1,276,144 | | Total Deposits | $2,910,777 | $2,041,612 | | Total Liabilities | $3,159,086 | $2,226,362 | | Total Shareholders' Equity | $362,685 | $207,064 | [Consolidated Statements of Income](index=14&type=section&id=COMMUNITY%20WEST%20BANCSHARES%20CONSOLIDATED%20STATEMENTS%20OF%20INCOME) The consolidated income statement for Q4 2024 details revenues and expenses leading to a net income of $6.9 million, while for the full twelve months ended December 31, 2024, net interest income was $110.4 million and net income was $7.7 million Full Year Income Statement Highlights (in thousands) | Account | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net Interest Income | $110,367 | $82,429 | | Provision for Credit Losses | $11,113 | $309 | | Non-Interest Income | $6,445 | $7,020 | | Non-Interest Expenses | $94,701 | $55,300 | | **Net Income** | **$7,666** | **$25,536** | [Selected Ratios](index=15&type=section&id=COMMUNITY%20WEST%20BANCSHARES%20SELECTED%20RATIOS) This schedule presents key performance and capital ratios on a quarterly basis, with Q4 2024 showing a return on average assets (ROAA) of 0.78%, return on average equity (ROAE) of 7.55%, an efficiency ratio of 67.55%, and a Bancorp Tier 1 leverage ratio of 9.17% Key Ratios for Q4 2024 | Ratio | Value | | :--- | :--- | | Return on Average Assets (ROAA) | 0.78% | | Return on Average Equity (ROAE) | 7.55% | | Efficiency Ratio | 67.55% | | Book Value Per Share | $19.11 | | Tier 1 Leverage - Bancorp | 9.17% | [Schedule of Average Balances and Yields](index=16&type=section&id=COMMUNITY%20WEST%20BANCSHARES%20SCHEDULE%20OF%20AVERAGE%20BALANCES%20AND%20AVERAGE%20YIELDS%20AND%20RATES) This schedule provides a detailed breakdown of average asset and liability balances and their corresponding yields and costs, with Q4 2024 showing an average yield on total interest-earning assets of 5.59% and an average cost of total interest-bearing liabilities of 2.59%, resulting in a net interest margin of 3.95% Q4 2024 Average Yields and Costs | Item | Average Rate | | :--- | :--- | | Yield on Interest-Earning Assets | 5.59% | | Yield on Loans | 6.61% | | Cost of Interest-Bearing Deposits | 2.33% | | Cost of Total Interest-Bearing Liabilities | 2.59% | | **Net Interest Margin** | **3.95%** |

PART 1: FINANCIAL INFORMATION [ITEM 1: FINANCIAL STATEMENTS (Unaudited)](index=5&type=section&id=ITEM%201%3A%20FINANCIAL%20STATEMENTS%20(Unaudited)) This section presents the unaudited consolidated financial statements of Community West Bancshares for the periods ended September 30, 2024, reflecting the significant impact of the April 1, 2024 merger [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) The balance sheet shows a significant increase in total assets to $3.53 billion as of September 30, 2024, primarily driven by the merger which expanded loans, goodwill, and deposits Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$3,531,298** | **$2,433,426** | | Total cash and cash equivalents | $149,013 | $53,728 | | Loans, net | $2,272,252 | $1,276,144 | | Goodwill | $96,379 | $53,777 | | **Total Liabilities** | **$3,167,783** | **$2,226,362** | | Total deposits | $2,921,695 | $2,041,612 | | **Total Shareholders' Equity** | **$363,515** | **$207,064** | [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) For the third quarter of 2024, net income decreased to $3.4 million, or $0.18 per diluted share, primarily due to increased provision for credit losses and non-interest expenses related to the merger Income Statement Summary (in thousands) | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $30,214 | $20,527 | $78,343 | $62,313 | | (Credit) Provision for Credit Losses | ($518) | $186 | $9,889 | $476 | | Non-Interest Income | $1,105 | $1,583 | $4,142 | $4,752 | | Non-Interest Expenses | $27,677 | $13,436 | $71,513 | $40,446 | | **Net Income** | **$3,385** | **$6,390** | **$771** | **$19,642** | | **Diluted EPS** | **$0.18** | **$0.54** | **$0.05** | **$1.67** | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2024, net cash provided by operating activities was $21.3 million, with a $95.3 million increase in cash and cash equivalents, bringing the total to $149.0 million Cash Flow Summary for Nine Months Ended Sept 30 (in thousands) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | | Net cash provided by operating activities | $21,278 | $23,437 | | Net cash provided by investing activities | $78,634 | $20,851 | | Net cash used in financing activities | ($4,627) | ($883) | | **Increase in cash and cash equivalents** | **$95,285** | **$43,405** | | **Cash and cash equivalents at end of period** | **$149,013** | **$74,575** | [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the company's accounting policies and financial statement components, including the April 1, 2024 merger, loan portfolios, and allowance for credit losses - Effective April 1, 2024, Central Valley Community Bancorp merged with Community West Bancshares, with the combined entity renamed Community West Bancshares, accounted for as an acquisition adding significant assets and liabilities[31](index=31&type=chunk) Merger Consideration and Net Assets Acquired (in thousands) | Item | Amount | | :--- | :--- | | Total merger consideration | $143,714 | | Total assets acquired | $1,041,385 | | Total liabilities assumed | ($940,276) | | Total net assets acquired | $101,109 | | **Goodwill created from transaction** | **$42,605** | - The allowance for credit losses on loans was **$24.9 million** as of September 30, 2024, up from **$14.7 million** at year-end 2023, primarily due to loan growth and provisions related to the acquired loan portfolio[64](index=64&type=chunk) - On October 23, 2024, the Board of Directors declared a quarterly cash dividend of **$0.12 per share**[149](index=149&type=chunk) [ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=41&type=section&id=ITEM%202%3A%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the company's financial performance and condition, emphasizing the transformative impact of the April 1, 2024 merger, which significantly affected earnings due to related expenses and credit loss provisions [Financial Highlights](index=42&type=section&id=Financial%20Highlights) The company's financial highlights for the period ending September 30, 2024, are dominated by the merger's effects, including a significant increase in total assets and gross loans, and strong capital ratios despite suppressed net income - Total assets increased by **$1.1 billion (45.12%)** and total gross loans increased by **$1.0 billion (77.96%)** compared to December 31, 2023, largely due to the merger[162](index=162&type=chunk) - Net interest margin improved to **3.69%** for Q3 2024 from **3.65%** in Q2 2024[163](index=163&type=chunk) - Q3 2024 net income was **$3.4 million**, or **$0.18 per diluted share**, impacted by merger-related expenses and a loss on the sale of securities[162](index=162&type=chunk) - Capital positions remain strong with a Tier 1 Leverage Ratio of **9.38%** and a Total Risk-Based Capital Ratio of **13.55%**[163](index=163&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) The company's operating results for Q3 and the first nine months of 2024 were heavily influenced by the merger, leading to increased net interest income but also a significant rise in non-interest expenses and credit loss provisions GAAP to Non-GAAP Net Income Reconciliation (Q3 2024, in thousands) | Description | Amount | | :--- | :--- | | Net income (GAAP) | $3,385 | | Merger and conversion related costs | $3,208 | | Loss on sale of investment securities | $1,853 | | Income tax benefit of non-core expenses | ($1,496) | | **Comparable net income (non-GAAP)** | **$6,950** | Net Interest Margin Analysis | Period | Net Interest Margin (FTE) | | :--- | :--- | | Q3 2024 | 3.69% | | Q3 2023 | 3.47% | | Nine Months 2024 | 3.69% | | Nine Months 2023 | 3.59% | - Non-interest expenses for Q3 2024 increased **106%** year-over-year to **$27.7 million**, driven by higher salaries, occupancy costs, and **$3.2 million** in merger and acquisition expenses[209](index=209&type=chunk)[212](index=212&type=chunk) [Financial Condition](index=53&type=section&id=Financial%20Condition) As of September 30, 2024, the company's financial condition was robust, with total assets at $3.53 billion, gross loans at $2.3 billion, and a low nonperforming asset ratio, bolstered by the merger Loan Portfolio Composition (in thousands) | Loan Type | September 30, 2024 | % of Total | | :--- | :--- | :--- | | Commercial | $160,816 | 7.0% | | Real estate | $1,726,444 | 75.1% | | Consumer | $407,919 | 17.8% | | **Total Gross Loans** | **$2,297,143** | **100.0%** | - The loan-to-deposit ratio increased to **78.62%** at September 30, 2024, compared to **63.22%** at December 31, 2023, reflecting a more optimized balance sheet post-merger[218](index=218&type=chunk) - Nonperforming assets were **$3.25 million**, or **0.14%** of total loans, as of September 30, 2024, compared to zero at the end of 2023[224](index=224&type=chunk)[228](index=228&type=chunk) [Capital and Liquidity](index=56&type=section&id=Capital%20and%20Liquidity) The company maintained strong capital and liquidity positions, with all regulatory capital ratios well above 'well-capitalized' thresholds and ample available borrowing capacity Regulatory Capital Ratios (Company) | Ratio | September 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Tier 1 Leverage Ratio | 9.38% | 9.18% | | Common Equity Tier 1 Ratio | 11.12% | 12.78% | | Tier 1 Risk-Based Capital Ratio | 11.30% | 13.07% | | Total Risk-Based Capital Ratio | 13.55% | 16.08% | Available Liquidity Sources (in thousands) | Source | Available Capacity | | :--- | :--- | | Unsecured Credit Lines | $110,000 | | Unused FHLB Advances | $565,283 | | Federal Reserve Bank Line | $3,958 | | **Total Available** | **$679,241** | [ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=59&type=section&id=ITEM%203%3A%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section details the company's management of interest rate risk, with simulation models used to monitor exposure of net interest income and equity to rate fluctuations, showing asset-sensitivity within policy limits Interest Rate Sensitivity Analysis (Estimated Change in Net Interest Income) | Rate Shock (bps) | Year 1 Change | Year 2 Change | | :--- | :--- | :--- | | +400 | 3.91% | 3.97% | | +200 | 2.38% | 2.48% | | +100 | 1.99% | 2.34% | | -100 | (3.86)% | (5.06)% | | -200 | (6.00)% | (8.01)% | - The company actively manages its asset and liability structure to correlate the effects of interest rate changes on its assets and liabilities, aiming to minimize exposure to net interest margin and capital[247](index=247&type=chunk)[248](index=248&type=chunk) [ITEM 4: CONTROLS AND PROCEDURES](index=60&type=section&id=ITEM%204%3A%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of September 30, 2024, with no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[252](index=252&type=chunk) - No changes in internal controls over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[253](index=253&type=chunk) PART II: OTHER INFORMATION [ITEM 1: LEGAL PROCEEDINGS](index=60&type=section&id=ITEM%201%3A%20LEGAL%20PROCEEDINGS) The company reported no material legal proceedings during the period - There are no legal proceedings to report for the period[254](index=254&type=chunk) [ITEM 1A: RISK FACTORS](index=60&type=section&id=ITEM%201A%3A%20RISK%20FACTORS) This section refers readers to the detailed discussion of risk factors in the company's 2023 Annual Report on Form 10-K, which could cause actual results to differ materially from expectations - The company directs stakeholders to its 2023 Annual Report on Form 10-K for a comprehensive discussion of risk factors[255](index=255&type=chunk) [Other Part II Items](index=60&type=section&id=Other%20Part%20II%20Items) The company reported no unregistered sales of equity securities, no defaults upon senior securities, no mine safety disclosures, and no other information requiring disclosure under Item 5 for the period - There were no reportable events under Item 2 (Unregistered Sales of Equity Securities), Item 3 (Defaults Upon Senior Securities), Item 4 (Mine Safety Disclosures), or Item 5 (Other Information)[256](index=256&type=chunk) [ITEM 6: EXHIBITS](index=61&type=section&id=ITEM%206%3A%20EXHIBITS) This section lists the exhibits filed with the quarterly report, including certifications by the CEO and CFO, and XBRL data files - The filing includes required certifications from the Principal Executive Officer and Principal Financial Officer pursuant to SEC rules[258](index=258&type=chunk) - Interactive Data Files (XBRL) are included as exhibits to the report[258](index=258&type=chunk)

[Community West Bancshares Q3 2024 Earnings Report](index=1&type=section&id=Community%20West%20Bancshares%20Q3%202024%20Earnings%20Report) [Financial Highlights](index=1&type=section&id=THIRD%20QUARTER%20FINANCIAL%20HIGHLIGHTS) The company reported Q3 net income of $3.4 million, reflecting merger impacts and balance sheet repositioning Q3 2024 Earnings Summary | Metric | Q3 2024 | Q2 2024 | Q3 2023 | | :--- | :--- | :--- | :--- | | Net Income (Loss) | $3.4 million | ($6.3 million) | $6.4 million | | Diluted EPS | $0.18 | ($0.33) | $0.54 | Balance Sheet Growth (as of Sep 30, 2024 vs Dec 31, 2023) | Metric | Growth Amount | Growth Rate | | :--- | :--- | :--- | | Total Assets | +$1.1 billion | +45.12% | | Total Gross Loans | +$1.0 billion | +77.96% | | Total Deposits | +$880.1 million | +43.11% | - The company is strategically repositioning its balance sheet by selling available-for-sale investment securities to fund loan growth, with proceeds from sales totaling **$64.2 million year-to-date**[3](index=3&type=chunk) Key Performance Ratios (Q3 2024) | Ratio | Value | | :--- | :--- | | Net Interest Margin | 3.69% | | Total Cost of Deposits | 1.69% | | Tier 1 Leverage Ratio | 9.38% | | Total Risk-Based Capital Ratio | 13.55% | [Management Commentary](index=2&type=section&id=Management%20Commentary) Management highlighted the transformative merger and system integration as key milestones for future growth and efficiency - CEO James J. Kim highlighted the completion of the merger and system integration as foundational milestones for future growth, establishing the new Community West Bank as a **premier community bank in Central California**[7](index=7&type=chunk) - CFO Shannon Livingston stated that with most merger-related expenses behind them, future operating results are expected to reflect the **implemented efficiencies and synergies**[8](index=8&type=chunk) [Results of Operations](index=2&type=section&id=Results%20of%20Operations) Q3 net income fell to $3.4 million year-over-year, driven by a 106% surge in non-interest expenses from the merger Consolidated Income Statement Summary (in thousands) | Metric | Q3 2024 | Q3 2023 | Nine Months 2024 | Nine Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $30,214 | $20,527 | $78,343 | $62,313 | | Provision for Credit Losses | ($518) | $186 | $9,889 | $476 | | Non-Interest Income | $1,105 | $1,583 | $4,142 | $4,752 | | Non-Interest Expense | $27,677 | $13,436 | $71,513 | $40,446 | | **Net Income (Loss)** | **$3,385** | **$6,390** | **$771** | **$19,642** | - The decrease in earnings for Q3 and the nine-month period was primarily due to **merger and acquisition expenses** and the additional operating costs associated with the expanded company[13](index=13&type=chunk)[14](index=14&type=chunk) Key Performance Ratios (Annualized) | Ratio | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Return on Average Equity (ROAE) | 3.84% | 13.60% | | Return on Average Assets (ROAA) | 0.38% | 1.02% | [Net Interest Income and Margin](index=4&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest margin expanded to 3.69% in Q3 2024, driven by higher asset yields that outpaced rising deposit costs Net Interest Margin and Component Yields | Metric | Q3 2024 | Q3 2023 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net Interest Margin (FTE) | 3.69% | 3.47% | 3.65% | | Yield on Interest Earning Assets | 5.52% | 4.46% | 5.50% | | Cost of Total Deposits | 1.69% | 0.90% | 1.71% | - Average loans increased by **over $1.0 billion** for Q3 2024 compared to Q3 2023, primarily due to the merger, with the effective yield on average loans increasing to **6.53%**[16](index=16&type=chunk) [Non-Interest Income](index=5&type=section&id=Non-Interest%20Income) Total non-interest income declined 30.2% in Q3 2024 due to strategic losses on securities sales to fund loan growth Non-Interest Income Components (Q3 2024 vs Q3 2023, in thousands) | Component | Q3 2024 | Q3 2023 | % Change | | :--- | :--- | :--- | :--- | | Service charges | $478 | $376 | 27.1% | | Loan placement fees | $251 | $119 | 110.9% | | Net realized losses on sales of securities | ($1,853) | ($39) | 4651.3% | | Other income | $1,040 | $283 | 267.5% | | **Total non-interest income** | **$1,105** | **$1,583** | **(30.2)%** | - The decrease in total non-interest income was due to **strategic sales of investment securities**, with proceeds used to fund loan growth[22](index=22&type=chunk) [Non-Interest Expense](index=6&type=section&id=Non-Interest%20Expense) Non-interest expenses more than doubled to $27.7 million in Q3 2024, primarily due to merger-related costs and expansion Non-Interest Expense Components (Q3 2024 vs Q3 2023, in thousands) | Component | Q3 2024 | Q3 2023 | % Change | | :--- | :--- | :--- | :--- | | Salaries and employee benefits | $13,710 | $7,474 | 83.4% | | Merger and acquisition expense | $3,208 | $365 | 778.9% | | Information technology | $1,878 | $915 | 105.2% | | **Total non-interest expenses** | **$27,677** | **$13,436** | **106.0%** | - The increase in non-interest expense was due to the merger, which added **131 full-time equivalent employees** and seven banking centers[26](index=26&type=chunk) [Non-GAAP Financial Measures](index=2&type=section&id=Reconciliation%20of%20GAAP%20and%20Non-GAAP%20Financial%20Measures) Non-GAAP measures show core net income of $5.7 million, excluding merger costs and other non-recurring items - Management uses non-GAAP measures to facilitate analysis of the Company's **core operating results** and for internal budgeting and business management[10](index=10&type=chunk) GAAP vs. Non-GAAP Reconciliation (Q3 2024, in thousands except per share) | Metric | GAAP | Adjustments | Non-GAAP (Comparable) | | :--- | :--- | :--- | :--- | | Net Income | $3,385 | $2,308 | $5,693 | | Diluted EPS | $0.18 | $0.12 | $0.30 | | ROAA (annualized) | 0.38% | | 0.64% | | ROAE (annualized) | 3.84% | | 6.45% | | Efficiency Ratio | 88.37% | | 73.76% | [Balance Sheet Analysis](index=8&type=section&id=Balance%20Sheet%20Summary) Total assets grew 45.1% to $3.53 billion since year-end 2023, driven by the recent merger's impact on loans and deposits - Total assets increased by **$1.1 billion**, or 45.12%, from December 31, 2023, to September 30, 2024, largely due to the merger[28](index=28&type=chunk) - As a result of the merger, the company recorded approximately **$42.6 million in goodwill** and **$10.0 million in core deposit intangibles**[28](index=28&type=chunk) [Asset and Loan Portfolio](index=8&type=section&id=Loan%20Portfolio) Gross loans increased by 78% to $2.3 billion since year-end, with the merger shifting the portfolio mix toward consumer loans Loan Portfolio Composition (in thousands) | Loan Type | Sep 30, 2024 | % of Total | Dec 31, 2023 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Commercial | $160,816 | 7.0% | $139,022 | 10.8% | | Real Estate | $1,726,444 | 75.1% | $1,094,327 | 84.8% | | Consumer | $407,919 | 17.8% | $55,606 | 4.3% | | **Total Gross Loans** | **$2,297,143** | **100.0%** | **$1,290,797** | **100.0%** | [Deposits and Liquidity](index=9&type=section&id=Deposits%20and%20Liquidity) Total deposits rose 43% to $2.92 billion, supported by strong liquidity sources of $1.28 billion Deposit Composition (in thousands) | Deposit Type | Sep 30, 2024 | % of Total | Dec 31, 2023 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Non-interest bearing | $1,076,423 | 36.8% | $951,541 | 46.6% | | Interest-bearing | $1,845,272 | 63.2% | $1,090,071 | 53.4% | | **Total Deposits** | **$2,921,695** | **100.0%** | **$2,041,612** | **100.0%** | Total Liquidity Sources (in thousands) | Source | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | **Total Liquidity** | **$1,275,858** | **$1,168,206** | [Credit Quality](index=10&type=section&id=Credit%20Quality) Credit quality remained strong with net loan recoveries in Q3 and an allowance for credit losses of 1.08% of total loans - The company recorded **net loan recoveries of $162,000** in Q3 2024, compared to net charge-offs of $194,000 in Q3 2023[36](index=36&type=chunk) - The allowance for credit losses for loans was **$24.9 million**, or 1.08% of total loans, as of September 30, 2024, with the increase driven by provisioning for acquired loans[37](index=37&type=chunk) Loan Risk Ratings (% of Total Portfolio) | Risk Rating | Sep 30, 2024 | Jun 30, 2024 | Sep 30, 2023 | | :--- | :--- | :--- | :--- | | Pass | 97.0% | 97.1% | 96.7% | | Special mention | 1.3% | 1.1% | 1.3% | | Substandard | 1.7% | 1.8% | 2.0% | [Dividend Declaration](index=10&type=section&id=Cash%20Dividend%20Declared) The Board of Directors declared a regular quarterly cash dividend of $0.12 per common share - A regular quarterly cash dividend of **$0.12 per share** was declared, payable on November 22, 2024, to shareholders of record as of November 8, 2024[38](index=38&type=chunk) [Company Overview](index=11&type=section&id=Company%20Overview) The company completed its merger with Central Valley Community Bancorp, establishing a larger presence in Central California - The merger between Central Valley Community Bancorp and Community West Bancshares was **completed on April 1, 2024**, with the resulting entities named Community West Bancshares and Community West Bank[40](index=40&type=chunk) - The company is headquartered in Fresno, California and provides a full suite of banking services throughout **Central California**[41](index=41&type=chunk)

[PART 1: FINANCIAL INFORMATION](index=5&type=section&id=PART%201%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=5&type=section&id=ITEM%201%20FINANCIAL%20STATEMENTS%20(Unaudited)) Unaudited statements show the financial impact of the April 2024 merger with Community West Bancshares [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew 43.2% to $3.48 billion, driven by merger-related increases in loans and deposits Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2024 | December 31, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Assets** | **$3,484,671** | **$2,433,426** | **+43.2%** | | Total cash and cash equivalents | $109,669 | $53,728 | +104.1% | | Loans, net | $2,231,631 | $1,276,144 | +74.9% | | Goodwill | $96,379 | $53,777 | +79.2% | | **Total Liabilities** | **$3,134,429** | **$2,226,362** | **+40.8%** | | Total deposits | $2,869,300 | $2,041,612 | +40.5% | | **Total Shareholders' Equity** | **$350,242** | **$207,064** | **+69.2%** | [Consolidated Statements of Operations](index=7&type=section&id=Consolidated%20Statements%20of%20Operations) A Q2 2024 net loss of $6.3 million resulted from merger-related credit provisions and expenses Quarterly and Six-Month Performance (in thousands, except per-share amounts) | Metric | Q2 2024 | Q2 2023 | Six Months 2024 | Six Months 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $29,057 | $20,205 | $48,129 | $41,786 | | Provision for Credit Losses | $9,831 | $(343) | $10,407 | $290 | | Non-Interest Income | $1,400 | $1,594 | $3,037 | $3,169 | | Non-Interest Expenses | $28,503 | $13,805 | $43,836 | $27,010 | | **Net (Loss) Income** | **$(6,290)** | **$6,282** | **$(2,614)** | **$13,252** | | **Diluted EPS** | **$(0.33)** | **$0.54** | **$(0.17)** | **$1.13** | [Notes to Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail the merger accounting, credit loss allowance, goodwill, and a declared cash dividend - Effective April 1, 2024, Central Valley Community Bancorp merged with Community West Bancshares, with Central Valley being the surviving entity and subsequently changing its name to Community West Bancshares[29](index=29&type=chunk) - The allowance for credit losses on loans increased to **$24.94 million** at June 30, 2024, from $14.65 million at year-end 2023, primarily driven by a **$10.03 million provision**[60](index=60&type=chunk)[63](index=63&type=chunk) - On July 17, 2024, the Board of Directors declared a **$0.12 per share cash dividend**, payable on August 16, 2024[131](index=131&type=chunk) Merger Consideration and Net Assets Acquired (in thousands) | Item | Amount | | :--- | :--- | | **Total merger consideration** | **$143,714** | | Total assets acquired | $1,041,385 | | Total liabilities assumed | $(940,276) | | Total net assets acquired | $101,109 | | **Goodwill created from transaction** | **$42,605** | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=42&type=section&id=ITEM%202%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) The merger drove balance sheet growth but resulted in a net loss due to related expenses and provisions [Financial Highlights](index=43&type=section&id=Financial%20Highlights) Merger effects led to a $6.3 million net loss despite significant growth in loans, deposits, and assets - The company incurred a **net loss of $6.3 million**, or $0.33 per diluted share, in Q2 2024, primarily due to merger-related expenses and a provision for loan losses on the acquired portfolio[143](index=143&type=chunk) Key Metrics as of June 30, 2024 | Metric | Value | Change vs. Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | $3.48 billion | +43.20% | | Total Gross Loans | $2.26 billion | +74.82% | | Total Deposits | $2.87 billion | +40.54% | | Net Interest Margin (Q2) | 3.65% | +23 bps (vs Q1 2024) | | Tier 1 Leverage Ratio | 9.14% | -4 bps | [Results of Operations](index=44&type=section&id=Results%20of%20Operations) A Q2 net loss of $6.3 million was driven by a $9.8M credit provision and a $14.7M rise in expenses - **Comparable net income (non-GAAP)**, which excludes merger costs and other non-core items, was **$7.8 million** ($0.41 per diluted share) for Q2 2024[149](index=149&type=chunk) - **Net interest margin (FTE)** for Q2 2024 increased 19 basis points to **3.65%** from 3.46% in Q2 2023, as the higher yield on the expanded loan portfolio outweighed the increased cost of funds[159](index=159&type=chunk) - **Non-interest expenses** for Q2 2024 rose 106.5% year-over-year to **$28.5 million**, with merger and acquisition expenses accounting for $5.6 million of the total[177](index=177&type=chunk)[179](index=179&type=chunk) [Financial Condition](index=54&type=section&id=Financial%20Condition) The merger expanded total assets to $3.48 billion, with loans up 74.8% and deposits up 40.5% - Total gross loans increased by **$965.8 million (74.8%) to $2.26 billion**, with commercial real estate loans comprising 56.0% of the total portfolio[185](index=185&type=chunk)[187](index=187&type=chunk) - **Nonperforming assets were $2.8 million** as of June 30, 2024, compared to zero at the end of 2023, with the increase resulting from the acquired loan portfolio[190](index=190&type=chunk) - The **allowance for credit losses (ACL)** on loans stood at **$24.9 million**, or 1.11% of total gross loans, up from $14.7 million at year-end 2023[191](index=191&type=chunk) - Total deposits grew by **$827.7 million (40.5%) to $2.87 billion**, with uninsured deposits representing 37.85% of total deposits[194](index=194&type=chunk)[196](index=196&type=chunk) [Capital and Liquidity](index=57&type=section&id=Capital%20and%20Liquidity) Capital ratios remained well-capitalized and liquidity was robust with significant available borrowing capacity - Primary liquidity sources include customer deposits, FHLB advances, and correspondent bank lines, with **$110 million in unsecured credit lines** and **$256 million in unused FHLB secured advances**[204](index=204&type=chunk)[205](index=205&type=chunk) Consolidated Regulatory Capital Ratios | Ratio | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Tier 1 Leverage Ratio | 9.14% | 9.18% | | Common Equity Tier 1 Ratio | 11.36% | 12.78% | | Tier 1 Risk-Based Capital Ratio | 11.55% | 13.07% | | Total Risk-Based Capital Ratio | 13.87% | 16.08% | [Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=ITEM%203%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is interest rate sensitivity, which remains within policy limits - The company actively manages interest rate risk to minimize exposure of its net interest margin and equity to rate changes, with risk remaining **within policy guidelines** as of June 30, 2024[207](index=207&type=chunk)[209](index=209&type=chunk) Interest Rate Sensitivity Analysis (Immediate Parallel Shift) | Rate Shift (bps) | Estimated Change in NII (Year 1) | Estimated Change in NII (Year 2) | | :--- | :--- | :--- | | +400 | (1.33)% | (2.02)% | | +200 | (0.85)% | (1.46)% | | +100 | 0.02% | (0.08)% | | -100 | (2.77)% | (3.59)% | | -200 | (4.20)% | (5.98)% | [Controls and Procedures](index=60&type=section&id=ITEM%204%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective with no material changes - The CEO and CFO concluded that the company's **disclosure controls and procedures were effective** as of June 30, 2024[211](index=211&type=chunk) - **No changes in internal controls** over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[212](index=212&type=chunk) [PART II: OTHER INFORMATION](index=61&type=section&id=PART%20II%20OTHER%20INFORMATION) [Other Information Items (Items 1-6)](index=61&type=section&id=Other%20Information%20Items) The company reports no new legal proceedings, material risk factor changes, or unregistered security sales - The company reports **no legal proceedings** to disclose for the period[213](index=213&type=chunk) - There have been **no material changes to the risk factors** previously disclosed in the company's 2023 Annual Report on Form 10-K[213](index=213&type=chunk) - **No unregistered sales of equity securities** or defaults upon senior securities were reported for the period[214](index=214&type=chunk)

[Earnings Release Overview](index=1&type=section&id=Community%20West%20Bancshares%20Reports%20Earnings%20Results%20for%20the%20Quarter%20Ended%20June%2030%2C%202024) [Second Quarter 2024 Financial Highlights](index=1&type=section&id=SECOND%20QUARTER%20FINANCIAL%20HIGHLIGHTS) Community West Bancshares reported a **$6.29 million net loss** in Q2 2024, driven by merger-related expenses and a **$9.83 million provision for credit losses**, alongside **42.8% asset growth** Q2 2024 Key Financial Results | Metric | Q2 2024 (in millions) | Q1 2024 (in millions) | Q2 2023 (in millions) | | :--- | :--- | :--- | :--- | | **Net (Loss) Income** | ($6.29) | $3.68 | $6.28 | | **Diluted (Loss) EPS** | ($0.33) | $0.31 | $0.54 | | **Provision for Credit Losses** | $9.83 | $0.58 | ($0.34) | | **Net Interest Margin** | 3.65% | 3.42% | 3.46% | - The net loss in Q2 was directly caused by merger-related expenses, a provision for loan losses on the acquired portfolio, and a realized loss on securities sales[4](index=4&type=chunk) - Total assets grew by **$1.04 billion (42.83%)** compared to December 31, 2023, primarily due to the merger[23](index=23&type=chunk) [Key Operational and Strategic Developments](index=1&type=section&id=Notable%20Items%20for%20Second%20Quarter%202024) The company completed its merger on April 1, 2024, adding **$920.9 million in loans** and **$844.0 million in deposits**, and declared a **$0.12 per share cash dividend** - On April 1, 2024, the company completed its acquisition of Community West Bancshares and adopted its name to reflect the expanded Central California territory[20](index=20&type=chunk) - The merger added loans with a fair value of **$920.9 million** and deposits with a fair value of **$844.0 million**[5](index=5&type=chunk)[6](index=6&type=chunk) - The company is repositioning its balance sheet by selling lower-earning investment securities to fund strong organic loan growth of **$49 million (8.89% annualized)** for the quarter[2](index=2&type=chunk)[11](index=11&type=chunk)[22](index=22&type=chunk) - A cash dividend of **$0.12 per common share** was declared, payable on August 16, 2024[10](index=10&type=chunk) [Results of Operations](index=2&type=section&id=Results%20of%20Operations) [Net Interest Income and Net Interest Margin](index=4&type=section&id=Net%20Interest%20Income%20and%20Margin) Net interest income increased **43.8% year-over-year to $29.06 million** in Q2 2024, with net interest margin expanding to **3.65%**, despite a rise in the cost of total deposits to **1.71%** Net Interest Income and Margin Performance | Metric | Q2 2024 (in millions) | Q1 2024 (in millions) | Q2 2023 (in millions) | | :--- | :--- | :--- | :--- | | **Net Interest Income** | $29.06 | $19.07 | $20.21 | | **Net Interest Margin (FTE)** | 3.65% | 3.42% | 3.46% | | **Yield on Earning Assets** | 5.50% | 4.58% | 4.43% | | **Cost of Total Deposits** | 1.71% | 0.98% | 0.88% | - Net interest margin increased to **3.65%** for Q2 2024, with fair value accretion from the merger contributing **12 basis points** to the **23 basis point** sequential increase[21](index=21&type=chunk) - The effective yield on average loans increased to **6.54%** in Q2 2024, up from **5.74%** in Q1 2024 and **5.54%** in Q2 2023[58](index=58&type=chunk) [Provision for Credit Losses](index=2&type=section&id=Provision%20for%20Credit%20Losses) The company recorded a significant **$9.83 million provision for credit losses** in Q2 2024, primarily due to establishing an allowance for the acquired loan portfolio from the merger Provision for Credit Losses Comparison | Period | Provision (Credit) for Credit Losses (in millions) | | :--- | :--- | | **Q2 2024** | $9.83 | | **Q1 2024** | $0.58 | | **Q2 2023** | ($0.34) | - The provision for credit losses on non-purchased credit deteriorated loans related to the merger was **$10.9 million**[31](index=31&type=chunk) [Non-Interest Income](index=5&type=section&id=Non-Interest%20Income) Total non-interest income decreased **12.2% to $1.40 million** in Q2 2024, primarily due to a **$1.97 million net realized loss** on securities sales for strategic balance sheet repositioning Non-Interest Income Components (Q2 2024 vs Q2 2023) | Component | Q2 2024 (in thousands) | Q2 2023 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Service charges | $480 | $367 | 30.8% | | Net realized losses on sales of securities | ($1,974) | ($39) | 4961.5% | | Other income | $1,508 | $276 | 446.4% | | **Total non-interest income** | **$1,400** | **$1,594** | **(12.2)%** | - Proceeds from the sale of securities were used to fund loan growth as part of a strategic balance sheet repositioning to improve future earnings[17](index=17&type=chunk)[22](index=22&type=chunk) [Non-Interest Expense](index=6&type=section&id=Non-Interest%20Expense) Non-interest expenses surged **106.5% to $28.50 million** in Q2 2024, primarily driven by **$5.56 million in merger expenses** and increased operational costs from expanded operations Non-Interest Expense Components (Q2 2024 vs Q2 2023) | Component | Q2 2024 (in thousands) | Q2 2023 (in thousands) | % Change | | :--- | :--- | :--- | :--- | | Salaries and employee benefits | $13,451 | $7,976 | 68.6% | | Merger and acquisition expense | $5,556 | $177 | 3039.0% | | Occupancy and equipment | $2,423 | $1,264 | 91.7% | | **Total non-interest expenses** | **$28,503** | **$13,805** | **106.5%** | - The increase in non-interest expense was due to the merger completed on April 1, 2024, which added **131 full-time equivalent employees** and **seven banking centers**[37](index=37&type=chunk) - Management expects elevated non-interest expenses to continue through Q3 2024 due to merger-related systems integration, with operational efficiencies anticipated to begin in Q4 2024[11](index=11&type=chunk) [Balance Sheet Analysis](index=7&type=section&id=Balance%20Sheet%20Summary) [Assets, Loans, and Deposits](index=7&type=section&id=Assets%2C%20Loans%2C%20and%20Deposits) The merger significantly expanded the balance sheet, with total assets reaching **$3.48 billion (42.8% increase)**, gross loans **$2.26 billion (74.8% increase)**, and total deposits **$2.87 billion (40.5% increase)** Balance Sheet Growth (June 30, 2024 vs. Dec 31, 2023) | Metric (in billions) | June 30, 2024 | Dec 31, 2023 | % Change | | :--- | :--- | :--- | :--- | | **Total Assets** | $3.48 | $2.43 | 42.8% | | **Total Gross Loans** | $2.26 | $1.29 | 74.8% | | **Total Deposits** | $2.87 | $2.04 | 40.5% | - Excluding the **$920.9 million** in acquired loans, gross loans increased organically by **$44.9 million (3.48%)** year-to-date[5](index=5&type=chunk) - The ratio of average non-interest bearing deposits to total deposits decreased to **37.36%** for Q2 2024, compared to **45.30%** for Q1 2024, reflecting the composition of acquired deposits[8](index=8&type=chunk)[41](index=41&type=chunk) [Liquidity and Capital](index=2&type=section&id=Liquidity%20and%20Capital) The company maintains strong liquidity with **$1.1 billion in available sources** and capital ratios well above regulatory requirements, including a **9.14% Tier 1 Leverage Ratio** Key Capital Ratios (June 30, 2024) | Ratio | Value | | :--- | :--- | | **Tier 1 Leverage Ratio** | 9.14% | | **Common Equity Tier 1 Ratio** | 11.36% | | **Tier 1 Risk-Based Capital Ratio** | 11.55% | | **Total Risk-Based Capital Ratio** | 13.87% | Liquidity Sources (in thousands) | Source | June 30, 2024 (in thousands) | | :--- | :--- | | Cash and cash equivalents | $109,723 | | Unpledged investment securities | $519,693 | | FHLB borrowing availability | $253,850 | | Unsecured lines of credit availability | $110,000 | | **Total** | **$1,104,883** | [Credit Quality](index=8&type=section&id=Credit%20Quality) [Non-performing Assets and Loan Quality](index=2&type=section&id=Non-performing%20Assets%20and%20Loan%20Quality) Credit quality metrics shifted post-merger, with non-performing assets reaching **$2.81 million** and increases in special mention and substandard loans, while net loan charge-offs remained minimal at **$41 thousand** - Non-performing assets totaled **$2.81 million** for the quarter ended June 30, 2024, as a result of acquired loans from the merger[9](index=9&type=chunk) Loan Risk Rating (in thousands) | Rating | June 30, 2024 (in thousands) | March 31, 2024 (in thousands) | | :--- | :--- | :--- | | Pass | $2,191,348 | $1,262,046 | | Special mention | $25,576 | $5,595 | | Substandard | $39,647 | $18,968 | - Net loan charge-offs were minimal at **$41 thousand** for the quarter, with a charge-off ratio of **0.01%**[9](index=9&type=chunk)[43](index=43&type=chunk) [Allowance for Credit Losses](index=9&type=section&id=Allowance%20for%20Credit%20Losses) The allowance for credit losses (ACL) increased to **$24.94 million** at June 30, 2024, reflecting the acquired loan portfolio, with ACL as a percentage of total loans at **1.11%** - The allowance for credit losses was **$24.94 million** at June 30, 2024, compared to **$14.65 million** at December 31, 2023[71](index=71&type=chunk) - The allowance for credit losses as a percentage of total loans was **1.11%** at June 30, 2024, compared to **1.14%** at December 31, 2023[71](index=71&type=chunk) [Company Information and Forward-Looking Statements](index=9&type=section&id=Company%20Overview) [Company Overview](index=9&type=section&id=Company%20Overview) Community West Bancshares, headquartered in Fresno, California, operates full-service banking centers across Central California, offering diverse financial services post-merger - Effective April 1, 2024, Central Valley Community Bancorp merged with Community West Bancshares and adopted its name[73](index=73&type=chunk) - The company is headquartered in Fresno, California and operates full-service Banking Centers across California's Central Valley and Central Coast[46](index=46&type=chunk) [Forward-Looking Statements](index=10&type=section&id=Forward-looking%20Statements) This section contains forward-looking statements, cautioning that actual results may differ materially due to economic conditions, interest rate changes, credit quality, competition, and merger integration risks - The report includes forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially[49](index=49&type=chunk) - Key risks include economic conditions, interest rate environment, credit quality, competition, and challenges related to merger integration, such as failing to achieve projected expansion or experiencing higher-than-expected costs[49](index=49&type=chunk) [Consolidated Financial Statements](index=11&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=11&type=section&id=Consolidated%20Balance%20Sheets) The consolidated balance sheet shows total assets of **$3.48 billion** as of June 30, 2024, driven by increased loans and goodwill, with total deposits at **$2.87 billion** and shareholders' equity at **$350.2 million** Consolidated Balance Sheets (in thousands) | Account | June 30, 2024 (in thousands) | Dec 31, 2023 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$3,475,764** | **$2,433,426** | | Total cash and cash equivalents | $109,723 | $53,728 | | Total loans, net | $2,231,631 | $1,276,144 | | Goodwill | $96,379 | $53,777 | | **Total Liabilities** | **$3,125,522** | **$2,226,362** | | Total deposits | $2,869,300 | $2,041,612 | | **Total Shareholders' Equity** | **$350,242** | **$207,064** | [Consolidated Statements of Income](index=12&type=section&id=Consolidated%20Statements%20of%20Income) The consolidated statement of income for Q2 2024 shows a **$6.29 million net loss**, with **$29.06 million in net interest income**, a **$9.83 million provision for credit losses**, and **$28.50 million in non-interest expenses** Consolidated Statements of Income (Three Months Ended June 30, in thousands) | Account | 2024 (in thousands) | 2023 (in thousands) | | :--- | :--- | :--- | | Net interest income | $29,057 | $20,205 | | Provision for credit losses | $9,831 | ($343) | | Total non-interest income | $1,400 | $1,594 | | Total non-interest expenses | $28,503 | $13,805 | | (Loss) income before income taxes | ($7,877) | $8,337 | | **Net (loss) income** | **($6,290)** | **$6,282** | [Selected Financial Highlights (Quarterly)](index=13&type=section&id=Selected%20Financial%20Highlights%20(Quarterly)) Quarterly financial highlights show a **$6.29 million net loss** in Q2 2024, an efficiency ratio spike to **93.58%**, and a loan-to-deposit ratio increase to **78.65%**, reflecting merger impacts Quarterly Performance Ratios | Metric | Q2 2024 (in thousands) | Q1 2024 (in thousands) | Q4 2023 (in thousands) | Q2 2023 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Net (loss) income | ($6,290) | $3,676 | $5,893 | $6,282 | | Diluted (loss) EPS | ($0.33) | $0.31 | $0.50 | $0.54 | | Return on average assets | (0.73)% | 0.61% | 0.98% | 1.00% | | Return on average equity | (7.39)% | 7.08% | 12.78% | 13.60% | | Efficiency ratio | 93.58% | 74.04% | 66.37% | 65.24% | | Loan to deposit ratio | 78.65% | 63.34% | 63.33% | 57.07% | [Average Balances and Yields](index=14&type=section&id=Average%20Balances%20and%20Average%20Yields%20and%20Rates) Average interest-earning assets increased to **$3.25 billion** in Q2 2024, with average loans at **$2.23 billion** and a net interest margin of **3.65%** Average Balances and Rates (Three Months Ended June 30, 2024) | Category | Average Balance (in thousands) | Interest Income/Expense (in thousands) | Average Rate | | :--- | :--- | :--- | :--- | | **Total interest-earning assets** | **$3,246,454** | **$44,368** | **5.50%** | | Average Loans | $2,226,858 | $36,197 | 6.54% | | **Total interest-bearing liabilities** | **$2,013,444** | **$14,940** | **2.98%** | | Average Interest-bearing deposits | $1,806,336 | $12,266 | 2.73% | | **Net interest income (FTE)** | | **$29,428** | **3.65% (Margin)** |

[PART 1: FINANCIAL INFORMATION](index=5&type=section&id=PART%201%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=5&type=section&id=ITEM%201%20FINANCIAL%20STATEMENTS%20(Unaudited)) Unaudited Q1 2024 results show lower net income and stable assets ahead of the Community West Bancshares merger [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets slightly decreased to $2.42 billion while shareholders' equity increased to $211.7 million Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | $2,415,624 | $2,433,426 | | Total Loans, net | $1,271,951 | $1,276,144 | | Total Deposits | $2,031,249 | $2,041,612 | | Total Liabilities | $2,203,907 | $2,226,362 | | Total Shareholders' Equity | $211,717 | $207,064 | [Consolidated Statements of Income](index=6&type=section&id=Consolidated%20Statements%20of%20Income) Q1 2024 net income fell to $3.7 million from $7.0 million year-over-year due to lower net interest income Q1 2024 vs Q1 2023 Income Statement (in thousands, except per-share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Interest Income | $19,073 | $21,581 | | Provision for Credit Losses | $575 | $633 | | Non-Interest Income | $1,636 | $1,575 | | Non-Interest Expenses | $15,333 | $13,205 | | Net Income | $3,676 | $6,970 | | Diluted EPS | $0.31 | $0.59 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash increased by $7.2 million, driven by investing inflows that offset financing outflows Cash Flow Summary for Three Months Ended March 31, 2024 (in thousands) | Activity | Cash Flow | | :--- | :--- | | Net Cash from Operating Activities | $3,982 | | Net Cash from Investing Activities | $27,960 | | Net Cash from Financing Activities | $(24,711) | | **Net Increase in Cash** | **$7,231** | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Disclosures cover the post-quarter merger, investment portfolio unrealized losses, and credit loss allowances - On April 1, 2024, Central Valley Community Bancorp completed its merger with Community West Bancshares, changing its name to Community West Bancshares; the combined company had approximately **$3.5 billion in assets** and results will be reported starting in Q2 2024[36](index=36&type=chunk)[37](index=37&type=chunk)[39](index=39&type=chunk) - The allowance for credit losses on loans was **$14.66 million** as of March 31, 2024, with a provision for credit losses on loans for Q1 2024 of $530,000[59](index=59&type=chunk)[61](index=61&type=chunk) - As of March 31, 2024, uninsured deposits totaled **$803.7 million**, down from $821.8 million at the end of 2023[73](index=73&type=chunk) - On April 17, 2024, the Board of Directors declared a cash dividend of **$0.12 per share**[115](index=115&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=34&type=section&id=ITEM%202%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Net income declined due to a compressed net interest margin and higher merger-related expenses [Financial Highlights](index=35&type=section&id=Financial%20Highlights) Q1 2024 featured net income of $3.7 million, a 3.42% net interest margin, and strong capital ratios Q1 2024 Key Metrics | Metric | Value | | :--- | :--- | | Net Income | $3,676,000 | | Diluted EPS | $0.31 | | Net Interest Margin | 3.42% | | Total Assets | $2.42 billion | | Tier 1 Leverage Ratio | 9.34% | | Cash Dividend per Share | $0.12 | - There were **no non-performing assets** at the end of Q1 2024; net loan charge-offs were $525,000[127](index=127&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Net income fell to $3.7 million from $7.0 million year-over-year, driven by lower net interest income - Net interest margin (fully tax equivalent) **decreased by 44 basis points to 3.42%** in Q1 2024 from 3.86% in Q1 2023, primarily due to rising funding costs[136](index=136&type=chunk) - The average interest rate on interest-bearing deposits **increased significantly to 1.80%** in Q1 2024 from 0.38% in Q1 2023[142](index=142&type=chunk) - Non-interest expenses **rose 16.1% year-over-year**, mainly due to $383,000 in acquisition expenses and increased professional services and salaries[153](index=153&type=chunk)[154](index=154&type=chunk)[156](index=156&type=chunk) [Financial Condition](index=41&type=section&id=Financial%20Condition) The company maintained a stable financial position with strong capital, adequate liquidity, and no nonperforming assets - The loan portfolio has a concentration in commercial real estate, representing **62.2% of total loans** as of March 31, 2024[164](index=164&type=chunk) - There were **no nonperforming assets** as of March 31, 2024, and December 31, 2023[168](index=168&type=chunk) Regulatory Capital Ratios (Company) - March 31, 2024 | Ratio | Actual | Minimum for 'Well-Capitalized' | | :--- | :--- | :--- | | Tier 1 Leverage Ratio | 9.34% | 5.00% | | Common Equity Tier 1 Ratio | 12.94% | 6.50% | | Tier 1 Risk-Based Capital Ratio | 13.23% | 8.00% | | Total Risk-Based Capital Ratio | 16.24% | 10.00% | - The company has significant available liquidity, including **$110 million in unsecured credit lines** and **$342.7 million in unused FHLB advances**[187](index=187&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=ITEM%203%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company's primary market risk is interest rate risk, which is actively managed and within policy limits Interest Rate Sensitivity Analysis on Net Interest Income | Immediate Rate Shift (bps) | Estimated Change in NII (Year 1) | Estimated Change in NII (Year 2) | | :--- | :--- | :--- | | +200 | +1.27% | +3.03% | | +100 | +1.20% | +2.46% | | -100 | -2.94% | -5.41% | | -200 | -4.40% | -9.70% | [Controls and Procedures](index=47&type=section&id=ITEM%204%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective with no material changes during the quarter - The CEO and CFO concluded that disclosure controls and procedures were **effective** as of March 31, 2024[194](index=194&type=chunk) - **No changes in internal controls** over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[195](index=195&type=chunk) [PART II: OTHER INFORMATION](index=47&type=section&id=PART%20II%20OTHER%20INFORMATION) [Legal Proceedings](index=48&type=section&id=ITEM%201%20LEGAL%20PROCEEDINGS) The company reported no material legal proceedings during the period - None to report[198](index=198&type=chunk) [Risk Factors](index=48&type=section&id=ITEM%201A%20RISK%20FACTORS) The report refers to the company's 2023 Form 10-K for a comprehensive discussion of potential risks - The company directs readers to its 2023 Annual Report on Form 10-K for a full discussion of risk factors[199](index=199&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=ITEM%202%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company reported no unregistered sales of equity securities or related use of proceeds - None to report[200](index=200&type=chunk) [Defaults Upon Senior Securities](index=48&type=section&id=ITEM%203%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) The company reported no defaults upon its senior securities - None to report[201](index=201&type=chunk) [Mine Safety Disclosures](index=48&type=section&id=ITEM%204%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company's operations - Not applicable[202](index=202&type=chunk) [Other Information](index=48&type=section&id=ITEM%205%20OTHER%20INFORMATION) The company reported no other material information for the period - None to report[203](index=203&type=chunk) [Exhibits](index=49&type=section&id=ITEM%206%20EXHIBITS) The filing includes required exhibits such as officer certifications and XBRL data files - Exhibits filed include corporate governance documents, officer certifications, and XBRL interactive data files[205](index=205&type=chunk)

Financial Performance - For the three months ended March 31, 2024, the company reported a net income of $3,676,000, a decrease of 47.3% from $6,970,000 for the same period in 2023[1]. - Fully diluted earnings per share for the first quarter of 2024 were $0.31, down from $0.59 in the first quarter of 2023[1]. - The annualized return on average equity (ROAE) for the quarter was 7.08%, significantly lower than 15.30% for the same period in 2023[16]. - Net interest income for the three months ended March 31, 2024, was $19,445 thousand, with a net interest margin of 3.42%[62]. - Net income for Q1 2024 decreased to $3,676,000 or $0.31 per diluted common share, compared to $5,893,000 and $0.50 in Q4 2023[68]. Income and Expenses - Net interest income before provision for credit losses was $19,073,000, a decline of 11.8% from $21,581,000 in the same quarter of the previous year[5]. - Total non-interest expenses rose to $15,333,000, an increase of 15.9% from $13,205,000 in the same quarter of 2023[5]. - Total non-interest income was $1,636,000, an increase of 3.9% from $1,575,000 for the same period in 2023[41]. - Total non-interest expenses increased by $2,128,000, or 16.1%, to $15,333,000 compared to $13,205,000 for the same period in 2023[42]. - The company incurred merger and acquisition expenses of $383,000 during the quarter ended March 31, 2024[42]. Assets and Deposits - The company's total assets as of March 31, 2024, were $2,415,624,000, a slight decrease from $2,433,426,000 as of December 31, 2023[33]. - Total average deposits decreased by $26,117,000, or 1.25%, to $2,055,141,000 compared to $2,081,258,000 for the quarter ended March 31, 2023[21]. - Total deposits were $2,031,249,000 as of March 31, 2024, slightly down from $2,041,612,000 at December 31, 2023[47]. - Total average gross loans increased by $14,746,000 or 1.16% compared to the previous quarter and by $22,890,000 or 1.82% year-over-year[44]. Loans and Credit Quality - Total average loans increased by $22,890,000 to $1,283,068,000 for the quarter ended March 31, 2024, compared to $1,260,178,000 for the same period in 2023[39]. - The allowance for credit losses for loans was $14,658,000, remaining stable at 1.14% of total loans as of March 31, 2024[51]. - Net loan charge-offs for the first quarter of 2024 were $525,000, resulting in a net charge-off ratio of 0.16%[48]. - There were no non-performing assets for the quarter ended March 31, 2024, with net loan charge-offs of $525,000[68]. Dividends and Shareholder Returns - Cash dividends per common share remained stable at $0.12 for the quarters ended March 31, 2024, March 31, 2023, and December 31, 2023[35]. - The Company declared a quarterly cash dividend of $0.12 per share, payable on May 17, 2024[52]. - The Company declared a $0.12 per common share cash dividend, payable on May 17, 2024, to shareholders of record as of May 3, 2024[68]. Mergers and Acquisitions - The company completed its acquisition of Community West Bancshares on April 1, 2024, marking its largest acquisition in 44 years[3]. - The merger with Central Valley Community Bancorp was completed on April 1, 2024, with Community West Bank becoming a wholly-owned subsidiary[53]. Liquidity and Capital - The Company has significant liquidity sources totaling $1,196,196,000 as of March 31, 2024[48]. - Capital positions remain strong with a 9.34% Tier 1 Leverage Ratio, a 12.94% Common Equity Tier 1 Ratio, a 13.24% Tier 1 Risk-Based Capital Ratio, and a 16.25% Total Risk-Based Capital Ratio as of March 31, 2024[68].

Financial Performance - As of December 31, 2023, the Company had consolidated total assets of approximately $2.43 billion[16]. - The Bank's total loans outstanding were $1.29 billion, with real estate loans comprising $1.09 billion, representing approximately 84.8% of the loan portfolio[25][27]. - The Company and the Bank exceed the required minimums for capital adequacy, with the Bank classified as "well capitalized"[68]. - The common equity Tier 1 capital ratio is a key measure, reflecting the institution's common equity Tier 1 capital against total risk-weighted assets[70]. - The allowance for credit losses on loans was 1.14% as of December 31, 2023, with a credit for credit losses of $85,000 for the year[150]. - Non-performing loans and leases were 0.00% of total loans and leases as of December 31, 2023, compared to 0.09% at December 31, 2021[154]. - The carrying value of the securities portfolio was approximately $906,287,000 as of December 31, 2023[156]. - As of December 31, 2023, the company had a net unrealized loss of $72,450,000 on its available for-sale investment securities portfolio due to the rising interest rate environment[122]. - Investment securities totaled $906,287,000, representing 37.2% of total assets as of December 31, 2023[122]. - The company may need to raise additional capital in the future, which will depend on market conditions and financial performance[160]. Regulatory Compliance - The Company is subject to regulation under the Bank Holding Company Act of 1956 and must obtain prior approval from the Federal Reserve for acquisitions that would result in owning 5% or more of a bank's voting shares[44]. - The Company is required to act as a source of financial and managerial strength to its subsidiary banks, committing resources even during financial stress[49]. - The Bank's primary federal regulator is the FDIC, which insures deposits up to $250,000 for each ownership category[54]. - The ability to pay dividends is subject to regulatory restrictions, with the Bank's dividends limited to its retained earnings or net income for the latest three fiscal years[66]. - The Federal Reserve requires bank holding companies to consult before redeeming or repurchasing capital instruments during financial weakness[64]. - The Company must maintain an adequate allowance for credit losses, which affects future dividend payments[67]. - The Company and the Bank are required to maintain a common equity Tier 1 capital ratio of at least 4.5%, a Tier 1 leverage ratio of 4.0%, a Tier 1 risk-based ratio of 6.0%, and a total risk-based ratio of 8.0%[72]. - The Company must maintain a "conservation buffer" of at least 2.5% above the required minimum levels to avoid restrictions on activities such as dividend payments and stock repurchases[72]. - The Bank received an "Outstanding" rating in its most recent Community Reinvestment Act performance examination, indicating strong compliance with community credit needs[87]. - The Company is subject to increased regulatory scrutiny regarding consumer protection laws, which may lead to additional compliance costs and changes in practices[89][97]. - The California Consumer Privacy Act provides consumers with rights over their personal information, requiring the Bank to implement specific privacy policies[79]. - The Bank has implemented extensive controls to comply with federal laws aimed at countering money laundering and terrorist financing, including the Bank Secrecy Act and the Anti-Money Laundering Act[75][76]. - The company is required to comply with the Sarbanes-Oxley Act, which mandates management certification of financial reporting and internal controls[192]. Merger and Acquisition - The Company entered into a merger agreement with Community West Bancshares, with an aggregate merger consideration of approximately $161.2 million[19][21]. - The merger is expected to close on April 1, 2024, following the completion of customary closing conditions[22]. - The company is expected to record approximately $64.7 million in goodwill and $12.7 million in core deposits intangibles as a result of the merger with Community West Bancshares[140]. - The merger's success depends on the ability to realize anticipated cost savings and effectively integrate operations without adversely affecting revenues[129]. - Integration challenges may lead to unforeseen expenses and delays, affecting the combined company's future operating results[130]. - The company may experience negative market reactions if the merger with Community West is not completed, potentially impacting stock prices[127]. - The company faces substantial non-recurring costs associated with the merger, including legal and advisory fees, which may exceed initial estimates[135]. Workforce and Employment - As of March 1, 2024, the Company had a total of 259 employees, including 245 full-time equivalent employees[18]. - Approximately 72% of the workforce is female, with an average tenure of 5.97 years as of December 31, 2023[37][36]. Economic and Market Conditions - The agricultural economy in California's Central Valley is crucial for the company's financial performance, with recent declines in farm income and farmland prices posing risks[112]. - Inflation has remained elevated through 2023, potentially impacting the ability of business customers to repay loans[113]. - The company faces risks from general economic conditions, including potential downturns in agriculture and related businesses, which could adversely affect financial performance[111]. - Changes in interest rates can significantly affect net interest income, impacting the company's overall financial condition and results of operations[123]. - Competition in loan origination and deposit attraction is intense, with competitors having advantages such as greater financial resources and lower operating costs, which could reduce the company's net income[170][171]. - The company must keep pace with rapid technological changes to remain competitive, as larger competitors may have more resources for technological improvements[174][176]. - Cybersecurity risks are heightened due to the increasing sophistication of cyber threats, which could disrupt operations and damage the company's reputation[177][178]. - Climate change poses both immediate and long-term risks to the company and its clients, impacting operational and credit risks[186]. - Increasing scrutiny regarding environmental, social, and governance (ESG) practices may lead to higher operational costs and reputational risks[188]. Risks and Challenges - The company faces risks related to noncompliance with the Bank Secrecy Act and anti-money laundering regulations, which could lead to significant penalties and reputational damage[199]. - The company may face more stringent capital requirements in the future, which could restrict activities and impact financial condition[159]. - The company relies on various funding sources, including unsecured borrowing lines and secured borrowing lines, to manage liquidity[119]. - The company faces risks related to the fair value of acquired assets, particularly in loan portfolios, which may suffer value deterioration due to unpredictable economic fluctuations[166]. - New lines of business and products may introduce substantial risks, including regulatory compliance and market acceptance challenges[169]. - Legislative changes regarding privacy and data protection could increase compliance costs and affect the company's operations[198]. - The trading price of the company's common stock may fluctuate significantly due to various factors, including market conditions and operational results[203]. - The company has no obligation to continue paying dividends, and changes in its dividend policy could impact shareholder returns[204]. Information Security - The company has implemented a comprehensive information security program to manage cybersecurity risks and protect customer data[208]. - The Information Security Officer (ISO) coordinates with the Incident Response Team to manage security incidents and report to the board of directors on an ad hoc basis[213]. - The ISO provides annual reports on the Information Security Program's compliance with regulatory requirements to the board of directors[213]. - The ISO has over 15 years of industry experience in cybersecurity and telecommunications infrastructure management[214]. - The ISO holds both undergraduate and graduate degrees in Information Security and Assurance[214]. - The ISO has been certified in 18 industry niches, including Certified Ethical Hacker and Certified Computer Hacking Forensics Investigator[214]. - The ISO is currently enrolled in the Certified Information Systems Security Professional curriculum[214]. - The ISO collaborates with business leaders and stakeholders to analyze risk holistically[214]. - The company utilizes an incident classification matrix to determine the severity of potential information security incidents[212]. - The company engages in predefined follow-up activities post-incident, including communication with law enforcement and impacted third parties[212].

FRESNO, Calif. & GOLETA, Calif.--(BUSINESS WIRE)--Central Valley Community Bancorp (Central Valley), (NASDAQ: CVCY), headquartered in Fresno, California, together with its banking subsidiary, Central Valley Community Bank (CVCB) and Community West Bancshares (Community West), (NASDAQ: CWBC), parent company of Community West Bank (CWB), headquartered in Goleta, California, announced today that shareholders of both companies approved the merger of Community West with and into Central Valley, with Central Vall ...