Community West Bancshares Reports Record Three Months and Nine Months Earnings.

GOLETA, Calif.--(BUSINESS WIRE)--Oct. 8, 1998--Lew Stone, President & CEO of Community West Bancshares (Nasdaq:CWBC), announced that the company produced record earnings for the three and nine months ended Sept. 30, 1998.

Net income for the three months ended Sept. 30, 1998, was $733,000 or 67.4% above the $438,000 for the same period of 1997. Net income for the first nine months of 1998 was $1,801,000 vs. $1,151,000 for the nine months ended Sept. 30, 1997, an increase of 56.5%.

Earnings per share on a diluted basis for the three and nine months ended Sept. 30, 1998, was $.18 and $.49 vs. $.12 and $.32 for the respective periods in 1997. Book value per share at Sept. 30, 1998, was $4.46 vs. $3.79 at Sept. 30, 1997.

Stone said: "Our earnings for the first nine months of 1998 are already more than we earned for all of 1997. The SBA lending in the Southeast Region is now adding substantially to our already outstanding production. The production of HLTV mortgage loans is also contributing to our earnings.

"At the same time, we have been working to complete the acquisition of Palomar Savings. Our shareholders will vote on the acquisition on Oct. 29, 1998, and we expect the acquisition to be complete by the end of the year."

Stone continued: "In addition, we opened a new full-service branch in Ventura, Calif., and moved our Ventura SBA and mortgage operations into the branch. We also located our accounts receivable financing group in the Ventura branch."

Total assets of the company increased from $98 million at Sept. 30, 1997, to $172 million at the end of the third quarter of 1998. Loans and deposits increased 218% and 178%, respectively, over the prior year. The ratio of equity to total assets was 10.52% at Sept. 30, 1998, as compared to 11.80% at Sept. 30, 1997.

Stone then discussed issues relating to current market conditions. He said: "During periods of uncertainty, people should look to companies that have demonstrated stellar performance over extended periods. Community West Bancshares has averaged 38% annual increases in earnings over the last five years. And we are currently over 56% ahead of the same period in 1997.

"We have zero exposure to Russia, Asia, or Latin America. We make loans to small- to medium-sized American companies and to American consumers. We have no hedged positions. With the ongoing reduction in interest rates as a catalyst, we expect to originate over $500 million in new loans during 1998. We have worked very hard to develop multiple profit centers to provide maximum earnings flexibility for our shareholders."

The company, through its profit centers, originates loans which it retains in its portfolio, sells servicing released, or sells servicing retained.

In addition, the company has been building a portfolio of loans to be included in a loan securitization, but has not yet completed the securitization because of the current spread volatility. A positive byproduct of holding the loans for the securitization is that the weighted average coupon on those loans is 13.15%, adding significantly to interest income.

As a result of the expenses associated with the previously discussed projects begun this year, the company's ratio of noninterest income to noninterest expense dropped slightly from 81.3% for the first nine months of 1997 to 77.1% for the same period of 1998.

Stone said: "We look forward to the remainder of this year. We are excited about the inclusion of Palomar Savings into the Community West family. Also, the current falling interest rate environment bodes well for continued loan growth."

Community West Bancshares is a financial services company with headquarters in Goleta. Goleta National Bank, subsidiary of the company, has loan production offices located in California, Nevada, Georgia, and Florida.

The company has previously announced the signing of a definitive agreement to acquire Palomar Savings of Escondido, Calif. In addition, the Bank is majority owner of Electronic Paycheck LLC.

This release contains forward-looking statements which reflect management's current views of future events and operations. These forward-looking statements are based on information currently available to the company as of the date of this release. It is important to note that these forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including, but not limited to, shareholder approval of its acquisition of Palomar Savings and continued positive loan production. The company's actual results may differ materially from those in the forward-looking statements as a result of various important factors, including general economic conditions and "Competition" as described in the company's Form 10-K for the year ended Dec. 31, 1997. -0-

The following represents comparative information:
                                        Sept. 30,
                                  1998                   1997
Total loans                      $145,796,000        $67,007,000
Total deposits                       151,747,000         85,214,000
Total equity                        18,073,000         11,541,000
Total assets                       171,817,000         97,781,000
Quarter ended:
 Net interest income,
   after provision                 2,474,000          1,306,000
 Other income                         3,398,000          2,509,000
 Other expense                         4,614,000          2,967,000
 Income taxes                           525,000            410,000
 Net income                           733,000            438,000
 Basic EPS                              $.18               $.14
 Diluted EPS                              $.18               $.12
Shares outstanding 9/30          4,048,772          3,042,846
Weighted shares-basic                 4,014,624          3,039,584
Weighted shares-diluted          4,159,346          3,554,504
Nine Months ended:
 Net interest income,
   after provision                 5,941,000          3,807,000
 Other income                         9,607,000          6,832,000
 Other expense                        12,469,000          8,401,000
 Income taxes                         1,278,000          1,087,000
 Net income                         1,801,000          1,151,000
 Basic EPS                              $.51               $.38
 Diluted EPS                              $.49               $.32
Shares outstanding 9/30          4,048,772          3,042,846
Weighted shares-basic                 3,544,106          3,001,654
Weighted shares-diluted          3,699,513          3,550,110