What Community West Bancshares told the SEC could break it.

Community West's business is concentrated in a set of California counties (Fresno, Kern, Madera, Merced, Placer, Sacramento, San Joaquin, San Luis Obispo, Santa Barbara, Stanislaus, Tulare and Ventura), and at December 31, 2025 $1.93 billion (76.1%) of its loan and lease portfolio was real-estate-related, with that real estate concentrated in California; this geographic and real-estate concentration exposes it to greater risk than more geographically diversified banks, so a downturn in those markets' residential/commercial real estate or economy would disproportionately raise losses.

“At December 31, 2025, $1.93 billion, or 76.1% of our total loan and lease portfolio, consisted of real estate related loans. The real estate securing our loan portfolio is concentrated in California.”

Community West's Central Valley footprint exposes it to agricultural-commodity risk: approximately $34.2 million (1.3%) of its loan portfolio is agribusiness loans whose repayment depends on successful crop planting/harvest, marketing the harvested commodity, or raising/feeding livestock (including milk production), with often illiquid, limited-purpose collateral; recent declines in farm income and downward pressure on farmland prices could increase borrower defaults, reduce foreclosure values of agricultural land/equipment and weaken demand for ag lending.

“Repayment of agribusiness loans depends primarily on the successful planting and harvest of crops and marketing the harvested commodity or raising and feeding of livestock (including milk production).”

Beyond deposits and loan/investment repayments, Community West relies on alternative funding sources — unsecured correspondent-bank borrowing lines, secured lines with the FHLB of San Francisco and the Federal Reserve Bank of San Francisco, and public time certificates of deposit — to manage liquidity, and its access to these could be impaired in stressed conditions; as a holding company, its primary source of funds to pay dividends is dividends from the Bank, which are limited by Federal Reserve policy and regulatory restrictions.

“We also rely on alternative funding sources including unsecured borrowing lines with correspondent banks, secured borrowing lines with the Federal Home Loan Bank of San Francisco and the Federal Reserve Bank of San Francisco, and public time certificates of deposits.”

Community West is subject to extensive federal/state bank regulation by the Federal Reserve, FDIC, California DFPI and CFPB (including RESPA and other consumer-protection laws with penalties for noncompliance), and to anti-money-laundering obligations under the USA PATRIOT Act, Bank Secrecy Act and AMLA (FinCEN beneficial-ownership rules) plus OFAC sanctions requiring it to block/report prohibited transactions; it is also exposed to changes in trade policy and tariffs that could hurt its local manufacturing and retail customers through higher input costs, reduced export demand and supply-chain disruption.

“We are subject to federal laws aiming to counter money laundering and terrorist financing, as well as transactions with persons, companies and foreign governments sanctioned by the United States. These laws include, among others, the USA PATRIOT Act, the Bank Secrecy Act (“BSA”), and the Anti-Money Laundering Act (“AMLA”).”