forms3a.htm
As filed
with the Securities and Exchange Commission on February 9, 2009
Registration
No. 333-156802
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
_______________
PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
_______________
COMMUNITY
WEST BANCSHARES
(Exact
name of registrant as specified in its charter)
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CALIFORNIA
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77-0446957
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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445
Pine Avenue
Goleta,
California 93117
(805)
692-5821
(Address,
including zip code, and telephone number, including area code, of
registrant’s
principal executive offices)
_______________
Lynda
J. Nahra
President
and Chief Executive Officer
445
Pine Avenue
Goleta,
California 93117
(805)
692-5821
(Name,
address, including zip code, and telephone number, including area code, of agent
for service)
_______________
with
a copy to:
Arthur
A. Coren, Professional Corporation
HORGAN,
ROSEN, BECKHAM & COREN, L.L.P.
23975
Park Sorrento, Suite 200
Calabasas,
California 91302
(818)
591-2121
(818)
591-3838 (Fax)
_______________
Approximate
date of commencement of proposed sale to the public:
From time
to time after this Registration Statement becomes effective.
_______________
If the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following
box. £
If any of
the securities being registered on this Form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. T
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. £
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. £
If this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. £
If this
Form is a post-effective amendment to a registration statement filed pursuant to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. £
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act:
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Large
accelerated filer £
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Accelerated
filer £
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Non-accelerated
filer £
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Smaller
reporting company T
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(Do
not check if a smaller reporting company)
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_______________
CALCULATION
OF REGISTRATION FEE
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Title of each class of
securities to be registered
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Amount to be registered
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Proposed maximum aggregate offering price per
share
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Proposed maximum aggregate offering
price
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Amount of registration
fee
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Common Stock, no par value(1)
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521,158
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$4.49(2)
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$2,340,000
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$92
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Warrant to Purchase Common Stock(1)
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---
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---
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---
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---
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Total
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$2,340,000
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$92(3)
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_______________
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(1)
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The
shares of our common stock, no par value (the “Common Stock”) being
registered are purchasable upon exercise of the warrant (the “Warrant”)
being registered, which we issued to the Treasury concurrent with the sale
and issuance of 15,600 shares of Fixed Rate Cumulative Perpetual Preferred
Stock, Series A, to the Treasury. In addition to the number of
shares of Common Stock stated in the table above, there is being
registered, pursuant to Rule 416, such number of additional shares of
Common Stock, of a currently indeterminate amount, as may from time to
time become issuable by reason of stock splits, stock dividends and
certain other anti-dilution provisions set forth in the
Warrant. Pursuant to Rule 457(g), no additional fee is payable
for the Warrant.
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(2)
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Calculated
in accordance with Rule 457(i) with respect to the exercise price of $4.49
per share of Common Stock.
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The
registrant hereby amends this registration statement on such date or dates as
may be necessary to delay its effective date until the registrant shall file a
further amendment that specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
SUBJECT
TO COMPLETION, DATED FEBRUARY 9, 2009
The
information in this prospectus is not complete and may be
changed. The securities may not be sold until the Registration
Statement filed with the Securities and Exchange Commission becomes
effective. This prospectus is not an offer to sell these securities
and it is not soliciting offers to buy these securities in any state where the
offer or sale is not permitted.
PROSPECTUS
COMMUNITY
WEST BANCSHARES
Warrant
to Purchase 521,158 Shares of Common Stock
521,158
Shares of Common Stock
This
prospectus relates to the resale from time to time by the Selling Shareholders
(as defined below) of: (i) a warrant (the “Warrant”) to purchase up
to 521,158 shares of our common stock, no par value (the “Common Stock”) at an
exercise price of $4.49 per share, subject to adjustment as described in this
prospectus, and (ii) the shares of our Common Stock that the Selling
Shareholders have the right to acquire upon the exercise of the
Warrant. The Warrant and 15,600 shares of Fixed Rate Cumulative
Perpetual Preferred Stock, Series A (the “Series A Preferred Stock”) were issued
by Community West Bancshares, a California corporation on December 19, 2008 to
the United States Department of the Treasury (the “Treasury” or the “Initial
Selling Shareholder”) as part of the Troubled Asset Relief Program - Capital
Purchase Program (the “TARP Program”) in a private placement exempt from the
registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”). In this prospectus, we refer to the Warrant and
the shares of Common Stock issuable upon exercise of the Warrant collectively as
the “securities.”
The
Initial Selling Shareholder and its successors, including transferees (together
with the Initial Selling Shareholder, the “Selling Shareholders”), may offer the
securities described in this prospectus from time to time through one or more
public or private transactions at prevailing market prices, at prices related to
prevailing market prices or at privately negotiated prices directly or through
underwriters, broker-dealers or agents. If these securities are sold
through underwriters, broker-dealers or agents, the Selling Shareholders will be
responsible for underwriting discounts or commissions or agents'
commissions. We will not receive any proceeds from any sale of the
securities by the Selling Shareholders.
Our
Common Stock is traded on the NASDAQ Global Market under the symbol
“CWBC”. On February 2, 2009, the last reported sale price of our
Common Stock was $3.44 per share. The Warrant is not listed on any
established securities exchange or quotation system, and, unless requested by
the Initial Selling Shareholder, we do not intend to seek such a listing for the
Warrant.
Our
principal executive offices are located at 445 Pine Avenue, Goleta, California
93117, and our telephone number is (805) 692-5821.
See
“RISK FACTORS” beginning on page 2 to read about factors you should consider
before buying our securities.
Neither
the Securities and Exchange Commission nor any state securities commission has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
These
securities are not savings or deposit accounts and are not insured by the
Federal Deposit Insurance Corporation (the “FDIC”) or any other governmental
agency.
The
date of this prospectus is _______________ __, 2009
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This
prospectus is part of a registration statement on Form S-3 that we filed with
the Securities and Exchange Commission using a “shelf” registration, or
continuous offering, process. Under this shelf process, the Selling
Shareholders may from time to time sell or otherwise dispose of the securities
covered by this prospectus in one or more offerings. We may
provide a prospectus supplement containing specific information about the terms
of a particular offering by the Selling Shareholders. The prospectus
supplement may add, update or change information in this
prospectus. If the information in this prospectus is inconsistent
with a prospectus supplement, you should rely on the information in that
prospectus supplement.
You
should rely only on the information contained or incorporated by reference in
this prospectus or in any prospectus supplement provided by us in the
future. We have not, and the Selling Shareholders have not,
authorized anyone to provide you with different information. If
anyone provides you with different or inconsistent information, you should not
rely on it. We are not making an offer to sell these securities in
any jurisdiction where the offer and sale are not
permitted. You should assume that the information appearing in this
prospectus is accurate only as of the date on the front cover of this
prospectus. Our business financial condition, results of operations
and prospects may have changed since that date.
This
prospectus contains certain forward-looking statements about the financial
condition, results of operations and business of the Company. These
statements may include statements regarding the projected performance of the
Company for the period following the completion of the offering. You
can find many of these statements by looking for words such as “believes,”
“expects,” “anticipates,” “estimates,” “intends,” “will,” “plans” or similar
words or expressions. These forward-looking statements involve
substantial risks and uncertainties. Some of the factors that may
cause actual results to differ materially from those contemplated by such
forward-looking statements include, but are not limited to, the following
possibilities:
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there may be increases in
competitive pressure among financial
institutions;
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general economic conditions,
either nationally or locally in areas in which the Company conducts its
operations, or conditions in securities markets may be less favorable than
we expect;
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legislation or regulatory changes
may adversely affect our ability to conduct our business;
or
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changes in the interest rate
environment may reduce interest margins or impair the ability of the
borrower to repay its loan to the
Company.
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Because
such statements are subject to risks and uncertainties, actual results may
differ materially from those expressed or implied by such
statements. You are cautioned not to place undue reliance on such
statements, which speak only as of the date of this
prospectus. Forward-looking statements are not guarantees of
performance. They involve risks, uncertainties and
assumptions. The future results and shareholder values of the Company
following the offering may differ materially from those expressed in these
forward-looking statements. Many of the factors that will determine
these results and values are beyond our ability to control or
predict. Accordingly, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995.
All
subsequent written and oral forward-looking statements attributable to us or any
person acting on our behalf are expressly qualified in their entirety by the
cautionary statements contained or referred to in this section. We do
not undertake any obligation to release publicly any revisions to such
forward-looking statements to reflect events or circumstances after the date of
this prospectus or to reflect the occurrence of unanticipated
events.
We file
annual, quarterly and special reports, proxy statements and other information
with the Securities and Exchange Commission, or SEC. You may read and
copy any document we file at the SEC’s Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. You may obtain information on the operation
of the Public Reference Room by calling the SEC at
1-800-SEC-0330. The SEC also maintains an Internet site that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the SEC. The internet address
of the SEC’s website is www.sec.gov. Such reports and other
information concerning Community West can also be inspected at the offices of
Community West at 445 Pine Street, Goleta, California 93117 and can also be
retrieved by accessing our website (www.communitywest.com).
This
prospectus, which is a part of a registration statement on Form S-3 that we have
filed with the SEC under the Securities Act, omits certain information set forth
in the registration statement. Accordingly, for further information,
you should refer to the registration statement and its exhibits on file with the
SEC. Furthermore, statements contained in this prospectus concerning
any document filed as an exhibit are not necessarily complete and, in each
instance, we refer you to the copy of such document filed as an exhibit to the
registration statement.
The SEC
allows us to incorporate by reference the information we file with them, which
means that we can disclose important information to you by referring you to
other documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede the information in this
prospectus. We incorporate by reference the documents listed below
and, until this offering has been completed, any future filings made with the
SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended:
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Our Annual Report on Form 10-K
(including information from the proxy statement for our 2008 Annual
Meeting of Shareholders incorporated therein) for the year ended December
31, 2007, which contains financial statements for our most recent fiscal
year ended.
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Our Quarterly Reports on Form
10-Q for the quarters ended March 31, 2008, June 30, 2008 and September
30, 2008.
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Our Current Reports on Form 8-K
filed January 22, 2008, April 17, 2008, July 25, 2008, September 10, 2008,
October 20, 2008, December 18, 2008 and December 24,
2008.
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The
description of our Common Stock which is contained in our registration
statement on Form 8-A dated December 31, 1997, filed under the Exchange
Act, and any amendment or report filed for the purpose of updating such
description.
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We will
provide each person to whom this prospectus is delivered, including any
beneficial owner of our shares, a copy of any or all of the information that has
been incorporated by reference in this prospectus but not delivered with this
prospectus, upon written or oral request at no cost, by writing or telephoning
us at the address set forth below.
Community
West Bancshares
445 Pine
Avenue
Goleta,
California 93117
Attention:
Charles G. Baltuskonis
(805)
692-5821
This
summary highlights some information contained or incorporated by reference in
this prospectus. It may not contain all of the information that is
important to you or that you should consider before investing in our
securities. Important information is incorporated by reference into
this prospectus. To understand this offering fully, you should read
carefully the entire prospectus, including “RISK FACTORS” and the other
information incorporated by reference in this prospectus which are described
under “WHERE TO FIND MORE INFORMATION” in this prospectus.
Company
Information
General
Community
West Bancshares (“Community West”) was incorporated in the State of California
on November 26, 1996, for the purpose of becoming a bank holding
company. On December 31, 1997, Community West acquired a 100%
interest in Community West Bank, National Association (the “Bank”) (formerly,
Goleta National Bank). Effective that date, shareholders of the Bank
became shareholders of Community West in a one-for-one
exchange. Community West and the Bank are collectively referred to
herein as the “Company,” “we” “us” or “our.”
Community
West is a bank holding company. The Bank is the sole bank subsidiary
of Community West. Community West provides management and shareholder
services to the Bank. The Bank offers a range of commercial and
retail financial services to professionals, small to mid-sized businesses and
individual households. These services include various loan and
deposit products. The Bank also offers other financial
services.
As of
September 30, 2008, we had total consolidated assets of $640.2 million, total
loans of $562.3 million, total deposits of $482.9 million and total
shareholders’ equity of $51.1 million.
Our
Common Stock is traded on the NASDAQ Global Select Market under the ticker
symbol “CWBC.” Our principal executive offices are located at 445
Pine Avenue, Goleta, California 93117. Our telephone number is (805)
692-5821.
Summary
of the 2008 Private Placement
On
October 14, 2008, the U.S. Department of the Treasury (the “Treasury”) announced
a voluntary Troubled Asset Relief Program Capital Purchase Program (the “TARP
Program”) to provide U.S. financial institutions with the opportunity to raise
additional capital. Under the TARP Program, the Treasury would
provide capital to U.S. financial institutions in exchange for senior preferred
stock.
On
December 19, 2008, pursuant to the TARP Program, we sold to the Treasury 15,600
shares of our Series A Preferred Stock for an aggregate purchase price of $15.6
million and concurrently issued to the Treasury a ten-year Warrant to purchase
up to 521,158 shares of our Common Stock at an exercise price of $4.49 per
share. The issuance of the Series A Preferred Stock and the Warrant
were completed in a private placement to the Treasury exempt from the
registration requirements of the Securities Act pursuant to the terms of a
Letter Agreement, dated December 19, 2008 which incorporates the provisions of a
Securities Purchase Agreement – Standard Terms attached thereto (collectively
with the Letter Agreement, the “Purchase Agreement”). We are required
under the terms of the Purchase Agreement to register for resale the shares of
the Series A Preferred Stock, the Warrant and the shares of our Common Stock
underlying the Warrant on the condition that we are eligible to register these
securities on Form S-3 as of the signing date of the Purchase Agreement,
December 19, 2008. The Series A Preferred Stock was not eligible for
registration on Form S-3 on December 19, 2008 and, therefore, this registration
statement relates solely to the Warrant and the shares of Common Stock issuable
upon exercise of the Warrant. The terms of the Warrant and our Common
Stock are described under “DESCRIPTION OF WARRANT” and “DESCRIPTION OF COMMON
STOCK.” The Purchase Agreement between us and the Treasury was
attached as Exhibit 10.1 to our Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 24, 2008 and incorporated into
this prospectus by reference. See “WHERE TO FIND MORE
INFORMATION.”
The
Offering
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Issuer:
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Community
West Bancshares
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Initial
Selling Shareholder:
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The
United States Department of the Treasury
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Selling
Shareholders:
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Collectively,
the Initial Selling Shareholder and its successors, including
transferees.
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Securities
Offered:
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A
Warrant to purchase up to 521,158 shares of our Common Stock;
and
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Up
to 521,158 shares of our Common Stock that the Selling Shareholders have
the right to purchase upon the exercise of the Warrant, subject to
adjustment as described in this prospectus. |
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Use
of Proceeds:
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We
will not receive any proceeds from any resale of the Warrant or the Common
Stock issuable upon exercise of the Warrant that may be sold from time to
time under this prospectus by the Selling Shareholders.
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Risk
Factors:
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An
investment in our securities involves a high degree of
risk. See “RISK FACTORS” beginning on page 2 for a discussion
of certain factors that you should consider when evaluating an investment
in our securities.
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Nasdaq
Global Market Symbol:
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CWBC
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Investing
in our securities involves various risks which are particular to our Company,
our industry and our market area. You should carefully consider the
risks described below, together with the other information included or
incorporated by reference in this prospectus, including the risk factors set
forth in our annual report on Form 10-K for the fiscal year ended December 31,
2007, our quarterly reports on Form 10-Q for the quarters ended March 31, 2008,
June 30, 2008 and September 30, 2008, and the risks that we have highlighted in
other sections of this prospectus before making an investment
decision. The risks described below are not the only risks we
face. The risks and uncertainties not presently known to us or that
we currently deem immaterial also may impair our business
operations. If any of the following risks actually occur, our
business, results of operations and financial condition could
suffer. In that event, the trading price of our securities could
decline, and you may lose all or part of your investment in our
securities. The risks discussed below include forward-looking
statements, and our actual results may differ substantially from those discussed
in these forward-looking statements.
Risks
Related to Our Business
Recession
and changes in domestic and foreign financial markets may have a material
negative impact on our results of operations and financial
condition.
Economic
indices have shown that since the fourth quarter of 2007, the United States
economy has been in a recession. This has been reflected in significant business
failures and job losses, including the potential bankruptcies of three U.S.
automobile manufacturing companies and by job losses in excess of 500,000 in
each of November and December 2008. Job losses at this level are
expected to continue at that level during the first calendar quarter of
2009.
In
addition, in the past year, the domestic and foreign financial markets,
securities trading markets and economies generally have experienced significant
turmoil including, without limitation, government takeovers of troubled
institutions, government brokered mergers of such firms to avoid bankruptcy or
failures, bankruptcies of securities trading firms and insurance companies,
failures of financial institutions and securities brokerage firms, declines in
real property values, and wide fluctuations in energy prices, all of which have
contributed to reduced availability of credit for businesses and consumers,
elevated foreclosures on residential and commercial properties, falling home
prices, reduced liquidity and a lack of stability across the entire financial
sector. These recent events and the corresponding uncertainty and
decline in financial markets are likely to continue for the foreseeable
future. The full extent of the repercussions to our nation’s economy
in general and our business in particular therefrom are not fully known at this
time. Such events may have a negative effect on (i) our ability to
service our existing customers and attract new customers, (ii) the ability of
our borrowers to operate their business as successfully as in the past, (iii)
the financial security and net worth of our customers, and (iv) the ability of
our customers to repay their loans with us in accordance with the terms
thereof. Even though we have enhanced our total shareholders equity
with the proceeds of the $15.6 million we received in TARP funds (discussed
below), such developments could have a material negative impact on our results
of operations and financial condition.
Recent
legislative and regulatory initiatives to address difficult market and economic
conditions may not stabilize the U.S. banking system.
The
recently enacted Emergency Economic Stabilization Act of 2008 (the “EESA”)
authorizes the Treasury to purchase from financial institutions and their
holding companies up to $700 billion in mortgage loans, mortgage-related
securities and certain other financial instruments, including debt and equity
securities issued by financial institutions and their holding companies, under a
troubled asset relief program, or “TARP.” The purpose of TARP is to
restore confidence and stability to the U.S. banking system and to encourage
financial institutions to increase their lending to customers and to each
other. The Treasury has allocated $250 billion towards the TARP
Program. Under the TARP Program, the Treasury is purchasing equity
securities from participating institutions. The Series A Preferred
Stock and Warrant offered by this prospectus were issued by us to the Treasury
pursuant to the TARP Program. The EESA also increased federal deposit
insurance on most deposit accounts from $100,000 to $250,000. This
increase is in place until the end of 2009 and is not covered by deposit
insurance premiums paid by the banking industry.
The EESA
followed, and has been followed by, numerous actions by the Board of Governors
of the Federal Reserve System, the U.S. Congress, the Treasury, the FDIC, the
SEC and others to address the liquidity and credit crisis that has followed the
sub-prime loan problems that commenced in 2007. These measures
include homeowner relief that encourage loan restructuring and modification; the
establishment of significant liquidity and credit facilities for financial
institutions and investment banks; the lowering of the federal funds rate;
emergency action against short selling practices; a temporary guaranty program
for money market funds; the establishment of a commercial paper funding facility
to provide “back-stop” liquidity to commercial paper issuers; and coordinated
international efforts to address illiquidity and other weaknesses in the banking
sector. The purpose of these legislative and regulatory actions is to
stabilize the U.S. banking system. The EESA and the other regulatory
initiatives described above may not have their desired effects. If
the volatility in the markets continues and economic conditions fail to improve
or worsen, our business, financial condition and results of operations could be
materially and adversely affected.
Current
levels of market volatility are unprecedented.
The
capital and credit markets have been experiencing volatility and disruption for
more than a year. In recent months, the volatility and disruption has reached
unprecedented levels. In some cases, the markets have produced
downward pressure on stock prices and credit availability for certain issuers
without regard to those issuers’ underlying financial strength. If current
levels of market disruption and volatility continue or worsen, there can be no
assurance that we will not experience an adverse effect, which may be material,
on our ability to access capital and on our business, financial condition and
results of operations.
We are subject to
certain executive compensation and corporate governance restrictions as a result
of our participation in the TARP Program.
As a
result of our participation in the TARP Program, we must adopt the Treasury's
standards for executive compensation and corporate governance for the period
during which the Treasury holds an equity position acquired under the TARP
Program. These standards generally apply to our Chief Executive
Officer, our Chief Financial Officer, our Chief Credit Officer and up to the two
next most highly compensated executive officers (collectively, the “senior
executive officers”). The standards include: (i) ensuring that
incentive compensation for senior executive officers does not encourage
unnecessary and excessive risks that threaten the value of our Company, (ii)
requiring clawback of any bonus or incentive compensation paid to a senior
executive officer based on statements of earnings, gains or other criteria that
are later proven to be materially inaccurate, (iii) prohibiting golden parachute
payments to a senior executive officer, and (iv) our agreement not to deduct for
tax purposes compensation to a senior executive officer in excess of
$500,000. In particular, the change to the deductibility limit on
executive compensation may increase the overall cost of our compensation
programs in future periods or impact our ability to attract and retain quality
executive personnel. We will be subject to the executive compensation
and corporate governance restrictions for so long as the Treasury holds the
Series A Preferred Stock, the Warrant or any shares of Common Stock issuable
upon exercise of the Warrant as a result of our participation in the TARP
Program. This period could be more than ten (10) years.
All
of our lending involves underwriting risks.
As of
September 30, 2008, commercial business loans represented 13.02% of our total
loan portfolio; real estate loans represented 22.91% of our total loan
portfolio; SBA loans represented 27.49% of our total loan portfolio and
manufactured housing loans represented 32.85% of our total
portfolio. All such lending, even when secured by the assets of a
business, involves considerable risk of loss in the event of failure of the
business. To reduce such risk, we typically take additional security
interests in other collateral of the borrower, such as real property,
certificates of deposit or life insurance, and/or obtain personal
guarantees. However, there can be no assurances that we have taken
sufficient security interests.
Our
dependence on real estate concentrated in the State of California.
As
previously noted, as of September 30, 2008, approximately $267 million, or 47.44%, of
our loan portfolio is secured by various forms of real estate, including
residential and commercial real estate. A further decline in current
economic conditions or rising interest rates could have an adverse effect on the
demand for new loans, the ability of borrowers to repay outstanding loans and
the value of real estate and other collateral securing loans. The
real estate securing our loan portfolio is concentrated in
California. If real estate values decline significantly, especially
in California, the change could harm the financial condition of our borrowers,
the collateral for our loans will provide less security and we would be more
likely to suffer losses on defaulted loans.
Curtailment
of government guaranteed loan programs could affect a segment of our
business.
A major
segment of our business consists of originating and periodically selling
government guaranteed loans, in particular those guaranteed by the Small
Business Administration (the “SBA”). From time to time, the
government agencies that guarantee these loans reach their internal limits and
cease to guarantee loans. In addition, these agencies may change
their rules for loans or Congress may adopt legislation that would have the
effect of discontinuing or changing the loan
programs. Non-governmental programs could replace government programs
for some borrowers, but the terms might not be equally
acceptable. Therefore, if these changes occur, the volume of loans to
small business, industrial and agricultural borrowers of the types that now
qualify for government guaranteed loans could decline. Also, the
profitability of these loans could decline. As the funding of the
guaranteed portion of 7(a) loans is a major portion of our business, the
long-term resolution to the funding for the 7(a) loan program may have an
unfavorable impact on our future performance and results of
operations.
Reserve
for credit losses may not be adequate to cover actual loan losses.
The risk
of nonpayment of loans is inherent in all lending activities, and nonpayment, if
it occurs, may have an adverse effect on our financial condition or results of
operation. We maintain a reserve for credit losses to absorb
estimated probable credit losses inherent in the loan and commitment portfolios
as of the balance sheet date. As of September 30, 2008, our allowance
for loan losses was 1.14% of gross loans. In determining the level of
the reserve for credit losses, our management makes various assumptions and
judgments about the loan portfolio. We rely on an analysis of our
loan portfolio based on historical loss experience, volume and types of loans,
trends in classifications, volume and trends in delinquencies and non-accruals,
national and local economic conditions and other pertinent
information. If management’s assumptions are incorrect, the reserve
for credit losses may not be sufficient to cover losses, which could have a
material adverse effect on our financial condition and/or results of
operations. There can be no assurance that the allowance will be
adequate. Material additions to our allowance for loan losses would
materially decrease our net income and could adversely affect our
capital.
Our
small business customers may lack the resources to weather a downturn in the
economy.
One of
the primary focal points of our business development and marketing strategy is
serving the banking and financial services needs of small- and medium-sized
businesses and professional organizations. Small businesses generally
have fewer financial resources in terms of capital or borrowing capacity than do
larger entities. If economic conditions are generally unfavorable in
our service areas, the businesses of our lending clients and their ability to
repay outstanding loans may be negatively affected. As a consequence,
our results of operations and financial condition may be adversely
affected.
Environmental
laws could force the Company to pay for environmental problems.
When a
borrower defaults on a loan secured by real property, we generally purchase the
property in foreclosure or accept a deed to the property surrendered by the
borrower. We may also take over the management of commercial
properties when owners have defaulted on loans. While the Bank has
guidelines intended to exclude properties with an unreasonable risk of
contamination, hazardous substances may exist on some of the properties that we
own, manage or occupy and unknown hazardous risks could impact the value of real
estate collateral. We face the risk that environmental laws could
force us to clean up the properties at our expense. It may cost much
more to clean a property than the property is worth. We could also be
liable for pollution generated by a borrower’s operations if we took a role in
managing those operations after default. Resale of contaminated
properties may also be difficult.
Fluctuations
in interest rates may reduce profitability.
Changes
in interest rates affect interest income, the primary component of our gross
revenue, as well as interest expense. Our earnings depend largely on
the relationship between the cost of funds, primarily deposits and borrowings,
and the yield on earning assets, primarily loans and investment
securities. This relationship, known as the interest rate spread, is
subject to fluctuation and is affected by the monetary policies of the Federal
Reserve Board, the shape of the yield curve, the international interest rate
environment, as well as by economic, regulatory and competitive factors which
influence interest rates, the volume and mix of interest-earning assets and
interest-bearing liabilities, and the level of nonperforming assets. Many of
these factors are beyond our control. Fluctuations in interest rates
may affect the demand of customers for products and services. As
interest rates change, we expect to periodically experience “gaps” in the
interest rate sensitivities of its assets and liabilities. This means
that either interest-bearing liabilities will be more sensitive to changes in
market interest rates than interest-earning assets, or vice versa. In
either event, changes in market interest rates may have a negative impact on our
earnings.
The
economic recession and significant downturn in the housing market and the
related crisis in mortgage lending have impacted the economy in many ways,
including:
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slowdown
in construction, both residential and commercial, including construction
lending;
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tightening
of credit markets;
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lowering
of consumer confidence and spending;
and
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increase
in non-performing loans and
foreclosures.
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Financial
institutions have been directly impacted by:
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write-offs
of mortgage backed securities and mortgage
assets;
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tightening
of credit standards for business and consumers;
and
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tightening
of available credit for bank holding companies for financing
growth.
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Responding
to economic sluggishness and recession concerns, the Federal Reserve Board,
through its Federal Open Market Committee (FOMC), cut the target federal funds
rate beginning in September 2007 to historically low levels. The
actions of the Federal Reserve Board, while designed to help the economy
overall, may negatively impact in the short term the Bank’s
earnings. Potentially lower earnings, combined with continued
uncertainty in the credit markets, may also impact the Bank’s ability to raise
capital and maintain required capital ratios.
Changes
in the level of interest rates also may negatively affect our ability to
originate loans, the value of loans and the ability to realize gains from the
sale of loans, all of which ultimately affect earnings. A decline in the market
value of our assets may limit our ability to borrow additional
funds. As a result, we could be required to sell some of our loans
and investments under adverse market conditions, under terms that are not
favorable, to maintain liquidity. If those sales are made at prices
lower than the amortized costs of the investments, losses may be
incurred.
Risks
due to economic conditions and environmental disasters in the regions we serve
may adversely affect our operations.
The
Company serves three primary regions: the Tri-Counties region which
consists of San Luis Obispo, Santa Barbara and Ventura counties in the state of
California, the SBA Western Region where the Bank originates SBA loans (Arizona,
California, Colorado, Oregon and Washington) and the SBA Southeast Region
(Alabama, Florida, Georgia, Maryland, North and South Carolina and
Tennessee). The current economic slowdown in those regions as well as
natural disasters such as hurricanes, floods, fires and earthquakes could result
in the following consequences, any of which could hurt our
business:
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loan delinquencies may
increase;
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problem assets and foreclosures
may increase;
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demand
for our products and services may decline;
and
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collateral for loans made by us,
especially real estate, may decline in value, in turn reducing customers’
borrowing power, and reducing the value of assets and collateral
associated with our existing
loans.
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Competition
with other banking institutions could adversely affect
profitability.
The
banking industry is highly competitive. We face increased competition
not only from other financial institutions within the markets we serve, but
deregulation has resulted in competition from companies not typically associated
with financial services as well as companies accessed through the
internet. As a community bank, the Bank attempts to combat this
increased competition by developing and offering new products and increased
quality of services. Ultimately, competition can drive down the
Bank’s interest margins and reduce profitability and make it more difficult to
increase the size of the loan portfolio and deposit base.
Regulatory
considerations may adversely affect our operations.
As a bank
holding company under the Bank Holding Company Act, we are regulated, supervised
and examined by the Board of Governors of the Federal Reserve System, or Federal
Reserve Board. This regulatory framework is intended primarily for
the protection of depositors and the federal deposit insurance funds and not for
the protection of security holders. As a result of this regulatory
framework, our earnings are affected by actions of the Federal Reserve Board,
the Office of the Comptroller of the Currency, which regulates the Bank, and the
Federal Deposit Insurance Corporation which insures the deposits of the Bank
within certain limits.
In
addition, there are numerous governmental requirements and regulations that
affect our business activities. A change in applicable statutes,
regulations or regulatory policy may have a material effect on our
business. Depository institutions, like the Bank, are also affected
by various federal laws, including those relating to consumer protection and
similar matters.
We are a
legal entity separate and distinct from the Bank. However, our
principal source of cash revenues is the payment of dividends from the
Bank. There are various legal and regulatory limitations on the
extent to which the Bank can finance or otherwise supply funds to us and our
other affiliates.
As a
national bank, the prior approval of the Comptroller of the Currency is required
if the total of all dividends declared and paid to Community West in any
calendar year exceeds the Bank’s net earnings for that year combined with their
retained net earnings less dividends paid for the preceding two calendar
years.
Changes
in the regulatory environment may adversely affect our operations.
The
financial services industry is heavily regulated. We are subject to
federal and state regulation designed to protect the deposits of consumers, not
to benefit shareholders. These regulations include the
following:
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the
amount of capital we must maintain;
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the
types of activities in which we can
engage;
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the
types and amounts of investments we can
make;
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the
locations of our offices;
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insurance
of our deposits and the premiums paid for the insurance;
and
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how
much cash we must set aside as reserves for
deposits.
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The
regulations impose limitations on operations and may be changed at any time,
possibly causing future results to vary significantly from past
results. Moreover, certain of these regulations contain significant
punitive sanctions for violations, including monetary penalties and limitations
on a bank’s ability to implement components of its business plan, such as
expansion through mergers and acquisitions. In addition, changes in
regulatory requirements may act to add costs associated with compliance
efforts. Furthermore, government policy and regulation, particularly
as implemented through the Federal Reserve System, significantly affect credit
conditions.
Operational
risks may result in losses.
Operational
risk represents the risk of loss resulting from our operations, including but
not limited to, the risk of fraud by employees or persons outside the Company,
the execution of unauthorized transactions by employees, transaction processing
errors and breaches of internal control system and compliance
requirements. This risk of loss also includes the potential legal
actions that could arise as a result of an operational deficiency or as a result
of noncompliance with applicable regulatory standards, adverse business
decisions or their implementation and customer attrition due to potential
negative publicity.
Operational
risks are inherent in all business activities and the management of these risks
is important to the achievement of our objectives. In the event of a
breakdown in the internal control system, improper operation of systems or
improper employee actions, we could suffer financial loss, face regulatory
action and suffer damage to our reputation. We manage operational risks through
a risk management framework and our internal control processes. While
we believe that we have designed effective methods to minimize operational
risks, there is no absolute assurance that business disruption or operational
losses would not occur in the event of disaster.
An
information systems interruption or breach in security might result in loss of
customers.
We rely
heavily on communications and information systems to conduct
business. In addition, we rely on third parties to provide key
components of information system infrastructure, including loan, deposit and
general ledger processing, internet connections, and network
access. Any disruption in service of these key components could
adversely affect our ability to deliver products and services to customers and
otherwise to conduct operations. Furthermore, any security breach of
information systems or data, whether managed by the Company or by third parties,
could harm our reputation or cause a decrease in the number of our
customers.
We
may depend on technology and technological improvements.
The
financial services industry is undergoing rapid technological changes with
frequent introductions of new technology-driven products and
services. In addition to providing better service to customers, the
effective use of technology increases efficiency and enables financial
institutions to reduce costs. Many of our competitors have
substantially greater resources to invest in technological
improvements. We face the risk of having to keep up with the rapid
technological changes.
Loss
of key management personnel may adversely affect our operations.
The Bank
is operated by key management personnel in each department of the Bank,
including executive, lending, finance, operations and retail
banking. Many of these key staff members have been employed by the
Bank for a number of years and, accordingly, have developed expertise and a
loyal customer following. In the event that a key management member
were to terminate employment with the Bank, the effect may be to impair the
Bank’s ability to operate as effectively as it does at the present time, or in
the case of a former employee being hired by a competitor, may result in a loss
of customers to a competitor. In addition, the loss of services of
any of our executive officers, or their failure to adequately perform their
management functions, would make it difficult for us to continue to grow our
business, obtain and retain customers, and set up and maintain appropriate
internal controls for our operations. If any member of our executive
officers does not perform up to expectations, our results of operations could
suffer and our current plans to expand and become more profitable may not
succeed. Finally, if any of our executive officers decides to leave,
it may be difficult to replace her or him and we would lose the benefit of the
knowledge she or he gained during her or his tenure with us.
There
may be variations in quarterly operating results.
Our
results of operations are reported on a quarterly basis. In the event
quarterly results fail to exceed results from the prior period or periods,
securities analysts and shareholders might assume that a decline in
profitability is indicative of lower results for a full fiscal year when they
might be the result of temporary factors.
Changes
in accounting policies may adversely affect the reported results of
operations.
The
financial statements prepared by the Company are subject to various guidelines
and requirements promulgated by the Financial Accounting Standards Board, the
Securities and Exchange Commission and bank regulatory agencies. The
adoption of new or revised accounting standards may adversely affect the
reported results of operation.
Litigation
risks may have a material impact on our assets or results of
operations.
We are
involved in various matters of litigation in the ordinary course of business
which, historically, have not been material to our assets or results of
operations. No assurances can be given that future litigation may not
have a material impact on our assets or results of operations.
Geopolitical
concerns and the heightened risk of terrorism have negatively affected the stock
market and the global economy.
Stock
prices domestically and around the world have been and continue to be adversely
affected by geopolitical concerns and the heightened risk of
terrorism. In addition to negatively affecting the stock markets, the
geopolitical concerns and the heightened risk of terrorism have adversely
affected, and may continue to adversely affect, the national and global economy
because of the uncertainties that exist as to the instabilities in the Middle
East and elsewhere, and as to how the U.S. and other countries will respond to
terrorist threats or actions. All of these uncertainties may
contribute to a global slowdown in economic activity. An overall
weakened economy may have the effect of decreasing loan demand, increasing loan
delinquencies and generally causing our results of operations and our financial
condition to suffer.
Risks
Relating to Our Common Stock
Our
Common Stock is equity and is subordinate to all of our existing and future
indebtedness; regulatory and contractual restrictions may limit or prevent us
from paying dividends on our Common Stock.
Shares of
our Common Stock are equity interests in our Company and do not constitute
indebtedness. As such, our Common Stock, like shares of our Series A
Preferred Stock, ranks junior to all indebtedness and other non-equity claims on
our Company with respect to assets available to satisfy claims on our Company,
including in the event of a liquidation. Additionally, unlike
indebtedness, where principal and interest would customarily be payable on
specified due dates, in the case of our Common Stock, as with our Series A
Preferred Stock, (i) dividends are payable only when, as and if authorized and
declared by, our Board of Directors and depend on, among other things, our
results of operations, financial condition, debt service requirements, other
cash needs and any other factors our Board of Directors deems relevant, and (ii)
as a California corporation, under California law we are subject to restrictions
on payments of dividends out of lawfully available funds.
As a bank
holding company, Community West’s ability to declare and pay dividends is
dependent on certain federal regulatory considerations. We are an
entity separate and distinct from the Bank. We derive substantially
all of our revenue in the form of dividends from the
Bank. Accordingly, although Community West has retained ample funds
from the proceeds of the sale of the Series A Preferred Stock to meet its
current obligations to pay dividends on the Series A Preferred Stock as and when
they come due, we may be dependent upon dividends from the Bank to pay the
principal of and interest of any indebtedness Community West may incur, to
satisfy our other cash needs and to pay dividends on the Series A Preferred
Stock and our Common Stock. The Bank’s ability to pay dividends is
subject to its ability to earn net income and to meet certain regulatory
requirements. In the event the Bank is unable to pay dividends to us,
we may not be able to service our debt, pay our obligations or pay dividends on
our Common Stock or the Series A Preferred Stock in the future.
In
addition, as a California corporation, Community West is prohibited from making
any distribution to its shareholders, including a distribution by way of
dividend or a repurchase or redemption of stock, unless: (i) the Company’s
retained earnings prior to the proposed distribution equals or exceeds the
amount of the proposed distribution; or (ii) immediately after giving effect to
the distribution, (A) the sum of the Company’s assets (exclusive of goodwill,
capitalized research and development expenses, and deferred charges) would be at
least equal to 1.25 times its liabilities (not including deferred taxes deferred
income and other deferred credits); and (B) the Company’s current assets would
be at least equal to its current liabilities or, if the average of the earnings
of the Company before taxes on income and before interest expense for the two
preceding fiscal years was less than the average of the interest expense of the
Company for such fiscal years, at least equal to 1.25 times its current
liabilities.
The
prices of our Common Stock may fluctuate significantly, and this may make it
difficult for you to resell the Common Stock when you want or at prices you find
attractive.
We cannot
predict how our Common Stock will trade in the future. The market
value of our Common Stock will likely continue to fluctuate in response to a
number of factors including the following, most of which are beyond our control,
as well as the other factors described in this section:
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actual
or anticipated quarterly fluctuations in our operating and financial
results;
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developments
related to investigations, proceedings or litigation that involve
us;
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changes
in financial estimates and recommendations by financial
analysts;
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dispositions,
acquisitions and financings;
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actions
of our current shareholders, including sales of Common Stock by existing
shareholders and our directors and executive
officers;
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fluctuations
in the stock price and operating results of our
competitors;
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regulatory
developments; and
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developments
related to the financial services
industry.
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The
market value of our Common Stock may also be affected by conditions affecting
the financial markets in general, including price and trading
fluctuations. These conditions may result in (i) volatility in the
level of, and fluctuations in, the market prices of stocks generally and, in
turn, our Common Stock and (ii) sales of substantial amounts of our Common Stock
in the market, in each case that could be unrelated or disproportionate to
changes in our operating performance. These broad market fluctuations
may adversely affect the market value of our Common Stock.
There
may be future sales of additional Common Stock or preferred stock or other
dilution of our equity, which may adversely affect the market price of our
Common Stock or the Series A Preferred Stock.
We are
not prohibited from issuing additional Common Stock or preferred stock,
including any securities that are convertible into or exchangeable for, or that
represent the right to receive, Common Stock or preferred stock or any
substantially similar securities. The market value of our Common Stock could
decline as a result of sales by us of a large number of shares of Common Stock
or preferred stock or similar securities in the market or the perception that
such sales could occur.
Registration
expenses in connection with the registration of the securities may be material
expenses.
Under the
Purchase Agreement, we are required to pay all registration expenses in
connection with the registration of the securities. If any of the
Selling Shareholders wish to resell the securities, we may incur additional
expenses in connection with such sales. Although the Selling
Shareholders will bear the selling expenses incurred in connection with any
registrations pro rata
on the basis of the aggregate offering or sales price of the securities so
registered, we are required under the terms of the Purchase Agreement to bear
all registration expenses incurred in connection therewith, which expenses may
be substantial. Registration expenses include all expenses incurred by us in
effecting any registration pursuant to the Purchase Agreement (whether or not
any registration or prospectus becomes effective or final) or otherwise
complying with our obligations under the Purchase
Agreement, including all registration, filing and listing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, expenses incurred in connection with any “road show”, the
reasonable fees and disbursements of attorneys for the Selling Shareholders, and
expenses of our independent accountants in connection with any regular or
special reviews or audits incident to or required by any such registration,
excluding the selling expenses of the Selling Shareholders.
Only
a limited market exists for our Common Stock.
Our
Common Stock was designated for quotation on Nasdaq on August 27, 1998 and
trading volumes since that time have been modest. There can be no
assurance that an active trading market for our Common Stock will
develop. The limited trading market for our Common Stock may cause
fluctuations in the market value of our Common Stock to be exaggerated, leading
to price volatility in excess of that which would occur in a more active trading
market.
Certain restrictions will affect our
ability to declare or pay dividends and repurchase our shares as a result of our
decision to participate in the TARP Program.
As a
result of our participation in the TARP Program, our ability to declare or pay
dividends on any of our Common Stock will be limited. Specifically,
we will not be able to declare dividends payments on common, junior preferred or
pari passu preferred
shares if we are in arrears on the dividends on the Series A Preferred
Stock. Further, while we are permitted to pay stock dividends,
effectuate stocks splits and reverse stock splits, we will not be permitted to
declare or pay cash dividends on our Common Stock without the Treasury's
approval until the third anniversary of the investment unless the Series A
Preferred Stock has been redeemed or transferred. In addition, our
ability to repurchase our shares will be restricted. Treasury consent
generally will be required for us to make any stock repurchases until the third
anniversary of the investment by the Treasury unless the Series A Preferred
Stock has been redeemed or transferred. Further, common, junior
preferred or pari passu
preferred shares may not be repurchased if we are in arrears on the Series A
Preferred Stock dividends to the Treasury. For more information
regarding our Series A Preferred Stock, including the rights, preferences,
privileges and restrictions of the Series A Preferred Stock that may affect the
holders of our Common Stock, please refer to the Company’s Current Reports on
Form 8-K as filed with the SEC on December 18, 2008 and December 24, 2008, the
Certificate of Determination of Fixed Rate Cumulative Perpetual Preferred Stock,
Series A, filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K as
filed with the SEC on December 18, 2008, and the Form of Certificate for the
Fixed Rate Cumulative Perpetual Preferred Stock, Series A, filed as Exhibit 4.3
hereto.
The
Series A Preferred Stock impacts net income available to our common shareholders
and earnings per common share and the Warrant we issued to the Treasury may be
dilutive to holders of our Common Stock.
The
dividends declared on the Series A Preferred Stock will reduce the net income
available to common shareholders and our earnings per common share. The Series A
Preferred Stock will also receive preferential treatment in the event of
liquidation, dissolution or winding up of the Company. Additionally,
the ownership interest of the existing holders of our Common Stock will be
diluted to the extent the Warrant we issued to the Treasury in conjunction with
the sale to the Treasury of the Series A Preferred Stock is
exercised. The shares of Common Stock underlying the Warrant
represent approximately 8.8% of the shares of our Common Stock outstanding as of
February 2, 2009 (including the shares issuable upon exercise of the Warrant in
total shares outstanding). Although the Treasury has agreed not to
vote any of the shares of Common Stock it receives upon exercise of the Warrant,
a transferee of any portion of the Warrant or of any shares of Common Stock
acquired upon exercise of the Warrant is not bound by this
restriction.
The
federal banking laws limit the ownership of our Common Stock.
Because
we are a bank holding company, purchasers of 10% or more of our Common Stock may
be required to obtain approvals under the Change in Bank Control Act of 1978, as
amended, or Bank Holding Company Act of 1956, as amended (and in certain cases
such approvals may be required at a lesser percentage of
ownership). Specifically, under regulations adopted by the Federal
Reserve, (a) any other bank holding company may be required to obtain the
approval of the Federal Reserve to acquire or retain 5% or more of the Common
Stock and (b) any person other than a bank holding company may be required to
obtain the approval of the Federal Reserve to acquire or retain 10% or more of
the Common Stock.
We will
not receive any proceeds from any resale of the securities by the Selling
Shareholders, but we will receive the exercise price payable upon exercise of
the Warrant if exercised for cash. We will use the proceeds received
from the exercise of the Warrant, if any, for working capital and general
corporate purposes.
The
following is a brief summary of the terms of the Warrant, which may be resold by
the Selling Shareholders. This summary does not purport to be
complete, and is subject to and qualified in its entirety by reference to the
Warrant, a copy of which has been filed with the Securities and Exchange
Commission and is also available upon request from us. Where this
description is inconsistent with the Warrant, the Warrant will
control.
Shares of Common
Stock Subject to the Warrant. The Warrant is initially
exercisable for up to 521,158 shares of Common Stock. However, if we
complete one or more qualified equity offerings on or prior to December 31, 2009
that result in our receipt of aggregate gross proceeds of at least $15,600,000,
which is equal to 100% of the aggregate liquidation preference of the Series A
Preferred Stock, the number of shares of Common Stock underlying the Warrant
then held by the Initial Selling Shareholder will be reduced by an amount equal
to one-half of the number of shares initially covered by the
Warrant. The number of shares subject to the Warrant is subject to
the further adjustments described below under the heading “--Adjustments to the
Warrant.”
Exercise of the
Warrant. The initial
exercise price applicable to the Warrant is $4.49 per share. The
Warrant may be exercised at any time on or before 5:00 p.m., New York City time,
on December 19, 2018 by surrender of the Warrant and a completed notice of
exercise attached as an annex to the Warrant together with payment of the
exercise price for the shares of Common Stock for which the Warrant is being
exercised. However, the Initial Selling Shareholder may not exercise
the Warrant with respect to more than one-half of the original number of shares
of Common Stock until the earlier of (i) the date on which the Company has
received aggregate gross proceeds from a qualified equity offering of at least
$15,600,000 and (ii) December 31, 2009.
The
exercise price may be paid either by the withholding by the Company of the
number of shares of Common Stock issuable upon exercise of the Warrant that is
equal to the value of the aggregate exercise price of the Warrant determined by
reference to the market price of our Common Stock on the trading day on which
the Warrant is exercised or, if agreed to by us and the warrantholder, by the
payment of cash equal to the aggregate exercise price. The exercise
price applicable to the Warrant is subject to further adjustments described
below under the heading “--Adjustments to the Warrant.”
Upon
exercise of the Warrant, certificates for the shares of Common Stock issuable
upon exercise will be issued to the warrantholder. We will not issue
fractional shares upon any exercise of the Warrant. Instead, the
warrantholder will be entitled to a cash payment equal to the market price of
our Common Stock on the last trading day preceding the date of exercise of the
Warrant (less the pro-rated exercise price of the Warrant) for any fractional
shares that would have otherwise been issuable upon exercise of the
Warrant. We will at all times reserve the aggregate number of shares
of our Common Stock for which the Warrant may be exercised. The
shares of Common Stock issuable upon exercise of the Warrant are listed on the
Nasdaq Global Market.
Rights as a
Shareholder. The warrantholder shall have no rights or
privileges of the holders of our Common Stock, including any voting rights,
until (and then only to the extent) the Warrant has been exercised.
Transferability. The
Initial Selling Shareholder may not transfer a portion of the Warrant with
respect to more than 260,579 shares of Common Stock until the earlier of (i) the
date on which the Company has received aggregate gross proceeds of not less than
$15,600,000 from one or more qualified equity offerings and (ii) December 31,
2009. The Warrant, and all rights under the Warrant, is otherwise
transferable.
Adjustments to the
Warrant.
Adjustments in Connection with Stock
Splits, Subdivisions, Reclassifications and Combinations. The
number of shares for which the Warrant may be exercised, and the exercise price
of the Warrant, will be proportionately adjusted in the event we pay dividends
or make distributions of our Common Stock, subdivide, combine or reclassify
outstanding shares of our Common Stock.
Anti-dilution
Adjustment. Until the earlier of December 19, 2011 and the
date the Initial Selling Shareholder no longer holds the Warrant (and other than
in certain permitted transactions described below), if we issue any shares of
Common Stock (or securities convertible or exercisable into Common Stock) for
less than 90% of the market price of the Common Stock on the last trading day
prior to pricing such shares, then the number of shares of Common Stock into
which the Warrant is exercisable and the exercise price will be
adjusted. Permitted transactions include issuances: (i) as
consideration for or to fund the acquisition of businesses and/or related
assets; (ii) in connection with employee benefit plans and compensation related
arrangements in the ordinary course and consistent with past practice approved
by our Board of Directors; (iii) in connection with public or broadly marketed
offerings and sales of Common Stock or convertible securities for cash conducted
by us or our affiliates pursuant to registration under the Securities Act of
1933, or Rule 144A on a basis consistent with capital-raising transactions by
comparable financial institutions; and (iv) in connection with the exercise of
preemptive rights on terms existing as of December 19, 2008.
Other
Distributions. If we declare any dividends or distributions
other than our historical, ordinary cash dividends, the exercise price of the
Warrant will be adjusted to reflect such a distribution.
Certain
Repurchases. If we effect a pro rata repurchase of Common
Stock, then both the number of shares issuable upon exercise of the Warrant and
the exercise price will be adjusted.
Business
Combinations. In the event of a merger, consolidation or
similar transaction involving the Company and requiring shareholder approval,
the warrantholder's right to receive shares of our Common Stock upon exercise of
the Warrant will convert into the right to exercise the Warrant for the
consideration that would have been payable to the warrantholder with respect to
the shares of Common Stock for which the Warrant may be exercised, as if the
Warrant had been exercised prior to such merger, consolidation or similar
transaction.
The
following is a brief summary of the terms of our Common Stock, which may be
resold by the Selling Shareholders. This summary does not purport to
be complete, and is subject to and qualified in its entirety by reference to our
Articles of Incorporation, as amended, and our Bylaws, copies of which have been
filed with the Securities and Exchange Commission and are also available upon
request from us, as well as the description of our Common Stock which is
incorporated herein by reference through our previous filings with the
Securities and Exchange Commission.
General. We
are authorized to issue up to 10,000,000 shares of Common Stock. As
of February 2, 2009, there were 5,915,130 shares of Common Stock
outstanding.
Voting. Each
holder of Common Stock is entitled to one vote for each share held, subject,
however, to such special voting rights by class as are or may be granted to the
holders of serial preferred stock. No shares have cumulative voting
rights.
Dividends. After
the requirements with respect to preferential dividends upon all classes and
series of stock entitled thereto have been paid or declared and set apart for
payment and after the Company has complied with all requirements, if any, with
respect to the setting aside of sums as a sinking fund or for a redemption
account on any class of stock, then and not otherwise, the holders of shares of
Common Stock are entitled to receive, subject to the applicable provisions of
the Corporations Code of the State of California, any dividends declared from
time to time by our Board of Directors. The ability of the Company to
pay cash dividends is also subject to the ability of the Bank, to pay dividends
or make other distributions to the Company, which in turn is subject to
limitations imposed by law and regulation.
Liquidation
Rights. In
the event of any liquidation or dissolution of the Company, all assets of the
Company legally available for distribution after payment or provision for
payment of (i) all debts and liabilities of the Company, (ii) any accrued
dividend claims and (iii) liquidation preferences of any outstanding preferred
stock, will be distributed ratably, in cash or in kind, among the holders of
Common Stock.
Transfer Agent
and Registrar. The transfer agent and registrar of our Common
Stock is Computershare Trust Company, N.A.
Restrictions on
Ownership. The Bank Holding Company Act requires any “bank
holding company,” as defined in the Bank Holding Company Act, to obtain the
approval of the Federal Reserve Board before acquiring 5% or more of our Common
Stock. Any entity that is a holder of 25% or more of our Common
Stock, or a holder of 5% or more if such holder otherwise exercises a
“controlling influence” over us, is subject to regulation as a bank holding
company under the Bank Holding Company Act. Any person, other than a bank
holding company, is required to obtain the approval of the Federal Reserve Board
before acquiring 10% or more of our Common Stock under the Change in Bank
Control Act.
For a
description of our Series A Preferred Stock, including the rights, preferences,
privileges and restrictions of the Series A Preferred Stock, please refer to the
Company’s Current Reports on Form 8-K as filed with the SEC on December 18, 2008
and December 24, 2008, the Certificate of Determination of Fixed Rate Cumulative
Perpetual Preferred Stock, Series A, filed as Exhibit 3.2 to the Company’s
Current Report on Form 8-K as filed with the SEC on December 18, 2008, and the
Form of Certificate for the Fixed Rate Cumulative Perpetual Preferred Stock,
Series A, filed as Exhibit 4.3 hereto.
The
Selling Shareholders and their successors, including their transferees, may sell
the securities directly to purchasers or through underwriters, broker-dealers or
agents, who may receive compensation in the form of discounts, concessions or
commissions from the Selling Shareholders or the purchasers of the securities.
These discounts, concessions or commissions as to any particular underwriter,
broker-dealer or agent may be in excess of those customary in the types of
transactions involved.
The
securities may be sold in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined at
the time of sale or at negotiated prices. These sales may be effected in
transactions, which may involve crosses or block transactions:
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·
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on
any national securities exchange or quotation service on which the
preferred stock or the Common Stock may be listed or quoted at the time of
sale, including, as of the date of this prospectus, the NASDAQ Global
Market in the case of the Common
Stock;
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·
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in
the over-the-counter market;
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·
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in
transactions otherwise than on these exchanges or services or in the
over-the-counter market; or
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·
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through
the writing of options, whether the options are listed on an options
exchange or otherwise.
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In
addition, any securities that qualify for sale pursuant to Rule 144 or Rule 144A
under the Securities Act may be sold under such rules rather than pursuant to
this prospectus.
In
connection with the sale of the securities or otherwise, the Selling
Shareholders may enter into hedging transactions with broker-dealers, which may
in turn engage in short sales of the Common Stock issuable upon exercise of the
Warrant in the course of hedging the positions they assume. The Selling
Shareholders may also sell short the Common Stock issuable upon exercise of the
Warrant and deliver Common Stock to close out short positions, or loan or pledge
the Series A Preferred Stock or the Common Stock issuable upon exercise of the
Warrant to broker-dealers that in turn may sell these securities.
The
aggregate proceeds to the Selling Shareholders from the sale of the securities
will be the purchase price of the securities less discounts and commissions, if
any.
In
effecting sales, broker-dealers or agents engaged by the Selling Shareholders
may arrange for other broker-dealers to participate. Broker-dealers or agents
may receive commissions, discounts or concessions from the Selling Shareholders
in amounts to be negotiated immediately prior to the sale.
In
offering the securities covered by this prospectus, the Selling Shareholders and
any broker-dealers who execute sales for the Selling Shareholders may be deemed
to be “underwriters” within the meaning of Section 2(a)(11) of the Securities
Act in connection with such sales. Any profits realized by the Selling
Shareholders and the compensation of any broker-dealer may be deemed to be
underwriting discounts and commissions. Selling Shareholders who are
“underwriters” within the meaning of Section 2(a)(11) of the Securities Act will
be subject to the prospectus delivery requirements of the Securities Act and may
be subject to certain statutory and regulatory liabilities, including
liabilities imposed pursuant to Sections 11, 12 and 17 of the Securities Act and
Rule 10b-5 under the Exchange Act.
In order
to comply with the securities laws of certain states, if applicable, the
securities must be sold in such jurisdictions only through registered or
licensed brokers or dealers. In addition, in certain states the securities may
not be sold unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
The
anti-manipulation rules of Regulation M under the Securities Exchange Act of
1934 may apply to sales of securities pursuant to this prospectus and to the
activities of the Selling Shareholders. In addition, we will make copies of this
prospectus available to the Selling Shareholders for the purpose of satisfying
the prospectus delivery requirements of the Securities Act.
At the
time a particular offer of securities is made, if required, a prospectus
supplement will set forth the number and type of securities being offered and
the terms of the offering, including the name of any underwriter, dealer or
agent, the purchase price paid by any underwriter, any discount, commission and
other item constituting compensation, any discount, commission or concession
allowed or reallowed or paid to any dealer, and the proposed selling price to
the public.
We do not
intend to apply for listing of the Series A Preferred Stock or the Warrant on
any securities exchange or for inclusion in any automated quotation system
unless requested by the Initial Selling Shareholder. No assurance can be given
as to the liquidity of the trading market, if any, for the Series A Preferred
Stock or the Warrant.
We have
agreed to indemnify the Selling Shareholders against certain liabilities,
including certain liabilities under the Securities Act. We have also agreed,
among other things, to bear substantially all expenses (other than underwriting
discounts and selling commissions) in connection with the registration of the
securities covered by this prospectus.
On
December 19, 2008, we issued to the Initial Selling Shareholder, in exchange for
an aggregate purchase price of $15.6 million in cash, (i) 15,600 shares of
Series A Preferred Stock, and (ii) a Warrant to purchase up to 521,158 shares of
our Common Stock at an exercise price of $4.49 per share in a private placement
exempt from registration pursuant to Section 4(2) of the Securities
Act. Other than with respect to the acquisition of the Series A
Preferred Stock and the Warrant, the Initial Selling Shareholder has not had any
material relationship with us.
The
Warrant and the Common Stock issuable upon exercise of the Warrant to be offered
by the Selling Shareholders under the prospectus are “restricted” securities
under applicable federal and state securities laws. The Warrant and
the Shares of Common Stock issuable upon exercise of the Warrant are being
registered under the Securities Act to give the Selling Shareholders the
opportunity to publicly sell these securities. The registration of
these securities does not require that any of the shares be offered or sold by
the Selling Shareholders. The Selling Shareholders may from time to
time offer and sell all or a portion of the securities indicated below in
privately negotiated transactions or on the Nasdaq Global Market or any other
market on which our securities may subsequently be listed.
No
estimate can be given as to the amount or percentage of the securities that will
be held by the Selling Shareholders after any sales made pursuant to this
prospectus because the Selling Shareholders are not required to sell any of the
securities being registered under this prospectus. For purposes of
this prospectus, however, we have assumed that, upon completion of the offering,
none of the securities covered by this prospectus will be held by the Selling
Shareholders.
The
securities to be offered under this prospectus for the account of the Selling
Shareholders are:
* a
Warrant to purchase up to 521,158 shares of Common Stock at an exercise price of
$4.49 per share, subject to adjustment as described under “Description of
Warrant,” representing beneficial ownership of approximately 8.8% of the shares
of Common Stock issued and outstanding as of February 2, 2009; and
* 521,158
shares of Common Stock issuable upon exercise of the Warrant (subject to
adjustment as described under “Description of Warrant”) which shares, if issued,
would represent beneficial ownership of approximately 8.8% of the shares of
Common Stock issued and outstanding as of February 2, 2009.
Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and includes voting or investment power with respect to
these securities. To our knowledge, the Initial Selling Shareholder
has sole voting and investment power with respect to the Series A Preferred
Stock and the Common Stock issuable upon exercise of the Warrant, subject to
restrictions on exercise of voting rights on Series A Preferred Stock and on the
Common Stock issuable upon exercise of the Warrant as more fully described
elsewhere in this prospectus.
Information
about the Selling Shareholders may change over time, and changed information
will be set forth in supplements to this prospectus if and when
necessary.
The
validity of the securities offered hereby will be passed upon by Horgan, Rosen,
Beckham & Coren, L.L.P.
The
consolidated financial statements of Community West Bancshares appearing in
Community West Bancshares Annual Report on Form 10-K for the year ended December
31, 2007, have been audited by Ernst & Young LLP, independent registered
public accounting firm, as set forth in their report thereon included therein,
and incorporated herein by reference. Such financial statements are,
and audited financial statements to be included in subsequently filed documents
will be, incorporated herein in reliance upon the reports of Ernst & Young
LLP pertaining to such financial statements to the extent covered by consents
filed with the Securities and Exchange Commission given on the authority of such
firm as experts in accounting and auditing.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
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Item
14.
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Other
Expenses of Issuance and
Distribution
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The
following are the estimated expenses, all of which will be paid by Community
West, in connection with the offering described in this registration
statement:
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Securities
and Exchange Commission registration fee
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$ |
92 |
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Printing
and other miscellaneous fees and expenses*
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$ |
10,000 |
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Legal
fees and expenses*
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$ |
50,000 |
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Accounting
fees and expenses*
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$ |
5,000 |
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Total
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$ |
65,092 |
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*
Estimated solely for the purpose of this Item. Actual expenses may be
more or less.
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Item
15.
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Indemnification
of Directors and Officers
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Article V
of Community West’s Articles of Incorporation provides that Community West shall
eliminate the liability of its directors for monetary damages to the fullest
extent permissible under California law. It also provides that
Community West is authorized to provide indemnification for its agents to the
extent permissible under California law. In both cases,
indemnification for breach of duty may be in excess of that expressly permitted
by Section 317 of the California General Corporation Law. Section 317
sets forth the provisions pertaining to the indemnification of corporate
“agents.” For purposes of this law, an agent is any person who is or
was a director, officer, employee or other agent of a corporation, or is or was
serving at the request of a corporation in such capacity with respect to any
other corporation, partnership, joint venture, trust or other
enterprise. Section 317 mandates indemnification of an agent for
expenses where the agent’s defense is successful on the merits. In
other cases, Section 317 allows a corporation to indemnify an agent for
expenses, judgments, fines, settlements and other amounts actually and
reasonably incurred if the agent acted in good faith and in a manner the agent
believed to be in the best interests of the corporation and its
shareholders. Such indemnification must be authorized by (1) a
majority vote of a quorum of the Board of Directors consisting of directors who
are not parties to the proceedings, (2) approval of the shareholders, with the
shares owned by the person to be indemnified not being entitled to vote thereon
or (3) the court in which the proceeding is or was pending upon application by
designated parties. Under certain circumstances, a corporation can
indemnify an agent even when the agent is found liable. Section 317
also allows a corporation to advance expenses to an agent for certain actions
upon receiving an undertaking by the agent that he or she will reimburse the
corporation if it is later determined that he or she is not entitled to be
indemnified.
In
accordance with Article V of Community West’s Articles of Incorporation and
California law, Community West has entered into indemnification agreements with
its directors and executive officers. These indemnification
agreements require Community West to indemnify and advance certain expenses to
its directors and executive officers, including attorneys’ fees and any kind of
fee actually and reasonably incurred in connection with the defense or
settlement of any threatened, pending or completed action, suit or proceeding,
whether brought in the name of Community West or otherwise and whether of a
civil, criminal, administrative or investigative nature, in which such director
or executive officer may be or may have been involved as a party or otherwise
(other than as plaintiff against Community West), by reason of the fact that
such director or executive officer is or was an agent of Community West or by
reason of any action taken by him or her or of any inaction on his or her part
while acting as such agent of Community West. Indemnity generally applies if its
determined that such director or executive officer acted in good faith and in a
manner such director or executive officer reasonably believed to be in the best
interest of Community West.
Item
16. Exhibits.
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Exhibit No.
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Description
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3.1
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Amended
and Restated Articles of Incorporation (incorporated by reference to
Exhibit 3.1 of Community West’s Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 18,
2008).
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3.2
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Bylaws
of Community West Bancshares (incorporated by reference to
Exhibit 3.1 of Community West’s Annual Report on Form 10-K filed with the
Securities and Exchange Commission on March 26, 1998).
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3.3
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Secretary's
Certificate of Amendment of Bylaws (incorporated by reference to Exhibit
3.3 of Community West’s Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 18,
2008).
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3.4
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Certificate
of Determination of Fixed Rate Cumulative Perpetual Preferred Stock,
Series A (incorporated by reference to Exhibit 3.2 of Community West's
Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 18, 2008).
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4.1
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Form
of Certificate for Common Stock (incorporated by reference to Community
West's Registration Statement on Form 8-A filed with the Securities and
Exchange Commission on March 12, 1998).
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4.2
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Warrant
to Purchase Common Stock (incorporated by reference to Exhibit 4.1 of
Community West’s Current Report on Form 8-K filed with the Securities and
Exchange Commission on December 24, 2008).
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4.3
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Form
of Certificate for the Fixed Rate Cumulative Perpetual Preferred Stock,
Series A. *
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5.1
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Opinion
of Horgan, Rosen, Beckham & Coren, L.L.P. *
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10.1
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Letter
Agreement, dated as of December 19, 2008, between the Company and the
United States Department of the Treasury, and the Securities Purchase
Agreement - Standard Terms attached thereto (incorporated by reference to
Exhibit 10.1 of Community West’s Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 24,
2008).
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10.2
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Letter
Agreement, dated as of December 19, 2008, between the Company and the
United States Department of the Treasury regarding the Number of Director
Positions (incorporated by reference to Exhibit 10.2 of Community West’s
Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 24, 2008).
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10.3
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Form
of Indemnification Agreement. Community West Bancshares has
entered into Indemnification Agreements with Lynda J. Nahra, Charles G.
Baltuskonis, Robert H. Bartlein, Jean W. Blois, John D. Illgen,
William R. Peeples and James R. Sims, Jr.*
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23.1
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Consent
of Horgan, Rosen, Beckham & Coren, L.L.P. (contained in its opinion
filed as Exhibit 5.1). *
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23.2
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Consent
of Ernst & Young LLP. *
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24.1
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Power
of Attorney (previously filed).
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*
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Filed
herewith.
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The
undersigned registrant hereby undertakes:
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(1)
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To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration
statement:
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(i)
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To include any prospectus
required by Section 10(a)(3) of The Securities Act of
1933;
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(ii)
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To reflect in the prospectus any
facts or events arising after the effective date of the registration
statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in the volume of securities offered
(if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the
effective registration statement;
and
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(iii)
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To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement.
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Provided,
however, that the undertakings set forth in paragraphs (1)(i), (1)(ii) and
(1)(iii) above do not apply if the registration statement is on Form S-3
and the information required to be included in a post-effective amendment
by those paragraphs is contained in reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference in the registration
statement, or is contained in a form of prospectus filed pursuant to Rule
424(b) that is part of the registration
statement.
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(2)
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That,
for the purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
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(3)
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To remove from registration by
means of a post-effective amendment any of the securities being registered
that remain unsold at the termination of the
offering.
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(4)
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That,
for the purpose of determining liability under the Securities Act of 1933
to any purchaser:
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(i)
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each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be
deemed to be part of the registration statement as of the date the filed
prospectus was deemed part of and included in the registration statement;
and
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(ii)
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each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or
(b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x)
for the purpose of providing the information required by Section 10(a) of
the Securities Act of 1933 shall be deemed to be part of and included in
the registration statement as of the earlier of the date such form of
prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability
purposes of the issuer and any person that is at that date an underwriter,
such date shall be deemed to be a new effective date of the registration
statement relating to the securities in the registration statement to
which that prospectus relates, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
Provided, however, that no statement made in a registration statement or
prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the registration
statement will, as to a purchaser with a time of contract of sale prior to
such effective date, supersede or modify any statement that was made in
the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such effective
date.
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(5)
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That,
for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities: The undersigned registrant undertakes that in a primary
offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered or sold to
such purchaser by means of any of the following communications, the
undersigned registrant will be a seller to the purchaser and will be
considered to offer or sell such securities to such
purchaser:
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(i)
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any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
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(ii)
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Any
free writing prospectus relating to the offering prepared by or on behalf
of the undersigned registrant or used or referred to by the undersigned
registrant;
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(iii)
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The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant or its
securities provided by or on behalf of the undersigned registrant;
and
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(iv)
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Any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser.
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(6)
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That,
for purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to section
13(a) or section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering
thereof.
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(7)
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Insofar
as indemnification for liabilities under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant
pursuant to provisions described in Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in a successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such
issue.
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SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that
it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Amendment No. 1 to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Goleta, State of California, on this 9th day of
February, 2009.
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COMMUNITY
WEST BANCSHARES
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By:
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/s/ Lynda J. Nahra
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Lynda
J. Nahra, President and Chief Executive
Officer
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Pursuant
to the requirements of the Securities Act of 1933, as amended, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities indicated on February 9, 2009.
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President
and Chief Executive Officer and Director
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/s/
Charles G. Baltuskonis
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Executive
Vice President and Chief Financial Officer
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Director |
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Director
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Director
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Director
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Director
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Director
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Director
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*
By:
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President
and Chief Executive Officer and Director
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Lynda
J. Nahra
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*
By:
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/s/
Charles G. Baltuskonis
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Executive
Vice President and Chief Financial Officer
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Charles
G. Baltuskonis
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Exhibit
Index
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Exhibit No.
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Description
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3.1
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Amended
and Restated Articles of Incorporation (incorporated by reference to
Exhibit 3.1 of Community West’s Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 18,
2008).
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3.2
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Bylaws
of Community West Bancshares (incorporated by reference to
Exhibit 3.1 of Community West’s Annual Report on Form 10-K filed with the
Securities and Exchange Commission on March 26, 1998).
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3.3
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Secretary's
Certificate of Amendment of Bylaws (incorporated by reference to Exhibit
3.3 of Community West’s Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 18,
2008).
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3.4
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Certificate
of Determination of Fixed Rate Cumulative Perpetual Preferred Stock,
Series A (incorporated by reference to Exhibit 3.2 of Community West's
Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 18, 2008).
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4.1
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Form
of Certificate for Common Stock (incorporated by reference to Community
West's Registration Statement on Form 8-A filed with the Securities and
Exchange Commission on March 12, 1998).
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4.2
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Warrant
to Purchase Common Stock (incorporated by reference to Exhibit 4.1 of
Community West’s Current Report on Form 8-K filed with the Securities and
Exchange Commission on December 24, 2008).
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Form
of Certificate for the Fixed Rate Cumulative Perpetual Preferred Stock,
Series A. *
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Opinion
of Horgan, Rosen, Beckham & Coren, L.L.P. *
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10.1
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Letter
Agreement, dated as of December 19, 2008, between the Company and the
United States Department of the Treasury, and the Securities Purchase
Agreement - Standard Terms attached thereto (incorporated by reference to
Exhibit 10.1 of Community West’s Current Report on Form 8-K filed with the
Securities and Exchange Commission on December 24,
2008).
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10.2
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Letter
Agreement, dated as of December 19, 2008, between the Company and the
United States Department of the Treasury regarding the Number of Director
Positions (incorporated by reference to Exhibit 10.2 of Community West’s
Current Report on Form 8-K filed with the Securities and Exchange
Commission on December 24, 2008).
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Form
of Indemnification Agreement. Community West Bancshares has
entered into Indemnification Agreements with Lynda J. Nahra, Charles G.
Baltuskonis, Robert H. Bartlein, Jean W. Blois, John D. Illgen,
William R. Peeples and James R. Sims, Jr.*
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23.1
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Consent
of Horgan, Rosen, Beckham & Coren, L.L.P. (contained in its opinion
filed as Exhibit 5.1). *
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Consent
of Ernst & Young LLP. *
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24.1
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Power
of Attorney (previously filed).
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*
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Filed
herewith.
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