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Business Combinations
 6 Months Ended
Jun. 30, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Investment in York Monterey Properties
Note 2. Business Combinations

On April 1, 2026, the Company completed its previously announced merger (“Merger”) with United Security Bancshares (“USB”) pursuant to which USB merged with and into the Company, with the Company continuing as the surviving entity. Following the Merger, United Security Bank, a wholly owned subsidiary of USB, merged with and into Community West Bank (the “Bank”), a wholly owned subsidiary of the Company, with the Bank continuing as the surviving entity.

Pursuant to the terms of the Merger, each outstanding share of USB capital stock was automatically converted as a result of the Merger into the right to receive 0.4520 shares of the Company’s common stock, with cash to be paid in lieu of fractional shares. Each outstanding share of the Company’s common stock remains outstanding and was unaffected by the Merger. As a result of the Merger, the Company issued approximately 7,922,108 shares of Company common stock.

The acquisition improves the Company’s footprint in Central California and diversifies the Company’s commercial banking business, adds additional revenue enhancing products, and creates operational efficiencies.

The acquisition of USB has been accounted for using the acquisition method of accounting in accordance with ASC Topic 805. Assets acquired, liabilities assumed, intangibles recognized and consideration exchanged were recorded at their respective acquisition date fair values. Determining the fair value of assets and liabilities involves significant judgment regarding methods and assumptions used to calculate estimated fair values. We recorded the fair values based on the valuations available as of reporting date. In accordance with business combination accounting guidance, we will continue to evaluate these fair values for up to one year following the Merger date of April 1, 2026. While management believes the information available and presented below provides a reasonable basis for estimating fair value, we may obtain additional information and evidence during the
measurement period that could result in changes to the estimated fair value amounts. Valuations subject to change include, but are not limited to, loans and leases, deposits, deferred tax items, and certain other assets and liabilities.

The following table summarizes the consideration paid for USB and the amounts of assets acquired and liabilities assumed that were recorded at the acquisition date (in thousands):

United Security Bancshares
April 1, 2026
Fair value of consideration transferred:
Fair value of shares issued$184,586 
Cash consideration86 
Total merger consideration$184,672 
Assets acquired:
Cash and cash equivalents$58,911 
Available-for-sale debt securities136,565 
Marketable equity securities3,407 
Loans and leases878,527 
Premises and equipment13,177 
Cash value of life insurance21,387 
Core deposit intangibles26,581 
Other assets62,625 
Total assets acquired1,201,180 
Liabilities assumed:
Deposits(1,058,485)
Other liabilities(15,795)
Total liabilities assumed(1,074,280)
Total net assets acquired126,900 
Goodwill created from transaction$57,772 

The acquisition resulted in goodwill of $57.8 million, which is nondeductible for tax purposes, as this acquisition was a non taxable transaction. Goodwill represents the premium paid over the fair value of the net tangible and intangible assets acquired and reflects the related synergies from the combined operations. Revenues and earnings of the acquired company since the acquisition date have not been disclosed as it is not practicable as USB was merged into the Company and separate financial information is not readily available.

Purchased loans that exhibited more-than-insignificant deterioration of credit quality from origination were classified as purchased credit deteriorated (“PCD”) loans. For PCD loans, the initial estimate of expected credit losses is recognized through allowance for credit losses (“ACL”) with an offsetting gross-up adjustment to the acquired loan balances and the related purchase accounting mark. In addition, the Company adopted ASU 2025-08 effectively January 1, 2026. Accordingly, the initial ACL established on acquired loans included both PCD and non-PCD loans that qualified as purchased seasoned loans (“PSL”) under the guidance.

The following table provides a summary of the acquired PCD and PSL loans as of April 1, 2026:

(Dollars in thousands)Unpaid principal balancePremium/(discount)LoansACLFair value
PCD loans$59,651 $563 $60,214 $(11,287)$48,927 
PSL loans874,652 (36,908)837,744 (8,144)829,600 
Total$934,303 $(36,345)$897,958 $— $(19,431)$— $878,527 
Note 5. Investment in York Monterey Properties
On April 1, 2026 as part of the Merger, the Company acquired a wholly-owned subsidiary of United Security Bancshares, York Monterey Properties, Inc. (“Properties”), organized as a California corporation. York Monterey Properties, Inc. is included within the consolidated financial statements of the Company, with $8.2 million of the total investment recognized within the balance of OREO within Other Assets on the consolidated balance sheets. The property is comprised of 14 lots in Monterey, California.