SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C.  20549





FORM
10-Q





(Mark
One)


T
            QUARTERLY REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
quarterly period ended June 30, 2008





or





£
            TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934





For the
transition period from _________ to _________





Commission
File Number:  000-23575





COMMUNITY
WEST BANCSHARES


(Exact
name of registrant as specified in its charter)





California
            77-0446957(State
      or other jurisdiction of incorporation or organization)
            (I.R.S.
      Employer Identification No.)








445 Pine
Avenue, Goleta,
California             
93117


(Address
of principal executive offices)(Zip Code)





(805)
692-5821


(Registrant's
telephone number, including area code)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.  T
YES   £
NO





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 definition of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange
Act.  (Check one):





Large
      accelerated filer £
            Accelerated
      filer £





Non-accelerated
      filer £
            Smaller
      reporting company T





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).  Yes £   No
T





Number of
shares of common stock of the registrant outstanding as of August 12, 2008:
5,915,130 shares
















TABLE OF CONTENTSPART
      I.   FINANCIAL
      INFORMATION
            PAGEITEM
      1.
            FINANCIAL STATEMENTS (UNAUDITED)CONSOLIDATED BALANCE SHEETS
            3CONSOLIDATED INCOME STATEMENTS
            4CONSOLIDATED STATEMENT OF STOCKHOLDERS’
    EQUITY
            5CONSOLIDATED STATEMENTS OF CASH FLOWS
            6NOTES TO UNAUDITED CONSOLIDATED FINANCIAL
      STATEMENTS
            7The
      financial statements included in this Form 10-Q should be read with
      reference to Community West Bancshares’ Annual Report on Form 10-K for the
      fiscal year ended December 31, 2007.ITEM
      2.
            MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
      AND RESULTS OF OPERATIONS
            12ITEM
      4T.
            CONTROLS AND PROCEDURES
            21PART
      II.   OTHER
      INFORMATIONITEM
      1.
            LEGAL PROCEEDINGS
            21ITEM
      2.
            UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS
            21ITEM
      3.
            DEFAULTS UPON SENIOR SECURITIES
            21ITEM
      4.
            SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY
      HOLDERS
            22ITEM
      5.
            OTHER INFORMATION
            22ITEM
      6.
            EXHIBITS
            22SIGNATURES





2
 Table of Contents





PART
I – FINANCIAL INFORMATION


ITEM
1.    FINANCIAL
STATEMENTS





COMMUNITY WEST BANCSHARES


CONSOLIDATED
BALANCE SHEETS





June 30,
      2008
            
            
            December 31,
      2007(unaudited)ASSETS
            
            (in
      thousands)Cash
      and due from banks
            
            $
            5,634
            
            
            $
            6,855Federal
      funds sold
            
            
            7,338
            
            
            
            2,434Cash
      and cash equivalents
            
            
            12,972
            
            
            
            9,289Time
      deposits in other financial institutions
            
            
            677
            
            
            
            778Investment
      securities available-for-sale, at fair value; amortized cost of $5,401 at
      June 30, 2008 and $12,711 at December 31, 2007
            
            
            5,390
            
            
            
            12,664Investment
      securities held-to-maturity, at amortized cost; fair value of $34,588 at
      June 30, 2008 and $25,733 at December 31, 2007
            
            
            34,415
            
            
            
            25,617Federal
      Home Loan Bank stock, at cost
            
            
            5,889
            
            
            
            5,734Federal
      Reserve Bank stock, at cost
            
            
            842
            
            
            
            812Loans:Loans
      held for sale, at lower of cost or fair value
            
            
            122,761
            
            
            
            110,415Loans
      held for investment, net of allowance for loan losses of  $6,423
      at June 30, 2008 and $4,412 at December 31, 2007
            
            
            446,384
            
            
            
            428,750Total
      loans
            
            
            569,145
            
            
            
            539,165Servicing
      rights
            
            
            1,152
            
            
            
            1,206Other
      assets acquired through foreclosure, net
            
            
            704
            
            
            
            150Premises
      and equipment, net
            
            
            3,985
            
            
            
            3,284Other
      assets
            
            
            12,490
            
            
            
            11,151TOTAL
      ASSETS
            
            $
            647,661
            
            
            $
            609,850LIABILITIESDeposits:Non-interest-bearing
      demand
            
            $
            36,041
            
            
            $
            33,240Interest-bearing
      demand
            
            
            56,433
            
            
            
            75,016Savings
            
            
            15,705
            
            
            
            14,905Time
      certificates
            
            
            377,603
            
            
            
            310,578Total
      deposits
            
            
            485,782
            
            
            
            433,739Federal
      Home Loan Bank advances
            
            
            105,000
            
            
            
            121,000Other
      liabilities
            
            
            6,479
            
            
            
            4,952Total
      liabilities
            
            
            597,261
            
            
            
            559,691STOCKHOLDERS'
      EQUITYCommon
      stock, no par value; 10,000,000shares
      authorized; 5,915,130 shares issued and outstanding at June 30, 2008 and
      5,894,585 at December 31, 2007
            
            
            31,820
            
            
            
            31,636Retained
      earnings
            
            
            18,587
            
            
            
            18,551Accumulated
      other comprehensive loss, net
            
            
            (7
            )
            
            
            (28
            )Total
      stockholders' equity
            
            
            50,400
            
            
            
            50,159TOTAL
      LIABILITIES AND STOCKHOLDERS’ EQUITY
            
            $
            647,661
            
            
            $
            609,850




See
accompanying notes.





3
 Table of Contents





COMMUNITY WEST BANCSHARES


CONSOLIDATED
INCOME STATEMENTS (UNAUDITED)





Three Months Ended
      June 30,
            
            
            Six Months Ended
    June 30,2008
            
            
            2007
            
            
            2008
            
            
            2007(dollars
      in thousands, except per share amounts)INTEREST
      INCOMELoans
            
            $
            10,720
            
            
            $
            10,930
            
            
            $
            22,080
            
            
            $
            21,365Investment
      securities
            
            
            590
            
            
            
            459
            
            
            
            1,155
            
            
            
            903Other
            
            
            70
            
            
            
            235
            
            
            
            156
            
            
            
            404Total
      interest income
            
            
            11,380
            
            
            
            11,624
            
            
            
            23,391
            
            
            
            22,672INTEREST
      EXPENSEDeposits
            
            
            4,329
            
            
            
            4,431
            
            
            
            8,824
            
            
            
            8,543Other
      borrowings
            
            
            1,248
            
            
            
            1,199
            
            
            
            2,603
            
            
            
            2,390Total
      interest expense
            
            
            5,577
            
            
            
            5,630
            
            
            
            11,427
            
            
            
            10,933NET
      INTEREST INCOME
            
            
            5,803
            
            
            
            5,994
            
            
            
            11,964
            
            
            
            11,739Provision
      for loan losses
            
            
            2,531
            
            
            
            (63
            )
            
            
            3,204
            
            
            
            222NET
      INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES
            
            
            3,272
            
            
            
            6,057
            
            
            
            8,760
            
            
            
            11,517NON-INTEREST
      INCOMEOther
      loan fees
            
            
            656
            
            
            
            802
            
            
            
            1,226
            
            
            
            1,545Gains
      from loan sales, net
            
            
            336
            
            
            
            228
            
            
            
            618
            
            
            
            332Document
      processing fees
            
            
            214
            
            
            
            196
            
            
            
            402
            
            
            
            372Loan
      servicing, net
            
            
            2
            
            
            
            35
            
            
            
            241
            
            
            
            62Service
      charges
            
            
            101
            
            
            
            110
            
            
            
            210
            
            
            
            212Other
            
            
            331
            
            
            
            31
            
            
            
            357
            
            
            
            54Total
      non-interest income
            
            
            1,640
            
            
            
            1,402
            
            
            
            3,054
            
            
            
            2,577NON-INTEREST
      EXPENSESSalaries
      and employee benefits
            
            
            3,446
            
            
            
            3,641
            
            
            
            7,087
            
            
            
            7,243Occupancy
      and equipment expenses
            
            
            558
            
            
            
            521
            
            
            
            1,140
            
            
            
            986Professional
      services
            
            
            178
            
            
            
            229
            
            
            
            405
            
            
            
            480Advertising
      and marketing
            
            
            149
            
            
            
            166
            
            
            
            256
            
            
            
            328Depreciation
      and amortization
            
            
            158
            
            
            
            114
            
            
            
            291
            
            
            
            239Other
      operating expenses
            
            
            824
            
            
            
            632
            
            
            
            1,314
            
            
            
            1,226Total
      non-interest expenses
            
            
            5,313
            
            
            
            5,303
            
            
            
            10,493
            
            
            
            10,502Income
      (loss) before provision for income taxes
            
            
            (401
            )
            
            
            2,156
            
            
            
            1,321
            
            
            
            3,592Provision
      for (benefit from) income taxes
            
            
            (149
            )
            
            
            904
            
            
            
            576
            
            
            
            1,514NET
      INCOME (LOSS)
            
            $
            (252
            )
            
            $
            1,252
            
            
            $
            745
            
            
            $
            2,078INCOME
      (LOSS) PER SHARE – BASIC
            
            $
            (.04
            )
            
            $
            .21
            
            
            $
            .13
            
            
            $
            .36INCOME
      (LOSS) PER SHARE – DILUTED
            
            $
            (.04
            )
            
            $
            .21
            
            
            $
            .12
            
            
            $
            .34Basic
      weighted average number of common shares outstanding
            
            
            5,913
            
            
            
            5,856
            
            
            
            5,911
            
            
            
            5,840Diluted
      weighted average number of common shares outstanding
            
            
            5,913
            
            
            
            6,038
            
            
            
            5,974
            
            
            
            6,035





See
accompanying notes.





4
 Table of Contents





COMMUNITY WEST BANCSHARES


CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY


(UNAUDITED)





Common
      Stock
            
            
            Retained
            
            
            Accumulated
      Other Comprehensive
            
            
            Total
      Stockholders’Shares
            
            
            Amount
            
            
            Earnings
            
            
            Income (Loss)
            
            
            Equity(in
      thousands)BALANCES
      AT JANUARY 1, 2008
            
            
            5,895
            
            
            $
            31,636
            
            
            $
            18,551
            
            
            $
            (28
            )
            
            $
            50,159Exercise
      of stock options
            
            
            20
            
            
            
            
            
            
            
            105
            
            
            
            
            
            
            
            105Stock-based
      compensation
            
            
            
            
            
            
            
            
            
            
            79
            
            
            
            
            
            
            
            79Comprehensive
      income:Net
      income
            
            
            
            
            
            
            
            
            
            
            745
            
            
            
            
            
            
            
            745Change
      in unrealized gains (losses) on securitiesAvailable-for-sale
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            21
            
            
            
            21Total
      comprehensive income
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            766Cash
      dividends paid ($0.12 per share)
            
            
            
            
            
            
            
            
            
            
            (709
            )
            
            
            
            
            
            
            (709
            )BALANCES
      AT JUNE 30, 2008
            
            
            5,915
            
            
            $
            31,820
            
            
            $
            18,587
            
            
            $
            (7
            )
            
            $
            50,400





See
accompanying notes.





5
 Table of Contents





COMMUNITY WEST BANCSHARES


CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)





Six Months Ended
    June 30,2008
            
            
            2007(in
      thousands)CASH FLOWS FROM OPERATING
      ACTIVITIES:Net
      income
            
            $
            745
            
            
            $
            2,078Adjustments
      to reconcile net income to net cash provided by operating
      activities:Provision
      for loan losses
            
            
            3,204
            
            
            
            222Depreciation
      and amortization
            
            
            291
            
            
            
            231Stock-based
      compensation
            
            
            79
            
            
            
            87Net
      amortization of discounts and premiums for investment
      securities
            
            
            (42
            )
            
            
            3Gains
      on  sale of loans
            
            
            (618
            )
            
            
            (332
            )Gains
      on  sale of other assets acquired through
      foreclosure
            
            
            (301
            )
            
            
            -Federal
      Home Loan Bank stock dividend
            
            
            (155
            )
            
            
            (117
            )Loans
      originated for sale and principal collections, net
            
            
            1,374
            
            
            
            2,041Changes
      in:Servicing
      rights, net of amortization and valuation adjustments
            
            
            54
            
            
            
            430Other
      assets
            
            
            (1,374
            )
            
            
            (1,657
            )Other
      liabilities
            
            
            1,548
            
            
            
            158Net
      cash provided by operating activities
            
            
            4,805
            
            
            
            3,144CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of held-to-maturity securities
            
            
            (12,899
            )
            
            
            (5,930
            )Purchase
      of Federal Home Loan Bank and Federal Reserve stock
            
            
            (30
            )
            
            
            (118
            )Principal
      paydowns and maturities of held-to-maturity securities
            
            
            4,142
            
            
            
            1,631Principal
      paydowns and maturities of available-for-sale securities
            
            
            7,310
            
            
            
            1,152Loan
      originations and principal collections, net
            
            
            (34,614
            )
            
            
            (35,042
            )Proceeds
      from sale of other assets acquired through foreclosure
            
            
            421
            
            
            
            -Net
      decrease (increase) in time deposits in other financial
      institutions
            
            
            101
            
            
            
            (119
            )Purchase
      of premises and equipment, net
            
            
            (992
            )
            
            
            (449
            )Net
      cash used in investing activities
            
            
            (36,561
            )
            
            
            (38,875
            )CASH FLOWS FROM FINANCING
      ACTIVITIES:Exercise
      of stock options
            
            
            105
            
            
            
            304Cash
      dividends paid to shareholders
            
            
            (709
            )
            
            
            (701
            )Net
      (decrease) increase in demand deposits and savings
accounts
            
            
            (14,982
            )
            
            
            19,983Net
      increase in time certificates of deposit
            
            
            67,025
            
            
            
            22,352Proceeds
      from Federal Home Loan Bank Advances
            
            
            9,000
            
            
            
            32,000Repayments
      of Federal Home Loan Bank Advances
            
            
            (25,000
            )
            
            
            (31,000
            )Net
      cash provided by financing activities
            
            
            35,439
            
            
            
            42,938NET
      INCREASE IN CASH AND CASH EQUIVALENTS
            
            
            3,683
            
            
            
            7,207CASH
      AND CASH EQUIVALENTS, BEGINNING OF PERIOD
            
            
            9,289
            
            
            
            11,343CASH
      AND CASH EQUIVALENTS, END OF PERIOD
            
            $
            12,972
            
            
            $
            18,550Supplemental
      Disclosure of Cash Flow Information:Cash
      paid for interest
            
            $
            9,065
            
            
            $
            8,820Cash
      paid for income taxes
            
            
            1,780
            
            
            
            3,097Supplemental
      Disclosure of Noncash Investing Activity:Transfers
      to other assets acquired through foreclosure
            
            $
            674
            
            
            $
            -





See
accompanying notes.





6
 Table of Contents





COMMUNITY WEST BANCSHARES





NOTES
TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS





The
interim consolidated financial statements reflect all adjustments and
reclassifications that, in the opinion of management, are necessary for the fair
presentation of the results of operations and financial condition for the
interim period. The unaudited consolidated financial statements include
Community West Bancshares (“CWBC") and its wholly-owned subsidiary, Community
West Bank N.A. ("CWB" or the “Bank”).  CWBC and CWB are referred to
herein as “the Company”.  The accompanying unaudited condensed
Consolidated Financial Statements have been prepared in accordance with
accounting principles generally accepted in the United States of America
(“GAAP”) and with the instructions to Form 10-Q and Article 8 of Regulation S-X
promulgated by the Securities and Exchange Commission (“SEC”). Accordingly, they
do not include all of the information and footnotes required for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair statement
have been reflected in the financial statements. However, the results of
operations for the six-month period ended June 30, 2008 are not necessarily
indicative of the results to be expected for the full year.





These
unaudited consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto of Community West
Bancshares included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2007.





1.  SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES





Provision and
Allowance for Loan Losses–The Company maintains a
detailed, systematic analysis and procedural discipline to determine the amount
of the allowance for loan losses (“ALL”).  The ALL is based on
estimates and is intended to be adequate to provide for probable losses inherent
in the loan portfolio.  This process involves deriving probable loss
estimates that are based on individual loan loss estimation, migration
analysis/historical loss rates and management’s judgment.





The
Company employs several methodologies for estimating probable
losses.  Methodologies are determined based on a number of factors,
including type of asset, risk rating, concentrations, collateral value and the
input of the Special Assets group, functioning as a workout unit.





The ALL
calculation for the different major loan types is as follows:





·
            SBA
      – All loans are reviewed and impaired loans are assigned a specific
      allowance.  A migration analysis and various portfolio specific
      factors are used to calculate the required allowance for loans not
      impaired.





·
            Relationship
      Banking – Includes commercial, commercial real estate and consumer
      loans.  Impaired loans are assigned a specific
      allowance.  A migration analysis and various portfolio specific
      factors are used to calculate the required allowance on the remaining pass
      loans.





·
            Manufactured
      Housing – An allowance is calculated on the basis of risk rating, which is
      a combination of delinquency, value of collateral on classified loans and
      perceived risk in the product line.





The
Company calculates the required ALL on a monthly basis.  Any
differences between estimated and actual observed losses from the prior month
are reflected in the current period required ALL calculation and adjusted as
deemed necessary.  The review of the adequacy of the allowance takes
into consideration such factors as concentrations of credit, changes in the
growth, size and composition of the loan portfolio, overall and individual
portfolio quality, review of specific problem loans, collateral, guarantees and
economic conditions that may affect the borrowers' ability to pay and/or the
value of the underlying collateral.  Additional factors considered
include: geographic location of borrowers, changes in the Company’s
product-specific credit policy and lending staff experience.  These
estimates depend on subjective factors and, therefore, contain inherent
uncertainties.





The
Company's ALL is maintained at a level believed adequate by management to absorb
known and inherent probable losses on existing loans.  A provision for
loan losses is charged to expense.  The allowance is charged for
losses when management believes that full recovery on the loan is
unlikely.  Generally, the Company charges off any loan classified as a
"loss"; portions of loans which are deemed to be uncollectible; overdrafts which
have been outstanding for more than 90 days; and, all other unsecured loans past
due 120 or more days.  Subsequent recoveries, if any, are credited to
the ALL.





Servicing Rights– The guaranteed portion of certain SBA loans are sold into the secondary
market.  Servicing rights are recognized as separate assets when loans
are sold with servicing retained.  Servicing rights are amortized in
proportion to, and over the period of, estimated future net servicing
income.  The Company uses industry prepayment statistics and its own
prepayment experience in estimating the expected life of the
loans.  Management periodically evaluates servicing rights for
impairment.  Servicing rights are evaluated for impairment based upon
the fair value of the rights as compared to amortized cost on a loan-by-loan
basis.  Fair value is determined using discounted future cash flows
calculated on a loan-by-loan basis and aggregated to the total asset
level.  The initial servicing rights and resulting gain on sale are
calculated based on the difference between the best actual par and premium bids
on an individual loan basis.





7
 Table of Contents





Other Assets
Acquired Through Foreclosure–Other assets acquired through
foreclosure includes real estate and other assets acquired through foreclosure
on the collateral property and is recorded at  the appraised value at
the time of foreclosure less estimated costs to sell .  Any excess of
loan balance over the net realizable value of the other assets is charged-off
against the allowance for loan losses.  Subsequent to foreclosure,
management periodically performs a new valuation and the asset is carried at the
lower of carrying amount or fair value less estimated costs to
sell.  Operating expenses or income, and gains or losses on
disposition of such properties, are recorded in current operations.





Recent Accounting
Pronouncements – In September 2006, the FASB issued Statement No. 157,
“Fair Value Measurements” (“SFAS 157”). SFAS 157 addresses how companies should
measure fair value when they are required to use a fair value measure for
recognition or disclosure purposes under U.S. GAAP.   SFAS 157
defines fair value, establishes a framework for measuring fair value and expands
disclosures about fair value measurements. SFAS 157 is effective prospectively
for fiscal years beginning after November 15, 2007.  The Company
adopted SFAS 157 on January 1, 2008. The adoption did not have a material impact
on the Company’s financial condition, results of operations or cash
flows.  See Note 4 for the additional disclosure requirements for
certain fair value measurements impacted by SFAS 157.





In
February 2007, the FASB issued Statement No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities” (“SFAS 159”).  SFAS 159
would allow the Company an irrevocable election to measure certain financial
assets and liabilities at fair value, with unrealized gains and losses on the
elected items recognized in earnings at each reporting period. The fair value
option may only be elected at the time of initial recognition of a financial
asset or financial liability or upon the occurrence of certain specified events.
The election is applied on an instrument by instrument basis, with a few
exceptions, and is applied only to entire instruments and not to portions of
instruments. SFAS 159 also provides expanded disclosure requirements regarding
the effects of electing the fair value option on the financial statements. SFAS
159 is effective prospectively for fiscal years beginning after November 15,
2007. The Company adopted SFAS 159 on January 1, 2008.  The Company
did not elect the fair value option, under SFAS 159, for any of our existing
financial assets or financial liabilities as of January 1, 2008, nor have we
elected the fair value option for any new financial assets or financial
liabilities originated or entered into during the first six months of
2008.








2.  LOAN
SALES AND SERVICING





SBA Loan
Sales-The
Company occasionally sells the guaranteed portion of selected SBA loans into the
secondary market on a servicing-retained basis.  The Company retains
the unguaranteed portion of these loans and services the loans as required under
the SBA programs to retain specified yield amounts.  The SBA program
stipulates that the Company retains a minimum of 5% of the loan balance, which
is unguaranteed.  The percentage of each unguaranteed loan in excess
of 5% may be periodically sold to a third party, typically for a cash
premium.  The Company records servicing liabilities for the
unguaranteed loans sold calculated based on the present value of the estimated
future servicing costs associated with each loan.  The balance of all
servicing rights and obligations is subsequently amortized over the estimated
life of the loans using an estimated prepayment rate of
5-25%.  Quarterly, the servicing asset is analyzed for
impairment.





The
Company also periodically sells certain SBA loans into the secondary market, on
a servicing-released basis, typically for a cash premium.





As of
June 30, 2008 and December 31, 2007, the Company had approximately $122.5
million and $108.9 million, respectively, in SBA loans included in loans held
for sale.





Mortgage Loan
Sales – The Company enters into mortgage loan rate lock commitments
(normally for 30 days) with potential borrowers.  In conjunction
therewith, the Company enters into a forward sale commitment to sell the locked
loan to a third party investor.  This forward sale agreement requires
delivery of the loan on a “best efforts” basis but does not obligate the Company
to deliver if the mortgage loan does not fund.





The
mortgage rate lock agreement and the forward sale agreement qualify as
derivatives under SFAS No. 133, as amended.  The value of these
derivatives is generally equal to the fee, if any, charged to the borrower at
inception but may fluctuate in the event of changes in interest
rates.  These derivative financial instruments are recorded at fair
value if material.  Although the Company does not attempt to qualify
these transactions for the special hedge accounting afforded by SFAS No. 133,
management believes that changes in the fair value of the two commitments
generally offset and create an economic hedge.  At June 30, 2008 and
December 31, 2007, the Company had $2.6 million and $7.6 million, respectively,
in notional amount of outstanding mortgage loan rate locks and forward sale
commitments, the impact of which was not material to the Company’s financial
position or results of operations.





8
 Table of Contents





3. 
LOANS HELD FOR INVESTMENT





The
composition of the Company’s loans held for investment and securitized loan
portfolio follows:





June 30,
            
            
            December 31,2008
            
            
            2007(in
      thousands)Commercial
            
            $
            72,289
            
            
            $
            72,470Real
      estate
            
            
            140,964
            
            
            
            136,734SBA
            
            
            38,896
            
            
            
            34,021Manufactured
      housing
            
            
            182,417
            
            
            
            172,938Securitized
            
            
            6,421
            
            
            
            7,507Other
      installment
            
            
            12,344
            
            
            
            10,027453,331
            
            
            
            433,697Less:Allowance
      for loan losses
            
            
            6,423
            
            
            
            4,412Deferred
      fees, net of costs
            
            
            (122
            )
            
            
            25Purchased
      premiums on securitized loans
            
            
            (56
            )
            
            
            (73
            )Discount
      on SBA loans
            
            
            702
            
            
            
            583Loans
      held for investment, net
            
            $
            446,384
            
            
            $
            428,750





An
analysis of the allowance for credit losses for loans held for investment
follows for the three and six months ended:





Three Months Ended
      June 30,
              
              
              Six Months Ended
    June 30,2008
              
              
              2007
              
              
              2008
              
              
              2007(in
      thousands)Balance,
      beginning of period
              
              $
              4,704
              
              
              $
              4,110
              
              
              $
              4,412
              
              
              $
              3,926Loans
      charged off
              
              
              (843
              )
              
              
              (37
              )
              
              
              (1,243
              )
              
              
              (180
              )Recoveries
      on loans previously charged off
              
              
              31
              
              
              
              37
              
              
              
              50
              
              
              
              79Net
      charge-offs
              
              
              (812
              )
              
              
              -
              
              
              
              (1,193
              )
              
              
              (101
              )Provision
      for loan losses
              
              
              2,531
              
              
              
              (63
              )
              
              
              3,204
              
              
              
              222Balance,
      end of period
              
              $
              6,423
              
              
              $
              4,047
              
              
              $
              6,423
              
              
              $
              4,047





As of
June 30, 2008 and December 31, 2007, the Company also had reserves for credit
losses on undisbursed loans of $114,000 and $73,000 respectively.





The
recorded investment in loans that is considered to be impaired:





June 30,
            
            
            December 31,2008
            
            
            2007(in
      thousands)Impaired
      loans without specific valuation allowances
            
            $
            -
            
            
            $
            33Impaired
      loans with specific valuation allowances
            
            
            10,655
            
            
            
            16,468Specific
      valuation allowances allocated to impaired loans
            
            
            (328
            )
            
            
            (966
            )Impaired
      loans, net
            
            $
            10,327
            
            
            $
            15,535Average
      investment in impaired loans
            
            $
            10,213
            
            
            $
            9,386





9
 Table of Contents





4.  FAIR
VALUE MEASUREMENT





SFAS 157
defines fair value as the exchange price that would be received for an asset or
the price that would be paid to transfer a liability (an exit price) in the
principal or most advantageous market for the asset or liability in an orderly
transaction between market participants on the measurement date.  SFAS
157 also establishes a fair value hierarchy which requires an entity to maximize
the use of observable inputs and minimize the use of unobservable inputs when
measuring fair value.   The standard describes three levels of
inputs that may be used to measure fair value:





Level 1 –
Quoted prices in active markets for identical assets and
liabilities





Level 2 –
Observable inputs other than quoted market prices in active markets for
identical assets and liabilities





Level 3 –
Unobservable inputs





The
following summarizes the fair value measurements of assets measured on a
recurring basis as of June 30, 2008 and the relative levels of inputs from which
such amounts were derived:





Fair value measurements at reporting date
      usingQuoted
      prices in active markets for identical assets
            
            
            Significant
      other observable inputs
            
            
            Significant
      unobservable inputsDescription
            
            Total
            
            
            (Level 1)
            
            
            (Level 2)
            
            
            (Level 3)(in
      thousands)Investment
      securities available-for-sale
            
            $
            5,390
            
            
            $
            5,390
            
            
            $
            -
            
            
            $
            -Interest
      only strips (included in other assets)
            
            
            673
            
            
            
            -
            
            
            
            -
            
            
            
            673Total
            
            $
            6,063
            
            
            $
            5,390
            
            
            $
            -
            
            
            $
            673





On
certain SBA loan sales that occurred prior to 2003, the Company retained
interest only strips (“I/O strips”), which represent the present value of excess
net cash flows generated by the difference between (a) interest at the stated
rate paid by borrowers and (b) the sum of (i) pass-through interest paid to
third-party investors and (ii) contractual servicing fees.  Interest
only strips are classified as level 3 in the fair value
hierarchy.  The fair value is determined on a quarterly basis through
a discounted cash flow analysis prepared by an independent third party using
industry prepayment speeds.  The interest only strips were valued at
$785,000 as of December 31, 2007. Valuation adjustments relating to the interest
only strips of $101,000 and $112,000 were recorded in income for the three and
six months ended June 30, 2008, respectively.  No other changes in the
balance have occurred related to the interest only strips and such valuation
adjustments are included as offset to loan servicing income.





The
Company also has assets that under certain conditions are subject to measurement
at fair value on a non-recurring basis.  These assets are loans that
are considered impaired per Financial Accounting Standard Board Statement No.
114 (“FAS 114”).  A loan is considered impaired when, based on current
information or events, it is probable that not all amounts due will be collected
according to the contractual terms of the loan agreement.  Impairment
is measured based on the fair value of the underlying collateral.  The
collateral value is determined based on appraisals and other market valuations
for similar assets.





The
following summarizes the fair value measurements of assets measured on a
non-recurring basis as of June 30, 2008 and the relative levels of inputs from
which such amounts were derived:





Fair value measurements at reporting date
      usingQuoted
      prices in active markets for identical assets
            
            
            Significant
      other observable inputs
            
            
            Significant
      unobservable inputsDescription
            
            Total
            
            
            (Level 1)
            
            
            (Level 2)
            
            
            (Level 3)(in
      thousands)Impaired
      loans
            
            $
            10,327
            
            
            $
            -
            
            
            $
            10,327
            
            
            $
            -





10
 Table of Contents





5. 
EARNINGS PER SHARE





Earnings per share – Basic
has been computed based on the weighted average number of shares outstanding
during each period.  Earnings per share – Diluted
has been computed based on the weighted average number of shares outstanding
during each period plus the dilutive effect of granted
options.  Earnings per share were computed as follows:





Three Months Ended
      June 30,
              
              
              Six Months Ended
    June 30,2008
              
              
              2007
              
              
              2008
              
              
              2007(dollars
      in thousands except per share amounts)Weighted
      average shares – Basic
              
              
              5,913
              
              
              
              5,856
              
              
              
              5,911
              
              
              
              5,840Dilutive
      effect of options
              
              
              -
              
              
              
              182
              
              
              
              63
              
              
              
              195Weighted
      average shares – Diluted
              
              
              5,913
              
              
              
              6,038
              
              
              
              5,974
              
              
              
              6,035Net
      income (loss)
              
              $
              (252
              )
              
              $
              1,252
              
              
              $
              745
              
              
              $
              2,078Earnings
      per share – Basic
              
              
              (.04
              )
              
              
              .21
              
              
              
              .13
              
              
              
              .36Earnings
      per share – Diluted
              
              
              (.04
              )
              
              
              .21
              
              
              
              .12
              
              
              
              .34





6. 
BORROWINGS





Federal Home Loan
Bank Advances–The Company has a blanket lien credit line with the Federal Home Loan
Bank (“FHLB”).  Advances are collateralized in the aggregate by CWB’s
eligible loans and securities.  Total FHLB advances were $105.0
million and $121.0 million at June 30, 2008 and December 31, 2007, respectively,
and include $7.5 million and $17.5 million, respectively, borrowed at variable
rates which adjust to the current LIBOR rate either monthly or
quarterly.  At June 30, 2008 and December 31, 2007, CWB had securities
pledged to FHLB of $39.8 million at carrying value and loans of $147.1 million,
and $38.1 million at carrying value and loans of $150.0 million, respectively.
Total FHLB interest expense for the six months ended June 30, 2008 and 2007 was
$2.6 million and $2.4 million, respectively.  At June 30, 2008, CWB
had $22.2 million available for additional borrowings with the
FHLB.





11
 Table of Contents





ITEM2.
            MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





This
discussion is designed to provide insight into management’s assessment of
significant trends related to the Company's consolidated financial condition,
results of operations, liquidity, capital resources and interest rate
sensitivity.  It should be read in conjunction with the unaudited
interim consolidated financial statements and notes thereto and the other
financial information appearing elsewhere in this report.





Forward
Looking Statements





This
Report on Form 10-Q contains statements that constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended.  Those forward-looking statements include statements
regarding the intent, belief or current expectations of the Company and its
management.  Any such forward-looking statements are not guarantees of
future performance and involve risks and uncertainties, and actual results may
differ materially from those projected in the forward-looking
statements.  The Company does not undertake any obligation to revise
or update publicly any forward-looking statements for any reason.





The
following discussion should be read in conjunction with the Company’s financial
statements and the related notes provided under "Item 1—Financial Statements"
above.





Overview
of Earnings Performance





The
Company reported a net loss of $(252,000), or $(.04) per diluted share, for the
second quarter 2008 compared to net income of $1.3 million, or $0.21 per diluted
share, for the second quarter 2007.





The
significant factors impacting operations for the second quarter 2008
were:





·
            loan
      loss provision of $2.5 million for the second quarter 2008 reflecting
      management’s assessment of heightened credit risk for the Company related
      to the current macroeconomic conditions impacting California and national
      business, real estate and consumer
markets





·
            a
      decline in interest income from loans of $210,000 due to the decline in
      yields, in part, resulting from the impact of actions of the Federal Open
      Market Committee (FOMC), which was partly offset by an increase to the
      average loan balance of $84.5 million for the second quarter 2008 compared
      to 2007





·
            a
      325 basis point cut in the target federal funds rate from 5.25% at June
      30, 2007 to 2.00% as of June 30, 2008, impacting both yields on loans and
      rates paid on deposits and contributing to a 72 basis point decline in net
      interest margin from 4.45% to 3.73%





·
            $301,000
      net gain on the sale of other foreclosed assets in the second quarter
      2008





·
            relatively
      flat  non-interest expenses for the second quarter 2008 compared
      to 2007





Critical
Accounting Policies





A number
of critical accounting policies are used in the preparation of the Company’s
consolidated financial statements.  These policies relate to areas of
the financial statements that involve estimates and judgments made by
management.  These include: the provision and allowance for loan
losses and servicing rights.  These critical accounting policies are
discussed in the Company’s 2007 10-K with a description of how the estimates are
determined and an indication of the consequences of an over or under
estimate.





12
 Table of Contents





Results of Operations – Second Quarter
Comparison





The
following table sets forth for the periods indicated, certain items in the
consolidated income statements of the Company and the related changes between
those periods:





Three Months Ended
      June 30,
            
            
            Increase2008
            
            
            2007
            
            
            (Decrease)(dollars
      in thousands, except per share amounts)Interest
      income
            
            $
            11,380
            
            
            $
            11,624
            
            
            $
            (244
            )Interest
      expense
            
            
            5,577
            
            
            
            5,630
            
            
            
            (53
            )Net
      interest income
            
            
            5,803
            
            
            
            5,994
            
            
            
            (191
            )Provision
      for loan losses
            
            
            2,531
            
            
            
            (63
            )
            
            
            2,594Net
      interest income after provision for loan losses
            
            
            3,272
            
            
            
            6,057
            
            
            
            (2,785
            )Non-interest
      income
            
            
            1,640
            
            
            
            1,402
            
            
            
            238Non-interest
      expenses
            
            
            5,313
            
            
            
            5,303
            
            
            
            10Income
      (loss) before provision for income taxes
            
            
            (401
            )
            
            
            2,156
            
            
            
            (2,557
            )Provision
      for (benefit from) income taxes
            
            
            (149
            )
            
            
            904
            
            
            
            (1,053
            )Net
      income (loss)
            
            $
            (252
            )
            
            $
            1,252
            
            
            $
            (1,504
            )Income
      (loss) per share – Basic
            
            $
            (.04
            )
            
            $
            .21
            
            
            $
            (.25
            )Income
      (loss)  per share – Diluted
            
            $
            (.04
            )
            
            $
            .21
            
            
            $
            (.25
            )Comprehensive
      income (loss)
            
            $
            (264
            )
            
            $
            1,261
            
            
            $
            (1,525
            )








The
following table sets forth the changes in interest income and expense
attributable to changes in rate and volume:





Three Months Ended
      June 30,2008 versus 2007Total
                  
                  
                  Change due tochange
                  
                  
                  Rate
                  
                  
                  Volume(in
      thousands)Loans,
      net
                  
                  $
                  (210
                  )
                  
                  $
                  (1,718
                  )
                  
                  $
                  1,508Investment
      securities
                  
                  
                  131
                  
                  
                  
                  42
                  
                  
                  
                  89Other
                  
                  
                  (165
                  )
                  
                  
                  (131
                  )
                  
                  
                  (34
                  )Total
      interest-earning assets
                  
                  
                  (244
                  )
                  
                  
                  (1,807
                  )
                  
                  
                  1,563Deposits
                  
                  
                  (102
                  )
                  
                  
                  (885
                  )
                  
                  
                  783Other
      borrowings
                  
                  
                  49
                  
                  
                  
                  (71
                  )
                  
                  
                  120Total
      interest-bearing liabilities
                  
                  
                  (53
                  )
                  
                  
                  (956
                  )
                  
                  
                  903Net
      interest income
                  
                  $
                  (191
                  )
                  
                  $
                  (851
                  )
                  
                  $
                  660








Net Interest
Income


Net
interest income declined by $191,000 for the second quarter 2008 compared to
2007.  Total interest income declined by $244,000.  While
average interest earning assets grew to $625.3 million for the second quarter
2008 compared to $539.7 million for the same period in 2007, an increase of
$85.6 million, yields declined to 7.32% from 8.64% and the net interest margin
declined 72 basis points from 4.45% to 3.73%.  The decline in interest
income due to rates of $1.8 million exceeded the increase of $1.6 million due to
volume growth.





The
decline in rates benefited the Bank in a reduction in interest expense of
$53,000.  The decline due to rates of $956,000 was partly offset by
the increase due to deposit and borrowing volume growth of $903,000 for the
second quarter of 2008 compared to 2007.





The rapid
nature of the reduction in the target federal funds rate by the FOMC over the
last year from 5.25% to 2.00%, for asset-sensitive
institutions,  tended to reduce yields on interest earning assets more
quickly than rates paid on interest bearing liabilities, primarily
deposits.  This compression of the net interest margin may ease
somewhat in coming months as deposit and borrowing rates reprice.





13
 Table of Contents





Provision for Loan
Losses


The
provision for loan losses increased to $2.5 million for the second quarter 2008
reflecting management’s assessment of increased credit risk for the Company
related to the current California and national business, real estate and
consumer economic slowdown.  The provision is impacted by both
quantitative factors resulting from actual loss experience and qualitative
factors which take into consideration management’s judgment regarding several
internal and external factors including concentration of credit risk and overall
macroeconomic conditions.  The higher provision is primarily a result
of increased qualitative factors which reflect the aforementioned economic
circumstances and outlook.  The Bank continues to diligently monitor
the portfolio and has enhanced underwriting standards as necessary to prudently
reflect the dynamics of the current economic outlook.





Non-Interest
Income


Non-interest
income includes gains from sale of loans, loan document fees, service charges on
deposit accounts, loan servicing fees and other revenues not derived from
interest on earning assets. Total non-interest income increased by $238,000, or
17.0%, for the second quarter 2008 compared to the same period in
2007.  Gain on loan sales increased by $108,000 or 47.4%, due to the
sale of $6.3 million in guaranteed SBA loans.  Other non-interest
income increased by $300,000 due to a $301,000 net gain on the sale of other
foreclosed assets.  These gains were partly offset by a decline in
other loan fees, including loan originations, of $146,000.





Non-Interest
Expenses


Non-interest
expense remained relatively flat for the second quarter 2008 compared to 2007,
increasing $10,000, or 0.2%.





Results
of Operations –Six-Month Comparison





The
following table sets forth for the periods indicated, certain items in the
consolidated income statements of the Company and the related changes between
those periods:





Six Months Ended
    June 30,
            
            
            Increase2008
            
            
            2007
            
            
            (Decrease)(dollars
      in thousands, except per share amounts)Interest
      income
            
            $
            23,391
            
            
            $
            22,672
            
            
            $
            719Interest
      expense
            
            
            11,427
            
            
            
            10,933
            
            
            
            494Net
      interest income
            
            
            11,964
            
            
            
            11,739
            
            
            
            225Provision
      for loan losses
            
            
            3,204
            
            
            
            222
            
            
            
            2,982Net
      interest income after provision for loan losses
            
            
            8,760
            
            
            
            11,517
            
            
            
            (2,757
            )Non-interest
      income
            
            
            3,054
            
            
            
            2,577
            
            
            
            477Non-interest
      expenses
            
            
            10,493
            
            
            
            10,502
            
            
            
            (9
            )Income
      before provision for income taxes
            
            
            1,321
            
            
            
            3,592
            
            
            
            (2,271
            )Provision
      for income taxes
            
            
            576
            
            
            
            1,514
            
            
            
            (938
            )Net
      income
            
            $
            745
            
            
            $
            2,078
            
            
            $
            (1,333
            )Income
      per share – Basic
            
            $
            .13
            
            
            $
            .36
            
            
            $
            (.23
            )Income
      per share – Diluted
            
            $
            .12
            
            
            $
            .34
            
            
            $
            (.22
            )Comprehensive
      income
            
            $
            766
            
            
            $
            2,102
            
            
            $
            (1,336
            )








The
following table sets forth the changes in interest income and expense
attributable to changes in rate and volume:





Six Months Ended
    June 30,2008 versus 2007Total
              
              
              Change due tochange
              
              
              Rate
              
              
              Volume(in
      thousands)Loans,
      net
              
              $
              715
              
              
              $
              (2,470
              )
              
              $
              3,185Investment
      securities
              
              
              252
              
              
              
              81
              
              
              
              171Other
              
              
              (248
              )
              
              
              (188
              )
              
              
              (60
              )Total
      interest-earning assets
              
              
              719
              
              
              
              (2,577
              )
              
              
              3,296Deposits
              
              
              281
              
              
              
              (1,164
              )
              
              
              1,445Other
      borrowings
              
              
              213
              
              
              
              (140
              )
              
              
              353Total
      interest-bearing liabilities
              
              
              494
              
              
              
              (1,304
              )
              
              
              1,798Net
      interest income
              
              $
              225
              
              
              $
              (1,273
              )
              
              $
              1,498





14
 Table of Contents





Net Interest
Income


Net
interest income increased by $225,000 for the first six months of 2008 compared
to 2007.  Total interest income increased $719,000 million, or 3.2%,
for the period ended June 30, 2008 compared to the same period in
2007.  The increase of $3.3 million due to growth in average earning
assets was partly offset by a $2.6 million decline due to lower
rates.  For the first six months of 2008, average earning assets were
$616.4 million compared to $529.9 million for the same period in 2007, an
increase of 16.3%.  This growth was offset by the decline in yield on
interest earning asset to 7.63% for the first six months of 2008 from 8.63% for
2007 and a corresponding 57 basis point decline in net interest margin from
4.47% to 3.90%.





Interest
expense increased $494,000, or 4.5% for the first six months of 2008 compared to
2007.  The increase due to volume of $1.8 million was partially offset
due to lower rates paid on deposits and borrowing.   Rates paid
on interest bearing liabilities declined from 4.83% for the first six months on
2007 to 4.24% for the same period of 2008.





The rapid
nature of the reduction in the target federal funds rate by the FOMC over the
last year from 5.25% to 2.00%, for asset-sensitive
institutions,  tended to reduce yields on interest earning assets more
quickly than rates paid on interest bearing liabilities, primarily
deposits.  This compression of the net interest margin may ease
somewhat in coming months as deposit and borrowing rates reprice.





Provision for Loan
Losses


The
provision for loan losses increased to $3.2 million for the first six months of
2008 compared to $222,000 for the same period of 2007.  This increase
reflected management’s assessment of increased credit risk for the Company
related to the current California and national business, real estate and
consumer economic slowdown.  The provision is impacted by both
quantitative factors resulting from actual loss experience and qualitative
factors which take into consideration management’s judgment regarding several
internal and external factors including concentration of credit risk and overall
macroeconomic conditions.  The higher provision is primarily a result
of increased qualitative factors which reflect the aforementioned economic
circumstances and outlook.  The Bank continues to diligently monitor
the portfolio and has enhanced underwriting standards as necessary to prudently
reflect the dynamics of the current economic outlook.





Non-Interest
Income


Non-interest
income for the first six months of 2008 increased by $477,000 over the same
period of 2008 primarily due to an increase of $286,000 in gains on loans sales
and the net gain on the sale of other foreclosed assets of $301,000 included in
other income.  The Company sold $10.1 million in guaranteed SBA loans
and $1.7 million in unguaranteed for the first six months of 2008 compared to
$3.5 million in unguaranteed SBA loans sold for the same period of
2007.  These increases were partly offset by a decline of $319,000 in
other loan fees.





Non-Interest
Expenses


Non-interest
expenses remained flat with a decline of $9,000 for the first six months of 2008
compared to 2007.





Interest
Rates and Differentials





The
following table illustrates average yields on interest-earning assets and
average rates on interest-bearing liabilities for the periods
indicated.





Three Months Ended
      June 30,
            
            
            Six Months Ended
    June 30,2008
            
            
            2007
            
            
            2008
            
            
            2007Interest-earning
      assets:
            
            (dollars
      in thousands)Interest-earning
      deposits in other financial institutions:Average
      balance
            
            $
            982
            
            
            $
            839
            
            
            $
            1,004
            
            
            $
            831Interest
      income
            
            
            10
            
            
            
            9
            
            
            
            19
            
            
            
            19Average
      yield
            
            
            4.11
            %
            
            
            4.35
            %
            
            
            3.76
            %
            
            
            4.71
            %Federal
      funds sold:Average
      balance
            
            $
            11,152
            
            
            $
            17,126
            
            
            $
            10,117
            
            
            $
            14,770Interest
      income
            
            
            60
            
            
            
            226
            
            
            
            137
            
            
            
            385Average
      yield
            
            
            2.16
            %
            
            
            5.29
            %
            
            
            2.72
            %
            
            
            5.26
            %Investment
      securities:Average
      balance
            
            $
            45,835
            
            
            $
            38,934
            
            
            $
            45,294
            
            
            $
            38,590Interest
      income
            
            
            590
            
            
            
            459
            
            
            
            1,155
            
            
            
            903Average
      yield
            
            
            5.18
            %
            
            
            4.73
            %
            
            
            5.13
            %
            
            
            4.72
            %Gross
      loans:Average
      balance
            
            $
            567,310
            
            
            $
            482,758
            
            
            $
            559,955
            
            
            $
            475,685Interest
      income
            
            
            10,720
            
            
            
            10,930
            
            
            
            22,080
            
            
            
            21,365Average
      yield
            
            
            7.60
            %
            
            
            9.08
            %
            
            
            7.93
            %
            
            
            9.06
            %Total
      interest-earning assets:Average
      balance
            
            $
            625,279
            
            
            $
            539,657
            
            
            $
            616,370
            
            
            $
            529,876Interest
      income
            
            
            11,380
            
            
            
            11,624
            
            
            
            23,391
            
            
            
            22,672Average
      yield
            
            
            7.32
            %
            
            
            8.64
            %
            
            
            7.63
            %
            
            
            8.63
            %





15
 Table of Contents




Three Months Ended
      June 30,
            
            
            Six Months Ended
    June 30,2008
            
            
            2007
            
            
            2008
            
            
            2007Interest-bearing
      liabilities:
            
            (dollars
      in thousands)Interest-bearing
      demand deposits:Average
      balance
            
            $
            60,325
            
            
            $
            60,186
            
            
            $
            65,445
            
            
            $
            55,187Interest
      expense
            
            
            269
            
            
            
            551
            
            
            
            677
            
            
            
            958Average
      cost of funds
            
            
            1.80
            %
            
            
            3.67
            %
            
            
            2.08
            %
            
            
            3.50
            %Savings
      deposits:Average
      balance
            
            $
            14,585
            
            
            $
            15,537
            
            
            $
            14,350
            
            
            $
            15,429Interest
      expense
            
            
            128
            
            
            
            137
            
            
            
            258
            
            
            
            266Average
      cost of funds
            
            
            3.52
            %
            
            
            3.53
            %
            
            
            3.61
            %
            
            
            3.48
            %Time
      certificates of deposit:Average
      balance
            
            $
            366,258
            
            
            $
            292,388
            
            
            $
            349,299
            
            
            $
            289,131Interest
      expense
            
            
            3,932
            
            
            
            3,743
            
            
            
            7,889
            
            
            
            7,319Average
      cost of funds
            
            
            4.54
            %
            
            
            5.13
            %
            
            
            4.54
            %
            
            
            5.10
            %Other
      borrowings:Average
      balance
            
            $
            108,000
            
            
            $
            97,581
            
            
            $
            112,291
            
            
            $
            97,099Interest
      expense
            
            
            1,248
            
            
            
            1,199
            
            
            
            2,603
            
            
            
            2,390Average
      cost of funds
            
            
            4.64
            %
            
            
            4.93
            %
            
            
            4.66
            %
            
            
            4.96
            %Total
      interest-bearing liabilities:Average
      balance
            
            $
            549,168
            
            
            $
            465,692
            
            
            $
            541,385
            
            
            $
            456,846Interest
      expense
            
            
            5,577
            
            
            
            5,630
            
            
            
            11,427
            
            
            
            10,933Average
      cost of funds
            
            
            4.08
            %
            
            
            4.85
            %
            
            
            4.24
            %
            
            
            4.83
            %Net
      interest income
            
            $
            5,803
            
            
            $
            5,994
            
            
            $
            11,964
            
            
            $
            11,739Net
      interest spread
            
            
            3.24
            %
            
            
            3.79
            %
            
            
            3.39
            %
            
            
            3.80
            %Net
      interest margin
            
            
            3.73
            %
            
            
            4.45
            %
            
            
            3.90
            %
            
            
            4.47
            %








Average
yields and rates are derived by dividing interest income by the average balances
of interest-earning assets and by dividing interest expense by the average
balances of interest-bearing liabilities for the periods
indicated.  Amounts outstanding are averages of daily balances during
the applicable periods.





Nonaccrual
loans are included in the average balance of loans outstanding.





Net
interest income is the difference between the interest and fees earned on loans
and investments and the interest expense paid on deposits and other
liabilities.  The amount by which interest income will exceed interest
expense depends on the volume or balance of earning assets compared to the
volume or balance of interest-bearing deposits and liabilities and the interest
rate earned on those interest-earning assets compared to the interest rate paid
on those interest-bearing liabilities.





Net
interest margin is net interest income expressed as a percentage of average
earning assets.  It is used to measure the difference between the
average rate of interest earned on assets and the average rate of interest that
must be paid on liabilities used to fund those assets.  To maintain
its net interest margin, the Company must manage the relationship between
interest earned and paid.





16
 Table of Contents





Financial
Condition





Average
total assets increased by $87 million, or 16.0%, to $632 million at June 30,
2008 compared to $545 million at June 30, 2007.  Average total equity
increased by 6.7% to $51.3 million at June 30, 2008 from $48.1 million at June
30, 2007.  Average total gross loans at June 30, 2008 increased by $84
million, or 17.7%, to $560 million from $475.7 million at June 30,
2007.  Average deposits also increased from $394.1 million at June 30,
2007 to $463.5 million as of June 30, 2008.





The book
value per share increased to $8.52 at June 30, 2008 from $8.51 at December 31,
2007.





Selected
      balance sheet accounts
              (dollars
      in thousands)
            
            June 30, 2008
            
            
            December 31, 2007
            
            
            Increase (Decrease)
            
            
            Percent of Increase
    (Decrease)Cash
      and cash equivalents
            
            $
            12,972
            
            
            $
            9,289
            
            
            $
            3,683
            
            
            
            39.6
            %Investment
      securities available-for-sale
            
            
            5,390
            
            
            
            12,664
            
            
            
            (7,274
            )
            
            
            (57.4
            %)Investment
      securities held-to-maturity
            
            
            34,415
            
            
            
            25,617
            
            
            
            8,798
            
            
            
            34.3
            %Loans-held
      for sale
            
            
            122,761
            
            
            
            110,415
            
            
            
            12,346
            
            
            
            11.2
            %Loans-held
      for investment, net
            
            
            446,384
            
            
            
            428,750
            
            
            
            17,634
            
            
            
            4.1
            %Total
      Assets
            
            
            647,661
            
            
            
            609,850
            
            
            
            37,811
            
            
            
            6.2
            %Total
      Deposits
            
            
            485,782
            
            
            
            433,739
            
            
            
            52,043
            
            
            
            12.0
            %Federal
      Home Loan Bank advances
            
            
            105,000
            
            
            
            121,000
            
            
            
            (16,000
            )
            
            
            (13.2
            %)Total
      Stockholders' Equity
            
            
            50,400
            
            
            
            50,159
            
            
            
            241
            
            
            
            0.5
            %





The
following schedule shows the balance and percentage change in the various
deposits:





June 30, 2008
            
            
            December 31, 2007
            
            
            Increase (Decrease)
            
            
            Percent of Increase
    (Decrease)(dollars
      in thousands)Non-interest-bearing
      deposits
            
            $
            36,041
            
            
            $
            33,240
            
            
            $
            2,801
            
            
            
            8.4
            %Interest-bearing
      deposits
            
            
            56,433
            
            
            
            75,016
            
            
            
            (18,583
            )
            
            
            (24.8
            %)Savings
            
            
            15,705
            
            
            
            14,905
            
            
            
            800
            
            
            
            5.4
            %Time
      certificates of $100,000 or more
            
            
            92,263
            
            
            
            60,782
            
            
            
            31,481
            
            
            
            51.8
            %Other
      time certificates
            
            
            285,340
            
            
            
            249,796
            
            
            
            35,544
            
            
            
            14.2
            %Total
      deposits
            
            $
            485,782
            
            
            $
            433,739
            
            
            $
            52,043
            
            
            
            12.0
            %





Nonaccrual,
Past Due and Restructured Loans





A loan is
considered impaired when, based on current information, it is probable that the
Company will be unable to collect the scheduled payments of principal or
interest under the contractual terms of the loan agreement.  Factors
considered by management in determining impairment include payment status,
collateral value and the probability of collecting scheduled principal and
interest payments.  Loans that experience insignificant payment delays
or payment shortfalls generally are not classified as
impaired.  Management determines the significance of payment delays or
payment shortfalls on a case-by-case basis.  When determining the
possibility of impairment, management considers the circumstances surrounding
the loan and the borrower, including the length of the delay, the reasons for
the delay, the borrower's prior payment record and the amount of the shortfall
in relation to the principal and interest owed.  For
collateral-dependent loans, the Company uses the fair value of collateral method
to measure impairment.  All other loans, except for securitized loans,
are measured for impairment based on the present value of future cash
flows.  Impairment is measured on a loan-by-loan basis for all loans
in the portfolio except for the securitized loans, which are evaluated for
impairment on a collective basis.





17
 Table of Contents





The
following schedule reflects recorded investment in loans that are considered to
be impaired:





June 30,
            
            
            December 31,2008
            
            
            2007(in
      thousands)Impaired
      loans without specific valuation allowances
            
            $
            -
            
            
            $
            33Impaired
      loans with specific valuation allowances
            
            
            10,655
            
            
            
            16,468Specific
      valuation allowances allocated to impaired loans
            
            
            (328
            )
            
            
            (966
            )Impaired
      loans, net
            
            $
            10,327
            
            
            $
            15,535Average
      investment in impaired loans
            
            $
            10,213
            
            
            $
            9,386





Impaired
loans declined by $5.3 million from December 31, 2007 to June 30,
2008.  This is primarily related to a single loan on a condominium
project.  The loan on this project was retired with a loan made by
Community West Bank to the junior deed holder on the property after the junior
deed holder foreclosed.  The Company believes that the new borrower
and guarantors evidence satisfactory capacity to meet the terms of the new
obligation and have been performing as agreed.





The
following schedule reflects recorded investment at the dates indicated in
certain types of loans:





June 30,
            
            
            December 31,2008
            
            
            2007(dollars
      in thousands)Nonaccrual
      loans
            
            $
            18,364
            
            
            $
            15,341SBA
      guaranteed portion of loans included above
            
            
            (6,809
            )
            
            
            (5,695
            )Nonaccrual
      loans, net
            
            $
            11,555
            
            
            $
            9,646Troubled
      debt restructured loans, gross
            
            $
            6,031
            
            
            $
            7,255Loans
      30 through 89 days past due with interest accruing
            
            $
            4,337
            
            
            $
            18,898Allowance
      for loan losses to gross loans
            
            
            1.12
            %
            
            
            .81
            %Allowance
      for loan losses to gross loans less SBA guaranteed
            
            
            1.34
            %
            
            
            .97
            %





The
higher allowance is primarily a result of increased qualitative factors
reflecting management’s judgment regarding several internal and external factors
including concentration of credit risk and overall economic
conditions.  The Bank continues to diligently monitor the portfolio
and has enhanced underwriting standards as necessary to prudently reflect the
dynamics of the current economic outlook.





CWB
generally repurchases the guaranteed portion of SBA loans from investors when
those loans become past due 120 days.  After the foreclosure and
collection process is complete, the SBA reimburses CWB for this principal
balance.  Therefore, although these balances do not earn interest
during this period, they generally do not result in a loss of principal to
CWB.




Liquidity and Capital
      Resources


Liquidity
Management





The
Company has established policies as well as analytical tools to manage
liquidity.  Proper liquidity management ensures that sufficient funds
are available to meet normal operating demands in addition to unexpected
customer demand for funds, such as high levels of deposit withdrawals or
increased loan demand, in a timely and cost effective manner.  The
most important factor in the preservation of liquidity is maintaining public
confidence that facilitates the retention and growth of core
deposits.  Ultimately, public confidence is gained through profitable
operations, sound credit quality and a strong capital position.  The
Company’s liquidity management is viewed from a long-term and short-term
perspective, as well as from an asset and liability
perspective.  Management monitors liquidity through regular reviews of
maturity profiles, funding sources and loan and deposit forecasts to minimize
funding risk.  The Company has asset/liability committees (“ALCO”) at
the Board and Bank management level to review asset/liability management and
liquidity issues.  The Company maintains strategic liquidity and
contingency plans.  The Company uses short-term time certificates from
other financial institutions to meet projected liquidity needs.





18
 Table of Contents





CWB has a
credit line with the Federal Home Loan Bank (“FHLB”).  Advances are
collateralized in the aggregate by CWB’s eligible loans and
securities.  Total FHLB advances were $105.0 million and $121.0
million at June 30, 2008 and December 31, 2007, respectively, and include $7.5
million and $17.5 million, respectively, borrowed at variable rates which adjust
to the current LIBOR rate either monthly or quarterly.  At June 30,
2008 and December 31, 2007, CWB had securities pledged to FHLB of $39.8 million
at carrying value and loans of $147.1 million, and $38.1 million at carrying
value and loans of $150 million, respectively. Total FHLB interest expense for
the six months ended June 30, 2008 and 2007 was $2.6 million and $2.4 million,
respectively.  At June 30, 2008, CWB had $22.2 million available for
additional borrowing.





CWB also
maintains four federal funds purchased lines for a total borrowing capacity of
$23.5 million.





The
Company has not experienced disintermediation and does not believe this is a
potentially probable occurrence.  The liquidity ratio of the Company
was 22% at June 30, 2008 and December 31, 2007.  The Company’s
liquidity ratio fluctuates in conjunction with loan funding
demands.  The liquidity ratio consists of cash and due from banks,
deposits in other financial institutions, available-for-sale investments,
federal funds sold and loans held for sale, divided by total
assets.





CWBC’s
routine funding requirements primarily consist of certain operating
expenses.  Normally, CWBC obtains funding to meet its obligations from
dividends collected from its subsidiary and has the capability to issue debt
securities.  Federal banking laws regulate the amount of dividends
that may be paid by banking subsidiaries without prior approval.





Interest
Rate Risk





The
Company is exposed to different types of interest rate risks.  These
risks include: lag, repricing, basis and prepayment risk.





·
            Lag Risk– lag risk
      results from the inherent timing difference between the repricing of the
      Company’s adjustable rate assets and liabilities.  For instance,
      certain loans tied to the prime rate index may only reprice on a quarterly
      basis.  However, at a community bank such as CWB, when rates are
      rising, funding sources tend to reprice more slowly than the
      loans.  Therefore, for CWB, the effect of this timing difference
      is generally favorable during a period of rising interest rates and
      unfavorable during a period of declining interest rates.  This
      lag can produce some short-term volatility, particularly in times of
      numerous prime rate changes.





·
            Repricing Risk –
      repricing risk is caused by the mismatch in the maturities / repricing
      periods between interest-earning assets and interest-bearing
      liabilities.  If CWB was perfectly matched, the net interest
      margin would expand during rising rate periods and contract during falling
      rate periods.  This is so since loans tend to reprice more
      quickly than do funding sources.  Typically, since CWB is
      somewhat asset sensitive, this would also tend to expand the net interest
      margin during times of interest rate
increases.





·
            Basis Risk – item
      pricing tied to different indices may tend to react differently, however,
      all CWB’s variable products are priced off the prime
  rate.





·
            Prepayment Risk –
      prepayment risk results from borrowers paying down / off their loans prior
      to maturity.  Prepayments on fixed-rate products increase in
      falling interest rate environments and decrease in rising interest rate
      environments.  Since a majority of CWB’s loan originations are
      adjustable rate and set based on prime, and there is little lag time on
      the reset, CWB does not experience significant
      prepayments.  However, CWB does have more prepayment risk on its
      securitized and manufactured housing loans and its mortgage-backed
      investment securities.





Management
of Interest Rate Risk





To
mitigate the impact of changes in market interest rates on the Company’s
interest-earning assets and interest-bearing liabilities, the amounts and
maturities are actively managed.  Short-term, adjustable-rate assets
are generally retained as they have similar repricing characteristics as our
funding sources.  CWB sells mortgage products and a portion of its SBA
loan originations.  While the Company has some interest rate exposure
in excess of five years, it has internal policy limits designed to minimize risk
should interest rates rise.  Currently, the Company does not use
derivative instruments to help manage risk, but will consider such instruments
in the future if the perceived need should arise.





Loan sales - The Company’s
ability to originate, purchase and sell loans is also significantly impacted by
changes in interest rates.  Increases in interest rates may also
reduce the amount of loan and commitment fees received by CWB.  A
significant decline in interest rates could also decrease the size of CWB’s
servicing portfolio and the related servicing income by increasing the level of
prepayments.





19
 Table of Contents





Capital
Resources





The
Company (on a consolidated basis) and CWB are subject to various regulatory
capital requirements administered by the federal banking agencies. Failure to
meet minimum capital requirements can initiate certain mandatory - and possibly
additional discretionary - actions by regulators that, if undertaken, could have
a direct material effect on the Company’s and CWB’s financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, the Company and CWB must meet specific capital guidelines that involve
quantitative measures of the Company’s and CWB’s assets, liabilities and certain
off-balance-sheet items as calculated under regulatory accounting
practices.  The Company’s and CWB’s capital amounts and classification
are also subject to qualitative judgments by the regulators about components,
risk weightings and other factors.  Prompt corrective action
provisions are not applicable to bank holding companies.





The
Federal Deposit Insurance Corporation Improvement Act (“FDICIA”) contains rules
as to the legal and regulatory environment for insured depository institutions,
including reductions in insurance coverage for certain kinds of deposits,
increased supervision by the federal regulatory agencies, increased reporting
requirements for insured institutions and new regulations concerning internal
controls, accounting and operations.  The prompt corrective action
regulations of FDICIA define specific capital categories based on the
institutions’ capital ratios.  The capital categories, in declining
order, are “well capitalized”, “adequately capitalized”, “undercapitalized”,
“significantly undercapitalized” and “critically
undercapitalized”.  To be considered “well capitalized”, an
institution must have a core capital ratio of at least 5% and a total risk-based
capital ratio of at least 10%.  Additionally, FDICIA imposes Tier I
risk-based capital ratio of at least 6% to be considered “well
capitalized”.  Tier I risk-based capital is, primarily, common stock
and retained earnings, net of goodwill and other intangible assets.





Quantitative
measures established by regulation to ensure capital adequacy require the
Company and the Bank to maintain minimum amounts and ratios (set forth in the
following table) of total and Tier 1 capital (as defined in the regulations) to
risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average
assets (as defined).  The Company’s and CWB’s actual capital amounts
and ratios as of June 30, 2008 and December 31, 2007 are presented in the table
below:





(dollars
      in thousands)
            
            Total
      Capital
            
            
            Tier
      1 Capital
            
            
            Risk-Weighted
      Assets
            
            
            Adjusted
      Average Assets
            
            
            Total
      Risk-Based Capital Ratio
            
            
            Tier
      1 Risk-Based Capital Ratio
            
            
            Tier
      1 Leverage RatioJune
      30, 2008CWBC
      (Consolidated)
            
            $
            56,819
            
            
            $
            50,292
            
            
            $
            522,153
            
            
            $
            642,996
            
            
            
            10.88
            %
            
            
            9.63
            %
            
            
            7.82
            %CWB
            
            
            56,557
            
            
            
            50,020
            
            
            
            523,174
            
            
            
            641,663
            
            
            
            10.81
            
            
            
            9.56
            
            
            
            7.80December
      31, 2007CWBC
      (Consolidated)
            
            $
            54,479
            
            
            $
            50,067
            
            
            $
            507,228
            
            
            $
            596,631
            
            
            
            10.74
            %
            
            
            9.87
            %
            
            
            8.39
            %CWB
            
            
            51,520
            
            
            
            47,108
            
            
            
            507,017
            
            
            
            591,755
            
            
            
            10.16
            
            
            
            9.29
            
            
            
            7.96Well
      capitalized ratios
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            10.00
            
            
            
            6.00
            
            
            
            5.00Minimum
      capital ratios
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            8.00
            
            
            
            4.00
            
            
            
            4.00





The
Company does not anticipate any material changes in its capital
resources.  CWBC has common equity only and does not have any
off-balance sheet financing arrangements.  The Company has not
reissued any treasury stock nor does it have any immediate plans or programs to
do so.





In
consideration of the near-term economic and capital raising environment, the
Company eliminated this quarter’s dividend.





20
 Table of Contents




Supervision and
      Regulation





Banking
is a complex, highly regulated industry. The banking regulatory scheme serves
not to protect investors, but is designed to maintain a safe and sound banking
system, to protect depositors and the FDIC insurance fund, and to facilitate the
conduct of sound monetary policy.  In furtherance of these goals,
Congress and the states have created several largely autonomous regulatory
agencies and enacted numerous laws that govern banks, bank holding companies and
the banking industry.  Consequently, the Company's growth and earnings
performance, as well as that of CWB, may be affected not only by management
decisions and general economic conditions, but also by the requirements of
applicable state and federal statutes and regulations and the policies of
various governmental regulatory authorities, including the Board of Governors of
the Federal Reserve Bank ("FRB”), the FDIC, and the Office of the Comptroller of
the Currency ("OCC").  For a detailed discussion of the regulatory
scheme governing the Company and CWB, please see the discussion in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2007 under the
caption "Management's Discussion and Analysis of Financial Condition and Results
of Operation – Supervision and Regulation."





ITEM
      4T.
            CONTROLS
      AND PROCEDURES





The
Company’s Chief Executive Officer and Chief Financial Officer, with the
participation of the Company’s management, carried out an evaluation of the
effectiveness of the Company’s disclosure controls and procedures pursuant to
Exchange Act Rule 13a-15(e).  Based upon that evaluation, the Chief
Executive Officer and the Chief Financial Officer believe that, as of the end of
the period covered by this report, the Company’s disclosure controls and
procedures are effective in making known to them material information relating
to the Company (including its consolidated subsidiaries) required to be included
in this report.





Disclosure
controls and procedures, no matter how well designed and implemented, can
provide only reasonable assurance of achieving an entity’s disclosure
objectives.  The likelihood of achieving such objections is affected
by limitations inherent in disclosure controls and procedures.  These
include the fact that human judgment in decision-making can be faulty and that
breakdowns in internal control can occur because of human failures such as
simple errors or mistakes or intentional circumvention of the established
process.





There was
no change in the Company’s internal control over financial reporting, known to
the Chief Executive Officer or the Chief Financial Officer, that occurred during
the period covered by this report that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial
reporting.





PART
II – OTHER INFORMATION





ITEM
      1.
            LEGAL
      PROCEEDINGS





The
Company is involved in various litigation of a routine nature that is being
handled and defended in the ordinary course of the Company’s
business.  In the opinion of management, based in part on consultation
with legal counsel, the resolution of these litigation matters will not have a
material impact on the Company’s financial position or results of
operations.





ITEM
      2.
            UNREGISTERED SALES OF
      EQUITY SECURITIES AND USE OF
PROCEEDS





None





ITEM
      3.
            DEFAULTS UPON SENIOR
      SECURITIES





None





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 Table of Contents





ITEM
      4.
            SUBMISSION OF MATTERS
      TO A VOTE OF SECURITY
HOLDERS





The
Company held its 2008 annual meeting of shareholders (“Meeting”) on May 22,
2008.  At the Meeting, the Company’s shareholders considered and voted
on the following matter:





1. Election of
Directors.  The Election of the following eight persons to the
Board of Directors to serve until the 2009 Meeting and until their successors
are elected and have qualified:





Votes For
            
            
            VotesWithheldRobert
      H. Bartlein
            
            
            4,315,166
            
            
            
            203,772Jean
      W. Blois
            
            
            4,323,760
            
            
            
            195,178John
      D. Illgen
            
            
            4,191,332
            
            
            
            327,606Lynda
      J. Nahra
            
            
            4,316,321
            
            
            
            202,617William
      R. Peeples
            
            
            4,341,021
            
            
            
            177,917James
      R. Sims, Jr.
            
            
            4,319,805
            
            
            
            199,133Kirk
      B. Stovesand
            
            
            4,336,866
            
            
            
            182,072C.
      Richard Whiston
            
            
            4,323,922
            
            
            
            195,016








ITEM
      5.
            OTHER
      INFORMATION





None





ITEM
      6.
            EXHIBITS





Exhibits.





31.1
            Certification
      of Chief Executive Officer of the Registrant pursuant to Rule 13a-14(a) or
      Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as
      amended.





31.2
            Certification
      of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(a) or
      Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as
      amended.





*32.1
            Certification
      of Chief Executive Officer and Chief Financial Officer of the Registrant
      pursuant to Rule 13a-14(b) or Rule 15d-14(b), promulgated under the
      Securities Exchange Act of 1934, as amended, and 18 U.S.C.
      1350.





*This certification is furnished to, but
shall not be deemed filed, with the Commission.  This certification
shall not be deemed to be incorporated by reference into any filing under the
Securities Act of 1933 or the Securities Exchange   Act of 1934,
except to the extent that the Registrant specifically incorporates it by
reference.





22
 Table of Contents





SIGNATURES












Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.








COMMUNITY WEST
      BANCSHARES(Registrant)Date:
      August 14, 2008
            /s/Charles G.
      BaltuskonisCharles
      G. BaltuskonisExecutive
      Vice President andChief
      Financial OfficerOn
      Behalf of Registrant and asPrincipal
      Financial and Accounting Officer





23
 Table of Contents





EXHIBIT
INDEX











ExhibitNumber
            
            Description of
  Document




31.1
            Certification
      of Chief Executive Officer of the Registrant pursuant to Rule 13a-14(a) or
      Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as
      amended.31.2
            Certification
      of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(a) or
      Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as
      amended.32.1*
            Certification
      of Chief Executive Officer and Chief Financial Officer of the Registrant
      pursuant to  Rule 13a-14(b) or Rule 15d-14(b), promulgated under
      the Securities Exchange Act of 1934, as amended, and 18
      U.S.C.1350.




____________________


*This
certification is furnished to, but shall not be deemed filed, with the
Commission.  This certification shall not be deemed to be incorporated
by reference into any filing under the Securities Act of 1933 or the Securities
Exchange Act of 1934, except to the extent that the Registrant specifically
incorporates it by reference.






24