BWC Financial Corp. Announces 2006 Second Quarter & First Half Earnings

James L. Ryan, Chief Executive Officer and Chairman of
the Board of BWC Financial Corp. (Nasdaq:BWCF) and its subsidiary Bank
of Walnut Creek, announced net income for the six month period ending
June 30, 2006.
   The Corporation reported net income of $4,214,000 or $1.01 diluted
earnings per share for the six months ended June 30, 2006, compared to
income of $3,662,000 or $0.86 diluted earnings per share for the same
period in 2005. Earnings for first half 2006 represent 1.52% return on
average assets (ROA) and 15.96% return on average equity (ROE),
compared to 1.45% return on average assets (ROA) and 15.30% return on
average equity for first half 2005.
   For second quarter 2006, net income was $2,138,000 or $0.51
diluted earnings per share, compared to net income of $1,982,000 or
$0.46 diluted earnings per share for the same period in 2005. Return
on average assets for second quarter 2006 was 1.52% and return on
average equity was 15.92% compared to second quarter 2005 return on
average assets of 1.54% and return on average equity of 16.50%. The
Corporation's second quarter earnings were adversely affected by
expenses of approximately $350,000 related to merger activities.
   In conjunction with the proposed merger of Bank of Walnut Creek
and First Republic Bank, BWC Financial Corp. sold its majority
interest in BWC Mortgage to the minority partner, resulting in the
discontinuance of this subsidiary.
   Total assets of the Corporation at June 30, 2006 were
$569,966,000, compared to total assets of $551,688,000, at June 30,
2005.
   Founded in 1980, Bank of Walnut Creek's headquarters and main
office are at 1400 Civic Drive, Walnut Creek. Additional branch
offices are in Orinda, San Ramon, Danville, Pleasanton, and Livermore,
with a regional commercial banking office in San Jose.
   Additional details may be found in the Summary of Consolidated
Financial Results for second quarter and first half 2006:
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*T
Selected Financial Data - Summary:
The following table provides certain selected consolidated financial
data as of and for the three month and six-month periods ended June
30, 2006 and 2005.
                                       Quarter Ended    Year to Date
SUMMARY INCOME STATEMENT                  June 30,        June 30,
                                         ----------      ----------
(Unaudited in thousands except share
 data)                                  2006    2005    2006    2005
                                      --------------------------------
Interest Income                       $10,551 $ 8,232 $20,258 $15,904
Interest Expense                        2,912   1,722   5,332   3,092
                                      --------------------------------
Net Interest Income                     7,639   6,510  14,926  12,812
Non-interest Income                       594     603   1,154   1,170
Non-interest Expense                    4,819   4,117   9,402   8,300
Income from Continuing Operations
 Before Income Taxes                    3,414   2,996   6,678   5,682
Income Taxes                            1,287   1,159   2,514   2,231
                                      --------------------------------
Net Income from Continuing
 Operations                           $ 2,127 $ 1,837 $ 4,164 $ 3,451

Income from Operations of Discontinued
  Subsidiary, net of tax              $    11 $   145 $    50 $   211
                                      --------------------------------

Total Net Income                      $ 2,138 $ 1,982 $ 4,214 $ 3,662
                                      ================================

                                Quarter Ended          Year to Date
SUMMARY INCOME STATEMENT          June 30,               June 30,
                                 ----------             ----------
(Unaudited in thousands
 except share data)             2006       2005       2006       2005
                          --------------------------------------------
Per share:
Basic EPS - Continuing
 Operations               $     0.51 $     0.44 $     1.01 $     0.82
                          --------------------------------------------
Diluted EPS - Continuing
 Operations               $     0.51 $     0.43 $     1.00 $     0.81
                          --------------------------------------------
Basic EPS - Discontinued
 Operations               $     0.00 $     0.03 $     0.01 $     0.05
                          --------------------------------------------
Diluted EPS - Discontinued
 Operations               $     0.00 $     0.03 $     0.01 $     0.05
                          --------------------------------------------

Weighted Average Basic
 shares                    4,137,935  4,197,791  4,133,402  4,213,315
                          --------------------------------------------
Weighted Average Diluted
 Shares                    4,179,895  4,255,761  4,181,074  4,269,954
                          --------------------------------------------
Cash dividends            $     0.10 $     0.08 $     0.20 $     0.16
                          --------------------------------------------
Book value at period-end                        $    13.21 $    11.25
                          --------------------------------------------
Ending shares                                    4,152,306  4,309,874
                          --------------------------------------------

                                   Quarter Ended          Year to Date
                          --------------------------------------------
                                        June 30,              June 30,
                          --------------------------------------------
Financial Ratios:               2006       2005       2006       2005
                          --------------------------------------------
Return on Average Assets        1.52%      1.54%      1.52%      1.45%
                          --------------------------------------------
Return on Average Equity       15.92%     16.50%     15.96%     15.30%
                          --------------------------------------------
Net Interest Margin to
 Earning Assets                 4.44%      5.52%      5.82%      5.56%
                          --------------------------------------------
Net loan losses
 (recoveries) to avg.
 loans                          0.01%      0.06%      0.02%      0.05%
                          --------------------------------------------
Efficiency Ratio (Bank
 only)                         54.21%     56.74%     55.90%     58.00%
                          --------------------------------------------

SUMMARY BALANCE SHEET
                          --------------------------------------------
(Unaudited in thousands)     June 30,   June 30,
                          --------------------------------------------
Assets:                         2006       2005
                          --------------------------------------------
Cash and Equivalents      $   28,992 $   57,878
                          --------------------------------------------
Investments                   89,891     63,476
                          --------------------------------------------
Loans                        442,634    392,403
                          --------------------------------------------
Allowance for Credit
 Losses                       (7,428)    (7,475)
                          --------------------------------------------
BWC Mortgage Services,
 Loans Held-for-Sale               -     30,027
                          --------------------------------------------
Other Assets                  15,877     15,379
                          --------------------------------------------
Total Assets              $  569,966 $  551,688
                          --------------------------------------------

Deposits:                 $  422,038 $  415,478
                          --------------------------------------------
Other Borrowings              90,705     84,105
                          --------------------------------------------
Other Liabilities              2,387      3,606
                          --------------------------------------------
Total Liabilities            515,130    503,189
                          --------------------------------------------
Equity                        54,836     48,499
                          --------------------------------------------
Total Liabilities and
 Equity                   $  569,966 $  551,688
                          --------------------------------------------
*T

   This press release contains forward-looking statements with
respect to the financial condition, results of operation and business
of BWC Financial Corp.(BWC). These include statements that relate to
or are dependent on estimates or assumptions relating to the prospects
of continued loan and deposit growth, improved credit quality, the
operating characteristics of the Company's income tax refund programs
and the economic conditions within its markets. These forward-looking
statements involve certain risks and uncertainties, many of which are
beyond the Company's control. Factors that may cause actual results to
differ materially from those contemplated by such forward-looking
statements include, among others, the following possibilities: (1)
increased competitive pressure among financial services companies; (2)
changes in the interest rate environment reducing interest margins or
increasing interest rate risk; (3) deterioration in general economic
conditions, internationally, nationally or in the State of California;
(4) the occurrence of future terrorist acts or impact of military
actions; and (5) legislative or regulatory changes adversely affecting
the business in which BWC engages. Forward-looking statements speak
only as of the date they are made, and BWC does not undertake to
update forward-looking statements to reflect circumstances or events
that occur after the date the forward-looking statements are made.