PBiz Reports Second Quarter Financial Results

Private Business, Inc. (NASDAQ:PBIZ), a leading provider
of financial technology to community banks and middle-market
businesses, today announced its operating results for the second
quarter and first six months of 2005.
   Revenues for the three months ended June 30, 2005, totaled $9.5
million, compared with $10.2 million in the second quarter of the
previous year. Operating income was $1.2 million for the second
quarter of 2005 compared with operating income of $1.2 million for the
second quarter of 2004. Net income available to common shareholders
totaled $125,000, or $0.01 per diluted share, in the second quarter of
2005, versus net income available to common shareholders of $270,000,
or $0.02 per diluted share, in the year-earlier quarter.
   For the six months ended June 30, 2005, revenues totaled $18.7
million, compared with $20.0 million in the corresponding period of
the prior year. Operating income for the six months ended June 30,
2005, was $1.9 million, versus operating income of $192,000 in the
first half of 2004. Net loss available to common shareholders totaled
$(36,000), or $(0.00) per diluted share in the first half of 2005,
compared with a net loss available to common shareholders of
$(883,000), or $(0.06) in the year-earlier period.
   As previously reported, the Company's operating results for the
first six months of 2004 reflected two one-time charges: a write-off
of unamortized deferred financing costs related to the 1998 Credit
Agreement and the expense for directors' and officers' insurance
premiums, totaling $1.7 million.
   Operating income for the first six months of 2005 and 2004,
excluding the one-time charges described above, would have been $1.9
million and $1.9 million, respectively, and net income, which excludes
preferred stock dividends and a one-time gain related to recovery of
non-trade receivables, would have been $1.0 million and $1.0 million,
respectively. Diluted loss per share for the six months ended June 30,
2005 and 2004, excluding the one-time charges, would have been $(0.00)
and $(0.00), respectively, versus the $(0.00) loss per share for the
six months ended June 30, 2005, and the $(0.06) loss per share for the
six months ended June 30, 2004, as reported.
   Revenues for the second quarter ended June 30, 2005, totaled $9.5
million compared with $9.2 million for first quarter 2005. Operating
expenses for the second quarter ended June 30, 2005, totaled $8.3
million compared with $8.5 million for first quarter 2005. Operating
income for the second quarter ended June 30, 2005, totaled $1.2
million compared with $693,000 for first quarter of 2005. Net income
available to common shareholders for the second quarter ended June 30,
2005, totaled $125,000 or $0.01 per diluted share compared with a net
loss of ($161,000) or ($0.01) per diluted share for the first quarter
of 2005.
   Commenting on the second quarter and first six months of 2005
results, Henry M. Baroco, Private Business' Chief Executive Officer
and Board member, stated, "We are continuing to work diligently to
grow our top line by hiring top quality sales personnel and training
them effectively. The first six months results do not meet our
expectations from a revenue perspective. I am pleased to see
quarter-over-quarter revenue growth, although the second quarter
revenue decreased by 6.5% compared with the same period in 2004. I am
also encouraged by our operating income results of $1.2 million, which
is equal to the second quarter of 2004 on slightly lower revenues.
   "I am excited about the recently announced acquisition of KVI
Capital, Inc. I have been a proponent of offering a leasing product to
our customer base, and I believe KVI offers us a great opportunity to
help us meet our long-term growth plans while providing a much needed
financing product to the community-based financial institution market.
   "We will continue to explore other acquisitions that provide
opportunities to leverage our existing market position and customer
base."

   About PBiz

   Private Business, Inc. (PBiz) is a leading supplier of financial
technology to community banks and middle-market businesses. The
Company is headquartered in Brentwood, Tennessee, and its common stock
trades on The Nasdaq Stock Market under the symbol PBIZ.

   PBiz provides information related to non-GAAP financial
measurements from time to time that adjust for certain items outside
of the ordinary course of its business. Such non-GAAP financial
measures are not determined in accordance with generally accepted
accounting principles and are susceptible to varying calculations.
Accordingly, non-GAAP financial measures, as presented, may not be
comparable to other similarly titled measures of other companies. To
enable interested parties to reconcile non-GAAP measures to the
Company's GAAP financials, the Company clearly defines and quantifies
all adjustments to GAAP measurements. The Company provides non-GAAP
financial measurements that adjust for certain items outside of the
ordinary course of business in order to assist in comparing the
Company's current operating performance to its historical performance.
These adjustments typically reflect non-recurring items but sometimes
reflect items, such as dispositions of assets that are not technically
non-recurring but are outside of the ordinary course of operations.
Investors are encouraged to use this information in connection with
the information contained in the Company's GAAP financial statements.

   Certain statements made in this press release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking
statements are based on management's current expectations and include
known and unknown risks, uncertainties and other factors, many of
which the company is unable to predict or control, that may cause the
company's actual results or performance to materially differ from any
future results or performance expressed or implied by such
forward-looking statements. These statements involve risks and
uncertainties, including, without limitation, risks and uncertainties
associated with the company's ability to achieve its growth plans and
to identify or complete acquisitions. These risks and uncertainties
are in addition to other factors detailed from time to time in the
company's filings with the Securities and Exchange Commission. The
company cautions investors that any forward-looking statements made by
the company are not necessarily indicative of future performance. The
company is not responsible for updating the information contained in
this press release beyond the published date, or for changes made to
this document by wire services or Internet services.

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                        PRIVATE BUSINESS, INC.
                   Consolidated Financial Highlights
               (in thousands, except per share amounts)

                          Three Months Ended       Six Months Ended
                               June 30                 June 30
                         --------------------    --------------------
                           2005        2004        2005        2004
                         --------    --------    --------    --------
Operating Highlights:
Revenue:
  Participation Fees     $  5,891    $  6,541    $ 11,481    $ 12,838
  Software license             42          60         236         113
  Retail planning
    services                2,193       2,213       4,395       4,463
  Maintenance and other     1,375       1,342       2,588       2,584
                         --------    --------    --------    --------
                            9,501      10,156      18,700      19,998

Operating costs and expenses:
  General and
    administrative          3,420       3,969       7,357       8,406
  Selling and marketing     4,647       4,581       8,947       8,829
  Research and
    development                55         121         116         235
  Amortization                202         290         410         616
  Other operating
    expense, net               19          20          19       1,720
                         --------    --------    --------    --------
                            8,343       8,981      16,849      19,806

Operating income            1,158       1,175       1,851         192
Other income                    0         265           0         265
Interest expense, net         (70)        (99)       (140)       (289)
                         --------    --------    --------    --------
Income before income
  taxes                     1,088       1,341       1,711         168
Income tax provision          423         526         667          68
                         --------    --------    --------    --------
Net income                    665         815       1,044         100
Preferred stock
  dividends                  (540)       (545)     (1,080)       (983)
                         --------    --------    --------    --------
Net income (loss)
  available to common
  shareholders           $    125    $    270    $    (36)   $   (883)
                         ========    ========    ========    ========

Loss per share:
  Basic                  $   0.01    $   0.02    $  (0.00)   $  (0.06)
                         ========    ========    ========    ========
  Diluted                $   0.01    $   0.02    $  (0.00)   $  (0.06)
                         ========    ========    ========    ========

Weighted average shares
  outstanding:
    Basic                  14,662      14,197      14,618      14,138
                         ========    ========    ========    ========
    Diluted                14,954      14,786      14,618      14,138
                         ========    ========    ========    ========

                                                        As of
                                                 --------------------
                                                  June 30    Dec. 31
                                                   2005        2004
                                                 --------    --------
Balance Sheet Highlights:
Cash and Cash equivalents                        $     --    $      7
Working capital (deficit)                           1,111        (158)
Total assets                                       20,556      21,336
Long-term debt, net of current portion                833       1,666
Stockholders' equity                               13,650      13,396


                        PRIVATE BUSINESS, INC.
            Reconciliation of Reported Results to Effect of
                    Lightyear Transaction Charges
               (in thousands, except per share amounts)

                                                   Six Months Ended
                                                       June 30,
                                                 --------------------
                                                   2005        2004
                                                 --------    --------
Operating income as reported                     $  1,851    $    192

Add:  Write-off unamortized deferred financing
      costs related to 1998 Credit Agreement          --          780

Add:  Directors and officers insurance premiums
      related to periods prior to Lightyear
      transaction closing                             --          896
                                                 --------    --------
Adjusted operating income                           1,851       1,868

Interest expense, net                                (140)       (289)
                                                 --------    --------
Adjusted income before income taxes                 1,711       1,579
Adjusted income tax provision                         667         616
                                                 --------    --------
Adjusted net income                                 1,044         963
Preferred stock dividends                          (1,080)       (983)
                                                 --------    --------
Adjusted net loss available to common
  shareholders                                   $    (36)   $    (20)
                                                 ========    ========
Adjusted diluted loss per share                  $  (0.00)   $  (0.00)
                                                 ========    ========
Diluted weighted average shares outstanding        14,618      14,138
                                                 ========    ========

Note:  In addition to the adjustments described above, adjusted
       income before income taxes for the six months ended June 30,
       2004 excludes a $265,000 gain related to recovery of non-trade
       receivables, which has been included as other income in the
       operating highlights.

                Additional information on this Company
                 can be found on the World Wide Web:
                        http://www.pbizinc.com

               For further information, please contact:
                   Michael Berman at [phone]

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