California Business Bank Announces Fifth Consecutive Quarterly Profits

  
    
  
  
    
      California Business Bank (OTCBB:CABB) announced today its first quarter 
      2008 profit after taxes in the amount of $67,925, or 3.6 cents per 
      share, compared with net profit of $45,460, or 2.5 cents per share in 
      the first quarter of 2007. The bank began paying income taxes in the 
      first quarter 2008 after fully utilized our prior year net operating 
      loss carryover in 2007. This earnings improvement is a result of 
      business growth and use of technology on leveraging human resources.
    
    
      Highlights for the first quarter 2008 include:
    
    
      
        Total Assets increased $34 million to $128.4 million, or 36% growth 
        from $94.3 million at March 31, 2007, and increased 9% from $117.8 
        million at December 31, 2007.
      
      
        Loans outstanding increased $24.3 million to $88.5 million, or 37.8% 
        increase from $64.2 million at March 31, 2007, and increased 5.7% from 
        $83.7 million at December 31, 2007.
      
      
        Deposits grew by 22.8% to $94.8 million from $77.2 million at March 
        31, 2007, and grew 0.6% from $94.2 million at December 31, 2007.
      
      
        Provision for loan losses was $50,000, with allowance for loan losses 
        to total loans at 1.28%.
      
      
        Return on average assets was 0.22%, compared to 0.20% for the first 
        quarter of 2007.
      
      
        Return on average equity was 1.5%, compared to 1.09% for the first 
        quarter of 2007.
      
      
        Net interest margin at 3.60%, decreased 63 basis points from 4.23% of 
        the same quarter 2007.
      
      
        The Bank continued to be categorized as “well-capitalized” 
        under the regulatory guidelines, with Tier 1 leverage capital ratio of 
        14.5%, Tier 1 risk-based capital ratio of 18.1%, and Total risk-based 
        capital ratio of 19.3%.
      
    
    
      Mr. Charles Wood, President and Chief Executive Officer, stated, “We 
      are particularly pleased by our continued positive growth trends with 
      five consecutive quarters of profitability. Our asset quality and loan 
      performance remain solid, notwithstanding some strains in construction 
      loans portfolio which constitutes approximately 17 percent of total 
      loans. We have had no non-performing assets since the Bank opened in 
      November 2005.
    
    
      “Like most community banks, we have been 
      negatively impacted by the economic slowdown and the 175 basis points 
      rates cuts by the Federal Reserve since January 2008. As a result, our 
      deposits growth has been stagnant and net interest margin decreased. 
      During the first quarter, our stock price has been trading between 
      $10.95 and $8.50 per share in small quantities. The recent drop in stock 
      price was mainly due to the current market volatility and economic 
      conditions.
    
    
      “The Bank will continue to achieve organic 
      growth mainly in the core commercial and industrial loans and deposits 
      areas. We will focus on our strategic priorities in continued developing 
      non-interest bearing deposit accounts and commercial loan relationships 
      in our target market. Moreover, we are developing an ebanking product 
      for consumers which will be launched later this year. The product will 
      allow consumers to open accounts on-line, sign up for mobile banking, 
      bill pay, debit cards, overdraft lines and credit cards. We will also be 
      expanding our footprint by establishing ATM network.”
    
    
      California Business Bank offers a wide range of financial services to 
      individuals, small and medium size businesses in Los Angeles, and the 
      surrounding communities in Southern California. Our commitment is to 
      deliver the highest quality financial services and products to our 
      customers.
    
    
      Forward Looking Statements
    
    
      Certain matters discussed in this press release constitute 
      forward-looking statements within the meaning of the Private Securities 
      Litigation Reform Act of 1995, and are subject to the safe harbors 
      created by the act. These forward-looking statements refer to the 
      Company’s current expectations regarding 
      future operating results, and growth in loans, deposits, and assets. These 
      forward looking statements are subject to certain risks and 
      uncertainties that could cause the actual results, performance, or 
      achievements to differ materially from those expressed, suggested, or 
      implied by the forward looking statements. These risks and 
      uncertainties include, but are not limited to (1) the impact of changes 
      in interest rates, a decline in economic conditions, and increased 
      competition by financial service providers on the Company’s 
      results of operation, (2) the Company’s 
      ability to continue its internal growth rate, (3) the Company’s 
      ability to build net interest spread, (4) the quality of the Company’s 
      earning assets, and (5) governmental regulations.