California Bank of Commerce Announces Results for the 3rd Quarter 2008

LAFAYETTE, CA--(Marketwire - October 10, 2008) - California Bank of Commerce (OTCBB: CABC), a unique commercial bank in the San Francisco Bay Area targeting middle market businesses and professionals, today announced financial results for the quarter end September 30, 2008, with strong growth in both loans and deposits. At the end of the third quarter, Total Assets were up by 20% over the end of the second quarter, 2008. Total Loans grew 45% and Total Deposits grew 19% over the same period. The Bank was negatively affected by the Government's GSE takeovers. The Bank is Well Capitalized according to regulatory guidelines and exhibits capital ratios that are in the upper quartile of banks in general.

Total Assets at September 30, 2008 stood at $124 million, up $21 million from $103 million at June 30, 2008. During the same period, Total Loans reached $78 million, up $24 million from $54 million at June 30, 2008. Commercial & Industrial (C&I) loans grew 32% reaching $36 million on September 30, 2008 versus $27 million on June 30, 2008. C&I loans are the Bank's core credit product. The Bank also makes Commercial Real Estate, construction and Small Business Administration Guaranteed Loans. The Bank's loan portfolio remains healthy, with no reported delinquent or non-performing loans as of September 30, 2008.

At September 30, 2008, the Bank had $25.3 million of cash and cash equivalents on its balance sheet and had in place back-up credit facilities with the Federal Reserve Bank, the Federal Home Loan Bank and several correspondent banks. Despite a challenging rate and margin environment, the Bank remains on target with regard to the execution of its strategic plan.

While many Banks are struggling with deposit gathering, California Bank of Commerce continues to grow and diversify its deposit base. Total deposits reached $95 million at September 30, 2008, increasing $15 million from June 30, 2008.

Following the September GSE takeover announcement by the U.S. Treasury Department and the Federal Housing Finance Agency with respect to Fannie Mae and Freddie Mac, the Bank recorded a non-cash charge to earnings of approximately $2 million ($0.74 per share), representing the entirety of the Bank's holdings of preferred securities issued by Fannie Mae. Under the Federal takeover plan, these securities remain outstanding, but currently trade below 10% of their par value and no longer pay a dividend. The Bank expects that the loss will result in a future tax benefit.

This write-off does not affect the Bank's status as "Well Capitalized," per regulatory guidelines.

Bank President and CEO John Rossell remarked: "In our initial offering of common stock, we raised $27.5 million in capital, $7.5 million in excess of the amount stipulated in our regulatory filing. Extraordinary market events, like the GSE takeover, are one of the reasons we chose to retain additional capital. The Bank's growth and progress continues to exceed plan and we have ample capital, cash and back-up credit facilities to continue to execute our plan."

The Bank does not hold any other common or preferred stock issued by Fannie Mae or Freddie Mac.

Excluding the extraordinary item, the Bank demonstrated favorable progress toward eliminating its start-up related operating losses. The Bank's net loss for the quarter ending September was reduced 25% or $266,000, as compared with quarter-end June 2008. The Bank's net interest margin improved to 3.15% for the 3rd quarter as compared to 2.96% in the 2nd quarter, while net interest income for the quarter grew 41% or $244,000 compared to the quarter ending June. "While other Banks are reducing their lending, we continue to emphasize taking care of our customers and prospects. As a result, we are gaining market share relative to the competition," said Rossell.

"The Bank continues to win in the marketplace for both loans and deposits. Our new business pipeline remains strong for both business loans and deposits. The bank continues to be well capitalized, and our liquidity remains very healthy. In short, the Bank is exceeding our ambitious goals for 2008," said John E. Rossell III, president and CEO California Bank of Commerce.

About California Bank of Commerce

California Bank of Commerce was designed and built to provide a unique banking experience for businesses, entrepreneurs, and their families. California Bank of Commerce provides a broad range of commercial banking and advisory services to mid-market businesses and professionals throughout the San Francisco Bay Area. For more information on California Bank of Commerce and our unique banking experience, call us at 925-283-2265, or visit us at www.californiabankofcommerce.com.

Contact Information: Contact: Mark DeVincenzi 925-444-2916