California Bank of Commerce Announces Results for the 1st Quarter 2010

LAFAYETTE, CA--(Marketwire - May 3, 2010) - California Bank of Commerce (OTCBB: CABC), a unique commercial bank serving closely held businesses and professionals in the in the San Francisco Bay Area, today announced financial results for the First Quarter ended March 31, 2010.

Operating Income (pre-tax income excluding provision for loan losses and option expense) was $497,863 for the First Quarter of 2010, up 7% from the Fourth Quarter 2009. "The Bank, now just under three years old, had its first operating profit in the Third Quarter of 2009 and the trend has been positive ever since," said John Rossell III. "We continue to win new client relationships and this is resulting in a growing base of loans and deposits, which in turn drive income," said Rossell.

Total Assets were $197 million at the end of the First Quarter 2010, up $3 million from $194 million at the end of the Fourth Quarter 2009. Year over year, Total Asset increased 43% or $59 million from $138 million at the end of the First Quarter 2009.

Total Loans were $147 million on March 31, 2010, up $3 million compared to $144 million on December 31, 2009. Total Commercial and Industrial (C & I) Loans increased $4 million to $62 million from $58 million at the end of the Fourth Quarter 2009. Total Commercial Real Estate (CRE) Loans increased $10 million to $75 million from $65 million at the end of the Fourth Quarter 2009. The Bank reduced its exposure to Construction Loans during the First Quarter 2010, from $10.8 million at December 31, 2009 to $476,000 at March 31, 2010. "We are particularly pleased with our mix of loans. We have curtailed construction lending for now and renewed our emphasis on C&I lending. This is what we know best and it is where we have established ourselves as leaders," commented Chief Credit Officer John Lindstedt.

Total Deposits were $161 million at March 31, 2010, up $8 million compared to $153 million on December 31, 2009. During the First Quarter 2010, Core Deposits increased $9 million or 8% to $129 million from $120 million in the Fourth Quarter 2009.

Net Interest Income reached a new quarterly high of $1.761 million in the First Quarter of 2010, up $110,000 compared to the Fourth Quarter 2009 and up $719,000 or 69% over the First Quarter 2009.

The Net Interest Margin for the First Quarter of 2010 was 3.89%, up 14 basis points over the Fourth Quarter 2009 and up 72 basis points over the First Quarter 2009.

"The banking industry's interest margins have been under pressure since the Second Quarter of 2008, when the Federal Reserve intervened aggressively to lower interest rates," commented Rossell. "Our Net Interest Margin for that quarter was 2.96%. The rate environment has not improved since then, but our margin has improved by almost a full percentage point. We have worked every variable that influences net revenue to bring this about, including growing our loan portfolio, growing our loan to deposit ratio and aggressively reducing our cost of funds," concluded Rossell.

The Bank recorded a Net Loss of ($215,000) for the First Quarter, as compared with ($180,000) in the Fourth Quarter of 2009 and ($566,000) in the First Quarter of 2009. The Net Loss for the First Quarter of 2010 was primarily attributable to a quarterly provision to the Reserve for Loan Losses of $507,000 for the quarter.

The Reserve for Loan Losses increased to $2.93 million or 2% of total loans at the end of the first quarter of 2010, up 95% from $1.5 million or 1.52% of total loans at the end of the first quarter of 2009. "We have managed our Reserve in a manner that is appropriate to the challenges posed by continuous growth in a difficult economy," commented CFO Randy Greenfield. "We started at zero in 2007, but we now have a Reserve that can absorb some bumps," Greenfield concluded.

On March 31, 2010, the Bank's capital levels exceeded those established by the Federal Deposit Insurance Corporation (FDIC) for a "well capitalized" bank. Our Tier 1 Leverage Capital Ratio of 12.2% at March 31, 2010 compared favorably with the FDIC "well capitalized" standard of 8%.

The Bank continues to maintain strong liquidity, with over $27 million in cash and cash equivalents at March 31, 2010.

About California Bank of Commerce

California Bank of Commerce was designed and built to provide a unique banking experience for its clients. The Bank offers a broad range of commercial banking services to closely held 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.

                       CALIFORNIA BANK OF COMMERCE
                 UNAUDITED SUMMARY FINANCIAL STATEMENTS
                             ($ Thousands)


SUMMARY INCOME STATEMENT ($ thousands)

                                       1Q 2010      4Q 2009      1Q 2009
                                     -----------  -----------  -----------
Interest income                      $     2,106  $     1,998  $     1,403
Interest expense                            (345)        (347)        (361)
                                     -----------  -----------  -----------
   Net interest income before
    provision                              1,761        1,651        1,042
Provision for loan losses                   (507)        (456)        (100)
                                     -----------  -----------  -----------
   Net interest income after
    provision                              1,253        1,195          942
Non-interest income                           79          149           40
Non-interest expense                      (1,546)      (1,524)      (1,547)
                                     -----------  -----------  -----------
   Income (loss) before tax
    provision                               (214)        (180)        (565)
                                     -----------  -----------  -----------
Provision for income taxes                    (1)           -           (1)
                                     -----------  -----------  -----------
   Net income (loss) - Period        $      (215) $      (180) $      (566)
                                     ===========  ===========  ===========

  Net Interest Margin                       3.89%        3.75%        3.17%

Weighted average shares outstanding    2,750,000    2,750,000    2,750,000

  Basic loss per share               $    (0.098) $    (0.085) $    (0.223)

Operating Income*                    $       498  $       467  $      (287)

*  Pre-tax Net Income (loss) excluding Provision for Loan Losses and Option
   Expense.


                       CALIFORNIA BANK OF COMMERCE
                 UNAUDITED SUMMARY FINANCIAL STATEMENTS
                             ($ Thousands)



SUMMMARY BALANCE SHEET ($ thousands)

                                       1Q 2010      4Q 2009      1Q 2009
                                     -----------  -----------  -----------
Assets
Cash and Investments                 $    48,999  $    48,751  $    38,858
Loans, net of deferred costs/fees        147,574      144,163       98,959
Loan loss reserve                         (2,930)      (2,565)      (1,500)
Other                                      3,416        3,415        1,263
                                     -----------  -----------  -----------
     Total Assets                    $   197,059  $   193,764  $   137,580
                                     ===========  ===========  ===========

Liabilities
Demand deposits                      $    37,696  $    35,418  $    21,102
Interest bearing deposits                123,217      117,256       85,964
                                     -----------  -----------  -----------
   Total Deposits                        160,913      152,674      107,066
Borrowings & other liabilities            12,855       17,760        6,640
                                     -----------  -----------  -----------
   Total Liabilities                     173,768      170,434      113,706

Common Stock, net                         19,302       19,351       19,922
Preferred Stock, net                       3,989        3,979        3,952
                                     -----------  -----------  -----------
   Shareholders' equity                   23,291       23,330       23,874
                                     -----------  -----------  -----------
     Total Liabilities and Equity    $   197,059  $   193,764  $   137,580
                                     ===========  ===========  ===========

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