Headline: Oakland Bank Has First Profitable Year

Publication: Oakland Tribune

Dateline: January 26, 2005

OAKLAND — Long plagued by financial mismanagement, Community Bank of the Bay reported its first ever profitable year in 2004.

The downtown Oakland bank, founded in 1996 as part of a federal program to promote banking in inner cities, dug itself a hole under past management by making too many out-of-state loans and paying executives big bonuses when the bank was losing money. For 2004, the bank earned a profit of $66,000, on assets of $41 million, compared to a loss of $735,643, on assets of $37 million in 2003, the institution said Tuesday.

Last October, the state and FDIC lifted restrictions placed on the bank in 2002, allowing the institution to once again offer Small Business Administration loans and other standard bank products.

Brian Garrett, president and CEO of the bank since 2002, said the institution turned profitable in 2004 by lowering its cost of inventory after shedding some higher-rate deposit accounts from out-of-state clients and signing up more local deposits.

Much of the new deposits are for the Oakland First Fund, which uses deposits to build houses, create jobs and expand businesses in Oakland.

The fund, which now totals more than $10 million, recently provided an $80,000 refinancing loan and a $170,000 line of credit for the Spanish Speaking Citizen's Foundation, Youth and Family Services, in Oakland's Fruitvale District.

The nonprofit had lost some federal grants and turned to Community Bank of the Bay after being denied financing from some of the well-known "traditional banks," said Jose Arredondo, the foundation's director.

"I found (Community Bank of the Bay) to be receptive to work with us the way I thought the other banks should have," Arredondo said.

Community Bank of the Bay's 2004 results also were boosted by about $407,000 in federal awards. Garrett's goal is to achieve future monthly profits without relying on such funds.

"Four million dollars more of new loans and we become profitable" on a monthly basis, Garrett   said, adding that the bank has $15 million of new loans in the pipeline.