Headline: Community Bank of the Bay Achieves Profitability

Publication: East Bay Business Times

Dateline: January 31, 2005

Oakland's 8-year-old Community Bank of the Bay said it posted its first-ever annual profit in 2004.

The bank, which has been pursuing a turnaround since 2002, earned a profit for the year of $66,000, compared to a loss of $735,643 in 2003.

"The milestone of annual profitability has been the target for all of the last two years," said President Brian Garrett, who came on board in 2002 to help lead the turnaround. "Now, instead of focusing on past problems, we can turn our attention to growing the bank and serving our current customers even better."

At the end of 2004, the bank had $33 million in deposits and $41 million in total assets compared to $35 million in deposits and $37 million in assets at the close of 2003.

Last October, state regulators and the Federal Deposit Insurance Corp. each lifted most of the formal restrictions they had placed on the bank's operations in 2002.

In overcoming past problems, the bank's primary focus has been on improving the quality of its loan portfolio and credit administration.

"Since 2002, there have been no further loan charge-offs," said Dick Kahler, chairman of the bank. "Loan delinquency is below industry norms, and many loans have been collected that had previously been considered uncollectable.

"In a dramatic change from past practices, the vast majority of new loans and deposits have been for local clients," Kahler added. 2005 American City Business Journals Inc.