Headline: Community Bank of the Bay earns first-ever annual profit

Publication: (Press Release)

Dateline: January 25, 2005

OAKLAND, Calif. – For the first time in its 8-year-history, Community Bank of the Bay (CBYAA.OB) of Oakland has recorded a profit, for the year that ended Dec. 31, 2004, Bank President Brian Garrett announced today.

The bank earned a profit on the year of $66,000. The bank, as of Dec. 31, 2004, had $33 million in deposits and $41 million in total assets compared to $35 million in deposits and $37 million in assets as of Dec. 31, 2003. For 2003 the bank had recorded a loss of $735.643.

The milestone of annual profitability has been the target for all of the last two years, Garrett said. “Now, instead of focusing on past problems, we can turn our attention to growing the bank and serving our current customers even better."

The bank has recently embarked on a campaign to emphasize its service to small-to-medium-sized businesses, whose owners recognize that the Community Bank of the Bay is the right size to give them the specific individual attention and financial expertise their businesses often require. “You can have a better bank – one that’s the right size for your business,” Community Bank’s newest marketing materials promise.

By focusing its service on local businesses, the Community Bank hopes to help boost local job creation and improve the local economic landscape, Garrett said.

Community Bank is introducing a level of attention to service and client satisfaction that is new to the Oakland market. It is the hallmark of community banking, Garrett said.

The bank has also earned accolades for its unique Oakland 1st Fund, which promises to use all designated deposits only for loans made exclusively in Oakland. Any depositor can participate at no cost.

The bank’s progress toward profitability has been gradual but steady. The primary focus has been on improving the quality of its loan portfolio and the credit administration, explained Dick Kahler, chairman of the bank’s board of directors. “Since 2002, there have been no further loan charge-offs. Loan delinquency is below industry norms, and many loans have been collected that had previously been considered uncollectible. Further, in a dramatic change from past practices, the vast majority of new loans and deposits have been for local clients,” Kahler said.

Garrett was named president in 2002 with clear instructions to turn the bank around. Last October, the state and the FDIC each lifted most of the formal restrictions that they had placed on bank operations in 2002, an affirmation that the problems identified earlier with bank operations, loan policies and governance had all been corrected.

Garrett shared the latest good news with the bank’s small staff – all of whom are also stockholders – with a small celebration one recent evening just after the bank had closed for the day.

Community Bank of the Bay is located at 1750 Broadway, on top of the 19th Street BART Station, with free parking for customers. The bank’s Web site is at www.communitybankbay.com.

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