Community Bank of the Bay

Headline: Community Bank reports earnings, asset growth reflecting building purchase, new lending staff, continued growth

Community Bank reports earnings, asset growth reflecting building purchase, new lending staff, continued growth

OAKLAND, Calif., (July 29, 2006) Community Bank of the Bay (CBYAA.OB) has reported earnings and asset growth that reflect continued aggressive moves toward growth, Bank President Brian Garrett announced.

Garrett said the bank’s core second quarter 2006 earnings of $3,900 compare to a loss of $18,800 in the second quarter of 2005. Garrett also noted that during the recent quarter, the bank completed the purchase of its headquarters office building in downtown Oakland, and added four new loan officers to its staff, both of which had the predicted effects of holding down earnings on a one-time basis.

“We are very pleased with our progress to date, even though the earnings alone do not reflect the progress we have made in the last year. In many ways, we are like a startup bank, facing many of the same challenges a startup does in deployment of capital, fully leveraging our staff and creating sustained organic growth,” Garrett said.

“We are investing in the future. We closed escrow on the $3.9 million purchase of our building – and stopped paying rent – and we began paying salaries to new loan officers, whose work will pay off to a much greater degree in the long term,” noted Garrett.

Total assets grew to $67 million, compared to $47 million a year earlier – reflecting 42 percent growth. Deposits grew by 43 percent year to year, and the bank’s total loans outstanding grew to $33 million, or 11 percent more than at the same time a year before. Interest income grew by 44 percent from $671,000 in the second quarter of 2005 to $974,000 in the most recent quarter.

One of the bank’s most popular programs, the Oakland 1st Fund, jumped 86 percent year-to-year, with approximately $22 million deposited in Oakland 1st accounts as of June 30.

	6/30/06	6/30/05
Core quarterly earnings	$3,900	– $18,800
Interest income	$974,000	$671,000
Total assets	$66,524,422	$46,794,805
Total deposits	$52,947,032	$36,934,571
Total loans	$33,154,155	$29,915,765
Oakland 1st deposits	$21,998,928	$11,843,384

“We anticipated having flat earnings in the second quarter, as we forecast when we released our first quarter report. This resulted from the expansion of staff and facilities but allows us to be prepared for more growth in the future. Maximizing opportunities now lays the groundwork for greater profitability in the future,” Garrett said.

“The most significant event in the second quarter was the purchase of the building that houses our main office. This will allow us to solidify our Oakland base of operations and permit expansion of staff and services well into the future. We also have added four new loan officers within the last year. They have been the driving force behind our asset growth,” Garrett added.