Headline: FDIC declares Community Bank of the Bay’s turnaround is official

Publication: Press Release

Dateline: August 1, 2006

FDIC declares Community Bank of the Bay’s turnaround is official

OAKLAND, Calif. (Aug. 1, 2006) – The FDIC Tuesday gave Community Bank of the Bay a squeaky clean bill of health, freeing it from all restrictions that had previously been imposed.

“This is it,” beamed Bank President Brian Garrett. “This is the turn-around. It’s official.”

The Federal Deposit Insurance Corporation notified the bank in a letter received Tuesday that it had removed a Memorandum of Understanding (MOU) that the bank had worked under for the past 21 months, Garrett confirmed. The FDIC had issued a Cease and Desist Order to the Bank about five years ago because of very serious operating and management problems. The MOU signed in 2004 had confirmed the FDIC’s recognition that corrections were underway, but there were still significant restrictions in place.

Community Bank was founded in 1996 as the first community development bank in California. For six years the bank suffered severe losses, stemming from problem loans, unsafe and unsound banking practices, and governance issues.

After the FDIC got involved, Garrett was hired to turn things around. A new management team was recruited and an entirely new board of directors was seated, with Dick Kahler – a veteran East Bay banker – as its chair.

Tuesday Kahler said he gives credit for the bank’s success to “the efforts of Brian, his management team and his excellent staff.”

Under Garrett’s leadership, Community Bank has emphasized its service to small- to medium sized businesses. “You can have a better bank,” its advertising says, “one that’s the right size for your business.”

“We just don’t have the bureaucracy to get in the way,” Garrett said about Community Bank’s style of can-do service. “We have no canned solutions.  We listen to our customers, and whenever we can find a way, we help them. It’s that simple.”

“Now we have more flexibility to find every way we can to serve our customers,” he added.
The bank staff celebrated the news with a champagne toast in the lobby after closing Tuesday afternoon.

As of June 30, Community Bank reported total assets of $67 million, 42 percent more than a year before. It reported $53 million in deposits and $33 million in loans outstanding. It reported interest income of $974,000, 44 percent more than in the second quarter of 2005.

The bank also recently completed the purchase of its headquarters building, at 1750 Broadway, Oakland.

One of the bank’s most popular programs, the Oakland 1st Fund, recently recorded $23 million deposited in Oakland 1st accounts. Any depositor can ask that his money be earmarked – at no charge – for use in “Oakland 1st,” and the money will be reserved exclusively for loans made within Oakland.