California Community Bank Maintains Excellent Asset Quality and Achieves 26% Year-over-Year Loan Growth

ESCONDIDO, Calif. - (Business Wire) California Community Bank (OTCBB: CABK) today released its unaudited second quarter 2008 financial performance results.

For the second quarter of 2008, the Bank reported a net loss of $139,000, or a basic loss per share of 7 cents, versus net income of $107,000, or basic earnings per share of 5 cents, for the comparable period last year. The net loss for the first six months of the year was $126,000, or a basic loss per share of 6 cents, compared to net income of $217,000, or basic earnings per share of 10 cents, for the first six months of 2007.

The Bank closed the second quarter of 2008 with an asset base of $148,265,000, an increase of $19,207,000, or 15%, from the second quarter of 2007. Total deposits were $118,536,000, up $13,227,000, or 13%, over the same period a year ago. As of June 30, 2008, total gross loans net of deferred fees, the primary revenue driver for the Bank, stood at an all time high of $128,962,000 compared to $102,388,000 at June 30, 2007, a significant increase of $26,574,000, or 26%.

Larry D. Hartwig, President and CEO, commented, “Second quarter results were very much as anticipated. Asset quality continues to remain excellent with not a single past due or non-performing loan as of quarter end. Loan growth during the quarter was robust as we continued to establish quality banking relationships throughout our market area. However, despite the significant increase in earning assets, rate cuts made by the Federal Reserve during the first half of the year, as well as the fiercely competitive pricing environment for local deposits, combined to maintain pressure on our net interest margin. Additionally, on a year-over-year basis our provision for possible loan losses increased commensurately with our loan growth. Non-interest expenses were also up on a year-over-year basis, principally the result of executing on our strategic plan to expand our footprint in and around San Diego’s North County marketplace. Most notably, on June 16^th we successfully opened our fourth full-service, de-novo branch in the City of Encinitas. We also recruited new leadership for our Miramar Branch strengthening our commitment to that market. Additionally, our mid-year 2007 strategic branch expansion within the Escondido marketplace contributed significantly to the year-over-year increase in non-interest expense. In summary, the combined expense of the strategic investments we have made in the long-term growth of our franchise has put us into a negative earnings position for the second quarter and first half of 2008.”

Hartwig further commented, “We are not involved in any way in the now infamous sub-prime residential loan markets. We remain focused on our relationship style of banking targeted toward small-to-medium size businesses, professionals, and high net worth individuals within our market area. Having now successfully built a four-branch network and operating infrastructure, we are well positioned to further grow the business and improve our financial performance results. We fully recognize the valuable contributions of our professional staff in this ongoing process. One building block at a time, we are methodically laying the foundation to create an outstanding community banking organization committed to providing our customers with 'Real Solutions. Personally Delivered.'”

California Community Bank is headquartered at 1320 West Valley Parkway in Escondido and currently operates 4 branches – Escondido, Encinitas, San Diego, and Vista, CA. For more information on the Bank, please visit www.calcommunitybank.com or call 760-888-1000.

The numbers in this press release are unaudited. Certain statements in this press release, including statements regarding the anticipated development and expansion of the Bank’s business, and the intent, belief or current expectations of the Bank, its directors or its officers, are “forward looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward looking statements. These risks and uncertainties include, but are not limited to, risks related to the local and national economy, the Bank’s performance, regulatory matters and those discussed in filings by the Bank with the Federal Deposit Insurance Corporation.

Condensed Statements of Financial Condition
($ in thousands)
Unaudited		6/30/2008			6/30/2007
Assets
Cash and Due from Banks		$ 4,648			$ 2,310
Federal Funds Sold		-			22,965
Investment Securities Available for Sale		13,244			-
Loans, Net of Deferred Fees and Costs		128,962			102,388
Allowance for Loan Losses		(1,517	)		(1,168	)
Net Loans		127,445			101,220
Other Assets		2,928			2,563
Total Assets		$ 148,265			$ 129,058
Liabilities and Shareholders' Equity
Deposits
Noninterest-Bearing		$ 24,894			$ 18,754
Interest-Bearing		93,642			86,555
Total Deposits		118,536			105,309
Federal Funds Purchased		1,065			-
Other Borrowings		5,000			-
Other Liabilities		760			761
Total Liabilities		125,361			106,070
Total Shareholders' Equity		22,904			22,988
Total Liabilities and Shareholders' Equity		$ 148,265			$ 129,058
Condensed Statements of Operations
($ in thousands, except per share amounts)
		Three Months Ended						Six Months Ended
Unaudited		6/30/2008			6/30/2007			6/30/2008			6/30/2007
Interest Income		$ 2,286			$ 2,282			$ 4,642			$ 4,513
Interest Expense		856			955			1,908			1,902
Net Interest Income		1,430			1,327			2,734			2,611
Provision for Loan Losses		94			47			159			101
Net Interest Income After Provision for Loan Losses		1,336			1,280			2,575			2,510
Noninterest Income		62			43			121			85
Noninterest Expense
Salaries and Employee Benefits		857			686			1,584			1,394
Occupancy and Equipment Expenses		306			224			574			449
Other Operating Expense		373			321			663			579
		1,536			1,231			2,821			2,422
Income Before Income Taxes		(138	)		92			(125	)		173
Income Taxes (Benefit)		1			(15	)		1			(44	)
Net Income (Loss)		$ (139	)		$ 107			$ (126	)		$ 217
Earnings (Loss) Per Share - Basic
Earnings (Loss) Per Share - Basic		$ (0.07	)		$ 0.05			$ (0.06	)		$ 0.10
Weighted Average Basic Shares		2,099,293			2,087,858			2,099,293			2,087,527
Net Interest Margin		4.00	%		4.24	%		3.84	%		4.19	%
Regulatory Capital Ratios		6/30/2008			6/30/2007
Total Capital (to Risk-Weighted Assets)		18.17	%		21.63	%
Required to be Well-Capitalized		10.00	%		10.00	%
Tier 1 Capital (to Risk-Weighted Assets)		17.03	%		20.55	%
Required to be Well-Capitalized		6.00	%		6.00	%
Tier 1 Capital (to Average Assets)		15.64	%		17.87	%
Required to be Well-Capitalized		5.00	%		5.00	%

California Community Bank, Escondido
Larry D. Hartwig, 760-888-1001
lhartwig@calcommunitybank.com