"Despite many positive indications on economic recovery, we are cautious to forecast the enduring economic and financial stabilization. There are still many prevailing uncertainties such as the rapid downward spiral of commercial real estate values, conclusion of the government stimulus programs, increasing unemployment rates and weak retail sales. Accordingly, we continue to focus on our defensive strategy with vigilant loan monitoring and early identification and resolution of problemed assets as well as building strong loan loss reserves."

3Q 2009 Results Compared to 2Q 2009

-- Net income was $307,000 or $0.09 per common share compared with a net loss of $435,000 or ($0.14) per common share.

-- Cost of funds decreased by 25 basis points to 2.17% and net interest margin improved by 24 basis points to 2.92%.

-- Non-interest income increased by $59,000 from recognition of gains on sale of SBA loans and an increase in other fee income.

-- Total assets decreased by 2.30% or $7.8 million to $330.7 million.

-- Total deposits decreased by 3.04% or $8.5 million to $270.3 million.

-- Gross loans increased by 0.9% or $2.3 million to $260.1 million.

-- ALLL decreased to 2.16% of gross loans, primarily due to charge-offs and pay-offs of loans previously placed in nonaccrual status.

-- NPL reduced to 0.84% from 2.10% of gross loans.

-- Net charge offs for the quarter decreased to 0.33% of average loans.

-- No OREOs or troubled debt restructuring.

-- Well capitalized with the leverage ratio of 14.5%, tier one capital ratio of 17.5% and total risk based capital ratio of 18.7%.

-- Tangible common equity to tangible assets of 12.3%.

-- Efficiency ratio decreased to 61.37% due to a reduction in non-interest expenses and increases in net interest income and non-interest income.

BALANCE SHEETS (Unaudited)
($ in thousands, expect per share amounts)
                                            September 30,      June 30,         September 30,
                                                 2009              2009              2008
Assets
Cash & due from banks                       $    4,049         $   4,411        $    5,473
Interest-bearing due from banks                  29,815            38,444            3,000
Fed funds sold                                   -                 3,320             15,810
Investment securities                            32,611            30,636            28,507
Loans, net of deferred fees                      260,098           257,839           238,377
Allowance for loan losses                        (5,611  )         (5,928  )         (3,467  )
Net loans                                        254,487           251,911           234,910
Premises and equipments, net                     1,436             1,523             1,743
Accrued interest receivable                      1,089             985               1,063
Customer liability on acceptances                482               187               -
Other assets                                     6,759             7,085             5,341
Total Assets                                $    330,728       $   338,502      $    295,847
Liabilities and Shareholders' Equity
Noninterest-bearing deposits                $    35,236        $   37,172       $    31,148
Interest-bearing deposits                        235,071           241,603           211,042
Total deposits                                   270,307           278,775           242,190
FHLB advance                                     9,000             9,000             9,000
Accrued interest payable                         886               971               997
Bank liability on acceptances                    482               187               -
Other liabilities                                1,319             1,386             1,736
Total Liabilities                                281,994           290,319           253,923
Total shareholders' equity                       48,734            48,183            41,924
Total Liabilities and Shareholders' Equity  $    330,728       $   338,502      $    295,847
Book value per common share                 $    13.24         $   13.07        $    13.53

STATEMENTS OF INCOME (Unaudited)
($ in thousands, except per share amounts)
                            Three Months Ended
                            Sept. 30, 2009    June 30, 2009     Sept. 30, 2008
Interest income             $    3,937        $    3,774        $    4,256
Interest Expense                 1,532             1,650             1,854
Net interest income              2,405             2,124             2,402
Provision for loan losses        602               1,482             628
Non interest income              606               547               311
Non interest expense             1,848             1,899             1,771
Income before income taxes       561               (710   )          314
Provision for income taxes       254               (275   )          160
Net income                  $    307          $    (435   )          154
Basic EPS                   $    0.09         $    (0.14  )     $    0.05
Diluted EPS                 $    0.09         $    (0.14  )     $    0.05
INCOME STATEMENT RATIOS
Return on average assets         0.37   %          -0.54  %          0.21  %
Return on average equity         2.50   %          -3.58  %          1.45  %
Net interest margin              2.92   %          2.68   %          3.41  %
Efficiency ratio                 61.37  %          71.10  %          66.55 %
                            Nine Months Ended
                            September 30
                                 2009              2008
Interest income             $    11,384       $    12,839
Interest expense                 4,792             5,848
Net interest income              6,592             6,991
Provision for loan losses        3,407             1,274
Non interest income              1,469             1,296
Non interest expense             5,513             5,513
Income before income taxes       (859   )          1,500
Income tax provision             (319   )          663
Net income                  $    (540   )     $    837
Basic EPS                   $    (0.19  )     $    0.27
Diluted EPS                 $    (0.19  )     $    0.26
INCOME STATEMENT RATIOS
Return on average assets         -0.23  %          0.41   %
Return on average equity         -1.49  %          2.67   %
Net interest margin              2.81   %          3.49   %
Efficiency ratio                 68.39  %          66.94  %

The Bank's Call Reports are available for review or download directly from the FDIC website at www.fdic.gov, or through the link at the Bank's website at www.cwbbank.com.

This press release contains certain forward-looking information about Commonwealth Business Bank that is intended to be covered by the safe harbor for "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements, and include statements related to the bank's outlook. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of Commonwealth Business Bank. Commonwealth Business Bank cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, or implied or projected by, such forward-looking statements. Risks and uncertainties include, but are not limited to, revenues that are lower than expected and credit quality deterioration which could cause an increase in the provision for credit losses.

These forward-looking statements involve known and unknown risks, uncertainties and factors such as: changes in consumer spending, borrowing and savings habits, technological changes, the cost of additional capital is more than expected, a change in the interest rate environment reduces interest margins, asset/liability repricing risks and liquidity risks, general economic conditions, particularly those affecting real estate values, either nationally or in the market areas in which Commonwealth Business Bank does or anticipates doing business, including the possibility of a U.S. recession, a slowdown in construction activity, recent volatility in the credit or equity markets and its effect on the general economy, loan delinquency rates, the ability of Commonwealth Business Bank to retain customers, demographic changes, demand for the products or services of Commonwealth Business Bank as well as its ability to attract and retain qualified people, competition with other banks and financial institutions, and other factors. If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, Commonwealth Business Bank's results could differ materially from those expressed in, or implied or projected by such forward-looking statements. Commonwealth Business Bank assumes no obligation to update such forward-looking statements.

SOURCE: Commonwealth Business Bank

Commonwealth Business Bank 
K. Kaye Kim, CFO, 323-988-3007 
Kayek@cwbbank.com

The president of First Business Bank, Nathan Rogge, said that the current economic and regulatory environment "presented unanticipated complications that could not be overcome, given the structure of the transaction".

The two banks are considering alternative transactions that could be mutually beneficial.

Comments on this story may be sent to admin@m2.com

First Business Bank has signed a definitive agreement to merge with 1st Pacific Bank.

Under the terms of agreement, each outstanding share of 1stPacific Bancorp will receive $1.4 per share in cash valued worth approximately $7 million in total and a percentage of the recoveries of certain charged-off loans and a lawsuit. The transaction is expected to close in the fourth quarter of 2009.

Keefe, Bruyette & Woods, Inc. is acting as financial advisor and Horgan, Rosen, Beckham & Coren, L.L.P as legal advisor to First Business Bank. Sandler O'Neill + Partners, L.P. is acting as financial advisor and Luce, Forward, Hamilton & Scripps LLP as legal advisor to 1stPacific Bancorp.

Deal Type   Merger
Deal Status Terminated: 2009-10-28

Deal Participants

Target 1 (Company) 1st Pacific Bank of California
Target 2 (Company) First Business Bank, N.A.

At September 30, 2009, the Bank's regulatory capital measurements, the measures of a Bank's core strength, stood at Total Risk-based Capital Ratio of 17.28% for the Bank, compared to the regulatory minimum of 10.0% to be "Well Capitalized." The Bank's other regulatory Capital measurements also continued to be significantly above the regulatory minimums for Well Capitalized with the Bank's Tier 1 Risk-Based Capital of 16.00%, compared to the regulatory minimum of 6.0%, and the Bank's Tier 1 Leverage Ratio of 13.33%, compared to the regulatory minimum of 5.0%. The Bank's common shareholder equity, or tangible book value, stands at $28.7 million or $7.10 per share.

Robert Franko, President and Chief Executive Officer commented, "We are most fortunate that our strong capital base and cohesive management and board have equipped us to deal with the very difficult financial environment and unique opportunities that community banks are still facing as a result of the worst recession since the 1930's. Anecdotal evidence among our client base gives us hope that the situation is beginning to turn around. We are cautiously optimistic about the future, although we still see double digit unemployment in California. We also see hopeful signs in the Federal Reserve Bank's recent pronouncement that, "The recession that began in the fourth quarter of 2007 appears to be over". We find particular comfort in President Obama's support of proposed changes to the SBA loan programs, which are so important in providing the capital small businesses need to generate quality, private-sector jobs. It appears that the money that has been available to Wall Street for months now is finally starting to find its way to Main Street. We are particularly proud that throughout this crisis, Beach Business Bank has continued to lend money to keep America's small businesses functioning. Just in the last 3 months, we originated $10.4 million in new loan commitments. In a little over 5 years, our Bank has originated $556 million in new loan commitments, mostly to provide needed capital to America's small businesses. We believe that just Beach Business Bank's efforts alone have directly created thousands of private-sector jobs in America. Strengthening the Bank's reserves at this time allows us to better deal with lingering problems in the economy, so that we can continue to look forward and continue to serve the financial needs of our customers and the communities we serve."

The Bank was proud to announce this quarter that Jim Gray, the Bank's co-chairman, is one of only 15 members across the United States, and the only member from California, appointed to the FDIC's Advisory Committee on Community Banking. The Advisory Committee members provide the FDIC with advice and recommendations on a broad range of policy issues that have particular impact on community banks from around the nation.

Mr. Gray commented, "Two thirds of the Directors on our Bank Board are experienced bankers who have been through crises like this before. They know that the economy does not turn in an instant, which is why we have decided to increase our Loan Loss Reserves at this time. We have built up one of the strongest core deposit banks in our peer group. We believe that our Liquidity and our strong Capital position, including our Loan Loss Reserves, allow us to take this fiscally conservative action during these challenging times. Our constant goal is to be a source of banking strength for our small business clients and the communities we serve."

The Bank increased the Allowance for Loan & Lease Losses (ALLL) to $6.8 million, or 3.5% of loans outstanding at the quarter end, a significant portion as a qualitative addition to the ALLL.

Other selected financial data is included in the table below.

Financial statements in the form of the Bank's Call Report, as filed with the FDIC, will be available on the Bank's web site at www.beachbusinessbank.com, and should be available for review or downloading from the FDIC web site at www.fdic.gov in approximately four weeks. Beach Business Bank is headquartered at 1230 Rosecrans Avenue, Lobby Level, in Manhattan Beach, and has a second full-service office at 180 E. Ocean Blvd. in Long Beach, CA. The Bank is first and foremost a community business bank serving Los Angeles, Long Beach, and the South Bay area residents and businesses. The Bank also has a division named The Doctors Bank(R), which serves physicians and dentists nationwide. In addition, Beach Business Bank provides loans to small businesses, focused around the SBA 7(a), 504, and Express lending programs. For more information on the Bank, please visit www.beachbusinessbank.com or call 866-862-3878 or 310-536-2260; in Long Beach, call 562-435-8600.

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995:

The financial information in this press release is based on our unaudited financial results. Certain statements in this press release, including statements regarding the anticipated development and expansion of the Bank's business, and the intent, belief, and 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). Such forward-looking statements are subject to risks and uncertainties and therefore the Bank's actual results may differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties that the Bank is subject to include, but are not limited to, risks related to the local and national economy, including fluctuations in interest rates and costs and changes in economic policy; the ability of the Bank to perform in accordance with its plans; competition; regulatory matters; and other risks detailed in its filings with the State of California Department of Financial Institutions and the Federal Deposit Insurance Corporation. The Bank cautions readers not to place undue reliance on any forward-looking statements. The Bank does not undertake, and specifically disclaims any obligation, to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

Summary Financial Information
The following tables present relevent financial data from Beach Business
Bank's recent performance.
                                   September 30, December 31, September 30,
                                         2009         2008         2008
                                     -----------  -----------  -----------
Balance Sheet Results (In
 thousands), except per share data:
       Total Assets                  $   254,883  $   231,022  $   221,846
       Gross Loans                   $   193,518  $   199,315  $   187,586
       Loans Held for Sale           $     4,285  $     1,780  $     1,567
       Allowance for Loan Losses     $     6,819  $     5,104  $     4,292
       Total Net Loans               $   182,414  $   192,431  $   181,727
       Total Deposits                $   211,702  $   173,689  $   176,244
       Other Real Estate Owned       $     2,399  $     2,500  $     3,364
       Preferred Stock               $     6,018  $         -  $         -
       Common Stock                  $    28,680  $    34,409  $    33,988
       Total Shareholders' Equity    $    34,698  $    34,409  $    33,988
       Net Loans to Deposits               86.17%      110.79%      104.00%
       ALLL to Loans HTM                    3.60%        2.58%        2.31%
       Equity to Assets                    13.61%       14.89%       15.32%
       Ending Shares outstanding       4,036,984    4,036,984    4,036,984
       Ending Book Value per Common
        Share                        $      7.10  $      8.52  $      8.42
                                              Three Months Ended
                                   September 30, December 31, September 30,
                                         2009         2008         2008
                                     -----------  -----------  -----------
Quarterly Operating Results (In
 thousands):
       Net Interest Income           $     2,041  $     2,450  $       716
       Non-interest Income           $       122  $       284  $        56
       Non-interest Expense**        $     3,208  $     1,632  $       701
       Income Before Provision &
        Taxes                        $    (1,045) $     1,102  $        71
       Provision for Loan Losses     $     4,850  $       812  $        30
       Income Tax Expense            $         -  $         -  $         -
       Net Income                    $    (5,895) $       290  $        41
       Quarterly Return on Average
        Assets*                            -9.08%        0.50%        0.08%
       Quarterly Return on Average
        Equity*                           -58.12%        3.39%        0.49%
       Quarterly Net Interest
        Margin*                             3.33%        4.37%        4.25%
       Quarterly Efficiency Ratio*        148.34%       59.70%       90.82%
                                       Nine Months Ended
                                   September 30,  September 30,
                                         2009         2008
                                     -----------  -----------
YTD Operating Results (In
 thousands):
       Net Interest Income           $     6,411  $     6,422
       Non-interest Income           $       558  $       699
       Non-interest Expense**        $     7,741  $     8,812
       Income Before Provision &
        Taxes                        $      (773) $    (1,692)
       Provision for Loan Losses     $     4,920  $     1,974
       Income Tax Expense            $         -  $         -
       Net Income                    $    (5,693) $    (3,666)
       YTD Return on Average Assets*       -2.30%       -1.69%
       YTD Return on Average Equity*      -14.24%      -10.07%
       YTD Net Interest Margin*             3.56%        4.08%
       YTD Efficiency Ratio*              111.10%      123.76%
       YTD Efficiency Ratio (Absent
        OREO Charges)                     108.70%       89.15%
       ** Includes FDIC Special
        Assessment                   $       132            -
       *Percentages are reported on an annualized basis.
       Source: FDIC quarterly Call Reports for Beach Business Bank for
       the periods indicated.

Contact:
Beach Business Bank
Robert M. Franko
310-802-2910
Email Contact
or
Melissa Lanfre
310-802-2919
Email Contact

SOURCE: Beach Business Bank

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