CULVER CITY, Calif., Aug 15, 2008 (BUSINESS WIRE) ----Alliance Bancshares California, (OTC BB: ABNS) the holding company for Alliance Bank, released its quarterly operating results.

Curtis S. Reis, Chairman and Chief Executive Officer, stated, "While I believe that the real estate market decline is nearing its bottom, this has been one of the most difficult periods in my 50 years of banking. For many banks it has been the so-called 'perfect storm.' The sequence of events includes collapsing real estate values, shrinking interest margins, a weakening economy, massive government deficits due, in great part, to long expensive wars and low consumer confidence. While we at Alliance don't like it, we have decided to deal with our share of the problems head on."

Following an extensive review of our loan portfolio, we identified a large number of loans where the appraised value of the property was below the carrying value of the related loan. Thus, for those loans that were considered to be impaired, we have chosen to charge off or write down each of these loans in the second quarter. This amounted to $25 million against our total loan portfolio of over $900 million. We have also added $29.6 million to our allowance for loan losses to increase it to approximately 2% of gross loans. All this resulted in a second quarter loss of $15.3 million versus a profit of $2.2 million one year earlier. For the six months ended June 30, 2008, we lost $14.7 million versus a profit of $4.0 million for the same period in 2007.

Total assets were $1.1 billion as of June 30, 2008 as compared to $985 million one year earlier. Total net loans reached $902 million at June 30, 2008 up from $826.7 million a year earlier.

Although we believe that most of our problem loans have been identified, we do expect credit losses in our residential construction and land development portfolios to remain at elevated levels throughout 2008 and into 2009 as compared to the past. Obviously, there can be no assurances that real estate prices will not go lower. We have improved our net liquid asset position to an amount in excess of $100 million. We have also engaged Stifel Nicolaus & Company Incorporated and Wunderlich Securities, Inc. as our financial advisors to assist us in raising additional capital. We believe that this capital will help us resume more normal growth when we see the economy turning upward.

As previously reported, Alliance Bank began curtailing the origination of construction loans over one year ago and as a result, these loans continue to diminish as a percent of our total loan portfolio. One year ago, construction loans totaled $284 million or 36% of our loan portfolio. As of June 30, 2008, construction loans were down to $208 million or about 22.6% of total loans.

Alliance Bank has total capital and reserves of about $87 million. We do not expect any significant growth until we see real improvement in the economic climate. In light of the weak business environment, the Bank has moved aggressively to reduce expenses. Staff levels peaked in the Fall of 2007 at 157 employees and will have declined to approximately 130 in the third quarter. This, coupled with a variety of planned measures, should result in a reduced annual expense run rate of about $3.5 million. We were able to consolidate and centralize a number of dispersed functions to our Irvine location at the end of June which helped to reduce staff and improve efficiencies.

Fortunately, our core businesses, the five regional banking centers, healthcare banking, asset based lending and the SBA Department are all performing well. These profit centers represent over 65% of our loan portfolio and about $500 million of our core deposits. Our emphasis will continue to be on these areas going forward.

Alliance Bancshares California is holding company of Alliance Bank. Alliance Bank is one of the leading independent business banks headquartered in Southern California. Alliance Bank offers a wide range of financial solutions tailored to meet the needs of small to mid-sized businesses, professionals and executives. Alliance Bank's strategy focuses on delivering progressive products and services including deposit and cash management services as well as commercial, small business, asset-based, construction and real estate financing. Founded in 1980, Alliance Bank has regional banking centers in Culver City, Irvine, Woodland Hills, Burbank and West Los Angeles. Find Alliance Bank on the Web at www.allbank.com.

Statement in the news release that are not historical facts or which refer to Company's expectations or beliefs constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements regarding the Company's future performance or financial condition are based on current information and are subject to a number of risks and uncertainties that could cause actual results to differ significantly from those expected at this time. These risks and uncertainties relate to such matters as, but are not limited to: increased competition from other financial institutions; changes in local national economic conditions and changes in Federal Reserve Board monetary policies, which could cause interest rates to increase, and loan demand to decline, and thereby reduce net margins and operating results; increased government regulation, which could increase the cost of operations; the Company's ability to successfully enter new markets or introduce new financial products or services; the costs and the possible adverse impact on operating results of planned growth and expansion; and continued performance of the Company's loan portfolio.

These, as well as other factors and uncertainties, are discussed in greater detail in the Company's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Readers are urged to review those reports and are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this news release. The Company also disclaims any obligation to update forward-looking statements whether as a result of new information, future events, or otherwise.

 CONSOLIDATED
   STATEMENTS OF FINANCIAL CONDITION June 30, -------------------- 2008 2007 ---------- -------- (Dollars in thousands) Assets
   Cash and due from banks $ 23,822 $ 18,697 Federal funds sold 39,460 17,155 ---------- -------- Total cash and cash equivalents
   63,282 35,852 Time deposits with other financial institutions 2,015 1,207 Securities held to maturity, fair market value $117,251
   at June 30, 2008; $100,190 at June 30, 2007 117,516 100,617 Loans held for sale 2,983 51,589 Loans, net of the allowance for
   loan losses of $18,491 at June 30, 2008; $11,242 at June 30, 2007 899,145 775,069 Equipment and leasehold improvements, net
   4,510 4,635 Accrued interest receivable and other assets 30,337 16,314 ---------- -------- Total assets $1,119,788 $985,283
   ========== ======== Liabilities, Redeemable Preferred Stock and Shareholders' Equity Deposits: Noninterest bearing demand
   $ 150,578 $153,878 Interest bearing: Demand 8,619 17,803 Savings and money market 191,554 205,503 Certificates of deposit
   553,774 425,484 ---------- -------- Total deposits 904,525 802,668 Accrued interest payable and other liabilities 4,833 5,623
   Securities sold under agreements to repurchase 70,908 22,099 FHLB advances 70,000 70,000 Junior subordinated debentures 27,837
   27,837 ---------- -------- Total liabilities 1,078,103 928,227 ---------- -------- Commitments and contingencies -- -- Redeemable
   Preferred Stock -- 19,016 ---------- --------- Shareholders' Equity: Serial preferred stock, no par value: Authorized--20,000,000
   shares 7% Series A Non-Cumulative Convertible Non- Voting: Authorized and outstanding--733,050 shares at June 30, 2008 7,697
   -- 6.82% Series B Non-Cumulative Convertible Non- Voting: Authorized and outstanding--667,096 shares at June 30, 2008 11,319
   -- Common stock, no par value: Authorized--20,000,000 shares; Outstanding-- 6,177,979 shares at June 30, 2008; 6,166,879 shares
   at June 30, 2007. 6,722 6,679 Additional paid-in capital 1,369 818 Undivided profits 14,578 30,543 ---------- -------- Total
   shareholders' equity 41,685 38,040 ---------- -------- Total liabilities, redeemable preferred stock and shareholders' equity
   $1,119,788 $985,283 ========== ======== 

 CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) Three Months Ended Six
   Months Ended June 30, June 30, ------------------ ------------------ 2008 2007 2008 2007 --------- ------- --------- -------
   (Dollars in thousands except earnings per share) Interest Income: Interest and fees on loans $ 14,454 $18,240 $ 31,646 $35,745
   Interest on time deposits with other financial institutions 17 20 33 39 Interest on securities held to maturity 1,547 1,246
   2,992 2,489 Interest on federal funds sold 216 759 534 1,167 --------- ------- --------- ------- Total interest income 16,234
   20,265 35,205 39,440 --------- ------- --------- ------- Interest Expense: Interest on deposits 7,616 7,642 15,641 14,629
   Interest on FHLB advances 574 679 1,262 1,357 Interest on securities sold under repurchase agreements 336 253 746 473 Interest
   on junior subordinated debentures 339 512 792 1,020 --------- ------- --------- ------- Total interest expense 8,865 9,086
   18,441 17,479 --------- ------- --------- ------- Net interest income before provision for loan losses 7,369 11,179 16,764
   21,961 Provision for Loan Losses 27,800 1,074 29,610 2,139 --------- ------- --------- ------- Net interest income(expense)
   (20,431) 10,105 (12,846) 19,822 Non-Interest Income: 1,122 774 1,742 1,395 Non-Interest Expense: Salaries and related benefits
   3,546 4,239 7,702 8,412 Occupancy and equipment expenses 1,055 935 2,136 1,880 Professional fees 469 419 840 707 Data processing
   249 220 475 431 Other operating expense 1,354 1,473 2,651 2,886 --------- ------- --------- ------- Total non-interest expense
   6,673 7,286 13,804 14,316 --------- ------- --------- ------- Earnings (Losses) Before Income Tax Expense (25,982) 3,593 (24,908)
   6,901 Income tax expense (10,692) 1,428 (10,191) 2,867 --------- ------- --------- ------- Net Earnings(Loss) $(15,290) $
   2,165 $(14,717) $ 4,034 ========= ======= ========= ======= Earnings per Common Share: Basic earnings (loss) per share $ (2.53)
   $ 0.30 $ (2.49) $ 0.55 Diluted earnings (loss) per share $ (2.53) $ 0.28 $ (2.49) $ 0.53 

To receive a copy of our financial reports or to be put on the Company's mailing list, please contact Cindy Walters, Senior Vice President/Director of Marketing at (949) 223-4910 or by email at cwalters@allbank.com. A better way to bank

SOURCE: Alliance Bancshares California

Alliance Bancshares California Dan Erickson, 310-258-9302 Executive Vice President Chief Financial Officer
   or Cindy Walters, 949-223-4910 Senior Vice President Director of Marketing 

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