LOS ANGELES, Aug 01, 2008 (BUSINESS WIRE) ----Commonwealth Business Bank (OTCBB:CWBB) today reported diluted earning per share of $0.08 for the second quarter 2008, compared to $ 0.13 for both the first quarter 2008 and the second quarter 2007.

"Our core operating income (excluding the impact of provision for credit losses) for the second quarter 2008 was better than the first quarter," noted Wun Hwa (Jack) Choi, President & CEO. "First quarter noninterest income included a gain on sale of the unguaranteed portion of the SBA loans which we recorded for the first time. Our service charge and fee income for the second quarter were higher than that of the preceding quarter."

At June 30, 2008, total assets were $287.9 million compared to $272.4 million in the first quarter and $228.3 million for the first quarter of 2007. Gross loans increased by $10.3 million or 4.7 percent to $230.2 million at June 30, 2008, compared to $219.9 million at March 31, 2008 and by $65.8 million when compared to $164.4 million reported in the first quarter of 2007. Total deposits increased by $15.5 million or 7.1 percent to $234.6 million as of June 30, 2008, from $219.1 million reported last quarter. Total deposits increased by $49.5 million or 26.7 percent when compared to $185.1 million reported in the first quarter of 2007.

For the three months ended June 30, 2008, net interest income before provision for credit losses totaled $2.32 million, compared to $2.27 million for the preceding quarter. While loan volume grew, the net interest margin experienced further compression at 3.48 percent compared to 3.58 percent reported in the previous quarter. Although our service charges and fee income increased, the total noninterest income decreased to $354,000 from $631,000 reported in the first quarter. This was due to an unordinary gain on sale of the unguaranteed portion of the SBA loans that was booked during the first quarter. Noninterest expenses also increased by $142,000 or 7.9 percent to $1.9 million as the Bank continued to expand and hired additional manpower. The expenses for the credit losses, however, decreased by $128,000 or to $259,000 when compared to the previous quarter. Net income for the second quarter of 2008 was $261,000, compared with $422,000 reported for the first quarter 2008. Return on average assets (ROA) and return on average equity (ROE) for the second quarter of 2008 decreased to 0.38 percent and 2.51 percent, respectively, from 0.65 percent and 4.07 percent, respectively, of the first quarter 2008.

For the six months ended June 30, 2008, net interest income totaled $4.59 million, compared to $ 4.58 million reported in the corresponding period in 2007. Noninterest income in the first six months of 2008 increased to $985,000 from $820,000 of the comparable period in 2007. Noninterest expense for the first six months of 2008 also increased to $3.7 million, compared with a $3.5 million increase in the corresponding period in 2007. However, non-interest expense as a percentage of average earning assets in the first six month of 2008 was lower at 2.91 percent, compared with 3.36 percent for the same period a year ago. We reserved $646,000 in provision for credit losses during the first half of 2008. This represented an increase of $294,000 compared to the corresponding period a year ago. Net income for the six-month period in 2008 totaled $683,000, equal to $0.21 per diluted share. This compared to net income of $1,005,000, or $0.32 per diluted share, in the same period of 2007. This was primarily due to an increase in provision for credit losses and overhead expenses. ROA and ROE for the first half of 2008 equaled 0.51 percent and 3.29 percent, respectively. For the first six months of 2007, ROA and ROE was 0.94 percent and 5.08 percent, respectively.

"During the second quarter, financial institutions continued to be challenged by pervasive asset quality problems and dwindling profitability. Unfortunately, the problem is far from over," commented CEO and President Wun Hwa (Jack) Choi. "Despite the slowing economy and the adverse financial condition, our asset quality remains sound. Given the overall market conditions, I am pleased with our second quarter performance. Our core operating income and total assets grew moderately. Also, the launching of our third branch in Irvine has been successful. We continue to be vigilant in monitoring our credit portfolio in consideration of further deterioration in macro economic conditions. Until the real estate market stabilizes, we will remain cautious. With the expertise of our seasoned staff, I am certain that we have the capability and acumen to overcome the challenges," said Wun Hwa (Jack) Choi, President and CEO.

Mr. Choi added that "We are optimistic about the regulatory approval of the Hana Financial Group's investment. We are putting a concerted effort towards expediting the approval process and although currently the exact date is unknown, we expect to conclude the deal soon."

 BALANCE SHEETS (Unaudited) ($ in thousands) As of As of As of 06/30/2008 3/31/2008 06/30/2007 Cash &
   Due From Banks $ 8,479 $ 3,666 $ 4,770 Interest-Bearing Due From Banks 0 0 4,455 Fed Funds Sold 13,270 13,500 23,350 Investment
   Securities 30,795 30,068 27,513 Loans, net of Deferred Fees 230,225 219,925 164,422 Allowance for Loan Losses (2,874) (2,734)
   (1,669) Net Loans 227,351 217,191 162,753 Premises and Equipments, Net 1,804 1,751 1,538 Accrued Interest Receivable 1,079
   1,199 1,074 Customer Liability on Acceptances 37 435 565 Other Assets 5,071 4,559 2,328 TOTAL ASSETS $ 287,886 $272,369 $
   228,346 Non-interest-Bearing Deposits $ 32,696 $ 27,552 $ 24,683 Interest-Bearing Deposits 201,901 191,507 160,458 Total Deposits
   234,597 219,059 185,141 FHLB Advance 9,000 9,000 0 Accrued Interest Payable 1,303 1,113 1,094 Bank Liability on Acceptances
   37 435 565 Other Liabilities 1,297 1,293 1,226 TOTAL LIABILITY 246,234 230,900 188,026 Total Shareholders' Equity 41,652 41,469
   40,320 TOTAL LIAB & SHAREHOLDERS' EQUITY $ 287,886 $272,369 $ 228,346 

 STATEMENTS OF INCOME (Unaudited) ($
   in thousands, except per share amounts) Three Months Ended 06/30/2008 3/31/2008 06/30/2007 ---------- --------- ----------
   Interest Income $ 4,207 $ 4,376 $ 4,329 Interest Expense 1,884 2,110 1,927 Net Interest Income 2,323 2,266 2,402 Provision
   for Loan Losses 259 387 35 Non Interest Income 354 631 414 Non Interest Expense 1,942 1,800 1,817 Income Before Income Taxes
   476 710 964 Income Tax Provision 215 288 524 NET INCOME 261 422 440 Basic EPS 0.08 0.14 0.14 Diluted EPS 0.08 0.13 0.13 INCOME
   STATEMENT RATIOS ROA 0.38% 0.65% 0.80% ROE 2.51% 4.07% 4.37% Net Interest Margin 3.48% 3.58% 4.52% Efficiency Ratio 72.54%
   62.13% 64.52% 

 STATEMENTS OF INCOME (Unaudited) ($ in thousands, except per share amounts) Six Months Ended 06/30/2008
   06/30/2007 ---------- ---------- Interest Income $ 8,583 $ 6.994 Interest Expense 3,994 3.707 Net Interest Income 4,589 4,577
   Provision for Loan Losses 646 294 Non Interest Income 985 820 Non Interest Expense 3,742 3,480 Income Before Income Taxes
   1,186 1,623 Income Tax Provision 503 618 NET INCOME 683 1,005 Basic EPS 0.22 0.33 Diluted EPS 0.21 0.32 INCOME STATEMENT RATIOS
   ROA 0.51% 0.94% ROE 3.29% 5.08% Net Interest Margin 3.56% 4.41% Efficiency Ratio 67.13% 64.48% 

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.

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve known and unknown risks, uncertainties and factors such as: (1) the impact of changes in interest rates, (2) fluctuation in economic conditions, (3) competition in the Bank's defined market, (4) the Bank's ability to sustain its internal growth rate and to preserve its earning assets quality, and (5) government regulations. Although the Bank believes the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct.

SOURCE: Commonwealth Business Bank

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

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