SOURCE: Beach Business Bank

April 28, 2008 21:28 ET

Beach Business Bank Reports Earnings for the Quarter

MANHATTAN BEACH, CA--(Marketwire - April 28, 2008) - Beach Business Bank (OTCBB: BBBC) (the "Bank") is pleased to report its results of operations for the first quarter of 2008. During the quarter, the Bank recorded after tax earnings of $207,000, an increase of 58.3% compared to the Bank's reported profitability in the 1st quarter of 2007. The financial results demonstrated 0.6% growth in net loans over the previous quarter, and 59.9% growth in net loans over the same quarter of the prior year. Deposit growth was 9.0% over the previous quarter, and 69.0% over the same quarter of the prior year. Total new loan commitments in the quarter amounted to almost $26 million. Non-interest bearing demand deposits totaled $26.2 million at quarter-end, an increase of 190.7% over the same period in 2007, and 34.0% over year-end 2007.

Robert Franko, president and chief executive of Beach Business Bank, commented, "We are very pleased to be able to report continued quarterly earnings in a tough economic environment. We have conscientiously watched our credit originations, while carefully monitoring our existing portfolio. In this quarter, we recruited my very experienced former colleague, Rafael Garcia, as senior vice president of credit risk management. Rafael has been proactively working with many of our clients to give them ideas of how to manage their businesses in challenging times. Rafael was instrumental in collecting the past due payments on a loan that had gone on non-accrual in the fourth quarter of 2007. Thanks to the efforts of our entire credit team, I am especially pleased to report that we had no loans more than 30 days past due at the end of the quarter."

Jim Gray, the co-chairman of the Bank's board of directors, commented, "We are pleased to be reporting another profitable quarter. The market for the sale of SBA loans opened up in this quarter, and the Bank took advantage of that opening to sell some of the guaranteed portions of these loans. In addition to creating non-interest income, this action also provided liquidity for our balance sheet. The Board and Management remain cautiously optimistic about this year. We have a very limited construction and acquisition portfolio, and a large segment of our credits are Commercial & Industrial, and owner-occupied commercial real estate loans. We did not originate or participate in the sub-prime mortgage market, and we do not have any sub-prime assets in our investment portfolio. We clearly value our strong capital position in these uncertain times."

The Bank provided $40,000 in the quarter to the Allowance for Loan & Lease Losses ("ALLL"), so that the ALLL now stands at about $2.6 million, approximately 1.40% of total loans. The guaranteed portion of SBA 7(a) and Express loans retained on the Bank's balance sheet at quarter end was approximately $5.5 million.

The Bank's net interest margin in the quarter was 4.22%, as the yield on floating rate loans declined more rapidly than the cost of the Bank's deposit liabilities. Severe deposit rate competition in the market has limited the Bank's ability to lower deposit rates as quickly as loan rates have declined.

The Bank charged off $5,600 during the quarter, representing the residual loss after collecting the remaining balance on one loan which had gone into default.

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, and should be available for review or downloading from the FDIC web site at 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, 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. The Bank makes a special effort to serve minority-owned businesses. For more information on the Bank, please visit 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.

                                      March 31,   December 31,  March 31,
                                        2008          2007        2007
                                     -----------  -----------  -----------
Balance Sheet Results (In
 thousands), except per share data:
   Total Assets                      $   228,011  $   213,936  $   149,365
   Gross Loans                       $   188,640  $   187,722  $   118,599
   Loans Held for Sale               $     3,178  $         -  $     2,942
   Allowance for Loan Losses         $     2,634  $     2,600  $     1,773
   Total Net Loans                   $   182,828  $   185,642  $   113,884
   Total Deposits                    $   188,141  $   172,685  $   111,361
   Other Real Estate Owned           $     3,864  $     3,864  $         -
   Total Shareholders' Equity        $    37,709  $    37,386  $    36,667
   Net Loans to Deposits                   98.86%      107.20%      102.27%
   ALLL to Loans HTM                        1.42%        1.39%        1.53%
   Equity to Assets                        16.54%       17.48%       24.55%
   Ending Shares outstanding           4,036,984    4,036,984    4,036,984
   Ending Book Value per Share       $      9.34  $      9.26  $      9.08

                                     Three Months Ended March,
                                         2008         2007
Quarterly and Year-to-Date Operating
 Results (In thousands):
   Net Interest Income               $     2,299  $     1,717
   Non-interest Income               $       255  $       486
   Non-interest Expense              $     2,306  $     1,864
   Income Before Provision & Taxes   $       247  $       339
   Provision for Loan Losses         $        40  $       208
   Income Tax Expense                $         -  $         -
   Net Income                        $       207  $       131
   Quarterly and YTD Return on
    Average Assets*                         0.38%        0.36%
   Quarterly and YTD Return on
    Average Equity*                         2.21%        1.43%
   Quarterly and YTD Net Interest
    Margin*                                 4.22%        4.94%
   Quarterly and YTD Efficiency
    Ratio*                                 90.32%       84.62%

*Percentages are reported on an annualized basis.
Source: FDIC quarterly Call Reports for Beach Business Bank for the periods

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