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Community Business Bank: Community Business Bank Reports Payment of Capital Purchase Program Dividend to Treasury

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  Published in Business and Finance on Friday, May 22nd 2009 at 6:38 GMT, Last Modified on 2009-05-22 06:39:25 by Market Wire
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WEST SACRAMENTO, CA--(Marketwire - May 22, 2009) - Community Business Bank (OTCBB: [ CBBC ]) today reported payment of its first dividend to the U.S. Treasury as part of its participation in the Capital Purchase Program (CPP), designed to provide additional capital to healthy financial institutions. Community Business Bank received $3.9 million in funding from the Treasury in February 2009. The Treasury acknowledged that Community Business Bank was a healthy institution in its decision to provide CPP funds to the Bank.

The Bank issued preferred stock that pays a return to the Treasury of approximately five percent annually, representing a cost-effective financing method for the Bank.

"The Treasury took an important step to restore normalcy and stability in the banking arena and it was a prudent strategy by the Bank to accept funds from the Treasury to protect its shareholders and provide growth capital at a reasonable cost," said John A. DiMichele, President and Chief Executive Officer.

This additional capital will allow the Bank to contribute to the economic recovery in several ways, including the following:

1. Continue to lend to qualified borrowers in a time when credit is difficult to get even for credit-worthy clients.

2. Provide additional capital to protect against dropping real estate valuations and present additional flexibility in difficult times. The Bank was well-capitalized by regulatory definition before receipt of the CPP capital. However, management and the board felt that acceptance of these funds was practical due to current uncertainty in the real estate markets.

3. Expand the Bank's SBA 504 and 7a loan programs. Community Business Bank has both the experience and knowledge to continue this lending, which will help its primary target customer and the majority of its existing clientele, the small local businesses.

4. Acquire a branch or a small bank in the bank's market area. According to management, there are now, and will be more troubled institutions that will not be able to maintain their independence due to problem loans and other risks. Community Business Bank intends to pursue opportunities that will make the company stronger by providing liquidity without taking on excessive risk with additional troubled loans. This objective will also meet the spirit of the CPP program by assisting the regulators in dealing with a potentially failing institution that could be mitigated by joining forces with a well-capitalized bank such as Community Business Bank. It would create one strong institution that could provide additional credit facility to its community.

About Community Business Bank

The Bank's market area includes the greater Yolo, Solano, Sacramento, Placer, San Joaquin and contiguous counties. The Bank focuses on and provides highly personalized commercial banking services to businesses, professionals and non-profit organizations. Call Reports for the Bank 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.communitybizbank.com ]. If you have any further questions regarding this Press Release or other areas, please contact Mark Day, Chief Financial Officer, at 916-830-3582.

Forward Looking Statement

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 Company's defined market, (4) the Company's ability to sustain its internal growth rate and to preserve its earning assets quality, and (5) government regulations. Although the Company 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.