Business Bancorp Announces Record Earnings and Growth in the First Quarter.

Business Editors

SAN BERNARDINO, Calif.--(BUSINESS WIRE)--April 19, 2000

Business Bancorp (OTC BB:BZBCE), the parent company of Business Bank of California (www.businessbank.com), Wednesday reported record first quarter earnings and substantial growth.

Net income for the quarter ended March 31, 2000 was a record $526,000. This represents an increase of $71,000 or 16% over earnings of $455,000 reported for the same period in 1999. Basic earnings per share for the quarter increased to $.27, up from $.23 per share as of March 31, 1999. Total assets increased 30% to a record high of $243,863,000, compared to total footings of $187,546,000 one year earlier.

Deposit and loan growth reported for the period strongly supports the institution's favorable performance trend. Total deposits as of March 31, 2000 stood at $196,988,000. This represents an increase of 17% over deposits of $168,493,000 reported at the end of the first quarter of 1999. Loans increased to $123,553,000, reflecting an increase of 19% over the total reported as of March 31, 1999.

Alan J. Lane, president and CEO of Business Bancorp commented on the company's record growth during the first quarter. He stated that "Careful management of the company's strategic plan over the first quarter has resulted in deposit growth that represents unprecedented highs for the institution and loan growth that exceeds last year's performance as well as corporate goals for the quarter."

He continued, "Our ability to surpass performance objectives for the first three months of 2000 supports two key strategic goals by enhancing shareholder value and positioning us to move ahead with acquisition plans announced earlier this month."

On April 5, 2000, Business Bancorp announced a definitive agreement to merge with Valley Merchants Bank, N.A. of Hemet, California. Lane's announcement, made jointly with Charles D. Rogness, president and CEO of Valley Merchants Bank, cited "location, shareholder value and similar business lines as favorable factors in the strategic partnership."

The addition of the Valley Merchants Bank office in Hemet will bring the total number of Business Bank of California branch offices to eight.

Business Bancorp reports a Tier 1 capital ratio of 9.20% as of March 31, 2000. This is due, in part, to a strategic decision to issue $10 million of Fixed Rate Capital Trust Pass-through Securities to support expansion plans and add franchise value to the organization without diluting shareholder equity. It also helps to ensure that the organization will retain its "well capitalized" designation under banking regulations.

Business Bank of California has served the Inland Empire since 1984. In addition to the proposed acquisition in Hemet, the Bank operates seven other branches in the cities of San Bernardino, Corona, Ontario, Redlands, Hesperia and Phelan. The Bank is strongly focused on providing high quality, personalized services to small businesses, professionals and consumers. Visit Business Bank of California on the Internet at www.businessbank.com. Information regarding Business Bancorp stock can be obtained on the OTC bulletin board utilizing the symbol (BZBCE).

                         Financial Highlights
                              (Unaudited)


                                        03/31/00              03/31/99


1st Quarter Net Income                 $ 526,000             $ 455,000
Net Income Year to Date                $ 526,000             $ 455,000
Total Assets                       $ 243,863,000         $ 187,546,000
Total Deposits                     $ 196,988,000         $ 168,493,000
Total Loans                        $ 123,553,000         $ 103,488,000
Total Capital                       $ 19,256,000          $ 17,585,000
Loan Loss Reserve                    $ 1,299,000           $ 1,353,000


Non Performing Loans                   $ 404,000           $ 1,258,000
Other Real Estate Owned                $ 741,000             $ 962,000
Total Non Performing Assets          $ 1,145,000           $ 2,220,000
Non Perf Assets / Total Assets               0.5%                  1.2%


Tier 1 Leverage Ratio (est.)                9.20%                 8.32%
Regulatory minimum                          4.00%                 4.00%

YTD Earnings Per Share:
 Basic                                      0.27                  0.23
 Diluted                                    0.26                  0.22

YTD Shares Outstanding:
 Basic                                 1,976,024             1,952,613
 Diluted                               2,027,460             2,037,273