Business Bank of Nevada Detects Diversion of Funds.

LAS VEGAS--(BUSINESS WIRE)--March 19, 1999--Business Bank of Nevada, formerly known as Las Vegas Business Bank, completed the year 1998 with asset growth of 50 percent, deposit growth of 59 percent and loan growth of 31 percent.

However, in December 1998, the bank experienced an event that impacted its profitability.

In early December 1998, the bank, through its daily monitoring of ATM transactions and Automated ClearingHouse electronic settlements, detected a diversion of funds through the system's processor. Although the initial amount diverted was approximately $2.3 million, some funds have already been retrieved which has brought the total amount diverted to approximately $2 million.

Although the electronic funds transfer system was used for the diversion of these funds, the system is not flawed and is totally secure. The bank is vigorously pursuing all related parties through legal means and insurance claims are being filed.

As a result of this event, the Business Bank of Nevada has opted to take a charge against 1998 earnings, which will be significantly offset through the operational earnings of the bank in 1998. All cash recovered will be recognized as recoveries for 1999 and, if need be, beyond 1999. The overall effect to capital is minimal and the bank remains adequately capitalized.

In order to handle the continued growth of the bank, the directors of the Business Bank of Nevada have agreed to flow funds through Business Bank Corp., the bank's holding company, to be contributed to the bank's capital, adding an additional $1 million to the capital accounts of the bank. This additional capital will allow the bank to continue its robust growth through 1999 and beyond.

"Business Bank of Nevada remains financially strong and continues to create a stream of income and profit which should overcome this isolated incident," said Al Alvarez, president and chief executive officer, Business Bank of Nevada. "The future earnings coupled with the anticipated recoveries will help to increase the financial strength of the bank."

The bank continues to expand its loan portfolio and plans this year to expand its SBA lending operation, using its designation as an SBA "Preferred Lender." In addition, the Business Bank of Nevada has opened a third branch in the fast growing Northwest area of the Las Vegas Valley.

"We want every shareholder, depositor, client and friend of the bank to know that this isolated incident in no way affects the ongoing operations of the bank," Alvarez said. "The bank remains financially strong with all core lines of business positioned to continue their profitable growth."

As this matter is currently involved in multiple legal proceedings, and there is an ongoing criminal investigation, the bank is not able to discuss specific details that may jeopardize its legal efforts and/or the criminal investigation.