Business Bank of Nevada Parent Company Posts 2nd-Quarter Numbers; Earnings Suffer From Declining Rates, While Asset, Loan and Deposit Growth Remains Strong.

Business Editors

LAS VEGAS--(BUSINESS WIRE)--July 19, 2001

Business Bank Corp., the parent company of Business Bank of Nevada, today announced that its earnings for the second quarter ended June 30, 2001, were $198,515, compared with $397,585 as of June 30, 2000.

The lower earnings were a direct result of the Federal Reserve Bank lowering interest rates by 2.75 percent during the first half of this year, said Business Bank President and Chief Executive Officer John Guedry.

"With the majority of our income being generated by interest income from our loan and investment portfolio, our margins continue to shrink with every rate reduction implemented by the Federal Reserve Bank," added Guedry.

"Lower rates will ultimately help stimulate the economy through increased spending and the acquisition of additional capital by businesses, but in the short term the profitability of smaller banks will suffer. With the falling rate environment, we have managed our expenses more closely, and we continue to grow the bank in all areas, with emphasis in our loan totals."

The corporation's total assets as of June 30, 2001, were $193.4 million, compared with $142.3 million a year earlier, which represents nearly a 36 percent increase in the company's total assets year over year.

Total loans were $112.3 million as of June 30, 2001, compared with $102.2 million a year earlier, which reflects a 10 percent increase in total loans year over year. The company's total deposits were $176.2 million as of the end of the second quarter this year, compared with $128.9 million the previous year, which resulted in a 37 percent increase in total deposits year over year.

The company's book value per share as of June 30, 2001, was $9.18, compared with $8.41 as of June 30, 2000. Earnings per share of common stock for the quarter were 12 cents, compared with 32 cents the previous year. The company's return on average assets (ROA) was 0.21 percent as of June 30, 2001, compared with 0.57 percent a year earlier. Return on average equity (ROE) for the quarter was 2.69 percent, compared with 7.30 percent 12 months earlier.

"The key for us is to stay the course and continue doing what we've been doing for the last several months, which is control our expenses and grow our loan portfolio," Guedry said.

"In the last few months, we've seen our net loan growth increase from $3 million to $5 million a month. We expect our net loan growth to increase even further in July and August to approximately $7 million a month. Lower interest rates are pushing up the demand for loans, and we have certainly focused our sales and marketing efforts on generating quality loans."

Guedry added that the bank's loan pipeline recently surpassed the $70 million mark. He also said that the SBA 504 loan product, coupled with aggressive advertising and the bank's experienced business development officers, has helped push Business Bank to the forefront of its peer banks for lending business in Nevada.

"It's taken a while for us to get where we're at today, but we're now clicking on all cylinders and we believe we're ready to take Business Bank to the next level," he said.

The bank expects to end the year at more than $200 million in total assets, which would rank it among the top five largest community banks in the state. This growth would represent a 24 percent increase in the bank's total assets year over year. The bank is projecting its total loans to be at $137 million by the end of the year, which would represent a 22 percent increase over last year.

Business Bank is in its sixth year of operation and is one of the fastest-growing independent banks in Nevada. The bank has four branch offices in the state, with three in the Las Vegas area and one in Carson City. Business Bank is FDIC-insured and is a member of the Federal Reserve Bank of San Francisco. Its stock is listed over the counter (OTC) at ticker symbol BBNV.

Note to Editors: Complete second-quarter financial information for Business Bank Corp. is located on Business Bank's Web site at www.bbnv.com. This information is located in the Inside Business Bank/Investor Relations section of the Bank's Web site.