California United Bank Finishes First Full Year of Operations by Increasing Capital by $19.4 Million and Achieving Total Assets of $178.3 Million.

ENCINO, Calif. -- California United Bank (OTCBB:CUNB) today reported results for its first full year of operations that were highlighted by growth of total assets to $178.3 million, growth of the loan portfolio to $94.2 million and an increase in capital to $51.1 million. The Bank's total capital increased by $19.4 million during 2006 as a result of its successful capital raising efforts in the fourth quarter.

Total assets increased by $76.4 million to $178.3 million, a 75% increase for the year ended December 31, 2006 compared to December 31, 2005. During the fourth quarter 2006, total assets increased by $18.6 million or 11.6% over the quarter ended September 30, 2006. Strong loan growth of $60.1 million for 2006 represented a 176.3% increase in the Bank's loan portfolio for the year ended December 31, 2006 over the year ended December 31, 2005. Total loans at December 31, 2006 were $94.2 million compared with $34.1 million at December 31, 2005 and $68.8 million at September 30, 2006.

"In 2006, California United Bank experienced significant asset growth, opened a West Los Angeles office, established the groundwork for a third office in the Santa Clarita Valley, raised over $20 million in additional capital in an oversubscribed offering and built its infrastructure to a level designed to sustain its future activities," said David I. Rainer, President and CEO. "We continued to execute our strategic goal of building the Bank with core deposits and loans generated by relationship banking in our target markets. We have not purchased any loan pools, nor do we have any brokered deposits. We are particularly gratified by both our loan growth, particularly in the fourth quarter 2006 which was our best quarter ever for loan production, and strong asset quality in a difficult rate and uncertain economic climate. With our now established infrastructure, momentum and capital base, we believe we are well positioned for success in 2007."

Total capital at year end 2006 of $51.1 million was 160.9% higher than at year end 2005 and 165.4% higher than at September 31, 2006, as a result of the first closing of the Bank's Best Efforts Secondary Common Stock Offering on December 29, 2006, resulting in a $20.6 million addition to Shareholders' Equity. The Bank's Tier 1 Capital Ratio of 30.6% exceeds all regulatory requirements and guidelines to be "well capitalized."

The Bank reported a net loss for the year ended December 31, 2006 of $(2.932 million) compared to a loss of $(2.578 million) for the period ended December 31, 2005 (the period from May 23 to December 31). The loss for the year ended December 31, 2006 included the recognition of $1.195 million of stock based compensation expense as compared to no similar expense during 2005. The loss also included a provision for loan losses for the year ended December 31, 2006 of $823 thousand as compared to $467 thousand for the year ended December 31, 2005, and $216 thousand non-recurring employee severance costs. Adding to the increase of non-interest expense for 2006 over 2005 was the establishment of the Bank's West Los Angeles office that was opened during June of 2006, as well as some additional cost associated with its Santa Clarita branch office that will become operational during 2007.

The loss for the 4th quarter 2006 was $(1.066 million) compared to $(583 thousand) for the third quarter of 2006 reflecting $274 thousand of stock compensation expense, a $345 thousand provision for loan losses, and $216 thousand of non-recurring employee severance expense. In addition, the management of the Bank made a decision to reduce its exposure to lower yielding investment securities, and recorded a loss of $133 thousand on a selected number of securities that were subsequently sold in January of 2007. The proceeds were reinvested in higher yielding securities that will improve the Bank's earning assets yields during 2007.

"The loss for 2006 was amplified by the required implementation of SFAS 123R, which required the expensing of the value of stock options granted. This is a non-cash expense, as the amount expensed increases the Bank's capital accounts. Similarly, our extraordinary loan growth required a substantial loan loss provision, which protects the Bank from future losses," commented Mr. Rainer. "As we continue to mature, we would expect the additional revenue from the loan growth to reduce the impact of the loan loss reserve requirements, and the stock option expense to decrease."

Asset quality remained high at year end, with no non-performing assets, no non-accrual loans and no Other Real Estate Owned at December 31, 2006. In addition, the Bank has had no loan charge offs since inception. The allowance for loan losses was $1.290 million at December 31, 2006, up $823 thousand or 176% from December 31, 2005 and up $345 thousand from $945 thousand at September 30, 2006. The ratio of the allowance for loan losses to total loans was 1.35% at December 31, 2006.

California United Bank provides a full range of financial services, including credit and deposit products, cash management, and internet banking for business and high net worth individuals from its headquarters office at 15821 Ventura Boulevard, Suite 100, Encino, CA 91436 and West Los Angeles Regional Office at 1640 South Sepulveda Boulevard, Suite 114, Los Angeles, CA 90025. Information on products and services may be obtained by calling [phone] or visiting the Bank's website at www.californiaunitedbank.com.

{NOTE}:

This news release contains forward-looking statements about the Bank for which the Bank claims the protection of the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the Bank's possible or assumed future financial condition, and its results of operations, business and earnings outlook. These forward-looking statements are subject to risks and uncertainties. A number of factors, some of which are beyond the Bank's ability to control or predict, could cause future results to differ materially from those contemplated by such forward-looking statements. These factors include (1) changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board or regulatory agencies, (2) changes in interest rates, (3) significant changes in banking laws or regulations, (4) increased competition in the Bank's markets, (5) other-than-expected credit losses due to real estate cycles or other economic events, (6) earthquake or other natural disasters affecting the condition of real estate collateral or the business environment, and (7) the impact of changes in regulatory, judicial, or legislative tax treatment of business transactions. Management cannot predict at this time the extent of the economic recovery, and a slowing or reversal could adversely affect our performance in a number of ways including decreased demand for our products and services and increased credit losses. Likewise, changes in deposit interest rates, among other things, could slow the rate of growth or put pressure on current deposit levels. Forward-looking statements speak only as of the date they are made, and the Bank does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the statements are made.

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