Capital Corp of the West Builds Loan Loss Reserves.

MERCED, Calif.--(BUSINESS WIRE)--Jan. 8, 1999--Capital Corp of the West (the "Company"), quoted on NASDAQ as CCOW, today announced its intention to increase its loan loss reserves by adding $500 thousand to its normally budgeted provision for the fourth quarter of 1998.

This decision followed the completion of a thorough internal review of its loan portfolio. The Company ended the year in excess of $500 million in total assets.

"With many economists predicting a much slower economy in 1999 and based on a rigorous review of our loans, the Company has decided to take what we believe to be a conservative measure by increasing our loan loss reserves this quarter.

"While we recognize that this provision will lower our earnings by approximately 7 cents per share for the quarter from our target, it should help us achieve our priority for 1999 -- continual improvement of profitability. Another factor in our decision was that loan growth for the Company in 1998 has been impressive at almost 25%.

"With this type of growth the Company needs to be looking ahead and create appropriate future reserves. We are confident in the Company's ability to weather adverse conditions such as El Nino last year, and we are looking forward to more normal loan loss reserve provision in 1999," said Tom Hawker, the Company's Chief Executive Officer.

The Company's total provision for the quarter was approximately $900 thousand. The allowance for loan losses at year end was approximately $4.9M or 1.8% of total loans outstanding. Nonperforming assets totaled $1.2M or .2% of total assets and nonperforming loans stood at $1.1M or .4% of total loans. The allowance for loan losses totaled approximately 448% of nonperforming loans. This compares with an allowance for loan losses of $4.5M or 1.75% of total loans and 105% of nonperforming loans as of Sept. 30, 1998.

"In 1997 the Company embarked on some significant plans for its future through the purchase of $60 million of deposits in three branches of Bank Of America and an $18 million capital offering to support the purchase and internal growth of the Company. The Company's goal was to effectively deploy these funds over a five year time frame. At this point one year after the transaction, we feel the Company has begun progress towards those goals and intends to accelerate this process in 1999," continued Hawker.

In addition to historical information, this release includes certain forward looking statements regarding events and trends which may affect the Company's future results. Such statements are subject to risks and uncertainties that could cause the Company's actual results to differ materially.

These risks and uncertainties include those related to the economic environment, particularly the region where the Company operates, the Company's asset quality, local weather conditions, competitive products and pricing, general interest rate changes and the fiscal and monetary policies of the U.S. Government, credit risk management, regulatory actions and other risks and uncertainties discussed from time to time in the Company's public securities filings.

Capital Corp of the West, a bank holding company established Nov. 1, 1995, is the parent company to two financial institutions: County Bank, with more than 20 years of service as "Central California's Community Bank" and Town & Country Finance & Thrift Company, an industrial loan company headquartered in Turlock serving the Central Valley for more than forty years.

Currently, County Bank has thirteen branch offices serving the communities of Merced, Mariposa, Madera, Stanislaus and Tuolumne counties. Town & Country has four branch offices located in Turlock, Modesto, Visalia and Fresno. For further information about the Company's financial performance, contact Tom Hawker, President & Chief Executive Officer, or Janey Boyce, Chief Financial Officer, at 209/725-2200.