Charter Pacific Bank Reports Dramatic Increase in Continuing Operations as Core Bank Continues Significant Improvement Begun in 1999.

Business Editors

AGOURA HILLS, Calif.--(BUSINESS WIRE)--May 16, 2000

Merchant Processing Division Discontinued

Equity at All-Time High

Charter Pacific Bank (OTCBB:CHTP), today announced that net earnings of its core banking operations surged by more than 350 percent to $96,000, or 2 cents per share, in the quarter ended March 31, 2000, as compared with net earnings of $21,000, or 0 cents per share in the year-ago quarter.

Even though the first quarter is historically a slow period for the commercial bank, the very strong year-to-year improvement indicates that the significant improvement in core banking operations begun last year is continuing.

Charter also announced that it has elected to divest its Merchant Draft Credit Card Processing Division. "After careful analysis," said Michael Ward, president and chief executive officer, "we decided that divestiture of this division would best serve our long-term goal of maximizing shareholder value.

"The greatly reduced volume of the division subsequent to our decision last fall to eliminate high-risk, non-traditional processing, coupled with the continued steady improvement in our core bank results, made it clear we could best enhance shareholder value by giving our full attention to what we see as the best long-term growth opportunity for the bank -- traditional community banking."

Ward said he was "very optimistic about the prospects for continuing the substantial core bank improvements. This is where we belong," he said, "and this is where we will place all our energy and creativity."

Ward added: "Core bank 1999 net income was $444,000 greater in 1999 than in 1998," and "the result was achieved while significantly reducing our reliance on the BankCard Division. The historical reliance on the BankCard Division was clearly mitigated during 1999.

"The very favorable comparison in core bank results in the first quarter this year compared to the same quarter last year gives us reason to expect that our core bank operations will show further strong improvement for the full year.

"The decision to divest is simply the next logical step in the progression of returning to our roots: traditional community banking.

"Our shareholders and investors have been telling us that our non-traditional business confused and complicated analysis of our bank. We expect that, as a result of this decision, we will once again be valued according to the norms of our peers.

"Our balance sheet continues to improve. Our deposit base and our liquidity remain strong. Liquid assets consistently in excess of 30 percent of unsecured liabilities is well ahead of peer averages.

"In addition, our Tier 1 Leverage Capital, at 13.5 percent of adjusted average assets, is at an all-time high, is well in excess of all regulatory requirements, is substantially ahead of peer levels, and provides us with a solid base for balance sheet growth."

Ward further added: "We are excited about our thriving market place and by the prospects for Charter OnLine, our new online banking service. The bank's customers are now able to conduct their banking from anywhere on the planet where there is Internet access by simply going to www.cpbank.com. We are proud of our achievements and look confidently to a bright future."

In addition to its Charter OnLine operations, Charter Pacific Bank is a full-service commercial bank operating offices in both Agoura Hills and Beverly Hills, Calif.

                         CHARTER PACIFIC BANK

Three months ending March 31:          2000                1999


Core bank
 Net income                       $    96,000      $       21,000
    Basic per share earnings             0.02                --

Discontinued operations
 Net income                            91,000             660,000
    Basic per share earnings             0.02                0.14

Total                                 187,000             681,000
    Basic per share earnings             0.04                0.14

Total equity                      $12,473,000         $10,730,000

Shares outstanding                  4,927,729           4,832,143
 (weighted avg.)

This release contains forward-looking information regarding Charter Pacific Bank. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including statements as to industry trends, future economic performance, anticipated profitability, anticipated revenues and expenses and products or service line growth, may be significantly impacted by certain risks and uncertainties, including, but not limited to, failure of the e-commerce industry to develop at anticipated rates, failure of the bank's services to gain significant market acceptance, competition and other economic factors. These forward-looking statements speak only as of the date hereof, and the bank disclaims any intention or obligation to update these forward-looking statements in the future. Additional risks and uncertainties are described in the bank's public filings with the Securities and Exchange Commission.