Commerce National Bank Announces Third Quarter 2008 Results.

NEWPORT BEACH, Calif. -- Commerce National Bank (OTCBB:CNBF), a community business bank in its fifth year of operation, announced its financial results for the third quarter and first nine months of 2008.

For the nine month period ended September 30, 2008, the Bank reported net income of $254,000 as compared to $702,000 for the same period in 2007. For the three month period ended September 30, 2008, the Bank reported a net loss of $152,000 as compared to net income of $294,000 for the same period in 2007. In recognition of the uncertain economic times impact on its loan portfolio, for the three and nine month periods ended September 30, 2008, respectively, the Bank recorded provisions for loan and lease losses of $375,000 and $702,000 as compared to the recording of $80,000 and $244,000 for the similar periods in 2007. In the quarter ended September 30, 2008, the Bank recognized a pre-tax loss in its investment portfolio of $359,000 for the portion of an investment that is considered to be Other Than Temporarily Impaired (OTTI) under the provisions of the Financial Accounting Standards Board (FASB) Statement 115. The loss relates to the portions of certain securities held in a mutual fund comprised of bank qualified mortgage backed securities, that is a part of the Bank's investment portfolio, and that the Bank has determined to likely be uncollectible. For the three and nine month periods ended September 30, 2008, respectively, the Bank recorded income tax benefits of $207,000 and $116,000 as compared to the recording of income tax benefits of $120,000 and $359,000 for the similar periods in 2007.

Net interest income increased $188,000 and $714,000, or 9% and 12%, for the three and nine month periods ended September 30, 2008, respectively, compared to the same periods of the prior year. Non-interest income decreased by $68,000 for the three month period ended September 30, 2008, but increased by $109,000 for the nine month period ended September 30, 2008 as compared to the same periods last year. The changes in non-interest income were primarily due to the growth and timing of the fees generated by the SBA Lending Division. For the three and nine month periods ended September 30, 2008, non-interest expense increased $358,000 and $572,000, respectively, compared to the same periods in 2007. The changes in non-interest expense were primarily due to the OTTI loss recognized in the third quarter of 2008 and increased compensation costs.

For the three month period ended September 30, 2008, basic and diluted losses per share were $0.06 compared to basic and diluted income per share of $0.11 for the same period of the prior year. For the nine month period ended September 30, 2008, basic and diluted earnings per share were $0.10 compared to $0.26 for the same period in 2007.

As of September 30, 2008, the Bank reported total assets of $261.9 million, representing an increase of $46.4 million, or 22% from September 30, 2007. Total deposits were $210.7 million, an increase of $23.5 million, or 13% from the prior year. Net loans were $133.0 million, representing an increase of $14.9 million, or 13% from the prior year. Total shareholders' equity as of September 30, 2008 was $27.8 million. The bank had regulatory capital ratios of 11.85% for Tier 1 leverage and 17.39% for total risk-based capital and continued to be well capitalized.

With offices in Newport Beach near John Wayne airport and in the City of Fullerton, the Bank is well positioned to serve businesses, professionals and selected real estate customers in both the northern and southern areas of Orange County. The offices are staffed by experienced business bankers who are committed to providing exemplary service to their customers in the business community.

Forward Looking Statement

This news release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about Commerce National Bank's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: Commerce National Bank's timely development of new products and services, technological changes, changes in consumer spending and savings habits and other risks discussed from time to time in Commerce National Bank's reports and filings with the Office of the Comptroller of the Currency. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and Commerce National Bank does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

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