Community Bancorp Announces 1999 Earnings; 21% Revenue Growth Drives Record Profits.

Business Editors

FALLBROOK, Calif.--(BUSINESS WIRE)--Feb. 23, 2000

Community Bancorp Inc. (Nasdaq:CMBC), today reported record earnings for the year ended Dec. 31, 1999, fueled by a 21% revenue increase.

Profits totaled $1.6 million, or $.66 per diluted share for the year, compared to $1.3 million, or $.52 per diluted share in 1998. Income from operations increased 47% to $1.9 million, compared to $1.3 million in 1998.

Community Bancorp is the parent of Fallbrook National Bank, the 7th largest SBA lender in California, 34th in the nation, and an SBA "Preferred Lender". Complete financial information for the fourth quarter and the year ended Dec. 31, 1999 will be available in the near future.

Revenues (net interest income before provision for loan losses plus noninterest income) totaled $13.4 million in 1999, compared to $11.1 million in 1998.

Strong balance sheet growth also contributed to the profits. Assets grew 29% to $176 million in 1999, from $136 million at Dec. 31, 1998. Net loans increased 33% to $144 million, compared to $109 million a year ago, and deposits gained 27% to $158 million, from $124 million last year.

"Community Bancorp grew significantly in 1999, and our strategy to continue that growth has evolved," stated Tom Swanson, president and chief executive officer. "To increase the long-term, stable interest income provided by our lending activities, we are going to stop selling the guaranteed portion of the SBA loans, and retain them in our portfolio. In 1999, we had a gain of $2.5 million on the sale of $33.8 million in SBA loans, and we anticipate that this gain revenue will not occur in 2000. In the future, the increase in interest income should offset this loss of revenue from gains on sale of loans."

"The premiums paid for SBA loans are getting squeezed," stated Bruce Mills, CFO. "Our solution is to replace the volatile income from gains on sale of loans with the steady interest income inherent in the underlying SBA guaranteed loans. The lack of gain on sale revenue will result in significantly lower earnings in 2000. However, the interest income due to the retention of SBA loans should result in a significant increase in earnings beginning with the first quarter of 2001, making this a stronger, more consistent and more profitable institution."

Community Bancorp, parent company of Fallbrook National Bank, is a $176 million bank holding company headquartered in Fallbrook, Calif.. Located between Los Angeles and San Diego, Fallbrook's primary focus is community banking and commercial lending, with additional lending niches of SBA and aircraft lending. Serving the North San Diego and Inland Empire communities with retail banking offices in Fallbrook, Temecula and Vista, Fallbrook has loan production offices in Fallbrook, Los Angeles, Ontario, Orange, Sacramento Temecula, Vista and in the East San Francisco Bay Area.

Fallbrook National Bank's Web site is www.fallbrooknationalbank.com

Statements concerning future performance, developments or events, concerning expectations and any other guidance on future periods, constitute forward-looking statements which are subject to a number of risks and uncertainties including successful business strategies, the ability to assimilate new offices, the potential for new competition, the ability to capture market share, interest rate fluctuations, economic changes, and government and regulatory actions which might cause actual results to differ materially from stated expectations.