Community Bank of the Bay Reports Strong 3rd Quarter Earnings.

OAKLAND, Calif. -- Community Bank of the Bay (OTCBB:CBYAA) has reported core bank income of $42,700 during the quarter ending Sept. 30, exclusive of a Business Enterprise Award (BEA) received from the US Treasury. The bank reported net income of $50,000 during the prior year's third quarter.

Community Bank was the recipient of $500,000 from the BEA, an award based on the bank's rate of lending in underserved communities in the East Bay. Eligibility for the award is considered annually and amounts vary.

With the BEA award added to core earnings, Community Bank reported net income of $365,600 for the nine months ended Sept. 30, compared to net income of $172,000 for the same period last year.

"We are very proud of our financial performance both this quarter and this year," said Brian K. Garrett, president and chief executive officer. "It is evidence of our successful efforts to achieve core profitability on both a monthly and quarterly basis. This has been a goal of the bank since opening. Core earnings will be our measure of success in the future. However, the grants do recognize our success at going into more difficult loan markets and bringing good banking practices and expanding economic opportunities on a wider scale."

During the first three quarters of 2006, interest income increased to $3 million, up 42.9 percent from $2.1 million for the same period last year. Loans also continued to experience strong growth with total loans outstanding climbing to $35.5 million on Sept. 30, an increase of 12 percent from $31.6 million at Sept. 30, 2005.

Total deposits were $51.5 million on Sept. 30, a 28 percent increase from the $40.2 million on deposit at the end of the third quarter 2005.

"We continue to build a strong base of clients based on our commitment to service and our innovative approach to banking," said Garrett, acknowledging the outstanding performance of the Bank's staff and the guidance of the board of directors. "The support of the local community has been vital to our turnaround, and a cornerstone of our success has been the Oakland 1st Fund.

"The reason for the decline in core earnings from 2005 to 2006 has been the addition of new staff and the purchase of our headquarters office. When all of this growth expense has been absorbed, we will be in excellent position to take advantage of market expansion for the next few years. The physical plant should be adequate for the next five years, at least. This was planned to take advantage of the overall growth within the East Bay market. Without these additions, Community Bank would not be positioned near as well to exploit these future opportunities."

The Oakland 1st Fund was created in 2004 to help enhance the economic vitality of Oakland. Customers who designate their deposits for Oakland 1st agree to have them used exclusively for loans to businesses and individuals who agree to use the money in Oakland. Every deposit product at Community Bank qualifies for the Fund. As of Sept. 30, 2006, Oakland 1st Fund deposits totaled more than $22 million.

As of Sep. 30, Community Bank had total assets of $64.3 million, an increase of 27 percent from $50.6 million at the end of the third quarter 2005.

Information on the Bank and its services is available online at www.communitybankbay.com.