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CU BANCORP REPORTS SECOND QUARTER AND SIX MONTHS RESULTS

 CU BANCORP REPORTS SECOND QUARTER AND SIX MONTHS RESULTS
 ENCINO, Calif., July 22 /PRNewswire/ -- CU Bancorp (NASDAQ: CUBN), the parent of California United Bank N.A., today reported a net loss of $3.5 million or $0.80 per share for its second quarter ended June 30, 1992, compared with net income of $1.1 million or $0.24 per share for the comparable period of 1991.
 For the first half of 1992, ended June 30, CU Bancorp lost $2.9 million, or $0.66 per share, versus net income of $2.1 million, or $0.45 per share, for the first half of 1991. Per share amounts for both years are on a fully diluted basis, using average common shares and equivalents outstanding.
 Stephen G. Carpenter, the bank's newly appointed chief executive officer, stated that performance for the second quarter and first half of 1992 was driven by the new management group's desire to guard against potential negative effects of asset deterioration, brought about principally by the continued regional economic downturn.
 Loss provisions for the second quarter amounted to $7.5 million as opposed to $900 thousand for the same period a year earlier and $1.0 million in 1992's first quarter. For the first half of the year, loss provisions totaled $8.5 million versus $2.0 million for the first half of 1991. Carpenter stated "California United's revenue generating ability and capital position enabled the company to make these business decisions, while continuing to maintain a capital position above mandated minimums."
 The reserve for possible loan losses equalled $18.1 million, or 8.44 percent of gross loans, and 10.58 percent of commercial loans outstanding at June 30, 1992. This compares with $4.8 million and $13.2 million at June 30, 1991 and March 31, 1992, respectively. Net loan losses for the second quarter and first half of 1992 were $2.6 million and $2.8 million, respectively, representing 1.10 percent of average loans for those periods. This compares with 0.09 percent and 0.46 percent for the second quarter and first half of 1991, respectively.
 Non-accrual loans were $18.3 million or 8.5 percent of total loans at June 30, 1992, versus $7.3 million, or 2.5 percent a year ago, and $20.7 million or 8.0 percent at the end of the first quarter of 1992. Loans ninety days past due and still accruing totaled $708 thousands at the end of the current quarter. This represents an increase from the $126 thousand at the end of the previous 1992 quarter, but a $5.5 million decline from a year ago and $1.6 million drop from year end 1991 levels. Other real estate owned totaled $4.8 million, declining from $6.7 million at the end of the first quarter, $6.1 million at year-end 1991 and $7.7 million at June 30, 1991.
 Net interest income grew to $8.9 million for the 1991 second quarter and $17.5 million for the half, representing increases of $0.8 million and $2.0 million, respectively over the comparable periods of 1991. According to Carpenter, "the company's mortgage banking operations made up for more than all of the margin erosion experienced by the commercial banking division." As a beneficiary of the record low interest rate environment experienced during the first half of 1992, mortgage banking activity reached an all time high. On an operating basis, the division's contribution to profits amounted to $1.7 million for the first half of 1992, reflecting an 84.8 percent increase over the first half of 1991. The growth of interest and loan fee income stemming from high mortgage demand, provided a natural counter cyclical hedge to the margin compression experienced by commercial banking in the current low rate environment. Additional margin enhancement was driven by benefits of interest rate hedging transactions, which were entered into in 1991 in anticipation of yield erosion. For the quarter benefits were $411 thousand and for the first half of 1992 were $823 thousand. Benefits of hedging transactions for the comparable 1991 quarter and half were $200 thousand and $270 thousand, respectively.
 Other operating revenues, exclusive of securities gains, were $1.5 million and $2.8 million for the 1992 second quarter and first half, respectively. These amounts represent increases of 30 percent and 29 percent, respectively. As in the case of net interest income, the growth was also driven by increases in loan servicing, servicing gains, documentation and processing fees in mortgage banking.
 Total assets and deposits amounted to $435.1 million and $402.3 million, respectively, at the end of the current quarter, substantially down from the $548.7 million and $507.2 million a year ago. This shrinkage is in direct response to management's conscious decision to reduce the company's risk exposure to problem assets, as well as a strategic redeployment of earning assets from high to low risk exposures.
 Shareholders' equity totaled $29.7 million or $6.78 per outstanding share at June 30, 1992. Tier 1 leverage capital at the end of June was 6.85 percent of adjusted assets and 12.1 percent on a risk adjusted basis. The latter represents an improvement of 67 basis points from the 1992's first quarter and 129 basis points from year end 1991. The improvement in the risk based ratio stems from active balance sheet management and the desire to continually lower the company's risk exposure. Both ratios were well above mandated minimums at June 30, 1992.
 California United Bank N.A. operates full service branches in Encino and Beverly Hills and a loan production office in Costa Mesa. The bank offers a full range of commercial banking services primarily to the middle market and entertainment business managers located in Southern California. Mortgage banking offices are located in San Jose, Sacramento and Orange County as well as in the Encino and Beverly Hills branch offices.
 CU BANCORP
 Second Quarter Earnings
 Period ended Three months Six months
 June 30 1992 1991 1992 1991
 Financial ratios
 ROA (annualized) -3.23 pct. 0.89 pct. -1.31 pct. 0.90 pct.
 ROE (annualized) -42.02 pct. 11.88 pct.-17.50 pct. 11.39 pct.
 Net interest margin 10.67 pct. 8.26 pct. 10.23 pct. 8.35 pct.
 Net loan losses to
 Ave loans 1.10 pct. 0.09 pct. 1.10 pct. 0.46 pct.
 Allowance to gross
 loans 8.44 pct. 1.65 pct. 8.44 pct. 1.65 pct.
 Teir 1 Capital ratio 6.85 pct. 7.73 pct. 6.85 pct. 7.73 pct.
 Selected Balance Sheet Data
 Total assets 435,072,234 548,667,792 435,072,234 548,667,792
 Interest-earning
 assets 323,600,396 410,957,214 323,600,396 410,957,214
 Interest-bearing
 liabilities 132,551,161 163,690,475 132,551,161 163,690,475
 Commercial
 loans 171,573,153 246,362,886 171,573,153 246,362,886
 Term federal
 funds sold 0 12,000,000 0 12,000,000
 Mortgage loans 43,425,305 46,649,203 43,425,305 46,649,203
 Allowance for
 loan losses 18,146,900 4,828,230 18,146,900 4,828,230
 Deposits 402,345,150 507,224,019 402,345,150 507,224,019
 Shareholders'
 equity 29,707,818 37,275,491 29,707,818 37,275,491
 Book value
 per share $6.78 $8.72 $6.78 $8.72
 Average assets 433,525,253 482,325,806 444,002,498 460,362,339
 Average earning
 assets 334,699,371 392,539,306 343,991,241 375,573,187
 Average gross
 loans 240,608,568 290,695,126 261,050,945 286,792,164
 Average equity 33,313,248 36,340,039 33,165,762 36,510,000
 Net charge-offs 2,647,823 253,734 2,765,282 1,305,726
 Revenue from
 earning assets 10,168,024 10,388,103 20,321,799 20,446,612
 Cost of funds 1,260,370 2,302,408 2,778,903 4,899,411
 Net revenues from
 earning assets
 before provision
 for loan losses 8,907,654 8,085,695 17,542,896 15,547,201
 Provision for
 loan losses 7,537,966 900,002 8,544,966 2,036,002
 Net revenue from
 earning assets 1,369,688 7,185,693 8,997,930 13,511,199
 Gain (loss) on
 securities sales 754,727 22,053 754,727 22,053
 Other operating
 revenue 1,500,868 1,150,852 2,841,968 2,206,088
 Total non-interest
 income 2,255,595 1,172,905 3,596,695 2,228,141
 Salaries and related
 benefits 2,974,402 2,311,661 5,725,997 4,394,528
 Occupancy expense 367,256 519,607 684,321 605,216
 Other operating
 expense 5,679,380 3,693,205 10,587,793 7,227,818
 Total non-interest
 expense 9,021,038 6,524,473 16,998,111 12,227,562
 Income/(loss) before
 provision for
 income taxes (5,395,755) 1,834,125 (4,403,486) 3,511,778
 Provision for
 income taxes (1,906,100) 758,200 (1,508,900) 1,449,171
 Net income/
 (loss) (3,489,655) 1,075,925 (2,894,586) 2,062,607
 Net income/(loss)
 per share(A) ($0.80) $0.24 ($0.66) $0.45
 Weighted average shares
 outstanding(A) 4,382,000 4,530,000 4,382,000 4,550,000
 (A) Fully diluted, using average common shares and equivalents outstanding.
 -0- 7/22/92
 /CONTACT: Stephen G. Carpenter of CU Bancorp, 818-907-9122, or Edmund R. Belak Jr., of Georgeson & Company, 212-440-9801, for CU Bancorp/
 (CUBN) CO: CU Bancorp ST: California IN: FIN SU: ERN


TQ-OB -- NY090 -- 2082 07/22/92 16:07 EDT
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