the PRIVATE BANK of CALIFORNIA

The Bank Reports Third Quarter 2011 Results - 
Strong Earnings Growth in Linked Quarter and Year-over-Year

11.01.11

LOS ANGELES (BUSINESS WIRE) – The Private Bank of California (the “Bank”) (OTCBB: PBCA.OB) announced its unaudited financial results for the quarter ended September 30, 2011.

Third Quarter 2011 Highlights:

• Net income for the quarter improved significantly to $883,000, up $542,000 or 159% from the linked quarter and $822,000 from the prior year quarter.  Year-to-date September 30, 2011 net income was $1,557,000, up an impressive $1,216,000 from $341,000 in 2010. 
• The Bank’s operating leverage improved markedly in the quarter ended September 30, 2011 as net interest income increased $1.1 million more than the increase in total noninterest expense compared to the same quarter in the prior year.  As a result, the Bank’s efficiency ratio improved from 105% in the quarter ended September 30, 2010 to 74% in the quarter ended September 30, 2011.
• Total assets grew $75 million or 15% from the linked quarter and $172 million or 44% year-over-year to $567 million at September 30, 2011.
• Total deposits rose $76 million or 19% from the linked quarter and $152 million or 46% from the prior year quarter to $483 million at September 30, 2011.  Demand deposits totaled $215 million and accounted for 44% of total deposits at September 30, 2011 compared to 40% of total deposits at both June 30, 2011 and September 30, 2010.
• Total earning loans were $272 million at September 30, 2011, a slight increase from the linked quarter and $86 million or 46% more than the same quarter in the prior year.
• The Bank had no nonaccrual loans at September 30, 2011, comparable to the linked quarter and a significant drop from $1.5 million at September 30, 2010.  The Bank also had no earning loans past due 90 days or more at September 30 and June 30, 2011, as well as September 30, 2010.
• Consistent with its improved credit performance, the Bank’s allowance for credit losses was $4.5 million or 1.67% of total loans at September 30, 2011, compared to 1.68% at the linked quarter and 1.77% at September 30, 2010.  The provision for credit losses for the quarter and year-to-date ended September 30, 2011 totaled $161,000 and $788,000, respectively, and is primarily attributable to loan growth; the provision for credit losses for the same periods in 2010 was $65,000 and $625,000, respectively, and primarily reflected problem credits.  Net loan charge-offs totaled $116,000 for year-to-date September 30, 2011, comparing favorably to $1.2 million for year-to-date September 30, 2010.
• The Bank received a $10 million preferred stock investment from the U.S. Department of the Treasury  (“Treasury”) during the quarter by opting into the Small Business Lending Fund (“SBLF”), a program intended to stimulate lending to small businesses by providing capital to qualified community banks.  Only healthy financial institutions were selected to participate in the program designed to stimulate jobs and economic growth. Simultaneously, with the receipt of its SBLF funding, the Bank redeemed 100% of the preferred stock totaling $5.7 million issued to the Treasury under the TARP Capital Purchase Program.
• The Bank’s capital ratios continue to significantly exceed all regulatory guidelines for “well-capitalized” financial institutions:

Forward-Looking Statements: Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements relate to The Private Bank of California’s current expectations regarding deposit and loan growth and operating results.  These forward-looking statements are subject to certain risks and uncertainties that could cause the actual results, performance or achievements to differ materially from those expressed, suggested or implied by the forward-looking statements.  These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, (2) a decline in economic conditions, (3) an increase in competition among financial service providers impacting on the Bank’s operating results and ability to attract deposit and loan customers and the quality of the Bank’s earning assets and (4) an increase in government regulation.  The Bank does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.