Bank of Commerce Announces Third Quarter Results

CHARLOTTE, October 18, 2011 - During the third quarter of 2011 Bank of Commerce (BONC.OB) continued to write-down and liquidate problem assets. “Based on updated appraisals and other market information, we believe we have properly accounted for the dramatic depreciation that has occurred over the past few years in the value of our real estate loan portfolio. Although this has negatively impacted our earnings both for the quarter and the year to date period, we remain a well capitalized bank.” said Wes Sturges, President and CEO.

As a result of falling real estate values, liquidations and write-downs on problem assets, the Bank posted a net loss attributable to common shareholders of $737,000 for the quarter ending September

30, 2011, compared to net income of $22,000 for the same period last year. Total assets have declined from $171.0 million at December 31, 2010 to $153.0 million as of September 30, 2011.

The Bank’s net loss attributable to common shareholders for the nine months ended September 30,

2011 was $967,000, compared to net income of $272,000 for the same period last year.

Bank of Commerce serves the needs of independently owned businesses in the Charlotte, N.C. area. From a midtown Charlotte office at 100 Queens Road, we offer guidance to clients from experienced loan officers, in addition to start-up financing and other banking products, services and information. Online banking, courier service and extended deposit hours are additional hallmarks of the Bank of Commerce. The Bank's common stock is quoted in the over-the-counter market through the OTC Bulletin Board under the symbol “BONC.OB.” For additional information, contact Bank of Commerce Headquarters, 100 Queens Road, Charlotte, N.C. (telephone 704-971-7000) or visit www.BankofCommerceNC.com.

This release contains certain forward-looking statements with respect to the financial condition, results of operations and business of Bank of Commerce. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of management of the Bank and on the information available to management at the time that these disclosures were prepared. These statements can be identified by the use of words like “expect,” “anticipate,” “estimate” and “believe,” variations of these words and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. The Bank does not undertake an obligation to update any forward-looking statements.

Bank of Commerce2011 Third Quarter ReportBalance Sheets

In Thousands September 30, December 31,
2011 2010

Assets (unaudited) *

Cash
$ 6,596 $
9,355
Federal funds sold 1,875 1,788
Investment securities 35,555 39,778
Loans, gross 103,013 113,239
Allowance for loan losses (1,812) (2,081) Foreclosed properties 2,130 2,971
Other assets 5,600 5,972
Total assets
$ 152,957 $
171,022

Liabilities andShareholders' Equity

Deposits
$ 110,863 $
123,665
Borrowed funds 27,840 32,868
Other liabilities 855 590
Shareholders' equity 13,399 13,899
Total liabilities and
shareholders' equity
$ 152,957 $
171,022

* Derived from audited financial statements

Statements of Operations

In Thousands
For the Quarter Ending For Year to Date Ending
September 30, September 30, September 30, September 30,
2011 2010 2011 2010 (unaudited) (unaudited) (unaudited) (unaudited)
Total interest income
$ 1,617 $
1,899 $
5,110 $
5,860
Total interest expense 480 663 1,612 2,055
Net interest income 1,137 1,236 3,498 3,805
Provision for loan losses 520 523 1,096 1,051
Net interest income after
provision for loan losses 617 713 2,402 2,754
Securities gains 207 435 336 653
Other non-interest income 69 69 210 208
Total non-interest income 276 504 546 861
Loss on foreclosed properties 711 216 796 216
Other non-interest expense 934 931 3,038 2,983
Total non-interest expense 1,645 1,147 3,834 3,199
Income (loss) before taxes (752) 70 (886) 416
Provision for income taxes - - - - Net income (loss) (752) 70 (886) 416
Preferred stock dividend (15) ** 48 81 144
Net income (loss) attributable to
common shareholders
$ (737) $
22 $
(967) $
272

** The FDIC did not grant the Bank permission to pay the scheduled dividend on preferred stock issued to the Treasury under the Capital Purchase Program. Therefore any dividends previously accrued were reversed, reflecting the “non- cumulative” nature of the preferred stock.