CBC Receives SBLF Capital, Repays TARP

September 28, 2011

California Bank of Commerce Receives New SBLF Investment; Pays Back TARP

LAFAYETTE, CA--(9/28/2011) – California Bank of Commerce (OTCQB: CABC), a unique commercial bank in the San Francisco Bay Area targeting closely held businesses, received an $11 million investment from the U.S. Department of Treasury in the form of preferred shares from the Small Business Lending Fund (SBLF), at a dividend rate of 1%.  In a simultaneous transaction, the Bank repaid in full its $4.2 million TARP Capital Purchase Program preferred stock obligation.  “The Bank repaid its TARP-CPP obligation about two years ahead of schedule, and it provided the U.S. Treasury with a 5.2% return on their investment,” said John E. Rossell, President and CEO of the Bank.

SBLF funds are meant to encourage community banks to increase their lending to small businesses, enabling those companies to expand their operations and create new jobs. The Treasury Department’s selection process was rigorous in its pursuit of banks that are healthy and remain engaged in making loans to business. Only a limited number of healthy banks were found to be eligible for SBLF. Even among applicants admitted to the program, the U.S. Treasury accorded a 1% dividend rate only to the banks with the best demonstrated rates of growth in small business lending.

Small businesses employ about half of all Americans and account for approximately 60 percent of gross job creation.  Unfortunately, small business owners continue to face disproportionate challenges in the aftermath of the credit crisis and recession.

“The SBLF program is good for all parties involved.  It is good for the Bank and its shareholders as it adds nearly $7 million in capital to the Bank’s balance sheet, without diluting our original shareholders, and it lowers our preferred stock dividend payments by over $100,000 per year.  It is good for the Bay Area business community because the Bank now as more funds to lend to growing companies who we hope will hire more employees and further fuel economic growth,” said Rossell.