Capital Pacific Bancorp Posts Profit in First Quarter of 2008

PORTLAND, OR, Apr 17 (MARKET WIRE) --
Capital Pacific Bancorp (OTCBB: CPBO) reported net income of $225,000 or $0.14
per diluted share in the first quarter of 2008, compared to net income of
$192,000 and $0.12 per diluted share in the first quarter last year. The
performance reflects the company's return to positive financial performance
after reporting a loss in the previous quarter.

"While in the middle of a very difficult economic cycle, net income has
returned to levels more in line with historical performance," said Mark
Stevenson, CEO of Capital Pacific Bancorp.

Loans and credit quality

As of March 31, 2008, loans totaled $131.0 million, up $2.5 million in the
first quarter of 2008 and $21.1 million when compared to the same quarter last
year. Loan growth was modest in the first quarter, a period often
characterized as being seasonally slow. The company's provision for loan
losses dropped to $40,000 in the first quarter, compared to $2.1 million
inthe preceding quarter.

"Overall asset quality stabilized in the first quarter of 2008," said
Stevenson. "We achieved tangible improvement in, or payoff of, certain
adversely
rated loans; however this improvement was offset to a degree by some level
of softness in other loans."

Other credit measures include:

-- At quarter-end, loan loss reserves totaled $2.4 million, or 1.87% of
total loans, virtually unchanged when compared to the previous quarter.
-- Non-performing assets were also unchanged from the previous quarter at
$1.4 million, or 1.1% of total loans. Non-performing assets represent
construction and land development loans that are 90 days past due and no
longer accruing interest. No other loans were 90 days past due.
-- The loan loss reserve as a percentage of non-performing assets was
178%.

Deposits

As of March 31, 2008, client deposits were $87.4 million,
down slightly on a linked-quarter basis and up $12.6 million compared to the
same quarter last year. Initiative based deposits, or deposits coming from the
nonprofit and professional sectors, grew approximately six million in the
current quarter. However, this growth was offset by declines in other accounts,
some of which were affected by seasonal factors. Client deposits are defined as
total deposits excluding brokered or nationally sourced deposits.

Interest margin

The net interest margin declined to 4.77% in the current quarter, down 24
basis points compared to 5.01% in the fourth quarter and 61 basis points
compared to the same quarter last year. The decline in margin is the result
of the rapid reduction in the federal funds target rate. Approximately half of
the company's loans have interest rates that are fully floating and decline
as the target rate declines. Further, deposit competition remains intense which
places upward pressure on deposit rates.

Other financial highlights

-- Income from the sale of loans totaled $87,000 compared to $70,000 for
the same quarter last year. Income from the sale of loans remains a small
but consistent source of additional revenue for the company.
-- The efficiency ratio increased to 78% in the current quarter compared
to 74% in the same quarter last year and 66% when compared to the fourth
quarter of 2007, which included lower than usual incentive compensation
expense.

About Capital Pacific Bancorp

Capital Pacific Bancorp (OTCBB: CPBO) is the parent company of Capital
Pacific
Bank, which serves businesses, professionals and nonprofit organizations with
comprehensive banking solutions and an elite level of service. Headquartered
in the Fox Tower in downtown Portland, the bank's full array of products and
services are delivered through a strategic combination of highly experienced
client
service officers and the innovative application of technology. For more
information on Capital Pacific Bancorp, past press releases or to see a copy of
our 2008 first quarter letter to shareholders, visit www.capitalpacificbank.com.

Forward-looking statements

Statements in this release about future events or performance are
forward-looking statements, which involve known and unknown risks, uncertainties
and other factors that may cause the actual results of the company to be
materially different from any future results expressed or implied by such
forward-looking statements. Factors that could affect future results include
changes in the financial condition of our borrowers, changes in economic
conditions
generally, deteriorating asset values caused by changing market conditions, loan
losses that exceed our allowance for loan losses, and fluctuations in
interest rates and the impact those factors may have upon clients of the
company. Other factors include competition for loans and deposits within the
company's trade area, and the impact that may have upon growth or income.
Although forward-looking statements help to provide complete information about
the
company, readers should keep in mind that forward-looking statements may be less
reliablethan historical information. The company undertakes no obligation to
updateor revise forward-looking statements in this release to reflect events or
changes in circumstances that occur after the date of this release.

(unaudited and dollars in thousands, except per share data)
As of As of
March 31, December
Condensed Balance Sheets 2008 31, 2007
--------- ---------
Cash and due from banks $ 1,065 $ 517
Investments 2,135 5,569

Loans:
Commercial 59,498 59,023
Real estate 62,144 60,913
Other 9,378 8,598
--------- ---------
Total loans 131,020 128,534
Loan loss reserve (2,444) (2,403)
--------- ---------
Total loans, net of loan loss reserve 128,576 126,131
Other assets 2,077 2,341
--------- ---------
Total assets $ 133,853 $ 134,558
========= =========

Deposits:
Non interest-bearing demand $ 20,885 $ 19,531
Interest-bearing demand 47,187 58,074
Certificates of deposit 42,112 35,769
--------- ---------
Total deposits 110,184 113,374

Other liabilities 8,184 7,697
Shareholders' equity 15,485 13,487
--------- ---------
Total liabilities and shareholders' equity $ 133,853 $ 134,558
========= =========

For the three For the three
months ending months ending
Condensed Statements of Operations March 31, 2008 March 31, 2007
--------------- ---------------
Interest income $ 2,468 $ 2,396
Interest expense 918 907
--------------- ---------------
Net interest income 1,550 1,489
Provision for loan losses 40 99
--------------- ---------------
Net interest income, net of provision for
loan losses 1,510 1,390
Deposit fees and other non-interest income 227 167
Income associated with the sale of loans 87 70
Non-interest expense 1,462 1,306
--------------- ---------------
Net income before tax expense 362 321
Income tax expense 137 129
--------------- ---------------
Net income $ 225 $ 192
=============== ===============
Net income per share, basic $ 0.14 $ 0.12
=============== ===============
Net income per share, fully diluted $ 0.14 $ 0.12
=============== ===============

Basic average shares outstanding 1,582,396 1,551,178
=============== ===============
Fully diluted average shares outstanding 1,582,418 1,612,160
=============== ===============

Performance by Quarter 3/31/08 12/31/07 9/30/07 6/30/07
--------- --------- --------- ---------

Actual Loans $ 131,020 $ 128,534 $ 128,158 $ 121,468
Average Loans $ 130,393 $ 131,692 $ 125,388 $ 113,135

Non-performing loans and loans
past due 90 days $ 1,375 $ 1,375 $ 3,029 $ 2,121
Loan loss reserve as a
percentage of loans 1.87% 1.87% 1.80% 1.53%
Loans charged off, net of
recoveries $ (2) $ 2,012 $ (6) $ (6)

Actual Client and Wholesale
Deposits $ 110,184 $ 113,374 $ 103,682 $ 105,471
Average Client and Wholesale
Deposits $ 112,013 $ 110,641 $ 111,607 $ 95,295

Actual Client Deposits $ 87,399 $ 88,604 $ 79,489 $ 82,963
Average Client Deposits $ 87,840 $ 88,056 $ 88,053 $ 78,317

Net interest income $ 1,550 $ 1,670 $ 1,607 $ 1,569
Net income (loss) before tax
expense $ 362 $ (1,438) $ 266 $ 10
Net income (loss) $ 225 $ (855) $ 170 $ 8
Net income (loss) per share,
basic $ 0.14 $ (0.55) $ 0.11 $ 0.01
Net income (loss) per share,
fully diluted $ 0.14 $ (0.55) $ 0.11 $ 0.01

Actual shares outstanding 1,748,594 1,552,178 1,552,178 1,551,178
Book value per share $ 8.86 $ 8.69 $ 9.20 $ 9.08

Return on average equity 6.59% -23.31% 4.71% 0.22%
Return on average assets 0.67% -2.49% 0.52% 0.03%
Net interest margin (2) 4.77% 5.01% 5.00% 5.44%
Efficiency ratio (1) 78% 66% 62% 70%

(1) Calculated by dividing non-interest expense by net interest income and
non-interest income.
(2) Calculated on a tax equivalent basis

Contact:
Mark Stevenson
CEO
Felice Belfiore
CFO
(503) 796-0100

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