California United Bank Reports Third Quarter 2009 Results Including a 12.5% Increase in Net Income, a 30.9% Increase in Total Assets and a 56.7% Increase in Deposits Over Third Quarter 2008

http://www.businesswire.com/news/home/20091109005420/en

ENCINO, Calif.--(Business Wire)--
California United Bank (OTCBB:CUNB) announced today its financial results for
the quarter ended September 30, 2009. Pre-tax net income of $371 thousand was up
51.4 percent over pre-tax net income of $245 thousand for the third quarter of
the prior year. Net income of $153 thousand for the 2009 third quarter increased
12.5 percent over net income of $136 thousand for the third quarter of the prior
year. The Bank`s results were driven by materially increased interest and fee
income, combined with significantly lower interest expense. Growth in total
deposits of 56.7 percent from the 2008 third quarter fueled a 30.8 percent, or
$108.8 million, increase in assets from the third quarter of 2008.

Third Quarter 2009 Highlights:

* Total assets reached a record $461.6 million, a 30.8 percent, or $108.8
million, increase from the third quarter of 2008. This record was achieved
notwithstanding a reduction in Federal Home Loan Bank borrowings from $38
million at September 30, 2008, to $13.0 million at September 30, 2009.
* EPS was $0.03 based on approximately 5.054 million diluted weighted average
shares outstanding, compared to EPS of $0.03 based on approximately 5.003
million diluted weighted average shares outstanding in the third quarter of
2008.
* Capital Ratios exceed all regulatory requirements to be "well-capitalized"
(the highest level determined by the regulatory agencies), with a Total
Risk-Based Capital Ratio of 18.11 percent, Tier I Risk-Based Capital Ratio of
16.86 percent and Tier I Leverage Ratio of 13.27 percent.
* Non-interest-bearing deposits increased 91.5 percent to $121.0 million from
$63.2 million in the prior-year period. Non-interest-bearing deposits
represented 34.2 percent of deposits.
* Total deposits increased to $354.4 million, up 56.7 percent, or $128.3
million, over the third quarter of 2008. The Bank achieved this without any
brokered deposits. Growth in certificates of deposit was generated principally
from the Bank`s core customers. The Bank does not engage in any advertising of
its certificate of deposit products.
* Loans grew to $250.7 million, up 18.0 percent, or $38.3 million, over the
third quarter of 2008.

"The third quarter was one of strong growth for the Bank, as we again generated
significant increases in quality loans, total assets and core deposits from a
year ago," said David Rainer, Chairman, President & Chief Executive Officer.
"Growth in both loans and deposits was a direct result of new banking
relationships we developed, as well as growth in existing ones, and is a credit
to the team`s diligent efforts."

Performance in the 2009 third quarter was impacted by a $1.2 million provision
for loan losses, compared to $162 thousand in the third quarter of 2008. After
charge-offs of $779 thousand, the provision added a net total of $457 thousand
to the Allowance for Loan Losses. The Allowance for Loan Losses equaled 1.70
percent of total loans at September 30, 2009, compared to 1.25 percent at
September 30, 2008. The level of the Provision for Loan Losses reflects moderate
loan growth over the prior quarter and the impact of continued negative economic
pressure in the Bank`s market.

"We experienced our first non-accrual loan in over four years of operation
during the third quarter, as well as the first material level of charge-offs,"
said Mr. Rainer. "We believe this is symptomatic of the stress the economy has
placed on even the most solid borrowers and that as a result, no bank can
realistically continue with an unblemished credit record. CUB continues to
maintain a strong credit culture that proactively deals with loans showing any
signs of weakness. Our credit quality remains extremely positive when compared
to banks in our market, generally."

The Bank had no REOs and no loans in foreclosure at September 30, 2009. For the
quarter, the Bank had $1.9 million in non-performing loans, or 0.75 percent of
outstanding loans, and $0.7 million in 30+ day delinquencies, versus $0 in the
third quarter of 2008.

"Our strong capital base will support us as our market works through the
economic downturn, as we believe our marketplace will lag the national economy
in recovery," Mr. Rainer added. "However, we remain firmly able to not only
withstand these conditions but also take advantage of growth opportunities, such
as our new South Bay Commercial Center located at the intersection of the 405
and 10 Freeways, which opened in September of this year. We have also taken
advantage of high-quality bankers available in the marketplace, augmenting our
team of highly experienced relationship managers and executives."

During the third quarter of 2009, the Bank recognized losses on investment
securities of $244 thousand as a result of other than temporary impairment
("OTTI") of Private Issue Collateralized Mortgage Obligation securities.

Pre-payments on the Bank`s Private Issue CMO securities portfolio remained
strong during the third quarter of 2009, with principal payments received on the
securities of $400 thousand, compared to $537 thousand in the second quarter of
2009.

About the Bank

California United Bank provides a full range of financial services, including
credit and deposit products, cash management, and Internet banking for business
and high net worth individuals. The Bank operates from its headquarters office
at 15821 Ventura Boulevard, Suite 100, Encino, CA 91436; West Los Angeles
Regional Office at 1640 South Sepulveda Boulevard, Suite 114, Los Angeles, CA
90025; Santa Clarita Valley Regional Office at 25350 Magic Mountain Parkway,
Suite 100, Valencia CA 91355, Conejo Valley Loan Production Office at 4333 Park
Terrace Drive, Suite 215, Westlake Village, CA 91361 and South Bay Commercial
Center at 1025 W. 190th Street, Gardena, California 90248. Information on
products and services may be obtained by calling (818) 257-7700 or visiting the
Bank`s website at www.californiaunitedbank.com.

SAFE-HARBOR LANGUAGE

This news release contains forward-looking statements about the Bank, for which
the Bank claims the protection of the safe harbor provisions contained in the
Private Securities Litigation Reform Act of 1995. Forward-looking statements are
based on management's knowledge and belief as of today and include information
concerning the Bank's possible or assumed future financial condition, and its
results of operations, business and earnings outlook. These forward-looking
statements are subject to risks and uncertainties. A number of factors, some of
which are beyond the Bank's ability to control or predict, could cause future
results to differ materially from those contemplated by such forward-looking
statements. These factors include (1) difficult and adverse conditions in the
global and domestic capital and credit markets, (2) continued volatility and
further deterioration of the capital and credit markets, (3) significant changes
in banking laws or regulations, (4) a more adverse than expected decline or
continued weakness in general business and economic conditions, which may
affect, among other things, the level of nonperforming assets, charge-offs and
provision expense, (5) changes in market rates and prices which may adversely
impact the value of financial products, (6) changes in the interest rate
environment and market liquidity which may reduce interest margins and impact
funding sources, (7) increased competition in the Bank's markets, (8) changes in
the financial performance and/or condition of the Bank's borrowers, (9)
increases in Federal Deposit Insurance Corporation premiums due to market
developments and regulatory changes, (10) earthquake, fire or other natural
disasters, (11) changes in accounting policies or procedures as may be required
by the Financial Accounting Standards Board or regulatory agencies, and (12) the
success of the Bank at managing the risks involved in the foregoing.

Forward-looking statements speak only as of the date they are made, and the Bank
does not undertake to update forward-looking statements to reflect circumstances
or events that occur after the date the statements are made, or to update
earnings guidance, including the factors that influence earnings.

For a more complete discussion of these risks and uncertainties, see the Bank's
Annual Report on Form 10-K for the year ended December 31, 2008 and particularly
Part I, Item 1A, titled "Risk Factors."

CALIFORNIA UNITED BANK
BALANCE SHEETS
(Dollars in thousands)

September 30, September 30, December31,
2009 2008 2008
Unaudited Unaudited Audited
Assets:
Cash and Due From Banks $ 6,057 $ 7,161 $ 4,417
Federal Funds Sold - 40,070 16,305
Interest-Earning Deposits In Other Financial Institutions 63,268 189 11,492
Total Cash and Cash Equivalents 69,325 47,420 32,214
U.S. Govt & U.S. Sponsored Agency Guaranteed Mortgage-Backed Securities 58,396 44,838 63,425
Private Issue CMO Securities 6,145 7,969 8,093
U.S. Agency Issued Securities 67,925 31,089 34,851
SBA Issued Securities 939 1,051 1,000
Total Investment Securities 133,405 84,947 107,369

Total Investment Securities, Cash & Cash Equivalents 202,730 132,367 139,583

Loans Net of Deferred Loan Fees 250,650 212,368 232,204
Allowance for Loan Losses (4,252 ) (2,662 ) (3,205 )
Loans Net of Allowance for Loan Losses 246,398 209,706 228,999
Total Other Assets 12,462 10,719 10,672

Total Assets $ 461,590 $ 352,792 $ 379,254

Liabilities:
Non-Interest-Bearing Demand Deposits $ 121,049 $ 63,204 $ 83,366
Interest-Bearing Demand Deposits (NOW Deposits) 53,144 28,831 42,861
Money Market Deposits 117,289 108,800 87,745
Savings Deposits 854 663 820
Certificates of Deposit 62,091 24,664 30,886
Total Interest Bearing Deposits 233,378 162,958 162,312
Total Deposits 354,427 226,162 245,678

Securities Sold Under Agreements to Repurchase 35,739 32,252 16,662
Borrowings 13,000 38,000 58,000

Total Deposits & Borrowings 403,166 296,414 320,340

Accrued Interest Payable and Other Liabilities 1,699 1,849 2,271

Total Liabilities 404,865 298,263 322,611

Shareholders' Equity:
Common Stock 56,901 56,831 56,831
Additional Paid in Capital 3,729 3,100 3,263
Prior Year Accumulated Deficit (3,364 ) (5,970 ) (5,970 )
Current Year-to-Date Income 702 2,517 1,893
Accumulated Other Comprehensive Income (Loss) (1,243 ) (1,949 ) 626
Total Shareholders' Equity 56,725 54,529 56,643

Total Liabilities & Shareholders' Equity $ 461,590 $ 352,792 $ 379,254

CALIFORNIA UNITED BANK
STATEMENT OF OPERATIONS
For the Three Months Ended September 30, 2009 and September 30, 2008
(Dollars in thousands except per share data)

For the three months ended
September 30, September 30,
2009 2008
Unaudited Unaudited
Interest Income:
Interest and Fees on Loans $ 3,159 $ 3,246
Interest on Federal Funds Sold - 35
Interest on Deposits in Other Financial Institutions 29 105
Interest on Investment Securities 1,904 1,026
Total Interest Income 5,092 4,412

Interest Expense:
Interest on Savings & Interest-Bearing Demand Deposit Accounts 46 128
Interest on Money Market Accounts 181 482
Interest on Certificates of Deposit 249 103
Interest on Securities Sold Under Agreements to Repurchase and Borrowings 213 379
Total Interest Expense 689 1,092

Net Interest Income 4,403 3,320

Provision for Loan Losses 1,235 162

Net Interest Income After Provision for Loan Losses 3,168 3,158

Non-Interest Income:
Gain on sale of investment securities 140 -
Non-interest Income 258 153
Total Non-Interest Income 398 153

Non-Interest Expense:
Salaries and Employee Benefits 1,706 2,014
Occupancy Expenses 484 455
Other Operating Expenses 761 597
Net impairment losses on securities 244 -
Total Non-Interest Expense 3,195 3,066

Net Income before Provision for Income Tax 371 245

Provision for Income Taxes 218 109

Net Income $ 153 $ 136

Basic Earnings per share $ 0.03 $ 0.03
Diluted Earnings per share $ 0.03 $ 0.03
Averages shares outstanding 4,957,896 4,923,609
Diluted average shares outstanding 5,053,759 5,002,910

CALIFORNIA UNITED BANK
STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2009 and September 30, 2008
(Dollars in thousands except per share data)

For the nine months ended
September 30, 2009 September 30, 2008
Unaudited Unaudited
Interest Income:
Interest and Fees on Loans $ 9,129 $ 8,976
Interest on Federal Funds Sold 11 47
Interest on Deposits in Other Financial Institutions 72 590
Interest on Investment Securities 5,612 2,895
Total Interest Income 14,824 12,508

Interest Expense:
Interest on Savings & Interest-Bearing Demand Deposit Accounts 134 257
Interest on Money Market Accounts 437 1,666
Interest on Certificates of Deposit 674 322
Interest on Securities Sold Under Agreements to Repurchase and Borrowings 657 970
Total Interest Expense 1,902 3,215

Net Interest Income 12,922 9,293

Provision for Loan Losses 2,182 642

Net Interest Income After Provision for Loan Losses 10,740 8,651

Non-Interest Income:
Gain on sale of investment securities 156 368
Non-interest Income 730 455
Total Non-Interest Income 886 823

Non-Interest Expense:
Salaries and Employee Benefits 5,838 5,504
Occupancy Expenses 1,432 1,312
Other Operating Expenses 2,525 1,877
Net impairment losses on securities 498 -
Total Non-Interest Expense 10,293 8,693

Net Income before Provision for Income Tax 1,333 781

Provision/(Benefit) for Income Taxes 631 (1,736 )

Net Income $ 702 $ 2,517

Basic Earnings per share $ 0.14 $ 0.51
Diluted Earnings per share $ 0.14 $ 0.50
Average shares outstanding 4,953,463 4,893,622
Diluted average shares outstanding 4,953,463 5,034,520

CALIFORNIA UNITED BANK
Supplemental Data
(Dollars in thousands)

September 30, June 30, December 31,
2009 2009 2008
Unaudited Unaudited Unaudited
Capital Ratios Table:

Tier 1 leverage ratio 13.27 % 14.07 % 15.77 %
Tier 1 risk based capital ratio 16.86 % 17.69 % 18.86 %
Total risk-based capital ratio 18.11 % 18.89 % 19.98 %

Non-Earning Asset Table:

Loans on non-accrual $ 1,879 $ 0 $ 0
Loans that are past due 30 days delinquent and still accruing 722 0 0

Other Real Estate Owned 0 0 0

Total non-earning, delinquent Loans and Other Real Owned $ 2,601 $ 0 $ 0

Loans on non-accrual as a % of total loans 0.75 % 0.00 % 0.00 %
Loans that are past due 30 days delinquent as a percentage of total loans 0.29 % 0.00 % 0.00 %

Total non-earning, delinquent loans and Other Real Owned as a % of Total Assets 0.56 % 0.00 % 0.00 %

Investor Relations Contacts:
California United Bank
David I. Rainer, Chairman, President and CEO, 818-257-7776
Karen Schoenbaum, Chief Financial Officer, 818-257-7700
or
Addo Communications, Inc.
Andrew Greenebaum, 310-829-5400
andrewg@addocommunications.com

Copyright Business Wire 2009