Focus Business Bank Announces Unaudited Financial Results for the Quarter and Year Ended December 31, 2011

The Bank reported net income of $239,000, or $0.09 per share, for the quarter ended December 31, 2011 compared to net income of $21,000 or $0.01 per share, for the quarter ended December 31, 2010. For the year ended December 31, 2011, the Bank reported net income of $601,000, or $0.22 per share, compared to a loss of $203,000, or ($0.07) per share, for the twelve-months ended December 31, 2010.

Assets and Liabilities

Total assets increased to $168.5 million at December 31, 2011, a 28% increase from December 31, 2010. Total loans were $97.4 million at December 31, 2011, a 47% increase from December 31, 2010. Total deposits grew to $145.2 million at December 31, 2011, a 32% increase from December 31, 2010.

Non-interest bearing deposits at December 31, 2011 were $63.2 million, as compared to $32.0 million at December 31, 2010, an increase of 98%. Non-interest bearing deposits represent 44% of total deposits at December 31, 2011, compared to 29% of total deposits at December 31, 2010.

Net Interest Income

Net interest income for the twelve-months ended December 31, 2011 was $4,847,000, an increase of 26% compared to $3,855,000 for the same period in 2010. The net interest margin of 3.46% for the twelve-months ended December 31, 2011 was an improvement compared to 3.29% for the twelve-months ended December 31, 2010. The increase in net interest margin for the year ending December 31, 2011, compared to the prior year, is primarily attributable to an increase in loans. At December 31, 2011, the loan to deposit ratio was 67% as compared to 60% at December 31, 2010.

Non-interest Income

Non-interest income was $1,027,000 for the twelve months ended December 31, 2011, compared to $464,000 for the same period in 2010. The increase in non-interest income for the twelve months ending December 31, 2011, as compared to the prior year, is primarily attributable to gains on the sale of SBA loans which totaled $761,000 in 2011 and $353,000 in 2010.

Non-Interest Expense

Non-interest expense was $5,211,000 for the twelve-months ended December 31, 2011, compared to $4,722,000 for the twelve months ended December 31, 2010. The increase in non-interest expense for the year ended December 31, 2011, compared to the same period in 2010, is primarily attributable to personnel and other expenses associated with the growth in earning assets.

Asset Quality

The Bank made no provision to loan loss reserves in the year ended December 31, 2011. The allowance for loan losses was 2.61% of total loans at December 31, 2011, as compared to 3.83% at December 31, 2010. There were no loan charge-offs or recoveries for the year ended December 31, 2011. At December 31, 2011, the Bank had two non-performing loans totaling $1,044,000 which are well secured and for which the Bank expects full collection. At December 31, 2010, the Bank had one non-performing loan for $86,000. The Bank has never had other real estate owned.

Capital

Focus Business Bank has capital ratios substantially in excess of regulatory requirements for well capitalized banks. At December 31, 2011, the total risk-based capital ratio was 20.75%.

About Focus Business Bank

Focus Business Bank is dedicated to meeting the banking needs of closely-held businesses and professionals in Santa Clara County. The Bank's office is located at 10 Almaden Boulevard in downtown San Jose, California and offers a variety of commercial banking products including loans, deposits, remote deposit capture and other cash management services oriented toward closely-held businesses and their owners. The Bank specializes in commercial loans and is also an SBA Preferred Lender. The Bank also serves not-for-profit businesses and condominium homeowner associations by offering expertise, market knowledge and specialized products and services to these customers.

Forward-Looking Statements

This release may contain forward-looking statements, such as, among others, statements about plans, expectations and goals concerning growth and improvement. Forward-looking statements are subject to risks and uncertainties. Such risks and uncertainties may include but are not necessarily limited to fluctuations in interest rates, inflation, government regulations and general economic conditions, including the real estate market in California and other factors beyond the Bank's control. Such risks and uncertainties could cause results for subsequent interim periods or for the entire year to differ materially from those indicated. Readers should not place undue reliance on the forward-looking statements, which reflect management's view only as of the date hereof. The Bank undertakes no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.


                            Focus Business Bank
                        Summary Financial Statements
                     (in, 000's except per share data)

                                            As of
                             ----------------------------------
                                                                 12 Month %
BALANCE SHEET                 31-Dec-11   30-Sep-11   31-Dec-10    Change
                             ----------  ----------  ----------  ----------
                              Unaudited   Unaudited   Unaudited
ASSETS
Cash and due from banks
  Interest bearing           $   40,906  $   32,942  $   34,061          20%
  Non-interest bearing            4,309       4,320       1,716         151%
Federal funds sold                  505         505         510          -1%
Investment securities            26,502      26,980      30,289         -13%
Loans                            97,401      89,011      66,387          47%
  Net deferred loan costs            37         102         138         -73%
  Allowance for loan losses      (2,541)     (2,541)     (2,541)          0%
                             ----------  ----------  ----------
    Net Loans                    94,897      86,572      63,984          48%
Other assets                      1,405       1,442       1,338           5%
                             ----------  ----------  ----------

TOTAL ASSETS                 $  168,524  $  152,761  $  131,898          28%
                             ==========  ==========  ==========

LIABILITIES
Deposits
  Non-interest bearing       $   63,196  $   44,045  $   31,982          98%
  Interest bearing               81,986      85,478      77,824           5%
                             ----------  ----------  ----------
    Total deposits              145,182     129,523     109,806          32%
Other liabilities                   716         828         601          19%
                             ----------  ----------  ----------
TOTAL LIABILITIES               145,898     130,351     110,407          32%
Stockholders' equity             22,626      22,410      21,491           5%
                             ----------  ----------  ----------

LIABILITIES AND
 STOCKHOLDERS' EQUITY        $  168,524  $  152,761  $  131,898          28%
                             ==========  ==========  ==========
Book value/share             $     8.15  $     8.07  $     7.77           5%

Balance Sheet Ratios
  Loan/deposit                       67%         69%         60%
  Non-interest
   deposits/total deposits           44%         34%         29%

Regulatory Capital Ratios
  Tier-1 leverage                 13.82%      15.47%      16.53%
  Tier-1 risk based capital       19.48%      20.04%      27.19%
  Total risk-based capital        20.75%      21.31%      28.46%

Asset Quality Metrics
  Non-performing loans       $    1,044  $       83  $       86
  Non-performing loans/total
   loans                           1.07%       0.09%       0.13%
  ALLL/total loans                 2.61%       2.85%       3.83%



                                     Quarter Ended          Year Ended
                                 --------------------  --------------------
INCOME STATEMENT                 31-Dec-11  31-Dec-10  31-Dec-11  31-Dec-10
                                 ---------  ---------  ---------  ---------
                                 Unaudited  Unaudited  Unaudited  Unaudited
Interest income                  $   1,465  $   1,090  $   5,275  $   4,419
Interest expense                       100        120        428        564
                                 ---------  ---------  ---------  ---------
  Net interest income                1,365        970      4,847      3,855
Provision for loan losses                -       (125)         -       (200)
Non-interest income                    137         97      1,027        464
Non-interest expense                 1,268      1,171      5,211      4,722
                                 ---------  ---------  ---------  ---------
    Pre-tax income (loss)              234         21        663       (203)
    Income taxes                        (5)         -         62          -
                                 ---------  ---------  ---------  ---------
Net income (loss)                $     239  $      21  $     601  $    (203)
                                 =========  =========  =========  =========
Net income (Loss) per basic
 share                           $    0.09  $    0.01  $    0.22  $   (0.07)

Performance Metrics
  Net interest margin                 3.47%      3.05%      3.46%      3.29%
  Return on average assets            0.59%      0.06%      0.42%     -0.17%
  Return on average equity            4.20%      0.38%      2.72%     -0.95%

Contact:
Richard L. Conniff
President and Chief Executive Officer
408.200.8701
Email Contact

Source: Focus Business Bank