Commerce National Bank Announces Third Quarter 2009 Results

Commerce National Bank (OTCBB: CNBF), a community business bank in its sixth year of operation, announced its financial results for the third quarter and first nine months of 2009.

For the three month period ended September 30, 2009, the Bank reported net income of $105,000 as compared to a net loss of $152,000 for the same period in 2008. For the nine month period ended September 30, 2009, the Bank reported a net loss of $130,000 as compared to net income of $254,000 for the same period in 2008. For the three and nine month periods ended September 30, 2009, respectively, the Bank recorded provisions for loan and lease losses of $200,000 and $725,000 as compared to provisions of $375,000 and $702,000 for the similar periods in 2008. For the three and nine month periods ended September 30, 2009, respectively, the Bank recognized losses in its investment portfolio of $167,000 and $427,000 for the portion of an investment that is considered to be Other Than Temporarily Impaired (OTTI). For the three and nine month periods ended September 30, 2008, respectively, the Bank recognized OTTI losses in its investment portfolio of $359,000. For the three and nine month periods ended September 30, 2009, respectively, the Bank recorded income tax expense of $358,000 and $195,000 as compared to the recording of income tax benefits of $207,000 and $116,000 for the similar periods in 2008. Notwithstanding the profits for the quarter, the Bank continues to absorb losses in its investment portfolio as a result of the continued deterioration of the mortgage markets. The Bank continues to reserve for the loan portfolio but, at this point, has not seen a significant deterioration in the quality of the loan portfolio.

Net interest income decreased $321,000 and $831,000 for the three and nine month periods ended September 30, 2009, respectively, compared to the same periods of the prior year due to lower interest rates. Non-interest income increased by $571,000 and $308,000 for the three and nine month periods ended September 30, 2009, as compared to the same periods last year. The changes in non-interest income were primarily due to fees generated by a gain on the sale of some available-for-sale securities. For the three and nine month periods ended September 30, 2009, non-interest expense decreased $205,000 and $542,000, respectively, compared to the same periods in 2008. The changes in non-interest expense were primarily due to reductions in compensation costs in 2009.

As of September 30, 2009, the Bank reported total assets of $232.2 million, representing a decrease of $29.7 million from September 30, 2008. Total deposits at September 30, 2009 were $179.6 million, a decrease of $31.1 million from the prior year. The 2008 deposits were increased by a one-time, very short term deposit for $28.5 million that was on the books over the quarter end. Net loans at September 30, 2009 were $131.8 million, representing a decrease of $1.2 million from the prior year. Total shareholders' equity as of September 30, 2009 was $32.9 million, an increase of $5.0 million from the prior year. $5.0 million of the increased equity was in the form of TARP-CPP preferred stock that the Bank received in January of 2009 and repaid to the U.S. Treasury in October of 2009. At September 30, 2009 the Bank had regulatory capital ratios of 13.80% for Tier 1 leverage and 22.01% for total risk-based capital and continued to be well capitalized. After the repayment of the TARP-CPP, these ratios were 11.69% and 18.83%, respectively, and the Bank continued to be well capitalized.

With offices in Newport Beach near John Wayne airport and in the City of Fullerton, the Bank is well positioned to serve businesses, professionals and selected real estate customers in both the northern and southern areas of Orange County. The offices are staffed by experienced business bankers who are committed to providing exemplary service to their customers in the business community.

Forward-Looking Statement

This news release contains statements that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations, estimates and projections about Commerce National Bank's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including those described above and the following: Commerce National Bank's timely development of new products and services, technological changes, changes in consumer spending and savings habits and other risks discussed from time to time in Commerce National Bank's reports and filings with the Office of the Comptroller of the Currency. In addition, such statements could be affected by general industry and market conditions and growth rates, and general domestic and international economic conditions. Such forward-looking statements speak only as of the date on which they are made, and Commerce National Bank does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

                    Condensed Statements of Operations
           000's Omitted (Except Per Share Amounts)  -  Unaudited

                                          Three Months      Nine Months
                                              Ended             Ended
                                          September 30,     September 30,
                                        ----------------  ----------------
                                          2009     2008     2009     2008
                                        -------- -------  -------  -------
Interest Income                         $  2,654 $ 3,064  $ 7,853  $ 8,920
Interest Expense                             632     721    1,867    2,102
                                        -------- -------  -------  -------
Net Interest Income                        2,022   2,343    5,987    6,818
Provision for Loan Losses                    200     375      725      702
                                        -------- -------  -------  -------
Net Interest Income After
      Provision for Loan Losses            1,822   1,968    5,262    6,116
Non Interest Income                          633      62      779      471
Non Interest Expense                       1,825   2,030    5,548    6,090
OTTI Charges on Investments Held             167     359      427      359
                                        -------- -------  -------  -------
      Income (Loss) Before Income Taxes      462    (359)      65      138
Income Tax Expense (Benefit)                 358    (207)     195     (116)
                                        -------- -------  -------  -------
Net Income (Loss)                       $    105 ($  152) ($  130) $   254
                                        ======== =======  =======  =======
Basic Earnings (Loss) Per Share         $   0.04 ($ 0.06) ($ 0.05) $  0.10
                                        ======== =======  =======  =======
   Diluted Earnings (Loss) Per Share    $   0.04 ($ 0.06) ($ 0.05) $  0.10
                                        ======== =======  =======  =======




                Condensed Statements of Financial Condition
                        000's Omitted  -  Unaudited

                                                          September 30,
                                                      --------------------
Assets                                                  2009       2008
                                                      ---------  ---------
 Cash & Due From Banks                                $   7,216  $   4,214
   Federal Funds Sold & Excess Balances at FRB           11,336     64,551
   Investments                                           78,236     55,832
   Loans (Net)                                          131,810    132,975
   Other Assets                                           3,606      4,336
                                                      ---------  ---------
      Total Assets                                    $ 232,204  $ 261,908
                                                      =========  =========
Liabilities & Shareholders' Equity
   Demand Deposits                                    $  37,677  $  77,475
   Money Market, Savings and NOW Accounts                44,483    108,437
   Certificates of Deposit                               97,414     24,800
                                                      ---------  ---------
      Total Deposits                                    179,574    210,712
   Other Borrowings                                      18,500     22,000
   Other Liabilities                                      1,249      1,357
Shareholders' Equity
   Preferred Stock                                        5,000          0
   Common Stock and Surplus                              31,867     31,735
   Accumulated Deficit                                   (3,397)    (2,792)
   Unrecognized Loss on AFS Securities                     (589)    (1,104)
                                                      ---------  ---------
      Total Shareholders' Equity                         32,881     27,839
                                                      ---------  ---------
Total Liabilities & Shareholders' Equity              $ 232,204  $ 261,908
                                                      =========  =========