SAN DIEGO, April 13, /PRNewswire/ -- Bank of Commerce
(Nasdaq: BCOM) today reported first quarter net income more than doubled due
to the strong economic growth and a dynamic business climate in the six
western states where the Bank operates.  Net income increased 123% to
$2.57 million, or $.20 per share (diluted) for the first quarter ended March
31, 1998 compared to $1.15 million, or $.10 per share (diluted) in the first
quarter of 1997.  Per share results reflect the 5-for-2 split of common shares
on May 5, 1997 and a 2-for-1 split paid December 10, 1997.
    "We are very proud of our results this quarter," stated Peter Q. Davis,
Chairman and Chief Executive Officer.  "However, perhaps even more significant
is the over $30 million of unrealized gains in our SBA loan portfolio which
does not appear on the financial statements.  Realizing these gains would give
us access to the capital needed for future growth, without incurring either
the cost, or the shareholder dilution associated with issuing more shares.  We
not only produced a 27% increase in net interest income, we also generated a
$3.2 million gain on sale of loans."  Last year, Bank of Commerce established
an on-going policy to sell a portion of the new SBA loans generated each
quarter.  In the first quarter a year ago, before this program was
implemented, the Bank realized a $367,000 gain on the sale of loans.
    "The strong business climate in California, Arizona, Nevada, Colorado,
Washington and Oregon continues to fuel demand for SBA loans and is the
primary driver to our solid growth," stated Davis.  Bank of Commerce is the
nation's leading bank SBA lender and is a Preferred Lender.  SBA loans
increased 19.6% to $341 million at March 31, 1998 from $285 million a year
ago.  "We recently announced plans to expand our franchise this year with new
loan production offices (LPOs) in five additional states including Texas,
Georgia, Illinois, Idaho and Utah.  We believe our  reputation as the nation's
small business lending experts will be welcomed by the companies in these
growing markets.  In addition, our merger with Rancho Vista National Bank is
on track and we expect to close this transaction shortly after our annual
meeting in May.
    "We generated a 27.03% return on equity and 1.87% return on assets in the
first quarter, reflecting our continued growth over the last few years.  Our
strong earnings record has recently earned the Bank of Commerce the highest
rankings by both Findley and Veribanc, two of the top private bank rating
agencies in the nation," added Davis.  "We are delighted with this quarter's
increased performance and I am extremely proud of our employees for earning
such top honors."
    Gross loans increased to $390.6 million at March 31, 1998 from
$327.4 million at March 31, 1997.  "Our lending teams have performed well in
every measure.  Not only have we expanded lending operations, but federal
regulators have also given us the highest possible rating for our community
reinvestment activities," Davis said.
    Bank of Commerce's net interest margin was 5.51% in the first quarter
compared to 6.12% in the first quarter a year ago.  "The decline in net
interest margin is due primarily to the accelerated need for deposits to match
the increased demand for loans during last year.  The Bank now has adequate
liquidity and is decreasing the yield offered on its deposits.  Loan yields
have declined slightly over the past year and we expect this trend may
continue due to increased competition.  However, any lower margins should be
more than offset by the expected increased loan demand created by our
expansion.  Our merger with Rancho Vista National Bank will add substantial
deposits and short-term loans to our portfolio, " said Gary Cristofani, chief
financial officer.
    Bank of Commerce's efficiency ratio improved to 59.9% at March 31, 1998
from 70.4% a year earlier.  Operating (non-interest) expense was $6.7 million
during the first quarter compared to $4.6 million a year ago.  "The increase
in operating expense is part of the cost of our success, as well as the merger
costs associated with Rancho Vista.  The expenses for expanding our LPO
network are expected to be modest and will largely fall in the second half of
this year -- although there were some expenses related to the opening of the
first of three new Texas offices, which will open their doors this quarter,"
Cristofani, said.
    Deposits also increased 23.7% to $511.7 million from $413.5 million a year
ago.  "Our local community's continued response to our savings programs, as
well as our certificates of deposit offerings have been excellent.  We also
are very pleased to have been selected as a depository for a substantial
number of our local public agencies that have accepted guaranteed SBA loans to
meet government collateral requirements, freeing up other investments for
liquidity needs. We will continue to work to attract deposits from our present
offices while seeking strategic acquisitions to build our branch network and
increase our deposit base," stated Davis.
    Total assets increased 25.4% to $558 million from $445 million at March
31, 1997.  Asset quality remains high, with total non-performing assets (net
of SBA guarantees) of $3.1 million or .55% of assets, at the end of March
compared to $2.3 million or .53% a year ago.  At March 31, 1998, total
reserves for possible loan losses were $2.14 million or 1.10% of total loans,
excluding SBA guaranteed.
    Shareholder equity increased to $39.9 million and book value rose to
$3.39 per share at March 31, 1998.  At December 31, 1997, the unrealized fair
value of the Bank's SBA loan portfolio was $30.4 million or $1.58 per share
(after-tax).
    Bank of Commerce is the nation's leading SBA bank lender and the largest
publicly held independent bank headquartered in San Diego County.  The bank
operates twelve specially designated loan production offices in San Diego,
Glendale, Orange, Sacramento, and San Francisco, CA; Las Vegas and Reno, NV;
Phoenix and Tucson, AZ; Seattle, WA, Portland, OR, and Denver, CO.  In
addition, Bank of Commerce operates seven full service branches in San Diego,
Palm Desert, and Temecula, CA.  On Thursday, April 9, Bank of Commerce closed
at $20.25 per share.
    This company is a client of Len Cereghino & Co. Corporate Investor
Relations.  Bank of Commerce's press releases are available at no charge
through PR Newswire's Company News On-Call fax service.  For a menu of Bank of
Commerce press releases or to retrieve a specific release, call 800-IRNEWS9,
extension 123798, or http://www.prnewswire.com/cnoc/exec/menu?123798 on the
Internet.


                             FINANCIAL HIGHLIGHTS
                                 (unaudited)
                       (in thousands except per share)

                                          First Quarter Ended March 31
                                       1998            1997        Change

    Interest Income                 $11,609          $8,637         34.4%
    Interest Expense                 $4,851          $3,353         44.7%
    Provision for Credit Losses         $50              $0
    Net Interest Income
     after provision                 $6,708          $5,284         26.9%
    Gain on Sale of SBA Loans        $3,185          $3,677         67.8%
    Non-Interest Income              $4,474          $1,231        263.4%
    Non-Interest Expense             $6,724          $4,587         46.6%
    Income Tax                       $1,893            $778        143.3%
    Net Income                       $2,565          $1,150        123.0%
    "Basic" Earnings Per Share        $0.22           $0.11
    Diluted Earnings Per Share        $0.20           $0.10
    "Basic" Average
     Shares Outstanding             $11,690         $10,052
    Diluted Average
     Shares Outstanding             $13,087         $11,716
    Cash Dividend per
     Common Share                    $0.030          $0.018

                           3/31/98      12/31/97      3/31/97         Change

    Total Assets          $558,335      $556,772     $445,310         25.4%
    Loans Receivable, net $388,422      $384,426     $325,391         19.4%
    Investment Securities  $32,246       $30,160      $14,235        126.5%
    Deposits              $511,662      $512,120     $413,540         23.7%
    Shareholders' Equity   $39,859       $37,259      $28,336         40.7%
    Book Value Per
     Common Share            $3.39         $3.22        $2.81         20.7%

    FINANCIAL RATIOS:               3/31/98        12/31/97       3/31/97

    Return on average assets          1.87%           1.51%         1.19%
    Return on average equity         27.03%          22.41%        16.42%
    Average equity to
     average assets                   6.91%           6.74%         7.23%
    Efficiency ratio                 59.90%          64.43%        70.42%
    Operating expenses
     to average assets                4.90%           4.74%         4.73%
    Net interest margin (ytd)         5.51%           5.82%         6.12%

    LOAN SERVICING PORTFOLIO:       3/31/98        12/31/97       3/31/97

    Balance at end of quarter      $255,111        $233,320      $203,966
    Balance at beginning
     of year                       $233,320        $203,696      $203,696
    Fee income generated
     during quarter                    $417            $394          $394
    Fee income generated
     year to date                      $417          $1,559          $394

    NONPERFORMING ASSETS:           3/31/98        12/31/97       3/31/97

    Accruing loans - 90 days past due    $0            $153           $18
    Non-accrual loans                $1,842          $1,187        $1,438
    Restructured loans                 $541            $550           $95
    Total nonperforming loans        $2,383          $1,890        $1,551
    Other real estate owned            $673            $574          $794
    Total nonperforming assets       $3,056          $2,464        $2,345
    Total nonperforming
     assets to total assets           0.55%           0.44%         0.53%
    SBA guaranteed
     portions excluded               $1,687          $1,291        $1,381

    ALLOWANCE FOR CREDIT LOSS     3/31/98                 12/31/97

    Balance beginning period       $2,154                  $2,279
    Provision for credit losses       $50                    $387
    Net chargeoffs (recoveries)       $61                    $512
    Balance end of period          $2,143                  $2,154
    Allowance to net loans
     (ex. SBA guar)                 1.10%                   1.15%
    Allowance to nonperforming
     loans (ex. SBA guarantees)    89.90%                 114.00%

    Statements concerning future performance, developments or events,
concerning expectations for growth and market forecasts, and any other
guidance on future periods, constitute forward-looking statements which are
subject to a number of risks and uncertainties which might cause actual
results to differ materially from stated expectations.  These factors include
but are not limited to the effect of interest rate changes, the expansion of
the bank, changes in SBA policy or funding, competition in the financial
services market for both deposits and loans, and general economic conditions.

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