SAN LUIS OBISPO, Calif., July 28 /PRNewswire-FirstCall/ -- American Perspective Bank (OTC Bulletin Board: APBA) (the "Bank") today announced second quarter and year to date financial results through June 30, 2010. In addition, the Bank is pleased to announce that it has recently opened its first branch office, in Santa Maria, California. The Bank completed changing its name from American Principle Bank to American Perspective Bank during the second quarter of 2010.

Net income during the second quarter of 2010 was $142 thousand, or $0.03 diluted earnings per share. This compared favorably to net income of $56 thousand during the second quarter of 2009, equivalent to $0.01 diluted earnings per share. Net income during the first quarter of 2010 (the immediately preceding quarter) was $147 thousand, equivalent to $0.03 diluted earnings per share.

Net income for the first six months of 2010 was $289 thousand, or $0.07 diluted earnings per share. This compares to net income of $260 thousand during the first six months of 2009, equivalent to $0.06 diluted earnings per share. The Bank, a de novo financial institution which opened for business on October 15, 2007, has generated a profit during five of the most recent six consecutive quarters.

The Bank reported record levels of net loans, assets, and deposits as of June 30, 2010. Net loans increased from $137.4 million at December 31, 2009 to $148.5 million at June 30, 2010. Total assets rose from $203.0 million at December 31, 2009 to $212.3 million at June 30, 2010. Deposits increased from $152.3 million at December 31, 2009 to $163.8 million at June 30, 2010. The deposit growth during the second quarter of 2010 was achieved despite that time period's being the seasonally weakest part of the year for deposits due to client tax payments.

The Bank opened its Santa Maria branch office on July 21, 2010. The branch presents many attractive features, including a "high tech" conference / training room that is available to local clients and community groups, all "sit-down" transaction processing (no teller lines or ropes), a concierge desk, a focus on client comfort and confidentiality throughout the facility, and private offices for meetings with Bank officers. The Santa Maria market contains a population in excess of 93,000 and is home to a significant number of local businesses. The Santa Maria branch is managed by Mike Sell (Senior Relationship Manager) and Rachel Hill (Branch Manager), both of whom are well regarded and long term Santa Maria area bankers. Shareholders and current and prospective clients are invited to tour the facility and meet the Santa Maria branch team. The branch is located at 2646 Santa Maria Way, Suite # 101 (near the intersection of Santa Maria Way and Broadway).

At June 30, 2010, the Bank's: (i) Tier One Leverage regulatory capital ratio was 18.93%; (ii) Tier One Risk-Based regulatory capital ratio was 24.26%; and (iii) Total Risk-Based regulatory capital ratio was 25.51%. All of these ratios were significantly in excess of the levels required to be categorized in the highest regulatory capital classification of "well capitalized." The Bank's capital ratio profile continues to be one of the strongest for banks headquartered in San Luis Obispo and Santa Barbara counties.

During the first quarter of 2010, the Bank reached a settlement with a third party that alleged trademark infringement associated with the Bank's name. Under the terms of the settlement, the Bank agreed to change its name within a suitable time period in exchange for the plaintiff and the Bank's general liability insurance carrier agreeing to make certain payments to the Bank. The Bank completed changing its name to American Perspective Bank during June 2010 at a cost of approximately $40 thousand less than the total payments received. Second quarter 2010 net income thus benefitted from the recognition of the $40 thousand in excess payments as a component of non-interest income.

Cash and cash equivalents decreased from $4.9 million at December 31, 2009 and $6.9 million at March 31, 2010 to $3.8 million at June 30, 2010. At March 31, 2010, the Bank augmented its short term liquidity position in preparation for seasonal tax related payments by its clients in April. Following the completion of the tax payment season during the second quarter of 2010, the Bank worked to minimize its excess cash and cash equivalents in light of the very low yields available for such assets in the current capital markets environment.

Total securities available for sale decreased from $56.0 million at December 31, 2009 to $52.5 million at June 30, 2010. During the second quarter of 2010, the Bank sold one mortgage backed security and purchased two variable rate collateralized mortgage obligations in conjunction with its interest rate risk management program. In addition, periodic cash flows from the security portfolio during the first half of 2010 were utilized to fund a portion of the increase in the loan portfolio. All of the Bank's securities at June 30, 2010 were AAA rated government agency mortgage backed securities or collateralized mortgage obligations. The estimated fair value of the Bank's $52.5 million in securities at June 30, 2010 exceeded historical cost by $989 thousand.

Net loans increased from $137.4 million at December 31, 2009 to $148.5 million at June 30, 2010. Increased balances were achieved across all segments of the loan portfolio other than construction, land, and farm real estate loans. The Bank has not emphasized land and construction lending in recent periods in light of the amount of existing real estate inventory relative to sales and leasing demand; and in recognition of the current relationship between the sales prices of existing inventory relative to the costs of development of new real estate projects in various markets. The Bank had a single farm real estate loan outstanding at December 31, 2009 that paid off in full during 2010. At both December 31, 2009 and June 30, 2010, the Bank had no residential, closed-end mortgages on its balance sheet.

Commenting on the loan portfolio growth during the first half of 2010, Thomas J. Beene, the Bank's President and Chief Executive Officer stated: "We have been communicating throughout our primary market area that American Perspective Bank is very strongly capitalized and has the liquidity and capacity to lend to qualified borrowers. The Bank continues to focus, in particular, on attracting additional professionals (e.g. physicians, accountants, and attorneys) and local businesses, offering those clients a highly customizable suite of financial solutions."

As of June 30, 2010, the Bank had no loans that were 30 or more days delinquent other than those loans on non-accrual status. Loans on non-accrual status decreased from $6.6 million at December 31, 2009 to $3.1 million at June 30, 2010. Non-accrual loans at June 30, 2010 were comprised of two loans, both of which are secured by real estate in the Bank's primary market area:

• a $2.96 million commercial loan collateralized by three parcels
• a $132 thousand loan secured by a residential lot

At this time, the Bank projects completing the foreclosure for all of the real estate collateral securing the two non-accrual loans before the end of the third quarter of 2010. The $2.96 million loan was adversely impacted by the incorrect recording of the real estate by the title company. The Bank has filed a claim under the subject title insurance policy and has also filed a lawsuit against the title company seeking to enforce their performance under the title insurance policy. The owner of the real estate (the Bank's borrower) has also filed a lawsuit which names the title company and the Bank, among multiple other parties, as defendants. The Bank is currently actively negotiating a settlement agreement with the borrower that will permit the Bank to timely complete the foreclosure process. Various legal actions are in process to rectify the incorrect recording of the real estate and the related subsequent events. The Bank intends to continue to vigorously pursue the title company to hold the Bank financially harmless from the results of the error.

Other real estate owned increased from none at December 31, 2009 to $3.1 million at March 31, 2010, and then decreased to $2.3 million at June 30, 2010. During the first quarter of 2010, the Bank foreclosed upon a motel securing a commercial real estate loan. The motel, flagged as a Best Western, was sold during the second quarter of 2010, generating a loss on sale of $105 thousand. The operating results for the motel also impacted the Bank's earnings during 2010. During the first quarter of 2010 (a seasonally peak period), the motel generated $118 thousand in net operating income, which was partially offset by a post-foreclosure valuation adjustment of $78 thousand. During the second quarter of 2010, the motel produced a $42 thousand operating loss.

During the second quarter of 2010, a newly formed limited liability company subsidiary of the Bank foreclosed upon commercial real estate in the Bank's primary market area that was slated for redevelopment. The commercial real estate is currently comprised of ground floor retail and second floor apartments. The approved entitlements call for a similar, though more extensive, use of the real estate, including residential condominiums on the upper floors. Through its subsidiary, the Bank is collecting rents from the current tenants and is actively marketing the real estate for sale. This was the only property comprising other real estate owned at June 30, 2010, with an estimated fair value less cost to sell of $2.3 million.

The ratio of allowance for loan losses to loans outstanding decreased from 1.78% at December 31, 2009 to 1.49% at June 30, 2010. The primary reason for this decrease was an overall improvement in the credit profile of the outstanding loan portfolio, as: (i) the motel securing the $3.15 million non-accrual loan (as of December 31, 2009) was foreclosed upon, with the motel subsequently sold; (ii) a $2.8 million loan secured by commercial real estate slated for redevelopment that was on non-accrual status at March 31, 2010 was foreclosed upon; (iii) certain loans experienced an improvement in credit profile during the first half of 2010, leading to a lower associated general reserve requirement; (iv) relatively few loans experienced a significant deterioration in credit profile during the most recent two quarters.

The Bank recorded gross charge-offs of $857 thousand during the first half of 2010, and gross recoveries of $20 thousand. The charge-offs were associated with the $132 thousand loan on non-accrual status as of June 30, 2010 and the loan collateralized by commercial real estate slated for redevelopment that was foreclosed upon during the second quarter of 2010.

Mark A. Crawford, the Bank's Chief Credit Officer, commented upon the Bank's credit profile at June 30, 2010: "We are pleased to report that the overall credit profile of the Bank has improved in recent quarters, as a number of troubled loans have been resolved and as fewer loans have suffered a decline in credit quality. The Bank has modified its underwriting criteria over the past year in recognition of the softness in real estate valuations, the slow pace of economic recovery, and the stubbornly high unemployment rate in California."

The Bank's investment in the capital stock of the Federal Home Loan Bank ("FHLB") increased from $0.8 million at December 31, 2009 to $1.1 million at June 30, 2010 due to the standard asset-based investment requirement applicable to FHLB members.

Premises and equipment, net, increased from $1.4 million at December 31, 2009 to $1.7 million at June 30, 2010, as the impact of the construction of tenant improvements and the purchase of furniture and equipment for the Santa Maria branch more than offset the effect of continued amortization and depreciation for existing fixed assets.

Non-interest bearing demand deposit balances decreased from $18.5 million at December 31, 2009 to $14.3 million at June 30, 2010. The primary reason for this decline was that some of the Bank's larger business customers used their demand deposit balances in order to pay down their lines of credit. In addition, certain clients enhanced their cash management processes and therefore more actively swept excess checking funds into money market accounts.

Interest bearing checking accounts rose from $3.3 million at December 31, 2009 to $4.4 million at June 30, 2010. This increase was facilitated in part by the Bank's participation in the FDIC Transaction Account Guarantee Program (the "Program"), which grants unlimited deposit insurance coverage to the Bank's checking accounts. Deposit insurance under the Program is in addition to the regular FDIC deposit insurance. Participants, including the Bank, pay additional FDIC deposit insurance premiums in conjunction with the Program.

Savings deposits increased from $77 thousand at December 31, 2009 to $471 thousand at June 30, 2010. This rise was primarily associated with new retirement (e.g. IRA) savings accounts following the Bank's introduction of that product during the first quarter of 2010.

Money market deposits increased from $74.9 million at December 31, 2009 to $82.3 million at June 30, 2010. The Bank's money market deposit balances during the first half of 2010 benefited from:

• Low (often, near zero) interest rates being paid on brokerage accounts and money market mutual funds, thereby encouraging clients to transfer their funds to higher yielding and FDIC insured accounts.
• The desire by certain clients to keep their funds liquid given the weak economic environment.
• The conversion of certain deposits from certificates of deposit to money market accounts given the limited yield differential between the products in the current interest rate environment.

Certificates of deposit increased from $55.5 million at December 31, 2009 to $62.3 million at June 30, 2010. Because of the Bank's strong regulatory capital profile, it was able to attract a $10.0 million certificate of deposit from a government agency during the first quarter of 2010. This deposit offset the impact of certain clients transferring their maturing certificate of deposit balances to money market accounts.

Commenting on the first half of 2010 deposit performance, Thomas R. Strait, the Bank's Director of Retail Banking, stated: "Our introduction of retirement deposit accounts (e.g. IRAs) during the first quarter of 2010 helped draw additional clients to the Bank. In addition, we continue to attract additional deposits from busy professionals who highly value the ease of use, customization, efficiency, and advanced cash management services provided through our operating and technology platform. Our deposit performance has also been enhanced by the addition of Lisa Mumford as our newest Relationship Manager and by ongoing referrals from existing clients. We look forward to welcoming many Santa Maria area residents and businesses to the Bank through our new Santa Maria branch. Our grand opening celebration is scheduled for Wednesday August 4, 2010 commencing at 4:00 PM Pacific Time. The celebration will include a number of events, and refreshments will be served."

Borrowings decreased from $10.5 million at December 31, 2010 to $7.5 million at June 30, 2010. During the second quarter of 2010, the Bank obtained a $5.0 million five year fixed rate advance from the FHLB in conjunction with its interest rate risk management program.

Shareholders' equity rose from $39.2 million at December 31, 2009 to $39.8 million at June 30, 2010. The increase was due to: (i) the 2010 year to date net income; (ii) capital generated through the Bank's Restricted Share Plan; and (iii) an increase in the accumulated other comprehensive income associated with the unrealized gain on securities available for sale. Nominal and tangible book values were $9.25 per share at June 30, 2010 versus $9.15 per share at December 31, 2009. Shares of common stock outstanding rose by 24,820 during the first half of 2010 in conjunction with the vesting of awards under the Restricted Share Plan. The Bank grants restricted share awards to employees as a means of encouraging an ownership orientation and aligning employee interests with the generation of shareholder value.

Net interest income before the provision for loan losses increased from $1.7 million during the second quarter of 2009 to $1.9 million during the second quarter of 2010. This increase was generated primarily through a larger average balance sheet, as the ratio of annualized net interest income to average total assets was 3.58% during the second quarter of 2010 versus 4.03% during the second quarter of 2009. Net interest income before the provision for loan losses during the first half of 2010 totaled $3.7 million, comparing favorably to $3.2 million during the first half of 2009. The improvement in year to date net interest income in 2010 compared to 2009 was also primarily generated by a larger average balance sheet, as the ratio of annualized net interest income to average total assets declined from 3.86% for the first half of 2009 to 3.57% for the first half of 2010. The Bank's ratio of annualized net interest income to average total assets was restrained in 2010 by the loans placed on non-accrual status.

During 2010, the Bank has been successful in continuing to gradually reduce its weighted average cost of deposits, despite such already being at a nominally and historically low level (1.36%) at December 31, 2009. The Bank's weighted average cost of deposits during the second quarter of 2010 was 1.30% despite the Bank's proactive steps to increase the duration of the certificate of deposit portfolio during 2010 in conjunction with its interest rate risk management program. The FDIC's imposition of deposit rate caps on troubled financial institutions, the industry-wide contraction in lending, and the limited competition from money market mutual funds have all contributed to a less competitive environment for deposit pricing than in certain prior periods.

The provision for loan losses was $333 thousand during the second quarter of 2010, compared to $364 thousand during the second quarter of 2009 and $262 thousand during the first quarter of 2010 (the immediately preceding quarter). The provision for loan losses during the first half of 2010 totaled $595 thousand, compared to $579 thousand during the first half of 2009. A majority of the provision for loan losses during 2010 was associated with: (i) establishing specific reserves for impaired loans; and (ii) increased reserve requirements stemming from the growth in the loan portfolio. These factors were partially offset by reduced general reserve requirements associated with an improvement in the overall credit profile of the Bank's loan portfolio. Many of the specific reserves established for impaired loans in 2010 were charged off by June 30, 2010.

The Bank realized a gain of $88 thousand on the sale of one mortgage backed security during the second quarter of 2010. No securities were sold during the three or six months ended June 30, 2009, nor during the three months ended March 31, 2010.

Other non-interest income totaled $28 thousand during the second quarter of 2010, versus $17 thousand during the second quarter of 2009. Other non-interest income was $53 thousand during the first six months of 2010, comparing favorably to $33 thousand during the first six months of 2009. The Bank is gradually augmenting its fee income as it builds its client base and more clients select fee based services such as ACH origination and online wire request. In addition, the Bank established a revised fee and service charge schedule effective June 1, 2009 that supported the improvement in other non-interest income during the first half of 2010 compared to the first half of 2009. The Bank has recently completed the development of its checking account analysis product. This product calculates an earnings credit associated with business demand deposits, compares it to the fees for services provided, and then assesses a service charge for any shortfall. Businesses can avoid the service charge by increasing their relative level of demand deposits. This new product is anticipated to gradually increase both the Bank's demand deposit balances and its fee income as it is introduced to existing and prospective accounts.

Non-interest expense (excluding other real estate owned expense) increased from $1.3 million during the second quarter of 2009 to $1.4 million during the second quarter of 2010; and from $2.4 million during the first six months of 2009 to $2.8 million during the first six months of 2010. Two factors that contributed significantly to the rise in non-interest expense from the 2009 periods to the 2010 periods were the commencement of expenses (e.g. salaries, rent, insurance) for the new Santa Maria branch starting in the first quarter of 2010 and higher credit collection costs (especially legal fees) in 2010 versus 2009.

Compensation and employee benefits expenses rose from $634 thousand during the second quarter of 2009 to $712 thousand during the second quarter of 2010; and from $1.2 million during the first six months of 2009 to $1.4 million during the first six months of 2010. Factors leading to these increases other than the aforementioned hiring for the Santa Maria branch included:

• The hire of additional employees (other than for Santa Maria) in light of the historic and planned growth of the Bank. This included the hire of Lisa Mumford, a veteran lender in the Bank's primary market area, as a new Vice President and Relationship Manager in April 2010.
• Increased benefits expenses, primarily due to higher costs for medical insurance sponsored by the Bank. While the Bank took multiple steps to moderate its medical insurance costs in 2010, such were insufficient in aggregate to fully offset the significant premium increases implemented throughout the marketplace.
• Base salary increases granted to non-executive employees effective October 1, 2009 (executives received no compensation adjustments in 2009).
• Increased expense for the Bank's Restricted Share Plan, as the Bank continues to provide a restricted share award to all employees soon following hire as a means of fostering an ownership orientation.

Accounting, legal, and consulting expenses totaled $152 thousand during the second quarter of 2010, down slightly from $161 thousand during the second quarter of 2009. Accounting, legal, and consulting expenses increased from $276 thousand during the first half of 2009 to $327 thousand during the first half of 2010. Legal expenses were elevated during the two most recent quarters primarily due to the costs associated with collecting troubled loans. Legal expenses totaled $185 thousand during the first half of 2010 compared to $103 thousand during the first half of 2009. Accounting expenses totaled $84 thousand during the first half of 2010 versus $90 thousand during the first half of 2009. These costs have been moderated by the Bank's negotiating more favorable pricing for internal audit services for 2010. Consulting expenses decreased from $83 thousand during the first half of 2009 to $58 thousand during the first half of 2010, as the Bank incurred non-recurring consulting expenses associated with the implementation of new technologies and products during the 2009 period.

Occupancy expense increased from $126 thousand and $251 thousand during the three and six months ended June 30, 2009, respectively, to $152 thousand and $309 thousand for the three and six months ended June 30, 2010, respectively. These increases were primarily due to the occupancy expense associated with the Santa Maria branch location.

Regulatory assessments decreased from $120 thousand and $173 thousand during the three and six months ended June 30, 2009, respectively, to $79 thousand and $154 thousand during the three and six months ended June 30, 2010, respectively. These declines occurred due to the impact of the second quarter 2009 FDIC special assessment ($67 thousand) more than offsetting the Bank's continuing rise in base FDIC insurance expense associated with the growth of the deposit portfolio.

Director expenses declined from $47 thousand during the second quarter of 2009 to $1 thousand during the second quarter of 2010, and from $48 thousand during the first six months of 2009 to $39 thousand during the first six months of 2010. These reductions were due to the March 2010 vesting of the only restricted share award ever provided to outside directors. Those awards vested one year following grant. The Bank's directors determined to not grant any new restricted share awards to directors thus far in 2010 in support of the Bank's earnings. The Bank's Board members have never received cash director fees since the Bank's inception.

Advertising and promotion expense increased from $19 thousand and $39 thousand during the three and six months ended June 30, 2009, respectively, to $52 thousand and $102 thousand during the three and six months ended June 30, 2010, respectively. The Bank increased its advertising and promotion expense during 2010 in support of:

• Its new retirement deposit account product line (e.g. both liquid and term IRA deposits).
• Introducing new officers to the Bank's primary market.
• Commencing the introduction of the Bank to the north San Luis Obispo County market in preparation for the planned branch opening in Paso Robles in 2011.
• Facilitating the introduction of the new name and the opening of the Santa Maria branch.
• Implementing an enhanced web site.

The Bank's enhanced web site (www.AmericanPerspectiveBank.com) was introduced in conjunction with the name change and has been well received by its clients and the local communities served. The web site presents an even more robust look and feel, with expanded content and easier navigation.

In conjunction with the Bank's Board Succession Plan, Committee assignments were rotated among the directors effective July 1, 2010. This approach facilitates each director's serving on various Board and Management Committees over time and thereby gaining an even more thorough background regarding the Bank and the financial services industry. Also in conjunction with the Board Succession Plan, the directors appointed Thomas J. Madden III as Chairman of the Board, replacing Eric J. Schwefler, who served in that role since the Bank's formation. There was no change in the aggregate composition of the Board.

Commenting on the Bank's financial and operating results for the first half of 2010, Thomas J. Madden, stated: "We are very pleased to announce the many significant recent achievements by the Bank, including smoothly completing the name change, opening the Santa Maria branch, selling a large OREO asset, implementing a new web site, and attaining record levels of net loans, assets, and deposits. At a time when many competitors are reporting significant issues and the FDIC has closed over 100 financial institutions thus far in 2010, we are pleased to report the Bank's being profitable in five of the six most recent quarters. We look forward to success in the Santa Maria market, where the Bank currently has a significant shareholder and client base. We will be able to offset a majority of the rent expense for the new branch through eliminating various existing costs of serving these clients, such as remote branch deposit and courier costs."

Mark R. Andino, the Bank's Chief Financial Officer and Chief Operating Officer, then added: "We are currently studying the recently passed Dodd-Frank Wall Street Reform and Consumer Protection Act ("Act"), recognizing that many of the details associated with the Act's implementation have yet to be determined. Several aspects of the Act appear to be favorable for the Bank, including the revised approach to calculating FDIC insurance assessments, which benefits strongly capitalized financial institutions such as American Perspective Bank. The permanent increase in the basic FDIC insurance coverage limit to $250 thousand will facilitate our marketing longer term certificates of deposit to clients who previously were concerned about the potential future reduction in the basic FDIC insurance coverage amount. In addition, the Act's extension of the FDIC's Transaction Account Guarantee Program, with modifications, through December 31, 2012, will continue to benefit the Bank in attracting larger commercial checking accounts."

Eric J. Schwefler then commented: "I look forward to the many initiatives planned by the Bank for the second half of 2010. These include the introduction of mobile banking via smart phones and personal digital assistants, implementing personal online check deposit for business owners and employees, and finalizing the preferred site for the planned Paso Robles branch. I also look forward to receiving client and community feedback regarding the new Santa Maria branch, which culminates a year of effort by the Bank to design and deliver a level of service, comfort, and client and community organization support unique to the Santa Maria Valley."

John M. Spencer, a director of the Bank and owner of Spencer's Fresh Markets, a regional chain of grocery stores, added: "The Board of Directors continues to be highly committed to the generation of shareholder value. The Bank's having the capital, liquidity, and human resources to expand and enhance our clients' experience should position the Bank to gain additional market share and produce long term earnings. The resolution of the remaining few problem assets and reallocating those resources to the development of the Bank should position us to be able to present improved returns to our shareholders. The Board of Directors will remain alert to opportunities to enhance shareholder value through efficiency improvement, balance sheet growth, new products and services, and strategic opportunities."

The Bank's target markets are commercial enterprises, professionals, real estate investors, family business entities, and residents in San Luis Obispo County and northern Santa Barbara County. The Bank's San Luis Obispo office is located at 4051 Broad Street, Suite 140, San Luis Obispo, California, near the intersection of Broad Street (Highway 227) and Tank Farm Road. The Bank's Santa Maria office is located at 2646 Santa Maria Way, Suite 101, Santa Maria, California, near the intersection of Santa Maria Way and Broadway. The Bank is a participant in the FDIC's Transaction Account Guarantee Program and the Bank's deposits are insured by the FDIC up to applicable legal limits.

Certain of the statements contained herein that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "intend," "estimate," "target," "plans," "may increase," "may fluctuate," "may result in," "are projected," and similar expressions. The Bank's actual results may differ materially from those included in the forward-looking statements. These forward-looking statements involve risks and uncertainties including, but not limited to, the economic, business, and real estate market conditions in the Bank's market areas, the interest rate environment, competition, regulatory and legislative actions, the possibility that the Bank will not be successful in achieving its strategic objectives, the performance and contributions of employees and directors, and other factors. The Bank does not undertake, and specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences or unanticipated events or circumstances after the date of such statements.

This news release is available at the www.AmericanPerspectiveBank.com Internet site for no charge.

For further information contact:

    Thomas J. Beene
    President
    Chief Executive Officer
    (805) 547 - 2831
    Tom.Beene@AmericanPerspectiveBank.com

    or

    Mark R. Andino
    Chief Financial Officer
    Chief Operating Officer
    (805) 547 - 2832
    Mark.Andino@AmericanPerspectiveBank.com

    General communication:
    ----------------------

    SERVICE@AMERICANPERSPECTIVEBANK.COM
    www.AmericanPerspectiveBank.com

    Phone:  (805) 547 - 2800 (San Luis Obispo)
    Facsimile:  (805) 547 - 2801 (San Luis Obispo)

    Phone:  (805) 354 - 7800 (Santa Maria)
    Facsimile:  (805) 354 - 7801 (Santa Maria)

--- financial data follows ---

                         AMERICAN PERSPECTIVE BANK

                     Consolidated Financial Highlights
                                 Unaudited
                           (Dollars In Thousands)

                                                          December
                                     June 30,  March 31,       31,
                                         2010       2010      2009
                                         ----       ----      ----
    Financial Condition Data
    ------------------------


    Assets
    ------
    Cash and due from banks            $2,025     $2,284    $2,462
    Interest bearing deposits
     in other financial
     institutions                       1,729      4,656     2,421
    Securities available for
     sale, at fair value:
          Mortgage backed securities   42,723     49,163    51,218
          Collateralized mortgage
           obligations                  9,824      3,562     4,819

    Loans receivable held for
     investment:
          Home equity lines of
           credit                      13,881     12,392    12,536
          Multifamily real estate
           loans                       11,166     11,438     7,966
          Commercial and industrial
           real estate loans           65,005     53,533    55,231
          Construction loans            9,176      9,414     9,440
          Land / lot loans              5,489      7,146     8,681
          Farm real estate loans           --         --     3,600
          Commercial business loans    39,428     39,342    37,067
          Other loans                   6,605      5,688     5,402
                                        -----      -----     -----

       Gross loans held for
        investment, net of
        deferred fees and costs       150,750    138,953   139,923

       Less:
          Allowance for loan losses    (2,246)    (2,115)   (2,488)
                                       ------     ------    ------

    Loans receivable held for
     investment, net                  148,504    136,838   137,435

    Investment in capital
     stock of the Federal Home
     Loan Bank, at cost                 1,076        757       757
    Premises and equipment,
     net                                1,690      1,305     1,384
    Accrued interest
     receivable                           581        593       623
    Other real estate owned             2,300      3,072        --
    Other assets                        1,834      1,822     1,849
                                        -----      -----     -----

    Total assets                     $212,286   $204,052  $202,968
                                     ========   ========  ========


    Liabilities and
     Shareholders' Equity
    ---------------------
    Deposits:
          Non-interest bearing
           demand deposits            $14,329    $14,517   $18,482
          Interest bearing checking
           accounts                     4,387      3,911     3,297
          Savings accounts                471        101        77
          Money market accounts        82,307     81,177    74,936
          Certificates of deposit      62,260     63,022    55,460
                                       ------     ------    ------

    Total deposits                    163,754    162,728   152,252
    Borrowings                          7,491        422    10,453
    Other liabilities                   1,247      1,389     1,109
                                        -----      -----     -----

    Total liabilities                 172,492    164,539   163,814
                                      -------    -------   -------

    Shareholders' equity               39,794     39,513    39,154
                                       ------     ------    ------

    Total liabilities and
     shareholders' equity            $212,286   $204,052  $202,968
                                     ========   ========  ========

                          AMERICAN PERSPECTIVE BANK

                Consolidated Financial Highlights, Continued
                                  Unaudited
               (Dollars In Thousands Except Per Share Amounts)

                                  Three      Three        Six        Six
                                 Months     Months     Months     Months
                                  Ended      Ended      Ended      Ended
    Operating Data            6/30/2010  6/30/2009  6/30/2010  6/30/2009
    --------------            ---------  ---------  ---------  ---------

    Interest and
     dividend income             $2,417     $2,250     $4,720     $4,373
    Interest expense                558        513      1,069      1,127
                                    ---        ---      -----      -----

    Net interest income
     before provision
     for loan losses              1,859      1,737      3,651      3,246
    Provision for loan
     losses                         333        364        595        579
                                    ---        ---        ---        ---

    Net interest income
     after provision for
     loan losses                  1,526      1,373      3,056      2,667
                                  -----      -----      -----      -----

    Non-interest income:
         Gain on sale of
          securities                 88         --         88         --
         Name change payments
          in excess of costs         40         --         40         --
         Other non-interest
          income                     28         17         53         33
                                    ---        ---        ---        ---
    Total non-interest
     income                         156         17        181         33
                                    ---        ---        ---        ---

    Other real estate
     owned expense:
         Loss on sale of
          other real estate
          owned                     105         --        105         --
         Other real estate
          owned valuation
          adjustment                 --         --         78         --
         Other real estate
          owned operations
          expense (income)           46         --        (72)        --
                                    ---        ---        ---        ---
    Total other real
     estate owned
     expense                        151         --        111         --
                                    ---        ---        ---        ---

    Non-interest
     expense:
         Compensation and
          employee benefits         712        634      1,422      1,222
         Accounting, legal,
          and consulting            152        161        327        276
         Occupancy                  152        126        309        251
         Regulatory
          assessments                79        120        154        173
         Equipment                   75         60        143        123
         Data and item
          processing                 51         51        102        100
         Director expenses            1         47         39         48
         Supplies, printing,
          courier, and
          postage                    29         23         51         39
         Advertising and
          promotion                  52         19        102         39
         (Reduction of)
          provision for off
          balance sheet
              commitments            (9)         1        (12)         1
         Other expenses              94         92        199        168
                                    ---        ---        ---        ---

    Total non-interest
     expense                      1,388      1,334      2,836      2,440
                                  -----      -----      -----      -----

    Income before
     provision for
     income taxes                   143         56        290        260
    Provision for income
     taxes                            1         --          1         --
                                    ---        ---        ---        ---

    Net income                     $142        $56       $289       $260
                                   ====        ===       ====       ====

    Weighted average
     shares used in
     basic income
          per share
           calculation        4,302,089  4,251,630  4,291,845  4,251,412

    Basic income per
     share                        $0.03      $0.01      $0.07      $0.06
                                  =====      =====      =====      =====

    Weighted average
     shares used in
     diluted income
          per share
           calculation        4,302,404  4,260,653  4,301,448  4,256,318

    Diluted income per
     share                        $0.03      $0.01      $0.07      $0.06
                                  =====      =====      =====      =====

    Average total assets       $207,982   $172,357   $204,448   $168,024
    Annualized net
     interest income /
     average total
     assets                        3.58%      4.03%      3.57%      3.86%

                            AMERICAN PERSPECTIVE BANK

                   Consolidated Financial Highlights, Continued
                                    Unaudited
                 (Dollars In Thousands Except Per Share Amounts)

                                 June 30,   March 31,   December 31,
                                     2010        2010           2009
                                ---------  ----------  -------------

    Other Information
    -----------------

    Net loans / deposits            90.69%      84.09%         90.27%
    Allowance for loan losses /
     loans outstanding               1.49%       1.52%          1.78%
    Nominal and tangible book
     value per share                $9.25       $9.19          $9.15
    Shares of common stock
     outstanding                4,302,533   4,300,513      4,277,713

SOURCE American Perspective Bank