Pacific Alliance Bank Announces Third Quarter Results

Pacific Alliance Bank (OTCBB:PFBN) is pleased to report its results for the year ending December 31, 2007.

From its opening with a capital account of $16.4 million, the Bank's assets increased from $18.2 million as of December 31, 2006 to $52.7 million as of December 31, 2007.

Total gross loans were $25.7 million, up from $19.1 million as of September 30^th. All loans were current as of December 31, 2007.

Total liabilities as of December 31, 2007 were $38.5 million, including total deposits of $36.3 million.

Total revenue for the year of 2007 before operating expense was $2,502 thousand, comprised of $2,463 thousand in interest income and $1,136 thousand in net interest income. Additionally, the Bank provided $311 thousand for loan losses reserves and benefited from $39 thousand in other non-interest income.

Net Operating Loss for the year of 2007 was $2,393 thousand, including stock option expenses.

Pacific Alliance Bank was formed to achieve its mission of delivering business value in its market, serving small to mid-size businesses, owners, and key employees who seek a personal bank ready to meet their needs with customized services.

Pacific Alliance Bank is a full-service FDIC insured community bank, headquartered at 8400 E. Valley Blvd., Rosemead, California 91770. For more information, contact Ms. Trish Lomeli-Sproles [phone] or [e-mail] and visit http://www.pacificalliancebank.com.

Pacific Alliance Bank
Balance Sheet (unaudited)
December 31, 2007 & 2006
$ in 000's
	ÂÂ				ÂÂ
Assets			2007				2006
						ÂÂ
Cash and due from banks		$	685			$	517
Federal funds sold		ÂÂ	7,950	ÂÂ		ÂÂ	16,620	ÂÂ
Cash and Cash Equivalents			8,635				17,137
Investment (net)			17,014				-
Loans, net of unearned income			25,666				0
Less allowance for loan losses		ÂÂ	(311	)		ÂÂ	0	ÂÂ
Net Loans			25,355				0
Premises and equipment, net			1,160				1,006
Accrued interest receivable and other assets		ÂÂ	523	ÂÂ		ÂÂ	24	ÂÂ
Total Assets		$	52,687	ÂÂ		$	18,167	ÂÂ
						ÂÂ
Liabilities and Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing deposits		$	3,109			$	28
Interest-bearing deposits		ÂÂ	33,233	ÂÂ		ÂÂ	580	ÂÂ
Total Deposits			36,342				608
						ÂÂ
Investor Seed Money			-				1,035
Organization Loan			-				700
Other borrow money (FHLB Advance)			1,900				-
Accrued interest payable and other liabilities		ÂÂ	283	ÂÂ		ÂÂ	132	ÂÂ
Total Liabilities		$	38,525	ÂÂ		$	2,475	ÂÂ
						ÂÂ
Commitments and Contingencies
						ÂÂ
Shareholders' Equity
Common stock, no par value, 5,000,000 shares authorized; 1,657,686 shares issued & outstanding
			16,365				16,365
Preferred Stock, no par value, 5,000,000 shares authorized; 0 share issue & outstanding
			0				0
Additional paid in capital			972				111
Accumulated deficit			(3,177	)			(784	)
Accumulated other comprehensive loss			2				0
Total Shareholders' Equity		ÂÂ	14,162	ÂÂ		ÂÂ	15,692	ÂÂ
Total Liabilities and Shareholders' Equity		$	52,687	ÂÂ		$	18,167	ÂÂ
						ÂÂ
Book Value per Share			8.54				9.47

Pacific Alliance Bank
Statement of Income for the Years Ended 2007 & 2006 (unaudited)
$ in 000's
	ÂÂ				ÂÂ
						ÂÂ
			2007				2006
						ÂÂ
Interest Income
Interest and fees on loans		$	1,048			$	0
Interest on Federal funds sold			865				83
Interest on securities		ÂÂ	550	ÂÂ		ÂÂ	20	ÂÂ
Total Interest Income			2,463				103
Interest Expense
Interest expense on deposits		ÂÂ	1,327	ÂÂ		ÂÂ	5	ÂÂ
		ÂÂ	1,327	ÂÂ		ÂÂ	5	ÂÂ
Net Interest Income			1,136				98
						ÂÂ
Provision for loan losses		ÂÂ	311	ÂÂ		ÂÂ	0	ÂÂ
						ÂÂ
Net Interest Income After
Provision for Loan Losses		ÂÂ	825	ÂÂ		ÂÂ	98	ÂÂ
Other Income
Service charges on deposit accounts			1				0
Other non-interest income		ÂÂ	38	ÂÂ		ÂÂ	0	ÂÂ
Total Other Income		ÂÂ	39	ÂÂ		ÂÂ	0	ÂÂ
Other Expenses
Salaries and other employee benefits (1)			1,579				305
Premises & Equipment			370				254
Legal fees			21				50
Professional fees			196				98
Other (1)		ÂÂ	1,090	ÂÂ		ÂÂ	175	ÂÂ
Total Operating Expenses		ÂÂ	3,256	ÂÂ		ÂÂ	882	ÂÂ
						ÂÂ
Income Before Provision for Income Taxes			(2,392	)			(784	)
						ÂÂ
Provision for Income Taxes		ÂÂ	1	ÂÂ		ÂÂ	0	ÂÂ
						ÂÂ
Net Loss		$	(2,393	)		$	(784	)
						ÂÂ
Loss Per Share - Basic		$	(1.44	)		$	(0.47	)

Pacific Alliance Bank
Statement of Cash Flow (unaudited)
For the Years Ended 2007 & 2006
$ in 000's
	ÂÂ				ÂÂ
						ÂÂ
			2007				2006
Operating Activities
Net income		$	(2,393	)		$	(784	)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization			125				-
Provision for loan loss			311				-
Share-based compensation expense (1)			861				111
Increase in accrued interest receivable and other assets			(499	)			(24	)
Increase in accrued interest payable and other liabilities		ÂÂ	315	ÂÂ		ÂÂ	1,867	ÂÂ
Net Cash Provided by Operating Activities		ÂÂ	(1,280	)		ÂÂ	1,170	ÂÂ
Investing Activities
Purchases of investment securities available-for-sale			(17,011	)			-
Purchases of premises and equipment			(279	)			(1,006	)
Net increase in loans		ÂÂ	(25,666	)		ÂÂ	-	ÂÂ
Net Cash Used in Investing Activities		ÂÂ	(42,956	)		ÂÂ	(1,006	)
Financing Activities
Net increase in deposits			35,734				608
Proceeds from initial capitalization			-				16,577
Organization expenses, net		ÂÂ	-	ÂÂ		ÂÂ	(212	)
Net Cash Provided by Financing Activities		ÂÂ	35,734	ÂÂ		ÂÂ	16,973	ÂÂ
Net Increase in Cash and Cash Equivalents			(8,502	)			17,137
Cash and Cash Equivalents, Beginning of Year		ÂÂ	17,137	ÂÂ		ÂÂ	-	ÂÂ
Cash and Cash Equivalents, End of Period		$	8,635	ÂÂ		$	17,137	ÂÂ
						ÂÂ
						ÂÂ
Note (1): Beginning in fiscal year 2006 all companies that utilize equity compensation will be required to recognize the cost of that compensation in their financial statements pursuant to FASB's revision to Statement No. 123, Accounting for Stock-Based Compensation (SFAS No. 123R). The bank's equity total stock based compensation for fiscal year was $111 thousand, and $861 thousand for year 2006 & 2007 respectively.

Pacific Alliance Bank
Shareholders Equity
For the Year Ended 2007
$ in 000's
	ÂÂ		ÂÂ			ÂÂ			ÂÂ				ÂÂ				ÂÂ			ÂÂ	ÂÂ
																		Accumulated
							Additional											Other
		Shares		Common			Paid In			Comprehensive				Accumulated				Comprehensive
		Outstanding		Stock			Capital			Loss				Deficit			ÂÂ	Loss				Total
																						ÂÂ
Balance, January 1, 2007		1,657,686		$	16,365		$	111						$	(784	)		$	-			$	15,692
																						ÂÂ
Share-based compensation expense (1)								861															861
Net loss (1)											(2,393	)			(2,393	)							(2,393	)
Unrealized gains (losses)											2								2				2
										ÂÂ
Total Comprehensive loss										$	(2,391	)
		ÂÂ		ÂÂ			ÂÂ							ÂÂ			ÂÂ	ÂÂ				ÂÂ
Balance, December 31, 2007		1,657,686		$	16,365		$	972						$	(3,177	)	ÂÂ	$	2			$	14,162	ÂÂ