Premier Service Bank Announces Earnings for the Quarter and Year Ended December 31, 2008

For the year ended December 31, 2008, the bank reported a net loss of $100 thousand, or ($0.08) per diluted share, compared to net earnings of $566 thousand, or $0.44 per diluted share for the year ended December 31, 2007. Net loss for the fourth quarter of 2008 was $227 thousand, or ($0.18) per diluted share, compared to net earnings of $178 thousand, or $0.14 per diluted share for the fourth quarter of 2007. The decline in earnings between the respective periods is primarily attributed to the increased provisions to the bank's allowance for loan losses, which for the year ended December 31, 2008 totaled $1.468 million, compared to $195 thousand for the year ended December 31, 2007; and for the fourth quarter of 2008 totaled $595 thousand, compared to $108 thousand for the same period in 2007.

At December 31, 2008, 2.84% of the Bank's loans were nonperforming, compared to 0.64% nonperforming loans at December 31, 2007. The Bank had foreclosed real estate of $572 thousand and other foreclosed assets of $166 thousand at December 31, 2008, and none at December 31, 2007. At December 31, 2008, non-accrual loans totaled $2.83 million, representing 2.25% of total loans at that date, compared to non-accrual loans of $0.7 million at December 31, 2007, representing 0.64% of total loans at that date. All loans delinquent 90 days or more were on non-accrual at December 31, 2008 and 2007. The allowance for loan losses totaled $1.60 million at December 31, 2008, or 1.27% of total loans as of that date, compared to $1.26 million at December 31, 2007, or 1.13% of total loans as of that date.

At December 31, 2008, the Bank had total assets of $151.5 million, representing an increase of $15.7 million, or 8.8% growth over total assets of $139.3 million at December 31, 2007. Total deposits at December 31, 2008 were $110.5 million, representing 1% growth over total deposits of $109.4 million at December 31, 2007. Non-interest bearing demand deposits totaled $38 million at December 31, 2008, representing 34.4% of total deposits at that date, compared to $38.4 million of non-interest bearing demand deposits at December 31, 2007, which represented 35.1% of total deposits at that date.

The Bank's gross loan portfolio grew to $125.7 million at December 31, 2008, representing a 14.2% increase over gross loans of $110.1 million at December 31, 2007. Unfunded credit commitments stood at $17.9 million at December 31, 2008, representing a 43.4% decrease compared to unfunded commitments of $31.6 million at December 31, 2007. The decrease in unfunded commitments was due, in part, to an overall lack of demand in the marketplace for credit line financing.

The Bank's net interest margin for the year ended December 31, 2008 was 5.17%, a decrease of 0.13% compared to 2007. The Bank's net interest margin for the quarter ended December 31, 2008 was 4.98%, a decrease of 0.38% compared to the fourth quarter of 2007.

At December 31, 2008, the Bank remained well capitalized under applicable regulatory guidelines, and continued to have no sub-prime residential loans in its portfolio. Total shareholders' equity at December 31, 2008 was $13.2 million, representing an increase of $77 thousand, or 0.6% over total shareholders' equity of $13.1 million at December 31, 2007.

President and Chief Executive Officer Kerry Pendergast stated, "Clearly 2008 was a year of unprecedented turmoil in the world's financial markets, with economic fallout and uncertainty having a profound impact on the banking sector as a whole. The breadth of the declines have put extraordinary stress on the credit portfolios of a large number of banks. Well managed institutions have responded by prudently increasing contributions to their allowances for loan losses during this uncertain period; this was certainly the case for Premier Service Bank throughout the 2008 calendar year. For the 12-month period ended December 31, 2008 the bank contributed $1.468 million to its allowance for loan losses, compared to $195 thousand for the same 12-month period in 2007; the significant decline in earnings is primarily the result of these increased contributions."

Pendergast went on to say, "We are confident that Premier Service Bank is well positioned to meet the challenges faced by the industry. We believe that the long-term relationships we enjoy with our clients, many of which pre-date the opening of the bank, will serve us well as the region works towards regaining its economic footing. Additionally, the bank remains well capitalized under regulatory guidelines, has opted to participate in all of the additional insurance programs offered by the FDIC, and is continuing to grow its base as individuals and businesses continue to seek out those institutions that are locally owned and operated," Pendergast said in closing.

Premier Service Bank is a California state-chartered bank with two offices, its headquarters office in Riverside and a full-service banking office in Corona. The Bank provides commercial banking services, including a wide variety of checking accounts, investment services with competitive deposit rates, on-line banking products, and real estate, construction, commercial and consumer loans, to small and medium-sized businesses, professionals and individuals. Additional information about Premier Service Bank is available at its website at www.premierservicebank.com.

Forward-looking Statements

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 Premier Service 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 in the following: Premier Service Bank's ability to increase its assets, deposits and total loans, control expenses, retain critical personnel, manage interest rate risk, manage technological changes, address regulatory requirements, and other risks discussed from time to time in Premier Service Bank's filings and reports with the Federal Deposit Insurance Corporation. 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 Premier Service Bank does not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this release.

For a more complete discussion of risks and uncertainties, investors and security holders are urged to read Premier Service Bank's annual report on Form 10-K, quarterly reports on Form 10-Q and other reports filed by Premier Service Bank with the FDIC.

See the unaudited Financial Data on the following page.

Financial Data - Premier Service Bank (Unaudited) Quarter Ended (In Thousands) Dec. 31, 2008 Sept. 30, 2008 June 30, 2008 Mar. 31, 2008 Dec. 31, 2007 Interest income(not taxable equivalent) $ 2,447 $ 2,451 $ 2,342 $ 2,430 $ 2,389 Interest expense 650 667 632 671 676 Net interest income 1,797 1,784 1,710 1,759 1,713 Provision for loan losses 595 470 347 56 108 Net interest income after provision for loan losses 1,202 1,314 1,363 1,703 1,605 Non-interest income 197 206 182 178 180 Non-interest expense 1,813 1,605 1,557 1,651 1,516 Income before income taxes (414 ) (85 ) (12 ) 230 269 (Benefit)/Provision for income taxes (187 ) (52 ) (21 ) 79 91 Net income $ (227 ) $ (33 ) $ 9 $ 151 $ 178 Quarter Ended (In Thousands) Dec. 31, 2008 Sept. 30, 2008 June 30, 2008 Mar. 31, 2008 Dec. 31, 2007 Per share: Net income - basic $ (0.18 ) $ (0.03 ) $ 0.01 $ 0.12 $ 0.14 Weighted average shares used in basic 1,261 1,259 1,257 1,256 1,255 Net income - diluted $ (0.18 ) $ (0.03 ) $ 0.01 $ 0.12 $ 0.14 Weighted average shares used in diluted 1,261 1,259 1,270 1,270 1,279 Book value at period end $ 10.48 $ 10.58 $ 10.53 $ 10.66 $ 10.46 Ending shares 1,261 1,261 1,257 1,257 1,255 Balance Sheet - At Period-End Cash and due from banks $ 4,315 $ 4,847 $ 5,572 $ 5,908 $ 3,571 Investments and Fed fund sold 15,843 20,655 22,812 22,630 21,813 Gross Loans 125,684 124,457 123,980 111,933 110,045 Deferred fees (334 ) (353 ) (363 ) (375 ) (369 ) Allowance for loan losses (1,596 ) (1,725 ) (1,634 ) (1,287 ) (1,259 ) Net Loans 123,754 122,379 121,983 110,271 108,417 Other assets 7,590 7,281 6,186 5,854 5,531 Total Assets $ 151,502 $ 155,162 $ 156,553 $ 144,664 $ 139,332 Non-interest-bearing deposits $ 38,040 $ 41,834 $ 43,989 $ 43,461 $ 38,356 Interest-bearing deposits 72,522 73,269 72,625 66,124 71,059 Other liabilities 27,731 26,722 26,703 21,681 16,785 Shareholders' equity 13,209 13,337 13,236 13,398 13,132 Total Liabilities and Shareholders' Equity $ 151,502 $ 155,162 $ 156,553 $ 144,664 $ 139,332 Asset Quality & Capital - At Period-End Non-accrual loans $ 2,833 $ 3,738 $ 4,707 $ 1,055 $ 700 Loans past due 90 days or more $ - $ 290 $ 302 $ 160 $ - Other real estate owned $ 572 $ 672 Other bank owned assets $ 166 $ 183 - - - Total non-performing assets $ 3,571 $ 4,883 $ 5,009 $ 1,215 $ 700 Allowance for losses to loans, gross 1.27 % 1.39 % 1.32 % 1.15 % 1.13 % Non-accrual loans to total loans, gross 2.25 % 3.00 % 3.80 % 0.94 % 0.64 % Non-performing loans to total loans, gross 2.84 % 3.92 % 4.04 % 1.09 % 0.64 % Non-performing asset to total assets 2.36 % 3.15 % 3.20 % 0.84 % 0.50 % Allowance for losses to non-performing loans 44.69 % 35.33 % 32.62 % 105.93 % 179.86 % Total capital to risk-adjusted assets 10.94 % 11.16 % 11.19 % 12.10 % 12.08 % Tier one capital to risk-adjusted assets 9.71 % 9.91 % 9.94 % 10.97 % 10.96 % Equity to average assets (leverage ratio) 8.50 % 8.66 % 9.07 % 9.39 % 9.46 %

SOURCE: Premier Service Bank

Premier Service Bank Kerry L. Pendergast, President and CEO Jessica Lee, Executive Vice President and CFO 951-274-2400