Your Bank’s fourth full year of operations was distinctly positive. In 2011, the Bank finished the year just short of the  $300 million mark in total assets, up 25% over the year previous. We passed the $240 million mark in total deposits and  the $200 million mark in total loans. This growth drove major improvements to net interest income, which was up in 2011  by 20%, to just over $9 million. Significantly lower 2011 provisions to the Loan Reserve were made possible by improving  economic conditions and borrower financial statements. These factors, together with careful control of overhead, made  for impressive progress in pre-tax earnings, which in 2011 experienced an almost five-fold increase over the prior year, to  just under $1.5 million. Important details are to be found in the exhibits that follow.  As impressive as our financial achievements were in 2011, the Bank’s progress in building and extending our reputation  in the market was even more impressive. During the year, we added numerous new relationships through our existing  product lines and we broadened the Bank’s commercial lending capabilities, with the addition of an asset-based lending  group, headquartered in San Jose, and with the addition of a team that provides term financing for the acquisition of  dental and medical practices. During the course of the year, we repaid our TARP-CPP preferred stock obligation and added non-dilutive new capital by  issuing 1% preferred stock under the U.S. Treasury’s Small Business Loan Fund.  We enter 2012 with strong momentum and a reputation for sound performance and good service. We continue to rely  on three unique strengths: Our board and management believe the prospects for our Bank are bright. We occupy a growing position in the closely  held business community that is the backbone of the Bay Area economy. We are truly defined by the company we keep  – our friends in the referral community, our clients, and our bankers are all exceptional.  We thank you, our shareholders for the interest you take in our enterprise and for recognizing the potential this Bank has  for creating significant shareholder value.  Sincerely,  California Bank of Commerce Our Bank is focused on a market niche that is rare among smaller banks and is often poorly served by larger banks:  Closely-held businesses with $5-50 million in sales and credit needs of $1-5 million. Our Bay Area business focus sets us apart from community banks, enabling us to serve successful companies that  have a broad geographic reach. Our operating strategy is unique because it is efficient from a cost perspective and effective with our clients: we  are “branchless;” we have an upstairs location, we gather deposits electronically; and we invest our money in the  best people. We are selective in our choice of clients so we can devote attention to each.  John Rossell President and Chief Executive Officer Stephen A. Cortese Chairman of the Board 1 Fellow Shareholders: