Bank of Commerce (BOCH) 8-K Bank of Commerce Holdings™ announces Third Quarter 2011 Earnings

Exhibit 99.1

For immediate release:

Bank of Commerce Holdings™ announces Third Quarter 2011 Earnings

REDDING, California, October 28, 2011/ PR Newswire — Patrick J. Moty,President & CEO of Bank of Commerce Holdings (NASDAQ: BOCH),a $928.2 million bank holding company, and parent company of Redding Bank of Commerce™, Roseville Bank of Commerce™

(a division of Redding Bank of Commerce), and Bank of Commerce Mortgage™ today reported net income available to common shareholders of $1.7 million and diluted earnings per share (“EPS”) of $0.10 for the third quarter 2011.

Key Financial Items for the Third Quarter 2011:

• Net Income available to common shareholders of $1.7 million reflects a 31% increase over the $1.25 million reported for the quarter ended September 30, 2010, and a 36.8% increase over the $1.3 million recorded for the second quarter 2011.

• Diluted EPS of $0.10 compares to $0.08 reported for the same period a year ago and $0.07 for prior quarter ended June 30, 2011.

• Loan loss provisions for the third quarter were $2.2 million compared to $4.4 million for the third quarter 2010 and $2.6 million for the prior quarter ended June 30, 2011.

• Nonperforming assets represented 2.30% of total assets in the current period versus 2.49% for the quarter ended June 30, 2011.

• Non-maturing core deposits increased $35.5 million or 11% from a year ago September 30, 2010.

• Mortgage banking revenue for the three months ended September 30, 2011 increased by 32% compared to the same period a year ago, primarily driven by increased origination and refinancing activities due to lower market rates.

Patrick J. Moty, President and CEO commented: “We are delighted to report a continuing trend of sound financial performance. The Company’s third quarter results reflect a sizeable increase in residential mortgage originations from Bank of Commerce Mortgage, and our continuing efforts in maintaining a solid net interest margin and aggressively managing through problematic assets. ”

1

Table 1 below shows summary financial information for the quarters ended September 30, 2011 and 2010, and June 30, 2011.

Table 1

SUMMARY FINANCIAL INFORMATION

(Shares and dollars in thousands)	Quarter ended September 30, 2011			Quarter ended September 30, 2010			Change			Quarter ended June 30, 2011			Change
Selective quarterly performance ratios
Return on average assets, annualized		0.91	%		0.67	%		0.24	%		0.65	%		0.26	%
Return on average equity, annualized		7.45	%		5.95	%		1.50	%		5.53	%		1.92	%
Efficiency ratio for quarter to date		56.32	%		50.93	%		5.39	%		64.68	%		-8.36	%
Share and Per Share figures - Actual
Common shares outstanding at period end		16,991			16,991			—			16,991			—
Weighted average diluted shares		16,991			16,991			—			16,991			—
Income per diluted share	$	0.10		$	0.08		$	0.02		$	0.07		$	0.03
Book value per common share	$	5.30		$	5.05		$	0.25		$	5.23		$	0.07
Tangible book value per common share	$	4.95		$	4.73		$	0.22		$	4.88		$	0.06
Capital Ratios
	September 30, 2011			September 30, 2010			Change			June 30, 2011			Change
Bank of Commerce Holdings
Tier 1 risk based capital ratio		14.80	%		14.58	%		0.22	%		15.75	%		-0.95	%
Total risk based capital ratio		16.05	%		15.84	%		0.21	%		17.00	%		-0.95	%
Leverage ratio		13.82	%		12.59	%		1.23	%		12.87	%		0.95	%
Redding Bank of Commerce
Tier 1 risk based capital ratio		15.20	%		14.28	%		0.92	%		15.76	%		-0.56	%
Total risk based capital ratio		16.45	%		15.54	%		0.91	%		17.02	%		-0.57	%
Leverage ratio		13.05	%		11.52	%		1.53	%		12.16	%		0.89	%

As indicated in Table 1 above, Bank of Commerce Holdings (the “Company”) continues to remain well capitalized. At September 30, 2011, the Company’s Tier 1 and Total risk based capital ratios measured 14.80% and 16.05% respectively, while the leverage ratio was 13.82%.

Return on average assets (ROA) and return on average equity (ROE) for the three months ended September 30, 2011, was 0.91% and 7.45%, respectively compared with 0.67% and 5.95% for the three months ended September 30, 2010. The increase in ROA and ROE for the three months ended September 30, 2011 compared with the same period a year ago, was primarily driven by lower provision expense, and decreased interest expense on deposits and borrowings, offset by decreased yields in the loan portfolio. In addition, the Company experienced disproportional decreases in total average assets, and average earning assets, while continuing to maintain consistent period over period net interest margins. The Company continues to experience decreased yields in the loan portfolio due to the combination of, downward rate adjustments of variable rate loans, pay offs of higher yielding loans, and the transfer of existing loans to nonaccrual status.

2

Balance Sheet Overview

As of September 30, 2011, the Company had total consolidated assets of $928.2 million, total net portfolio loans of $579.0 million, Allowance for loan losses of $10.6 million, total deposits of $650.6 million, and stockholders’ equity of $112.8 million.

Overall, the net portfolio loan balance decreased modestly for the three months ended September 30, 2011 compared to the same period a year ago. The Company’s net loan portfolio was $579.0 million at September 30, 2011, compared with $595.6 million at September 30, 2010, a decrease of $21.5 million, or 3%. The decrease was primarily driven by net payoffs, and specific charge offs of principal balances.

Table 2

PERIOD END LOANS

(Dollars in thousands)	September  30, 2011			% of Total			September  30, 2010			% of Total			Change						June 30, 2011			% of Total
													Amount			%
Commercial	$	147,495			25	%	$	134,612			22	%	$	12,883			10	%	$	140,610			24	%
Real estate loans
Construction		24,257			4	%		43,942			7	%		(19,685	)		-45	%		26,357			4	%
Commercial (investor)		215,781			37	%		215,117			35	%		664			—	%		218,535			37	%
Commercial (owner occupied)		64,963			11	%		72,093			12	%		(7,130	)		-10	%		68,327			11	%
ITIN loan pool		66,365			11	%		72,299			12	%		(5,934	)		-8	%		67,675			11	%
Other mortgage		19,653			3	%		19,345			3	%		308			2	%		22,116			4	%
Equity lines		45,593			8	%		47,963			8	%		(2,370	)		-5	%		46,850			8	%
Consumer		5,400			1	%		5,691			1	%		(291	)		-5	%		5,271			1	%
Other loans		101			—	%		89			—	%		12			13	%		91			—	%
Gross loans		589,608			100	%		611,151			100	%		(21,543	)		-4	%		595,832			100	%
Less:
Deferred loan fees, net		11						124						(113	)		-91	%		51
Allowance for loan losses		10,590						15,452						(4,862	)		-31	%		13,363
Net portfolio loans	$	579,007					$	595,575					$	(16,568	)		-3	%	$	582,418
Yield on loans		5.67	%					6.05	%								-0.38	%		5.74	%

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Table 3

PERIOD END CASH EQUIVALENTS AND INVESTMENT SECURITIES

(Dollars in thousands)	September 30, 2011			% of Total			September 30, 2010			% of Total			Change						June 30, 2011			% of Total
													Amount			%
Cash equivalents:
Cash and due from banks	$	30,961			14	%	$	27,763			12	%	$	3,198			12	%	$	19,091			9	%
Interest bearing due from banks		27,476			12	%		43,188			18	%		(15,712	)		-36	%		29,225			14	%
		58,437			26	%		70,951			30	%		(12,514	)		-18	%		48,316			23	%
Investment Securities:
U.S. Treasury and agency		4,012			2	%		31,269			13	%		(27,257	)		-87	%		21,982			10	%
Obligations of state and political subdivisions		60,417			27	%		65,116			27	%		(4,699	)		-7	%		57,881			27	%
Mortgage backed securities		46,169			21	%		65,733			28	%		(19,564	)		-30	%		39,309			19	%
Corporate securities		35,521			16	%		—			—	%		35,521			100	%		23,432			11	%
Other asset backed securities		19,585			8	%		4,807			2	%		14,778			307	%		19,580			10	%
		165,704			74	%		166,925			70	%		(1,221	)		-1	%		162,184			77	%
Total cash equivalents and investment securities	$	224,141			100	%	$	237,876			100	%	$	(13,735	)		-6	%	$	210,500			100	%
Yield on cash equivalents and investment Securities		2.32	%					2.63	%											2.68	%

The Company continued to maintain a strong liquidity position during the reporting period. As of September 30, 2011 the Company maintained cash positions at the Federal Reserve Bank (FRB) and correspondent banks in the amount of $31.0 million. The Company also held certificates of deposits with other financial institutions in the amount of $27.5 million, which the Company considers highly liquid.

The Company continues to maintain a relatively low-risk, liquid available-for-sale investment portfolio. This resource is utilized as a source of liquidity to fund other higher yielding asset opportunities, such as mortgage loan originations when required. Investment securities totaled $165.7 million at September 30, 2011, compared with $162.2 million at June 30, 2011. The $3.5 million, or 2.17% increase primarily reflected net purchase activity relating to municipal bonds, residential mortgage backed securities, and corporate securities, offset by sales of U.S treasuries and agencies. During the three months ended September 30, 2011, the Company sold securities with the objective of repositioning the portfolio to shorten duration. The Company recognized $532 thousand in gains on sales of securities for the three months ended September 30, 2011.

At September 30, 2011, the Company’s net unrealized gain on available-for-sale securities was $2.0 million, compared with an $809 thousand net unrealized gain at June 30, 2011. The favorable change in net unrealized gains was primarily due to increases in the fair values of the Company’s municipal bond portfolio, primarily driven by decreases in long term interest rates.

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Table 4

QUARTERLY AVERAGE DEPOSITS BY CATEGORY

	Q3 2011			% of Total			Q3 2010			% of Total			Change						Q2 2011			% of Total
(Dollars in thousands)													Amount			%
Demand deposits	$	99,087			15	%	$	94,038			15	%	$	5,049			5	%	$	91,608			14	%
Interest bearing demand		167,489			26	%		152,043			23	%		15,446			10	%		147,802			23	%
Total checking deposits		266,576			41	%		246,081			38	%		20,495			8	%		239,410			37	%
Savings		94,287			14	%		79,272			12	%		15,015			19	%		93,111			15	%
Total non-time deposits		360,863			55	%		325,353			50	%		35,510			11	%		332,521			52	%
Time deposits		290,811			45	%		319,492			50	%		(28,681	)		-9	%		306,668			48	%
Total deposits	$	651,674			100	%	$	644,845			100	%	$	6,829			1	%	$	639,189			100	%
Weighted average rate on total deposits		1.13	%					1.41	%											1.25	%

Third quarter 2011 average total deposits of $651.7 million increased 1% or $6.8 million from the third quarter in 2010.

Operating Results for the Third Quarter 2011

Through a proactive and aggressive management of problem credits, and the maintenance of a relatively healthy net interest margin, the Company has remained profitable during the economic downturn. Accordingly, the Company continues to be well positioned to take advantage of growth opportunities in the coming years. Net income attributable to Bank of Commerce Holdings was $2.0 million for the three months ended September 30, 2011, compared with $1.5 million for the three months ended June 30, 2011, and $1.6 million for the three months ended September 30, 2010. Net income available to common stockholders was $1.7 million for the three months ended September 30, 2011, compared with $1.3 million for the three months ended June 30, 2011, and $1.3 million for the three months ended September 30, 2010. During the third quarter of 2011, diluted earnings per share increased $0.03 per share when compared to the second quarter of 2011, and increased $0.02 per share compared to the third quarter of 2010.

The Company continued to pay cash dividends of $0.03 per share during the third quarter, consistent with the three months ended June 30, 2011 and September 30, 2010.

Table 5

SUMMARY INCOME STATEMENT

	Q3 2011		Q3 2010		Change						Q2 2011		Change
(Dollars in thousands)					Amount			%					Amount			%
Net interest income	$	8,446	$	8,678	$	(232	)		-3	%	$	8,517	$	(71	)		-1	%
Provision for loan and lease losses		2,211		4,450		(2,239	)		-50	%		2,580		(369	)		-14	%
Noninterest income		5,301		5,648		(347	)		-6	%		3,625		1,676			46	%
Noninterest expense		7,742		7,296		446			6	%		7,854		(112	)		-1	%
Income before income taxes		3,794		2,580		1,214			47	%		1,708		2,086			122	%
Provision for income taxes		1,403		916		487			53	%		216		1,187			550	%
Net income		2,391		1,664		727			44	%		1,492		899			60	%
Less: Net income attributable to noncontrolling interest		348		105		243			231	%		6		342			+100	%
Net income attributable to Bank of Commerce Holdings		2,043		1,559		484			31	%		1,486		557			37	%
Less: preferred dividend and accretion on preferred stock		334		235		99			42	%		235		99			42	%
Income available to common shareholders	$	1,709	$	1,324	$	385			29	%	$	1,251	$	458			37	%
Basic earnings per share	$	0.10	$	0.08	$	0.02			25	%	$	0.07	$	0.03			43	%
Diluted earnings per share	$	0.10	$	0.08	$	0.02			25	%	$	0.07	$	0.03			43	%
Cash dividends declared per share	$	0.03	$	0.03	$	—			—	%	$	0.03	$	—			—	%

Table 6

NET INTEREST SPREAD AND MARGIN

	Q3 2011			Q3 2010			Change Amount			Q2 2011			Change Amount
(Dollars in thousands)
Yield on average interest earning assets		4.87	%		5.10	%		-0.23	%		4.83	%		0.04	%
Rate on average interest bearing liabilities		1.18	%		1.45	%		-0.27	%		1.20	%		-0.02	%
Net interest spread		3.69	%		3.65	%		0.04	%		3.63	%		0.06	%
Net interest margin on a tax equivalent basis		4.03	%		4.02	%		0.01	%		3.97	%		0.06	%
Average earning assets	$	859,919		$	884,464		$	(24,545	)	$	881,887		$	(21,968	)
Average interest bearing liabilities	$	686,422		$	716,942		$	(30,520	)	$	711,513		$	(25,091	)

5

Net interest income for the three months ended September 30, 2011 was $8.4 million, an decrease of $232 thousand or 3% compared to the same period in 2010, and a decrease of $71 thousand or 1% compared with three months ended June 30, 2011. Net interest income for the three months ended September 30, 2011 compared to the same period a year ago, was negatively impacted by lower yields in the loan portfolio, partially offset by lower volume of FHLB advances and certificates of deposits, and lower funding costs relating to the certificate of deposits and floating rate junior subordinated debentures.

The net interest margin (net interest income as a percentage of average interest earning assets) on a fully tax-equivalent basis was 4.03% for the three months ended September 30, 2011, a decrease of 1basis point as compared to the same period in 2010.

Table 7

NONINTEREST INCOME

(Dollars in thousands)	Q3 2011		Q3 2010		Change						Q2 2011		Change
					Amount			%					Amount			%
Service charges on deposit accounts	$	50	$	63	$	(13	)		-21	%	$	52	$	(2	)		-4	%
Payroll and benefit processing fees		99		107		(8	)		-7	%		102		(3	)		-3	%
Earnings on cash surrender value – bank owned life insurance		117		112		5			4	%		119		(2	)		-2	%
Net gain on sale of securities available-for-sale		532		179		353			197	%		655		(123	)		-19	%
Gain on settlement of put reserve		—		1,750		(1,750	)		-100	%		—		—			—	%
Merchant credit card service income, net		39		65		(26	)		-40	%		33		6			18	%
Mortgage banking revenue, net		4,346		3,281		1,065			32	%		2,550		1,796			70	%
Other income		118		91		27			30	%		114		4			4	%
Total noninterest income	$	5,301	$	5,648	$	(347	)		-6	%	$	3,625	$	1,676			46	%

For the three months ended September 30, 2011, the Company recorded service charges on deposit accounts of $50 thousand compared to $63 thousand for the same period a year ago. The decrease in service charges was primarily attributable to the discontinuance of the Overdraft Privilege product, and decreased analysis fees charged to customers.

For the three months ended September 30, 2011, Company recorded earnings on cash surrender value Bank owned life insurance of $117 thousand compared to $112 thousand for the same period a year ago. The increased income was primarily attributable to one time accrual adjustments, and the purchase of an additional policy.

For the three months ended September 30, 2011, the Company recorded securities gains of $532 thousand compared to securities gains of $179 thousand for the same period a year ago. The increased gains during the three months ended September 30, 2011 compared to the same period a year ago, resulted from increased sales activity pursuant to repositioning of the available-for-sale investment portfolio to shorten duration.

For the three months ended September 30, 2011, the Company recorded merchant credit card income of $39 thousand compared to $65 thousand for the same period a year ago. During the first quarter of 2011, approximately 50% of the merchant credit card portfolio was sold to an independent third party, resulting in additional revenues of $225 thousand. Accordingly, merchant credit card income for the three months ended September 30, 2011 is down 40% compared to the same period a year ago.

Mortgage banking revenue for the three months ended September 30, 2011 increased by 32% compared to the same period a year ago, primarily driven by increased origination and refinancing activity due to lower market interest rates.

For the three months ended September 30, 2011, the Company recorded other noninterest income of $118 thousand compared to $91 thousand for the same period a year ago. The increase in other noninterest income was primarily related to immaterial reclassification adjustments.

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Table 8

NONINTEREST EXPENSE

(Dollars in thousands)	Q3 2011		Q3 2010		Change						Q2 2011		Change
					Amount			%					Amount			%
Salaries and related benefits	$	4,994	$	4,162	$	832			20	%	$	4,068	$	926			23	%
Occupancy and equipment expense		742		952		(210	)		-22	%		800		(58	)		-7	%
Write down of other real estate owned		—		129		(129	)		-100	%		370		(370	)		-100	%
FDIC insurance premium		300		250		50			20	%		363		(63	)		-17	%
Data processing fees		92		52		40			77	%		91		1			1	%
Professional service fees		513		216		297			138	%		595		(82	)		-14	%
Deferred compensation expense		136		126		10			8	%		131		5			4	%
Stationery and supplies		63		35		28			80	%		88		(25	)		-28	%
Postage		47		58		(11	)		-19	%		44		3			7	%
Directors expense		67		56		11			20	%		67		—			—	%
Other expenses		788		1,260		(472	)		-37	%		1,237		(449	)		-36	%
Total noninterest expense	$	7,742	$	7,296	$	446			6	%	$	7,854	$	(112	)		-1	%

Noninterest expense includes salaries and benefits, occupancy and equipment, write down of other real estate owned (OREO), FDIC insurance assessments, director fees, and other expenses. Other expenses include overhead items such as utilities, telephone, insurance and licensing fees, and business travel. Noninterest expense for the three months ended September 30, 2011 was $7.7 million compared to $7.3 million during the same period in 2010, and $7.9 million for the second quarter 2011.

Salaries and related benefits for the three months ended September 30, 2011 increased by $832 thousand or 20%, compared to the same period a year ago, and increased by $926 thousand compared to the second quarter of 2011. During the second quarter of 2011, the mortgage subsidiary transitioned existing loan officers from a commission based compensation plan to a salary based compensation plan, which resulted in increased salary expense. Prior to the transition, commission expenses were recorded in net mortgage banking revenues. Furthermore, during late second quarter of 2011, the mortgage subsidiary added several new branches resulting in increased salary expense during the three months ended September 30, 2011.

Occupancy and equipment expense for the three months ended September 30, 2011 decreased by $210 thousand or 22%, compared to the same period a year ago, and decreased by $58 thousand compared to the second quarter of 2011. The decrease in occupancy and equipment expense was primarily driven by decreased rent expense, and decreased equipment repairs expenses.

Write down of the Company’s OREO decreased by $129 thousand compared to the same period a year ago, and decreased $370 thousand when compared to the second quarter of 2011. The OREO charges during the periods presented were primarily associated with a commercial real estate property where management identified impairment and appropriately reduced the property’s carrying value.

FDIC insurance premium expense for the three months ended September 30, 2011 increased by $50 thousand or 20%, compared to the same period a year ago. The increase is primarily due to the FDIC’s revisions in deposit insurance assessments methodology for determining premiums, and prepayment true up adjustments.

Data processing expense for the three months ended September 30, 2011 increased by $40 thousand or 77%, compared to the same period a year ago. The increase is primarily attributable to new software additions and their associated licensing.

Professional service fees encompass audit, legal and consulting fees. The increase in the three months ended September 30, 2011 professional service fee expense compared to the same period a year ago was primarily driven by increased consulting fees related to network infrastructure, and increased legal fees related to mortgage loan officer compensation reform, both of which were recognized by the mortgage subsidiary.

Other expenses for the three months ended September 30, 2011 decreased by $472 thousand or 37.46%, compared to the same period a year ago, and decreased by $449 thousand compared to the three months ended June 30, 2011. The decrease in other expenses is primarily related to decreased loan losses recognized by the mortgage subsidiary, partially offset by increased losses on sale of OREO.

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Table 9

ALLOWANCE ROLL FORWARD

(Dollars in thousands)	Q3 2011			Q2 2011			Q1 2011			Q4 2010			Q3 2010
Beginning balance	$	13,363		$	13,610		$	12,841		$	15,452		$	12,767
Provision for loan loss charged to expense		2,211			2,580			2,400			4,550			4,450
Loans charged off		(5,355	)		(3,166	)		(1,966	)		(7,324	)		(1,883	)
Loan loss recoveries		371			339			335			163			118
Ending balance	$	10,590		$	13,363		$	13,610		$	12,841		$	15,452
Gross portfolio loans outstanding at period end	$	589,608		$	595,832		$	602,980		$	600,796		$	611,151
Ratio of allowance for loan losses to total loans		1.80	%		2.24	%		2.26	%		2.14	%		2.53	%
Nonaccrual loans at period end:
Commercial	$	228		$	901		$	2,848		$	2,302		$	4,952
Construction		1,650			1,999			224			342			2,512
Commercial real estate		3,034			3,282			3,706			7,066			9,617
Residential real estate		14,010			12,741			11,705			10,704			7,997
Home equity		353			—			96			97			194
Total nonaccrual loans	$	19,275		$	18,923		$	18,579		$	20,511		$	25,272
Accruing troubled debt restructured loans
Commercial	$	—		$	—		$	—		$	—		$	—
Construction		—			108			2,328			2,804			2,327
Commercial real estate		16,811			17,304			3,619			3,621			2,929
Residential real estate		3,279			6,569			5,782			6,243			6,906
Home equity		426			429			396			—			—
Total accruing restructured loans	$	20,516		$	24,410		$	12,125		$	12,668		$	12,162
All other accruing impaired loans		908			539			1,182			737			740
Total impaired loans	$	40,699		$	43,872		$	31,886		$	33,916		$	38,174
Allowance for loan losses to nonaccrual loans at period end		54.94	%		70.62	%		73.25	%		62.61	%		61.14	%
Nonaccrual loans to total loans		3.27	%		3.18	%		3.08	%		3.41	%		4.14	%
Allowance for loan losses to impaired loans		26.02	%		30.46	%		42.68	%		37.86	%		40.48	%

The Company continued to conservatively monitor credit quality during the period, and adjust the ALL accordingly. As such, the Company provided $2.2 million in provisions for loan losses for the three months ended September 30, 2011, compared with $4.5 million for the same period a year ago. The Company’s ALL as a percentage of total portfolio loans were 1.80% and 2.53% as of September 30, 2011, and September 30, 2010, respectively.

Net charge offs were $5.0 million for the three months ended September 30, 2011 compared with net charge offs of $1.8 million for the same period a year ago. The charge offs were centered in commercial real estate, commercial, and construction loans, where ongoing credit quality issues continue to surface. During the three months ended September 30, 2011, the Company recognized a significant charge off of $1.2 million due to a short pay-off settlement relating to a large commercial real estate loan. The continued weaknesses in the commercial loan portfolio are specifically centered on loans where the borrower’s business is tied to real estate. For the foreseeable future, the commercial real estate loan portfolio, and commercial loan portfolio will continue to be influenced by weakness in real estate values, the effects of high unemployment levels, and general overall weakness in economic conditions.

As of September 30, 2011, impaired loans totaled $41.0 million, of which $19.3 million were in nonaccrual status. Of the total impaired loans, $12.6 million or one hundred and forty-four were ITIN loans with an approximate average balance of $87 thousand. The ITIN loan pool represents residential mortgage loans made to legal United States residents without a social security number, and are geographically dispersed throughout the United States. The remaining impaired loans consist of two commercial loans, four construction loans, two commercial real estate loans, eleven non-ITIN residential mortgages, and sixteen home equity loans.

Loans are reported as Troubled Debt Restructurings (TDRs) when the Bank grants a concession(s) to a borrower experiencing financial difficulties that it would not otherwise consider. Examples of such concessions include a reduction in the loan rate, forgiveness of principal or accrued interest, extending the maturity date(s) significantly, or providing a lower interest rate than would be normally available for a transaction of similar risk.

8

TDRs are considered impaired loans, but are not necessarily placed on nonaccrual status at inception of TDR status. Rather, if the borrower is current to original loan terms at the time of the restructuring, and continues to pay as agreed to modified terms, the loan is reported as current. As of September 30, 2011, there were $6.9 million of impaired ITINs which were classified as TDRs with $4.1 million on nonaccrual.

As of September 30, 2011 the Company had $29.7 million in TDR’s compared to $32.4 million as of June 30, 2011. As of September 30, 2011, the Company had one hundred and one restructured loans that qualified as TDRs, of which forty-three loans were performing according to their restructured terms. TDRs represented 5.03% of gross portfolio loans, compared with 5.43% of gross portfolio loans at June 30, 2011.

Table 10

TROUBLED DEBT RESTRUCTURINGS

(Dollars in thousands)	September 30, 2011			June 30, 2011			March 31, 2011			December 31, 2010			September 30, 2010
Nonaccrual	$	9,155		$	7,959		$	9,752		$	11,977		$	12,587
Accruing		20,516			24,410			12,125			12,668			12,162
Total troubled debt restructurings	$	29,671		$	32,369		$	21,877		$	24,645		$	24,749
Percentage of total gross portfolio loans		5.03	%		5.43	%		3.63	%		4.10	%		4.05	%

Table 11

NONPERFORMING ASSETS

(Dollars in thousands)	September 30, 2011			June 30, 2011			March 31, 2011				December 31, 2010			September 30, 2010
Commercial	$	228		$	901		$	2,849			$	2,302		$	4,952
Real estate construction
Commercial real estate construction		1,543			1,973			99				100			2,251
Residential real estate construction		107			26			125				242			261
Total real estate construction		1,650			1,999			224				342			2,512
Real estate mortgage
1-4 family, closed end 1st lien		4,205			3,002			1,634				1,166			1,204
1-4 family revolving		353			—			96				97			194
ITIN 1-4 family loan pool		9,805			9,739			10,071				9,538			6,751
Home equity loan pool		—			—			—				—			42
Total real estate mortgage		14,363			12,741			11,801				10,801			8,191
Commercial real estate		3,034			3,282			3,706		��		7,066			9,617
Total nonaccrual loans		19,275			18,923			18,580				20,511			25,272
90 days past due not on nonaccrual		373			953			743				—			682
Total nonperforming loans		19,648			19,876			19,323				20,511			25,954
Other real estate owned		1,665			1,793			3,868				2,288			2,020
Total nonperforming assets	$	21,313		$	21,669		$	23,191			$	22,799		$	27,974
Nonperforming loans to total loans		3.33	%		3.34	%		3.20	%			3.41	%		4.25	%
Nonperforming assets to total assets		2.30	%		2.49	%		2.53	%			2.43	%		3.03	%

9

Table 12

OTHER REAL ESTATE OWNED ACTIVITY

(Dollars in thousands)	Q3 2011			Q2 2011			Q1 2011			Q4 2010			Q3 2010
Beginning balance	$	1,793		$	3,868		$	2,288		$	2,020		$	2,039
Additions to OREO		129			407			2,099			3,680			215
Dispositions of OREO		(257	)		(2,112	)		(332	)		(3,215	)		(105	)
OREO valuation adjustment		—			(370	)		(187	)		(197	)		(129	)
Ending balance	$	1,665		$	1,793		$	3,868		$	2,288		$	2,020

At September 30, 2011 the Company’s recorded investment in OREO was $1.7 million. During the third quarter of 2011, the Company transferred two foreclosed properties aggregating $129 thousand to OREO with no associated charges to the allowance for loan losses for these foreclosed assets. During the third quarter 2011, the Company sold four properties aggregating $257 thousand for a net loss of $72 thousand, and did not record any additional write downs of existing OREO in other noninterest expense. The September 30, 2011 OREO balance consists of seven properties, of which six are secured with 1-4 family residential real estate in the amount of $490 thousand. The remaining property consists of improved commercial land in the amount of $1.2 million.

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Table 13

INCOME STATEMENT

(Dollars in thousands, except for per share data)	Q3 2011		Q3 2010		Change						Q2 2011		Full Year 2010		Full Year 2009
					$			%
Interest income:
Interest and fees on loans	$	9,013	$	9,710	$	(697	)		-7	%	$	8,958	$	38,034	$	35,860
Interest on tax-exempt securities		470		465		5			1	%		478		1,692		1,164
Interest on U.S. government securities		437		633		(196	)		-31	%		633		2,083		3,450
Interest on other securities		548		472		76			16	%		577		1,616		855
Total interest income		10,468		11,280		(812	)		-7	%		10,646		43,425		41,329
Interest expense:
Interest on demand deposits		191		251		(60	)		-24	%		204		968		1,015
Interest on savings deposits		172		237		(65	)		-27	%		229		921		963
Interest on certificates of deposit		1,204		1,453		(249	)		-17	%		1,272		6,151		7,628
Securities sold under agreements to repurchase		9		13		(4	)		-31	%		13		52		51
Interest on FHLB and other borrowings		135		178		(43	)		-24	%		148		1,630		1,833
Interest on other borrowings		311		470		(159	)		-34	%		263		680		845
Total interest expense		2,022		2,602		(580	)		-22	%		2,129		10,402		12,335
Net interest income		8,446		8,678		(232	)		-3	%		8,517		33,023		28,994
Provision for loan and lease losses		2,211		4,450		(2,239	)		-50	%		2,580		12,850		9,475
Net interest income after provision for loan losses		6,235		4,228		2,007			47	%		5,937		20,173		19,519
Noninterest income:
Service charges on deposit accounts		50		63		(13	)		-21	%		52		260		390
Payroll and benefit processing fees		99		107		(8	)		-7	%		102		448		452
Earnings on cash surrender value – Bank owned life insurance		117		112		5			4	%		119		438		418
Net gain on sale of securities available-for-sale		532		179		353			197	%		655		1,981		2,438
Gain on settlement of put reserve		—		1,750		(1,750	)		—	%		—		1,750		—
Merchant credit card service income, net		39		65		(26	)		-40	%		33		235		—
Mortgage banking revenue, net		4,346		3,281		1,065			32	%		2,550		14,328		5,327
Other income		118		91		27			30	%		114		351		1,038
Total noninterest income		5,301		5,648		(347	)		-6	%		3,625		19,791		10,063
Noninterest expense:
Salaries and related benefits		4,994		4,162		832			20	%		4,068		15,903		10,882
Occupancy and equipment expense		742		952		(210	)		-22	%		800		3,660		3,405
Write down of other real estate owned		—		129		(129	)		-100	%		370		1,571		161
FDIC insurance premium		300		250		50			20	%		363		1,016		1,274
Data processing fees		92		52		40			77	%		91		270		282
Professional service fees		513		216		297			138	%		595		1,726		820
Deferred compensation expense		136		126		10			8	%		131		493		478
Stationery and supplies		63		35		28			80	%		88		258		185
Postage		47		58		(11	)		-19	%		44		198		147
Directors’ expense		67		56		11			20	%		67		266		299
Other expenses		788		1,260		(472	)		-37	%		1,237		4,970		2,691
Total noninterest expense		7,742		7,296		446			6	%		7,854		30,331		20,624
Income before provision for income taxes		3,794		2,580		1,214			47	%		1,708		9,633		8,958
Provision for income taxes		1,403		916		487			53	%		216		3,159		2,690
Net Income		2,391		1,664		727			44	%		1,492		6,474		6,268
Less: Net income (loss) attributable to noncontrolling interest		348		105		243			231	%		6		254		263
Net income attributable to Bank of Commerce Holdings	$	2,043	$	1,559	$	484			31	%	$	1,486	$	6,220	$	6,005
Less: Preferred dividend and accretion on preferred stock		334		235		99			42	%		235		940		942
Income available to common stockholders	$	1,709	$	1,324	$	385			29	%	$	1,251	$	5,280	$	5,063
Basic earnings per share	$	0.10	$	0.08	$	0.02					$	0.07	$	0.35	$	0.58
Weighted average shares – basic		16,991		16,991		—						16,991		14,951		8,711
Diluted earnings per share	$	0.10	$	0.08	$	0.02					$	0.07	$	0.35	$	0.58
Weighted average shares – diluted		16,991		16,991		—						16,991		14,951		8,711
Cash dividends declared	$	0.03	$	0.03	$	—					$	0.03	$	0.18	$	0.24

11

Table 14

BALANCE SHEET

(Dollars in thousands)	September 30, 2011		September 30, 2010		Change						June 30, 2011
					$			%
ASSETS
Cash and due from banks	$	30,961	$	27,763	$	3,198			12	%	$	19,091
Interest bearing deposits in other banks		27,476		43,188		(15,712	)		-36	%		29,225
Cash and cash equivalents		58,437		70,951		(12,514	)		-18	%		48,316
Investment securities		165,704		166,925		(1,221	)		-1	%		162,184
Total portfolio loans		589,597		611,027		(21,430	)		-4	%		595,781
Allowance for loan losses		10,590		15,452		(4,862	)		-31	%		13,363
Loans, net		579,007		595,575		(16,568	)		-3	%		582,418
Mortgage loans held for sale		75,805		41,025		34,780			85	%		26,067
Total interest earning assets		889,543		889,928		(385	)		—	%		832,348
Bank premises and equipment, net		9,664		9,842		(178	)		-2	%		9,691
Goodwill		3,695		3,695		—			—	%		3,695
OREO, net		1,665		2,020		(355	)		-18	%		1,793
Other assets		34,194		34,239		(45	)		—	%		34,358
TOTAL ASSETS	$	928,171	$	924,272	$	3,899			—	%	$	868,522
LIABILITIES AND STOCKHOLDERS’ EQUITY
Demand – noninterest bearing	$	99,431	$	90,613	$	8,818			10	%	$	87,643
Demand – interest bearing		175,745		161,154		14,591			9	%		149,917
Savings accounts		94,519		82,761		11,758			14	%		93,698
Certificates of deposit		280,887		305,503		(24,616	)		-8	%		294,173
Total deposits		650,582		640,031		10,551			2	%		625,431
Securities sold under agreements to repurchase		15,701		11,328		4,373			39	%		15,353
Federal Home Loan Bank borrowings		111,000		141,000		(30,000	)		-21	%		91,000
Mortgage warehouse line of credit		11,290		—		11,290			100	%		4,236
Junior subordinated debentures		15,465		15,465		—			—	%		15,465
Other liabilities		11,377		11,669		(292	)		-3	%		8,843
Total Liabilities	$	815,415	$	819,493	$	(4,078	)		—	%	$	760,328
Total Equity – Bank of Commerce Holdings		109,847		102,460		7,387			7	%		105,633
Noncontrolling interest in subsidiary		2,909		2,319		590			25	%		2,561
Total Stockholders’ Equity		112,756		104,779		7,977			8	%		108,194
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	928,171	$	924,272	$	3,899			—	%	$	868,522

12

Table 15

AVERAGE BALANCE SHEET (Year to Date)

(Dollars in thousands)	September 30, 2011		September 30, 2010		June 30, 2011		December 31, 2010		December 31, 2009
Earning assets:
Loans	$	634,945	$	625,396	$	626,685	$	640,213	$	589,336
Tax exempt securities		50,330		38,452		50,899		42,172		28,384
US government securities		24,661		26,631		29,480		27,423		8,606
Mortgage backed securities		68,422		45,368		73,500		48,972		53,722
Other securities		41,828		11,080		42,256		16,946		3,199
Interest bearing due from banks		67,560		71,984		69,205		62,651		64,454
Fed funds sold		—		995		—		995		13,438
Average earning assets		887,746		819,906		892,025		839,372		761,139
Cash and DFB		2,240		1,758		1,985		1,473		493
Bank premises		9,531		9,875		9,576		9,814		10,322
Other assets		21,122		41,518		21,114		55,440		32,257
Average total assets	$	920,639	$	873,057	$	924,700	$	906,099	$	804,211
Interest bearing liabilities:
Demand – interest bearing	$	154,882	$	133,494	$	148,473	$	146,210	$	145,542
Savings deposits		91,918		74,310		90,714		76,718		62,846
CDs		301,607		329,456		307,094		321,051		317,417
Repurchase agreements		14,723		11,971		14,224		12,274		11,006
Other borrowings		148,418		117,271		156,756		128,242		122,057
		711,548		666,502		717,261		684,495		658,868
Demand – noninterest bearing		96,802		92,204		95,641		94,253		69,250
Other liabilities		4,908		21,621		5,617		31,714		9,467
Shareholders’ equity		107,381		92,730		106,181		95,637		66,626
Average liabilities & equity	$	920,639	$	873,057	$	924,700	$	906,099	$	804,211

13

BOCH is a NASDAQ National Market listed stock. Please contact your local investment advisor for purchases and sales. Investment firms making a market in BOCH stock are:

Raymond James Financial / Howe Barnes

John T. Cavender

555 Market Street

San Francisco, CA (800) 346-5544

Hill, Thompson, Magid & Co. Inc / R.J. Dragani

15 Exchange Place, Suite 800

Jersey City, New Jersey 07030 (201) 369-2908

Keefe, Bruyette & Woods, Inc. /

Dave Bonaccorso

101 California Street, 37^th Floor

San Francisco, CA 94105 (415) 591-5063

Sandler & O’Neil /Bryan Sullivan

919 Third Avenue, 6^th Floor

New York, NY 10022 (888) 383-3112

McAdams Wright Ragen, Inc. /Joey Warmenhoven

1121 SW Fifth Avenue

Suite 1400

Portland, Oregon 97204 (866) 662-0351

Stifel Nicolaus

Perry Wright

1255 East Street #100

Redding, CA 96001 (530) 244-7199

Contact Information:

Patrick J. Moty, President & CEO 530-722-3953

Linda J. Miles, Executive Vice President & Chief Operating Officer 530-722-3955

Samuel D. Jimenez, Executive Vice President & Chief Financial Officer 530-722-3952

14