2008-09-20 00:05:00 -

www.securitybusinessbank.com - Security Business Bancorp (OTCBB:SBBC) and its operating subsidiary, Security Business Bank of San Diego, are making shareholders and customers aware that the bank holds a preferred investment in Fannie Mae as part of securities available for sale at a cost of $2.0 million. These securities currently trade at 10 to 12 percent of par value. Security Business Bank does not hold any common stock or any other equity securities issued by Fannie Mae or Freddie Mac.

The bank's outreach comes as a result of the Sept. 7 announcement by the U.S. Treasury and the Federal Housing Finance Agency that the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) were placed

into conservatorship.

Given the recent sizeable decline in market value of these securities, Security Business Bank is working to determine the level of impairment that may be incurred. Because it is unknown as of today if the value of said securities will increase, the bank expects to record a non-cash other-than-temporary impairment charge on these investments during the third quarter of 2008.

According to Security Business Bank President and CEO Paul Rodeno, the bank purchased shares of Fannie Mae because of its then favorable regulatory risk rating, the steady income provided by the stock's dividend and the favorable tax treatment afforded to these dividends.

Said Rodeno, "The charge against earnings, while unfortunate, does not impact the bank's day-to-day operations. In particular,

-- the charge does not influence our cash position;

-- we remain 'well-capitalized,' which is the highest regulatory standard;

-- our strong capital position provides stability to our depositors;

-- our investment in Fannie Mae stock represents less than 1% of our total assets;

-- our core earnings are in line with our growth targets;

-- we have no direct exposure to the subprime housing market;

-- the charge against the bank's earnings will not influence the ability to run our business;

-- our growth plans are on schedule including the expansion and relocation of our Carlsbad office."

Based on its consistent, positive performance since the company's founding six years ago, Security Business Bank is well positioned to absorb the anticipated write-down and to continue to operate as one of the leading business-focused community banks in San Diego.

Security Business Bank, a wholly-owned subsidiary of Security Business Bancorp, has built a reputation for ensuring customer accessibility to executive-level advisors, speed-of-business responsiveness and financial innovation. The bank's client base is comprised of growth-oriented San Diego organizations in an array of industries. Security Business Bank operates three San Diego locations including Downtown, Carmel Valley and Carlsbad offices.

Certain statements in this release, including statements regarding the anticipated development and expansion of the bank's business, and the intent, belief or current expectations of the bank, its directors or its officers, are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements.

Security Business Bancorp
Paul Rodeno, 619-237-4801
prodeno@securitybusinessbank.com
or
Melissa Dennis, 760-930-8973
melissa@teamoutsmart.com