8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 10, 2012 (May 31, 2012)

MANHATTAN BANCORP

(Exact name of registrant as specified in its charter)

California
(State or other jurisdiction of
incorporation or organization) 000-54116
(Commission
File Number) 20-5344927
(IRS Employer
Identification No.)

2141 Rosecrans Avenue, Suite 1100
El Segundo, California
(Address of principal executive offices) 90245
(Zip Code)

Registrant’s telephone number, including area code:  (310) 606-8000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

EXPLANATORY NOTE

This Current Report on Form 8-K/A (Amendment No. 1) (this “Amendment”) is being filed by Manhattan Bancorp (the “Company”) to amend the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission on June 1, 2012 (the “Closing 8-K”), which was filed in connection with the completion, on May 31, 2012, of the previously announced merger between Professional Business Bank and Bank of Manhattan, N.A., a wholly-owned subsidiary of the Company, with Bank of Manhattan as the surviving corporation.  The Company is filing this Amendment solely to provide the historical audited and unaudited financial information and unaudited pro forma financial information that are required to be filed under Item 9.01 of Form 8-K in connection with the completion of the merger.  Except for the foregoing, this Amendment does not modify or update any other disclosure contained in the Closing 8-K.

Item 9.01Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The audited consolidated financial statements of CGB Holdings, Inc. (and subsidiaries)as of December 31, 2011 and 2010, and for the years ended December 31, 2011 and 2010, and the related report of McGladrey LLP with respect thereto, were included in the Joint Proxy Statement/Prospectus previously filed by the Company with the Securities and Exchange Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933, as amended, on May 2, 2012, relating to the Company’s Registration Statement on Form S-4, as amended (File No. 333-179137), and are hereby incorporated herein by reference.

The unaudited consolidated financial statements of CGB Holdings, Inc. (and subsidiaries) as of March 31, 2012 and for the three month periods ended March 31, 2012, and 2011, are attached hereto as Exhibit 99.1.

(b) Pro Forma Financial Information.

The unaudited pro forma condensed combined financial information reflecting the acquisition of Professional Business Bank by Bank of Manhattan, N.A., a wholly-owned subsidiary of the Company, as of March 31, 2012 and December 31, 2011, with the related notes thereto, are attached hereto as Exhibit 99.2. They are not necessarily indicative of the operating results or financial position that would have been achieved had the acquisition been consummated as of the dates indicated or of the results that may be obtained for future periods.

(d) Exhibits.

Exhibit No.	Description
99.1	Unaudited consolidated financial statements of CGB Holdings, Inc. (and subsidiaries) as of March 31, 2012 and for the three month periods ended March 31, 2012 and 2011, with the related notes thereto.
99.2	Unaudited pro forma combined condensed balance sheet as of March 31, 2012 and unaudited pro forma combined condensed statements of operations for the three months ended March 31, 2012 and for the year ended December 31, 2011, with the related notes thereto.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 10, 2012	MANHATTAN BANCORP
	(Registrant)
	By:	/s/ Brian E. Côté
		Brian E. Côté
		Executive Vice President and Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Unaudited consolidated financial statements of CGB Holdings, Inc. (and subsidiaries) as of March 31, 2012, and for the three month periods ended March 31, 2012 and 2011, with the related notes thereto.
99.2	Unaudited pro forma combined condensed balance sheet as of March 31, 2012 and unaudited pro forma combined condensed statements of operations for the three months ended March 31, 2012 and for the year ended December 31, 2011, with the related notes thereto.

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EX-99.1

Exhibit 99.1

CGB Holdings, Inc. and Subsidiaries

Consolidated Financial Report (unaudited)

March 31, 2012

Contents

	Page
Financial Statements
Consolidated balance sheets	2
Consolidated statements of operations	3
Consolidated statements of changes in stockholders’ equity	4
Consolidated statements of cash flows	5-6
Notes to consolidated financial statements	7-31

CGB Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets

March 31, 2012 and December 31, 2011

(dollars and shares in thousands)

	March 31,
	2012			December 31,
	(unaudited)			2011
Assets
Cash and Due From Banks	$	6,328		$	6,779
Interest-Earning Deposits in Other Financial Institutions	40,552			38,756
Total cash and cash equivalents	46,880			45,535
Interest-Earning Deposits in Other Financial Institutions	3,103			3,952
Investment Securities Available for Sale	1,783			9,460
Loans Held for Investment	167,202			168,736
Allowance for loan losses	(1,912		)	(2,355		)
Loans, net	165,290			166,381
Premises and Equipment, net	4,096			4,201
Federal Home Loan Bank and Other Bank Stock, at cost	1,894			1,986
Core Deposit Intangible	1,785			1,863
Other Real Estate Owned	3,581			3,581
Accrued Interest Receivable and Other Assets	2,162			2,425
Total assets	$	230,574		$	239,384
Liabilities and Stockholders’ Equity
Liabilities
Deposits:
Demand, noninterest-bearing	$	72,871		$	70,188
Savings, NOW and money market	67,805			73,158
Time deposits under $100,000	31,094			31,857
Time deposits $100,000 or more	20,961			25,949
Total deposits	192,731			201,152
Accrued interest payable and other liabilities	3,696			3,044
Total liabilities	196,427			204,196
Commitments and Contingencies
Stockholders’ Equity
Preferred stock, no par, 100 shares authorized; none issued and outstanding	—			—
Common stock, $.0001 par value; 750 shares authorized; 358 shares issued and outstanding at March 31, 2012 and December 31, 2011	—			—
Additional paid-in capital	36,037			36,006
Accumulated deficit	(4,538		)	(3,992		)
Noncontrolling interest	2,627			2,691
Accumulated other comprehensive income	21			483
Total stockholders’ equity	34,147			35,188
Total liabilities and stockholders’ equity	$	230,574		$	239,384

The accompanying notes are an integral part of these financial statements.

2

CGB Holdings, Inc. and Subsidiaries

Consolidated Statements of Operations

Three Months Ended March 31, 2012 and 2011

(dollars in thousands, except per share amounts)

	2012			2011
	(unaudited)
Interest income:
Loans	$	2,506		$	3,203
Investment securities	69			86
Other	32			80
Total interest income	2,607			3,369
Interest expense:
Deposits	124			262
Total interest expense	124			262
Net interest income	2,483			3,107
Provision for (reduction of) allowance for loan losses	(415		)	604
Net interest income after provision for (reduction of) allowance for loan losses	2,898			2,503
Noninterest income:
Gain on sale of securities	527			—
Service charges and other	389			761
Total noninterest income	916			761
Noninterest expense:
Salaries and employee benefits	2,287			1,867
Occupancy and equipment expenses	298			416
Other expenses	1,821			1,473
Total noninterest expense	4,406			3,756
Loss before income taxes	(592		)	(492		)
Provision for income tax expense	—			—
Net (loss)	(592		)	(492		)
Less: consolidated net (loss) attributable to noncontrolling interest in subsidiary	(46		)	(47		)
Consolidated net (loss) attributable to controlling interest	$	(546	)	$	(445	)
Basic and diluted loss per share	$	(1.49	)	$	(1.14	)

The accompanying notes are an integral part of these financial statements.

3

CGB Holdings, Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

Three Months Ended March 31, 2012 (unaudited)

(dollars and shares in thousands)

												Accumulated
												Accumulated
	Comprehensive						Additional					Other			Non-
	Income			Common Stock			Paid-In		Accumulated			Comprehensive			controlling
	(Loss)			Shares	Amount		Capital		Deficit			Income			Interest			Total
Balance, December 31, 2011				358	$	—	$	36,006	$	(3,992	)	$	483		$	2,691		$	35,188
Stock-based compensation				—	—		31		—			—			3			34
Comprehensive (loss):
Unrealized gain on investment securities, net of taxes of $0	$	(462	)	—	—		—		—			(462		)	(21		)	(483		)
Net (loss)	(592		)	—	—		—		(546		)	—			(46		)	(592		)
Comprehensive loss	$	(1,054	)
Balance, March 31, 2012				358	—		36,037		(4,538		)	21			2,627			34,147

The accompanying notes are an integral part of these financial statements.

4

CGB Holdings, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

Three Months Ended March 31, 2012 and 2011 (unaudited)

(dollars in thousands)

	2012			2011
Cash Flows From Operating Activities
Net (loss)	$	(592	)	$	(492	)
Adjustments to reconcile net (loss) to net cash provided by (used in) operating activities:
Gain on sale of available for sale securities	(527		)	—
Depreciation	105			139
Net amortization (accretion) of investment securities premiums and discounts	261			(32		)
Amortization of core deposit intangible	78			83
Provision for (reduction of) allowance for loan losses	(415		)	604
Share-based compensation expense	34			20
Net (increase) decrease in deferred fees and costs	(9		)	23
Gain on sale of other real estate owned	—			(158		)
Net decrease (increase) in accrued interest receivable and other assets	261			(732		)
Net increase in accrued interest payable and other liabilities	633			2,397
Net cash provided by (used in) operating activities	(171		)	1,852
Cash Flows From Investing Activities
Proceeds from maturities and principal paydowns on securities	7,481			3,240
Net decrease in interest-earning deposits in other financial institutions	849			6,040
Net decrease in loans	1,515			23,083
Proceeds from redemption of Federal Home Loan Bank stock	92			91
Proceeds from sale of other real estate owned	—			1,605
Net cash provided by investing activities	9,937			34,059
Cash Flows From Financing Activities
Net (decrease) in deposits	(8,421		)	(21,030		)
Payments on borrowings	—			(12,000		)
Transfer of net assets to affiliate, cash paid	—			(3,615		)
Net cash (used in) financing activities	(8,421		)	(36,645		)
Increase (decrease) in cash and cash equivalents	1,345			(734		)
Cash and Cash Equivalents
Beginning of period	45,535			74,178
End of period	$	46,880		$	73,444

(Continued)

5

CGB Holdings, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

Three Months Ended March 31, 2012 and 2011 (unaudited)

(dollars in thousands)

	2012		2011
Supplemental Disclosures of Cash Flow Information
Cash paid for interest	$	136	$	244
Cash paid for income taxes	$	—	$	—

The accompanying notes are an integral part of these financial statements.

6

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1.Nature of Business and Summary of Significant Accounting Policies

Nature of business: CGB Holdings, Inc. (the Company), through its majority-owned subsidiary, Professional Business Bank (the Bank), provides a full range of banking services to its commercial and consumer customers. The Bank is headquartered in Pasadena, California, in the San Gabriel Valley of Los Angeles County, California. The Bank currently operates from four full-service locations, with the main office and branch office in Pasadena and one branch office each in Montebello and Glendale. All branches are located in the San Gabriel Valley of Los Angeles County. The Bank’s primary source of revenue is providing loans to customers, who are predominately small- and medium-sized businesses and individuals.

On December 31, 2010, California General Bank acquired 100 percent of the outstanding common stock of Professional Business Bank and immediately changed the name of the merged bank to Professional Business Bank. During 2010 California General Bank converted from a national to a state-chartered bank in anticipation of the merger. In connection with the merger, the Company also formed CGB Asset Management, Inc., a wholly owned subsidiary, in order to hold certain troubled assets acquired in the merger.

On May 31, 2012, the Company completed its merger with a public company, Manhattan Bancorp.  Immediately prior to the merger with Manhattan Bancorp, the Company merged into its subsidiary, Professional Business Bank, in a common control transaction accounted for using the historical balances of the Company and the Bank.

The Bank then merged into Bank of Manhattan with Bank of Manhattan as the surviving institution. Total assets of the merged entities approximate $470 million based upon the fair value of the transaction in the preliminary purchase price allocation as of May 31, 2012.  Application of the accounting standards to this reverse merger results in Professional Business Bank being identified as the accounting acquirer in this transaction, and Manhattan Bancorp is the legal acquirer. Therefore, the net assets and liabilities of Professional Business Bank were carried forward in the merger at the historical cost basis.

A summary of the Company’s significant accounting policies is as follows:

Basis of presentation: The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) and conform to general practices within the banking industry   In the opinion of Management, all adjustments considered necessary for a fair presentation of results for the interim periods presented have been included. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes contained therein (and which are included in the Form 8-K in which these unaudited condensed consolidated financial statements are included).  Operating results for the three months ended March 31, 2012 are not necessarily indicative of the results that may be expected for the year ended December 31, 2012.

Principles of consolidation: The unaudited condensed consolidated financial statements include the accounts of the Company, its majority-owned subsidiary, Professional Business Bank (the Bank), and its wholly owned subsidiary, CGB Asset Management, Inc. (collectively referred to as the Company). CGB Asset Management, Inc. was sold on March 31, 2011 to a related party. Noncontrolling interest amounts relating to the Company’s majority-owned subsidiary are included within net income attributable to the noncontrolling interest caption in its consolidated statement of operations and within the noncontrolling interest caption in its consolidated balance sheet. All intercompany balances and transactions have been eliminated in consolidation.

7

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

Reclassifications: Certain amounts in prior presentations have been reclassified to conform to the current presentation. These reclassifications had no effect on previously reported shareholders’ equity, net loss or loss per share amounts.

Use of estimates: In preparing consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Material estimates susceptible to significant change in the near term include the allowance for loan losses, deferred tax assets and the fair value of assets and liabilities.

Business combinations: The Company applies the acquisition method of accounting for business combinations. Under the acquisition method, the acquiring entity in a business combination recognizes 100 percent of the assets acquired and liabilities assumed at their acquisition date fair values. Management utilizes valuation techniques appropriate for the asset or liability being measured in determining these fair values. Any excess of the purchase price over amounts allocated to assets acquired, including identifiable intangible assets, and liabilities assumed is recorded as goodwill. When amounts allocated to assets acquired and liabilities assumed are greater than the purchase price, a bargain purchase gain is recognized. Acquisition-related costs are expensed as incurred.

Investment securities: Investment securities are classified as available-for-sale and recorded at fair value. Unrealized gains or losses on available-for-sale securities are excluded from net income and reported as a separate component of other comprehensive income included in stockholders’ equity. Premiums or discounts on available-for-sale securities are amortized or accreted into income using the interest method. Realized gains or losses on sales of available-for-sale securities are recorded using the specific identification method.

Management evaluates securities for other-than-temporary impairment (OTTI) at least on a quarterly basis and more frequently when economic or market conditions warrant such evaluation. Declines in the fair value of individual available-for-sale securities below their cost that are other than temporary result in write-downs of the individual securities to their fair value. In estimating other-than-temporary impairment losses, management considers the length of time and the extent to which the fair value has been less than cost, the financial condition and near-term prospects of the issuer, and the intent and ability of the Bank to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. If it is probable that the issuer of the security will be unable to pay all amounts due according to the contractual terms of the debt security, then OTTI will be recognized and the security will be written down to fair value.

If the Company intends to sell an impaired security, the Company records an other-than-temporary loss in an amount equal to the entire difference between fair value and amortized cost. If a security is determined to be other-than-temporarily impaired, but the Company does not intend to sell the security, only the credit portion of the estimated loss is recognized in earnings, with the other portion of the loss recognized in other comprehensive income.

Acquired loans: Acquired loans from the business combination include both nonperforming loans with evidence of credit deterioration since their origination date and performing loans with no such credit deterioration. The Company is accounting for a significant majority of the loans, including loans with evidence of credit deterioration acquired in the transaction in accordance with Accounting Standards Codification (ASC) 310-30, Accounting for Loans or Certain Securities Acquired in a Transfer, formerly known as Statement of Position (SOP) 03-3.

8

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1.Nature of Business and Summary of Significant Accounting Policies (Continued)

At the date of acquisition, the Company recorded the loans at their fair value. In accordance with ASC 310-30, the Company has pooled performing loans at the date of purchase. The loans were aggregated into pools based on common risk characteristics.

The difference between the undiscounted cash flows expected to be collected at acquisition and the investment in the loan, or the “accretable yield,” is recognized as interest income on a level-yield method over the life of the loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “nonaccretable difference,” are not recognized as a yield adjustment, loss accrual or valuation allowance. Increases in expected cash flows subsequent to the initial investment are recognized prospectively through adjustment of the yield on the loan over its remaining life. Decreases in expected cash flows are recognized as impairment. If the Company does not have the information necessary to reasonably estimate cash flows to be expected, it may use the cost recovery method or cash basis method of income recognition. Valuation allowances on these impaired loans reflect only losses incurred after the acquisition (meaning the present value of all cash flows expected at acquisition that ultimately are not to be received).

Originated loans: Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at their outstanding unpaid principal balances reduced by any charge-offs, net of deferred loan fees or costs, unearned discounts, fair value valuation allowances and net of allowance for loan losses or specific valuation accounts. Loan origination fees and certain direct origination costs are capitalized and recognized as an adjustment of the yield of the related loan. Interest on loans is accrued daily and recognized over the terms of the loans and is calculated using the simple-interest method based on principal amounts outstanding.

Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. Generally, the accrual of interest on loans is discontinued when principal or interest is past due 90 days based on the contractual terms of the loan or when, in the opinion of management, there is reasonable doubt as to collectability. When loans are placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Income on nonaccrual loans is subsequently recognized only to the extent that cash is received and the loan’s principal balance is deemed collectable. Interest accruals are resumed on such loans only when they are brought current with respect to interest and principal for a period of at least six months and when, in the judgment of management, the loans are estimated to be fully collectible as to all principal and interest.

The Company’s loan portfolio consists primarily of the following loan types:

·Construction loans: Construction loans consist of vacant land and property that is in the process of improvement. Repayment of these loans can be dependent on the sale of the property to third parties or the successful completion of the improvements by the builder for the end user. In the event a loan is made on property that is not yet improved for the planned development, there is the risk that approvals will not be granted or will be delayed. Construction loans also run the risk that improvements will not be completed on time or in accordance with specifications and projected costs. Construction real estate loans generally have terms of one year to 18 months during the construction period and interest rates based on a designated index.

·Commercial real estate loans: Commercial real estate loans are primarily secured by apartment buildings, office and industrial buildings, warehouses, small retail shopping centers and various special purpose properties, including hotels, restaurants and nursing homes. Although terms vary, commercial real estate loans generally have amortizations of 15 to 25 years, as well as balloon payments of two to five years, and terms which provide that the interest rates thereon may be adjusted annually at the Company’s discretion, based on a designated index.

9

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1.Nature of Business and Summary of Significant Accounting Policies (Continued)

·Residential multifamily real estate: Residential multifamily loans generally involve a greater degree of credit risk than residential real estate loans due to the reliance on the successful operation of the project. This loan type is sensitive to adverse economic conditions.

·Commercial and industrial loans: Commercial and industrial loans are loans for commercial, corporate and business purposes, including issuing letters of credit. The Company’s commercial business loan portfolio is comprised of loans for a variety of purposes and generally is secured by equipment, machinery and other business assets. Commercial business loans generally have terms of five years or less and interest rates that float in accordance with a designated published index. Substantially all of such loans are secured and backed by the personal guarantees of the owners of the business.

·Residential 1-4 family real estate loans: Residential real estate loans are generally smaller in size and are homogenous because they exhibit similar characteristics.

·Consumer: Consumer loans generally have higher interest rates than mortgage loans. The risk involved in consumer loans is the type and nature of the collateral and, in certain cases, the absence of collateral. Consumer loans include second mortgage and home equity loans, education loans, vehicle loans and other secured and unsecured loans that have been made for a variety of consumer purposes.

Allowance for loan losses: The allowance for loan losses is established through a provision for loan losses charged to expense. Loans are charged against the allowance for loan losses when management believes that collectability of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance.

The allowance is an amount that management believes will be adequate to absorb estimated losses relating to specifically identified loans, as well as probable credit losses inherent in the balance of the loan portfolio, based on an evaluation of the collectability of existing loans, prior loss experience and peer bank loss experience. This evaluation also takes into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans and current economic conditions that may affect the borrower’s ability to pay. While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions. In addition, regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses and may require the Company to make additions to the allowance based on their judgment about information available to them at the time of their examinations.

When establishing the allowance for loan losses, management categorizes loans into risk categories generally based on the nature of the collateral and the basis of repayment. These risk categories are pass, special mention, substandard, doubtful and loss. The relevant risk characteristics of these risk categories are more fully described in Note 3.

10

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1.Nature of Business and Summary of Significant Accounting Policies (Continued)

The allowance consists of two primary components, specific reserves related to impaired loans and general reserves for inherent losses related to loans that are not impaired. For such loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan are lower than the carrying value of that loan. The general component of the allowance covers non-impaired loans and is based on historical and peer banks’ loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced by the Company and peer banks over the most recent three years. This actual loss experience is supplemented with other economic and qualitative factors based on the risks present for each portfolio segment. These economic and qualitative factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures and practices; experience, ability and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.

A loan is impaired when it is probable, based on current information and events, the Company will be unable to collect all contractual principal and interest payments due in accordance with the terms of the loan agreement. Impaired loans are measured on an individual basis for commercial and construction loans based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent. The amount of impairment, if any, and any subsequent changes are included in the allowance for loan losses.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Commercial and commercial real estate loans are individually evaluated for impairment. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans, may collectively be evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.

All loans on nonaccrual status are considered to be impaired; however, not all impaired loans are on nonaccrual status. Impaired loans on accrual status are loans that continue to pay as agreed. Factors that contribute to a performing loan being classified as impaired include payment status, collateral value, probability of collecting scheduled payments, delinquent taxes and debts to other lenders that cannot be serviced out of existing cash flow.

A troubled debt restructuring is a loan which the Company, for reasons related to a borrower’s financial difficulties, grants a concession to a borrower that the Company would not otherwise consider. The loan terms which have been modified or restructured due to a borrower’s financial difficulty include, but are not limited to, a reduction in the stated interest rate, an extension of the maturity at an interest rate below market, a reduction in the face amount of the debt, and a reduction in the accrued interest or extension, deferral, renewal or rewrite. Under ASC 310, Receivables, troubled debt restructurings are considered

11

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1.Nature of Business and Summary of Significant Accounting Policies (Continued)

impaired loans and are evaluated for the amount of impairment, with the appropriate allowance for loan loss adjustment.

Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt is considered to be a collateral dependent loan, the loan is reported at the fair value of the collateral. For troubled debt restructurings that subsequently default, the Bank determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The restructured loans may be classified “special mention” or “substandard” depending on the severity of the modification. Loans that were paid current at the time of modification may be upgraded in their classification after a sustained period of repayment performance, usually six months or longer.

Loans that are past due at the time of modification are classified “substandard” on nonaccrual status. Those loans may be upgraded in their classification and placed on accrual status once there is a sustained period of repayment performance (usually six months or longer) and there is a reasonable assurance that the repayment will continue. Generally, until a loan that is a troubled debt restructure (TDR) is paid in full or otherwise settled, sold, or charged off, the loan must be reported as a TDR.

Core deposit intangible: The Company has a premium on acquired deposits which represents the intangible value of deposit relationships resulting from deposit liabilities assumed in business combinations accounted for using the acquisition method of accounting.  Core deposit intangible assets are amortized over seven years. The Company evaluates the remaining useful lives of its core deposit intangible assets each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization. If the estimate of an intangible asset’s remaining useful life is changed, the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. The balance of the core deposit intangible, net of accumulated amortization, at March 31, 2012 and December 31, 2011 is $1.8 million and $1.9 million, respectively.  Amortization expense for the three months ended March 31, 2012 and 2011 totaled $78 thousand and $83 thousand, respectively.  Amortization of the core deposit intangible, totaling approximately $300 thousand per year, is expected to continue until the asset is fully amortized in 2017.

Earnings per share: Basic earnings per share (EPS) excludes dilution and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. At March 31, 2012 and December 31, 2011, there were no awards outstanding which were considered common stock equivalents for diluted EPS purposes as they would be anti-dilutive as a result of operating losses incurred.  See Note 7 for information about share-based awards.

12

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1.Nature of Business and Summary of Significant Accounting Policies (Continued)

	(Loss) per Share
	Three Months Ended March 31,
	2012			2011
	(unaudited)
Net (loss) (dollars in thousands) attributable to controlling interest	$	(546	)	$	(445	)
Basic and diluted weighted-average shares outstanding (in thousands)	366			392
(Loss) per share	$	(1.49	)	$	(1.14	)

Fair value measurement: Applicable accounting guidance establishes a fair value hierarchy based on the valuation inputs used to measure fair value and clarifies assumptions about risk and the effect of a restriction on the sale or use of an asset.

Fair value is defined in the accounting standards as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Accounting standards also establish a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes the following three levels of inputs that may be used to measure fair value:

·Level 1: Quoted prices (unadjusted) or identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

·Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

·Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

See Note 8 for additional information.

Subsequent events: The Company has evaluated subsequent events for potential recognition and disclosure through August 6, 2012, the date on which the consolidated financial statements were available to be issued.

Recent accounting pronouncements:In April 2011, the FASB issued amended accounting and disclosure guidance relating to a creditor’s determination of whether a restructuring is a troubled debt restructuring. The amendments clarify the guidance on a creditor’s valuation of whether it has granted a concession and whether a debtor is experiencing financial difficulties. This guidance is effective for annual periods ending on or after December 15, 2012, including interim periods within those annual periods. The adoption of this guidance is not expected to have a material impact on the Bank’s financial position, results of operations or cash flows.

In May 2011, the FASB issued updated accounting guidance related to fair value measurements and disclosures that result in common fair value measurements and disclosures between US GAAP and International Financial Reporting Standards (IFRS). This guidance includes amendments that clarify the application of existing fair value measurement requirements, in addition to other amendments that change

13

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1.Nature of Business and Summary of Significant Accounting Policies (Continued)

principles or requirements for measuring fair value and for disclosing information about fair value measurements. This guidance is effective for annual periods beginning after December 15, 2011. The adoption of this guidance is not expected to have a material effect on the Company’s consolidated financial statements.

In June 2011, the FASB issued new accounting guidance related to the presentation of comprehensive income that eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The amendments require that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The amendments do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. This guidance is effective for fiscal years ending after December 15, 2012, and interim and annual periods thereafter. The Company is currently evaluating which presentation option it will utilize for comprehensive income in its consolidated financial statements. The adoption of this guidance will not impact the Company’s financial position, results of operations or cash flows and will only impact the presentation of other comprehensive income in the consolidated financial statements.

In September 2011, the FASB issued guidance that gives both public and nonpublic companies the option to qualitatively determine whether they can bypass the two-step goodwill impairment test described in the accounting standards.  If a company chooses to perform a qualitative assessment and determines that it is more likely than not (a more than fifty percent likelihood) that the fair value of the reporting unit is less than its carrying value, it would then perform step 1 of the annual goodwill impairment test and, if necessary, step 2.  If the results of the qualitative assessment indicate that it is not “more likely than not” that the fair value is less than the carrying value, no further evaluation is necessary. The amended guidance is effective for interim and annual periods beginning after December 31, 2011.  This guidance did not have an impact on the Company’s consolidated financial statements.

In December of 2011, the FASB issued guidance that requires that entities disclose both gross information and net information about instruments and transactions subject to an agreement similar to a master netting arrangement. This scope would include derivatives, sale and repurchase agreements and reverse sale and repurchase agreements, and securities borrowing and securities lending arrangements. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements prepared under IFRS. This guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Retrospective application is required for all comparative periods and is not expected to have a significant impact on the Company’s financial position.

14

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 2. Investment Securities

The amortized cost and estimated fair value of available-for-sale securities are summarized as follows (dollars in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized
March 31, 2012 (unaudited)	Cost		Gains		Losses		Fair Value
Mortgage-backed securities, residential	$	1,737	$	46	$	—	$	1,783

			Gross		Gross
	Amortized		Unrealized		Unrealized
December 31, 2011	Cost		Gains		Losses		Fair Value
U.S. government agency securities	$	1,517	$	1	$	—	$	1,518
Municipal securities	5,492		467		—		5,959
Mortgage-backed securities, residential	1,941		42		—		1,983
	$	8,950	$	510	$	—	$	9,460

There were no investment securities with continuous unrealized losses greater than 12 months at March 31, 2012 and December 31, 2011.  For the three months ended March 31, 2012 and 2011, gross realized gains on dispositions of securities totaled $527 thousand and $0, respectively.  There were no gross realized losses on disposition of securities for the three months ended March 31, 2012 and 2011.

Mortgage-backed securities have contractual maturities through 2033; however, the expected maturity will differ from the contractual maturities because borrowers or issuers may have the right to prepay such obligations without penalties.

The Company pledges securities for various purposes, and securities totaling $172 thousand and $7.2 million are pledged as of March 31, 2012 and December 31, 2011, respectively.

Note 3. Loans and Allowances for Loan Losses

The Company’s loan portfolio consists primarily of loans to borrowers within Southern California. Although the Company seeks to avoid concentrations of loans to a single industry or based upon a single class of collateral, real estate and real estate-associated businesses are among the principal industries in the Company’s market area, and as a result, the Company’s loan and collateral portfolios are, to some degree, concentrated in those industries. The Company’s loan policy requires that sufficient collateral, which consists primarily of real estate, be obtained as necessary to meet the Company’s relative risk criteria for each borrower.

Commercial and residential multifamily real estate loans represent 67 percent of total loans as of March 31, 2012 and December 31, 2011. A substantial decline in the performance of the economy in general or a continued decline in real estate values in the Company’s primary market area in particular could have an adverse impact on collectability, increase the level of real estate-related nonperforming loans, or have

15

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 3. Loans and Allowances for Loan Losses (Continued)

other adverse effects, which alone or in the aggregate could have a material adverse effect on the financial condition of the Company.

The composition of the Company’s loans is as follows (dollars in thousands):

	March 31,
	2012			December 31,
	(unaudited)			2011
Loans:
Construction	$	36		$	35
Commercial real estate	97,751			98,934
Residential multifamily real estate	14,587			14,644
Commercial and industrial	46,351			46,474
Residential 1-4 family real estate	6,108			6,263
Consumer	2,387			2,394
Total loans	167,220			168,744
Deferred loan fees	(18		)	(8		)
Allowance for loan losses	(1,912		)	(2,355		)
Net loans	$	165,290		$	166,381

	March 31,
	2012		December 31,
	(unaudited)		2011
Acquired performing loans	$	113,713	$	122,035
Acquired nonperforming loans	1,672		1,398
Originated loans	51,835		45,311
Total loans	$	167,220	$	168,744

The total contractual outstanding amount for loans under ASC 310-30 are $101.6 million and $106.9 million for March 31, 2012 and December 31, 2011, respectively.

The excess of cash flows expected to be collected over the initial fair value of acquired loans is referred to as accretable yield and is accreted into interest income over the estimated life of the acquired loans using the effective yield method. The accretable yield will change due to:

·Estimate of the remaining life of acquired loans which may change the amount of future interest income

·Estimate of the amount of contractually required principal and interest payments over the estimated life that will not be collected (the nonaccretable difference)

·Indices for acquired loans with variable rates of interest

·Improvement in the amount of expected cash flows

16

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 3.   Loans and Allowances for Loan Losses (Continued)

The following table reflects changes in accretable yield of acquired loans accounted for under ASC 310-30 (dollars in thousands):

	Three Months Ended March 31,
	2012			2011
	(unaudited)
Balance at the beginning of the period	$	28,161		$	27,287
Other additions (reductions)	(1,028		)	—
Interest income recognized in earnings(1)	(1,648		)	(2,615		)
Reclassification of nonaccretable to accretable	2,613			3,213
Amounts transferred to accretable due to loan payoffs	—			54
Balance at the end of the period	$	28,098		$	27,939

(1) Includes accretion related to early loan pay-offs.

The following table reflects changes in nonaccretable yield of acquired loans accounted for under ASC 310-30 (dollar in thousands):

	Three Months Ended March 31,
	2012			2011
	(unaudited)
Balance at the beginning of the period	$	6,050		$	19,200
Transfer of loans	—			(3,216		)
Reclassification of nonaccretable to accretable due to improvement in expected cash flows	(2,613		)	(3,213		)
Amounts not recognized due to charge-offs on transfers to other real estate	—			(55		)
Amounts transferred to accretable due to loan pay-offs	—			(54		)
Balance at the end of the period	$	3,437		$	12,662

The historical performance of the acquired loan portfolio indicates that the credit quality is performing better than originally estimated. Acquired loans with no evidence of credit deterioration also performed better than originally estimated. The better-than-expected performance of acquired loans resulted in a decrease to the nonaccretable difference which will result in increased interest income recognition over the remaining life of the loans.

17

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 3.   Loans and Allowances for Loan Losses (Continued)

The following table reflects changes in the allowance for loan losses for acquired loans for the three months ended March 31 (dollars in thousands):

	(unaudited)
Allowance for loan losses on acquired loans at December 31, 2011	$	310
Reduction to provision based on improvement in expected cash flows	(7		)
Allowance for loan losses on acquired loans at March 31, 2012	$	303
Allowance for loan losses on acquired loans at December 31, 2010	$	—
Provision for loan losses on acquired loans	232
Allowance for loan losses on acquired loans at March 31, 2011	$	232

The allowance on acquired loans relates specifically to four impaired loans totaling $2.3 million which were not accounted for on a pooled basis and are maintained on a nonaccrual basis.

Allowance for loan losses: A summary of the changes in the allowance for loan losses during the three months ended March 31 follows (dollars in thousands):

	March 31,
	2012			2011
	(unaudited)
Allowance at the beginning of the period	$	2,355		$	1,178
Provision for (reduction of) in allowance for loan losses	(415		)	604
Recoveries on loans charged off	—			—
	1,940			1,782
Less loans charged off	28			376
Allowance at the end of the period	$	1,912		$	1,406

The following tables provide additional details about the allowance for loan losses and the activity therein, by portfolio segment, as of for the periods indicated in the tables (dollars in thousands):

18

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 3.   Loans and Allowances for Loan Losses (Continued)

									Residential			Residential
				Commercial			Construction		1-4 Family			Multifamily
March 31, 2012 (unaudited)	Commercial			Real Estate			Real Estate		Real Estate			Real Estate			Consumer			Total
Allowance for loan losses:
Beginning balance	$	1,813		$	355		$	—	$	75		$	46		$	66		$	2,355
Charge-offs	—			—			—		—			—			(28		)	(28		)
Recoveries	—			—			—		—			—			—			—
Provision for (Reduction of)	(339		)	3			1		(46		)	(3		)	(31		)	(415		)
Ending balance	$	1,474		$	358		$	1	$	29		$	43		$	7		$	1,912
Allowance allocated to:
Individually evaluated for impairment	$	641		$	38		$	—	$	—		$	—		$	0		$	679
Collectively evaluated for impairment	532			318			1		29			43			7			930
Loans under ASC 310-30	301			2			—		—			—			—			303
Ending balance	$	1,474		$	358		$	1	$	29		$	43		$	7		$	1,912
Loans:
Individually evaluated for impairment	$	2,071		$	293		$	—	$	212		$	—		$	19		$	2,595
Collectively evaluated for impairment	30,507			28,692			36		5,446			5,247			2,165			72,092
Loans under ASC 310-30	13,773			68,942			—		450			9,166			202			92,532
Ending balance	$	46,351		$	97,927		$	36	$	6,108		$	14,413		$	2,386		$	167,220
									Residential			Residential
				Commercial			Construction		1-4 Family			Multifamily
December 31, 2011	Commercial			Real Estate			Real Estate		Real Estate			Real Estate			Consumer			Total
Allowance for loan losses:
Beginning balance	$	748		$	288		$	—	$	88		$	54		$	—		$	1,178
Charge-offs	(1,129		)	(254		)	—		(59		)	—			(98		)	(1,540		)
Recoveries	—			—			—		—			—			—			—
Provision	2,194			321			—		46			(8		)	164			2,717
Ending balance	$	1,813		$	355		$	—	$	75		$	46		$	66		$	2,355
Allowance allocated to:
Individually evaluated for impairment	$	627		$	—		$	—	$	—		$	—		$	—		$	627
Collectively evaluated for impairment	876			355			—		75			46			66			1,418
Loans under ASC 310-30	310			—			—		—			—			—			310
Ending balance	$	1,813		$	355		$	—	$	75		$	46		$	66		$	2,355
Loans:
Individually evaluated for impairment	$	2,145		$	—		$	—	$	244		$	—		$	59		$	2,448
Collectively evaluated for impairment	29,053			26,705			35		5,554			5,164			2,122			68,633
Loans under ASC 310-30	15,276			72,229			—		465			9,480			213			97,663
Ending balance	$	46,474		$	98,934		$	35	$	6,263		$	14,644		$	2,394		$	168,744

19

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 3. Loans and Allowances for Loan Losses (Continued)

Impaired loans: The following is a summary of the investment in impaired loans, excluding loans under ASC 310-30, the related allowance for loan losses, income recognized thereon and information pertaining to nonaccrual and past due loans as(dollars in thousands):

	March 31, 2012
Investment in impaired loans	(unaudited)		December 31, 2011
Recorded investment in impaired loans with no allocated reserves	$	1,099	$	1,240
Recorded investment in impaired loans with allocated reserves	1,497		1,208
Total impaired loans	$	2,595	$	2,448
Related allowance for loan losses on impaired loans	$	679	$	627
Average recorded investment in impaired loans	$	2,469	$	1,968
Total loans on nonaccrual	$	2,273	$	2,448
Total loans past 90 days or more and still accruing interest	$	—	$	21

The following table presents additional details of impaired loans, segregated by class of loan excluding loans under ASC 310-30. The unpaid principal balance represents the recorded balance prior to any partial charge-offs. The recorded investment represents customer balances net of any partial charge-offs recognized on the loans. The interest income recognized column represents all interest income reported either on a cash or accrual basis after the loan became impaired. The cash basis income column represents only the interest income recognized on a cash basis after the loan was classified as impaired.

											Cash Basis
	Unpaid				Allowance for		Average		Interest		Interest
	Principal		Recorded		Loan Losses		Recorded		Income		Income
March 31, 2012 (unaudited)	Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial	$	886	$	886	$	—	$	807	$	—	$	—
Commercial real estate	—		—		—		—		—		—
Construction real estate	—		—		—		—		—		—
Residential 1-4 family real estate	212		212		—		230		—		—
Residential multifamily real estate	—		—		—		—		—		—
Consumer	—		—		—		—		—		—
With an allowance recorded:
Commercial and industrial	1,184		1,184		641		1,215		—		—
Commercial real estate	293		293		38		197
Construction real estate	—		—		—		—		—		—
Residential 1-4 family real estate	—		—		—		—		—		—
Residential multifamily real estate	—		—		—		—		—		—
Consumer	19		19		0		20		—		—
Total	$	2,595	$	2,595	$	679	$	2,469	$	—	$	—

20

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 3. Loans and Allowances for Loan Losses (Continued)

											Cash Basis
	Unpaid				Allowance for		Average		Interest		Interest
	Principal		Recorded		Loan Losses		Recorded		Income		Income
December 31, 2011	Balance		Investment		Allocated		Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial	$	937	$	937	$	—	$	536	$	—	$	—
Commercial real estate	—		—		—		—		—		—
Construction real estate	—		—		—		—		—		—
Residential 1-4 family real estate	244		244		—		145		—		—
Residential multifamily real estate	—		—		—		—		—		—
Consumer	59		59		—		59		—		—
With an allowance recorded:
Commercial and industrial	1,208		1,208		627		1,228		—		—
Commercial real estate
Construction real estate	—		—		—		—		—		—
Residential 1-4 family real estate	—		—		—		—		—		—
Residential multifamily real estate	—		—		—		—		—		—
Consumer	—		—		—		—		—		—
Total	$	2,448	$	2,448	$	627	$	1,968	$	—	$	—

As of March 31, 2012 and December 31, 2011, the Company’s impaired loans include a combination of real estate-secured and commercial and industrial loans. If real estate values continue to decline, and as updated appraisals are received, the Company may have to increase its allowance for loan losses appropriately.

As of March 31, 2012 and December 31, 2011, the Company was not committed to lend additional funds on these impaired loans.

The following table presents the contractual aging of the recorded investment in past due loans by class of loans as of March 31, 2012 and December 31, 2011 (dollars in thousands):

							Loans Past				90 days or
			30-59 Days		60-89 Days		Due 90 days				More Past Due
March 31, 2012 (unaudited)	Current		Past Due		Past Due		or More		Total		and accruing
Commercial and industrial	$	42,597	$	117	$	—	$	3,637	$	46,351	$	—
Commercial real estate	92,324		847		—		4,580		97,751		—
Construction real estate	36		—		—		—		36		—
Residential 1-4 family real estate	5,868		—		—		240		6,108		—
Residential multifamily real estate	14,587		—		—		—		14,587		—
Consumer	2,328		—		—		59		2,387		—
Total	$	157,740	$	964	$	—	$	8,516	$	167,220	$	—

21

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 3. Loans and Allowances for Loan Losses (Continued)

							Loans Past				90 days or
			30-59 Days		60-89 Days		Due 90 days				More Past Due
December 31, 2011	Current		Past Due		Past Due		or More		Total		and accruing
Commercial and industrial	$	42,281	$	818	$	7	$	3,368	$	46,474	$	—
Commercial real estate	95,525		261		—		3,148		98,934		—
Construction real estate	35		—		—		—		35		—
Residential 1-4 family real estate	5,968		—		30		265		6,263		21
Residential multifamily real estate	14,644		—		—		—		14,644		—
Consumer	2,286		49		—		59		2,394		—
Total	$	160,739	$	1,128	$	37	$	6,840	$	168,744	$	21

The following table presents the recorded investment in nonaccrual loans by class of loans as of March 31, 2012 and December 31, 2011 (dollars in thousands):

	March 31, 2012
	(unaudited)		December 31, 2011
Commercial and industrial	$	2,043	$	2,145
Commercial real estate	—		—
Construction real estate	—		—
Residential 1-4 family real estate	192		244
Residential multifamily real estate	—		—
Consumer	38		59
Total	$	2,273	$	2,448

As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt and comply with various terms of their loan agreements. The Company considers current financial information, historical payment experience, credit documentation, public information and current economic trends. Generally, all sizeable credits receive a financial review no less than annually to monitor and adjust, if necessary, the credit’s risk profile. Credits classified as watch generally receive a review more frequently than annually. For special mention, substandard, and doubtful credit classifications, the frequency of review is increased to no less than quarterly in order to determine potential impact on credit loss estimates.

The Company categorizes loans into the following risk categories based on relevant information about the ability of borrowers to service their debt:

Pass: A pass asset is well protected by the current worth and paying capacity of the obligator (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner. Pass assets also include certain assets considered watch, which are still protected by the worth and paying capacity of the borrower but deserve closer attention and a higher level of credit monitoring.

22

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 3. Loans and Allowances for Loan Losses (Continued)

Special mention: A special mention asset has potential weaknesses that deserve management’s close attention. The asset may also be subject to a weak or speculative market or to economic conditions, which may, in the future adversely affect the obligator. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Special mention assets are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Substandard: A substandard asset is an asset with a well-defined weakness that jeopardizes repayment, in whole or in part, of the debt. These credits are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged. These assets are characterized by the distinct possibility that the institution will sustain some loss of principal and/or interest if the deficiencies are not corrected. It is not necessary for a loan to have an identifiable loss potential in order to receive this rating.

Doubtful: An asset that has all the weaknesses inherent in the substandard classification, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable. The possibility of loss is extremely likely, but it is not identified at this point due to pending factors.

Loss: An asset, or portion thereof, classified as loss is considered uncollectible and of such little value that its continuance on the Company’s books as an asset is not warranted. This classification does not necessarily mean that an asset has no recovery or salvage value; but rather, there is much doubt about whether, how much, or when the recovery would occur. As such, it is not practical or desirable to defer the write-off. Therefore, there is no balance to report at March 31, 2012 and December 31, 2011.

The following tables present the risk category of loans evaluated by internal asset classification based on the most recent analysis performed and the contractual aging (dollars in thousands):

			Special
March 31, 2012 (unaudited)	Pass		Mention		Substandard		Doubtful		Loss		Total
Commercial and industrial	$	35,741	$	4,941	$	3,369	$	2,300	$	—	$	46,351
Commercial real estate	87,621		744		9,386		—		—		97,751
Construction real estate	36		—		—		—		—		36
Residential real estate	5,615		253		240		—		—		6,108
Residential multifamily real estate	13,975		612		—		—		—		14,587
Consumer	1,164		1,204		19		—		—		2,387
Total	$	144,152	$	7,754	$	13,014	$	2,300	$	—	$	167,220

23

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 3. Loans and Allowances for Loan Losses (Continued)

			Special
December 31, 2011	Pass		Mention		Substandard		Doubtful		Loss		Total
Commercial and industrial	$	38,258	$	2,423	$	3,410	$	2,383	$	—	$	46,474
Commercial real estate	89,459		2,500		6,975		—		—		98,934
Construction real estate	35		—		—		—		—		35
Residential real estate	5,736		283		244		—		—		6,263
Residential multifamily real estate	13,799		845		—		—		—		14,644
Consumer	2,372		22		—		—		—		2,394
Total	$	149,659	$	6,073	$	10,629	$	2,383	$	—	$	168,744

The following tables present troubled debt restructurings and the financial effects of troubled debt restructurings (dollars in thousands):

		Pre-Modification		Post-Modification
		Outstanding		Outstanding				Lost
	Number of	Recorded		Recorded		Foregone		Interest
March 31, 2012 (unaudited)	Contracts	Investment		Investment		Principal		Income
Commercial and industrial	5	$	2,549	$	2,183	$	—	$	—
Commercial real estate	—	—		—		—		—
Construction real estate	—	—		—		—		—
Residential real estate	2	270		270		—		—
Residential multifamily real estate	—	—		—		—		—
Consumer	1	19		19		—		—
	8	$	2,838	$	2,472	$	—	—

		Pre-Modification		Post-Modification
		Outstanding		Outstanding				Lost
	Number of	Recorded		Recorded		Foregone		Interest
December 31, 2011	Contracts	Investment		Investment		Principal		Income
Commercial and industrial	5	$	2,549	$	2,141	$	—	$	19
Commercial real estate	—	—		—		—		—
Construction real estate	—	—		—		—		—
Residential real estate	1	250		250		—		—
Residential multifamily real estate	—	—		—		—		—
Consumer	—	—		—		—		—
	6	$	2,799	$	2,391	$	—	19

There was no principal forgiven on troubled debt restructurings during the three months ended March 31, 2012 or 2011. There were no troubled debt restructuring re-defaults that occurred in the three months ended March 31, 2012 or 2011. There were no commitments to lend additional funds to borrowers whose terms have been modified in troubled debt restructurings as of March 31, 2012 or December 31, 2011.

24

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 4. Borrowing Arrangements

The Company has financing availability with the FHLB secured by certain of its loans.  In addition, the Company has pledged investment securities with market values of approximately $172 thousand as collateral for potential borrowings with the FHLB. As of March 31, 2012, this line had total financing availability of approximately $38 million, of which none is outstanding at March 31, 2012 and December 31, 2011. Interest rates are determined at the time of each borrowing.

As of March 31, 2012, the Company had no overnight borrowing availability in its borrowing facility with the Federal Reserve Bank. The Company had no outstanding borrowings on this facility as of March 31, 2012 and December 31, 2011. The Company also has a $3 million line of credit from its correspondent bank upon receipt of acceptable collateral.

In connection with the business combination, Carpenter Community Bancfunds and certain former shareholders of Professional Business Bank each originally contributed $6,000,000 notes payable to CGB Asset Management, Inc., of which the entire amount was outstanding at December 31, 2010. The borrowings required mandatory quarterly principal payments due within 15 days of each quarter end and accrued interest at 10 percent per annum. As a condition of the merger, the Company was informed by its regulator that the notes would be required to be converted to preferred stock that would qualify as Tier 1 capital under the regulations and policies of the Federal Reserve Board within 60 days of the close of the merger. The Company converted the notes to preferred stock within the required time period. On March 31, 2011, the Preferred Stock was transferred to the Carpenter Community Bancfunds.

Note 5. Related-Party Transactions

There were no loans outstanding to directors, officers or their related interests as of March 31, 2012 or December 31, 2011.

Note 6. Commitments and Contingencies

Financial instruments with off-balance-sheet risk: In the ordinary course of business, the Company enters into financial commitments to meet the financing needs of its customers. These financial commitments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk not recognized in the Company’s financial statements.

The Company’s exposure to loan loss in the event of nonperformance on commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for loans reflected in the financial statements.

As of March 31, 2012, the Company had the following outstanding financial commitments whose contractual amount represents credit risk (dollars in thousands):

	(unaudited)
Commitments to extend credit	$	23,757
Standby letters of credit	694
	$	24,451

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Since many of the commitments are expected to expire without

25

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 6. Commitments and Contingencies (Continued)

being drawn upon, the total amounts do not necessarily represent future cash requirements. The Company evaluates each client’s creditworthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Company is based on management’s credit evaluation of the customer. The majority of the Company’s commitments to extend credit and standby letters of credit are secured by real estate.

Contingencies: In the ordinary course of business, the Company is involved in various litigation. In the opinion of management, based upon the advice of the Company’s legal counsel, the disposition of such litigation will not have a material effect on the Company’s consolidated financial statements.

Note 7. Stock Option Plan and Restricted Share Grants

The Company recognized stock-based compensation expense related to stock options of $9 thousand and $12 thousand for the three months ended March 31, 2012 and 2011, respectively.

A summary of the status of the Company’s stock option plan as of March 31, 2012 and changes during the three months then ended is presented below:

				Weighted-
		Weighted-		Average
		Average		Remaining
		Exercise		Contractual
(unaudited)	Shares	Price		Term
Outstanding at beginning of period	108,159	$	10.00
Granted	—
Exercised	—
Forfeited or expired	—	10.00
Outstanding at end of period	108,159
Options exercisable	88,475	10.00		7.00
Vested and expected to vest	108,159	10.00		7.00

As of March 31, 2012, there was $63 thousand of total unrecognized compensation cost related to the outstanding stock options that will be recognized over a weighted-average period of 2 years.

In 2011, the Company issued 102,758 restricted share grants to certain officers. The grants had a fair value, at grant date of $3.75 per share. 52,658 of the restricted shares were issued with a five year cliff vesting, with the remaining grants vesting 20 percent at each anniversary of issuance. Twenty percent of these remaining grants vested during the three months ended March 31, 2012. The Company recorded stock-based compensation costs related to restricted share grants of $25 thousand and $8 thousand during the three months ended March 31, 2012 and 2011.

There were no new grants of share-based awards during the three months ended March 31, 2012.  Awards outstanding at the time of the 2012 merger described in Note 1 have been adjusted to reflect the share-exchange ratio and exercise price as required by the terms of the merger.

26

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 8.   Fair Value Measurements

The table below represents balances of assets measured and presented in the balance sheets on a recurring basis (dollars in thousands):

	Assets Measured at Fair Value on a Recurring Basis
			Quoted Prices
			in Active		Significant
			Markets With		Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
March 31, 2012 (unaudited)	Value		(Level 1)		(Level 2)		(Level 3)
Securities available for sale:
Mortgage-backed securities, residential	$	1,783	$	—	$	1,783	$	—

	Assets Measured at Fair Value on a Recurring Basis
			Quoted Prices
			in Active		Significant
			Markets With		Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
December 31, 2011	Value		(Level 1)		(Level 2)		(Level 3)
Securities available for sale:
U.S. government agency securities	$	1,518	$	1,518	$	—	$	—
Municipal securities	5,959		—		5,473		486
Mortgage-backed securities, residential	1,983		—		1,983		—
	$	9,460	$	1,518	$	7,456	$	486

27

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 8. Fair Value Measurements (Continued)

Investment securities: The fair values of securities available for sale may be determined by obtaining quoted prices in active markets, when available, from nationally recognized securities exchanges (Level 1 inputs). If quoted market prices are not available, the fair value is determined by a matrix pricing, which is a mathematical technique widely used in the securities industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). Debt securities’ pricing is generally obtained from one of the matrix pricing models developed from one of the three national pricing agencies. In case where significant credit valuation adjustments are incorporated into the estimation of fair value, reported amounts are classified as Level 3 inputs.

Impaired loans: The Company does not record loans at fair value on a recurring basis. However, from time to time, fair value adjustments are recorded on these loans to reflect partial write-downs, through charge-offs or specific reserve allowances that are based on the current appraised or market-quoted value of the underlying collateral. Fair value estimates for collateral-dependent impaired loans are obtained from real estate brokers or other third-party consultants (Level 3). The fair value of noncollateral-dependent loans is estimated using a discounted cash flow model.

Other real estate owned: The value assigned represent fair value of the properties as established by recently conducted appraisal of the property (Level 3). The carrying values represent the actual sales contracts from an all-cash purchase price from third party buyers to purchase the property.

Additional information: During 2011 the Company determined that, since there were specific trades on the exact U.S. government agency securities, such assets should be classified out of Level 2 into Level 1.

The following table presents a rollforward including additional information about the financial assets of the Company measured at fair value on a recurring basis for which the Company used significant unobservable inputs (Level 3) for the three months ended March 31, 2011. There were no transfers to Level 3 in the three months ended March 31, 2012 (dollars in thousands).

					Included in
					Other		Purchases
	Balance at		Included in		Comprehensive		Issuances,		Transfers in		Balance at
(unaudited)	January 1, 2011		Earnings		Income (Loss)		Settlements		to Level 3		March 31, 2011
Assets, measured at fair value using Level 3, March 31, 2011
Municipal securities	$	—	$	—	$	—	$	—	$	486	$	486
	$	—	$	—	$	—	$	—	$	486	$	486

This 2011 transfer occurred because the Company determined that, based on the limitation on the observability of significant inputs into the valuation of certain municipal securities, such assets should be classified as a Level 3 input.

28

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 8. Fair Value Measurements (Continued)

The following is a description of valuation methodologies used for financial assets recorded at fair value on a nonrecurring basis (dollars in thousands):

	Assets Measured at Fair Value on a Nonrecurring Basis
			Quoted Prices
			in Active		Significant
			Markets With		Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
March 31, 2012 (unaudited)	Value		(Level 1)		(Level 2)		(Level 3)
Collateral-dependent impaired loans	$	505	$	—	$	—	$	505
Other real estate owned	$	3,581	$	—	$	—	$	3,581
Cash flow-dependent impaired loans	$	2,090	$	—	$	—	$	2,090

	Assets Measured at Fair Value on a Nonrecurring Basis
			Quoted Prices
			in Active		Significant
			Markets With		Other		Significant
			Identical		Observable		Unobservable
	Carrying		Assets		Inputs		Inputs
December 31, 2011	Value		(Level 1)		(Level 2)		(Level 3)
Collateral-dependent impaired loans	$	2,448	$	—	$	—	$	2,448

Fair value of financial instruments: The following disclosure of the carrying amount and estimated fair value of financial instruments is made in accordance with the requirements of SFAS No. 107, as codified in ASC 825-10, Disclosures about Fair Value of Financial Instruments. The estimated fair value amounts have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to develop the estimates of fair value. Accordingly, the estimates presented below are not necessarily indicative of the amounts the Company could have realized in a current market exchange as of March 31, 2012 or December 31, 2011. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

29

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 8. Fair Value Measurements (Continued)

The table below presents the carrying amounts and estimated fair values of financial instruments at (dollars in thousands):

	March 31, 2012
	(unaudited)				December 31, 2011
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Financial assets:
Cash and due from banks	$	6,328	$	6,328	$	6,779	$	6,779
Interest-earning deposits in other financial institutions	43,655		43,655		42,708		42,708
Investment securities	1,783		1,783		9,460		9,460
Loans, net	165,290		162,517		166,381		165,755
FHLB stock and other bank stock	1,894		1,894		1,986		1,986
Accrued interest receivable	547		547		675		669
Financial liabilities:
Noninterest-bearing demand	72,871		72,871		70,188		70,188
Savings, NOW and money market	67,805		67,805		73,158		73,158
Time deposit accounts	52,055		52,280		57,806		58,200
Accrued interest payable	49		49		61		61

Cash and cash equivalents:The carrying amounts reported in the balance sheet for cash and due from banks, interest-earning deposits in other banks and federal funds sold approximate their fair value.

Loans: For variable-rate loans that reprice frequently and have experienced no significant change in credit risk, fair value is based on carrying value. Fair value for all other loans is estimated based on discounted cash flows, using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality and for the same remaining maturities. Prepayments prior to the repricing date are not expected to be significant. Loans are expected to be held to maturity and any unrealized gains or losses are not expected to be realized.

FHLB stock and other bank stock: The carrying amounts reported in the balance sheets for the Company’s investment in FHLB and other bank nonmarketable common stock approximates fair value.

Deposit liabilities:Fair value disclosed for demand deposits, including savings, NOW and money market accounts, equals their carrying amounts, which represent the amount payable on demand. The carrying amounts for variable-rate money market accounts and certificates of deposit approximate their fair value at the reporting date.

The fair value for fixed-rate certificates of deposit which have a remaining maturity of less than 12 months approximates their fair value. For the fixed-rate certificates greater than 12 months, the fair value is estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregate expected monthly maturities on time deposits. Early withdrawal of fixed-rate certificates of deposit is not expected to be significant.

30

CGB Holdings, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 8. Fair Value Measurements (Continued)

Accrued interest receivable and payable:The fair values of accrued interest receivable and payable approximate their carrying amounts.

Fair value of commitments:The estimated fair value of fee income on letters of credit at March 31, 2012 and December 31, 2011 is insignificant. Loan commitments on which the committed interest rate is less than the current market rate are also insignificant at March 31, 2012 and December 31, 2011.

Interest rate risk:The Company assumes interest rate risk as a result of its normal customer business activity. The fair value of the Company’s financial instruments will change with movements in interest rate levels, spreads between interest rate indices, or implied future interest rate volatility. These changes may be either favorable or unfavorable to the Company. Management attempts to match interest rate repricing maturities of assets and liabilities to contain its adverse exposure within limits specified in its Interest Rate Risk Management policy. To the extent that customer business creates an excessive adverse risk exposure, management will moderate that risk by adjusting the tenor of fixed income investments and/or wholesale financings. Management measures interest rate risk in terms of predicted changes in forecasted net interest income and the estimated fair value of assets and liabilities should the yield curve shift above or below its current level.

31

EX-99.2

Exhibit 99.2

UNAUDITED PRO FORMA COMBINED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma combined condensed consolidated financial information and explanatory notes illustrate the effect of the bank merger on Manhattan Bancorp’s financial position and results of operations based upon the respective historical financial positions and results of operations under the acquisition method of accounting with Professional Business Bank treated as the acquirer (subsequent to the merger with CGB Holdings). The unaudited pro forma combined condensed consolidated financial information has been derived from and should be read in conjunction with the historical consolidated financial statements and the related notes of Manhattan Bancorp and Professional Business Bank, which are incorporated by reference to the Joint Proxy Statement/Prospectus filed by Manhattan Bancorp with the Securities and Exchange Commission pursuant to Rule 424(b)(3) under the Securities Act of 1933, as amended, on May 2, 2012. We have presented the historic consolidated financial statements of CGB Holdings as opposed to the historic consolidated financial statements of Professional Business Bank, as the combination of Manhattan Bancorp and Professional Business Bank will occur following the merger of CGB Holdings into Professional Business Bank.

In accordance with generally accepted accounting principles in the United States of America (GAAP), the assets and liabilities of Manhattan Bancorp have been recorded by Professional Business Bank at their estimated fair values as of May 31, 2012, the actual date the bank merger was completed.  The unaudited pro forma combined condensed consolidated balance sheet as of March 31, 2012 assumes the bank merger took place on that date. The unaudited pro forma combined condensed consolidated statements of operations for the three months ended March 31, 2012 and for the year ended December 31, 2011 assumes the bank merger took place on January 1, 2011.

The pro forma financial information includes adjustments to record assets and liabilities of Manhattan Bancorp at their respective fair values as determined through the use of third party appraisers and internal models. These adjustments may be subject to change. The final amount and allocation of the purchase price is based upon the fair value of Manhattan Bancorp’s tangible and identifiable intangible assets and liabilities as of the date the bank merger, May 31, 2012. Increases or decreases in the estimated fair values of the net assets acquired as compared with the information shown in the unaudited pro forma combined condensed consolidated financial information may change the amount of the purchase price allocated to goodwill and other assets and liabilities and may impact Manhattan Bancorp’s statements of income due to adjustments in yield and/or amortization of the adjusted assets or liabilities.

Any changes to Manhattan Bancorp’s stockholders’ equity, including results of operations from March 31, 2012 through the date the bank merger was completed, will also change the purchase price allocation, which may include the recording of a lower or higher amount of goodwill. The final adjustments may be materially different from the unaudited pro forma adjustments presented herein.  Manhattan Bancorp anticipates that the merger with Professional Business Bank will provide the combined bank with financial benefits that include reduced combined operating expenses. The pro forma information, which is intended to illustrate the financial characteristics of the bank merger and the combined bank under one set of assumptions, does not reflect the benefits of expected cost savings or opportunities to earn additional revenues, or all integration costs that may be incurred and, accordingly, should not be considered a prediction of future results. It also does not necessarily reflect what the historical results of the combined bank would have been had our companies been combined during the period shown.

The unaudited pro forma stockholders’ equity and net loss should not be considered indicative of the market value of Manhattan Bancorp’s common stock or the actual or future results of operations of Manhattan Bancorp for any period. Actual results may be materially different than the pro forma information presented.

1

Unaudited Pro Forma Combined Condensed Consolidated Balance Sheet

As of March 31, 2012

(Dollars in thousands, except per share amounts)

	Manhattan Bancorp			Professional Business Bank (1)			Merger Adjustments (2)				Pro Forma Combined
	(historical)			(historical)			(unaudited)				(unaudited)
Assets
Total cash and cash equivalents	$	38,749		$	46,888		$	(1,539	)	A	$	84,098
Interest-earning deposits in other financial institutions	—			3,103			—				3,103
Securities-available for sale, at fair value	8,646			1,783			—				10,429
Loans held for sale, at fair value	50,739			—			—				50,739
Loans held for sale, at lower of cost or fair value	913			—			—				913
Gross loans held for investment	104,563			167,202			(5,138		)	B	266,627
Allowance for loan losses	(2,389		)	(1,912		)	2,389			B	(1,912		)
Property and equipment, net	5,162			4,096			(255		)	D	9,003
Other real estate owned	—			3,581			—				3,581
Federal Home Loan Bank and Federal Reserve Bank stock	1,106			1,894			—				3,000
Investment in limited partnership fund	2,698			—			—				2,698
Goodwill	—			—			5,171			F	5,171
Core deposit intangible	—			1,785			1,156			F	2,941
Accrued interest receivable and other assets	6,824			2,154			234			G	9,212
Total assets	217,011			230,574			2,018				449,603
Liabilities and Stockholders’ Equity
Deposits	185,439			192,731			241			E	378,411
FHLB advances and other borrowings	10,573			—			434			H	11,007
Incentives payable	298			—			—				298
Accrued interest payable and other liabilities	4,766			3,696			(339		)	G,H	8,123
Total liabilities	201,076			196,427			336				397,839
Total stockholders’ equity	16,539			34,147			1,078			A	51,764
Non-controlling interest	(604		)	—			604			M	—
Total equity	15,935			34,147			1,682				51,764
Total liabilities and stockholders’ equity	$	217,011		$	230,574		$	2,018			449,603
Total number of shares outstanding	3,997,631						8,120,240			K	12,117,871
Book value per share	$	3.99									$	4.27

(1) The financial information presented under the heading Professional Business Bank reflects the consolidated financial statements of CGB Holdings, Inc. giving effect to the merger of CGB Holdings with and into Professional Business Bank.

(2) See Note 3 of the accompanying Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Statements.

2

Unaudited Pro Forma Combined Condensed Consolidated Statements of Operations

For the three months ended March 31, 2012

(Dollars in thousands, except per share amounts)

	Manhattan Bancorp			Professional Business Bank (1)			Merger Adjustments (2)				Pro Forma Combined
	(historical)			(historical)			(unaudited)				(unaudited)
Interest income	$	1,993		$	2,607		$	107		C	$	4,707
Interest expense	445			124			17			E,H	586
Provision for (reduction of) allowance for loan losses	485			(415		)	—				70
Net interest income after provision for loan losses	1,063			2,898			90				4,051
Non-interest income	6,596			916			—				7,512
Non-interest expense	8,960			3,047			82			G,I	12,088
Merger and acquisition expenses	264			1,359			(1,623		)	J	—
Income (loss) before income tax provision	(1,565		)	(592		)	1,632				(525		)
Income tax provision	8			—			—				8
Net income (loss)	(1,573		)	(592		)	1,632				(533		)
Less: Net (loss) gain attributable to the non-controlling interest	(141		)	—			—				(141		)
Net income (loss) available to common stockholders	$	(1,432	)	$	(592	)	$	1,632			$	(392	)
Weighted average shares outstanding— Basic	3,997,631						8,120,240			L	12,117,871
Weighted average shares outstanding—Diluted	3,997,631						8,120,240			L	12,117,871
Earnings (loss) per share—Basic	$	(0.36	)								$	(0.03	)
Earnings (loss) per share—Diluted	$	(0.36	)								$	(0.03	)

(1) The financial information presented under the heading Professional Business Bank reflects the consolidated financial statements of CGB Holdings, Inc. giving effect to the merger of CGB Holdings with and into Professional Business Bank.

(2) See Note 3 of the accompanying Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Statements.

3

Unaudited Pro Forma Combined Condensed Consolidated Statements of Operations

For the year ended December 31, 2011

(Dollars in thousands, except per share amounts)

	Manhattan Bancorp			Professional Business Bank (1)			Merger Adjustments (2)				Pro Forma Combined
	(historical)			(historical)			(unaudited)				(unaudited)
Interest income	$	6,079		$	15,910		$	524		C	$	22,513
Interest expense	1,142			801			(55		)	E,H	1,888
Provision for loan losses	80			2,717			—				2,797
Net interest income after provision for loan losses	4,857			12,392			579				17,828
Non-interest income	10,408			2,333			—				12,741
Non-interest expense	21,577			14,409			326			G,I	36,312
Merger and acquisition expenses	584			353			(937		)	J	—
Income (loss) before income tax provision	(6,896		)	(37		)	1,190				(5,743		)
Income tax provision	27			202			—				229
Net income (loss)	(6,923		)	(239		)	1,190				(5,972		)
Less: Net (loss) gain attributable to the non-controlling interest	(666		)	—			—				(666		)
Net income (loss) available to common stockholders	$	(6,257	)	$	(239	)	$	1,190			$	(5,306	)
Weighted average shares outstanding— Basic	3,993,850						8,120,240			L	12,114,090
Weighted average shares outstanding—Diluted	3,993,850						8,120,240			L	12,114,090
Earnings (loss) per share—Basic	$	(1.57	)								$	(0.45	)
Earnings (loss) per share—Diluted	$	(1.57	)								$	(0.44	)

(1) The financial information presented under the heading Professional Business Bank reflects the consolidated financial statements of CGB Holdings, Inc. giving effect to the merger of CGB Holdings with and into Professional Business Bank.

(2) See Note 3 of the accompanying Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Statements.

4

Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Statements

(In thousands, except share and per share data unless otherwise stated)

NOTE 1. BASIS OF PRESENTATION

The unaudited pro forma combined condensed consolidated financial information related to the bank merger includes the unaudited pro forma combined condensed consolidated balance sheet as of March 31, 2012, which assumes that the bank merger was completed on March 31, 2012. The unaudited pro forma combined condensed consolidated statements of operations for the three months ended March 31, 2012 and for the year ended December 31, 2011 were prepared assuming that the bank merger was completed on January 1, 2011.  The number of Manhattan Bancorp shares issued in the bank merger is based upon an exchange ratio using the respective book values of Manhattan Bancorp and Professional Business Bank common stock, adjusted for certain merger related expenses. The adjusted book value per share of Manhattan Bancorp common stock used in the exchange ratio does not represent the fair value of such shares, nor does the trading price of Manhattan Bancorp common stock, as such common stock is very thinly traded. For the purposes of the pro forma combined condensed consolidated financial statements, the fair value of the outstanding shares of Manhattan Bancorp is currently estimated at approximately $19 million, which is based on a price of $4.75 per share (the fair value of Manhattan Bancorp common stock on May 31, 2012 as determined by the Funds in valuing their interest in Manhattan Bancorp) of Manhattan Bancorp common stock. The valuation of Manhattan Bancorp common stock was derived using a variety of valuation techniques including Level 1, Level 2 and Level 3 inputs. Specifically, the trading price of Manhattan Bancorp stock (Level 1 input), the trading values of comparable California community banks (Level 2 input) and a discounted cash flow analysis of the combined Manhattan Bancorp and Professional Business Bank (Level 3 input) were used together to arrive at the stated indication of fair value of Manhattan Bancorp as of March 31, 2012. The Level 3 inputs serve as the most significant in the valuation.  The pro forma adjustments included herein reflect the conversion of Professional Business Bank common stock into Manhattan Bancorp common stock at the exchange ratio stated in the merger agreement of 1.7991 of a share of Manhattan Bancorp common stock for each of the approximately 4.5 million shares of Professional Business Bank common stock outstanding as of March 31, 2012.

The bank merger was completed on May 31, 2012 and was accounted for as an acquisition of Manhattan Bancorp by Professional Business Bank in accordance with the acquisition method of accounting as detailed in Financial Accounting Standards Board (FASB) ASC 805-10 (previously SFAS No. 141(R)), Business Combinations. The acquisition method of accounting requires an acquirer to recognize the assets acquired, the liabilities assumed and any non-controlling interest in the acquiree based on their fair values as of the date of acquisition. As described in more detail in ASC 805-10, goodwill, if any, will be recognized as of the acquisition date, in the amount equal to the excess of the consideration transferred over the fair value of identifiable net assets acquired. Based on Manhattan Bancorp’s preliminary purchase price allocation, goodwill of approximately $5.2 million has been recorded as of May 31, 2012.

As the bank merger is recorded using the acquisition method of accounting, all loans of Manhattan Bancorp are recorded at fair value, including adjustments for credit, and no allowance for credit losses is carried over to Professional Business Bank’s balance sheet. In addition, certain anticipated nonrecurring costs associated with the bank merger, such as severance costs, accounting fees, legal and other professional fees and conversion related expenditures, are not reflected in the pro forma statements of income.

While the recording of the acquired loans at their fair value will impact the prospective determination of the provision for loan losses and the allowance for loan losses, for purposes of the unaudited pro forma combined condensed consolidated statements of operations for the three months ended March 31, 2012 and for the year ended December 31, 2011, there are no assumed adjustments to the historical amount of provision for credit losses.  If such adjustments were estimated, there could be a reduction, which could be significant, to the historical amounts of provision for credit losses presented.

The historical financial results of Manhattan Bancorp include merger and acquisition integration costs of $264,000 for the three months ended March 31, 2012 and $584,000 for the year ended December 31, 2011. These integration costs primarily consisted of legal fees and due diligence related costs.

The pro forma information for Professional Business Bank assumes that the first merger between Professional Business Bank and CGB Holdings has occurred on January 1, 2011. Professional Business Bank is the accounting acquirer in the first merger and the surviving entity is Professional Business Bank. This merger was accounted for

5

Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Statements

(In thousands, except share and per share data unless otherwise stated)

NOTE 1. BASIS OF PRESENTATION (Continued)

similar to a pooling of interests because the entities are under common control and the assets and liabilities of each entity are recorded at historical cost.

The historical financial results of Professional Business Bank include professional fees associated with the bank merger of $1,359,000 for the three months ended March 31, 2012 and $353,000 for the year ended December 31, 2011.

NOTE 2. PRELIMINARY PURCHASE ACCOUNTING ALLOCATIONS

The unaudited pro forma combined condensed consolidated financial information for the bank merger includes the unaudited pro forma combined condensed consolidated balance sheet as of March 31, 2012 assuming the bank merger was completed on March 31, 2012. The unaudited pro forma combined condensed consolidated statements of operations for the three months ended March 31, 2012 and for the year ended December 31, 2011 were prepared assuming the bank merger was completed on January 1, 2011.

Fair value of outstanding Manhattan shares (1)			$	18,941
Fair value of consideration from share-based awards			215
Total consideration transferred			$	19,156
Carrying value of Manhattan net assets at March 31, 2012 (2)			$	16,539
Fair value adjustments:
Loans, net	(2,749	)
Accrued interest receivable	(225	)
Premises and equipment	(255	)
Core deposit intangible	1,156
Certificates of deposit	(241	)
Favorable lease intangible	459
Other liabilities	339
Borrowings	(434	)
Non-controlling interest	(604	)
Total fair value adjustments			(2,554		)
Fair value of net assets acquired at March 31, 2012			$	13,985
Excess of consideration paid over fair value of net assets acquired (goodwill)			$	5,171

(1)The fair value is based on a price of $4.75 per share of Manhattan Bancorp common stock (fair value of Manhattan common stock as determined by the Funds valuation of its holdings of Manhattan Bancorp common stock as of May 31, 2012) and the 3,997,631 shares currently outstanding. Because the trading activity of the common stock of Manhattan Bancorp is very limited, the Company utilized a valuation model to determine the fair value of the transaction rather than the actual traded price of the stock.  As such, the valuation of Manhattan Bancorp common stock was derived using a variety of valuation techniques including Level 1, Level 2 and Level 3 inputs. Specifically, the trading price of Manhattan Bancorp stock (Level 1 input), the trading values of comparable California community banks (Level 2 input) and a discounted cash flow analysis of the combined Manhattan Bancorp and Professional Business Bank (Level 3 input) were used together to arrive at the stated indication of fair value of Manhattan Bancorp as of March 31, 2012.  The Level 3 inputs serve as the most significant in the valuation.

(2)The carrying value of Manhattan Bancorp net assets at March 31, 2012 of $16.5 million is equal to Manhattan Bancorp’s total assets less liabilities at that date.

NOTE 3. PRELIMINARY PRO FORMA ADJUSTMENTS

A. The adjustment to equity reflects the acquisition of Professional Business Bank by the issuance of approximately 8.1 million shares of Manhattan Bancorp common stock, which was calculated by multiplying Professional Business

6

Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Statements

(In thousands, except share and per share data unless otherwise stated)

NOTE 3. PRELIMINARY PRO FORMA ADJUSTMENTS (Continued)

Bank’s approximately 4.5 million shares outstanding as of March 31, 2012 by the merger exchange ratio of 1.7991. The adjustments to common shareholders’ equity represent the reversal of the historical Manhattan Bancorp shareholders’ common equity components and adding the value of the Manhattan Bancorp outstanding shares by multiplying the 3,997,681 outstanding shares by the fair value amount of $4.75 per share, or approximately $19 million. Common shareholders’ equity is also adjusted for $0.2 million related to certain share-based awards under FASB ASC 805 as well as expenses expected to be incurred subsequent to March 31, 2012; these expected expenses are comprised of severance costs, professional fees, and other contract termination expenses. The following table details the pro forma adjustments made to common shareholders’ equity.

	Reverse
	Historical			Value of		Value of		Expected
	Manhattan			Manhattan		Share-Based		Transaction			Total
	Bancorp			Shares		Awards		Expenses			Adjustment
Common stock	$	(38,977	)	$	18,941	$	—	$	—		$	(20,036	)
Additional paid in capital	(2,362		)	—		215		—			(2,147		)
Unrealized gain on available-for-sale securities	(238		)	—		—		—			(238		)
Accumulated deficit	25,038			—		—		(1,539		)	23,499
Total common shareholders’ equity	$	(16,539	)	$	18,941	$	215	$	(1,539	)	$	1,078

B. The fair value of the loan portfolio being acquired from Manhattan Bancorp is less than the net book value of the related assets. The third party valuation model resulted in an aggregate discount equal to approximately $5.3 million of the held for investment loan portfolio as shown in the following table.

	Credit			Yield			Total
	Discount			Discount			Discount
Loans valued in pools	$	(1,479	)	$	(1,013	)	$	(2,492	)
Loans individually valued	(1,228		)	(169		)	(1,397		)
Loans not subject to ASC 310-30 (revolving credits)	(828		)	(629		)	(1,457		)
Totals	$	(3,535	)	$	(1,811	)	$	(5,346	)

This adjustment reflects both the market rate differential and the potential adjustments required by FASB ASC 310-30, Receivables—Loans and Debt Securities Acquired with Deteriorated Credit Quality as well as those not qualifying for such accounting treatment. The loan portfolio was segmented by loans that were deemed to be impaired and those that were not. Impaired loans were individually valued where unimpaired loans were further segmented into pools based upon loan type and interest rate characteristics. Potential loss factors and discount rates were applied to the respective pools of unimpaired loans commensurate with the characteristics of the loans in each pool. Because the acquired loans are recorded at fair value at the acquisition date, there is no carryover of Manhattan Bancorp’s allowance for loan losses of approximately $2.4 million.  In addition, the pro forma adjustment to loans includes a reduction resulting from the removal of $208,000 of deferred loan fees and premiums on loans purchased which are not carried over in the merger.

In accordance with GAAP, Manhattan Bancorp will record the fair value difference pertaining to market rate differential into interest income over the weighted average remaining term of the loan portfolio, which is estimated to be approximately five years. In addition, the fact that the loans acquired with deteriorated credit quality are recorded at fair value at acquisition date could result in a reduction in the amount of loan loss provision expense required on these loans in the future.

7

Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Statements

(In thousands, except share and per share data unless otherwise stated)

NOTE 3. PRELIMINARY PRO FORMA ADJUSTMENTS (Continued)

C. The loan fair value adjustment pertaining to market rate differential will be recognized over the estimated weighted average remaining life of the loan portfolio of approximately five years. The accretion for the first five years after the effective date is estimated to be approximately $524,000, $429,000, $415,000, $277,000, and $166,000, before tax.  The pro forma adjustment to interest income for the three months ended March 31, 2012 is approximately $107,000, representing three months of the second year’s estimated amount.

D. The fair value of premises and equipment being acquired from Manhattan Bancorp is less than the book value of such assets by approximately $255,000, primarily due to the improvements made by Manhattan Bancorp for its headquarters branch. The depreciation in value of the properties is expected to primarily be from the depreciation in value of leasehold improvements.

E. The fair value of certificate of deposit liabilities exceeds the face amount of such deposits by approximately $241,000. The following table details the computed fair value marks by category of certificate of deposit.

Retail and IRA CDs	$	24,900	$	59	0.24	%
Listed CDs	14,363		182		1.27	%
Brokered CDs	20,000		—		0.00	%
Total certificates of deposit	$	59,263	$	241	0.41	%

In accordance with GAAP, subsequent to the merger’s effective date, Manhattan Bancorp will record amortization to the face amount in interest expense over the remaining term of the deposits. The amortization for the first 12 months after the effective date is estimated to be approximately $169,000 as the majority of the deposits are estimated to mature within one year. The pro forma adjustment for the three months ended March 31, 2012 is estimated to be $24,000 based on the remaining maturities of the deposits.

F. Adjustments to other assets include a core deposit intangible of $1.2 million and goodwill of $5.2 million. A core deposit intangible arises from a financial institution or a financial institution branch having a deposit base comprised of funds associated with stable customer relationships. These customer relationships provide a cost benefit to the acquiring institution since the associated customer deposits typically are at lower interest rates and can be expected to be retained on a long-term basis.

Deposit customer relationships have value due to their favorable interest rates in comparison to market rates for alternative funding sources with expected lives comparable to expected lives of the core deposits. The discounted cash flow method is based upon the principle of future benefits; economic value tends to be based on anticipated future benefits as measured by cash flows expected to occur in the future. In determining this value, Manhattan Bancorp and Professional Business Bank have considered recently completed transactions and the overall value assigned to the DDA, NOW, Money Market and Savings approximated 0.92% as a result of the cost of these deposits being lower than the cost of comparable alternative funding sources.

The following table provides detail on the valuation of the core customer base of Manhattan Bancorp:

			Customer		Percent of
	Amount		Value		Deposit
Core customer accounts:
Non-interest bearing demand	$	63,128	$	512	0.81	%
Interest bearing demand	4,151		70		1.69	%
Money market and savings accounts	58,897		574		0.97	%
Totals	$	126,176	$	1,156	0.92	%

8

Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Statements

(In thousands, except share and per share data unless otherwise stated)

NOTE 3. PRELIMINARY PRO FORMA ADJUSTMENTS (Continued)

G. The lease payments for the rental of one property at Manhattan Bancorp are lower than the current market offering rates, resulting in a favorable lease intangible asset.  The fair value of the asset totaled approximately $459,000 and was determined using a discounted cash flow model.  The asset will be amortized into lease expense over the remaining life of the lease of five years.  The pro forma statements of operations include adjustments to increase non-interest expense in the amounts of $24,000 and $95,000 for the three months ended March 31, 2012 and for the year ended December 31, 2011, respectively.

The lease arrangements recorded by Manhattan Bancorp prior to the merger included other liabilities of $339,000 which are not carried over in the merger.  As such, those amounts are included as a reduction of other liabilities in the pro forma adjustments in the March 31, 2012 balance sheet.

In addition, the pro forma adjustment to other assets includes a reduction resulting from the removal of $225,000 of accrued interest receivable on loans which is not carried over in the merger as a result of the accounting for those loans under ASC 310-30.

H. FHLB advances and the mortgage for one of the Manhattan Bank properties were increased by approximately $434,000 to adjust the debt to fair value using a discounted cash flow model and rates available to the Bancorp for borrowing.  The pro forma statements of operations include adjustments to decrease interest expense in the amounts of $7,000 and $224,000 for the three months ended March 31, 2012 and for the year ended December 31, 2011, respectively.

I. This presentation assumes amortization of the core deposit intangible thru an adjustment to non-interest expense on a straight-line basis over five years, which approximates $231,000 for the first year (approximately $58,000 each three months). Amortization of the core deposit intangible could accelerate based upon the actual customer retention experience.

J. Adjustment is made to reverse merger and acquisition expenses included in the historical financial results of Manhattan Bancorp and Professional Business Bank for the three months ended March 31, 2012 of $264,000 and $1,359,000, respectively and for the year ended December 31, 2011 of $584,000 and $353,000, respectively.

K. The amount of pro forma combined total shares outstanding is calculated by adding Manhattan Bancorp’s 3,997,631 historical shares outstanding at March 31, 2012 and Professional Business Bank’s pro forma equivalent shares, which were calculated by multiplying Professional Business Bank’s 4,513,501 historical shares outstanding at March 31, 2012 by the merger exchange ratio of 1.7991, or 8,120,240 shares.

L. The amount of pro forma combined weighted average shares outstanding for basic earnings per share is calculated by adding Manhattan Bancorp’s 3,997,631 historical weighted average shares outstanding for the three months ended March 31, 2012 and 3,993,850 historical weighted average shares outstanding for the year ended December 31, 2011 to the shares issued in connection with bank merger, which were calculated by multiplying Professional Business Bank’s 4,513,501 historical shares outstanding at March 31, 2012 and December 31, 2011 by the merger exchange ratio of 1.7991 or 8,120,240 shares.  Because the effect is anti-dilutive, the number of pro forma combined weighted average shares outstanding for diluted earnings per share does not include the 102,758 shares of unvested restricted stock at Professional Business Bank that will be converted at the same exchange ratio into 184,872 shares of Manhattan Bancorp restricted stock and that would result in a total weighted average shares outstanding of 8,305,112 shares. All options outstanding at this date were antidilutive, so the same number of weighted averages shares outstanding is used to compute basic and diluted earnings per share. At March 31, 2012 and December 31, 2011 Manhattan Bancorp had outstanding options to purchase a total of 447,145 and 585,693 shares of Manhattan Bancorp common stock, respectively, with a weighted average exercise price of $8.40 per share. At these same dates, Professional Business Bank had outstanding options to purchase 108,159 shares of Professional Business Bank common stock at $10.00 per share; these options would be converted at the close of the merger for options to purchase 185,584 shares of Manhattan Bancorp common stock at a weighted average exercise price of $5.93 per share.

9

Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Statements

(In thousands, except share and per share data unless otherwise stated)

NOTE 3. PRELIMINARY PRO FORMA ADJUSTMENTS (Continued)

M. The fair value of the non-controlling interest was determined to be zero at the acquisition date, based on the Company’s evaluation and conclusion thereon as to the value of the underlying assets and liabilities.

10