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Commercial State Bank

Sinton, TX · Cert 1217

FDIC

Q4 2006

$56.8MAssets
$12.1MLoans
$51.3MDeposits
$5.0MEquity
Loan mix
50%RE $2.3M50%C&I $2.3M1%Consumer $0.0MQ4 2005Q4 2006
Deposit mix
71%Interest-bearing $36.5M29%Noninterest $14.8MQ4 2005Q4 2006

NIM

3.53%Q4 ’043.95%Q4 ’055.12%Q4 ’06-4%+18%

Non-interest income vs. expense

2.92%Q4 ’042.76%Q4 ’052.72%Q4 ’06-15%+14%

Executive Summary

  • Earnings: ROA of 1.39%, up 21 bps year over year; NIM at 3.30%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.03%.
  • Funding: loans stand at 23.48% of deposits as of Q4 2006.

Financial Results

Return on Assets (YTD, annualized)

1.39%+21 bps YoY

Net Interest Margin (YTD, annualized)

3.30%+50 bps YoY

Efficiency Ratio (YTD, annualized)

66.10%-480 bps YoY

Tier 1 Leverage Ratio

n/a

Year to date, annualized, through each quarter.

MetricQ4 2005Q1 2006Q2 2006Q3 2006Q4 2006YoY ΔTrend
Earnings
Return on Assets1.18%1.27%1.34%1.40%1.39%+21 bps
Return on Equity13.53%14.69%15.50%16.09%15.98%+245 bps
Net Interest Margin2.80%3.07%3.30%3.28%3.30%+50 bps
Efficiency Ratio70.90%67.90%66.42%65.60%66.10%-480 bps
Non-Interest Burden1.67%1.85%1.92%1.87%1.90%+24 bps
Growth
Asset Growth (YoY)-1.88%4.30%2.75%0.58%0.16%+205 bps
Loan Growth (YoY)-10.20%-9.39%-10.25%-10.56%-9.32%+87 bps
Deposit Growth (YoY)-2.16%4.87%3.70%0.42%-0.46%+171 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans-0.04%0.00%0.03%0.04%0.03%+7 bps
Allowance / Loans4.29%3.99%4.01%4.71%4.73%+44 bps
Allowance Coverage of NPLsn/an/an/an/an/an/an/a
Capital
Tier 1 Leverage Ration/an/an/an/an/an/an/a
Total Risk-Based Capital24.84%26.52%25.76%27.99%29.77%+493 bps
Equity / Assets8.24%9.03%8.65%8.83%8.83%+59 bps
Liquidity & Funding
Loans / Deposits25.77%29.35%28.74%24.68%23.48%-230 bps
Liquid Assets / Assets38.39%42.47%44.45%46.32%41.63%+324 bps
CRE / Total Capitaln/an/an/an/an/an/an/a