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Desert Community Bank

Victorville, CA · Cert 23066

FDIC

Q2 2007

$576.3MAssets
$402.2MLoans
$496.9MDeposits
$58.5MEquity
Loan mix
88%RE $295.5M11%C&I $38.4M0%Consumer $0.2MQ2 2006Q2 2007
Deposit mix
85%Interest-bearing $421.3M15%Noninterest $75.7MQ2 2006Q2 2007

NIM

5.88%Q2 ’056.62%Q2 ’067.12%Q2 ’07+6%-7%

Non-interest income vs. expense

4.05%Q2 ’054.14%Q2 ’064.44%Q2 ’07+15%+2%

Executive Summary

  • Earnings: ROA of 0.94%, down 33 bps year over year; NIM at 5.02%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.18%.
  • Funding: loans stand at 80.95% of deposits as of Q2 2007.

Financial Results

Return on Assets (quarter, annualized)

0.94%-33 bps YoY

Net Interest Margin (quarter, annualized)

5.02%-37 bps YoY

Efficiency Ratio (quarter, annualized)

73.10%+640 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ2 2006Q3 2006Q4 2006Q1 2007Q2 2007YoY ΔTrend
Earnings
Return on Assets1.26%1.27%1.06%0.81%0.94%-33 bps
Return on Equity13.80%13.43%10.52%7.94%9.38%-441 bps
Net Interest Margin5.38%5.15%5.12%5.00%5.02%-37 bps
Efficiency Ratio66.69%65.38%68.93%77.76%73.10%+640 bps
Non-Interest Burden3.32%2.89%3.17%3.68%3.38%+7 bps
Growth
Asset Growth (YoY)8.53%5.46%-1.53%5.14%4.73%-380 bps
Loan Growth (YoY)17.49%19.74%20.77%18.27%13.26%-423 bps
Deposit Growth (YoY)7.65%-2.01%-5.36%0.61%0.50%-714 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans0.02%-0.13%0.08%0.04%0.18%+17 bps
Allowance / Loans1.10%1.14%1.10%1.06%0.99%-10 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 Capital12.69%12.83%13.12%13.02%13.00%+30 bps
Equity / Assets9.32%9.66%10.52%9.82%10.15%+83 bps
Liquidity & Funding
Loans / Deposits71.84%79.42%83.43%77.95%80.95%+912 bps
Liquid Assets / Assets3.12%2.65%2.29%2.20%2.17%-96 bps
CRE / Total Capitaln/an/an/an/an/an/an/a