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Western State Bank

Duarte, CA · Cert 23234

FDIC

Q2 2006

$51.2MAssets
$26.6MLoans
$37.4MDeposits
$13.4MEquity
Loan mix
53%RE $4.7M47%C&I $4.2M0%Consumer $0.0MQ2 2005Q2 2006
Deposit mix
66%Interest-bearing $24.7M34%Noninterest $12.6MQ2 2005Q2 2006

NIM

4.29%Q2 ’045.79%Q2 ’05-3.20%Q2 ’06+39%-155%

Non-interest income vs. expense

4.68%Q2 ’044.64%Q2 ’05-3.09%Q2 ’06+16%-167%

Executive Summary

  • Earnings: ROA of 0.31%, down 2 bps year over year; NIM at -2.38%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net recoveries of 0.09%.
  • Funding: loans stand at 71.08% of deposits as of Q2 2006.

Financial Results

Return on Assets (quarter, annualized)

0.31%-2 bps YoY

Net Interest Margin (quarter, annualized)

-2.38%-671 bps YoY

Efficiency Ratio (quarter, annualized)

92.38%-90 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ2 2005Q3 2005Q4 2005Q1 2006Q2 2006YoY ΔTrend
Earnings
Return on Assets0.33%0.31%-0.25%-0.12%0.31%-2 bps
Return on Equity2.87%2.47%-1.77%-0.81%1.46%-141 bps
Net Interest Margin4.33%4.71%4.80%4.69%-2.38%-671 bps
Efficiency Ratio93.28%94.09%104.45%102.29%92.38%-90 bps
Non-Interest Burden3.99%4.40%5.05%4.82%-2.68%-668 bps
Growth
Asset Growth (YoY)-15.10%-23.70%-27.40%-28.01%-16.83%-173 bps
Loan Growth (YoY)-18.00%-37.44%-32.90%-45.88%-29.74%-1,174 bps
Deposit Growth (YoY)-16.88%-26.65%-30.90%-31.66%-30.78%-1,390 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans-0.53%-0.31%-0.11%-0.08%-0.09%+44 bps
Allowance / Loans2.37%2.86%3.32%3.93%3.53%+117 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 Capital18.73%21.73%24.25%28.02%27.25%+853 bps
Equity / Assets12.04%13.38%14.57%15.52%26.14%+1,410 bps
Liquidity & Funding
Loans / Deposits70.03%66.87%64.67%59.18%71.08%+105 bps
Liquid Assets / Assets14.87%9.94%9.64%9.82%7.87%-699 bps
CRE / Total Capitaln/an/an/an/an/an/an/a