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Community National Bank

Fallbrook, CA · Cert 26426

FDIC

Q3 2006

$878.8MAssets
$727.9MLoans
$673.4MDeposits
$140.5MEquity
Loan mix
42%RE $57.9M57%C&I $78.4M0%Consumer $0.7MQ3 2005Q3 2006
Deposit mix
91%Interest-bearing $612.7M9%Noninterest $60.7MQ3 2005Q3 2006

NIM

6.02%Q3 ’047.16%Q3 ’058.22%Q3 ’06+8%+10%

Non-interest income vs. expense

4.21%Q3 ’043.58%Q3 ’053.60%Q3 ’06+11%+16%

Executive Summary

  • Earnings: ROA of 2.02%, up 21 bps year over year; NIM at 6.07%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.06%.
  • Funding: loans stand at 108.09% of deposits as of Q3 2006.

Financial Results

Return on Assets (quarter, annualized)

2.02%+21 bps YoY

Net Interest Margin (quarter, annualized)

6.07%+53 bps YoY

Efficiency Ratio (quarter, annualized)

50.55%-204 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ3 2005Q4 2005Q1 2006Q2 2006Q3 2006YoY ΔTrend
Earnings
Return on Assets1.81%1.91%1.78%1.73%2.02%+21 bps
Return on Equity14.53%13.50%12.29%11.52%13.00%-152 bps
Net Interest Margin5.54%5.73%5.71%5.93%6.07%+53 bps
Efficiency Ratio52.59%53.07%57.02%55.43%50.55%-204 bps
Non-Interest Burden2.32%2.53%2.76%2.95%2.68%+36 bps
Growth
Asset Growth (YoY)63.16%41.89%25.65%16.62%-0.44%-6,360 bps
Loan Growth (YoY)61.16%36.62%23.58%15.74%-0.79%-6,195 bps
Deposit Growth (YoY)58.85%29.30%22.47%10.43%-8.91%-6,776 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans-0.02%0.23%-0.05%0.04%0.06%+8 bps
Allowance / Loans1.38%1.33%1.35%1.31%1.33%-5 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 Capital11.17%11.49%12.09%12.55%13.21%+204 bps
Equity / Assets14.10%14.15%14.84%15.13%15.99%+189 bps
Liquidity & Funding
Loans / Deposits99.25%103.35%101.58%106.35%108.09%+885 bps
Liquid Assets / Assets0.87%0.79%0.91%0.90%0.88%+1 bps
CRE / Total Capitaln/an/an/an/an/an/an/a