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Letter portraitLegal landscapeQuarterYTD

Potomac Bank of Virginia

Vienna, VA · Cert 34807

FDIC

Q4 2006

$263.8MAssets
$203.7MLoans
$210.0MDeposits
$26.1MEquity
Loan mix
31%RE $30.1M68%C&I $65.4M0%Consumer $0.1MQ4 2005Q4 2006
Deposit mix
68%Interest-bearing $142.9M32%Noninterest $67.1MQ4 2005Q4 2006

NIM

4.89%Q4 ’045.96%Q4 ’056.73%Q4 ’06+4%-2%

Non-interest income vs. expense

3.19%Q4 ’043.10%Q4 ’052.98%Q4 ’06+10%-5%

Executive Summary

  • Earnings: ROA of 0.79%, up 13 bps year over year; NIM at 3.91%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net recoveries of 0.01%.
  • Funding: loans stand at 96.97% of deposits as of Q4 2006.

Financial Results

Return on Assets (quarter, annualized)

0.79%+13 bps YoY

Net Interest Margin (quarter, annualized)

3.91%-9 bps YoY

Efficiency Ratio (quarter, annualized)

71.30%-162 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ4 2005Q1 2006Q2 2006Q3 2006Q4 2006YoY ΔTrend
Earnings
Return on Assets0.66%0.63%0.68%0.95%0.79%+13 bps
Return on Equity6.23%6.03%6.71%9.53%7.89%+167 bps
Net Interest Margin4.00%3.86%4.00%4.07%3.91%-9 bps
Efficiency Ratio72.92%70.48%68.73%67.57%71.30%-162 bps
Non-Interest Burden2.85%2.68%2.71%2.61%2.71%-14 bps
Growth
Asset Growth (YoY)11.54%9.86%17.03%16.59%15.26%+372 bps
Loan Growth (YoY)14.60%17.37%26.05%22.70%24.07%+946 bps
Deposit Growth (YoY)6.13%2.95%17.32%11.84%16.57%+1,043 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans0.08%-0.02%0.00%0.04%-0.01%-9 bps
Allowance / Loans1.01%1.01%1.00%1.02%0.97%-4 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 Capital14.07%13.63%12.64%13.06%12.78%-129 bps
Equity / Assets10.41%10.44%9.96%10.04%9.88%-53 bps
Liquidity & Funding
Loans / Deposits91.10%97.98%100.17%96.05%96.97%+586 bps
Liquid Assets / Assets1.94%1.66%1.93%2.03%1.40%-54 bps
CRE / Total Capitaln/an/an/an/an/an/an/a