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Sterlingsouth Bank & Trust Company

Greensboro, NC · Cert 35570

FDIC

Q2 2006

$168.9MAssets
$137.9MLoans
$138.8MDeposits
$14.0MEquity
Loan mix
61%RE $38.3M35%C&I $21.6M4%Consumer $2.4MQ2 2005Q2 2006
Deposit mix
90%Interest-bearing $125.3M10%Noninterest $13.5MQ2 2005Q2 2006

NIM

3.93%Q2 ’045.07%Q2 ’056.53%Q2 ’06+30%+14%

Non-interest income vs. expense

2.44%Q2 ’042.34%Q2 ’052.58%Q2 ’06-11%+16%

Executive Summary

  • Earnings: ROA of 0.82%, down 1 bps year over year; NIM at 3.72%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.08%.
  • Funding: loans stand at 99.39% of deposits as of Q2 2006.

Financial Results

Return on Assets (YTD, annualized)

0.82%-1 bps YoY

Net Interest Margin (YTD, annualized)

3.72%+47 bps YoY

Efficiency Ratio (YTD, annualized)

66.28%-28 bps YoY

Tier 1 Leverage Ratio

n/a

Year to date, annualized, through each quarter.

MetricQ2 2005Q3 2005Q4 2005Q1 2006Q2 2006YoY ΔTrend
Earnings
Return on Assets0.83%0.88%0.97%0.83%0.82%-1 bps
Return on Equity9.20%9.87%11.09%10.13%9.96%+76 bps
Net Interest Margin3.26%3.31%3.28%3.78%3.72%+47 bps
Efficiency Ratio66.56%64.54%63.70%70.70%66.28%-28 bps
Non-Interest Burden2.08%2.05%2.01%2.62%2.41%+33 bps
Growth
Asset Growth (YoY)31.36%31.89%27.95%18.81%21.28%-1,008 bps
Loan Growth (YoY)32.00%30.05%29.77%21.01%21.36%-1,064 bps
Deposit Growth (YoY)25.96%31.37%29.06%23.04%20.80%-517 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans0.02%0.12%0.11%0.00%0.08%+6 bps
Allowance / Loans1.32%1.33%1.32%1.32%1.32%0 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 Capital11.38%11.17%11.06%11.08%11.06%-33 bps
Equity / Assets8.87%8.53%8.21%8.22%8.29%-59 bps
Liquidity & Funding
Loans / Deposits98.92%98.31%94.79%91.43%99.39%+46 bps
Liquid Assets / Assets0.08%0.07%0.15%0.07%0.10%+1 bps
CRE / Total Capitaln/an/an/an/an/an/an/a