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Royal Oaks Bank, SSB

Houston, TX · Cert 57023

FDIC

Q4 2006

$206.6MAssets
$168.3MLoans
$160.1MDeposits
$16.4MEquity
Loan mix
29%RE $18.0M71%C&I $43.9M0%Consumer $0.1MQ4 2005Q4 2006
Deposit mix
82%Interest-bearing $130.5M18%Noninterest $29.6MQ4 2005Q4 2006

NIM

7.15%Q4 ’047.97%Q4 ’058.71%Q4 ’06+1%-1%

Non-interest income vs. expense

4.02%Q4 ’044.18%Q4 ’054.68%Q4 ’06+8%+6%

Executive Summary

  • Earnings: ROA of 0.61%, down 33 bps year over year; NIM at 5.12%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.03%.
  • Funding: loans stand at 105.14% of deposits as of Q4 2006.

Financial Results

Return on Assets (quarter, annualized)

0.61%-33 bps YoY

Net Interest Margin (quarter, annualized)

5.12%-6 bps YoY

Efficiency Ratio (quarter, annualized)

81.47%+588 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ4 2005Q1 2006Q2 2006Q3 2006Q4 2006YoY ΔTrend
Earnings
Return on Assets0.94%0.68%0.75%0.95%0.61%-33 bps
Return on Equity10.10%7.41%8.45%11.44%7.64%-247 bps
Net Interest Margin5.18%4.99%5.03%5.14%5.12%-6 bps
Efficiency Ratio75.59%77.37%74.39%69.37%81.47%+588 bps
Non-Interest Burden3.83%3.76%3.63%3.34%4.06%+23 bps
Growth
Asset Growth (YoY)18.93%17.53%25.77%36.89%30.28%+1,134 bps
Loan Growth (YoY)18.09%13.66%24.71%27.82%34.01%+1,592 bps
Deposit Growth (YoY)19.59%17.41%26.73%32.40%11.46%-813 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans0.18%0.03%0.02%0.07%0.03%-15 bps
Allowance / Loans0.79%0.80%0.79%0.80%0.78%-2 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 Capital12.21%12.13%11.20%10.20%9.90%-231 bps
Equity / Assets9.02%9.23%8.65%8.01%7.94%-108 bps
Liquidity & Funding
Loans / Deposits87.45%89.23%89.46%90.93%105.14%+1,769 bps
Liquid Assets / Assets2.93%3.54%3.30%2.24%2.21%-72 bps
CRE / Total Capitaln/an/an/an/an/an/an/a