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Desert Hills Bank

Phoenix, AZ · Cert 57060

FDIC

Q4 2009

$496.6MAssets
$343.0MLoans
$426.5MDeposits
$22.7MEquity
Loan mix
70%RE $203.7M29%C&I $85.2M0%Consumer $0.1MQ4 2008Q4 2009
Deposit mix
95%Interest-bearing $405.0M5%Noninterest $21.5MQ4 2008Q4 2009

NIM

7.55%Q4 ’075.76%Q4 ’084.27%Q4 ’09-30%-27%

Non-interest income vs. expense

3.28%Q4 ’073.41%Q4 ’083.34%Q4 ’09+40%-33%

Executive Summary

  • Earnings: ROA of -1.73%, up 307 bps year over year; NIM at 1.90%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 4.67%.
  • Funding: loans stand at 80.43% of deposits as of Q4 2009.

Financial Results

Return on Assets (YTD, annualized)

-1.73%+307 bps YoY

Net Interest Margin (YTD, annualized)

1.90%-70 bps YoY

Efficiency Ratio (YTD, annualized)

124.73%-1,757 bps YoY

Tier 1 Leverage Ratio

n/a

Year to date, annualized, through each quarter.

MetricQ4 2008Q1 2009Q2 2009Q3 2009Q4 2009YoY ΔTrend
Earnings
Return on Assets-4.80%-0.95%-1.98%-2.07%-1.73%+307 bps
Return on Equity-59.64%-20.08%-40.42%-43.14%-36.46%+2,318 bps
Net Interest Margin2.61%1.98%1.88%1.86%1.90%-70 bps
Efficiency Ratio142.30%108.89%156.86%112.66%124.73%-1,757 bps
Non-Interest Burden3.82%2.21%3.11%2.22%2.57%-125 bps
Growth
Asset Growth (YoY)2.96%0.81%-3.06%2.57%-2.92%-588 bps
Loan Growth (YoY)-1.73%-6.91%-13.85%-18.69%-20.77%-1,904 bps
Deposit Growth (YoY)9.05%15.18%12.85%15.94%2.41%-664 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans0.90%5.26%4.22%4.90%4.67%+377 bps
Allowance / Loans4.30%3.33%3.05%3.31%2.68%-162 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 Capital6.78%7.01%7.63%7.22%7.06%+29 bps
Equity / Assets4.68%4.79%5.25%4.48%4.57%-11 bps
Liquidity & Funding
Loans / Deposits103.96%98.26%94.66%80.21%80.43%-2,354 bps
Liquid Assets / Assets0.98%5.30%7.51%16.23%11.72%+1,075 bps
CRE / Total Capitaln/an/an/an/an/an/an/a