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Discovery Valley Bank

San Marcos, CA · Cert 57136

FDIC

Q2 2009

$151.1MAssets
$128.5MLoans
$123.9MDeposits
$16.0MEquity
Loan mix
61%RE $58.9M38%C&I $36.4M1%Consumer $0.6MQ2 2008Q2 2009
Deposit mix
79%Interest-bearing $98.2M21%Noninterest $25.8MQ2 2008Q2 2009

NIM

8.14%Q2 ’076.00%Q2 ’084.85%Q2 ’09-11%-18%

Non-interest income vs. expense

4.09%Q2 ’074.66%Q2 ’085.33%Q2 ’09+6%+18%

Executive Summary

  • Earnings: ROA of -2.78%, up 35 bps year over year; NIM at 3.30%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.34%.
  • Funding: loans stand at 103.72% of deposits as of Q2 2009.

Financial Results

Return on Assets (quarter, annualized)

-2.78%+35 bps YoY

Net Interest Margin (quarter, annualized)

3.30%-74 bps YoY

Efficiency Ratio (quarter, annualized)

140.34%+3,880 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ2 2008Q3 2008Q4 2008Q1 2009Q2 2009YoY ΔTrend
Earnings
Return on Assets-3.13%-1.10%-4.98%-2.69%-2.78%+35 bps
Return on Equity-32.41%-11.42%-49.40%-26.30%-26.91%+550 bps
Net Interest Margin4.05%3.77%3.03%2.65%3.30%-74 bps
Efficiency Ratio101.54%102.63%143.85%142.45%140.34%+3,880 bps
Non-Interest Burden4.12%3.88%4.45%3.95%4.84%+72 bps
Growth
Asset Growth (YoY)-3.62%-10.85%-7.61%-3.19%-10.72%-710 bps
Loan Growth (YoY)-0.11%-2.37%-10.46%-6.11%-6.74%-663 bps
Deposit Growth (YoY)-5.79%-3.06%-2.38%-4.13%-12.52%-672 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans1.70%4.44%8.91%1.52%0.34%-136 bps
Allowance / Loans3.20%2.57%2.53%2.66%3.04%-16 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 Capital10.97%11.14%12.80%12.38%12.40%+144 bps
Equity / Assets9.47%9.83%10.32%10.10%10.60%+113 bps
Liquidity & Funding
Loans / Deposits97.30%102.06%92.80%97.01%103.72%+642 bps
Liquid Assets / Assets2.39%2.50%1.40%1.09%0.92%-147 bps
CRE / Total Capitaln/an/an/an/an/an/an/a