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Letter portraitLegal landscapeQuarterYTD

Legacy Bank, National Association

Campbell, CA · Cert 57536

FDIC

Q4 2006

$87.2MAssets
$63.9MLoans
$75.9MDeposits
$11.0MEquity
Loan mix
11%RE $3.8M85%C&I $28.7M4%Consumer $1.4MQ4 2005Q4 2006
Deposit mix
75%Interest-bearing $56.6M25%Noninterest $19.3MQ4 2005Q4 2006

NIM

5.09%Q4 ’047.59%Q4 ’058.58%Q4 ’06+62%+2%

Non-interest income vs. expense

5.61%Q4 ’045.84%Q4 ’055.68%Q4 ’06-9%-9%

Executive Summary

  • Earnings: ROA of 1.39%, up 107 bps year over year; NIM at 5.96%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net recoveries of 0.78%.
  • Funding: loans stand at 84.12% of deposits as of Q4 2006.

Financial Results

Return on Assets (quarter, annualized)

1.39%+107 bps YoY

Net Interest Margin (quarter, annualized)

5.96%+13 bps YoY

Efficiency Ratio (quarter, annualized)

80.36%-730 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ4 2005Q1 2006Q2 2006Q3 2006Q4 2006YoY ΔTrend
Earnings
Return on Assets0.32%0.31%0.13%0.82%1.39%+107 bps
Return on Equity2.41%2.52%1.00%6.38%10.94%+853 bps
Net Interest Margin5.84%5.74%5.90%6.26%5.96%+13 bps
Efficiency Ratio87.66%97.16%87.70%88.17%80.36%-730 bps
Non-Interest Burden5.01%5.55%5.00%5.42%4.58%-44 bps
Growth
Asset Growth (YoY)38.59%33.13%26.37%17.46%5.62%-3,298 bps
Loan Growth (YoY)76.10%45.77%40.88%13.82%1.12%-7,498 bps
Deposit Growth (YoY)31.10%41.41%32.56%19.77%10.13%-2,097 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans-0.22%-0.06%-0.33%-0.09%-0.78%-56 bps
Allowance / Loans1.33%1.39%1.62%1.61%1.83%+50 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 Capital15.79%16.62%15.96%15.87%16.01%+22 bps
Equity / Assets12.45%12.42%12.80%12.82%12.64%+20 bps
Liquidity & Funding
Loans / Deposits91.61%81.35%90.12%89.47%84.12%-749 bps
Liquid Assets / Assets0.12%1.44%1.85%0.60%0.57%+45 bps
CRE / Total Capitaln/an/an/an/an/an/an/a