SOURCE: Bank On It, Inc.

December 06, 2006 09:00 ET

Bank On It, Inc. Reports 3rd Quarter Earnings

STOCKTON, CA -- (MARKET WIRE) -- December 6, 2006 --

Dear Shareholder:

The Quarterly Report for September 30, 2006 is below. Bank On It, Inc. (OTCBB: BKOT), parent company of Community Bank of San Joaquin, reported earnings of $987,000 or $ 0.78 per share for the first nine months of 2006, compared to $870,000 or $ 0.72 per share for the same time frame in 2005, representing an increase of 13%. Reduced construction lending due to the changing real estate market as well as increased deposit customer investments in off balance sheet products have led to the decline in loans and deposits as shown in the report.

We anticipate the opening of our new branch at 4426 East Waterloo Road in Stockton before the end of the year. While this will be a small facility (1,200 square feet), we will be able to offer all the services we have at our Main branch location, including an ATM and night depository. We will have loan officers available and look forward to serving our customers in the East Stockton and Linden areas.

Our Trust and Investment Services Department, headed by James Jimenez, is in process of introducing a new state-of-the-art investment program that will provide individual access to top performing money managers. This is a very exciting step forward for our Trust Department. We look forward to providing you, our shareholders, and our trust customers more detailed information about our capabilities in the near future.

If you have any questions or comments, please contact either one of us. As always, we would like to thank you for your support.

Sincerely,

Rudy G. Croce, Chairman

Jane R. Butterfield, President and CEO



CONSOLIDATED BALANCE SHEETS
(unaudited) as of September 30

                                                    2006         2005
Assets
Cash and due from banks                       $  5,731,381 $  4,659,569
Federal funds sold & money
 market investments                             14,440,000    9,310,000
                                              ------------ ------------

   Cash and cash equivalents                    20,171,381   13,969,569

Certificates of deposit in
 other financial institutions                    1,598,000    3,095,000
Investment securities                           24,929,386   22,565,715
Loans, net of reserves for
 possible loan losses of
 $ 1,284,630 and $ 1,623,400                    74,111,021   83,780,678

Accrued interest receivable                        701,903      605,517
Bank premises and equipment, net                   502,545      622,161
Other assets                                     1,109,507    1,156,577
                                              ------------ ------------

   Total Assets                               $123,123,743 $125,795,217
                                              ============ ============

Liabilities
Demand deposits                               $ 17,288,053 $ 24,027,127
Interest-bearing checking                        9,796,080   11,334,121
Money market checking                           17,908,166   22,034,026
Savings deposits                                 5,020,694    6,560,854
Time deposits                                   53,054,308   48,875,970
                                              ------------ ------------
   Total Deposits                              103,067,301  112,832,098

Trust preferred subordinated debentures          4,124,000            -
Accrued interest payable                               651          145
Other liabilities                                1,210,256      393,998
                                              ------------ ------------
   Total Liabilities                           108,402,208  113,226,241
                                              ------------ ------------

Stockholders' Equity
Common stock                                    13,094,522   11,488,000
Unrealized loss on securities                     (171,030)    (156,580)
Accumulated profit                                 811,337      367,616
Current income                                     986,706      869,940
                                              ------------ ------------

   Total Stockholders' Equity                   14,721,535   12,568,976
                                              ------------ ------------

   Total Liabilities & Stockholders' Equity   $123,123,743 $125,795,217
                                              ============ ============



CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited) for nine months ended September 30

                                                    2006         2005
Interest Income
Investment interest income                    $  1,280,448 $    823,920
Loan interest income                             4,763,170    4,416,711
                                              ------------ ------------

   Total interest income                         6,043,618    5,240,631

Interest Expense
Interest expense on deposits                  $  1,621,548 $    984,953
Interest expense on borrowings                     101,972       20,613
                                              ------------ ------------

   Total interest expense                        1,723,520    1,005,566

   Net interest income                           4,320,098    4,235,065

Provision For Loan Losses                          120,500      647,971
                                              ------------ ------------
   Net interest income after provision for
    loan losses                                  4,199,598    3,587,094

Other Income                                       238,333      228,011
Income from trust operations                       188,003      219,978
Gains from sale of loans                            82,608      135,949
Other income                                         1,166         (893)

Operating Expenses
Salaries and employee benefits                   1,785,808    1,554,257
Occupancy                                          215,388      207,382
Other operating expenses                         1,123,506      993,685
                                              ------------ ------------

   Total operating expenses                      3,124,702    2,755,324
                                              ------------ ------------

Net Income Before Income Tax                     1,585,006    1,414,815
Income tax expense                                 598,300      544,875
                                              ------------ ------------

   Net Income                                 $    986,706 $    869,940
                                              ============ ============

Net Income Per Share-Basic*                   $       0.78 $       0.72
Net Income Per Share-Diluted*                 $       0.74 $       0.67
Return on Average Assets                              1.11%        0.97%
Return on Equity                                      9.41%        9.50%

* Per share amounts adjusted for
  5% stock dividend issued in December 2005.

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