SOURCE: Vineyard National Bancorp

April 26, 2007 08:30 ET

Vineyard National Bancorp Reports First Quarter Results: Record Quarterly Earnings, EPS Growth of 18%, Net Earnings Growth of 32%, and Total Assets Reaching $2.4 Billion

CORONA, CA -- (MARKET WIRE) -- April 26, 2007 -- Vineyard National Bancorp (the "company") (NASDAQ: VNBC), and its subsidiary Vineyard Bank, N.A. ("Vineyard"), today reported record earnings for the quarter-ended March 2007 of $5.5 million, or $0.51 per diluted share, compared with net earnings of $4.2 million, or $0.43 per diluted share, for the quarter-ended March 2006. First quarter 2007 diluted earnings per share and net earnings increased by 18% and 32%, respectively, over the results for the same quarter in 2006.

First Quarter 2007 Operating Highlights:

--  Total assets were $2.4 billion at quarter-end March 2007, an increase
    of $493.2 million, or 27% over the quarter-end March 2006 level, and an
    increase of $93.9 million, or 4% over quarter-end December 2006;
    
--  Total loans, net of unearned income, were $2.0 billion at quarter-end
    March 2007, an increase of $477.2 million, or 31% over the quarter-end
    March 2006 level, and an increase of $94.5 million, or 5% over quarter-end
    December 2006;
    
--  Total deposits were $1.8 billion at quarter-end March 2007, an
    increase of $386.6 million, or 28% over quarter-end March 2006, and a
    decrease of $38.7 million, or 2% from quarter-end December 2006,
    principally related to pre-planned reductions in higher-cost time deposits;
    
--  Provision for loan losses during the first quarter 2007 was $1.2
    million, with $0.1 million of net loan charge-offs;
    
--  The company's operating efficiency ratio was 55% for the quarter, an
    improvement as compared to 58% and 60% for the fourth and third quarters of
    2006, respectively; and
    
--  The company's net interest margin for the first quarter 2007 was
    4.18%, as compared to 4.31% for the fourth quarter 2006.  This compression
    is related to several factors described below.
    
"Vineyard's operating performance continues to be grounded in the deliberate expansion and diversity of its earning asset base, the acquisition and expansion of commercial business and entrepreneur core depository relationships, the leveraging of infrastructure now in place, and the heightened sensitivity to enterprise risk management," said Norman Morales, president and chief executive officer. "While we cannot directly allay general concerns within the financial and investment markets over housing, real estate, construction and competition over core deposits, we believe our continued performance and adherence to the established strategic plan should deliver consistent earnings per share growth and increase the franchise value of Vineyard."

Income Statement

For the quarter-ended March 2007, net interest income before the provision for loan losses was $22.5 million, an increase of $3.7 million, or 20% as compared to the same period in 2006. These results produced a net interest margin of 4.18% for the quarter-ended March 2007, as compared to 4.44% for the same period in 2006.

The net interest margin for the first quarter of 2007 was impacted by: 1) seasonal outflows of average non-interest bearing deposits which began to return late in the quarter, 2) reduced construction fees earned in the first half of the quarter related to lighter production volumes, 3) increased short-term borrowing costs related to the planned reduction of retail time deposits, and 4) increased prepayment expenses related to early payoffs on consumer and SBA-related loans. The company's net interest margin recovered a portion of this compression by the end of the quarter.

The company's net interest margin has also experienced some compression related to the rise in cost of funding portions of the commercial income property portfolio without the benefit of the resetting of rates on those portfolios until the appropriate reset period. For the remainder of 2007, approximately $70 million in multi-family apartment loans will reset at contractual rates that are approximately 70 basis points higher than the current sub-portfolio yield. Additionally, approximately $60 million in other income property loans will reset within the balance of 2007 at contractual rates that are approximately 40 basis points higher than the current sub-portfolio yield. The resetting of these assets should provide additional expansion opportunities to the net interest margin.

For the quarter-ended March 2007, gross loan interest income was $42.2 million, an increase of $11.0 million, or 35% as compared to the same period in 2006. The effective yield of the loan portfolio in the first quarter 2007 was 8.81% as compared to 8.78% for the same period in 2006. Over the course of the last year, the company has increased its efforts to broaden and diversify the composition of its loan portfolio, with two of the largest percentage increases in portfolio growth centered in commercial business loans and commercial income property mortgages.

Total net revenue (or net interest income and other operating income before provision for loan losses) for the quarter-ended March 2007 was $23.7 million, an increase of $4.0 million, or 20% as compared to the same period in 2006.

The provision for loan losses for the quarter-ended March 2007 was $1.2 million based on management's review of several factors, including significant loan growth, underlying loan collateral, delinquency trends, current economic conditions and historic loan loss experience. By comparison, the provision for loan losses was $1.1 million for the quarter-ended December 2006 and $1.2 million for the quarter-ended March 2006. There were $0.1 million of net charge-offs for each of the quarter-ended March 2007 and the quarter-end December 2006.

The provision for loan losses increased the allowance for loan losses to $20.8 million, or 1.04% of the gross loan portfolio at March 2007. The company also has a reserve for unfunded loan commitments, principally related to its construction loans, in the amount of $1.0 million (recorded under other liabilities), producing total reserves as a percent of gross loans outstanding of 1.09% at March 2007. Management believes these reserves are at an appropriate level based upon its evaluation and analysis of portfolio credit quality and prevailing economic conditions.

In the third quarter 2006, the company placed an aggregate of $14.4 million of land development loans on non-accrual status, with the largest loan in the amount of $11.7 million. During the first quarter 2007, the company sold its interest in six loans aggregating $2.7 million, secured by land in various stages of entitlement, for its principal balances with a recovery of legal costs. After weighing further legal and administrative costs, in the best interest of the company, management strategically elected to forego the recovery of unrecognized interest income of approximately $0.2 million. The company has completed a recent valuation of the collateral securing the largest loan, which remains well secured, and although circumstances may change, as of this release, anticipates either foreclosure or recovery within the second quarter of 2007.

Total operating expenses for the quarter-ended March 2007 were $13.1 million, as compared to $11.3 million for the same period in 2006, which did not include the impact of operating costs related to the acquisition of Rancho Bank. The acquisition was completed in the third quarter of 2006. Total operating expenses for the fourth and third quarters of 2006 were $14.0 million and $13.5 million, respectively.

First quarter operating expenses were generally impacted by increased levels of employee-related payroll taxes which tend to be greater in the earlier parts of a calendar year and increased deposit insurance premiums to the FDIC, which the company absorbed while reducing its total operating expenses for the period. The company continues to align its operating costs with the expansion of its lending expertise, the expansion of its core deposit collecting efforts, and overall enterprise risk management.

The company's efficiency ratio, which measures the relationship of total operating expenses and total operating income, decreased to 55% for the quarter-ended March 2007, as compared to 58% for the same period in 2006. The company's desired long-term efficiency ratio is a range of 50% to 52%, which it believes best leverages the established infrastructure and allows for acquisition of new client relationships.

Balance Sheet

At March 31, 2007, loans outstanding, net of unearned income, were $2.0 billion, as compared to the March 31, 2006 level of $1.5 billion. The largest dollar components of this increase are centered in the established commercial real estate and single family residential ("SFR") luxury construction product lines, followed by commercial construction financings, business lending and consumer loans.

Construction Lending Specialties:

The company's specialty construction lending groups continue to be focused on the origination of construction lending opportunities within several sub-markets of the southern California market place. During the quarter-ended March 31, 2007, the company originated $165.2 million in new construction commitments within the three sub-specialty construction lending disciplines: SFR luxury construction with $128.9 million, SFR tract construction with $27.2 million and commercial real-estate construction with $9.1 million. Related to these same three specialty lending disciplines, payoffs and principal payments during the first quarter were $140.1 million.

At March 31, 2007, the total unfunded amounts for the company's three sub-specialty construction disciplines were $281.8 million in SFR luxury construction, $126.5 million in SFR tract construction and $102.3 million in commercial real-estate construction.

Over the course of the past twelve months, the company has been carefully monitoring its SFR tract construction exposure, its builder relationships, project strength, and absorption rates. While a significant majority of all of the remaining tract construction exposure is related to established and well-managed projects, absorption rates on new sales have slowed as general inventory levels on competitive offerings from major home builders within the Inland Empire continue to be significant though reducing.

The company's largest concentration in construction loans is centered in its SFR luxury line of business, which continues to demonstrate strong liquidity and demand for the product. At March 31, 2007, approximately $146.2 million or 28% of total disbursed balances represented in 94 custom homes, were 95% complete or greater, and expected to be completed and sold within the next few months. This current level is consistent with historical levels of portfolio composition and absorption rates.

There were no non-performing SFR luxury construction loans at March 31, 2007, and the company has not had any charge-offs on SFR luxury construction loans since inception of this product line in early 2001.

The company's efforts continue to be focused on the measured growth of its loan and deposit portfolios in the desired compositions. Loan growth, net of unearned income, for the quarter-ended March 2007, was $94.5 million, as compared to loan growth of $106.1 million in the fourth quarter 2006, and $146.4 million in the first quarter 2006.

Deposit Acquisition and Funding Strategies

At March 31, 2007, total deposits were $1.8 billion, as compared to the March 31, 2006 level of $1.4 billion. Total deposits at December 31, 2006 were $1.8 million, or $38.7 million greater as compared to March 31, 2007. During the first quarter of 2007, the company sought to reduce its dependence on non-core related time deposits, and reduced its total portfolio of time deposits by $89.2 million. The company has utilized its liquidity facilities, principally through the Federal Home Loan Bank, to handle this shift in funding. The company anticipates replacing these wholesale borrowings through its efforts to attract business and individual depository relationships, many which were in the process of transferring deposits late in the first quarter.

Non-interest bearing demand deposits were $287.9 million at quarter-end March 2007, an increase of $113.9 million, or 65% over quarter-end March 2006. Non-interest bearing demand deposits were $292.9 million at December 31, 2006, the slight decrease in balances is reflective of season fluctuations with client's funds related to taxes, employee bonuses and other working capital requirements. The company's efforts to increase its core commercial demand base has seen positive results in the establishment of new accounts, supported by electronic deposit technology and other state-of-the art cash management services.

Money market deposits, principally concentrated in business relationships, were $619.0 million at quarter-end March 2007, an increase of $164.9 million, or 36.3% over quarter-end March 2006. Money market deposits increased by $56.3 million, or 10%, during the first quarter of 2007, again related to increased and new business relationships.

The company's interest-bearing deposits, whose average balances for the three months ended March 31, 2007 were $1.5 billion, produced an average cost of interest-bearing deposits of 4.66%. For the three months ended March 31, 2006, the company's interest-bearing deposits, whose average balances were $1.1 billion, produced an average cost of interest-bearing deposits of 3.82%.

Capital Resources

At March 31, 2007, total stockholders' equity of the company totaled $147.3 million, an increase of $49.7 million, or 51% as compared to March 31, 2006. The company's net book value per share of its common stock increased from $9.59 at March 31, 2006 to $13.55 per share at March 31, 2007. The tangible book value decreased during this same period from $9.42 to $9.23 per share due to $40.5 million in goodwill related to the Rancho Bank acquisition. For the quarter-ended March 2007, the company declared cash dividends for its common stock of $0.9 million and for its preferred stock of $0.2 million.

Vineyard continues to be "well-capitalized" pursuant to the guidelines established by regulatory agencies. To be considered "well-capitalized" a bank must have total risk-based capital of 10% or greater, and a leverage ratio of 5% or greater. Vineyard's total risk-based and leverage capital ratios were 12.0% and 11.3% at March 31, 2007, respectively.

As a continuing component of its Shareholders' Relations Program, the company is preparing a presentation describing its operating performance and strategies. The presentation will be accessible at www.vnbcstock.com.

The company is a financial holding company headquartered in Corona, and the parent company of Vineyard, also headquartered in Corona. Vineyard operates through 16 full-service banking centers and five loan production offices located in the counties of Los Angeles, Marin, Monterey, Orange, Riverside, San Bernardino, San Diego, Santa Clara and Ventura, Calif. The company's common stock is traded on the NASDAQ Global Market System under the symbol "VNBC."

This press release contains forward-looking statements as referenced in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently unreliable and actual results may vary. Factors which could cause actual results to differ from these forward-looking statements include changes in the competitive marketplace, changes in the interest rate environment, economic conditions, outcome of pending litigation, risks associated with credit quality and other factors discussed in the company's filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

                 VINEYARD NATIONAL BANCORP AND SUBSIDIARY
                        CONSOLIDATED BALANCE SHEETS
             (dollars in thousands, except per share amounts)
                                (unaudited)

                          March 31, 2007  March 31, 2006  $ Change  %Change
                          --------------  --------------  --------- -------
Assets
 Loans, net of unearned
  income                  $    1,996,760  $    1,519,513  $ 477,247     31%
  Less allowance for loan
   losses                        (20,827)        (15,000)    (5,827)    39%
                          --------------  --------------  ---------  -----
   Net Loans                   1,975,933       1,504,513    471,420     31%

 Investment securities           232,504         258,120    (25,616)   -10%
                          --------------  --------------  ---------  -----
   Total Earnings Assets       2,208,437       1,762,633    445,804     25%
                          --------------  --------------  ---------  -----

 Cash and cash
  equivalents                     37,724          42,799     (5,075)   -12%
 Premises and equipment,
  net                             19,642          19,352        290      1%
 Goodwill and other
  intangibles                     43,890           1,554     42,336   2724%
 Other assets                     41,978          32,127      9,851     31%
                          --------------  --------------  ---------  -----
     Total Assets         $    2,351,671  $    1,858,465  $ 493,206     27%
                          ==============  ==============  =========  =====

Liabilities and
 Stockholders' Equity
Liabilities
 Deposits
  Non-interest bearing    $      287,866  $      173,975  $ 113,891     65%
  Interest-bearing             1,479,866       1,207,110    272,756     23%
                          --------------  --------------  ---------  -----
   Total Deposits              1,767,732       1,381,085    386,647     28%

 Federal Home Loan Bank
  advances                       244,000         249,000     (5,000)    -2%
 Other borrowings                 45,400          10,000     35,400    354%
 Subordinated debt                 5,000           5,000          -      0%
 Junior subordinated
  debentures                     115,470          96,913     18,557     19%
 Other liabilities                26,762          18,901      7,861     42%
                          --------------  --------------  ---------  -----
   Total Liabilities           2,204,364       1,760,899    443,465     25%

Stockholders' Equity
 Common stock equity             146,751         100,289     46,462     46%
 Preferred stock equity            9,665           9,665          -      0%
 Unallocated ESOP shares          (5,629)         (6,169)       540     -9%
 Cumulative other
  comprehensive loss              (3,480)         (6,219)     2,739    -44%
                          --------------  --------------  ---------  -----
   Total Stockholders'
    Equity                       147,307          97,566     49,741     51%
                          --------------  --------------  ---------  -----
     Total Liabilities
      and Stockholders'
      Equity              $    2,351,671  $    1,858,465  $ 493,206     27%
                          ==============  ==============  =========  =====

Total non-performing
 loans/Gross loans                 0.67%(1)         0.03%(1)

Number of shares of
 common stock outstanding     10,157,504(2)    9,169,468 (2)

Net book value of common
 stock (3)                $        13.55  $         9.59
Tangible book value of
 common stock (4)         $         9.23  $         9.42
Net book value of common
 stock,
 excluding other
  comprehensive loss (3)  $        13.89  $        10.26


(1) Total non-performing loans include non-accrual loans and accrual loans
    that are more than 90 days past due.
(2) Number of shares of common stock outstanding at March 31, 2007 and
    March 31, 2006 excludes 239,740 and 262,771 unreleased and unallocated 
    ESOP shares, respectively.
(3) Net book value of common stock is calculated by dividing stockholders'
    equity available to common shareholders by the number of shares of common 
    stock outstanding at period-end. The net book value of common stock, 
    excluding other comprehensive loss eliminates cumulative other 
    comprehensive loss from the numerator.
(4) Tangible book value of common stock is calculated by dividing stockholder's 
    equity available to common shareholders, less goodwill and other intangible 
    assets, by the number of common shares outstanding at period-end.


                 VINEYARD NATIONAL BANCORP AND SUBSIDIARY
                        CONSOLIDATED BALANCE SHEETS
             (dollars in thousands, except per share amounts)
                                (unaudited)

                                 March 31,   December 31,              
                                    2007         2006     $ Change  %Change
                                -----------  -----------  --------- -------
Assets
 Loans, net of unearned income  $ 1,996,760  $ 1,902,244  $  94,516      5%
  Less allowance for loan
   losses                           (20,827)     (19,689)    (1,138)     6%
                                -----------  -----------  ---------  -----
   Net Loans                      1,975,933    1,882,555     93,378      5%

 Investment securities              232,504      233,600     (1,096)     0%
                                -----------  -----------  ---------  -----
   Total Earnings Assets          2,208,437    2,116,155     92,282      4%
                                -----------  -----------  ---------  -----

 Cash and cash equivalents           37,724       35,129      2,595      7%
 Premises and equipment, net         19,642       20,402       (760)    -4%
 Goodwill and other intangibles      43,890       44,198       (308)    -1%
 Other assets                        41,978       41,855        123      0%
                                -----------  -----------  ---------  -----
     Total Assets               $ 2,351,671  $ 2,257,739  $  93,932      4%
                                ===========  ===========  =========  =====


Liabilities and Stockholders'
 Equity
Liabilities
 Deposits
  Noninterest-bearing           $   287,866  $   292,917  $  (5,051)    -2%
  Interest-bearing                1,479,866    1,513,496    (33,630)    -2%
                                -----------  -----------  ---------  -----
   Total Deposits                 1,767,732    1,806,413    (38,681)    -2%

 Federal Home Loan Bank
  advances                          244,000      126,000    118,000     94%
 Other borrowings                    45,400       40,000      5,400     14%
 Subordinated debt                    5,000        5,000          -      0%
 Junior subordinated debentures     115,470      115,470          -      0%
 Other liabilities                   26,762       21,796      4,966     23%
                                -----------  -----------  ---------  -----
   Total Liabilities              2,204,364    2,114,679     89,685      4%

Stockholders' Equity
 Common stock equity                146,751      143,073      3,678      3%
 Preferred stock equity               9,665        9,665          -      0%
 Unallocated ESOP shares             (5,629)      (5,765)       136     -2%
 Cumulative other comprehensive
  loss                               (3,480)      (3,913)       433    -11%
                                -----------  -----------  ---------  -----
   Total Stockholders' Equity       147,307      143,060      4,247      3%
                                -----------  -----------  ---------  -----
     Total Liabilities and
      Stockholders' Equity      $ 2,351,671  $ 2,257,739  $  93,932      4%
                                ===========  ===========  =========  =====

Total non-performing
 loans/Gross loans                     0.67%(1)     0.88%(1)

Number of shares of common       10,157,504(2) 10,172,889(2)
 stock outstanding                                

Net book value of common stock
 (3)                                  13.55  $     13.11
Tangible book value of common
 stock (4)                      $      9.23  $      8.77
Net book value of common stock,
 excluding other comprehensive
  loss (3)                      $     13.89  $     13.50


(1) Total non-performing loans include non-accrual loans and accrual
    loans that are more than 90 days past due.
(2) Number of shares of common stock outstanding at March 31, 2007 and
    December 31, 2006 excludes 239,740 and 245,547 unreleased and unallocated 
    ESOP shares, respectively.
(3) Net book value of common stock is calculated by dividing stockholders' 
    equity available to common shareholders by the number of shares of common  
    stock outstanding at period-end. The net book value of common stock, 
    excluding other comprehensive loss eliminates cumulative other 
    comprehensive loss from the numerator.
(4) Tangible book value of common stock is calculated by dividing stockholders' 
    equity available to common shareholders, less goodwill and other intangible 
    assets, by the number of common shares outstanding at period-end.


                 VINEYARD NATIONAL BANCORP AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF EARNINGS
             (dollars in thousands, except per share amounts)
                                (unaudited)


                              Three Months Ended
                                  March 31,
                            ----------------------
                               2007        2006      $ Change    % Change
                            ----------  ----------  ----------  ----------
Interest Income
 Loans, including fees      $   42,211  $   31,175  $   11,036          35%
 Investment securities           2,938       3,072        (134)         -4%
                            ----------  ----------  ----------  ----------
  Total Interest Income         45,149      34,247      10,902          32%

Interest Expense
 Deposits                       17,073      10,516       6,557          62%
 Borrowings and debt
  obligations                    5,583       4,980         603          12%
                            ----------  ----------  ----------  ----------
  Total Interest Expense        22,656      15,496       7,160          46%

Net Interest Income             22,493      18,751       3,742          20%
Provision for loan losses        1,200       1,200           -           0%
                            ----------  ----------  ----------  ----------
 Net interest income after
  provision for loan losses     21,293      17,551       3,742          21%

Other Income
 Fees and service charges          483         277         206          74%
 Gain on sale of SBA loans
  and SBA broker fee income        600         544          56          10%
 Other income                      119         110           9           8%
                            ----------  ----------  ----------  ----------
  Total Other Income             1,202         931         271          29%

  Gross Operating Income        22,495      18,482       4,013          22%

Operating Expenses
 Salaries and benefits           7,594       6,501       1,093          17%
 Occupancy and equipment         2,458       2,118         340          16%
 Other operating expense         3,075       2,730         345          13%
                            ----------  ----------  ----------  ----------
  Total Operating Expenses      13,127      11,349       1,778          16%

Earnings before income
 taxes                           9,368       7,133       2,235          31%
Income tax provision             3,859       2,972         887          30%
                            ----------  ----------  ----------  ----------
  Net Earnings              $    5,509  $    4,161  $    1,348          32%
                            ==========  ==========  ==========  ==========

Weighted average shares
 outstanding used in
 diluted EPS calculation    10,407,325   9,115,526

Earnings per common share
 Basic                      $     0.52  $     0.45  $     0.07          15%
 Diluted                    $     0.51  $     0.43  $     0.08          18%

Efficiency Ratio (5)                55%         58%

(5) The efficiency ratio is calculated by dividing total operating expenses
    by net interest income before provision for loan losses plus total other
    income.


                 VINEYARD NATIONAL BANCORP AND SUBSIDIARY
                    CONSOLIDATED STATEMENTS OF EARNINGS
             (dollars in thousands, except per share amounts)
                                (unaudited)


                              Three Months Ended
                            ----------------------
                            March 31,    December
                               2007      31, 2006    $ Change    % Change
                            ----------  ----------  ----------  ----------
Interest Income
 Loans, including fees      $   42,211  $   41,818  $      393           1%
 Investment securities           2,938       3,035         (97)         -3%
                            ----------  ----------  ----------  ----------
  Total Interest Income         45,149      44,853         296           1%

Interest Expense
 Deposits                       17,073      17,722        (649)         -4%
 Borrowings and debt
  obligations                    5,583       4,331       1,252          29%
                            ----------  ----------  ----------  ----------
  Total Interest Expense        22,656      22,053         603           3%
Net Interest Income             22,493      22,800        (307)         -1%
Provision for loan losses        1,200       1,050         150          14%
                            ----------  ----------  ----------  ----------
 Net interest income after
  provision for loan losses     21,293      21,750        (457)         -2%

Other Income
 Fees and service charges          483         558         (75)        -13%
 Gain on sale of SBA loans
  and SBA broker fee income        600         783        (183)        -23%
 Gain on sale of other
  loans                              -          34         (34)       -100%
 Other income                      119         159         (40)        -25%
                            ----------  ----------  ----------  ----------
  Total Other Income             1,202       1,534        (332)        -22%

  Gross Operating Income        22,495      23,284        (789)         -3%

Operating Expenses
 Salaries and benefits           7,594       7,943        (349)         -4%
 Occupancy and equipment         2,458       2,584        (126)         -5%
 Other operating expense         3,075       3,485        (410)        -12%
                            ----------  ----------  ----------  ----------
  Total Operating Expenses      13,127      14,012        (885)         -6%

Earnings before income
 taxes                           9,368       9,272          96           1%
Income tax provision             3,859       3,782          77           2%
                            ----------  ----------  ----------  ----------
  Net Earnings              $    5,509  $    5,490  $       19           0%
                            ==========  ==========  ==========  ==========

Weighted average shares
 outstanding used in
 diluted EPS calculation    10,407,325  10,402,959

Earnings per common share
 Basic                      $     0.52  $     0.52  $        -           0%
 Diluted                    $     0.51  $     0.51  $        -           0%

Efficiency Ratio (5)                55%         58%

(5) The efficiency ratio is calculated by dividing total operating expenses
    by net interest income before provision for loan losses plus total other 
    income.


                 VINEYARD NATIONAL BANCORP AND SUBSIDIARY
                          FINANCIAL PERFORMANCE
                                (unaudited)
                          (dollars in thousands)


                                Three Months Ended March 31,
                  --------------------------------------------------------
                              2007                         2006
                  ---------------------------  ---------------------------
                                        Aver-                        Aver-
                    Average              age     Average              age
                                        Yiel-                        Yiel-
                                        d/Co-                        d/Co-
                    Balance    Interest   st     Balance    Interest   st
                  -----------  -------- -----  -----------  -------- -----
Assets
 Gross loans (6)  $ 1,943,391  $ 42,211  8.81% $ 1,440,184  $ 31,175  8.78%
 Investment
  securities (7)      241,068     2,938  4.89%     274,183     3,072  4.49%
                  -----------  --------        -----------  --------
    Total
     interest-ea-
     rning assets   2,184,459    45,149  8.38%   1,714,367    34,247  8.09%
 Other assets         127,932                       75,158
 Less: allowance
  for loan losses     (19,913)                     (14,170)
                  -----------                  -----------
    Total average
     assets       $ 2,292,478                  $ 1,775,355
                  ===========                  ===========

Liabilities and
 Stockholders'
 Equity
 Interest-bearing
  deposits (8)    $ 1,485,193    17,073  4.66% $ 1,117,714    10,516  3.82%
 FHLB advances        205,309     2,554  5.00%     267,317     2,972  4.51%
 Other borrowings      34,748       635  7.31%      10,044       169  6.75%
 Subordinated
  debt                  5,000       109  8.73%       5,000        98  7.82%
 Junior
  subordinated
  debentures          115,470     2,285  7.92%      96,913     1,741  7.18%
                  -----------  --------        -----------  --------
    Total
     interest-be-
     aring liabi-
     lities         1,845,720    22,656  4.96%   1,496,988    15,496  4.19%
                               --------                     --------
 Demand deposits      277,860                      161,937
 Other
  liabilities          24,370                       14,595
                  -----------                  -----------
    Total average
     liabilities    2,147,950                    1,673,520
 Preferred stock
  equity                9,665                        9,665
 Common stock
  equity, net of
  cumulative
   other
   comprehensive
   loss               134,863                       92,170
                  -----------                  -----------
    Stockholders'
     equity           144,528                      101,835
                  -----------                  -----------
    Total
     liabilities
     and
     stockholder-
     s' equity    $ 2,292,478                  $ 1,775,355
                  ===========                  ===========

Net interest
 spread (9)                              3.42%                        3.90%
                                        =====                        =====
Net interest
 margin (10)                   $ 22,493  4.18%              $ 18,751  4.44%
                               ======== =====               ======== =====


Return on Average
 Assets                                  0.97%                        0.95%
Return on Average
 Tangible Assets
 (11)                                    0.99%                        0.95%
Return on Average
 Common Equity                          16.57%                       18.31%
Return on Average
 Tangible Common
 Equity (12)                            24.61%                       18.64%
Net
 Charge-off's/Av-
 erage Gross
 Loans                                   0.00%                        0.00%

(6)  The average loan balances include loans held for sale and non-accrual
     loans.
(7)  The yield for investment securities is based on historical amortized
     cost balances.
(8)  Includes savings, NOW, money market, and time certificate of deposit
     accounts.
(9)  Net interest spread represents the average yield earned on interest-earning
     assets less the average rate paid on interest-bearing liabilities.
(10) Net interest margin is computed by dividing net interest income by
     total average earning assets.
(11) Return on average tangible assets is computed by dividing net income
     for the period by average tangible assets. Average tangible assets equals 
     average total assets less average identifiable intangible assets and 
     goodwill.
(12) Return on average tangible common stockholders’ equity is computed by
     dividing net income applicable to common stock for the period by average  
     tangible common stockholders’ equity. Average tangible common 
     stockholders’ equity equals average total common stockholders’ 
     equity less average identifiable intangible assets and goodwill.


                 VINEYARD NATIONAL BANCORP AND SUBSIDIARY
                          FINANCIAL PERFORMANCE
                                (unaudited)
                          (dollars in thousands)


                                    Three Months Ended,
                  --------------------------------------------------------
                        March 31, 2007              December 31, 2006
                  ---------------------------  ---------------------------
                                        Aver-                        Aver-
                    Average              age     Average              age
                                        Yiel-                        Yiel-
                                        d/Co-                        d/Co-
                    Balance    Interest   st     Balance    Interest   st
                  -----------  -------- -----  -----------  -------- -----
Assets
 Gross loans (6)  $ 1,943,391  $ 42,211  8.81% $ 1,837,749  $ 41,818  9.03%
 Investment
  securities (7)      241,068     2,938  4.89%     262,176     3,035  4.63%
                  -----------  --------        -----------  --------
    Total
     interest-ea-
     rning assets   2,184,459    45,149  8.38%   2,099,925    44,853  8.48%
 Other assets         127,932                      123,821
 Less: allowance
  for loan losses     (19,913)                     (18,863)
                  -----------                  -----------
    Total average
     assets       $ 2,292,478                  $ 2,204,883
                  ===========                  ===========

Liabilities and
 Stockholders'
 Equity
 Interest-bearing
  deposits (8)    $ 1,485,193    17,073  4.66% $ 1,521,213    17,722  4.62%
 FHLB advances        205,309     2,554  5.00%     109,971     1,347  4.86%
 Other borrowings      34,748       635  7.31%      26,950       531  7.71%
 Subordinated
  debt                  5,000       109  8.73%       5,000       110  8.54%
 Junior
  subordinated
  debentures          115,470     2,285  7.92%     115,470     2,343  7.94%
                  -----------  --------        -----------  --------
    Total
     interest-be-
     aring liabi-
     lities         1,845,720    22,656  4.96%   1,778,604    22,053  4.92%
                               --------                     --------
 Demand deposits      277,860                      264,335
 Other
  liabilities          24,370                       22,996
                  -----------                  -----------
    Total average
     liabilities    2,147,950                    2,065,935
 Preferred stock
  equity                9,665                        9,665
 Common stock
  equity, net of
  cumulative
   other
   comprehensive
   loss               134,863                      129,283
                  -----------                  -----------
    Stockholders'
     equity           144,528                      138,948
                  -----------                  -----------
    Total
     liabilities
     and
     stockholder-
     s' equity    $ 2,292,478                  $ 2,204,883
                  ===========                  ===========

Net interest
 spread (9)                              3.42%                        3.56%
                                        =====                        =====
Net interest
 margin (10)                   $ 22,493  4.18%              $ 22,800  4.31%
                               ======== =====               ======== =====


Return on Average
 Assets                                  0.97%                        0.99%
Return on Average
 Tangible Assets
 (11)                                    0.99%                        1.01%
Return on Average
 Common Equity                          16.57%                       16.85%
Return on Average
 Tangible Common
 Equity (12)                            24.61%                       25.95%
Net
 Charge-off's/Av-
 erage Gross
 Loans                                   0.00%                        0.01%

(6)  The average loan balances include loans held for sale and non-accrual
     loans.
(7)  The yield for investment securities is based on historical amortized
     cost balances.
(8)  Includes savings, NOW, money market, and time certificate of deposit
     accounts.
(9)  Net interest spread represents the average yield earned on 
     interest-earning assets less the average rate paid on interest-bearing 
     liabilities.
(10) Net interest margin is computed by dividing net interest income by
     total average earning assets.
(11) Return on average tangible assets is computed by dividing net income
     for the period by average tangible assets. Average tangible assets equals 
     average total assets less average identifiable intangible assets and  
     goodwill.
(12) Return on average tangible common stockholders’ equity is computed by
     dividing net income applicable to common stock for the period by average  
     tangible common stockholders’ equity. Average tangible 
     common stockholders’ equity equals average total common
     stockholders’ equity less average identifiable intangible assets and
     goodwill.


                 VINEYARD NATIONAL BANCORP AND SUBSIDIARY
              Earning Asset and Funding Liability Composition
                                (unaudited)
                          (dollars in thousands)


                                                    December    September
                                      March 31,     31, 2006     30, 2006
                                      2007 (13)       (13)         (13)
                                     -----------  -----------  -----------
Earning Assets
Loans
 Commercial and industrial           $   127,164  $   122,257  $   111,850
 Real estate construction and land:
  Single-family coastal                  553,333      514,385      507,390
  Single-family tract                    160,270      152,060      132,966
  Commercial                             136,465      134,404       90,513
  Land                                   117,473      112,418      104,082
 Real estate mortgage:
  Commercial                             565,199      531,159      500,994
  Multi-family residential               213,877      222,470      241,113
  All other residential                   43,954       49,353       58,712
 Consumer loans                           80,306       65,914       51,785
 All other loans (including
  overdrafts)                                 70           98          139
                                     -----------  -----------  -----------
                                       1,998,111    1,904,518    1,799,544
 Unearned premium on acquired loans        2,050        1,696        1,239
 Deferred loan fees                       (3,842)      (3,970)      (4,719)
                                     -----------  -----------  -----------
   Loans, net of unearned income       1,996,319    1,902,244    1,796,064
                                     -----------  -----------  -----------

Loans held-for-sale                          441            -            -
Investment securities                    232,504      233,600      235,373
                                     -----------  -----------  -----------
    Total Earning Assets, excluding
     Allowance
     for Loan Losses                 $ 2,229,264  $ 2,135,844  $ 2,031,437
                                     ===========  ===========  ===========

Unfunded Loan Commitments
 Commercial and industrial           $   110,649  $    97,655  $    87,283
 Real estate construction and land:
  Single-family coastal                  281,842      264,967      290,434
  Single-family tract                    126,463      150,702      164,737
  Commercial                             102,308      119,134      103,563
  Land                                    13,495       16,336       26,026
 Real estate mortgage:
  Commercial                              13,388       14,221       15,836
  Multi-family residential                   961        1,194        2,176
  All other residential                   19,388       16,496       15,085
 Consumer loans                            5,663        4,089        4,061
                                     -----------  -----------  -----------
   Total Unfunded Loan Commitments   $   674,157  $   684,794  $   709,201
                                     ===========  ===========  ===========

Funding Liabilities
Deposits
 Non-interest bearing                $   287,867  $   292,917  $   253,927
 Money market                            618,954      562,622      506,532
 Savings and NOW                          69,947       70,741       75,787
 Time deposits                           790,965      880,133      876,586
                                     -----------  -----------  -----------
   Total Deposits                      1,767,733    1,806,413    1,712,832
                                     -----------  -----------  -----------

FHLB advances                            244,000      126,000      127,000
Other borrowings                          45,400       40,000       35,500
Subordinated debt                          5,000        5,000        5,000
Junior subordinated debentures           115,470      115,470      115,470
                                     -----------  -----------  -----------
    Total Funding Liabilities        $ 2,177,603  $ 2,092,883  $ 1,995,802
                                     ===========  ===========  ===========




                                       June 30,    March 31,
                                         2006         2006
                                     -----------  -----------
Earning Assets
Loans
 Commercial and industrial           $    71,774  $    65,690
 Real estate construction and land:
  Single-family coastal                  438,788      456,832
  Single-family tract                    125,806      146,869
  Commercial                              79,389       56,047
  Land                                   107,666       95,936
 Real estate mortgage:
  Commercial                             392,209      371,085
  Multi-family residential               195,406      246,501
  All other residential                   63,237       60,782
 Consumer loans                           36,136       23,690
 All other loans (including
  overdrafts)                                167          366
                                     -----------  -----------
                                       1,510,578    1,523,798
 Unearned premium on acquired loans        1,073          743
 Deferred loan fees                       (3,939)      (5,028)
                                     -----------  -----------
   Loans, net of unearned income       1,507,712    1,519,513
                                     -----------  -----------

Loans held-for-sale                       43,601            -
Investment securities                    243,316      254,139
                                     -----------  -----------
    Total Earning Assets, excluding
     Allowance
     for Loan Losses                 $ 1,794,629  $ 1,773,652
                                     ===========  ===========

Unfunded Loan Commitments
 Commercial and industrial           $    77,120  $    56,614
 Real estate construction and land:
  Single-family coastal                  295,124      303,812
  Single-family tract                    153,080      161,916
  Commercial                              70,250       58,958
  Land                                    16,307       17,650
 Real estate mortgage:
  Commercial                              11,770        8,331
  Multi-family residential                 1,031        1,231
  All other residential                   10,873        9,791
 Consumer loans                            2,856        3,553
                                     -----------  -----------
   Total Unfunded Loan Commitments   $   638,411  $   621,856
                                     ===========  ===========

Funding Liabilities
Deposits
 Non-interest bearing                $   176,398  $   173,975
 Money market                            478,056      454,017
 Savings and NOW                          48,243       47,455
 Time deposits                           822,167      705,638
                                     -----------  -----------
   Total Deposits                      1,524,864    1,381,085
                                     -----------  -----------

FHLB advances                             72,000      249,000
Other borrowings                               -       10,000
Subordinated debt                          5,000        5,000
Junior subordinated debentures           115,470       96,913
                                     -----------  -----------
    Total Funding Liabilities        $ 1,717,334  $ 1,741,998
                                     ===========  ===========

(13) Balances as of March 31, 2007, December 31, 2006 and September 30,
     2006 include loans acquired and deposits assumed in the merger with Rancho
     Bank on July 31, 2006.