SOURCE: Vineyard National Bancorp

January 25, 2007 08:30 ET

Vineyard National Bancorp Reports Record Earnings for the Fourth Quarter and Year-End, With Assets Reaching $2.3 Billion

CORONA, CA -- (MARKET WIRE) -- January 25, 2007 -- Vineyard National Bancorp (the "company") (NASDAQ: VNBC), and its subsidiary Vineyard Bank, N.A. ("Vineyard"), today reported record earnings for the quarter-ended December 2006 of $5.5 million, or $0.51 per diluted share, compared with net earnings of $4.5 million, or $0.44 per diluted share, for the quarter-ended December 2005. For the year-ended December 2006, the company reported record net earnings of $19.7 million, or $1.89 per diluted share, compared with net earnings of $18.9 million, or $1.89 per diluted share, for the comparable period in 2005.

Fourth Quarter and Year-End 2006 Operating Highlights:

--  Total assets were $2.3 billion at year-end December 2006, an increase
    of $543.8 million, or 32% over the year-end December 2005 level, and an
    increase of $104.3 million, or 5% over third quarter 2006;
    
--  Total loans, net of unearned income, were $1.9 billion at year-end
    December 2006, an increase of $529.1 million, or 39% over the year-end
    December 2005 level, and an increase of $106.2 million, or 6% over third
    quarter 2006;
    
--  Total deposits were $1.8 billion at year-end December 2006, an
    increase of $530.1 million, or 42% over year-end December 2005, and an
    increase of $93.6 million, or 5% over third quarter 2006. During the fourth
    quarter 2006, demand deposits increased by $39.0 million, or 15% over third
    quarter 2006, representing one of the company's most significant increases
    related to organic growth;
    
--  Provision for loan losses during the fourth quarter 2006 was $1.1
    million related to the increased credit exposure as a result of the
    significant loan growth within the period, and $4.1 million for the year-
    ended December 2006;
    
--  The fourth quarter 2006 operations were negatively impacted by
    approximately $0.6 million in expenses related to the Rancho Bank
    acquisition, and $0.4 million in unrecognized interest income related to
    the large loan relationship on non-accrual. Both of these items were
    previously reported in the third quarter 2006;
    
--  The company's net interest margin for the fourth quarter 2006 was
    4.32%, as compared to 4.33% for the third quarter 2006 and 4.57% for the
    fourth quarter 2005.
    
"2006 was a challenging year for Vineyard due in part to market dynamics, real estate concerns, the rising effect of interest rates on deposits and the impact to margin compression and ultimately the overall impact of all of these forces on profitability," stated Norman Morales, president and chief executive officer. "The financing of home and commercial construction continues to be a significant component to Vineyard's strategies going forward, and we believe the measured growth in such loan types and our expertise will continue into 2007."

"We are pleased that our strategy to make investments in talented individuals in 2006 is gaining traction and as a result, the company benefited from absolute growth in both deposits and loans. We are confident with the outlook for continued growth in our loan portfolio. We will accelerate our focus and efforts on core deposit relationship growth, and we will continue to efficiently leverage our operating infrastructure and optimally use our balance sheet to produce the desired operating results throughout 2007."

Income Statement

For the quarter-ended December 2006, net interest income before the provision for loan losses was $22.8 million, an increase of $4.0 million, or 21% as compared to the same period in 2005. These results produced a net interest margin of 4.32% for the quarter-ended December 2006, as compared to 4.57% for the same period in 2005. The net interest income for the full year-ended December 2006 was $83.1 million, an increase of $15.6 million, or 23% as compared to the same period in 2005. These results produced a net interest margin of 4.38%, as compared to 4.47% for the same period in 2005.

For the quarter-ended December 2006, gross loan interest income was $41.8 million, an increase of $12.6 million, or 43% as compared to the same period in 2005. The effective yield of the loan portfolio in the fourth quarter 2006 was 9.03%. Gross loan interest income for the full year-ended December 2006 was $146.2 million, producing an effective yield on the loan portfolio of 8.95%, as compared to $98.3 million and 8.12% respectively, for the full year-ended December 2005.

Total net revenues (net interest income before provision for loan losses and other operating income) for the quarter-ended December 2006 was $24.3 million, an increase of $4.4 million, or 22% as compared to the same period in 2005. Total net revenues for the year-ended December 2006 were $88.7 million, as compared to $72.8 million for the same period in 2005.

The total provision for loan losses for the quarter-ended December 2006 was $1.1 million, principally due to the organic loan growth within the period of $106.2 million, net of unearned income. By comparison, the provision for loan losses was $1.2 million for the quarter-ended September 2006 and $0.5 million for the quarter-ended December 2005. Net charge-offs for the quarter-ended December 2006 were $0.1 million, as compared to approximately $8,000 in net recoveries for the same period in 2005.

The total provision for loan losses for the full year-ended December 2006 was $4.1 million, as compared to $1.9 million for the full year-ended December 2005. The full year provision for 2006 was principally due to the significant organic loan growth, which approximated $410.4 million (excluding the $118.8 million in loans acquired through the Rancho Bank transaction). Net charge-offs for the full year-ended December 2006 were $0.3 million, as compared to $0.1 million for the full year-ended December 2005.

The provision for loan losses in 2006, along with the acquisition of Rancho Bank, increased the allowance for loan losses to $19.7 million, or 1.03% of the gross loan portfolio at December 2006. The company also has a reserve for unfunded loan commitments, principally related to its construction loans, in the amount of $1.4 million, producing total reserves as a percent of gross loans outstanding of 1.11% at December 2006.

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. Unrecognized interest income on these loans amounted to approximately $0.8 million as of December 31, 2006. The company is continuing its process in recovering these loans and the corresponding non-accrued income. The loans are well secured and we expect to collect all principal and interest on these loans.

Total operating expenses for the quarter-ended December 2006 were $14.0 million, as compared to $12.0 million for the same period in 2005. Total operating expenses for the full year-ended December 2006 were $51.0 million, as compared to $38.7 million for the same period in 2005. During the fourth quarter 2006, the company incurred approximately $0.6 million in expenses related to the Rancho Bank acquisition, principally related to contractual obligations to certain former executives of Rancho Bank continuing as employees of Vineyard. The company incurred approximately $0.7 million of Rancho Bank related acquisition expenses during the third quarter 2006. These amounts will be significantly reduced in future quarters and terminated by the end of 2007.

The company's efficiency ratio, which measures the relationship of total operating expenses and total operating income, was 58%, including those expenses discussed above, for the quarter-ended December 2006, as compared to 60% for the same period in 2005. The efficiency ratio for the full year-ended December 2006 was 58%, as compared to 53% for the full year-ended December 2005.

Balance Sheet

At December 31, 2006, loans outstanding, net of unearned income, were $1.9 billion, as compared to the December 31, 2005 level of $1.4 billion. The largest dollar components of this increase in 2006 are centered in the established commercial real estate and single family residential ("SFR") coastal construction product lines, followed by commercial construction financings, business lending and consumer loans.

The company's specialty lending groups continue to be focused on the origination of construction lending opportunities within the southern California market place. During the quarter-ended December 31, 2006, the company originated $165.4 million in construction loans, consisting of the company's three sub-specialty construction lending disciplines: SFR coastal construction with $67.9 million, SFR tract construction with $28.7 million and commercial real-estate construction with $68.8 million. At December 31, 2006, the total unfunded amounts for the company's three sub-specialty construction disciplines were $265.0 million in SFR coastal construction, $150.7 million in SFR tract construction and $119.1 million in commercial real-estate construction.

The SFR coastal construction group has been one of the catalysts for Vineyard's success since 2000 and continues to significantly contribute to its current operations. The SFR coastal construction group serves the southern California high-end construction housing market with projects primarily located along the ocean communities within Los Angeles County, reaching along the coast as far north as Santa Barbara and south into Orange County. These types of construction loans are made to independent builders, who cater to the luxury home buyers, and generally range from $1.0 million to $5.0 million. In today's dynamic real estate environment, the coastal group continues to see stability in its product, which is driven more by location and quality product than any other factor. This is a market segment that typically serves individuals with accumulated wealth.

During 2006, the SFR coastal construction group originated $434.1 million in loans corresponding to approximately 193 units. This is down from $497.3 million in commitments for 2005, and comparable to $395.7 million in commitments in 2004. The disbursed loan balance was $514.4 million as of December 31, 2006, net of participations sold of $86.7 million, as compared to $392.2 million at December 31, 2005 and $299.0 million at December 31, 2004, net of loan participations sold of $114.7 million and $59.6 million, respectively. There were no non-performing SFR coastal construction loans and no charge-offs on SFR coastal construction loans at and for each of the years ended December 31, 2006, 2005 and 2004.

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 December 2006, was $106.2 million, as compared to loan growth of $244.8 million in the third quarter 2006 (including $118.8 million acquired from Rancho Bank), $31.8 million in the second quarter 2006, and $146.4 million in the first quarter 2006. These quarterly loan growth amounts are net of loan participations sold of $16.2 million, $5.6 million, $71.6 million and $3.4 million, for the fourth quarter 2006, third quarter 2006, second quarter 2006 and first quarter 2006, respectively.

As the company continued its efforts to diversify its loan portfolio, for the quarter-ended and year-ended December 2006, it participated with other community banks approximately $16.2 million and $96.7 million in loans, respectively, with the majority of the participations in construction loan balances of approximately $73.4 million for the year-ended December 2006.

At December 31, 2006, total deposits were $1.8 billion, as compared to the December 31, 2005 level of $1.3 billion. Non-interest bearing demand deposits were $293.6 million at year-end December 2006, an increase of $138.9 million, or 90% over year-end December 2005. Money market deposits, principally concentrated in business relationships, were $562.6 million at year-end 2006, an increase of $148.4 million, or 36% over year-end December 2005.

The company's continuing efforts to build out existing and new banking centers have produced eight offices with deposits in excess of $100 million, four offices with deposit balances of $75 million to $100 million, and four offices with deposit balances of $30 million to $75 million. During the past eighteen months, the company has extended its reach into new markets with banking centers in Irvine (opened June 2005), San Diego (opened in July 2005), and San Rafael (opened in March 2006), with deposit balances in excess of $155 million, $108 million, and $89 million, respectively, in each location.

The company's interest-bearing deposits, whose average balances for the three months ended December 31, 2006 were $1.5 billion, produced an average cost of interest-bearing deposits of 4.62%. For the three months ended September 30, 2006, the company's interest-bearing deposits, whose average balances were $1.4 billion, produced an average cost of interest-bearing deposits of 4.43%. Despite this overall increase in the cost of interest-bearing deposits, the company's overall net interest margin was 4.32% for the three months ended December 31, 2006. For the three months ended September 30, 2006, the company's overall net interest margin was 4.33%.

Capital Resources

At December 31, 2006, total stockholders' equity of the company totaled $142.8 million, an increase of $42.8 million, or 43% as compared to December 31, 2005. The company's net book value per share of its common stock increased from $9.86 at December 31, 2005 to $13.08 per share at December 31, 2006. The tangible book value decreased during this same period from $9.68 to $8.70 per share due to $41.0 million in goodwill related to the Rancho Bank acquisition. For the quarter-ended and year-ended December 2006, the company declared cash dividends for its common stock of $0.7 million and $3.2 million, respectively. For the quarter-ended and year-ended December 2006, the company declared cash dividends for its preferred stock of $0.2 million and $0.9 million, respectively.

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 12.2% and 11.4% at December 31, 2006, 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 four loan production offices located in the counties of Los Angeles, Marin, Monterey, Orange, Riverside, San Bernardino, San Diego, 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)


                       December 31,   December 31,
                          2006           2005        $ Change    % Change
                       -----------    -----------    ---------   ---------

Assets
 Loans, net of
  unearned income      $ 1,902,244    $ 1,373,099    $ 529,145          39%
  Less allowance for
   loan losses             (19,689)       (13,762)      (5,927)         43%
                       -----------    -----------    ---------   ---------
   Net Loans             1,882,555      1,359,337      523,218          38%

 Investment securities     228,893        267,849      (38,956)        -15%
                       -----------    -----------    ---------   ---------
   Total Earnings
    Assets               2,111,448      1,627,186      484,262          30%
                       -----------    -----------    ---------   ---------

 Cash and cash
  equivalents               35,129         28,630        6,499          23%
 Premises and
  equipment, net            20,402         19,192        1,210           6%
 Goodwill and other
  intangibles               44,633          1,670       42,963        2573%
 Other assets               45,839         36,960        8,879          24%
                       -----------    -----------    ---------   ---------
     Total Assets      $ 2,257,451    $ 1,713,638    $ 543,813          32%
                       ===========    ===========    =========   =========


Liabilities and
 Stockholders' Equity
Liabilities
 Deposits
  Noninterest-bearing  $   293,572    $   154,664    $ 138,908          90%
  Interest-bearing       1,513,496      1,122,348      391,148          35%
                       -----------    -----------    ---------   ---------
   Total Deposits        1,807,068      1,277,012      530,056          42%

 Federal Home Loan
  Bank advances            126,000        214,000      (88,000)        -41%
 Other borrowings           40,000         10,000       30,000         300%
 Subordinated debt           5,000          5,000            -           0%
 Junior subordinated
  debentures               115,470         96,913       18,557          19%
 Other liabilities          21,142         10,728       10,414          97%
                       -----------    -----------    ---------   ---------
   Total Liabilities     2,114,680      1,613,653      501,027          31%

Stockholders' Equity
 Common stock equity       142,784        101,869       40,915          40%
 Preferred stock
  equity                     9,665          9,665            -           0%
 Unallocated ESOP
  shares                    (5,765)        (6,304)         539          -9%
 Cumulative other
  comprehensive loss        (3,913)        (5,245)       1,332         -25%
                       -----------    -----------    ---------   ---------
   Total Stockholders'
    Equity                 142,771         99,985       42,786          43%
                       -----------    -----------    ---------   ---------
     Total Liabilities
      and Stockholders'
      Equity           $ 2,257,451    $ 1,713,638    $ 543,813          32%
                       ===========    ===========    =========   =========

Total non-performing
 loans/Gross loans           0.88% (1)      0.07% (1)

Number of shares of
 common stock
 outstanding            10,172,889 (2)  9,159,203 (2)

Net book value of
 common stock (3)      $     13.08    $      9.86
Tangible book value of
 common stock (4)      $      8.70    $      9.68
Net book value of
 common stock,
 excluding other
 comprehensive
 loss (3)              $     13.47    $     10.43


(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 December 31, 2006 and
     December 31, 2005 excludes 245,547 and 268,487 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 BALANCE SHEETS
             (dollars in thousands, except per share amounts)
                                (unaudited)


                       December 31,  September 30,
                          2006           2006        $ Change    % Change
                       -----------    -----------    ---------   ---------

Assets
 Loans, net of
  unearned income      $ 1,902,244    $ 1,796,064    $ 106,180           6%
  Less allowance for
   loan losses             (19,689)       (18,740)        (949)          5%
                       -----------    -----------    ---------   ---------
   Net Loans             1,882,555      1,777,324      105,231           6%

 Investment securities     228,893        235,373       (6,480)         -3%
                       -----------    -----------    ---------   ---------
   Total Earnings
    Assets               2,111,448      2,012,697       98,751           5%
                       -----------    -----------    ---------   ---------

 Cash and cash
  equivalents               35,129         29,761        5,368          18%
 Premises and
  equipment, net            20,402         21,162         (760)         -4%
 Goodwill and other
  intangibles               44,633         45,487         (854)         -2%
 Other assets               45,839         44,003        1,836           4%
                       -----------    -----------    ---------   ---------
     Total Assets      $ 2,257,451    $ 2,153,110    $ 104,341           5%
                       ===========    ===========    =========   =========


Liabilities and
 Stockholders' Equity
Liabilities
 Deposits
  Noninterest-bearing  $   293,572    $   254,534    $  39,038          15%
  Interest-bearing       1,513,496      1,458,905       54,591           4%
                       -----------    -----------    ---------   ---------
   Total Deposits        1,807,068      1,713,439       93,629           5%

 Federal Home Loan
  Bank advances            126,000        127,000       (1,000)         -1%
 Other borrowings           40,000         35,500        4,500          13%
 Subordinated debt           5,000          5,000            -           0%
 Junior subordinated
  debentures               115,470        115,470            -           0%
 Other liabilities          21,142         20,117        1,025           5%
                       -----------    -----------    ---------   ---------
   Total Liabilities     2,114,680      2,016,526       98,154           5%

Stockholders' Equity
 Common stock equity       142,784        137,799        4,985           4%
 Preferred stock
  equity                     9,665          9,665            -           0%
 Unallocated ESOP
  shares                    (5,765)        (5,898)         133          -2%
 Cumulative other
  comprehensive loss        (3,913)        (4,982)       1,069         -21%
                       -----------    -----------    ---------   ---------
   Total Stockholders'
    Equity                 142,771        136,584        6,187           5%
                       -----------    -----------    ---------   ---------
     Total Liabilities
      and Stockholders'
      Equity           $ 2,257,451    $ 2,153,110    $ 104,341           5%
                       ===========    ===========    =========   =========

Total non-performing
 loans/Gross loans           0.88% (1)       0.80% (1)

Number of shares of
 common stock
 outstanding            10,172,889 (2)  10,106,606 (2)

Net book value of
 common stock (3)      $     13.08    $     12.56
Tangible book value of
 common stock (4)      $      8.70    $      8.06
Net book value of
 common stock,
 excluding other
 comprehensive
 loss (3)              $     13.47    $     13.05


(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 December 31, 2006 and
     September 30, 2006 excludes 245,547 and 251,227 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
                                   December 31,
                             -----------------------
                                2006         2005      $ Change   % Change
                             ----------   ----------   --------   --------
Interest Income
 Loans, including fees       $   41,818   $   29,210   $ 12,608         43%
 Investment securities            3,035        3,091        (56)        -2%
                             ----------   ----------   --------   --------
  Total Interest Income          44,853       32,301     12,552         39%

Interest Expense
 Deposits                        17,722        8,863      8,859        100%
 Borrowings and debt
  obligations                     4,331        4,670       (339)        -7%
                             ----------   ----------   --------   --------
  Total Interest Expense         22,053       13,533      8,520         63%

Net Interest Income              22,800       18,768      4,032         21%
Provision for loan losses         1,050          536        514         96%
                             ----------   ----------   --------   --------
 Net interest income after
  provision for loan losses      21,750       18,232      3,518         19%

Other Income
 Fees and service charges           558          227        331        146%
 Gain on sale of SBA loans
  and SBA broker fee income         783          548        235         43%
 Gain on sale of other loans         34          262       (228)       -87%
 Other income                       159           86         73         85%
                             ----------   ----------   --------   --------
  Total Other Income              1,534        1,123        411         37%

  Gross Operating Income         23,284       19,355      3,929         20%

Operating Expenses
 Salaries and benefits            7,943        7,011        932         13%
 Occupancy and equipment          2,584        2,129        455         21%
 Other operating expense          3,485        2,872        613         21%
                             ----------   ----------   --------   --------
  Total Operating Expenses       14,012       12,012      2,000         17%

Earnings before income taxes      9,272        7,343      1,929         26%
Income tax provision              3,782        2,886        896         31%
                             ----------   ----------   --------   --------
  Net Earnings               $    5,490   $    4,457   $  1,033         23%
                             ==========   ==========   ========   ========

Weighted average shares
 outstanding used in
 diluted EPS calculation     10,402,959    9,637,983

Earnings per common share
 Basic                       $     0.52   $     0.46   $   0.06         13%
 Diluted                     $     0.51   $     0.44   $   0.07         16%

Efficiency Ratio(5)                  58%          60%


(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)


                                   Year Ended
                                   December 31,
                             -----------------------
                                2006         2005      $ Change   % Change
                             ----------   ----------   --------   --------
Interest Income
 Loans, including fees       $  146,183   $   98,303   $ 47,880         49%
 Investment securities           12,137       12,556       (419)        -3%
                             ----------   ----------   --------   --------
  Total Interest Income         158,320      110,859     47,461         43%

Interest Expense
 Deposits                        57,858       28,008     29,850        107%
 Borrowings and debt
  obligations                    17,372       15,337      2,035         13%
                             ----------   ----------   --------   --------
  Total Interest Expense         75,230       43,345     31,885         74%

Net Interest Income              83,090       67,514     15,576         23%
Provision for loan losses         4,125        1,886      2,239        119%
                             ----------   ----------   --------   --------
 Net interest income after
  provision for loan losses      78,965       65,628     13,337         20%

Other Income
 Fees and service charges         1,825        1,413        412         29%
 Gain on sale of SBA loans
  and SBA broker fee income       2,839        2,903        (64)        -2%
 Gain on sale of other loans        456          660       (204)       -31%
 Other income                       502          329        173         53%
                             ----------   ----------   --------   --------
  Total Other Income              5,622        5,305        317          6%

  Gross Operating Income         84,587       70,933     13,654         19%

Operating Expenses
 Salaries and benefits           28,764       21,802      6,962         32%
 Occupancy and equipment          9,247        7,266      1,981         27%
 Other operating expense         13,006        9,678      3,328         34%
                             ----------   ----------   --------   --------
  Total Operating Expenses       51,017       38,746     12,271         32%

Earnings before income taxes     33,570       32,187      1,383          4%
Income tax provision             13,825       13,276        549          4%
                             ----------   ----------   --------   --------
  Net Earnings               $   19,745   $   18,911   $    834          4%
                             ==========   ==========   ========   ========

Weighted average shares
 outstanding used in
 diluted EPS calculation      9,997,120    9,744,474

Earnings per common share
 Basic                       $     1.95   $     1.97   $  (0.02)       -1%
 Diluted                     $     1.89   $     1.89   $      -         0%

Efficiency Ratio(5)                  58%          53%

(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 December 31,
                                     -------------------------------------
                                                     2006
                                     -------------------------------------
                                       Average                  Average
                                       Balance      Interest   Yield/Cost
                                     -----------  ------------ -----------
Assets
 Gross loans (6)                     $ 1,837,749  $     41,818        9.03%
 Investment securities (7)               257,711         3,035        4.71%
                                     -----------  ------------
    Total interest-earning assets      2,095,460        44,853        8.50%
 Other assets                            128,286
 Less: allowance for loan losses         (18,863)
                                     -----------
    Total average assets             $ 2,204,883
                                     ===========

Liabilities and Stockholders' Equity
 Interest-bearing deposits (8)       $ 1,521,213        17,722        4.62%
 FHLB advances                           109,971         1,347        4.86%
 Other borrowings                         26,950           531        7.71%
 Subordinated debt                         5,000           110        8.54%
 Junior subordinated debentures          115,470         2,343        7.94%
                                     -----------  ------------
    Total interest-bearing
     liabilities                       1,778,604        22,053        4.92%
                                                  ------------
 Demand deposits                         264,335
 Other liabilities                        22,996
                                     -----------
    Total average liabilities          2,065,935
 Preferred stock equity                    9,665
 Common stock equity, net of
  cumulative other comprehensive
  loss                                   129,283
                                     -----------
    Stockholders' equity                 138,948
                                     -----------
    Total liabilities and
     stockholders' equity            $ 2,204,883
                                     ===========

Net interest spread (9)                                               3.58%
                                                               ===========
Net interest margin (10)                          $     22,800        4.32%
                                                  ============ ===========


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



                                        Three Months Ended December 31,
                                     -------------------------------------
                                                     2005
                                     -------------------------------------
                                       Average                  Average
                                       Balance      Interest   Yield/Cost
                                     -----------  ------------ -----------
Assets
 Gross loans (6)                     $ 1,344,021  $     29,210        8.62%
 Investment securities (7)               286,063         3,091        4.29%
                                     -----------  ------------
    Total interest-earning assets      1,630,084        32,301        7.86%
 Other assets                             73,119
 Less: allowance for loan losses         (14,371)
                                     -----------
    Total average assets             $ 1,688,832
                                     ===========

Liabilities and Stockholders' Equity
 Interest-bearing deposits (8)       $ 1,028,303         8,863        3.42%
 FHLB advances                           284,273         2,866        4.00%
 Other borrowings                          1,652            27        6.48%
 Subordinated debt                         5,000            93        7.38%
 Junior subordinated debentures           96,913         1,684        6.89%
                                     -----------  ------------
    Total interest-bearing
     liabilities                       1,416,141        13,533        3.79%
                                                  ------------
 Demand deposits                         160,810
 Other liabilities                         9,904
                                     -----------
    Total average liabilities          1,586,855
 Preferred stock equity                    9,665
 Common stock equity, net of
  cumulative other comprehensive
  loss                                    92,312
                                     -----------
    Stockholders' equity                 101,977
                                     -----------
    Total liabilities and
     stockholders' equity            $ 1,688,832
                                     ===========

Net interest spread (9)                                               4.07%
                                                               ===========
Net interest margin (10)                          $     18,768        4.57%
                                                  ============ ===========


Return on Average Assets                                              1.05%
Return on Average Tangible
 Assets (11)                                                          1.05%
Return on Average Common Equity                                      19.16%
Return on Average Tangible Common
 Equity (12)                                                         19.51%
Net Charge-off's/Average Gross Loans                                  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
     applicable to common stock 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)


                                            Year Ended December 31,
                                     -------------------------------------
                                                     2006
                                     -------------------------------------
                                       Average                  Average
                                       Balance      Interest   Yield/Cost
                                     -----------  ------------ -----------
Assets
 Gross loans (6)                     $ 1,632,995  $    146,183        8.95%
 Investment securities (7)               263,214        12,137        4.61%
                                     -----------  ------------
    Total interest-earning assets      1,896,209       158,320        8.35%
 Other assets                             95,470
 Less: allowance for loan losses         (16,390)
                                     -----------
    Total average assets             $ 1,975,289
                                     ===========

Liabilities and Stockholders' Equity
 Interest-bearing deposits (8)       $ 1,341,767        57,858        4.31%
 FHLB advances                           156,430         7,353        4.70%
 Other borrowings                         14,799         1,119        7.45%
 Subordinated debt                         5,000           423        8.34%
 Junior subordinated debentures          108,606         8,477        7.70%
                                     -----------  ------------
    Total interest-bearing
     liabilities                       1,626,602        75,230        4.62%
                                                  ------------
 Demand deposits                         206,782
 Other liabilities                        19,867
                                     -----------
    Total average liabilities          1,853,251
 Preferred stock equity                    9,665
 Common stock equity, net of
  cumulative other comprehensive
  loss                                   112,373
                                     -----------
    Stockholders' equity                 122,038
                                     -----------
    Total liabilities and
     stockholders' equity            $ 1,975,289
                                     ===========

Net interest spread (9)                                               3.73%
                                                               ===========
Net interest margin (10)                          $     83,090        4.38%
                                                  ============ ===========


Return on Average Assets                                              1.00%
Return on Average Tangible Assets (11)                                1.01%
Return on Average Common Equity                                      17.57%
Return on Average Tangible Common
 Equity (12)                                                         21.44%
Net Charge-off's/Average Gross Loans                                  0.02%



                                            Year Ended December 31,
                                     -------------------------------------
                                                     2005
                                     -------------------------------------
                                       Average                  Average
                                       Balance      Interest   Yield/Cost
                                     -----------  ------------ -----------
Assets
 Gross loans (6)                     $ 1,210,673  $     98,303        8.12%
 Investment securities (7)               298,295        12,556        4.21%
                                     -----------  ------------
    Total interest-earning assets      1,508,968       110,859        7.35%
 Other assets                             66,376
 Less: allowance for loan losses         (13,737)
                                     -----------
    Total average assets             $ 1,561,607
                                     ===========

Liabilities and Stockholders' Equity
 Interest-bearing deposits (8)       $   934,362        28,008        3.00%
 FHLB advances                           290,731         9,624        3.31%
 Other borrowings                            447            28        6.26%
 Subordinated debt                         5,000           333        6.66%
 Junior subordinated debentures           84,089         5,352        6.36%
                                     -----------  ------------
    Total interest-bearing
     liabilities                       1,314,629        43,345        3.30%
                                                  ------------
 Demand deposits                         141,380
 Other liabilities                         9,122
                                     -----------
    Total average liabilities          1,465,131
 Preferred stock equity                    6,861
 Common stock equity, net of
  cumulative other comprehensive
  loss                                    89,615
                                     -----------
    Stockholders' equity                  96,476
                                     -----------
    Total liabilities and
     stockholders' equity            $ 1,561,607
                                     ===========

Net interest spread (9)                                               4.05%
                                                               ===========
Net interest margin (10)                          $     67,514        4.47%
                                                  ============ ===========


Return on Average Assets                                              1.21%
Return on Average Tangible Assets (11)                                1.21%
Return on Average Common Equity                                      21.10%
Return on Average Tangible Common
 Equity (12)                                                         21.55%
Net Charge-off's/Average Gross Loans                                  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
     applicable to common stock 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 31,   September 30,    June 30,
                                   2006 (13)      2006 (13)        2006
                                 -------------  -------------  -----------
Earning Assets
Loans
 Commercial and industrial       $     122,257  $     111,850  $    71,774
 Real estate construction:
  Single-family coastal                514,385        507,390      438,788
  Single-family tract                  152,060        132,966      125,806
  Commercial                           134,404         90,513       79,389
 Real estate mortgage:
  Commercial                           531,159        500,994      392,209
  Multi-family residential             222,470        241,113      195,406
  Land                                 112,418        104,082      107,666
  All other residential                 49,353         58,712       63,237
 Consumer loans                         65,914         51,785       36,136
 All other loans (including
  overdrafts)                               98            139          167
                                 -------------  -------------  -----------
                                     1,904,518      1,799,544    1,510,578
 Unearned premium on acquired
  loans                                  1,696          1,239        1,073
 Deferred loan fees                     (3,970)        (4,719)      (3,939)
                                 -------------  -------------  -----------
   Loans, net of unearned income     1,902,244      1,796,064    1,507,712
                                 -------------  -------------  -----------

Loans held-for-sale                          -              -       43,601
Investment securities                  228,893        235,373      243,316
                                 -------------  -------------  -----------
    Total Earning Assets,
     excluding Allowance
     for Loan Losses             $   2,131,137  $   2,031,437  $ 1,794,629
                                 =============  =============  ===========

Quarterly Unfunded Commitments   $     684,794  $     709,201  $   638,411
                                 =============  =============  ===========

Funding Liabilities
Deposits
 Non-interest bearing            $     293,572  $     254,534  $   177,090
 Money market                          562,622        506,532      478,056
 Savings and NOW                        70,741         75,787       48,243
 Time deposits                         880,133        876,586      822,167
                                 -------------  -------------  -----------
   Total Deposits                    1,807,068      1,713,439    1,525,556
                                 -------------  -------------  -----------

FHLB advances                          126,000        127,000       72,000
Other borrowings                        40,000         35,500            -
Subordinated debt                        5,000          5,000        5,000
Junior subordinated debentures         115,470        115,470      115,470
                                 -------------  -------------  -----------
    Total Funding Liabilities    $   2,093,538  $   1,996,409  $ 1,718,026
                                 =============  =============  ===========



                                   March 31,    December 31,
                                     2006           2005
                                 -------------  -------------
Earning Assets
Loans
 Commercial and industrial       $      65,690  $      54,757
 Real estate construction:
  Single-family coastal                456,832        392,183
  Single-family tract                  146,869        129,706
  Commercial                            56,047         61,392
 Real estate mortgage:
  Commercial                           371,085        321,821
  Multi-family residential             246,501        246,597
  Land                                  95,936         91,035
  All other residential                 60,782         64,426
 Consumer loans                         23,690         15,205
 All other loans (including
  overdrafts)                              366            207
                                 -------------  -------------
                                     1,523,798      1,377,329
 Unearned premium on acquired
  loans                                    743            484
 Deferred loan fees                     (5,028)        (4,714)
                                 -------------  -------------
   Loans, net of unearned income     1,519,513      1,373,099
                                 -------------  -------------

Loans held-for-sale                          -              -
Investment securities                  254,139        267,849
                                 -------------  -------------
    Total Earning Assets,
     excluding Allowance
     for Loan Losses             $   1,773,652  $   1,640,948
                                 =============  =============

Quarterly Unfunded Commitments   $     621,856  $     595,301
                                 =============  =============

Funding Liabilities
Deposits
 Non-interest bearing            $     173,975  $     154,664
 Money market                          454,017        414,216
 Savings and NOW                        47,455         45,223
 Time deposits                         705,638        662,909
                                 -------------  -------------
   Total Deposits                    1,381,085      1,277,012
                                 -------------  -------------

FHLB advances                          249,000        214,000
Other borrowings                        10,000         10,000
Subordinated debt                        5,000          5,000
Junior subordinated debentures          96,913         96,913
                                 -------------  -------------
    Total Funding Liabilities    $   1,741,998  $   1,602,925
                                 =============  =============

(13) Balances as of December 31, 2006 and September 30, 2006 include
     $118.8 million of loans acquired and $198.2 million of deposits
     assumed in the merger with Rancho Bank on July 31, 2006.

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