Mission Oaks Earnings Increase 56.1%


TEMECULA, Calif., Jan. 11, 2005 (PRIMEZONE) -- Mission Oaks National Bank (OTCBB:MKNB) posted record results in the fourth quarter of 2004 that boosted earnings for the year ended Dec. 31 to $1.6 million, an increase of 56.1 percent from a year ago.

In the fourth quarter, the Temecula-based community bank earned a record $589,000, or 31 cents a share, up 106.7 percent from the $285,000, or 15 cents a share, reported in the same period a year ago. Results from the fourth quarter of 2003 included 85,055 fewer average outstanding shares of common stock.

"In the quarter, Mission Oaks benefited from strong growth in interest and non-interest income," said Gary Votapka, Mission Oaks president and chief executive. "With no non-performing loans on the books, we look forward to 2005."

Interest income in the quarter reached $1.7 million, up from $1.2 million in the same quarter a year earlier. Non-interest income from the sale of loans, fees and mortgage originations grew 38.2 percent from a year ago to $958,000.

For all of 2004, Mission Oaks earned $1.6 million, or 83 cents, a share, up 56.1 percent from $1 million a year ago.

Assets in the 12-month period ended Dec. 31, 2004, grew 24.8 percent, or nearly $23 million, to $115.9 million.

Net loans increased $16.3 million, or 24.8 percent, to a record $82 million. Total deposits increased by $21 million, or 27.9 percent, to a record $96.1 million.

Annualized return on average assets (ROA), a ratio of profit to assets, reached 1.54 percent in 2004. Annualized return on average shareholders' equity (ROE), a ratio of profit to equity, reached 15.37 percent.

More than 350 similarly sized U.S. banks reported an average ROA and ROE of 1.19 percent and 12.57 percent, respectively, according to a Federal Deposit Insurance Corp. survey as of September 30, 2004.

Mission Oaks National Bank is an award-winning, community-based, federally chartered bank that is committed to serving consumers and businesses in Southern California. The bank offers personalized services and products through two full-service branch offices and loan production offices in San Diego and Phoenix. Mission Oaks plans to open a third branch in Ontario this summer.

For more on Mission Oaks National Bank visit its Web site at www.missionoaksbank.com.

Safe Harbor

Certain statements in this press release, including statements regarding the anticipated development and expansion of the Bank's business, and the intent, belief or current expectations of the Bank, its directors or its officers, are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, risks related to the local and national economy, the Bank's performance, regulatory matters and those discussed in filings by the Bank with the Office of the Comptroller of the Currency.



 MISSION OAKS NATIONAL BANK
 FOURTH QUARTER REPORT / DECEMBER 31, 2004

 ---------------------------------------------------------------------
 BALANCE SHEET
 ---------------------------------------------------------------------
 (all amounts in whole dollars except share and per share information)

                  December 31,  December 31,     Increase    Increase 
                     2004          2003         (Decrease)  (Decrease)
                  ------------  ------------    ----------  ----------
 ASSETS

  Cash and due
   from banks     $  1,425,000  $  2,791,000 ($  1,366,000)    -48.9%
  Due from
   banks -- time     1,089,000             0     1,089,000
  Federal funds
   sold              2,120,000     2,635,000      (515,000)    -19.5%
  Securities --
   available for
   sale             22,882,000    16,124,000     6,758,000

  Loans             83,013,000    66,538,000    16,475,000      24.8%
  Less allowance
   for loan
   losses           (1,050,000)     (840,000)     (210,000)     25.0%
                  ------------  ------------  ------------
  Loans, net        81,963,000    65,698,000    16,265,000      24.8%

  Premises and
   equipment, net      536,000       645,000      (109,000)    -16.9%
  SBA-Loan
   servicing
   asset/interest
   only strips         891,000       501,000       390,000      77.8%
  Cash surrender
   value of life
   insurance         2,625,000     2,510,000       115,000       4.6%
  Accrued
   interest and
   other assets      2,331,000     1,969,000       362,000      18.4%
                  ------------  ------------  ------------
                  $115,862,000  $ 92,873,000  $ 22,989,000      24.8%
                  ============  ============  ============

 LIABILITIES AND STOCKHOLDERS' EQUITY

  Demand deposits $ 32,748,000  $ 19,795,000  $ 12,953,000      65.4%
  Interest
   bearing
   deposits         63,342,000    55,327,000     8,015,000      14.5%
  Federal funds
   purchased and
   other
   borrowings        7,000,000     7,000,000             0
  Other
   liabilities       1,255,000     1,034,000       221,000      21.4%
                  ------------  ------------  ------------
   Total
    liabilities    104,345,000    83,156,000    21,189,000      25.5%


  Total
   stockholders'
   equity           11,517,000    9,717,000      1,800,000      18.5%
                  ------------  ------------  ------------
                  $115,862,000  $ 92,873,000  $ 22,989,000      24.8%
                  ============  ============  ============


 ---------------------------------------------------------------------
 STATEMENT OF INCOME
 ---------------------------------------------------------------------

                3 Mos ended   3 Mos ended   12 Mos ended  12 Mos ended
                December 31,  December 31,  December 31,  December 31,
                   2004          2003          2004           2003
                ------------  ------------  ------------  ------------
 Interest
  income         $1,672,000    $1,174,000    $5,708,000    $4,172,000
 Interest
  expense           292,000       197,000     1,007,000       842,000
                 ----------    ----------    ----------    ----------
 Net
  interest
  income          1,380,000       977,000     4,701,000     3,330,000
 Provision
  for loan
  losses            103,000       146,000       213,000       366,000
                 ----------    ----------    ----------    ----------
 Net
  interest
  income
  after
  provision
  for loan
  losses          1,277,000       831,000     4,488,000     2,964,000
 Other
  income            958,000       693,000     2,781,000     2,024,000
 Other
  expense         1,249,000     1,046,000     4,623,000     3,612,000
                 ----------    ----------    ----------    ----------
 Earnings
  before
  income
  taxes             986,000       478,000     2,646,000     1,376,000
 Income
  taxes             397,000       193,000     1,043,000       349,000
                 ----------    ----------    ----------    ----------
  Net
   earnings      $  589,000    $  285,000    $1,603,000    $1,027,000
                 ==========    ==========    ==========    ==========


 Average
  common
  shares
  outstanding     1,930,131     1,845,076     1,924,590     1,638,988
 Basic
  earnings
  per share      $     0.31    $     0.15    $     0.83    $     0.63
 Return on
  average
  assets
  (annualized)         2.03%         1.33%         1.54%         1.37%
 Return on
  average
  equity
  (annualized)        21.13%        12.37%        15.37%        13.28%

 ---------------------------------------------------------------------
 SELECTED RATIOS
 ---------------------------------------------------------------------
                              December 31, 2004     December 31, 2003
                              -----------------     -----------------
 Leveraged capital ratio            9.79%                 11.51%
 Total risk based capital 
  ratio                            14.14%                 15.46%
 Allowance for loan losses 
  as a percent of total 
  loans                             1.25%                  1.25%
 Nonperforming assets as a 
  percent of total assets           0.00%                  0.00%
 Loan to deposit ratio             87.38%                 89.32% 


            

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