Mission Oaks National Bank Reports Fourth Quarter Results


TEMECULA, Calif., Jan. 15, 2003 (PRIMEZONE) -- Mission Oaks National Bank (OTCBB:MKNB) benefited from strong loan and asset growth to finish 2002, its second full year, with an annual profit of $337,000, or 44 cents a share.

In 2001 the Temecula-based community bank lost $647,000, or 85 cents a share. It typically takes new banks as long as three years to post an annual profit.

In the fourth quarter, Mission Oaks earned $280,000, or 37 cents a share, compared with a loss of $95,000, or 12 cents a share, a year ago. It was the second consecutive profitable quarter for Mission Oaks, which posted a profit of $82,000 in the third quarter.

"The bank in the second half of the year clearly benefited from a growing acceptance of our personalized banking services and the vibrant economy of Southwest Riverside and Northern San Diego counties," said Gary Votapka, Mission Oaks president and chief executive officer.

Total assets as of Dec. 31, 2002 were $58.4 million, up 75 percent from a year ago.

Deposits at year-end reached $51.6 million, nearly double from a year ago. Loans also grew nearly two-fold, from $22.9 million to $43.9 million.

"We continue to see strong demand for construction and business loans in our region despite economic sluggishness elsewhere," said Keith Johnson, Mission Oaks executive vice president and chief operating officer.

Net interest income for the year was $2 million, up from $1.2 million a year earlier.

The fourth quarter capped a remarkable year for Mission Oaks, a traditional community bank that opened its doors in November 2000.

Mission Oaks in June opened its second office on Highway 79 South in south Temecula. It is the only full-service bank branch serving a fast growing part of the city.

During the year, the bank also expanded small business lending with the addition of loan offices in San Diego County and Arizona. By year-end Mission Oaks was the fifth busiest small business lender in Riverside County and the 22nd busiest in Southern California, according to the Small Business Administration.

Mission Oaks National Bank is a full-service community bank that serves Southwest Riverside and Northern San Diego counties.

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

Safe Harbor

Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to the company's current expectations regarding future operating results and growth in loans, deposits, and assets. These forward looking statements are subject to certain risks and uncertainties that could cause the actual results, performance or achievements to differ materially from those expressed, suggested or implied by the forward-looking statements.

These risks and uncertainties include, but are not limited to: (1) the impact of changes in interest rates, a decline in economic conditions and increased competition among financial service providers on the company's results of operation, (2) the company's ability to continue its internal growth rate, (3) the company's ability to build net interest spread, (4) the quality of the company's earning assets, and (5) government regulations.


 MISSION OAKS NATIONAL BANK
 FOURTH QUARTER REPORT / DECEMBER 31, 2002

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


                                                  Increase   Increase
                    Dec. 31, 2002  Dec. 31, 2001 (Decrease) (Decrease)
                      ----------    ----------    ----------   ------


 ASSETS

 Cash and due from
   banks             $ 2,291,000   $   800,000   $ 1,491,000    186.4%
 Due from banks -
  time                   694,000             0       694,000        --
 Federal funds sold    1,340,000     1,910,000      (570,000)   -29.8%
 Securities - 
  available for sale   9,003,000     6,010,000     2,993,000        --
 Securities - 
  held to maturity             0     1,000,000    (1,000,000)  -100.0%

 Loans                43,984,000    22,952,000    21,032,000     91.6%
 Less allowance for
  loan losses           (495,000)     (289,000)     (206,000)    71.3%
                      ----------    ----------    ----------   ------
 Loans, net           43,489,000    22,663,000    20,826,000     91.9%

 Bank premises and
  equipment, net         716,000       515,000       201,000     39.0%
 Other real estate
  owned, net                   0             0             0        --
 SBA - Loan servicing
  asset                   46,000             0        46,000        --
 Other assets            861,000       494,000       367,000     74.3%
                      ----------    ----------    ----------   ------
                     $58,440,000   $33,392,000   $25,048,000     75.0%
                      ==========    ==========    ==========   ======

 LIABILIITIES AND STOCKHOLDERS' EQUITY

 Demand deposits     $12,684,000   $ 6,355,000   $ 6,329,000     99.6%
 Interest bearing
  deposits            38,432,000    20,477,000    17,955,000     87.7%
 Federal funds
  purchased and
  other borrowings             0             0             0        --
 Other liabilities       504,000       157,000       347,000    221.0%
                      ----------    ----------    ----------   ------
  Total liabilities   51,620,000    26,989,000    24,631,000     91.3%


 Total stockholders'
  equity               6,820,000     6,403,000       417,000      6.5%
                      ----------    ----------    ----------   ------
                     $58,440,000   $33,392,000   $25,048,000     75.0%
                      ==========    ==========    ==========   ======


 STATEMENT OF OPERATIONS

                         3 Mos      3 Mos      12 Mos        12 Mos
                         ended      ended      ended         ended
                       Dec. 31,    Dec. 31,   Dec. 31,      Dec. 31, 
                         2002        2001       2002          2001
                        -------    -------    ---------     ---------

 Interest income       $810,000   $536,000   $2,645,000    $1,654,000
 Interest expense       195,000    142,000      609,000       479,000
                        -------    -------    ---------     ---------
 Net interest income    615,000    394,000    2,036,000     1,175,000
 Provision for
  loan losses            45,000     65,000      205,000       260,000
 Other income           245,000    110,000      740,000       191,000
 Other expense          759,000    534,000    2,458,000     1,753,000
                        -------    -------    ---------     ---------
 Earnings (loss)
  before income
  taxes                  56,000    (95,000)     113,000      (647,000)
 Income taxes
  (benefit)            (224,000)         0     (224,000)            0
                        -------    -------    ---------     ---------
 Net earnings
  (loss)               $280,000   ($95,000)  $  337,000     ($647,000)
                        =======    =======    =========     =========


 Average common
  shares
  outstanding           763,471    760,921      763,085       760,921
 Basic earnings
 (loss) per share      $   0.37     ($0.12)  $     0.44        ($0.85)
 Diluted earnings
  (loss) per share     $   0.33     ($0.12)  $     0.40        ($0.85)
 Return on average
  assets (annualized)      1.97%     -1.13%        0.73%        -2.51%
 Return on average
  equity (annualized)     16.98%     -5.80%        5.22%        -9.68%

 SELECTED RATIOS
                              December 31, 2002     December 31, 2001
                              -----------------     -----------------
 Leveraged capital ratio            12.05%                19.30%
 Total risk based capital ratio     15.62%                26.10%
 Allowance for loan losses
  as a percent of total loans        1.12%                 1.26%
 Nonperforming assets as a
  percent of total assets            0.00%                 0.00%
 Loan to deposit ratio              86.33%                85.71%


            

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