Mission Oaks National Bank Reports Record Results for 2003


TEMECULA, Calif., Jan. 21, 2004 (PRIMEZONE) -- Mission Oaks National Bank (OTCBB:MKNB) finished 2003 on a strong note by posting record results.

The Temecula-based community bank earned a record $1.03 million, or $1.25 a share, for the year ended Dec. 31. That was a 204 percent increase from the profit of $337,000, or 44 cents a share, the bank posted a year ago. 2003 results included a tax credit of $214,000 and 2002 results included a tax credit of 224,000 arising from a net operating loss carryforward.

Mission Oaks, which is entering its fourth year, benefited from strong loan and deposit growth.

"The Bank continues to attract good, healthy business," said Gary Votapka, president and chief executive. "We have no non-performing assets on our books."

For the year, net interest income reached $3.3 million, up 63.6 percent, or $1.3 million , from $2.03 million a year ago.

The Bank also benefited from increased non-interest income from the sale of loans, fees and mortgage originations. Non-interest income for the year was $2.02 million, up nearly three-fold from the $740,000 posted a year ago. A strong housing market and the lowest interest rates in four decades helped boost Mission Oaks' mortgage lending operation.

Assets at year-end were $92.7 million, up 58.6 percent from $58.4 million a year ago. Total deposits reached $75.1 million compared with $51.1 million a year ago.

Loans at year-end were $66.5 million, up 51.3 percent from $44 million 12 months earlier.

Mission Oaks finished the year with a return on average assets (ROA) of 1.37 percent and return on average equity (ROE) of 13.28 percent. Nearly 500 similarly sized U.S. banks reported an average ROA and ROE of 0.98 percent and 9.65 percent, respectively, according to Federal Deposit Insurance Corp. data for the period ended Sept. 30, 2003.

In the fourth quarter, Mission Oaks earned $285,000, or 31 cents a share. A year ago the bank had a profit of $280,000, or 37 cents a share, but results included a tax credit of $224,000. A warrant exercise program offered to Mission Oaks shareholders in the quarter increased the number of shares outstanding from 763,471 a year ago to 959,641.

Mission Oaks National Bank is an award-winning, community-based, federally chartered bank that is committed to serving consumers and businesses in Southwest Riverside and Northern San Diego counties. The bank offers personalized services and products through two full-service branch offices and loan production offices in San Diego and Phoenix.

For more on Mission Oaks National Bank visit its Web site at: http://www.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, 2003

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

                                              Increase      Increase
                December 31,  December 31,   (Decrease)    (Decrease)
                    2003          2002
                ------------  ------------  ------------  ------------
 ASSETS

   Cash and due
    from banks   $2,791,000    $2,291,000      $500,000         21.8%
   Due from
    banks -
    time                  0       694,000      (694,000)
   Federal
    funds sold    2,635,000     1,340,000     1,295,000         96.6%
   Securities -
    available
    for sale     16,124,000     9,003,000     7,121,000
   Securities -
    held to
    maturity              0             0             0          0.0%

   Loans         66,538,000    43,984,000    22,554,000         51.3%
   Less allow-
    ance for
    loan losses    (840,000)     (495,000)     (345,000)        69.7%
                ------------  ------------  ------------
   Loans, net    65,698,000    43,489,000    22,209,000         51.1%

   Premises and
    equipment,
    net             645,000       716,000       (71,000)        -9.9%
   Federal
    Reserve
    Bank and
    other bank
    stocks          662,000       267,000       395,000        147.9%
   Deferred tax
    asset           240,000       230,000        10,000          4.3%
   Accrued
    interest
    and other
    assets        3,865,000       396,000     3,469,000        876.0%
                ------------  ------------  ------------
                $92,660,000   $58,426,000   $34,234,000         58.6%
                ============  ============  ============

 LIABILIITIES AND STOCKHOLDERS' EQUITY

   Demand
    deposits    $19,795,000   $12,684,000    $7,111,000         56.1%
   Interest-
    bearing
    deposits     55,327,000    38,432,000    16,895,000         44.0%
   Federal
    funds
    purchased
    and other
    borrowings    7,000,000             0     7,000,000
   Other
    liabilities     821,000       490,000       331,000         67.6%
                ------------  ------------  ------------
     Total
      liabili-
      ties       82,943,000    51,606,000    31,337,000         60.7%


   Total
    stock-
    holders'
    equity        9,717,000     6,820,000     2,897,000         42.5%
                ------------  ------------  ------------
                $92,660,000   $58,426,000   $34,234,000         58.6%
                ============  ============  ============


 ---------------------------------------------------------------------
 STATEMENT OF OPERATIONS
 ---------------------------------------------------------------------

                3 Mos ended   3 Mos ended   12 Mos ended  12 Mos ended
                December 31,  December 31,  December 31,  December 31,
                    2003          2002          2003          2002
                ------------  ------------  ------------  ------------
   Interest
    income       $1,174,000      $810,000    $4,172,000    $2,645,000
   Interest
    expense         197,000       195,000       842,000       609,000
                ------------  ------------  ------------  ------------
   Net interest
    income          977,000       615,000     3,330,000     2,036,000
   Provision
    for loan
    losses          146,000        45,000       366,000       205,000
                ------------  ------------  ------------  ------------
   Net interest
    income
    after
    provision
    for loan
    losses          831,000       570,000     2,964,000     1,831,000
   Other income     693,000       245,000     2,024,000       740,000
   Other
    expense       1,046,000       759,000     3,612,000     2,458,000
                ------------  ------------  ------------  ------------
   Earnings
    (loss)
    before
    income
    taxes           478,000        56,000     1,376,000       113,000
   Income taxes
    (benefit)       193,000      (224,000)      349,000      (224,000)
                ------------  ------------  ------------  ------------
     Net
      earnings
      (loss)       $285,000      $280,000    $1,027,000      $337,000
                ============  ============  ============  ============


   Average
    common
    shares
    outstanding     922,538       763,471       819,494       763,085
   Basic
    earnings
    (loss)
    per share         $0.31         $0.37         $1.25         $0.44
   Return on
    average
    assets
    (annual-
    ized)             1.33%         1.97%         1.37%         0.73%
   Return on
    average
    equity
    (annual-
    ized)            12.37%        16.98%        13.28%         5.22%

 ---------------------------------------------------------------------
 SELECTED RATIOS
 ---------------------------------------------------------------------

                December 31,  December 31,
                    2003          2002
                ------------  ------------
   Leveraged
    capital
    ratio            11.51%        12.05%
   Total risk-
    based
    capital
    ratio            15.46%        15.62%
   Allowance
    for loan
    losses as a
    percent of
    total loans       1.25%         1.12%
   Nonperform-
    ing assets
    as a per-
    cent of
    total
    assets            0.00%         0.00%
   Loan to
    deposit
    ratio            89.32%        86.33%


            

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