----

----

| California                                                     |   | 77-0446957                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification No.) |
|                                                           |   |                                 |
| 445 Pine Avenue, Goleta, California                            |   | 93117                                |
| (Address of principal executive offices)                       |   | (Zip code)                           |

| Title of each class        |   | Name of each exchange on which registered |
|----------------------------|--------|-------------------------------------------|
| Common Stock, No Par Value |   | Nasdaq Global Market                      |

| Large accelerated filer o                                           | Accelerated filer o         |
|---------------------------------------------------------------------|-----------------------------|
|                                                                |                        |
| Non-accelerated filer (Do not check if smaller reporting company) o | Smaller reporting company x |

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INDEX

|       |        |                                                                                                               |   |   |
|------------|-------------|--------------------------------------------------------------------------------------------------------------------|--------|--------|
| Part I     |        |                                                                                                               |   | Page   |
|       |        |                                                                                                               |   |   |
|       | Item 1.     | Business                                                                                                           |   | 4      |
|       | Item 1A.    | Risk Factors                                                                                                       |   | 6      |
|       | Item 1B.    | Unresolved Staff Comments                                                                                          |   | 13     |
|       | Item 2.     | Properties                                                                                                         |   | 13     |
|       | Item 3.     | Legal Proceedings                                                                                                  |   | 13     |
|       | Item 4.     | Submission of Matters to a Vote of Security Holders                                                                |   | 13     |
|       |        |                                                                                                               |   |   |
| Part II    |        |                                                                                                               |   |   |
|       |        |                                                                                                               |   |   |
|       | Item 5.     | Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities |   | 14     |
|       | Item 6.     | Selected Financial Data                                                                                            |   | 16     |
|       | Item 7.     | Management’s Discussion and Analysis of Financial Condition and Results of Operations                        |   | 17     |
|       | Item 7A.    | Quantitative and Qualitative Disclosure about Market Risk                                                          |   | 49     |
|       | Item 8.     | Consolidated Financial Statements and Supplementary Data                                                           |   | F1     |
|       | Item 9.     | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure                               |   | 76     |
|       | Item 9A(T). | Controls and Procedures                                                                                            |   | 76     |
|       | Item 9B.    | Other Information                                                                                                  |   | 76     |
|       |        |                                                                                                               |   |   |
| Part III   |        |                                                                                                               |   |   |
|       |        |                                                                                                               |   |   |
|       | Item 10.    | Directors, Executive Officers and Corporate Governance                                                             |   | 76     |
|       | Item 11.    | Executive Compensation                                                                                             |   | 77     |
|       | Item 12.    | Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters                     |   | 77     |
|       | Item 13.    | Certain Relationships and Related Transactions and Director Independence                                           |   | 77     |
|       | Item 14.    | Principal Accounting Fees and Services                                                                             |   | 77     |
|       |        |                                                                                                               |   |   |
| Part IV    |        |                                                                                                               |   |   |
|       |        |                                                                                                               |   |   |
|       | Item 15.    | Exhibits, Financial Statement Schedules                                                                            |   | 77     |
|       |        |                                                                                                               |
| Signatures |        | 80                                                                                                                 |

----

Index

PART I

ITEM 1.  BUSINESS

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Index

----

Index

ITEM 1A.  RISK FACTORS

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Index

----

Index

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Index

|   | ● | loan delinquencies may increase; |
|--------|---------|----------------------------------|

|   | ● | problem assets and foreclosures may increase; |
|--------|---------|-----------------------------------------------|

|   | ● | demand for our products and services may decline; and |
|--------|---------|-------------------------------------------------------|

|   | ● | collateral for loans made by us, especially real estate, may decline in value, in turn reducing customers’ borrowing power, and reducing the value of assets and collateral associated with our existing loans. |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Index

|   | ● | the amount of capital we must maintain;                                |
|--------|---------|------------------------------------------------------------------------|
|   |    |                                                                   |
|   | ● | the types of activities in which we can engage;                        |
|   |    |                                                                   |
|   | ● | the types and amounts of investments we can make;                      |
|   |    |                                                                   |
|   | ● | the locations of our offices;                                          |
|   |    |                                                                   |
|   | ● | insurance of our deposits and the premiums paid for the insurance; and |
|   |    |                                                                   |
|   | ● | how much cash we must set aside as reserves for deposits.              |

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Index

----

Index

----

Index

ITEM 1B.  UNRESOLVED STAFF COMMENTS

ITEM 2.  PROPERTIES

ITEM 3.  LEGAL PROCEEDINGS

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

----

Index

PART II

| ITEM 5. | MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
|---------|------------------------------------------------------------------------------------------------------------------------|

|               |   | 2009 Quarters |   |   | 2008 Quarters |   |
|--------------------|--------|---------------|--------|--------|---------------|--------|
|               |   | Fourth        |   |   | Third         |   |   | Second |   |   | First |   |   | Fourth |   |   | Third |   |   | Second |   |   | First |   |
| Stock Price Range: |   |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| High               |   | $             | 3.25   |   |          | $      | 2.83 |   |   | $ | 3.15 |   |   | $ | 4.02 |   |   | $ | 5.50 |   |   | $ | 7.65 |   |   | $ | 9.52 |   |   | $ | 10.25 |   |
| Low                |   |          | 2.26   |   |          |   | 1.49 |   |   |   | 2.00 |   |   |   | 1.59 |   |   |   | 3.00 |   |   |   | 3.50 |   |   |   | 6.49 |   |   |   | 7.05 |   |
|               |   |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common Dividends   |   |          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Declared           |   | $             | 0.00   |   |          | $      | 0.00 |   |   | $ | 0.00 |   |   | $ | 0.00 |   |   | $ | 0.00 |   |   | $ | 0.00 |   |   | $ | .06 |   |   | $ | .06 |   |

----

Index

|       Plan Category |   | Number ofsecurities to beissued uponexercise ofoutstanding options, warrantsand rights |   |   | Weighted-averageexercise price ofoutstandingoptions, warrantsand rights |   |   | Number of securitiesremaining available for futureissuance under equitycompensation plans(excluding securitiesreflected in column (a)) |   |
|---------------------------------------------------|--------|----------------------------------------------------------------------------------------|--------|--------|-------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                              |   | (a)                                                                                    |   |   | (b)                                                                     |   |   | (c)                                                                                                                                    |   |
| Plans approved by shareholders                    |   | 467,063                                                                                |   |   | $7.36                                                                   |   |   | 306,400                                                                                                                                |   |
| Plans not approved by shareholders                |   |                                                                                   |   |   |                                                                    |   |   |                                                                                                                                   |   |   |   |
| Total                                             |   | 467,063                                                                                |   |   | $7.36                                                                   |   |   | 306,400                                                                                                                                |   |

----

Index

ITEM 6.  SELECTED FINANCIAL DATA

|                                                                         |   | Year Ended December 31,                          |    |
|------------------------------------------------------------------------------|--------|--------------------------------------------------|---------|
|                                                                         |   | 2009                                             |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                         |   | (in thousands, except per share data and ratios) |    |
| INCOME STATEMENT:                                                            |   |                                             |    |
| Interest income                                                              |   | $                                                | 40,903  |   |   | $ | 45,532 |   |   | $ | 46,841 |   |   | $ | 39,303 |   |   | $ | 29,778 |   |
| Interest expense                                                             |   |                                             | 14,945  |   |   |   | 22,223 |   |   |   | 22,834 |   |   |   | 16,804 |   |   |   | 10,347 |   |
| Net interest income                                                          |   |                                             | 25,958  |   |   |   | 23,309 |   |   |   | 24,007 |   |   |   | 22,499 |   |   |   | 19,431 |   |
| Provision for loan losses                                                    |   |                                             | 18,678  |   |   |   | 5,264 |   |   |   | 1,297 |   |   |   | 489 |   |   |   | 566 |   |
| Net interest income after provision for loan losses                          |   |                                             | 7,280   |   |   |   | 18,045 |   |   |   | 22,710 |   |   |   | 22,010 |   |   |   | 18,865 |   |
| Non-interest income                                                          |   |                                             | 4,418   |   |   |   | 5,081 |   |   |   | 4,845 |   |   |   | 5,972 |   |   |   | 7,310 |   |
| Non-interest expenses                                                        |   |                                             | 21,479  |   |   |   | 20,516 |   |   |   | 21,000 |   |   |   | 18,832 |   |   |   | 18,160 |   |
| (Loss) income before income taxes                                            |   |                                             | (9,781  | ) |   |   | 2,610 |   |   |   | 6,555 |   |   |   | 9,150 |   |   |   | 8,015 |   |
| (Benefit) provision for income taxes                                         |   |                                             | (4,018  | ) |   |   | 1,129 |   |   |   | 2,766 |   |   |   | 3,822 |   |   |   | 2,373 |   |
| NET (LOSS) INCOME                                                            |   | $                                                | (5,763  | ) |   | $ | 1,481 |   |   | $ | 3,789 |   |   | $ | 5,328 |   |   | $ | 5,642 |   |
| Preferred stock dividends                                                    |   |                                             | 1,046   |   |   |   | 35 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| NET (LOSS) INCOME APPLICABLE TO COMMON STOCKHOLDERS                          |   | $                                                | (6,809  | ) |   | $ | 1,446 |   |   | $ | 3,789 |   |   | $ | 5,328 |   |   | $ | 5,642 |   |
|                                                                         |   |                                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| PER COMMON SHARE DATA:                                                       |   |                                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Loss) income per  share – Basic                             |   | $                                                | (1.15   | ) |   | $ | 0.24 |   |   | $ | 0.65 |   |   | $ | 0.92 |   |   | $ | 0.98 |   |
| Weighted average shares used in income per share calculation – Basic   |   |                                             | 5,915   |   |   |   | 5,913 |   |   |   | 5,862 |   |   |   | 5,785 |   |   |   | 5,744 |   |
| (Loss) income per  share – Diluted                           |   | $                                                | (1.15   | ) |   | $ | 0.24 |   |   | $ | 0.63 |   |   | $ | .89 |   |   | $ | 0.95 |   |
| Weighted average shares used in income per share calculation – Diluted |   |                                             | 5,915   |   |   |   | 5,941 |   |   |   | 6,022 |   |   |   | 6,001 |   |   |   | 5,931 |   |
| Book value per share                                                         |   | $                                                | 7.74    |   |   | $ | 8.84 |   |   | $ | 8.51 |   |   | $ | 8.05 |   |   | $ | 7.34 |   |
|                                                                         |   |                                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCE SHEET:                                                               |   |                                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loans                                                                    |   | $                                                | 603,440 |   |   | $ | 581,075 |   |   | $ | 539,165 |   |   | $ | 451,572 |   |   | $ | 381,517 |   |
| Total assets                                                                 |   |                                             | 684,216 |   |   |   | 656,981 |   |   |   | 609,850 |   |   |   | 516,615 |   |   |   | 444,354 |   |
| Total deposits                                                               |   |                                             | 531,392 |   |   |   | 475,439 |   |   |   | 433,739 |   |   |   | 368,747 |   |   |   | 334,238 |   |
| Total liabilities                                                            |   |                                             | 623,909 |   |   |   | 590,363 |   |   |   | 559,691 |   |   |   | 469,795 |   |   |   | 402,119 |   |
| Total stockholders’ equity                                             |   |                                             | 60,307  |   |   |   | 66,618 |   |   |   | 50,159 |   |   |   | 46,820 |   |   |   | 42,235 |   |
|                                                                         |   |                                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| OPERATING AND CAPITAL RATIOS:                                                |   |                                             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on average equity                                                     |   |                                             | (9.24   | )% |   |   | 2.85 | % |   |   | 7.72 | % |   |   | 11.88 | % |   |   | 14.16 | % |
| Return on average assets                                                     |   |                                             | (0.85   | ) |   |   | 0.23 |   |   |   | 0.67 |   |   |   | 1.12 |   |   |   | 1.43 |   |
| Dividend payout ratio                                                        |   |                                             | -       |   |   |   | 49.07 |   |   |   | 36.92 |   |   |   | 24.97 |   |   |   | 19.39 |   |
| Equity to assets ratio                                                       |   |                                             | 8.81    |   |   |   | 10.14 |   |   |   | 8.22 |   |   |   | 9.06 |   |   |   | 9.50 |   |
| Tier 1 leverage ratio                                                        |   |                                             | 8.81    |   |   |   | 10.28 |   |   |   | 8.39 |   |   |   | 9.21 |   |   |   | 9.80 |   |
| Tier 1 risk-based capital ratio                                              |   |                                             | 10.93   |   |   |   | 12.45 |   |   |   | 9.87 |   |   |   | 10.57 |   |   |   | 11.21 |   |
| Total risk-based capital ratio                                               |   |                                             | 12.20   |   |   |   | 13.70 |   |   |   | 10.74 |   |   |   | 11.45 |   |   |   | 12.26 |   |

----

Index

| ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS |
|---------|--------------------------------------------------------------------------------------------|

| ■ | The provision for loan losses increased to $18.7 million for 2009 compared to $5.3 million for 2008.  Charge-offs of $12.3 million continued to impact the loan portfolio. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ■ | The decline in rates paid on deposits and borrowing contributed to an improvement in the margin which increased to 3.91% for 2009 compared to 3.72% for 2008. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ■ | The decline in interest income from $45.5 million in 2008 to $40.9 million in 2009 continued to reflect the target fed funds rate which has been maintained at a range of 0% to .25% since the reduction from 4.25% at December 31, 2007 to a range of 0% to .25% as of December 31, 2008. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ■ | Interest expense declined $7.3 million to $14.9 million for 2009 compared to $22.2 million for 2008.  This improvement resulted from a decline in rates paid on deposits and borrowings to 2.60% for 2009 compared to 4.05% for 2008. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ■ | The strategic decision in the first quarter 2009 to discontinue SBA lending east of the Rocky Mountains contributed to a decline in salaries and employee benefits to $11.9 million 2009 from $13.4 million for 2008 and in occupancy expenses which declined to $2.1 million for 2009 from $2.3 million for 2008. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ■ | An increase of $1.2 million in the FDIC assessment for 2009 compared to 2008 resulting from higher assessment rates and a special assessment of $306,000. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

| ● | SBA – A migration analysis and various portfolio specific factors are used to determine the required allowance for all non-impaired loans.  In addition, the migration results are adjusted based upon qualitative factors.  Qualitative factors include, but are not limited to, adjustments for existing economic conditions, past due trends and concentration exposure.   Impaired loans are assigned a specific reserve based upon the individual characteristics of the loan. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Relationship Banking – Primarily includes commercial, commercial real estate and construction loans.  A migration analysis and various portfolio specific factors are used to calculate the required allowance for all non-impaired loans. In addition, the migration results are adjusted based upon qualitative factors.  Qualitative factors include, but are not limited to, adjustments for existing economic conditions, past due trends and concentration exposure. Impaired loans are assigned a specific reserve based upon the individual characteristics of the loan. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Manufactured Housing – The allowance is calculated on the basis of loss history and risk rating, which is primarily a function of delinquency.  In addition, the loss history is adjusted based upon qualitative factors similar to those used for SBA loans. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Index

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Index

|                                                                                                                    |   | Year Ended December 31,      |    |
|-------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                                                                    |   | 2009 vs. 2008                |    |   | 2008 vs. 2007 |   |
|                                                                                                                    |   | Amount ofIncrease(decrease)  |    |   | Percent ofIncrease(decrease) |   |   | Amount ofIncrease(decrease) |   |   | Percent ofIncrease(decrease) |   |
|                                                                                                                    |   |  (dollars in thousands) |    |
| INTEREST INCOME                                                                                                         |   |                         |    |
| Loans                                                                                                                   |   | $                            | (3,987  | ) |   |   | (9.3 | )% |   | $ | (1,099 | ) |   |   | (2.5 | )% |
| Investment securities                                                                                                   |   |                         | (439    | ) |   |   | (20.1 | )% |   |   | 227 |   |   |   | 11.6 | % |
| Other                                                                                                                   |   |                         | (203    | ) |   |   | (74.6 | )% |   |   | (437 | ) |   |   | (61.6 | )% |
|    Total interest income                                                                                 |   |                         | (4,629  | ) |   |   | (10.2 | )% |   |   | (1,309 | ) |   |   | (2.8 | )% |
| INTEREST EXPENSE                                                                                                        |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                                                |   |                         | (5,985  | ) |   |   | (34.7 | )% |   |   | (583 | ) |   |   | (3.3 | )% |
| Other borrowings                                                                                                        |   |                         | (1,293  | ) |   |   | (25.9 | )% |   |   | (28 | ) |   |   | (0.6 | )% |
|   Total interest expense                                                                                      |   |                         | (7,278  | ) |   |   | (32.7 | )% |   |   | (611 | ) |   |   | (2.7 | )% |
| NET INTEREST INCOME                                                                                                     |   |                         | 2,649   |   |   |   | 11.4 | % |   |   | (698 | ) |   |   | (2.9 | )% |
| Provision for loan losses                                                                                               |   |                         | 13,414  |   |   |   | 254.8 | % |   |   | 3,967 |   |   |   | 305.9 | % |
| NET INTEREST INCOME AFTER PROVISION   FOR LOAN LOSSES                                                    |   |                         | (10,765 | ) |   |   | (59.7 | )% |   |   | (4,665 | ) |   |   | (20.5 | )% |
| NON-INTEREST INCOME                                                                                                     |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other loan fees                                                                                                         |   |                         | (211    | ) |   |   | (10.0 | )% |   |   | (634 | ) |   |   | (23.2 | )% |
| Gains from loan sales, net                                                                                              |   |                         | (655    | ) |   |   | (64.3 | )% |   |   | 216 |   |   |   | 26.9 | % |
| Document processing fees, net                                                                                           |   |                         | 85      |   |   |   | 11.8 | % |   |   | (32 | ) |   |   | (4.3 | )% |
| Loan servicing fees, net                                                                                                |   |                         | 285     |   |   |   | 58.4 | % |   |   | 484 |   |   |   | - |   |
| Service charges                                                                                                         |   |                         | 22      |   |   |   | 5.1 | % |   |   | (8 | ) |   |   | (1.8 | )% |
| Other                                                                                                                   |   |                         | (189    | ) |   |   | (59.2 | )% |   |   | 210 |   |   |   | 192.7 | % |
|    Total non-interest income                                                                             |   |                         | (663    | ) |   |   | (13.0 | )% |   |   | 236 |   |   |   | 4.9 | % |
| NON-INTEREST EXPENSES                                                                                                   |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                                                                                          |   |                         | (1,494  | ) |   |   | (11.2 | )% |   |   | (622 | ) |   |   | (4.4 | )% |
| Occupancy and equipment expenses                                                                                        |   |                         | (229    | ) |   |   | (9.8 | )% |   |   | 252 |   |   |   | 12.1 | % |
| FDIC Assessment                                                                                                         |   |                         | 1,227   |   |   |   | 332.5 | % |   |   | 139 |   |   |   | 60.4 | % |
| Professional services                                                                                                   |   |                         | 113     |   |   |   | 14.3 | % |   |   | (108 | ) |   |   | (12.1 | )% |
| Advertising and marketing                                                                                               |   |                         | (77     | ) |   |   | (18.3 | )% |   |   | (330 | ) |   |   | (43.9 | )% |
| Depreciation                                                                                                            |   |                         | (27     | ) |   |   | (5.2 | )% |   |   | 2 |   |   |   | 0.4 | % |
| Loss on sale and write-down of other assets acquired through foreclosure                                                |   |                         | 615     |   |   |   | - |   |   |   | (29 | ) |   |   | (100 | )% |
| Data processing                                                                                                         |   |                         | 79      |   |   |   | 14.6 | % |   |   | 41 |   |   |   | 8.2 | % |
| Other                                                                                                                   |   |                         | 756     |   |   |   | 35.2 | % |   |   | 171 |   |   |   | 8.6 | % |
|    Total non-interest expenses                                                                           |   |                         | 963     |   |   |   | 4.7 | % |   |   | (484 | ) |   |   | (2.3 | )% |
| (Loss) income before provision for income taxes                                                                         |   |                         | (12,391 | ) |   |   |   |   |   |   | (3,945 | ) |   |   |   |   |
| (Benefit) provision for income taxes                                                                                    |   |                         | (5,147  | ) |   |   |   |   |   |   | (1,637 | ) |   |   |   |   |
|                  NET (LOSS) INCOME |   | $                            | (7,244  | ) |   |   |   |   |   | $ | (2,308 | ) |   |   |   |   |
| Preferred stock dividends                                                                                               |   |                         | 1,011   |   |   |   |   |   |   |   | 35 |   |   |   |   |   |
| NET (LOSS) INCOME APPLICABLE TO COMMON STOCKHOLDERS                                                                     |   | $                            | (8,255  | ) |   |   |   |   |   | $ | (2,343 | ) |   |   |   |   |

----

Index

|                                                                                |   | Year Ended December 31, |   |
|-------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                |   | 2009 versus 2008        |   |   | 2008 versus 2007 |   |
|                                                                                |   | Totalchange             |   |   | Change due to |   |   | Totalchange |   |   | Change due to  |   |
|                                                                                |   |                    |   | Rate |   |   | Volume |   |   |   |   | Rate |   |   | Volume |   |
|                                                                                |   | (in thousands)          |   |
| Interest earning deposits in other financial institutions (including time deposits) |   | $                       | (4     | ) |   | $ | (7 | ) |   | $ | 3 |   |   | $ | (7 | ) |   | $ | (9 | ) |   | $ | 2 |   |
| Federal funds sold                                                                  |   |                    | (199   | ) |   |   | (196 | ) |   |   | (3 | ) |   |   | (430 | ) |   |   | (400 | ) |   |   | (30 | ) |
| Investment securities                                                               |   |                    | (439   | ) |   |   | (467 | ) |   |   | 28 |   |   |   | 227 |   |   |   | 8 |   |   |   | 219 |   |
| Loans, net                                                                          |   |                    | (3,987 | ) |   |   | (6,001 | ) |   |   | 2,014 |   |   |   | (1,099 | ) |   |   | (6,722 | ) |   |   | 5,623 |   |
| Total interest-earning assets                                                       |   |                    | (4,629 | ) |   |   | (6,671 | ) |   |   | 2,042 |   |   |   | (1,309 | ) |   |   | (7,123 | ) |   |   | 5,814 |   |
|                                                                                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand                                                             |   |                    | 976    |   |   |   | (108 | ) |   |   | 1,084 |   |   |   | (1,224 | ) |   |   | (1,091 | ) |   |   | (133 | ) |
| Savings                                                                             |   |                    | (56    | ) |   |   | (105 | ) |   |   | 49 |   |   |   | (53 | ) |   |   | (31 | ) |   |   | (22 | ) |
| Time certificates of deposit                                                        |   |                    | (6,905 | ) |   |   | (5,879 | ) |   |   | (1,026 | ) |   |   | 694 |   |   |   | (2,526 | ) |   |   | 3,220 |   |
| Other borrowings                                                                    |   |                    | (1,293 | ) |   |   | (1,348 | ) |   |   | 55 |   |   |   | (28 | ) |   |   | (304 | ) |   |   | 276 |   |
| Total interest-bearing liabilities                                                  |   |                    | (7,278 | ) |   |   | (7,440 | ) |   |   | 162 |   |   |   | (611 | ) |   |   | (3,952 | ) |   |   | 3,341 |   |
| Net interest income                                                                 |   | $                       | 2,649  |   |   | $ | 769 |   |   | $ | 1,880 |   |   | $ | (698 | ) |   | $ | (3,171 | ) |   | $ | 2,473 |   |

----

Index

|                |   | Year Ended December 31, |   |
|---------------------|--------|-------------------------|--------|
|                |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
|                |   | (dollars in thousands)  |   |
| Interest income     |   | $                       | 40,903 |   |   | $ | 45,532 |   |   | $ | 46,841 |   |
| Interest expense    |   |                    | 14,945 |   |   |   | 22,223 |   |   |   | 22,834 |   |
| Net interest income |   | $                       | 25,958 |   |   | $ | 23,309 |   |   | $ | 24,007 |   |
| Net interest margin |   |                    | 3.91   | % |   |   | 3.72 | % |   |   | 4.38 | % |

|                 |   |              |   |
|----------------------|--------|-------------------|--------|
|                 |   | (in thousands)    |   |
|                 |   | Allowance12/31/08 |   |   | Provision |   |   | Charge-offs |   |   | Recoveries |   |   | Net Charge-offs |   |   | Allowance12/31/09 |   |
| Real estate          |   | $                 | 1,583  |   |   | $ | 3,555 |   |   | $ | (2,133 | ) |   | $ | 7 |   |   | $ | (2,126 | ) |   | $ | 3,012 |   |
| Manufactured housing |   |              | 1,659  |   |   |   | 2,170 |   |   |   | (1,574 | ) |   |   | - |   |   |   | (1,574 | ) |   |   | 2,255 |   |
| Commercial           |   |              | 1,428  |   |   |   | 5,584 |   |   |   | (3,609 | ) |   |   | 45 |   |   |   | (3,564 | ) |   |   | 3,448 |   |
| SBA                  |   |              | 2,556  |   |   |   | 7,153 |   |   |   | (5,004 | ) |   |   | 96 |   |   |   | (4,908 | ) |   |   | 4,801 |   |
| Other installment    |   |              | 115    |   |   |   | 216 |   |   |   | (117 | ) |   |   | 3 |   |   |   | (114 | ) |   |   | 217 |   |
| Total                |   | $                 | 7,341  |   |   | $ | 18,678 |   |   | $ | (12,437 | ) |   | $ | 151 |   |   | $ | (12,286 | ) |   | $ | 13,733 |   |

----

Index

|                          |   | Year Ended December 31, |   |
|-------------------------------|--------|-------------------------|--------|
| Non-interest income           |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
|                          |   | (in thousands)          |   |
| Other loan fees               |   | $                       | 1,893  |   |   | $ | 2,104 |   |   | $ | 2,738 |   |
| Gains from loan sales, net    |   |                    | 363    |   |   |   | 1,018 |   |   |   | 802 |   |
| Document processing fees, net |   |                    | 803    |   |   |   | 718 |   |   |   | 750 |   |
| Loan servicing fees, net      |   |                    | 773    |   |   |   | 488 |   |   |   | 4 |   |
| Service charges               |   |                    | 456    |   |   |   | 434 |   |   |   | 442 |   |
| Other                         |   |                    | 130    |   |   |   | 319 |   |   |   | 109 |   |
| Total non-interest income     |   | $                       | 4,418  |   |   | $ | 5,081 |   |   | $ | 4,845 |   |

|                                                                     |   | Year Ended December 31, |   |
|--------------------------------------------------------------------------|--------|-------------------------|--------|
| Non-interest expenses                                                    |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
|                                                                     |   | (in thousands)          |   |
| Salaries and employee benefits                                           |   | $                       | 11,896 |   |   | $ | 13,390 |   |   | $ | 14,012 |   |
| Occupancy and equipment expenses                                         |   |                    | 2,112  |   |   |   | 2,341 |   |   |   | 2,089 |   |
| FDIC assessment                                                          |   |                    | 1,596  |   |   |   | 369 |   |   |   | 230 |   |
| Professional services                                                    |   |                    | 901    |   |   |   | 788 |   |   |   | 896 |   |
| Advertising and marketing                                                |   |                    | 344    |   |   |   | 421 |   |   |   | 751 |   |
| Depreciation                                                             |   |                    | 491    |   |   |   | 518 |   |   |   | 516 |   |
| Loss on sale and write-down of other assets acquired through foreclosure |   |                    | 615    |   |   |   | - |   |   |   | 29 |   |
| Data processing                                                          |   |                    | 620    |   |   |   | 541 |   |   |   | 500 |   |
| Other                                                                    |   |                    | 2,904  |   |   |   | 2,148 |   |   |   | 1,977 |   |
| Total non-interest expenses                                              |   | $                       | 21,479 |   |   | $ | 20,516 |   |   | $ | 21,000 |   |

----

Index

| Year Ended December 31, |   | Average Assets |    |   | Total Non-Interest Expenses |   | Salaries and Employee Benefits |   | Occupancy andDepreciationExpenses |   | Efficiency Ratio |
|-------------------------|--------|----------------|---------|--------|----------------------------------|--------|--------------------------------|--------|-----------------------------------|--------|------------------|
| (dollars in thousands)  |   |           |    |   |                             |   |                           |   |
|  2009              |   | $              | 675,672 |   |                             |   | 3.18                           | %      |                              |   | 1.76             | % |   |   | 0.39 | % |   |   | 71 | % |
| 2008                    |   | $              | 640,993 |   |                             |   | 3.20                           | %      |                              |   | 2.09             | % |   |   | 0.45 | % |   |   | 72 | % |
| 2007                    |   | $              | 563,493 |   |                             |   | 3.73                           | %      |                              |   | 2.49             | % |   |   | 0.46 | % |   |   | 73 | % |

----

Index

|                                                               |   | December 31,           |    |
|--------------------------------------------------------------------|--------|------------------------|---------|
|                                                               |   | 2009                   |    |   | 2008 |   |   | 2007 |   |
|                                                               |   | Amount                 |    |   | % |   |   | Amount |   |   | % |   |   | Amount |   |   | % |   |
|                                                               |   | (dollars in thousands) |    |
| ASSETS                                                             |   |                   |    |
| Cash and due from banks                                            |   | $                      | 4,949   |   |   |   | 0.7 | % |   | $ | 4,419 |   |   |   | 0.7 | % |   | $ | 4,374 |   |   |   | 0.8 | % |
| Time and interest-earning deposits in other financial institutions |   |                   | 1,081   |   |   |   | 0.2 | % |   |   | 997 |   |   |   | 0.2 | % |   |   | 935 |   |   |   | 0.2 | % |
| Federal funds sold                                                 |   |                   | 10,751  |   |   |   | 1.6 | % |   |   | 11,488 |   |   |   | 1.8 | % |   |   | 12,938 |   |   |   | 2.3 | % |
| Investment securities available-for-sale                           |   |                   | 14,178  |   |   |   | 2.1 | % |   |   | 6,889 |   |   |   | 1.1 | % |   |   | 19,929 |   |   |   | 3.5 | % |
| Investment securities held-to-maturity                             |   |                   | 24,619  |   |   |   | 3.6 | % |   |   | 31,319 |   |   |   | 4.9 | % |   |   | 14,741 |   |   |   | 2.6 | % |
| Federal Reserve Bank & Federal Home Loan Bank stock            |   |                   | 6,781   |   |   |   | 1.0 | % |   |   | 6,634 |   |   |   | 1.0 | % |   |   | 5,657 |   |   |   | 1.0 | % |
| Loans held for sale, net                                           |   |                   | 100,823 |   |   |   | 14.9 | % |   |   | 120,339 |   |   |   | 18.7 | % |   |   | 92,867 |   |   |   | 16.5 | % |
| Loans held for investment, net                                     |   |                   | 493,016 |   |   |   | 73.0 | % |   |   | 442,908 |   |   |   | 69.1 | % |   |   | 396,863 |   |   |   | 70.4 | % |
| Servicing rights                                                   |   |                   | 1,086   |   |   |   | 0.2 | % |   |   | 1,161 |   |   |   | 0.2 | % |   |   | 1,580 |   |   |   | 0.3 | % |
| Other assets acquired through foreclosure, net                     |   |                   | 2,496   |   |   |   | 0.4 | % |   |   | 540 |   |   |   | 0.1 | % |   |   | 499 |   |   |   | 0.1 | % |
| Premises and equipment, net                                        |   |                   | 3,506   |   |   |   | 0.5 | % |   |   | 3,814 |   |   |   | 0.6 | % |   |   | 3,007 |   |   |   | 0.5 | % |
| Other assets                                                       |   |                   | 12,386  |   |   |   | 1.8 | % |   |   | 10,485 |   |   |   | 1.6 | % |   |   | 10,103 |   |   |   | 1.8 | % |
| TOTAL ASSETS                                                       |   | $                      | 675,672 |   |   |   | 100.0 | % |   | $ | 640,993 |   |   |   | 100.0 | % |   | $ | 563,493 |   |   |   | 100.0 | % |
|                                                               |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES                                                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                          |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Non-interest-bearing demand                      |   | $                      | 37,408  |   |   |   | 5.5 | % |   | $ | 35,618 |   |   |   | 5.5 | % |   | $ | 34,172 |   |   |   | 6.0 | % |
|    Interest-bearing demand                          |   |                   | 119,923 |   |   |   | 17.8 | % |   |   | 58,893 |   |   |   | 9.2 | % |   |   | 65,687 |   |   |   | 11.7 | % |
|    Savings                                          |   |                   | 16,807  |   |   |   | 2.5 | % |   |   | 14,989 |   |   |   | 2.3 | % |   |   | 15,642 |   |   |   | 2.8 | % |
|    Time certificates of $100,000 or more            |   |                   | 149,291 |   |   |   | 22.1 | % |   |   | 88,385 |   |   |   | 13.8 | % |   |   | 155,156 |   |   |   | 27.5 | % |
|    Other time certificates                          |   |                   | 178,744 |   |   |   | 26.4 | % |   |   | 278,510 |   |   |   | 43.5 | % |   |   | 135,831 |   |   |   | 24.1 | % |
|      Total deposits                       |   |                   | 502,173 |   |   |   | 74.3 | % |   |   | 476,395 |   |   |   | 74.3 | % |   |   | 406,488 |   |   |   | 72.1 | % |
| Other borrowings                                                   |   |                   | 109,767 |   |   |   | 16.3 | % |   |   | 108,141 |   |   |   | 16.9 | % |   |   | 102,167 |   |   |   | 18.2 | % |
| Other liabilities                                                  |   |                   | 1,379   |   |   |   | 0.2 | % |   |   | 4,562 |   |   |   | 0.7 | % |   |   | 5,785 |   |   |   | 1.0 | % |
|      Total liabilities                    |   |                   | 613,319 |   |   |   | 90.8 | % |   |   | 589,098 |   |   |   | 91.9 | % |   |   | 514,440 |   |   |   | 91.3 | % |
| STOCKHOLDERS’ EQUITY                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock                                                    |   |                   | 14,407  |   |   |   | 2.1 | % |   |   | 464 |   |   |   | 0.1 | % |   |   | - |   |   |   | - |   |
| Common stock                                                       |   |                   | 33,097  |   |   |   | 4.9 | % |   |   | 31,808 |   |   |   | 4.9 | % |   |   | 31,210 |   |   |   | 5.5 | % |
| Retained earnings                                                  |   |                   | 14,763  |   |   |   | 2.2 | % |   |   | 19,630 |   |   |   | 3.1 | % |   |   | 17,953 |   |   |   | 3.2 | % |
| Accumulated other comprehensive loss                               |   |                   | 86      |   |   |   | - |   |   |   | (7 | ) |   |   | - |   |   |   | (110 | ) |   |   | - |   |
|    Total stockholders’ equity                 |   |                   | 62,353  |   |   |   | 9.2 | % |   |   | 51,895 |   |   |   | 8.1 | % |   |   | 49,053 |   |   |   | 8.7 | % |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                   |   | $                      | 675,672 |   |   |   | 100.0 | % |   | $ | 640,993 |   |   |   | 100.0 | % |   | $ | 563,493 |   |   |   | 100.0 | % |

----

Index

|                                                                |   | Year Ended December 31, |    |
|---------------------------------------------------------------------|--------|-------------------------|---------|
| Interest-earning assets:                                            |   | 2009                    |    |   | 2008 |   |   | 2007 |   |
|                                                                |   | (dollars in thousands)  |    |
| Time and interest earning deposits in other financial institutions: |   |                    |    |   |   |   |   |   |   |
| Average outstanding                                                 |   | $                       | 1,081   |   |   | $ | 997 |   |   | $ | 935 |   |
| Interest income                                                     |   |                    | 32      |   |   |   | 36 |   |   |   | 43 |   |
| Average yield                                                       |   |                    | 2.95    | % |   |   | 3.66 | % |   |   | 4.57 | % |
| Federal funds sold:                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |
| Average outstanding                                                 |   | $                       | 10,751  |   |   | $ | 11,488 |   |   | $ | 12,938 |   |
| Interest income                                                     |   |                    | 37      |   |   |   | 236 |   |   |   | 666 |   |
| Average yield                                                       |   |                    | 0.34    | % |   |   | 2.05 | % |   |   | 5.15 | % |
| Investment securities:                                              |   |                    |    |   |   |   |   |   |   |   |   |   |
| Average outstanding                                                 |   | $                       | 45,578  |   |   | $ | 44,841 |   |   | $ | 40,326 |   |
| Interest income                                                     |   |                    | 1,740   |   |   |   | 2,179 |   |   |   | 1,952 |   |
| Average yield                                                       |   |                    | 3.82    | % |   |   | 4.86 | % |   |   | 4.84 | % |
| Gross loans:                                                        |   |                    |    |   |   |   |   |   |   |   |   |   |
| Average outstanding                                                 |   | $                       | 605,741 |   |   | $ | 568,861 |   |   | $ | 493,903 |   |
| Interest income                                                     |   |                    | 39,094  |   |   |   | 43,081 |   |   |   | 44,180 |   |
| Average yield                                                       |   |                    | 6.45    | % |   |   | 7.57 | % |   |   | 8.95 | % |
| Total interest-earning assets:                                      |   |                    |    |   |   |   |   |   |   |   |   |   |
| Average outstanding                                                 |   | $                       | 663,151 |   |   | $ | 626,187 |   |   | $ | 548,102 |   |
| Interest income                                                     |   |                    | 40,903  |   |   |   | 45,532 |   |   |   | 46,841 |   |
| Average yield                                                       |   |                    | 6.17    | % |   |   | 7.27 | % |   |   | 8.55 | % |

----

Index

|                                |   | Year Ended December 31, |    |
|-------------------------------------|--------|-------------------------|---------|
| Interest-bearing liabilities:       |   | 2009                    |    |   | 2008 |   |   | 2007 |   |
|                                |   | (dollars in thousands)  |    |
| Interest-bearing demand deposits:   |   |                    |    |
| Average outstanding                 |   | $                       | 119,923 |   |   | $ | 58,893 |   |   | $ | 65,687 |   |
| Interest expense                    |   |                    | 2,130   |   |   |   | 1,153 |   |   |   | 2,378 |   |
| Average effective rate              |   |                    | 1.78    | % |   |   | 1.96 | % |   |   | 3.62 | % |
| Savings deposits:                   |   |                    |    |   |   |   |   |   |   |   |   |   |
| Average outstanding                 |   | $                       | 16,807  |   |   | $ | 14,989 |   |   | $ | 15,642 |   |
| Interest expense                    |   |                    | 451     |   |   |   | 507 |   |   |   | 560 |   |
| Average effective rate              |   |                    | 2.68    | % |   |   | 3.39 | % |   |   | 3.58 | % |
| Time certificates of deposit:       |   |                    |    |   |   |   |   |   |   |   |   |   |
| Average outstanding                 |   | $                       | 328,035 |   |   | $ | 366,895 |   |   | $ | 290,987 |   |
| Interest expense                    |   |                    | 8,659   |   |   |   | 15,565 |   |   |   | 14,870 |   |
| Average effective rate              |   |                    | 2.64    | % |   |   | 4.24 | % |   |   | 5.11 | % |
| Other borrowings:                   |   |                    |    |   |   |   |   |   |   |   |   |   |
| Average outstanding                 |   | $                       | 109,767 |   |   | $ | 108,141 |   |   | $ | 102,167 |   |
| Interest expense                    |   |                    | 3,705   |   |   |   | 4,998 |   |   |   | 5,026 |   |
| Average effective rate              |   |                    | 3.38    | % |   |   | 4.62 | % |   |   | 4.92 | % |
| Total interest-bearing liabilities: |   |                    |    |   |   |   |   |   |   |   |   |   |
| Average outstanding                 |   | $                       | 574,532 |   |   | $ | 548,918 |   |   | $ | 474,483 |   |
| Interest expense                    |   |                    | 14,945  |   |   |   | 22,223 |   |   |   | 22,834 |   |
| Average effective rate              |   |                    | 2.60    | % |   |   | 4.05 | % |   |   | 4.81 | % |
|                                |   |                    |    |   |   |   |   |   |   |   |   |   |
| Net interest income                 |   | $                       | 25,958  |   |   | $ | 23,309 |   |   | $ | 24,007 |   |
| Net interest spread                 |   |                    | 3.57    | % |   |   | 3.22 | % |   |   | 3.74 | % |
| Average net margin                  |   |                    | 3.91    | % |   |   | 3.72 | % |   |   | 4.38 | % |

----

Index

|          |   | December 31, |    |
|---------------|--------|--------------|---------|
|          |   | 2009         |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| In Years      |   |         |    |   |   |   |   | (in thousands) |   |   |   |   |   |   |   |
|          |   | Fixed        |    |   | Variable |   |   | Fixed |   |   | Variable |   |   | Fixed |   |   | Variable |   |   | Fixed |   |   | Variable |   |   | Fixed |   |   | Variable |   |
| Less than One |   | $            | 20,571  |   |   | $ | 81,132 |   |   | $ | 16,405 |   |   | $ | 78,005 |   |   | $ | 16,445 |   |   | $ | 83,356 |   |   | $ | 16,442 |   |   | $ | 76,509 |   |   | $ | 19,797 |   |   | $ | 49,796 |   |
| One to Five   |   |         | 87,062  |   |   |   | 130,364 |   |   |   | 87,034 |   |   |   | 82,298 |   |   |   | 79,549 |   |   |   | 67,549 |   |   |   | 65,083 |   |   |   | 50,931 |   |   |   | 39,081 |   |   |   | 50,708 |   |
| Over Five     |   |         | 111,243 |   |   |   | 187,200 |   |   |   | 137,632 |   |   |   | 187,525 |   |   |   | 129,335 |   |   |   | 167,878 |   |   |   | 103,242 |   |   |   | 144,136 |   |   |   | 88,086 |   |   |   | 139,570 |   |
| Total         |   | $            | 218,876 |   |   | $ | 398,696 |   |   | $ | 241,071 |   |   | $ | 347,828 |   |   | $ | 225,329 |   |   | $ | 318,783 |   |   | $ | 184,767 |   |   | $ | 271,576 |   |   | $ | 146,964 |   |   | $ | 240,074 |   |
|          |   |         | 35.4    | % |   |   | 64.6 | % |   |   | 40.9 | % |   |   | 59.1 | % |   |   | 41.4 | % |   |   | 58.6 | % |   |   | 40.5 | % |   |   | 59.5 | % |   |   | 38.0 | % |   |   | 62.0 | % |

|                         |   | December 31,           |    |
|------------------------------|--------|------------------------|---------|
|                         |   | 2009                   |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                         |   | (dollars in thousands) |    |
|                         |   | Loan Balance           |    |   | Loan Balance |   |   | Loan Balance |   |   | Loan Balance |   |   | Loan Balance |   |
| Commercial                   |   | $                      | 61,810  |   |   | $ | 74,895 |   |   | $ | 72,470 |   |   | $ | 53,725 |   |   | $ | 44,957 |   |
| Real estate                  |   |                   | 190,942 |   |   |   | 164,660 |   |   |   | 162,645 |   |   |   | 154,352 |   |   |   | 129,363 |   |
| SBA                          |   |                   | 139,541 |   |   |   | 132,707 |   |   |   | 116,963 |   |   |   | 84,911 |   |   |   | 82,792 |   |
| Manufactured housing         |   |                   | 195,656 |   |   |   | 190,838 |   |   |   | 172,938 |   |   |   | 142,804 |   |   |   | 101,336 |   |
| Other installment            |   |                   | 18,189  |   |   |   | 15,793 |   |   |   | 10,027 |   |   |   | 8,301 |   |   |   | 11,355 |   |
| Single family                |   |                   | 4,538   |   |   |   | 5,645 |   |   |   | 7,507 |   |   |   | 10,104 |   |   |   | 14,858 |   |
| Mortgage loans held for sale |   |                   | 6,896   |   |   |   | 4,361 |   |   |   | 1,562 |   |   |   | 2,146 |   |   |   | 2,377 |   |
| Gross Loans                  |   |                   | 617,572 |   |   |   | 588,899 |   |   |   | 544,112 |   |   |   | 456,343 |   |   |   | 387,038 |   |
| Less:                        |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses    |   |                   | 13,733  |   |   |   | 7,341 |   |   |   | 4,412 |   |   |   | 3,926 |   |   |   | 3,954 |   |
| Deferred fees/costs          |   |                   | (228    | ) |   |   | (326 | ) |   |   | (48 | ) |   |   | 43 |   |   |   | 181 |   |
| Discount on SBA loans        |   |                   | 627     |   |   |   | 809 |   |   |   | 583 |   |   |   | 802 |   |   |   | 1,386 |   |
| Net Loans                    |   | $                      | 603,440 |   |   | $ | 581,075 |   |   | $ | 539,165 |   |   | $ | 451,572 |   |   | $ | 381,517 |   |
| Percentage to Gross Loans:   |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                   |   |                   | 10.0    | % |   |   | 12.7 | % |   |   | 13.3 | % |   |   | 11.8 | % |   |   | 11.6 | % |
| Real estate                  |   |                   | 30.9    |   |   |   | 28.0 |   |   |   | 29.9 |   |   |   | 33.9 |   |   |   | 33.4 |   |
| SBA                          |   |                   | 22.6    |   |   |   | 22.5 |   |   |   | 21.5 |   |   |   | 18.6 |   |   |   | 21.4 |   |
| Manufactured housing         |   |                   | 31.7    |   |   |   | 32.4 |   |   |   | 31.8 |   |   |   | 31.3 |   |   |   | 26.2 |   |
| Other installment            |   |                   | 3.0     |   |   |   | 2.7 |   |   |   | 1.8 |   |   |   | 1.8 |   |   |   | 2.9 |   |
| Single family                |   |                   | 0.7     |   |   |   | 1.0 |   |   |   | 1.4 |   |   |   | 2.2 |   |   |   | 3.9 |   |
| Mortgage loans held for sale |   |                   | 1.1     |   |   |   | .7 |   |   |   | .3 |   |   |   | .4 |   |   |   | .6 |   |
|                         |   |                   | 100.0   | % |   |   | 100.0 | % |   |   | 100.0 | % |   |   | 100.0 | % |   |   | 100.0 | % |

----

Index

----

Index

|                      |   | December 31,   |   |
|---------------------------|--------|----------------|--------|
|                      |   | 2009           |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                      |   | (in thousands) |   |
| Commercial                |   | $              | 16,065 |   |   | $ | 17,940 |   |   | $ | 21,612 |   |   | $ | 24,431 |   |   | $ | 22,327 |   |
| Real estate               |   |           | 6,595  |   |   |   | 4,376 |   |   |   | 8,649 |   |   |   | 18,839 |   |   |   | 19,323 |   |
| SBA                       |   |           | 1,133  |   |   |   | 6,526 |   |   |   | 9,453 |   |   |   | 5,508 |   |   |   | 3,408 |   |
| Installment loans         |   |           | 7,996  |   |   |   | 8,333 |   |   |   | 10,503 |   |   |   | 9,662 |   |   |   | 9,330 |   |
| Standby letters of credit |   |           | 543    |   |   |   | 552 |   |   |   | 518 |   |   |   | 847 |   |   |   | 1,499 |   |
| Total commitments         |   | $              | 32,332 |   |   | $ | 37,727 |   |   | $ | 50,735 |   |   | $ | 59,287 |   |   | $ | 55,887 |   |

----

Index

|                                                                     |   | Year Ended December 31, |    |
|--------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                     |   | 2009                    |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                     |   | (in thousands)          |    |
| Average gross loans, held for investment,                                |   | $                       | 504,918 |   |   | $ | 448,522 |   |   | $ | 401,036 |   |   | $ | 348,161 |   |   | $ | 288,049 |   |
| Gross loans at end of year, held for investment                          |   |                    | 514,599 |   |   |   | 456,630 |   |   |   | 433,162 |   |   |   | 379,703 |   |   |   | 324,965 |   |
|                                                                     |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses, beginning of year                             |   | $                       | 7,341   |   |   | $ | 4,412 |   |   | $ | 3,926 |   |   | $ | 3,954 |   |   | $ | 3,894 |   |
|    Loans charged off:                                     |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Commercial (including SBA)           |   |                    | 8,613   |   |   |   | 1,499 |   |   |   | 775 |   |   |   | 459 |   |   |   | 228 |   |
|       Real estate                          |   |                    | 1,972   |   |   |   | 263 |   |   |   | - |   |   |   | - |   |   |   | 8 |   |
|       Manufactured housing                 |   |                    | 1,574   |   |   |   | 298 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|       Installment                          |   |                    | 117     |   |   |   | 27 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|       Single family                        |   |                    | 161     |   |   |   | 372 |   |   |   | 142 |   |   |   | 341 |   |   |   | 831 |   |
|            Total  |   |                    | 12,437  |   |   |   | 2,459 |   |   |   | 917 |   |   |   | 800 |   |   |   | 1,067 |   |
|    Recoveries of loans previously charged off             |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Commercial (including SBA)                 |   |                    | 141     |   |   |   | 106 |   |   |   | 45 |   |   |   | 93 |   |   |   | 20 |   |
|      Real estate                                |   |                    | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 89 |   |
|      Manufactured housing                       |   |                    | -       |   |   |   | 2 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|      Installment                                |   |                    | 3       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|      Single family                              |   |                    | 7       |   |   |   | 16 |   |   |   | 61 |   |   |   | 190 |   |   |   | 452 |   |
|           Total        |   |                    | 151     |   |   |   | 124 |   |   |   | 106 |   |   |   | 283 |   |   |   | 561 |   |
| Net loans charged off                                                    |   |                    | 12,286  |   |   |   | 2,335 |   |   |   | 811 |   |   |   | 517 |   |   |   | 506 |   |
| Provision for loan losses                                                |   |                    | 18,678  |   |   |   | 5,264 |   |   |   | 1,297 |   |   |   | 489 |   |   |   | 566 |   |
| Allowance for loan losses, end of year                                   |   | $                       | 13,733  |   |   | $ | 7,341 |   |   | $ | 4,412 |   |   | $ | 3,926 |   |   | $ | 3,954 |   |
| Ratios:                                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loan charge-offs to average loans                                    |   |                    | 2.43    | % |   |   | 0.52 | % |   |   | 0.20 | % |   |   | 0.15 | % |   |   | 0.18 | % |
| Net loan charge-offs to loans at end of period                           |   |                    | 2.39    | % |   |   | 0.51 | % |   |   | 0.19 | % |   |   | 0.14 | % |   |   | 0.16 | % |
| Allowance for loan losses to loans held for investment at end of period  |   |                    | 2.67    | % |   |   | 1.61 | % |   |   | 1.02 | % |   |   | 1.03 | % |   |   | 1.22 | % |
| Net loan charge-offs to allowance for loan losses at beginning of period |   |                    | 167.4   | % |   |   | 52.92 | % |   |   | 20.66 | % |   |   | 13.08 | % |   |   | 12.99 | % |
| Net loan charge-offs to provision for loan losses                        |   |                    | 65.8    | % |   |   | 44.46 | % |   |   | 62.53 | % |   |   | 105.73 | % |   |   | 89.40 | % |

----

Index

|                                    |   | December 31,           |   |
|-----------------------------------------|--------|------------------------|--------|
|                                    |   | 2009                   |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                    |   | (dollars in thousands) |   |
| Balance at end of period applicable to: |   | Amount                 |   |   | Percent of loansin eachcategory to totalloans |   |   | Amount |   |   | Percent of loans in each category to total loans |   |   | Amount |   |   | Percent of loans in each category to total loans |   |   | Amount |   |   | Percent of loans in each category to total loans |   |   | Amount |   |   | Percent of loans in each category to total loans |   |
| SBA                                     |   | $                      | 4,801  |   |   |   | 22.6 | % |   | $ | 2,850 |   |   |   | 28.4 | % |   | $ | 1,810 |   |   |   | 26.3 | % |   | $ | 1,365 |   |   |   | 22.6 | % |   | $ | 1,409 |   |   |   | 24.6 | % |
| Manufactured housing                    |   |                   | 2,256  |   |   |   | 31.7 | % |   |   | 1,659 |   |   |   | 32.4 | % |   |   | 610 |   |   |   | 31.8 | % |   |   | 786 |   |   |   | 31.3 | % |   |   | 563 |   |   |   | 26.2 | % |
| Single family                           |   |                   | 126    |   |   |   | .7 | % |   |   | 107 |   |   |   | 1.0 | % |   |   | 322 |   |   |   | 1.4 | % |   |   | 351 |   |   |   | 2.2 | % |   |   | 628 |   |   |   | 3.9 | % |
| All other loans                         |   |                   | 6,550  |   |   |   | 45.0 | % |   |   | 2,725 |   |   |   | 38.2 | % |   |   | 1,670 |   |   |   | 40.5 | % |   |   | 1,424 |   |   |   | 43.9 | % |   |   | 1,354 |   |   |   | 45.3 | % |
| Total                                   |   | $                      | 13,733 |   |   |   | 100.0 | % |   | $ | 7,341 |   |   |   | 100.0 | % |   | $ | 4,412 |   |   |   | 100.0 | % |   | $ | 3,926 |   |   |   | 100.0 | % |   | $ | 3,954 |   |   |   | 100.0 | % |

|                                                   |   | Year Ended December 31, |   |
|--------------------------------------------------------|--------|-------------------------|--------|
|                                                   |   | 2009                    |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                   |   | (in thousands)          |   |
| Impaired loans without specific valuation allowances   |   | $                       | 13,699 |   |   | $ | 8,043 |   |   | $ | 7,509 |   |   | $ | 754 |   |   | $ | 77 |   |
| Impaired loans with specific valuation allowances      |   |                    | 716    |   |   |   | 523 |   |   |   | 8,992 |   |   |   | 4,454 |   |   |   | 3,406 |   |
| Specific valuation allowance related to impaired loans |   |                    | (622   | ) |   |   | (151 | ) |   |   | (966 | ) |   |   | (641 | ) |   |   | (473 | ) |
| Impaired loans, net                                    |   | $                       | 13,793 |   |   | $ | 8,415 |   |   | $ | 15,535 |   |   | $ | 4,567 |   |   | $ | 3,010 |   |
|                                                   |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average investment in impaired loans                   |   | $                       | 9,058  |   |   | $ | 9,612 |   |   | $ | 9,386 |   |   | $ | 4,074 |   |   | $ | 3,716 |   |

----

Index

| The following schedule reflects recorded investment at the dates indicated in certain types of loans: |   |
|-------------------------------------------------------------------------------------------------------|--------|
|                                                                                                  |   |
|                                                                                                  |   | Year Ended December 31, |   |
|                                                                                                  |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                                                  |   | (in thousands) |   |
| Nonaccrual loans                                                                                      |   | $ | 40,265 |   |   | $ | 28,821 |   |   | $ | 15,341 |   |   | $ | 7,417 |   |   | $ | 6,797 |   |
| SBA guaranteed portion of loans included above                                                        |   |   | (24,088 | ) |   |   | (11,918 | ) |   |   | (5,695 | ) |   |   | (4,256 | ) |   |   | (4,332 | ) |
| Nonaccrual loans, net                                                                                 |   | $ | 16,177 |   |   | $ | 16,903 |   |   | $ | 9,646 |   |   | $ | 3,161 |   |   | $ | 2,465 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Troubled debt restructured loans                                                                      |   | $ | 7,013 |   |   | $ | 5,408 |   |   | $ | 7,255 |   |   | $ | 68 |   |   | $ | 75 |   |
| Loans 30 through 90 days past due with interest accruing                                              |   | $ | 17,686 |   |   | $ | 11,974 |   |   | $ | 18,898 |   |   | $ | 2,463 |   |   | $ | 1,792 |   |
|                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income recognized on impaired loans                                                          |   | $ | 426 |   |   | $ | 12 |   |   | $ | 691 |   |   | $ | 242 |   |   | $ | 141 |   |
| Interest foregone on nonaccrual loans and troubled debt restructured loans outstanding           |   |   | 2,109 |   |   |   | 1,707 |   |   |   | 904 |   |   |   | 488 |   |   |   | 253 |   |
| Gross interest income on impaired and nonaccrual  loans                                     |   | $ | 2,535 |   |   | $ | 1,719 |   |   | $ | 1,595 |   |   | $ | 730 |   |   | $ | 394 |   |

|                          |   | December 31,   |   |
|-------------------------------|--------|----------------|--------|
|                          |   | 2009           |   |   | 2008 |   |   | 2007 |   |
|                          |   | (in thousands) |   |
| Available-for-sale securities |   |           |   |
| U.S. Government agency notes  |   | $              | -      |   |   | $ | - |   |   | $ | 5,993 |   |
| U.S. Government agency: MBS   |   |           | 10,461 |   |   |   | 5,284 |   |   |   | 5,004 |   |
| U.S. Government agency: CMO   |   |           | 7,209  |   |   |   | 1,499 |   |   |   | 1,667 |   |
| Total                         |   | $              | 17,670 |   |   | $ | 6,783 |   |   | $ | 12,664 |   |
|                          |   |           |   |   |   |   |   |   |   |   |   |   |
|                          |   | December 31,   |   |
|                          |   | 2009           |   |   | 2008 |   |   | 2007 |   |
|                          |   | (in thousands  |   |
| Held-to-maturity securities   |   |           |   |
| U.S. Government agency notes  |   | $              | -      |   |   | $ | - |   |   | $ | 200 |   |
| U.S. Government agency: MBS   |   |           | 22,678 |   |   |   | 25,750 |   |   |   | 25,417 |   |
| U.S. Government agency: CMO   |   |           | -      |   |   |   | 5,442 |   |   |   | - |   |
| Total                         |   | $              | 22,678 |   |   | $ | 31,192 |   |   | $ | 25,617 |   |

----

Index

|                          |   | Total Amount |   |   | Less than One Year |   |   | One to Five Years |   |   | Five toTen Years |   |
|-------------------------------|--------|--------------|--------|--------|--------------------|--------|--------|-------------------|--------|--------|------------------|--------|
|                          |   | Amount       |   |   | Yield              |   |   | Amount            |   |   | Yield            |   |   | Amount |   |   | Yield |   |   | Amount |   |   | Yield |   |
| (dollars in thousands)        |   |
| Available-for-sale securities |   |         |   |   |               |   |   |              |   |   |             |   |   |   |   |   |   |   |   |
| U. S. Government:             |   |         |   |   |               |   |   |              |   |   |             |   |   |   |   |   |   |   |   |
| Agency: MBS                   |   | $            | 10,461 |   |               |   | 2.7    | %                 |   | $      | -                |   |   |   | - |   |   | $ | 10,461 |   |   |   | 2.7 | % |   | $ | - |   |   |   | - |   |
| Agency: CMO                   |   |         | 7,209  |   |               |   | 2.0    | %                 |   |   | 520              |   |   |   | 4.9 | % |   |   | 6,689 |   |   |   | 1.8 | % |   |   | - |   |   |   | - |   |
| Total                         |   | $            | 17,670 |   |               |   | 2.5    | %                 |   | $      | 520              |   |   |   | 4.9 | % |   | $ | 17,150 |   |   |   | 2.4 | % |   | $ | - |   |   |   | - |   |
|                          |   |         |   |   |               |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-maturity securities   |   |         |   |   |               |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government:              |   |         |   |   |               |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Agency: MBS                   |   | $            | 22,678 |   |               |   | 4.9    | %                 |   | $      | -                |   |   |   | - |   |   | $ | 21,460 |   |   |   | 4.9 | % |   | $ | 1,218 |   |   |   | 4.3 | % |
| Agency: CMO                   |   |         | -      |   |               |   | -      |              |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                         |   | $            | 22,678 |   |               |   | 4.9    | %                 |   | $      | -                |   |   |   | - |   |   | $ | 21,460 |   |   |   | 4.9 | % |   | $ | 1,218 |   |   |   | 4.3 | % |

| (dollars in thousands)                |   | TotalCapital           |   |   | Tier 1Capital |   |   | Risk-WeightedAssets |   |   | Adjusted AverageAssets |   |   | TotalRisk-BasedCapital Ratio |    |   | Tier 1Risk-BasedCapitalRatio |   |   | Tier 1LeverageRatio |   |
|---------------------------------------|--------|------------------------|--------|--------|---------------|--------|--------|---------------------|--------|--------|------------------------|--------|--------|------------------------------|---------|--------|------------------------------|--------|--------|---------------------|--------|
|                                  |   | (dollars in thousands) |   |
| December 31, 2009                     |   |                   |   |   |          |   |   |                |   |   |                   |   |   |                         |    |   |                         |   |   |
| CWBC (Consolidated)                   |   | $                      | 66,984 |   |          | $      | 60,029 |                |   | $      | 549,207                |   |   | $                            | 681,101 |   |                         |   | 12.20  | %                   |   |   | 10.93 | % |   |   | 8.81 | % |
| Capital in excess of well capitalized |   |                   |   |   |          |   |   |                |   |   |                   |   |   |                         |    |   |                         | $      | 12,063 |                |   | $ | 27,077 |   |   | $ | 25,974 |   |
| CWB                                   |   |                   | 66,175 |   |          |   | 59,219 |                |   |   | 549,240                |   |   |                         | 681,129 |   |                         |   | 12.05  | %                   |   |   | 10.78 | % |   |   | 8.69 | % |
| Capital in excess of well capitalized |   |                   |   |   |          |   |   |                |   |   |                   |   |   |                         |    |   |                         | $      | 11,251 |                |   | $ | 26,265 |   |   | $ | 25,163 |   |
|                                  |   |                   |   |   |          |   |   |                |   |   |                   |   |   |                         |    |   |                         |   |   |                |   |   |   |   |   |   |   |   |
| December 31, 2008                     |   |                   |   |   |          |   |   |                |   |   |                   |   |   |                         |    |   |                         |   |   |                |   |   |   |   |   |   |   |   |
| CWBC (Consolidated)                   |   | $                      | 73,245 |   |          | $      | 66,553 |                |   | $      | 534,628                |   |   | $                            | 647,413 |   |                         |   | 13.70  | %                   |   |   | 12.45 | % |   |   | 10.28 | % |
| Capital in excess of well capitalized |   |                   |   |   |          |   |   |                |   |   |                   |   |   |                         |    |   |                         | $      | 19,782 |                |   | $ | 34,475 |   |   | $ | 34,182 |   |
| CWB                                   |   |                   | 60,597 |   |          |   | 53,904 |                |   |   | 534,655                |   |   |                         | 647,432 |   |                         |   | 11.33  | %                   |   |   | 10.08 | % |   |   | 8.33 | % |
| Capital in excess of well capitalized |   |                   |   |   |          |   |   |                |   |   |                   |   |   |                         |    |   |                         | $      | 7,132  |                |   | $ | 21,825 |   |   | $ | 21,532 |   |
| Well capitalized ratios               |   |                   |   |   |          |   |   |                |   |   |                   |   |   |                         |    |   |                         |   | 10.00  | %                   |   |   | 6.00 | % |   |   | 5.00 | % |
| Minimum capital ratios                |   |                   |   |   |          |   |   |                |   |   |                   |   |   |                         |    | 8.00   | %                            |   |   | 4.00                | %      |   |   | 4.00 | % |

----

Index

----

Index

----

Index

| ● | Lag Risk – lag risk results from the inherent timing difference between the repricing of the Company’s adjustable rate assets and liabilities.  For instance, certain loans tied to the prime rate index may only reprice on a quarterly basis.  However, at a community bank such as CWB, when rates are rising, funding sources tend to reprice more slowly than the loans.  Therefore, for CWB, the effect of this timing difference is generally favorable during a period of rising interest rates and unfavorable during a period of declining interest rates.  This lag can produce some short-term volatility, particularly in times of numerous prime rate changes. |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Repricing Risk – repricing risk is caused by the mismatch in the maturities / repricing periods between interest-earning assets and interest-bearing liabilities.  If CWB was perfectly matched, the net interest margin would expand during rising rate periods and contract during falling rate periods.  This is so since loans tend to reprice more quickly than do funding sources.  Typically, since CWB is somewhat asset sensitive, this would also tend to expand the net interest margin during times of interest rate increases.  However, the margin relationship is somewhat dependent on the shape of the yield curve. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Basis Risk – item pricing tied to different indices may tend to react differently, however, all CWB’s variable products are priced off the prime rate. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Prepayment Risk – prepayment risk results from borrowers paying down / off their loans prior to maturity.  Prepayments on fixed-rate products increase in falling interest rate environments and decrease in rising interest rate environments.  Since a majority of CWB’s loan originations are adjustable rate and set based on prime, and there is little lag time on the reset, CWB does not experience significant prepayments.  However, CWB does have more prepayment risk manufactured housing loans and its mortgage-backed investment securities. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

|                            |   | Year Ended December 31, |    |
|---------------------------------|--------|-------------------------|---------|
|                            |   | 2009                    |    |   | 2008 |   |   | 2007 |   |
|                            |   | AverageBalance          |    |   | Percentof Total |   |   | AverageBalance |   |   | Percentof Total |   |   | AverageBalance |   |   | Percentof Total |   |
|                            |   | (dollars in thousands)  |    |
| Noninterest-bearing demand      |   | $                       | 37,408  |   |   |   | 7.5 | % |   | $ | 35,618 |   |   |   | 7.5 | % |   | $ | 34,172 |   |   |   | 8.4 | % |
| Interest-bearing demand         |   |                    | 119,923 |   |   |   | 23.9 | % |   |   | 58,893 |   |   |   | 12.4 | % |   |   | 65,687 |   |   |   | 16.1 | % |
| Savings                         |   |                    | 16,807  |   |   |   | 3.3 | % |   |   | 14,989 |   |   |   | 3.1 | % |   |   | 15,642 |   |   |   | 3.9 | % |
| TCD’s of $100,000 or more |   |                    | 174,786 |   |   |   | 34.8 | % |   |   | 88,385 |   |   |   | 18.5 | % |   |   | 155,156 |   |   |   | 38.2 | % |
| Other TCD’s               |   |                    | 153,249 |   |   |   | 30.5 | % |   |   | 278,510 |   |   |   | 58.5 | % |   |   | 135,831 |   |   |   | 33.4 | % |
|   Total Deposits      |   | $                       | 502,173 |   |   |   | 100.0 | % |   | $ | 476,395 |   |   |   | 100.0 | % |   | $ | 406,488 |   |   |   | 100.0 | % |

|                                  |   | December 31,              |    |
|---------------------------------------|--------|---------------------------|---------|
|                                  |   | 2009                      |    |   | 2008 |   |
|                                  |   | TCD’s over $100,000 |    |   | Other TCD’s |   |   | TCD’s over $100,000 |   |   | Other TCD’s |   |
|                                  |   | (in thousands)            |    |
| Less than three months                |   | $                         | 44,736  |   |   | $ | 53,639 |   |   | $ | 44,376 |   |   | $ | 85,921 |   |
| Over three months through six months  |   |                      | 30,569  |   |   |   | 29,392 |   |   |   | 31,633 |   |   |   | 61,331 |   |
| Over six months through twelve months |   |                      | 36,042  |   |   |   | 13,042 |   |   |   | 33,985 |   |   |   | 46,584 |   |
| Over twelve months through five years |   |                      | 62,247  |   |   |   | 15,721 |   |   |   | 28,336 |   |   |   | 36,001 |   |
| Total                                 |   | $                         | 173,594 |   |   | $ | 111,794 |   |   | $ | 138,330 |   |   | $ | 229,837 |   |

|                                       |   | Total          |    |   | < 1 Year |   |    | 1-3 Years |   |   | 3-5 Years |   |   | Over 5 Years |   |
|--------------------------------------------|--------|----------------|---------|--------|-------------|--------|---------|-----------|--------|--------|-----------|--------|--------|--------------|--------|
|                                       |   | (in thousands) |    |
| FHLB and FRB borrowing                     |   | $              | 89,000  |   |        | $      | 45,000  |      |   | $      | 20,000    |   |   | $            | 24,000 |   |   | $ | - |   |
| Time certificates of deposits              |   |           | 285,388 |   |        |   | 207,420 |      |   |   | 59,238    |   |   |         | 18,730 |   |   |   | - |   |
| Operating lease obligations                |   |           | 3,750   |   |        |   | 1,186   |      |   |   | 1,540     |   |   |         | 576    |   |   |   | 448 |   |
| Purchase obligations for service providers |   |           | 1,790   |   |        |   | 594     |      |   |   | 895       |   |   |         | 301    |   |   |   | - |   |
| Total                                      |   | $              | 379,928 |   |        | $      | 254,200 |      |   | $      | 81,673    |   |   | $            | 43,607 |   |   | $ | 448 |   |

----

Index

----

Index

| ■ | making or acquiring loans or other extensions of credit for its own account or for the account of others |
|---------|----------------------------------------------------------------------------------------------------------|

| ■ | servicing loans and other extensions of credit; |
|---------|-------------------------------------------------|

| ■ | performing functions or activities that may be performed by a trust company in the manner authorized by federal or state law under certain circumstances; |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ■ | leasing personal and real property or acting as agent, broker, or adviser in leasing such property in accordance with various restrictions imposed by FRB regulations; |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ■ | acting as investment or financial advisor; |
|---------|--------------------------------------------|

| ■ | providing management consulting advise under certain circumstances; |
|---------|---------------------------------------------------------------------|

| ■ | providing support services, including courier services and printing and selling MICR-encoded items; |
|---------|-----------------------------------------------------------------------------------------------------|

| ■ | acting as a principal, agent or broker for insurance under certain circumstances; |
|---------|-----------------------------------------------------------------------------------|

| ■ | making equity and debt investments in corporations or projects designed primarily to promote community welfare or jobs for residents; |
|---------|---------------------------------------------------------------------------------------------------------------------------------------|

| ■ | providing financial, banking or economic data processing and data transmission services; |
|---------|------------------------------------------------------------------------------------------|

| ■ | owning, controlling or operating a savings association under certain circumstances; |
|---------|-------------------------------------------------------------------------------------|

| ■ | selling money orders, travelers’ checks and U.S. Savings Bonds; |
|---------|-----------------------------------------------------------------------|

| ■ | providing securities brokerage services, related securities credit activities pursuant to Regulation T and other incidental activities; |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------|

| ■ | underwriting and dealing in obligations of the U.S., general obligations of states and their political subdivisions and other obligations authorized for state member banks under federal law |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | the customer must obtain or provide some additional credit, property or services from or to CWB other than a loan, discount, deposit or trust services: |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | the customer must obtain or provide some additional credit, property or service from or to CWBC or any subsidiaries; or |
|---------|-------------------------------------------------------------------------------------------------------------------------|

| ● | the customer must not obtain some other credit, property or services from competitors, except reasonable requirements to assure soundness of credit extended |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

| ■ | assets (exclusive of goodwill and other intangible assets) would be 1.25 times its liabilities (exclusive of deferred taxes, deferred income and other deferred credits); and |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ■ | current assets would be at least equal to current liabilities. |
|---------|----------------------------------------------------------------|

| ● | the creation of an independent accounting oversight board; |
|---------|------------------------------------------------------------|

| ● | auditor independence provisions that restrict non-audit services that accountants may provide to their audit clients; |
|---------|-----------------------------------------------------------------------------------------------------------------------|

| ● | additional corporate governance and responsibility measures, including the requirement that the chief executive officer and chief financial officer of a public company certify financial statements; |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | the forfeiture of bonuses or other incentive-based compensation and profits from the sale of an issuer’s securities by directors and senior officers in the twelve month period following initial publication of any financial statements that later require restatement; |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | an increase in the oversight of, and enhancement of certain requirements relating to, audit committees of public companies and how they interact with CWBC’s independent auditors; |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | requirements that audit committee members must be independent and are barred from accepting consulting, advisory or other compensatory fees from the issuer; |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

| ● | requirements that companies disclose whether at least one member of the audit committee is a “financial expert’ (as such term is defined by the SEC) and if not discussed, why the audit committee does not have a financial expert; |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | expanded disclosure requirements for corporate insiders, including accelerated reporting of stock transactions by insiders and a prohibition on insider trading during pension blackout periods; |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | a prohibition on personal loans to directors and officers, except certain loans made by insured financial institutions on non-preferential terms and in compliance with other bank regulatory requirements; |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | disclosure of a code of ethics and filing a Form 8-K for a change or waiver of such code; |
|---------|-------------------------------------------------------------------------------------------|

| ● | a range of enhanced penalties for fraud and other violations; and |
|---------|-------------------------------------------------------------------|

| ● | expanded disclosure and certification relating to an issuer’s disclosure controls and procedures and internal controls over financial reporting. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|                            |   | AdequatelyCapitalized      |   | WellCapitalized |   | CWB    |   | CWBC(consolidated) |
|---------------------------------|--------|----------------------------|--------|-----------------|--------|--------|--------|--------------------|
|                            |   | (greater than or equal to) |   |            |   |   |   |               |
| Total risk-based capital        |   |                       | 8.00   | %               |   |   | 10.00  | %                  |   |   | 12.05 | % |   |   | 12.20 | % |
| Tier 1 risk-based capital ratio |   |                       | 4.00   | %               |   |   | 6.00   | %                  |   |   | 10.78 | % |   |   | 10.93 | % |
| Tier 1 leverage capital ratio   |   |                       | 4.00   | %               |   |   | 5.00   | %                  |   |   | 8.69 | % |   |   | 8.81 | % |

| ■ | “well capitalized” if it has a total risk-based capital ratio of 10% or more, has a Tier 1 risk-based capital ratio of 6% or more, has a leverage capital ratio of 5% or more and is not subject to specified requirements to meet and maintain a specific capital level for any capital measure; |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ■ | “adequately capitalized” if it has a total risk-based capital ratio of 8% or more, a Tier 1 risk-based capital ratio of 4% or more and a leverage capital ratio of 4% or more (3% under certain circumstances) and does not meet the definition of “well capitalized”; |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

| ■ | “undercapitalized” if it has a total risk-based capital ratio that is less than 8%, a Tier 1 risk-based capital ratio that is less than 4%, or a leverage capital ratio that is less than 4% (3% under certain circumstances) |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ■ | “significantly undercapitalized” if it has a total risk-based capital ratio that is less than 6%, a Tier 1 risk-based capital ratio that is less than 3% or a leverage capital ratio that is less than 3%; and |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ■ | “critically undercapitalized” if it has a ratio of tangible equity to total assets that is equal to or less than 2% |
|---------|---------------------------------------------------------------------------------------------------------------------------------|

----

Index

| Capital Group                                    | Supervisory Subgroup |
|--------------------------------------------------|----------------------|
| A                                                | B                    | C |
| 1.    Well Capitalized       | I                    | II | III |
| 2.    Adequately Capitalized |                 |
| 3.    Undercapitalized       |                 | III | IV |

| Initial Base Assessment Rates  |
|--------------------------------|
| Annual Rates (in basis points) | Risk Category |
| I *                            | II | III | IV |
| Minimum                        | Maximum |
| 12                             | 16 | 22 | 32 | 45 |

----

Index

| Total Base Assessment Rates  |
|------------------------------|
|                         | RiskCategoryI | RiskCategoryII | RiskCategoryIII | RiskCategoryIV |
| Initial base assessment rate | 12 – 16 | 22 | 32 | 45 |
| Unsecured debt adjustment    | -5 – 0 | -5 – 0 | -5 – 0 | -5 – 0 |
| Secured liability adjustment | 0 – 8 | 0 – 11 | 0 – 16 | 0 – 22.5 |
| Brokered deposit adjustment  |   | 0 – 10 | 0 – 10 | 0 – 10 |
| Total base assessment rate   | 7 – 24 | 17 – 43 | 27 – 58 | 40 – 77.5 |

----

Index

----

Index

----

Index

----

Index

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

| Interest Rate Sensitivity                       |   | 200 bp increase        |    |   | 200 bp decrease |   |
|-------------------------------------------------|--------|------------------------|---------|--------|-----------------|--------|
|                                            |   | 2009                   |    |   | 2008            |   |   | 2009 |   |   | 2008 |   |
|                                            |   | (dollars in thousands) |    |
| Anticipated impact over the next twelve months: |   |                   |    |   |            |   |   |   |   |   |   |   |
| Net interest income (NII)                       |   | $                      | 263     |   |            | $      | 684 |   |   | $ | - |   |   | $ | - |   |
|                                            |   |                   | 0.9     | %      |            |   | 2.8 | % |   |   | - |   |   |   | - |   |
|                                            |   |                   |    |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Economic value of equity (EVE)                  |   | $                      | (12,744 | )      |            | $      | (11,298 | ) |   | $ | - |   |   | $ | - |   |
|                                            |   |                   | (19.1   | %)     |            |   | (16.5 | %) |   |   | - |   |   |   | - |   |

----

Index

ITEM 8.  CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

----

Index

CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                 |   | December 31,           |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                                                                                                                 |   | 2009                   |    |   | 2008 |   |
|                                                                                                                                                                 |   | (dollars in thousands) |    |
| ASSETS                                                                                                                                                               |   |                   |    |   |   |   |
| Cash and due from banks                                                                                                                                              |   | $                      | 4,906   |   |   | $ | 4,151 |   |
| Federal funds sold                                                                                                                                                   |   |                   | 605     |   |   |   | 8,102 |   |
|    Cash and cash equivalents                                                                                                                          |   |                   | 5,511   |   |   |   | 12,253 |   |
| Time deposits in other financial institutions                                                                                                                        |   |                   | 640     |   |   |   | 812 |   |
| Investment securities available-for-sale, at fair value; amortized cost of $17,367 at December 31, 2009 and $6,871 at December 31, 2008                         |   |                   | 17,670  |   |   |   | 6,783 |   |
| Investment securities held-to-maturity, at amortized cost; fair value of $23,538  at December 31, 2009 and $31,574 at December 31, 2008               |   |                   | 22,678  |   |   |   | 31,192 |   |
| Federal Home Loan Bank stock, at cost                                                                                                                                |   |                   | 5,660   |   |   |   | 5,660 |   |
| Federal Reserve Bank stock, at cost                                                                                                                                  |   |                   | 1,322   |   |   |   | 902 |   |
| Loans:                                                                                                                                                               |   |                   |    |   |   |   |   |   |
|    Held for sale, at lower of cost or fair value                                                                                                      |   |                   | 102,574 |   |   |   | 131,786 |   |
|    Held for investment, net of allowance for loan losses of $13,733 at December 31,     2009 and $7,341 at December 31, 2008 |   |                   | 500,866 |   |   |   | 449,289 |   |
|        Total loans                                                                                                                |   |                   | 603,440 |   |   |   | 581,075 |   |
| Servicing rights                                                                                                                                                     |   |                   | 998     |   |   |   | 1,161 |   |
| Other assets acquired through foreclosure, net                                                                                                                       |   |                   | 1,822   |   |   |   | 1,146 |   |
| Premises and equipment, net                                                                                                                                          |   |                   | 3,279   |   |   |   | 3,718 |   |
| Other assets                                                                                                                                                         |   |                   | 21,196  |   |   |   | 12,279 |   |
| TOTAL ASSETS                                                                                                                                                         |   | $                      | 684,216 |   |   | $ | 656,981 |   |
|                                                                                                                                                                 |   |                   |    |   |   |   |   |   |
| LIABILITIES                                                                                                                                                          |   |                   |    |   |   |   |   |   |
| Deposits:                                                                                                                                                            |   |                   |    |   |   |   |   |   |
|    Non-interest-bearing demand                                                                                                                        |   | $                      | 37,703  |   |   | $ | 35,080 |   |
|    Interest-bearing demand                                                                                                                            |   |                   | 191,905 |   |   |   | 57,474 |   |
|    Savings                                                                                                                                            |   |                   | 16,396  |   |   |   | 14,718 |   |
|    Time certificates                                                                                                                                  |   |                   | 285,388 |   |   |   | 368,167 |   |
|      Total deposits                                                                                                                         |   |                   | 531,392 |   |   |   | 475,439 |   |
| Federal Home Loan Bank advances                                                                                                                                      |   |                   | 89,000  |   |   |   | 110,000 |   |
| Other liabilities                                                                                                                                                    |   |                   | 3,517   |   |   |   | 4,924 |   |
|      Total liabilities                                                                                                                      |   |                   | 623,909 |   |   |   | 590,363 |   |
| Commitments and contingencies-See Note 16                                                                                                                            |   |                   |    |   |   |   |   |   |
| STOCKHOLDERS’ EQUITY                                                                                                                                           |   |                   |    |   |   |   |   |   |
| Preferred stock, no par value; 10,000,000 shares authorized; 15,600 shares  issued and outstanding                                                         |   |                   | 14,540  |   |   |   | 14,300 |   |
| Common stock, no par value; 10,000,000 shares authorized; 5,915,130 shares issued and outstanding  at December 31, 2009 and December 31, 2008         |   |                   | 33,110  |   |   |   | 33,081 |   |
| Retained earnings                                                                                                                                                    |   |                   | 12,479  |   |   |   | 19,288 |   |
| Accumulated other comprehensive income (loss)                                                                                                                        |   |                   | 178     |   |   |   | (51 | ) |
|    Total stockholders’ equity                                                                                                                   |   |                   | 60,307  |   |   |   | 66,618 |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                     |   | $                      | 684,216 |   |   | $ | 656,981 |   |
|                                                                                                                                                                 |   |                   |    |   |   |   |   |   |
| See accompanying notes.                                                                                                                                              |   |                   |    |   |   |   |   |   |

----

Index

CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                                     |   | Year Ended December 31,               |   |
|--------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                     |   | 2009                                  |   |   | 2008 |   |   | 2007 |   |
|                                                                     |   | (in thousands, except per share data) |   |
| INTEREST INCOME                                                          |   |                                  |   |   |   |   |   |   |   |
| Loans                                                                    |   | $                                     | 39,094 |   |   | $ | 43,081 |   |   | $ | 44,180 |   |
| Investment securities                                                    |   |                                  | 1,740  |   |   |   | 2,179 |   |   |   | 1,952 |   |
| Other                                                                    |   |                                  | 69     |   |   |   | 272 |   |   |   | 709 |   |
| Total interest income                                                    |   |                                  | 40,903 |   |   |   | 45,532 |   |   |   | 46,841 |   |
| INTEREST EXPENSE                                                         |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                 |   |                                  | 11,240 |   |   |   | 17,225 |   |   |   | 17,808 |   |
| Other borrowings                                                         |   |                                  | 3,705  |   |   |   | 4,998 |   |   |   | 5,026 |   |
| Total interest expense                                                   |   |                                  | 14,945 |   |   |   | 22,223 |   |   |   | 22,834 |   |
| NET INTEREST INCOME                                                      |   |                                  | 25,958 |   |   |   | 23,309 |   |   |   | 24,007 |   |
| Provision for loan losses                                                |   |                                  | 18,678 |   |   |   | 5,264 |   |   |   | 1,297 |   |
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                      |   |                                  | 7,280  |   |   |   | 18,045 |   |   |   | 22,710 |   |
| NON-INTEREST INCOME                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Other loan fees                                                          |   |                                  | 1,893  |   |   |   | 2,104 |   |   |   | 2,738 |   |
| Gains from loan sales, net                                               |   |                                  | 363    |   |   |   | 1,018 |   |   |   | 802 |   |
| Document processing fees, net                                            |   |                                  | 803    |   |   |   | 718 |   |   |   | 750 |   |
| Service charges                                                          |   |                                  | 456    |   |   |   | 434 |   |   |   | 442 |   |
| Loan servicing fees, net                                                 |   |                                  | 773    |   |   |   | 488 |   |   |   | 4 |   |
| Other                                                                    |   |                                  | 130    |   |   |   | 319 |   |   |   | 109 |   |
| Total non-interest income                                                |   |                                  | 4,418  |   |   |   | 5,081 |   |   |   | 4,845 |   |
| NON-INTEREST EXPENSES                                                    |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                                           |   |                                  | 11,896 |   |   |   | 13,390 |   |   |   | 14,012 |   |
| Occupancy and equipment expenses                                         |   |                                  | 2,112  |   |   |   | 2,341 |   |   |   | 2,089 |   |
| FDIC assessment                                                          |   |                                  | 1,596  |   |   |   | 369 |   |   |   | 230 |   |
| Professional services                                                    |   |                                  | 901    |   |   |   | 788 |   |   |   | 896 |   |
| Advertising and marketing                                                |   |                                  | 344    |   |   |   | 421 |   |   |   | 751 |   |
| Depreciation and amortization                                            |   |                                  | 491    |   |   |   | 518 |   |   |   | 516 |   |
| Loss on sale and write-down of other assets acquired through foreclosure |   |                                  | 615    |   |   |   | - |   |   |   | 29 |   |
| Data processing                                                          |   |                                  | 620    |   |   |   | 541 |   |   |   | 500 |   |
| Other                                                                    |   |                                  | 2,904  |   |   |   | 2,148 |   |   |   | 1,977 |   |
| Total non-interest expenses                                              |   |                                  | 21,479 |   |   |   | 20,516 |   |   |   | 21,000 |   |
| (Loss) income before provision for income taxes                          |   |                                  | (9,781 | ) |   |   | 2,610 |   |   |   | 6,555 |   |
| (Benefit) provision for income taxes                                     |   |                                  | (4,018 | ) |   |   | 1,129 |   |   |   | 2,766 |   |
| NET (LOSS) INCOME                                                        |   | $                                     | (5,763 | ) |   | $ | 1,481 |   |   | $ | 3,789 |   |
|                                                                     |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends                                                |   |                                  | 1,046  |   |   |   | 35 |   |   |   | - |   |
| NET (LOSS) INCOME APPLICABLE TO COMMON STOCKHOLDERS                      |   | $                                     | (6,809 | ) |   | $ | 1,446 |   |   | $ | 3,789 |   |
| (Loss) earnings per common share:                                        |   |                                  |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                    |   | $                                     | (1.15  | ) |   | $ | 0.24 |   |   | $ | 0.65 |   |
| Diluted                                                                  |   | $                                     | (1.15  | ) |   | $ | 0.24 |   |   | $ | 0.63 |   |
| Basic weighted average number of common shares outstanding               |   |                                  | 5,915  |   |   |   | 5,913 |   |   |   | 5,862 |   |
| Diluted weighted average number of common shares outstanding             |   |                                  | 5,915  |   |   |   | 5,941 |   |   |   | 6,022 |   |
|                                                                     |   |                                  |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes.                                                  |   |                                  |   |   |   |   |   |   |   |   |   |   |

----

Index

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

|                                                                    |   |            |   |   |               |   |   |           |   |   |                |   |   |  Accumulated Other  |   |   |  Total |   |
|-------------------------------------------------------------------------|--------|-----------------|--------|--------|--------------------|--------|--------|----------------|--------|--------|---------------------|--------|--------|-------------------------------|--------|--------|-------------|--------|
|                                                                    |   |  Preferred |   |   |  Common Stock |   |   |  Retained |   |   |  Comprehensive |   |   |  Stockholders’     |   |
|                                                                    |   |  Stock     |   |   |  Shares       |   |   |  Amount   |   |   |  Earnings      |   |   | Income (Loss)            |   |   | Equity      |   |
|                                                                    |   |            |   |   | (in thousands)     |   |   |           |   |   |                |   |   |                          |   |
| BALANCES AT                                                             |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   |
| JANUARY 1, 2007                                                         |   | $               | -      |   |               |   | 5,815  |           |   | $      | 30,794              |   |   | $                             | 16,169 |   |        | $      | (143 | ) |   | $ | 46,820 |   |
| Exercise of stock options                                               |   |            |   |   |               |   | 80     |           |   |   | 499                 |   |   |                          |   |   |        |   |   |   |   |   | 499 |   |
| Stock option expense, recognized in earnings                            |   |            |   |   |               |   |   |           |   |   | 283                 |   |   |                          |   |   |        |   |   |   |   |   | 283 |   |
| Tax benefit from stock options                                          |   |            |   |   |               |   |   |           |   |   | 60                  |   |   |                          |   |   |        |   |   |   |   |   | 60 |   |
| Comprehensive income:                                                   |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   |   |   |   |   |   |   |
| Net income                                                              |   |            |   |   |               |   |   |           |   |   |                |   |   |                          | 3,789  |   |        |   |   |   |   |   | 3,789 |   |
| Change in unrealized loss on securities available-for-sale, net         |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   | 115 |   |   |   | 115 |   |
| Comprehensive income                                                    |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   |   |   |   |   | 3,904 |   |
| Dividends paid on common ($0.24 per share)                              |   |            |   |   |               |   |   |           |   |   |                |   |   |                          | (1,407 | )      |        |   |   |   |   |   | (1,407 | ) |
| BALANCES AT                                                             |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   |   |   |   |   |   |   |
| DECEMBER 31, 2007                                                       |   |            | -      |   |               |   | 5,895  |           |   |   | 31,636              |   |   |                          | 18,551 |   |        |   | (28 | ) |   |   | 50,159 |   |
| Issuance of preferred stock                                             |   |            | 14,291 |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   |   |   |   |   | 14,291 |   |
| Issuance of common stock warrants                                       |   |            |   |   |               |   |   |           |   |   | 1,159               |   |   |                          |   |   |        |   |   |   |   |   | 1,159 |   |
| Exercise of stock options                                               |   |            |   |   |               |   | 20     |           |   |   | 105                 |   |   |                          |   |   |        |   |   |   |   |   | 105 |   |
| Stock option expense, recognized in earnings                            |   |            |   |   |               |   |   |           |   |   | 181                 |   |   |                          |   |   |        |   |   |   |   |   | 181 |   |
| Comprehensive income:                                                   |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   |   |   |   |   |   |   |
| Net income                                                              |   |            |   |   |               |   |   |           |   |   |                |   |   |                          | 1,481  |   |        |   |   |   |   |   | 1,481 |   |
| Change in unrealized loss on securities available-for-sale, net         |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   | (23 | ) |   |   | (23 | ) |
| Comprehensive income                                                    |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   |   |   |   |   | 1,458 |   |
| Dividends paid:                                                         |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   |   |   |   |   |   |   |
| Common ($0.12 per share)                                                |   |            |   |   |               |   |   |           |   |   |                |   |   |                          | (709   | )      |        |   |   |   |   |   | (709 | ) |
| Preferred                                                               |   |            | 9      |   |               |   |   |           |   |   |                |   |   |                          | (35    | )      |        |   |   |   |   |   | (26 | ) |
| BALANCES AT                                                             |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   |   |   |   |   |   |   |
| DECEMBER 31, 2008                                                       |   |            | 14,300 |   |               |   | 5,915  |           |   |   | 33,081              |   |   |                          | 19,288 |   |        |   | (51 | ) |   |   | 66,618 |   |
| Preferred stock related costs                                           |   |            | (26    | )      |               |   |   |           |   |   |                |   |   |                          |   |   |        |   |   |   |   |   | (26 | ) |
| Stock option expense, recognized in earnings                            |   |            |   |   |               |   |   |           |   |   | 29                  |   |   |                          |   |   |        |   |   |   |   |   | 29 |   |
| Comprehensive income:                                                   |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   |   |   |   |   |   |   |
| Net loss                                                                |   |            |   |   |               |   |   |           |   |   |                |   |   |                          | (5,763 | )      |        |   |   |   |   |   | (5,763 | ) |
| Change in unrealized gain ( loss) on securities available-for-sale, net |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   | 229 |   |   |   | 229 |   |
| Comprehensive loss                                                      |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   |   |   |   |   | (5,534 | ) |
| Dividends paid on preferred                                             |   |            | 266    |   |               |   |   |           |   |   |                |   |   |                          | (1,046 | )      |        |   |   |   |   |   | (780 | ) |
| BALANCES AT                                                             |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   |   |   |   |   |   |   |
| DECEMBER 31, 2009                                                       |   | $               | 14,540 |   |               |   | 5,915  |           |   | $      | 33,110              |   |   | $                             | 12,479 |   |        | $      | 178 |   |   | $ | 60,307 |   |
|                                                                    |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   |   |   |   |   |   |   |
| See accompanying notes.                                                 |   |            |   |   |               |   |   |           |   |   |                |   |   |                          |   |   |        |   |   |   |   |   |   |   |

----

Index

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                                                    |   | Year Ended December 31, |     |
|-------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|----------|
|                                                                                                                    |   | 2009                    |     |   | 2008 |   |   | 2007 |   |
|                                                                                                                    |   | (in thousands)          |     |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                   |   |                    |     |   |   |   |   |   |   |
|    Net (loss) income                                                                                     |   | $                       | (5,763   | ) |   | $ | 1,481 |   |   | $ | 3,789 |   |
|    Adjustments to reconcile net (loss) income to net cash provided by operating activities:              |   |                    |     |   |   |   |   |   |   |   |   |   |
|        Provision for loan losses                                                     |   |                    | 18,678   |   |   |   | 5,264 |   |   |   | 1,297 |   |
|        Write-down of other assets acquired through foreclosure                       |   |                    | 57       |   |   |   | - |   |   |   | 54 |   |
|        Depreciation and amortization                                                 |   |                    | 491      |   |   |   | 518 |   |   |   | 516 |   |
|        Deferred income taxes                                                         |   |                    | (3,221   | ) |   |   | (1,668 | ) |   |   | (576 | ) |
|        Stock-based compensation                                                      |   |                    | 29       |   |   |   | 181 |   |   |   | 283 |   |
|        Net amortization of discounts and premiums for investment securities          |   |                    | (56      | ) |   |   | (85 | ) |   |   | (19 | ) |
|        Loss (gain) on:                                                               |   |                    |     |   |   |   |   |   |   |   |   |   |
|           Sale of other assets acquired through foreclosure           |   |                    | 558      |   |   |   | (205 | ) |   |   | 29 |   |
|           Sale of loans held for sale                                 |   |                    | (363     | ) |   |   | (1,018 | ) |   |   | (802 | ) |
|        Loan originated for sale and principal collections, net                       |   |                    | (2,251   | ) |   |   | (2,682 | ) |   |   | 673 |   |
|        Changes in:                                                                   |   |                    |     |   |   |   |   |   |   |   |   |   |
|           Servicing rights, net of amortization                       |   |                    | 163      |   |   |   | 45 |   |   |   | 762 |   |
|           Other assets                                                |   |                    | (6,077   | ) |   |   | 552 |   |   |   | (1,444 | ) |
|           Other liabilities                                           |   |                    | (1,178   | ) |   |   | (22 | ) |   |   | (345 | ) |
|              Net cash provided by operating activities |   |                    | 1,067    |   |   |   | 2,361 |   |   |   | 4,217 |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                                                   |   |                    |     |   |   |   |   |   |   |   |   |   |
|        Purchase of held-to-maturity securities                                       |   |                    | (2,872   | ) |   |   | (12,899 | ) |   |   | (17,782 | ) |
|        Purchase of available-for-sale securities                                     |   |                    | (13,433  | ) |   |   | (2,002 | ) |   |   | - |   |
|        Purchase of Federal Home Loan Bank stock, net of redemptions                  |   |                    | -        |   |   |   | 375 |   |   |   | (1,029 | ) |
|        Purchase of Federal Reserve stock                                             |   |                    | (420     | ) |   |   | (90 | ) |   |   | - |   |
|        Federal Home Loan Bank stock dividend                                         |   |                    | -        |   |   |   | (301 | ) |   |   | (240 | ) |
|        Principal pay downs and maturities of available-for-sale securities           |   |                    | 2,973    |   |   |   | 7,844 |   |   |   | 9,634 |   |
|        Principal pay downs and maturities of held-to-maturity securities             |   |                    | 11,405   |   |   |   | 7,407 |   |   |   | 2,714 |   |
|        Loan originations and principal collections, net                              |   |                    | (43,545  | ) |   |   | (45,360 | ) |   |   | (88,863 | ) |
|        Proceeds from sale of other assets acquired through foreclosure               |   |                    | 3,816    |   |   |   | 1,095 |   |   |   | 451 |   |
|        Net increase in time deposits in other financial institutions                 |   |                    | 172      |   |   |   | (34 | ) |   |   | (242 | ) |
|        Purchase of premises and equipment, net                                       |   |                    | (52      | ) |   |   | (952 | ) |   |   | (998 | ) |
|           Net cash used in investing activities                       |   |                    | (41,956  | ) |   |   | (44,917 | ) |   |   | (96,355 | ) |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                                                   |   |                    |     |   |   |   |   |   |   |   |   |   |
|        Proceeds from issuance of preferred stock and warrants on common stock        |   |                    | -        |   |   |   | 15,450 |   |   |   | - |   |
|        Preferred stock dividends                                                     |   |                    | (1,046   | ) |   |   | (35 | ) |   |   | - |   |
|        Amortization of discount on preferred stock, net of additional costs          |   |                    | 240      |   |   |   | 9 |   |   |   | - |   |
|        Exercise of stock options                                                     |   |                    | -        |   |   |   | 105 |   |   |   | 499 |   |
|        Cash dividends paid on common stock                                           |   |                    | -        |   |   |   | (709 | ) |   |   | (1,407 | ) |
|        Net increase (decrease)  in demand deposits and savings accounts    |   |                    | 138,732  |   |   |   | (15,889 | ) |   |   | 25,631 |   |
|        Net (decrease) increase in time certificates of deposit                       |   |                    | (82,779  | ) |   |   | 57,589 |   |   |   | 39,361 |   |
|        Proceeds from Federal Home Loan Bank and FRB advances                         |   |                    | 130,000  |   |   |   | 33,000 |   |   |   | 64,000 |   |
|        Repayment of Federal Home Loan Bank and FRB advances                          |   |                    | (151,000 | ) |   |   | (44,000 | ) |   |   | (38,000 | ) |
|           Net cash provided by financing activities                   |   |                    | 34,147   |   |   |   | 45,520 |   |   |   | 90,084 |   |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                                    |   |                    | (6,742   | ) |   |   | 2,964 |   |   |   | (2,054 | ) |
| CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                                                            |   |                    | 12,253   |   |   |   | 9,289 |   |   |   | 11,343 |   |
| CASH AND CASH EQUIVALENTS, END OF YEAR                                                                                  |   | $                       | 5,511    |   |   | $ | 12,253 |   |   | $ | 9,289 |   |
|                                                                                                                    |   |                    |     |   |   |   |   |   |   |   |   |   |
| See accompanying notes.                                                                                                 |   |                    |     |   |   |   |   |   |   |   |   |   |

----

Index

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| 1.   | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
|----------------|--------------------------------------------|

----

Index

| ●   | SBA – A migration analysis and various portfolio specific factors are used to determine the required allowance for all non-impaired loans.  In addition, the migration results are adjusted based upon qualitative factors.  Qualitative factors include, but are not limited to, adjustments for existing economic conditions, past due trends and concentration exposure.   Impaired loans are assigned a specific reserve based upon the individual characteristics of the loan. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Relationship Banking – Primarily includes commercial, commercial real estate and construction loans.  A migration analysis and various portfolio specific factors are used to calculate the required allowance for all non-impaired loans. In addition, the migration results are adjusted based upon qualitative factors.  Qualitative factors include, but are not limited to, adjustments for existing economic conditions, past due trends and concentration exposure. Impaired loans are assigned a specific reserve based upon the individual characteristics of the loan. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●   | Manufactured Housing – The allowance is calculated on the basis of loss history and risk rating, which is primarily a function of delinquency.  In addition, the loss history is adjusted based upon qualitative factors similar to those used for SBA loans. |
|---------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

|   | Building and improvements         | 31.5 years         |
|--------|-----------------------------------|--------------------|
|   | Furniture and equipment           | 5 – 10 years |
|   | Electronic equipment and software | 3 – 5 years  |

----

Index

----

Index

| 2. | INVESTMENT SECURITIES |
|----|-----------------------|

|                          |   |           |   |
|-------------------------------|--------|----------------|--------|
| December 31, 2009             |   | (in thousands) |   |
|                          |   |           |   |   | Gross |   |   | Gross |   |   |   |   |
|                          |   | Amortized      |   |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
| Available-for-sale securities |   | Cost           |   |   | Gains |   |   | Losses |   |   | Value |   |
| U.S. Government agency: MBS   |   | $              | 10,175 |   |   | $ | 286 |   |   | $ | - |   |   | $ | 10,461 |   |
| U.S. Government agency: CMO   |   |           | 7,192  |   |   |   | 37 |   |   |   | (20 | ) |   |   | 7,209 |   |
| Total                         |   | $              | 17,367 |   |   | $ | 323 |   |   | $ | (20 | ) |   | $ | 17,670 |   |
|                          |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-maturity securities   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government agency: MBS   |   | $              | 22,678 |   |   | $ | 891 |   |   | $ | (31 | ) |   | $ | 23,538 |   |
| U.S. Government agency: CMO   |   |           | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                         |   | $              | 22,678 |   |   | $ | 891 |   |   | $ | (31 | ) |   | $ | 23,538 |   |

| December 31, 2008             |   | (in thousands) |   |
|-------------------------------|--------|----------------|--------|
|                          |   |           |   |   | Gross |   |   | Gross |   |   |   |   |
|                          |   | Amortized      |   |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
| Available-for-sale securities |   | Cost           |   |   | Gains |   |   | Losses |   |   | Value |   |
| U.S. Government agency: MBS   |   | $              | 5,371  |   |   | $ | 1 |   |   | $ | (88 | ) |   | $ | 5,284 |   |
| U.S. Government agency: CMO   |   |           | 1,500  |   |   |   | 3 |   |   |   | (4 | ) |   |   | 1,499 |   |
| Total                         |   | $              | 6,871  |   |   | $ | 4 |   |   | $ | (92 | ) |   | $ | 6,783 |   |
|                          |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-maturity securities   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government agency: MBS   |   | $              | 25,750 |   |   | $ | 459 |   |   | $ | (21 | ) |   | $ | 26,188 |   |
| U.S. Government agency: CMO   |   |           | 5,442  |   |   |   | - |   |   |   | (56 | ) |   |   | 5,386 |   |
| Total                         |   | $              | 31,192 |   |   | $ | 459 |   |   | $ | (77 | ) |   | $ | 31,574 |   |

|                          |   | Total Amount |   |   | Less than One Year |   |   | One to Five Years |   |   | Five toTen Years |   |
|-------------------------------|--------|--------------|--------|--------|--------------------|--------|--------|-------------------|--------|--------|------------------|--------|
|                          |   | Amount       |   |   | Yield              |   |   | Amount            |   |   | Yield            |   |   | Amount |   |   | Yield |   |   | Amount |   |   | Yield |   |
| (dollars in thousands)        |   |
| Available-for-sale securities |   |         |   |   |               |   |   |              |   |   |             |   |   |   |   |   |   |   |   |
| U. S. Government:             |   |         |   |   |               |   |   |              |   |   |             |   |   |   |   |   |   |   |   |
| Agency: MBS                   |   | $            | 10,461 |   |               |   | 2.7    | %                 |   | $      | -                |   |   |   | - |   |   | $ | 10,461 |   |   |   | 2.7 | % |   | $ | - |   |   |   | - |   |
| Agency: CMO                   |   |         | 7,209  |   |               |   | 2.0    | %                 |   |   | 520              |   |   |   | 4.9 | % |   |   | 6,689 |   |   |   | 1.8 | % |   |   | - |   |   |   | - |   |
| Total                         |   | $            | 17,670 |   |               |   | 2.5    | %                 |   | $      | 520              |   |   |   | 4.9 | % |   | $ | 17,150 |   |   |   | 2.4 | % |   | $ | - |   |   |   | - |   |
|                          |   |         |   |   |               |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-maturity securities   |   |         |   |   |               |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government:              |   |         |   |   |               |   |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Agency: MBS                   |   | $            | 22,678 |   |               |   | 4.9    | %                 |   | $      | -                |   |   |   | - |   |   | $ | 21,460 |   |   |   | 4.9 | % |   | $ | 1,218 |   |   |   | 4.3 | % |
| Agency: CMO                   |   |         | -      |   |               |   | -      |              |   |   | -                |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |
| Total                         |   | $            | 22,678 |   |               |   | 4.9    | %                 |   | $      | -                |   |   |   | - |   |   | $ | 21,460 |   |   |   | 4.9 | % |   | $ | 1,218 |   |   |   | 4.3 | % |

----

Index

| December 31, 2009                 |   | Less than 12 months |   |   | More than 12 months |   |   | Total  |   |
|-----------------------------------|--------|---------------------|--------|--------|---------------------|--------|--------|--------|--------|
|                              |   | Fair                |   |   | Unrealized          |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                              |   | Value               |   |   | Losses              |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
|                              |   | (in thousands)      |   |
| Available-for-sale securities     |   |                |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government agency: MBS       |   | $                   | -      |   |                | $      | -      |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| U.S. Government agency: CMO       |   |                | 1,816  |   |                |   | 20     |   |   |   | - |   |   |   | - |   |   |   | 1,816 |   |   |   | 20 |   |
| Total                             |   | $                   | 1,816  |   |                | $      | 20     |   |   | $ | - |   |   | $ | - |   |   | $ | 1,816 |   |   | $ | 20 |   |
|                              |   |                |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-maturity securities       |   |                |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government agency: MBS       |   | $                   | 2,854  |   |                | $      | 31     |   |   | $ | - |   |   | $ | - |   |   | $ | 2,854 |   |   | $ | 31 |   |
|  U.S. Government agency: CMO |   |                | -      |   |                |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                             |   | $                   | 2,854  |   |                | $      | 31     |   |   | $ | - |   |   | $ | - |   |   | $ | 2,854 |   |   | $ | 31 |   |

| December 31, 2008                 |   | Less than 12 months |   |   | More than 12 months |   |   | Total  |   |
|-----------------------------------|--------|---------------------|--------|--------|---------------------|--------|--------|--------|--------|
|                              |   | Fair                |   |   | Unrealized          |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                              |   | Value               |   |   | Losses              |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
|                              |   | (in thousands)      |   |
| Available-for-sale securities     |   |                |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government agency: MBS       |   | $                   | 4,249  |   |                | $      | 66     |   |   | $ | 716 |   |   | $ | 22 |   |   | $ | 4,965 |   |   | $ | 88 |   |
| U.S. Government agency: CMO       |   |                | -      |   |                |   | -      |   |   |   | 1,106 |   |   |   | 4 |   |   |   | 1,106 |   |   |   | 4 |   |
| Total                             |   | $                   | 4,249  |   |                | $      | 66     |   |   | $ | 1,822 |   |   | $ | 26 |   |   | $ | 6,071 |   |   | $ | 92 |   |
|                              |   |                |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-maturity securities       |   |                |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government agency: MBS       |   | $                   | 4,025  |   |                | $      | 21     |   |   | $ | - |   |   | $ | - |   |   | $ | 4,025 |   |   | $ | 21 |   |
|  U.S. Government agency: CMO |   |                | 5,386  |   |                |   | 56     |   |   |   | - |   |   |   | - |   |   |   | 5,386 |   |   |   | 56 |   |
| Total                             |   | $                   | 9,411  |   |                | $      | 77     |   |   | $ | - |   |   | $ | - |   |   | $ | 9,411 |   |   | $ | 77 |   |

| 3. | LOAN SALES AND SERVICING |
|----|--------------------------|

----

Index

|                         |   | Year Ended December 31, |   |
|------------------------------|--------|-------------------------|--------|
|                         |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
|                         |   | (in thousands)          |   |
| Balance, beginning of year   |   | $                       | 1,161  |   |   | $ | 1,206 |   |   | $ | 1,968 |   |
| Additions through loan sales |   |                    | -      |   |   |   | 273 |   |   |   | 83 |   |
| Amortization                 |   |                    | (163   | ) |   |   | (318 | ) |   |   | (845 | ) |
| Balance, end of year         |   | $                       | 998    |   |   | $ | 1,161 |   |   | $ | 1,206 |   |

| 4.  | LOANS HELD FOR INVESTMENT |
|----------|---------------------------|

|                                                |   | December 31,   |    |
|-----------------------------------------------------|--------|----------------|---------|
|                                                |   | 2009           |    |   | 2008 |   |
|                                                |   | (in thousands) |    |
| Commercial                                          |   | $              | 61,810  |   |   | $ | 74,895 |   |
| Real estate                                         |   |           | 190,942 |   |   |   | 129,876 |   |
| SBA                                                 |   |           | 43,863  |   |   |   | 40,066 |   |
| Manufactured housing                                |   |           | 195,656 |   |   |   | 190,838 |   |
| Single family                                       |   |           | 4,538   |   |   |   | 5,645 |   |
| Other installment                                   |   |           | 18,189  |   |   |   | 15,793 |   |
|                                                |   |           | 514,998 |   |   |   | 457,113 |   |
|   Less:                                   |   |           |    |   |   |   |   |   |
|  Allowance for loan losses                     |   |           | 13,733  |   |   |   | 7,341 |   |
|  Deferred fees, net of costs                   |   |           | (204    | ) |   |   | (284 | ) |
|  Purchased premiums                            |   |           | (24     | ) |   |   | (42 | ) |
|  Discount on unguaranteed portion of SBA loans |   |           | 627     |   |   |   | 809 |   |
|  Loans held for investment, net                |   | $              | 500,866 |   |   | $ | 449,289 |   |

----

Index

|                                       |   | Year Ended December 31, |    |
|--------------------------------------------|--------|-------------------------|---------|
|                                       |   | 2009                    |    |   | 2008 |   |   | 2007 |   |
|                                       |   | (in thousands)          |    |
| Balance, beginning of year                 |   | $                       | 7,341   |   |   | $ | 4,412 |   |   | $ | 3,926 |   |
|                                       |   |                    |    |   |   |   |   |   |   |   |   |   |
| Loans charged off                          |   |                    | (12,437 | ) |   |   | (2,459 | ) |   |   | (917 | ) |
| Recoveries on loans previously charged off |   |                    | 151     |   |   |   | 124 |   |   |   | 106 |   |
|   Net charge-offs                |   |                    | (12,286 | ) |   |   | (2,335 | ) |   |   | (811 | ) |
|                                       |   |                    |    |   |   |   |   |   |   |   |   |   |
| Provision for loan losses                  |   |                    | 18,678  |   |   |   | 5,264 |   |   |   | 1,297 |   |
| Balance, end of year                       |   | $                       | 13,733  |   |   | $ | 7,341 |   |   | $ | 4,412 |   |

|                                                                                                  |   | Year Ended December 31, |    |
|-------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                                  |   | 2009                    |    |   | 2008 |   |   | 2007 |   |
|                                                                                                  |   | (in thousands)          |    |
| Impaired loans without specific valuation allowances                                                  |   | $                       | 13,699  |   |   | $ | 8,043 |   |   | $ | 7,509 |   |
| Impaired loans with specific valuation allowances                                                     |   |                    | 716     |   |   |   | 523 |   |   |   | 8,992 |   |
| Specific valuation allowance related to impaired loans                                                |   |                    | (622    | ) |   |   | (151 | ) |   |   | (966 | ) |
| Impaired loans, net                                                                                   |   | $                       | 13,793  |   |   | $ | 8,415 |   |   | $ | 15,535 |   |
|                                                                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |
| Average investment in impaired loans                                                                  |   | $                       | 9,058   |   |   | $ | 9,612 |   |   | $ | 9,386 |   |
|                                                                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |
| The following schedule reflects recorded investment at the dates indicated in certain types of loans: |   |                    |    |   |   |
|                                                                                                  |   |                    |    |
|                                                                                                  |   | Year Ended December 31, |    |
|                                                                                                  |   | 2009                    |    |   | 2008 |   |   | 2007 |   |
|                                                                                                  |   | (in thousands)          |    |
| Nonaccrual loans                                                                                      |   | $                       | 40,265  |   |   | $ | 28,821 |   |   | $ | 15,341 |   |
| SBA guaranteed portion of loans included above                                                        |   |                    | (24,088 | ) |   |   | (11,918 | ) |   |   | (5,695 | ) |
| Nonaccrual loans, net                                                                                 |   | $                       | 16,177  |   |   | $ | 16,903 |   |   | $ | 9,646 |   |
|                                                                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |
| Troubled debt restructured loans                                                                      |   | $                       | 7,013   |   |   | $ | 5,408 |   |   | $ | 7,255 |   |
| Loans 30 through 90 days past due with interest accruing                                              |   | $                       | 17,686  |   |   | $ | 11,974 |   |   | $ | 18,898 |   |
|                                                                                                  |   |                    |    |   |   |   |   |   |   |   |   |   |
| Interest income recognized on impaired loans                                                          |   | $                       | 426     |   |   | $ | 12 |   |   | $ | 691 |   |
| Interest foregone on nonaccrual loans and troubled debt restructured                                  |   |                    |    |   |   |   |   |   |   |   |   |   |
|    loans outstanding                                                                   |   |                    | 2,109   |   |   |   | 1,707 |   |   |   | 904 |   |
| Gross interest income on impaired and nonaccrual loans                                                |   | $                       | 2,535   |   |   | $ | 1,719 |   |   | $ | 1,595 |   |

----

Index

|                                            |   | Fair value measurements at December 31, 2009 using |   |
|-------------------------------------------------|--------|----------------------------------------------------|--------|
|                                            |   |                                               |   |   | Quoted prices inactive markets foridentical assets |   |   | Significant otherobservable inputs |   |   | Significantunobservableinputs |   |
| Description                                     |   | Total                                              |   |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
|                                            |   | (in thousands)                                     |   |
| Investment securities available-for-sale        |   | $                                                  | 17,670 |   |   | $ | - |   |   | $ | 17,670 |   |   | $ | - |   |
| Interest only strips (included in other assets) |   |                                               | 623    |   |   |   | - |   |   |   | - |   |   |   | 623 |   |
| Total                                           |   | $                                                  | 18,293 |   |   | $ | - |   |   | $ | 17,670 |   |   | $ | 623 |   |

|                                            |   | Fair value measurements at December 31, 2008 using |   |
|-------------------------------------------------|--------|----------------------------------------------------|--------|
|                                            |   |                                               |   |   | Quoted prices inactive markets foridentical assets |   |   | Significant otherobservable inputs |   |   | Significantunobservableinputs |   |
| Description                                     |   | Total                                              |   |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
|                                            |   | (in thousands)                                     |   |
| Investment securities available-for-sale        |   | $                                                  | 6,783  |   |   | $ | - |   |   | $ | 6,783 |   |   | $ | - |   |
| Interest only strips (included in other assets) |   |                                               | 558    |   |   |   | - |   |   |   | - |   |   |   | 558 |   |
| Total                                           |   | $                                                  | 7,341  |   |   | $ | - |   |   | $ | 6,783 |   |   | $ | 558 |   |

----

Index

|           |   | Fair value measurements at December 31, 2009 using |   |
|----------------|--------|----------------------------------------------------|--------|
|           |   |                                               |   |   | Quoted prices inactive markets foridentical assets |   |   | Significant otherobservable inputs |   |   | Significantunobservableinputs |   |
| Description    |   | Total                                              |   |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
|           |   | (in thousands)                                     |   |
| Impaired loans |   | $                                                  | 13,793 |   |   | $ | - |   |   | $ | 13,562 |   |   | $ | 231 |   |

|           |   | Fair value measurements at December 31, 2008 using |   |
|----------------|--------|----------------------------------------------------|--------|
|           |   |                                               |   |   | Quoted prices inactive markets foridentical assets |   |   | Significant otherobservable inputs |   |   | Significantunobservableinputs |   |
| Description    |   | Total                                              |   |   | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
|           |   | (in thousands)                                     |   |
| Impaired loans |   | $                                                  | 8,566  |   |   | $ | - |   |   | $ | 7,849 |   |   | $ | 717 |   |

| 6. | PREMISES AND EQUIPMENT |
|----|------------------------|

|                                            |   | December 31,   |   |
|-------------------------------------------------|--------|----------------|--------|
|                                            |   | 2009           |   |   | 2008 |   |
|                                            |   | (in thousands) |   |
| Furniture, fixtures and equipment               |   | $              | 8,225  |   |   | $ | 8,210 |   |
| Building and land                               |   |           | 1,407  |   |   |   | 1,407 |   |
| Leasehold improvements                          |   |           | 2,436  |   |   |   | 2,431 |   |
|                                            |   |           | 12,068 |   |   |   | 12,048 |   |
| Less: accumulated depreciation and amortization |   |           | (8,789 | ) |   |   | (8,330 | ) |
| Premises and equipment, net                     |   | $              | 3,279  |   |   | $ | 3,718 |   |

|                          |   | (in thousands) |   |
|-------------------------------|--------|----------------|--------|
|  2010                    |   | $              | 1,186  |   |
|  2011                    |   |           | 1,049  |   |
|  2012                    |   |           | 491    |   |
|  2013                    |   |           | 303    |   |
|  2014                    |   |           | 273    |   |
|  Thereafter              |   |           | 448    |   |
|     Total |   | $              | 3,750  |   |

----

Index

| 7. | DEPOSITS |
|----|----------|

|                          |   | (in thousands) |    |
|-------------------------------|--------|----------------|---------|
|  2010                    |   | $              | 207,420 |   |
|  2011                    |   |           | 46,521  |   |
|  2012                    |   |           | 12,717  |   |
|  2013                    |   |           | 9,640   |   |
|  2014                    |   |           | 9,090   |   |
|     Total |   | $              | 285,388 |   |

| 8. | BORROWINGS |
|----|------------|

|                                    |   | December 31, 2009      |   |
|-----------------------------------------|--------|------------------------|--------|
|                                    |   |                   |   |   | Fixed |   |   | Variable |   |
|                                    |   | Total                  |   |   | Amount |   |   | InterestRates |   |   | Amount |   |   | InterestRates |   |
|                                    |   | (dollars in thousands) |   |
| Due within one year                     |   | $                      | 24,000 |   |   | $ | 24,000 |   |   | 4.28%-5.18% |   |   | $ | - |   |   |   | - |   |
| After one year but within three years   |   |                   | 12,000 |   |   |   | 12,000 |   |   | 1.85%-3.48% |   |   |   | - |   |   |   | - |   |
| After three years but within five years |   |                   | 32,000 |   |   |   | 32,000 |   |   | 2.68%-3.81% |   |   |   | - |   |   |   | - |   |
| Total                                   |   | $                      | 68,000 |   |   | $ | 68,000 |   |   |   |   |   |   | $ | - |   |   |   | - |   |

|                                    |   |                   |    |
|-----------------------------------------|--------|------------------------|---------|
|                                    |   | December 31, 2008      |    |
|                                    |   |                   |    |   | Fixed |   |   | Variable |   |
|                                    |   | Total                  |    |   | Amount |   |   | InterestRates |   |   | Amount |   |   | Interest Rates |   |
|                                    |   | (dollars in thousands) |    |
| Due within one year                     |   | $                      | 70,000  |   |   | $ | 66,000 |   |   | .50%-5.32% |   |   | $ | 4,000 |   |   |   | 1.87 | % |
| After one year but within three years   |   |                   | 32,000  |   |   |   | 32,000 |   |   | 3.31%-5.18% |   |   |   | - |   |   |   | - |   |
| After three years but within five years |   |                   | 8,000   |   |   |   | 8,000 |   |   | 2.81%-3.81% |   |   |   | - |   |   |   | - |   |
| Total                                   |   | $                      | 110,000 |   |   | $ | 106,000 |   |   |   |   |   |   | $ | 4,000 |   |   |   |   |   |
|                                    |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| Financial information pertaining to advances from FHLB: |   |                   |    |
|---------------------------------------------------------|--------|------------------------|---------|
|                                                    |   | 2009                   |    |   | 2008 |   |
|                                                    |   | (dollars in thousands) |    |
| Weighted average interest rate, end of the year         |   |                   | 3.57    | % |   |   | 4.11 | % |
| Weighted average interest rate during the year          |   |                   | 4.04    | % |   |   | 4.62 | % |
| Average balance of advances from FHLB                   |   | $                      | 89,077  |   |   | $ | 108,141 |   |
| Maximum amount outstanding at any month end             |   | $                      | 106,000 |   |   | $ | 119,000 |   |

----

Index

|                     |   | Year Ended December 31, |   |
|--------------------------|--------|-------------------------|--------|
|                     |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
| Annual dividend yield    |   |                    | 1.0    | % |   |   | .9 | % |   |   | 1.9 | % |
| Expected volatility      |   |                    | 48.0   | % |   |   | 29.6 | % |   |   | 31.7 | % |
| Risk free interest rate  |   |                    | 2.9    | % |   |   | 3.1 | % |   |   | 4.2 | % |
| Expected life (in years) |   |                    | 6.8    |   |   |   | 6.4 |   |   |   | 6.7 |   |

----

Index

| 10. | STOCKHOLDERS’ EQUITY |
|-----|----------------------------|

|                                               |   | Year Ended December 31, |   |
|----------------------------------------------------|--------|-------------------------|--------|
|                                               |   | 2009                    |   |   | 2008 |   | 2007 |   |
|                                               |   | (in thousands)          |   |
| Basic weighted average common shares outstanding   |   |                    | 5,915  |   |   |   | 5,913 |   |   |   | 5,862 |   |
| Dilutive effect of stock options                   |   |                    | -      |   |   |   | 28 |   |   |   | 160 |   |
| Diluted weighted average common shares outstanding |   |                    | 5,915  |   |   |   | 5,941 |   |   |   | 6,022 |   |

----

Index

|                                    |   | Year Ended December 31,               |   |
|-----------------------------------------|--------|---------------------------------------|--------|
|                                    |   | 2009OptionShares                      |   |   | 2009WeightedAverageExercisePrice |   |   | 2008OptionShares |   |   | 2008WeightedAverageExercisePrice |   |   | 2007OptionShares |   |   | 2007WeightedAverageExercisePrice |   |
|                                    |
|                                    |   | (in thousands, except per share data) |   |
| Total options as of January 1,          |   |                                  | 460    |   |   | $ | 8.14 |   |   |   | 462 |   |   | $ | 8.63 |   |   |   | 501 |   |   | $ | 7.87 |   |
| Granted                                 |   |                                  | 44     |   |   |   | 2.70 |   |   |   | 87 |   |   |   | 5.58 |   |   |   | 72 |   |   |   | 12.18 |   |
| Canceled                                |   |                                  | (37    | ) |   |   | 11.50 |   |   |   | (69 | ) |   |   | 9.15 |   |   |   | (31 | ) |   |   | 10.74 |   |
| Exercised                               |   |                                  | -      |   |   |   | - |   |   |   | (20 | ) |   |   | 5.12 |   |   |   | (80 | ) |   |   | 6.24 |   |
| Total options at December 31,           |   |                                  | 467    |   |   |   | 7.36 |   |   |   | 460 |   |   |   | 8.14 |   |   |   | 462 |   |   |   | 8.63 |   |
| Total vested options as of December 31, |   |                                  | 362    |   |   |   | 7.43 |   |   |   | 343 |   |   |   | 7.36 |   |   |   | 326 |   |   | $ | 7.61 |   |

|                                              |   | Year Ended December 31,               |   |
|---------------------------------------------------|--------|---------------------------------------|--------|
|                                              |   | 2009                                  |   |   | 2008 |   |   | 2007 |   |
|                                              |   | (in thousands, except per share data) |   |
| Intrinsic value of options exercised              |   | $                                     | -      |   |   | $ | 72 |   |   | $ | 651 |   |
| Cash received from the exercise of options        |   |                                  | -      |   |   |   | 105 |   |   |   | 499 |   |
| Weighted-average grant-date fair value of options |   |                                  | -      |   |   |   | 2.44 |   |   |   | 4.06 |   |

| Unvested Stock Option Shares                      |                                   | Number ofOption Shares |   |   | Weighted-AverageGrant-DateFair Value |   |
|---------------------------------------------------|----------------------------------------|------------------------|--------|--------|--------------------------------------|--------|
|                                              | ( in thousands, except per share data) |                   |
| Unvested stock options at January 1, 2009         |                                   |                   | 117    |   |                                 | $      | 3.50 |   |
| Granted                                           |                                   |                   | 44     |   |                                 |   | 1.27 |   |
| Vested                                            |                                   |                   | (39    | )      |                                 |   | 3.59 |   |
| Forfeited                                         |                                   |                   | (17    | )      |                                 |   | 3.97 |   |
| Total unvested stock options at December 31, 2009 |                                   |                   | 105    |   |                                 | $      | 2.44 |   |

|                                       |   | Year Ended December 31, |   |
|--------------------------------------------|--------|-------------------------|--------|
|                                       |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
|                                       |   | (in thousands)          |   |
| Current:                                   |   |                    |   |   |   |   |   |   |   |
|   Federal                        |   | $                       | (830   | ) |   | $ | 2,017 |   |   | $ | 2,432 |   |
|   State                          |   |                    | 34     |   |   |   | 780 |   |   |   | 910 |   |
|                                       |   |                    | (796   | ) |   |   | 2,797 |   |   |   | 3,342 |   |
| Deferred:                                  |   |                    |   |   |   |   |   |   |   |   |   |   |
|   Federal                        |   |                    | (2,130 | ) |   |   | (1,186 | ) |   |   | (395 | ) |
|   State                          |   |                    | (1,092 | ) |   |   | (482 | ) |   |   | (181 | ) |
|                                       |   |                    | (3,222 | ) |   |   | (1,668 | ) |   |   | (576 | ) |
| Total (benefit) provision for income taxes |   | $                       | (4,018 | ) |   | $ | 1,129 |   |   | $ | 2,766 |   |

----

Index

|                                        |   | Year Ended December 31, |   |
|---------------------------------------------|--------|-------------------------|--------|
|                                        |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
| Federal income tax at statutory rate        |   |                    | 34.0   | % |   |   | 34.0 | % |   |   | 34.0 | % |
| State franchise tax, net of federal benefit |   |                    | 7.2    | % |   |   | 7.2 | % |   |   | 7.2 | % |
| Other                                       |   |                    | (0.1   | ) |   |   | 2.1 | % |   |   | 1.0 | % |
|                                        |   |                    | 41.1   | % |   |   | 43.3 | % |   |   | 42.2 | % |

|                                        |   | 2009           |   |   | 2008   |   |
|---------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                        |   | (in thousands) |   |
| Deferred tax assets:                        |   |           |   |   |   |   |   |   |
|    Allowance for loan losses |   | $              | 4,892  |   |   | $      | 1,325 |   |
|    Depreciation              |   |           | 78     |   |   |   | 305 |   |
|    Other                     |   |           | 967    |   |   |   | 511 |   |
|                                        |   |           | 5,937  |   |   |   | 2,141 |   |
| Deferred tax liabilities:                   |   |           |   |   |   |   |   |   |
|    Deferred loan costs       |   |           | (8     | )      |   |   | (17 | ) |
|    Other                     |   |           | (1,069 | )      |   |   | (485 | ) |
|                                        |   |           | (1,077 | )      |   |   | (502 | ) |
| Net deferred taxes                          |   | $              | 4,860  |   |   | $      | 1,639 |   |

|                                                                     |   | Year Ended December 31, |   |
|--------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                     |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
|                                                                     |   | (in thousands)          |   |
| Supplemental Disclosure of Cash Flow Information:                        |   |                    |   |   |   |   |   |   |   |
|    Cash paid for interest                                 |   | $                       | 16,218 |   |   | $ | 20,325 |   |   | $ | 21,012 |   |
|    Cash paid for income taxes                             |   |                    | 86     |   |   |   | 2,573 |   |   |   | 3,855 |   |
| Supplemental Disclosure of Noncash Investing Activity:                   |   |                    |   |   |   |   |   |   |   |   |   |   |
|    Transfers to other assets acquired through foreclosure |   |                    | 5,116  |   |   |   | 1,886 |   |   |   | 102 |   |

| 13.  | EMPLOYEE BENEFIT PLAN |
|-----------|-----------------------|

----

Index

| 14. | FAIR VALUES OF FINANCIAL INSTRUMENTS |
|-----|--------------------------------------|

|                                                               |   | December 31,   |    |
|--------------------------------------------------------------------|--------|----------------|---------|
|                                                               |   | 2009           |    |   | 2008 |   |
|                                                               |   | CarryingAmount |    |   | EstimatedFair Value |   |   | CarryingAmount |   |   | EstimatedFair Value |   |
|                                                               |   | (in thousands) |    |
| Assets:                                                            |   |           |    |   |   |   |   |   |   |   |   |   |
|   Cash and cash equivalents                              |   | $              | 5,511   |   |   | $ | 5,511 |   |   | $ | 12,253 |   |   | $ | 12,253 |   |
|    Time deposits in other financial institutions    |   |           | 640     |   |   |   | 640 |   |   |   | 812 |   |   |   | 812 |   |
|    Federal Reserve and Federal Home Loan Bank stock |   |           | 6,982   |   |   |   | 6,982 |   |   |   | 6,562 |   |   |   | 6,562 |   |
|    Investment securities                            |   |           | 40,348  |   |   |   | 41,208 |   |   |   | 37,975 |   |   |   | 38,357 |   |
|    Loans                                            |   |           | 617,173 |   |   |   | 589,858 |   |   |   | 588,416 |   |   |   | 567,598 |   |
| Liabilities:                                                       |   |           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Deposits (other than time deposits)              |   |           | 246,004 |   |   |   | 246,004 |   |   |   | 107,272 |   |   |   | 107,272 |   |
|    Time deposits                                    |   |           | 285,388 |   |   |   | 287,806 |   |   |   | 368,167 |   |   |   | 372,003 |   |
|    Other borrowings                                 |   |           | 89,000  |   |   |   | 89,751 |   |   |   | 110,000 |   |   |   | 111,797 |   |

----

Index

|  (dollars in thousands)               |   | TotalCapital |   |   | Tier 1Capital |   |   | Risk-WeightedAssets |   |   | AdjustedAverageAssets |   |   | TotalRisk-BasedCapitalRatio |    |   | Tier 1Risk-BasedCapitalRatio |   |   | Tier 1LeverageRatio |   |
|--------------------------------------------|--------|--------------|--------|--------|---------------|--------|--------|---------------------|--------|--------|-----------------------|--------|--------|-----------------------------|---------|--------|------------------------------|--------|--------|---------------------|--------|
| (dollars in thousands)                     |   |
| December 31, 2009                          |   |         |   |   |          |   |   |                |   |   |                  |   |   |                        |    |   |                         |   |   |
| CWBC (Consolidated)                        |   | $            | 66,984 |   |          | $      | 60,029 |                |   | $      | 549,207               |   |   | $                           | 681,101 |   |                         |   | 12.20  | %                   |   |   | 10.93 | % |   |   | 8.81 | % |
| Capital in excess of well capitalized |   |         |   |   |          |   |   |                |   |   |                  |   |   |                        |    |   |                         | $      | 12,063 |                |   | $ | 27,077 |   |   | $ | 25,974 |   |
| CWB                                        |   |         | 66,175 |   |          |   | 59,219 |                |   |   | 549,240               |   |   |                        | 681,129 |   |                         |   | 12.05  | %                   |   |   | 10.78 | % |   |   | 8.69 | % |
| Capital in excess of well capitalized |   |         |   |   |          |   |   |                |   |   |                  |   |   |                        |    |   |                         | $      | 11,251 |                |   | $ | 26,265 |   |   | $ | 25,163 |   |
|                                       |   |         |   |   |          |   |   |                |   |   |                  |   |   |                        |    |   |                         |   |   |                |   |   |   |   |   |   |   |   |
| December 31, 2008                          |   |         |   |   |          |   |   |                |   |   |                  |   |   |                        |    |   |                         |   |   |                |   |   |   |   |   |   |   |   |
| CWBC (Consolidated)                        |   | $            | 73,245 |   |          | $      | 66,553 |                |   | $      | 534,628               |   |   | $                           | 647,413 |   |                         |   | 13.70  | %                   |   |   | 12.45 | % |   |   | 10.28 | % |
| Capital in excess of well capitalized |   |         |   |   |          |   |   |                |   |   |                  |   |   |                        |    |   |                         | $      | 19,782 |                |   | $ | 34,475 |   |   | $ | 34,182 |   |
| CWB                                        |   |         | 60,597 |   |          |   | 53,904 |                |   |   | 534,655               |   |   |                        | 647,432 |   |                         |   | 11.33  | %                   |   |   | 10.08 | % |   |   | 8.33 | % |
| Capital in excess of well capitalized |   |         |   |   |          |   |   |                |   |   |                  |   |   |                        |    |   |                         | $      | 7,132  |                |   | $ | 21,825 |   |   | $ | 21,532 |   |
|                                       |   |         |   |   |          |   |   |                |   |   |                  |   |   |                        |    |   |                         |   |   |                |   |   |   |   |   |   |   |   |
| Well capitalized ratios                    |   |         |   |   |          |   |   |                |   |   |                  |   |   |                        |    |   |                         |   | 10.00  | %                   |   |   | 6.00 | % |   |   | 5.00 | % |
| Minimum capital ratios                     |   |         |   |   |          |   |   |                |   |   |                  |   |   |                        |    | 8.00   | %                            |   |   | 4.00                | %      |   |   | 4.00 | % |

----

Index

| 16. | COMMITMENTS AND CONTINGENCIES |
|-----|-------------------------------|

----

Index

|                                                         |   | December 31,   |   |
|--------------------------------------------------------------|--------|----------------|--------|
| Balance Sheets                                               |   | 2009           |   |   | 2008 |   |
|                                                         |   | (in thousands) |   |
| Assets                                                       |   |           |   |   |   |   |   |   |
| Cash and equivalents                                         |   | $              | 977    |   |   | $ | 12,746 |   |
| Investment in subsidiary                                     |   |           | 59,319 |   |   |   | 54,020 |   |
| Other assets                                                 |   |           | 2      |   |   |   | 121 |   |
|   Total assets                                     |   | $              | 60,298 |   |   | $ | 66,887 |   |
|                                                         |   |           |   |   |   |   |   |   |
| Liabilities and stockholders’ equity                   |   |           |   |   |   |   |   |   |
| Total  liabilities                                 |   | $              | 169    |   |   | $ | 218 |   |
| Preferred stock                                              |   |           | 14,540 |   |   |   | 14,300 |   |
| Common stock                                                 |   |           | 33,110 |   |   |   | 33,081 |   |
| Retained earnings                                            |   |           | 12,479 |   |   |   | 19,288 |   |
|   Total stockholders equity                        |   |           | 60,129 |   |   |   | 66,669 |   |
|   Total liabilities and stockholders’ equity |   | $              | 60,298 |   |   | $ | 66,887 |   |

|                                                                      |   | Year Ended December 31, |   |
|---------------------------------------------------------------------------|--------|-------------------------|--------|
| Statements of Operations                                                  |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
|                                                                      |   | (in thousands)          |   |
| Total income                                                              |   | $                       | 39     |   |   | $ | - |   |   | $ | - |   |
| Total expense                                                             |   |                    | 124    |   |   |   | 432 |   |   |   | 532 |   |
| Equity in undistributed subsidiaries: Net (loss) income from subsidiaries |   |                    | (5,701 | ) |   |   | 1,791 |   |   |   | 4,170 |   |
| (Loss) Income before  income tax provision                      |   |                    | (5,786 | ) |   |   | 1,359 |   |   |   | 3,638 |   |
| Income tax (benefit)                                                      |   |                    | (23    | ) |   |   | (122 | ) |   |   | (151 | ) |
| Net (loss) income                                                         |   | $                       | (5,763 | ) |   | $ | 1,481 |   |   | $ | 3,789 |   |
| Preferred stock dividends                                                 |   |                    | 1,046  |   |   |   | 35 |   |   |   | - |   |
| Net (loss) income  applicable to common stockholders            |   | $                       | (6,809 | ) |   | $ | 1,446 |   |   | $ | 3,789 |   |

|                                                                                 |   | Year Ended December 31, |    |
|--------------------------------------------------------------------------------------|--------|-------------------------|---------|
| Statements of Cash Flows                                                             |   | 2009                    |    |   | 2008 |   |   | 2007 |   |
|                                                                                 |   | (in thousands)          |    |
| Cash flows from operating activities:                                                |   |                    |    |   |   |   |   |   |   |
| Net (loss) income                                                                    |   | $                       | (5,763  | ) |   | $ | 1,481 |   |   | $ | 3,789 |   |
| Adjustments to reconcile net income to cash used in operating activities:            |   |                    |    |   |   |   |   |   |   |   |   |
|    Equity in undistributed  loss (income) from subsidiaries |   |                    | 5,701   |   |   |   | (1,791 | ) |   |   | (4,170 | ) |
|    Stock-based compensation                                           |   |                    | 29      |   |   |   | 181 |   |   |   | 283 |   |
|    Net change in other liabilities                                    |   |                    | (49     | ) |   |   | 90 |   |   |   | (5 | ) |
|    Net change in other assets                                         |   |                    | 119     |   |   |   | 91 |   |   |   | 233 |   |
| Net cash provided by (used in) operating activities                                  |   |                    | 37      |   |   |   | 52 |   |   |   | 130 |   |
| Cash flows from investing activities:                                                |   |                    |    |   |   |   |   |   |   |   |   |   |
|   Net dividends from and investments in subsidiaries                       |   |                    | (11,000 | ) |   |   | (5,000 | ) |   |   | 53 |   |
|   Net cash provided by investing activities                                |   |                    | (11,000 | ) |   |   | (5,000 | ) |   |   | 53 |   |
| Cash flows from financing activities:                                                |   |                    |    |   |   |   |   |   |   |   |   |   |
|    Proceeds from issuance of preferred stock                          |   |                    | -       |   |   |   | 15,450 |   |   |   | - |   |
|    Preferred stock dividend                                           |   |                    | (1046   | ) |   |   | (35 | ) |   |   | - |   |
|    Amortization of discount on preferred stock                        |   |                    | 240     |   |   |   | 9 |   |   |   | - |   |
|   Proceeds from issuance of common stock                                   |   |                    | -       |   |   |   | 105 |   |   |   | 499 |   |
|   Cash dividend payments to shareholders                                   |   |                    | -       |   |   |   | (709 | ) |   |   | (1,407 | ) |
| Net cash (used in) provided by financing activities                                  |   |                    | (806    | ) |   |   | 14,820 |   |   |   | (908 | ) |
|    Net increase (decrease) in cash and cash equivalents               |   |                    | (11,769 | ) |   |   | 9,872 |   |   |   | (725 | ) |
|    Cash and cash equivalents at beginning of year                     |   |                    | 12,746  |   |   |   | 2,874 |   |   |   | 3,599 |   |
|    Cash and cash equivalents, at end of year                          |   | $                       | 977     |   |   | $ | 12,746 |   |   | $ | 2,874 |   |

----

Index

| 19. | QUARTERLY FINANCIAL DATA (unaudited) |
|-----|--------------------------------------|

|                                                                                            |   | Year Ended December 31, 2009      |   |
|-------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|
|                                                                                            |   |                              | Q4     |   |   |   | Q3 |   |   |   | Q2 |   |   |   | Q1 |   |   | Totals |   |
|                                                                                            |   | (in thousands, except share data) |   |
| Interest income                                                                                 |   | $                                 | 10,108 |   |   | $ | 10,378 |   |   | $ | 10,200 |   |   | $ | 10,217 |   |   | $ | 40,903 |   |
| Interest expense                                                                                |   |                              | 3,058  |   |   |   | 3,467 |   |   |   | 3,966 |   |   |   | 4,454 |   |   |   | 14,945 |   |
| Net interest income                                                                             |   |                              | 7,050  |   |   |   | 6,911 |   |   |   | 6,234 |   |   |   | 5,763 |   |   |   | 25,958 |   |
| Provision for loan losses                                                                       |   |                              | 2,788  |   |   |   | 2,592 |   |   |   | 743 |   |   |   | 12,555 |   |   |   | 18,678 |   |
| Net interest income (loss) after provision for loan losses                                      |   |                              | 4,262  |   |   |   | 4,319 |   |   |   | 5,491 |   |   |   | (6,792 | ) |   |   | 7,280 |   |
| Non-interest income                                                                             |   |                              | 1,029  |   |   |   | 966 |   |   |   | 1,255 |   |   |   | 1,168 |   |   |   | 4,418 |   |
| Non-interest expenses                                                                           |   |                              | 5,124  |   |   |   | 5,165 |   |   |   | 5,383 |   |   |   | 5,807 |   |   |   | 21,479 |   |
| Income (loss) before income taxes                                                               |   |                              | 167    |   |   |   | 120 |   |   |   | 1,363 |   |   |   | (11,431 | ) |   |   | (9,781 | ) |
| Provision (benefit) for income taxes                                                            |   |                              | 70     |   |   |   | 51 |   |   |   | 563 |   |   |   | (4,702 | ) |   |   | (4,018 | ) |
|              NET INCOME (LOSS) |   |                              | 97     |   |   |   | 69 |   |   |   | 800 |   |   |   | (6,729 | ) |   |   | (5,763 | ) |
|                                                                                            |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends                                                                       |   |                              | 262    |   |   |   | 261 |   |   |   | 262 |   |   |   | 261 |   |   |   | 1,046 |   |
| NET (LOSS)  INCOME APPLICABLE TO COMMON STOCKHOLDERS                                  |   | $                                 | (165   | ) |   | $ | (192 | ) |   | $ | 538 |   |   | $ | (6,990 | ) |   | $ | (6,809 | ) |
| (Loss) earnings per common share:                                                               |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Basic                                                       |   | $                                 | (0.03  | ) |   | $ | (0.03 | ) |   | $ | 0.09 |   |   | $ | (1.18 | ) |   | $ | (1.15 | ) |
|       Diluted                                                     |   |                              | (0.03  | ) |   |   | (0.03 | ) |   |   | 0.09 |   |   |   | (1.18 | ) |   |   | (1.15 | ) |
| Cash dividends per common share                                                                 |   |                              | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Weighted average common shares:                                                                 |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Basic                                                             |   |                              | 5,915  |   |   |   | 5,915 |   |   |   | 5,915 |   |   |   | 5,915 |   |   |   | 5,915 |   |
|      Diluted                                                           |   |                              | 5,915  |   |   |   | 5,915 |   |   |   | 5,915 |   |   |   | 5,915 |   |   |   | 5,915 |   |
|                                                                                            |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                                                            |   | Year Ended December 31, 2008          |   |
|-------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                                            |   |                                  | Q4     |   |   |   | Q3 |   |   |   | Q2 |   |   |   | Q1 |   |   | Totals |   |
|                                                                                            |   | (in thousands, except per share data) |   |
| Interest income                                                                                 |   | $                                     | 10,805 |   |   | $ | 11,336 |   |   | $ | 11,380 |   |   | $ | 12,011 |   |   | $ | 45,532 |   |
| Interest expense                                                                                |   |                                  | 5,234  |   |   |   | 5,562 |   |   |   | 5,577 |   |   |   | 5,850 |   |   |   | 22,223 |   |
| Net interest income                                                                             |   |                                  | 5,571  |   |   |   | 5,774 |   |   |   | 5,803 |   |   |   | 6,161 |   |   |   | 23,309 |   |
| Provision for loan losses                                                                       |   |                                  | 1,408  |   |   |   | 652 |   |   |   | 2,531 |   |   |   | 673 |   |   |   | 5,264 |   |
| Net interest income after provision for loan losses                                             |   |                                  | 4,163  |   |   |   | 5,122 |   |   |   | 3,272 |   |   |   | 5,488 |   |   |   | 18,045 |   |
| Non-interest income                                                                             |   |                                  | 829    |   |   |   | 1,198 |   |   |   | 1,640 |   |   |   | 1,414 |   |   |   | 5,081 |   |
| Non-interest expenses                                                                           |   |                                  | 4,869  |   |   |   | 5,154 |   |   |   | 5,313 |   |   |   | 5,180 |   |   |   | 20,516 |   |
| Income before income taxes                                                                      |   |                                  | 123    |   |   |   | 1,166 |   |   |   | (401 | ) |   |   | 1,722 |   |   |   | 2,610 |   |
| Provision for income taxes                                                                      |   |                                  | 62     |   |   |   | 491 |   |   |   | (149 | ) |   |   | 725 |   |   |   | 1,129 |   |
|              NET INCOME (LOSS) |   |                                  | 61     |   |   |   | 675 |   |   |   | (252 | ) |   |   | 997 |   |   |   | 1,481 |   |
|                                                                                            |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends                                                                       |   |                                  | 35     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 35 |   |
| NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS                                              |   | $                                     | 26     |   |   | $ | 675 |   |   | $ | (252 | ) |   | $ | 997 |   |   | $ | 1,446 |   |
| Earnings per common share:                                                                      |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Basic                                                       |   | $                                     | 0.00   |   |   | $ | 0.11 |   |   | $ | (0.04 | ) |   | $ | 0.17 |   |   | $ | 0.24 |   |
|       Diluted                                                     |   |                                  | 0.00   |   |   |   | 0.11 |   |   |   | (0.04 | ) |   |   | 0.17 |   |   |   | 0.24 |   |
| Cash dividends per common share                                                                 |   |                                  | 0.00   |   |   |   | 0.00 |   |   |   | 0.06 |   |   |   | 0.06 |   |   |   | 0.12 |   |
| Weighted average common shares:                                                                 |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Basic                                                             |   |                                  | 5,915  |   |   |   | 5,915 |   |   |   | 5,913 |   |   |   | 5,909 |   |   |   | 5,913 |   |
|      Diluted                                                           |   |                                  | 5,915  |   |   |   | 5,918 |   |   |   | 5,913 |   |   |   | 5,975 |   |   |   | 5,941 |   |

----

Index

| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
|---------|--------------------------------------------------------------------------------------|

|        |                    |
|-------------|-------------------------|
| ITEM 9A(T). | CONTROLS AND PROCEDURES |

|     |              |
|----------|-------------------|
| ITEM 9B. | OTHER INFORMATION |

PART III

|     |                                                   |
|----------|--------------------------------------------------------|
| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |

----

Index

|     |                   |
|----------|------------------------|
| ITEM 11. | EXECUTIVE COMPENSATION |

|     |                                                                                           |
|----------|------------------------------------------------------------------------------------------------|
| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS |

|     |                                                                     |
|----------|--------------------------------------------------------------------------|
| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE |

|     |                                   |
|----------|----------------------------------------|
| ITEM 14. | PRINCIPAL ACCOUNTING FEES AND SERVICES |

PART IV

|     |                                    |
|----------|-----------------------------------------|
| ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES |

|                                                                                                                    |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|
| Report of Independent Registered Public Accounting Firm                                                                 | F-1    |
|                                                                                                                    |   |
| Consolidated Balance Sheets as of December 31, 2009 and 2008                                                            | F-2    |
|                                                                                                                    |   |
| Consolidated Statements of Operations for each of the three years in the period ended December 31, 2009            | F-3    |
|                                                                                                                    |   |
| Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended December 31, 2009 | F-4    |

|                                                                                                    |   |
|---------------------------------------------------------------------------------------------------------|--------|
| Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2009 | F-5    |
|                                                                                                    |   |
| Notes to Consolidated Financial Statements                                                              | F-6    |

----

Index

|   |                                                                                                                                                                                                                                 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1    | Articles of Incorporation (3)                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                 |
| 3.2    | Amended and Restated Articles of Incorporation (11)                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                 |
| 3.3    | Bylaws (3)                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                 |
| 3.4    | Certificate of Amendment of Bylaws (11)                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                 |
| 3.5    | Certificate of Determination of Fixed Rate Cumulative Perpetual Preferred Stock, Series A (11)                                                                                                                                       |
|   |                                                                                                                                                                                                                                 |
| 4.1    | Common Stock Certificate (2)                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                 |
| 4.2    | Warrant to Purchase 521,158 shares of Common Stock, dated December 19, 2008, issued to the United States Department of the Treasury (12)                                                                                             |
|   |                                                                                                                                                                                                                                 |
| 10.1*  | 1997 Stock Option Plan and Form of Stock Option Agreement (1)                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                 |
| 10.3*  | Salary Continuation Agreement between Goleta National Bank and Llewellyn Stone, President and CEO (3)                                                                                                                                |
|   |                                                                                                                                                                                                                                 |
| 10.9   | Indemnification Agreement between the Company and Lynda Nahra, dated December 20, 2001 (4)                                                                                                                                           |
|   |                                                                                                                                                                                                                                 |
| 10.17  | Indemnification Agreement between the Company and Charles G. Baltuskonis, dated March 18, 2003 (5)                                                                                                                                   |
|   |                                                                                                                                                                                                                                 |
| 10.21  | Assistant Secretary’s Certificate of Adoption of Amendment No. 1 to Community West Bancshares 1997 Stock Option Plan (6)                                                                                                       |
|   |                                                                                                                                                                                                                                 |
| 10.22* | Community West Bancshares 2006 Stock Option Plan (7)                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                 |
| 10.23* | Community West Bancshares 2006 Stock Option Plan form of Stock Option Agreement (7)                                                                                                                                                  |
|   |                                                                                                                                                                                                                                 |
| 10.24* | Employment and Confidentiality Agreement date January 1, 2007 among Community West Bank, Community West Bancshares and Lynda J. Nahra (8)                                                                                            |
|   |                                                                                                                                                                                                                                 |
| 10.25* | Employment and Confidentiality Agreement date July 1, 2007 among Community West Bank, Community West Bancshares and Charles G. Baltuskonis (9)                                                                                       |
|   |                                                                                                                                                                                                                                 |
| 10.27* | Employment and Confidentiality Agreement, dated September 5, 2008, among Community West Bank, Community West Bancshares and Richard M. Favor (10)                                                                                    |
|   |                                                                                                                                                                                                                                 |
| 10.28  | Letter Agreement, dated December 19, 2008, between Community West Bancshares and the United States Department of the Treasury, and the Securities Purchase Agreement - Standard Terms attached thereto and incorporated therein (12) |
|   |                                                                                                                                                                                                                                 |
| 10.29  | Letter Agreement, dated December 19, 2008, between Community West Bancshares and the United States Department of the Treasury regarding the Number of Director Positions (12)                                                        |
|   |                                                                                                                                                                                                                                 |
| 10.30* | Agreement, dated December 19, 2008, between Community West Bancshares and Lynda Nahra regarding modifications to Benefit Plans (12)                                                                                                  |
|   |                                                                                                                                                                                                                                 |
| 10.31* | Agreement, dated December 19, 2008, between Community West Bancshares and Charles Baltuskonis regarding modifications to Benefit Plans (12)                                                                                          |
|   |                                                                                                                                                                                                                                 |
| 10.32* | Agreement, dated December 19, 2008, between Community West Bancshares and Richard Favor regarding modifications to Benefit Plans (12)                                                                                                |

----

Index

| 10.33  | Waiver of Lynda Nahra, dated December 19, 2008, waiving claims against Community West Bancshares and the United States Department of the Treasury as a result of modifications to Benefit Plans (12)         |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                         |
| 10.34  | Waiver of Charles Baltuskonis, dated December 19, 2008, waiving claims against Community West Bancshares and the United States Department of the Treasury as a result of modifications to Benefit Plans (12) |
|   |                                                                                                                                                                                                         |
| 10.35  | Waiver of Richard Favor, dated December 19, 2008, waiving claims against Community West Bancshares and the United States Department of the Treasury as a result of modifications to Benefit Plans (12)       |
|   |                                                                                                                                                                                                         |
| 21     | Subsidiaries of the Registrant (7)                                                                                                                                                                           |
|   |                                                                                                                                                                                                         |
| 23.1   | Consent of Ernst & Young LLP **                                                                                                                                                                          |
|   |                                                                                                                                                                                                         |
| 31.1   | Certification of the Chief Executive Officer **                                                                                                                                                              |
|   |                                                                                                                                                                                                         |
| 31.2   | Certification of the Chief Financial Officer **                                                                                                                                                              |
|   |                                                                                                                                                                                                         |
| 32.1   | Certification pursuant to 18 U.S.C. Section 1350 **                                                                                                                                                          |

----

|   | (1)    | Incorporated by reference from the Registrant’s Registration Statement on Form S-8 filed with the Commission on December 31, 1997.                                             |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                 |
|   | (2)    | Incorporated by reference from the Registrant’s Amendment to Registration Statement on Form 8-A filed with the Commission on March 12, 1998.                                   |
|   |   |                                                                                                                                                                                 |
|   | (3)    | Incorporated by reference from the Registrant’s Annual Report on Form 10-K filed with the Commission on March 26, 1998.                                                   |
|   |   |                                                                                                                                                                                 |
|   | (4)    | Incorporated by reference from the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2001 filed by the Registrant with the Commission on April 16, 2002. |
|   |   |                                                                                                                                                                                 |
|   | (5)    | Incorporated by reference from the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2002 filed with the Commission on March 31, 2003.                   |
|   |   |                                                                                                                                                                                 |
|   | (6)    | Incorporated by reference from the Registrant’s Registration Statement on Form S-8 (File No 333-129898) filed with the Commission on November 22, 2005.                        |
|   |   |                                                                                                                                                                                 |
|   | (7)    | Incorporated by reference from Registrant’s Annual Report on Form 10-K for the year ended December 31, 2006 filed with the Commission on March 26, 2007.                       |
|   |   |                                                                                                                                                                                 |
|   | (8)    | Incorporated by reference from the Registrant’s Form 8-K filed with the Commission on February 28, 2007                                                                        |
|   |   |                                                                                                                                                                                 |
|   | (9)    | Incorporated by reference from the Registrant’s Form 8-K filed with the Commission on July 2, 2007                                                                             |
|   |   |                                                                                                                                                                                 |
|   | (10)   | Incorporated by reference from Registrant’s Form 8-K filed with the Commission on September 10, 2008                                                                           |
|   |   |                                                                                                                                                                                 |
|   | (11)   | Incorporated by reference from the Registrant’s Form 8-K filed with the Commission on December 18, 2008                                                                        |
|   |   |                                                                                                                                                                                 |
|   | (12)   | Incorporated by reference from the Registrant’s Form 8-K filed with the Commission on December 24, 2008                                                                        |
|   |   |                                                                                                                                                                                 |
|   | *      | Indicates a management contract or compensatory plan or arrangement.                                                                                                                 |
|   |   |                                                                                                                                                                                 |
|   | **     | Filed herewith.                                                                                                                                                                      |

----

Index

SIGNATURES

|   | COMMUNITY WEST BANCSHARES |   |
|--------|---------------------------|--------|
|   | (Registrant)              |   |
| Date: March 25, 2010 | By:    | /s/ William R. Peeples |   |
|----------------------|--------|------------------------|--------|
|                 |   | William R. Peeples     |   |
|                 |   | Chairman of the Board  |   |

|                       |   |                                         |   |           |
|----------------------------|--------|----------------------------------------------|--------|----------------|
| Signature                  |   |                                         | Title  |           |   | Date |   |
|                       |   |                                         |   |           |
| /s/ William R. Peeples     |   | Director and                                 |   | March 25, 2010 |
| William R. Peeples         |   | Chairman of the Board                        |   |           |
|                       |   |                                         |   |           |
| /s/ Charles G. Baltuskonis |   | Executive Vice President and                 |   | March 25, 2010 |
| Charles G. Baltuskonis     |   | Chief Financial Officer                      |   |           |
|                       |   | (Principal Financial and Accounting Officer) |   |           |
|                       |   |                                         |   |           |
| /s/ Robert H. Bartlein     |   | Director                                     |   | March 25, 2010 |
| Robert H. Bartlein         |   |                                         |   |           |
|                       |   |                                         |   |           |
| /s/ Jean W. Blois          |   | Director                                     |   | March 25, 2010 |
| Jean W. Blois              |   |                                         |   |           |
|                       |   |                                         |   |           |
| /s/ John D. Illgen         |   | Director and Secretary                       |   | March 25, 2010 |
| John D. Illgen             |   | of the Board                                 |   |           |
|                       |   |                                         |   |           |
| /s/ Lynda J. Nahra         |   | Director, President and                      |   | March 25, 2010 |
| Lynda J. Nahra             |   | Chief Executive Officer                      |   |           |
|                       |   | (Principal Executive Officer)                |   |           |
|                       |   |                                         |   |           |
| /s/ James R. Sims Jr.      |   | Director                                     |   | March 25, 2010 |
| James R. Sims Jr.          |   |                                         |   |           |
|                       |   |                                         |   |           |
| /s/ Kirk B. Stovesand      |   | Director                                     |   | March 25, 2010 |
| Kirk B. Stovesand          |   |                                         |   |           |
|                       |   |                                         |   |           |
| /s/ C. Richard Whiston     |   | Director                                     |   | March 25, 2010 |
| C Richard Whiston          |   |                                         |   |           |

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