----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-Q**

**FOR      THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007**

**VINEYARD      NATIONAL BANCORP**

|                California(State                or other jurisdiction ofincorporation                or organization)     |        | 33-0309110(IRS                  employeridentification                  number) |
|-------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|
|                                                                                                                          |   |                                                                            |
|  1260                Corona Pointe CourtCorona,                CA(Address                of principal executive offices) |        |  92879                (Zip                Code)                            |

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**VINEYARD      NATIONAL BANCORP AND SUBSIDIARY**

**FORM      10-Q INDEX**

**FOR      THE PERIODS ENDED SEPTEMBER 30, 2007 AND 2006,**

**AND      DECEMBER 31, 2006**

|                    | **PART                I – FINANCIAL INFORMATION**                                                                                                                                               |   |
|-------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                    |                                                                                                                                                                                                  |   |
| ITEM                1.  | Financial                Statements                                                                                                                                                                   |   |
|                    |                                                                                                                                                                                                  |   |
|                    | Consolidated                Statements of Financial Condition at September 30,                2007 and December 31, 2006                                                                              | 4      |
|                    |                                                                                                                                                                                                  |   |
|                    | Consolidated                Statements of Income for the Three and Nine Months                Ended September 30, 2007 and 2006                                                                       | 5      |
|                    |                                                                                                                                                                                                  |   |
|                    | Consolidated                Statements of Changes in Stockholders' Equity and                Comprehensive Income for the Nine Months Ended September 30, 2007                and                2006 | 6      |
|                    |                                                                                                                                                                                                  |   |
|                    | Consolidated                Statements of Cash Flows for the Nine Months Ended                September 30, 2007 and 2006                                                                             | 8      |
|                    |                                                                                                                                                                                                  |   |
|                    | Notes                to Consolidated Financial                Statements                                                                                                                              | 10     |
|                    |                                                                                                                                                                                                  |   |
| ITEM                2.  | Management's                Discussion and Analysis of Financial Condition                and Results of Operations                                                                                   | 18     |
|                    |                                                                                                                                                                                                  |   |
| ITEM                3.  | Quantitative                and Qualitative Disclosures about Market                Risk                                                                                                              | 41     |
|                    |                                                                                                                                                                                                  |   |
| ITEM                4.  | Controls                and Procedures                                                                                                                                                                | 41     |
|                    |                                                                                                                                                                                                  |   |
|                    | **PART                II – OTHER INFORMATION**                                                                                                                                                  |   |
|                    |                                                                                                                                                                                                  |   |
| ITEM                1.  | Legal                Proceedings                                                                                                                                                                      | 41     |
|                    |                                                                                                                                                                                                  |   |
| ITEM                1A. | Risk                Factors                                                                                                                                                                           | 42     |
|                    |                                                                                                                                                                                                  |   |
| ITEM                2.  | Unregistered                Sales of Equity Securities and Use of                Proceeds                                                                                                             | 42     |
|                    |                                                                                                                                                                                                  |   |
| ITEM                3.  | Defaults                Upon Senior Securities                                                                                                                                                        | 42     |
|                    |                                                                                                                                                                                                  |   |
| ITEM                4.  | Submission                of Matters to a Vote of Security                Holders                                                                                                                     | 42     |
|                    |                                                                                                                                                                                                  |   |
| ITEM                5.  | Other                Information                                                                                                                                                                      | 42     |
|                    |                                                                                                                                                                                                  |   |
| ITEM                6.  | Exhibits                                                                                                                                                                                              | 42     |
|                    |                                                                                                                                                                                                  |   |
| Signatures              |                                                                                                                                                                                                  | 45     |
|                    |                                                                                                                                                                                                  |   |
| Exhibits                |                                                                                                                                                                                                  |   |
|                    |                                                                                                                                                                                                  |   |
|                    |                                                                                                                                                                                                  |   |

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*Table          of Contents*

**Forward-looking      statements**

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*Table          of Contents*

**PART      I**

**ITEM      I.  FINANCIAL STATEMENTS**

**VINEYARD      NATIONAL BANCORP AND SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF FINANCIAL CONDITION**

**AT      SEPTEMBER 30, 2007 AND DECEMBER 31, 2006**

| (Dollars                in thousands)                                                                                                                      |   | **September                30, 2007** |      |   | **December                31, 2006** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|-----------|--------|--------------------------------------|--------|
|                                                                                                                                                       |   |                                  |      |   |                                 |   |
| **ASSETS**                                                                                                                                                 |   |                                  |      |   |                                 |   |
| Cash                and cash equivalents                                                                                                                   |   | $                                     | 29,286    |   |                                 | $      | 35,129 |   |
| Investment                securities                                                                                                                       |   |                                  | 195,362   |   |                                 |   | 217,907 |   |
| Loans                held-for-sale                                                                                                                         |   |                                  | 143,737   |   |                                 |   | - |   |
| Loans,                net of unearned income                                                                                                               |   |                                  | 1,990,645 |   |                                 |   | 1,902,244 |   |
| Less:  Allowance                for loan losses                                                                                                  |   |                                  | (22,037   | )      |                                 |   | (19,689 | ) |
| Net                Loans                                                                                                                                   |   |                                  | 1,968,608 |   |                                 |   | 1,882,555 |   |
| Bank                premises and equipment, net                                                                                                            |   |                                  | 18,593    |   |                                 |   | 20,402 |   |
| Accrued                interest                                                                                                                            |   |                                  | 12,523    |   |                                 |   | 11,577 |   |
| Other                real estate owned                                                                                                                     |   |                                  | 12,862    |   |                                 |   | - |   |
| Federal                Home Loan Bank ("FHLB") and other stock, at cost                                                                                    |   |                                  | 21,194    |   |                                 |   | 15,693 |   |
| Deferred                income tax asset                                                                                                                   |   |                                  | 15,837    |   |                                 |   | 15,475 |   |
| Goodwill                and other intangibles                                                                                                              |   |                                  | 42,730    |   |                                 |   | 43,265 |   |
| Other                assets                                                                                                                                |   |                                  | 14,317    |   |                                 |   | 15,736 |   |
| **TOTAL                ASSETS**                                                                                                                            |   | $                                     | 2,475,049 |   |                                 | $      | 2,257,739 |   |
|                                                                                                                                                       |   |                                  |      |   |                                 |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS' EQUITY**                                                                                                    |   |                                  |      |   |                                 |   |   |   |
| Liabilities                                                                                                                                                |   |                                  |      |   |                                 |   |   |   |
| Deposits                                                                                                                                                   |   |                                  |      |   |                                 |   |   |   |
| Non-interest                bearing                                                                                                                        |   | $                                     | 292,172   |   |                                 | $      | 292,917 |   |
| Interest-bearing                                                                                                                                           |   |                                  | 1,558,699 |   |                                 |   | 1,513,496 |   |
| Total                Deposits                                                                                                                              |   |                                  | 1,850,871 |   |                                 |   | 1,806,413 |   |
|                                                                                                                                                       |   |                                  |      |   |                                 |   |   |   |
| FHLB                advances                                                                                                                               |   |                                  | 271,000   |   |                                 |   | 126,000 |   |
| Other                borrowings                                                                                                                            |   |                                  | 33,100    |   |                                 |   | 40,000 |   |
| Subordinated                debentures                                                                                                                     |   |                                  | 5,000     |   |                                 |   | 5,000 |   |
| Junior                subordinated debentures                                                                                                              |   |                                  | 115,470   |   |                                 |   | 115,470 |   |
| Accrued                interest and other liabilities                                                                                                      |   |                                  | 24,239    |   |                                 |   | 21,796 |   |
| **TOTAL                LIABILITIES**                                                                                                                       |   |                                  | 2,299,680 |   |                                 |   | 2,114,679 |   |
|                                                                                                                                                       |   |                                  |      |   |                                 |   |   |   |
| **COMMITMENTS                AND CONTINGENCIES**                                                                                                           |   |                                  |      |   |                                 |   |   |   |
|                                                                                                                                                       |   |                                  |      |   |                                 |   |   |   |
| Stockholders'                Equity                                                                                                                        |   |                                  |      |   |                                 |   |   |   |
| Contributed                capital                                                                                                                         |   |                                  |      |   |                                 |   |   |   |
| Perpetual                preferred stock - authorized 10,000,000 shares                                                                                    |   |                                  |      |   |                                 |   |   |   |
| Series                C - no par value, issued and outstanding 10,000                                                                                      |   |                                  |      |   |                                 |   |   |   |
|                 shares                in 2007 and 2006                     |   |                                  | 9,665     |   |                                 |   | 9,665 |   |
|             Series                D - no par value, issued and outstanding 2,300,000           |   |                                  |      |   |                                 |   |   |   |
|                 and                0 shares in 2007 and 2006, respectively |   |                                  | 21,961    |   |                                 |   | - |   |
| Common                stock - no par value, authorized 50,000,000 shares;                                                                                  |   |                                  |      |   |                                 |   |   |   |
| issued                11,618,009 and 11,661,269 shares                                                                                                     |   |                                  |      |   |                                 |   |   |   |
| in                2007 and 2006, respectively                                                                                                              |   |                                  | 121,835   |   |                                 |   | 109,458 |   |
| Additional                paid-in capital                                                                                                                  |   |                                  | 619       |   |                                 |   | 2,149 |   |
| Retained                earnings                                                                                                                           |   |                                  | 53,099    |   |                                 |   | 52,105 |   |
| Treasury                stock, 818,214 and 721,959 shares, at cost                                                                                         |   |                                  |      |   |                                 |   |   |   |
| in                2007 and 2006, respectively                                                                                                              |   |                                  | (21,935   | )      |                                 |   | (20,639 | ) |
| Unallocated                Employee Stock Ownership Plan ("ESOP") shares                                                                                   |   |                                  | (5,320    | )      |                                 |   | (5,765 | ) |
| Accumulated                other comprehensive loss, net of income taxes                                                                                   |   |                                  | (4,555    | )      |                                 |   | (3,913 | ) |
| **TOTAL                STOCKHOLDERS' EQUITY**                                                                                                              |   |                                  | 175,369   |   |                                 |   | 143,060 |   |
| **TOTAL                LIABILITIES AND STOCKHOLDERS' EQUITY**                                                                                              |   | $                                     | 2,475,049 |   |                                 | $      | 2,257,739 |   |
|                                                                                                                                                       |   |                                  |      |   |                                 |   |   |   |
| See                accompanying notes to consolidated financial statements.                                                                                |   |                                  |      |   |                                 |   |   |   |

----

*Table          of Contents*

**VINEYARD      NATIONAL BANCORP AND SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF INCOME**

**FOR      THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 AND      2006**

| (Dollars                in thousands, except per share amounts)               |   | **Three                Months Ended September 30,** |   |   | **Nine                Months Ended September 30,** |   |
|-------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|--------|----------------------------------------------------|--------|
|                                                                          |   | **2007**                                            |   |   | **2006**                                           |   |   | **2007** |   |   | **2006** |   |
| **Interest                Income**                                            |   |                                                |   |   |                                               |   |   |   |   |   |   |   |
| Interest                and fees on loans                                     |   | $                                                   | 45,627 |   |                                               | $      | 37,916 |   |   | $ | 132,356 |   |   | $ | 104,365 |   |
| Interest                on investment securities                              |   |                                                | 3,058  |   |                                               |   | 3,010 |   |   |   | 8,963 |   |   |   | 9,102 |   |
| **TOTAL                INTEREST INCOME**                                      |   |                                                | 48,685 |   |                                               |   | 40,926 |   |   |   | 141,319 |   |   |   | 113,467 |   |
|                                                                          |   |                                                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| **Interest                Expense**                                           |   |                                                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| Interest                on savings deposits                (1)                |   |                                                | 7,091  |   |                                               |   | 5,619 |   |   |   | 20,143 |   |   |   | 14,023 |   |
| Interest                on time deposits in denominations of $100,000 or more |   |                                                | 7,170  |   |                                               |   | 5,873 |   |   |   | 20,054 |   |   |   | 14,573 |   |
| Interest                on other time deposits                                |   |                                                | 4,720  |   |                                               |   | 4,574 |   |   |   | 13,038 |   |   |   | 11,540 |   |
| Interest                on FHLB advances and other borrowings                 |   |                                                | 5,387  |   |                                               |   | 3,667 |   |   |   | 17,904 |   |   |   | 13,041 |   |
| **TOTAL                INTEREST EXPENSE**                                     |   |                                                | 24,368 |   |                                               |   | 19,733 |   |   |   | 71,139 |   |   |   | 53,177 |   |
| **NET                INTEREST INCOME**                                        |   |                                                | 24,317 |   |                                               |   | 21,193 |   |   |   | 70,180 |   |   |   | 60,290 |   |
|                                                                          |   |                                                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| **Provision                for Loan Losses**                                  |   |                                                | (1,000 | )      |                                               |   | (1,175 | ) |   |   | (2,700 | ) |   |   | (3,075 | ) |
|                                                                          |   |                                                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| **NET                INTEREST INCOME AFTER**                                  |   |                                                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| **PROVISION                FOR LOAN LOSSES**                                  |   |                                                | 23,317 |   |                                               |   | 20,018 |   |   |   | 67,480 |   |   |   | 57,215 |   |
|                                                                          |   |                                                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| **Other                Income**                                               |   |                                                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| Fees                and service charges                                       |   |                                                | 464    |   |                                               |   | 548 |   |   |   | 1,363 |   |   |   | 1,267 |   |
| Gain                on sale of SBA loans and SBA broker fee income            |   |                                                | 145    |   |                                               |   | 659 |   |   |   | 1,326 |   |   |   | 2,056 |   |
| Gain                on sale of other loans                                    |   |                                                | -      |   |                                               |   | 36 |   |   |   | 337 |   |   |   | 422 |   |
| Other                income                                                   |   |                                                | 82     |   |                                               |   | 117 |   |   |   | 329 |   |   |   | 343 |   |
| **TOTAL                OTHER INCOME**                                         |   |                                                | 691    |   |                                               |   | 1,360 |   |   |   | 3,355 |   |   |   | 4,088 |   |
|                                                                          |   |                                                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| **Other                Expense**                                              |   |                                                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| Salaries                and employee benefits                                 |   |                                                | 8,132  |   |                                               |   | 7,648 |   |   |   | 23,582 |   |   |   | 20,821 |   |
| Occupancy                                                                     |   |                                                | 1,450  |   |                                               |   | 1,265 |   |   |   | 4,252 |   |   |   | 3,495 |   |
| Furniture                and equipment                                        |   |                                                | 1,104  |   |                                               |   | 1,146 |   |   |   | 3,235 |   |   |   | 3,168 |   |
| Other                                                                         |   |                                                | 4,029  |   |                                               |   | 3,451 |   |   |   | 10,947 |   |   |   | 9,521 |   |
| **TOTAL                OTHER EXPENSES**                                       |   |                                                | 14,715 |   |                                               |   | 13,510 |   |   |   | 42,016 |   |   |   | 37,005 |   |
| **INCOME                BEFORE INCOME TAXES**                                 |   |                                                | 9,293  |   |                                               |   | 7,868 |   |   |   | 28,819 |   |   |   | 24,298 |   |
| **INCOME                TAX PROVISION**                                       |   |                                                | 3,822  |   |                                               |   | 3,214 |   |   |   | 11,837 |   |   |   | 10,043 |   |
| **NET                INCOME**                                                 |   | $                                                   | 5,471  |   |                                               | $      | 4,654 |   |   | $ | 16,982 |   |   | $ | 14,255 |   |
|                                                                          |   |                                                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| **EARNINGS                PER SHARE (2)**                                     |   |                                                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| **BASIC**                                                                     |   | $                                                   | 0.46   |   |                                               | $      | 0.42 |   |   | $ | 1.49 |   |   | $ | 1.36 |   |
| **DILUTED**                                                                   |   | $                                                   | 0.45   |   |                                               | $      | 0.40 |   |   | $ | 1.46 |   |   | $ | 1.31 |   |
|                                                                          |   |                                                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| **CASH                DIVIDENDS DECLARED PER SHARE (2)**                      |   | $                                                   | 0.08   |   |                                               | $      | 0.08 |   |   | $ | 0.23 |   |   | $ | 0.23 |   |
| **CASH                DIVIDENDS PAID PER SHARE (2)**                          |   | $                                                   | 0.08   |   |                                               | $      | 0.08 |   |   | $ | 0.23 |   |   | $ | 0.23 |   |
|                                                                          |   |                                                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to consolidated financial statements.   |   |                                                |   |   |                                               |   |   |   |   |   |   |   |   |   |   |   |

| (1)   | Includes                savings, NOW, and money market deposit                accounts. |
|-----------------|-----------------------------------------------------------------------------------------|

| (2)   | Per                share amounts have been retroactively adjusted to reflect the 5%                stock                dividend issued in June 2007. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

**VINEYARD      NATIONAL BANCORP AND SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF CHANGES IN**

**STOCKHOLDERS'      EQUITY AND COMPREHENSIVE INCOME**

**FOR      THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**

| (Dollars                  in thousands)               |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                | **Accumulated**   |   |                           |   |   |       |   |      |   |
|-------------------------------------------------------|---------------|--------|-----------------------------------|--------|----------------|------------|--------|-------------|---------|-------------------|--------|--------------|-----------|-----------------|-------------------------------------|-------------------|--------|--------------------------------|--------|--------|------------|--------|-----------|--------|
|                                                  | **Perpetual** |   | **Common                  Stock** |   | **Additional** |       |   |        |    |              |   |         | **Other** |            | **Treasury                  Stock** |              |   |                           |
|                                                  | **Preferred** |   | **Number                  of**    |   |           |       |   | **Paid-in** |    | **Comprehensive** |   | **Retained** |      | **Unallocated** |                                | **Comprehensive** |   | **Number                  of** |   |   |       |   |      |   |
|                                                  | **Stock**     |   | **Shares**                        |   |           | **Amount** |   | **Capital** |    | **Income**        |   | **Earnings** |      | **ESOP**        |                                | **Loss**          |   | **Shares**                     |   |   | **Amount** |   | **Total** |   |
| **Balance                  at December 31, 2005**     | $             | 9,665  |                              |   | 10,518,318     |       |   | $           | 78,832  |              | $      | 4,443        |      |            |                                | $                 | 36,454 |                           | $      | (6,304 | )          | $      | (5,245    | )      |   | (619,288 | ) |   | $ | (17,860 | ) | $ | 99,985 |   |
|                                                  |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |   |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of common stock             |          |   |                              |   | 1,260,000      |       |   |        | 30,287  |              |   |         |      |            |                                |              |   |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   | 30,287 |   |
| Exercise                  of stock options            |          |   |                              |   | 70,922         |       |   |        | 242     |              |   |         |      |            |                                |              |   |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   | 242 |   |
| Purchase                  of treasury stock           |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |   |                           |   |   |       |   |      |   |   | (93,808 | ) |   |   | (2,470 | ) |   | (2,470 | ) |
| Treasury                  stock adjustment for 5%     |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |   |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |
| stock                  dividend in June 2007          |          |   |                              |   | (4,466         | )          |   |        |    |              |   |         |      |            |                                |              |   |                           |   |   |       |   |      |   |   | 4,466 |   |   |   |   |   |   | - |   |
| Purchase                  of restricted stock         |          |   |                              |   | (44,099        | )          |   |        |    |              |   | (1,237       | )         |            |                                |              |   |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   | (1,237 | ) |
| Reclassification                  of restricted stock |          |   |                              |   | (227,905       | )          |   |        |    |              |   | (3,134       | )         |            |                                |              |   |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   | (3,134 | ) |
| Vesting                  of restricted stock          |          |   |                              |   | 23,983         |       |   |        |    |              |   |         |      |            |                                |              |   |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Amortization                  of restricted stock     |          |   |                              |   |           |       |   |        |    |              |   | 1,004        |      |            |                                |              |   |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   | 1,004 |   |
| Share-based                  compensation expense     |          |   |                              |   |           |       |   |        |    |              |   | 13           |      |            |                                |              |   |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   | 13 |   |
| Release                  of ESOP shares               |          |   |                              |   |           |       |   |        |    |              |   | 89           |      |            |                                |              |   |                           |   | 406    |       |   |      |   |   |   |   |   |   |   |   |   | 495 |   |
| Cash                  dividends declared on           |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |   |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |
| preferred                  stock                      |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              | (666   | )                              |   |   |       |   |      |   |   |   |   |   |   |   |   |   | (666 | ) |
| Cash                  dividends declared on           |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |   |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |
| common                  stock                         |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              | (2,453 | )                              |   |   |       |   |      |   |   |   |   |   |   |   |   |   | (2,453 | ) |
| Comprehensive                  income                 |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |   |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Income                           |          |   |                              |   |           |       |   |        |    |              |   |         |      | $               | 14,255                              |              |   | 14,255                         |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   | 14,255 |   |
| Unrealized                  security holding          |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |   |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |   |
| gain                  (net of $191                    |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |   |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |   |
| tax                  provision)                       |          |   |                              |   |           |       |   |        |    |              |   |         |      |            | 263                                 |              |   |                           |   |   |       |   |      | 263    |   |   |   |   |   |   |   |   |   | 263 |   |
| Total                  comprehensive income           |          |   |                              |   |           |       |   |        |    |              |   |         |      | $               | 14,518                              |              |   |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                  at September 30, 2006**    | $             | 9,665  |                              |   | 11,596,753     |       |   | $           | 109,361 |              | $      | 1,178        |      |            |                                |              | $      | 47,590                         |   | $      | (5,898     | )      | $         | (4,982 | ) |   | (708,630 | ) |   | $ | (20,330 | ) | $ | 136,584 |   |

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*Table          of Contents*

**VINEYARD      NATIONAL BANCORP AND SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF CHANGES IN**

**STOCKHOLDERS'      EQUITY AND COMPREHENSIVE INCOME**

**FOR      THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**

| (Dollars                  in thousands)                         |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                | **Accumulated**   |    |                           |   |   |       |   |      |   |
|-----------------------------------------------------------------|--------|---------------|--------|-----------------------------------|--------|----------------|------------|--------|-------------|---------|-------------------|--------|--------------|-----------|-----------------|-------------------------------------|-------------------|---------|--------------------------------|--------|--------|------------|--------|-----------|--------|
|                                                            |   | **Perpetual** |   | **Common                  Stock** |   | **Additional** |       |   |        |    |              |   |         | **Other** |            | **Treasury                  Stock** |              |    |                           |
|                                                            |   | **Preferred** |   | **Number                  of**    |   |           |       |   | **Paid-in** |    | **Comprehensive** |   | **Retained** |      | **Unallocated** |                                | **Comprehensive** |    | **Number                  of** |   |   |       |   |      |   |
|                                                            |   | **Stock**     |   | **Shares**                        |   |           | **Amount** |   | **Capital** |    | **Income**        |   | **Earnings** |      | **ESOP**        |                                | **Loss**          |    | **Shares**                     |   |   | **Amount** |   | **Total** |   |
| **Balance                  at December 31, 2006**               |   | $             | 9,665  |                              |   | 11,661,269     |       |   | $           | 109,458 |              | $      | 2,149        |      |            |                                | $                 | 52,105  |                           | $      | (5,765 | )          | $      | (3,913    | )      |   | (721,959 | ) |   | $ | (20,639 | ) | $ | 143,060 |   |
|                                                            |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Issuance                  of 5% stock dividend                  |   |          |   |                              |   |           |       |   |        | 12,309  |              |   |         |      |            |                                |              | (12,309 | )                              |   |   |       |   |      |   |   |   |   |   |   |   |   |   | - |   |
| Exercise                  of stock options                      |   |          |   |                              |   | 24,229         |       |   |        | 68      |              |   |         |      |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   | 68 |   |
| Restricted                  shares surrendered to treasury      |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |    |                           |   |   |       |   |      |   |   | (6,512 | ) |   |   | (135 | ) |   | (135 | ) |
| Transfer                  of treasury stock to restricted stock |   |          |   |                              |   | (62,900        | )          |   |        |    |              |   | (1,721       | )         |            |                                |              |    |                           |   |   |       |   |      |   |   | 62,900 |   |   |   | 1,721 |   |   | - |   |
| Treasury                  stock adjustment for 5%               |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |
| stock                  dividend in June 2007                    |   |          |   |                              |   | 2,643          |       |   |        |    |              |   |         |      |            |                                |              |    |                           |   |   |       |   |      |   |   | (2,643 | ) |   |   |   |   |   | - |   |
| Issuance                  of preferred stock                    |   |          | 21,961 |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   | 21,961 |   |
| Purchase                  of treasury stock                     |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |    |                           |   |   |       |   |      |   |   | (150,000 | ) |   |   | (2,882 | ) |   | (2,882 | ) |
| Purchase                  of restricted stock                   |   |          |   |                              |   | (36,750        | )          |   |        |    |              |   | (858         | )         |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   | (858 | ) |
| Vesting                  of restricted stock                    |   |          |   |                              |   | 29,518         |       |   |        |    |              |   |         |      |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   | - |   |
| Amortization                  of restricted stock               |   |          |   |                              |   |           |       |   |        |    |              |   | 932          |      |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   | 932 |   |
| Share-based                  compensation expense               |   |          |   |                              |   |           |       |   |        |    |              |   | 107          |      |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   | 107 |   |
| Release                  of ESOP shares                         |   |          |   |                              |   |           |       |   |        |    |              |   | (1           | )         |            |                                |              |    |                           |   | 445    |       |   |      |   |   |   |   |   |   |   |   |   | 444 |   |
| Disgorgement                  of short swing profit             |   |          |   |                              |   |           |       |   |        |    |              |   | 11           |      |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   | 11 |   |
| Cash                  paid for fractional shares in             |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |
| stock                  dividend distribution                    |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              | (18     | )                              |   |   |       |   |      |   |   |   |   |   |   |   |   |   | (18 | ) |
| Cash                  dividends declared on preferred           |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |
| stock                                                           |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              | (1,070  | )                              |   |   |       |   |      |   |   |   |   |   |   |   |   |   | (1,070 | ) |
| Cash                  dividends declared on common              |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |
| stock                                                           |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              | (2,591  | )                              |   |   |       |   |      |   |   |   |   |   |   |   |   |   | (2,591 | ) |
| Comprehensive                  income                           |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |
| Net                  Income                                     |   |          |   |                              |   |           |       |   |        |    |              |   |         |      | $               | 16,982                              |              |    | 16,982                         |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   | 16,982 |   |
| Unrealized                  security holding                    |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |   |
| losses                  (net of $464                            |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |   |
| tax                  benefit)                                   |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            | (642                                | )                 |    |                           |   |   |       |   |      | (642   | ) |   |   |   |   |   |   |   |   | (642 | ) |
| Total                  comprehensive income                     |   |          |   |                              |   |           |       |   |        |    |              |   |         |      | $               | 16,340                              |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                  at September 30, 2007**              |   | $             | 31,626 |                              |   | 11,618,009     |       |   | $           | 121,835 |              | $      | 619          |      |            |                                |              | $       | 53,099                         |   | $      | (5,320     | )      | $         | (4,555 | ) |   | (818,214 | ) |   | $ | (21,935 | ) | $ | 175,369 |   |
|                                                            |   |          |   |                              |   |           |       |   |        |    |              |   |         |      |            |                                |              |    |                           |   |   |       |   |      |   |   |   |   |   |   |   |   |   |   |   |   |

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*Table          of Contents*

**VINEYARD      NATIONAL BANCORP AND SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**FOR      THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**

| (Dollars                in thousands)                                         |   | **Nine                Months Ended September 30,** |     |
|-------------------------------------------------------------------------------|--------|----------------------------------------------------|----------|
|                                                                          |   | **2007**                                           |     |   | **2006** |   |
| **Cash                Flows From Operating Activities**                       |   |                                               |     |   |   |   |
| Net                Income                                                     |   | $                                                  | 16,982   |   |   | $ | 14,255 |   |
| Adjustments                to Reconcile Net Income                            |   |                                               |     |   |   |   |   |   |
| to                Net Cash Provided by Operating Activities                   |   |                                               |     |   |   |   |   |   |
|                                                                          |   |                                               |     |   |   |   |   |   |
| Depreciation                and amortization                                  |   |                                               | 4,689    |   |   |   | 4,867 |   |
| Provision                for credit losses                                    |   |                                               | 2,100    |   |   |   | 3,125 |   |
| FHLB                stock dividends                                           |   |                                               | (445     | ) |   |   | (596 | ) |
| Share-based                compensation                                       |   |                                               | 107      |   |   |   | 13 |   |
| Release                of ESOP shares                                         |   |                                               | 444      |   |   |   | 495 |   |
| Changes                in assets and liabilities, net of effects from         |   |                                               |     |   |   |   |   |   |
| merger                with Rancho Bank                                        |   |                                               |     |   |   |   |   |   |
| Increase                in interest receivable                                |   |                                               | (946     | ) |   |   | (1,875 | ) |
| Increase                in other assets                                       |   |                                               | (691     | ) |   |   | (1,318 | ) |
| Decrease/(increase)                in deferred tax assets                     |   |                                               | 102      |   |   |   | (3,432 | ) |
| Increase/(decrease)  in                net taxes payable/receivable |   |                                               | 2,437    |   |   |   | (3,022 | ) |
| Decrease                in unearned loan fees                                 |   |                                               | (2,149   | ) |   |   | (750 | ) |
| Increase                in interest payable                                   |   |                                               | 588      |   |   |   | 1,042 |   |
| Increase                in accrued expense and other liabilities              |   |                                               | 671      |   |   |   | 7,587 |   |
| Gain                on sale of property, plant, and equipment                 |   |                                               | -        |   |   |   | (4 | ) |
| Origination                and purchase of held-for-sale loans,               |   |                                               |     |   |   |   |   |   |
| net                of principal payments                                      |   |                                               | (12,839  | ) |   |   | - |   |
| Proceeds                from sale of held-for-sale loans                      |   |                                               | 10,697   |   |   |   | - |   |
| Gain                on sale of loans                                          |   |                                               | (861     | ) |   |   | (1,162 | ) |
| Total                Adjustment                                               |   |                                               | 3,904    |   |   |   | 4,970 |   |
| **Net                Cash Provided By Operating Activities**                  |   |                                               | 20,886   |   |   |   | 19,225 |   |
|                                                                          |   |                                               |     |   |   |   |   |   |
| **Cash                Flows From Investing Activities**                       |   |                                               |     |   |   |   |   |   |
| Proceeds                from principal reductions and maturities of           |   |                                               |     |   |   |   |   |   |
| mortgage-backed                securities available-for-sale                  |   |                                               | 22,525   |   |   |   | 29,029 |   |
| Purchase                of investment securities, net of effects from         |   |                                               |     |   |   |   |   |   |
| merger                with Rancho Bank                                        |   |                                               | -        |   |   |   | 1,648 |   |
| Purchase                of FHLB & other stock                             |   |                                               | (10,755  | ) |   |   | (9,945 | ) |
| Redemption                of FHLB stock                                       |   |                                               | 5,699    |   |   |   | 14,138 |   |
| Cash                acquired in merger with Rancho Bank                       |   |                                               | -        |   |   |   | 34,165 |   |
| Origination                and purchase of loans, net of principal payments   |   |                                               | (307,888 | ) |   |   | (384,213 | ) |
| Proceeds                from sale of loans                                    |   |                                               | 67,688   |   |   |   | 81,759 |   |
| Proceeds                from sale of property, plant, and equipment           |   |                                               | -        |   |   |   | 4 |   |
| Capital                expenditures                                           |   |                                               | (1,039   | ) |   |   | (3,157 | ) |
| **Net                Cash Used In Investing Activities**                      |   | $                                                  | (223,770 | ) |   | $ | (236,572 | ) |

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*Table          of Contents*

**VINEYARD      NATIONAL BANCORP AND SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**FOR      THE NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006**

| (Dollars                in thousands)                                       |   |     |    |   |     |   |
|-----------------------------------------------------------------------------|--------|----------|---------|--------|----------|--------|
|                                                                        |   | **2007** |    |   | **2006** |   |
| **Cash                Flows From Financing Activities**                     |   |     |    |   |     |   |
| Net                (decrease)/increase in non-interest bearing deposits     |   | $        | (745    | )      |     | $      | 14,127 |   |
| Net                increase in interest-bearing deposits                    |   |     | 45,203  |   |     |   | 224,114 |   |
| Net                increase/(decrease) in FHLB advances                     |   |     | 145,000 |   |     |   | (87,000 | ) |
| (Decrease)/increase                in other borrowings                      |   |     | (6,900  | )      |     |   | 25,500 |   |
| Purchase                of treasury stock                                   |   |     | (3,017  | )      |     |   | (2,470 | ) |
| Purchase                of restricted stock                                 |   |     | (858    | )      |     |   | (1,237 | ) |
| Dividends                paid on preferred stock                            |   |     | (1,073  | )      |     |   | (632 | ) |
| Dividends                paid on common stock                               |   |     | (2,591  | )      |     |   | (2,453 | ) |
| Proceeds                from exercise of stock options                      |   |     | 68      |   |     |   | 242 |   |
| Proceeds                from issuance of preferred stock, net               |   |     | 21,961  |   |     |   | - |   |
| Cash                paid in lieu of fractional shares of stock dividend     |   |     | (18     | )      |     |   | - |   |
| Cash                received for disgorgement of short swing profit         |   |     | 11      |   |     |   | - |   |
| Proceeds                from issuance of common stock, net                  |   |     | -       |   |     |   | 30,287 |   |
| Proceeds                from issuance of junior subordinated debentures     |   |     | -       |   |     |   | 18,000 |   |
| **Net                Cash Provided By Financing Activities**                |   |     | 197,041 |   |     |   | 218,478 |   |
|                                                                        |   |     |    |   |     |   |   |   |
| **Net                (Decrease)/Increase in Cash and Cash Equivalents**     |   |     | (5,843  | )      |     |   | 1,131 |   |
|                                                                        |   |     |    |   |     |   |   |   |
| **Cash                and Cash Equivalents**, Beginning of year             |   |     | 35,129  |   |     |   | 28,630 |   |
|                                                                        |   |     |    |   |     |   |   |   |
| **Cash                and Cash Equivalents**, End of period                 |   | $        | 29,286  |   |     | $      | 29,761 |   |
|                                                                        |   |     |    |   |     |   |   |   |
| **Supplemental                Information**                                 |   |     |    |   |     |   |   |   |
| Net                change in unrealized loss on investment securities       |   | $        | 1,106   |   |     | $      | (454 | ) |
| Interest                paid                                                |   | $        | 70,551  |   |     | $      | 52,135 |   |
| Income                tax paid                                              |   | $        | 10,050  |   |     | $      | 13,060 |   |
| Transfer                of loans to other real estate owned                 |   | $        | 12,862  |   |     | $      | - |   |
| Transfer                of loans held-for-investment to loans held-for-sale |   | $        | 141,078 |   |     | $      | - |   |
| Issuance                of 5% stock dividend                                |   | $        | 12,309  |   |     | $      | - |   |

----

*Table          of Contents*

**VINEYARD      NATIONAL BANCORP AND SUBSIDIARY**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**Note      #1 – Nature of Business and Summary of Significant Accounting      Policies**

*“Accounting for Certain Investments in Debt and Equity Securities,”*
* *

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*Table          of Contents*

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*Table          of Contents*

**Note      #2 – Recently Issued Accounting Pronouncements**

*The Fair Value Option for Financial Assets and Financial      Liabilities*

*Fair Value Measurement*

**Note      #3 - Share-Based Compensation**

*“Shared-Based Payment”*

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*Table          of Contents*

|                                                                     |   | **Nine                months ended**  |   |
|--------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                     |   | **September                30, 2007** |   |
| Dividend                yield                                            |   |                                  | 1.42   | % |
| Expected                life (in years)                                  |   |                                  | 3.25   |   |
| Expected                volatility                                       |   |                                  | 27.14  | % |
| Risk-free                rate                                            |   |                                  | 4.48   | % |
| Weighted                average grant date fair value of options granted |   | $                                     | 4.79   |   |

| (Dollars                in thousands) |   |                                  |   |
|---------------------------------------|--------|---------------------------------------|--------|
|                                  |   |                                  |   |
| **Year                ended**         |   |                                  |   |
| **December                31,**       |   | **Compensation                Costs** |   |
| 2007                                  |   | $                                     | 149    |   |
| 2008                                  |   | $                                     | 167    |   |
| 2009                                  |   | $                                     | 153    |   |
| 2010                                  |   | $                                     | 18     |   |

| (Dollars                in thousands, except per share) |   |       |    |   |          |   |   | **Weighted-**   |   |                      |          |   |
|---------------------------------------------------------|--------|------------|---------|--------|---------------|--------|--------|-----------------|--------|---------------------------|---------------|--------|
|                                                    |   |       |    |   | **Weighted-** |   |   | **Average**     |   |                      |          |   |
|                                                    |   |       |    |   | **Average**   |   |   | **Remaining**   |   |                      | **Aggregate** |   |
|                                                    |   |       |    |   | **Exercise**  |   |   | **Contractual** |   |                      | **Intrinsic** |   |
|                                                    |   | **Shares** |    |   | **Price**     |   |   | **Term**        |   |                      | **Value**     |   |
| Outstanding                at December 31, 2006         |   |       | 388,579 |   |          | $      | 6.19   |            |   | 5.03                years |          |   | $ | - |   |
| Granted                                                 |   |       | 52,500  |   |          |   | 21.44  |            |   | 3.47                years |          |   |   | - |   |
| Exercised                                               |   |       | (24,229 | )      |          |   | 2.81   |            |   | 4.26                years |          |   |   | - |   |
| Forfeited                or expired                     |   |       | -       |   |          |   | -      |            |   |                      | -             |   |   |   | - |   |
| Outstanding                at September 30, 2007        |   |       | 416,850 |   |          | $      | 8.31   |            |   | 4.18                years |          |   | $ | 3,506 |   |
| Exercisable                at September 30, 2007        |   |       | 311,850 |   |          | $      | 3.95   |            |   | 4.48                years |          |   | $ | 3,982 |   |

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*Table          of Contents*

| (Dollars                in thousands, except per share data) |   |        |    |   |          |   |   | **Weighted-**   |   |                      |          |   |
|--------------------------------------------------------------|--------|-------------|---------|--------|---------------|--------|--------|-----------------|--------|---------------------------|---------------|--------|
|                                                         |   |        |    |   | **Weighted-** |   |   | **Average**     |   |                      |          |   |
|                                                         |   |        |    |   | **Average**   |   |   | **Remaining**   |   |                      | **Aggregate** |   |
|                                                         |   |        |    |   | **Exercise**  |   |   | **Contractual** |   |                      | **Intrinsic** |   |
|                                                         |   | **Options** |    |   | **Price**     |   |   | **Term**        |   |                      | **Value**     |   |
| Outstanding                at December 31, 2005              |   |        | 448,506 |   |          | $      | 3.65   |            |   | 6.15                years |          |   | $ | - |   |
| Granted                                                      |   |        | -       |   |          |   | -      |            |   |                      | -             |   |   |   | - |   |
| Exercised                                                    |   |        | (70,922 | )      |          |   | 3.41   |            |   | 5.38                years |          |   |   | - |   |
| Forfeited                or expired                          |   |        | -       |   |          |   | -      |            |   |                      | -             |   |   |   | - |   |
| Outstanding                at September 30, 2006             |   |        | 377,584 |   |          | $      | 3.70   |            |   | 5.40                years |          |   | $ | 7,938 |   |
| Exercisable                at September 30, 2006             |   |        | 377,584 |   |          | $      | 3.70   |            |   | 5.40                years |          |   | $ | 7,938 |   |

|                                           |   |           |    |   | **Weighted-**                 |   |
|------------------------------------------------|--------|----------------|---------|--------|-------------------------------|--------|
|                                           |   |           |    |   | **Average**                   |   |
|                                           |   | **Non-vested** |    |   | **Grant-Date**                |   |
|                                           |   | **Options**    |    |   | **Fair                Value** |   |
| Nonvested                at December 31, 2006  |   |           | 52,500  |   |                          | $      | 4.76 |   |
| Granted                                        |   |           | 52,500  |   |                          |   | 4.79 |   |
| Vested                                         |   |           | -       |   |                          |   | - |   |
| Forfeited                or expired            |   |           | -       |   |                          |   | - |   |
| Nonvested                at September 30, 2007 |   |           | 105,000 |   |                          | $      | 4.78 |   |

|                                           |   |           |   |   | **Weighted-**                 |   |
|------------------------------------------------|--------|----------------|--------|--------|-------------------------------|--------|
|                                           |   |           |   |   | **Average**                   |   |
|                                           |   | **Non-vested** |   |   | **Grant-Date**                |   |
|                                           |   | **Options**    |   |   | **Fair                Value** |   |
| Nonvested                at December 31, 2005  |   |           | 8,397  |   |                          | $      | 1.54 |   |
| Granted                                        |   |           | -      |   |                          |   | - |   |
| Vested                                         |   |           | (8,397 | )      |                          |   | 1.54 |   |
| Forfeited                or expired            |   |           | -      |   |                          |   | - |   |
| Nonvested                at September 30, 2006 |   |           | -      |   |                          | $      | - |   |

----

*Table          of Contents*

|                                             |   |                                 |    |   | **Weighted-                Average** |   |
|--------------------------------------------------|--------|--------------------------------------|---------|--------|--------------------------------------|--------|
|                                             |   | **Restricted                Shares** |    |   | **Fair                Value**        |   |
| Outstanding                at December 31, 2006  |   |                                 | 224,344 |   |                                 | $      | 23.82 |   |
| Granted                                          |   |                                 | 136,108 |   |                                 |   | 22.70 |   |
| Forfeited                                        |   |                                 | (36,458 | )      |                                 |   | 21.25 |   |
| Vested                                           |   |                                 | (29,518 | )      |                                 |   | 18.35 |   |
| Outstanding                at September 30, 2007 |   |                                 | 294,476 |   |                                 | $      | 24.17 |   |

**Note      #4 - Noncumulative Preferred Stock**

**Note      #5 – Dividends**

**Note      #6 – Commitments and Contingencies**

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*Table          of Contents*

| (Dollars                in thousands)       |   | **As                of**              |    |
|---------------------------------------------|--------|---------------------------------------|---------|
|                                        |   | **September                30, 2007** |    |   | **December                31, 2006** |   |
| Commitments                to extend credit |   | $                                     | 615,178 |   |   | $ | 684,794 |   |
| Commitments                to extend credit |   |                                  |    |   |   |   |   |   |
| to                directors and officers    |   | $                                     | 397     |   |   | $ | 1,411 |   |
| Standby                letters of credit    |   | $                                     | 7,984   |   |   | $ | 10,547 |   |
| Commercial                letters of credit |   | $                                     | -       |   |   | $ | - |   |

**Note      #7 – Employee Stock Ownership Plan**

*Employers’ Accounting for      Employee Stock Ownership Plans”*

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*Table          of Contents*

**Note      #8 - Earnings per Share**

| (Dollars                in thousands)                   |   | **Three                Months Ended September 30,** |   |
|---------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                    |   | **2007**                                            |   |   | **2006** |   |
|                                                    |   | **Income**                                          |   |   | **Shares** |   |   | **Income** |   |   | **Shares** |   |
| Net                income as reported                   |   | $                                                   | 5,471  |   |   |   |   |   | $ | 4,654 |   |   |   |   |
| Less:                Preferred stock dividends declared |   |                                                | (610   | ) |   |   |   |   |   | (236 | ) |   |   |   |
| Shares                outstanding at end of period      |   |                                                |   |   |   |   | 10,799,795 |   |   |   |   |   |   |   | 10,888,123 |   |
| Unreleased                and unallocated ESOP shares   |   |                                                |   |   |   |   | (238,306 | ) |   |   |   |   |   |   | (263,792 | ) |
| Impact                of weighting shares               |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| issued                during the period                 |   |                                                |   |   |   |   | 25,944 |   |   |   |   |   |   |   | (10,327 | ) |
| Used                in basic EPS                        |   | $                                                   | 4,861  |   |   |   | 10,587,433 |   |   | $ | 4,418 |   |   |   | 10,614,004 |   |
| Dilutive                effect of outstanding           |   |                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stock                options and warrants               |   |                                                |   |   |   |   | 229,761 |   |   |   |   |   |   |   | 357,563 |   |
| Used                in diluted EPS                      |   | $                                                   | 4,861  |   |   |   | 10,817,194 |   |   | $ | 4,418 |   |   |   | 10,971,567 |   |

| (Dollars                in thousands)                   |   | **Nine                Months Ended September 30,** |   |
|---------------------------------------------------------|--------|----------------------------------------------------|--------|
|                                                    |   | **2007**                                           |   |   | **2006** |   |
|                                                    |   | **Income**                                         |   |   | **Shares** |   |   | **Income** |   |   | **Shares** |   |
| Net                income as reported                   |   | $                                                  | 16,982 |   |   |   |   |   | $ | 14,255 |   |   |   |   |
| Less:                Preferred stock dividends declared |   |                                               | (1,070 | ) |   |   |   |   |   | (666 | ) |   |   |   |
| Shares                outstanding at end of period      |   |                                               |   |   |   |   | 10,799,795 |   |   |   |   |   |   |   | 10,888,123 |   |
| Unreleased                and unallocated ESOP shares   |   |                                               |   |   |   |   | (238,306 | ) |   |   |   |   |   |   | (263,792 | ) |
| Impact                of weighting shares               |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| issued                during the period                 |   |                                               |   |   |   |   | 85,407 |   |   |   |   |   |   |   | (643,174 | ) |
| Used                in basic EPS                        |   | $                                                  | 15,912 |   |   |   | 10,646,896 |   |   | $ | 13,589 |   |   |   | 9,981,157 |   |
| Dilutive                effect of outstanding           |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stock                options and warrants               |   |                                               |   |   |   |   | 265,152 |   |   |   |   |   |   |   | 381,675 |   |
| Used                in diluted EPS                      |   | $                                                  | 15,912 |   |   |   | 10,912,048 |   |   | $ | 13,589 |   |   |   | 10,362,832 |   |

**Note      #9 – Stock Repurchase Program**

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*Table          of Contents*

**ITEM      2.  Management’s Discussion and Analysis of Financial      Condition and Results of Operations**

**General      Business and Organization**

*Vineyard      National Bancorp*

*Vineyard      Bank*

**Executive      Overview and Highlights**

**Our      Strategic Plan**

*Organic      Growth Initiatives*

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*Table          of Contents*

| ·   | Commercial                customers with annual revenues typically ranging from $10 million                to $75                million; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Entrepreneurs                and individuals with a focus on their unique objectives, operations                and                activities; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Non-profit                organizations, such as religious institutions, schools, and government                and                quasi-government agencies. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | the                coastal communities of Los Angeles                county; |
|--------------------|------------------------------------------------------------------------------|

| ·   | the                San Gabriel Valley region of Los Angeles                county; |
|--------------------|------------------------------------------------------------------------------------|

| ·   | the                southern coastal communities of Orange and San Diego                counties; |
|--------------------|--------------------------------------------------------------------------------------------------|

| ·   | the                Inland Empire region, which primarily includes San Bernardino and                Riverside counties; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

| ·   | the                northern communities of Marin, Monterey, and Santa Clara counties;                and |
|--------------------|----------------------------------------------------------------------------------------------------------|

| ·   | the                central coastal communities of Ventura                county. |
|--------------------|----------------------------------------------------------------------------------|

*Inorganic      Growth Initiatives*

*Capital      Strategy*

*Specialty      Lending Product Offerings*

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*Table          of Contents*

| ·   | Luxury                Home Construction Lending:* * We originate high-end SFR                luxury home construction loans primarily within Los Angeles’ “south bay”                coastal communities (including Manhattan Beach, Hermosa Beach, El                Segundo,                Redondo Beach, and the Palos Verdes Peninsula area), Los Angeles’ “west                side” (including Beverly Hills, Brentwood, Bel Air and Malibu) and Orange                County regions where we believe we have a competitive advantage based                on                established builder and customer relationships and expertise in the                construction market.  Although the general California real estate                market has shown signs of slowing, we continue to believe there is                relative strength in the demand for this loan product within the                luxury                housing market (consisting of homes priced at $2.0 million and above)                along the California coast and in other established affluent regions                of                California.  We believe the high employment level, strong                incomes, wealth accumulation, stable interest rates and good schools                in                these luxury regions allow continued confidence in the stability                of these                markets.  These types of construction loans typically range from                $1.0 million to $5.0 million. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Tract                Construction Lending:  We originate SFR tract construction                loans, primarily secured by newly-constructed, entry to mid-level                detached                and attached homes.  The majority of these loans were originated                within the Inland Empire of Southern California, and the rest were                originated throughout California. This division has experienced a                significant slowdown in the last few quarters, as home sales decline,                inventory levels build, and this market continues to soften in pricing.                As                of September 30, 2007, we were financing 33 SFR tract construction                projects within southern California, with the average commitment                amount of                $6.7 million. The amount, size and geographic diversity of these                projects                help mitigate some of the inherent risks within this product line.                The                majority of our builder clients continue to offer various buyer incentives                to move inventory in this marketplace and complete projects based                on                on-going absorption rates. We have met with each of our clients to                determine appropriate exit strategies and risk profiles for each                project. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Commercial                Construction Lending:  We originate commercial construction                loans, which include office buildings, retail space, churches, and                multifamily/apartment construction projects.  At September 30,                2007, the majority of our projects related to low-rise office buildings                and medical offices.  This product is mainly originated                throughout Southern California, with 34% of projects in the Inland                Empire,                followed by 20% and 16% of projects in Orange and San Diego counties                of                Southern California, respectively.  Commercial real estate loans                generated from this division typically range from $2.0 million to                $25.0                million.  We had a balance of $163.6 million and $134.4 million                of commercial construction loans at September 30, 2007 and December                31,                2006, respectively, net of unfunded commitments of $101.7 million                and                $119.1 million for the same periods,                respectively. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Small                Business Administration (“SBA”) Lending:  We offer SBA 7(a)                and 504 loans to small businesses throughout our market                area.  SBA loans are a complement to our focus on strengthening                and supporting local communities. SBA loans are generally made pursuant                to                a federal government program designed to assist small businesses                in                obtaining financing.  The federal government guarantees 75% to                85% of the SBA loan balances as an incentive for financial institutions                to                make loans to small businesses. We generally sell the guaranteed                portion                of the SBA loan at a premium sale price between 105% and                110%.  We had $16.4 million and $12.4 million of                outstanding SBA loans in our portfolio at September 30, 2007 and                December                31, 2006, respectively, net of participations sold of $50.2 million                and                $50.4 million, respectively. In addition, we had $2.7 million of                SBA loans                held for sale at September 30, 2007, which we anticipate selling                in the                fourth quarter of 2007 in order to achieve more efficient pricing                execution.  We did not have any SBA loans held for sale at                December 31, 2006. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

| ·   | Non-Profit                Services Group:  We provide loan and deposit services to                non-profit organizations, including churches and private schools                throughout our market area.  These activities are also a                complement to our focus on strengthening and supporting local                communities.  Loans to non-profit organizations amounted to                $57.7 million and $45.6 million at September 30, 2007 and December                31, 2006, respectively. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Income                Property Lending:  We have an income property lending                division to service the lending needs in growing markets for commercial                real estate and multi-family/apartments in California and neighboring                states. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Commercial      Real Estate*

*Residential      Real Estate*

*Specialty      Deposit Product Offerings*

| ·   | Branching                System:*** *** The majority of our                full-service banking centers have recently been redesigned to offer                a                high-tech, high-service environment.  We have replaced the                traditional teller lines with client service desks that incorporate                both                new account and traditional teller operations with state-of-the-art                circulating cash machines present at each desk.  To further the                reach of each of our banking centers, we may open additional RFCs                which                operate exclusively to generate deposits and/or loans.  We also                offer courier services, internet-based banking, and ATMs and kiosks                to                make banking more convenient to our                customers. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

| ***·  *** | Cash                Management:*** *** To offer expedient banking                with new and emerging technologies, we offer various cash management                services to our customers.  These services facilitate business                customers’ cash flow and aid in maximizing their investment potential by                aligning products and services to a customer’s needs and include the                following: |
|--------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ***o  *** | *Remote                Item Capture:**** ***This technology, also                known as “electronic deposit”, allows clients to scan items for deposit                and electronically send images of the items securely to our                processor.  This service also provides customers with the                convenience to perform banking activities from within their place                of                business and extend past our traditional branch                hours. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ***o  *** | *Online                Banking:**** *** Our online banking includes                services such as automated wire processing, electronic tax payments,                electronic transfers, loan payments, bill payments, and account                reconciliation. |
|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ***o  *** | *Lockbox                Processing:**** *** Our lockbox services aid                customers in expediting the processing of their deposits and increasing                their float value for investment purposes.  This product also                provides same-day reporting of                deposits. |
|---------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ***o  *** | *Positive                Pay:**** ***This service provides business                customers with increased efficiency and security by allowing them                to                review checks presented against their accounts prior to disbursing                funds                while helping clients to identify potentially fraudulent activity                in their                account. |
|---------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Critical      Accounting Policies**

*Allowance      for Credit Losses*

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*Table          of Contents*

*Goodwill      and Intangible Assets*

*Income      Taxes*

----

*Table          of Contents*

**Results      of Operations**

*Overview*

*Net      Interest Income*

----

*Table          of Contents*

*Net      Interest Margin*

----

*Table          of Contents*

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*Table          of Contents*

| (Dollars                in thousands)                     |   | **For                the three months ended September 30,** |      |
|-----------------------------------------------------------|--------|-------------------------------------------------------------|-----------|
|                                                      |   | **2007**                                                    |      |   | **2006** |   |
|                                                      |   | **Average**                                                 |      |   |   |   |   | **Average** |   |   | **Average** |   |   |   |   |   | **Average** |   |
|                                                      |   | **Balance**                                                 |      |   | **Interest** |   |   | **Yield/Cost** |   |   | **Balance** |   |   | **Interest** |   |   | **Yield/Cost** |   |
| **Assets**                                                |   |                                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                (1)                                  |   | $                                                           | 2,070,975 |   |   | $ | 45,627 |   |   |   | 8.74 | % |   | $ | 1,681,047 |   |   | $ | 37,916 |   |   |   | 8.95 | % |
| Investment                securities (2)                  |   |                                                        | 206,681   |   |   |   | 2,610 |   |   |   | 5.05 | % |   |   | 238,729 |   |   |   | 2,663 |   |   |   | 4.46 | % |
| Federal                funds sold                         |   |                                                        | 12,937    |   |   |   | 170 |   |   |   | 5.20 | % |   |   | 11,087 |   |   |   | 136 |   |   |   | 4.86 | % |
| Other                investments                          |   |                                                        | 20,874    |   |   |   | 278 |   |   |   | 5.29 | % |   |   | 15,573 |   |   |   | 211 |   |   |   | 5.42 | % |
| Total                interest-earning assets              |   |                                                        | 2,311,467 |   |   |   | 48,685 |   |   |   | 8.36 | % |   |   | 1,946,436 |   |   |   | 40,926 |   |   |   | 8.35 | % |
| Other                assets                               |   |                                                        | 135,305   |   |   |   |   |   |   |   |   |   |   |   | 105,862 |   |   |   |   |   |   |   |   |   |
| Less:                allowance for loan losses            |   |                                                        | (21,390   | ) |   |   |   |   |   |   |   |   |   |   | (17,116 | ) |   |   |   |   |   |   |   |   |
| Total                average assets                       |   | $                                                           | 2,425,382 |   |   |   |   |   |   |   |   |   |   | $ | 2,035,182 |   |   |   |   |   |   |   |   |   |
|                                                      |   |                                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Liabilities                and Stockholders' Equity**   |   |                                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings                deposits                (3)        |   | $                                                           | 680,455   |   |   |   | 7,091 |   |   |   | 4.13 | % |   | $ | 588,902 |   |   |   | 5,619 |   |   |   | 3.79 | % |
| Time                deposits                              |   |                                                        | 902,512   |   |   |   | 11,890 |   |   |   | 5.23 | % |   |   | 851,262 |   |   |   | 10,447 |   |   |   | 4.87 | % |
| FHLB                advances                              |   |                                                        | 213,450   |   |   |   | 2,642 |   |   |   | 4.86 | % |   |   | 70,610 |   |   |   | 862 |   |   |   | 4.84 | % |
| Other                borrowings                           |   |                                                        | 15,974    |   |   |   | 295 |   |   |   | 7.23 | % |   |   | 18,077 |   |   |   | 352 |   |   |   | 7.63 | % |
| Subordinated                debt                          |   |                                                        | 5,000     |   |   |   | 110 |   |   |   | 8.62 | % |   |   | 5,000 |   |   |   | 112 |   |   |   | 8.72 | % |
| Junior                subordinated debentures             |   |                                                        | 115,470   |   |   |   | 2,340 |   |   |   | 7.93 | % |   |   | 115,470 |   |   |   | 2,341 |   |   |   | 7.93 | % |
| Total                interest-bearing liabilities         |   |                                                        | 1,932,861 |   |   |   | 24,368 |   |   |   | 4.99 | % |   |   | 1,649,321 |   |   |   | 19,733 |   |   |   | 4.75 | % |
| Demand                deposits                            |   |                                                        | 291,606   |   |   |   |   |   |   |   |   |   |   |   | 229,122 |   |   |   |   |   |   |   |   |   |
| Other                liabilities                          |   |                                                        | 27,276    |   |   |   |   |   |   |   |   |   |   |   | 23,676 |   |   |   |   |   |   |   |   |   |
| Total                average liabilities                  |   |                                                        | 2,251,743 |   |   |   |   |   |   |   |   |   |   |   | 1,902,119 |   |   |   |   |   |   |   |   |   |
| Total                average shareholders' equity         |   |                                                        | 173,639   |   |   |   |   |   |   |   |   |   |   |   | 133,063 |   |   |   |   |   |   |   |   |   |
| Total                average liabilities and              |   |                                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stockholders'                equity                       |   | $                                                           | 2,425,382 |   |   |   |   |   |   |   |   |   |   | $ | 2,035,182 |   |   |   |   |   |   |   |   |   |
|                                                      |   |                                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest spread                (4)     |   |                                                        |      |   |   |   |   |   |   |   | 3.37 | % |   |   |   |   |   |   |   |   |   |   | 3.60 | % |
| Net                interest income                        |   |                                                        |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and                net interest margin                (5) |   |                                                        |      |   |   | $ | 24,317 |   |   |   | 4.19 | % |   |   |   |   |   | $ | 21,193 |   |   |   | 4.32 | % |

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*Table          of Contents*

| (Dollars                in thousands)                     |   | **For                the nine months ended September 30,** |      |
|-----------------------------------------------------------|--------|------------------------------------------------------------|-----------|
|                                                      |   | **2007**                                                   |      |   | **2006** |   |
|                                                      |   | **Average**                                                |      |   |   |   |   | **Average** |   |   | **Average** |   |   |   |   |   | **Average** |   |
|                                                      |   | **Balance**                                                |      |   | **Interest** |   |   | **Yield/Cost** |   |   | **Balance** |   |   | **Interest** |   |   | **Yield/Cost** |   |
| **Assets**                                                |   |                                                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                (1)                                  |   | $                                                          | 2,017,835 |   |   | $ | 132,356 |   |   |   | 8.77 | % |   | $ | 1,563,994 |   |   | $ | 104,365 |   |   |   | 8.92 | % |
| Investment                securities (2)                  |   |                                                       | 214,416   |   |   |   | 7,919 |   |   |   | 4.93 | % |   |   | 248,160 |   |   |   | 8,302 |   |   |   | 4.46 | % |
| Federal                funds sold                         |   |                                                       | 5,422     |   |   |   | 212 |   |   |   | 5.21 | % |   |   | 4,344 |   |   |   | 158 |   |   |   | 4.87 | % |
| Other                investments                          |   |                                                       | 20,902    |   |   |   | 832 |   |   |   | 5.32 | % |   |   | 16,508 |   |   |   | 642 |   |   |   | 5.21 | % |
| Total                interest-earning assets              |   |                                                       | 2,258,575 |   |   |   | 141,319 |   |   |   | 8.36 | % |   |   | 1,833,006 |   |   |   | 113,467 |   |   |   | 8.27 | % |
| Other                assets                               |   |                                                       | 130,910   |   |   |   |   |   |   |   |   |   |   |   | 80,468 |   |   |   |   |   |   |   |   |   |
| Less:                allowance for loan losses            |   |                                                       | (20,792   | ) |   |   |   |   |   |   |   |   |   |   | (15,557 | ) |   |   |   |   |   |   |   |   |
| Total                average assets                       |   | $                                                          | 2,368,693 |   |   |   |   |   |   |   |   |   |   | $ | 1,897,917 |   |   |   |   |   |   |   |   |   |
|                                                      |   |                                                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Liabilities                and Stockholders' Equity**   |   |                                                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings                deposits                (3)        |   | $                                                          | 660,952   |   |   |   | 20,143 |   |   |   | 4.07 | % |   | $ | 516,895 |   |   |   | 14,023 |   |   |   | 3.63 | % |
| Time                deposits                              |   |                                                       | 849,854   |   |   |   | 33,092 |   |   |   | 5.21 | % |   |   | 764,399 |   |   |   | 26,113 |   |   |   | 4.57 | % |
| FHLB                advances                              |   |                                                       | 237,166   |   |   |   | 8,883 |   |   |   | 4.96 | % |   |   | 172,087 |   |   |   | 6,006 |   |   |   | 4.67 | % |
| Other                borrowings                           |   |                                                       | 32,933    |   |   |   | 1,760 |   |   |   | 7.05 | % |   |   | 10,704 |   |   |   | 588 |   |   |   | 7.24 | % |
| Subordinated                debt                          |   |                                                       | 5,000     |   |   |   | 328 |   |   |   | 8.65 | % |   |   | 5,000 |   |   |   | 313 |   |   |   | 8.27 | % |
| Junior                subordinated debentures             |   |                                                       | 115,470   |   |   |   | 6,933 |   |   |   | 7.92 | % |   |   | 106,293 |   |   |   | 6,134 |   |   |   | 7.61 | % |
| Total                interest-bearing liabilities         |   |                                                       | 1,901,375 |   |   |   | 71,139 |   |   |   | 4.99 | % |   |   | 1,575,378 |   |   |   | 53,177 |   |   |   | 4.50 | % |
| Demand                deposits                            |   |                                                       | 285,499   |   |   |   |   |   |   |   |   |   |   |   | 187,387 |   |   |   |   |   |   |   |   |   |
| Other                liabilities                          |   |                                                       | 25,300    |   |   |   |   |   |   |   |   |   |   |   | 18,774 |   |   |   |   |   |   |   |   |   |
| Total                average liabilities                  |   |                                                       | 2,212,174 |   |   |   |   |   |   |   |   |   |   |   | 1,781,539 |   |   |   |   |   |   |   |   |   |
| Total                average shareholders' equity         |   |                                                       | 156,519   |   |   |   |   |   |   |   |   |   |   |   | 116,378 |   |   |   |   |   |   |   |   |   |
| Total                average liabilities and              |   |                                                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stockholders'                equity                       |   | $                                                          | 2,368,693 |   |   |   |   |   |   |   |   |   |   | $ | 1,897,917 |   |   |   |   |   |   |   |   |   |
|                                                      |   |                                                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest spread                (4)     |   |                                                       |      |   |   |   |   |   |   |   | 3.37 | % |   |   |   |   |   |   |   |   |   |   | 3.77 | % |
| Net                interest income                        |   |                                                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and                net interest margin                (5) |   |                                                       |      |   |   | $ | 70,180 |   |   |   | 4.17 | % |   |   |   |   |   | $ | 60,290 |   |   |   | 4.40 | % |
|                                                      |   |                                                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|  (1) | Interest                on loans includes loan fees, which totaled $2.1 million and $2.7                million                for the three months ended September 30, 2007 and 2006, respectively,                and                $6.8 million and $9.0 million for the nine months ended September                30, 2007                and 2006, respectively.  The average loan balance includes loans                held-for-sale and non-accrual                loans. |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  (2) | The                yield for securities that are classified as available-for-sale is                based on                historical amortized cost balances. |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  (3) | Includes                savings, NOW and money market deposit                accounts. |
|-----------|----------------------------------------------------------------------------------------|

|  (4) | Net                interest spread represents the average yield earned on interest-earning                assets less the average rate paid on interest-bearing                liabilities. |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  (5) | Net                interest margin is computed by dividing net interest income by total                average earning assets. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------|

*Provision      for Loan Losses and Unfunded Commitments*

----

*Table          of Contents*

*Non-Interest      Income*

*Non-Interest      Expense*

|   | (i) | Salaries                and employee benefits expense is the largest component of non-interest                expense. As we have continued to grow, personnel have been placed                in                business development capacities for commercial and community banking,                as                well as administrative functions. This growth has increased our salaries                and employee benefits expense by $0.5 million or 6.3% to $8.1 million                for                the three months ended September 30, 2007 as compared to the same                period                in 2006, and by $2.8 million or 13.3% to $23.6 million for the nine                months                ended September 30, 2007 as compared to the same period in                2006. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (ii) | Occupancy                expense amounted to $1.5 million and $4.3 million for the three and                nine                months ended September 30, 2007, respectively, in comparison to $1.3                million and $3.5 million for the same periods in 2006, respectively.                We                opened an RFC in Palo Alto during the first quarter for 2007 contributing                to the higher occupancy expense for the three and nine months ended                September 30, 2007 than the same periods in 2006.  In addition,                we completed the redesign of the Crestline banking center in the                third                quarter of 2007, causing an increase in occupancy expenses in 2007                as                compared with 2006. |
|--|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (iii)  | Furniture                and equipment expense, comprised mainly of depreciation and maintenance                expense, was $1.1 million and $3.2 million for the three and nine                months                ended September 30, 2007, respectively, compared to $1.1 million                and $3.2                million for the same periods in 2006,                respectively. |
|--------|-------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                        (iv) | Other                non-interest expense was $4.0 million and $3.5 million for the three                months ended September 30, 2007 and 2006, respectively, and $10.9                million                and $9.5 million for the nine months ended September 30, 2007 and                2006,                respectively. During September 2007, we transferred $141.3 million                of                multifamily and commercial real estate loans to held-for-sale                status.  In conjunction with this transfer, we established a                valuation reserve of $0.4 million to record these loans at the lower                of                cost or fair market value with a corresponding provision to non-interest                expense.  The increase in other non-interest expense for the                quarter ended September 30, 2007 is due primarily to this $0.4 million                valuation reserve, as well as $0.3 million in real estate property                taxes                and legal and collection costs associated with problem loans and                other                real estate owned.  These increases to non-interest expense were                offset by a $0.2 million decrease in the provision for unfunded                commitments during the three months ended September 30,                2007. |
|----------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

| (Dollars                in thousands)                 |   | **Three                Months Ended September 30,** |   |   | **Nine                Months Ended September 30,** |   |
|-------------------------------------------------------|--------|-----------------------------------------------------|--------|--------|----------------------------------------------------|--------|
|                                                  |   | **2007**                                            |   |   | **2006**                                           |   |   | **2007** |   |   | **2006** |   |
| Other                non-interest expense:            |   |                                                |   |   |                                               |   |   |   |   |   |   |   |
| Data                processing                        |   | $                                                   | 380    |   |                                               | $      | 264 |   |   | $ | 1,112 |   |   | $ | 742 |   |
| Marketing                                             |   |                                                | 275    |   |                                               |   | 323 |   |   |   | 698 |   |   |   | 1,023 |   |
| Professional                services                  |   |                                                | 763    |   |                                               |   | 669 |   |   |   | 2,242 |   |   |   | 1,948 |   |
| Office                supplies, postage and telephone |   |                                                | 567    |   |                                               |   | 617 |   |   |   | 1,766 |   |   |   | 1,507 |   |
| Insurance                and assessments              |   |                                                | 327    |   |                                               |   | 282 |   |   |   | 1,092 |   |   |   | 627 |   |
| Administrative                                        |   |                                                | 86     |   |                                               |   | 141 |   |   |   | 220 |   |   |   | 442 |   |
| Business                development                   |   |                                                | 500    |   |                                               |   | 542 |   |   |   | 1,660 |   |   |   | 1,637 |   |
| Loan                related                           |   |                                                | 760    |   |                                               |   | 283 |   |   |   | 1,240 |   |   |   | 677 |   |
| Other                                                 |   |                                                | 371    |   |                                               |   | 330 |   |   |   | 917 |   |   |   | 918 |   |
| Total                other non-interest expense       |   | $                                                   | 4,029  |   |                                               | $      | 3,451 |   |   | $ | 10,947 |   |   | $ | 9,521 |   |

*Income      Taxes*

*“Accounting for      Uncertainty in Income Taxes” *

**Financial      Condition**

*Assets*

*Investments*

----

*Table          of Contents*

| (Dollars                in thousands)              |   |          |    |   | **Gross**      |   |   | **Gross**      |   |   |                          |   |
|----------------------------------------------------|--------|---------------|---------|--------|----------------|--------|--------|----------------|--------|--------|-------------------------------|--------|
|                                               |   | **Amortized** |    |   | **Unrealized** |   |   | **Unrealized** |   |   |                          |   |
|                                               |   | **Cost**      |    |   | **Gains**      |   |   | **Losses**     |   |   | **Fair                Value** |   |
| Trading                securities:                 |   | $             | 5,223   |   |           | $      | 504    |           |   | $      | -                             |   |   | $ | 5,727 |   |
|                                               |   |          |    |   |           |   |   |           |   |   |                          |   |   |   |   |   |
| Available-for-sale                securities:      |   |          |    |   |           |   |   |           |   |   |                          |   |   |   |   |   |
| U.S.                agency securities              |   |          | 13,117  |   |           |   | -      |           |   |   | (757                          | )      |   |   | 12,360 |   |
| Mortgage-backed                securities          |   |          | 182,006 |   |           |   | -      |           |   |   | (6,959                        | )      |   |   | 175,047 |   |
| Mutual                funds                        |   |          | 2,285   |   |           |   | -      |           |   |   | (57                           | )      |   |   | 2,228 |   |
| Total                available-for-sale securities |   |          | 197,408 |   |           |   | -      |           |   |   | (7,773                        | )      |   |   | 189,635 |   |
| Total                Investment Securities         |   | $             | 202,631 |   |           | $      | 504    |           |   | $      | (7,773                        | )      |   | $ | 195,362 |   |

| (Dollars                in thousands)              |   |          |    |   | **Gross**      |   |   | **Gross**      |   |   |                          |   |
|----------------------------------------------------|--------|---------------|---------|--------|----------------|--------|--------|----------------|--------|--------|-------------------------------|--------|
|                                               |   | **Amortized** |    |   | **Unrealized** |   |   | **Unrealized** |   |   |                          |   |
|                                               |   | **Cost**      |    |   | **Gains**      |   |   | **Losses**     |   |   | **Fair                Value** |   |
| Trading                securities:                 |   | $             | 4,707   |   |           | $      | -      |           |   | $      | -                             |   |   | $ | 4,707 |   |
|                                               |   |          |    |   |           |   |   |           |   |   |                          |   |   |   |   |   |
| Available-for-sale                securities:      |   |          |    |   |           |   |   |           |   |   |                          |   |   |   |   |   |
| U.S.                agency securities              |   |          | 12,515  |   |           |   | -      |           |   |   | (181                          | )      |   |   | 12,334 |   |
| Mortgage-backed                securities          |   |          | 205,139 |   |           |   | -      |           |   |   | (6,437                        | )      |   |   | 198,702 |   |
| Mutual                funds                        |   |          | 2,213   |   |           |   | -      |           |   |   | (49                           | )      |   |   | 2,164 |   |
| Total                available-for-sale securities |   |          | 219,867 |   |           |   | -      |           |   |   | (6,667                        | )      |   |   | 213,200 |   |
| Total                Investment Securities         |   | $             | 224,574 |   |           | $      | -      |           |   | $      | (6,667                        | )      |   | $ | 217,907 |   |

| (Dollars                in thousands)           |   | **Less                than 12 months** |   |   | **12                months or Longer** |   |   | **Total**                     |   |
|-------------------------------------------------|--------|----------------------------------------|--------|--------|----------------------------------------|--------|--------|-------------------------------|--------|
|                                            |   |                                   |   |   | **Gross**                              |   |   |                          |   |   | **Gross** |   |   |   |   |   | **Gross** |   |
|                                            |   |                                   |   |   | **Unrealized**                         |   |   |                          |   |   | **Unrealized** |   |   |   |   |   | **Unrealized** |   |
|                                            |   |                                   |   |   | **Holding**                            |   |   |                          |   |   | **Holding** |   |   |   |   |   | **Holding** |   |
|                                            |   | **Fair                Value**          |   |   | **Losses**                             |   |   | **Fair                Value** |   |   | **Losses** |   |   | **Fair                Value** |   |   | **Losses** |   |
|                                            |   |                                   |   |   |                                   |   |   |                          |   |   |   |   |   |   |   |   |   |   |
| U.S.                agency securities           |   | $                                      | -      |   |                                   | $      | -      |                          |   | $ | 12,360 |   |   | $ | (757 | ) |   | $ | 12,360 |   |   | $ | (757 | ) |
| Mortgage-backed                securities       |   |                                   | -      |   |                                   |   | -      |                          |   |   | 175,047 |   |   |   | (6,959 | ) |   |   | 175,047 |   |   |   | (6,959 | ) |
| Mutual                funds                     |   |                                   | 2,228  |   |                                   |   | (57    | )                             |   |   | - |   |   |   | - |   |   |   | 2,228 |   |   |   | (57 | ) |
|        Total |   | $                                      | 2,228  |   |                                   | $      | (57    | )                             |   | $ | 187,407 |   |   | $ | (7,716 | ) |   | $ | 189,635 |   |   | $ | (7,773 | ) |

----

*Table          of Contents*

|  (Dollars                in thousands)     |   | **Less                than 12 months** |   |   | **12                months or Longer** |   |   | **Total**                     |   |
|-------------------------------------------------|--------|----------------------------------------|--------|--------|----------------------------------------|--------|--------|-------------------------------|--------|
|                                            |   |                                   |   |   | **Gross**                              |   |   |                          |   |   | **Gross** |   |   |   |   |   | **Gross** |   |
|                                            |   |                                   |   |   | **Unrealized**                         |   |   |                          |   |   | **Unrealized** |   |   |   |   |   | **Unrealized** |   |
|                                            |   |                                   |   |   | **Holding**                            |   |   |                          |   |   | **Holding** |   |   |   |   |   | **Holding** |   |
|                                            |   | **Fair                Value**          |   |   | **Losses**                             |   |   | **Fair                Value** |   |   | **Losses** |   |   | **Fair                Value** |   |   | **Losses** |   |
|                                            |   |                                   |   |   |                                   |   |   |                          |   |   |   |   |   |   |   |   |   |   |
| U.S.                agency securities           |   | $                                      | -      |   |                                   | $      | -      |                          |   | $ | 12,334 |   |   | $ | (181 | ) |   | $ | 12,334 |   |   | $ | (181 | ) |
| Mortgage-backed                securities       |   |                                   | -      |   |                                   |   | -      |                          |   |   | 198,702 |   |   |   | (6,437 | ) |   |   | 198,702 |   |   |   | (6,437 | ) |
| Mutual                funds                     |   |                                   | 2,164  |   |                                   |   | (49    | )                             |   |   | - |   |   |   | - |   |   |   | 2,164 |   |   |   | (49 | ) |
|        Total |   | $                                      | 2,164  |   |                                   | $      | (49    | )                             |   | $ | 211,036 |   |   | $ | (6,618 | ) |   | $ | 213,200 |   |   | $ | (6,667 | ) |

| (Dollars                in thousands)     |   | **Securities                Available-for-Sale** |                                                    |
|-------------------------------------------|--------|--------------------------------------------------|---------------------------------------------------------|
|                                      |   | **Maturing                5-10 years**           |                                                    |   | **Maturing                after 10 years** |   |
|                                      |   | **Amortized**                                    |                                                    |   |   |   |   | **Amortized** |   |   |   |   |
|                                      |   | **Cost**                                         |                                                    |   | **Fair                Value** |   |   | **Cost** |   |   | **Fair                Value** |   |
| U.S.                agency securities     |   | $                                      |          - |   |   | $ |     - |   |   | $ | 13,117 |   |   | $ | 12,360 |   |
| Mortgage-backed                securities |   |                                             | 10,023                                                  |   |   |   | 10,002 |   |   |   | 171,983 |   |   |   | 165,045 |   |
| Total                                     |   | $                                                | 10,023                                                  |   |   | $ | 10,002 |   |   | $ | 185,100 |   |   | $ | 177,405 |   |

*Loans*

----

*Table          of Contents*

| (Dollars                in thousands)                 |   | **As                of**              |      |
|-------------------------------------------------------|--------|---------------------------------------|-----------|
|                                                  |   | **September                30, 2007** |      |   | **December                31, 2006** |   |
|                                                  |   |                                  |      |   |   |   |
| Commercial                and industrial              |   | $                                     | 147,799   |   |   | $ | 122,257 |   |
| Real                estate construction and land:     |   |                                  |      |   |   |   |   |   |
| Single-family                luxury                   |   |                                  | 577,155   |   |   |   | 514,385 |   |
| Single-family                tract                    |   |                                  | 163,396   |   |   |   | 152,060 |   |
| Commercial                                            |   |                                  | 163,573   |   |   |   | 134,404 |   |
| Land                                                  |   |                                  | 98,647    |   |   |   | 112,418 |   |
| Real                estate mortgage:                  |   |                                  |      |   |   |   |   |   |
| Commercial                                            |   |                                  | 569,167   |   |   |   | 531,159 |   |
| Multi-family                residential               |   |                                  | 97,971    |   |   |   | 222,470 |   |
| Other                residential                      |   |                                  | 60,944    |   |   |   | 49,353 |   |
| Consumer                loans                         |   |                                  | 112,064   |   |   |   | 65,914 |   |
| All                other loans (including overdrafts) |   |                                  | 54        |   |   |   | 98 |   |
|                                                  |   |                                  | 1,990,770 |   |   |   | 1,904,518 |   |
| Less:                                                 |   |                                  |      |   |   |   |   |   |
| Unearned                premium on loans              |   |                                  | 3,110     |   |   |   | 1,696 |   |
| Deferred                loan fees                     |   |                                  | (3,235    | ) |   |   | (3,970 | ) |
| Loans,                net of unearned income          |   | $                                     | 1,990,645 |   |   | $ | 1,902,244 |   |
| Loans                held-for-sale                    |   | $                                     | 143,737   |   |   | $ | - |   |

| (Dollars                in thousands)       |   | **Three                months ended September 30,** |   |   | **Nine                months ended September 30,** |   |
|---------------------------------------------|--------|-----------------------------------------------------|--------|--------|----------------------------------------------------|--------|
|                                        |   | **2007**                                            |   |   | **2006**                                           |   |   | **2007** |   |   | **2006** |   |
| Servicing                rights capitalized |   | $                                                   | 13     |   |                                               | $      | 62 |   |   | $ | 185 |   |   | $ | 284 |   |
| Servicing                rights amortized   |   | $                                                   | 116    |   |                                               | $      | 246 |   |   | $ | 368 |   |   | $ | 589 |   |
| Valuation                allowances         |   | $                                                   | -      |   |                                               | $      | - |   |   | $ | - |   |   | $ | - |   |

----

*Table          of Contents*

| (Dollars                in thousands)                |   | **Nine                months ended September 30,** |   |
|------------------------------------------------------|--------|----------------------------------------------------|--------|
|                                                 |   | **2007**                                           |   |   | **2006** |   |
| Servicing                rights, beginning of year   |   | $                                                  | 933    |   |   | $ | 1,358 |   |
| Servicing                rights added in period, net |   |                                               | 185    |   |   |   | 284 |   |
| Servicing                rights amortized            |   |                                               | (368   | ) |   |   | (589 | ) |
| Servicing                rights, end of period       |   | $                                                  | 750    |   |   | $ | 1,053 |   |

*Allowance      for Credit Losses*

| (Dollars                in thousands)                            |   | **Nine                months ended September 30,** |   |
|------------------------------------------------------------------|--------|----------------------------------------------------|--------|
|                                                             |   | **2007**                                           |   |   | **2006** |   |
| **Allowance                for  Loan Losses**          |   |                                               |   |   |   |   |
| Balance,                beginning of period                      |   | $                                                  | 19,689 |   |   | $ | 13,762 |   |
| Additions                due to acquisition of Rancho Bank       |   |                                               | -      |   |   |   | 2,097 |   |
| Recoveries                on loans previously charged off        |   |                                               | 65     |   |   |   | 68 |   |
| Loans                charged off                                 |   |                                               | (417   | ) |   |   | (262 | ) |
| Provision                charged to operating expense            |   |                                               | 2,700  |   |   |   | 3,075 |   |
| Balance,                end of period                            |   | $                                                  | 22,037 |   |   | $ | 18,740 |   |
|                                                             |   |                                               |   |   |   |   |   |   |
| **Reserve                for Unfunded Commitments**              |   |                                               |   |   |   |   |   |   |
| Balance,                beginning of period                      |   | $                                                  | 1,396  |   |   | $ | 1,346 |   |
| Net                (decrease)/increase charged to other expenses |   |                                               | (600   | ) |   |   | 50 |   |
| Balance,                end of period                            |   | $                                                  | 796    |   |   | $ | 1,396 |   |
|                                                             |   |                                               |   |   |   |   |   |   |
| **Allowance                for Credit Losses**                   |   |                                               |   |   |   |   |   |   |
| Allowance                for loan losses                         |   | $                                                  | 22,037 |   |   | $ | 18,740 |   |
| Reserve                for unfunded commitments                  |   |                                               | 796    |   |   |   | 1,396 |   |
| Allowance                for credit losses                       |   | $                                                  | 22,833 |   |   | $ | 20,136 |   |

*“Accounting by Creditors for Impairment of a      Loan”*
*Accounting by Creditors for Impairment of a      Loan-Income Recognition and Disclosures”*

----

*Table          of Contents*

*Nonperforming      Assets*

| (Dollars                in thousands)                        |   | **As                of**              |   |
|--------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                         |   | **September                30, 2007** |   |   | **December                31, 2006** |   |
|                                                         |   |                                  |   |   |   |   |
| **Accruing                Loans More than 90 Days Past Due** |   |                                  |   |   |   |   |
| Aggregate                loan amounts                        |   |                                  |   |   |   |   |
| Commercial                and industrial                     |   | $                                     | -      |   |   | $ | 2,315 |   |
| Real                estate-mortgage                          |   |                                  | 2,510  |   |   |   | - |   |
| Consumer                loans                                |   |                                  | -      |   |   |   | - |   |
| Total                loans past due more than 90 days        |   |                                  |   |   |   |   |   |   |
| and                still accruing                            |   | $                                     | 2,510  |   |   | $ | 2,315 |   |
| **Renegotiated                loans**                        |   | $                                     | -      |   |   | $ | - |   |
|                                                         |   |                                  |   |   |   |   |   |   |
| **Non-accrual                loans**                         |   |                                  |   |   |   |   |   |   |
| Aggregate                loan amounts                        |   |                                  |   |   |   |   |   |   |
| Commercial                and industrial                     |   | $                                     | 635    |   |   | $ | - |   |
| Real                estate-mortgage                          |   |                                  | 10,418 |   |   |   | 14,400 |   |
| Consumer                loans                                |   |                                  | 452    |   |   |   | - |   |
| Total                non-accrual loans                       |   | $                                     | 11,505 |   |   | $ | 14,400 |   |
|                                                         |   |                                  |   |   |   |   |   |   |
| Total                non-performing loans                    |   | $                                     | 14,015 |   |   | $ | 16,715 |   |

| (Dollars                in thousands)                                 |   | **As                of**         |   |
|-----------------------------------------------------------------------|--------|----------------------------------|--------|
|                                                                  |   | **September                30,** |   |   | **December                31,** |   |
|                                                                  |   | **2007**                         |   |   | **2006** |   |
|                                                                  |   |                             |   |   |   |   |
| Impaired                loans with a specific valuation allowance     |   | $                                | 9,558  |   |   | $ | - |   |
| Impaired                loans without a specific valuation allowance  |   |                             | 4,457  |   |   |   | 16,715 |   |
| Total                impaired loans                                   |   | $                                | 14,015 |   |   | $ | 16,715 |   |
|                                                                  |   |                             |   |   |   |   |   |   |
| Specific                valuation allowance related to impaired loans |   | $                                | 438    |   |   | $ | - |   |

----

*Table          of Contents*

| (Dollars                in thousands)                            |   | **Nine                months ended**  |   |   | **Year                ended**        |   |
|------------------------------------------------------------------|--------|---------------------------------------|--------|--------|--------------------------------------|--------|
|                                                             |   | **September                30, 2007** |   |   | **December                31, 2006** |   |
| Average                recorded investment in impaired loans     |   | $                                     | 14,996 |   |                                 | $      | 9,285 |   |
| Cash                receipts applied to reduce principal balance |   | $                                     | 9,180  |   |                                 | $      | 1,093 |   |
| Interest                income recognized for cash payments      |   | $                                     | 100    |   |                                 | $      | 185 |   |

*Liabilities      and Stockholders’ Equity*

*Deposits*

| (Dollars                in thousands)            |   | **As                of**              |      |
|--------------------------------------------------|--------|---------------------------------------|-----------|
|                                             |   | **September                30, 2007** |      |   | **December                31, 2006** |   |
| Money                market deposits             |   | $                                     | 597,620   |   |   | $ | 562,622 |   |
| Savings                and NOW deposits          |   |                                  | 63,582    |   |   |   | 70,741 |   |
| Time                deposits under $100,000      |   |                                  | 358,143   |   |   |   | 362,365 |   |
| Time                deposits of $100,000 or more |   |                                  | 539,354   |   |   |   | 517,768 |   |
| Total                                            |   | $                                     | 1,558,699 |   |   | $ | 1,513,496 |   |

| (Dollars                in thousands)           |   |   |    |
|-------------------------------------------------|--------|--------|---------|
|                                            |   |   |    |
| Three                months or less             |   | $      | 222,862 |   |
| Over                three through twelve months |   |   | 290,354 |   |
| Over                one through five years      |   |   | 26,138  |   |
|                                            |   | $      | 539,354 |   |

*Borrowings*

----

*Table          of Contents*

| (Dollars                in thousands) |   | **Weighted** |   |   |         |   |    |        |   |
|---------------------------------------|--------|--------------|--------|--------|--------------|--------|---------|-------------|--------|
|                                  |   | **Average**  |   |   | **Maturity** |   |    | **Putable** |   |
| **Maturity**                          |   | **Rate**     |   |   | **Amount**   |   |    | **Amount**  |   |
| 2007                                  |   |         | 5.01   | %      |         | $      | 96,000  |        |   | $ | - |   |
| 2008                                  |   |         | 5.08   | %      |         |   | 40,000  |        |   |   | 20,000 |   |
| 2009                                  |   |         | 4.87   | %      |         |   | 90,000  |        |   |   | 90,000 |   |
| 2010                                  |   |         | 4.64   | %      |         |   | 45,000  |        |   |   | 45,000 |   |
|                                  |   |         | 4.91   | %      |         | $      | 271,000 |        |   | $ | 155,000 |   |

| (Dollars                in thousands)        |                                       |                             |   | **As                of September 30, 2007** |   |
|----------------------------------------------|--------------------------------------------|----------------------------------|--------|---------------------------------------------|--------|
|                                         |                                       |                             |   | **Common**                                  |   |   | **Effective** |   |   |   |   |
|                                         | **Interest                Rate**           | **Maturity                Date** |   | **Stock**                                   |   |   | **Interest                Rate** |   |   | **Balance** |   |
| Vineyard                Statutory Trust I    | 3-month                LIBOR + 3.60%       | December                18, 2031 |   | $                                           | 372    |   |   |   | 9.25 | % |   | $ | 12,372 |   |
| Vineyard                Statutory Trust II   | 3-month                      LIBOR + 3.35% | December                26, 2032 |   |                                        | 155    |   |   |   | 8.71 | % |   |   | 5,155 |   |
| Vineyard                Statutory Trust III  | 3-month                LIBOR + 3.05%       | October                8, 2033   |   |                                        | 310    |   |   |   | 8.41 | % |   |   | 10,310 |   |
| Vineyard                Statutory Trust IV   | 3-month                LIBOR + 2.85%       | January                23, 2034  |   |                                        | 310    |   |   |   | 8.21 | % |   |   | 10,310 |   |
| Vineyard                Statutory Trust V    | 3-month                LIBOR + 2.85%       | April                23, 2034    |   |                                        | 310    |   |   |   | 8.21 | % |   |   | 10,310 |   |
| Vineyard                Statutory Trust VI   | 3-month                LIBOR + 2.85%       | July                23, 2034     |   |                                        | 372    |   |   |   | 8.21 | % |   |   | 12,372 |   |
| Vineyard                Statutory Trust VII  | 3-month                LIBOR + 2.00%       | December                16, 2034 |   |                                        | 310    |   |   |   | 7.58 | % |   |   | 10,310 |   |
| Vineyard                Statutory Trust VIII | 3-month                LIBOR + 2.25%       | May                23, 2035      |   |                                        | 310    |   |   |   | 7.74 | % |   |   | 10,310 |   |
| Vineyard                Statutory Trust IX   | 3-month                LIBOR + 1.70%       | November                23, 2035 |   |                                        | 464    |   |   |   | 7.19 | % |   |   | 15,464 |   |
| Vineyard                Statutory Trust XI   | 3-month                LIBOR + 1.60%       | June                23, 2036     |   |                                        | 557    |   |   |   | 6.81 | % |   |   | 18,557 |   |
|                                         |                                       |                             |   | $                                           | 3,470  |   |   |   | 7.90 | % |   | $ | 115,470 |   |

*Consolidation of Variable Interest      Entities*

*Stockholders’      Equity*

----

*Table          of Contents*

|                                                           |   | **As                of**              |       |
|----------------------------------------------------------------|--------|---------------------------------------|------------|
|                                                           |   | **September                30, 2007** |       |   | **December                31, 2006** |   |
|                                                           |   |                                  |       |   |   |   |
| Period-end                shares outstanding                   |   |                                  | 10,799,795 |   |   |   | 10,939,310 |   |
| Unreleased                and unallocated ESOP shares          |   |                                  | (238,306   | ) |   |   | (257,828 | ) |
| Used                in basic book value per common share       |   |                                  | 10,561,489 |   |   |   | 10,681,482 |   |
| Warrants                (1)                (3)                 |   |                                  | 168,000    |   |   |   | 168,000 |   |
| Used                in book value per common share,            |   |                                  |       |   |   |   |   |   |
| assuming                exercise of warrants                   |   |                                  | 10,729,489 |   |   |   | 10,849,482 |   |
|                                                           |   |                                  |       |   |   |   |   |   |
| Book                value per common share, basic              |   | $                                     | 13.61      |   |   | $ | 12.49 |   |
| Tangible                book value per common share, basic (2) |   | $                                     | 9.56       |   |   | $ | 8.44 |   |
| Book                value per common share, assuming           |   |                                  |       |   |   |   |   |   |
| exercise                of warrants (3)                        |   | $                                     | 13.77      |   |   | $ | 12.66 |   |

| (1)   | Warrants                were granted to institutional investors in June 2004 in conjunction                with a                private placement of common stock.  These warrants have an                exercise price of $23.81 per share and expire in June 2011. Share                and per                share data were retroactively adjusted for the 5% stock dividend                issued in                June 2007. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Tangible                book value per common share is calculated by dividing common shareholders’                equity, less goodwill and other intangible assets, by common shares                outstanding. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | We                consider the disclosure of “book value per common share, assuming exercise                of warrants” to be a meaningful ratio, as it considers the potential                effect of additional shares outstanding from the exercise of                warrants. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Liquidity**

----

*Table          of Contents*

**Capital      Resources**

----

*Table          of Contents*

| (Dollars                in thousands)                  |   |                                 |    |   |                                 |   |   | **Capital                Needed**    |   |
|--------------------------------------------------------|--------|--------------------------------------|---------|--------|--------------------------------------|--------|--------|--------------------------------------|--------|
|                                                   |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |   | **To                Be Well** |   |
|                                                   |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |   | **Capitalized                Under** |   |
|                                                   |   |                                 |    |   |                                 |   |   | **For                Capital**       |   |   | **Prompt                Corrective** |   |
|                                                   |   | **Actual                Regulatory** |    |   | **Adequacy                Purposes** |   |   | **Action                Provisions** |   |
|                                                   |   | **Capital**                          |    |   |                                 |   |   | **Capital**                          |   |   |   |   |   | **Capital** |   |   |   |   |
|                                                   |   | **Amount**                           |    |   | **Ratio**                            |   |   | **Amount**                           |   |   | **Ratio** |   |   | **Amount** |   |   | **Ratio** |   |
| **As                of September 30, 2007**            |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Total                capital to risk-weighted assets:  |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |   |   |   |   |   |   |
| Bank                                                   |   | $                                    | 293,539 |   |                                 |   | 12.23  | %                                    |   | $ | 192,000 |   |   |   | 8.0 | % |   | $ | 240,000 |   |   |   | 10.0 | % |
| Consolidated                                           |   | $                                    | 276,951 |   |                                 |   | 11.53  | %                                    |   | $ | 192,200 |   |   |   | 8.0 | % |   | N/A |   |   | N/A |   |
|                                                   |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1 capital to risk-weighted assets: |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bank                                                   |   | $                                    | 270,706 |   |                                 |   | 11.28  | %                                    |   | $ | 96,000 |   |   |   | 4.0 | % |   | $ | 144,000 |   |   |   | 6.0 | % |
| Consolidated                                           |   | $                                    | 182,823 |   |                                 |   | 7.61   | %                                    |   | $ | 96,100 |   |   |   | 4.0 | % |   | N/A |   |   | N/A |   |
|                                                   |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1 capital to average assets:       |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bank                                                   |   | $                                    | 270,706 |   |                                 |   | 11.35  | %                                    |   | $ | 95,400 |   |   |   | 4.0 | % |   | $ | 119,300 |   |   |   | 5.0 | % |
| Consolidated                                           |   | $                                    | 182,823 |   |                                 |   | 7.64   | %                                    |   | $ | 95,700 |   |   |   | 4.0 | % |   | N/A |   |   | N/A |   |
|                                                   |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **As                of December 31, 2006**             |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                capital to risk-weighted assets:  |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bank                                                   |   | $                                    | 266,813 |   |                                 |   | 12.17  | %                                    |   | $ | 175,400 |   |   |   | 8.0 | % |   | $ | 219,200 |   |   |   | 10.00 | % |
| Consolidated                                           |   | $                                    | 227,164 |   |                                 |   | 10.34  | %                                    |   | $ | 175,800 |   |   |   | 8.0 | % |   | N/A |   |   | N/A |   |
|                                                   |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1 capital to risk-weighted assets: |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bank                                                   |   | $                                    | 245,728 |   |                                 |   | 11.20  | %                                    |   | $ | 87,800 |   |   |   | 4.0 | % |   | $ | 131,600 |   |   |   | 6.00 | % |
| Consolidated                                           |   | $                                    | 137,386 |   |                                 |   | 6.25   | %                                    |   | $ | 87,900 |   |   |   | 4.0 | % |   | N/A |   |   | N/A |   |
|                                                   |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1 capital to average assets:       |   |                                 |    |   |                                 |   |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bank                                                   |   | $                                    | 245,728 |   |                                 |   | 11.41  | %                                    |   | $ | 86,100 |   |   |   | 4.0 | % |   | $ | 107,700 |   |   |   | 5.00 | % |
| Consolidated                                           |   | $                                    | 137,386 |   |                                 |   | 6.36   | %                                    |   | $ | 86,400 |   |   |   | 4.0 | % |   | N/A |   |   | N/A |   |

**Asset/Liability      Management and Interest Rate Sensitivity**

----

*Table          of Contents*

| (Dollars                in thousands) |   |   | **Economic                Value of Equity** |   |    | **Earnings                at Risk**  |   |
|---------------------------------------|--------|--------|---------------------------------------------|--------|---------|--------------------------------------|--------|
| **Simulated**                         |   |   | **Cumulative**                              |   |    | **Cumulative**                       |   |   | **Cumulative** |   |   | **Cumulative** |   |
| **Rate                Changes**       |   |   | **Dollar                Change**            |   |    | **Percentage                Change** |   |   | **Dollar                Change** |   |   | **Percentage                Change** |   |
|                                  | 200    |   |                                        | $      | (18,037 | )                                    |   |   | -9.3 | % |   | $ | 1,854 |   |   |   | 1.9 | % |
|                                  | 100    |   |                                        | $      | (9,076  | )                                    |   |   | -4.7 | % |   | $ | 613 |   |   |   | 0.6 | % |
|                                  | -100   |   |                                        | $      | 6,047   |                                 |   |   | 3.1 | % |   | $ | 212 |   |   |   | 0.2 | % |
|                                  | -200   |   |                                        | $      | 4,319   |                                 |   |   | 2.2 | % |   | $ | 220 |   |   |   | 0.2 | % |

**Off-Balance      Sheet Arrangements**

**ITEM      3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES      ABOUT MARKET RISK**

**ITEM      4.  CONTROLS AND      PROCEDURES**

**PART      II -- OTHER INFORMATION**

**ITEM      1.  LEGAL PROCEEDINGS**

----

*Table          of Contents*

**ITEM      1A.  RISK FACTORS**

**ITEM      2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF      PROCEEDS**

**Unregistered      Sale of Equity Securities**

**Purchases      of Equity Securities**

| (Dollars                in thousands) |   |                         |    |   |                          |   |   |                                   |   |   | **Approximate**                       |   |
|---------------------------------------|--------|------------------------------|---------|--------|-------------------------------|--------|--------|----------------------------------------|--------|--------|---------------------------------------|--------|
|                                  |   |                         |    |   |                          |   |   | **Total                Number of**     |   |   | **Dollar                Value of**    |   |
|                                  |   | **Total**                    |    |   |                          |   |   | **Shares                Purchased**    |   |   | **Shares                that May**    |   |
|                                  |   | **Number                of** |    |   | **Average**                   |   |   | **as                Part of Publicly** |   |   | **Yet                be Purchased**   |   |
|                                  |   | **Shares**                   |    |   | **Price                Paid** |   |   | **Announced                Plans**     |   |   | **Under                the Plans or** |   |
| **Period**                            |   | **Purchased**                |    |   | **Per                Share**  |   |   | **or                Programs**(1)      |   |   | **Program**                           |   |
|                                  |   |                         |    |   |                          |   |   |                                   |   |   |                                  |   |
| July                1-31, 2007        |   |                         | -       |   |                          | $      | -      |                                   |   |   | -                                     |   |   | $ | 10,045 |   |
| August                1-31, 2007      |   |                         | 150,000 |   |                          |   | 19.21  |                                   |   |   | 150,000                               |   |   | $ | 27,163 |   |
| September                1-30, 2007   |   |                         | -       |   |                          |   | -      |                                   |   |   | -                                     |   |   | $ | 27,163 |   |
| Total                                 |   |                         | 150,000 |   |                          | $      | 19.21  |                                   |   |   | 150,000                               |   |   |   |   |   |

|   | (1) | In                July 2002, we adopted a stock repurchase program in the initial amount                of                $2.0 million.  In each of December 2003, January 2005, and May                2005, we announced                increases in our stock repurchase program of $5.0 million, and in                October                2005 and August 2007, we announced additional increases of $20.0                million                in our stock repurchase program for a total amount of $57.0                million.  Under our stock repurchase program, we have been                acquiring our common stock shares in the open market from time to                time.  Our stock repurchase program does not have an expiration                date. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ITEM      3.  DEFAULTS UPON SENIOR      SECURITIES**

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

**ITEM      5.  OTHER INFORMATION**

**ITEM      6.  EXHIBITS**

| EXHIBIT                NO. | DESCRIPTION |
|----------------------------|-------------|
| 3.1                        |        | Restated                Articles of Incorporation of Vineyard National Bancorp (2) |
| 3.2                        |        | Amended                and Restated Bylaws of Vineyard National Bancorp (2) |
| 3.3                        |        | Certificate                of Determination of Floating Rate Series C Noncumulative Redeemable                Preferred Stock (14) |
| 3.4                        |        | Certificate                of Determination of 7.50% Series D Noncumulative Preferred Stock(9) |
| 4.1                        |        | Specimen                Common Stock Certificate of Vineyard National Bancorp (3) |
| 4.2                        |        | Form                of Warrant to Purchase Shares of Common Stock (4) |

----

*Table          of Contents*

| 4.3   |   | The                Registrant will furnish, upon request, to the Commission copies of                all                instruments defining the rights of holders of long-term debt instruments                of the Registrant and its consolidated subsidiary. |
|-------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.4   |   | Registration                Rights Agreement (4)                                                                                                                                                                                                              |
| 10.1  |   | Vineyard                National Bancorp Nonqualified Deferred Compensation Plan (1)*                                                                                                                                                                         |
| 10.2  |   | Vineyard                National Bancorp Directors’ Deferred Compensation Plan (1)*                                                                                                                                                                     |
| 10.3  |   | Amended                and Restated Vineyard National Bancorp 1997 Incentive Stock Option                Plan                (7)*                                                                                                                                  |
| 10.4  |   | Vineyard                National Bancorp 2002 Restricted Share Plan (1)*                                                                                                                                                                                      |
| 10.5  |   | Form                of 2002 Restricted Share Award Agreement (7)*                                                                                                                                                                                             |
| 10.6  |   | Vineyard                National Bancorp 2003 Restricted Share Plan (10)*                                                                                                                                                                                     |
| 10.7  |   | Form                of 2003 Restricted Share Award Agreement (7)*                                                                                                                                                                                                  |
| 10.8  |   | Vineyard                National Bancorp 2004 Restricted Share Plan (8)*                                                                                                                                                                                           |
| 10.9  |   | Form                of 2004 Restricted Share Award Agreement (7)*                                                                                                                                                                                                  |
| 10.10 |   | Vineyard                National Bancorp 2005 Restricted Share Plan (12)*                                                                                                                                                                                          |
| 10.11 |   | Form                of 2005 Restricted Share Award Agreement (15)*                                                                                                                                                                                                 |
| 10.12 |   | Amended                and Restated Employment Agreement between Vineyard National Bancorp,                Vineyard Bank, National Association and Norman A. Morales (6)*                                                                                     |
| 10.13 |   | Revised                Form of Change of Control Agreement (13)*                                                                                                                                                                                              |
| 10.14 |   | Loan                agreement between Vineyard National Bancorp and First Tennessee Bank                National Association (11)                                                                                                                                  |
| 10.15 |   | Vineyard                National Bancorp 2006 Incentive Stock Plan (16)*                                                                                                                                                                                           |
| 10.16 |   | Form                of 2006 Incentive Stock Plan Award Agreement (5)*                                                                                                                                                                                              |
| 11    |   | Statement                regarding computation of per share earnings.  See Note 7 to the                Consolidated Financial Statements included in Item 1                hereof                                                                       |
| 31.1  |   | Certification                of Chief Executive Officer under Section 302 of the Sarbanes-Oxley                Act of                2002                                                                                                                          |
| 31.2  |   | Certification                of Chief Financial Officer under Section 302 of the Sarbanes-Oxley                Act of                2002                                                                                                                          |
| 32    |   | Certification                of Chief Executive Officer and Chief Financial Officer pursuant to                Section                906 of the Sarbanes-Oxley Act 0f                2002                                                                         |

|   | (1)    | Incorporated                by reference from our Annual Report on Form 10-K for the year ended                December 31, 2002 filed with the SEC on March 28, 2003.                                                       |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                         |
|   | (2)    | Incorporated                by reference from our Form 8-K filed with the SEC on August 8,                2007.                                                                                                              |
|   |   |                                                                                                                                                                                                                         |
|   | (3)    | Incorporated                by reference from our Annual Report on Form 10-K for the year ended                December 31, 1988 filed with the SEC.                                                                         |
|   |   |                                                                                                                                                                                                                         |
|   | (4)    | Incorporated                by reference from our Form 8-K filed with the SEC on June 21,                2004.                                                                                                               |
|   |   |                                                                                                                                                                                                                         |
|   | (5)    | Incorporated                by reference from our Quarterly Report on Form 10-Q for the three                and nine                months ended September 30, 2006 filed with the SEC on November 9,                2006.  |
|   |   |                                                                                                                                                                                                                         |
|   | (6)    | Incorporated                by reference from our Form 8-K filed with the SEC on April 11,                2007.                                                                                                              |
|   |   |                                                                                                                                                                                                                         |
|   | (7)    | Incorporated                by reference from our Annual Report on Form 10-K for the year ended                December 31, 2004 filed with the SEC on March 10, 2005.                                                       |
|   |   |                                                                                                                                                                                                                         |
|   | (8)    | Incorporated                by reference from our Proxy Statement for an annual meeting held                on May                22, 2003 filed with the SEC on April 14, 2003.                                             |
|   |   |                                                                                                                                                                                                                         |
|   | (9)    | Incorporated                by reference from our Form 8-K filed with the SEC on June 26,                2007.                                                                                                               |
|   |   |                                                                                                                                                                                                                         |
|   | (10)   | Incorporated                by reference from our Quarterly Report on Form 10-Q for the three                and nine                months ended September 30, 2004 filed with the SEC on November 10,                2004. |

----

*Table          of Contents*

|   |   |                                                                                                                                                                                                                |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (11)   | Incorporated                by reference from our Quarterly Report on Form 10-Q for the three                months                ended March 31, 2006 filed with the SEC on May 10,                2006.          |
|   |   |                                                                                                                                                                                                                |
|   | (12)   | Incorporated                by reference from our Proxy Statement for an annual meeting held                on May                25, 2005 filed with the SEC on April 18, 2005.                                    |
|   |   |                                                                                                                                                                                                                |
|   | (13)   | Incorporated                by reference from our Form 8-K filed with the SEC on October 4,                2007.                                                                                                    |
|   |   |                                                                                                                                                                                                                |
|   | (14)   | Incorporated                by reference from our Form 8-K filed with the SEC on April 19,                2005.                                                                                                     |
|   |   |                                                                                                                                                                                                                |
|   | (15)   | Incorporated                by reference from our Quarterly Report on Form 10-Q for the three                and six                months ended June 30, 2005 filed with the SEC on August 1,                2005. |
|   |   |                                                                                                                                                                                                                |
|   | (16)   | Incorporated                by reference from our Proxy Statement for an annual meeting held                on May                24, 2006 filed with the SEC on April 17, 2006.                                    |
|   |   |                                                                                                                                                                                                                |
|   | *      | Management                contract or compensatory plan or                arrangement.                                                                                                                              |

----

*Table          of Contents*

**SIGNATURES**

|   |   |  **VINEYARD              NATIONAL BANCORP**  |                                                                    |
|--------|--------|--------------------------------------------------------|-------------------------------------------------------------------------|
|   |   |                                                   |                                                                    |   |
|   |   |  By:                                              | */s/                Norman                A. Morales*                   |   |
|   |   |                                                   | Norman                Morales                                           |   |
|   |   |                                                   | President                and                Chief Executive Officer     |   |
|   |   |                                                   |                                                                    |   |
|   |   |  By:                                              |  */s/              Gordon Fong*                                    |   |
|   |   |                                                   |  Gordon              Fong                                          |   |
|   |   |                                                   |  Executive              Vice President and Chief Financial Officer |   |
|   |   |                                                   |  (Principal              Financial Officer)                        |   |

----