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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**FORM      10-Q**

**FOR      THE      QUARTER**
**LY PERIOD ENDED SEPTEMBER 30, 2005**

**VINEYARD      NATIONAL BANCORP**

| California(State                  or                  other jurisdiction ofincorporation                  or organization)                                                             | 33-0309110(IRS                  employer                  identification                  number) |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                   |                                                                                              |
| 9590                  Foothill                  BoulevardRancho                  Cucamonga,  California(Address                  of                  principal executive offices) | 91730(Zip                  Code)                                                                  |

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**VINEYARD      NATIONAL BANCORP AND SUBSIDIARY**

**FORM      10-Q      INDEX**

**FOR      THE      PERIODS ENDED SEPTEMBER 30, 2005 AND 2004,**

**AND      DECEMBER 31, 2004**

|                   | **PART                I - FINANCIAL INFORMATION**                                                                                              |     |
|------------------------|------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|                   |                                                                                                                                           |     |
| ITEM                1. | Financial                Statements                                                                                                            |     |
|                   |                                                                                                                                           |     |
|                   | Consolidated                Statements of Financial Condition at September 30,                2005 and December 31, 2004                       |  4  |
|                   |                                                                                                                                           |     |
|                   | Consolidated                Statements of Income for the Three and Nine Months                Ended September 30, 2005 and 2004                |  5  |
|                   |                                                                                                                                           |     |
|                   | Consolidated                Statements of Changes in Stockholders' Equity for                the Nine Months Ended September 30, 2005 and 2004 |  6  |
|                   |                                                                                                                                           |     |
|                   | Consolidated                Statements of Cash Flows for the Nine Months Ended                September 30, 2005 and 2004                      |  7  |
|                   |                                                                                                                                           |     |
|                   | Notes                to Consolidated Financial                Statements                                                                       |  9  |
|                   |                                                                                                                                           |     |
|                   | Report                of Independent Registered Public Accounting                Firm                                                          |  16 |
|                   |                                                                                                                                           |     |
| ITEM                2. | Management's                Discussion and Analysis of Financial Condition                and Results of Operations                            |  17 |
|                   |                                                                                                                                           |     |
| ITEM                3. | Quantitative                and Qualitative Disclosures about Market                Risk                                                       |  34 |
|                   |                                                                                                                                           |     |
| ITEM                4. | Controls                and Procedures                                                                                                         |  37 |
|                   |                                                                                                                                           |     |
|                   | **PART                II - OTHER INFORMATION**                                                                                                 |     |
|                   |                                                                                                                                           |     |
| ITEM                1. | Legal                Proceedings                                                                                                               |  37 |
|                   |                                                                                                                                           |     |
| ITEM                2. | Unregistered                Sales of Equity Securities and Use of                Proceeds                                                      |  37 |
|                   |                                                                                                                                           |     |
| ITEM                3. | Defaults                upon Senior Securities                                                                                                 |  38 |
|                   |                                                                                                                                           |     |
| ITEM                4. | Submission                of Matters to a Vote of Security                Holders                                                              |  38 |
|                   |                                                                                                                                           |     |
| ITEM                5. | Other                Information                                                                                                               |  38 |
|                   |                                                                                                                                           |     |
| ITEM                6. | Exhibits                                                                                                                                       |  38 |
|                   |                                                                                                                                           |     |
| Signatures             |                                                                                                                                           |  40 |
|                   |                                                                                                                                           |     |
| 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, 2005 AND DECEMBER 31, 2004**

| (Dollars                in                Thousands)                                     |   | September                30,                2005 |      | December                31,                2004 |   |
|------------------------------------------------------------------------------------------|--------|--------------------------------------------------|-----------|-------------------------------------------------|--------|
|                                                                                     |   | (unaudited)                                      |      | (audited)                                       |   |
| **ASSETS**                                                                               |   |                                             |      |                                            |   |
| Cash                and cash                equivalents                                  |   | $                                                | 52,877    |                                            | $      | 22,551 |   |
| Investment                securities, available-for-sale                                 |   |                                             | 268,229   |                                            |   | 223,480 |   |
| Loans,                net of                unearned income                              |   |                                             | 1,301,556 |                                            |   | 1,027,037 |   |
| Less:                Allowance for possible loan losses                                  |   |                                             | (14,250   | )                                               |   | (13,001 | ) |
| Net                Loans                                                                 |   |                                             | 1,287,306 |                                            |   | 1,014,036 |   |
| Bank                premises                and equipment, net                           |   |                                             | 19,274    |                                            |   | 12,399 |   |
| Accrued                interest                                                          |   |                                             | 7,340     |                                            |   | 5,423 |   |
| Federal                Home                Loan Bank ("FHLB") and other stock, at cost   |   |                                             | 20,141    |                                            |   | 12,235 |   |
| Deferred                income tax asset                                                 |   |                                             | 8,492     |                                            |   | 8,196 |   |
| Other                assets                                                              |   |                                             | 15,265    |                                            |   | 13,177 |   |
| **TOTAL                ASSETS**                                                          |   | $                                                | 1,678,924 |                                            | $      | 1,311,497 |   |
|                                                                                     |   |                                             |      |                                            |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS' EQUITY**                                  |   |                                             |      |                                            |   |   |   |
| Liabilities                                                                              |   |                                             |      |                                            |   |   |   |
| Deposits                                                                                 |   |                                             |      |                                            |   |   |   |
| Non-interest                bearing                                                      |   | $                                                | 160,279   |                                            | $      | 127,466 |   |
| Interest-bearing                                                                         |   |                                             | 960,310   |                                            |   | 838,080 |   |
| Total                Deposits                                                            |   |                                             | 1,120,589 |                                            |   | 965,546 |   |
|                                                                                     |   |                                             |      |                                            |   |   |   |
| FHLB                advances                and other borrowings                         |   |                                             | 342,000   |                                            |   | 177,000 |   |
| Subordinated                debentures                                                   |   |                                             | 5,000     |                                            |   | 5,000 |   |
| Junior                subordinated debentures                                            |   |                                             | 96,913    |                                            |   | 71,139 |   |
| Accrued                interest and other liabilities                                    |   |                                             | 8,303     |                                            |   | 7,585 |   |
| **TOTAL                LIABILITIES**                                                     |   |                                             | 1,572,805 |                                            |   | 1,226,270 |   |
|                                                                                     |   |                                             |      |                                            |   |   |   |
| **COMMITMENTS                AND CONTINGENCIES (Note #2)**                               |   |                                             |      |                                            |   |   |   |
|                                                                                     |   |                                             |      |                                            |   |   |   |
| Stockholders'                Equity                                                      |   |                                             |      |                                            |   |   |   |
| Contributed                capital                                                       |   |                                             |      |                                            |   |   |   |
| Perpetual                preferred stock - authorized 10,000,000 shares                  |   |                                             |      |                                            |   |   |   |
| Series                C - no                par value, issued and outstanding 10,000     |   |                                             |      |                                            |   |   |   |
| and                0 shares                in 2005 and 2004, respectively                |   |                                             | 9,665     |                                            |   | - |   |
| Common                stock                - no par value, authorized 50,000,000 shares; |   |                                             |      |                                            |   |   |   |
| issued                and                outstanding 9,683,371 and 9,581,941 shares      |   |                                             |      |                                            |   |   |   |
| in                2005 and                2004, respectively                             |   |                                             | 69,177    |                                            |   | 70,536 |   |
| Additional                paid-in capital                                                |   |                                             | 3,904     |                                            |   | 3,772 |   |
| Unallocated                ESOP shares                                                   |   |                                             | (6,439    | )                                               |   | (6,856 | ) |
| Retained                earnings                                                         |   |                                             | 32,960    |                                            |   | 20,513 |   |
| Accumulated                other comprehensive loss, net of taxes                        |   |                                             | (3,148    | )                                               |   | (2,738 | ) |
| **TOTAL                STOCKHOLDERS' EQUITY**                                            |   |                                             | 106,119   |                                            |   | 85,227 |   |
| **TOTAL                LIABILITIES AND STOCKHOLDERS' EQUITY**                            |   | $                                                | 1,678,924 |                                            | $      | 1,311,497 |   |
|                                                                                     |   |                                             |      |                                            |   |   |   |
| See                accompanying notes to financial statements.                           |   |                                             |      |                                            |   |   |   |

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Table          of Contents 

**VINEYARD      NATIONAL BANCORP AND SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF INCOME**

**FOR      THE      THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004**

| (Dollars                in                Thousands, except per share amounts)              |   | Three                Months                Ended September 30, |   | Nine                Months                Ended September 30, |   |
|---------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                                                                        |   | 2005                                                           |   | 2004                                                          |   | 2005 |   | 2004 |   |
|                                                                                        |   | (unaudited)                                                    |   | (unaudited)                                                   |   | (unaudited) |   | (unaudited) |   |
| **Interest                Income**                                                          |   |                                                           |   |                                                          |   |   |   |   |   |
| Interest                and                fees on loans                                    |   | $                                                              | 26,674 |                                                          | $      | 17,931 |   | $ | 69,093 |   | $ | 47,169 |   |
| Interest                on                investment securities                             |   |                                                           | 3,132  |                                                          |   | 2,382 |   |   | 9,465 |   |   | 6,382 |   |
| **TOTAL                INTEREST INCOME**                                                    |   |                                                           | 29,806 |                                                          |   | 20,313 |   |   | 78,558 |   |   | 53,551 |   |
|                                                                                        |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |
| **Interest                Expense**                                                         |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |
| Interest                on                savings deposits                (1)               |   |                                                           | 3,239  |                                                          |   | 2,288 |   |   | 8,720 |   |   | 5,288 |   |
| Interest                on                time deposits in denominations of 100,000 or more |   |                                                           | 2,360  |                                                          |   | 1,088 |   |   | 5,938 |   |   | 2,964 |   |
| Interest                on                other time deposits                               |   |                                                           | 1,764  |                                                          |   | 932 |   |   | 4,487 |   |   | 2,632 |   |
| Interest                on                FHLB advances and other borrowings                |   |                                                           | 4,807  |                                                          |   | 1,853 |   |   | 10,667 |   |   | 4,422 |   |
| **TOTAL                INTEREST EXPENSE**                                                   |   |                                                           | 12,170 |                                                          |   | 6,161 |   |   | 29,812 |   |   | 15,306 |   |
| **NET                INTEREST INCOME**                                                      |   |                                                           | 17,636 |                                                          |   | 14,152 |   |   | 48,746 |   |   | 38,245 |   |
|                                                                                        |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |
| **Provision                for Possible Loan and Lease Losses**                             |   |                                                           | (500   | )                                                             |   | (1,350 | ) |   | (1,350 | ) |   | (4,833 | ) |
|                                                                                        |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |
| **NET                INTEREST INCOME AFTER**                                                |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |
| **PROVISION                FOR POSSIBLE**                                                   |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |
| **LOAN                AND LEASE LOSSES**                                                    |   |                                                           | 17,136 |                                                          |   | 12,802 |   |   | 47,396 |   |   | 33,412 |   |
|                                                                                        |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |
| **Other                Income**                                                             |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |
| Fees                and                service charges                                      |   |                                                           | 342    |                                                          |   | 443 |   |   | 1,186 |   |   | 1,367 |   |
| Gain                on sale                of SBA loans and broker fee income               |   |                                                           | 928    |                                                          |   | 1,052 |   |   | 2,355 |   |   | 2,314 |   |
| Net                gain on                sale of investment securities and loans           |   |                                                           | 398    |                                                          |   | - |   |   | 398 |   |   | 207 |   |
| Other                income                                                                 |   |                                                           | 76     |                                                          |   | 31 |   |   | 243 |   |   | 167 |   |
| **TOTAL                OTHER INCOME**                                                       |   |                                                           | 1,744  |                                                          |   | 1,526 |   |   | 4,182 |   |   | 4,055 |   |
|                                                                                        |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |
| **Other                Expense**                                                            |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |
| Salaries                and                employee benefits                                |   |                                                           | 5,380  |                                                          |   | 4,949 |   |   | 14,791 |   |   | 11,627 |   |
| Occupancy                expense of premises                                                |   |                                                           | 1,056  |                                                          |   | 690 |   |   | 2,733 |   |   | 1,787 |   |
| Furniture                and                equipment                                       |   |                                                           | 904    |                                                          |   | 664 |   |   | 2,404 |   |   | 1,681 |   |
| Other                                                                                       |   |                                                           | 2,467  |                                                          |   | 1,820 |   |   | 6,806 |   |   | 5,589 |   |
| **TOTAL                OTHER EXPENSES**                                                     |   |                                                           | 9,807  |                                                          |   | 8,123 |   |   | 26,734 |   |   | 20,684 |   |
| **INCOME                BEFORE INCOME TAXES**                                               |   |                                                           | 9,073  |                                                          |   | 6,205 |   |   | 24,844 |   |   | 16,783 |   |
| **INCOME                TAX PROVISION**                                                     |   |                                                           | 3,794  |                                                          |   | 2,535 |   |   | 10,390 |   |   | 6,859 |   |
| **NET                INCOME**                                                               |   | $                                                              | 5,279  |                                                          | $      | 3,670 |   | $ | 14,454 |   | $ | 9,924 |   |
|                                                                                        |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |
| **EARNINGS                PER SHARE**                                                       |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |
| **BASIC**                                                                                   |   | $                                                              | 0.54   |                                                          | $      | 0.43 |   | $ | 1.51 |   | $ | 1.25 |   |
| **DILUTED**                                                                                 |   | $                                                              | 0.52   |                                                          | $      | 0.40 |   | $ | 1.44 |   | $ | 1.11 |   |
|                                                                                        |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to financial statements.                              |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |

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

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Table          of Contents 

**VINEYARD      NATIONAL BANCORP AND SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY**

**FOR      THE      NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004**

| (Dollars                in Thousands)                |   |      |    |                        |   |          |   |     |       | Stock                |   |          |   |     |   |        |   | Accumulated   |   |   |       |
|------------------------------------------------------|--------|-----------|---------|-----------------------------|--------|---------------|--------|----------|------------|----------------------|--------|---------------|--------|----------|--------|-------------|--------|---------------|--------|--------|------------|
|                                                 |   | Perpetual |    | Common                Stock |   | Additional    |   | Dividend |       |                 |   |          |   |     |   | Other       |   |          |   |
|                                                 |   | Preferred |    | Number                of    |   |          |   | Paid-in  |       | To                Be |   | Comprehensive |   | Retained |   | Unallocated |   | Comprehensive |   |   |       |
|                                                 |   | Stock     |    | Shares                      |   | Amount        |   | Capital  |       | Distributed          |   | Income        |   | Earnings |   | ESOP        |   | Income        |   | Total  |       |
| **Balance                December 31, 2003**         |   | $         | 28,999  |                        |   | 6,291,430     |   | $        | 9,739      |                 | $      | 3,307         |   | $        | 4,981  |        |   |          |   | $      | 8,237      |   |   |   |   | $ | (3,088 | ) | $ | 52,175 |   |
|                                                 |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Issuance                of common stock              |   |      |    |                        |   | 800,000       |   |     | 15,187     |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   | 15,187 |   |
| Stock                options exercised               |   |      |    |                        |   | 138,054       |   |     | 463        |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   | 463 |   |
| Purchase                of treasury stock            |   |      |    |                        |   | (82,200       | )      |     | (1,612     | )                    |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   | (1,612 | ) |
| Purchase                of common stock              |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| to                pre-fund ESOP                      |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   | $ | (6,997 | ) |   |   |   |   | (6,997 | ) |
| Redemption                of Series A                |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| preferred                stock                       |   |      | (2,450  | )                           |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   | (2,450 | ) |
| Redemption                and conversion of          |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Series                B preferred stock to           |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| common                stock                          |   |      | (26,547 | )                           |   | 1,727,182     |   |     | 26,491     |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   | (56 | ) |
| Cash                paid for fractional shares of    |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Series                B stock conversion             |   |      | (2      | )                           |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   | (2 | ) |
| Stock                dividends distributed           |   |      |    |                        |   |          |   |     | 4,966      |                 |   |          |   |     | (4,966 | )           |   |          |   |   |       |   |   |   |   |   |   |   |   | - |   |
| Cash                paid for fractional shares       |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| of                stock dividend distribution        |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     | (15    | )           |   |          |   |   |       |   |   |   |   |   |   |   |   | (15 | ) |
| Cash                paid in excess of cost to redeem |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| and                convert preferred stock           |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   | (71        | ) |   |   |   |   |   |   |   | (71 | ) |
| Cash                dividends paid on                |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| common                stock                          |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   | (577       | ) |   |   |   |   |   |   |   | (577 | ) |
| Cash                dividends paid on                |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| preferred                stock                       |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   | (702       | ) |   |   |   |   |   |   |   | (702 | ) |
| Comprehensive                income                  |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Net                Income                            |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        | $      | 9,924         |   |   | 9,924      |   |   |   |   |   |   |   |   | 9,924 |   |
| Unrealized                security holding           |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| gains                (net of $529                    |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| tax                provision)                        |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   | 762           |   |   |       |   |   |   |   |   | 762 |   |   | 762 |   |
| Less                reclassification                 |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| adjustment                for realized               |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| gains                (net of $85                     |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   |          |   |   |       |   |   |   |   |   |   |   |   |   |   |
| tax                provision)                        |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |        |   | 122           |   |   |       |   |   |   |   |   | 122 |   |   | 122 |   |
| Total                comprehensive income            |   |      |    |                        |   |          |   |     |       |                 |   |          |   |     |   |             | **$**  | **10,808**    |   |   |       |   |   |   |   |   |   |   |   |   |   |
| **Balance,                September 30, 2004**       |   | **$**     | **-**   |                        |   | **8,874,466** |   | **$**    | **55,234** |                 | **$**  | **3,307**     |   | **$**    | **-**  |        |   |          |   | **$**  | **16,811** |   | **$** | **(6,997** | **)** | **$** | **(2,204** | **)** | **$** | **66,151** |   |

|                                                                          |   |      |      |                        |   |                    |   |                   |       |          |   |                    |   |                     |       | Accumulated              |   |                    |   |
|-------------------------------------------------------------------------------|--------|-----------|-----------|-----------------------------|--------|-------------------------|--------|------------------------|------------|---------------|--------|-------------------------|--------|--------------------------|------------|--------------------------|--------|-------------------------|--------|
|                                                                          |   | Perpetual |      | Common                Stock |   | Additional              |   |                   |       |          |   |                    |   | Other                    |       |                     |   |
|                                                                          |   | Preferred |      | Number                of    |   |                    |   | Paid-in                |       | Comprehensive |   | Retained                |   | Unallocated              |       | Comprehensive            |   |                    |   |
|                                                                          |   | Stock     |      | Shares                      |   | Amount                  |   | Capital                |       | Income        |   | Earnings                |   | ESOP                     |       | Income                   |   | Total                   |   |
| **Balance                December 31, 2004**                                  |   |      |      | 9,581,941                   |   | $                70,536 |   | $                3,772 |       |          |   | $                20,513 |   | $                (6,856) |       | $                (2,738) |   | $                85,227 |   |
|                                                                          |   |      |      |                        |   |                    |   |                   |       |          |   |                    |   |                     |       |                     |   |                    |   |
| Issuance                of Series C preferred stock                           |   | $         | 9,665     |                        |   |                    |   |                   |       |          |   |                    |   |                     |       |                     |   |                    |   |   |   |   |   |   |   |   | 9,665 |   |
| Stock                options exercised                                        |   |      |      |                        |   | 132,475                 |   |                   | 771        |          |   |                    |   |                     |       |                     |   |                    |   |   |   |   |   |   |   |   | 771 |   |
| Warrants                exercised                                             |   |      |      |                        |   | 50,350                  |   |                   | 343        |          |   |                    |   |                     |       |                     |   |                    |   |   |   |   |   |   |   |   | 343 |   |
| Additional                investment rights exercised                         |   |      |      |                        |   | 120,775                 |   |                   | 3,530      |          |   |                    |   |                     |       |                     |   |                    |   |   |   |   |   |   |   |   | 3,530 |   |
| Purchase                of treasury stock                                     |   |      |      |                        |   | (202,170                | )      |                   | (6,003     | )             |   |                    |   |                     |       |                     |   |                    |   |   |   |   |   |   |   |   | (6,003 | ) |
| Release                of ESOP shares                                         |   |      |      |                        |   |                    |   |                   |       |          |   | 132                     |   |                     |       |                     |   |                    |   |   | 417 |   |   |   |   |   | 549 |   |
| Cash                dividends declared on preferred                           |   |      |      |                        |   |                    |   |                   |       |          |   |                    |   |                     |       |                     |   |                    |   |   |   |   |   |   |   |   |   |   |
| stock                                                                         |   |      |      |                        |   |                    |   |                   |       |          |   |                    |   |                     |       |                     |   | (340                    | )      |   |   |   |   |   |   |   | (340 | ) |
| Cash                dividends paid on common                                  |   |      |      |                        |   |                    |   |                   |       |          |   |                    |   |                     |       |                     |   |                    |   |   |   |   |   |   |   |   |   |   |
| stock                                                                         |   |      |      |                        |   |                    |   |                   |       |          |   |                    |   |                     |       |                     |   | (1,667                  | )      |   |   |   |   |   |   |   | (1,667 | ) |
| Comprehensive                income                                           |   |      |      |                        |   |                    |   |                   |       |          |   |                    |   |                     |       |                     |   |                    |   |   |   |   |   |   |   |   |   |   |
| Net                Income                                                     |   |      |      |                        |   |                    |   |                   |       |          |   |                    |   | $                        | 14,454     |                     |   | 14,454                  |   |   |   |   |   |   |   |   | 14,454 |   |
| Unrealized                security holding                                    |   |      |      |                        |   |                    |   |                   |       |          |   |                    |   |                     |       |                     |   |                    |   |   |   |   |   |   |   |   |   |   |
| losses                (net of $296                                            |   |      |      |                        |   |                    |   |                   |       |          |   |                    |   |                     |       |                     |   |                    |   |   |   |   |   |   |   |   |   |   |
| tax                benefit)                                                   |   |      |      |                        |   |                    |   |                   |       |          |   |                    |   |                     | (410       | )                        |   |                    |   |   |   |   |   | (410 | ) |   | (410 | ) |
| Total                comprehensive income                                     |   |      |      |                        |   |                    |   |                   |       |          |   |                    |   | **$**                    | **14,044** |                     |   |                    |   |   |   |   |   |   |   |   |   |   |
| **Balance,                September 30, 2005**                                |   | **$**     | **9,665** |                        |   | **9,683,371**           |   | **$**                  | **69,177** |          | **$**  | **3,904**               |   |                     |       |                     | **$**  | **32,960**              |   | **$** | **(6,439** | **)** | **$** | **(3,148** | **)** | **$** | **106,119** |   |
|                                                                          |   |      |      |                        |   |                    |   |                   |       |          |   |                    |   |                     |       |                     |   |                    |   |   |   |   |   |   |   |   |   |   |
| See                accompanying notes to financial                statements. |

|  Page                  6 of                  40 |
|------------------------------------------------------|

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Table          of Contents 

**VINEYARD      NATIONAL BANCORP AND SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**FOR      THE      NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004**

| (Dollars                in                Thousands)                                       |   | Nine                Months                Ended September 30, |     |
|--------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------|----------|
|                                                                                       |   | 2005                                                          |     | 2004 |   |
|                                                                                       |   | (unaudited)                                                   |     | (unaudited) |   |
| **Cash                Flows From Operating Activities**                                    |   |                                                          |     |   |   |
| Net                Income                                                                  |   | $                                                             | 14,454   |   | $ | 9,924 |   |
| Adjustments                to Reconcile Net Income                                         |   |                                                          |     |   |   |   |   |
| to                Net Cash                Provided by Operating Activities                 |   |                                                          |     |   |   |   |   |
|                                                                                       |   |                                                          |     |   |   |   |   |
| Depreciation                                                                               |   |                                                          | 2,107    |   |   | 1,458 |   |
| Investment                securities accretion/amortization                                |   |                                                          | 1,193    |   |   | 477 |   |
| Provision                for                possible loan losses                           |   |                                                          | 1,350    |   |   | 4,833 |   |
| FHLB                stock                dividends                                         |   |                                                          | (385     | ) |   | (314 | ) |
| Amortization                of intangible assets                                           |   |                                                          | 8        |   |   | 8 |   |
| Amortization                of SBA servicing asset                                         |   |                                                          | 469      |   |   | 164 |   |
| Amortization                of SBA interest only strip                                     |   |                                                          | 68       |   |   | 30 |   |
| Reinvestment                of mutual fund interest                                        |   |                                                          | (57      | ) |   | (24 | ) |
| Release                of                ESOP shares                                       |   |                                                          | 549      |   |   | - |   |
| Decrease                in                deferred tax assets                              |   |                                                          | -        |   |   | 852 |   |
| Increase                in                taxes payable                                    |   |                                                          | 122      |   |   | 290 |   |
| Increase                in                other assets                                     |   |                                                          | (1,861   | ) |   | (2,650 | ) |
| Decrease/(increase)                in cash surrender value of life insurance policies      |   |                                                          | 2        |   |   | (196 | ) |
| Gain                on sale                of other real estate owned                      |   |                                                          | -        |   |   | (56 | ) |
| Gain                on sale                of loans                                        |   |                                                          | (1,565   | ) |   | (1,408 | ) |
| Gain                on sale                of investment securities                        |   |                                                          | -        |   |   | (207 | ) |
| Increase/(decrease)                in unearned loan fees                                   |   |                                                          | 1,753    |   |   | (39 | ) |
| Increase                in                interest receivable                              |   |                                                          | (1,917   | ) |   | (1,945 | ) |
| Increase/(decrease)                in interest payable                                     |   |                                                          | 6        |   |   | (107 | ) |
| Increase/(decrease)                in accrued expense and other liabilities                |   |                                                          | 399      |   |   | (1,263 | ) |
| Total                Adjustment                                                            |   |                                                          | 2,241    |   |   | (97 | ) |
| **Net                Cash Provided By Operating Activities**                               |   |                                                          | 16,695   |   |   | 9,827 |   |
|                                                                                       |   |                                                          |     |   |   |   |   |
| **Cash                Flows From Investing Activities**                                    |   |                                                          |     |   |   |   |   |
| Proceeds                from                sales of investment securities/mortgage-backed |   |                                                          |     |   |   |   |   |
| securities                available-for-sale                                               |   |                                                          | -        |   |   | 26,029 |   |
| Proceeds                from                principal reductions and maturities of         |   |                                                          |     |   |   |   |   |
| mortgage-backed                securities available-for-sale                               |   |                                                          | 49,062   |   |   | 21,480 |   |
| Purchase                of                mortgage-backed securities available-for-sale    |   |                                                          | (95,653  | ) |   | (60,635 | ) |
| Purchase                of                FHLB & other stock                           |   |                                                          | (8,755   | ) |   | (3,670 | ) |
| Redemption                of                FHLB stock                                     |   |                                                          | 1,234    |   |   | 607 |   |
| Recoveries                on                loans previously written off                   |   |                                                          | (101     | ) |   | 105 |   |
| Net                loans                made to customers and principal                    |   |                                                          |     |   |   |   |   |
| collection                of                loans                                          |   |                                                          | (274,707 | ) |   | (422,381 | ) |
| Capital                expenditures                                                        |   |                                                          | (8,982   | ) |   | (3,498 | ) |
| **Net                Cash Used In Investing Activities**                                   |   |                                                          | (337,902 | ) |   | (441,963 | ) |

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Table          of Contents 

**VINEYARD      NATIONAL BANCORP AND SUBSIDIARY**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**FOR      THE      NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004**

**(continued)**

| (Dollars                in                Thousands)                                          |   |   |    |   |   |
|-----------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|
|                                                                                          |   | 2005   |    | 2004   |   |
| **Cash                Flows From Financing Activities**                                       |   |   |    |   |   |
| Net                increase                in demand deposits, NOW accounts,                  |   |   |    |   |   |
| savings                accounts, and money market deposits                                    |   |   | 34,487  |   |   | 212,989 |   |
| Net                increase                in certificates of deposits                        |   |   | 120,556 |   |   | 114,846 |   |
| Proceeds                from                issuance of junior subordinated debentures        |   |   | 25,000  |   |   | 22,000 |   |
| Issuance                of                common stock                                        |   |   | -       |   |   | 15,187 |   |
| Issuance                of                preferred stock                                     |   |   | 9,665   |   |   | - |   |
| Net                change in                FHLB advances                                     |   |   | 165,000 |   |   | 40,425 |   |
| Purchase                of                treasury stock                                      |   |   | (6,003  | )      |   | (1,612 | ) |
| Redemption                of                preferred stock (including                        |   |   |    |   |   |   |   |
| cash                paid in                excess of cost)                                    |   |   | -       |   |   | (2,577 | ) |
| Dividends                paid on preferred stock                                              |   |   | (149    | )      |   | (702 | ) |
| Dividends                paid on common stock                                                 |   |   | (1,667  | )      |   | (577 | ) |
| Cash                paid on                fractional shares of stock dividend                |   |   | -       |   |   | (15 | ) |
| Cash                paid on                fractional shares of preferred stock conversion    |   |   | -       |   |   | (2 | ) |
| Proceeds                from                exercise of warrants                              |   |   | 343     |   |   | - |   |
| Net                proceeds                from exercise of additional investment rights      |   |   | 3,530   |   |   | - |   |
| Proceeds                from                exercise of stock options                         |   |   | 771     |   |   | 463 |   |
| **Net                Cash Provided By Financing Activities**                                  |   |   | 351,533 |   |   | 400,425 |   |
|                                                                                          |   |   |    |   |   |   |   |
| **Net                Increase / (Decrease) in Cash and Cash                Equivalents**      |   |   | 30,326  |   |   | (31,711 | ) |
|                                                                                          |   |   |    |   |   |   |   |
| **Cash                and Cash Equivalents**,                Beginning                of year |   |   | 22,551  |   |   | 58,242 |   |
|                                                                                          |   |   |    |   |   |   |   |
| **Cash                and Cash Equivalents**,                End of                period     |   | $      | 52,877  |   | $      | 26,531 |   |
|                                                                                          |   |   |    |   |   |   |   |
| **Supplemental                Information**                                                   |   |   |    |   |   |   |   |
| Net                change in                unrealized loss on investment securities          |   | $      | 706     |   | $      | (1,498 | ) |
| Interest                paid                                                                  |   | $      | 29,806  |   | $      | 15,199 |   |
| Income                tax                paid                                                 |   | $      | 8,255   |   | $      | 7,920 |   |
|                                                                                          |   |   |    |   |   |   |   |
|                                                                                          |   |   |    |   |   |   |   |
| See                accompanying notes to financial statements.                                |   |   |    |   |   |   |   |

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

| Page                  9 of                  40 |
|------------------------------------------------|

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*"Accounting      for      Certain Investments in Debt and Equity Securities," *

*Accounting      for      Contingencies*
*Accounting      by      Creditors for Impairment of a Loan*
*Accounting      by      Creditors for Impairment of a Loan-Income Recognition and      Disclosure*

*“Reporting      Comprehensive Income,*

*Share-Based      Payment*
*Accounting      for      Stock-Based Compensation*
*Employers’      Accounting for Employee Stock Ownership Plans”*

| Page                10 of                40 |
|---------------------------------------------|

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*"Accounting      Changes and Error Corrections"*

**Note      #2 -      Commitments and Contingencies**

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Table          of Contents 

**Note      #3 -      Junior Subordinated Debentures**

**Note      #4 -      Issuance of Capital Stock**

**Note      #5 -      Shelf Registration Statement**

**Note      #6 -      Dividends **

|  Page                12 of                40 |
|---------------------------------------------------|

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

*Employers’      Accounting for Employee Stock Ownership Plans*

**Note      #8 -      Earnings per Share and Book Value**

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Table          of Contents 

| (Dollars                in                Thousands)                      |   | Three                Months                Ended September 30, |   | Nine                Months                Ended September 30, |   |
|---------------------------------------------------------------------------|--------|----------------------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                                                      |   | 2005                                                           |   | 2004                                                          |   | 2005 |   | 2004 |   |
|                                                                      |   | Income                                                         |   | Shares                                                        |   | Income |   | Shares |   | Income |   | Shares |   | Income |   | Shares |   |
| Net                income as                reported                      |   | $                                                              | 5,279  |                                                          |   |   |   | $ | 3,670 |   |   |   |   | $ | 14,454 |   |   |   |   | $ | 9,924 |   |   |   |   |
| Less:                preferred stock dividends declared                   |   |                                                           | (191   | )                                                             |   |   |   |   | - |   |   |   |   |   | (340 | ) |   |   |   |   | (702 | ) |   |   |   |
| Less:                excess                cost to redeem preferred stock |   |                                                           | -      |                                                          |   |   |   |   | (3 | ) |   |   |   |   | - |   |   |   |   |   | (71 | ) |   |   |   |
| Shares                outstanding at end of period                        |   |                                                           |   |                                                          |   | 9,683,371 |   |   |   |   |   | 8,874,466 |   |   |   |   |   | 9,683,371 |   |   |   |   |   | 8,874,466 |   |
| Unreleased                and unallocated ESOP shares                     |   |                                                           |   |                                                          |   | (274,238 | ) |   |   |   |   | (298,000 | ) |   |   |   |   | (274,238 | ) |   |   |   |   | (298,000 | ) |
| Impact                of                weighting shares                  |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| issued                during                the period                    |   |                                                           |   |                                                          | (2,339 | ) |   |   |   | (21,274 | ) |   |   |   | (79,465 | ) |   |   |   | (1,266,451 | ) |
| Used                in basic                EPS                           |   | $                                                              | 5,088  |                                                          |   | 9,406,794 |   | $ | 3,667 |   |   | 8,555,192 |   | $ | 14,114 |   |   | 9,329,668 |   | $ | 9,151 |   |   | 7,310,015 |   |
| Plus:                anti-dilutive effect of Series B                     |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| dividends                and                redemption                    |   |                                                           | -      |                                                          |   |   |   |   | 3 |   |   |   |   |   | - |   |   |   |   |   | 654 |   |   |   |   |
| Dilutive                effect of outstanding                             |   |                                                           |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stock                options                and warrants                  |   |                                                           |   |                                                          |   | 415,907 |   |   |   |   |   | 672,953 |   |   |   |   |   | 447,875 |   |   |   |   |   | 1,526,615 |   |
| Used                in                diluted EPS                         |   | $                                                              | 5,088  |                                                          |   | 9,822,701 |   | $ | 3,670 |   |   | 9,228,145 |   | $ | 14,114 |   |   | 9,777,543 |   | $ | 9,805 |   |   | 8,836,630 |   |

| (Dollars                in                Thousands, except per share data) |   | Three                Months                Ended September 30, |      | Nine                Months                Ended September 30, |   |
|-----------------------------------------------------------------------------|--------|----------------------------------------------------------------|-----------|---------------------------------------------------------------|--------|
|                                                                        |   | 2005                                                           |      | 2004                                                          |   | 2005 |   | 2004 |   |
|                                                                        |   |                                                           |      |                                                          |   |   |   |   |   |
| Net                income:                                                  |   |                                                           |      |                                                          |   |   |   |   |   |
| As                reported                                                  |   | $                                                              | 5,279     |                                                          | $      | 3,670 |   | $ | 14,454 |   | $ | 9,924 |   |
| Less:                preferred stock dividends declared                     |   |                                                           | (191      | )                                                             |   | - |   |   | (340 | ) |   | (702 | ) |
| Less:                excess                cost to redeem preferred stock   |   |                                                           | -         |                                                          |   | (3 | ) |   | - |   |   | (71 | ) |
| Stock-based                compensation that would have been reported       |   |                                                           |      |                                                          |   |   |   |   |   |   |   |   |   |
| using                the                fair value method of SFAS No.123    |   |                                                           | (43       | )                                                             |   | (7 | ) |   | (110 | ) |   | (86 | ) |
| Pro                forma net                income - used in basic EPS      |   |                                                           | 5,045     |                                                          |   | 3,660 |   |   | 14,004 |   |   | 9,065 |   |
| Add:                anti-dilutive effects of Series B dividends             |   |                                                           | -         |                                                          |   | 3 |   |   | - |   |   | 654 |   |
| Pro                forma net                income - used in diluted EPS    |   | $                                                              | 5,045     |                                                          | $      | 3,663 |   | $ | 14,004 |   | $ | 9,719 |   |
|                                                                        |   |                                                           |      |                                                          |   |   |   |   |   |   |   |   |   |
| Weighted                average shares outstanding - basic                  |   |                                                           | 9,406,794 |                                                          |   | 8,555,192 |   |   | 9,329,668 |   |   | 7,310,015 |   |
| Weighted                average shares outstanding - diluted                |   |                                                           | 9,822,701 |                                                          |   | 9,228,145 |   |   | 9,777,543 |   |   | 8,836,630 |   |
|                                                                        |   |                                                           |      |                                                          |   |   |   |   |   |   |   |   |   |
| Basic                EPS                                                    |   |                                                           |      |                                                          |   |   |   |   |   |   |   |   |   |
| As                reported                                                  |   | $                                                              | 0.54      |                                                          | $      | 0.43 |   | $ | 1.51 |   | $ | 1.25 |   |
| Pro                forma                                                    |   | $                                                              | 0.54      |                                                          | $      | 0.43 |   | $ | 1.50 |   | $ | 1.24 |   |
|                                                                        |   |                                                           |      |                                                          |   |   |   |   |   |   |   |   |   |
| Diluted                EPS                                                  |   |                                                           |      |                                                          |   |   |   |   |   |   |   |   |   |
| As                reported                                                  |   | $                                                              | 0.52      |                                                          | $      | 0.40 |   | $ | 1.44 |   | $ | 1.11 |   |
| Pro                forma                                                    |   | $                                                              | 0.51      |                                                          | $      | 0.40 |   | $ | 1.43 |   | $ | 1.10 |   |

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Table          of Contents 

|                                                                    |   | As                of                             |      |
|-------------------------------------------------------------------------|--------|--------------------------------------------------|-----------|
|                                                                    |   | September                30,                2005 |      | December                31,                2004 |   |
|                                                                    |   |                                             |      |   |   |
| Period-end                shares outstanding                            |   |                                             | 9,683,371 |   |   | 9,581,941 |   |
| Unreleased                and unallocated ESOP shares              |   |                                             | (274,238  | ) |   | (291,994 | ) |
| Used                in basic                book value per common stock |   |                                             | 9,409,133 |   |   | 9,289,947 |   |
| Warrants                (1)                                             |   |                                             | 177,640   |   |   | 227,990 |   |
| Additional                Investment Rights                (2)          |   |                                             | -         |   |   | 120,775 |   |
| Used                in book                value per common stock,      |   |                                             |      |   |   |   |   |
| assuming                exercise of warrants and                        |   |                                             |      |   |   |   |   |
| additional                investment rights                             |   |                                             | 9,586,773 |   |   | 9,638,712 |   |
|                                                                    |   |                                             |      |   |   |   |   |
| Book                value                per common stock, basic        |   | $                                                | 10.25     |   | $ | 9.17 |   |
| Book                value                per common stock, assuming     |   |                                             |      |   |   |   |   |
| exercise                of                warrants and additional       |   |                                             |      |   |   |   |   |
| investment                rights                                        |   | $                                                | 10.49     |   | $ | 9.69 |   |

**Note      #9 -      Subsequent Events**

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Table          of Contents 

Board      of Directors and Shareholders of

**REPORT      OF      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

*/s/      Vavrinek,      Trine, Day & Co., LLP*

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Table          of Contents 

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

**Business      and Organization**

*Vineyard      National Bancorp*

*Vineyard      Bank*

*The      Bank’s      Strategic Plan*

|  Page                  17                  of 40 |
|-------------------------------------------------------|

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*Expanded        Product Offering.*

|   ·                              |  In                    2001, the Bank began originating high-end market single-family                    construction loans within the coastal communities of Los Angeles,                    California (primarily Manhattan Beach, Hermosa Beach and Redondo                    Beach, as                    well as the Palos Verdes Peninsula area), where it believed it                    had a                    competitive advantage based on established builder and customer                    relationships and expertise in the construction market.                     This                    specialty lending group has expanded its builder and customer                    base and now                    finances projects in Los Angeles’ upper end “west side” (including Beverly                    Hills, Brentwood and Malibu) and Orange County coastal regions.                     The                    demand for new luxury construction in many of these communities                    continues                    to be especially strong. These types of construction loans typically                    range                    from $1.0 million to $5.0 million. The Bank’s single-family residential                    coastal construction loans outstanding amounted to $341.7 million                    and                    $299.0 million at September 30, 2005 and December 31, 2004, respectively,                    net of participations sold of $135.4 million and $59.6 million,                    respectively. At September 30, 2005 and December 31, 2004, unfunded                    commitments relating to single-family residential coastal construction                    loans amounted to $277.0 million and $213.4 million,                    respectively.                                                                                                                                                                                                                                                                                                                                                                                                                         |
|----------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   ·                              | In                    2002, the                    Bank began originating single-family residential tract construction                    loans,                    primarily secured by newly-constructed, entry to mid-level detached                    homes.  These loans are predominantly originated within                    the Inland                    Empire of Southern California, however the Bank has financed                    projects                    throughout California.  Its builders operate within approximately                    twenty communities where demand for new affordable housing is                    consistently                    exceeding new production supply, with a substantial amount of                    new housing                    starts pre-sold to qualified buyers. The Inland Empire’s resale and new                    home markets continue to be supported by a growing labor base                    and                    relatively low mortgage rates. These types of construction loans                    typically                    range from $3.0 million to $10.0 million. The Bank’s                    single-family residential tract construction loans outstanding                    amounted to                    $143.6 million and $129.9 million at September 30, 2005 and December                    31,                    2004, respectively, net of participations sold of $6.3 million                    and $1.7                    million, respectively. At September 30, 2005 and December 31,                    2004,                    unfunded commitments relating to single-family residential tract                    construction loans amounted to $175.0 million and $153.4 million,                    respectively.                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   ·                         | In                    2002, the                    Bank also began originating SBA loans and religious loans (which                    are                    comprised of loans to churches and private schools) throughout                    its market                    area. The Bank emphasizes these types of loans as they are a                    complement to                    the Bank’s focus on strengthening and supporting the local communities                    it                    serves. Religious loans amounted to $29.4 million and $23.8 million                    at September 30, 2005 and December 31, 2004, respectively. During                    July                    2005, the Company opened a new loan production office in Carlsbad,                    California, which will focus partially on SBA loans. SBA loans                    amounted to                    $14.0 million and $18.0 million at September 30, 2005                    and December                    31, 2004, respectively, net of participations sold of $38.1 million                    and                    $29.0 million, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|  ·                                    | In                    2003, the                    Bank established an income property lending division to service                    the                    growing markets for commercial real estate and multifamily/apartments                    in                    Southern California. The commercial real estate portfolio includes                    office                    buildings, retail outlets and industrial warehouses, the majority                    of which                    are located in the Inland Empire region, and Los Angeles and                    Orange                    counties. The Southern California office market has witnessed                    strong                    demand for space, as evidenced by decreased vacancy rates. Due                    to the                    steady rise in population and the strong demand for housing,                    the                    competitive advantage remains appealing to companies repositioning                    themselves to the Inland Empire. The Bank’s multifamily loan portfolio is                    centered in Los Angeles and Orange counties, as well as the Inland                    Empire                    region. Given the relatively high home prices in Southern California,                    the                    apartment market has experienced solid rental performance. Vacancy                    rates                    remain relatively low as renters are finding little product available                    for                    lease. Commercial real estate loans generated from this division                    typically                    range from $2.0 million to $10.0 million, while apartment loans                    typically                    range from $0.5 million to $5.0 million. At September 30, 2005                    and                    December 31, 2004, the outstanding balance of loans generated                    from this                    division amounted to $226.8 million and $91.6 million, respectively,                    for                    commercial real estate loans and $250.1 million and $177.9 million,                    respectively, for apartment loans. |

|  Page                18                of 40 |
|---------------------------------------------------|

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|   ·   | In                order to                expand the Bank’s core deposit franchise, the Community Banking Group of                the Bank has focused on offering competitive interest rate products,                offering promotional rates for new customers, and providing value-added                consumer services by introducing additional products and services.                Each of                the Bank’s eleven full-service banking centers has a business plan                catering specifically to the needs of consumers in that banking center                market. Based on the demographics of the target market, each banking                center tailors its offering of financial services and products for                its                customer base. Business deposits have been pursued by offering an                expanded                courier network, by introduction of cash management products and                by                specific targeting of small business customers. The Company’s core deposit                franchise has been built around the community banking system, which                resulted in deposit growth of 16.1% for the nine months ended September                30, 2005 and 54.3% for the same period ended in 2004. Consolidated                total                deposits amounted to $1.1 billion at September 30, 2005 and                $965.5                million at December 31, 2004. Non-interest bearing demand deposits                amounted to $160.3 million at September 30, 2005 and $127.5                million                at December 31, 2004. |
|--------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Loan      and      Deposit Growth. *

*Relationship      Banking Facilities.*

*Strategic      Expansion. *

|  Page                  19                  of 40 |
|-------------------------------------------------------|

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Table          of Contents 

*Asset      Growth.*

**Results      of      Operations**

|   |
|--------|

----

|   |
|--------|

----

Table          of Contents 

*Net        Interest        Income*

|  Page                  22                  of 40 |
|-------------------------------------------------------|

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Table          of Contents 

|  Page                  23 of                  40 |
|-------------------------------------------------------|

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Table          of Contents 

| (Dollars                in                Thousands)      |   | **Three                Months Ended September 30,** |      |
|-----------------------------------------------------------|--------|-----------------------------------------------------|-----------|
|                                                      |   | **2005**                                            |      | **2004** |   |
|                                                      |   | **Average**                                         |      |   |   | **Average** |   | **Average** |   |   |   | **Average** |   |
|                                                      |   | **Balance**                                         |      | **Interest** |   | **Yield/Cost** |   | **Balance** |   | **Interest** |   | **Yield/Cost** |   |
| Assets                                                    |   |                                                |      |   |   |   |   |   |   |   |   |   |   |
| Loans (1)                                            |   | $                                                   | 1,296,428 |   | $ | 26,674 |   |   | 8.2 | % | $ | 988,207 |   | $ | 17,931 |   |   | 7.2 | % |
| Investment                securities                (2)   |   |                                                | 287,298   |   |   | 2,908 |   |   | 4.0 | % |   | 215,576 |   |   | 2,220 |   |   | 4.1 | % |
| Other                investments                          |   |                                                | 19,961    |   |   | 224 |   |   | 4.5 | % |   | 12,579 |   |   | 162 |   |   | 5.1 | % |
| Total                interest-earning assets              |   |                                                | 1,603,687 |   |   | 29,806 |   |   | 7.4 | % |   | 1,216,362 |   |   | 20,313 |   |   | 6.6 | % |
| Other                assets                               |   |                                                | 69,649    |   |   |   |   |   |   |   |   | 49,709 |   |   |   |   |   |   |   |
| Less:                allowance for possible loan losses   |   |                                                | (14,156   | ) |   |   |   |   |   |   |   | (11,236 | ) |   |   |   |   |   |   |
| Total                average                assets        |   | $                                                   | 1,659,180 |   |   |   |   |   |   |   | $ | 1,254,835 |   |   |   |   |   |   |   |
|                                                      |   |                                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                and Stockholders' Equity       |   |                                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings                deposits (3)                       |   | $                                                   | 445,617   |   |   | 3,239 |   |   | 2.9 | % | $ | 428,922 |   |   | 2,288 |   |   | 2.1 | % |
| Time                deposits                              |   |                                                | 489,734   |   |   | 4,124 |   |   | 3.3 | % |   | 332,013 |   |   | 2,020 |   |   | 2.4 | % |
| Subordinated                debt                          |   |                                                | 5,000     |   |   | 86 |   |   | 6.7 | % |   | 5,000 |   |   | 62 |   |   | 4.9 | % |
| Junior                subordinated debentures             |   |                                                | 88,341    |   |   | 1,446 |   |   | 6.5 | % |   | 60,829 |   |   | 767 |   |   | 5.0 | % |
| Short                term                borrowings       |   |                                                | 371,129   |   |   | 3,275 |   |   | 3.5 | % |   | 236,806 |   |   | 1,024 |   |   | 1.7 | % |
| Total                interest-bearing liabilities         |   |                                                | 1,399,821 |   |   | 12,170 |   |   | 3.4 | % |   | 1,063,570 |   |   | 6,161 |   |   | 2.3 | % |
| Demand                deposits                            |   |                                                | 146,136   |   |   |   |   |   |   |   |   | 122,706 |   |   |   |   |   |   |   |
| Other                liabilities                          |   |                                                | 9,540     |   |   |   |   |   |   |   |   | 6,198 |   |   |   |   |   |   |   |
| Total                average                liabilities   |   |                                                | 1,555,497 |   |   |   |   |   |   |   |   | 1,192,474 |   |   |   |   |   |   |   |
| Preferred                stock equity                     |   |                                                | 9,668     |   |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   |
| Common                stock                equity         |   |                                                | 94,015    |   |   |   |   |   |   |   |   | 62,361 |   |   |   |   |   |   |   |
| Total                stockholders' equity                 |   |                                                | 103,683   |   |   |   |   |   |   |   |   | 62,361 |   |   |   |   |   |   |   |
| Total                liabilities and                      |   |                                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stockholders'                equity                       |   | $                                                   | 1,659,180 |   |   |   |   |   |   |   | $ | 1,254,835 |   |   |   |   |   |   |   |
|                                                      |   |                                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest                spread (4)     |   |                                                |      |   |   |   |   |   | 4.0 | % |   |   |   |   |   |   |   | 4.3 | % |
| Net                interest                income         |   |                                                |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |  |   |
| and                net                interest margin (5) |   |                                                |      |   | $ | 17,636 |   |   | 4.4 | % |   |   |   | $ | 14,152 |   |   | 4.6 | % |

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Table          of Contents 

| (Dollars                in                Thousands)      |   | **Nine                Months Ended September 30,** |      |
|-----------------------------------------------------------|--------|----------------------------------------------------|-----------|
|                                                      |   | **2005**                                           |      | **2004** |   |
|                                                      |   | **Average**                                        |      |   |   | **Average** |   | **Average** |   |   |   | **Average** |   |
|                                                      |   | **Balance**                                        |      | **Interest** |   | **Yield/Cost** |   | **Balance** |   | **Interest** |   | **Yield/Cost** |   |
| Assets                                                    |   |                                               |      |   |   |   |   |   |   |   |   |   |   |
| Loans (1)                                            |   | $                                                  | 1,165,736 |   | $ | 69,093 |   |   | 7.9 | % | $ | 866,501 |   | $ | 47,169 |   |   | 7.3 | % |
| Investment                securities                (2)   |   |                                               | 286,844   |   |   | 8,970 |   |   | 4.1 | % |   | 198,503 |   |   | 6,037 |   |   | 4.1 | % |
| Other                investments                          |   |                                               | 15,573    |   |   | 495 |   |   | 4.2 | % |   | 11,450 |   |   | 345 |   |   | 4.0 | % |
| Total                interest-earning assets              |   |                                               | 1,468,153 |   |   | 78,558 |   |   | 7.2 | % |   | 1,076,454 |   |   | 53,551 |   |   | 6.7 | % |
| Other                assets                               |   |                                               | 64,101    |   |   |   |   |   |   |   |   | 45,629 |   |   |   |   |   |   |   |
| Less:                allowance for possible loan losses   |   |                                               | (13,523   | ) |   |   |   |   |   |   |   | (9,803 | ) |   |   |   |   |   |   |
| Total                average                assets        |   | $                                                  | 1,518,731 |   |   |   |   |   |   |   | $ | 1,112,280 |   |   |   |   |   |   |   |
|                                                      |   |                                               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                and Stockholders' Equity       |   |                                               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings                deposits (3)                       |   | $                                                  | 442,808   |   |   | 8,720 |   |   | 2.6 | % | $ | 356,784 |   |   | 5,288 |   |   | 2.0 | % |
| Time                deposits                              |   |                                               | 459,896   |   |   | 10,425 |   |   | 3.0 | % |   | 309,861 |   |   | 5,596 |   |   | 2.4 | % |
| Subordinated                debt                          |   |                                               | 5,000     |   |   | 240 |   |   | 6.3 | % |   | 5,000 |   |   | 173 |   |   | 4.6 | % |
| Junior                subordinated debentures             |   |                                               | 79,768    |   |   | 3,668 |   |   | 6.1 | % |   | 51,437 |   |   | 1,805 |   |   | 4.7 | % |
| Short                term                borrowings       |   |                                               | 292,948   |   |   | 6,759 |   |   | 3.1 | % |   | 215,751 |   |   | 2,444 |   |   | 1.5 | % |
| Total                interest-bearing liabilities         |   |                                               | 1,280,420 |   |   | 29,812 |   |   | 3.1 | % |   | 938,833 |   |   | 15,306 |   |   | 2.2 | % |
| Demand                deposits                            |   |                                               | 134,832   |   |   |   |   |   |   |   |   | 111,522 |   |   |   |   |   |   |   |
| Other                liabilities                          |   |                                               | 8,857     |   |   |   |   |   |   |   |   | 6,720 |   |   |   |   |   |   |   |
| Total                average                liabilities   |   |                                               | 1,424,109 |   |   |   |   |   |   |   |   | 1,057,075 |   |   |   |   |   |   |   |
| Preferred                stock equity                     |   |                                               | 5,916     |   |   |   |   |   |   |   |   | 14,300 |   |   |   |   |   |   |   |
| Common                stock                equity         |   |                                               | 88,706    |   |   |   |   |   |   |   |   | 40,905 |   |   |   |   |   |   |   |
| Total                stockholders' equity                 |   |                                               | 94,622    |   |   |   |   |   |   |   |   | 55,205 |   |   |   |   |   |   |   |
| Total                liabilities and                      |   |                                               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stockholders'                equity                       |   | $                                                  | 1,518,731 |   |   |   |   |   |   |   | $ | 1,112,280 |   |   |   |   |   |   |   |
|                                                      |   |                                               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest                spread (4)     |   |                                               |      |   |   |   |   |   | 4.1 | % |   |   |   |   |   |   |   | 4.5 | % |
| Net                interest                income         |   |                                               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |  |   |
| and                net                interest margin (5) |   |                                               |      |   | $ | 48,746 |   |   | 4.4 | % |   |   |   | $ | 38,245 |   |   | 4.7 | % |

| (1) | Interest                on                loans includes loan fees, which totaled $2.9 million and $2.5 million                for                the three months ended September 30, 2005 and 2004, respectively,                and $8.0                million and $7.2 million for the nine months ended September 30,                2005 and                2004, respectively. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

| (3) | Includes                savings, NOW, and money market disposit                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      Possible Loan Losses*

|  Page 25                  of 40 |
|-------------------------------------------|

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Table          of Contents 

*Non-Interest      Income*

*Non-Interest      Expenses*

|  Page                  26 of                  40 |
|-------------------------------------------------------|

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Table          of Contents 

| (Dollars                in                Thousands)           |   | Three                Months                Ended September 30, |   | Nine                Months                Ended September 30, |   |
|----------------------------------------------------------------|--------|----------------------------------------------------------------|--------|---------------------------------------------------------------|--------|
|                                                           |   | 2005                                                           |   | 2004                                                          |   | 2005 |   | 2004 |   |
| Other                non-interest expense:                     |   |                                                           |   |                                                          |   |   |   |   |   |
| Data                processing                                 |   | $                                                              | 204    |                                                          | $      | 183 |   | $ | 610 |   | $ | 552 |   |
| Marketing                                                      |   |                                                           | 326    |                                                          |   | 173 |   |   | 751 |   |   | 701 |   |
| Professional                services                           |   |                                                           | 333    |                                                          |   | 311 |   |   | 977 |   |   | 966 |   |
| Office                supplies, postage and telephone          |   |                                                           | 431    |                                                          |   | 327 |   |   | 1,147 |   |   | 1,044 |   |
| Insurance                and                assessments        |   |                                                           | 171    |                                                          |   | 179 |   |   | 618 |   |   | 370 |   |
| Administrative                                                 |   |                                                           | 132    |                                                          |   | 118 |   |   | 391 |   |   | 379 |   |
| Business                development                            |   |                                                           | 450    |                                                          |   | 244 |   |   | 1,266 |   |   | 797 |   |
| Other                                                          |   |                                                           | 420    |                                                          |   | 285 |   |   | 1,046 |   |   | 780 |   |
| Total                other                non-interest expense |   | $                                                              | 2,467  |                                                          | $      | 1,820 |   | $ | 6,806 |   | $ | 5,589 |   |

**Financial      Condition**

*Assets*

*Investments*

| (Dollars                in                Thousands) |   |      |    | Gross      |   | Gross      |   |                      |   |
|------------------------------------------------------|--------|-----------|---------|------------|--------|------------|--------|---------------------------|--------|
|                                                 |   | Amortized |    | Unrealized |   | Unrealized |   |                      |   |
|                                                 |   | Cost      |    | Gains      |   | Losses     |   | Fair                Value |   |
| U.S.                agency                securities |   | $         | 11,564  |       | $      | -          |   | $                         | (147   | ) | $ | 11,417 |   |
| Mortgage-backed                securities            |   |      | 259,912 |       |   | -          |   |                      | (5,180 | ) |   | 254,732 |   |
| Mutual                funds                          |   |      | 2,100   |       |   | -          |   |                      | (20    | ) |   | 2,080 |   |
| Total                                                |   | $         | 273,576 |       | $      | -          |   | $                         | (5,347 | ) | $ | 268,229 |   |

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Table          of Contents 

| (Dollars                in                Thousands) |   |      |    | Gross      |   | Gross      |   |                      |   |
|------------------------------------------------------|--------|-----------|---------|------------|--------|------------|--------|---------------------------|--------|
|                                                 |   | Amortized |    | Unrealized |   | Unrealized |   |                      |   |
|                                                 |   | Cost      |    | Gains      |   | Losses     |   | Fair                Value |   |
| U.S.                agency                securities |   | $         | 11,033  |       | $      | -          |   | $                         | (532   | ) | $ | 10,501 |   |
| Mortgage-backed                securities            |   |      | 215,045 |       |   | 116        |   |                      | (4,228 | ) |   | 210,933 |   |
| Mutual                funds                          |   |      | 2,042   |       |   | 4          |   |                      | -      |   |   | 2,046 |   |
| Total                                                |   | $         | 228,120 |       | $      | 120        |   | $                         | (4,760 | ) | $ | 223,480 |   |

| (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 |   | $                                                 | -       |                                              | $      | -                         |   | $ | 11,417 |   | $ | (147 | ) | $ | 11,417 |   | $ | (147 | ) |
| Mortgage                backed securities            |   |                                              | 136,352 |                                              |   | (1,059                    | )      |   | 118,380 |   |   | (4,121 | ) |   | 254,732 |   |   | (5,180 | ) |
| Mutual                funds                          |   |                                              | 2,080   |                                              |   | (20                       | )      |   | - |   |   | - |   |   | 2,080 |   |   | (20 | ) |
| Total                                                |   | $                                                 | 138,432 |                                              | $      | (1,079                    | )      | $ | 129,797 |   | $ | (4,268 | ) | $ | 268,229 |   | $ | (5,347 | ) |

| (Dollars                in                Thousands) |   | Securities                Available-for-Sale      |   |
|------------------------------------------------------|--------|---------------------------------------------------|--------|
|                                                 |   | Maturing                5-10                years |   | Maturing                after 10 years |   |
|                                                 |   | Amortized                                         |   |   |   | Amortized |   |   |   |
|                                                 |   | Cost                                              |   | Fair                Value |   | Cost |   | Fair                Value |   |
| Mortgage-backed                securities            |   | $                                                 | 15,929 |   | $ | 15,831 |   | $ | 243,983 |   | $ | 238,901 |   |
| U.S.                agency                securities |   |                                              | -      |   |   | - |   |   | 11,564 |   |   | 11,417 |   |
| Total                                                |   | $                                                 | 15,929 |   | $ | 15,831 |   | $ | 255,547 |   | $ | 250,318 |   |

|  Page                28                of 40 |
|---------------------------------------------------|

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Table          of Contents 

*Loans      *

| (Dollars                in                Thousands)                 |   | As                of                             |      |
|----------------------------------------------------------------------|--------|--------------------------------------------------|-----------|
|                                                                 |   | September                30,                2005 |      | December                31,                2004 |   |
|                                                                 |   |                                             |      |   |   |
| Commercial                and industrial                             |   | $                                                | 42,660    |   | $ | 36,095 |   |
| Real                estate                construction:              |   |                                             |      |   |   |   |   |
| Singe-family                coastal                                  |   |                                             | 341,693   |   |   | 298,984 |   |
| Singe-family                tract                                    |   |                                             | 143,569   |   |   | 129,900 |   |
| Commercial                                                           |   |                                             | 54,117    |   |   | 36,215 |   |
| Real                estate                mortgage:                  |   |                                             |      |   |   |   |   |
| Commercial                                                           |   |                                             | 299,204   |   |   | 216,609 |   |
| Multi-family                residential                              |   |                                             | 260,451   |   |   | 189,912 |   |
| Land                                                                 |   |                                             | 86,662    |   |   | 61,979 |   |
| All                other                residential                  |   |                                             | 66,038    |   |   | 56,983 |   |
| Consumer                loans                                        |   |                                             | 11,500    |   |   | 2,905 |   |
| All                other                loans (including overdrafts) |   |                                             | 96        |   |   | 137 |   |
|                                                                 |   |                                             | 1,305,990 |   |   | 1,029,719 |   |
| Unearned                premium on loans                             |   |                                             | 386       |   |   | 541 |   |
| Deferred                loan                fees                     |   |                                             | (4,820    | ) |   | (3,223 | ) |
| Loans,                net of                unearned income          |   | $                                                | 1,301,556 |   | $ | 1,027,037 |   |

| (Dollars                in                Thousands) |   | Nine                months                ended  |   | Year                ended                       |   |
|------------------------------------------------------|--------|--------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                 |   | September                30,                2005 |   | December                31,                2004 |   |
| Servicing                rights capitalized          |   | $                                                | 239    |                                            | $      | 1,143 |   |
| Servicing                rights amortized            |   | $                                                | 537    |                                            | $      | 269 |   |
| Valuation                allowances                  |   | $                                                | -      |                                            | $      | - |   |

*Allowance      for      Possible Loan Losses*

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Table          of Contents 

| (Dollars                in                Thousands)                     |   | Nine                months                ended  |   | Year                ended                       |   |
|--------------------------------------------------------------------------|--------|--------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                                     |   | September                30,                2005 |   | December                31,                2004 |   |
| Balance,                beginning of year                                |   | $                                                | 13,001 |                                            | $      | 7,537 |   |
| Recoveries                on                loans previously charged off |   |                                             | 44     |                                            |   | 122 |   |
| Loans                charged                off                          |   |                                             | (145   | )                                               |   | (392 | ) |
| Provision                charged to operating expense                    |   |                                             | 1,350  |                                            |   | 5,734 |   |
| Balance,                end                of period                     |   | $                                                | 14,250 |                                            | $      | 13,001 |   |

*Nonperforming      Assets*

| (Dollars                in                Thousands)                 |   | As                of         |   |
|----------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                 |   | September                30, |   | December                31, |   |
|                                                                 |   | 2005                         |   | 2004 |   |
| **Accruing                Loans More than 90 Days Past Due**         |   |                         |   |   |   |
| Aggregate                loan amounts                                |   |                         |   |   |   |
| Commercial,                financial and agricultural                |   | $                            | -      |   | $ | - |   |
| Real                estate                                           |   |                         | -      |   |   | - |   |
| Installment                loans to individuals                      |   |                         | -      |   |   | - |   |
| Total                loans                past due more than 90 days |   | $                            | -      |   | $ | - |   |
|                                                                 |   |                         |   |   |   |   |   |
| **Renegotiated                loans**                           |   |                         | -      |   |   | - |   |
|                                                                 |   |                         |   |   |   |   |   |
| **Non-accrual                loans**                                 |   |                         |   |   |   |   |   |
| Aggregate                loan amounts                                |   |                         |   |   |   |   |   |
| Commercial,                financial and agricultural                |   | $                            | 350    |   | $ | - |   |
| Real                estate                                           |   |                         | 4,636  |   |   | - |   |
| Installment                loans to individuals                      |   |                         | -      |   |   | - |   |
| Total                non-accrual loans                               |   | $                            | 4,986  |   | $ | - |   |
|                                                                 |   |                         |   |   |   |   |   |
| Total                non-performing loans                            |   | $                            | 4,986  |   | $ | - |   |

| (Dollars                in                Thousands)                 |   | As                of         |   |
|----------------------------------------------------------------------|--------|------------------------------|--------|
|                                                                 |   | September                30, |   | December                31, |   |
|                                                                 |   | 2005                         |   | 2004 |   |
| Impaired                loans with a specific valuation allowance    |   | $                            | -      |   | $ | - |   |
| Impaired                loans without a specific valuation allowance |   |                         | 4,986  |   |   | - |   |
| Total                impaired loans                                  |   | $                            | 4,986  |   | $ | - |   |
|                                                                 |   |                         |   |   |   |   |   |
| Valuation                allowance related to impaired loans         |   | $                            | -      |   | $ | - |   |

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| (Dollars                in                Thousands)                            |   | Nine                months                ended  |   | Year                ended                       |   |
|---------------------------------------------------------------------------------|--------|--------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                                            |   | September                30,                2005 |   | December                31,                2004 |   |
| Average                recorded investment in impaired loans                    |   | $                                                | 3,336  |                                            | $      | 238 |   |
| Cash                receipts                applied to reduce principal balance |   | $                                                | 211    |                                            | $      | 671 |   |
| Interest                income recognized for cash payments                     |   | $                                                | 3      |                                            | $      | 21 |   |

*Deposits*

| (Dollars                in                Thousands)           |   |   |    |
|----------------------------------------------------------------|--------|--------|---------|
|                                                           |   |   |    |
| Three                months                or less             |   | $      | 69,110  |   |
| Over                three                through twelve months |   |   | 212,893 |   |
| Over                one                through five years      |   |   | 7,784   |   |
|                                                           |   | $      | 289,787 |   |

*Borrowings*

| (Dollars                in                Thousands) |   | Weighted |   |   |   |
|------------------------------------------------------|--------|----------|--------|--------|--------|
|                                                 |   | Average  |   |   |   |
| Maturity                                             |   | Rate     |   | Amount |   |
| 2005                                                 |   |     | 4.1    | %      | $      | 317,000 |   |
| 2006                                                 |   |     | 2.6    | %      |   | 15,000 |   |
|                                                 |   |     | 4.0    | %      | $      | 332,000 |   |

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| (Dollars                in                Thousands) |   |                         |                                                |                    |   |                                            |   | As                of                September 30, 2005 |   |
|------------------------------------------------------|--------|------------------------------|-----------------------------------------------------|-------------------------|--------|-------------------------------------------------|--------|--------------------------------------------------------|--------|
|                                                 |   |                         |                                                |                    |   | Minority                                        |   | Effective                                              |   |   |   |
|                                                 |   | Interest                Rate |                                                | Due                Date |   | Interest                                        |   | Interest                Rate                           |   | Balance |   |
| Vineyard                Statutory Trust I            |   |                         | 3-month                LIBOR                + 3.60% |                    |   | December                18,                2031 |   | $                                                      | 372    |   |   | 7.49 | % | $ | 12,372 |   |
| Vineyard                Statutory Trust II           |   |                         | 3-month                LIBOR                + 3.35% |                    |   | December                26,                2032 |   |                                                   | 155    |   |   | 6.95 | % |   | 5,155 |   |
| Vineyard                Statutory Trust III          |   |                         | 3-month                LIBOR                + 3.05% |                    |   | October                8,                2033   |   |                                                   | 310    |   |   | 6.65 | % |   | 10,310 |   |
| Vineyard                Statutory Trust IV           |   |                         | 3-month                LIBOR                + 2.85% |                    |   | January                23,                2034  |   |                                                   | 310    |   |   | 6.54 | % |   | 10,310 |   |
| Vineyard                Statutory Trust V            |   |                         | 3-month                LIBOR                + 2.85% |                    |   | April                23,                2034    |   |                                                   | 310    |   |   | 6.45 | % |   | 10,310 |   |
| Vineyard                Statutory Trust VI           |   |                         | 3-month                LIBOR                + 2.85% |                    |   | July                23,                2034     |   |                                                   | 372    |   |   | 6.50 | % |   | 12,372 |   |
| Vineyard                Statutory Trust VII          |   |                         | 3-month                LIBOR                + 2.00% |                    |   | December                16,                2034 |   |                                                   | 310    |   |   | 5.87 | % |   | 10,310 |   |
| Vineyard                Statutory Trust VIII         |   |                         | 3-month                LIBOR                + 2.25% |                    |   | May                23,                2035      |   |                                                   | 310    |   |   | 6.07 | % |   | 10,310 |   |
| Vineyard                Statutory Trust IX           |   |                         | 3-month                LIBOR                + 1.70% |                    |   | November                23,                2035 |   |                                                   | 464    |   |   | 5.51 | % |   | 15,464 |   |
|                                                 |   |                         |                                                |                    |   |                                            |   | $                                                      | 2,913  |   |   | 6.39 | % | $ | 96,913 |   |

*Stockholders’      Equity *

**Liquidity**

|  Page                32                of 40 |
|---------------------------------------------------|

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**Capital      Resources**

|  Page                  33                  of 40 |
|-------------------------------------------------------|

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| (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, 2005**            |   |                             |    |                             |   |                             |   |   |   |   |   |   |   |
| Total                capital                to risk-weighted assets:  |   |                             |    |                             |   |                             |   |   |   |   |   |   |   |
| Bank                                                                  |   | $                                | 205,076 |                             |   | 13.3                             | %      | $ | 123,200 |   |   | 8.0 | % | $ | 154,000 |   |   | 10.0 | % |
| Consolidated                                                          |   | $                                | 222,076 |                             |   | 14.4                             | %      | $ | 123,600 |   |   | 8.0 | % |   | N/A |   |   | N/A |   |
|                                                                  |   |                             |    |                             |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1                capital to risk-weighted assets: |   |                             |    |                             |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bank                                                                  |   | $                                | 190,826 |                             |   | 12.4                             | %      | $ | 61,600 |   |   | 4.0 | % | $ | 92,400 |   |   | 6.0 | % |
| Consolidated                                                          |   | $                                | 145,101 |                             |   | 9.4                              | %      | $ | 61,800 |   |   | 4.0 | % |   | N/A |   |   | N/A |   |
|                                                                  |   |                             |    |                             |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1                capital to average assets:       |   |                             |    |                             |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bank                                                                  |   | $                                | 190,826 |                             |   | 11.6                             | %      | $ | 66,100 |   |   | 4.0 | % | $ | 82,600 |   |   | 5.0 | % |
| Consolidated                                                          |   | $                                | 145,101 |                             |   | 8.7                              | %      | $ | 66,400 |   |   | 4.0 | % |   | N/A |   |   | N/A |   |
|                                                                  |   |                             |    |                             |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **As                of                December 31, 2004**             |   |                             |    |                             |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                capital                to risk-weighted assets:  |   |                             |    |                             |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bank                                                                  |   | $                                | 160,509 |                             |   | 13.5                             | %      | $ | 95,200 |   |   | 8.0 | % | $ | 118,900 |   |   | 10.0 | % |
| Consolidated                                                          |   | $                                | 174,212 |                             |   | 14.6                             | %      | $ | 95,500 |   |   | 8.0 | % |   | N/A |   |   | N/A |   |
|                                                                  |   |                             |    |                             |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1                capital to risk-weighted assets: |   |                             |    |                             |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bank                                                                  |   | $                                | 147,508 |                             |   | 12.4                             | %      | $ | 47,600 |   |   | 4.0 | % | $ | 71,400 |   |   | 6.0 | % |
| Consolidated                                                          |   | $                                | 116,280 |                             |   | 9.7                              | %      | $ | 47,700 |   |   | 4.0 | % |   | N/A |   |   | N/A |   |
|                                                                  |   |                             |    |                             |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1                capital to average assets:       |   |                             |    |                             |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Bank                                                                  |   | $                                | 147,508 |                             |   | 11.3                             | %      | $ | 52,100 |   |   | 4.0 | % | $ | 65,100 |   |   | 5.0 | % |
| Consolidated                                                          |   | $                                | 116,280 |                             |   | 8.9                              | %      | $ | 52,300 |   |   | 4.0 | % |   | N/A |   |   | N/A |   |

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

**The      Company’s business is subject to general economic risks that could adversely      impact its operating results and financial condition.**

*Changes      in      economic conditions, particularly an economic slowdown in California, could      hurt      the Company’s business. *

|   | · | loan                delinquencies may increase; |
|--------|--------|-------------------------------------------------|

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

|   | · | demand                for                the Company’s products and services may decline;                and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

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|  | · | collateral                for loans made by the Company, especially real estate, may decline                in                value, in turn reducing a                client’s                borrowing power, and reducing the value of assets and collateral                associated with its loans held for investment. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*A      downturn in      the California real estate market could hurt the Company’s      business.*

*The      Company may      suffer losses in its loan portfolio despite its underwriting      practices*

**The      Company’s business is subject to interest rate risk and variations in interest      rates may negatively affect its financial performance.**

|   | · | inflation; |
|--------|--------|------------|

|   | · | slow                or                stagnant economic growth or                recession; |
|--------|--------|---------------------------------------------------------------------------------------------|

|   | · | unemployment; |
|--------|--------|---------------|

|   | · | money                supply                and the monetary policies of the                FRB; |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | international                disorders; and |
|--------|--------|---------------------------------------------|

|   | · | instability                in domestic and foreign financial                markets. |
|--------|--------|--------------------------------------------------------------------------------------|

**Interest      Rates and Differentials**

|  Page                35                of 40 |
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**Asset/Liability      Management**

| (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                                                  |   | $                                           | (20,879 | )                                    |   | -12.1 | % | $ | 1,215 |   |   | 1.8 | % |
| 100                                                  |   | $                                           | (10,327 | )                                    |   | -6.0 | % | $ | 541 |   |   | 0.8 | % |
| -100                                                 |   | $                                           | 8,250   |                                 |   | 4.8 | % | $ | 4,282 |   |   | 6.2 | % |
| -200                                                 |   | $                                           | 12,534  |                                 |   | 7.3 | % | $ | 10,960 |   |   | 15.9 | % |

|  Page                  36 of                  40 |
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**ITEM      4. CONTROLS AND PROCEDURES**

**PART      II --      OTHER INFORMATION**

**ITEM      1. LEGAL PROCEEDINGS**

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

**Unregistered      Sale of Equity Securities**

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Table          of Contents 

**Purchases      of Equity Securities**

| **Period**                                           |   | **Total                Number of Shares Purchased** |   | **Average                Price Paid Per Share** |   | **Total                Number of Shares Purchased as Part of Publicly Announced Plans or                Programs****(1)** |   | **Approximate                Dollar Value of Shares that May Yet Be Purchased Under the Plans                or                Programs** |   |
|------------------------------------------------------|--------|-----------------------------------------------------|--------|-------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                 |   |                                                |   |                                            |   |                                                                                                                      |   |                                                                                                                                      |   |
| July                1 - 31,                2005      |   |                                                | -      |                                            | $      | -                                                                                                                         |   |                                                                                                                                      | -      |   | $ | 3,908,735 |   |
| August                1 -                31, 2005    |   |                                                | 7,333  |                                            |   | 32.78                                                                                                                     |   |                                                                                                                                      | 7,333  |   | $ | 3,668,345 |   |
| September                1 -                30, 2005 |   |                                                | 12,000 |                                            |   | 29.97                                                                                                                     |   |                                                                                                                                      | 12,000 |   | $ | 3,308,737 |   |
| Total                                                |   |                                                | 19,333 |                                            | $      | 31.03                                                                                                                     |   |                                                                                                                                      | 19,333 |   |   |   |   |

|   | (1) | In                July 2002,                the Company adopted a stock repurchase program in the initial amount                of                $2.0 million. In December 2003, February 2005 and May 2005, the Company                approved increases in its stock repurchase program of $5.0 million                for a                total amount of $17.0 million. In October 2005, the Company announced                an                additional increase of $20.0 million in its stock repurchase program.                Under its stock repurchase program, the Company has been acquiring                its                common stock shares in the open market and holds the repurchased                shares as                authorized but unissued shares. The Company’s 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                        |        | Articles                of                Incorporation of Vineyard National Bancorp, as amended (1) |
| 3.2                        |        | Bylaws                of                Vineyard National Bancorp                (2) |
| 4                          |        | Specimen                Common Stock Certificate of Vineyard National Bancorp (3) |
| 4.1                        |        | Form                of                Warrant to Purchase Shares of Common Stock (4) |
| 4.2                        |        | 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. |
| 4.3                        |        | Registration                Rights Agreement (5) |
| 4.4                        |        | Registration                Rights Agreement (9) |
| 10.1                       |        | Vineyard                National Bancorp Nonqualified Deferred Compensation Plan (1)* |
| 10.2                       |        | Vineyard                National Bancorp Directors’ Deferred Compensation Plan (1)* |
| 10.3                       |        | Vineyard                National Bancorp 1997 Incentive Stock Option Plan                (1)* |
| 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)* |

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| 10.11 |   | Form                  of 2005                  Restricted Share Award Agreement*                                                                                                                   |
|-------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.12 |   | Employment                  Agreement between Vineyard National Bancorp, Vineyard Bank and                  Norman A.                  Morales (6)*                                           |
| 10.13 |   | Securities                  Purchase Agreement (5)                                                                                                                                            |
| 10.14 |   | Securities                  Purchase Agreement (11)                                                                                                                                                |
| 11    |   | Statement                  regarding computation of per share earnings. See Note 8 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 the Registrant’s Annual Report on Form 10-K for the year                ended December 31, 2002 filed with the Commission on March 28,                2003.                |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                           |
|   | (2)    | Incorporated                by reference from the Registrant’s Registration Statement on Form S-8                (File No. 333-18217) filed with the Commission on December 19,                1996.                     |
|   |   |                                                                                                                                                                                                                           |
|   | (3)    | Incorporated                by reference from the Registrant’s Annual Report on Form 10-K for the year                ended December 31, 1988 filed with the Commission.                                                 |
|   |   |                                                                                                                                                                                                                           |
|   | (4)    | Incorporated                by reference from the Registrant’s Proxy Statement for a special meeting                held on December 18, 2002 filed with the Commission on November 25,                2002.             |
|   |   |                                                                                                                                                                                                                           |
|   | (5)    | Incorporated                by reference from the Registrant’s Form 8-K filed with the Commission on                June 21, 2004.                                                                                       |
|   |   |                                                                                                                                                                                                                           |
|   | (6)    | Incorporated                by reference from the Registrant’s Annual Report on Form 10-K for the year                ended December 31, 2000 filed with the Commission on March 30,                2001.                |
|   |   |                                                                                                                                                                                                                           |
|   | (7)    | Incorporated                by reference from the Registrant’s Annual Report on Form 10-K for the year                ended December 31, 2004 filed with the Commission on March 10,                2005.                |
|   |   |                                                                                                                                                                                                                           |
|   | (8)    | Incorporated                by reference from the Registrant’s Proxy Statement for an annual meeting                held on May 22, 2003 filed with the Commission on April 14,                2003.                     |
|   |   |                                                                                                                                                                                                                           |
|   | (9)    | Incorporated                by reference from the Registrant's Form 8-K filed with the SEC on                December                10, 2004.                                                                                 |
|   |   |                                                                                                                                                                                                                           |
|   | (10)   | Incorporated                by reference from the Registrant’s Quarterly Report on Form 10-Q for the                three months ended September 30, 2004 filed with the Commission on                November 10, 2004. |
|   |   |                                                                                                                                                                                                                           |
|   | (11)   | Incorporated                by reference from the Registrant’s Form 8-K filed with the Commission on                April 19, 2005.                                                                                      |
|   |   |                                                                                                                                                                                                                           |
|   | (12)   | Incorporated                by reference from the Registrant’s Proxy Statement for an annual meeting                held on May 25, 2005 filed with the Commission on April 18,                2005.                     |
|   |   |                                                                                                                                                                                                                           |
|   | *      | Management                contract or compensatory plan or                arrangement.                                                                                                                                         |

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**SIGNATURES**

|         |                                                                |                                        |
|--------------|---------------------------------------------------------------------|---------------------------------------------|
|         | **VINEYARD                NATIONAL BANCORP**                        |
|    |                                                           |                                   |
|         | By:                                                       | */s/ Norman                A. Morales* |
|         | Norman                A.                Morales                     |
|         | President                and                Chief Executive Officer |

|         |                                                                  |                                  |
|--------------|-----------------------------------------------------------------------|---------------------------------------|
|         |                                                                  |
|    |                                                             |                             |
|         | By:                                                         | */s/ Gordon                Fong* |
|         | Gordon                Fong                                            |
|         | Executive                  Vice President and Chief Financial Officer |
|         | (Principal                  Financial Officer)                   |

|  Page                40                of 40 |
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