UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2005

OR

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from ___to ___

Commission File Number 0-26960

ITLA CAPITAL CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware		95-4596322
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification No.)
888 Prospect St., Suite 110, La Jolla, California		92037
(Address of Principal Executive Offices)		(Zip Code)

(858) 551-0511

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o.

Indicate by check mark whether the Registrant is an accelerated filer
(as defined in Rule 12b-2 of the Exchange Act). Yes þ No o.

Number of shares of common stock of the registrant: 5,784,081 outstanding as of August 4, 2005.

 

 

FORM 10-Q
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2005

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
Item 1.		Financial Statements		3
		Consolidated Balance Sheets – June 30, 2005 (Unaudited) and December 31, 2004		3
		Consolidated Statements of Income – Three and Six Months Ended June 30, 2005 and 2004 (Unaudited)		4
		Consolidated Statements of Cash Flows – Six Months Ended June 30, 2005 and 2004 (Unaudited)		5
		Notes to the Unaudited Consolidated Financial Statements		6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3.		Quantitative and Qualitative Disclosures about Market Risk		26
Item 4.		Controls and Procedures		27
PART II – OTHER INFORMATION
Item 1.		Legal Proceedings		28
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		28
Item 3.		Defaults Upon Senior Securities		28
Item 4.		Submission of Matters to a Vote of Security Holders		28
Item 5.		Other Information		28
Item 6.		Exhibits		28
		Signatures		29
		Certifications		31
Exhibit 31.1
Exhibit 31.2
Exhibit 32

Forward Looking Statements

          “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This Form 10-Q contains forward-looking statements that are subject to risks and uncertainties, including, but not limited to, changes in economic conditions in our market areas, changes in policies by regulatory agencies, the impact of competitive loan products, loan demand risks, the quality or composition of our loan or investment portfolios, increased costs from pursuing the national expansion of our lending platform and operational challenges inherent in implementing this expansion strategy, fluctuations in interest rates and changes in the relative differences between short and long-term interest rates, levels of nonperforming assets and operating results, the economic impact of terrorist actions on our loan originations and loan repayments, and other risks detailed from time to time in our filings with the Securities and Exchange Commission. We caution readers not to place undue reliance on forward-looking statements. We do not undertake and specifically disclaim any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. These risks could cause our actual results for 2005 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us.

     As used throughout this report, the terms “we”, “our”, “us” or the “Company” refer to ITLA Capital Corporation and its consolidated subsidiaries.

PART I — FINANCIAL INFORMATION

ITLA CAPITAL CORPORATION AND SUBSIDIARIES

		June 30,
		2005				December 31,
		(unaudited)				2004
		(in thousands, except share data)
Assets
Cash and cash equivalents		$	33,121			$	87,580
Investment securities available for sale, at fair value			87,097				66,845
Investment securities held-to-maturity, at amortized cost			269,724				296,028
Stock in Federal Home Loan Bank			33,975				23,200
Loans, net (net of allowance for loan losses of $37,402 and $35,483 as of June 30, 2005 and December 31, 2004, respectively)			2,360,437				1,793,815
Interest receivable			13,962				10,695
Other real estate owned, net			—				—
Premises and equipment, net			6,898				6,645
Deferred income taxes			10,600				10,468
Goodwill			3,118				3,118
Other assets			20,916				19,677
Total assets		$	2,839,848			$	2,318,071
Liabilities and Shareholders’ Equity
Liabilities:
Deposit accounts		$	1,716,809			$	1,432,032
Federal Home Loan Bank advances and other borrowings			814,678				584,224
Accounts payable and other liabilities			23,545				20,491
Junior subordinated debentures			86,600				86,600
Total liabilities			2,641,632				2,123,347
Commitments and contingencies
Shareholders’ equity:
Preferred stock, 5,000,000 shares authorized, none issued			—				—
Contributed capital — common stock, $.01 par value; 20,000,000 shares authorized, 8,905,143 and 8,703,894 issued as of June 30, 2005 and December 31, 2004, respectively			75,492				69,327
Retained earnings			207,522				196,032
Accumulated other comprehensive (loss) income, net			(131	)			78
			282,883				265,437
Less treasury stock, at cost 3,420,988 and 3,154,290 shares as of June 30, 2005 and December 31, 2004, respectively			(84,667	)			(70,713	)
Total shareholders’ equity			198,216				194,724
Total liabilities and shareholders’ equity		$	2,839,848			$	2,318,071

See accompanying notes to the unaudited consolidated financial statements.

ITLA CAPITAL CORPORATION AND SUBSIDIARIES

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2005				2004				2005				2004
		(in thousands, except per share data)
Interest income:
Loans, including fees		$	37,210			$	27,220			$	69,121			$	56,860
Cash and investment securities			4,470				968				9,311				3,411
Total interest income			41,680				28,188				78,432				60,271
Interest expense:
Deposit accounts			11,897				6,485				21,395				12,999
Federal Home Loan Bank advances and other borrowings			5,900				833				9,732				1,976
Junior subordinated debentures			1,754				1,501				3,434				2,990
Total interest expense			19,551				8,819				34,561				17,965
Net interest income before provision for loan losses			22,129				19,369				43,871				42,306
Provision for loan losses			1,500				950				2,250				2,350
Net interest income after provision for loan losses			20,629				18,419				41,621				39,956
Non-interest income:
Premium on sale of loans, net			—				260				—				9,284
Late and collection fees			130				84				203				185
Other			379				701				286				4,970
Total non-interest income			509				1,045				489				14,439
Non-interest expense:
Compensation and benefits			5,376				5,446				11,267				11,602
Occupancy and equipment			1,750				1,522				3,401				2,850
Other			3,943				3,520				7,631				7,388
Total general and administrative			11,069				10,488				22,299				21,840
Real estate owned expense, net			—				(15	)			—				81
Provision for losses on other real estate owned			—				—				—				1,000
Gain on sale of other real estate owned, net			—				(315	)			(11	)			(354	)
Total real estate owned expense, net			—				(330	)			(11	)			727
Total non-interest expense			11,069				10,158				22,288				22,567
Income before provision for income taxes			10,069				9,306				19,822				31,828
Provision for income taxes			4,230				3,676				8,332				12,414
NET INCOME		$	5,839			$	5,630			$	11,490			$	19,414
BASIC EARNINGS PER SHARE		$	1.01			$	0.91			$	1.99			$	3.12
DILUTED EARNINGS PER SHARE		$	0.98			$	0.86			$	1.90			$	2.93

See accompanying notes to the unaudited consolidated financial statements.

ITLA CAPITAL CORPORATION AND SUBSIDIARIES

		For the Six Months Ended
		June 30,
		2005				2004
		(in thousands)
Cash Flows From Operating Activities:
Net Income		$	11,490			$	19,414
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of premises and equipment			1,232				985
Amortization of premium on purchased loans			1,078				1,101
Accretion of deferred loan origination fees, net of costs			(1,391	)			(1,143	)
Provision for loan losses			2,250				2,350
Premium on sale of RAL loans, net			—				(9,284	)
Other, net			(418	)			241
(Increase) decrease in interest receivable			(3,267	)			647
Decrease in other assets			1,848				3,352
Increase in accounts payable and other liabilities			3,054				17,541
Net cash provided by operating activities			15,876				35,204
Cash Flows From Investing Activities:
Purchases of investment securities available for sale			(22,876	)			(13,985	)
Proceeds from maturity and calls of investment securities available for sale			2,219				10,639
Proceeds from repayments of investment securities held-to-maturity			26,273				—
(Purchase) sale of stock in Federal Home Loan Bank			(10,221	)			295
Purchase of loans			(493,171	)			—
Origination of RAL loans			—				(12,949,433	)
Proceeds from participation in RAL loans			—				12,956,989
Increase in loans, net			(75,458	)			(57,025	)
Proceeds from sale of other real estate owned			81				7,314
Cash paid for capital expenditures			(1,485	)			(1,483	)
Net cash used in investing activities			(574,638	)			(46,689	)
Cash Flows From Financing Activities:
Proceeds from exercise of employee stock options			3,026				1,456
Cash paid to acquire treasury stock			(13,954	)			(5,590	)
Principal payments on collateralized mortgage obligations			—				(15,870	)
Net increase in deposit accounts			284,777				28,078
Net (decrease) increase in short-term borrowings			(166,000	)			66,000
Proceeds from long-term borrowings			397,554				10,000
Repayments of long-term borrowings			(1,100	)			(55,600	)
Net cash provided by financing activities			504,303				28,474
Net (decrease) increase in cash and cash equivalents			(54,459	)			16,989
Cash and cash equivalents at beginning of period			87,580				178,318
Cash and cash equivalents at end of period		$	33,121			$	195,307
Supplemental Cash Flow Information:
Cash paid during the period for interest		$	33,756			$	17,857
Cash paid during the period for income taxes		$	8,429			$	4,600
Non-Cash Investing Transactions:
Loans transferred to other real estate owned		$	70			$	1,897

See accompanying notes to the unaudited consolidated financial statements.

ITLA CAPITAL CORPORATION AND SUBSIDIARIES

NOTE 1 — BASIS OF PRESENTATION

          The unaudited consolidated financial statements of ITLA Capital Corporation (the “Company”) included herein reflect all normal recurring adjustments which are, in the opinion of management, necessary to present fairly the results of operations and financial position of the Company, as of the dates and for the interim periods indicated. The unaudited consolidated financial statements include the accounts of ITLA Capital Corporation and its wholly-owned subsidiaries, Imperial Capital Bank (the “Bank”) and Imperial Capital Real Estate Investment Trust (“Imperial Capital REIT”).

          All intercompany transactions and balances have been eliminated. Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Certain amounts in prior periods have been reclassified to conform to the presentation in the current period. The results of operations for the three and six months ended June 30, 2005 are not necessarily indicative of the results of operations for the remainder of the year.

          These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our annual report on Form 10-K for the year ended December 31, 2004.

NOTE 2 — ACCOUNTING FOR STOCK-BASED COMPENSATION

          The Company’s stock-based compensation plan is accounted for in accordance with Accounting Principles Board (“APB”) Opinion No. 25 — “Accounting for Stock Issued to Employees.” Under APB Opinion No. 25, no compensation expense is recognized for a stock option grant if the exercise price of the stock option at measurement date is equal to or greater than the fair market value of the common stock on the date of grant. The Company applies Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation”, for disclosure purposes only. SFAS No. 123 disclosures include pro forma net income and earnings per share as if the fair value-based method of accounting had been used. If compensation had been determined based on SFAS No. 123, the Company’s pro forma net income and pro forma per share data would be as follows:

		For the Three Months								For the Six Months
		Ended June 30,								Ended June 30,
		2005				2004				2005				2004
		(in thousands, except per share data)
Net income, as reported		$	5,839			$	5,630			$	11,490			$	19,414
Less: Stock-based employee compensation expense determined under the fair value method, net of tax			396				337				461				674
Pro forma net income		$	5,443			$	5,293			$	11,029			$	18,740
Earnings per share:
Basic — as reported		$	1.01			$	0.91			$	1.99			$	3.12
Basic — pro forma		$	0.95			$	0.85			$	1.91			$	3.01
Diluted — as reported		$	0.98			$	0.86			$	1.90			$	2.93
Diluted — pro forma		$	0.91			$	0.80			$	1.83			$	2.83

          The fair value of each option grant was estimated on the date of grant using a black-scholes option pricing model with the following weighted-average assumptions for option grants:

		Weighted-Average Assumptions for
		Option Grants
		2005				2004
Dividend Yield			0.00	%			0.00	%
Expected Volatility			36.06	%			38.04	%
Risk-Free Interest Rates			3.89	%			4.28	%
Expected Lives		Seven Years				Seven Years

NOTE 3 — EARNINGS PER SHARE

          Basic Earnings Per Share (“Basic EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding for the period. Diluted Earnings Per Share (“Diluted EPS”) reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock which shared in the Company’s earnings.

          The following is a reconciliation of the calculation of Basic EPS and Diluted EPS:

						Weighted-				Per
						Average Shares				Share
		Net Income				Outstanding				Amount
		(in thousands, except per share data)
For the Three Months Ended June 30, 2005
Basic EPS		$	5,839				5,755			$	1.01
Effect of dilutive stock options			—				212				(0.03	)
Diluted EPS		$	5,839				5,967			$	0.98
2004
Basic EPS		$	5,630				6,207			$	0.91
Effect of dilutive stock options			—				372				(0.05	)
Diluted EPS		$	5,630				6,579			$	0.86
For the Six Months Ended June 30, 2005
Basic EPS		$	11,490				5,780			$	1.99
Effect of dilutive stock options			—				256				(0.09	)
Diluted EPS		$	11,490				6,036			$	1.90
2004
Basic EPS		$	19,414				6,224			$	3.12
Effect of dilutive stock options			—				402				(0.19	)
Diluted EPS		$	19,414				6,626			$	2.93

NOTE 4 — COMPREHENSIVE INCOME

          Comprehensive income, which encompasses net income and the net change in unrealized gains (losses) on investment securities available for sale, is presented below:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2005				2004				2005				2004
		(in thousands)
Net Income		$	5,839			$	5,630			$	11,490			$	19,414
Other comprehensive income (loss):
Change in unrealized gains (losses) on investment securities available for sale, net of tax (expense) benefit of $(107) and $239 for the three months ended June 30, 2005 and 2004, and net of tax benefit of $137 and $161 for the six months ended June 30, 2005 and 2004, respectively			162				(359	)			(209	)			(242	)
Comprehensive Income		$	6,001			$	5,271			$	11,281			$	19,172

NOTE 5 — IMPAIRED LOANS RECEIVABLE

          As of June 30, 2005 and December 31, 2004, the recorded investment in impaired loans was $24.3 million and $18.6 million, respectively. The average recorded investment in impaired loans was $25.1 million and $21.7 million, respectively, for the three and six months ended June 30, 2005 and $18.8 million and $17.2 million, respectively, for the same periods last year. Interest income recognized on impaired loans totaled $219,000 and $313,000 for the three and six months ended June 30, 2005 as compared to $140,000 and $237,000 for the same periods last year.

NOTE 6 — RESIDUAL INTEREST IN SECURITIZATION

          During 2002, the Company formed a limited liability company to issue $86.3 million of asset-backed notes in a securitization of substantially all of the Company’s residential loan portfolio . The Company recorded a residual asset in connection with the securitization, which represented the present value of future cash flows (spread and fees) that were estimated to be received over the life of the loans. The residual interest is recorded on the consolidated balance sheet in “Investment securities available for sale, at fair value”. The value of the residual interest is subject to substantial credit, prepayment, and interest rate risk on the sold residential loans. Fair value is estimated on a monthly basis based on a discounted cash flow analysis. These cash flows are estimated over the lives of the receivables using prepayment, default, and interest rate assumptions that management believes market participants would use for similar financial instruments.

          At June 30, 2005 and December 31, 2004, key economic assumptions and the sensitivity of the current fair value of the residual interest based on projected cash flows to immediate adverse changes in those assumptions are as follows:

		June 30,				December 31,
		2005				2004
Dollars in thousands
Fair value of retained interest		$	5,000			$	5,368
Weighted average life (in years) — securities			0.56				0.68
Weighted average life (in years) — residual interest			2.87				3.61
Weighted average annual prepayment speed			40.0	%			26.5	%
Impact of 10% adverse change		$	(183	)		$	(236	)
Impact of 25% adverse change		$	(269	)		$	(630	)
Weighted average annual discount rate			13.0	%			15.0	%
Impact of 10% adverse change		$	(149	)		$	(243	)
Impact of 25% adverse change		$	(367	)		$	(630	)
Weighted average lifetime credit losses			15.6	%			25.0	%
Impact of 10% adverse change		$	(122	)		$	(262	)
Impact of 25% adverse change		$	(302	)		$	(700	)

          These sensitivities are hypothetical and should be used with caution. As the figures indicate, changes in the fair value of the residual interest are based on a variation in assumptions and generally cannot be extrapolated because the relationship of the change in assumption to the

change in fair value may not be linear. Also, in the above table, the effect of a variation in a particular assumption on the fair value of the residual interest is calculated without changing any other assumption; in reality, changes in one factor may result in changes in another (for example, increases in market interest rates may result in lower prepayments but increased credit losses), which might magnify or counteract the sensitivities, and depending on the severity of such changes, the results of operations may be materially affected.

NOTE 7 — NEW ACCOUNTING PRONOUNCEMENTS

          On December 16, 2004, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 123 (revised 2004), “Share-Based Payment”, which is a revision of SFAS No. 123. SFAS No. 123(R) supersedes APB No. 25, and amends SFAS No. 95, “Statement of Cash Flows”. Generally, the approach to accounting for share-based payments in SFAS No. 123(R) is similar to the approach described in SFAS No. 123. However, SFAS No. 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values (i.e., pro forma disclosure is no longer an alternative to financial statement recognition). SFAS No. 123(R) was to be effective for public companies at the beginning of the first interim or annual period beginning after June 15, 2005; however, the required implementation date for the Company was delayed until January 1, 2006. The Company plans to adopt SFAS No. 123(R) using a modified version of prospective application (“modified prospective application”). Under modified prospective application, as it is applicable to the Company, SFAS No. 123(R) applies to new awards and to awards modified, repurchased, or cancelled after January 1, 2006. Additionally, compensation cost for the portion of awards for which the requisite service has not been rendered (generally referring to non-vested awards) that are outstanding as of January 1, 2006 must be recognized as the remaining requisite service is rendered during the period of and/or the periods after the adoption of SFAS No. 123(R). The attribution of compensation cost for those earlier awards will be based on the same method and on the same grant-date fair values previously determined for the pro forma disclosures required for companies that did not adopt the fair value accounting method for stock-based employee compensation. Management is currently evaluating the effect of the adoption of SFAS No. 123(R) and cannot currently quantify the impact on the Company’s results of operations or financial position. Future levels of compensation cost recognized related to stock-based compensation awards will be impacted by new awards and/or modifications, repurchases and cancellations of existing awards before and after the adoption of this standard.

          In May 2005, the FASB issued SFAS No. 154, “Accounting Changes and Error Corrections”, which is a replacement of APB Opinion No. 20, “Accounting Changes”, and SFAS No. 3, ‘Reporting Accounting Changes in Interim Financial Statements”. SFAS No. 154 applies to all voluntary changes in accounting principle, and changes the requirements for accounting for and reporting of a change in accounting principle. SFAS No. 154 requires retrospective application to prior periods’ financial statements of a voluntary change in accounting principle unless it is impracticable. APB Opinion No. 20 previously required that most voluntary changes in accounting principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle. SFAS No. 154 will be effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. Management does not expect the adoption of SFAS No. 154

on January 1, 2006 to have a material impact on the Company’s consolidated results of operations or financial position.

NOTE 8 — BUSINESS SEGMENT INFORMATION

          SFAS No. 131, “Disclosures About Segments of an Enterprise and Related Information”, requires disclosure of segment information in a manner consistent with the “management approach”. The management approach is based on the way the chief operating decision-maker organizes segments within a company for making operating decisions and assessing performance.

          The main factors used to identify operating segments were the specific product and business lines of the various operating segments of the Company. Operating segments are organized separately by product and service offered. We have identified one operating segment that meets the criteria of being a reportable segment in accordance with the provisions of SFAS No. 131. This reportable segment is the origination and purchase of loans, which by its legal form, is identified as operations of the Bank and Imperial Capital REIT. This segment derives the majority of its revenue by originating and purchasing loans. Other operating segments of the Company that did not meet the criteria of being a reportable segment in accordance with SFAS No. 131 have been aggregated and reported as “All Other”. Substantially all of the transactions from the Company’s operating segments occur in the United States.

          Transactions between the reportable segment of the Company and its other operating segments are made at terms which approximate arm’s-length transactions and in accordance with GAAP. There is no significant difference between the measurement of the reportable segments profits and losses disclosed below and the measurement of profits and losses in our consolidated statements of income. Accounting allocations are made in the same manner for all operating segments.

		Lending
		Operations				All Other				Eliminations				Consolidated
		(in thousands)
For the three months ended June 30, 2005
Revenues from external customers		$	41,707			$	482			$	—			$	42,189
Total interest income			41,279				401				—				41,680
Total interest expense			17,797				1,754				—				19,551
Net income			7,177				(1,338	)			—				5,839
2004
Revenues from external customers		$	29,155			$	327			$	—			$	29,482
Total interest income			28,185				327				(324	)			28,188
Total interest expense			7,641				1,502				(324	)			8,819
Net income			7,008				(1,378	)			—				5,630
For the six months ended June 30, 2005
Revenues from external customers		$	77,874			$	1,047			$	—			$	78,921
Total interest income			77,020				1,412				—				78,432
Total interest expense			31,127				3,434				—				34,561
Net income			14,008				(2,518	)			—				11,490
2004
Revenues from external customers		$	74,566			$	641			$	—			$	75,207
Total interest income			60,151				641				(521	)			60,271
Total interest expense			15,322				3,164				(521	)			17,965
Net income			22,670				(3,256	)			—				19,414

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

          The following discussion and analysis is intended to identify the major factors that affected our financial condition and results of operations for the three and six months ended June 30, 2005.

Application of Critical Accounting Policies and Accounting Estimates

          The accounting and reporting policies followed by us conform, in all material respects, to accounting principles generally accepted in the United States (“GAAP”) and to general practices within the financial services industry. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. While we base our estimates on historical experience, current information and other factors deemed to be relevant, actual results could differ from those estimates.

          We consider accounting estimates to be critical to reported financial results if (i) the accounting estimate requires management to make assumptions about matters that are highly uncertain and (ii) different estimates that management reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, could have a material impact on our financial statements. Accounting polices related to the allowance for loan losses are considered to be critical, as these policies involve considerable subjective judgment and estimation by management. We also consider accounting policies related to stock-based compensation to be critical due to the continuously evolving standards, changes to which could materially impact the way we account for stock options. Additionally, we also consider our accounting polices related to other real estate owned to be critical due to the potential significance of these activities and the estimates involved.

          For additional information regarding critical accounting policies, refer to Note 1 – Organization and Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements and the sections captioned “Application of Critical Accounting Policies and Accounting Estimates” and “Allowance for Possible Loan Losses and Nonperforming Assets” in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the Company’s Form 10-K for the year ended December 31, 2004. There have been no significant changes in the Company’s application of accounting policies since December 31, 2004.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2005 Compared to Three Months Ended June 30, 2004

Executive Summary

          Consolidated net income was $5.8 million and $5.6 million for the quarters ended June 30, 2005 and 2004, respectively. Diluted EPS was $0.98 for the three months ended June 30, 2005 compared to $0.86 for the same period last year.

          Net interest income before provision for loan losses increased to $22.1 million for the quarter ended June 30, 2005 compared to $19.4 million for the same period last year. The increase was primarily caused by additional interest income earned due to the growth in the average balance of our loan portfolio, and an increase in the average balance of higher yielding investment securities held-to-maturity as compared to the quarter ended June 30, 2004. This increase was partially offset by additional interest expense incurred due to the growth in the average balance of interest bearing liabilities as compared to the same period last year, deposits repricing to higher current market interest rates, and the addition of new borrowings at higher current market interest rates.

          The return on average assets was 0.91% for the three months ended June 30, 2005, compared to 1.30% for the same period last year. The decrease in the return on average assets ratio was primarily due to the increase in average total assets, which increased to $2.6 billion as of June 30, 2005 as compared to $1.7 billion for the same period last year. The return on average shareholders’ equity was 11.99% for the three months ended June 30, 2005, compared 11.23% for the same period last year.

          Loan production was $559.8 million for the quarter ended June 30, 2005, compared to $258.1 million for the same period last year. During the current quarter, the Bank originated $145.1 million of commercial real estate loans, $80.1 million of small balance multi-family real estate loans, $31.6 million of entertainment finance loans, $2.0 million of franchise loans, and its wholesale loan operations acquired $301.0 million of small balance multi-family loans. The Bank’s franchise loan production continues to decline in 2005 as it focuses on its commercial real estate and small balance multi-family real estate loan production. Loan production for the same period last year consisted of the origination of $156.0 million of commercial real estate loans, $55.8 million of small balance multi-family real estate loans, $21.6 million of entertainment finance loans and $24.7 million of franchise loans.

Net Interest Income and Margin

          The following table presents for the three months ended June 30, 2005 and 2004, our condensed average balance sheet information, together with interest income and yields earned on average interest earning assets and interest expense and rates paid on average interest bearing liabilities. Average balances are computed using daily average balances. Nonaccrual loans are included in loans receivable.

		For the Three Months Ended June 30,
		2005												2004
		Average				Income/				Yield/				Average Balance				Income/				Yield/
		Balance				Expense				Rate								Expense				Rate
		(dollars in thousands)
Assets
Cash and investment securities		$	443,035			$	4,470				4.05	%		$	150,621			$	968				2.58	%
Loans receivable:
Loans			2,080,691				36,740				7.08	%			1,507,288				26,424				7.05	%
Real estate loans held at REIT			28,770				470				6.55	%			53,092				796				6.03	%
Total loans receivable			2,109,461				37,210				7.08	%			1,560,380				27,220				7.02	%
Total interest earning assets			2,552,496			$	41,680				6.55	%			1,711,001			$	28,188				6.63	%
Non-interest earning assets			48,556												60,211
Allowance for loan losses			(36,755	)											(35,291	)
Total assets		$	2,564,297											$	1,735,921
Liabilities and Shareholders’ Equity
Interest bearing deposit accounts:
Interest bearing demand		$	53,878			$	320				2.38	%		$	78,256			$	368				1.89	%
Money market and passbook			171,425				1,223				2.86	%			132,836				537				1.63	%
Time certificates			1,326,175				10,354				3.13	%			986,730				5,580				2.27	%
Total interest bearing deposit accounts			1,551,478				11,897				3.08	%			1,197,822				6,485				2.18	%
FHLB advances and other borrowings			690,322				5,900				3.43	%			129,901				833				2.58	%
Junior subordinated debentures			86,600				1,754				8.12	%			86,600				1,501				6.97	%
Total interest bearing liabilities			2,328,400			$	19,551				3.37	%			1,414,323			$	8,819				2.51	%
Non-interest bearing demand accounts			15,036												19,473
Other non-interest bearing liabilities			25,459												100,551
Shareholders’ equity			195,402												201,574
Total liabilities and shareholders’ equity		$	2,564,297											$	1,735,921
Net interest spread (1)											3.18	%											4.12	%
Net interest income before provision for loan losses						$	22,129											$	19,369
Net interest margin (2)											3.48	%											4.55	%

          The following table sets forth a summary of the changes in interest income and interest expense resulting from changes in average interest earning asset and interest bearing liability balances and changes in average interest rates. The change in interest due to both volume and rate has been allocated to change due to volume and rate in proportion to the relationship of absolute dollar amounts of each.

		For the Three Months Ended
		June 30, 2005 and 2004
		Increase (Decrease) Due to:
		Rate				Volume				Total
		(In thousands)
Interest and fees earned from:
Cash and investment securities		$	795			$	2,707			$	3,502
Loans			306				9,684				9,990
Total increase in interest income			1,101				12,391				13,492
Interest paid on:
Deposit accounts			3,156				2,256				5,412
FHLB advances and other borrowings			359				4,708				5,067
Junior subordinated debentures			253				—				253
Total increase in interest expense			3,768				6,964				10,732
Increase (decrease) in net interest income		$	(2,667	)		$	5,427			$	2,760

          Total interest income increased $13.5 million to $41.7 million in the second quarter of 2005 as compared to $28.2 million for the same period last year. The increase in interest income was primarily attributable to a $549.1 million increase in the average balance of total loans receivable, a $292.4 million increase in the average balance of cash and investment securities, and a 147 basis point increase in the average yield earned on cash and investment securities.

          The average balance of cash and investments increased to $443.0 million in the second quarter of 2005 compared to $150.6 million during the same period last year. The increase in average cash and investments was primarily due to an increase in the average balance of higher yielding investment securities held-to-maturity, partially offset by a decline in lower yielding short-term and overnight investments as compared to the same period last year. As a result, the average yield earned on cash and investments increased to 4.05% during the second quarter of 2005 as compared to 2.58% for the same period last year.

          The average aggregate balance of our loan portfolio was $2.1 billion and $1.6 billion for the three months ended June 30, 2005 and 2004, respectively. Commercial real estate and construction loans had an average aggregate balance of $814.7 million during the quarter ended June 30, 2005 compared to $683.0 million during the same period last year. Multi-family real estate loans had an average aggregate balance of $1.0 billion during the quarter ended June 30, 2005 compared to $647.6 million during the same period last year. The average aggregate balance of entertainment finance loans was $93.0 million and $95.2 million during the quarters ended June 30, 2005 and 2004, respectively. The average aggregate balance of franchise loans was $137.7 million and $125.1 million during the quarters ended June 30, 2005 and 2004, respectively.

          The average yield earned on total loans increased to 7.08% in the quarter ended June 30, 2005 as compared to 7.02% in the same period last year. The increase in yield was primarily due to loans repricing to higher current interest rates, partially offset by higher yielding loans being repaid and replaced by new loan production at current market interest rates. Our loan portfolio is primarily comprised of adjustable rate loans indexed to six month LIBOR. Approximately 98.5% of our loan portfolio was comprised of adjustable rate loans at June 30, 2005. These adjustable rate loans generally reprice on a quarterly basis. At June 30, 2005, approximately $2.2 billion, or 91.0%, of our loan portfolio contained interest rate floors, below which the loans’ contractual interest rate may not adjust. At June 30, 2005, the weighted average floor interest rate of these loans was 6.1%. At that date, approximately $736.6 million, or 31.1%, of our loans were at their floor interest rate.

          Total interest expense increased by $10.7 million to $19.6 million during the second quarter of 2005, compared to $8.8 million for the same period last year. The increase in interest expense was primarily attributable to an increase of $914.1 million in the average balance of interest bearing liabilities, which was caused by the increase in deposits and FHLB advances and other borrowings, and a 86 basis point increase in the rate paid on interest bearing liabilities, which was primarily caused by deposits repricing to higher current market interest rates.

          Our average cost of funds increased to 3.37% during the three months ended June 30, 2005, compared to 2.51% for the same period last year. As discussed above, the increase in the average funding costs was primarily due to deposits repricing to higher current market interest rates, and the addition of FHLB advances and other borrowings. The average rate paid on deposit accounts was 3.08% during the three months ended June 30, 2005 as compared to 2.18% for the same period last year. The average balance of deposit accounts increased $353.7 million to $1.6 billion for the three months ended June 30, 2005 as compared to $1.2 billion for the same period last year. The average rate paid on FHLB advances and other borrowings was 3.43% during the three months ended June 30, 2005 compared to 2.58% for the same period last year. FHLB advances and other borrowings averaged $690.3 million during the current quarter, compared to $129.9 million for the same period last year.

          Net interest margin decreased to 3.48% for the three months ended June 30, 2005 as compared to 4.55% for the same period last year. This decrease was primarily due to the increase in the average balance of interest bearing liabilities and the corresponding increase in our average cost of funds.

Provision for Loan Losses

          Management periodically assesses the adequacy of the allowance for loan losses by reference to certain quantitative and qualitative factors that may be weighted differently at various times depending on prevailing conditions. These factors include, among other elements:

	•		general portfolio trends relative to asset and portfolio size;
	•		asset categories;
	•		credit and geographic concentrations;
	•		delinquency trends and nonaccrual loan levels;
	•		historical loss experience and risks associated with changes in economic, social and business conditions; and
	•		the underwriting standards in effect when the loan was made.

          Accordingly, the calculation of the adequacy of the allowance for loan losses is not based solely on the level of nonperforming assets. The quantitative factors, included above, are utilized by our management to identify two different risk groups (1) individual loans (loans with specifically identifiable risks); and (2) homogeneous loans (groups of loan with similar characteristics). We base the allocation for individual loans primarily on risk rating grades assigned to each of these loans as a result of our loan management and review processes. We then assign each risk-rating grade a loss ratio, which is determined based on the experience of management and our independent loan review process. We estimate losses on impaired loans based on estimated cash flows discounted at the loan’s original effective interest rate or based on the underlying collateral value. Based on management’s experience, we also assign loss ratios to groups of loans. These loss ratios are assigned to the various homogenous categories of the portfolio.

          The qualitative factors, included above, are generally utilized to identify other risks inherent in the portfolio and to determine whether the estimated credit losses associated with the current portfolio might differ from historical loss trends. We estimate a range of exposure for each qualitative factor and evaluate the current condition and trend of each factor. Based on this evaluation, we assign a positive, negative or neutral grade to each factor to determine whether the portion of the qualitative reserve is in the high, middle or low end of the range for each factor. Because of the subjective nature of these factors and the judgments required to determine the estimated ranges, the actual losses incurred can vary significantly from the estimated amounts.

          Management believes that our allowance for loan losses as of June 30, 2005 was adequate to absorb the known and inherent risks of loss in the loan portfolio at that date. While management believes the estimates and assumptions used in its determination of the adequacy of the allowance are reasonable, there can be no assurance that such estimates and assumptions will not be proven incorrect in the future, or that the actual amount of future provisions will not exceed the amount of past provisions or that any increased provisions that may be required will not adversely impact our financial condition and results of operations. In addition, the determination of the amount of the Bank’s allowance for loan losses is subject to review by bank regulators, as part of the routine examination process, which may result in the establishment of

additional reserves based upon their judgment of information available to them at the time of their examination.

          The consolidated provision for loan losses totaled $1.5 million for the second quarter of 2005, compared to $1.0 million for the same period last year. The provision for loan losses was recorded based on an analysis of the factors referred to above. The allowance for loan losses was 1.56% of our total loan portfolio at June 30, 2005 as compared to 1.94% at December 31, 2004. The decrease in this percentage primarily reflects the decline in our overall risk profile due to a broader geographic diversification of our real estate loan portfolio resulting from the higher concentration of non-California small balance multi-family loans as a percentage of our total loan portfolio. As of June 30, 2005, 38.3% of our loan portfolio secured by real estate was located outside of California. During the quarter ended June 30, 2005, we had net loan charge-offs of $15,000 as compared to net loan recoveries of $41,000 during the same period last year. See also — “Financial Condition — Credit Risk”.

Non-Interest Income

          Non-interest income declined to $509,000 during the quarter ended June 30, 2005 as compared to $1.0 million for the same period last year. Substantially all of the non-interest income earned during the prior period related to the refund anticipation loan (“RAL”) program, which was terminated during 2004.

Non-Interest Expense

          Non-interest expense totaled $11.1 million for the three months ended June 30, 2005, compared to $10.2 million for the quarter ended June 30, 2004. The increase in non-interest expense was caused by the additional overhead expenses incurred in connection with the national expansion of our loan production platform over the same period last year. As of June 30, 2005, the Bank had 17 loan production offices outside of California and a total of 24 loan production offices operating. Our efficiency ratio (defined as recurring general and administrative expenses as a percentage of net revenue) decreased to 48.90% for the quarter ended June 30, 2005, as compared to 51.38% for the same period last year. The improvement in our efficiency ratio was primarily due to the increase in interest income earned, as discussed above.

Six Months Ended June 30, 2005 Compared to Six Months Ended June 30, 2004

Executive Summary

          Consolidated net income totaled $11.5 million for the six months ended June 30, 2005 compared to $19.4 million for the same period last year. Diluted EPS was $1.90 for the six months ended June 30, 2005, compared to $2.93 for the same period last year. This decrease was primarily caused by a decline in interest and fee income earned in connection with the Bank’s RAL program, which terminated at the conclusion of the 2004 tax season.

          Despite the termination of the RAL program, net interest income before provision for loan losses increased to $43.9 million for the six months ended June 30, 2005 compared to $42.3 million for the same period last year. This increase was due to the growth in the average balance of our loan

portfolio, a decrease in the average balance of low yielding short-term and overnight investments, and an increase in the average balance of higher yielding investment securities held-to-maturity as compared to the same period last year. The decline in the average balance of short-term and overnight investment securities was a result of the termination of the RAL program, which generated a substantial level of liquidity during the quarter ended March 31, 2004. The Bank invested this additional liquidity in short-term and overnight investments, which earned a lower yield than the Bank earns on its current investment portfolio. The increase in net interest income was partially offset by additional interest expense incurred due to the growth in the average balance of our interest bearing liabilities as compared to the same period last year, deposits repricing to higher current market interest rates, and the addition of new borrowings at higher current market interest rates.

          The return on average assets was 0.96% for the six months ended June 30, 2005, compared to 1.79% for the same period last year. The return on average shareholders’ equity was 11.86% for the six months ended June 30, 2005, compared to 19.61% for the same period last year. The decrease in these ratios was primarily attributable to the absence of RAL related income during the six months ended June 30, 2005.

          Loan production was $878.3 million for the six months ended June 30, 2005, compared to $413.2 million for the same period last year. During the current six month period, the Bank originated $186.3 million of commercial real estate loans, $149.4 million of small balance multi-family real estate loans, $47.0 million of entertainment finance loan, $2.4 million of franchise loans, and its wholesale loan operations acquired $493.2 million of small balance multi-family loans. Loan production for the same period last year consisted of $236.0 million of commercial real estate loans, $94.0 million of small balance multi-family real estate loans, $42.0 million of entertainment finance loans and $41.2 million of franchise loans.

Net Interest Income and Margin

          The following table presents, for the six months ended June 30, 2005 and 2004, our condensed average balance sheet information, together with interest income and yields earned on average interest earning assets and interest expense and rates paid on average interest bearing liabilities. Average balances are computed using daily average balances. Nonaccrual loans are included in loans receivable.

		For the Six Months Ended June 30,
		2005												2004
		Average				Income/				Yield/				Average				Income/				Yield/
		Balance				Expense				Rate				Balance				Expense				Rate
		(dollars in thousands)
Assets
Cash and investments		$	429,743			$	9,311				4.37	%		$	530,326			$	3,411				1.29	%
Loans receivable:
Loans			1,936,444				68,208				7.10	%			1,492,503				55,338				7.46	%
Real estate loans held in trust			30,810				913				5.98	%			57,630				1,522				5.31	%
Total loans receivable			1,967,254				69,121				7.09	%			1,550,133				56,860				7.38	%
Total interest earning assets			2,396,997			$	78,432				6.60	%			2,080,459			$	60,271				5.83	%
Non-interest earning assets			48,386												138,519
Allowance for loan losses			(36,322	)											(34,728	)
Total assets		$	2,409,061											$	2,184,250
Liabilities and Shareholders’ Equity
Interest bearing deposit accounts:
Interest bearing demand		$	61,197			$	681				2.24	%		$	66,822			$	615				1.85	%
Money market and passbook			168,782				2,209				2.64	%			139,150				1,135				1.64	%
Time certificates			1,261,224				18,505				2.96	%			983,745				11,249				2.30	%
Total interest bearing deposit accounts			1,491,203				21,395				2.89	%			1,189,717				12,999				2.20	%
FHLB advances and other borrowings			594,958				9,732				3.30	%			143,871				1,976				2.76	%
Junior subordinated debentures			86,600				3,434				8.00	%			86,600				2,990				6.94	%
Total interest bearing liabilities			2,172,761			$	34,561				3.21	%			1,420,188			$	17,965				2.54	%
Non-interest bearing demand accounts			14,517												14,896
Other non-interest bearing liabilities			26,397												550,030
Shareholders’ equity			195,386												199,136
Total liabilities and shareholders’ equity		$	2,409,061											$	2,184,250
Net interest spread (1)											3.39	%											3.29	%
Net interest income before provision for loan losses						$	43,871											$	42,306
Net interest margin (2)											3.69	%											4.09	%

          The following table sets forth a summary of the changes in interest income and interest expense resulting from changes in average interest earning asset and interest bearing liability balances and changes in average interest rates. The change in interest due to both volume and rate has been allocated to change due to volume and rate in proportion to the relationship of the absolute dollar amounts of each.

		For the Six Months Ended
		June 30, 2005 and 2004
		Increase (Decrease) Due to:
		Rate				Volume				Total
		(In thousands)
Interest and fees earned from:
Cash and investment securities		$	6,658			$	(758	)		$	5,900
Loans			(1,258	)			13,519				12,261
Total increase in interest income			5,400				12,761				18,161
Interest paid on:
Deposit accounts			4,644				3,752				8,396
FHLB advances and other borrowings			429				7,327				7,756
Junior subordinated debentures			444				—				444
Total increase in interest expense			5,517				11,079				16,596
Increase (decrease) in net interest income		$	(117	)		$	1,682			$	1,565

          Total interest income increased $18.2 million to $78.4 million during the six months ended June 30, 2005 as compared to $60.3 million for the same period last year. The increase in interest income was primarily attributable to a $417.1 million increase in the average balance of total loans receivable and a 308 basis point increase in the average yield earned on cash and investments.

          The average balance of cash and investments decreased to $429.7 million for the six months ended June 30, 2005 compared to $530.3 million during the same period last year. The decrease in average cash and investments was primarily due to a decrease in the average balance of low yielding short-term and overnight investments, partially offset by an increase in the average balance of higher yielding investment securities held-to-maturity as compared to the same period last year. The decline in the average balance of short-term and overnight investment securities was a result of the termination of the RAL program, which generated a substantial level of liquidity during the quarter ended March 31, 2004. The Bank invested this additional liquidity in short-term and overnight investments, which earned a lower yield than the Bank earns on its current investment portfolio. As a result, the average yield earned on cash and investments increased to 4.37% during the six months ended June 30, 2005 as compared to 1.29% for the same period last year.

          The average balance of our loan portfolio was $2.0 billion and $1.6 billion for the six months ended June 30, 2005 and 2004, respectively. Loans secured by income producing properties and construction loans increased to $1.7 billion for the six month period ended June 30, 2005, from $1.3 billion during same period last year. The average balance of entertainment finance loans was $96.2 million and $96.4 million during the six months ended June 30, 2005

and 2004, respectively. The average balance of franchise loans was $137.7 million and $115.4 million during the six months ended June 30, 2005 and 2004, respectively.

          The average yield earned on total loans decreased to 7.09% for the six months ended June 30, 2005 as compared to 7.38% during the same period last year. The decrease in the yield on loans was primarily due to the higher yielding loans being repaid and replaced by new loan production at lower current market interest rates, partially offset by adjustable rate loans repricing to higher current market interest rates. Our loan portfolio is primarily comprised of adjustable rate loans indexed to the six month LIBOR.

          Total interest expense increased by $16.6 million to $34.6 million for the six months ended June 30, 2005, compared to $18.0 million for the same period last year. The increase in interest expense was primarily attributable to an increase of $752.6 million in the average balance of interest bearing liabilities, which was caused by the increase in deposits and FHLB advances and other borrowings, and a 67 basis point increase in the rate paid on interest bearing liabilities, which was primarily caused by deposits repricing to higher current market interest rates.

          Our average cost of funds increased to 3.21% during the six months ended June 30, 2005, compared to 2.54% for the same period last year. The average rate paid on deposit accounts was 2.89% during the six months ended June 30, 2005 compared to 2.20% for the same period last year. The average balance of deposit accounts increased $301.5 million to $1.5 billion for the six months ended June 30, 2005, compared to $1.2 billion for the same period last year. The average rate paid on the FHLB advances and other borrowings was 3.30% during the six months ended June 30, 2005 compared to 2.76% for the same period last year. FHLB advances and other borrowings averaged $595.0 million for the six months ended June 30, 2005, compared to $143.9 million for the same period last year.

          Net interest margin decreased to 3.69% for the six months ended June 30, 2005 as compared to 4.09% for the same period last year. This decrease was primarily due to the increase in the average balance of interest bearing liabilities and the corresponding increase in our average cost of funds, partially offset by the increase in yield earned on the average interest earning assets.

Provision for Loan Losses

          The consolidated provision for loan losses totaled $2.3 million for the six months ended June 30, 2005, compared to $2.4 million for the same period last year. The provision for loan losses was recorded based on an analysis of the factors referred to previously. During the six months ended June 30, 2005, we had net loan charge-offs of $331,000, compared to net loan recoveries of $125,000 for the same period last year.

Non-Interest Income

          Non-interest income totaled $489,000 for the six months ended June 30, 2005, compared to $14.4 million for the same period last year. Substantially all of the non-interest income earned during the prior period was due to income earned in connection with the RAL program. During the six months ended June 30, 2004, non-interest income consisted of fee income earned in connection with the RAL program consisting of $9.3 million of net premiums on the sale of RAL loans and $4.6 million of processing and administrative fees. Because the origination of loans under the RAL program resulted from the filing of individual income tax returns, transaction activity was concentrated most heavily during the tax season. This resulted in the Company earning most of its RAL program income in the first quarter of 2004.

Non-Interest Expense

          Non-interest expense totaled $22.3 million for the six months ended June 30, 2005, compared to $22.6 million for the same period last year, and reflects the Company’s continued investment in the national expansion of our loan production platform. The Company’s efficiency ratio (defined as recurring general and administrative expenses as percentage of net revenue) increased to 50.27 percent for the six months ended June 30, 2005, compared to 38.49 percent for the same period in 2004, due to the decline in net revenues as a result of the termination of the RAL program.

FINANCIAL CONDITION

          Total assets increased to $2.8 billion at June 30, 2005 as compared to $2.3 billion at December 31, 2004. The increase in total assets was primarily due to a $566.6 million increase in our loan portfolio, partially offset by a $54.5 million decrease in cash and cash equivalents. The increase in the loan portfolio was primarily due to the loan production of $878.3 million and a decline in loan prepayment speeds experienced during the current period. At June 30, 2005, loans, net totaled $2.4 billion, including approximately $2.2 billion of real estate loans, $86.1 million of entertainment finance loans, and $135.2 million of franchise loans. Total deposit accounts increased to $1.7 billion at June 30, 2005 from $1.4 billion at December 31, 2004. FHLB advances and other borrowings increased to $814.7 million at June 30, 2005, compared to $584.2 million at December 31, 2004. This increase was primarily due to additional borrowings utilized to fund the growth in our loan portfolio. Management believes that a significant portion of deposits will remain with us upon maturity based on our historical experience regarding retention of deposits.

CREDIT RISK

Nonperforming Assets, Other Loans of Concern and Allowance for Loan Losses

          The following table sets forth our nonperforming assets by category and troubled debt restructurings as of the dates indicated.

		June 30,				December 31,
		2005				2004
		(dollars in thousands)
Nonaccrual loans:
Real estate		$	7,093			$	7,057
Franchise			3,576				3,874
Entertainment finance			3,009				3,721
Total nonaccrual loans			13,678				14,652
Other real estate owned, net			—				—
Total nonperforming assets			13,678				14,652
Performing troubled debt restructurings			9,321				8,811
		$	22,999			$	23,463
Nonaccrual loans to total loans			0.58	%			0.80	%
Allowance for loan losses to nonaccrual loans			273.45	%			242.17	%
Nonperforming assets to total assets			0.48	%			0.63	%