Mission Oaks Bancorp Announces Results for First Quarter of 2013.

Selected quarterly highlights as of March 31, 2013:

• Mission Oaks earned $220,000 for the first quarter, its most profitable quarter since 2008.
• Classified assets continued to fall, and at $13.5 million were at their lowest level in five years.
• Loan charge offs continued to decline with only $158,000 in net quarterly charge offs.
• Other Real Estate Owned (OREO) was reduced to one property valued at $75,000.
• The Company’s cost of funds dropped to 0.39 percent, down from 0.73 percent in the same period last year, and the average interest margin rose to 4.18 percent from 3.67 percent.

Mission Oaks Bancorp, the parent company of Mission Oaks National Bank, announced unaudited results for the first quarter of 2013. The Company reported a net profit of $220,000, or $0.02 per share, for the quarter that ended March 31, 2013. This compares to a profit of $23,000 in the prior quarter, and a loss of $1.6 million in the same quarter in 2012.

One major factor leading to the earnings turnaround from 2012 was a $400,000 negative loan loss provision taken in 2013. In the first quarter of 2012, the Company added $668,000 to its Allowance for Loan Losses (ALLL). The negative provision in 2013 reflects improvements in the quality of subsidiary bank’s loan portfolio and a dramatic slowdown in loan charge offs in recent quarters. In the first quarter of this year, net charge offs were $158,000 as compared to $1.1 million in the same period last year. For the last three calendar quarters, net recoveries actually exceeded charge offs by $11,000.

Even after taking the negative provision, at March 31, 2013, the bank’s Allowance for Loan Losses (ALLL) stood at$2.9 million, or 3.93% of gross loans, more than twice the average for California financial institutions.

Mission Oaks’ CEO Gary Deems pointed to improved asset quality and operating expense reductions as the primary contributors to the Company’s improved profitability. “Since March 31, 2012, we have reduced our nonperforming assets from $13.5 million to $5.3 million. This decline has allowed us to reduce operating expenses in a number of areas. Legal fees are down 47 percent from the first quarter of last year, and OREO related expenses declined 70 percent. We also closed our underperforming branch in Lake Elsinore in April 2012, and that contributed to a decline in the bank’s salary and benefit expenses of 24 percent and a decrease in occupancy and FFE costs of 29 percent,” stated Deems.

At March 31, 2013, Mission Oaks reported deposits of $94.6 million, gross loans of $73.6 million, and total assets of $105.2 million. These totals are up 2.2 percent, down 2.4 percent and up 2.1 percent, respectively, from the end of 2012.

“Our primary focus is on sustaining our profitability and slowly regrowing the Company,” continued Deems. “The bank and the community have had a tough few years and we’re pleased to see that our Company and our customers are doing a little better, and that loan demand is finally starting to pick up.”

For more information, please contact Gary Deems, President/ CEO, at (951) 506-8891.

About Mission Oaks Bancorp
Mission Oaks Bancorp’s only subsidiary is Mission Oaks National Bank, a federally chartered bank that opened in 2000 and currently operates branches in Temecula and Fallbrook, CA. Mission Oaks Bancorp’s common stock is traded over the counter under the stock symbol MOKB.OB.

About Mission Oaks National Bank
Mission Oaks National Bank offers banking with a personal touch. They are locally owned and operated, which allows them to quickly and efficiently make decisions to fit local needs and the local economy. Whatever you need, Mission Oaks can design a financial plan to help you reach your goals.