Mission Oaks Reports Record Earnings, Asset, Deposit Growth


TEMECULA, Calif., Oct. 13, 2005 (PRIMEZONE) -- Mission Oaks Bancorp (OTCBB:MOKB) reported record earnings in the third quarter ended Sept. 30, 2005 after posting strong deposit and asset growth.

Mission Oaks Bancorp, whose principal subsidiary is Temecula-based Mission Oaks National Bank, said it earned a record $548,000, or 14 cents a share, in the third quarter up from the $324,000, or 8 cents a share, posted in the same quarter a year ago. Per share amounts were adjusted to account for a two-for-one stock split that was effective Sept. 1, 2005.

"It was a remarkable quarter in many respects," said Gary Votapka, Mission Oaks Bancorp president and chief executive. "Earnings reached an historic high despite the costs associated with opening our third full-service branch in Ontario."

During the third quarter, Mission Oaks National Bank became a wholly owned subsidiary of Mission Oaks Bancorp as part of a merger that was approved by shareholders and regulators.

The bank holding company structure makes it easier for Mission Oaks to raise additional capital, repurchase its own stock, borrow money, acquire other banks and non-bank entities and issue stock.

In the first nine months of 2005, Mission Oaks earned $1.4 million, or 35 cents a share, compared with $1 million, or 26 cents a share, in the same period a year ago.

Interest income in the quarter reached $2.2 million, up from $1.4 million in the same quarter a year earlier. Non-interest income reached $599,000, up 18.8 percent from $504,000 a year ago.

Assets in the 12-month period ended Sept. 30 2005, grew 32.3 percent, or nearly $35 million, to a record $142.7 million.

Net loans increased more than $15 million, or 20.6 percent, to a record $88.9 million. Total deposits increased by $32.5 million, or 35.4 percent, to a record $124.6 million.

Annualized return on average assets (ROA), a ratio of profit to assets, reached 1.51 percent, up from 1.25 percent a year ago. Annualized return on average shareholders' equity (ROE), a ratio of profit to equity, was 17.10 percent for the three months ended Sept. 30, 2005, up from 12.2 percent a year earlier.

More than 330 similarly sized U.S. banks reported an average ROA and ROE of 1.35 percent and 13.90 percent, respectively, according to a Federal Deposit Insurance Corp. survey as of June 30, 2005.

Mission Oaks National Bank is a federally chartered community bank that is committed to serving consumers and businesses in Southern California. The bank offers personalized services and products through three full-service branch offices in Temecula and Ontario and loan production offices in San Diego and Phoenix.

Mission Oaks Bancorp common stock is traded over the counter under the stock symbol MOKB.

For more on Mission Oaks National Bank visit its Web site at missionoaksbank.com.

Safe Harbor

Certain statements in this press release, including statements regarding the anticipated development and expansion of the Bank's business, and the intent, belief or current expectations of the Bank, its directors or its officers, are "forward-looking" statements (as such term is defined in the Private Securities Litigation Reform Act of 1995). Because such statements are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, risks related to the local and national economy, the Bank's performance, regulatory matters and those discussed in filings by the Bank with the Office of the Comptroller of the Currency.



 MISSION OAKS BANCORP
 THIRD QUARTER REPORT / SEPTEMBER 30, 2005
 ---------------------------------------------------------------------
 BALANCE SHEET
 ---------------------------------------------------------------------
 (all amounts in whole dollars except share and per share information)

                            September 30,               Increase
                          2005          2004           (Decrease)
                      ------------  ------------  --------------------
 ASSETS
  Cash and due
   from banks         $  4,561,000  $  3,120,000  $  1,441,000    46.2%
  Due from banks
   - time                3,951,000     1,089,000     2,862,000   262.8%
  Federal funds sold    15,035,000     2,460,000    12,575,000   511.2%
  Securities -
   available for sale   23,440,000    21,468,000     1,972,000     9.2%

  Loans                 90,057,000    74,652,000    15,405,000    20.6%
  Less allowance for
   loan losses          (1,201,000)     (951,000)     (250,000)   26.3%
                      ------------  ------------  ------------
  Loans, net            88,856,000    73,701,000    15,155,000    20.6%

  Premises and
   equipment, net          923,000       555,000       368,000    66.3%
  SBA-Loan servicing
   asset/interest only
   strips                  882,000       881,000         1,000     0.1%
  Cash surrender value
   of life insurance     2,703,000     2,597,000       106,000
  Other assets           2,331,000     1,946,000       385,000    19.8%
                      ------------  ------------  ------------
                      $142,682,000  $107,817,000  $ 34,865,000    32.3%
                      ============  ============  ============
 LIABILITIES AND
 STOCKHOLDERS' EQUITY
  Demand deposits     $ 34,600,000  $ 24,325,000  $ 10,275,000    42.2%
  Interest bearing
   deposits             90,028,000    67,770,000    22,258,000    32.8%
  Federal funds
   purchased and other
   borrowings            4,000,000     4,000,000             0
  Other liabilities      1,081,000       909,000       172,000    18.9%
                      ------------  ------------  ------------
   Total liabilities   129,709,000    97,004,000    32,705,000    33.7%


  Total stockholders'
   equity               12,973,000    10,813,000     2,160,000    20.0%
                      ------------  ------------  ------------
                      $142,682,000  $107,817,000  $ 34,865,000    32.3%
                      ============  ============  ============


 ---------------------------------------------------------------------
 STATEMENT OF INCOME
 ---------------------------------------------------------------------

                          3 Mos ended               9 Mos ended
                         September 30,             September 30,
                    ----------------------    ----------------------
                       2005        2004          2005        2004
                    ----------  ----------    ----------  ----------
 Interest income    $2,237,000  $1,432,000    $6,066,000  $4,036,000
 Interest expense      475,000     272,000     1,201,000     715,000
                    ----------  ----------    ----------  ----------
 Net interest income 1,762,000   1,160,000     4,865,000   3,321,000
 Provision for loan
  losses                44,000      10,000       204,000     110,000
                    ----------  ----------    ----------  ----------
 Net interest income
  after provision
  for loan losses    1,718,000   1,150,000     4,661,000   3,211,000
 Other income          599,000     504,000     1,831,000   1,823,000
                    ----------  ----------    ----------  ----------
 Other expense       1,401,000   1,127,000     4,200,000   3,374,000
                    ----------  ----------    ----------  ----------
 Income before
  income taxes         916,000     527,000     2,292,000   1,660,000
 Income taxes          368,000     203,000       914,000     646,000
                    ----------  ----------    ----------  ----------
   Net income       $  548,000  $  324,000    $1,378,000  $1,014,000
                    ==========  ==========    ==========  ==========


 Average common shares
  outstanding        3,919,012   3,851,860(a)  3,900,128   3,844,638(a)
 Basic income
  per share         $     0.14  $     0.08(a) $     0.35  $     0.26(a)
 Return on average
  assets (annualized)     1.51%       1.25%         1.43%       1.38%
 Return on average
  equity (annualized)    17.10%      12.20%        15.10%      13.27%

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 SELECTED RATIOS
 ---------------------------------------------------------------------
                                                    September 30, 
                                               2005              2004
                                              ------           -------
 Leveraged capital ratio                                        10.43%
 Total risk based capital ratio                                 14.45%
 Allowance for loan losses as a percent
  of total loans                               1.32%             1.27%
 Nonperforming assets as a percent
  of total assets                              0.00%             0.12%
 Loan to deposit ratio                        73.12%            81.17%


 (a) Adjusted for September 1, 2005 two-for-one stock split


            

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