Vineyard National Bancorp Reports Revised Results of Operations for the Quarter and Year Ended 2007 and Results for the First Quarter 2008

CORONA, CA -- (MARKET WIRE) -- 05/01/08 -- Vineyard National Bancorp (the "company") (NASDAQ: VNBC), parent company of Vineyard Bank, N.A. ("Vineyard") and other subsidiaries today reported a loss for the quarter ended March 31, 2008 of $16.6 million, or $1.77 per common share, compared with net earnings of $5.5 million, or $0.48 per common share, for the quarter ended March 31, 2007. The net loss for the first quarter of 2008 was due primarily to $26.9 million of provision for loan losses, principally associated with Vineyard's construction loans originated between 2005 and 2007. The company also reported revised results for the quarter and the year ended December 31, 2007 of a net loss of $57.0 million, or $5.64 per common share, for the quarter ended December 31, 2007, and a net loss of $40.0 million, or $3.96 per common share, for the year ended December 31, 2007. The company's audit for the year ended December 31, 2007 is not yet complete. These numbers are not audited, and there could be further changes upon completion of the audit.

On January 30, 2008, the company had announced a fourth quarter 2007 net loss of $41.3 million and a net loss for the year of $24.4 million. Since that date, the company has obtained updated appraisals and additional data which indicate further declines in loan values at year end than that which earlier data had indicated. These declines are primarily related to the tract and related land loan portfolios. The company has also completed a review of its current methodology for determining an adequate allowance for loan losses. Based upon the abrupt and severe declines in real estate values reflected in the data, the company has added $26.5 million of provision for loan losses and has charged off an additional $4.5 million of tract construction loans for the fourth quarter of 2007. The increase in provision for loan losses, net of tax, increased the company's fourth quarter 2007 consolidated net loss to $57.0 million, or $5.64 per common share.

The allowance for loan losses at December 31, 2007 totaled $48.8 million, and net charge-offs for the year ended December 31, 2007 equaled $9.2 million. The balance of non-performing loans at December 31, 2007 was $75.4 million.

As previously reported, the company incurred a fourth quarter 2007 non-cash charge of $40.8 million for the write-off of goodwill. As shown below, when this one time charge is excluded from expenses, the company's results reflected net operating earnings of $0.7 million for the year ended December 31, 2007, as compared to the actual net loss of $40.0 million.

(Dollars in thousands) Year ended December 31, 2007 --------------GAAP Net Loss $ (40,039) Write-down of goodwill 40,771 --------------Non-GAAP Net Operating Earnings, net of goodwill write-down $ 732 =============

2008 Operating Objectives

As disclosed previously, the company has established the following four primary objectives as a basis to reduce risk, refocus on core operations and reposition the company in the current operating environment to achieve the long-term success of its franchise:

1. Reduce the Overall Risk Profile of the company: This objective includes the significant reduction of single family residential tract construction lending and related land development projects, enhanced borrower sponsorship requirements, increased and expanded core deposit growth, expanded business and commercial real estate lending in supportive sub-markets, and enhanced balance sheet management;

2. Loan Portfolio Management: In order to produce a base of stabilized long-term earnings, the company will seek to proactively rebalance the existing loan portfolio and pursue new and diversified business generation to reduce its risk profile, meet its targeted concentration ranges within sub-markets and sub- portfolios, and maintain an overall portfolio yield consistent with quality and sustainable returns;

3. Liquidity Enhancement and Funding Cost Reduction: The company will seek to reduce its funding costs by an intensified focus on lower cost core deposits, cash management driven business relationships, the effective repricing of its time deposit portfolio in a decreasing interest rate environment, and reduction of its reliance on higher costing liabilities; and

4. Corporate Reallocation and Reorganization: To improve its operating efficiencies, the company will continually review its resource allocation to ensure the optimum allocation of talent among functions. The company seeks to continue to deploy and redeploy resources, both personnel and other operating costs, toward achievement of its objectives.

Balance Sheet

As part of the operating objectives described above, the company implemented actions to manage its loan production levels resulting in a net contraction of its balance sheet during the first quarter of 2008. Overall, the company compressed its balance sheet by $128.7 million, or 5%, during the first quarter of 2008, from $2.5 billion at December 31, 2007 to $2.4 billion at March 31, 2008. Of this strategic contraction, $45.9 million relates to loans, including loans held-for-sale. During the first quarter of 2008, this loan balance decrease was comprised primarily of $199.4 million in loan payoffs or principal paydowns, $27.5 million of net charge-offs and $9.5 million of net loan sales, offset by $190.5 million in disbursements on new and existing loan commitments.

As discussed above, the company is reducing its exposure in the tract construction market. As of December 31, 2007, Vineyard had $146.6 million of tract construction loans outstanding and $57.2 million of unfunded tract construction loan commitments. At March 31, 2008, Vineyard's outstanding tract construction loans totaled $130.0 million, a decrease of $16.6 million or 11.3% since December 31, 2007, and its unfunded commitments for the tract construction portfolio totaled $32.4 million, a decrease of $24.9 million, or 43.5% from December 31, 2007. While $21.3 million of the loan balance decrease resulted from the charge-off of tract construction loans, there were $7.1 million of principal paydowns and payoffs associated with this portfolio during the first quarter of 2008.

The company continues to focus on the previously stated objectives of its 2008 strategic plan, which called for the reduction of the company's overall risk profile, including a significant reduction of the tract construction loan portfolio, and a focus on loan portfolio management, which called for a rebalancing of the existing loan portfolio to produce a base of stabilized long-term earnings.

Commensurate with the company's asset contraction, there was a $136.8 million decrease in deposits during the first quarter of 2008, related primarily to a decline in money market deposit accounts. There was also a $29.4 million decrease in exchange balances, which are 1031 exchange balances associated with 1031 Exchange Advantage, Inc. and 1031 Funding & Reverse Corp. (collectively, the "exchange companies"), the company's consolidated subsidiaries. As a result of the decline in funding deposits, the company increased its FHLB borrowings from $175.0 million at December 31, 2007 to $227.0 million at March 31, 2008.

Asset Quality

Non-accrual loans

During the first quarter of 2008, the company placed $49.4 million of loans on non-accrual status, increasing the balance of non-accrual loans to $105.2 million at March 31, 2008 from its $75.4 million level at December 31, 2007. Of the increase in non-accrual loans, $37.9 million relates to tract construction loans, $3.2 million relates to land loans and $2.6 million relates to luxury construction loans. The loss of previously accrued interest income associated with these new non-accrual loans totaled $1.1 million in the first quarter of 2008. Loans are placed on non-accrual status if there is reasonable doubt as to the collectability of principal and interest in accordance with the original credit terms.

(Dollars in Thousands) March 31, 2008 December 31, 2007 ----------------------- ----------------------- Non-accrual Specific Non-accrual Specific Loan Type Balance Reserve Balance Reserve ----------- ----------- ----------- -----------Construction and Land: Single-family tract $ 87,042 $ 2,227 $ 61,741 $ 19,773 Single-family luxury 4,523 46 2,300 88 Land 6,205 - 6,934 493 Commercial and residential real estate 4,965 1,133 2,494 494 SBA 1,533 - 1,753 -Other 903 - 140 - ----------- ----------- ----------- ----------- Total $ 105,171 $ 3,406 $ 75,362 $ 20,848 =========== =========== =========== ==========

Charged-off loans

During the quarter ended March 31, 2008, the company recorded $27.5 million in net charge-offs, which equates to 1.29% of average gross loans for the quarter. Of the charge-offs, $21.3 million relate to tract construction loans and $4.7 million relate to land loans. Of the loans charged-off during the first quarter 2008, $11.5 million were on non-accrual status at December 31, 2007.

Other Real Estate Owned

During the first quarter 2008, other real estate owned ("OREO"), which consists of properties obtained through foreclosure, decreased from $17.4 million to $12.6 million. The decrease was primarily related to a $3.7 million OREO write-down and $1.1 million of paydowns from OREO sales. There were no new OREO properties in the first quarter of 2008.

The balance of OREO at March 31, 2008 includes $5.9 million in two tract loans which were transferred to OREO in the fourth quarter of 2007, a $0.6 million (net of $0.6 million in sales proceeds) SBA-guaranteed loan which was transferred to OREO in the third quarter of 2007, and a $6.1 million (net of a $5.6 million write-down) tract development land loan which was foreclosed upon in the second quarter of 2007.

The $3.7 million OREO write-down relates primarily to the tract development land foreclosure, which encompassed one hundred finished residential lots in a 1,788 unit planned development project within the Temecula Valley region of southern California. The property was sold subsequent to March 31, 2008 for net proceeds of $6.1 million with no further loss. The company is actively pursuing disposition of the remaining foreclosed assets.

Results of Operations

As previously stated, the company recorded a net loss of $16.6 million for the three months ended March 31, 2008, as compared to net income of $5.5 million in the same quarter in 2007. The net loss in the first quarter of 2008 is mainly attributable to a provision for loan losses of $26.9 million. These results of operations produced a net interest margin of 3.47% for the first quarter of 2008, as compared to 4.18% for the same period in 2007 and 3.91% for the fourth quarter of 2007.

For the quarter-ended March 31, 2008, gross loan interest income was $40.5 million, a decrease of $1.7 million, or 4% as compared to the same period in 2007. The effective yield of the loan portfolio in the first quarter 2008 was 7.6%, as compared to 8.8% for the same period in 2007. The increase in non-accrual loans negatively impacted our loan yield due to the $1.1 million of interest reversal during the first quarter of 2008.

Total net revenues (net interest income plus other operating income) for the quarter ended March 31, 2008 were $20.3 million, a decrease of $3.4 million, or 14% as compared to the same period in 2007.

Total operating expenses for the quarter-ended March 31, 2008 were $21.2 million, as compared to $13.1 million for the same period in 2007. The increase from 2007 is primarily attributable to 1) approximately $1.7 million related to the year-end audit and legal expenses, 2) the $3.7 million write-down of other real estate owned and 3) $1.5 million in separation costs to the company's former chief executive officer who resigned in January 2008.

Jim LeSieur, interim chief executive officer, stated, "Although we are disappointed with the overall results, we have made significant progress in identifying asset quality issues and making objective assessments of the financial impact of those problems. The Board of Directors and our management team are committed to taking all necessary actions to continue to reduce the company's overall risk profile, strengthen its capital base and return the company to sustainable profitability as quickly as possible. We made a significant step in achieving those objectives by having a realistic evaluation of the challenges we need to overcome."

Capital Resources

At March 31, 2008, stockholders' equity of the company totaled $92.9 million, a decrease of $20.1 million, or 18% as compared to December 31, 2007. The company's net book value per share of its common stock decreased from $8.10 at December 31, 2007 to $6.34 per share at March 31, 2008. This was principally caused by the company's net loss for the first quarter of 2008. In addition, the company's Tier 1 Risk-Based and Leverage capital ratios of 5.1% and 5.0%, respectively, exceeded the minimum regulatory ratio requirement of 4.0%.

Despite the impact of the additional provision and charge-offs, Vineyard was considered to be "Well Capitalized" at March 31, 2008, and it is intended that the strategic contraction of assets will assist in the preservation of Vineyard's capital. At March 31, 2008, Vineyard's Tier 1 Risk-Based and Leverage capital ratios were 10.0% and 9.8%, respectively, far in excess of the "Well Capitalized" minimum ratios of 6.0% and 5.0%, respectively.

Payment of Dividends

The company's ability to pay cash dividends is limited by California law. With certain exceptions, a California corporation may not pay a dividend to its shareholders unless (i) its retained earnings equal at least the amount of the proposed dividend, or (ii) after giving effect to the dividend, the corporation's assets would equal at least 1.25 times its liabilities and, for corporations with classified balance sheets, the current assets of the corporation would be at least equal to its current liabilities or, if the average of the earnings of the corporation before taxes on income and before interest expense for the two preceding fiscal years was less than the average of the interest expense of the corporation for those fiscal years, at least equal to 1.25 times its current liabilities.

At March 31, 2008, the company had an accumulated deficit of $23.4 million and did not otherwise satisfy the minimum asset to liability ratios for paying dividends under California law. As a result, the company is legally prohibited from paying dividends on both its common stock and preferred stock. The company expects that it will be legally prohibited from paying dividends on both its common stock and preferred stock for the foreseeable future.

Strategic Capital Activities

In order to address the financial impact of the abrupt and severe decline in real estate values and the consequent increase in the company's provision for loan losses, the company has engaged financial advisors to explore strategic alternatives, including potential significant capital raises. The company has engaged in preliminary discussions with a limited number of parties concerning possible transactions which would infuse significant additional capital into the company, and the company currently remains in discussions with one of those parties.

Update on Timing of Filing of the Annual Report on Form 10-K

The company continues to be delayed in the filing of its Annual Report on Form 10-K. The delay relates primarily to an investigation by the company's Audit Committee regarding the nature, scope and circumstances of certain internal violations of security policies, procedures and controls of the information technology function ("IT Review") and the impact of those violations on the company's internal control functions.

In addition to the IT Review, the company also completed an extended evaluation of Vineyard's allowance for loan loss methodology and related matters (the "ALL Review"). Though unaudited, the results of the company's ALL Review are reflected in the financial statements included in this release. The company does not expect the IT Review to have an impact on the company's financial statements.

Upon filing of the Annual Report on Form 10-K, the company intends to schedule a conference call and webcast to discuss the company's results of operations and to answer questions from analysts, investors, and shareholders.

The company is a $2.4 billion financial holding company headquartered in Corona and the parent company of Vineyard and the exchange companies. Vineyard, also headquartered in Corona, operates through sixteen full-service banking centers and four regional financial centers in the counties of Los Angeles, Marin, Monterey, Orange, Riverside, San Bernardino, San Diego, Santa Clara and Ventura, Calif. The exchange companies are headquartered in Encinitas, Calif. The company's common stock is traded on the NASDAQ Global Market System under the symbol "VNBC." For additional information on the company visit www.vnbcstock.com or for additional information on Vineyard and to access internet banking, please visit www.vineyardbank.com. For additional information on the exchange companies, please visit www.1031exchangeadvantage.com.

This press release contains forward-looking statements as referenced in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently unreliable and actual results may vary. Factors which could cause actual results to differ from these forward-looking statements include changes in the competitive marketplace, changes in the interest rate environment, economic conditions, outcome of pending litigation, risks associated with credit quality and other factors discussed in the company's filings with the Securities and Exchange Commission. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

VINEYARD NATIONAL BANCORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per share amounts) (unaudited)

March 31, March 31, 2008 2007 $ Change % Change ----------- ----------- ----------- -----------Assets Loans, net of unearned income $ 1,978,524 $ 1,996,319 $ (17,795) -1% Less: Allowance for loan losses (48,222) (20,827) (27,395) 132% ----------- ----------- ----------- ----------- Net Loans 1,930,302 1,975,492 (45,190) -2% Loans held-for-sale 103,061 441 102,620 23270% Investment securities 158,418 232,504 (74,086) -32% ----------- ----------- ----------- ----------- Total Earnings Assets 2,191,781 2,208,437 (16,656) -1% ----------- ----------- ----------- ----------- Cash and cash equivalents 35,452 37,724 (2,272) -6% Premises and equipment, net 17,950 19,642 (1,692) -9% Other real estate owned 12,642 - 12,642 100% Goodwill and other intangibles 4,501 43,074 (38,573) -90% Other assets 92,276 42,794 49,482 116% ----------- ----------- ----------- ----------- Total Assets $ 2,354,602 $ 2,351,671 $ 2,931 0% =========== =========== =========== ========== Liabilities and Stockholders' Equity Liabilities Deposits Non-interest bearing $ 302,886 $ 287,866 $ 15,020 5% Interest-bearing 1,495,972 1,479,866 16,106 1% ----------- ----------- ----------- ----------- Total Deposits 1,798,858 1,767,732 31,126 2%

Exchange balances 18,135 - 18,135 100% Federal Home Loan Bank advances 227,000 244,000 (17,000) -7% Other borrowings 54,300 45,400 8,900 20% Subordinated debt 5,000 5,000 - 0% Junior subordinated debentures 115,470 115,470 - 0% Other liabilities 42,942 26,762 16,180 60% ----------- ----------- ----------- ----------- Total Liabilities 2,261,705 2,204,364 57,341 3% ----------- ----------- ----------- ----------- Stockholders' Equity Common stock equity 90,874 90,217 657 1% Preferred stock equity 31,615 9,665 21,950 227% Retained (deficit) / earnings (23,430) 56,534 (79,964) -141% Unallocated ESOP shares (5,009) (5,629) 620 -11% Cumulative other comprehensive loss (1,153) (3,480) 2,327 -67% ----------- ----------- ----------- ----------- Total Stockholders' Equity 92,897 147,307 (54,410) -37% ----------- ----------- ----------- ----------- Total Liabilities and Stockholders' Equity $ 2,354,602 $ 2,351,671 $ 2,931 0% =========== =========== =========== ========== Total non-performing loans/Gross loans (1) 5.86% 0.67%

Number of shares of common stock outstanding (2) 9,659,401 10,665,327

Net book value of common stock (3) $ 6.34 $ 12.91 Tangible book value of common stock (4) $ 5.88 $ 8.87 Net book value of common stock, excluding other comprehensive loss (3) $ 6.46 $ 13.23

(1) Total non-performing loans include non-accrual loans, renegotiated loans and accruing loans that are more than 90 days past due. For purposes of this calculation, gross loans include loans held-for-sale. (2) Number of shares of common stock outstanding at March 31, 2008 and March 31, 2007 excludes 225,040 and 251,731 unreleased and unallocated ESOP shares, respectively. The outstanding shares were retrospectively adjusted for the 5% stock dividend issued June 22, 2007. (3) "Net book value of common stock" is calculated by dividing stockholders' equity available to common shareholders by the number of shares of common stock outstanding at period-end. "Net book value of common stock, excluding other comprehensive loss" eliminates cumulative other comprehensive loss from the numerator. (4) "Tangible book value of common stock" is calculated by dividing stockholders' equity available to common shareholders, less goodwill and other intangible assets, by the number of common shares outstanding at period-end.

VINEYARD NATIONAL BANCORP AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per share amounts) (unaudited)

March 31, December 31, 2008 2007 $ Change % Change ----------- ----------- ----------- -----------Assets Loans, net of unearned income $ 1,978,524 $ 2,008,071 $ (29,547) -1% Less: Allowance for loan losses (48,222) (48,849) 627 -1% ----------- ----------- ----------- ----------- Net Loans 1,930,302 1,959,222 (28,920) -1% Loans held-for-sale 103,061 119,427 (16,366) -14% Investment securities 158,418 202,387 (43,969) -22% ----------- ----------- ----------- ----------- Total Earnings Assets 2,191,781 2,281,036 (89,255) -4% ----------- ----------- ----------- ----------- Cash and cash equivalents 35,452 83,537 (48,085) -58% Premises and equipment, net 17,950 18,326 (376) -2% Other real estate owned 12,642 17,375 (4,733) -27% Goodwill and other intangibles 4,501 4,637 (136) -3% Other assets 92,276 78,368 13,908 18% ----------- ----------- ----------- ----------- Total Assets $ 2,354,602 $ 2,483,279 $ (128,677) -5% =========== =========== =========== ========== Liabilities and Stockholders' Equity Liabilities Deposits Non-interest bearing $ 302,886 $ 316,905 $ (14,019) -4% Interest-bearing 1,495,972 1,618,747 (122,775) -8% ----------- ----------- ----------- ----------- Total Deposits 1,798,858 1,935,652 (136,794) -7%

Exchange balances 18,135 47,515 (29,380) -62% Federal Home Loan Bank advances 227,000 175,000 52,000 30% Other borrowings 54,300 45,250 9,050 20% Subordinated debt 5,000 5,000 - 0% Junior subordinated debentures 115,470 115,470 - 0% Other liabilities 42,942 46,367 (3,425) -7% ----------- ----------- ----------- ----------- Total Liabilities 2,261,705 2,370,254 (108,549) -5% ----------- ----------- ----------- ----------- Stockholders' Equity Common stock equity 90,874 94,499 (3,625) -4% Preferred stock equity 31,615 31,615 - 0% Retained deficit (23,430) (5,372) (18,058) 336% Unallocated ESOP shares (5,009) (5,168) 159 -3% Cumulative other comprehensive loss (1,153) (2,549) 1,396 -55% ----------- ----------- ----------- ----------- Total Stockholders' Equity 92,897 113,025 (20,128) -18% ----------- ----------- ----------- ----------- Total Liabilities and Stockholders' Equity $ 2,354,602 $ 2,483,279 $ (128,677) -5% =========== =========== =========== ========== Total non-performing loans/Gross loans (1) 5.86% 3.55%

Number of shares of common stock outstanding (2) 9,659,401 10,053,971

Net book value of common stock (3) $ 6.34 $ 8.10 Tangible book value of common stock (4) $ 5.88 $ 7.64 Net book value of common stock, excluding other comprehensive loss (3) $ 6.46 $ 8.35

(1) Total non-performing loans include non-accrual loans, renegotiated loans and accruing loans that are more than 90 days past due. For purposes of this calculation, gross loans include loans held-for-sale. (2) Number of shares of common stock outstanding at March 31, 2008 and December 31, 2007 excludes 225,040 and 231,804 unreleased and Unallocated ESOP shares, respectively. The outstanding shares were Retrospectively adjusted for the 5% stock dividend issued June 22, 2007. (3) "Net book value of common stock" is calculated by dividing stockholders' equity available to common shareholders by the number of shares of common stock outstanding at period-end. "Net book value of common stock, excluding other comprehensive loss" eliminates cumulative other comprehensive loss from the numerator. (4) "Tangible book value of common stock" is calculated by dividing stockholders' equity available to common shareholders, less goodwill and other intangible assets, by the number of common shares outstanding at period-end.

VINEYARD NATIONAL BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (dollars in thousands, except per share amounts) (unaudited)

Three Months Ended March 31, ---------------------- 2008 2007 $ Change % Change ---------- ---------- ---------- ----------Interest Income Loans, including fees $ 40,473 $ 42,211 $ (1,738) -4% Investment securities 1,679 2,938 (1,259) -43% ---------- ---------- ---------- ---------- Total Interest Income 42,152 45,149 (2,997) -7%

Interest Expense Deposits 17,107 17,073 34 0% Borrowings and debt obligations 5,163 5,583 (420) -8% ---------- ---------- ---------- ---------- Total Interest Expense 22,270 22,656 (386) -2%

Net Interest Income 19,882 22,493 (2,611) -12% Provision for loan losses 26,900 1,200 25,700 2142% ---------- ---------- ---------- ---------- Net interest (loss) / income after provision for loan losses (7,018) 21,293 (28,311) -133%

Other Income Fees and service charges 348 483 (135) -28% Gain on sale of SBA loans and SBA broker fee income 170 600 (430) -72% Loss on sale of securities and non-SBA loans (131) - (131) -100% Other income 74 119 (45) -38% ---------- ---------- ---------- ---------- Total Other Income 461 1,202 (741) -62%

Gross Operating (Loss) / Income (6,557) 22,495 (29,052) -129%

Operating Expenses Salaries and benefits 8,389 7,594 795 10% Occupancy and equipment 2,704 2,458 246 10% Professional services 3,040 647 2,393 370% Office supplies, postage and telephone 541 627 (86) -14% Business development 583 566 17 3% Write down of assets 3,868 - 3,868 100% Other operating expense 2,050 1,235 815 66% ---------- ---------- ---------- ---------- Total Operating Expenses 21,175 13,127 8,048 61%

(Loss) / earnings before income taxes (27,732) 9,368 (37,100) -396% Income tax (benefit) / provision (11,136) 3,859 (14,995) -389% ---------- ---------- ---------- ---------- Net (Loss) / Earnings $ (16,596) $ 5,509 $ (22,105) -401% ========== ========== ========== ========= Preferred stock dividend $ 645 $ 229 $ 416 182%

Weighted average shares outstanding used in (loss) / earnings per share calculation (5) Basic 9,730,002 10,683,466 Diluted (7) 9,730,002 10,927,114

(Loss) / Earnings per common share (5) Basic $ (1.77) $ 0.49 $ (2.26) -461% Diluted (7) $ (1.77) $ 0.48 $ (2.25) -469%

Efficiency Ratio (6) 104% 55%

(5) Number of share and per share amounts were retrospectively adjusted for the 5% stock dividend issued June 22, 2007. (6) The efficiency ratio is calculated by dividing total operating expenses by net interest income and total other income. (7) In a net loss scenario, diluted loss per share equals basic loss per share.

VINEYARD NATIONAL BANCORP AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (dollars in thousands, except per share amounts) (unaudited)

Three Months Ended -------------------------- March 31, December 31, 2008 2007 $ Change % Change ------------ ------------ ------------ ------------Interest Income Loans, including fees $ 40,473 $ 45,496 $ (5,023) -11% Investment securities 1,679 2,619 (940) -36% ------------ ------------ ------------ ------------ Total Interest Income 42,152 48,115 (5,963) -12%

Interest Expense Deposits 17,107 18,787 (1,680) -9% Borrowings and debt obligations 5,163 5,997 (834) -14% ------------ ------------ ------------ ------------ Total Interest Expense 22,270 24,784 (2,514) -10%

Net Interest Income 19,882 23,331 (3,449) -15% Provision for loan losses 26,900 35,700 (8,800) -25% ------------ ------------ ------------ ------------ Net interest loss after provision for loan losses (7,018) (12,369) 5,351 -43%

Other Income Fees and service charges 348 484 (136) -28% Gain on sale of SBA loans and SBA broker fee income 170 442 (272) -62% (Loss) / gain on sale of securities and non-SBA loans (131) 149 (280) -188% Other income 74 150 (76) -51% ------------ ------------ ------------ ------------ Total Other Income 461 1,225 (764) -62%

Gross Operating Loss (6,557) (11,144) 4,587 -41%

Operating Expenses Salaries and benefits 8,389 7,623 766 10% Occupancy and equipment 2,704 2,513 191 8% Professional services 3,040 1,120 1,920 171% Office supplies, postage and telephone 541 562 (21) -4% Business development 583 564 19 3% Write-down of assets 3,868 2,274 1,594 70% Write-down of goodwill - 40,771 (40,771) -100% Other operating expense 2,050 2,323 (273) -12% ------------ ------------ ------------ ------------ Total Operating Expenses 21,175 57,750 (36,575) -63%

Loss before income taxes (27,732) (68,894) 41,162 -60% Income tax benefit (11,136) (11,873) 737 -6% ------------ ------------ ------------ ------------ Net Loss $ (16,596) $ (57,021) $ 40,425 -71% ============ ============ ============ =========== Preferred stock dividend $ 645 $ 665 $ (20) -3%

Weighted average shares outstanding used in loss per share calculation (5) Basic 9,730,002 10,226,436 Diluted (7) 9,730,002 10,226,436

Loss per common share (5) Basic $ (1.77) $ (5.64) $ 3.87 -69% Diluted (7) $ (1.77) $ (5.64) $ 3.87 -69%

Efficiency Ratio (6) 104% 235%

(5) Number of share and per share amounts were retrospectively adjusted for the 5% stock dividend issued June 22, 2007. (6) The efficiency ratio is calculated by dividing total operating expenses by net interest income and total other income. (7) In a net loss scenario, diluted loss per share equals basic loss per share.

VINEYARD NATIONAL BANCORP AND SUBSIDIARIES FINANCIAL PERFORMANCE (unaudited) (dollars in thousands)

Three Months Ended March 31, ------------------------------------------------------ 2008 2007 -------------------------- -------------------------- Average Average Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost ---------- -------- ----- ---------- -------- -----Assets Gross loans (8) $2,129,067 $ 40,473 7.65% $1,943,391 $ 42,211 8.81% Investment securities (9) 181,536 1,679 3.70% 241,068 2,938 4.89% ---------- -------- ---------- -------- Total interest- earning assets 2,310,603 42,152 7.34% 2,184,459 45,149 8.38% Other assets 144,326 127,932 Less: allowance for loan losses (51,775) (19,913) ---------- ---------- Total average assets $2,403,154 $2,292,478 ========== ========= Liabilities and Stockholders' Equity Interest-bearing deposits (10) $1,574,445 17,107 4.37% $1,485,193 17,073 4.66% FHLB advances 193,150 2,272 4.67% 205,309 2,554 5.00% Other borrowings 44,631 771 6.84% 34,748 635 7.31% Subordinated debt 5,000 101 7.98% 5,000 109 8.73% Junior subordinated debentures 115,470 2,019 6.92% 115,470 2,285 7.92% ---------- -------- ---------- -------- Total interest- bearing liabilities 1,932,696 22,270 4.62% 1,845,720 22,656 4.96% -------- -------- Demand deposits 288,669 277,860 Exchange balances 33,679 - Other liabilities 42,758 24,370 ---------- ---------- Total average liabilities 2,297,802 2,147,950 Preferred stock equity 31,615 9,665 Common stock equity, net of cumulative other comprehensive loss 73,737 134,863 ---------- ---------- Stockholders' equity 105,352 144,528 ---------- ---------- Total liabilities and stockholders' equity $2,403,154 $2,292,478 ========== ========= Net interest spread (11) 2.72% 3.42% ===== ====Net interest margin (12) $ 19,882 3.47% $ 22,493 4.18% ======== ===== ======== ==== Return on Average Assets -2.78% 0.97% Return on Average Tangible Assets (13) -2.76% 1.03% Return on Average Common Equity -94.04% 15.88% Return on Average Tangible Common Equity (14) -99.47% 24.19% Net Charge-off's/ Average Gross Loans 1.29% 0.00%

(8) The average loan balances include loans held-for-sale and non-accrual loans. (9) The yield for investment securities is based on historical amortized cost balances. (10) Includes savings, NOW, money market, and time certificate of deposit accounts. (11) Net interest spread represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities. (12) Net interest margin is computed by dividing net interest income by total average earning assets. (13) Return on average tangible assets is computed by dividing net income excluding core deposit amortization for the period by average tangible assets. Average tangible assets equal average total assets less average identifiable intangible assets and goodwill. (14) Return on average tangible common stockholders' equity is computed by dividing net income applicable to common stock excluding core deposit amortization for the period by average tangible common stockholders' equity. Average tangible common stockholders' equity equals average total common stockholders' equity less average identifiable intangible assets and goodwill.

VINEYARD NATIONAL BANCORP AND SUBSIDIARIES FINANCIAL PERFORMANCE (unaudited) (dollars in thousands)

Three Months Ended, ------------------------------------------------------ March 31, 2008 December 31, 2007 -------------------------- -------------------------- Average Average Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost ---------- -------- ----- ---------- -------- -----Assets Gross loans (8) $2,129,067 $ 40,473 7.65% $2,149,838 $ 45,496 8.40% Investment securities (9) 181,536 1,679 3.70% 229,046 2,619 4.57% ---------- -------- ---------- -------- Total interest- earning assets 2,310,603 42,152 7.34% 2,378,884 48,115 8.03% Other assets 144,326 153,233 Less: allowance for loan losses (51,775) (22,402) ---------- ---------- Total average assets $2,403,154 $2,509,715 ========== ========= Liabilities and Stockholders' Equity Interest-bearing deposits (10) $1,574,445 17,107 4.37% $1,599,551 18,787 4.66% FHLB advances 193,150 2,272 4.67% 247,274 3,048 4.85% Other borrowings 44,631 771 6.84% 26,301 530 7.89% Subordinated debt 5,000 101 7.98% 5,000 108 8.44% Junior subordinated debentures 115,470 2,019 6.92% 115,470 2,311 7.83% ---------- -------- ---------- -------- Total interest- bearing liabilities 1,932,696 22,270 4.62% 1,993,596 24,784 4.92% -------- -------- Demand deposits 288,669 299,532 Exchange balances 33,679 10,261 Other liabilities 42,758 40,555 ---------- ---------- Total average liabilities 2,297,802 2,343,944 Preferred stock equity 31,615 31,622 Common stock equity, net of cumulative other comprehensive loss 73,737 134,149 ---------- ---------- Stockholders' equity 105,352 165,771 ---------- ---------- Total liabilities and stockholders' equity $2,403,154 $2,509,715 ========== ========= Net interest spread (11) 2.72% 3.11% ===== ====Net interest margin (12) $ 19,882 3.47% $ 23,331 3.91% ======== ===== ======== ==== Return on Average Assets -2.78% -9.01% Return on Average Tangible Assets (13) -2.76% -9.15% Return on Average Common Equity -94.04% -170.60% Return on Average Tangible Common Equity (14) -99.47% -250.56% Net Charge-off's/ Average Gross Loans 1.29% 0.43%

(8) The average loan balances include loans held-for-sale and non-accrual loans. (9) The yield for investment securities is based on historical amortized cost balances. (10) Includes savings, NOW, money market, and time certificate of deposit accounts. (11) Net interest spread represents the average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities. (12) Net interest margin is computed by dividing net interest income by total average earning assets. (13) Return on average tangible assets is computed by dividing net income excluding core deposit amortization for the period by average tangible assets. Average tangible assets equal average total assets less average identifiable intangible assets and goodwill. (14) Return on average tangible common stockholders' equity is computed by dividing net income applicable to common stock excluding core deposit amortization for the period by average tangible common stockholders' equity. Average tangible common stockholders' equity equals average total common stockholders' equity less average identifiable intangible assets and goodwill.

VINEYARD NATIONAL BANCORP AND SUBSIDIARIES Earning Asset, Funding Liability and Operating Expenses Composition (unaudited) (dollars in thousands)

March December September June March 31, 2008 31, 2007 30, 2007 30, 2007 31, 2007 ---------- ---------- ---------- ---------- ----------Earning Assets Loans Commercial and industrial $ 165,300 $ 156,966 $ 147,799 $ 133,255 $ 127,164 Real estate construction and land: Single-family luxury 573,104 582,962 577,155 497,494 553,333 Single-family tract 130,003 146,627 163,396 183,395 160,270 Commercial 218,499 198,186 163,573 162,514 136,465 Land: Single-family luxury 24,560 22,931 16,648 19,946 17,382 Single-family tract 59,647 64,405 61,760 38,878 70,761 Commercial 14,766 15,439 19,444 30,686 23,046 Other 906 909 795 25,099 6,284 Real estate mortgage: Commercial 525,198 553,531 569,167 604,157 565,199 Multi-family residential 88,370 93,662 97,971 185,450 213,877 All other residential 68,584 56,257 60,944 53,533 43,954 Consumer loans 108,736 115,702 112,064 97,752 80,306 All other loans (including overdrafts) 71 264 54 194 70 ---------- ---------- ---------- ---------- ---------- 1,977,744 2,007,841 1,990,770 2,032,353 1,998,111 Unearned premium on acquired loans 2,863 3,272 3,110 2,627 2,050 Deferred loan fees (2,083) (3,042) (3,235) (3,108) (3,842) ---------- ---------- ---------- ---------- ---------- Loans, net of unearned income 1,978,524 2,008,071 1,990,645 2,031,872 1,996,319 ---------- ---------- ---------- ---------- ---------- Loans held-for-sale 103,061 119,427 143,737 296 441 Investment securities 158,418 202,387 216,556 223,793 232,504 ---------- ---------- ---------- ---------- ---------- Total Earning Assets $2,240,003 $2,329,885 $2,350,938 $2,255,961 $2,229,264 ========== ========== ========== ========== ========= Unfunded Loan Commitments Commercial and industrial $ 138,613 $ 151,584 $ 125,431 $ 109,696 $ 110,649 Real estate construction and land: Single-family luxury 208,835 243,739 269,863 261,299 281,842 Single-family tract 32,355 57,239 59,035 108,898 126,463 Commercial 94,193 115,919 101,719 118,851 102,308 Land 6,617 8,930 10,236 12,928 13,495 Real estate mortgage: Commercial 8,841 8,780 14,005 14,736 13,388 Multi-family residential 1,376 1,662 1,901 709 961 All other residential 16,455 20,684 23,683 19,569 19,388 Consumer loans 12,192 9,799 9,305 5,948 5,663 ---------- ---------- ---------- ---------- ---------- Total Unfunded Loan Commitments $ 519,477 $ 618,336 $ 615,178 $ 652,634 $ 674,157 ========== ========== ========== ========== ========= Funding Liabilities Deposits Non-interest bearing $ 302,886 $ 316,905 $ 292,172 $ 301,281 $ 287,866 Money market 444,989 568,713 597,620 575,867 618,954 Savings and NOW 145,276 136,982 63,582 69,471 69,947 Time deposits 905,707 913,052 897,497 915,873 790,965 ---------- ---------- ---------- ---------- ---------- Total Deposits 1,798,858 1,935,652 1,850,871 1,862,492 1,767,732 ---------- ---------- ---------- ---------- ---------- Exchange balances 18,135 47,515 - - -FHLB advances 227,000 175,000 271,000 210,000 244,000 Other borrowings 54,300 45,250 33,100 26,000 45,400 Subordinated debt 5,000 5,000 5,000 5,000 5,000 Junior subordinated debentures 115,470 115,470 115,470 115,470 115,470 ---------- ---------- ---------- ---------- ---------- Total Funding Liabilities $2,218,763 $2,323,887 $2,275,441 $2,218,962 $2,177,602 ========== ========== ========== ========== ========= Quarterly Operating Expenses Salary and benefits $ 8,389 $ 7,623 $ 8,132 $ 7,856 $ 7,594 Occupancy and equipment 2,704 2,513 2,554 2,475 2,458 Professional services 3,040 1,120 763 832 647 Office supplies, postage and telephone 541 562 567 572 627 Business development 583 564 500 594 566 Write-down of assets 3,868 2,274 397 - - Write-down of goodwill - 40,771 - - - Other operating expenses 2,050 2,323 1,802 1,845 1,235 ---------- ---------- ---------- ---------- ---------- Total Operating Expenses $ 21,175 $ 57,750 $ 14,715 $ 14,174 $ 13,127 ========== ========== ========== ========== =========

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2008-05-01 22:27:34 0351153 MARKETWIRE