2006 ANNUAL REPORT - Far East National Bank

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The following table presents a breakdown of the impaired loans and their related impairment allowance.SpecificRecorded ValuationDecember 31, 2006 Investment AllowanceImpaired loans:Nonaccrual loans, including restructured loans of $1,578,664 $ 11,965,935Restructured loans—accruing -Totalimpairedloans $ 11,965,935Loans with impairment allowance $ 11,965,935 $ 1,552,806Loans without impairment allowance - -Total $ 11,965,935 $ 1,552,806Average impaired loans for the year $ 10,752,351Income recognized on impaired loans for the year $ 740,153Income recognized on impaired loans on a cash basis for the year $ 739,858SpecificRecorded ValuationDecember 31, 2005 Investment AllowanceImpaired loans:Nonaccrual loans, including restructured loans of $197,034 $ 8,537,325Restructured loans—accruing 793,232Totalimpairedloans $ 9,330,557Loans with impairment allowance $ 9,330,557 $ 960,106Loans without impairment allowance - -Total $ 9,330,557 $ 960,106Average impaired loans for the year $ 15,135,914Income recognized on impaired loans for the year $ 1,531,364Income recognized on impaired loans on a cash basis for the year $ 1,530,99126
4. PREMISES AND EQUIPMENTPremises and equipment are summarized as follows at December 31:2006 2005Land and building $ 4,713,696 $ 4,713,696Leasehold improvements 9,782,356 9,208,004Furniture and fixtures 3,271,466 3,096,907Equipment 8,224,698 7,902,299Total 25,992,216 24,920,906Less accumulated depreciation and amortization 16,605,617 14,372,189Premises and equipment—net $ 9,386,599 $ 10,548,717Depreciation expense for the years ended December 31, 2006 and 2005 amounted to approximately$2,282,000 and $2,416,000, respectively.On June 14, 2005 the Bank sold its Newport Beach property subject to a 4 year lease back for$8,750,000. The Bank recognized a one-time gain of $5,299,716 and a deferred gain of $1,360,335.5. OTHER REAL ESTATE OWNEDThe following is an analysis of the activity in OREO for the years ended December 31:Balance—January 1, 2005 $ -Additions to OREO 4,339,203Sales (979,017)Balance—December 31, 2005 $ 3,360,186Additions to OREO $ 600,000OREO sold (3,960,186)Balance—December 31, 2006 $ -There was no allowance on other real estate owned for the years ended December 31, 2006 and 2005.The following table presents the income and expense components of other real estate owned and relatedcollection expenses for the years ended December 31:2006 2005Gain on sale $ 637,280 $ 51,217Operating reimbursement/expense, net 58,217 53,000OREO income —net $ 695,497 $ 104,21727
Page 1: 2006 ANNUAL REPORT
Page 4 and 5: Year inReview/2006During 2006, our
Page 6 and 7: A Message from theChairman and the
Page 8 and 9: Board ofDirectorsPaul C. Lo is the
Page 10 and 11: CorporateExecutive OfficersFred Tsa
Page 12 and 13: Branches andOffice LocationsCorpora
Page 14 and 15: FAR EAST NATIONAL BANK AND SUBSIDIA
Page 20 and 21: inherent in the loan portfolio at t
Page 22 and 23: Recent Accounting Pronouncements—
Page 24 and 25: The maturity distribution of securi
Page 26 and 27: The unrealized loss positions on th
Page 30 and 31: 6. GOODWILL INTANGIBLE ASSETSOn Aug
Page 32 and 33: 11. INCOME TAXESCurrent and deferre
Page 34 and 35: 12. 401(k) PLANThe Bank has a 401(k
Page 36 and 37: no conditions or events since that
Page 38 and 39: The following methods and assumptio
Page 40: As of December 31, 2006 and 2005, t

2006 ANNUAL REPORT - Far East National Bank

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