2006 ANNUAL REPORT - Far East National Bank

The components of the net deferred tax liabilities (assets) are as follows for the years endedDecember 31:2006 2005Federal:Deferred tax liabilities:Deferred loan fees $ 3,786,543 $ 4,039,103State deferred tax 474,196 158,677Acquisition premium excluding goodwill 913,237 1,075,590Other 508,431 332,998Gross deferred tax liabilities 5,682,407 5,606,368Deferred tax assets:State franchise tax (771,112) (861,503)Depreciation and amortization (1,989,245) (1,067,039)Provision for loan losses (6,005,743) (4,714,093)Unrealized losses (941,095) (1,436,097)Other (1,416,953) (1,238,129)Gross deferred tax assets (11,124,148) (9,316,861)Net deferred federal tax assets $ (5,441,741) $ (3,710,493)State:Deferred tax liabilities:Deferred loan fees 1,172,745 1,250,968Acquisition premium excluding goodwill 282,842 333,126Other 38,677 103,134Gross deferred tax liabilities 1,494,264 1,687,228Deferred tax assets:Depreciation (620,792) (363,994)Provision for loan losses (1,860,064) (1,460,022)Unrealized losses (326,908) (498,856)Other (429,866) (378,185)Gross deferred tax assets (3,237,630) (2,701,057)Net deferred state tax assets (1,743,366) (1,013,829)Total net deferred tax assets $ (7,185,107) $ (4,724,322)31