It is believed that there is a significant market segment of small to mid-sized businesses that are looking for a locally based commercial bank capable of providing a high degree of flexibility and responsiveness, in addition to offering a broad range of financial products and services. The local community banks that compete in the markets do not offer the same breadth of products and services that the customers require to meet their growing needs, while the large, national banks lack the flexibility and personalized service that the customers desire in their banking relationships.

It is believed that the rapid population growth and attractive economic factors of the markets will provide the companies with significant opportunities in the future. Increased economic activity by individuals and accelerated infrastructure investments by businesses should generate additional demand for products and services. For example, economic growth should produce additional commercial and residential development, providing with greater lending opportunities. In addition, as per capita income continues to rise, there should be greater opportunities for companies to provide financial products and services, such as checking accounts and wealth and asset management services.

In addition to traditional lending and deposit gathering capabilities, the Company also offers a broad array of financial products and services aimed at satisfying the needs of small to mid-sized businesses and their proprietors, including cash management, trust administration and estate planning, custody and investments and equipment leasing. The Company provides a variety of loans, including commercial and residential real estate loans, construction and land development loans, commercial loans, and to a lesser extent, consumer loans.

The majority of the Company’s lending activity consists of loans to finance the purchase of commercial real estate and loans to finance inventory and working capital that are secured by commercial real estate. The Company has a commercial real estate portfolio comprised of loans on apartment buildings, professional offices, industrial facilities, retail centers and other commercial properties.

The principal types of the Company’s construction loans include industrial/warehouse properties, office buildings, retail centers, medical facilities, restaurants and, on occasion, luxury single-family homes. An analysis of each construction project is performed as part of the underwriting process to determine whether the type of property, location, construction costs and contingency funds are appropriate and adequate. The Company extends raw commercial land loans primarily to borrowers who plan to initiate active development of the property within two years.

In addition to real estate related loan products, the Company also originates commercial and industrial loans, including working capital lines of credit, inventory and accounts receivable lines, equipment loans and other commercial loans. The Company focuses on making commercial loans to small and medium-sized businesses in a wide variety of industries.

The Company originates residential mortgage loans secured by one- to four-family properties, most of which serve as the primary residence of the owner. The Company’s primary focus is to maintain and expand relationships with realtors and other key contacts in the residential real estate industry in order to originate new mortgages. Most of the Company’s loan originations result from relationships with existing or past customers, members of the local community, and referrals from realtors, attorneys and builders.

The Company offers a variety of consumer loans to meet customer demand and to increase the yield on its loan portfolio. Consumer loans are generally offered at a higher rate and shorter term than residential mortgages. Examples of consumer loans include home equity loans and lines of credit, home improvement loans, new and used automobile loans, and personal lines of credit.

Net interest income increased 73.4% to $71.1 million for the year ended December 31, 2004 compared to $41.0 million for the year ended December 31, 2003.

Provision for loan losses declined to $3.9 million for the year ended December 31, 2004, from $5.1 million for the year ended December 31, 2003.

Non-interest income increased $4.5 million, or 104.4%, to $8.7 million for the year ended December 31, 2004 from $4.3 million for the year ended December 31, 2003.

Non-interest expense grew $17.6 million, or 64.6%, to $44.9 million for the year ended December 31, 2004 from $27.3 million for the year ended December 31, 2003.