The tip of the iceberg is starting to show---

Subsequent to June 30, 2009, we moved loans totaling $43.8 million to nonaccrual status. The additions include a $23.5 million relationship secured by a golf course, three related residential units and 15 improved lots located in the Desert region of Southern California

We have $246.9 million of commercial real estate mortgage loans maturing over the next 12 months. ---such loans may be considered troubled debt restructurings

1.85% allowance for loan losses is completely inadequate at $76 million. The mortgage loan portfolio is $2.5 billion with $546 million in retail space. look what happened after the close of the quarter--$44 million went on non-accrual.

The most significant nonaccrual loans include: a $16.6 million residential construction loan collateralized by 28 unsold units of a 32-unit condo project in Orange County; a $13.7 million commercial loan for a retailer of high-end sports equipment where we continue to work with the bankrupt debtor and the guarantor; and an $11.8 million "residential other" loan secured by several exclusive residential properties in and around San Diego.

The $100MM they raised last year will be gone soon. The san Diego market is not recovering and there are more retail bankruptcies every day. I drive around and look at empty space. Commercial space is standing empty and the commercial market is a ticking time bomb. Shareholder equity is only $464 million. If just 10% of the mortgage portfolio gets written off, they would be impaired and would have to raise more money--good luck on that front.

Deposits are even down $160MM in the quarter. Money is moving to stronger players with implicit Government guarantees--like Wells and Chase/Morgan. They will absorb massive deposits from the sick and weak. There deposit base is up 40% year to date.

Use this recent run up to get out of this pig until the air clears. The Board and management have shown poor judgement and continue to dump stock-- 132,000 shares in the last 6 months and 17,000 in August from 3 sellers--note-- not one direct buyer, that should tell you something. Chairman Eggemeyer dumped at $13. What do you know at $19 that makes you want to hold it? any recovery is several quarters away.