8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

   May 1, 2008 (May 1, 2008)

   Date of Report (Date of earliest event reported)

 VINEYARD NATIONAL BANCORP

   (Exact name of registrant as specified in its charter)

 California 000-20862   33-0309110

 (State or other jurisdiction of incorporation)  (Commission File Number)  (IRS Employer Identification No.)

1260 Corona Pointe Court, Corona, California     92879

 (Address of principal executive offices)  (Zip Code)

  (951)271-4232

  (Registrant’s telephone number, including area code)

  Not Applicable

  (Former name, former address and former fiscal year, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item  2.02.  Results of Operations and Financial Condition

On May 1, 2008 Vineyard National Bancorp announced by press release its revised earnings for the three months and year ended December 31, 2007 and its earnings for the three months ended March 31, 2008.  A copy of the press release is attached hereto as Exhibit 99.1.

Item  9.01.  Financial Statements and Exhibits

(a)    Not applicable

(b)    Not applicable.

(c)    Not applicable.

(d)    The following exhibit is included with this Report:         

     Exhibit 99.1   Press release dated May 1, 2008. 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. 

	VINEYARD NATIONAL BANCORP
Date: May 1, 2008	By:	/s/ Gordon Fong
		Gordon Fong
		Executive Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

For Immediate Release

Contact:                 Shareholder Relations

951-271-4232

shareholderinfo@vineyardbank.com

Vineyard National Bancorp Reports Revised Results of Operations for the Quarter

and Year Ended 2007 and Results for the First Quarter 2008

Corona, California, May 1, 2008 -- 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.

1

(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.

2

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.

3

(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.

4

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%.

5

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.

6

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.

7

VINEYARD NATIONAL BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share amounts)
(unaudited)
	March 31, 2008			March 31, 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.

8

VINEYARD NATIONAL BANCORP AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share amounts)
(unaudited)
	March 31, 2008			December 31, 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.

9

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.

10

VINEYARD NATIONAL BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(dollars in thousands, except per share amounts)
(unaudited)
	Three Months Ended
	March 31, 2008			December 31, 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.

11

VINEYARD NATIONAL BANCORP AND SUBSIDIARIES
FINANCIAL PERFORMANCE
(unaudited)
(dollars in thousands)
	Three Months Ended March 31,
	2008								2007
	Average					Average			Average					Average
	Balance			Interest		Yield/Cost			Balance			Interest		Yield/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.

12

VINEYARD NATIONAL BANCORP AND SUBSIDIARIES
FINANCIAL PERFORMANCE
(unaudited)
(dollars in thousands)
	Three Months Ended,
	March 31, 2008								December 31, 2007
	Average					Average			Average					Average
	Balance			Interest		Yield/Cost			Balance			Interest		Yield/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.

13

VINEYARD NATIONAL BANCORP AND SUBSIDIARIES
Earning Asset, Funding Liability and Operating Expenses Composition
(unaudited)
(dollars in thousands)
	March 31, 2008			December 31, 2007			September 30, 2007			June 30, 2007			March 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

14