Nevada Security Bank

Nevada Security Bank was incorporated under the laws of the State of Nevada on February 26, 2001, and was licensed by the Nevada Commissioner of Financial Institutions and commenced operations as a Nevada state chartered bank on December 27, 2001. The Bank's website is www.nevadasecuritybank.com.

Nevada Security Bank ("NSB") operates from its head office in Reno, Nevada. Additional Reno branches are Moana and MaeAnne. The Bank also has a branch office in Incline Village, Nevada as well as Roseville, California. Incline Village is located on the north shore of Lake Tahoe, Nevada, approximately 25 miles south of Reno, Nevada.  Roseville is located in the Sacramento, California environs about 124 miles southwest of Reno, Nevada. The California branch is separately branded as Silverado Bank, a division of NSB. Silverado Bank also focuses on government guaranteed loans through the Small Business Administration or SBA.

As an independent community oriented commercial bank, Nevada Security Bank offers a full range of consumer and commercial banking services primarily to the business and professional community and individuals located in two primary areas: Washoe and Douglas Counties and Carson City in Nevada and Placer and Sacramento Counties in California. Nevada Security Bank has a full complement of lending activities, including commercial and industrial, real estate construction, real estate mortgage, as well as agricultural and consumer loans with particular emphasis on short and medium-term obligations. Nevada Security Bank's loan portfolio is not concentrated in any one industry, although approximately 80% of Nevada Security Bank’s loans are secured by real estate which has not significantly changed over the past three years. A loan may be secured (in whole or in part) by real estate even though the purpose of the loan is not to facilitate the purchase or development of real estate.

As of December 31, 2008, the principal areas in which we directed our lending activities and the percentage of our total loan portfolio for which each of those areas was responsible were as follows: (i) loans secured by real estate 80%; (ii) commercial and industrial (including USDA) loans, 18%; and (iii) consumer loans 2%.

Nevada Security Bank offers a wide range of deposit instruments including personal and business checking accounts and savings accounts, health savings accounts, interest-bearing negotiable order of withdrawal accounts, money market accounts and time certificates of deposit. Most of Nevada Security Bank’s deposits are attracted from individuals and from small and medium-sized business-related sources. Its deposits are insured under the Federal Deposit Insurance Act up to applicable limits and subject to regulations by that federal agency. The Bank is subject to periodic examinations of its operations and verification of compliance with applicable laws and regulations issued by the FDIC and the Nevada Financial Institutions Division.

As of December 31, 2008 the Bank had 9,431 deposit accounts with balances totaling approximately $466.0 million, and as of December 31, 2007 there were reported 7,512 deposit accounts with balances totaling approximately $451.3 million, compared to 9,512 deposit accounts with balances totaling approximately $447.0 million at December 31, 2006. After the data conversion in December, 2006 to accommodate the purchase of Northern Nevada Bank, the Company purged closed and zero balance accounts which led to a reduction of 3,807 deposit accounts that were reported open as of December 31, 2006. We attract deposits through our customer oriented product mix, competitive pricing, and convenient locations where all are provided with the highest level of customer service. Further, we offer shared ATM and point-of-sale (POS) networks to allow customer access to national and international funds transfer networks, as well as remote capture devices to speed customer deposit funding efficiency.

In addition to the loan and deposit services, Nevada Security Bank also offers a wide range of specialized services designed to attract and meet the needs of commercial customers and personal account holders. These services include cashiers' checks, travelers' checks and foreign drafts. Nevada Security Bank does not operate a trust department; however, it had, prior to December 31, 2008, made an arrangement with a private trust company to offer trust services to its customers on request. It is uncertain at this time whether such an arrangement may be made with another local trust company during 2009. Most of Nevada Security Bank's business originates from within Washoe and Douglas Counties and Carson City, Nevada; however, the six counties which comprise the Sacramento, California SMSA provide a substantial source of additional business through Silverado Bank, a division of Nevada Security Bank. Neither Nevada Security Bank's business nor liquidity is seasonal, and there have been no material effects upon Nevada Security Bank's capital expenditures, earnings or competitive position as a result of federal, state or local environmental regulation.