Viejas Band buys 100 percent of Borrego Springs

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LA MESA, Calif. - The Viejas Band of Kumeyaay Indians is buying out its
minority stockholders and now will own 100 percent of Borrego Springs Bank,
NA.

In a reverse stock split, the band will pay $6.8 million to buy out
minority holders at $22 per share. The tribe has been the majority
stockholder for the past nine years, holding about 70 percent of shares.

The stockholders will be getting a decent deal, as $22 is the highest
Borrego Springs has traded at for the past 52 weeks (the lowest is about
$15). The stock trades in the Over the Counter (OTCBB) market as "BRGO."

According to OTCBB, the stock last traded on Dec. 31, with the last price
being $21. It has 979,950 shares outstanding and a market capitalization of
$20.5 million.

It has been thinly traded for the past three months, averaging less than
2,000 shares a day. Most of that appears to be from late October when the
transaction was initially authorized.

The proposal was authorized by the bank's directors and the tribe in
October, approved by stockholders late in December, and the payouts will be
made beginning this month. U.S. Stock Transfer will be the exchange agent.

According to its most recent call report, filed with the Federal Deposit
Insurance Corp., Borrego Springs has turned a small profit of $815,000 for
the year through Sept. 30, 2004. That's up slightly from the similar nine
months of 2003, when it made $784,000.

The bank reported assets of $155.6 million, liabilities of $146.2 million,
and capital of $9.2 million, or about 6 percent. Assets were up 28 percent
year to year and deposits were up 30 percent, BSB reported.

Most of its liabilities were deposits, of which it reported $144.7 million.
Its assets were split between loans ($43 million), securities ($23.8
million) and federal funds sold ($66.7 million).

Credit quality seems good, with just $2.1 million of non-accruing loans.
According to the bank, $1.7 million of that amount is guaranteed by the
federal government.

Started in 1982, Borrego Springs was the first American-Indian owned bank
in California. Serving east San Diego County, it has branches in La Mesa,
Borrego Springs and Alpine.

An active Small Business Administration lender, BSB also has 19 loan
production offices in seven, mostly Western, states. It is also active in
providing gaming services to Indian tribes. In addition, it offers tribes
deposit and loan programs, trust fund management, a business startup
program and financial counseling. The bank started this program in 1997.

The bank says it has been named a top 50 SBA lender for three of the last
four years.

Frank Riolo is chairman and chief executive of the bank, as well as CEO of
Viejas Enterprises. President and Chief Credit Officer William Ruhlman has
led the SBA effort, while Senior Vice President Scott Yankton has
spearheaded the Indian gaming unit.

Most recently, Indian Gaming Services has introduced an automatic Internet
backup for casino automated teller machines, with fast transaction speeds
and backup protection. Earlier last year it rolled out fault-tolerant
servers to run and protect all products, like ATMs, credit, check and debit
services. IGS acted in the wake of Southern California wildfires that
underlined the need for disaster recovery programs.

Nationwide, there are about 20 banks owned by tribes or American Indian
individuals. There is also a handful of Indian credit unions.