Oak Valley Bancorp Reports 1st Quarter Results

OAKDALE, CA--(Marketwire - April 22, 2010) - Oak Valley Bancorp (NASDAQ: OVLY), the bank holding company for Oak Valley Community Bank and Eastern Sierra Community Bank, recently reported financial results. For the three months ended March 31, 2010, net income was $948,000, while net income available to common shareholders was $737,000, or $0.10 per diluted common share. This compared to net income available to common shareholders of $220,000, or $0.03 per diluted common share for the same period a year ago.

Increased net interest income and net interest margin expansion continues to support the Bank's earnings growth. Net interest income grew by $404,000, or 7.1%, to $6.1 million compared to $5.7 million for the same period last year. Net interest margin during the same periods were 5.22% and 4.86%, respectively.

Non interest expense for the quarter totaled $4.4 million, a decrease from $4.7 million for the three months ended December 31, 2009, but an increase from $3.9 million during the same period a year ago. Write downs and expenses associated with Other Real Estate Owned (OREO) represented the majority of the year-over-year increase. The provision for loan losses during the three months ended March 31, 2010, was $1.0 million, compared to $900,000 in the prior quarter, and $1.9 million in the same quarter of last year.

Management continues to actively write-down non-performing assets to reflect current values. First quarter non-performing assets to total assets are 2.85%, or $14.9 million, up from 2.66%, or $13.9 million for the same period a year ago, but down from the 3.16%, or $16.6 million for the three months ended December 31, 2009. As of March 31, 2010, nine loan relationships were on non-accrual status totaling $12.3 million. OREO held as of March 31, 2010 totaled $2.5 million and consists of eight properties.

Total assets were $520.3 million at March 31, 2010, a decrease of $3.5 million, or 0.7%, from March 31, 2009. Gross loans decreased by $19.4 million, to $411.0 million as of March 31, 2010, a decrease of 4.5% from March 31, 2009. The Bank's total deposits were $431.6 million as of March 31, 2010, an increase of $21.5 million, or 5.3% over March 31, 2009.

"Despite the recession and sluggish economy, our ongoing focus on attracting new business and core deposit accounts has served us well with respect to growing our customer base and expanding our net interest margin," commented Ron Martin, CEO. "Although balance sheet growth has been repressed due to limited loan demand, we have continued to progress in our ability to develop primary banking relationships with the business community and broaden the relationships we have with existing retail and commercial banking clients," Martin concluded.

Oak Valley Bancorp operates Oak Valley and Eastern Sierra Community Bank, through which it offers a variety of loan and deposit products to individuals and small businesses. The Company currently operates through 12 conveniently located branches: Oakdale, Sonora, Turlock, Stockton, Patterson, Ripon, Escalon, two branches in Modesto, and three branches in their Eastern Sierra Division, which includes Bridgeport, Mammoth Lakes and Bishop.

For more information call 1-866-844-7500 or visit us online at www.ovcb.com.

This press release includes forward-looking statements about the corporation for which the corporation claims the protection of safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the corporation's possible or assumed future financial condition, and its results of operations and business. Forward-looking statements are subject to risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include fluctuations in interest rates, government policies and regulations (including monetary and fiscal policies), legislation, economic conditions, including increased energy costs in California, credit quality of borrowers, operational factors and competition in the geographic and business areas in which the company conducts its operations. All forward-looking statements included in this press release are based on information available at the time of the release, and the Company assumes no obligation to update any forward-looking statement.

                        Oak Valley Community Bank

                    Statement of Condition (unaudited)


($ in thousands,        1st        4th        3rd        2nd        1st
 except per share)    Quarter    Quarter    Quarter    Quarter    Quarter
Selected Quarterly
 Operating Data:        2010       2009       2009       2009       2009

  Net interest
   income            $   6,060  $   6,079  $   6,020  $   5,887  $   5,656
  Provision for
   loan losses           1,005        900        925      2,137      1,900
  Non-interest
   income                  647        618        778        647        598
  Non-interest
   expense               4,445      4,749      4,745      4,787      3,938
  Income before
   income taxes          1,257      1,048      1,128       (389)       416
  Provision for
   income taxes            309        313        249       (344)       (14)
                     ---------  ---------  ---------  ---------  ---------
  Net income               948        735        879        (45)       430

  Preferred stock
   dividends and
   accretion              (211)      (210)      (210)      (210)      (210)
                     ---------  ---------  ---------  ---------  ---------
  Net income
   available to
   common
   shareholders            737        525        669       (255)       220
                     =========  =========  =========  =========  =========

  Earnings per
   common share -
   basic                  0.10       0.07       0.09      (0.03)      0.03
  Earnings per
   common share -
   diluted                0.10       0.07       0.09      (0.03)      0.03
  Dividends declared
   per common share (1)      -          -          -          -      0.025
  Return on average
   common equity          6.22%      4.41%      5.73%     -2.23%      1.97%
  Return on average
   assets                 0.75%      0.56%      0.67%     -0.03%      0.34%
  Net interest
   margin (2)             5.22%      5.10%      5.06%      4.96%      4.86%
  Efficiency Ratio (2)   65.59%     69.52%     68.77%     71.59%     61.97%

Capital - Period End
  Book value per
   share             $    6.24  $    6.14  $    6.06  $    5.89  $    5.91

Credit Quality -
 Period End
  Nonperforming
   assets/ total
   assets                 2.85%      3.16%      2.09%      1.94%      2.66%
  Loan loss reserve/
   gross loans (3)        1.65%      1.65%      1.50%      1.34%      1.53%

Period End Balance
 Sheet
($ in thousands)
Total assets         $ 520,275  $ 524,722  $ 521,179  $ 525,606  $ 523,747
  Gross Loans          411,013    425,627    425,374    424,390    430,416
  Nonperforming
   assets               14,854     16,568     10,904     10,177     13,906
  Allowance for
   credit losses (3)     6,762      7,020      6,396      5,701      6,603
  Deposits             431,624    429,210    431,533    419,941    410,089
  Common Equity         47,904     47,192     46,563     45,130     45,286
  Total Capital (4)     61,404     60,692     60,063     58,630     58,786
Non-Financial Data
  Full-time
   equivalent staff        118        117        120        111        117
  Number of banking
   offices, domestic
   and foreign              12         12         12         12         12

Common Shares
 outstanding
  Period end         7,681,877  7,681,877  7,681,877  7,661,627  7,661,627
  Period average -
   basic             7,681,877  7,681,877  7,668,891  7,661,627  7,661,627
  Period average -
   diluted           7,705,488  7,709,076  7,694,058  7,686,800  7,703,892
Market Ratios
  Stock Price        $    4.10  $    4.41  $    4.30  $    4.25  $    3.75
  Price/Earnings         10.54      16.27      12.43        N/A      32.22
  Price/Book              0.66       0.72       0.71       0.72       0.63


(1) Common shareholder cash dividend of $191,542 was paid in the first
    quarter of 2009.
(2) Ratio computed on a fully tax equivalent basis using a marginal federal
    tax rate of 34%.
(3) Adjusted for Allowance for Off-Balance Sheet Credit Exposure.
(4) Includes $13.5 million in preferred stock issued to the U.S. Treasury
    under the TARP Capital Purchase Program.

Contact Information: Contact: Ron Martin/Chris Courtney/Rick McCarty Phone: (209) 848-2265 www.ovcb.com