Oak Valley Community Bank Reports 3rd Quarter Results

 | Source: Oak Valley Community Bank Oak Valley Community Bank

OAKDALE, CA--(Marketwire - October 18, 2007) - Oak Valley Community Bank (OTCBB: OVYB) reported net income of $1,013,000, or $0.13 per diluted share, for the third quarter ending September 30, 2007; a 1.63% increase from the $997,000, for the same period last year. For the nine month period ending September 30, 2007 net income was $3,018,000 compared to last year's $2,676,000; an increase of 12.7%. Total assets grew to $453.9 million at September 30, 2007, an increase of $25.2 million, or 5.9%, over September 30, 2006. Gross loans increased by $22.1 million, to $385.9 million as of September 30, 2007, an increase of 6.1% over September 30, 2006. The Bank's total deposits were $386.2 million on September 30, 2007, which is an increase of $14.2 million, or 3.8% over September 30, 2006.

"Given recent economic concerns and the ongoing pressure on interest margins in the banking industry, we are pleased with our third quarter results. While we have seen relatively modest growth in loans and deposits this year, we continue to see improvement in our overall deposit mix. Consequently, our third quarter net interest margin expanded to 4.67%, up from 4.47% in the second quarter of 2007," stated Rick McCarty, CFO.

"Slowdowns in the housing market and the Federal Reserve Bank's recent interest rate reduction have, and will continue, to affect the banking industry this year. We are fortunate to have 4 of our 12 branches in the early growth stages of their lifecycle that continue to prove their independent profitability and add to the bottom line. We are seeing some solid growth with regard to commercial lending opportunities and deposit market share growth at these branches. We are optimistic that this trend will continue and expect contributions from some of our more mature markets, as well as, Stockton as it comes online late this year," concluded Ron Martin, CEO.

Established in 1991, Oak Valley Community Bank offers a variety of loan and deposit products dedicated to serving the needs of individuals and small businesses. The Bank currently operates through 12 conveniently located branches: Oakdale, Escalon, Sonora, Turlock, Stockton, Patterson, Ripon, two branches in Modesto, and three branches in their Eastern Sierra Division, which include Bridgeport, Mammoth Lakes and Bishop. They recently completed restoration of the Historic First National Bank building in Oakdale and they are nearing completion on their full-service branch on March Lane in Stockton.

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)

                        3rd        2nd        1st        4th        3rd
                      Quarter    Quarter    Quarter    Quarter    Quarter
                       2007       2007       2007       2006       2006
Profitability
($ in thousands,
 except per share)
Selected Quarterly
 Operating Data:
  Net interest
   income            $   4,859  $   4,653  $   4,602  $   4,515  $   4,419
  Provision for loan
   losses                  145        120        170         50        140
  Non-interest
   income                  506        552        540        541        432
  Non-interest
   expense               3,540      3,452      3,320      3,135      3,082
  Income before
   income taxes          1,680      1,633      1,652      1,871      1,629
  Provision for
   income taxes            667        630        650        717        632
  Net income             1,013      1,003      1,002      1,154        997
  Earnings per
   common share -
   basic                  0.13       0.14       0.14       0.16       0.14
  Earnings per
   common share -
   diluted                0.13       0.14       0.14       0.16       0.14
  Dividends declared
   per common share (1)   0.19          -          -          -       0.19
  Return on average
   common equity (5)      9.75%     11.04%     11.50%     13.48%     11.91%
  Return on average
   assets                 0.91%      0.90%      0.92%      1.05%      0.93%
  Net interest
   margin (2)             4.67%      4.47%      4.49%      4.45%      4.47%
  Efficiency Ratio (2)   65.24%     65.49%     63.75%     61.23%     62.72%

Capital - Period End
  Tier 1 risk-based
   capital ratio (4)      9.76%      9.57%      8.76%      8.42%      8.68%
  Book value per
   share (5)         $    5.45  $    5.32  $    5.01  $    4.85  $    4.66

Credit Quality -
 Period End
  Nonperforming
   assets/assets          0.27%      0.00%      0.00%      0.00%      0.01%
  Loan loss
   reserve/loans (3)      1.23%      1.22%      1.16%      1.15%      1.18%

Period End Balance
 Sheet
($ in thousands)
Total assets         $ 453,882  $ 441,334  $ 452,520  $ 455,431  $ 428,670
  Gross Loans          385,901    376,671    387,580    378,393    363,807
  Nonperforming
   assets                1,216          -          -          -         22
  Allowance for
   credit losses (3)     4,757      4,600      4,480      4,341      4,296
  Deposits             386,158    364,164    352,086    378,530    371,950
  Common Equity (5)     41,462     39,287     35,665     34,424     33,025
Non-Financial Data
  Full-time
   equivalent staff        119        120        115        112        110
  Number of banking
   offices, domestic
   and foreign              12         12         12         12         12
Common Shares
 outstanding
  Period end (5)     7,606,068  7,379,613  7,122,171  7,103,243  7,094,244
  Period average -
   basic (5)         7,567,719  7,167,879  7,108,923  7,095,114  7,090,707
  Period average -
   diluted (5)       7,717,768  7,341,990  7,293,827  7,358,875  7,375,174
Market Ratios
  Stock Price        $    9.94  $   10.95  $   11.10  $   13.03  $   14.40
  Price/Earnings     $   18.72  $   19.50  $   19.43  $   20.18  $   25.81
  Price/Book (5)     $    1.82  $    2.06  $    2.22  $    2.69  $    3.09



Profitability                                             YEAR TO DATE
                                                      --------------------
($ in thousands, except per share)                    9/30/2007  9/30/2006
Selected Quarterly Operating Data:
  Net interest income                                 $  14,114  $  12,818
  Provision for loan losses                                 435        545
  Non-interest income                                     1,598      1,183
  Non-interest expense                                   10,312      9,084
  Income before income taxes                              4,965      4,372
  Provision for income taxes                              1,947      1,696
  Net income                                              3,018      2,676
  Earnings per common share - basic                        0.41       0.38
  Earnings per common share - diluted                      0.41       0.36
  Dividends declared per common share (1)                  0.19       0.19
  Return on average common equity (5)                     10.71%     11.11%
  Return on average assets                                 0.91%      0.90%
  Net interest margin (2)                                  4.54%      4.53%
  Efficiency Ratio (2)                                    64.83%     64.88%
Capital - Period End
  Tier 1 risk-based capital ratio (4)                      9.57%      8.68%
  Book value per share (5)                            $    5.45  $    4.66

Credit Quality - Period End
  Nonperforming assets/assets                              0.27%      0.01%
  Loan loss reserve/loans (3)                              1.23%      1.18%

Period End Balance Sheet
($ in thousands)
Total assets                                          $ 453,882  $ 428,670
  Gross Loans                                           385,901    363,807
  Nonperforming assets                                    1,216         22
  Allowance for credit losses (3)                         4,757      4,296
  Deposits                                              386,158    371,950
  Common Equity (5)                                      41,462     33,025
Non-Financial Data
  Full-time equivalent staff                                119        110
  Number of banking offices, domestic
  and foreign                                                12         12
Common Shares outstanding
  Period end (5)                                      7,606,068  7,094,244
  Period average - basic (5)                          7,283,187  7,051,965
  Period average - diluted (5)                        7,443,004  7,375,978
Market Ratios
  Stock Price                                              9.94      14.40
  Price/Earnings                                          17.94      28.38
  Price/Book (5)                                           1.82       3.09

(1) Dividend per share data does not reflect stock split.  Cash dividend of
    $1,444,697 paid in August 2007 and $1,345,072 in August 2006.
(2) Ratio computed on a fully tax equivalent basis using a marginal tax
    rate of 35%.
(3) Adjusted for Allowance for Off-Balance Sheet Credit Exposure.
(4) 3rd Quarter 2007 is estimated.
(5) Includes 256,142 shares issued on June 15, 2007 for the Rights
    Subscription stock offering and 200,289 shares issued on July 16, 2007
    for the Remaining shares stock offering, totaling $5,020,739 in
    additional capital less the $1,444,697 cash dividend paid in
    August 2007.

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

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