PVBK Pacific Valley Bancorp (PK)

Pacific Valley Bank (OTCBB: PVBK) released its unaudited 2009 1st quarter financial results.

Summary of Pacific Valley Bank's Financial Results for the 1st Quarter Ended March 31, 2009

The Bank reported net income of $129,700 for the first quarter of 2009 versus a loss of $478,400 in the first quarter of 2008. Basic earnings per share for the quarter were $0.06 as compared to a loss of $0.25 per share for the first quarter of 2008. Several factors contributed to the $608,100 positive change in net income.

--  First and foremost was a $267,700 increase in net interest income
    resulting from an increase in average loans outstanding, offset in part by
    lower rates on Fed Funds sold and lower volume of investment securities as
    well as a favorable decrease in interest expense as a result of lower
    deposit rates.
--  Second, the Bank provided $39,000 for the allowance for loan losses in
    the first quarter of this year as compared to $222,000 in the first quarter
    of last year.  This was a favorable change of $183,000.
--  Third, the Bank reduced its noninterest expenses by $124,000 (7.2%) on
    a quarter over quarter basis.
--  Fourth, completing the private placement of new stock added low cost
    funds to our funding base and increased our capital.
    

David Warner, CEO, stated, "We are pleased with the accomplishments and progress that the Bank has made in the last six months in improving its operations to attain its first quarterly profit." He went on to say, "In this challenging economic environment there are still many potential obstacles to achieving sustainable earnings, but we are making good progress towards this goal. We are also making great strides with respect to the administrative order entered into last November with our regulators. We believe we are in compliance with the order."

At March 31, 2009, the Bank had total assets of $183,800,000 which was a decrease of $8,900,000 (4.6%) from the balance at December 31, 2008. This was an anticipated decrease as the Bank is reducing its reliance on brokered CD deposits. Funds from reducing balances in cash, Fed Funds sold and loans were used to retire the maturing brokered CDs. Loan balances decreased $3,155,000 (2.1%) to total $150,355,000 at quarter end. Fed Funds sold were $4,120,000 (35%) lower and ended the quarter with a balance of $7,640,000. Total deposits decreased $10,378,000 (6.7%) to total $144,810,000 at March 31, 2009. During the quarter, $11,417,000 of brokered CD deposits matured from a balance of $14,374,000 at December 31, 2008 leaving a balance of $2,957,000 at March 31, 2009. Other deposits had a net growth of $1,041,000 in the quarter.

During the first quarter, the Bank completed its private placement offering of common stock. Additional capital of $1,502,000 was raised by this stock sale. The capital raised in the first quarter, combined with the capital raised through the first phase of the private placement in the fourth quarter of 2008, resulted in a total of $3,954,000 of new equity capital. Total shareholder's equity increased from $18.2 million at year end 2008 to $19.9 million at the quarter end. At March 31, 2009 our Tier 1 capital to average assets ratio was 10.56% and our total risk-based capital ratio was 13.45% compared to 9.17% and 12.06%, respectively, at December 31, 2008.

Recent Developments

During the quarter, upon receipt of necessary regulatory approvals, Mr. David B. Warner was appointed Chief Executive Officer and Director. Mr. Thomas Van der Ploeg joined the Bank as Executive Vice President and Chief Credit Officer. Mr. Ben A. Tinkey was appointed President. We also consolidated the branch banking functions of the Rossi head office into our downtown branch on Main Street in Salinas. We also have published notification that we intend to relocate our headquarters office from its current location at 3 Rossi Circle, Salinas to the downtown branch location at 422 S. Main Street, Salinas, CA. This relocation is subject to approval by the FDIC.

About Pacific Valley Bank

Pacific Valley Bank is a California banking corporation that commenced operations on September 14, 2004. We offer our services from four locations; our headquarters office and Main Street office which are both located in Salinas, California, our office located in King City and our office located in Monterey. We provide a broad range of banking products and services, including credit and deposit services to our targeted client base of small and medium sized businesses, agriculture related businesses, non-profit organizations, professionals and individuals primarily in Monterey County. For more information, visit www.pacificvalleybank.com.

Forward-Looking Statements

Statements concerning future performance, developments or events, expectations for growth and income forecasts, and any other guidance on future periods, constitute forward-looking statements that are subject to a number of risks and uncertainties. Actual results may differ materially from stated expectations. Specific factors include, but are not limited to, loan production, competitive pressure in the banking industry, balance sheet management, net interest margin variations, the ability to control costs and expenses, changes in the interest rate environment and financial policies of the United States government and general economic conditions. The Bank disclaims any obligation to update any such factors.

Contact: David Warner CEO 831-771-4323