Oak Valley Community Bank Reports 3rd Quarter Results

 | Source: Oak Valley Community Bank Oak Valley Community Bank

OAKDALE, CA -- (MARKET WIRE) -- October 23, 2006 --Oak Valley Community Bank (OTCBB: OVYB) reported net income of $997,000, or $0.14 per diluted share, for the third quarter ending September 30, 2006; an 11.3% decrease from the $1,124,000, for the same period last year. For the nine month period ending September 30, 2006 net income was $2,676,000 compared to last year's $2,857,000; a decrease of 6.3%. Total assets grew to $428.7 million at September 30, 2006, an increase of $77.9 million, or 22.2%, over September 30, 2005. Gross loans increased by $71.4 million, to $363.8 million as of September 30, 2006, an increase of 24.4% over September 30, 2005. The Bank's total deposits were $372.0 million on September 30, 2006, which is an increase of $87.6 million, or 30.8% over September 30, 2005.

"Increases in assets and deposits continue to fuel the growth of the Bank. While we are pleased with the overall progress in these areas, we remain focused on improving net income by year end," remarked, Ron Martin, CEO. "We are pleased with the rate at which our newest branches have gotten up to speed and began capturing market share in their respective communities. The Modesto market continues to be a balanced source of deposits and loan volume and has continued to post outstanding growth, while the Oakdale market continues to be one of our strongest sources of loan fundings. Nonetheless, as stated last quarter, expenses associated with staffing and operating the new branches and continued compression on our net interest margin has put pressure on earnings. In the fourth quarter, we anticipate that our ongoing focus on sound credit practices and core deposit generation will help us reach our aggressive profitability goals," he concluded.

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 are also nearing completion on the restoration of the Historic First National Bank building in Oakdale which will house a portion of the branch and administrative offices.

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)

                                   For the Three Months Ended

                     9/30/2006  6/30/2006  3/31/2006 12/31/2005  9/30/2005
Profitability
($ in thousands,
 except per share)
Selected Quarterly
 Operating Data:
    Net interest
     income          $   4,419  $   4,231  $   4,168  $   4,152  $   3,988
    Provision for
     loan losses           140        220        185        200        170
    Non-interest
     income                432        412        340        353        352
    Non-interest
     expense             3,081      3,052      2,951      2,544      2,338
    Income before
     income taxes        1,629      1,372      1,371      1,762      1,832
    Provision for
     income taxes          632        532        532        684        709
    Net income             997        840        839      1,078      1,124
    Earnings per
     common share -
     basic (1)            0.14       0.12       0.12       0.15       0.16
    Earnings per
     common share -
     diluted (1)          0.14       0.11       0.11       0.15       0.15
    Dividends
     declared per
     common share(2)     0.190          -          -          -      0.250
    Return on
     average common
     equity              11.91%     10.31%     10.71%     13.91%     14.70%
    Return on
     average assets       0.93%      0.83%      0.88%      1.19%      1.31%
    Net interest
     margin               4.44%      4.57%      4.67%      4.91%      4.96%
    Efficiency Ratio     63.52%     65.72%     65.47%     56.46%     53.86%
Capital - Period End
    Tier 1 risk-based
     capital ratio(3)     8.68%      9.22%      9.10%      9.36%      9.86%
    Book value per
     share (1)            4.66       4.65       4.51       4.44       4.31

Credit Quality-
 Period End
    Nonperforming
     assets/assets        0.01%      0.01%      0.00%      0.00%      0.00%
    Loan loss
     reserve/loans(4)     1.18%      1.22%      1.17%      1.18%      1.22%

Period End Balance
 Sheet
($ in thousands)
Total assets         $ 428,670  $ 409,103  $ 402,080  $ 382,122  $ 350,801
    Gross Loans        363,807    341,652    337,016    318,108    292,403
    Nonperforming
     assets                 22         25          -          -          -
    Allowance for
     credit losses(4)    4,296      4,157      3,938      3,757      3,558
    Deposits           371,950    365,003    353,376    329,080    284,391
    Common Equity       33,025     32,931     31,815     31,038     30,106
Non-Financial Data
    Full-time
     equivalent
     staff                 110        108        108        101         91
    Number of
     banking
     offices,
     domestic               12         12         12         11          9
     and foreign
Common Shares
 outstanding
    Period end (1)   7,094,244  7,079,326  7,046,732  6,988,224  6,986,874
    Period average -
     basic (1)       7,090,707  7,059,219  7,004,325  6,987,549  6,954,491
    Period average -
     diluted (1)     7,375,174  7,357,295  7,349,790  7,361,137  7,310,637
Market Ratios
    Stock Price (1)      14.40      13.50      14.95      15.67      12.67
    Price/Earnings       25.80      28.30      30.76      25.60      19.76
    Price/Book            3.09       2.90       3.31       3.53       2.94





                          YEAR TO DATE
                     ---------------------
                      9/30/2006  9/30/2005
Profitability
($ in thousands,
 except per share)
Selected Quarterly
 Operating Data:
    Net interest
     income          $  12,818  $   11,011
    Provision for
     loan losses           545         505
    Non-interest
     income              1,183         993
    Non-interest
     expense             9,084       6,832
    Income before
     income taxes        4,372       4,667
    Provision for
     income taxes        1,696       1,811
    Net income           2,676       2,857
    Earnings per
     common share -
     basic (1)            0.38        0.41
    Earnings per
     common share -
     diluted(1)           0.36        0.39
    Dividends
     declared per
     common share (2)    0.190       0.250
    Return on average
     common equity       11.11%      12.92%
    Return on
     average assets       0.90%       1.15%
    Net interest
     margin               4.53%       4.74%
    Efficiency
     Ratio               64.88%      56.91%
Capital - Period End
    Tier 1 risk-based
     capital ratio(3)     8.68%       9.86%
    Book value per
     share(1)             4.66        4.31

Credit Quality -
 Period End
    Nonperforming
     assets/assets        0.01%       0.00%
    Loan loss
     reserve/loans(4)     1.18%       1.29%

Period End Balance
 Sheet
($ in thousands)
Total assets         $  428,670  $ 350,801
    Gross Loans         363,807    292,403
    Nonperforming
     assets                  22          -
    Allowance for
     credit
     losses(4)            4,296      3,777
    Deposits            371,950    284,391
    Common Equity        33,025     30,106
Non-Financial Data
    Full-time
     equivalent staff       110         91
    Number of banking
     offices,domestic        12          9
     and foreign
Common Shares
 outstanding
    Period end
     (1)              7,094,244  6,986,874
    Period
     average -
     basic (1)        7,051,965  6,927,657
    Period
     average -
     diluted(1)       7,375,978  7,283,804
Market Ratios
    Stock Price (1)       14.40      12.67
    Price/Earnings        28.38      22.97
    Price/Book             3.09       2.94


   (1) Number of shares adjusted for January 3, 2006, three for two stock
       split.
   (2) Dividend per share data does not reflect stock split.
   (3) 3rd Quarter 2006 estimated.
   (4) Adjusted for Allowance for Off-Balance Sheet Credit Exposure.

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

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