Oak Valley Community Bank Reports 1st Quarter Results

OAKDALE, CA -- (MARKET WIRE) -- 04/25/08 -- Oak Valley Community Bank, traded as (OTCBB: OVYB), announced its financial results for the three months ended March 31, 2008. The Bank's total assets increased by $11 million, or 2.3%, over March 31, 2007, to $463 million at the end of the first quarter. The Bank's total deposits were $363 million on March 31, 2008, which is an increase of $11 million, or 3.0% over March 31, 2007. Gross loans were essentially flat, at $388 million on March 31, 2008, increasing by 67 thousand over March 31, 2007. The Bank posted first quarter earnings of $776 thousand, or $0.10 per diluted share, down $226 thousand, or 22.5%, compared to $1.0 million, or $0.14 per diluted share, for the same period in 2007.

"Although we have seen an unprecedented 200 basis point rate drop by the Federal Reserve Bank in the first quarter, we have been able to maintain a consistent margin. While other banks have seen a drop off in loan volume due to depressed property values, decreased activity, and pay downs, our portfolio has remained stable," stated CFO, Rick McCarty. "Our focus on full banking relationships, and limited tolerance for high cost deposits held by single service households, has resulted in a stable net interest margin," he concluded.

Net interest income increased by $207 thousand, or 4.5% over the same period last year, as a result of an increase in the Bank's net interest margin of 4.60% for the three months ended March 31, 2008, up from 4.49% for the same period in 2007. During the first quarter, non-interest income increased by $83 thousand, or 15.4%, over the same period last year. The increases in net interest margin and non-interest income correspond to an increase in the Bank's core deposit base, resulting from the growth in the Bank's branch network and product base. Offsetting these increases is the impact of the young network of branches, including the December 2007 opening of the Bank's newest Stockton location and the addition of three experienced Commercial Loan Officers, which led to increases in non-interest expense of $744 thousand, or 22.4%, for the period ending March 31, 2008, compared to the same period in 2007.

"Not only did we fully staff the Stockton branch, we had the good fortune to hire three experienced Lending Officers in the Stockton, Modesto and Sonora markets. Technological advancements include upgrades to our Small Business program and a new 24-hour 'In Touch' telephone banking system. We also hired a cash management expert to work directly with customers in the Bank's four Central Valley counties. Over time, these initiatives will enhance profitability and yield long-term benefits," commented President, Chris Courtney.

The bank has not been immune from the credit cycle currently being experienced in parts of the nation including the Central Valley of California. Oak Valley has always taken pride in its history of low credit losses and adherence to prudent loan underwriting standards supported by a philosophy of early recognition and remediation of problem loans. December 31, 2007 Non-Performing Assets were at 2.0% of total assets, or $9.1 million. This number has decreased in the first quarter to 1.6%, or $7.4 million, $2.8 million of which have been taken into OREO (other real estate owned) and written down to an appropriate level given current market conditions. The decrease of $1.7 million is the result of the sale of property and write downs of $413 thousand. The much publicized default of an $875 thousand loan to Diablo Grande is included in this non-performing category and is secured by real estate with sufficient equity for no loss potential in the opinion of management. Management also believes that the current level of classified loans is moderate and manageable in relation to the size of the Bank's loan portfolio and they have identified problem loans to date and reserved appropriately for potential losses. All NPAs are secured by real estate and the Bank will continue its vigilance and reserve accordingly given current and forecasted economic conditions.

"While we have seen modest, year over year growth in deposits, loan growth was limited due to the general slowdown in the Central Valley economy. Increased non-interest expenses corresponding to the Bank's strategic objectives have caused some erosion of first quarter earnings. Despite intense pressure on interest rates, we have diligently managed our net interest margin as a result of our ongoing focus on core deposit expansion. Going forward, our ability to expand our margin and increase profitability requires a continued broadening of our customer base and our successfully establishing full-banking relationships with our clients," summarized 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.

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)

Profitability 1st 4th 3rd 2nd 1st ($ in thousands, Quarter Quarter Quarter Quarter Quarter except per share) 2008 2007 2007 2007 2007 Selected Quarterly Operating Data: Net interest income $ 4,809 $ 4,792 $ 4,859 $ 4,653 $ 4,602 Provision for loan losses 145 120 145 120 170 Non-interest income 623 562 506 552 540 Non-interest expense 4,065 3,897 3,540 3,452 3,320 Income before income taxes 1,222 1,337 1,680 1,633 1,652 Provision for income taxes 446 387 667 630 650 Net income 776 950 1,013 1,003 1,002 Earnings per common share - basic 0.10 0.12 0.13 0.14 0.14 Earnings per common share - diluted 0.10 0.12 0.13 0.14 0.14 Dividends declared per common share (1) - - 0.19 - - Return on average common equity (5) 7.16% 8.93% 9.75% 11.04% 11.50% Return on average assets 0.68% 0.83% 0.91% 0.90% 0.92% Net interest margin (2) 4.60% 4.50% 4.67% 4.47% 4.49% Efficiency Ratio (2) 73.70% 72.00% 65.24% 65.49% 63.75%

Capital - Period End Tier 1 risk-based capital ratio (4) 10.02% 10.02% 9.86% 9.57% 8.47% Book value per share (5) $ 5.74 $ 5.60 $ 5.45 $ 5.32 $ 5.01

Credit Quality - Period End Nonperforming assets/assets 1.60% 2.00% 0.27% 0.00% 0.00% Loan loss reserve/loans (3) 1.09% 1.16% 1.23% 1.22% 1.16%

Period End Balance Sheet ($ in thousands) Total assets $ 463,140 $ 454,401 $ 453,882 $ 441,334 $ 452,520 Gross Loans 387,647 387,809 385,901 376,671 387,580 Nonperforming assets 7,395 9,087 1,216 - - Allowance for credit losses (3) 4,225 4,507 4,757 4,600 4,480 Deposits 362,760 377,348 386,158 364,164 352,086 Common Equity (5) 43,652 42,640 41,462 39,287 35,665 Non-Financial Data Full-time equivalent staff 130 125 119 120 115 Number of banking offices, domestic and foreign 12 12 12 12 12 Common Shares outstanding Period end (5) 7,611,377 7,607,780 7,606,068 7,379,613 7,122,171 Period average - basic (5) 7,610,039 7,606,506 7,567,719 7,167,879 7,108,923 Period average - diluted (5) 7,748,962 7,727,570 7,717,768 7,341,990 7,293,827 Market Ratios Stock Price $ 8.49 $ 8.25 $ 9.94 $ 10.95 $ 11.10 Price/Earnings 20.71 16.64 18.72 19.50 19.43 Price/Book (5) 1.48 1.47 1.82 2.06 2.22

Profitability YEAR TO DATE ($ in thousands, -------------------- except per share) 3/31/2008 3/31/2007 Selected Quarterly Operating Data: Net interest income $ 4,809 $ 4,602 Provision for loan losses 145 170 Non-interest income 623 540 Non-interest expense 4,065 3,320 Income before income taxes 1,222 1,652 Provision for income taxes 446 650 Net income 776 1,002 Earnings per common share - basic 0.10 0.14 Earnings per common share - diluted 0.10 0.14 Dividends declared per common share (1) - - Return on average common equity (5) 7.16% 11.50% Return on average assets 0.68% 0.92% Net interest margin (2) 4.60% 4.49% Efficiency Ratio (2) 73.70% 63.75% Capital - Period End Tier 1 risk-based capital ratio (4) 10.02% 8.47% Book value per share (5) $ 5.74 $ 5.01

Credit Quality - Period End Nonperforming assets/assets 1.60% 0.00% Loan loss reserve/loans (3) 1.09% 1.16%

Period End Balance Sheet ($ in thousands) Total assets $ 463,140 $ 452,520 Gross Loans 387,647 387,580 Nonperforming assets 7,395 - Allowance for credit losses (3) 4,225 4,480 Deposits 362,760 352,086 Common Equity (5) 43,652 35,665 Non-Financial Data Full-time equivalent staff 130 115 Number of banking offices, domestic and foreign 12 12 Common Shares outstanding Period end (5) 7,611,377 7,122,171 Period average - basic (5) 7,610,039 7,108,923 Period average - diluted (5) 7,748,962 7,293,827 Market Ratios Stock Price $ 8.49 $ 11.10 Price/Earnings 20.71 19.43 Price/Book (5) 1.48 2.22

(1) Cash dividend of $1,444,697 paid in August. (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) 1st Quarter 2008 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.

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

2008-04-25 17:11:23 0345672 MARKETWIRE