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Pacific Valley Bank Announces Its Greatest Annual Net Income and Surpassing the $300 Million Mark in Total Assets

Salinas, CA – February 11, 2019 – Pacific Valley Bank (OTCQB: PVBK) announced its unaudited fourth quarter 2018 net income of $503,153 or $0.13 basic earnings per share (adjusted for 2018 stock dividend).   Net income for the twelve months of 2018 was $2,456,457 or $0.62 basic earnings per share, as compared to the twelve months of 2017 with a reported $1,569,787 or $0.40 basic earnings per share.

Fourth Quarter 2018 Financial Highlights (annualized)

Return on Average Assets (ROAA): 0.69%
Net Interest Margin (NIM): 4.53%
Efficiency Ratio: 78.66%

Year-to-date 2018 Financial Highlights (annualized)

Return on Average Assets (ROAA): 0.90%
Net Interest Margin (NIM): 4.28%
Efficiency Ratio: 69.80%

“The year of 2018 has been the most profitable in Pacific Valley Bank’s history, a reflection of comprehensive asset management and emphasis on safe growth,” stated Anker Fanoe, President and CEO.  “This past year has been pivotal for the Bank, as total assets surpassed the $300 million milestone, a key benchmark for community banks.”  He continued, “The Bank is achieving record profits through performance of the loan portfolio as we continue to run a safe and sound bank.  The Pacific Valley Bank team of directors, senior management and employees are to be commended on a successful 2018 and for unwavering commitment to the Bank’s strategic plan, mission, and core values.”

Total Assets were $320.7 million at December 31, 2018, a net growth of $47.1 million or 17% over total assets of $273.6 million at December 31, 2017.  Outstanding loan balances grew to $248.7 million, advancing $38.2 million since December 31, 2017.  Increased competition for deposit growth in 2018 prompted development of enhanced sustainable liquidity planning to support loan portfolio expansion.  At December 31, 2018, total deposit balances were $286.4 million, an increase of $44.8 million or 19% over the same period in 2017.

Net interest income was $11.2 million for the twelve months ended December 31, 2018, representing an increase exceeding $1 million, or 10% when compared with the same period of 2017. The net interest income was impacted by increased interest expense of $754 thousand in 2018, offset by increased interest income of $1.8 million.  “Deposit expense in 2018 was $565 thousand over 2017, ending at $852 thousand for the year,” said Lee-Ann Cimino, Chief Financial Officer.  “This increase is attributable to increased demand for higher rates on deposits accounts, a pressure which is expected to continue into 2019.”

Bank Management increased its Allowance for Loan and Lease Losses by $250 thousand in 2018 to end the year at $4.6 million or 1.84% of outstanding loans. CEO Anker Fanoe stated, “We believe the quality of our assets is strong.  In addition to internal bank quantitative analysis, Bank Management continues to take a more macroeconomic view to consider global and local economic factors, as well as factors which may affect our customers.”   The $250 thousand in the Provision for Loan Loss expense in 2018 is in contrast to the $1 million benefit in 2017. In 2017, the Bank benefited from strong recoveries on previously charged-off loans.

ABOUT PACIFIC VALLEY BANK:

Pacific Valley Bank is a full service business bank that commenced operations in September 2004 to provide exceptional service to customers in Monterey County. Pacific Valley Bank operates business at three locations; administrative headquarters and branch offices in Salinas, King City and Monterey, California. The Bank offers a broad range of banking products and services, including credit and deposit services to small and medium sized businesses, agriculture related businesses, non-profit organizations, professional service providers and individuals. For more information, visit www.pacificvalleybank.com.

FORWARD LOOKING STATEMENTS 

This release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results, performance and/or achievements to differ materially from those projected. Accordingly, readers should not place undue reliance on these forward-looking statements. These risks and uncertainties include, but are not limited to, economic conditions in all areas in which the Bank conducts business, including the competitive environment for attracting loans and deposits; supply and demand for real estate and periodic deterioration in real estate prices and/or values in California or other states where we lend; changes in the financial performance and/or condition of our borrowers, depositors, key vendors or counterparties; changes in our levels of delinquent loans, nonperforming assets, allowance for loan losses and charge-offs; the effect of changes in laws and regulations, including accounting practices; changes in estimates of future reserve requirements and minimum capital requirements based upon periodic review thereof under relevant regulatory and accounting requirements; fluctuations in the interest rate and market environment; cyber-security threats, including the loss of system functionality, theft, loss of customer data or money; technological changes and the expanding use of technology in banking; the costs and effects of legal, compliance and regulatory actions; acts of war or terrorism, or natural disasters; and other factors beyond the Bank’s control. These

forward-looking statements, which reflect management’s views, are as of the date of this release. Pacific Valley Bank has no obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances.

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