Golden Valley Bank Reports Strong Third Quarter 2012 Earnings

CHICO, Calif.--(BUSINESS WIRE)-- Golden Valley Bank (OTCBB: GVYB), headquartered in Chico, California today reported its third quarter 2012 financial results.

Third Quarter 2012 Highlights:

• Pre tax year-to-date income of $1,325,320, representing a 77% increase over the third quarter of 2011
• Assets up $17.3 million or 15.9% over the third quarter of 2011 now total $125,939,094
• Deposits up $16.1 million or 17.5% over the third quarter of 2011 now total $107,765,977
• Loans up $12.4 million or 17.5% over the third quarter of 2011 now total $83,120,171
• Continued success in deploying excess capital with the repurchase of 17,732 shares during the quarter

“Our solid earnings are driven by our excellent credit quality, strong relationships with customers, and commitment to the community,” said Mark Francis President & CEO. “We sincerely appreciate the continued support of the citizens of Chico and the surrounding areas and the confidence shown in choosing Golden Valley for all of their banking needs.”

Third quarter year-to-date earnings were 77% greater on a pre tax basis than the same period last year. This comparison is made on a pre tax basis because in 2012 the Bank is recognizing full income taxes whereas in 2011 the Bank recognized only partial income taxes. The net interest margin through the third quarter of 2012 was 4.39% compared to 4.49% for the same period last year. Although the margin is being squeezed due to loan rate pricing and lower rates obtained on investment securities, net interest income is up $337,399 from the year to date period ending September 2011. Fee income from mortgage activity and well managed operating expenses helped to further support the positive third quarter results. Net income after tax was $810,320 or 37% greater than the $592,621 third quarter year-to-date 2011 earnings.

The Bank’s year-to-date third quarter annualized return on average assets (ROAA) improved from .94% in 2011 to 1.47% in 2012 on a pre tax basis and the annualized return on average equity (ROAE) improved from 6.33% year-to-date through the third quarter of 2011 to 10.43% in 2012 also on a pretax basis.

Asset quality continues to be excellent as only .49% of total assets are considered to be non-performing. By comparison, the industry average was 2.72% of total assets for the Bank’s national peer group, based on data provided as of June 30, 2012 (the most recent data available). The company has set aside over $1.6 million in loan loss reserves to protect it from future economic uncertainties. Golden Valley continues to be a well capitalized bank and far exceeds minimum regulatory requirements.

Golden Valley Bank is a locally owned and operated commercial bank serving the needs of individuals and businesses in northern California. The Bank has a full service office in Chico, California and a Loan Production Office in Redding, California. For more information regarding the Bank please call at (530) 894-1000 or visit www.goldenvalleybank.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 are pre-fiscal year-end audit and may differ materially from stated expectations. Specific factors include, but are not limited to, loan production, balance sheet management, expanded net interest margin, the ability to control costs and expenses, interest rate changes and financial policies of the United States government and general economic conditions. The Bank disclaims any obligation to update any such factors.