FOR
IMMEDIATE RELEASE




CONTACT:          Roy
Estridge. EVP/CFO




Valley
Commerce Bancorp




(559)
622-9000







VALLEY
COMMERCE BANCORP REPORTS EARNINGS FOR SECOND QUARTER 2008




VISALIA,
Calif., July 22, 2008/ -- Valley Commerce Bancorp (OTCBB: VCBP), a bank holding
company and the parent company of Valley Business Bank, today announced
unaudited consolidated net income of $536,000 or $.22 per diluted share for the
quarter ended June 30, 2008, compared to $671,000 or $.26 per diluted share for
the same period of 2007, representing a 15% decrease in diluted earnings per
share.




For the
six months ended June 30, 2008 the Company’s consolidated net income totaled
$953,000 or $.38 per diluted share compared to $1,264,000 or $.50 per diluted
share achieved in the comparable 2007 period, representing a 24% decrease in
diluted earnings per share.




During
the six-month period ended June 30, 2008, the Company added $800,000 to its loan
loss reserves compared to no addition in the first half of 2007.




“Although
we have yet to book a loan loss in 2008, the recent decline in real estate
values and the slowing economy necessitated increasing our loss reserves which
is the primary reason our earnings are lower this year,” stated Don Gilles,
President and Chief Executive Officer of Valley Commerce Bancorp and Valley
Business Bank.  “I am pleased to report that the Company’s quarter end
reports reflect sound credit quality and strong capital and liquidity, all of
which have elevated importance in this particular economic
environment.”




The
annualized return on average assets for the six-month periods ended June 30,
2008 and 2007 was .67% and .98%, respectively.  The annualized return
on average equity was 6.56% for the 2008 period compared to 9.77% for the 2007
period.




Net
interest income for the three- and six-month periods ended June 30, 2008 was
$3.1 million and $6.1 million, respectively, compared to $2.8 million and $5.5
million for the same periods of the previous year.  The improvement
was primarily attributable to loan growth.  The Company’s net loans
were $216 million at June 30, 2008 which was $21 million or 11% higher than net
loans at June 30, 2007.  In addition, the cost of funds decreased in
the six-month period ended June 30, 2008









compared
to the same period of 2007.  The average cost of interest-bearing
liabilities was 3.04% for the 2008 period compared to 4.19% for the 2007 period,
a reduction of 115 basis points.  These factors were offset by an 82
basis point reduction in the yield on average loans and other interest-earning
assets that was due to falling market interest rates.  For the
six-month periods ended June 30, 2008 and 2007, the yield on loans and other
interest-earning assets was 6.87% and 7.69%, respectively.




The
Company’s net interest margin for the second quarter of 2008 was 4.71% compared
to 4.64% for the second quarter of 2007, an increase of 7 basis
points.  The Company’s net interest margins for the six-month periods
ended June 30, 2008 and 2007 were 4.74% for the 2008 period compared to 4.69%
for the 2007 period.  The Company maintained a stable net interest
margin despite Fed funds rate decreases totaling 325 basis points during the
period September 2007 to June 2008.  The net interest margin stability
was attributable to both loan growth and management’s efforts to mitigate the
impact of falling interest rates.  These efforts included adding
assets earning fixed interest rates to the balance sheet, requiring interest
rate floors on variable priced loans, utilizing variable priced funding, and
aggressively lowering deposit rates.




Average
total assets for the six months ended June 30, 2008 were $287 million compared
to $261 million for the same period in 2007, an increase of $26 million or
10%.  Average net loans for the six months ended June 30, 2008 were
$213 million compared to $189 million for the same period in 2007, an increase
of $24 million or 13%.




Average
deposits for the six months ended June 30, 2008 were $231 million compared to
$209 million for the same period in 2007, an increase of $22 million or
11%.  Average demand deposits for the 2008 period were $66 million, a
$7 million or 11% increase from the 2007 period.




Total
deposits were $262 million at June 30, 2008, a $47 million or 22% increase from
the December 31, 2007 total of $215 million, and a $48 million or 23% increase
from total deposits of $214 million at June 30, 2007.  The Company
utilized brokered time deposits and FHLB borrowings in addition to local deposit
growth to fund asset growth and maintain targeted liquidity
levels.  The amount of brokered time deposits at June 30, 2008,
December 31, 2007 and June 30, 2007 were $21.9 million, $2.9 million, and $10.0
million, respectively.  All other deposits were acquired
locally.  The Company’s long term growth strategy is based on
acquiring core deposits in its local market.









The
allowance for loan losses totaled $2.6 million or 1.17% of total loans at June
30, 2008 compared to $1.8 million or .89% of total loans at June 30, 2007. An
$800,000 loan loss provision was recorded during the six-month period ended June
30, 2008.  No loan loss provision was recorded during the comparable
period of 2007.  Management determined the allowance for loan losses
and the second quarter loss provision after consideration of current economic
conditions, including a significant decline in real estate values in the Bank’s
primary markets.  The Company recorded net recoveries of $8,000 during
the six months ended June 30, 2008 and net recoveries of $6,000 during the same
period of 2007.




The
Company had $1.4 million in non-performing assets at June 30, 2008 which
represented 0.63% of total loans.  Non-performing assets were
comprised of three nonaccrual loans for which management has established
specific loss reserves totaling $102,000.  There were no
non-performing assets at either June 30, 2007 or December 31, 2007.




Non-interest
income for the three- and six-month periods ended June 30, 2008 was $390,000 and
$681,000, respectively, compared to $282,000 and $573,000 for the same periods
of 2007.  The $108,000 increase for the six-month period reflected a
$60,000 increase in service charges on deposit accounts during the 2008 period
due to increased deposits and a higher fee structure.  In addition,
the Company recorded a $46,000 gain on sale of investment securities in the 2008
period compared to a slight loss on sale of securities in the 2007
period.




Non-interest
expense for the three-and six-month periods ended June 30, 2008 was $2.3 million
and $4.6 million, respectively, compared to $2.1 million and $4.2 million for
the same respective periods of 2007.  The 9% increase in non-interest
expense for the year to date period was due primarily to increased employee
costs associated with the Company’s growth initiatives, higher federal deposit
insurance premiums, and increased occupancy and equipment costs.  In
May 2008, the Company opened a new full service branch office in the City of
Tulare and closed its Tulare Loan Production Office.




Valley
Commerce Bancorp had 2,460,667 shares of common stock outstanding at June 30,
2008.  The book value per share was $11.69 at June 30, 2008, compared
to $10.77 at June 30, 2007.  The increase in book value was primarily
attributable to the retention of earnings during the 12-month period ended June
30, 2008.  All per share calculations stated above have been adjusted
for the 5% stock dividend declared in June 2008.









OTHER
INFORMATION:  Valley Commerce Bancorp stock trades on NASDAQ’s Over
The Counter Bulletin Board under the symbol VCBP.  Valley Business
Bank, the wholly owned subsidiary of Valley Commerce Bancorp, is a commercial
bank that commenced operations in 1996 under the name Bank of Visalia. Valley
Business Bank operates through Business Banking Centers in Visalia, Tulare, and
Fresno and has branch offices in Woodlake and Tipton.  Additional
information about Valley Business Bank is available from the Bank’s website at
http://www.valleybusinessbank.net.




FORWARD-LOOKING
STATEMENTS:  In addition to historical information, this release
includes forward-looking statements, which reflect management's current
expectations for Valley Commerce Bancorp’s future financial results, business
prospects and business developments.  Management's expectations for
Valley Commerce Bancorp's future necessarily involve assumptions, estimates and
the evaluation of risks and uncertainties. Various factors could cause actual
events or results to differ materially from those expectations.  The
forward-looking statements contained herein represent management's expectations
as of the date of this release. Valley Commerce Bancorp undertakes no obligation
to release publicly the results of any revisions to the forward-looking
statements included herein to reflect events or circumstances after today, or to
reflect the occurrence of unanticipated events.  For those statements,
the Company claims the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of
1995.





















Condensed
      Consolidated
              Balance
      Sheet
              (in
      Thousands) (Unaudited)
            
            As of June 30,
            
            
            As of December 31,2008
            
            
            2007
            
            
            2007
            
            
            2006AssetsCash
      and Due from Banks
            
            $
            11,634
            
            
            $
            8,196
            
            
            $
            9,297
            
            
            $
            13,266Federal
      Funds Sold
            
            
            23,605
            
            
            
            -
            
            
            
            -
            
            
            
            -Available-for-Sale
      Investment Securities
            
            
            42,805
            
            
            
            51,153
            
            
            
            56,615
            
            
            
            55,298Loans
      (net)
            
            
            215,985
            
            
            
            194,986
            
            
            
            199,514
            
            
            
            182,331Bank
      Premises and Equipment (net)
            
            
            4,116
            
            
            
            2,024
            
            
            
            3,037
            
            
            
            1,832Cash
      Surrender Value of Bank Owned Life Insurance
            
            
            6,310
            
            
            
            6,058
            
            
            
            6,185
            
            
            
            5,935Other
      Assets
            
            
            4,991
            
            
            
            4,834
            
            
            
            4,433
            
            
            
            5,003TOTAL
      ASSETS
            
            $
            309,446
            
            
            $
            267,251
            
            
            $
            279,081
            
            
            $
            263,665Liabilities
      & EquityNon-Interest
      Bearing Deposits
            
            $
            69,210
            
            
            $
            58,708
            
            
            $
            66,993
            
            
            $
            63,020Interest
      Bearing Deposits
            
            
            89,841
            
            
            
            82,504
            
            
            
            86,277
            
            
            
            75,293Time
      Deposits
            
            
            102,950
            
            
            
            72,613
            
            
            
            62,116
            
            
            
            69,263Total
      Deposits
            
            
            262,001
            
            
            
            213,825
            
            
            
            215,386
            
            
            
            207,576Short-Term
      Debt
            
            
            8,000
            
            
            
            14,053
            
            
            
            21,804
            
            
            
            17,600Long-Term
      Debt
            
            
            5,541
            
            
            
            8,248
            
            
            
            8,146
            
            
            
            8,548Junior
      Subordinated Deferrable Interest Debentures
            
            
            3,093
            
            
            
            3,093
            
            
            
            3,093
            
            
            
            3,093Other
      Liabilities
            
            
            2,047
            
            
            
            1,701
            
            
            
            1,779
            
            
            
            1,400Total
      Liabilities
            
            
            280,682
            
            
            
            240,920
            
            
            
            250,208
            
            
            
            238,217Shareholders’
      Equity
            
            
            28,764
            
            
            
            26,331
            
            
            
            28,873
            
            
            
            25,448TOTAL
      LIABILITIES & EQUITY
            
            $
            309,446
            
            
            $
            267,251
            
            
            $
            279,081
            
            
            $
            263,665




Condensed
      Consolidated
                Statement
      of Income
                (in
      Thousands except share data) (Unaudited)
              
              Three
      Months Ended June 30,
              
              
              Six
      Months Ended June 30,2008
              
              
              2007
              
              
              2008
              
              
              2007Interest
      Income
              
              $
              4,454
              
              
              $
              4,616
              
              
              $
              8,903
              
              
              $
              9,073Interest
      Expense
              
              
              1,358
              
              
              
              1,856
              
              
              
              2,848
              
              
              
              3,620NET
      INTEREST INCOME
              
              
              3,096
              
              
              
              2,760
              
              
              
              6,055
              
              
              
              5,453Provision for Loan
      Losses
              
              
              400
              
              
              
              -
              
              
              
              800
              
              
              
              -NET
      INTEREST INCOME AFTER
                PROVISION
      FOR LOAN LOSSES
              
              
              2,696
              
              
              
              2,760
              
              
              
              5,255
              
              
              
              5,453Non-interest
      Income
              
              
              390
              
              
              
              282
              
              
              
              681
              
              
              
              573Non-interest
      Expenses
              
              
              2,315
              
              
              
              2,113
              
              
              
              4,591
              
              
              
              4,225INCOME
      BEFORE INCOME TAXES
              
              
              771
              
              
              
              929
              
              
              
              1,345
              
              
              
              1,801Income
      Taxes
              
              
              235
              
              
              
              258
              
              
              
              392
              
              
              
              537NET
      INCOME
              
              $
              536
              
              
              $
              671
              
              
              $
              953
              
              
              $
              1,264EARNINGS
      PER SHARE - BASIC*
              
              $
              0.22
              
              
              $
              0.27
              
              
              $
              0.39
              
              
              $
              0.52EARNINGS
      PER SHARE – DILUTED*
              
              $
              0.22
              
              
              $
              0.26
              
              
              $
              0.38
              
              
              $
              0.50SHARES
      OUTSTANDING – END OF PERIOD*
              
              
              2,460,667
              
              
              
              2,444,600
              
              
              
              2,460,667
              
              
              
              2,444,600*All
      share and earnings per share data have been restated for the 5% stock
      dividend issued in June 2008.