##### 



FOR IMMEDIATE RELEASE  October 19, 2005
 VALLEY BANCORP STRONG EARNINGS TREND CONTINUES IN THIRD QUARTER
 HIGHLIGHTS
 
    
    Third quarter earnings of $1,453,000, up 65% from $879,000 in 3rd quarter 2004.
    
    Third quarter earnings per diluted share of $0.49 up 4% from $0.47 in 3rd quarter 2004.
    
    ROE and ROA of 14.51% and 1.63% respectively in 3rd quarter 2005.
    
    Total net loans increased $96 million, up 51% from 3rd quarter 2004.
 Las Vegas, Nevada VLLY




---



##### 



(Unaudited)
 At September 30,
    
    
    Change2005
    
    
    2004
    
    
    $ or #
    
    
    %Balance Sheet:Loans net of Unearned Fees
    
    $
    285,321
    
    
    $
    188,614
    
    
    $
    96,707
    
    
    
    51.27
    %Allowance for Loan Losses
    
    $
    (2,841
    )
    
    $
    (2,026
    )
    
    $
    (815
    )
    
    
    40.23
    %Loans, net
    
    $
    282,480
    
    
    $
    186,588
    
    
    $
    95,892
    
    
    
    51.39
    %Total Assets
    
    $
    373,183
    
    
    $
    251,244
    
    
    $
    121,939
    
    
    
    48.53
    %Total Earning Assets
    
    $
    358,104
    
    
    $
    236,334
    
    
    $
    121,770
    
    
    
    51.52
    %Total Investments
    
    $
    75,624
    
    
    $
    49,746
    
    
    $
    25,878
    
    
    
    52.02
    %Total Deposits
    
    $
    315,625
    
    
    $
    214,417
    
    
    $
    101,208
    
    
    
    47.20
    %Total Borrowed Funds
    
    $
    15,436
    
    
    $
    477
    
    
    $
    14,959
    
    
    
    3136.06
    %Total Liabilities
    
    $
    332,874
    
    
    $
    216,003
    
    
    $
    116,871
    
    
    
    54.11
    %Total Stockholders Equity
    
    $
    40,309
    
    
    $
    35,241
    
    
    $
    5,068
    
    
    
    14.38
    %Common Shares Outstanding
    
    
    2,824,901
    
    
    
    2,789,228
    
    
    
    35,673
    
    
    
    1.28
    %Book Value per Share
    
    $
    14.27
    
    
    $
    12.63
    
    
    $
    1.64
    
    
    
    12.96
    %Allowance for Loan Losses to Total Loans
    
    
    1.00
    %
    
    
    1.07
    %
    
    
    
    
    
    
    -0.07
    %Total Stockholders Equity to Total Assets
    
    
    10.80
    %
    
    
    14.03
    %
    
    
    
    
    
    
    -3.23
    %Total Loans to Total Deposits & Borrowed Funds
    
    
    85.33
    %
    
    
    86.83
    %
    
    
    
    
    
    
    -1.50
    %
 Three Months Ended September 30,
    
    
    Change2005
    
    
    2004
    
    
    $ or #
    
    
    %Income Statement:Interest Income
    
    $
    6,199
    
    
    $
    3,474
    
    
    $
    2,725
    
    
    
    78.44
    %Interest Expense
    
    $
    1,844
    
    
    $
    670
    
    
    $
    1,174
    
    
    
    175.22
    %Net Interest Income
    
    $
    4,355
    
    
    $
    2,804
    
    
    $
    1,551
    
    
    
    55.31
    %Provision for Loan Losses
    
    $
    324
    
    
    $
    120
    
    
    $
    204
    
    
    
    170.00
    %Non-interest Income
    
    $
    66
    
    
    $
    63
    
    
    $
    3
    
    
    
    4.76
    %Non-interest Expense
    
    $
    1,892
    
    
    $
    1,414
    
    
    $
    478
    
    
    
    33.80
    %Income before Income Taxes
    
    $
    2,205
    
    
    $
    1,333
    
    
    $
    872
    
    
    
    65.42
    %Income Tax Expense
    
    $
    752
    
    
    $
    454
    
    
    $
    298
    
    
    
    65.64
    %Net Income
    
    $
    1,453
    
    
    $
    879
    
    
    $
    574
    
    
    
    65.30
    %Basic Earnings Per Share
    
    $
    0.51
    
    
    $
    0.48
    
    
    $
    0.03
    
    
    
    6.25
    %Diluted Earnings Per Share
    
    $
    0.49
    
    
    $
    0.47
    
    
    $
    0.02
    
    
    
    4.26
    %Weighted Average Shares  Basic
    
    
    2,822,814
    
    
    
    1,817,978
    
    
    
    1,004,836
    
    
    
    55.27
    %Weighted Average Shares  Diluted
    
    
    2,963,453
    
    
    
    1,888,336
    
    
    
    1,075,117
    
    
    
    56.93
    %Average Total Assets
    
    $
    357,129
    
    
    $
    232,629
    
    
    $
    124,500
    
    
    
    53.52
    %Average Earning Assets
    
    $
    342,827
    
    
    $
    221,029
    
    
    $
    121,798
    
    
    
    55.10
    %Average Stockholders Equity
    
    $
    40,055
    
    
    $
    18,059
    
    
    $
    21,996
    
    
    
    121.80
    %Net Interest Margin (1)
    
    
    5.04
    %
    
    
    5.05
    %
    
    
    
    
    
    
    -0.01
    %Return on Assets (1)
    
    
    1.63
    %
    
    
    1.51
    %
    
    
    
    
    
    
    0.12
    %Return on Equity (1)
    
    
    14.51
    %
    
    
    19.47
    %
    
    
    
    
    
    
    -4.96
    %Non-interest Expense to Average Earning Assets (1)
    
    
    2.21
    %
    
    
    2.56
    %
    
    
    
    
    
    
    -0.35
    %Efficiency Ratio
    
    
    42.80
    %
    
    
    49.17
    %
    
    
    
    
    
    
    -6.38
    %Full Time Equivalent Employees
    
    
    57
    
    
    
    47
    
    
    
    10
    
    
    
    21.28
    %




---



##### 



Nine Months Ended September 30,
    
    
    Change2005
    
    
    2004
    
    
    $ or #
    
    
    %Income Statement:Interest Income
    
    $
    15,943
    
    
    $
    9,536
    
    
    $
    6,407
    
    
    
    67.19
    %Interest Expense
    
    $
    4,363
    
    
    $
    1,982
    
    
    $
    2,381
    
    
    
    120.13
    %Net Interest Income
    
    $
    11,580
    
    
    $
    7,554
    
    
    $
    4,026
    
    
    
    53.30
    %Provision for Loan Losses
    
    $
    604
    
    
    $
    506
    
    
    $
    98
    
    
    
    19.37
    %Non-interest Income
    
    $
    203
    
    
    $
    224
    
    
    $
    (21
    )
    
    
    -9.38
    %Non-interest Expense
    
    $
    5,187
    
    
    $
    3,946
    
    
    $
    1,241
    
    
    
    31.45
    %Income before Income Taxes
    
    $
    5,992
    
    
    $
    3,326
    
    
    $
    2,666
    
    
    
    80.16
    %Income Tax Expense
    
    $
    2,042
    
    
    $
    1,134
    
    
    $
    908
    
    
    
    80.07
    %Net Income
    
    $
    3,950
    
    
    $
    2,192
    
    
    $
    1,758
    
    
    
    80.20
    %Basic Earnings Per Share
    
    $
    1.41
    
    
    $
    1.25
    
    
    $
    0.16
    
    
    
    12.80
    %Diluted Earnings Per Share
    
    $
    1.34
    
    
    $
    1.20
    
    
    $
    0.14
    
    
    
    11.67
    %Weighted Average Shares  Basic
    
    
    2,804,054
    
    
    
    1,756,650
    
    
    
    1,047,404
    
    
    
    59.63
    %Weighted Average Shares  Diluted
    
    
    2,955,666
    
    
    
    1,819,770
    
    
    
    1,135,896
    
    
    
    62.42
    %Average Total Assets
    
    $
    322,197
    
    
    $
    220,629
    
    
    $
    101,568
    
    
    
    46.04
    %Average Earning Assets
    
    $
    308,547
    
    
    $
    209,420
    
    
    $
    99,127
    
    
    
    47.33
    %Average Stockholders Equity
    
    $
    38,315
    
    
    $
    17,371
    
    
    $
    20,944
    
    
    
    120.57
    %Net Interest Margin (1)
    
    
    5.02
    %
    
    
    4.82
    %
    
    
    
    
    
    
    0.20
    %Return on Assets (1)
    
    
    1.63
    %
    
    
    1.32
    %
    
    
    
    
    
    
    0.31
    %Return on Equity (1)
    
    
    13.74
    %
    
    
    16.82
    %
    
    
    
    
    
    
    -3.08
    %Non-interest Expense to Average Earning Assets (1)
    
    
    2.24
    %
    
    
    2.51
    %
    
    
    
    
    
    
    -0.27
    %Efficiency Ratio
    
    
    44.02
    %
    
    
    50.69
    %
    
    
    
    
    
    
    -6.67
    %
 
 (1)
    
    Annualized




---



##### 



Net Interest Income and Net Interest Margin
    Three Months Ended September 30,2005
    
    
    2004Average
    
    
    Interest
    
    
    Average
    
    
    Average
    
    
    Interest
    
    
    AverageBalance
    
    
    Income/
    
    
    Yield/
    
    
    Balance
    
    
    Income/
    
    
    Yield/(1)
    
    
    Expense
    
    
    Cost (2)
    
    
    (1)
    
    
    Expense
    
    
    Cost (2)(Dollars in thousands)AssetsEarning assets:Loans (3) (4) (5)
    
    $
    269,573
    
    
    $
    5,541
    
    
    
    8.15
    %
    
    $
    181,289
    
    
    $
    3,279
    
    
    
    7.20
    %Federal funds sold (6)
    
    
    26,825
    
    
    
    234
    
    
    
    3.46
    %
    
    
    17,274
    
    
    
    60
    
    
    
    1.38
    %Interest bearing deposits (6)
    
    
    7,566
    
    
    
    66
    
    
    
    3.46
    %
    
    
    9,705
    
    
    
    53
    
    
    
    2.17
    %Investment securities (6)
    
    
    38,863
    
    
    
    358
    
    
    
    3.65
    %
    
    
    12,761
    
    
    
    82
    
    
    
    2.56
    %Total earning assets and interest income
    
    
    342,827
    
    
    
    6,199
    
    
    
    7.17
    %
    
    
    221,029
    
    
    
    3,474
    
    
    
    6.25
    %Non-interest earning assets:Cash and due from banks
    
    
    7,455
    
    
    
    
    
    
    
    
    
    
    
    8,218Premises and equipment
    
    
    6,713
    
    
    
    
    
    
    
    
    
    
    
    4,358Other assets
    
    
    2,800
    
    
    
    
    
    
    
    
    
    
    
    1,039Allowance for credit losses
    
    
    (2,666
    )
    
    
    
    
    
    
    
    
    
    
    (2,015
    )Total assets
    
    $
    357,129
    
    
    
    
    
    
    
    
    
    
    $
    232,629Liabilities and Stockholders EquityInterest bearing liabilities:Interest bearing demand deposits
    
    $
    86,387
    
    
    $
    341
    
    
    
    1.57
    %
    
    $
    73,386
    
    
    $
    182
    
    
    
    0.99
    %Savings deposits
    
    
    11,341
    
    
    
    41
    
    
    
    1.43
    %
    
    
    12,156
    
    
    
    15
    
    
    
    0.49
    %Time deposits $100,000 or more
    
    
    67,520
    
    
    
    554
    
    
    
    3.26
    %
    
    
    31,405
    
    
    
    172
    
    
    
    2.18
    %Other time deposits
    
    
    86,456
    
    
    
    743
    
    
    
    3.41
    %
    
    
    49,835
    
    
    
    294
    
    
    
    2.34
    %Short-term borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Long-term borrowings
    
    
    15,443
    
    
    
    165
    
    
    
    4.24
    %
    
    
    483
    
    
    
    7
    
    
    
    6.59
    %Total interest bearing liabilities
    
    
    267,147
    
    
    
    1,844
    
    
    
    2.74
    %
    
    
    167,265
    
    
    
    670
    
    
    
    1.59
    %




---



##### 



Three Months Ended September 30,2005
    
    
    2004Average
    
    
    Interest
    
    
    Average
    
    
    Average
    
    
    Interest
    
    
    AverageBalance
    
    
    Income/
    
    
    Yield/
    
    
    Balance
    
    
    Income/
    
    
    Yield/(1)
    
    
    Expense
    
    
    Cost (2)
    
    
    (1)
    
    
    Expense
    
    
    Cost (2)(Dollars in thousands)Noninterest-bearing liabilities:Demand deposits
    
    
    48,204
    
    
    
    
    
    
    
    
    
    
    
    46,489Other liabilities
    
    
    1,723
    
    
    
    
    
    
    
    
    
    
    
    816Stockholders equity
    
    
    40,055
    
    
    
    
    
    
    
    
    
    
    
    18,059Total liabilities and stockholders equity
    
    $
    357,129
    
    
    
    
    
    
    
    
    
    
    $
    232,629Net Interest Spread (7)
    
    
    
    
    
    
    
    
    
    
    4.43
    %
    
    
    
    
    
    
    
    
    
    
    4.66
    %Net interest income/margin (8)
    
    
    
    
    
    $
    4,355
    
    
    
    5.04
    %
    
    
    
    
    
    $
    2,804
    
    
    
    5.05
    %
 
 (1)
    
    Average balances are obtained from the best available daily data.(2)
    
    Annualized.(3)
    
    Loans are gross of allowance for credit losses but after unearned fees.(4)
    
    Non-accruing loans are included in the average balances.(5)
    
    Interest income includes loan fees of $24,000 and $82,000 for the three months ended September, 2005 and 2004, respectively.(6)
    
    All investments are taxable.(7)
    
    Represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities(8)
    
    Net interest margin represents net interest income as a percentage of average interest-earning assets. Nine Months Ended September 30,2005
    
    
    2004Average
    
    
    Interest
    
    
    Average
    
    
    Average
    
    
    Interest
    
    
    AverageBalance
    
    
    Income/
    
    
    Yield/
    
    
    Balance
    
    
    Income/
    
    
    Yield/(1)
    
    
    Expense
    
    
    Cost (2)
    
    
    (1)
    
    
    Expense
    
    
    Cost (2)(Dollars in thousands)AssetsEarning assets:Loans (3) (4) (5)
    
    $
    239,703
    
    
    $
    14,194
    
    
    
    7.92
    %
    
    $
    166,350
    
    
    $
    8,947
    
    
    
    7.18
    %Federal funds sold (6)
    
    
    20,934
    
    
    
    474
    
    
    
    3.03
    %
    
    
    16,460
    
    
    
    138
    
    
    
    1.12
    %Interest bearing deposits (6)
    
    
    9,096
    
    
    
    206
    
    
    
    3.03
    %
    
    
    12,444
    
    
    
    193
    
    
    
    2.07
    %Investment securities (6)
    
    
    38,814
    
    
    
    1,069
    
    
    
    3.68
    %
    
    
    14,166
    
    
    
    258
    
    
    
    2.43
    %Total earning assets and interest income
    
    
    308,547
    
    
    
    15,943
    
    
    
    6.91
    %
    
    
    209,420
    
    
    
    9,536
    
    
    
    6.08
    %Non-interest earning assets:Cash and due from banks
    
    
    7,404
    
    
    
    
    
    
    
    
    
    
    
    7,684Premises and equipment
    
    
    6,268
    
    
    
    
    
    
    
    
    
    
    
    4,392Other assets
    
    
    2,408
    
    
    
    
    
    
    
    
    
    
    
    1,058Allowance for credit losses
    
    
    (2,430
    )
    
    
    
    
    
    
    
    
    
    
    (1,925
    )Total assets
    
    $
    322,197
    
    
    
    
    
    
    
    
    
    
    $
    220,629Liabilities and Stockholders EquityInterest bearing liabilities:Interest bearing demand deposits
    
    $
    78,373
    
    
    $
    816
    
    
    
    1.39
    %
    
    $
    69,417
    
    
    $
    457
    
    
    
    0.88
    %Savings deposits
    
    
    11,905
    
    
    
    81
    
    
    
    0.91
    %
    
    
    11,159
    
    
    
    41
    
    
    
    0.49
    %Time deposits $100,000 or more
    
    
    59,948
    
    
    
    1,335
    
    
    
    2.98
    %
    
    
    31,960
    
    
    
    536
    
    
    
    2.24
    %Other time deposits
    
    
    80,256
    
    
    
    1,933
    
    
    
    3.22
    %
    
    
    50,590
    
    
    
    921
    
    
    
    2.43
    %Short-term borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102
    
    
    
    1
    
    
    
    1.31
    %Long-term borrowings
    
    
    6,057
    
    
    
    198
    
    
    
    4.37
    %
    
    
    492
    
    
    
    26
    
    
    
    7.06
    %Total interest bearing liabilities
    
    
    236,539
    
    
    
    4,363
    
    
    
    2.47
    %
    
    
    163,720
    
    
    
    1,982
    
    
    
    1.62
    %




---



##### 



Nine Months Ended September 30,2005
    
    
    2004Average
    
    
    Interest
    
    
    Average
    
    
    Average
    
    
    Interest
    
    
    AverageBalance
    
    
    Income/
    
    
    Yield/
    
    
    Balance
    
    
    Income/
    
    
    Yield/(1)
    
    
    Expense
    
    
    Cost (2)
    
    
    (1)
    
    
    Expense
    
    
    Cost (2)(Dollars in thousands)Noninterest-bearing liabilities:Demand deposits
    
    
    45,907
    
    
    
    
    
    
    
    
    
    
    
    38,716Other liabilities
    
    
    1,436
    
    
    
    
    
    
    
    
    
    
    
    822Stockholders equity
    
    
    38,315
    
    
    
    
    
    
    
    
    
    
    
    17,371Total liabilities and stockholders equity
    
    $
    322,197
    
    
    
    
    
    
    
    
    
    
    $
    220,629Net Interest Spread (7)
    
    
    
    
    
    
    
    
    
    
    4.44
    %
    
    
    
    
    
    
    
    
    
    
    4.46
    %Net interest income/margin (8)
    
    
    
    
    
    $
    11,580
    
    
    
    5.02
    %
    
    
    
    
    
    $
    7,554
    
    
    
    4.82
    %
 
 (1)
    
    Average balances are obtained from the best available daily data.(2)
    
    Annualized.(3)
    
    Loans are gross of allowance for credit losses but after unearned fees.(4)
    
    Non-accruing loans are included in the average balances.(5)
    
    Interest income includes loan fees of $106,000 and $319,000 for the nine months ended September, 2005 and 2004, respectively.(6)
    
    All investments are taxable.(7)
    
    Represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities(8)
    
    Net interest margin represents net interest income as a percentage of average interest-earning assets. Provision for Loan Losses and Related Allowance for Loan Losses
  Non-interest Income and Non-interest Expense




---



##### 



Balance Sheet
  About Valley Bancorp
  Website:
    
    Valley Bancorps
website
    
    www.valleybancorp.comValley Banks website
    
    www.vbnv.com