##### 



FOR IMMEDIATE RELEASE
 July 19, 2006
 
 VALLEY BANCORP Q2 06 EPS UP 42%
 HIGHLIGHTS
 
    
    Second quarter earnings of $2,005,000, up 43% from $1,404,000 in 2nd quarter 2005.
 
    
    Second quarter earnings per diluted share of $0.68 up 42% from $0.48 in 2nd quarter
2005.
 
    
    ROE and ROA of 17.92% and 1.88% respectively in 2nd quarter 2006.
 
    
    Total net loans increased $83 million, up 34% from 2nd quarter 2005.
 Las Vegas, Nevada VLLY




---



##### 



(Unaudited)
 At June 30,
    
    
    Change2006
    
    
    2005
    
    
    $ or #
    
    
    %Balance Sheet:Loans net of Unearned Fees
    
    $
    331,658
    
    
    $
    248,154
    
    
    $
    83,504
    
    
    
    33.65
    %Allowance for Loan Losses
    
    
    (3,317
    )
    
    
    (2,497
    )
    
    
    (820
    )
    
    
    32.84
    %Loans, net
    
    
    328,341
    
    
    
    245,657
    
    
    
    82,684
    
    
    
    33.66
    %Total Assets
    
    $
    440,664
    
    
    $
    334,784
    
    
    $
    105,880
    
    
    
    31.63
    %Total Earning Assets
    
    
    423,922
    
    
    
    320,586
    
    
    
    103,336
    
    
    
    32.23
    %Total Investments
    
    
    95,581
    
    
    
    74,929
    
    
    
    20,652
    
    
    
    27.56
    %Total Deposits
    
    
    377,548
    
    
    
    278,860
    
    
    
    98,688
    
    
    
    35.39
    %Total Borrowed Funds
    
    
    15,404
    
    
    
    15,446
    
    
    
    (42
    )
    
    
    -0.27
    %Total Liabilities
    
    
    395,230
    
    
    
    295,903
    
    
    
    99,327
    
    
    
    33.57
    %Total Stockholders Equity
    
    
    45,434
    
    
    
    38,881
    
    
    
    6,553
    
    
    
    16.85
    %Common Shares Outstanding
    
    
    2,827,881
    
    
    
    2,808,173
    
    
    
    19,708
    
    
    
    0.70
    %Book Value per Share
    
    $
    16.07
    
    
    $
    13.85
    
    
    $
    2.22
    
    
    
    16.04
    %Allowance for Loan Losses to Total Loans
    
    
    1.00
    %
    
    
    1.01
    %
    
    
    
    
    
    
    -0.01
    %Total Stockholders Equity to Total Assets
    
    
    10.31
    %
    
    
    11.61
    %
    
    
    
    
    
    
    -1.30
    %Total Loans to Total Deposits & Borrowed Funds
    
    
    83.56
    %
    
    
    83.47
    %
    
    
    
    
    
    
    0.09
    %
 Three Months Ended June 30,
    
    
    Change2006
    
    
    2005
    
    
    $ or #
    
    
    %Income Statement:Interest Income
    
    $
    8,465
    
    
    $
    5,282
    
    
    $
    3,183
    
    
    
    60.26
    %Interest Expense
    
    
    2,988
    
    
    
    1,430
    
    
    
    1,558
    
    
    
    108.95
    %Net Interest Income
    
    
    5,477
    
    
    
    3,852
    
    
    
    1,625
    
    
    
    42.19
    %Provision for Loan Losses
    
    
    52
    
    
    
    229
    
    
    
    (177
    )
    
    
    -77.29
    %Non-interest Income
    
    
    84
    
    
    
    62
    
    
    
    22
    
    
    
    35.48
    %Non-interest Expense
    
    
    2,439
    
    
    
    1,554
    
    
    
    885
    
    
    
    56.95
    %Income before Income Taxes
    
    
    3,070
    
    
    
    2,131
    
    
    
    939
    
    
    
    44.06
    %Income Tax Expense
    
    
    1,065
    
    
    
    727
    
    
    
    338
    
    
    
    46.49
    %Net Income
    
    $
    2,005
    
    
    $
    1,404
    
    
    $
    601
    
    
    
    42.81
    %Basic Earnings Per Share
    
    $
    0.71
    
    
    $
    0.50
    
    
    $
    0.21
    
    
    
    42.00
    %Diluted Earnings Per Share
    
    
    0.68
    
    
    
    0.48
    
    
    
    0.20
    
    
    
    41.67
    %Weighted Average Shares  Basic
    
    
    2,827,881
    
    
    
    2,798,203
    
    
    
    29,678
    
    
    
    1.06
    %Weighted Average Shares  Diluted
    
    
    2,969,580
    
    
    
    2,936,942
    
    
    
    32,638
    
    
    
    1.11
    %Average Total Assets
    
    $
    426,204
    
    
    $
    320,054
    
    
    $
    106,150
    
    
    
    33.17
    %Average Earning Assets
    
    
    410,395
    
    
    
    306,613
    
    
    
    103,782
    
    
    
    33.85
    %Average Stockholders Equity
    
    
    44,788
    
    
    
    38,015
    
    
    
    6,773
    
    
    
    17.82
    %Net Interest Margin (1)
    
    
    5.35
    %
    
    
    5.04
    %
    
    
    
    
    
    
    0.31
    %Return on Assets (1)
    
    
    1.88
    %
    
    
    1.75
    %
    
    
    
    
    
    
    0.13
    %Return on Equity (1)
    
    
    17.92
    %
    
    
    14.77
    %
    
    
    
    
    
    
    3.14
    %Non-interest Expense to Average Earning Assets (1)
    
    
    2.38
    %
    
    
    2.03
    %
    
    
    
    
    
    
    0.35
    %Efficiency Ratio
    
    
    43.85
    %
    
    
    39.70
    %
    
    
    
    
    
    
    4.15
    %Full Time Equivalent Employees
    
    
    69
    
    
    
    53
    
    
    
    16
    
    
    
    30.19
    %




---



##### 



Six Months Ended June 30,
    
    
    Change2006
    
    
    2005
    
    
    $ or #
    
    
    %Income Statement:Interest Income
    
    $
    15,878
    
    
    $
    9,744
    
    
    $
    6,134
    
    
    
    62.95
    %Interest Expense
    
    
    5,428
    
    
    
    2,519
    
    
    
    2,909
    
    
    
    115.48
    %Net Interest Income
    
    
    10,450
    
    
    
    7,225
    
    
    
    3,225
    
    
    
    44.64
    %Provision for Loan Losses
    
    
    279
    
    
    
    280
    
    
    
    (1
    )
    
    
    -0.36
    %Non-interest Income
    
    
    146
    
    
    
    137
    
    
    
    9
    
    
    
    6.57
    %Non-interest Expense
    
    
    4,770
    
    
    
    3,295
    
    
    
    1,475
    
    
    
    44.76
    %Income before Income Taxes
    
    
    5,547
    
    
    
    3,787
    
    
    
    1,760
    
    
    
    46.47
    %Income Tax Expense
    
    
    1,907
    
    
    
    1,291
    
    
    
    616
    
    
    
    47.71
    %Net Income
    
    $
    3,640
    
    
    $
    2,496
    
    
    $
    1,144
    
    
    
    45.83
    %Basic Earnings Per Share
    
    $
    1.29
    
    
    $
    0.89
    
    
    $
    0.40
    
    
    
    44.94
    %Diluted Earnings Per Share
    
    
    1.23
    
    
    
    0.85
    
    
    
    0.38
    
    
    
    44.71
    %Weighted Average Shares  Basic
    
    
    2,827,857
    
    
    
    2,794,518
    
    
    
    33,339
    
    
    
    1.19
    %Weighted Average Shares  Diluted
    
    
    2,968,087
    
    
    
    2,945,444
    
    
    
    22,643
    
    
    
    0.77
    %Average Total Assets
    
    $
    413,748
    
    
    $
    304,440
    
    
    $
    109,308
    
    
    
    35.90
    %Average Earning Assets
    
    
    397,541
    
    
    
    291,122
    
    
    
    106,419
    
    
    
    36.55
    %Average Stockholders Equity
    
    
    43,947
    
    
    
    37,431
    
    
    
    6,516
    
    
    
    17.41
    %Net Interest Margin (1)
    
    
    5.30
    %
    
    
    5.00
    %
    
    
    
    
    
    
    0.30
    %Return on Assets (1)
    
    
    1.76
    %
    
    
    1.64
    %
    
    
    
    
    
    
    0.12
    %Return on Equity (1)
    
    
    16.57
    %
    
    
    13.34
    %
    
    
    
    
    
    
    3.23
    %Non-interest Expense to Average Earning Assets (1)
    
    
    2.40
    %
    
    
    2.26
    %
    
    
    
    
    
    
    0.14
    %Efficiency Ratio
    
    
    45.02
    %
    
    
    44.76
    %
    
    
    
    
    
    
    0.26
    %




---



##### 



Net Interest Income and Net Interest Margin
     Three Months Ended June 30,2006
    
    
    2005Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    Income/
    
    
    Yield/
    
    
    Average
    
    
    Income/
    
    
    Yield/Balance (1)
    
    
    Expense
    
    
    Cost (2)
    
    
    Balance (1)
    
    
    Expense
    
    
    Cost (2)(Dollars in thousands)AssetsEarning assets:Loans (3) (4) (5)
    
    $
    333,243
    
    
    $
    7,606
    
    
    
    9.15
    %
    
    $
    240,560
    
    
    $
    4,722
    
    
    
    7.87
    %Federal funds sold (6)
    
    
    36,141
    
    
    
    435
    
    
    
    4.83
    %
    
    
    16,270
    
    
    
    119
    
    
    
    2.93
    %Interest bearing deposits (6)
    
    
    6,196
    
    
    
    77
    
    
    
    4.98
    %
    
    
    10,682
    
    
    
    84
    
    
    
    3.15
    %Investment securities (6)
    
    
    34,815
    
    
    
    347
    
    
    
    4.00
    %
    
    
    39,101
    
    
    
    357
    
    
    
    3.66
    %Total earning assets and interest income
    
    
    410,395
    
    
    
    8,465
    
    
    
    8.27
    %
    
    
    306,613
    
    
    
    5,282
    
    
    
    6.91
    %Non-interest earning assets:Cash and due from banks
    
    
    9,197
    
    
    
    
    
    
    
    
    
    
    
    7,141Premises and equipment
    
    
    7,326
    
    
    
    
    
    
    
    
    
    
    
    6,282Other assets
    
    
    2,626
    
    
    
    
    
    
    
    
    
    
    
    2,392Allowance for credit losses
    
    
    (3,340
    )
    
    
    
    
    
    
    
    
    
    
    (2,374
    )Total assets
    
    $
    426,204
    
    
    
    
    
    
    
    
    
    
    $
    320,054Liabilities and Stockholders EquityInterest bearing liabilities:Interest bearing demand deposits
    
    $
    84,003
    
    
    $
    345
    
    
    
    1.65
    %
    
    $
    75,394
    
    
    $
    262
    
    
    
    1.39
    %Savings deposits
    
    
    35,599
    
    
    
    310
    
    
    
    3.49
    %
    
    
    11,768
    
    
    
    22
    
    
    
    0.75
    %Time deposits $100,000 or more
    
    
    93,385
    
    
    
    1,035
    
    
    
    4.45
    %
    
    
    61,741
    
    
    
    457
    
    
    
    2.97
    %Other time deposits
    
    
    99,538
    
    
    
    1,137
    
    
    
    4.58
    %
    
    
    82,522
    
    
    
    664
    
    
    
    3.23
    %Long-term borrowings
    
    
    15,410
    
    
    
    161
    
    
    
    4.19
    %
    
    
    2,101
    
    
    
    25
    
    
    
    4.77
    %Total interest bearing liabilities
    
    
    327,935
    
    
    
    2,988
    
    
    
    3.65
    %
    
    
    233,526
    
    
    
    1,430
    
    
    
    2.46
    %Noninterest-bearing liabilities:Demand deposits
    
    
    50,770
    
    
    
    
    
    
    
    
    
    
    
    46,959Other liabilities
    
    
    2,711
    
    
    
    
    
    
    
    
    
    
    
    1,554Stockholders equity
    
    
    44,788
    
    
    
    
    
    
    
    
    
    
    
    38,015Total liabilities and stockholders equity
    
    $
    426,204
    
    
    
    
    
    
    
    
    
    
    $
    320,054Net Interest Spread (7)
    
    
    
    
    
    
    
    
    
    
    4.62
    %
    
    
    
    
    
    
    
    
    
    
    4.45
    %Net interest income/margin (8)
    
    
    
    
    
    $
    5,477
    
    
    
    5.35
    %
    
    
    
    
    
    $
    3,852
    
    
    
    5.04
    %




---



##### 



Six Months Ended June 30,2006
    
    2005Interest
    
    
    Average
    
    
    
    
    
    
    Interest
    
    
    AverageAverage
    
    
    Income/
    
    
    Yield/
    
    
    Average
    
    
    Income/
    
    
    Yield/Balance (1)
    
    
    Expense
    
    
    Cost (2)
    
    
    Balance (1)
    
    
    Expense
    
    
    Cost (2)(Dollars in thousands)AssetsEarning assets:Loans (3) (4) (5)
    
    $
    320,670
    
    
    $
    14,220
    
    
    
    8.94
    %
    
    $
    224,521
    
    
    $
    8,653
    
    
    
    7.77
    %Federal funds sold (6)
    
    
    34,173
    
    
    
    793
    
    
    
    4.68
    %
    
    
    17,939
    
    
    
    240
    
    
    
    2.70
    %Interest bearing deposits (6)
    
    
    7,548
    
    
    
    175
    
    
    
    4.68
    %
    
    
    9,898
    
    
    
    140
    
    
    
    2.85
    %Investment securities (6)
    
    
    35,150
    
    
    
    690
    
    
    
    3.96
    %
    
    
    38,764
    
    
    
    711
    
    
    
    3.70
    %Total earning assets and interest income
    
    
    397,541
    
    
    
    15,878
    
    
    
    8.05
    %
    
    
    291,122
    
    
    
    9,744
    
    
    
    6.75
    %Non-interest earning assets:Cash and due from banks
    
    
    9,586
    
    
    
    
    
    
    
    
    
    
    
    7,379Premises and equipment
    
    
    7,334
    
    
    
    
    
    
    
    
    
    
    
    6,042Other assets
    
    
    2,489
    
    
    
    
    
    
    
    
    
    
    
    2,207Allowance for credit losses
    
    
    (3,202
    )
    
    
    
    
    
    
    
    
    
    
    (2,310
    )Total assets
    
    $
    413,748
    
    
    
    
    
    
    
    
    
    
    $
    304,440Liabilities and Stockholders EquityInterest bearing liabilities:Interest bearing demand deposits
    
    $
    89,970
    
    
    $
    750
    
    
    
    1.68
    %
    
    $
    74,300
    
    
    $
    475
    
    
    
    1.29
    %Savings deposits
    
    
    26,432
    
    
    
    391
    
    
    
    2.98
    %
    
    
    12,192
    
    
    
    40
    
    
    
    0.66
    %Time deposits $100,000 or more
    
    
    89,610
    
    
    
    1,904
    
    
    
    4.28
    %
    
    
    56,098
    
    
    
    781
    
    
    
    2.81
    %Other time deposits
    
    
    95,070
    
    
    
    2,062
    
    
    
    4.37
    %
    
    
    77,105
    
    
    
    1,190
    
    
    
    3.11
    %Long-term borrowings
    
    
    15,416
    
    
    
    321
    
    
    
    4.20
    %
    
    
    1,287
    
    
    
    33
    
    
    
    5.17
    %Total interest bearing liabilities
    
    
    316,498
    
    
    
    5,428
    
    
    
    3.46
    %
    
    
    220,982
    
    
    
    2,519
    
    
    
    2.30
    %Noninterest-bearing liabilities:Demand deposits
    
    
    50,943
    
    
    
    
    
    
    
    
    
    
    
    44,739Other liabilities
    
    
    2,360
    
    
    
    
    
    
    
    
    
    
    
    1,288Stockholders equity
    
    
    43,947
    
    
    
    
    
    
    
    
    
    
    
    37,431Total liabilities and stockholders equity
    
    $
    413,748
    
    
    
    
    
    
    
    
    
    
    $
    304,440Net Interest Spread (7)
    
    
    
    
    
    
    
    
    
    
    4.59
    %
    
    
    
    
    
    
    
    
    
    
    4.45
    %Net interest income/margin (8)
    
    
    
    
    
    $
    10,450
    
    
    
    5.30
    %
    
    
    
    
    
    $
    7,225
    
    
    
    5.00
    %




---



##### 



Provision for Loan Losses and Related Allowance for Loan Losses
  Non-interest Income and Non-interest Expense
  th rd th st




---



##### 



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