On June 30, 2008, our assets were $192.0 million an increase of $31.2million (19%) compared to $160.8 million at December 31, 2007. Our loanswere $158.1 million an increase of $50.5 million (47%) compared to $107.8million at December 31, 2007. Our deposits were $150.2 million an increaseof $11.0 million (8%) compared to $139.2 million at December 31, 2007.

Interest income for the six months ended June 30, 2008 was $5,185,500, anincrease of $1,168,200 (29%) compared to $4,017,300 for the same period in2007. Interest expense for the six months ended June 30, 2008 was$2,096,700, an increase of $284,300 (16%) compared to $1,812,400 for thesame period in 2007. Net interest income for the six months ended June 30,2008 was $3,088,800, an increase of $883,900 (40%) compared to $2,204,900for the same period in 2007. Net interest income was higher in 2008,despite the significant decrease in interest rates during the period,primarily due to an increase in the volume of interest earning assets.

Non-interest income for the six months ended June 30, 2008 was $107,000, anincrease of $73,800 (222%) compared to $33,200 for the same period in 2007.Non-interest expense for the six-month period ending June 30, 2008 was$3,392,700, an increase of $140,700 (4%) compared to $3,252,000 for thesame period in 2007. This modest increase in the first half is due to therapid growth of the bank during 2007, and has actually decreased during thesecond quarter as we have been able to put staff efficiencies in place.

Our net loss was $1,030,300, or $0.53 per share, and $1,062,500, or $0.55per share, for the six-month periods ended June 30, 2008 and 2007,respectively. Our net loss was $551,900, or $0.29 per share, and $637,700,or $0.33 per share, for the three-month periods ended June 30, 2008 and2007, respectively.

"I am pleased that we again showed remarkable growth," said President BenTinkey. "While these are trying times for many in the financial industry,we have been able to continue to increase our market share and exceed ourgrowth objectives for the period. We are especially pleased with thequality of the new lending relationships we have established. We believethat our ability to deliver the combination of true community bankingresponsiveness and local decision making is the reason that more and moreindividuals and businesses are switching to Pacific Valley Bank."

Pacific Valley Bank is a full-service community-based bank organized bylocal business and community leaders. It opened its doors in September2004 and has approximately 1100 shareholders. The Bank now has fivebranches with two located in Salinas, and one each in King City, Hollisterand Monterey.The Bank's 2nd Quarter 10-Q Report may be found on our websitewww.PacificValleyBank.com.