VLLY Valley Bancorp

Valley Bancorp (NASDAQ: VLLY): HIGHLIGHTS -- First quarter earnings of $1,634,000, up 50% from $1,092,000 in 1st quarter 2005. -- First quarter earnings per diluted share of $0.55 up 49% from 1st quarter 2005. -- ROE and ROA of 15.17% and 1.63% respectively in 1st quarter 2006. -- Total loans increased $103 million, up 46% from 1st quarter 2005. Valley Bancorp (NASDAQ: VLLY), the holding company for Valley Bank, today announced net income of $1,634,000 for the quarter ended March 31, 2006, a 50% increase from net income of $1,092,000 for the first quarter of 2005. Earnings per diluted share were $0.55 for the first quarter of 2006 as compared to $0.37 for the same period last year. Return on average assets and return on average equity for the quarter ended March 31, 2006, were 1.63% and 15.17% as compared to 1.51% and 11.86% for the same period in 2005, respectively. Valley Bancorp's total assets grew $96.6 million or 31%, to $407.7 million at March 31, 2006, as compared to $311.1 million at March 31, 2005. At March 31, 2006, Valley Bancorp's total net loans were $325.7 million, total deposits were $346.0 million, and stockholders' equity was $43.5 million. Barry L. Hulin, president and chief executive officer of Valley Bancorp, stated, "This quarter represents a solid start to the year. The southern Nevada economy remains strong and we continue to execute on our plan." -0- *T Financial Performance Indicators for the Three Months Ended March 31, 2006 and 2005 (Dollars in thousands, except per share data) (Unaudited) At March 31, Change --------------------- ------------------ 2006 2005 $ or # % ---------- ---------- --------- -------- Balance Sheet: Loans net of Unearned Fees $328,986 $225,256 $103,730 46.05% Allowance for Loan Losses (3,289) (2,248) (1,041) 46.31% ---------- ---------- --------- Loans, net 325,697 223,008 102,689 46.05% Total Assets 407,688 311,104 96,584 31.05% Total Earning Assets 389,112 297,644 91,468 30.73% Total Investments 63,415 74,585 (11,170) -14.98% Total Deposits 346,017 271,726 74,291 27.34% Total Borrowed Funds 15,415 457 14,958 3273.09% Total Liabilities 364,179 274,026 90,153 32.90% Total Stockholders' Equity 43,509 37,078 6,431 17.34% Common Shares Outstanding 2,827,881 2,794,748 33,133 1.19% Book Value per Share $15.39 $13.27 $2.12 15.97% Allowance for Loan Losses to Total Loans 1.00% 1.00% 0.00% Total Stockholders' Equity to Total Assets 10.67% 11.92% -1.25% Total Loans to Total Deposits & Borrowed Funds 90.11% 81.93% 8.18% Three Months Ended March 31, Change --------------------- ------------------ 2006 2005 $ or # % ---------- ---------- --------- -------- Income Statement: Interest Income $7,413 $4,462 $2,951 66.14% Interest Expense 2,440 1,089 1,351 124.06% ---------- ---------- --------- Net Interest Income 4,973 3,373 1,600 47.44% Provision for Loan Losses 227 51 176 345.10% Non-interest Income 61 75 (14) -18.67% Non-interest Expense 2,331 1,741 590 33.89% ---------- ---------- --------- Income before Income Taxes 2,476 1,656 820 49.52% Income Tax Expense 842 564 278 49.29% ---------- ---------- --------- Net Income $1,634 $1,092 $542 49.63% ========== ========== ========= Basic Earnings Per Share $0.58 $0.39 $0.19 48.72% Diluted Earnings Per Share $0.55 $0.37 $0.18 48.65% Weighted Average Shares - Basic 2,827,832 2,790,792 37,040 1.33% Weighted Average Shares - Diluted 2,966,593 2,953,762 12,831 0.43% Average Total Assets $401,163 $288,656 $112,507 38.98% Average Earning Assets 384,542 275,455 109,087 39.60% Average Stockholders' Equity 43,099 36,840 6,259 16.99% Net Interest Margin (1) 5.24% 4.97% 0.27% Return on Assets (1) 1.63% 1.51% 0.12% Return on Equity (1) 15.17% 11.86% 3.31% Non-interest Expense to Average Earning Assets (1) 2.42% 2.53% -0.11% Efficiency Ratio 46.30% 50.49% -4.19% Full Time Equivalent Employees 72 53 19 35.85% ------------------------------ (1) Annualized *T Net Interest Income and Net Interest Margin Net interest income increased by $1.6 million or 47.4% to $5.0 million for the first quarter of 2006 as compared to $3.4 million in the first quarter of 2005. This increase was primarily the result of higher interest income from loans and other earning assets due to increased outstanding totals as well as an improved interest margin. Valley Bancorp average earning assets increased by $109.1 million or 39.6% to $384.5 million for the quarter ended March 31, 2006, as compared to $275.4 million for the first quarter of 2005. The net interest margin for the quarter ended March 31, 2006, increased to 5.24% as compared to 4.97% for the same period in 2005. Rising interest rates and increasing loans outstanding contributed to this improved net interest margin. -0- *T Distribution of Assets, Liabilities and Stockholders' Equity; Interest Rates and Interest Differential (Unaudited) Three Months Ended March 31, ----------------------------------------------------- 2006 2005 -------------------------- -------------------------- Average Average Average Interest Yield/ Average Interest Yield/ Balance Income/ Cost Balance Income/ Cost (1) Expense (2) (1) Expense (2) --------- -------- ------- --------- -------- ------- Assets (Dollars in thousands) Earning assets: Loans (3)(4) (5) $307,957 $6,614 8.71% $208,302 $3,931 7.65% Federal funds sold (6) 32,182 358 4.51% 19,627 121 2.50% Interest bearing deposits (6) 8,916 98 4.46% 9,104 56 2.49% Investment securities (6) 35,487 343 3.92% 38,422 354 3.74% --------- -------- --------- -------- Total earning assets and interest income 384,542 7,413 7.82% 275,455 4,462 6.57% Non-interest earning assets: Cash and due from banks 9,991 7,622 Premises and equipment 7,342 5,799 Other assets 2,350 2,024 Allowance for credit losses (3,062) (2,244) --------- --------- Total assets $401,163 $288,656 ========= ========= Liabilities and Stockholders' Equity Interest bearing liabilities: Interest bearing demand deposits $96,004 $405 1.71% $73,194 $213 1.18% Savings deposits 17,162 81 1.91% 12,620 18 0.58% Time deposits $100,000 or more 85,792 869 4.11% 50,393 324 2.61% Other time deposits 90,554 925 4.14% 71,628 526 2.98% Long-term borrowings 15,422 160 4.21% 463 8 7.01% --------- -------- --------- -------- Total interest bearing liabilities 304,934 2,440 3.25% 208,298 1,089 2.12% Noninterest- bearing liabilities: Demand deposits 51,117 42,495 Other liabilities 2,013 1,023 Stockholders' equity 43,099 36,840 --------- --------- Total liabilities and stockholders' equity $401,163 $288,656 ========= ========= Net Interest Spread (7) 4.57% 4.45% -------- -------- Net interest income/margin (8) $4,973 5.24% $3,373 4.97% ======== ======= ======== ======= -------------------------- (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) Fee income is included in interest income. (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. *T Provision for Loan Losses and Related Allowance for Loan Losses The provision for loan losses was $227,000 for the quarter ended March 31, 2006, as compared to $51,000 for the same period in 2005. The allowance for loan losses of $3.3 million at March 31, 2006, reflected management's assessment of the current risk in the loan portfolio and represented 1.00% of total loans. Valley Bancorp had only one non-accrual loan of $100,000 as of March 31, 2006. There were no loans past due 90 days or more as of March 31, 2006. Non-interest Income and Non-interest Expense Non-interest income was $61,000 for the quarter ended March 31, 2006, as compared to $75,000 for the same period in 2005. The decrease of $14,000 was due primarily to write-offs on some minor office equipment dispositions. Non-interest expense was $2.3 million for the quarter ended March 31, 2006, an increase of $590,000 over the same period in 2005. The increase primarily resulted from a combination of the following: increased compensation and employee benefits cost due to increasing staff levels; higher professional fees associated with being a publicly traded company; higher data processing expenses due to increased number of accounts and transactions being processed; higher marketing and advertising costs; higher occupancy and related costs associated with the new headquarters and the 4th branch occupied in the 3rd quarter of 2005, as well as the opening of the 5th branch in the 1st quarter of 2006. Balance Sheet Valley Bancorp's total assets were $408 million at March 31, 2006, an increase of $97 million or 31% from $311 million at March 31, 2005. The increase was due primarily to a $103 million net increase in the loan portfolio, a $4 million decrease in available for sale securities and a $6 million decrease in interest-bearing deposits at other financial institutions. Total deposits increased by $74 million or 27% to $346 million at March 31, 2006, as compared to $272 million at March 31, 2005. Valley Bancorp stockholders' equity increased by $6.4 million or 17% to $43.5 million at March 31, 2006, from $37.1 million at March 31, 2005, due primarily to increased retained earnings of $6.2 million. About Valley Bancorp Headquartered in Las Vegas, Valley Bancorp is the holding company for Valley Bank, a Nevada state-chartered commercial bank with branches in Las Vegas, Henderson and Pahrump. -0- *T Web site: Valley Bancorp's Web site - www.valleybancorp.com Valley Bank's Web site - www.vbnv.com *T This news release contains forward-looking statements. These statements are subject to a number of uncertainties and risks including, but not limited to, the company's inability to generate increased earning assets, sustain credit losses, maintain adequate net interest margin, control fluctuations in operating results, maintain liquidity to fund assets, retain key personnel, and other risks detailed from time to time in Valley Bancorp's filings with the Securities and Exchange Commission, including our annual report on Form 10-K for the period ended Dec. 31, 2005. Actual results may differ.