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Valley Bank National Association

Elk Point, SD · Cert 16385

FDIC

Q3 2008

$83.1MAssets
$61.5MLoans
$61.6MDeposits
$18.2MEquity
Loan mix
64%RE $31.4M36%C&I $17.8M0%Consumer $0.1MQ3 2007Q3 2008
Deposit mix
61%Interest-bearing $37.6M39%Noninterest $24.0MQ3 2007Q3 2008

NIM

6.10%Q3 ’066.53%Q3 ’074.74%Q3 ’08+2%-16%

Non-interest income vs. expense

4.10%Q3 ’063.78%Q3 ’073.16%Q3 ’08+7%-12%

Executive Summary

  • Earnings: ROA of 0.67%, down 70 bps year over year; NIM at 3.53%.
  • Asset quality: problem loans at 0.00% of loans (0 bps YoY), with net charge-offs at 0.00%.
  • Funding: loans stand at 99.82% of deposits as of Q3 2008.

Financial Results

Return on Assets (quarter, annualized)

0.67%-70 bps YoY

Net Interest Margin (quarter, annualized)

3.53%-69 bps YoY

Efficiency Ratio (quarter, annualized)

75.20%+222 bps YoY

Tier 1 Leverage Ratio

n/a

Discrete quarter, annualized.

MetricQ3 2007Q4 2007Q1 2008Q2 2008Q3 2008YoY ΔTrend
Earnings
Return on Assets1.37%1.30%1.27%-0.98%0.67%-70 bps
Return on Equity12.99%12.51%12.16%-5.84%2.98%-1,001 bps
Net Interest Margin4.22%4.34%3.94%-2.57%3.53%-69 bps
Efficiency Ratio72.98%74.93%72.44%70.07%75.20%+222 bps
Non-Interest Burden2.83%3.01%2.60%-1.76%2.49%-33 bps
Growth
Asset Growth (YoY)6.95%2.01%2.90%10.63%12.03%+509 bps
Loan Growth (YoY)4.49%3.91%7.38%5.07%18.11%+1,362 bps
Deposit Growth (YoY)9.06%1.77%2.76%-3.01%-0.88%-993 bps
Asset Quality
Nonperforming Loans / Loans0.00%0.00%0.00%0.00%0.00%0 bps
Net Charge-Offs / Loans0.02%-0.47%-1.10%0.02%0.00%-2 bps
Allowance / Loans1.23%1.41%1.63%0.99%0.84%-39 bps
Allowance Coverage of NPLsn/an/an/an/an/an/an/a
Capital
Tier 1 Leverage Ration/an/an/an/an/an/an/a
Total Risk-Based Capital14.73%15.17%14.80%13.17%11.61%-313 bps
Equity / Assets10.43%10.41%10.53%22.77%21.86%+1,143 bps
Liquidity & Funding
Loans / Deposits83.78%78.05%81.03%90.44%99.82%+1,604 bps
Liquid Assets / Assets3.06%3.85%6.50%1.45%0.06%-300 bps
CRE / Total Capitaln/an/an/an/an/an/an/a