Community Valley Bancorp Annual Report 2005

fifteen years of excellence

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Letter to Shareholders .........................................3

Profile ...................................................................5

Financial Growth ............................................ 6-7

Discussion & Analysis ................................... 8-11

Condensed Statements ................................ 12-13

Board of Directors ....................................... 14-15

Management Team ..................................... 16-17

Bank Locations ............................................ 18-19

Our People ................................................... 20-21

Community Support ................................... 22-23

Corporate Information ......................................24

Table of Contents

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Secure Financial Growth

As of December 31, 2005, total assets were $495 million, or a 10% increase over the $450 million at year end 2004. Deposits also increased 9% to $434 million in 2005.

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Dear Shareholder:

2005 represents our completion of 15 full years of providing first class community

banking to the North State. We can look back at great accomplishments and great

financial results for all concerned. A central theme of our success is that we continue

to innovate and develop new products and services that meet and exceed the

financial needs of the communities we serve.

Since its launch in December 2004, CVB Insurance Agency has secured multiple

appointments with the best insurance providers in the industry. This has enabled

Community Valley Bancorp to offer competitive insurance products that meet every

personal and business requirement.

In 2005 we enhanced our collection of commercial services by creating Butte

Community Payroll Systems, a division of Butte Community Bank that provides

Northern California businesses with all essential payroll and tax services. As we

develop these new products, our Bank maintains its growth and Community Valley

Bancorp continues to produce record earnings.

Also in 2005, we opened our first Redding branch and began construction of a

second Redding office. Plans are also underway to build new branches in Red Bluff,

Corning and Marysville to further expand our footprint in these communities.

For the 14th year in a row we have been recognized as a Super Premier Performing

bank by The Findley Reports. Community Valley Bancorp is committed to providing

a broad spectrum of financial services to our customers. We firmly believe that this

strategy will pay great dividends for years to come.

Keith Robbins

President

Chief Executive Officer

Donald Leforce

Chairman of the Board

To Our Shareholders

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Banking products such as checking accounts, savings accounts and

certificates of deposit are FDIC insured and are offered through

Butte Community Bank, an FDIC member.

Butte Community Bank and LPL Financial Services are not

affiliated. Investments available through LPL Financial Services are

not insured by the FDIC, or any other regulatory agency, are not

deposits or obligations of, nor guaranteed by, Butte Community

Bank or any other affiliated entity. Investments are subject to

investment risks including loss of the principal invested.

CVB Insurance Agency, LLC is a wholly owned subsidiary of

Community Valley Bancorp and can process insurance requests

for both Butte Community Bank customers and non-customers.

Purchasing insurance from CVB Insurance Agency is not a

condition of obtaining credit at Butte Community Bank.

15 Years of Super Performance

Butte Community Bank has received the highest designation of Super Premier Performing Bank from The Findley Reports every year since the bank’s ratings began in 1992.

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Profile

Butte Community Bank, a subsidiary of

Community Valley Bancorp, is a progressive

Northern California bank that combines

traditional deposit and lending services with

innovative banking solutions.

Founded in December, 1990, Butte

Community Bank is state-chartered with

13 branches in 10 cities including Chico,

Magalia, Oroville, Paradise, Yuba City, Red

Bluff, Marysville, Colusa, Corning and

Redding. It also operates loan production

offices in Citrus Heights and Gridley.

From Community Workshops to complex

construction loans, Butte Community Bank’s

mix of traditional and progressive financial

services is second to none in the markets

we serve. Our status as a Small Business

Administration (SBA) Preferred Lender

coupled with our position as a top-ranked

USDA Business & Industry Lender makes us

the #1 choice for business and commercial

financing. Butte Community Bank also

operates a progressive merchant services

department, a real estate loan division and

an investment center.

CVB Insurance Agency, LLC, a subsidiary

of Community Valley Bancorp, is a full-

service insurance agency offering all lines of

coverage from auto and health to commercial

and farm packages.

As your one-stop insurance source, we can

ensure you get the greatest insurance value

for your dollar. Plus, by staying with CVB

Insurance, you save time and money

because you can compare plans again

anytime in the future.

Now you can insure your business with a

wide variety of products from top-name

companies such as Zurich, Hartford, Blue

Shield, Chubb, Liberty Mutual and Lloyd’s of

London.

Butte Community Financial Services, a

division of Butte Community Bank, offers

the following investment options through

LPL Financial Services:

• 401k Rollovers • Annuities • Asset Allocation Planning • Stocks & Bonds • Tax Strategies • Education & College Planning • Estate Planning • Mutual Funds • Portfolio Management • Retirement Planning • Individual Retirement Accounts

Butte Community Payroll Systems, the

newest division of Butte Community Bank,

provides Northern California businesses

with all essential payroll and tax services. We

offer tax processing for all 50 states, custom

reports, fax and online data input, job

costing, general ledger service and complete

training and support.

We stay current on hundreds of regulation

changes each year to keep our customers

compliant with the ever changing federal,

state and local tax laws. Butte Community

Payroll Systems assumes full responsibility

for the accuracy and timely filing of all your

business payroll tax deposits.

Butte Community Bank and CVB Insurance

are subsidiaries of Community Valley

Bancorp, a financial holding company.

Community Valley Bancorp was founded in

2002 to provide a wider range of financial

services to the communities it serves. It has

headquarters in Chico, California.

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1991(321,000)24,632,00021,649,00018,246,000

1993645,00044,754,00040,283,00034,916,000

1992559,00035,592,00031,983,00027,921,000

1994758,00056,525,00051,147,00038,561,000

IncomeAssets

DepositsLoans

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Financial Growth

19951,017,00072,275,00065,607,00054,220,000

19992,223,000158,167,000142,876,000 118,411,000

Income

Assets

Deposits

Loans

19971,409,000118,419,000108,253,00089,738,000

20013,811,000272,464,000246,420,000197,875,000

20035,269,000386,723,000342,511,000 270,231,000

19961,225,00089,391,00081,586,00064,381,000

20003,046,000214,066,000194,131,000172,412,000

19982,131,000144,601,000131,779,000107,279,000

20024,850,000337,483,000297,981,000229,699,000

20045,610,000449,675,000399,059,000339,174,000

20057,198,000 494,777,000 434,018,000 401,221,000

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Management’s Discussion and Analysis of Financial Condition and Results of Operations for the years ended December 31, 2005 and 2004.

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Discussion & Analysis

This condensed discussion and analysis of

the Company’s financial position and results

of operations should be read in connection

with the Company’s Annual Report on Form

10-K for the year ended December 31, 2005.

OverviewNet income was $7,198,000 ($1.00 basic

earnings per share) for 2005 compared to

2004 earnings of $5,610,000 ($0.79 basic

earnings per share). Return on beginning

shareholders’ equity was 18.82% in 2005 and

17.20% in 2004. Return on average assets

in 2005 and 2004 was 1.51% and 1.34%,

respectively.

As of December 31, 2005, total assets were

$495 million, or a 10% increase over the

$450 million at year end 2004. The Company

had portfolio loans totaling $401 million at

December 31, 2005, for an increase of $62

million, or an 18% increase over the $339

million at December 31, 2004. Deposits

also increased 9% to $434 million from the

previous year end total of $399 million. The

Company’s continued growth in its branch

banking system along with the introduction

of new and varied banking products were

principal factors in the increased totals.

Net Interest IncomeNet interest income is the difference between

total interest income and total interest

expense. It is expressed as a percentage of

average earning assets and is referred to as

net interest margin. It is used to measure

the difference between the average rate of

interest earned on assets and the average rate

of interest that must be paid on liabilities

used to fund those assets. The Company’s

net interest margin for 2005 was 6.32%, up

from 5.70% in the year 2004. During 2005,

the Company’s net interest margin improved

primarily as a result of the increase in loan

volume and the increase in interest rates

charged on these loans.

On an average basis, the rates on loans

increased by 43 basis points resulting in an

increase in interest income of $1.7 million.

This increase in rates was augmented by

the increase in the average volume of loans

of $69 million that generated an additional

$5.2 million in loan related interest income.

During 2005 overall interest income on

earning assets increased by $7.5 million. Due

to the favorable changes in the Company’s

mix of deposits from the growth in average

balances of NOW, savings and money

market accounts, the Company was able to

increase the overall level of deposits while

controlling interest expense. The average

rates paid on interest bearing deposits for

2005 was 1.42% compared to 1.22% in 2004.

Non-Interest IncomeNon-interest income of $6.7 million

increased $700,000 over the 2004 total. The

primary traditional sources of non-interest

income for the Company are service charges

on deposit accounts, gains on the sale of

loans, loan servicing income, alternative

investment fees earned on the sales of non-

deposit investment products and merchant

credit card fees.

Non-Interest ExpenseThe Company’s total non-interest expense

increased to $20.9 million in 2005, as

compared to $16.8 million in 2004. Refer to

the Income Statement in the accompanying

Consolidated Financial Statements for a

detailed description of non-interest expense.

Salaries and BenefitsSalaries and employee benefits increased in

2005 by $2.3 million, or 22.9% from 2004.

This increase resulted from normal cost

of living raises, salaries paid to employees

for a full year in 2005 at the three new

branch offices opened in 2004 in Red Bluff,

Marysville and Colusa as well as the branch

office in Corning opened in March, 2005

and the branch office opened in Redding

in September, 2005. We also opened a Loan

Production Office in the city of Gridley

in July, 2005. Commissions paid to Butte

Community Bank’s Real Estate Loan agents

and staffing additions made during the year

as the Company continued to grow also

contributed to the increase.

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Provision for TaxesThe effective tax rate for 2005 was 40.8%

compared to 40.4% for 2004. The provision

for current taxes results from applying the

current tax rate to taxable income, and is

in essence the actual current income tax

liability. Some items of income and expense

are recognized in different years for tax

purposes than when applying accounting

principles generally accepted in the United

States of America, however, leading to

differences between the Company’s actual

tax liability and the amount accrued for this

liability based on book income.

LoansA comparative schedule of outstanding

loan balances is presented in Note 3 to the

Consolidated Financial Statements. Loan

balances net of the allowance for loan losses

at December 31, 2005 were $401.2 million,

an increase of 18% from the $339.5 million

at year-end 2004. This increase, primarily

in the real estate lending area, is due to

the Company’s decision to continue to

concentrate on short-term secured loans.

Risk ElementsThe majority of the Company’s loan

activity is with customers located within

the service area of its branches or lending

offices. Approximately 90% of the total loan

portfolio is located within the Company’s

service area. Significant concentrations of

credit risk may exist if a number of loan

customers are engaged in similar activities

and have similar economic characteristics.

The Company believes that it has policies

and procedures in place to monitor, mitigate

and identify any concentration of credit risk

in the portfolio.

Non-Performing AssetsManagement classifies all loans as non-

accrual when they become more than 90

days past due, or earlier when the timely

collection of interest or principal becomes

questionable. A loan remains in non-accrual

status until principal and interest are current

for a sufficient period of time and also meets

the Company’s cash flow and collateral

requirements. When this criterion is not met,

the loan is charged-off against the allowance

for loan losses, or in the case of real estate

loans, is transferred to other real estate.

The Company’s non-performing assets as

a percent of net loans totaled 0.002% at

December 31, 2005 and 0.03% at December

31, 2004.

Other ExpensesOccupancy and equipment expenses were

$2,969,000, an increase of $444,000 or

18% when compared to the 2004 total

of $2,525,000. Much of the increase in

occupancy expense was related to furniture,

fixtures and equipment for the new Red

Bluff, Marysville, and Colusa branches

opened during 2004, and the Corning and

Redding branch offices opened in 2005.

The lease agreements and remodeling costs

associated with these offices, also added to

the year over year increase.

Expenses representing telephone and

data communications, postage and mail,

stationery and supplies, director fees

and retirement accruals, advertising and

promotion, and other expenses totaled

$4,651,000 for 2005 compared to $3,657,000

in 2004. Management considers this increase

in expenses commensurate with the growth

of the Company.

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Discussion & Analysis (cont.)

Allowances for Loan LossesThe provision for loan losses charged to

operations is based on the Company’s

monthly evaluation of the loan portfolio and

the adequacy of the allowance in relation to

total loans outstanding. The provision for

loan losses amounted to $724,000 in 2005

and $734,000 in 2004. This change in the

provision is a reflection of the growth in

total loans and management’s evaluation

and assessment of the loan portfolio. The

Company maintains a separate allowance

for losses related to undisbursed loan

commitments. Management estimates the

amount of probable losses by applying the

loss factors used in the allowance for loan

loss methodology to an estimate of the

expected usage and applies the factor to

the unused portion of undisbursed lines of

credit. The allowance totaled $481,000 and

$381,000 at December 31, 2005 and 2004,

respectively, and is included in accrued

interest payable and other liabilities on the

balance sheet.

The allowance for loan losses is maintained

at a level considered adequate to provide for

losses that can reasonably be anticipated.

The allowance and relevant changes are

shown in Note 3 to the Consolidated

Financial Statements. At December 31,

2005 the allowance for loan losses was $4.7

million or 1.16% of total loans, compared

to $4.0 million or 1.16% in 2004. The

Company recorded net charge-offs of $8,000

in 2005 compared to net recoveries of $4,000

in 2004. The continued low level of charge-

offs compared to industry standards reflects

the Company’s sound underwriting policies

and collection procedures.

Capital The Company and the Bank are subject

to certain regulatory capital requirements

administered by the FDIC. The FDIC has

adopted risk-based capital guidelines which

establish a risk-adjusted ratio relating

capital to various categories of assets and off

balance sheet exposures. The table showing

the FDIC required ratios and the Company’s

and the Bank’s actual ratios are shown in the

Consolidated Financial Statements in Note

11. At December 31, 2005, the Company’s

total risk-based capital ratio was 12.5%, the

Tier 1 risk-based capital was 11.4% and the

leverage capital ratio was 9.8%. All ratios

exceed the minimum guidelines of 8%, 4%

and 4% respectively. The ratios at December

31, 2004 were 12.5%, 11.3% and 9.5%,

respectively.

Liquidity ManagementThe Bank’s liquidity is determined by the

level of liquid assets (such as cash, federal

funds sold and securities classified as

available for sale) that are convertible to cash

to meet customer withdrawal and borrowing

needs. The Company’s asset and liability

policy is used to monitor and determine

liquidity needs. At December 31, 2005, the

Company’s liquidity ratio (cash, fed funds,

and securities) as a percentage of total

liabilities was 12% as compared to 18% at

December 31, 2004.

Asset and Liability ManagementThe objective of asset and liability

management is to manage the sensitivity

of net interest rate spreads to changes in

interest rates. Management also attempts to

balance risk with profitability. Interest rate

sensitivity measures the difference in both

the timing and amount at which certain

assets and liabilities are re-priced. The

Company historically maintains the majority

of its assets and liabilities with relatively

short maturities to protect its net interest

income from major shifts in rates.

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Condensed Consolidated Balance Sheets(in thousands) Year Ended December 31, 2005 2004

Assets: Cash and cash equivalents ......................................................... $48,003 ....................................... $68,218 Securities ........................................................................................... 6,676 ........................................... 6,961 Net loans, including loans held for sale .................................... 403,418 ....................................... 341,045 Other assets .................................................................................... 36,680 ......................................... 33,832 Total assets ............................................................................... $494,777 .................................... $450,056

Liabilities and shareholders’ equity: Deposits ..................................................................................... $434,018 ..................................... $399,059 Borrowings ....................................................................................... 1,782 .............................................. 833 Other liabilities ............................................................................. 17,422 ......................................... 15,633 Total liabilities ........................................................................... 453,222 .......................................415,525 Shareholders’ equity ...................................................................... 41,555 ......................................... 34,531 Total liabilities and shareholders’ equity ............................ $494,777 .................................... $450,056

Condensed Consolidated Statements of Income(in thousands, except per share data) Year Ended December 31, 2005 2004 2003

Interest income ..................................................................................... $32,438 ................$24,980 ......... $21,517Interest expense ........................................................................................ 5,331 .................... 4,056 ............. 4,396Net interest income ...............................................................................27,107 ................. 20,924 ...........17,121

Provision for loan losses ............................................................................. 724 ...................... 734 ................ 586Noninterest income .................................................................................. 6,711 .................... 6,018 ............. 5,950Operating expense .................................................................................. 20,925 ..................16,795 ........... 13,887

Income before provision for income taxes .......................................... 12,169 .................... 9,413 ............. 8,598Provision for income taxes ...................................................................... 4,971 .................... 3,803 ............. 3,329

Net income .............................................................................................$7,198 ................. $5,610 ...........$5,269

Net income per share, basic .................................................................... $1.00 .................... $0.79 ............. $0.75Net income per share, diluted ................................................................. $0.95 .................... $0.74 ............. $0.71Shares used to compute net income per share, basic .......................... 7,166 .................... 7,112 ............. 7,025Shares used to compute net income per share, diluted ...................... 7,612 .................... 7,601 ............. 7,431Dividends paid per share ......................................................................... $0.16 .................... $0.15 ............. $0.15

These are unaudited condensed financial statements that have been derived from the audited financial information and should be read in conjunction with the full consolidated financial statements of the Company in its Annual Report on Form 10-K.

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Condensed Statements

Condensed Consolidated Statements of Cash Flows(in thousands) Year Ended December 31, 2005 2004 2003

Cash flows from operating activities: Net income ..................................................................................... $7,198 ..................$5,610 ........... $5,269 Adjustments to reconcile net income to net cash provided by operations ........................................... 2,892 .................... 5,788 ............. 5,717 Net cash provided by operating activities ...............................10,090 ................. 11,398 ...........10,986

Cash flows from investing activities: (Purchases) and sales or maturities of securities, net ................. 2,341 ................. (3,446) .......... (4,853) Net increase in loans made to customers ................................ (62,477) ...............(69,722) ........ (41,383) Other, net ....................................................................................... (5,187) ................. (1,908) .......... (4,469) Net cash used in investing activities .................................... (65,323) ..............(75,076) ....... (50,705)

Cash flows from financing activities:Net increase in deposits ......................................................................... 34,959 ..................56,548 ........... 44,531

ESOP note, net ................................................................................. (199) .................... (149) ............. (221) Dividends paid .............................................................................. (1,069) ................. (1,089) .......... (1,079) Cash paid for fractional shares ......................................................................................... (6) Proceeds from exercise of stock options .......................................... 527 ....................... 284 ................ 267 Repurchase of common stock ....................................................................................... (502) Proceeds from note payable .............................................................. 800 Net cash provided by financing activities ................................35,018 ................. 55,086 ...........43,498

Decrease in cash and cash equivalents ..................................... (20,215) ................. (8,592) ............. 3,779 Cash and cash equivalents at beginning of year ........................ 68,218 ..................76,810 ........... 73,031

Cash and cash equivalents at end of year ...................................... $48,003 ............... $68,218 .........$76,810

Condensed Consolidated Statements of Changes in Shareholders’ Equity (in thousands) Year Ended December 31, 2005 2004 2003

Beginning balance ................................................................................$34,531 ............. $29,949 .........$25,380 Exercise of stock options ...................................................................1,039 ..................... 532 ................ 462 Cash dividends .................................................................................(1,092) ............... (1,097) .......... (1,081) Earned ESOP shares ..............................................................................251 ..................... 180 ................ 252 Shares acquired by ESOP ...................................................................(348) .................. (150) ............. (321) Changes in unrealized gain (loss) on securities available for sale ..(24) ......................... 9 ................(12) Repurchase and retirement of common stock ............................................................ (502) Net income ..........................................................................................7,198 .................. 5,610 ............. 5,269

Ending balance ......................................................................................$41,555 ............. $34,531 .........$29,949

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Donald W. LeforceChairman of the Board.

Retired. Past President

and Secretary/Treasurer

of Compass Equipment,

Inc., a distributor of

mining and heavy

construction equipment.

John D. LanamRetired

Gary B. Strauss, MDVice Chairman

Retired

Charles MathewsOwner of Mathews

Farms since 1965 and

partner in Mathews Rice

Dryer since 1980.

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Board of Directors

James S. RickardsSecretary. Real Estate

Broker associated with

Century 21 Select.

Ellis L. MatthewsRetired

Keith RobbinsPresident and Chief

Executive Officer of

Butte Community Bank

and Community Valley

Bancorp

Luther W. McLaughlin, CPAManaging Director and

President of Matson &

Isom Certified Public

Accountants for more

than ten years.

John CogerExecutive Vice President,

Chief Financial Officer

and Chief Operating

Officer of Butte

Community Bank and

Community Valley

Bancorp

Robert L. Morgan, MD Retired

M. Robert Ching, MDOrthopedic Surgeon

Hubert TownshendRetired. Formerly

involved in general

engineering, contracting

and equipment rental.

Eugene B. EvenRetired

Jack B. SchmelkeRetired

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Executive GroupKeith Robbins

President Chief Executive Officer

John CogerExecutive Vice President Chief Financial Officer Chief Operating Officer

Bruce BarnettSenior Vice President Chief Information Officer

Roger JanisSenior Vice President Area Administrator

Steve JohnsonSenior Vice President RE Development and Risk Management

Craig LarsonSenior Vice President Chief Lending Officer

Russ WittmeierSenior Vice President Product Development Executive

Debbie MileyAdmin. Vice President Operations and HR Administrator

Brad RudkinAdmin. Vice President Branch Banking Executive

Return on Investment

Net income was $7,198,000 for 2005 compared to 2004 earnings of $5,610,000. Return on beginning shareholders’ equity was 18.82% in 2005 and 17.20% in 2004.

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Management Team

Administrative ManagementGayle Lee

Senior Vice President Controller

Beverly BrinkerAdmin.Vice President Audit Compliance Mgr.

Kash GillAdmin.Vice President Regional Manager

Michelle BeichVice President Note Department Mgr.

Lee BrownVice President Special Assets Mgr. and Security Officer

Phil PapemanVice President Marketing Director

Carla GeyerAssistant Vice President Executive Assistant

Bank Branch ManagementCheryl Almeida

Vice President Regional Branch Mgr.

Laurie BeibersVice President Branch Manager Sr. Commercial Lender

Cindy BrownVice President Branch Manager

Diane ModesVice President Branch Manager

Janet OlsenVice President Branch Manager

Katy ThomaVice President Branch Manager

Andrea WhiteVice President Branch Manager

Margaret CoronaAssistant Vice President Branch Manager

Manny PhaguraAssistant Vice President Branch Manager

Brenda WelchAssistant Vice President Branch Manager

Lending

Glenn RilingerAdmin. Vice President SBA/Commercial Loans

Doug WeigandAdmin. Vice President Commercial Lender

Kevin KaiserCorporate Vice President Sr. Commercial Lender

Marcy SutcliffeCorporate Vice President Sr. Commercial Lender

Joel ArnoldVice President Sr. Commercial Lender

Erika BenderVice President Sr. Commercial Lender

Ruth GildeaVice President Commercial Loan Officer

Roger HartVice President Sr. Commercial Lender

Bob HetherwickVice President Commercial Loan Officer

Tim JamesVice President Sr. Construction Lender

Steve MontandonVice President Sr. Commercial Lender

Lorinda Spencer Vice President Commercial Loan Officer

Jeremy StoneVice President Loan Officer

Butte Community Financial ServicesJadee Carter

Vice President LPL Registered Representative

Ellen HuntAssistant Vice President LPL Registered Principal

CVB Insurance AgencyFrank Hill

Vice President Agency Manager

Butte Community Payroll SystemsScott Reynolds

Sales Manager

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Chico South2041 Forest Avenue, Chico, CA 95928 (530) 891-3494

Chico Central900 Mangrove Avenue, Chico, CA 95926 (530) 891-9000

Chico North237 West East Avenue, Chico, CA 95926 (530) 899-2347

15 Years of Record Stock Price Gain

An original share of Butte Community Bank stock cost $10. Adjusted for eight stock splits, that’s only $0.67 per share. As of December 31, 2005, that single share has increased in value 2,035%.

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Bank Locations

Paradise South672 Pearson Road, Paradise, CA 95969 (530) 877-0857

Paradise North6653 Clark Road, Paradise, CA 95969 (530) 877-2506

Magalia14001 Lakeridge Circle, Magalia, CA 95954 (inside Holiday Quality Foods) (530) 873-6854

Oroville2227 Myers Street, Oroville, CA 95966 (530) 532-0800

Yuba City1600 Butte House Road Yuba City, CA 95993 (530) 751-2700

Red Bluff84 Belle Mill Road, Red Bluff, CA 96080 (530) 528-3060

Marysville812 “B” St, Marysville, CA 95901 (530) 741-0210

Colusa1017 Bridge St, Colusa, CA 95932 (inside Holiday Quality Foods) (530) 458-5430

Corning 908 Highway 99W, Suite D Corning, CA 96021 (530) 824-3966

Redding100 East Cypress Avenue, Suite 150 Redding, CA 96002 (530) 722-0295

Citrus Heights LPO5959 Greenback Lane #450 Citrus Heights, CA 95621 (916) 728-1600

Gridley LPO 1010 Spruce Street, Gridley, CA 95948 (530) 846-3472

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Abdulmasih, RitaAkers, LeslieAldama, MeganAllison, DarrenAllison, DoreenAlmeida, CherylAltamirano, CindyAndrade, JanetArechar, Lesley AnnArnold, JoelAspromonte, ShellieAzevedo, VickiBaker, TylerBales, TeresaBall, MindyBarbo, TerryBarnett, BruceBarranti, Jill Barrett, RyanBass, TanikaBaumann, AmandaBeckett, DianeBecraft, MollyBecraft, TaraBeebe, CathyBeibers, LaurieBeich, MichelleBelben, LeahBender, ErikaBenevento, DanielBenson, BarrettBerge, ChrisBerry, PeggyBondza, SuzanaBowman, BreaBravo, JoseBrinker, BeverlyBrock, AudraBrockman, WendyBrown, CindyBrown, LeeBrown, TinaBrunelli, RitaByland, MariaByrne, JacquelineCamolinga, SylviaCarter, JadeeCarter, RachelCartoscelli, AngelaCaughey, Amber

15 Years of Service

Beverly Brinker Maria Byland John Coger Windy Hill Gayle Lee Debbie Miley Stacey Morris Keith Robbins

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Our People

280 Employees as of March 15, 2006

Cerrato, JeriChiotti, DanielleCiancio, NicoleClausen, KristinaCoffelt, JakeCoffelt, JoshCoger, JohnCoger, MeganCollins, JeffConard, MargoConner, JillCornell, ShannonCorona, MargaretCromwell, SamCrouse, BarbaraDavis, LindaDillard, CindyDodge, KelleyDolan, JennyDorgali, SuzyEldredge, TammyErnenwein, JustinEsparza-Smith, KristinaEvans, JoiFawns, DeniseFellner, AndreasFillmer, ReanetteFlores, DebbieFlores, MikeFranco, EvaFranco, GinaGard, BeckyGates, LindaGaussoin, EmeraldGeyer, CarlaGildea, RuthGill, HarveenGill, KashmirGlassgow, NicoleGoble, MelissaGrider, EileenGustafson, DamonHamblin, Deboragh

Hamblin, KariHard, BeckyHardesty, BrendaHarger, DiannHarnish, JulieHarris, EliHart, RogerHayes, MarilynHeindell, CatherineHelberg, DixieHendel, JessicaHenderson, ChristineHenshaw, ReneeHernandez, AbelHernandez-Reeson, PattiHerndon, JeannetteHetherwick, BobHiell, DonnaHill, FrankHill, WindyHoffie, AudreyHolland, KathyHollingsworth, KellyHollstrom, KristaHoofard, FrancineHoover, RachelHopper, ChristinaHowder, LiliaHughes, JohnnieHumlick, CindyHunt, EllenHunter, AndreaHutcheson, ShilohJackson, HelenJames, TimJanis, RogerJimenez, StephanieJohnson, SteveJones, LynsieJuanarena, SusanKaiser, KevinKeller, JaneKemp, AshleyKemp, StacyKirk, JerryKlemens, AntonKoehn, Patricia

Kremer, EmmaleeLaizure, TammyLandis, LarryLarson, CraigLarson, HeidiLee, GayleLee, LizetteLeen, DonaldLehman, DarcieLehman, DickLindquist, KyleLobo, WesMacNeill, ChristinaMartin, TarynMartinez, TammiMatulich, VickyMcCain, SandyMcCarthy, RhondaMcClure, MelanieMcKillop, DeannaMedina, GabrielMercer, AnnetteMichael, EllenMilco, KathyMiles, DeeMiley, DebbieMiley, JeffMiley, JustinMiller, JustinModes, DianeMoffitt, SandiMonson, AmyMontandon, StephenMoody, SteveMoore, DebbieMorris, KristyMorris, StaceyMussmann, MichelleNichols, DanaNorris, DixieNovo, CariO’Brien, AmyOlsen, JanetOn, AmberO’Neill, LanaeeOsterlund, DavidPaniagua, LettyPapeman, PhilipPatterson, AmandaPearman, Jonathan

Pegany, KirenjitPeters, PattyPeterson, MikePhagura, MannyPreecs, CarolePresley, LizPrice, BenPritchett, WilliamPruitt, NicolePusch, MichelleRamirez, JeannetteReeson, KellyReinbold, DavidRenlund, KateReyes, ChristyReynolds, ScottRichardson, LajinaRidley, BettyRilinger, GlennRilinger, MandyRobbins, KeithRobertson, CalumRohleder, AshleyRoldan, AnaRomanshek, KevinRudkin, BradRyan, AlainaSalcido, KatieSchneider, TrineSchreckengost, KimSellers, BarbaraShields, RobinShoemaker, LisaShore, AshelyShores, LindaSilver, CoriSimmons, JanSimon, JulieannaSkelly, HeatherSlocum, Patty

Smith, BrianSmith, DianaSpencer, JimSpencer, LorindaStangeland, SaraStanton, GaryStone, JeremySutcliffe, MarcySweeney, BritneyTakhar, PoonamTaylor, BruceTaylor, CarriTaylor, YolindaThoma, KatyThompson, BeverlyThunen, LisaTimm, PattiTraynor, RhondaTurner, BethValdez, MaryVanderlinde, CaroleVaughn, MaryVaught, RebeccaVega, MonaVernon, JimVersola, MarquesaWagner, PamWalsh, MikeWebb, ShirleyWebster, KellyWeigand, DougWelch, BrendaWest, MelanieWhite, AndreaWhite, BrandyWhittaker-Belben, AbigailWilkerson, TeresaWilliams, JeremyWillis, AmandaWilson, BeckyWilson, JoanneWilson, JuliaWilson, LaurenWilson, LindaWittmeier, RussWolf, BrandiWolter, HeatherWolter, NikiWoolsey, AshleyWright, Lori

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Achieve Charter School

Alzheimer’s AssociationMemory Walk 2005

American Cancer Society2005 Relay for Life

American Heart AssociationHeart Night at the Oscars Gala 2005

Arbuckle Revitalization CommitteeAnnual Depot BBQ and Car Show

The ARC of Butte County

Athletic Horizons

Barry R. Kirshner Wildlife Foundation

Big Brothers Big Sisters of Butte CountyBowl for Kids’ Sake 2005

Bob Busch All Star Baseball Classic

Boys & Girls Club of ChicoLinks Across Time Golf TournamentParadise Ridge Inaugural Special Recognition Dinner

Building Industry Association14th Annual Golf Tournament

Butte College Small Business Development Center7th Annual Women in Business Conference

California Peach Festival (Marysville)

California State University, ChicoSuperior Ag Golf Tournament

Butte Community Bank is committed to the Northern California cities that we serve. Following are just some of the fine organizations and local events that we helped in 2005.

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Community Support

Casa de EsperanzaOld Fashioned Barbecue (Yuba City)

Challenger Division Baseball

Chico AquaJets Swim Team

Chico Concours d’Elegance

Chico High School Foundation

Chico High School Grad Night

Chico MerchantsCompetitive Senior Softball

Chico Museum AssociationThreshing Bee Sponsorship

Chico OutlawsSchool Reading Program

Chico Police DepartmentMounted Enforcement Team

Chico Rooks Pro Soccer Foundation

Chico Senior Soft Ball

Chico Sunrise Rotary ClubRotary Night at the Races

Chico Tennis Club

Chico Valley ScorchersYouth Football & Cheer Program

Chico Veterans Memorial CommitteeVeterans Memorial Fund

Center for Economic Development at CSUC2005 Tri County Economic Forecast Conference

Hispanic Business AssociationCinco De Mayo Fiesta

Colusa Area Little League

Colusa Concerts in the Park

Colusa County Fair Parade

Corning Car Show

Corning Chamber of CommerceHometown Christmas

Corning Jr. Rodeo Association24th Annual Corning Junior Rodeo

Corning Olive Festival

CP Auto Racing Team (Chico)

Decorators Dream House 2005

Durham Rotary Harvest Festival

Enterprise StarshipLive Entertainment

Exceptional Soccer League (Chico)

Family Solutions (Chico)

Feather River Health FoundationFeather River Scramble Golf Tournament

Focus Club of Gridley

Forward Redding Foundation

Fremont-Rideout Hospice ProgramFairway to Health Golf Tournament

Friends of Chico Community Ballet

Future Farmers of America Booster Club

Girl Scouts of Sierra CascadeStover Celebrity Golf Classic

Hamilton High SchoolBaseball Golf Tournament

Innovative Preschool (Chico)Spaghetti Feed

International Organization of Punjabi Women (Yuba City)Women’s Dance Festival

Jesus Center (Chico)Benefit Golf Tournament October 3, 2005

St. Jude Children’s Hospital RadiothonKALF Radio

Kiwanis Club of Yuba City11th Annual Lobster Feed

Marigold School (Chico)Jog-A-Thon

Northern California Ballet

North Valley Community Foundation (Chico)

Oroville Chamber of CommerceTable Mountain Scramble Golf Tournament

Oroville Economic Development Corporation (OEDCO)Annual Dinner 2005

Oroville High SchoolBasketball Tournament

Paradise Blues & BrewsThe Exchange Club of Paradise

Paradise Bowling AssociationChampionship Bowling Tournament 2005

Paradise High School Graduation Night 2005

Paradise Police DepartmentTactical Deployment Vehicle

Pediatric Brain Tumor FoundationHarris Cup Miniature Golf Tournament

Pioneer Parade (Williams)

Pleasant Valley High SchoolBoys Varsity Basketball Tournament

Punjabi-American Festival (Yuba City)

Red Bluff Round Up

Red Bluff Junior Round-Up

Shasta County Women’s Refuge (Redding)

Shoes That Fit

Sikh Temple Gurdwara (Yuba City)Annual Parade

Skyway House (Chico)Annual Benefit Dinner

Snow Goose Festival

Superior California Economic DevelopmentBusiness Financing Conference Redding

Sutter North Golf Classic (Yuba City)Sutter North Medical Foundation

Taste of TehamaMicrobrew Festival

Tehama District Fair (Red Bluff)

TOPCats on the Ridge

Wildcat Century ClubFour-Person Scramble Golf Tournament

Woodson Bridge Nature Trail Project (Corning)

Youth for Change

Yuba-Sutter Chamber of CommerceSeptember Business After Hours: “Great Balls of Fire”

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Corporate Information

Shareholder RelationsGayle LeeSenior Vice President/Controller Community Valley Bancorp

6653 Clark Rd Paradise, CA 95969 (530) 877-2506 x3161 glee@communityvalleybancorp.com

Stock ListingSymbol: CVLLMarket: OTC Bulletin Board

Transfer AgentU.S. Stock Transfer Corporation

1745 Gardena Ave Ste 200 Glendale, CA 91204-2991 (818) 502-1404 www.usstock.com

Independent AccountantsPerry-Smith LLP

400 Capitol Mall, Suite 1200 Sacramento, CA 95814 (916) 441-1000 www.perry-smith.com

HeadquartersCommunity Valley Bancorp

2041 Forest Ave Chico, CA 95928 (530) 899-2344 www.communityvalleybancorp.com

Butte Community Bank2041 Forest Ave Chico, CA 95928 (530) 899-7100 www.buttecommunity.com

Butte Community Financial Services936 Mangrove Ave Chico, CA 95926 (530) 892-4968 www.buttecommunityfinancial.com

CVB Insurance Agency936 Mangrove Ave Chico, CA 95926 (530) 893-1466 www.cvbinsurance.com

Butte Community Payroll Systems2041 Forest Ave Chico, CA 95928 (530) 899-1636 www.buttecommunitypayroll.com

Market MakersMarket Makers in Community Valley Bancorp stock are:

Sandler O’Neill & Partners, LP919 Third Ave, 6th Floor New York, NY 10022 1-800-635-6851 www.sandleroneill.com

Dave BonaccorsoHoefer & Arnett

555 Market St 18th Floor San Francisco, CA 94105 1-800-346-5544 www.hoeferarnett.com

Troy Norlander & Michael NatzicThe Seidler Companies, Inc

PO Box 1688 Big Bear Lake, CA 92315 1-800-288-2811 www.seidlercos.com

Joey WarmenhovenWedbush Morgan Securities

4949 SW Meadows Rd Ste 100 Lake Oswego, OR 97035 1-800-357-3680

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2041 Forest Avenue, Chico CA 95928 www.communityvalleybancorp.com