The Board of Directors of Hopewell Valley Community Bank (PinkSheets: HWDY) announced that 2011 ended with record annual earnings. The Board also increased the semi-annual cash dividend by 11.1%, moving it from $.045 to $.05. The cash dividend will be payable on March 9, 2012, to shareholders of record on February 13, 2012.

For the full 2011 year, earnings advanced 41.8% to $2,219,857, easily outpacing the 2010 year-end mark of $1,565,499. On a per share basis, 2011 ended 32.0% higher at $.66 per share, eclipsing the $.50 posted for the prior year. The major factors affecting earnings growth during 2011 were a 9.1% increase in net interest income along with a 51.5% jump in non-interest income, while total operating expense rose only 5.3%.

HVCBank also reported that 2011 year-end total assets rose to $404,394,969, a 14.9% increase over the December, 2010, year-end figure of $351,950,657. Total deposits increased 12.9%, finishing 2011 at $335,857,358, topping the 2010 year-end mark of $297,574,237. Total loans advanced $13,702,639, a 6.0% increase, ending the year at $242,540,967.

Due to increased profitability, conversion of warrants, and the Bank's $11,000,000 participation in the Small Business Lending Fund (SBLF), shareholder equity increased year-over-year 51.3%, ending 2011 at $42,111,200 as compared to the 2010 year-end total of $27,829,001.

Net Income for the fourth quarter of 2011 was $421,680 or $.11 per share, falling short of the equivalent 2010 mark of $496,553 or $.15 per share. This shortfall resulted from management's decision to allocate an additional $200,000 to loan loss reserves during the quarter and, thereby, better position the Bank against loss from one loan relationship that deteriorated late in the year.

HVCBank's Chairman, Patrick L Ryan, commented that, "2011 proved to be a very strong year for our Bank despite the economic headwinds. We are particularly pleased that the U.S. Treasury chose us for participation in the SBLF which provides us with $11,000,000 in non-dilutive Tier One Capital and will bolster our lending to small business. The marketplace is very competitive, but we will accept its challenges and will do all we can to support an economic recovery in our market area."

President/CEO, James Hyman, stated, "All of our growth in 2011 was organic, however, in 2012 our expanded footprint will provide new markets as we prepare to open our Flemington Office in the first quarter 2012. This new location further expands our presence and our opportunities in a dynamic community that borders our Hopewell Valley roots."

                   
TWELVE MONTH UNAUDITED RESULTS     DECEMBER 31, 2011     DECEMBER 31, 2010     % CHANGE
Total Interest Income $15,473,604 $15,401,205 0.5%
Total Noninterest Income $1,570,069 $1,036,339 51.5%
Total Income $17,043,673 $16,437,544 3.7%
Interest Expense ($3,658,792) ($4,572,056) (20.0)%
Net Interest Income $11,814,812 $10,829,149 9.1%
Total Operating Expense ($9,998,424) ($9,496,089) 5.3%
Net Income Before Taxes $3,386,457 $2,369,399 42.9%
Taxes $1,166,600 $803,900 45.1%
Net Income $2,219,857 $1,565,499 41.8%
Preferred Stock Dividends $90,225 $43,475 107.5%
Net Income Available to Common Shareholders $2,129,632 $1,522,024 39.9%
Earnings Per Share (Basic) .66 $.50 32.0%
Total Assets $404,394,969 $351,950,657 14.9%
Total Equity     $42,111,200     $27,829,001     51.3%

Hopewell Valley Community Bank is a locally owned and managed, full service, FDIC insured commercial bank. Founded in 1998, HVCBank provides a friendly, personalized banking experience for residents and small business owners with seven banking offices in Hopewell, Pennington, Hamilton, Ewing and Princeton in Mercer County, Ringoes in Hunterdon County, and through its fully interactive website at www.hvcbonline.com. And Coming Soon to Flemington!

Hopewell Valley Community Bank
James Hyman, 609-466-2900
President & CEO
hvcbonline.com