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HVCBank Announces Results for 2013

January 29, 2014

4 th Quarter Profits Increase 20% Declares Common Dividend HOPEWELL TOWNSHIP, N.J. --(BUSINESS WIRE)-- The Board of Directors of Hopewell Valley Community Bank (PinkSheets:HWDY) announced that net income for the fourth quarter of 2013 was $544,976 or $.15 per share, substantially exceeding the equivalent 2012 mark of $454,712 or $.12 per share, by 19.9%. The Board also declared a semi-annual $.05 per common share dividend with a February 14, 2014 , record date and March 14, 2014 payment date. Due mainly to the first quarter balance sheet restructuring, full year 2013 net income came in at $80,923 , which was below the 2012 year-end mark of $1,911,750 . Taking into account preferred dividends, on a per share basis, 2013 earnings were a negative ( $.02 ) well behind the $.53 posted for the prior year. For the year, total loans advanced a strong 14.3% to $317,548,695 , compared to the 2012 total of $277,828,914 . Total deposits advanced 1.5%, finishing 2013 at $389,043,148 , topping the 2012 year-end mark of $383,143,603 . Overall institutional growth for 2013 was negative, total assets pulled back 3.2% to $438,170,897 against the 2012 year-end total of $452,848,375 as a result of the repayment of $20,000,000 of high cost advances to the Federal Home Loan Bank of New York (FHLB). Shareholder equity for 2013 was down year-over-year 3.3% at $42,082,831 as compared to the 2012 year-end total of $43,494,310 , resulting from a negative variance in valuation of our investment portfolio at year end 2013 versus 2012. This variance occurred because of a rise in interest rates going into the end of 2013. HVCBank’s Chairman, Patrick L Ryan , commented that, “Hopewell Valley Community Bank ended 2013 in very strong fashion as we enjoyed our strongest fourth quarter in the Bank’s history. Repaying the FHLB advances and associated penalties was a bit of a step backward, but we are now benefiting from much stronger earning power through substantially decreased cost of funds and a much wider net interest margin.” President/CEO, James Hyman , stated, “While events of the first quarter 2013 overshadowed our full year performance, the remainder of the year showed the true value of the early balance sheet restructuring. During the nine months that followed, we deployed our resources into growing our loans almost $31 million . Best of all, without the high cost FHLB borrowings that were repaid, the new loans boosted our net interest margin to 3.44% at year-end 2013 from 2.97% at year-end 2012, an increase of 15.8%. This improvement and the enhanced profitability it promises will now carry into 2014, allowing for great optimism for this new year. TWELVE MONTH UNAUDITED RESULTS DECEMBER 31, 2013 DECEMBER 31, 2012 % CHANGE Total Interest Income $16,165,243 $15,662,273 3.2% Total Noninterest Income $1,696,094 $1,555,408 9.0% Total Income $17,861,337 $17,217,681 3.7% Interest Expense ( $2,149,613 ) ( $3,261,137 ) (34.1%) Net Interest Income $14,015,630 $12,401,136 13.0% Total Operating Expense ( $16,071,801 ) ( $11,234,894 ) 43.1% Net Income Before Taxes ( $360,077 ) $2,721,650 (113.2%) Taxes ( $441,000 ) $809,900 (154.5%) Net Income $80,923 $1,911,750 (95.8%) Preferred Stock Dividends $153,475 $153,475 0.0% Net Income Available to Common Shareholders ( $72,552 ) $1,758,275 (104.1%) Earnings Per Share (Basic) ( $0.02 ) $0.53 (103.8%) Total Assets $438,170,897 $452,848,375 (3.2%) Total Equity $42,082,831 $43,494,310 (3.3%) Hopewell Valley Community Bank is a locally owned and managed, full service, FDIC insured commercial bank. Founded in 1998, HVCBank is celebrating 15 years of providing a friendly, personalized banking experience for residents and small business owners with ten banking offices in Hopewell, Pennington , Hamilton , Ewing and Princeton in Mercer County , Ringoes , Flemington , and Pittstown in Hunterdon County , Skillman in Somerset County , a loan production office in Toms River , and through its fully interactive website at FORWARD LOOKING STATEMENTS Certain statements contained herein are “forward looking statements” and may be identified by reference to a future period or periods, or by the use of forward looking terminology, such as “may,” “will,” “believe,” “expect,” “estimate,” “anticipate,” “continue,” or similar terms or variations on those terms, or the negative of those terms. Forward looking statements are subject to numerous risks and uncertainties, including, but not limited to, those related to the real estate and economic environment, particularly in the market areas in which the Bank operates, competitive products and pricing, fiscal and monetary policies of the U.S. Government , changes in government regulations affecting financial institutions, including regulatory fees and capital requirements, changes in prevailing interest rates, acquisitions and the integration of acquired businesses, credit risk management, asset-liability management, the financial and securities markets and the availability of and costs associated with sources of liquidity. The Bank wishes to caution readers not to place undue reliance on any such forward looking statements, which speak only as of the date made. The Bank wishes to advise readers that the factors listed above could affect the Bank’s financial performance and could cause the Bank’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements. The Bank does not undertake and specifically declines any obligation to publicly release the results of any revisions, which may be made to any forward looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Hopewell Valley Community Bank James Hyman , 609-466-2900 President & CEO Source: HVCBank

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