EXHIBIT 99.1

                                 AMENDMENT NO. 1
                                       to
                               Catawba Valley Bank
                        1996 Incentive Stock Option Plan


            WHEREAS, the Board of Directors of Catawba Valley Bank adopted and
the shareholders and the North Carolina Commissioner of Banks approved the 1996
Incentive Stock Option Plan (the "Plan"); and

            WHEREAS, effective June 30, 1999 Catawba Valley Bank reorganized
into a bank holding company form of organization and is the wholly-owned
subsidiary of Catawba Valley Bancshares, Inc. ("CVB"); and

            WHEREAS, on March 24, 1999 the Board of Directors of CVB adopted the
Plan as the Plan of CVB, subject to certain amendments set forth in such
adoption.

            NOW, THEREFORE, the following Amendment No. 1 to the Plan is hereby
effected as follows:

            The name of the Plan shall be the "Catawba Valley Bancshares, Inc.
1996 Incentive Stock Option Plan."

            Paragraphs 7 and 11 of the Plan are hereby amended to provide that
payment for shares subject to an option may be made either in cash or in issued
and outstanding shares of the $1.00 par value common stock of CVB.

            Paragraph 10 is hereby amended by eliminating the limitation that no
more than 40% of the shares of common stock available under the Plan may be
allocated to any one individual.

            Paragraph 4 of Exhibit A entitled "Incentive Stock Option Agreement"
shall be amended to eliminate the requirement that an optionee complete one full
year of service as a director of CVB following the date of the grant of the
option prior to exercise.

            IN WITNESS WHEREOF, this Amendment No. 1 is effective June 30, 1999.


                                          /s/ R. Steve Aaron
                                          -------------------------
                                          R. Steve Aaron, President

Attest:


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Secretary