Oak Valley Bancorp Reports 4th Quarter Results OAKDALE,

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News Desk 2022
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Oak Valley Bancorp Reports 4th Quarter Results

OAKDALE, Calif., Jan. 18, 2019 (GLOBE NEWSWIRE) -- Oak Valley Bancorp (NASDAQ: OVLY) (the “Company”), the bank holding company for Oak Valley Community Bank and their Eastern Sierra Community Bank division, recently reported unaudited consolidated financial results. For the three months ended December 31, 2018, consolidated net income was $2,979,000 or $0.37 per diluted share (EPS), as compared to $3,165,000, or $0.39 EPS, for the prior quarter and $1,589,000, or $0.20 EPS for the same period a year ago. Consolidated net income for the year ended December 31, 2018 totaled $11,537,000, or $1.42 EPS, representing an increase of 26.9% compared to $9,094,000 or $1.13 EPS for 2017.  The decrease from the prior quarter is the result of loan loss provisions recorded during the quarter corresponding to loan growth. The 2018 net income increases over the comparable periods of 2017 were mainly driven by strong earning asset growth and corresponding increases to net interest income.  Additionally, the Company realized a reduction in income tax provision in 2018 due to the lower federal income tax rate of 21%, following the passing of the U.S. Tax Cuts and Jobs Act of 2017, which also resulted in a $983,000 charge to federal income tax provision in the fourth quarter of 2017, due to the revaluation of net deferred tax assets.  

Net interest income was $10,179,000 and $38,567,000 for the quarter and year ended December 31, 2018, respectively, compared to $9,944,000 during the prior quarter, $9,023,000 for the fourth quarter of 2017 and $34,180,000 for the year ended December 31, 2017.  Net interest margin increased to 3.96% and 3.89% for the quarter and year ended December 31, 2018, respectively, as compared to 3.86% and 3.77% for the same periods of 2017. The net interest income and net interest margin increases in 2018 over the comparable prior periods were the result of strong growth of our loan and investment portfolios and the positive impact that rising interest rates have had on our variable rate earning assets.  

Non-interest income for the fourth quarter and year ended December 31, 2018 totaled $1,232,000 and $4,712,000, respectively, compared to $1,137,000 during the prior quarter, $1,193,000 for the fourth quarter of 2017, and $5,976,000 for the year ended December 31, 2017.  The moderate increase in the fourth quarter was mainly due to FHLB dividend income and steady increases in service charges and fee income from our growing customer base.  The year-over-year decrease is mainly due to the $938,000 merger-related settlement payments recorded in the second quarter of 2017.

Non-interest expense for the fourth quarter and year ended December 31, 2018 totaled $6,921,000 and $27,378,000, respectively, compared to $6,820,000 during the prior quarter, $6,222,000 for the fourth quarter of 2017 and $24,565,000 for the year ended December 31, 2017. The increase compared to prior periods corresponds to staffing increases, partially related to the expansion into the new Sacramento Branch during the third quarter, and general operating costs related to servicing the growing loan and deposit portfolios.

Total assets were $1.09 billion at December 31, 2018, an increase of $19.1 million over September 30, 2018 and $60.1 million over December 31, 2017. Gross loans were $711.9 million as of December 31, 2018, an increase of $48.7 million over September 30, 2018, and an increase of $49.4 million over December 31, 2017. The Company’s total deposits were $986.5 million as of December 31, 2018, an increase of $12.1 million over September 30, 2018, and an increase of $47.6 million over December 31, 2017.

“Steady core deposit growth combined with third and fourth quarter loan growth have again helped push Company earnings to record level. We are very pleased with our year-end results for 2018,” stated Chris Courtney, President and CEO of the Company and the Bank. “We are enthusiastic about our recent expansion into Sacramento and look forward to growth opportunities in the greater Sacramento region. As we expand our Northern California presence to better serve our clients, we naturally garner increased awareness of the Oak Valley brand, which enables us to introduce more Central Valley families and businesses to our premier style of community banking,” Courtney concluded.

Non-performing assets as of December 31, 2018 were $920,000, or 0.08% of total assets, compared to $920,000, or 0.09% of total assets, as of September 30, 2018, and $1,564,000, or 0.15% at December 31, 2017.  The decrease in non-performing assets during 2018 is the result of payments on non-performing loans and an OREO property sale during the first quarter of 2018.  

The Company recorded provision for loan losses of $555,000 during the fourth quarter corresponding to strong fourth quarter loan growth. At the same time, credit quality improved slightly, which allowed for a decrease in the allowance for loan losses as a percentage of gross loans to 1.22% at December 31, 2018, compared to 1.23% at September 30, 2018 and December 31, 2017.

Oak Valley Bancorp operates Oak Valley Community Bank & their Eastern Sierra Community Bank division, through which it offers a variety of loan and deposit products to individuals and small businesses. They currently operate through 17 conveniently located branches: Oakdale, Turlock, Stockton, Patterson, Ripon, Escalon, Manteca, Tracy, Sacramento, two branches in Sonora, three branches in Modesto, and three branches in their Eastern Sierra division, which includes Bridgeport, Mammoth Lakes and Bishop. The Sacramento – Capitol Mall Branch, which opened in 2018, is the latest addition to Oak Valley’s network.

For more information, call 1-866-844-7500 or visit www.ovcb.com .

This press release includes forward-looking statements about the corporation for which the corporation claims the protection of safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the corporation's possible or assumed future financial condition, and its results of operations and business. Forward-looking statements are subject to risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include fluctuations in interest rates, government policies and regulations (including monetary and fiscal policies), legislation, economic conditions, including increased energy costs in California, credit quality of borrowers, operational factors and competition in the geographic and business areas in which the company conducts its operations. All forward-looking statements included in this press release are based on information available at the time of the release, and the Company assumes no obligation to update any forward-looking statement.

     
Contact:        Chris Courtney/Rick McCarty
Phone:   (209) 848-2265 www.ovcb.com
     
 
Oak Valley Bancorp
Financial Highlights (unaudited)
             
($ in thousands, except per share) 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter
Selected Quarterly Operating Data: 2018 2018 2018 2018 2017
             
  Net interest income $   10,179   $   9,944   $   9,327   $   9,117   $   9,023  
  Provision for loan losses     555       -       -       -       245  
  Non-interest income     1,232       1,137       1,011       1,332       1,193  
  Non-interest expense     6,921       6,820       6,905       6,732       6,222  
  Net income before income taxes     3,935       4,261       3,433       3,717       3,749  
  Provision for income taxes     956       1,096       842       915       2,160  
  Net income $   2,979   $   3,165   $   2,591   $   2,802   $   1,589  
             
  Earnings per common share - basic $   0.37   $   0.39   $   0.32   $   0.35   $   0.20  
  Earnings per common share - diluted $   0.37   $   0.39   $   0.32   $   0.35   $   0.20  
  Dividends paid per common share $   -    $   0.130   $   -    $   0.130   $   -   
  Return on average common equity   12.16 %   13.21 %   11.18 %   12.47 %   6.93 %
  Return on average assets   1.08 %   1.17 %   0.99 %   1.08 %   0.62 %
  Net interest margin (1)   3.96 %   3.97 %   3.83 %   3.80 %   3.86 %
  Efficiency ratio (2)   58.78 %   59.50 %   64.20 %   63.40 %   58.35 %
             
Capital - Period End          
  Book value per common share $   12.09   $   11.67   $   11.50   $   11.19   $   11.21  
             
Credit Quality - Period End          
  Nonperforming assets/ total assets   0.08 %   0.09 %   0.12 %   0.12 %   0.15 %
  Loan loss reserve/ gross loans   1.22 %   1.23 %   1.25 %   1.26 %   1.23 %
             
Period End Balance Sheet          
($ in thousands)          
  Total assets $   1,094,929   $   1,075,805   $   1,069,600   $   1,052,813   $   1,034,852  
  Gross loans     711,902       663,195       654,594       648,367       662,544  
  Nonperforming assets     920       920       1,310       1,310       1,564  
  Allowance for loan losses     8,685       8,135       8,162       8,165       8,166  
  Deposits     986,495       974,424       970,615       955,341       938,882  
  Common equity     99,038       95,666       94,145       91,595       90,767  
             
Non-Financial Data          
  Full-time equivalent staff     178       176       175       168       167  
  Number of banking offices     17       17       16       16       16  
             
Common Shares outstanding          
  Period end     8,194,805       8,194,255       8,183,005       8,183,005       8,098,605  
  Period average - basic     8,086,748       8,083,927       8,080,134       8,074,961       8,073,805  
  Period average - diluted     8,097,161       8,104,252       8,098,269       8,100,703       8,090,826  
             
Market Ratios          
  Stock Price $   18.30   $   19.65   $   22.87   $   22.30   $   19.54  
  Price/Earnings     12.52       12.65       17.78       15.85       25.02  
  Price/Book     1.51       1.68       1.99       1.99       1.74  
             
             
             
             
    YEAR ENDED DECEMBER 31,       
($ in thousands, except per share)   2018   2017      
             
  Net interest income $   38,567   $   34,180        
  Provision for loan losses     555       350        
  Non-interest income     4,712       5,976        
  Non-interest expense     27,378       24,565        
  Net income before income taxes     15,346       15,241        
  Provision for income taxes     3,809       6,147        
  Net income $   11,537   $   9,094        
             
  Earnings per common share - basic $   1.43   $   1.13        
  Earnings per common share - diluted $   1.42   $   1.13        
  Dividends paid per common share $   0.26   $   0.25        
  Return on average common equity   12.26 %   10.41 %      
  Return on average assets   1.08 %   0.91 %      
  Net interest margin (1)   3.89 %   3.77 %      
  Efficiency ratio (2)   61.37 %   60.66 %      
             
Capital - Period End          
  Book value per common share $   12.09   $   11.21        
             
Credit Quality - Period End          
  Nonperforming assets/ total assets   0.08 %   0.15 %      
  Loan loss reserve/ gross loans   1.22 %   1.23 %      
             
Period End Balance Sheet          
($ in thousands)          
  Total assets $   1,094,929   $   1,034,852        
  Gross loans     711,902       662,544        
  Nonperforming assets     920       1,564        
  Allowance for loan losses     8,685       8,166        
  Deposits     986,495       938,882        
  Common equity     99,038       90,767        
             
Non-Financial Data          
  Full-time equivalent staff     178       167        
  Number of banking offices     17       16        
             
Common Shares outstanding          
  Period end     8,194,805       8,098,605        
  Period average - basic     8,081,482       8,060,686        
  Period average - diluted     8,100,098       8,081,497        
             
Market Ratios          
  Stock Price $   18.30   $   19.54        
  Price/Earnings     12.82       17.32        
  Price/Book     1.51       1.74        
             
(1)   Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 34% in 2017, and 21% in 2018.
(2)   Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 34% 2017, and 21% in 2018. 
    A marginal federal/state combined tax rate of 41.15% in 2017 and 29.56% in 2018, was used for applicable revenue.
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