Oak Valley Bancorp Reports 4th Quarter Results

Marketwired

OAKDALE, CA--(Marketwire -01/23/12)- Oak Valley Bancorp (NASDAQ: OVLY - News), the bank holding company for Oak Valley Community Bank and Eastern Sierra Community Bank, recently reported financial results for the fiscal year ended December 31, 2011. Net income for 2011 totaled $5.9 million compared to $4.6 million for 2010. After adjustment for preferred stock dividends and accretion, net income available to common shareholders was $4.7 million, or $0.61 per diluted share, compared to net income of $3.8 million, or $0.49 per diluted common share, in 2010. This represents a 24% increase in net income available to common shareholders and marks record earnings for Oak Valley Bancorp.

For the three months ended December 31, 2011, Oak Valley Bancorp reported net income of $1.5 million. After adjustment for preferred stock dividends and accretion, net income available to common shareholders was $1.3 million, or $0.17 per diluted share, representing a 3.0% increase in net income available to common shareholders when compared to the three months ended December 31, 2010.

Total assets grew to $612.4 million as of December 31, 2011, which was an increase of $60.0 million, or 10.9% over the prior year. Deposits increased to $536.2 million, which was an increase of $59.5 million, or 12.5% over the prior year. Gross loans at year end totaled $396.2 million, reflecting a decrease of $8.0 million, or 2.0%, from December 31, 2010.

"We are pleased to report the results of another successful year. In a year which included our 20 year anniversary and the opening of two new branches, operational growth remained strong. Asset growth driven by core deposits continues to positively impact earnings," stated Ron Martin, CEO.

Loan loss reserves as a percentage of gross loans increased to 2.17% at December 31, 2011 compared to 2.04% at December 31, 2010. The increased reserve ratio was realized even with a lower annual provision of $1.5 million in 2011, down from $4.0 million in 2010.

The Company continues to experience solid reductions in non-performing assets. Non-performing assets totaled $7.5 million, or 1.22% of total assets at December 31, 2011, compared to $12.3 million, or 2.22% of total assets, at December 31, 2010.

"Credit quality is an absolute cornerstone for any financial institution. We have, through deliberate adherence to sound principles, been successful in managing our credit portfolio and mitigating non-performing assets this year and throughout our history," commented Chris Courtney, President. "It is reassuring to have the ideals on which we base our decisions validated by our emergence from these trying times, not only strong, but poised to continue serving the needs of the community," Courtney concluded.

Net interest income of $25.2 million for the year ended December 31, 2011, increased slightly by $173,000, or 0.7%, from the prior year. The Company's net interest margin was 4.83% for the year ended December 31, 2011, compared to 5.20% for the year ended December 31, 2010. This decrease is largely the result of pressure on the Bank's yield on earnings assets which currently outpaces the Bank's ability to make subsequent reductions to its cost of funds given the historically low interest rate environment.

Non-interest expense of $17.4 million for the year ended December 31, 2011, increased $618,000, or 3.7%, from the prior year. This was partially the result of expansion and staffing related expenses associated with opening the new Modesto and Manteca offices.

The Company currently operates through 14 branches in Oakdale, Sonora, Turlock, Stockton, Patterson, Ripon, Escalon, Manteca, three branches in Modesto, and three branches in their Eastern Sierra Division, which includes Bridgeport, Mammoth Lakes, and Bishop.

For more information, please 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.

 

                         Oak Valley Community Bank
                     Statement of Condition (unaudited)

($ in thousands,         4th        3rd        2nd        1st        4th
 except per share)     Quarter    Quarter    Quarter    Quarter    Quarter
Selected Quarterly
 Operating Data:        2011       2011       2011       2011       2010
--------------------

  Net interest
   income            $    6,335 $    6,339 $    6,300 $    6,206 $    6,343
  Provision for loan
   losses                   300        300        300        600      1,005
  Non-interest
   income                   636        764        680        671        715
  Non-interest
   expense                4,259      4,208      4,401      4,526      3,826
  Income before
   income taxes           2,412      2,595      2,279      1,751      2,227
  Provision for
   income taxes             915        846        829        586        727
                     ---------- ---------- ---------- ---------- ----------
  Net income              1,497      1,749      1,450      1,165      1,500
  Preferred stock
   dividends and
   accretion               (168)      (572)      (211)      (210)      (210)
                     ---------- ---------- ---------- ---------- ----------
  Net income
   available to
   common
   shareholders           1,329      1,177      1,239        955      1,290
                     ========== ========== ========== ========== ==========

  Earnings per
   common share -
   basic                   0.17       0.15       0.16       0.12       0.17
  Earnings per
   common share -
   diluted                 0.17       0.15       0.16       0.12       0.17
  Dividends declared
   per common share           -          -          -          -          -
  Return on average
   common equity           9.34%      8.44%      9.33%      7.48%      9.99%
  Return on average
   assets                  1.00%      1.21%      1.03%      0.85%      1.09%
  Net interest
   margin (1)              4.70%      4.85%      4.86%      4.92%      5.01%
  Efficiency Ratio
   (1)                    60.06%     58.27%     61.79%     65.09%     53.03%

Capital - Period End
  Book value per
   share             $     7.37 $     7.26 $     7.02 $     6.78 $     6.64

Credit Quality -
 Period End
  Nonperforming
   assets/ total
   assets                  1.22%      1.50%      1.62%      2.02%      2.22%
  Loan loss reserve/
   gross loans             2.17%      2.26%      2.20%      2.22%      2.04%

Period End Balance
 Sheet
--------------------
($ in thousands)
  Total assets       $  612,377 $  583,955 $  572,262 $  562,769 $  552,396
  Gross Loans           396,202    391,379    390,521    395,243    404,194
  Nonperforming
   assets                 7,477      8,748      9,245     11,386     12,253
  Allowance for
   credit losses          8,609      8,857      8,591      8,765      8,255
  Deposits              536,204    505,505    496,212    485,641    476,739
  Common Equity          56,902     56,064     54,134     52,279     51,158
  Total Capital (2)      70,402     69,564     67,634     65,779     64,658

Non-Financial Data
  Full-time
   equivalent staff         128        127        130        125        120
  Number of banking
   offices                   14         14         13         12         12

Common Shares
 outstanding
  Period end          7,718,469  7,718,469  7,713,794  7,713,794  7,702,127
  Period average -
   basic              7,705,164  7,705,164  7,713,794  7,711,401  7,702,127
  Period average -
   diluted            7,737,248  7,731,463  7,745,193  7,742,230  7,719,157

Market Ratios
  Stock Price        $     6.75 $     4.05 $     5.85 $     5.99 $     5.90
  Price/Earnings           9.87       6.68       9.08      11.93       8.88
  Price/Book               0.92       0.56       0.83       0.88       0.89




($ in thousands, except per share)                  Year Ended December 31,
                                                   ------------------------
                                                       2011         2010
                                                   -----------  -----------

  Net interest income                              $    25,180  $    25,006
  Provision for loan losses                              1,500        4,020
  Non-interest income                                    2,751        2,770
  Non-interest expense                                  17,394       16,775
  Income before income taxes                             9,037        6,981
  Provision for income taxes                             3,176        2,353
                                                   -----------  -----------
  Net income                                             5,861        4,628
  Preferred stock dividends and accretion               (1,161)        (842)
                                                   -----------  -----------
  Net income available to common shareholders            4,700        3,786
                                                   ===========  ===========

  Earnings per common share - basic                       0.61         0.49
  Earnings per common share - diluted                     0.61         0.49
  Dividends declared per common share                        -            -
  Return on average common equity                         8.67%        7.65%
  Return on average assets                                1.02%        0.88%
  Net interest margin (1)                                 4.83%        5.20%
  Efficiency Ratio (1)                                   61.28%       59.62%

Capital - Period End
  Book value per share                             $      7.37  $      6.64

Credit Quality - Period End
  Nonperforming assets/ total assets                      1.22%        2.22%
  Loan loss reserve/ gross loans                          2.17%        2.04%

Period End Balance Sheet
--------------------------------------------------
($ in thousands)
  Total assets                                     $   612,377  $   552,396
  Gross Loans                                          396,202      404,194
  Nonperforming assets                                   7,477       12,253
  Allowance for credit losses                            8,609        8,255
  Deposits                                             536,204      476,739
  Common Equity                                         56,902       51,158
  Total Capital (2)                                     70,402       64,658

Non-Financial Data
  Full-time equivalent staff                               128          120
  Number of banking offices                                 14           12

Common Shares outstanding
  Period end                                         7,718,469    7,702,127
  Period average - basic                             7,708,853    7,689,760
  Period average - diluted                           7,738,999    7,720,624

Market Ratios
  Stock Price                                      $      6.75  $      5.90
  Price/Earnings                                         11.07        11.98
  Price/Book                                              0.92         0.89




(1) Ratio computed on a fully tax equivalent basis using a marginal federal
tax rate of 34%.
(2) Includes $13.5 million in preferred stock issued to the U.S. Treasury
under the SBLF Program.
Prior to 9/30/2011, it was issued under the TARP Capital Purchase Program.



Contact:

Ron Martin/Chris Courtney/Rick McCarty
Phone:
(209) 848-2265
www.ovcb.com

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