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Oak Valley Bancorp Reports 2nd Quarter Results

OAKDALE, CA--(Marketwired - Jul 18, 2013) - Oak Valley Bancorp ( NASDAQ : OVLY ), the bank holding company for Oak Valley Community Bank and Eastern Sierra Community Bank, recently reported consolidated financial results. For the three months ended June 30, 2013, consolidated net income available to common shareholders was $1,374,000, or $0.18 per diluted common share. This compared to consolidated net income available to common shareholders of $1,238,000, or $0.16 per diluted common share for the same period a year ago.

Total assets were $644.2 million at June 30, 2013, an increase of $47.8 million, or 8.0%, from June 30, 2012. The Company's total deposits were $577.1 million as of June 30, 2013, an increase of $50.7 million, or 9.6% over June 30, 2012. Gross loans remained essentially unchanged at $390.6 million as of June 30, 2013, compared to $390.5 million as of June 30, 2012. 

"We are pleased to report another quarter of solid earnings, in the face of continued margin compression," stated Chris Courtney, President and CEO of the Company and the Bank. "We remain steadied by the ongoing efforts of our lenders and managers who have worked diligently to retain and strengthen existing relationships, as well as, build new ones."

Net interest income reflected a decrease of $188,000 or 3.0% to $6.0 million for the three months ended June 30, 2013, compared to $6.2 million for the same period last year. The low interest rate environment continues to drive loan and investment yields down. The Company's net interest margin for the three months ended June 30, 2013 was 4.18%, compared to 4.73% for the same period last year.

Non interest expense for the quarter and six month periods ended June 30, 2013 totaled $4.7 million and $9.4 million, respectively, a slight increase over the $4.6 million and $9.2 million for the comparable periods in 2012. This increase corresponds to growth in full time equivalent staff from 125 to 134. Data processing costs associated with increased deposit account activity have also increased. 

Non-performing assets as of June 30, 2013 were $4.2 million, or 0.65% of total assets. This is down from $7.2 million, or 1.20% at June 30, 2012. The decrease reflects the continued management of the portfolio.

The provision for loan losses during the three months ended June 30, 2013, was $100,000, compared to $300,000 for the same period of the previous year. The ratio of loan loss reserves to gross loans decreased to 1.94% as of June 30, 2013, compared to 2.05% at June 30, 2012, as a result of the reduction of non-performing assets.

The Bank 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 Bancorp  
Financial Highlights (unaudited)  
                               
($ in thousands, except per share)                              
Selected Quarterly Operating Data:   2nd Quarter
2013
    1st Quarter
2013
    4th Quarter
2012
    3rd Quarter
2012
    2nd Quarter
2012
 
                                         
  Net interest income   $ 6,024     $ 5,849     $ 6,115     $ 6,254     $ 6,212  
  Provision for loan losses     100       100       250       300       300  
  Non-interest income     818       785       855       790       672  
  Non-interest expense     4,734       4,639       4,513       4,527       4,612  
  Income before income taxes     2,008       1,895       2,207       2,217       1,972  
  Provision for income taxes     634       595       718       738       620  
  Net income     1,374       1,300       1,489       1,479       1,352  
  Preferred stock dividends and accretion     -       (68 )     (84 )     (84 )     (114 )
  Net income available to common shareholders   $ 1,374     $ 1,232     $ 1,405     $ 1,395     $ 1,238  
                                           
  Earnings per common share - basic   $ 0.18     $ 0.16     $ 0.18     $ 0.18     $ 0.16  
  Earnings per common share - diluted   $ 0.18     $ 0.16     $ 0.18     $ 0.18     $ 0.16  
  Dividends declared per common share     -       -       -       -       -  
  Return on average common equity     8.48 %     7.82 %     8.87 %     9.02 %     8.36 %
  Return on average assets     0.86 %     0.81 %     0.91 %     0.97 %     0.92 %
  Net interest margin (1)     4.18 %     4.05 %     4.15 %     4.57 %     4.73 %
  Efficiency ratio (1)     67.17 %     67.95 %     63.23 %     63.11 %     65.28 %
                                         
Capital - Period End                                        
  Book value per share   $ 8.01     $ 8.10     $ 7.99     $ 7.85     $ 7.63  
                                         
Credit Quality - Period End                                        
  Nonperforming assets/ total assets     0.65 %     0.99 %     1.05 %     1.05 %     1.20 %
  Loan loss reserve/ gross loans     1.94 %     1.99 %     2.04 %     2.05 %     2.05 %
                                         
Period End Balance Sheet                                        
($ in thousands)                                        
  Total assets   $ 644,230     $ 648,418     $ 660,581     $ 627,817     $ 596,417  
  Gross loans     390,647       389,992       390,986       388,714       390,515  
  Nonperforming assets     4,189       6,439       6,923       6,611       7,185  
  Allowance for loan losses     7,570       7,743       7,975       7,953       8,008  
  Deposits     577,129       580,215       586,993       553,333       526,407  
  Common equity     63,457       64,098       63,219       62,075       60,185  
  Total capital (2)     63,457       64,098       69,969       68,825       66,935  
                                         
Non-Financial Data                                        
  Full-time equivalent staff     134       134       130       123       125  
  Number of banking offices     14       14       14       14       14  
                                         
Common Shares outstanding                                        
  Period end     7,924,730       7,914,730       7,907,780       7,909,280       7,890,905  
  Period average - basic     7,802,012       7,778,333       7,762,261       7,750,727       7,728,024  
  Period average - diluted     7,842,964       7,830,439       7,793,523       7,778,146       7,750,952  
                                         
Market Ratios                                        
  Stock Price   $ 7.67     $ 8.14     $ 7.45     $ 7.49     $ 6.96  
  Price/Earnings     10.86       12.67       10.38       10.49       10.84  
  Price/Book     0.96       1.01       0.93       0.95       0.91  
                                         
                                         
                                         
    SIX MONTHS ENDED JUNE 30,                    
    2013     2012                    
                                         
($ in thousands, except per share)                                        
Selected Quarterly Operating Data:                                        
                                         
  Net interest income   $ 11,873     $ 12,476                          
  Provision for loan losses     200       600                          
  Non-interest income     1,603       1,503                          
  Non-interest expense     9,373       9,209                          
  Income before income taxes     3,903       4,170                          
  Provision for income taxes     1,229       1,357                          
  Net income     2,674       2,813                          
  Preferred stock dividends and accretion     (68 )     (283 )                        
  Net income available to common shareholders   $ 2,606     $ 2,530                          
                                           
  Earnings per common share - basic     0.33       0.33                          
  Earnings per common share - diluted     0.33       0.33                          
  Dividends declared per common share     -       -                          
  Return on average common equity     8.16 %     8.65 %                        
  Return on average assets     0.84 %     0.95 %                        
  Net interest margin (1)     4.11 %     4.70 %                        
  Efficiency ratio (1)     67.55 %     64.50 %                        
                                         
Capital - Period End                                        
  Book value per share   $ 8.01     $ 7.63                          
                                         
Credit Quality - Period End                                        
  Nonperforming assets/ total assets     0.65 %     1.20 %                        
  Loan loss reserve/ gross loans     1.94 %     2.05 %                        
                                         
Period End Balance Sheet                                        
($ in thousands)                                        
  Total assets   $ 644,230     $ 596,417                          
  Gross loans     390,647       390,515                          
  Nonperforming assets     4,189       7,185                          
  Allowance for loan losses     7,570       8,008                          
  Deposits     577,129       526,407                          
  Common equity     63,457       60,185                          
  Total capital (2)     63,457       66,935                          
                                         
Non-Financial Data                                        
  Full-time equivalent staff     134       125                          
  Number of banking offices     14       14                          
                                         
Common Shares outstanding                                        
  Period end     7,924,730       7,890,905                          
  Period average - basic     7,790,238       7,725,316                          
  Period average - diluted     7,836,736       7,747,446                          
                                         
Market Ratios                                        
  Stock Price   $ 7.67     $ 6.96                          
  Price/Earnings     11.37       10.60                          
  Price/Book     0.96       0.91                          
                                         
                                         
(1) Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 34%.  
(2) Includes preferred stock issued to the U.S. Treasury under the SBLF Program of $6.75 million for the quarters ended June 30, September 30 and December 31, 2012. There was no preferred stock outstanding as of March 31 and June 30, 2013.