Oak Valley Bancorp Reports 2nd Quarter Results

OAKDALE, CA--(Marketwire - Jul 18, 2012) -  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, 2012, consolidated net income was $1,352,000, while consolidated net income available to common shareholders was $1,238,000, or $0.16 per diluted common share. This compared to net income of $1,450,000 and net income available to common shareholders of $1,239,000, or $0.16 per diluted common share for the same period a year ago.

Net interest income reflected a slight decrease of $88,000 or 1.4% to $6.2 million for the three months ended June 30, 2012, compared to $6.3 million for the same period last year. Year-to-date net interest income remained essentially flat at $12.5 million in both years. 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, 2012 was 4.73%, compared to 4.86% for the same period last year.

Non interest expense for the quarter and six month period ended June 30, 2012 totaled $4.6 million and $9.2 million, respectively, a slight increase over the $4.4 million and $8.9 million for the comparable periods in 2011. This increase was primarily due to additional salary and overhead costs associated with recent branch additions. 

Non-performing assets as of June 30, 2012 were $7.2 million, or 1.20% of assets. This is up from $6.7 million, or 1.12% at March 31, 2012. The increase reflects the classification of one additional loan relationship as non-accrual. Non-performing assets remain at favorable levels compared to the same period last year of $9.2 million, or 1.62%. 

The provision for loan losses during the three months ended June 30, 2012, remained at $300,000, and unchanged from the same period of the previous year. The ratio of loan loss reserves to gross loans for the three months ended June 30, 2012 was 2.05%. 

Total assets were $596.4 million at June 30, 2012, an increase of $24.2 million, or 4.2%, from June 30, 2011. The Company's total deposits were $526.4 million as of June 30, 2012, an increase of $30.2 million, or 6.1% over June 30, 2011. Gross loans remained unchanged at $390.5 million as of June 30, 2012, compared to June 30, 2011. 

"Though earnings remain solid in a difficult economic environment, we have not become complacent. Faced with downward pressure on earning asset yield, corresponding to low interest rates and limited loan demand, we remain diligent in our business development efforts. The relationships we forge today will yield quality loans in the future," stated Ron Martin, CEO.

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 Bancorp
Financial Highlights (unaudited)
($ in thousands, except per share) Selected Quarterly Operating Data:		2nd Quarter 2012				1st Quarter 2012				4th Quarter 2011				3rd Quarter 2011				2nd Quarter 2011
	Net interest income	$	6,212			$	6,264			$	6,335			$	6,339			$	6,300
	Provision for loan losses		300				300				300				300				300
	Non-interest income		672				831				636				764				680
	Non-interest expense		4,612				4,597				4,259				4,208				4,401
	Income before income taxes		1,972				2,198				2,412				2,595				2,279
	Provision for income taxes		620				737				915				846				829
	Net income		1,352				1,461				1,497				1,749				1,450
	Preferred stock dividends and accretion		(114	)			(169	)			(168	)			(572	)			(211	)
	Net income available to common shareholders	$	1,238			$	1,292			$	1,329			$	1,177			$	1,239
	Earnings per common share - basic		0.16				0.17				0.17				0.15				0.16
	Earnings per common share - diluted		0.16				0.17				0.17				0.15				0.16
	Dividends declared per common share		-				-				-				-				-
	Return on average common equity		8.37	%			8.93	%			9.34	%			8.44	%			9.33	%
	Return on average assets		0.92	%			0.98	%			1.00	%			1.21	%			1.03	%
	Net interest margin (1)		4.73	%			4.67	%			4.70	%			4.85	%			4.86	%
	Efficiency ratio (1)		65.28	%			63.74	%			60.06	%			58.27	%			61.79	%
Capital - Period End
	Book value per share	$	7.63			$	7.37			$	7.37			$	7.26			$	7.02
Credit Quality - Period End
	Nonperforming assets/ total assets		1.20	%			1.12	%			1.22	%			1.50	%			1.62	%
	Loan loss reserve/ gross loans		2.05	%			1.98	%			2.17	%			2.26	%			2.20	%
Period End Balance Sheet
($ in thousands)
	Total assets	$	596,417			$	593,513			$	612,172			$	583,955			$	572,262
	Gross loans		390,515				392,584				396,202				391,379				390,521
	Nonperforming assets		7,185				6,656				7,477				8,748				9,245
	Allowance for loan losses		8,008				7,792				8,609				8,857				8,591
	Deposits		526,407				518,727				536,204				505,505				496,212
	Common equity		60,185				58,092				56,902				56,064				54,134
	Total capital (2)		66,935				71,592				70,402				69,564				67,634
Non-Financial Data
	Full-time equivalent staff		125				126				128				127				130
	Number of banking offices		14				14				14				14				13
Common Shares outstanding
	Period end		7,890,905				7,883,780				7,718,469				7,718,469				7,713,794
	Period average - basic		7,728,024				7,722,609				7,705,164				7,705,164				7,713,794
	Period average - diluted		7,750,952				7,743,941				7,737,248				7,731,463				7,745,193
Market Ratios
	Stock Price	$	6.96			$	7.39			$	6.75			$	4.05			$	5.85
	Price/Earnings		10.83				11.01				9.87				6.68				9.08
	Price/Book		0.91				1.00				0.92				0.56				0.83

(1)		Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 34%.
(2)		Includes $6.75 million in preferred stock issued to the U.S. Treasury under the SBLF Program.
		Prior to 6/30/2012, the amount of preferred stock issued was $13.5 million.
		Prior to 9/30/2011, the preferred stock was issued under the TARP Capital Purchase Program.

			Six Months Ended June 30,
			2012				2011
	Net interest income		$	12,476			$	12,506
	Provision for loan losses			600				900
	Non-interest income			1,503				1,351
	Non-interest expense			9,209				8,927
	Income before income taxes			4,170				4,030
	Provision for income taxes			1,357				1,415
	Net income			2,813				2,615
	Preferred stock dividends and accretion			(283	)			(421	)
	Net income available to common shareholders		$	2,530			$	2,194
	Earnings per common share - basic			0.33				0.28
	Earnings per common share - diluted			0.33				0.28
	Dividends declared per common share			-				-
	Return on average common equity			8.65	%			8.42	%
	Return on average assets			0.95	%			0.94	%
	Net interest margin (1)			4.70	%			4.89	%
	Efficiency ratio (1)			64.50	%			63.43	%
Capital - Period End
	Book value per share		$	7.63			$	7.02
Credit Quality - Period End
	Nonperforming assets/ total assets			1.20	%			1.62	%
	Loan loss reserve/ gross loans			2.05	%			2.20	%
Period End Balance Sheet
($ in thousands)
	Total assets		$	596,417			$	572,262
	Gross loans			390,515				390,521
	Nonperforming assets			7,185				9,245
	Allowance for loan losses			8,008				8,591
	Deposits			526,407				496,212
	Common equity			60,185				54,134
	Total capital (2)			66,935				67,634
Non-Financial Data
	Full-time equivalent staff			125				130
	Number of banking offices			14				13
Common Shares outstanding
	Period end			7,890,905				7,713,794
	Period average - basic			7,725,316				7,712,604
	Period average - diluted			7,747,446				7,743,707
Market Ratios
	Stock Price		$	6.96			$	5.85
	Price/Earnings			10.60				10.20
	Price/Book			0.91				0.83

(1)		Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 34%.
(2)		Includes $6.75 million in preferred stock issued to the U.S. Treasury under the SBLF Program.
		Prior to 6/30/2012, the amount of preferred stock issued was $13.5 million.
		Prior to 9/30/2011, the preferred stock was issued under the TARP Capital Purchase Program.