SOURCE: Oak Valley Bancorp

Oak Valley Bancorp

January 22, 2015 18:48 ET

Oak Valley Bancorp Reports 4th Quarter Results

OAKDALE, CA--(Marketwired - Jan 22, 2015) - 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 December 31, 2014, consolidated net income was $1.6 million, or $0.20 per diluted share. This compared to consolidated net income of $1.7 million, or $0.22 per diluted share for the three months ended December 31, 2013 and represented a 3.8% decrease from the prior year. 

Consolidated net income for 2014 totaled $7.1 million, or $0.89 per diluted share, compared to net income available to common shareholders of $5.8 million, or $0.74 per diluted share for 2013, which included the final preferred stock dividend payment of $68,000 recorded in the first quarter of 2013. The 2014 operating results represent a 22.4% increase in consolidated net income available to common shareholders and marks a new annual earnings record for Oak Valley Bancorp.

As reported earlier this year, income from normal operations was bolstered by a $1.88 million credit to the loan loss provision related to the recovery of a previously charged off loan. This recovery was received and reported in the second quarter of 2014.

Total assets grew to $749.5 million as of December 31, 2014, which was an increase of $77.6 million, or 11.6% over the prior year. Deposits increased to $669.6 million, which was an increase of $66.9 million, or 11.1% over the prior year. Gross loans at year end totaled $454.5 million, reflecting an increase of $35.0 million, or 8.4% over December 31, 2013. 

"The Company is pleased to report another year of positive results and solid earnings. A strengthening economy and our commitment to a full service relationship banking strategy continue to yield year over year gains across the board," stated Chris Courtney, President and CEO of the Company and the Bank. "Our fifteenth location was well-received by the community of Tracy last month and the announcement of a second branch planned for Sonora in 2015 has Oak Valley firmly focused on its long-term vision for the Central Valley and Sierra foothills," Courtney concluded. 

Non-performing assets were $5.6 million, or 0.75% of total assets at December 31, 2014, an increase from $4.3 million, or 0.61% at the end of the third quarter of 2014. The increase is the result of the classification of one additional loan to non-performing status. The Bank classified the loan as non-performing, concurrent with the Bank's payment of $195,000 in delinquent taxes on the subject property. No additional reserve was required. The non-performing assets at December 31, 2014 are comprised of five loan relationships totaling $4.7 million and three OREO properties totaling $884,000. All classified assets are adequately collateralized.

In spite of the $35 million in loan growth, additional loan loss provisions were not required during 2014 due to the overall credit quality improvements in the loan portfolio. These factors decreased the ratio of loan loss reserves to gross loans to 1.66% at December 31, 2014 compared to 1.83% at December 31, 2013.

Net interest income of $25.3 million for the year ended December 31, 2014, increased by $1.0 million, or 4.2%, from the prior year. The Company's net interest margin was 4.11% for the year ended December 31, 2014, compared to 4.13% for the year ended December 31, 2013. Net interest margin for the fourth quarter of 2014 and 2013 was 4.19%. Margin compression gradually stabilized throughout the year as loan volume increased and cash was deployed, improving the Company's earning asset mix.

Non-interest income was $3.8 million for the year ended December 31, 2014, compared to $3.3 million the prior year. The increase is attributable to increased service charge income fueled by deposit growth and gains associated with called securities in the investment portfolio. No securities were sold during the year.

Non-interest expense was $20.2 million for the year ended December 31, 2014, compared to $18.7 million for the prior year, an increase of $1.6 million, or 8.4%. This increase corresponds to a combination of employee expense and growth related factors. Year-over-year full time equivalent staff has grown from 136 to 148, which is attributable to staffing in expansion markets and to support our relationship growth strategy. In addition, deposit growth and related servicing costs associated with increased transaction volume across all branches continues to increase proportionally.  

The Company currently operates through 15 branches in Oakdale, Sonora, Turlock, Stockton, Patterson, Ripon, Escalon, Manteca, Tracy, 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) 4th Quarter   3rd Quarter   2nd Quarter   1st Quarter   4th Quarter  
Selected Quarterly Operating Data: 2014   2014   2014   2014   2013  
                               
  Net interest income $ 6,621   $ 6,389   $ 6,175   $ 6,104   $ 6,372  
  (Recovery of) provision for loan losses   -     -     (1,877 )   -     -  
  Non-interest income   1,086     940     927     810     812  
  Non-interest expense   5,252     5,112     4,989     4,881     4,668  
  Net income before income taxes   2,455     2,217     3,990     2,033     2,516  
  Provision for income taxes   813     682     1,453     625     809  
  Net income available to common shareholders $ 1,642   $ 1,535   $ 2,537   $ 1,408   $ 1,707  
                               
  Earnings per common share - basic $ 0.21   $ 0.19   $ 0.32   $ 0.18   $ 0.22  
  Earnings per common share - diluted $ 0.20   $ 0.19   $ 0.32   $ 0.18   $ 0.22  
  Dividends paid per common share $ -   $ 0.07   $ -   $ 0.10   $ -  
  Return on average common equity   8.80 %   8.44 %   14.53 %   8.59 %   10.47 %
  Return on average assets   0.91 %   0.88 %   1.50 %   0.84 %   1.01 %
  Net interest margin (1)   4.19 %   4.13 %   4.07 %   4.04 %   4.19 %
  Efficiency ratio (2)   67.01 %   66.76 %   67.55 %   68.29 %   63.05 %
                               
Capital - Period End                              
  Book value per common share $ 9.29   $ 9.01   $ 8.84   $ 8.40   $ 8.14  
                               
Credit Quality - Period End                              
  Nonperforming assets/ total assets   0.75 %   0.61 %   0.75 %   0.90 %   0.48 %
  Loan loss reserve/ gross loans   1.66 %   1.73 %   1.74 %   1.80 %   1.83 %
                               
Period End Balance Sheet                              
($ in thousands)                              
  Total assets $ 749,477   $ 706,821   $ 678,319   $ 687,591   $ 671,853  
  Gross loans   454,471     435,776     435,671     422,510     419,438  
  Nonperforming assets   5,584     4,333     5,065     6,164     3,256  
  Allowance for loan losses   7,534     7,541     7,602     7,615     7,659  
  Deposits   669,581     630,178     602,978     615,997     602,633  
  Common equity   74,991     72,793     71,369     67,824     64,517  
                               
Non-Financial Data                              
  Full-time equivalent staff   148     145     144     142     136  
  Number of banking offices   15     14     14     14     14  
                               
Common Shares outstanding                              
  Period end   8,074,855     8,074,855     8,075,855     8,071,355     7,929,730  
  Period average - basic   7,960,108     7,959,316     7,953,499     7,878,152     7,803,247  
  Period average - diluted   8,015,511     8,011,125     8,001,815     7,941,456     7,859,380  
                               
Market Ratios                              
  Stock Price $ 10.16   $ 10.03   $ 9.93   $ 9.41   $ 8.37  
  Price/Earnings   12.41     13.11     7.76     12.98     9.64  
  Price/Book   1.09     1.11     1.12     1.12     1.03  
                               
(1) Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 34%.  
(2) Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 34%, and a marginal federal/state combined tax rate of 41.15% for applicable revenue.  
                     
             
             
    YEAR ENDED  
    DECEMBER 31,  
    2014     2013  
                 
  Net interest income   $ 25,289     $ 24,276  
  (Recovery of) provision for loan losses     (1,877 )     300  
  Non-interest income     3,763       3,280  
  Non-interest expense     20,234       18,660  
  Net income before income taxes     10,695       8,596  
  Provision for income taxes     3,573       2,710  
  Net income     7,122       5,886  
  Preferred stock dividends     -       (68 )
  Net income available to common shareholders   $ 7,122     $ 5,818  
                 
  Earnings per common share - basic   $ 0.90     $ 0.75  
  Earnings per common share - diluted   $ 0.89     $ 0.74  
  Dividends paid per common share   $ 0.165     $ -  
  Return on average common equity     10.07 %     9.07 %
  Return on average assets     1.03 %     0.90 %
  Net interest margin (1)     4.11 %     4.13 %
  Efficiency ratio (2)     67.38 %     65.65 %
                 
Capital - Period End                
  Book value per common share   $ 9.29     $ 8.14  
                 
Credit Quality - Period End                
  Nonperforming assets/ total assets     0.75 %     0.48 %
  Loan loss reserve/ gross loans     1.66 %     1.83 %
                 
Period End Balance Sheet                
($ in thousands)                
  Total assets   $ 749,477     $ 671,853  
  Gross loans     454,471       419,438  
  Nonperforming assets     5,584       3,256  
  Allowance for loan losses     7,534       7,659  
  Deposits     669,581       602,633  
  Common equity     74,991       64,517  
                 
Non-Financial Data                
  Full-time equivalent staff     148       136  
  Number of banking offices     15       14  
                 
Common Shares outstanding                
  Period end     8,074,855       7,929,730  
  Period average - basic     7,938,052       7,796,659  
  Period average - diluted     7,992,731       7,846,078  
                 
Market Ratios                
  Stock Price   $ 10.16     $ 8.37  
  Price/Earnings     11.32       11.22  
  Price/Book     1.09       1.03  
                 
                 
(1) Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 34%.  
(2) Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 34%, and a marginal federal/state combined tax rate of 41.15% for applicable revenue.  

Contact Information

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