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Oak Valley Bancorp Reports 3rd Quarter Results

OAKDALE, Calif., Oct. 18, 2017 (GLOBE NEWSWIRE) -- 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 September 30, 2017, consolidated net income was $2,468,000, or $0.31 per diluted common share, compared to $2,830,000, or $0.35 per diluted common share, for the prior quarter and $1,930,000, or $0.24 per diluted common share for the same period of 2016. The earnings decrease compared to the prior period is primarily due to one-time merger-related settlement payments that were recorded in the second quarter. The increase compared to the same period last year was primarily due to loan growth and the positive impact of recent FOMC rate hikes on our cash balances, both resulting in an increase in net interest income.

Oak Valley Bancorp Logo


Net interest income increased to $8,620,000 for the three months ended September 30, 2017, compared to $8,455,000 for the prior quarter and $7,829,000 for the same period of 2016, due to loan growth and increased yields on cash balances as described above. Net interest margin for the three months ended September 30, 2017 was 3.78%, compared to 3.74% for the prior quarter, and 3.73% for the same period of 2016. The net interest margin expanded slightly compared to the prior periods as the Bank continues to deploy low-yielding cash balances into higher yielding loans and investment securities.

Non-interest income for the three months ended September 30, 2017 totaled $1,276,000, compared to $2,036,000 during the prior quarter, and $1,077,000 for the same period of 2016. The decrease compared to the prior quarter is due to the previously mentioned merger-related settlement payments which were recorded in the second quarter. The increase compared to the third quarter of 2016 is due to a $211,000 gain on the sale of an OREO property.

Non-interest expense for the three months ended September 30, 2017 totaled $6,060,000, compared to $6,076,000 during the prior quarter, and $5,924,000 for the same period of 2016. The increase compared to last year corresponds to staffing increases and general operating costs related to servicing the growing loan and deposit portfolios.

Total assets were $996.7 million as of September 30, 2017, a decrease of $23.8 million from June 30, 2017 and an increase of $49.7 million over September 30, 2016. Gross loans were $636.6 million as of September 30, 2017, an increase of $12.8 million over June 30, 2017, and an increase of $34.0 million over September 30, 2016. The Company’s total deposits were $901.7 million as of September 30, 2017, a decrease of $24.1 million over June 30, 2017, and an increase of $42.0 million over September 30, 2016.

“We are pleased to report another solid quarter. Our vision remains steadfast - to build loyalty and lifelong relationships, based on trust and the needs of our clients. In turn, they will share their satisfaction with friends and business partners, allowing us to reach new customers and grow the bank,” stated Chris Courtney, President and CEO.

Non-performing assets as of September 30, 2017 were $1,564,000, or 0.16% of total assets, compared to $3,242,000, or 0.32% of total assets, as of June 30, 2017, and $4,099,000, or 0.43%, at September 30, 2016. The decrease during the quarter is due to the sale of one OREO property and a significant pay-down on one impaired loan relationship. Provisions for loan loss of $70,000 were recorded during the third quarter of 2017, mainly due to loan growth, as credit quality has continued to improve, thus decreasing the allowance for loan losses to 1.24% of gross loans at September 30, 2017 compared to 1.26% at June 30, 2017 and 1.29% at September 30, 2016.

Oak Valley Bancorp operates Oak Valley Community Bank & Eastern Sierra Community Bank, through which it offers a variety of loan and deposit products to individuals and small businesses. They currently operate through 16 conveniently located branches: Oakdale, Turlock, Stockton, Patterson, Ripon, Escalon, Manteca, Tracy, two branches in Sonora, three branches in Modesto, and three branches in their Eastern Sierra Division, which includes Bridgeport, Mammoth Lakes and Bishop.

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.

Oak Valley Bancorp
Financial Highlights (unaudited)
($ in thousands, except per share)3rd Quarter2nd Quarter1st Quarter4th Quarter3rd Quarter
Selected Quarterly Operating Data: 2017 2017 2017 2016 2016
Net interest income$ 8,620 $ 8,455 $ 8,082 $ 8,049 $ 7,829
Provision for loan losses 70 35 - 69 90
Non-interest income 1,276 2,036 1,471 1,242 1,077
Non-interest expense 6,060 6,076 6,207 6,017 5,924
Net income before income taxes 3,766 4,380 3,346 3,205 2,892
Provision for income taxes 1,298 1,550 1,139 883 962
Net income$ 2,468 $ 2,830 $ 2,207 $ 2,322 $ 1,930
Earnings per common share - basic$ 0.31 $ 0.35 $ 0.27 $ 0.29 $ 0.24
Earnings per common share - diluted$ 0.31 $ 0.35 $ 0.27 $ 0.29 $ 0.24
Dividends paid per common share$ 0.125 $ - $ 0.125 $ - $ 0.12
Return on average common equity 11.04% 13.14% 10.73% 11.07% 9.28%
Return on average assets 0.98% 1.14% 0.91% 0.95% 0.82%
Net interest margin (1) 3.78% 3.74% 3.69% 3.68% 3.73%
Efficiency ratio (2) 59.55% 61.14% 63.88% 60.79% 62.08%
Capital - Period End
Book value per common share$ 11.07 $ 10.89 $ 10.40 $ 10.19 $ 10.24
Credit Quality - Period End
Nonperforming assets/ total assets 0.16% 0.32% 0.38% 0.42% 0.43%
Loan loss reserve/ gross loans 1.24% 1.26% 1.28% 1.28% 1.29%
Period End Balance Sheet
($ in thousands)
Total assets$ 996,721 $ 1,020,495 $ 989,879 $ 1,002,110 $ 947,017
Gross loans 636,609 623,809 612,894 610,949 602,569
Nonperforming assets 1,564 3,242 3,777 4,247 4,099
Allowance for loan losses 7,917 7,854 7,827 7,832 7,767
Deposits 901,716 925,786 899,169 914,093 859,756
Common equity 89,676 88,100 84,061 82,450 82,858
Non-Financial Data
Full-time equivalent staff 164 164 159 161 158
Number of banking offices 16 16 16 16 16
Common Shares outstanding
Period end 8,098,605 8,089,705 8,082,205 8,088,455 8,093,555
Period average - basic 8,064,690 8,062,026 8,041,829 8,032,380 8,030,782
Period average - diluted 8,083,137 8,080,030 8,071,768 8,066,575 8,063,381
Market Ratios
Stock Price$ 16.79 $ 13.90 $ 13.20 $ 12.55 $ 10.20
Price/Earnings 13.83 9.87 11.86 10.94 10.70
Price/Book 1.52 1.28 1.27 1.23 1.00
Nine Months Ended September 30,
($ in thousands, except per share) 2017 2016
Net interest income$ 25,157 $ 23,477
Provision for (reversal of) loan losses 105 415
Non-interest income 4,783 3,170
Non-interest expense 18,343 18,298
Net income before income taxes 11,492 7,934
Provision for income taxes 3,987 2,591
Net income$ 7,505 $ 5,343
Earnings per common share - basic$ 0.93 $ 0.67
Earnings per common share - diluted$ 0.93 $ 0.66
Dividends paid per common share$ 0.250 $ 0.240
Return on average common equity 11.64% 8.83%
Return on average assets 1.01% 0.78%
Net interest margin (1) 3.73% 3.84%
Efficiency ratio (2) 61.48% 63.95%
Capital - Period End
Book value per common share$ 11.07 $ 10.24
Credit Quality - Period End
Nonperforming assets/ total assets 0.16% 0.43%
Loan loss reserve/ gross loans 1.24% 1.29%
Period End Balance Sheet
($ in thousands)
Total assets$ 996,721 $ 947,017
Gross loans 636,609 602,569
Nonperforming assets 1,564 4,099
Allowance for loan losses 7,917 7,767
Deposits 901,716 859,756
Common equity 89,676 82,858
Non-Financial Data
Full-time equivalent staff 164 158
Number of banking offices 16 16
Common Shares outstanding
Period end 8,098,605 8,093,555
Period average - basic 8,056,265 8,022,602
Period average - diluted 8,078,353 8,058,558
Market Ratios
Stock Price$ 16.79 $ 10.20
Price/Earnings 13.48 11.50
Price/Book 1.52 1.00
(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: Chris Courtney/Rick McCarty Phone: (209) 848-2265 www.ovcb.com

Source:Oak Valley Community Bank