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October 19, 2011 at 19:27 PM EDT
Oak Valley Bancorp Reports 3rd Quarter Results

OAKDALE, CA -- (Marketwire) -- 10/19/11 -- 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, 2011, consolidated net income was $1,749,000, while consolidated net income available to common shareholders was $1,177,000, or $0.15 per diluted common share. This compared favorably to net income available to common shareholders of $931,000, or $0.12 per diluted common share for the same period a year ago.

Year-to-date results for the nine months ended September 30, 2011, include net income of $4,364,000 and net income available to common shareholders of $3,371,000, compared to net income of $3,128,000 and net income available to common shareholders of $2,496,000 during the same period last year.

Net interest income remained stable decreasing slightly by $20,000 or 0.3% to $6.3 million for the three months ended September 30, 2011, compared to the same period last year. Year-to-date net interest income increased $182,000 from the previous year to $18.8 million. The bank's balance sheet growth, driven by core deposit expansion, and corresponding increases in the investment portfolio, have effectively offset the impact of the decrease in the loan portfolio.

Noninterest expense for the quarter and nine month period ended September 30, 2011 totaled $4.2 million and $13.1 million, respectively, and $4.2 million and $12.9 million for the comparable periods in 2010. The year-to-date increase is primarily related to staffing and overhead costs associated with the opening of two branches in 2011.

"It has been a very positive year for Oak Valley Community Bank. We opened two new locations within the core of our existing footprint, expanding service and convenience for both new and current customers," stated Ron Martin, CEO. "Earlier this year, we also reached a milestone, celebrating our 20 year anniversary and two decades providing a true community banking alternative to our friends and neighbors who appreciate the value of investing in the communities we call home."

The Company continues to experience solid reductions in non-performing assets. As of September 30, 2011, non-performing assets to total assets are 1.50%, or $8.7 million, down from 2.00%, or $10.7 million for the same period a year ago.

The provision for loan losses during the three months ended September 30, 2011, was $300,000, compared to $1.0 million during the same quarter of last year. However, in the last 12 months the ratio of loan loss reserves to gross loans has been increased from 1.88% to 2.26%.

During the quarter, the Company repaid the Treasury Capital Purchase Programs funds. This resulted in the accelerated accretion of $361 thousand associated with a corresponding warrant to purchase Oak Valley Bancorp common stock. The Bancorp concurrently participated in the Small Business Lending Fund, maintaining its strong capital position.

Total assets were $584.0 million at September 30, 2011, an increase of $49.1 million, or 9.2%, from September 30, 2010. The Company's total deposits were $505.5 million as of September 30, 2011, an increase of $56.6 million, or 12.6% over September 30, 2010. Gross loans decreased by $17.6 million, to $391.4 million as of September 30, 2011, a decrease of 4.3% from September 30, 2010.

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

  Net interest
   income            $    6,339 $    6,300 $    6,206 $    6,343 $    6,359
  Provision for loan
   losses                   300        300        600      1,005      1,005
  Non-interest
   income                   764        680        671        715        676
  Non-interest
   expense                4,208      4,401      4,526      3,826      4,188
  Income before
   income taxes           2,595      2,279      1,751      2,227      1,842
  Provision for
   income taxes             846        829        586        727        701
                     ---------- ---------- ---------- ---------- ----------
  Net income              1,749      1,450      1,165      1,500      1,141
  Preferred stock
   dividends and
   accretion               (572)      (211)      (210)      (210)      (210)
                     ---------- ---------- ---------- ---------- ----------
  Net income
   available to
   common
   shareholders           1,177      1,239        955      1,290        931
                     ========== ========== ========== ========== ==========

  Earnings per
   common share -
   basic                   0.15       0.16       0.12       0.17       0.12
  Earnings per
   common share -
   diluted                 0.15       0.16       0.12       0.17       0.12
  Dividends declared
   per common share           -          -          -          -          -
  Return on average
   common equity           8.44%      9.33%      7.48%      9.99%      7.38%
  Return on average
   assets                  1.21%      1.03%      0.85%      1.09%      0.86%
  Net interest
   margin (1)              4.85%      4.86%      4.92%      5.01%      5.23%
  Efficiency Ratio
   (1)                    58.27%     61.79%     65.09%     53.03%     58.99%

Capital - Period End
  Book value per
   share             $     7.26 $     7.02 $     6.78 $     6.64 $     6.57

Credit Quality -
 Period End
  Nonperforming
   assets/ total
   assets                  1.50%      1.62%      2.02%      2.22%      2.00%
  Loan loss reserve/
   gross loans             2.26%      2.20%      2.22%      2.04%      1.88%

Period End Balance
 Sheet
--------------------
($ in thousands)
  Total assets       $  583,955 $  572,262 $  562,769 $  552,396 $  534,879
  Gross Loans           391,379    390,521    395,243    404,194    408,971
  Nonperforming
   assets                 8,748      9,245     11,386     12,253     10,690
  Allowance for
   credit losses          8,857      8,591      8,765      8,255      7,700
  Deposits              505,505    496,212    485,641    476,739    448,904
  Common Equity          56,071     54,134     52,279     51,158     50,605
  Total Capital (2)      69,571     67,634     65,779     64,658     64,105

Non-Financial Data
  Full-time
   equivalent staff         127        130        125        120        115
  Number of banking
   offices                   14         13         12         12         12

Common Shares
 outstanding
  Period end          7,718,469  7,713,794  7,713,794  7,702,127  7,702,127
  Period average -
   basic              7,705,164  7,713,794  7,711,401  7,702,127  7,692,900
  Period average -
   diluted            7,731,463  7,745,193  7,742,230  7,719,157  7,729,175

Market Ratios
  Stock Price        $     4.05 $     5.85 $     5.99 $     5.90 $     5.40
  Price/Earnings           6.68       9.08      11.93       8.88      11.25
  Price/Book               0.56       0.83       0.88       0.89       0.82





($ in thousands, except per share)         Nine Months Ended September 30,
                                         ----------------------------------
                                               2011              2010
                                         ----------------  ----------------

  Net interest income                    $         18,845  $         18,663
  Provision for loan losses                         1,200             3,015
  Non-interest income                               2,115             2,055
  Non-interest expense                             13,135            12,949
  Income before income taxes                        6,625             4,754
  Provision for income taxes                        2,261             1,626
                                         ----------------  ----------------
  Net income                                        4,364             3,128
  Preferred stock dividends and
   accretion                                         (993)             (632)
                                         ----------------  ----------------
  Net income available to common
   shareholders                                     3,371             2,496
                                         ================  ================

  Earnings per common share - basic                  0.44              0.32
  Earnings per common share - diluted                0.44              0.32
  Dividends declared per common share                   -                 -
  Return on average common equity                    8.43%             6.83%
  Return on average assets                           1.03%             0.81%
  Net interest margin (1)                            4.88%             5.27%
  Efficiency Ratio (1)                              61.68%            61.88%

Capital - Period End
  Book value per share                   $           7.26  $           6.57

Credit Quality - Period End
  Nonperforming assets/ total assets                 1.50%             2.00%
  Loan loss reserve/ gross loans                     2.26%             1.88%

Period End Balance Sheet
----------------------------------------
($ in thousands)
  Total assets                           $        583,955  $        534,879
  Gross Loans                                     391,379           408,971
  Nonperforming assets                              8,748            10,690
  Allowance for credit losses                       8,857             7,700
  Deposits                                        505,505           448,904
  Common Equity                                    56,071            50,605
  Total Capital (2)                                69,571            64,105

Non-Financial Data
  Full-time equivalent staff                          127               115
  Number of banking offices                            14                12

Common Shares outstanding
  Period end                                    7,718,469         7,702,127
  Period average - basic                        7,710,097         7,685,592
  Period average - diluted                      7,739,589         7,719,616

Market Ratios
  Stock Price                            $           4.05  $           5.40
  Price/Earnings                                     6.93             12.44
  Price/Book                                         0.56              0.82



(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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