Oak Valley Bancorp (NASDAQ:OVLY) (the “Company”), the bank holding
company for Oak Valley Community Bank and their Eastern Sierra
Community Bank division, recently reported unaudited consolidated
financial results for the first quarter of 2018. For the three
months ended March 31, 2018, consolidated net income was
$2,802,000, or $0.35 per diluted share (EPS). This compared to
consolidated net income of $1,589,000, or $0.20 EPS, for the prior
quarter and $2,207,000, or $0.27 EPS, for the same period a year
ago.
The increase in net income compared to prior
quarters was primarily the result of net interest income expansion
and a reduction in provision for income taxes due to the lower
federal income tax rate corresponding to the Tax Cuts and Jobs Act
of 2017. This recent tax reform act further compounded the
quarter-over-quarter net income increase due to the $983,000 net
deferred asset remeasurement recorded during the fourth quarter of
2017.
Net interest income for the three months ended
March 31, 2018 was $9,117,000, compared to $9,023,000 in the prior
quarter and $8,082,000 for the same period last year. The net
interest income increases over prior periods corresponds to the
growth of our average loan and investment portfolios and the
positive impact of rising rates on earning assets. Despite the
decrease in gross loans of $14.2 million during the quarter due to
principal paydowns on a few loan relationships, the first quarter
average gross loans increased by $3.9 million compared to the prior
quarter, and thus contributed to the net interest income
expansion.
The net interest margin for the three months
ended March 31, 2018 was 3.80%, compared to 3.86% for the prior
quarter and 3.69% for the same period last year. The modest
decrease from the previous quarter is mainly due to the difference
in the full tax equivalent benefit of tax-exempt municipal
securities and loans, pertaining to the lower federal income tax
rate as described above. The increase compared to the first quarter
of 2017, is mainly due to loan growth and the positive impact of
rising rates.
Non-interest expense totaled $6,732,000 for the
quarter ended March 31, 2018, compared to $6,222,000 in the
previous quarter and $6,207,000 in the same quarter a year ago. The
increase compared to prior periods corresponds to staffing
increases and general operating costs related to servicing the
growing loan and deposit portfolios.
Non-interest income was $1,332,000 for the
quarter ended March 31, 2018, compared to $1,193,000 for the prior
quarter and $1,471,000 for the same period last year. The increase
compared to the prior quarter is due to gains recorded on the sale
of an OREO property and an investment security. The decrease
compared to the first quarter of 2017, was due to a decrease in
gains on called investment securities.
“We are pleased to report another strong quarter
with solid earnings. Despite the drop-off in gross loans at
quarter-end, average earning assets realized growth during the
quarter fueling net interest income expansion. As always, we
remain committed to the relationship banking model and we are
confident in our team’s ability to make meaningful connections with
the people and families behind the locally owned businesses that
are the lifeblood of our community,” stated Chris Courtney,
President and CEO.
Total assets were $1.05 billion at March 31,
2018, an increase of $18.0 million over December 31, 2017 and an
increase of $62.9 million over March 31, 2017. Gross loans were
$648.4 million at March 31, 2018, a decrease of $14.2 million over
December 31, 2017, and an increase of $35.5 million over March 31,
2017. The Company’s total deposits were $955.3 million as of March
31, 2018, an increase of $16.5 million and $56.2 million over
December 31, 2017 and March 31, 2017, respectively.
As of March 31, 2018, non-performing assets were
$1.3 million or 0.12% of total assets, compared to $1.6 million or
0.15% of total assets as of December 31, 2017 and $3.8 million or
0.38% of total assets as of March 31, 2017. The decrease in
non-performing assets is the result of continued payments on
non-performing loans and the sale of two OREO properties during the
prior twelve months.
The Company did not record a provision for loan
losses during the first quarter of 2018 due to a decline in gross
loans and an improvement in credit quality as described above. As a
result, the ratio of allowance for loan losses to gross loans
increased to 1.26% at March 31, 2018, compared to 1.23% at December
31, 2017 and 1.28% at March 31, 2017.
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,
a loan production office in Downtown Sacramento, 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) |
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
1st Quarter |
Selected Quarterly Operating Data: |
2018 |
2017 |
2017 |
2017 |
2017 |
|
|
|
|
|
|
|
|
Net interest
income |
$ |
9,117 |
|
$ |
9,023 |
|
$ |
8,620 |
|
$ |
8,455 |
|
$ |
8,082 |
|
|
Provision for loan
losses |
|
- |
|
|
245 |
|
|
70 |
|
|
35 |
|
|
- |
|
|
Non-interest
income |
|
1,332 |
|
|
1,193 |
|
|
1,276 |
|
|
2,036 |
|
|
1,471 |
|
|
Non-interest
expense |
|
6,732 |
|
|
6,222 |
|
|
6,060 |
|
|
6,076 |
|
|
6,207 |
|
|
Net income before
income taxes |
|
3,717 |
|
|
3,749 |
|
|
3,766 |
|
|
4,380 |
|
|
3,346 |
|
|
Provision for income
taxes |
|
915 |
|
|
2,160 |
|
|
1,298 |
|
|
1,550 |
|
|
1,139 |
|
|
Net income |
$ |
2,802 |
|
$ |
1,589 |
|
$ |
2,468 |
|
$ |
2,830 |
|
$ |
2,207 |
|
|
|
|
|
|
|
|
|
Earnings per common
share - basic |
$ |
0.35 |
|
$ |
0.20 |
|
$ |
0.31 |
|
$ |
0.35 |
|
$ |
0.27 |
|
|
Earnings per common
share - diluted |
$ |
0.35 |
|
$ |
0.20 |
|
$ |
0.31 |
|
$ |
0.35 |
|
$ |
0.27 |
|
|
Dividends paid per
common share |
$ |
0.130 |
|
$ |
- |
|
$ |
0.125 |
|
$ |
- |
|
$ |
0.125 |
|
|
Return on average
common equity |
|
12.47 |
% |
|
6.93 |
% |
|
11.04 |
% |
|
13.14 |
% |
|
10.73 |
% |
|
Return on average
assets |
|
1.08 |
% |
|
0.62 |
% |
|
0.98 |
% |
|
1.14 |
% |
|
0.91 |
% |
|
Net interest margin
(1) |
|
3.80 |
% |
|
3.86 |
% |
|
3.78 |
% |
|
3.74 |
% |
|
3.69 |
% |
|
Efficiency ratio
(2) |
|
63.40 |
% |
|
58.35 |
% |
|
59.55 |
% |
|
61.14 |
% |
|
63.88 |
% |
|
|
|
|
|
|
|
Capital -
Period End |
|
|
|
|
|
|
Book value per common
share |
$ |
11.19 |
|
$ |
11.21 |
|
$ |
11.07 |
|
$ |
10.89 |
|
$ |
10.40 |
|
|
|
|
|
|
|
|
Credit
Quality - Period End |
|
|
|
|
|
|
Nonperforming assets/
total assets |
|
0.12 |
% |
|
0.15 |
% |
|
0.16 |
% |
|
0.32 |
% |
|
0.38 |
% |
|
Loan loss reserve/
gross loans |
|
1.26 |
% |
|
1.23 |
% |
|
1.24 |
% |
|
1.26 |
% |
|
1.28 |
% |
|
|
|
|
|
|
|
Period End
Balance Sheet |
|
|
|
|
|
($ in
thousands) |
|
|
|
|
|
|
Total assets |
$ |
1,052,813 |
|
$ |
1,034,852 |
|
$ |
996,721 |
|
$ |
1,020,495 |
|
$ |
989,879 |
|
|
Gross loans |
|
648,367 |
|
|
662,544 |
|
|
636,609 |
|
|
623,809 |
|
|
612,894 |
|
|
Nonperforming
assets |
|
1,310 |
|
|
1,564 |
|
|
1,564 |
|
|
3,242 |
|
|
3,777 |
|
|
Allowance for loan
losses |
|
8,165 |
|
|
8,166 |
|
|
7,917 |
|
|
7,854 |
|
|
7,827 |
|
|
Deposits |
|
955,341 |
|
|
938,882 |
|
|
901,716 |
|
|
925,786 |
|
|
899,169 |
|
|
Common equity |
|
91,595 |
|
|
90,767 |
|
|
89,676 |
|
|
88,100 |
|
|
84,061 |
|
|
|
|
|
|
|
|
Non-Financial Data |
|
|
|
|
|
|
Full-time equivalent
staff |
|
168 |
|
|
167 |
|
|
164 |
|
|
164 |
|
|
159 |
|
|
Number of banking
offices |
|
16 |
|
|
16 |
|
|
16 |
|
|
16 |
|
|
16 |
|
|
|
|
|
|
|
|
Common
Shares outstanding |
|
|
|
|
|
|
Period end |
|
8,183,005 |
|
|
8,098,605 |
|
|
8,098,605 |
|
|
8,089,705 |
|
|
8,082,205 |
|
|
Period average -
basic |
|
8,074,961 |
|
|
8,073,805 |
|
|
8,064,690 |
|
|
8,062,026 |
|
|
8,041,829 |
|
|
Period average -
diluted |
|
8,077,304 |
|
|
8,090,826 |
|
|
8,083,137 |
|
|
8,080,030 |
|
|
8,071,768 |
|
|
|
|
|
|
|
|
Market
Ratios |
|
|
|
|
|
|
Stock Price |
$ |
22.30 |
|
$ |
19.54 |
|
$ |
16.79 |
|
$ |
13.90 |
|
$ |
13.20 |
|
|
Price/Earnings |
|
15.85 |
|
|
25.02 |
|
|
13.83 |
|
|
9.87 |
|
|
11.86 |
|
|
Price/Book |
|
1.99 |
|
|
1.74 |
|
|
1.52 |
|
|
1.28 |
|
|
1.27 |
|
|
|
|
|
|
|
|
(1) |
|
Ratio
computed on a fully tax equivalent basis using a marginal federal
tax rate of 34% in 2017, and 21% in 2018. |
(2) |
|
Ratio
computed on a fully tax equivalent basis using a marginal federal
tax rate of 34% 2017, and 21% in 2018. |
|
|
A marginal
federal/state combined tax rate of 41.15% in 2017 and 29.56% in
2018, was used for applicable revenue. |
|
|
|
Contact:Phone: |
|
Chris
Courtney/Rick McCarty(209) 848-2265www.ovcb.com |
|
|
|
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