Oak Valley Bancorp Amends 4th Quarter Results

Oak Valley Bancorp Amends 4th Quarter Results  OAKDALE, CA -- (Marketwired) -- 03/18/14 --  Oak Valley Bancorp (NASDAQ: OVLY), the bank holding company for Oak Valley Community Bank and Eastern Sierra Community Bank, recently published a revision to their fourth quarter results, which were first published January 22, 2014. Changes to the financial results reduced reported common equity and total capital by $793,000 as a result of the common stock dividend that was declared in December 2013, but inadvertently was not transferred out of equity and into a liability account at that time. The effect of the error was that the book value per share should have been $8.14 instead of $8.24 and the price to book ratio should have been 1.03 instead of 1.02. Also, due to a reclassification of deferred tax assets, reported total assets decreased by $207,000, which was reported as $672.1 million and should have been $671.9 million. The original release is amended and restated as follows and the financial tables below have been adjusted accordingly to reflect these changes.   For the three months ended December 31, 2013, consolidated net income available to common shareholders was a record $1.7 million, or $0.22 per diluted share. This compared to consolidated net income available to common shareholders of $1.4 million, or $0.18 per diluted share for the three months ended December 31, 2012 and represented a 21.5% increase over the prior year.   Net income for 2013 totaled $5.9 million compared to $5.8 million for 2012. After adjustment for preferred stock dividends and accretion, consolidated net income available to common shareholders was $5.8 million, or $0.74 per diluted share, compared to consolidated net income of $5.3 million, or $0.69 per diluted common share, in 2012. This represents a 9.2% increase in consolidated net income available to common shareholders and marks a new annual earnings record for Oak Valley Bancorp.   Total assets grew to $671.9 million as of December 31, 2013, which was an increase of $11.3 million, or 1.7% over the prior year. Deposits increased to $602.6 million, which was an increase of $15.6 million, or 2.7% over the prior year. Gross loans at year end totaled $419.4 million, reflecting an increase of $28.5 million, or 7.3%, over December 31, 2012.   "We are pleased to report another year of solid earnings. Our commitment to customer care and relationship building is unwavering and the cornerstone of our success," stated Chris Courtney, President and CEO of the Company and the Bank. "Our results are a reflection of emerging consumer confidence and economic expansion in the communities we serve."   Non-performing assets were $3.3 million, or 0.48% of total assets at December 31, 2013. This is down from $6.9 million, or 1.05% at December 31, 2012. There are currently six properties remaining with the non-performing classification; five of which remain as loans, along with one property taken into OREO.   The allowance for loan losses totaled 1.83% of gross loans at December 31, 2013 compared to 2.04% at December 31, 2012. The annual provision for loan losses of $300,000 in 2013 was down from $1.2 million in 2012. Given the high quality of the loan portfolio, limited provisioning was required to support the growth of the portfolio.  Net interest income of $24.3 million for the year ended December 31, 2013, decreased by $570,000, or 2.3%, from the prior year. The year began with margin compression, corresponding to low loan pricing and high cash balances. The margin stabilized in the second half of the year, as cash was deployed into new loans. The Company's net interest margin was 4.13% for the year ended December 31, 2013, compared to 4.53% for the year ended December 31, 2012. Net interest margin for the three months ended December 31, 2013 was 4.19%, compared to 4.15% for the three months ended December 31, 2012.   Non-interest income was $3.3 million for the year ended December 31, 2013, compared to $3.1 million the prior year. The increase is partially attributable to additional fee income related to deposit growth and commissions corresponding to growth in Oak Valley Investments.   Non-interest expense was $18.7 million for the year ended December 31, 2013, compared to $18.2 million for the prior year, an increase of $411,000, or 2.3%. This increase consists primarily of costs associated with servicing deposit growth across all branches.   The Company currently operates through 14 branches in Oakdale, Sonora, Turlock, Stockton, Patterson, Ripon, Escalon, Manteca, three branches in Modesto, and three branches in their Eastern Sierra Division, which includes Bridgeport, Mammoth Lakes, and Bishop.   For more information, please call 1-866-844-7500 or visit www.ovcb.com.   This press release includes forward-looking statements about the corporation for which the corporation claims the protection of safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.   Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the corporation's possible or assumed future financial condition, and its results of operations and business. Forward-looking statements are subject to risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include fluctuations in interest rates, government policies and regulations (including monetary and fiscal policies), legislation, economic conditions, including increased energy costs in California, credit quality of borrowers, operational factors and competition in the geographic and business areas in which the company conducts its operations. All forward-looking statements included in this press release are based on information available at the time of the release, and the Company assumes no obligation to update any forward-looking statement.                                                                                                                 Oak Valley Bancorp                                                    Financial Highlights (unaudited)                                                                                                    ($ in thousands,                                                              except per          4th         3rd         2nd         1st         4th      share)            Quarter     Quarter     Quarter     Quarter     Quarter   Selected                                                                      Quarterly                                                                    Operating Data:    2013        2013        2013        2013        2012                      ----------  ----------  ----------  ----------  ----------                                                                                 Net interest                                                                  income        $    6,372  $    6,030  $    6,024  $    5,849  $    6,115    Provision for                                                                 loan losses            -         100         100         100         250    Non-interest                                                                  income               812         866         818         785         855    Non-interest                                                                  expense            4,668       4,619       4,734       4,639       4,513    Income before                                                                  income taxes       2,516       2,177       2,008       1,895       2,207    Provision for                                                                 income taxes         809         672         634         595         718                   ----------  ----------  ----------  ----------  ----------    Net income          1,707       1,505       1,374       1,300       1,489    Preferred stock                                                               dividends and                                                                accretion              -           -           -         (68)        (84)                  ----------  ----------  ----------  ----------  ----------    Net income                                                                    available to                                                                 common                                                                       shareholders  $    1,707  $    1,505  $    1,374  $    1,232  $    1,405                   ==========  ==========  ==========  ==========  ==========                                                                                 Earnings per                                                                  common share -                                                               basic         $     0.22  $     0.19  $     0.18  $     0.16  $     0.18    Earnings per                                                                  common share -                                                               diluted       $     0.22  $     0.19  $     0.18  $     0.16  $     0.18    Return on                                                                     average common                                                               equity             10.47%       9.45%       8.48%       7.82%       8.87%   Return on                                                                     average assets      1.01%       0.92%       0.86%       0.81%       0.91%   Net interest                                                                  margin (1)          4.19%       4.12%       4.18%       4.05%       4.15%   Efficiency                                                                    ratio (1)          63.05%      64.65%      67.17%      67.95%      63.23%                                                                              Capital - Period                                                              End                                                                           Book value per                                                                share         $     8.14  $     7.99  $     8.01  $     8.10  $     7.99                                                                               Credit Quality -                                                              Period End                                                                    Nonperforming                                                                 assets/ total                                                                assets              0.48%       0.68%       0.65%       0.99%       1.05%   Loan loss                                                                     reserve/ gross                                                               loans               1.83%       1.85%       1.94%       1.99%       2.04%                                                                              Period End                                                                    Balance Sheet                                                               ($ in thousands)                                                               Total assets   $  671,853  $  659,192  $  644,230  $  648,418  $  660,581    Gross loans       419,438     413,856     390,647     389,992     390,986    Nonperforming                                                                 assets             3,256       4,495       4,189       6,439       6,923    Allowance for                                                                 loan losses        7,659       7,669       7,570       7,743       7,975    Deposits          602,633     591,642     577,129     580,215     586,993    Common equity      64,517      63,379      63,457      64,098      63,219    Total capital                                                                 (2)               64,517      63,379      63,457      64,098      69,969                                                                               Non-Financial                                                                 Data                                                                          Full-time                                                                     equivalent                                                                   staff                136         135         134         134         130    Number of                                                                     banking                                                                      offices               14          14          14          14          14                                                                               Common Shares                                                                 outstanding                                                                   Period end      7,929,730   7,929,730   7,924,730   7,914,730   7,907,780    Period average                                                                - basic        7,803,247   7,802,705   7,802,012   7,778,333   7,762,261    Period average                                                                - diluted      7,859,380   7,851,157   7,842,964   7,830,439   7,793,523                                                                               Market Ratios                                                                  Stock Price    $     8.37  $     7.96  $     7.67  $     8.14  $     7.45    Price/Earnings       9.64       10.40       10.86       12.67       10.38    Price/Book           1.03        1.00        0.96        1.01        0.93                                                                                                                                                                                                                                                            YEAR ENDED DECEMBER                                                                  31,                                                                   2013        2012                                                          ----------  ----------                                                                                                                   ($ in thousands,                                                              except per                                                                   share)                                                                      Selected                                                                      Quarterly                                                                    Operating Data:                                                                                                                                            Net interest                                                                  inco me        $   24,275  $   24,845                                        Provision for                                                                 loan losses          300       1,150                                        Non-interest                                                                  income             3,281       3,148                                        Non-interest                                                                  expense           18,660      18,249                                        Income before                                                                 income taxes       8,596       8,594                                        Provision for                                                                 income taxes       2,710       2,813                                                       ----------  ----------                                        Net income          5,886       5,781                                        Preferred stock                                                               dividends and                                                                accretion            (68)       (452)                                                      ----------  ----------                                        Net income                                                                    available to                                                                 common                                                                       shareholders  $    5,818  $    5,329                                                       ==========  ==========                                                                                                                     Earnings per                                                                  common share -                                                               basic         $     0.75  $     0.69                                        Earnings per                                                                  common share -                                                               diluted       $     0.74  $     0.69                                        Return on                                                                     average common                                                               equity              9.07%       8.80%                                       Return on                                                                     average assets      0.90%       0.95%                                       Net interest                                                                  margin (1)          4.13%       4.53%                                       Efficiency                                                                    ratio (1)          65.65%      63.83%                                                                                                                  Capital - Period                                                              End                                                                           Book value per                                                                share         $     8.14  $     7.99                                                                                                                   Credit Quality -                                                              Period End                                                                    Nonperforming                                                                 assets/ total                                                                assets              0.48%       1.05%                                       Loan loss                                                                     reserve/ gross                                                               loans               1.83%       2.04%                                                                                                                  Period End                                                                    Balance Sheet                                                               ($ in thousands)                                                               Total assets   $  671,853  $  660,581                                        Gross loans       419,438     390,986                                        Nonperforming                                                                 assets             3,256       6,923                                        Allowance for                                                                 loan losses        7,659       7,975                                        Deposits          602,633     586,993                                        Common equity      64,517      63,219                                        Common equity      64,517      69,969                                                                                                                   Non-Financial                                                                 Data                                                                          Full-time                                                                     equivalent                                                                   staff                136         130                                        Number of                                                                     banking                                                                      offices               14          14                                                                                                                   Common Shares                                                                 outstanding                                                                   Period end      7,929,730   7,907,780                                        Period average                                                                - basic        7,796,659   7,740,990                                        Period average                                                                - diluted      7,846,078   7,766,745                                                                                                                   Market Ratios                                                                  Stock Price    $     8.37  $     7.45                                        Price/Earnings      11.22       10.85                                        Price/Book           1.03        0.93                                                                                                                                                                                                  (1) Ratio computed on a fully tax equivalent basis using a marginal          federal tax rate of 34%.                                                     (2) Includes preferred stock issued to the U.S. Treasury under the SBLF      Program of $6.75 million for the quarter ended December 31, 2012. There      was no preferred stock outstanding as of March 31, June 30, September 30,    and December 31, 2013.                                                         Contact:  Chris Courtney/Rick McCarty Phone: (209) 848-2265  www.ovcb.com     
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