Oak Valley Bancorp Reports 2nd Quarter Results

Oak Valley Bancorp Reports 2nd Quarter Results  OAKDALE, CA -- (Marketwired) -- 07/16/14 --  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 June 30, 2014, consolidated net income available to common shareholders was $2,537,000, or $0.32 per diluted common share. This compared to consolidated net income available to common shareholders of $1,374,000, or $0.18 per diluted common share for the same period a year ago.   Total assets were $678.3 million at June 30, 2014, an increase of $34.1 million, or 5.3%, from June 30, 2013. The Company's total deposits were $603.0 million as of June 30, 2014, an increase of $25.8 million, or 4.5% over June 30, 2013. Gross loans increased to $435.7 million at June 30, 2014, an increase of $45.0 million, or 11.5% from June 30, 2013.  Net interest income increased $151,000 or 2.5% to $6.2 million for the three months ended June 30, 2014, compared to $6.0 million for the same period last year. The increase is driven primarily by the increase in loan volume, as the interest rate environment continues to compress loan and investment yields. The Company's net interest margin for the three months ended June 30, 2014 was 4.07%, compared to 4.18% for the same period last year.   In addition to income from normal operations, during the quarter, the Company also reached a settlement of $2.92 million on a previously written down asset, which ultimately led to a net recovery of $1.88 million. The entire $1.88 million was recognized in income through a credit to the loan loss provision.   "We are very pleased to report another solid operational performance for the quarter. Despite continued margin pressure, the efforts of our relationship management teams are producing results that are fueling earnings," stated Chris Courtney, President and CEO of the Company and the Bank. "We acknowledge the tremendous impact of the recovery the Bank recorded during the quarter, yet we are equally energized by the loan growth we've experienced and the underlying momentum we seem to be building within the local business community," Courtney concluded.  Non-interest expense for the three month and six month periods ended June 30, 2014 totaled $5.0 million and $9.9 million, respectively, an increase over the $4.7 million and $9.4 million for the comparable periods in 2013. This increase corresponds to growth in full time equivalent staff from 134 to 144. Deposit servicing costs associated with deposit growth and transaction activity have also increased.   Non-performing assets as of June 30, 2014 were $5.1 million, or 0.75% of total assets, as compared to $4.2 million, or 0.65% at June 30, 2013. The increase is the net result of the Bank placing one additional loan relationship on non-accrual status during the first quarter of 2014 and receiving the remaining principal payment from the aforementioned loan settlement.   The recovery resulted in a reversal of provision for loan losses of $1.88 million for the quarter ended June 30, 2014, as compared to a provision of $100,000 for the same period of the previous year. The ratio of loan loss reserves to gross loans decreased to 1.74% as of June 30, 2014, compared to 1.94% at June 30, 2013.  The Company recently announced the payment of a cash dividend of $0.065 per share of common stock to its shareholders of record at the close of business on July 14, 2014. In aggregate, the distribution will amount to approximately $524,000. This is the second dividend payment made by the Company in 2014.  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. The Company also recently announced plans to open a branch in Tracy later this summer.  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)                                                                      Selected             2nd         1st         4th         3rd         2nd      Quarterly         Quarter     Quarter     Quarter     Quarter     Quarter    Operating Data:    2014        2014        2013        2013        2013                                                                                    Net interest                                                                  income        $    6,175  $    6,104  $    6,372  $    6,030  $    6,024    Provision for                                                                 loan losses       (1,877)          -           -         100         100    Non-interest                                                                  income               927         810         812         866         818    Non-interest                                                                  expense            4,989       4,881       4,668       4,619       4,734    Net income                                                                    before income                                                                taxes              3,990       2,033       2,516       2,177       2,008    Provision for                                                                 income taxes       1,453         625         809         672         634                   ----------  ----------  ----------  ----------  ----------    Net income                                                                    available to                                                                 common                                                                       shareholders       2,537       1,408       1,707       1,505       1,374                   ==========  ==========  ==========  ==========  ==========                                                                                 Earnings per                                                                  common share                                                                 - basic       $     0.32  $     0.18  $     0.22  $     0.19  $     0.18    Earnings per                                                                  common share                                                                 - diluted     $     0.32  $     0.18  $     0.22  $     0.19  $     0.18    Dividends paid                                                                per common                                                                   share         $        -  $     0.10  $        -  $        -  $        -    Return on                                                                     average                                                                      common equity      14.53%       8.59%      10.47%       9.45%       8.48%   Return on                                                                     average                                                                      assets              1.50%       0.84%       1.01%       0.92%       0.86%   Net interest                                                                  margin (1)          4.07%       4.04%       4.19%       4.12%       4.18%   Efficiency                                                                    ratio (2)          67.55%      68.29%      63.05%      64.65%      67.17%                                                                              Capital - Period                                                              End                                                                           Book value per                                                                common share  $     8.84  $     8.40  $     8.14  $     7.99  $     8.01                                                                               Credit Quality -                                                              Period End                                                                    Nonperforming                                                                 assets/ total                                                                assets              0.75%       0.90%       0.48%       0.68%       0.65%   Loan loss                                                                     reserve/                                                                     gross loans         1.74%       1.80%       1.83%       1.85%       1.94%                                                                              Period End                                                                    Balance Sheet                                                               ($ in thousands)                                                               Total assets   $  678,319  $  687,591  $  671,853  $  659,192  $  644,230    Gross loans       435,671     422,510     419,438     413,856     390,647    Nonperforming                                                                 assets             5,065       6,164       3,256       4,495       4,189    Allowance for                                                                 loan losses        7,602       7,615       7,659       7,669       7,570    Deposits          602,978     615,997     602,633     591,642     577,129    Common equity      71,369      67,824      64,517      63,379      63,457                                                                               Non-Financial                                                                 Data                                                                          Full-time                                                                     equivalent                                                                   staff                144         142         136         135         134    Number of                                                                     banking                                                                      offices               14          14          14          14          14                                                                               Common Shares                                                                 outstanding                                                                   Period end      8,075,855   8,071,355   7,929,730   7,929,730   7,924,730    Period average                                                                - basic        7,953,499   7,878,152   7,803,247   7,802,705   7,802,012    Period average                                                                - diluted      8,001,815   7,941,456   7,859,380   7,851,157   7,842,964                                                                               Market Ratios                                                                  Stock Price    $     9.93  $     9.41  $     8.37  $     7.96  $     7.67    Price/Earnings       7.76       12.98        9.64       10.40       10.86    Price/Book           1.12        1.12        1.03        1.00        0.96                                                                                                                                                                                                                                                                                        SIX MONTHS ENDED JUNE 30,                                                      2014             2013                                                  ---------------  ---------------                                                                                 Net interest income                      $        12,279  $        11,873    Provision for loan losses                         (1,877)             200    Non-interest income                                1,737            1,603    Non-interest expense                               9,870            9,373    Net income before income taxes                     6,023            3,903    Provision for income taxes                         2,078            1,229                                             ---------------  ---------------    Net income                                         3,945            2,674    Preferred stock dividends                              -              (68)                                            ---------------  ---------------    Net income available to common                                                shareholders                            $         3,945  $         2,606                                             ===============  ===============                                                                                 Earnings per common share - basic        $          0.50  $          0.33    Earnings per common share - diluted      $          0.49  $          0.33    Dividends paid per common share          $          0.10  $             -    Return on average common equity                    11.65%            8.16%   Return on average assets                            1.17%            0.84%   Net interest margin (1)                             4.06%            4.11%   Efficiency ratio (2)                               67.91%           67.55%                                                                              Capital - Period End                                                           Book value per common share              $          8.84  $          8.01                                                                               Credit Quality - Period End                                                    Nonperforming assets/ total assets                  0.75%            0.65%   Loan loss reserve/ gross loans                      1.74%            1.94%                                                                              Period End Balance Sheet                                                     ($ in thousands)                                                               Total assets                             $       678,319  $       644,230    Gross loans                                      435,671          390,647    Nonperforming assets                               5,065            4,189    Allowance for loan losses                          7,602            7,570    Deposits                                         602,978          577,129    Common equity                                     71,369           63,457                                                                               Non-Financial Data                                                             Full-time equivalent staff                           144              134    Number of banking offices                             14               14                                                                               Common Shares outstanding                                                      Period end                                     8,075,855        7,924,730    Period average - basic                         7,916,034        7,790,238    Period average - diluted                       7,971,802        7,836,736                                                                               Market Ratios                                                                  Stock Price                              $          9.93  $          7.67    Price/Earnings                                      9.88            11.37    Price/Book                                          1.12             0.96                                                                                                                                                            (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     
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