OAKDALE, CA--(Marketwire - October 22, 2008) - Oak Valley Bancorp, the bank holding company
for Oak Valley Community Bank, traded as OVLY on the bulletin board,
(OTCBB: OVLY), recently reported third quarter results. For the three
months ending September 30, 2008, net income was $549,000, or $0.07 per
diluted share; a 43.3% decrease from the $969,000 for the same period last
year. For the nine month period ending September 30, 2008 net income was
$1,878,000, compared to last year's $2,974,000; a decrease of 36.9%. Net
interest income growth continues to be strong with the nine months ending
September 30, 2008 increasing $1,068,000, or 7.57%, when compared to the
same period in 2007. Increased loan loss provisions of $752,000 and OREO
writedowns of $765,000 during the first nine months of 2008, compared to
the same period in 2007, offset increases in net interest income.
Total assets grew to $490.1 million at September 30, 2008, an increase of
$36.4 million, or 8.0%, over September 30, 2007. Gross loans increased by
$30.8 million, to $416.7 million as of September 30, 2008, an increase of
8.0% over September 30, 2007. The Bank's total deposits were $365.2
million on September 30, 2008, which is a decrease of $20.9 million, or
5.4% less than September 30, 2007. Certificate of deposit balances
decreased by $30.3 million during the twelve month period ending September
30, 2008, while core deposits increased by $13.7 million during the same
period.
"Given the recent turmoil that has plagued the financial sector, we
continue to monitor the performance of our loan portfolio and to augment
our reserves. We are not overjoyed with the decrease in net income
compared to last year; however, we believe that we have identified the
problem loans in our portfolio and have reserved adequately for potential
losses," stated Ron Martin, CEO. "Loan growth for the year has been strong
and this will fuel the profits needed to ensure stability during this
economic downturn. Loan production for the nine months ending September
30, 2008 was $116 million of new and renewed loans which is a 24% increase
over loan production for the same period in 2007. Quality loans still exist
in the marketplace today and there are still banks that adhere to strict
credit quality who are still willing to lend to solid borrowers," Martin
concluded.
President Chris Courtney continued, "We have seen strong year-over-year
growth in net interest income, which can be attributed to solid loan growth
and deliberate efforts to increase low-cost core deposits through calling
efforts focused on full relationships and a willingness to allow single
service accounts to run-off. Due to deposit mix improvements, our
year-to-date net interest margin has increased to 4.71%, a 17 basis point
increase over the 4.54% for the same period last year, despite a 325 basis
point decrease in interest rates by the Fed."
The third quarter is marked by continued improvement in credit trends.
Non-performing loans to total assets are 1.33%, or $6.54 million, down from
2.16%, or $9.81 million, at December 31, 2007. OREO at September 30, 2008
was $4.36 million, or 0.89% of total assets, consisting of three loans.
Non-accrual loans are $2.18 million, or 0.44% of total assets. All OREO
property has been written down to current appraised values and non-accrual
loans have been reviewed by management for reserve adequacy in light of
current market values. The bank's common equity has grown to $44.2 million
and the bank remains well capitalized by regulatory standards.
The bank continues to bolster loan loss reserves, in recognition of the
weak economic climate. The September 30th provision stands at 1.12% up from
1.08% last quarter. Management remains confident in its underwriting
practices and in the adequacy of its loss methodology, but given the
current economic outlook, is poised to further provision if positive trends
in non-performing loans reverse.
Established in 1991, Oak Valley Community Bank offers a variety of loan and
deposit products dedicated to serving the needs of individuals and small
businesses. The Bank currently operates through 12 conveniently located
branches: Oakdale, Escalon, Sonora, Turlock, Stockton, Patterson, Ripon,
two branches in Modesto, and three branches in their Eastern Sierra
Division, which include Bridgeport, Mammoth Lakes and Bishop.
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)
Profitability 3rd 2nd 1st 4th 3rd
($ in thousands, Quarter Quarter Quarter Quarter Quarter
except per share) 2008 2008 2008 2007 2007
Selected Quarterly
Operating Data:
Net interest
income $ 5,292 $ 5,081 $ 4,809 $ 4,792 $ 4,859
Provision for loan
losses 602 440 145 120 145
Non-interest
income 634 672 614 562 506
Non-interest
expense 4,535 4,562 4,057 3,897 3,582
Income before
income taxes 789 751 1,221 1,337 1,638
Provision for
income taxes 240 198 445 387 668
Net income 549 553 776 950 969
Earnings per
common share -
basic 0.07 0.07 0.10 0.12 0.13
Earnings per
common share -
diluted 0.07 0.07 0.10 0.12 0.13
Dividends declared
per common share
(1) 0.05 - - - 0.19
Return on average
common equity (2) 4.91% 5.01% 7.16% 8.93% 9.34%
Return on average
assets 0.45% 0.47% 0.68% 0.83% 0.87%
Net interest
margin (3) 4.76% 4.77% 4.60% 4.50% 4.67%
Efficiency Ratio
(3) 76.03% 78.04% 73.70% 72.00% 66.02%
Capital - Period End
Book value per
share (2) $ 5.77 $ 5.71 $ 5.70 $ 5.57 $ 5.41
Credit Quality -
Period End
Nonperforming
assets/assets 1.33% 1.35% 1.60% 2.16% 0.27%
Loan loss
reserve/loans (4) 1.12% 1.08% 1.09% 1.16% 1.23%
Period End Balance
Sheet
($ in thousands)
Total assets $ 490,111 $ 476,094 $ 463,044 $ 454,259 $ 453,738
Gross Loans 416,664 400,537 387,647 387,809 385,901
Nonperforming
assets 6,538 6,435 7,395 9,808 1,216
Allowance for
credit losses (4) 4,650 4,321 4,225 4,507 4,757
Deposits 365,230 358,159 362,760 377,348 386,158
Common Equity (2) 44,151 43,735 43,302 42,361 41,184
Non-Financial Data
Full-time
equivalent staff 119 128 130 125 119
Number of banking
offices, domestic
and foreign 12 12 12 12 12
Common Shares
outstanding
Period end (2) 7,658,252 7,658,252 7,611,377 7,607,780 7,606,068
Period average -
basic (2) 7,658,252 7,641,534 7,610,039 7,606,506 7,567,719
Period average -
diluted (2) 7,743,091 7,697,681 7,696,308 7,727,570 7,717,768
Market Ratios
Stock Price $ 6.30 $ 7.00 $ 8.49 $ 8.25 $ 9.94
Price/Earnings 22.14 24.12 20.69 16.64 19.56
Price/Book (2) 1.09 1.23 1.49 1.48 1.84
Profitability YEAR TO DATE
--------------------
($ in thousands, except per share) 9/30/2008 9/30/2007
Selected Quarterly Operating Data:
Net interest income $ 15,181 $ 14,114
Provision for loan losses 1,187 435
Non-interest income 1,920 1,598
Non-interest expense 13,153 10,354
Income before income taxes 2,761 4,923
Provision for income taxes 883 1,948
Net income 1,878 2,974
Earnings per common share - basic 0.25 0.41
Earnings per common share - diluted 0.24 0.40
Dividends declared per common share (1) 0.05 0.19
Return on average common equity (2) 5.71% 10.56%
Return on average assets 0.53% 0.90%
Net interest margin (3) 4.71% 4.54%
Efficiency Ratio (3) 75.95% 65.10%
Capital - Period End
Book value per share (2) $ 5.77 $ 5.41
Credit Quality - Period End
Nonperforming assets/assets 1.33% 0.27%
Loan loss reserve/loans (4) 1.12% 1.23%
Period End Balance Sheet
($ in thousands)
Total assets $ 490,111 $ 453,738
Gross Loans 416,664 385,901
Nonperforming assets 6,538 1,216
Allowance for credit losses (4) 4,650 4,757
Deposits 365,230 386,158
Common Equity (2) 44,151 41,184
Non-Financial Data
Full-time equivalent staff 119 119
Number of banking offices, domestic
and foreign 12 12
Common Shares outstanding
Period end (2) 7,658,252 7,606,068
Period average - basic (2) 7,636,687 7,283,187
Period average - diluted (2) 7,737,050 7,443,004
Market Ratios
Stock Price $ 6.30 $ 9.94
Price/Earnings 19.23 18.20
Price/Book (2) 1.09 1.84
(1) Cash dividend of $382,943 and $1,444,697 paid in August 2008 and
2007, respectively.
(2) Includes 256,142 shares issued on June 15, 2007 for the Rights
Subscription stock offering and 200,289 shares issued on July 16,
2007 for the remaining shares stock offering, totaling $5,020,739
in additional capital.
(3) Ratio computed on a fully tax equivalent basis using a marginal
federal tax rate of 34%.
(4) Adjusted for Allowance for Off-Balance Sheet Credit Exposure.
Contact Information: Contact:
Ron Martin/Chris Courtney/Rick McCarty
Phone: (209) 848-2265
www.ovcb.com