OAKDALE, CA--(Marketwire - January 30, 2009) - Oak Valley Bancorp (
NASDAQ:
OVLY), the bank
holding company for Oak Valley Community Bank and Eastern Sierra Community
Bank, recently reported financial results for the fiscal year ended
December 31, 2008. Total assets exceeded $500 million, increasing to
$508.2 million for the year ended December 31, 2008, an 11.8% increase from
the prior year. Net income for 2008 totaled $2.2 million compared to $3.9
million for 2007. Diluted earnings per common share were $0.27 in 2008
compared to $0.53 in 2007. For the three months ended December 31, 2008,
net income totaled $283 thousand compared to $950 thousand, for the same
period in 2007. Diluted earnings per common share were $0.03 for the
quarter ended December 31, 2008, compared to $0.12 in the same quarter of
2007.
"Reaching the $500 million asset mark is a milestone for us, one which we
are happy to have achieved in a steady and consistent manner over the
Bank's eighteen year history. Although we are not delighted with our net
income relative to last year, we are pleased to be in a position to report
positive net income; a profit, amidst these turbulent times faced by the
financial sector and the country as a whole," stated Ron Martin, CEO.
"Despite the decrease in net earnings, operating income remains healthy,
non-performing loans remain below peer average and the bank took cautionary
measures to fortify the balance sheet by strengthening an already
well-capitalized position by injecting additional capital," Martin
concluded.
At December 31, 2008 gross loans totaled $428.2 million, an increase of
$40.4 million, or 10.4%, during 2008. The Bank's loan loss provision
totaled $2.2 million in 2008, including $1.0 million during the fourth
quarter of 2008. This compares to $555 thousand in loan loss provision for
the year ended December 31, 2007. The increases in loan loss provisions
reflect 2008 charge-offs, strong loan growth and increased allocation for
economic uncertainty. Net charge-offs totaling $1.1 million for 2008
primarily relate to construction loans secured by real property, where the
value of the collateral has declined.
"The bank experienced loan growth of $40 million in 2008, and while growth
is part of the general plan, we are definitely pleased with our good
fortune under these economic circumstances. Though we are not overly
optimistic about 2009 production potential, we believe opportunities
continue to exist that will allow us to grow with quality loans," commented
Chris Courtney, President. "Careful credit decisions and adherence to a
style of relationship lending requires a deeper understanding of the
borrower, which has, and will continue to serve the bank well even in hard
economic times," Courtney concluded.
The allowance for loan losses as a percentage of loans totaled 1.30% at
December 31, 2008, compared to 1.16% at December 31, 2007. The increase
represents the increased allocation for economic uncertainty. At December
31, 2008 non-performing assets totaled $6.8 million, or 1.34% of total
assets, compared to $9.1 million, or 2.00% of total assets, at December 31,
2007. Write-downs on OREO properties represented $1.3 million of the
decrease in non-performing assets during 2008.
Total deposits were $378.2 million at year-end 2008, compared to $377.3
million at December 31, 2007. Despite the nominal growth in total
deposits, the number of deposit accounts increased by 2.4 thousand, or 15%,
during 2008, to over 18.3 thousand deposits accounts at December 31, 2008.
Average balances per account have declined as a result of the impact of the
weak economic environment, on both commercial and retail customers.
Net interest income of $20.5 million for the year ended December 31, 2008,
increased by $1.7 million, or 8.9%, over the prior year. The increase
reflects the growth in earning assets and expansion of the Bank's net
interest margin. The Bank's net interest margin was 4.72% for the year
ended December 31, 2008, compared to 4.53% for the year ended December 31,
2007. The increase is a result of the Bank's ability to reduce its cost of
funds more rapidly than the decline in the yield on earning assets, through
the declining rate environment of 2008.
Non-interest expense of $17.9 million for the year ended December 31, 2008,
increased by $3.7 million, or 25.7%, over the prior year. The increase
includes write-downs and expenses associated with OREO properties, higher
personnel and facilities costs associated with expansion, higher FDIC
premiums and professional fees associated with the formation of the bank
holding company.
In the fourth quarter, Oak Valley Bancorp voluntarily elected to
participate in the U.S. Treasury's Capital Purchase Program (TCPP) in which
the Company issued $13.5 million in senior preferred shares to the
Treasury. With the infusion of these funds, the Company's total risk-based
capital ratio expanded to over 13.2% as of December 31, 2008, from 11.1% at
December 31, 2007. Further details about the TCPP participation are
available at
www.ovcb.com in the Investor Relations section on the About Us
tab. "In taking part in the TCPP, we enhance our ability to support the
communities we call home and simultaneously strengthen our financial
footing by expanding our capital base," noted Rick McCarty, CFO.
Oak Valley Bancorp operates Oak Valley & Eastern Sierra Community Bank,
through which it offers a variety of loan and deposit products to
individuals and small businesses. The Company currently operates through 12
conveniently located branches: Oakdale, Sonora, Turlock, Stockton,
Patterson, Ripon, Escalon, two branches in Modesto, 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 us online at
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)
Profitability 4th 3rd 2nd 1st 4th
($ in thousands, Quarter Quarter Quarter Quarter Quarter
except per share) 2008 2008 2008 2008 2007
Selected Quarterly
Operating Data:
Net interest income $ 5,333 $ 5,292 $ 5,081 $ 4,809 $ 4,792
Provision for loan
losses 1,001 602 440 145 120
Non-interest income 602 634 672 614 562
Non-interest expense 4,712 4,535 4,562 4,057 3,897
Income before income
taxes 222 789 751 1,221 1,337
Provision for income
taxes (61) 240 198 445 387
Net income 283 549 553 776 950
Preferred stock
dividends and
accretion (64) - - - -
Net income available
to common shareholders 219 549 553 776 950
Earnings per common
share - basic 0.03 0.07 0.07 0.10 0.12
Earnings per common
share - diluted 0.03 0.07 0.07 0.10 0.12
Dividends declared
per common share (1) 0.03 0.05 - - -
Return on average
common equity 2.31% 4.91% 5.01% 7.16% 8.93%
Return on average assets 0.23% 0.45% 0.47% 0.68% 0.83%
Net interest margin (2) 4.72% 4.76% 4.77% 4.60% 4.50%
Efficiency Ratio (2) 78.30% 76.03% 78.04% 73.70% 72.00%
Capital - Period End
Book value per share $ 7.57 $ 5.77 $ 5.71 $ 5.69 $ 5.57
Credit Quality -
Period End
Nonperforming
assets/assets 1.34% 1.33% 1.35% 1.60% 2.16%
Loan loss
reserve/loans (3) 1.30% 1.12% 1.08% 1.09% 1.16%
Period End Balance Sheet
($ in thousands)
Total assets $ 508,203 $ 490,111 $ 476,094 $ 463,044 $ 454,259
Gross Loans 428,177 416,664 400,537 387,647 387,809
Nonperforming assets 6,824 6,538 6,435 7,395 9,808
Allowance for credit
losses (3) 5,569 4,650 4,321 4,225 4,507
Deposits 378,248 365,230 358,159 362,760 377,348
Common Equity 57,986 44,151 43,735 43,302 42,361
Non-Financial Data
Full-time equivalent
staff 117 119 128 130 125
Number of banking
offices, domestic 12 12 12 12 12
and foreign
Common Shares outstanding
Period end 7,661,627 7,658,252 7,658,252 7,611,377 7,607,780
Period average -
basic 7,660,526 7,658,252 7,641,534 7,610,039 7,606,506
Period average -
diluted 7,723,711 7,743,091 7,697,681 7,696,308 7,727,570
Market Ratios
Stock Price $ 6.00 $ 6.30 $ 7.00 $ 8.49 $ 8.25
Price/Earnings 52.82 22.14 24.12 20.69 16.64
Price/Book 0.79 1.09 1.23 1.49 1.48
YEAR TO DATE
Profitability ---------------------
($ in thousands, 12/31/2008 12/31/2007
except per share)
Selected Quarterly
Operating Data:
Net interest
income $ 20,515 $ 18,831
Provision for
loan losses 2,188 555
Non-interest
income 2,522 2,198
Non-interest
expense 17,865 14,213
Income before
income taxes 2,984 6,260
Provision for
income taxes 822 2,335
Net income 2,162 3,925
Preferred stock
dividends and
accretion (64) -
Net income
available to
common
shareholders 2,098 3,925
Earnings per
common share -
basic 0.27 0.53
Earnings per
common share -
diluted 0.27 0.52
Dividends
declared per
common share (1) 0.08 0.19
Return on average
common equity 4.80% 10.11%
Return on average
assets 0.46% 0.88%
Net interest
margin (2) 4.72% 4.53%
Efficiency Ratio (2) 76.55% 66.79%
Capital - Period End
Book value per
share $ 7.57 $ 5.57
Credit Quality -
Period End
Nonperforming
assets/assets 1.34% 2.16%
Loan loss
reserve/loans (3) 1.30% 1.16%
Period End Balance Sheet
($ in thousands)
Total assets $ 508,203 $ 454,259
Gross Loans 428,177 387,809
Nonperforming
assets 6,824 9,808
Allowance for
credit losses (3) 5,569 4,507
Deposits 378,248 377,348
Common Equity 57,986 42,361
Non-Financial Data
Full-time
equivalent staff 117 125
Number of banking
offices,
domestic 12 12
and foreign
Common Shares
outstanding
Period end 7,661,627 7,607,780
Period average -
basic 7,642,775 7,364,681
Period average -
diluted 7,733,881 7,524,505
Market Ratios
Stock Price $ 6.00 $ 8.25
Price/Earnings 21.86 15.48
Price/Book 0.79 1.48
(1) Cash dividends of $382,943 and $191,542 paid in the 3rd and 4th
quarter of 2008, respectively.
(2) Ratio computed on a fully tax equivalent basis using a marginal
federal tax rate of 34%.
(3) 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