Oak Valley Bancorp Reports 4th Quarter Results


OAKDALE, CA--(Marketwire - Jan 23, 2012) - 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, 2011. Net income for 2011 totaled $5.9 million compared to $4.6 million for 2010. After adjustment for preferred stock dividends and accretion, net income available to common shareholders was $4.7 million, or $0.61 per diluted share, compared to net income of $3.8 million, or $0.49 per diluted common share, in 2010. This represents a 24% increase in net income available to common shareholders and marks record earnings for Oak Valley Bancorp.

For the three months ended December 31, 2011, Oak Valley Bancorp reported net income of $1.5 million. After adjustment for preferred stock dividends and accretion, net income available to common shareholders was $1.3 million, or $0.17 per diluted share, representing a 3.0% increase in net income available to common shareholders when compared to the three months ended December 31, 2010.

Total assets grew to $612.4 million as of December 31, 2011, which was an increase of $60.0 million, or 10.9% over the prior year. Deposits increased to $536.2 million, which was an increase of $59.5 million, or 12.5% over the prior year. Gross loans at year end totaled $396.2 million, reflecting a decrease of $8.0 million, or 2.0%, from December 31, 2010.

"We are pleased to report the results of another successful year. In a year which included our 20 year anniversary and the opening of two new branches, operational growth remained strong. Asset growth driven by core deposits continues to positively impact earnings," stated Ron Martin, CEO.

Loan loss reserves as a percentage of gross loans increased to 2.17% at December 31, 2011 compared to 2.04% at December 31, 2010. The increased reserve ratio was realized even with a lower annual provision of $1.5 million in 2011, down from $4.0 million in 2010.

The Company continues to experience solid reductions in non-performing assets. Non-performing assets totaled $7.5 million, or 1.22% of total assets at December 31, 2011, compared to $12.3 million, or 2.22% of total assets, at December 31, 2010.

"Credit quality is an absolute cornerstone for any financial institution. We have, through deliberate adherence to sound principles, been successful in managing our credit portfolio and mitigating non-performing assets this year and throughout our history," commented Chris Courtney, President. "It is reassuring to have the ideals on which we base our decisions validated by our emergence from these trying times, not only strong, but poised to continue serving the needs of the community," Courtney concluded.

Net interest income of $25.2 million for the year ended December 31, 2011, increased slightly by $173,000, or 0.7%, from the prior year. The Company's net interest margin was 4.83% for the year ended December 31, 2011, compared to 5.20% for the year ended December 31, 2010. This decrease is largely the result of pressure on the Bank's yield on earnings assets which currently outpaces the Bank's ability to make subsequent reductions to its cost of funds given the historically low interest rate environment.

Non-interest expense of $17.4 million for the year ended December 31, 2011, increased $618,000, or 3.7%, from the prior year. This was partially the result of expansion and staffing related expenses associated with opening the new Modesto and Manteca offices.

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 Community Bank
Statement of Condition (unaudited)
($ in thousands, except per share) 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter
Selected Quarterly Operating Data: 2011 2011 2011 2011 2010
Net interest income $ 6,335 $ 6,339 $ 6,300 $ 6,206 $ 6,343
Provision for loan losses 300 300 300 600 1,005
Non-interest income 636 764 680 671 715
Non-interest expense 4,259 4,208 4,401 4,526 3,826
Income before income taxes 2,412 2,595 2,279 1,751 2,227
Provision for income taxes 915 846 829 586 727
Net income 1,497 1,749 1,450 1,165 1,500
Preferred stock dividends and accretion (168 ) (572 ) (211 ) (210 ) (210 )
Net income available to common shareholders 1,329 1,177 1,239 955 1,290
Earnings per common share - basic 0.17 0.15 0.16 0.12 0.17
Earnings per common share - diluted 0.17 0.15 0.16 0.12 0.17
Dividends declared per common share - - - - -
Return on average common equity 9.34 % 8.44 % 9.33 % 7.48 % 9.99 %
Return on average assets 1.00 % 1.21 % 1.03 % 0.85 % 1.09 %
Net interest margin (1) 4.70 % 4.85 % 4.86 % 4.92 % 5.01 %
Efficiency Ratio (1) 60.06 % 58.27 % 61.79 % 65.09 % 53.03 %
Capital - Period End
Book value per share $ 7.37 $ 7.26 $ 7.02 $ 6.78 $ 6.64
Credit Quality - Period End
Nonperforming assets/ total assets 1.22 % 1.50 % 1.62 % 2.02 % 2.22 %
Loan loss reserve/ gross loans 2.17 % 2.26 % 2.20 % 2.22 % 2.04 %
Period End Balance Sheet
($ in thousands)
Total assets $ 612,377 $ 583,955 $ 572,262 $ 562,769 $ 552,396
Gross Loans 396,202 391,379 390,521 395,243 404,194
Nonperforming assets 7,477 8,748 9,245 11,386 12,253
Allowance for credit losses 8,609 8,857 8,591 8,765 8,255
Deposits 536,204 505,505 496,212 485,641 476,739
Common Equity 56,902 56,064 54,134 52,279 51,158
Total Capital (2) 70,402 69,564 67,634 65,779 64,658
Non-Financial Data
Full-time equivalent staff 128 127 130 125 120
Number of banking offices 14 14 13 12 12
Common Shares outstanding
Period end 7,718,469 7,718,469 7,713,794 7,713,794 7,702,127
Period average - basic 7,705,164 7,705,164 7,713,794 7,711,401 7,702,127
Period average - diluted 7,737,248 7,731,463 7,745,193 7,742,230 7,719,157
Market Ratios
Stock Price $ 6.75 $ 4.05 $ 5.85 $ 5.99 $ 5.90
Price/Earnings 9.87 6.68 9.08 11.93 8.88
Price/Book 0.92 0.56 0.83 0.88 0.89
($ in thousands, except per share) Year Ended December 31,
2011 2010
Net interest income $ 25,180 $ 25,006
Provision for loan losses 1,500 4,020
Non-interest income 2,751 2,770
Non-interest expense 17,394 16,775
Income before income taxes 9,037 6,981
Provision for income taxes 3,176 2,353
Net income 5,861 4,628
Preferred stock dividends and accretion (1,161 ) (842 )
Net income available to common shareholders 4,700 3,786
Earnings per common share - basic 0.61 0.49
Earnings per common share - diluted 0.61 0.49
Dividends declared per common share - -
Return on average common equity 8.67 % 7.65 %
Return on average assets 1.02 % 0.88 %
Net interest margin (1) 4.83 % 5.20 %
Efficiency Ratio (1) 61.28 % 59.62 %
Capital - Period End
Book value per share $ 7.37 $ 6.64
Credit Quality - Period End
Nonperforming assets/ total assets 1.22 % 2.22 %
Loan loss reserve/ gross loans 2.17 % 2.04 %
Period End Balance Sheet
($ in thousands)
Total assets $ 612,377 $ 552,396
Gross Loans 396,202 404,194
Nonperforming assets 7,477 12,253
Allowance for credit losses 8,609 8,255
Deposits 536,204 476,739
Common Equity 56,902 51,158
Total Capital (2) 70,402 64,658
Non-Financial Data
Full-time equivalent staff 128 120
Number of banking offices 14 12
Common Shares outstanding
Period end 7,718,469 7,702,127
Period average - basic 7,708,853 7,689,760
Period average - diluted 7,738,999 7,720,624
Market Ratios
Stock Price $ 6.75 $ 5.90
Price/Earnings 11.07 11.98
Price/Book 0.92 0.89
(1) Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 34%.
(2) Includes $13.5 million in preferred stock issued to the U.S. Treasury under the SBLF Program.
Prior to 9/30/2011, it was issued under the TARP Capital Purchase Program.

Contact Information:

Contact:
Ron Martin/Chris Courtney/Rick McCarty
Phone:
(209) 848-2265
www.ovcb.com