Oak Valley Bancorp Reports 1st Quarter Results

OAKDALE, CA--(Marketwired - Apr 17, 2013) - 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 March 31, 2013, consolidated net income was $1,300,000, while consolidated net income available to common shareholders was $1,232,000, or $0.16 per diluted common share. This compared to consolidated net income of $1,461,000 and net income available to common shareholders of $1,292,000, or $0.17 per diluted common share for the same period a year ago.

Total assets were $648.4 million at March 31, 2013, an increase of $54.9 million, or 9.3%, from March 31, 2012. Gross loans decreased by $2.6 million, to $390.0 million as of March 31, 2013, a decrease of 0.7% from March 31, 2012. The Bank's total deposits were $580.2 million as of March 31, 2013, an increase of $61.5 million, or 11.9% over March 31, 2012.

Net interest income for the three months ended March 31, 2013 was $5.8 million, decreasing by $415,000, or 6.6% from $6.3 million for the same period last year. The net interest margin for the three months ended March 31, 2013 was 4.05%, compared to 4.15% for the three months prior and 4.67% for the same period last year.

"Margin compression will continue to play a considerable role in banking sector profitability this year, however, we remain encouraged by signs of strengthening commercial loan demand," stated Ron Martin, CEO. "After experiencing early loan paydowns in January, commercial borrowing activity gained momentum and we replaced the majority of those loan balances by quarter-end," Martin concluded

Non-interest expense for the quarter ended March 31, 2013 totaled $4.6 million, essentially flat compared to the same period the previous year. While full time equivalent staffing rose to 134 from 126 for the same period a year ago, total non-interest expense remained stable as strong loan production led to an increase in deferred cost which helped offset salary expense.

The provision for loan losses during the three months ended March 31, 2013, was $100,000, compared to $300,000 during the same quarter of last year. The ratio of loan loss reserves to gross loans for the quarter was 1.99%, compared to 2.04% for the three months prior and 1.98% for the same period last year. As of March 31, 2013 non-performing assets were $6.4 million or 0.99% of total assets, compared to $6.7 million or 1.12% of total assets as of March 31, 2012.

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 share)
Selected Quarterly Operating Data:			1st Quarter 2013				4th Quarter 2012				3rd Quarter 2012				2nd Quarter 2012				1st Quarter 2012
	Net interest income		$	5,849			$	6,115			$	6,254			$	6,212			$	6,264
	Provision for loan losses			100				250				300				300				300
	Non-interest income			785				855				790				672				831
	Non-interest expense			4,639				4,513				4,527				4,612				4,597
	Income before income taxes			1,895				2,207				2,217				1,972				2,198
	Provision for income taxes			595				718				738				620				737
	Net income			1,300				1,489				1,479				1,352				1,461
	Preferred stock dividends and accretion			(68	)			(84	)			(84	)			(114	)			(169	)
	Net income available to common shareholders		$	1,232			$	1,405			$	1,395			$	1,238			$	1,292
	Earnings per common share - basic		$	0.16			$	0.18			$	0.18			$	0.16			$	0.17
	Earnings per common share - diluted		$	0.16			$	0.18			$	0.18			$	0.16			$	0.17
	Dividends declared per common share			-				-				-				-				-
	Return on average common equity			7.82	%			8.87	%			9.02	%			8.36	%			8.93	%
	Return on average assets			0.81	%			0.91	%			0.97	%			0.92	%			0.98	%
	Net interest margin (1)			4.05	%			4.15	%			4.57	%			4.73	%			4.67	%
	Efficiency ratio (1)			67.95	%			63.23	%			63.11	%			65.28	%			63.74	%
Capital - Period End
	Book value per share		$	8.10			$	7.99			$	7.85			$	7.63			$	7.37
Credit Quality - Period End
	Nonperforming assets/ total assets			0.99	%			1.05	%			1.05	%			1.20	%			1.12	%
	Loan loss reserve/ gross loans			1.99	%			2.04	%			2.05	%			2.05	%			1.98	%
Period End Balance Sheet
($ in thousands)
	Total assets		$	648,418			$	660,581			$	627,817			$	596,417			$	593,513
	Gross loans			389,992				390,986				388,714				390,515				392,584
	Nonperforming assets			6,439				6,923				6,611				7,185				6,656
	Allowance for loan losses			7,743				7,975				7,953				8,008				7,792
	Deposits			580,215				586,993				553,333				526,407				518,727
	Common equity			64,098				63,219				62,075				60,185				58,092
	Total capital (2)			64,098				69,969				68,825				66,935				71,592
Non-Financial Data
	Full-time equivalent staff			134				130				123				125				126
	Number of banking offices			14				14				14				14				14
Common Shares outstanding
	Period end			7,914,730				7,907,780				7,909,280				7,890,905				7,883,780
	Period average - basic			7,778,333				7,762,261				7,750,727				7,728,024				7,722,609
	Period average - diluted			7,830,439				7,793,523				7,778,146				7,750,952				7,743,941
Market Ratios
	Stock Price		$	8.14			$	7.45			$	7.49			$	6.96			$	7.39
	Price/Earnings			12.67				10.38				10.49				10.84				11.01
	Price/Book			1.01				0.93				0.95				0.91				1.00

(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 quarters ended June 30, September 30 and December 31, 2012, and $13.5 million for the quarter ended March 31, 2012. There was no preferred stock outstanding as of March 31, 2013.