Oak Ridge Financial Services, Inc. Announces First Quarter 2022 Results, Increase in Quarterly Cash Dividend to $0.08 Per Share

Rhea-AI Summary

Oak Ridge Financial Services, Inc. (OTC Pink: BKOR) reported its unaudited financial results for Q1 2022, with earnings per share at $0.62, down 15 cents from last year. The quarterly cash dividend is increased to $0.08, payable on June 9, 2022. Key highlights include loans of $434.5 million (up 1.1%) and deposits of $541.6 million (up 6.4%). Nonperforming assets dropped 65.2% to $1.0 million. However, net interest income decreased to $5.4 million, with a 4.07% margin, down 19 basis points. The bank's CBLR remained at 10.2%.

Positive

• Increased quarterly cash dividend to $0.08 per share, highlighting commitment to shareholder value.
• Loan growth of 1.1% from December 2021 to $434.5 million.
• Deposits rose 6.4% to $541.6 million, indicating strong customer confidence.
• Nonperforming assets decreased by 65.2% to $1.0 million, enhancing asset quality.
• Noninterest income increased by 16.1% to $779,000, driven by gains in various income sources.

Negative

• Earnings per share declined by 15 cents from the previous year, reflecting income reduction.
• Net interest income fell to $5.4 million, down from $5.6 million in Q1 2021.
• Annualized net interest margin decreased by 19 basis points to 4.07%.

OAK RIDGE, N.C., May 04, 2022 (GLOBE NEWSWIRE) -- Oak Ridge Financial Services, Inc. (“Oak Ridge”; or the “Company”) (OTCPink: BKOR), the parent company of Bank of Oak Ridge (the “Bank”), announced unaudited financial results for the first three months of 2022, and an increase in its quarterly cash dividend to $0.08.

First Quarter 2022 Highlights

• Earnings per share of $0.62 for the three months ended March 31, 2022, down 15 cents from the comparable 2021 period.
• Annualized return on average common stockholders’ equity of 13.07% for the three months ended March 31, 2022, compared to 18.45% for the same period in 2021.
• Tangible book value per common share of $18.63 as of March 31, 2022, up 8.1%, or $1.39, from $17.24 as of March 31, 2021.
• Period end loans of $434.5 million, up 1.1% (4.5% annualized) from December 31, 2021.
• Period end allowance for loan losses of $3.9 million, up 3.6%, from $3.8 million on December 31, 2021.
• Nonperforming assets of $1.0 million, down 65.2% from $3.0 million on December 31, 2021.
• Period end deposits of $541.6 million, up 6.4% (26.0% annualized) from December 31, 2021.
• Through March 31, 2022, the Small Business Administration (“SBA”) forgave, and the Bank recognized remaining unamortized fees and associated costs of approximately 92% on the $80.0 million of first and second rounds of SBA Paycheck Protection Program (“PPP”) loans.

Tom Wayne, Chief Executive Officer and Chief Financial Officer, reported, “I am extremely pleased with our continued strong financial performance in the first quarter of 2022 given the reduction in the bank’s income from 2021 to 2022 as our participation in the PPP program ends. Our team has shown great resilience and performance as we navigate the ever changing economic and social environment. In the first quarter of 2022, we experienced solid loan growth despite the reduction in PPP loans, and deposit growth was strong as well. Additionally, our nonperforming assets to total assets declined from 0.51% on December 31, 2021, to 0.16% on March 31, 2022.”

The Company also announced a $0.01 increase in its quarterly cash dividend to $0.08 per share of common stock. The dividend is payable on June 9, 2022, to stockholders of record as of the close of business on May 24, 2022. “We are pleased to increase our quarterly cash dividend to our stockholders,” said Mr. Wayne. “Paying stockholders a portion of our earnings reflects our continuing commitment to enhance stockholder value.”

The Bank has adopted the community bank leverage ratio (“CBLR”) requirement, and as of March 31, 2022, the Bank’s CBLR was 10.2%, unchanged from December 31, 2021. Stockholders’ equity on March 31, 2022, was $50.3 million, down 1.9% from $51.3 million on December 31, 2021, due to a reduction in accumulated other comprehensive income.

With respect to the consolidated statement of operations for the three months ended March 31, 2022, net interest income was $5.4 million, compared to $5.6 million during the same period in 2021. For the three months ended March 31, 2022, the annualized net interest margin was 4.07% compared to 4.26% for the same period in 2021, a decrease of 19 basis points.

The Company recorded a provision for loan losses of $88,000 for the three months ended March 31, 2022, compared to a negative provision of $112,000 for the same period in 2021. The allowance for loan losses as a percentage of total loans was 0.89% on March 31, 2022, compared to 0.87% on December 31, 2021. The allowance for loan losses as a percentage of total loans not including PPP loans was 0.91% on March 31, 2022, and December 31, 2021. The primary risks inherent in the Bank’s loan portfolio, including the adequacy of the allowance or reserve for loan losses, are based on management’s assumptions regarding, among other factors, general and local economic conditions, which are difficult to predict and are beyond the Bank’s control. In estimating these risks, and the related loss reserve levels, management also considers the financial conditions of specific borrowers and credit concentrations with specific borrowers, groups of borrowers, and industries. Nonperforming assets represented 0.16% of total assets on March 31, 2022, compared to 0.51% on December 31, 2021.

Noninterest income totaled $779,000 for the three months ended March 31, 2022, compared with $671,000 for the same period in 2021, an increase of $108,000 or 16.1%. The most significant contributors to the overall increase were increases in Income from Small Business Investment Company (“SBIC”), gain on sale of SBA non-PPP loans, and debit and credit card interchange income of $69,000, $30,000, and $22,000, respectively.

Noninterest expense totaled $4.0 million in the three months ended March 31, 2022, an increase of $293,000, or 7.8%, from the same period in 2021. The most significant contributors to the overall increase were increases in salaries (because of annual salary increases as of November 1, 2021, and lower 2021 payroll tax expense), professional and advertising, and other expense of $163,000, $133,000, and $73,000, respectively.

About Oak Ridge Financial Services, Inc. and Bank of Oak Ridge
At Bank of Oak Ridge, we pride ourselves on knowing your name when you walk through our door. Whether in-person or through our digital offerings, managing your financial well-being is easy, safe, and convenient. We are the longest-running employee-owned community bank in the Triad and have served community members, local businesses, and non-profit organizations since 2000. Learn more about what makes Bank of Oak Ridge the Triad’s community bank by visiting one of our convenient locations in Greensboro, High Point, Summerfield & Oak Ridge.

Oak Ridge Financial Services, Inc. (OTC Pink: BKOR) is the holding company for Bank of Oak Ridge. Bank of Oak Ridge is a member of the FDIC and an Equal Housing Lender.

Awards & Recognitions | Best Bank in the Triad | Triad’s Top Workplace Finalist | 2016 Better Business Bureau Torch Award for Business Ethics | Triad’s Healthiest Employer Winner

Banking for Business & Personal | Mobile & Online Banking | Worldwide ATM | Debit, Credit + Rewards | Checking, Savings & Money Market | Loans + SBA | Mortgage | Insurance | Wealth Management

Let’s Talk | 336.644.9944 | www.BankofOakRidge.com | Extended Hours at all Triad Locations

Forward-looking Information This earnings release contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Company. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of management of the Company and on the information available to management at the time that these disclosures were prepared. These statements can be identified by the use of words like “expect,” “anticipate,” “estimate” and “believe,” variations of these words and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, (1) competition in the Company’s markets, (2) changes in the interest rate environment, (3) general national, regional or local economic conditions may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and the possible impairment of collectability of loans, (4) legislative or regulatory changes, including changes in accounting standards, (5) significant changes in the federal and state legal and regulatory environment and tax laws, and (6) the impact of changes in monetary and fiscal policies, laws, rules and regulations. The Company undertakes no obligation to update any forward-looking statements.

Oak Ridge Financial Services, Inc.
Consolidated Balance Sheets
As of March 31, 2022 (Unaudited) and December 31, 2021 (Audited)
(Dollars in thousands)

		2022		2021
Assets
Cash and due from banks	$	10,831	$	8,998
Interest-bearing deposits with banks		96,711		79,086
Total cash and cash equivalents		107,542		88,084
Securities available-for-sale		54,370		46,948
Securities held-to-maturity		370		387
Restricted stock, at cost		1,347		1,324
Loans, net of allowance for loan losses of $3,891 and
$3,756 at March 31, 2022 and December 31, 2021, respectively		430,640		425,900
Property and equipment, net		9,655		9,907
Accrued interest receivable		1,819		1,842
Bank owned life insurance		6,034		6,014
Right-of-use assets – operating leases		1,493		1,594
Other assets		5,413		4,921
Total assets	$	618,683	$	586,921
Liabilities and Stockholders’ Equity
Liabilities
Deposits
Noninterest-bearing	$	143,338	$	116,525
Interest-bearing		398,294		392,754
Total deposits		541,632		509,279
Long-term borrowings		617		683
Junior subordinated notes – trust preferred securities		8,248		8,248
Subordinated debentures		9,873		9,863
Lease liabilities – operating leases		1,493		1,594
Accrued interest payable		273		110
Other liabilities		6,204		5,816
Total liabilities		568,340		535,593
Stockholders’ equity
Common stock, no par value; 50,000,000 shares authorized;
2,702,370 and 2,672,620 issued and outstanding
at March 31, 2022 and December 31, 2021, respectively		25,700		25,532
Retained earnings		24,291		22,815
Accumulated other comprehensive income		352		2,981
Total stockholders’ equity		50,343		51,328
Total liabilities and stockholders’ equity	$	618,683	$	586,921

Oak Ridge Financial Services, Inc.
Consolidated Statements of Income (Unaudited)
For the three months ended March 31, 2022 and 2021
(Dollars in thousands)

		2022		2021
Interest and dividend income
Loans and fees on loans	$	5,489	$	5,874
Interest on deposits in banks		27		24
Restricted stock dividends		18		20
Interest on investment securities		356		336
Total interest and dividend income		5,890		6,254
Interest expense
Deposits		257		375
Short-term and long-term debt		211		321
Total interest expense		468		696
Net interest income		5,422		5,558
Provision for (recovery of) loan losses		88		(112	)
Net interest income after provision for loan losses		5,334		5,670
Noninterest income
Service charges on deposit accounts		136		135
Brokerage commissions on mortgage loans		73		77
Insurance commissions		114		121
Gain on sale of Small Business Administration loans		30		-
Debit and credit card interchange income		277		254
Income from Small Business Investment Company		69		-
Income earned on bank owned life insurance		20		21
Other service charges and fees		60		63
Total noninterest income		779		671
Noninterest expense
Salaries		2,016		1,853
Employee benefits		247		294
Occupancy		295		286
Equipment		252		277
Data and item processing		446		446
Professional and advertising		290		157
Stationary and supplies		27		39
Impairment loss on securities		-		10
Telecommunications		108		95
FDIC assessment		54		58
Other expense		302		229
Total noninterest expense		4,037		3,744
Income before income taxes		2,076		2,597
Income tax expense		414		542
Net income and income available to common stockholders	$	1,662	$	2,055
Basic income per common share	$	0.62	$	0.77
Diluted income per common share	$	0.62	$	0.77
Basic weighted average shares outstanding		2,682,982		2,675,500
Diluted weighted average shares outstanding		2,682,982		2,675,500

 

Selected Financial Data	March 31, 2022			December 31, 2021				September 30, 2021				June 30, 2021			March 31, 2021				December 31, 2020
Return on average common stockholders' equity1		13.07	%			15.70	%		16.40	%			14.71	%			18.45	%			9.17	%
Tangible book value per share	$	18.63			$	19.20		$	18.53		$		17.93			$	17.24			$	16.85
Return on average assets1		1.14	%			1.36	%		1.41	%			1.20	%			1.49	%			0.73	%
Net interest margin1		4.07	%			3.65	%		3.94	%			3.79	%			4.26	%			3.57	%
Efficiency ratio		65.10	%			69.73	%		63.08	%			62.80	%			59.94	%			67.64	%
Nonperforming assets to total assets		0.16	%			0.51	%		0.50	%			0.55	%			0.62	%			0.64	%

¹Annualized

Contact: Tom Wayne, CEO and CFO
Phone: 336.644.9944

FAQ

What is the dividend amount for BKOR in 2022?

BKOR has announced a quarterly cash dividend of $0.08 per share.

When is the dividend payment date for BKOR?

The dividend is payable on June 9, 2022.

What were BKOR's earnings per share for Q1 2022?

Earnings per share for BKOR in Q1 2022 were $0.62.

How did BKOR's nonperforming assets change in Q1 2022?

Nonperforming assets decreased by 65.2% to $1.0 million in Q1 2022.

What are the total loans for BKOR as of March 31, 2022?

Total loans as of March 31, 2022, were $434.5 million.