Oak Valley Bancorp Reports 4th Quarter Results and Announces Cash Dividend

Rhea-AI Summary

Oak Valley Bancorp (NASDAQ: OVLY) reported robust financial results for Q4 and the full year ending December 31, 2022. Net income surged to $9.5 million ($1.15 EPS) in Q4, a significant increase from $3.5 million ($0.42 EPS) year-over-year. For the year, net income reached $22.9 million ($2.79 EPS), up 40.2% from 2021. Key growth factors included a reversal of loan loss provisions of $1.55 million and increased net interest income of $19.1 million for Q4. Total assets rose to $1.97 billion, with gross loans at $915.8 million. The company declared a $0.16 cash dividend, marking its first payout in 2023.

Positive

• Net income for Q4 2022 was $9.5 million, up from $3.5 million year-over-year.
• Full-year net income increased 40.2% to $22.9 million.
• Net interest income rose to $19.1 million for Q4 2022, a significant increase from previous quarters.
• Loan loss provision reversal of $1.55 million contributed to strong earnings.
• Total assets increased to $1.97 billion as of December 31, 2022.
• Gross loans grew to $915.8 million, with strong demand contributing to growth.

Negative

• Total deposits decreased by $16.6 million from the previous quarter.
• Outstanding PPP loans significantly reduced, impacting interest income.

OAKDALE, Calif., Jan. 20, 2023 (GLOBE NEWSWIRE) -- Oak Valley Bancorp (NASDAQ: OVLY) (the “Company”), the bank holding company for Oak Valley Community Bank and their Eastern Sierra Community Bank division, recently reported unaudited consolidated financial results. For the three months ended December 31, 2022, consolidated net income was $9,475,000 or $1.15 per diluted share (EPS), as compared to $6,800,000, or $0.83 EPS, for the prior quarter and $3,466,000, or $0.42 EPS for the same period a year ago. Consolidated net income for the year ended December 31, 2022, totaled $22,902,000, or $2.79 EPS, representing an increase of 40.2% compared to $16,337,000 or $2.00 EPS for 2021. The increase in QTD and YTD earnings is mainly due to rising net interest income and a loan loss provision reversal of $1,550,000 recorded during the fourth quarter.

“We are excited to report a truly outstanding financial performance for the quarter and the year. Our team’s dedication to serving our clients’ needs, expanding banking relationships, and delivering a premier banking experience has proven to resonate with clients – time and time again,” stated Chris Courtney, Chief Executive Officer.

Net interest income was $19,113,000 and $60,076,000 for the fourth quarter and year ended December 31, 2022, respectively, compared to $16,772,000 during the prior quarter, $11,309,000 for the fourth quarter of 2021, and $48,835,000 for the year ended December 31, 2021. The increases over prior periods are mainly attributable to increased yields on all earning assets resulting from recent FOMC rate hikes. In addition, gross core loans, excluding PPP loans, grew by $84.4 million and the book value of the investment security portfolio grew by $264.1 million during the year. These increases were offset in part by the decrease in PPP loan interest and fees, as outstanding balances have been paid down to $1.8 million as of December 31, 2022, a year-over-year reduction of $28.7 million due to SBA forgiveness payments.

Net interest margin was 4.09% and 3.32% for the fourth quarter and year ended December 31, 2022, respectively, as compared to 2.55% and 3.04% for the same periods of 2021. The interest margin expansion compared to the prior periods was the result of deploying cash balances into higher yielding investments and loans, deposit interest rates remaining relatively flat, and the aforementioned positive impact of FOMC rate hikes on earning asset yield.

Non-interest income for the fourth quarter and year ended December 31, 2022, totaled $1,421,000 and $5,571,000, respectively, compared to $1,611,000 during the prior quarter, $1,542,000 for the fourth quarter of 2021, and $5,426,000 for the year ended December 31, 2021. The year-over-year increase was primarily due to a gain of $274,000 from market value changes on a limited partnership equity investment recorded in the third quarter, which consequently resulted in a decrease in the fourth quarter.

Non-interest expense for the fourth quarter and year ended December 31, 2022, totaled $9,611,000 and $37,308,000, respectively, compared to $9,370,000 during the prior quarter, $8,877,000 for the fourth quarter of 2021 and $33,219,000 for the year ended December 31, 2021. The fourth quarter and year-to-date increases compared to prior periods correspond to staffing expense, general operating costs related to servicing the growing loan and deposit portfolios, and a decrease in deferred costs associated with funded loans which is recorded against salary expense.

Total assets were $1.97 billion at December 31, 2022, an increase of $6.4 million over September 30, 2022, and $4.4 million over December 31, 2021. Gross loans were $915.8 million as of December 31, 2022, an increase of $3.5 million from September 30, 2022, and $55.7 million from December 31, 2021. Gross loans were impacted by PPP loan balance decreases of $3.2 million and $28.7 million, during the fourth quarter and trailing twelve months, respectively, due to SBA forgiveness payments. The Company’s total deposits were $1.81 billion as of December 31, 2022, a decrease of $16.6 million from September 30, 2022, and an increase of $7.3 million over December 31, 2021.

Non-performing assets remained at zero as of December 31, 2022, as they were as of September 30, 2022 and December 31, 2021. The allowance for loan losses as a percentage of gross loans decreased to 1.03% at December 31, 2022, compared to 1.21% at September 30, 2022, and 1.25% at December 31, 2021. The Company recorded a $1,550,000 reversal of loan loss provisions during the fourth quarter, mainly related to a COVID-19 risk-based discretionary reserve first recorded during 2020, that was no longer required, as economic conditions have improved. Loan loss reserves relative to gross loans remain at acceptable levels consistent with our internal loan risk model and credit quality remains stable.

The Board of Directors of Oak Valley Bancorp at their January 17, 2023, meeting declared the payment of a cash dividend of $0.16 per share of common stock to its shareholders of record at the close of business on January 30, 2023. The payment date will be February 10, 2023 and will amount to approximately $1,321,000. This is the first dividend payment made by the Company in 2023.

Oak Valley Bancorp operates Oak Valley Community Bank & their Eastern Sierra Community Bank division, through which it offers a variety of loan and deposit products to individuals and small businesses. They currently operate through 18 conveniently located branches: Oakdale, Turlock, Stockton, Patterson, Ripon, Escalon, Manteca, Tracy, Sacramento, Roseville, two branches in Sonora, three branches in Modesto, and three branches in their Eastern Sierra division, which includes Bridgeport, Mammoth Lakes, and Bishop. The Company’s Roseville location opened in early 2022 as a Loan Production Office and as a full-service branch in December 2022.

For more information, 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)		4th Quarter			3rd Quarter			2nd Quarter			1st Quarter			4th Quarter
Selected Quarterly Operating Data:			2022			2022			2022			2022			2021
	Net interest income	$	19,113		$	16,772		$	13,233		$	10,958		$	11,309
	(Reversal of) provision for loan losses		(1,550	)		200			-			-			(635	)
	Non-interest income		1,421			1,611			1,371			1,168			1,542
	Non-interest expense		9,611			9,370			9,205			9,122			8,877
	Net income before income taxes		12,473			8,813			5,399			3,004			4,609
	Provision for income taxes		2,998			2,013			1,141			635			1,143
	Net income	$	9,475		$	6,800		$	4,258		$	2,369		$	3,466
	Earnings per common share - basic	$	1.16		$	0.83		$	0.52		$	0.29		$	0.43
	Earnings per common share - diluted	$	1.15		$	0.83		$	0.52		$	0.29		$	0.42
	Dividends paid per common share	$	-		$	0.150		$	-		$	0.150		$	-
	Return on average common equity		33.37	%		21.96	%		13.40	%		6.84	%		9.75	%
	Return on average assets		1.90	%		1.35	%		0.88	%		0.50	%		0.72	%
	Net interest margin (1)		4.09	%		3.61	%		2.98	%		2.51	%		2.55	%
	Efficiency ratio (2)		45.49	%		48.14	%		59.68	%		71.70	%		67.45	%
Capital - Period End
	Book value per common share	$	15.33		$	12.86		$	14.38		$	15.95		$	17.31
Credit Quality - Period End
	Nonperforming assets/ total assets		0.00	%		0.00	%		0.00	%		0.00	%		0.00	%
	Loan loss reserve/ gross loans		1.03	%		1.21	%		1.19	%		1.25	%		1.25	%
Period End Balance Sheet
($ in thousands)
	Total assets	$	1,968,346		$	1,962,470		$	1,991,235		$	1,946,019		$	1,964,478
	Gross loans		915,758			912,235			907,627			858,763			860,037
	Nonperforming assets		-			-			-			-			-
	Allowance for loan losses		9,468			10,997			10,785			10,762			10,738
	Deposits		1,814,297			1,830,882			1,852,502			1,799,305			1,806,966
	Common equity		126,627			106,188			118,698			131,649			142,612
Non-Financial Data
	Full-time equivalent staff		198			209			209			206			205
	Number of banking offices		18			17			17			17			17
Common Shares outstanding
	Period end		8,257,894			8,258,794			8,254,574			8,255,601			8,239,099
	Period average - basic		8,175,871			8,172,836			8,170,291			8,157,987			8,151,250
	Period average - diluted		8,213,891			8,206,342			8,201,367			8,197,275			8,188,003
Market Ratios
	Stock Price	$	22.65		$	17.87		$	17.20		$	18.45		$	17.40
	Price/Earnings		4.93			5.41			8.23			15.67			10.31
	Price/Book		1.48			1.39			1.20			1.16			1.01
(1)	Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 21%.
(2)	Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 21%.
	A marginal federal/state combined tax rate of 29.56%, was used for applicable revenue
		YEAR ENDED DECEMBER 31,
Profitability			2022			2021
($ in thousands, except per share)
	Net interest income	$	60,076		$	48,835
	Provision for loan losses		(1,350	)		(635	)
	Non-interest income		5,571			5,426
	Non-interest expense		37,308			33,219
	Net income before income taxes		29,689			21,677
	Provision for income taxes		6,787			5,340
	Net income	$	22,902		$	16,337
	Earnings per share - basic	$	2.80		$	2.01
	Earnings per share - diluted	$	2.79		$	2.00
	Dividends paid per share	$	0.300		$	0.290
	Return on average equity		18.21	%		11.96	%
	Return on average assets		1.17	%		0.93	%
	Net interest margin (1)		3.32	%		3.04	%
	Efficiency ratio (2)		54.29	%		59.43	%
Capital - Period End
	Book value per share	$	15.33		$	17.31
Credit Quality - Period End
	Nonperforming assets/ total assets		0.00	%		0.00	%
	Loan loss reserve/ gross loans		1.03	%		1.25	%
Period End Balance Sheet
($ in thousands)
	Total assets	$	1,968,346		$	1,964,478
	Gross loans		915,758			860,037
	Nonperforming assets		-			-
	Allowance for loan losses		9,468			10,738
	Deposits		1,814,297			1,806,966
	Stockholders' equity		126,627			142,612
Non-Financial Data
	Full-time equivalent staff		198			205
	Number of banking offices		18			17
Common Shares outstanding
	Period end		8,257,894			8,239,099
	Period average - basic		8,169,305			8,145,028
	Period average - diluted		8,204,769			8,178,740
Market Ratios
	Stock Price	$	22.65		$	17.40
	Price/Earnings		8.08			8.68
	Price/Book		1.48			1.01
(1)	Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 21%.
(2)	Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 21%.
	A marginal federal/state combined tax rate of 29.56%, was used for applicable revenue.

 

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

 

 

FAQ

What is Oak Valley Bancorp's Q4 2022 earnings report?

Oak Valley Bancorp reported Q4 2022 net income of $9.5 million, or $1.15 per diluted share.

How did Oak Valley Bancorp perform in 2022?

For the full year 2022, Oak Valley Bancorp's net income was $22.9 million, representing a 40.2% increase from 2021.

What was the reason behind the increase in net income for Oak Valley Bancorp?

The increase was primarily driven by higher net interest income and a reversal of loan loss provisions.

Did Oak Valley Bancorp declare dividends in 2023?

Yes, the board declared a cash dividend of $0.16 per share, payable on February 10, 2023.

What are the total assets of Oak Valley Bancorp as of December 31, 2022?

Total assets were reported at $1.97 billion.