Oak Valley Bancorp 8-K, filed Jul 19, 2024
Oak Valley Bancorp (OVLY)
About this 8-K
Oak Valley Bancorp filed this 8-K on July 19, 2024, reporting on events of July 18, 2024.
Items reported
- Item 2.02: Financial results
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Securities Exchange Act of 1934.
(Date of earliest event reported)
(Exact name of registrant as specified in its charter)
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(Registrant's telephone number, including area code)
(Former Name or Former Address, if changed since last report)
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Title of each class
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Name of each exchange on which registered
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The
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On July 18, 2024, Oak Valley Bancorp issued a press release, a copy of which is attached as Exhibit 99.1 and incorporated herein by reference. The press release announced the Company’s operating results for the quarter ended June 30, 2024.
The information in this Item 2.02 in this Form 8-K and the Exhibit 99.1 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.
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99.1
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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Dated: July 19, 2024
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OAK VALLEY BANCORP
By: /s/ Jeffrey A. Gall
Jeffrey A. Gall
Executive Vice President and Chief Financial Officer
(Principal Financial Officer and duly authorized signatory)
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Exhibit No.
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Description
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99.1
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Press Release of Oak Valley Bancorp dated July 18, 2024
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document)
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Exhibit 99.1
PRESS RELEASE
For Immediate Release
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Date: |
July 18, 2024 |
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Contact: |
Chris Courtney/Rick McCarty |
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Phone: |
(209) 848-2265 www.ovcb.com |
OAK VALLEY BANCORP REPORTS 2nd QUARTER RESULTS AND ANNOUNCES CASH DIVIDEND
OAKDALE, CA – 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 June 30, 2024, consolidated net income was $5,889,000, or $0.71 per diluted share (EPS), as compared to $5,727,000, or $0.69 EPS, for the prior quarter and $8,404,000, or $1.02 EPS, for the same period a year ago. Consolidated net income for the six months ended June 30, 2024 was $11,616,000, or $1.41 EPS, compared to $17,629,000 or $2.14 EPS for the same period of 2023.
The increase in second quarter net income compared to the prior quarter was due to growth in the deposit and loan portfolios, and an increase in non-interest income. The QTD and YTD decreases compared to the same periods of 2023 were related to an increase in deposit interest expense and general operating expenses.
Net interest income for the three months ended June 30, 2024 was $17,292,000, compared to $17,241,000 in the prior quarter, and $19,407,000 in the same period a year ago. The increase in net interest income over the prior quarter is attributed to loan growth and an increase of 6 basis points in the average earning asset yield. The decrease from the same period a year ago is due to an increase in the average cost of funds to 73 bps for the second quarter of 2024, compared to 16 bps for the comparable period of 2023. The higher interest expense was partially offset by loan growth of $119.5 million over the same period. Net interest margin for the three months ended June 30, 2024 was 4.11%, compared to 4.09% for the prior quarter and 4.45% for the same period last year.
“Our earnings performance reflects our consistent and prudent approach to managing our business. We continue to focus on relationship-based core deposit growth which enables us to maintain our lending activity and enhance profitability,” stated Rick McCarty, President and Chief Operating Officer.
Non-interest income was $1,760,000 for the quarter ended June 30, 2024, compared to $1,519,000 for the prior quarter and $1,655,000 for the same period last year. The increases compared to prior periods was mainly due to increased production from our investment advisory service and related fee income.
Non-interest expense totaled $11,616,000 for the quarter ended June 30, 2024, compared to $11,529,000 in the prior quarter and $10,062,000 in the same quarter a year ago. The second quarter increase compared to prior periods is due to general operating costs related to servicing the growing loan and deposit portfolios.
Total assets were $1.84 billion at June 30, 2024, an increase of $34.1 million over March 31, 2024 and a decrease of $21.2 million from June 30, 2023. Gross loans were $1.07 billion at June 30, 2024, an increase of $30.5 million over March 31, 2024 and $119.5 million over June 30, 2023. The Company’s total deposits were $1.64 billion as of June 30, 2024, an increase of $32.3 million over March 31, 2024 and a decrease of $37.6 million from June 30, 2023. The deposit increase during the second quarter was due in part to an increase in new checking accounts and their corresponding balances resulting from the new checking acquisition program launched by the bank in January 2024. The deposit decrease compared to the same period a year ago was due to the migration of rate-sensitive deposits, prior to the bank making deposit rate increases in July 2023. Our liquidity position remains strong, as evidenced by $180.3 million in cash and cash equivalents balances at June 30, 2024.
“We are pleased to report another strong financial performance and solid earnings for the quarter. We have achieved steady growth, driven by our ability to meet the needs of our customers and communities,” stated Chris Courtney, CEO. “We appreciate the dedication and professionalism of our team members who deliver excellent service to our clients every day.”
Non-performing assets (“NPA”) remained at zero as of June 30, 2024, as they were for all of 2024 and 2023. The allowance for credit losses (“ACL”) as a percentage of gross loans decreased slightly to 1.04% at June 30, 2024, compared to 1.05% at March 31, 2024 and increased from 0.99% at June 30, 2023. The decrease from the prior quarter is due to the growth in outstanding loans. Given industry concerns of credit risk specific to commercial real estate, management has performed a thorough analysis of this segment as part of the CECL credit risk model’s ACL computation, concluding that the credit loss reserves relative to gross loans remains at acceptable levels, and credit quality remains stable. As a result, the Company did not record a provision for credit losses during the second quarter.
The Board of Directors of Oak Valley Bancorp at their July 16, 2024, meeting declared the payment of a cash dividend of $0.225 per share of common stock to its shareholders of record at the close of business on July 29, 2024. The payment date will be August 9, 2024 and will amount to approximately $1,881,000. This is the second dividend payment made by the Company in 2024.
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.
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.
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Oak Valley Bancorp
Financial Highlights (unaudited)
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($ in thousands, except per share) |
2nd Quarter |
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
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Selected Quarterly Operating Data: |
2024 |
2024 |
2023 |
2023 |
2023 |
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Net interest income |
$ | 17,292 | $ | 17,241 | $ | 17,914 | $ | 18,938 | $ | 19,407 | ||||||||||
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Provision for (reversal of) credit losses |
- | - | 1,130 | 300 | - | |||||||||||||||
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Non-interest income |
1,760 | 1,519 | 1,755 | 1,566 | 1,655 | |||||||||||||||
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Non-interest expense |
11,616 | 11,529 | 10,760 | 10,578 | 10,062 | |||||||||||||||
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Net income before income taxes |
7,436 | 7,231 | 7,779 | 9,626 | 11,000 | |||||||||||||||
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Provision for income taxes |
1,547 | 1,504 | 1,914 | 2,272 | 2,596 | |||||||||||||||
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Net income |
$ | 5,889 | $ | 5,727 | $ | 5,865 | $ | 7,354 | $ | 8,404 | ||||||||||
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Earnings per common share - basic |
$ | 0.72 | $ | 0.70 | $ | 0.72 | $ | 0.90 | $ | 1.03 | ||||||||||
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Earnings per common share - diluted |
$ | 0.71 | $ | 0.69 | $ | 0.71 | $ | 0.89 | $ | 1.02 | ||||||||||
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Dividends paid per common share |
$ | - | $ | 0.225 | $ | - | $ | 0.160 | $ | - | ||||||||||
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Return on average common equity |
14.19 | % | 13.86 | % | 16.44 | % | 19.85 | % | 23.48 | % | ||||||||||
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Return on average assets |
1.30 | % | 1.26 | % | 1.27 | % | 1.57 | % | 1.79 | % | ||||||||||
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Net interest margin (1) |
4.11 | % | 4.09 | % | 4.15 | % | 4.34 | % | 4.45 | % | ||||||||||
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Efficiency ratio (2) |
59.12 | % | 59.61 | % | 53.08 | % | 49.89 | % | 46.31 | % | ||||||||||
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Capital - Period End |
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Book value per common share |
$ | 20.55 | $ | 19.97 | $ | 20.03 | $ | 16.29 | $ | 17.76 | ||||||||||
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Credit Quality - Period End |
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Nonperforming assets/ total assets |
0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | 0.00 | % | ||||||||||
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Credit loss reserve/ gross loans |
1.04 | % | 1.05 | % | 1.07 | % | 1.00 | % | 0.99 | % | ||||||||||
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Period End Balance Sheet |
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($ in thousands) |
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Total assets |
$ | 1,840,521 | $ | 1,805,739 | $ | 1,842,422 | $ | 1,835,402 | $ | 1,861,713 | ||||||||||
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Gross loans |
1,070,036 | 1,039,509 | 1,016,579 | 971,243 | 950,488 | |||||||||||||||
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Nonperforming assets |
- | - | - | - | - | |||||||||||||||
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Allowance for credit losses |
11,121 | 10,922 | 10,896 | 9,738 | 9,411 | |||||||||||||||
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Deposits |
1,644,748 | 1,612,400 | 1,650,534 | 1,666,548 | 1,682,378 | |||||||||||||||
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Common equity |
171,799 | 166,916 | 166,092 | 135,095 | 147,122 | |||||||||||||||
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Non-Financial Data |
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Full-time equivalent staff |
223 | 219 | 222 | 225 | 213 | |||||||||||||||
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Number of banking offices |
18 | 18 | 18 | 18 | 18 | |||||||||||||||
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Common Shares outstanding |
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Period end |
8,359,556 | 8,359,556 | 8,293,168 | 8,293,468 | 8,281,661 | |||||||||||||||
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Period average - basic |
8,219,699 | 8,209,617 | 8,200,177 | 8,197,083 | 8,195,270 | |||||||||||||||
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Period average - diluted |
8,248,295 | 8,244,648 | 8,236,897 | 8,232,338 | 8,227,218 | |||||||||||||||
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Market Ratios |
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Stock Price |
$ | 24.97 | $ | 24.78 | $ | 29.95 | $ | 25.08 | $ | 25.19 | ||||||||||
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Price/Earnings |
8.69 | 8.86 | 10.55 | 7.05 | 6.12 | |||||||||||||||
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Price/Book |
1.22 | 1.24 | 1.50 | 1.54 | 1.42 | |||||||||||||||
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(1) |
Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 21%. |
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(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. |
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SIX MONTHS ENDED |
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2024 |
2023 |
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| Profitability | ||||||||
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($ in thousands, except per share) |
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Net interest income |
$ | 34,533 | $ | 38,950 | ||||
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Provision for (reversal of) credit losses |
- | (460 | ) | |||||
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Non-interest income |
3,279 | 3,310 | ||||||
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Non-interest expense |
23,145 | 19,819 | ||||||
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Net income before income taxes |
14,667 | 22,901 | ||||||
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Provision for income taxes |
3,051 | 5,272 | ||||||
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Net income |
$ | 11,616 | $ | 17,629 | ||||
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Earnings per share - basic |
$ | 1.41 | $ | 2.15 | ||||
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Earnings per share - diluted |
$ | 1.41 | $ | 2.14 | ||||
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Dividends paid per share |
$ | 0.225 | $ | 0.160 | ||||
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Return on average equity |
14.03 | % | 25.80 | % | ||||
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Return on average assets |
1.28 | % | 1.86 | % | ||||
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Net interest margin (1) |
4.10 | % | 4.42 | % | ||||
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Efficiency ratio (2) |
59.36 | % | 46.31 | % | ||||
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Capital - Period End |
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Book value per share |
$ | 20.55 | $ | 17.76 | ||||
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Credit Quality - Period End |
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Nonperforming assets/ total assets |
0.00 | % | 0.00 | % | ||||
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Credit loss reserve/ gross loans |
1.04 | % | 0.99 | % | ||||
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Period End Balance Sheet |
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($ in thousands) |
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Total assets |
$ | 1,840,521 | $ | 1,861,713 | ||||
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Gross loans |
1,070,036 | 950,488 | ||||||
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Nonperforming assets |
- | - | ||||||
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Allowance for credit losses |
11,121 | 9,411 | ||||||
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Deposits |
1,644,748 | 1,682,378 | ||||||
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Stockholders' equity |
171,799 | 147,122 | ||||||
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Non-Financial Data |
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Full-time equivalent staff |
223 | 213 | ||||||
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Number of banking offices |
18 | 18 | ||||||
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Common Shares outstanding |
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Period end |
8,359,556 | 8,281,661 | ||||||
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Period average - basic |
8,214,658 | 8,189,038 | ||||||
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Period average - diluted |
8,246,472 | 8,227,105 | ||||||
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Market Ratios |
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Stock Price |
$ | 24.97 | $ | 25.19 | ||||
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Price/Earnings |
8.81 | 5.80 | ||||||
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Price/Book |
1.22 | 1.42 | ||||||
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(1) |
Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 21%. |
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(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. |