UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934.
Date of Report: July 19, 2017 | ||
Oak Valley Bancorp | ||
CA |
001-34142 Number) |
26-2326676 |
125 N. Third Ave. Oakdale, CA offices) |
95361 |
|
(209) 848-2265 | ||
Not Applicable |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
On July 19, 2017 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 and six months ended June 30, 2017.
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.
Item 7.01. Regulation FD Disclosure.
See “Item 2.02. Results of Operations and Financial Condition” which is incorporated by reference in this Item 7.01.
ITEM 8.01 Other Events
On July 18, 2017, the Board of Directors of Oak Valley Bancorp declared a $0.125 per share cash dividend for shareholders of record as of July 31, 2017, payable on August 10, 2017. A press release was issued on July 19, 2017 and is attached to this Current Report and is incorporated into this report by reference.
Item 9.01. Financial Statements and Exhibits
(a) Financial statements:
None
(b) Pro forma financial information:
None
(c) Shell company transactions:
None
(d) Exhibits
99.1 Press Release of Oak Valley Bancorp dated July 19, 2017
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: July 19, 2017 |
OAK VALLEY BANCORP By: /s/ Jeffrey A. Gall (Principal Financial Officer and duly authorized signatory) |
Exhibit Index
Exhibit No. |
Description |
99.1 |
Press Release of Oak Valley Bancorp dated July 19, 2017 |
Exhibit 99.1
PRESS RELEASE |
For Immediate Release
Date: |
July 19, 2017 |
Contact: | Chris Courtney/Rick McCarty |
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 bank holding company for Oak Valley Community Bank and Eastern Sierra Community Bank, recently reported consolidated financial results. For the three months ended June 30, 2017, net income was $2,830,000, or $0.35 per diluted common share, compared to $2,207,000, or $0.27 per diluted common share, for the prior quarter and $1,904,000, or $0.24 per diluted common share for the same period a year ago.
Consolidated net income for the six months ended June 30, 2017 totaled $5,037,000, or $0.62 per diluted share, representing an increase of 47.6% compared to $3,413,000, or $0.42 per diluted share for the six months ended June 30, 2016. Settlement payments totaling $938,000 were received in the second quarter from service providers in connection with the Mother Lode Bank acquisition. The settlements, strong loan production and higher yields on cash balances were the primary drivers in the year-to-date net income increase of $1,624,000.
Net interest income was $8,455,000 for the three months ended June 30, 2017, compared to $8,082,000 for the prior quarter and $8,106,000 for the same period last year. The increase is the result of organic loan growth during the trailing twelve months. The Company’s net interest margin for the three months ended June 30, 2017 was 3.74%, compared to 3.69% for the prior quarter, and 4.03% for the same period last year. The decrease compared to the same period last year is mainly due to loan discount accretion on purchased credit impaired loans recorded during the second quarter of 2016. However, recent interest rate increases have provided a positive offset given our high cash balances, as evidenced by the increase in net interest margin over the prior quarter.
Non-interest income for the three months ended June 30, 2017 totaled $2,036,000, compared to $1,471,000 during the prior quarter, and $1,056,000 for the same period last year. The increase compared to prior periods is mainly due to the $938,000 merger-related settlement payment as described above. Compared to the prior quarter, this settlement was partially offset by significant gains on called investment securities recorded during the first quarter of 2017.
Non-interest expense for the three months ended June 30, 2017 totaled $6,076,000, compared to $6,207,000 during the prior quarter, and $6,187,000 for the same period last year. Reductions in non-interest expense compared to the prior quarters are partially due to increased deferred loan costs as a result of higher loan originations, and an $85,000 non-recurring legal expense recovery associated with one OREO property recorded during the second quarter of 2017.
Total assets were $1.02 billion as of June 30, 2017, an increase of $30.6 million over March 31, 2017 and $94.9 million over June 30, 2016. Gross loans were $623.8 million as of June 30, 2017, an increase of $10.9 million over March 31, 2017, and an increase of $44.0 million over June 30, 2016. Total deposits were $925.8 million as of June 30, 2017, an increase of $26.6 million over March 31, 2017, and an increase of $87.3 million over June 30, 2016.
“We are pleased to report another solid quarter of earnings. Stable growth across the board fueled bottom line results and is a testament to our constant effort to create quality relationships with our clients,” stated Chris Courtney, President and CEO. “We are confident it will earn us the opportunity to serve more and more families and businesses in the communities we call home,” he concluded.
Non-performing assets as of June 30, 2017 were $3,242,000, or 0.32% of total assets, compared to $3,777,000, or 0.38% of total assets, as of March 31, 2017, and $3,884,000, or 0.42%, at June 30, 2016. The reduction at June 30, 2017 is due to paydowns received from one delinquent borrower during the quarter. The loan growth slightly outpaced the provision for loan losses of $35,000 during the second quarter of 2017, thus decreasing the allowance for loan losses to 1.26% of gross loans at June 30, 2017 compared to 1.28% at March 31, 2017 and 1.32% at June 30, 2016.
Concurrent with the earnings announcement, the Board of Directors of Oak Valley Bancorp declared the payment of a cash dividend of $0.125 per share of common stock to its shareholders of record at the close of business on July 31, 2017. The distribution will amount to approximately $1,011,000. The payment date will be August 10, 2017. This is the second dividend payment made by the Company in 2017.
Oak Valley Bancorp operates Oak Valley Community Bank & Eastern Sierra Community Bank, through which it offers a variety of loan and deposit products to individuals and small businesses. They currently operate through 16 conveniently located branches: Oakdale, Turlock, Stockton, Patterson, Ripon, Escalon, Manteca, Tracy, two branches in Sonora, three branches in Modesto, and three branches in their Eastern Sierra Division, which includes Bridgeport, Mammoth Lakes and Bishop.
For more information, call 1-866-844-7500 or visit www.ovcb.com.
This press release includes forward-looking statements about the corporation for which the corporation claims the protection of safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the corporation's possible or assumed future financial condition, and its results of operations and business. Forward-looking statements are subject to risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include fluctuations in interest rates, government policies and regulations (including monetary and fiscal policies), legislation, economic conditions, including increased energy costs in California, credit quality of borrowers, operational factors and competition in the geographic and business areas in which the company conducts its operations. All forward-looking statements included in this press release are based on information available at the time of the release, and the Company assumes no obligation to update any forward-looking statement.
###
Oak Valley Bancorp
Financial Highlights (unaudited)
($ in thousands, except per share) |
2nd Quarter |
1st Quarter |
4th Quarter |
3rd Quarter |
2nd Quarter |
|||||||||||||||
Selected Quarterly Operating Data: |
2017 |
2017 |
2016 |
2016 |
2016 |
|||||||||||||||
Net interest income |
$ | 8,455 | $ | 8,082 | $ | 8,049 | $ | 7,829 | $ | 8,106 | ||||||||||
Provision for loan losses |
35 | - | 69 | 90 | 125 | |||||||||||||||
Non-interest income |
2,036 | 1,471 | 1,242 | 1,077 | 1,056 | |||||||||||||||
Non-interest expense |
6,076 | 6,207 | 6,017 | 5,924 | 6,187 | |||||||||||||||
Net income before income taxes |
4,380 | 3,346 | 3,205 | 2,892 | 2,850 | |||||||||||||||
Provision for income taxes |
1,550 | 1,139 | 883 | 962 | 946 | |||||||||||||||
Net income |
$ | 2,830 | $ | 2,207 | $ | 2,322 | $ | 1,930 | $ | 1,904 | ||||||||||
Earnings per common share - basic |
$ | 0.35 | $ | 0.27 | $ | 0.29 | $ | 0.24 | $ | 0.24 | ||||||||||
Earnings per common share - diluted |
$ | 0.35 | $ | 0.27 | $ | 0.29 | $ | 0.24 | $ | 0.24 | ||||||||||
Dividends paid per common share |
$ | - | $ | 0.125 | $ | - | $ | 0.120 | $ | - | ||||||||||
Return on average common equity |
13.14 | % | 10.73 | % | 11.07 | % | 9.28 | % | 9.48 | % | ||||||||||
Return on average assets |
1.14 | % | 0.91 | % | 0.95 | % | 0.82 | % | 0.85 | % | ||||||||||
Net interest margin (1) |
3.74 | % | 3.69 | % | 3.68 | % | 3.73 | % | 4.03 | % | ||||||||||
Efficiency ratio (2) |
61.06 | % | 63.84 | % | 60.79 | % | 62.08 | % | 62.48 | % | ||||||||||
Capital - Period End |
||||||||||||||||||||
Book value per common share |
$ | 10.89 | $ | 10.40 | $ | 10.19 | $ | 10.24 | $ | 10.14 | ||||||||||
Credit Quality - Period End |
||||||||||||||||||||
Nonperforming assets/ total assets |
0.32 | % | 0.38 | % | 0.42 | % | 0.43 | % | 0.42 | % | ||||||||||
Loan loss reserve/ gross loans |
1.26 | % | 1.28 | % | 1.28 | % | 1.29 | % | 1.32 | % | ||||||||||
Period End Balance Sheet |
||||||||||||||||||||
($ in thousands) |
||||||||||||||||||||
Total assets |
$ | 1,020,495 | $ | 989,879 | $ | 1,002,110 | $ | 947,017 | $ | 925,635 | ||||||||||
Gross loans |
623,809 | 612,894 | 610,949 | 602,569 | 579,774 | |||||||||||||||
Nonperforming assets |
3,242 | 3,777 | 4,247 | 4,099 | 3,884 | |||||||||||||||
Allowance for loan losses |
7,854 | 7,827 | 7,832 | 7,767 | 7,680 | |||||||||||||||
Deposits |
925,786 | 899,169 | 914,093 | 859,756 | 838,458 | |||||||||||||||
Common equity |
88,100 | 84,061 | 82,450 | 82,858 | 81,993 | |||||||||||||||
Non-Financial Data |
||||||||||||||||||||
Full-time equivalent staff |
164 | 159 | 161 | 158 | 158 | |||||||||||||||
Number of banking offices |
16 | 16 | 16 | 16 | 16 | |||||||||||||||
Common Shares outstanding |
||||||||||||||||||||
Period end |
8,089,705 | 8,082,205 | 8,088,455 | 8,093,555 | 8,088,155 | |||||||||||||||
Period average - basic |
8,062,026 | 8,041,829 | 8,032,380 | 8,030,782 | 8,028,332 | |||||||||||||||
Period average - diluted |
8,080,030 | 8,071,768 | 8,066,575 | 8,063,381 | 8,060,464 | |||||||||||||||
Market Ratios |
||||||||||||||||||||
Stock Price |
$ | 13.90 | $ | 13.20 | $ | 12.55 | $ | 10.20 | $ | 9.75 | ||||||||||
Price/Earnings |
9.87 | 11.86 | 10.94 | 10.70 | 10.25 | |||||||||||||||
Price/Book |
1.28 | 1.27 | 1.23 | 1.00 | 0.96 |
Six Months Ended June 30, |
||||||||||||||||||||
($ in thousands, except per share) |
2017 |
2016 |
||||||||||||||||||
Net interest income |
$ | 16,537 | $ | 15,648 | ||||||||||||||||
Provision for (reversal of) loan losses |
35 | 325 | ||||||||||||||||||
Non-interest income |
3,507 | 2,093 | ||||||||||||||||||
Non-interest expense |
12,283 | 12,374 | ||||||||||||||||||
Net income before income taxes |
7,726 | 5,042 | ||||||||||||||||||
Provision for income taxes |
2,689 | 1,629 | ||||||||||||||||||
Net income |
$ | 5,037 | $ | 3,413 | ||||||||||||||||
Earnings per common share - basic |
$ | 0.63 | $ | 0.43 | ||||||||||||||||
Earnings per common share - diluted |
$ | 0.62 | $ | 0.42 | ||||||||||||||||
Dividends paid per common share |
$ | 0.125 | $ | 0.120 | ||||||||||||||||
Return on average common equity |
11.96 | % | 8.59 | % | ||||||||||||||||
Return on average assets |
1.02 | % | 0.76 | % | ||||||||||||||||
Net interest margin (1) |
3.72 | % | 3.90 | % | ||||||||||||||||
Efficiency ratio (2) |
62.42 | % | 64.89 | % | ||||||||||||||||
Capital - Period End |
||||||||||||||||||||
Book value per common share |
$ | 10.89 | $ | 10.14 | ||||||||||||||||
Credit Quality - Period End |
||||||||||||||||||||
Nonperforming assets/ total assets |
0.32 | % | 0.42 | % | ||||||||||||||||
Loan loss reserve/ gross loans |
1.26 | % | 1.32 | % | ||||||||||||||||
Period End Balance Sheet |
||||||||||||||||||||
($ in thousands) |
||||||||||||||||||||
Total assets |
$ | 1,020,495 | $ | 925,635 | ||||||||||||||||
Gross loans |
623,809 | 579,774 | ||||||||||||||||||
Nonperforming assets |
3,242 | 3,884 | ||||||||||||||||||
Allowance for loan losses |
7,854 | 7,680 | ||||||||||||||||||
Deposits |
925,786 | 838,458 | ||||||||||||||||||
Common equity |
88,100 | 81,993 | ||||||||||||||||||
Non-Financial Data |
||||||||||||||||||||
Full-time equivalent staff |
164 | 158 | ||||||||||||||||||
Number of banking offices |
16 | 16 | ||||||||||||||||||
Common Shares outstanding |
||||||||||||||||||||
Period end |
8,089,705 | 8,088,155 | ||||||||||||||||||
Period average - basic |
8,051,983 | 8,018,467 | ||||||||||||||||||
Period average - diluted |
8,075,922 | 8,056,120 | ||||||||||||||||||
Market Ratios |
||||||||||||||||||||
Stock Price |
$ | 13.90 | $ | 9.75 | ||||||||||||||||
Price/Earnings |
11.02 | 11.42 | ||||||||||||||||||
Price/Book |
1.28 | 0.96 |
(1) |
Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 34%. |
(2) |
Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 34%, and a marginal federal/state combined tax rate of 41.15% for applicable revenue. |