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Section 1: 8-K (FORM 8-K)

ovly20180118_8k.htm

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:  January 16, 2018
(Date of earliest event reported)

 

Oak Valley Bancorp
(Exact name of registrant as specified in its charter)

 

CA
(State or other jurisdiction
of incorporation)

001-34142
(Commission File Number)

26-2326676
(IRS Employer
Identification Number)

 

125 N. Third Ave. Oakdale, CA
(Address of principal executive offices)

95361
(Zip Code)

 
     

(209) 848-2265
(Registrant's telephone number, including area code)

 

Not Applicable
(Former Name or Former Address, if changed since last report)



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 January 18, 2018, 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 year ended December 31, 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 January 16, 2018, the Board of Directors of Oak Valley Bancorp declared a $0.13 per share cash dividend for shareholders of record as of January 29, 2018, payable on February 9, 2018. A press release was issued on January 18, 2018 and is attached as Exhibit 99.2 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      Operating Results Press Release of Oak Valley Bancorp dated January 18, 2018

 

             99.2      Cash Dividend Press Release of Oak Valley Bancorp dated January 18, 2018

 

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: January 19, 2018  

 

OAK VALLEY BANCORP 

 

By:  /s/ Jeffrey A. Gall                       
     Jeffrey A. Gall
     Senior Vice President and Chief Financial Officer
(Principal Financial Officer and duly authorized signatory)

 

 

 

 

 


Exhibit Index

 

Exhibit No.

Description

   

99.1

Operating Results Press Release of Oak Valley Bancorp dated January 18, 2018

   

99.2

Cash Dividend Press Release of Oak Valley Bancorp date January 18, 2018

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

ex_103259.htm

Exhibit 99.1

 

PRESS RELEASE

 

For Immediate Release

 

Date:

January 18, 2018

Contact:

Chris Courtney/Rick McCarty

Phone: (209) 848-2265 
  www.ovcb.com

         

OAK VALLEY BANCORP REPORTS 4th QUARTER RESULTS

 

OAKDALE, CA − Oak Valley Bancorp (NASDAQ: OVLY) (the “Company”), the bank holding company for Oak Valley Community Bank and Eastern Sierra Community Bank (the “Bank”), reported today unaudited consolidated financial results for the fourth quarter and year ended December 31, 2017. For the three months ended December 31, 2017, consolidated net income was $1,589,000, or $0.20 per diluted share (EPS), as compared to $2,468,000, or $0.31 EPS, for the prior quarter and $2,322,000, or $0.29 EPS for the same period a year ago. Consolidated net income for the year ended December 31, 2017 totaled $9,094,000, or $1.13 EPS, representing an increase of 18.6% compared to $7,665,000 or $0.95 EPS for 2016. Following the passing of the U.S. Tax Cuts and Jobs Act of 2017 (“Tax Act”), the Company recorded a charge of $983,000, or ($0.12) per diluted share, through its federal income tax provision relating to the Company’s net deferred tax asset valuation at the new lower enacted tax rates.

 

Net interest income was $9,023,000 and $34,180,000 for the three and twelve months ended December 31, 2017, respectively, compared to $8,620,000 during the prior quarter, $8,049,000 for the fourth quarter of 2016 and $31,525,000 for the year ended December 31, 2016. The Company’s net interest margin for the three months ended December 31, 2017 was 3.86%, compared to 3.78% for the prior quarter and 3.68% for the same period last year. Net interest margin for the year ended December 31, 2017 was 3.77% compared to 3.81% in 2016. The net interest income and net interest margin increases are the result of strong loan growth and the positive impact of FOMC rate hikes on our cash balances. In spite of these positive trends, the year-over-year net interest margin decreased slightly due to a decrease in loan discount accretion in 2017 compared to 2016.

 

 

 

 

Non-interest income for the three and twelve months ended December 31, 2017 totaled $1,193,000 and $5,976,000, respectively, compared to $1,276,000 during the prior quarter, $1,242,000 for the fourth quarter of 2016, and $4,413,000 for the year ended December 31, 2016. The year-over-year increase in 2017 is mainly due to one-time merger-related settlement payments recorded in the second quarter, an increase in gains on called investment securities, and a gain on the sale of an OREO property during the third quarter.

 

Non-interest expense for the three and twelve months ended December 31, 2017 totaled $6,222,000 and $24,565,000, respectively, compared to $6,060,000 during the prior quarter, $6,017,000 for the fourth quarter of 2016 and $24,315,000 for the year ended December 31, 2016. The increase compared to prior periods corresponds to staffing increases and general operating costs related to servicing the growing loan and deposit portfolios.

 

Total assets were $1.03 billion at December 31, 2017, an increase of $38.1 million over September 30, 2017 and $32.7 million over December 31, 2016. Gross loans were $662.5 million as of December 31, 2017, an increase of $25.9 million over September 30, 2017, and an increase of $51.6 million over December 31, 2016. The Company’s total deposits were $938.9 million as of December 31, 2017, an increase of $37.2 million over September 30, 2017, and an increase of $24.8 million over December 31, 2016.

 

We are pleased to report another strong financial performance in 2017. Fueled by core operating results including healthy core deposit growth throughout the year and strong second half loan growth, we have once again reached a record earnings mark for the year,” stated Chris Courtney, President and CEO of the Company and the Bank. “We’re looking forward to 2018 and the opportunity to relocate two of our branches, Turlock and East Sonora, to better serve our customers. We’re also excited about the opening of a new Loan Production Office in Downtown Sacramento and the prospect of expanding our banking services in the greater Sacramento area.”

 

Non-performing assets as of December 31, 2017 were $1,564,000, or 0.15% of total assets, compared to $1,564,000, or 0.16% of total assets, as of September 30, 2017, and $4,247,000, or 0.42% at December 31, 2016.  The year-over-year decrease is the result of continued pay-downs and the sale of an OREO property.

 

Provisions for loan losses of $245,000 and $350,000 were recorded during the three and twelve month periods of 2017, respectively, corresponding to loan growth. At the same time, credit quality has improved, which has allowed for a decrease in the allowance for loan losses to 1.23% of gross loans at December 31, 2017 compared to 1.24% at September 30, 2017 and 1.28% at December 31, 2016.

 

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, a loan production office in Downtown Sacramento, and three branches in their Eastern Sierra Division, including 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)

 

($ in thousands, except per share)

 

4th Quarter

   

3rd Quarter

   

2nd Quarter

   

1st Quarter

   

4th Quarter

 

Selected Quarterly Operating Data:

 

2017

   

2017

   

2017

   

2017

   

2016

 
                                         

Net interest income

  $ 9,023     $ 8,620     $ 8,455     $ 8,082     $ 8,049  

Provision for loan losses

    245       70       35       -       69  

Non-interest income

    1,193       1,276       2,036       1,471       1,242  

Non-interest expense

    6,222       6,060       6,076       6,207       6,017  

Net income before income taxes

    3,749       3,766       4,380       3,346       3,205  

Net DTA adjustment

    983       -       -       -       -  

Provision for income taxes

    1,177       1,298       1,550       1,139       883  

Net income

  $ 1,589     $ 2,468     $ 2,830     $ 2,207     $ 2,322  
                                         

Earnings per common share - basic

  $ 0.20     $ 0.31     $ 0.35     $ 0.27     $ 0.29  

Earnings per common share - diluted

  $ 0.20     $ 0.31     $ 0.35     $ 0.27     $ 0.29  

Dividends paid per common share

  $ -     $ 0.125     $ -     $ 0.125     $ -  

Return on average common equity

    6.93 %     11.04 %     13.14 %     10.73 %     11.07 %

Return on average assets

    0.62 %     0.98 %     1.14 %     0.91 %     0.95 %

Net interest margin (1)

    3.86 %     3.78 %     3.74 %     3.69 %     3.68 %

Efficiency ratio (2)

    58.35 %     59.55 %     61.14 %     63.88 %     60.79 %
                                         

Capital - Period End

                                       

Book value per common share

  $ 11.21     $ 11.07     $ 10.89     $ 10.40     $ 10.19  
                                         

Credit Quality - Period End

                                       

Nonperforming assets/ total assets

    0.15 %     0.16 %     0.32 %     0.38 %     0.42 %

Loan loss reserve/ gross loans

    1.23 %     1.24 %     1.26 %     1.28 %     1.28 %
                                         

Period End Balance Sheet

                                       

($ in thousands)

                                       

Total assets

  $ 1,034,852     $ 996,721     $ 1,020,495     $ 989,879     $ 1,002,110  

Gross loans

    662,544       636,609       623,809       612,894       610,949  

Nonperforming assets

    1,564       1,564       3,242       3,777       4,247  

Allowance for loan losses

    8,166       7,917       7,854       7,827       7,832  

Deposits

    938,882       901,716       925,786       899,169       914,093  

Common equity

    90,767       89,676       88,100       84,061       82,450  
                                         

Non-Financial Data

                                       

Full-time equivalent staff

    167       164       164       159       161  

Number of banking offices

    16       16       16       16       16  
                                         

Common Shares outstanding

                                       

Period end

    8,098,605       8,098,605       8,089,705       8,082,205       8,088,455  

Period average - basic

    8,073,805       8,064,690       8,062,026       8,041,829       8,032,380  

Period average - diluted

    8,090,826       8,083,137       8,080,030       8,071,768       8,066,575  
                                         

Market Ratios

                                       

Stock Price

  $ 19.54     $ 16.79     $ 13.90     $ 13.20     $ 12.55  

Price/Earnings

    25.02       13.83       9.87       11.86       10.94  

Price/Book

    1.74       1.52       1.28       1.27       1.23  

 

 

 

 

    Year Ended December 31,  

($ in thousands, except per share)

 

2017

   

2016

 
                 

Net interest income

  $ 34,180     $ 31,525  

Provision for loan losses

    350       484  

Non-interest income

    5,976       4,413  

Non-interest expense

    24,565       24,315  

Net income before income taxes

    15,241       11,139  

Net DTA adjustment

    983       -  

Provision for income taxes

    5,164       3,474  

Net income

  $ 9,094     $ 7,665  
                 

Earnings per common share - basic

  $ 1.13     $ 0.95  

Earnings per common share - diluted

  $ 1.13     $ 0.95  

Dividends paid per common share

  $ 0.25     $ 0.24  

Return on average common equity

    10.41 %     9.43 %

Return on average assets

    0.91 %     0.83 %

Net interest margin (1)

    3.77 %     3.81 %

Efficiency ratio (2)

    60.66 %     63.13 %
                 

Capital - Period End

               

Book value per common share

  $ 11.21     $ 10.19  
                 

Credit Quality - Period End

               

Nonperforming assets/ total assets

    0.15 %     0.42 %

Loan loss reserve/ gross loans

    1.23 %     1.28 %
                 

Period End Balance Sheet

               

($ in thousands)

               

Total assets

  $ 1,034,852     $ 1,002,110  

Gross loans

    662,544       610,949  

Nonperforming assets

    1,564       4,247  

Allowance for loan losses

    8,166       7,832  

Deposits

    938,882       914,093  

Common equity

    90,767       82,450  
                 

Non-Financial Data

               

Full-time equivalent staff

    167       163  

Number of banking offices

    16       16  
                 

Common Shares outstanding

               

Period end

    8,098,605       8,088,455  

Period average - basic

    8,060,686       8,047,046  

Period average - diluted

    8,081,497       8,082,657  
                 

Market Ratios

               

Stock Price

  $ 19.54     $ 12.55  

Price/Earnings

    17.32       13.18  

Price/Book

    1.74       1.23  

 

(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.

 

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Section 3: EX-99.2 (EXHIBIT 99.2)

ex_103260.htm

Exhibit 99.2

 

PRESS RELEASE

 

 

For Immediate Release

 

Date:

January 18, 2018

Contact:

Chris Courtney/Rick McCarty

Phone: (209) 848-2265
  www.ovcb.com
  www.escbank.com

          

OAK VALLEY BANCORP TO PAY CASH DIVIDEND

 

OAKDALE, CA – On January 16, 2018, the Board of Directors of Oak Valley Bancorp (NASDAQ: OVLY), the bank holding company for Oak Valley Community Bank and Eastern Sierra Community Bank, declared the payment of a cash dividend of $0.130 per share of common stock to its shareholders of record at the close of business on January 29, 2018. In aggregate, the distribution will amount to approximately $1,053,000. The payment date will be February 9, 2018.  

 

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, a loan production office in Downtown Sacramento, and three branches in their Eastern Sierra Division, including 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.

 

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