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

ovly20180418_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:  April 18, 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 April 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 ended March 31, 2018.

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 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 April 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: April 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

Press Release of Oak Valley Bancorp dated April 18, 2018

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

ex_110613.htm

Exhibit 99.1

 

PRESS RELEASE

 

 

 

For Immediate Release

 

Date:

April 18, 2018

Contact:

Chris Courtney/Rick McCarty

Phone: (209) 848-2265 
  www.ovcb.com

         

 

OAK VALLEY BANCORP REPORTS 1st QUARTER RESULTS

 

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 first quarter of 2018. For the three months ended March 31, 2018, consolidated net income was $2,802,000, or $0.35 per diluted share (EPS). This compared to consolidated net income of $1,589,000, or $0.20 EPS, for the prior quarter and $2,207,000, or $0.27 EPS, for the same period a year ago.

 

The increase in net income compared to prior quarters was primarily the result of net interest income expansion and a reduction in provision for income taxes due to the lower federal income tax rate corresponding to the Tax Cuts and Jobs Act of 2017. This recent tax reform act further compounded the quarter-over-quarter net income increase due to the $983,000 net deferred asset remeasurement recorded during the fourth quarter of 2017.

 

Net interest income for the three months ended March 31, 2018 was $9,117,000, compared to $9,023,000 in the prior quarter and $8,082,000 for the same period last year. The net interest income increases over prior periods corresponds to the growth of our average loan and investment portfolios and the positive impact of rising rates on earning assets. Despite the decrease in gross loans of $14.2 million during the quarter due to principal paydowns on a few loan relationships, the first quarter average gross loans increased by $3.9 million compared to the prior quarter, and thus contributed to the net interest income expansion.

 

The net interest margin for the three months ended March 31, 2018 was 3.80%, compared to 3.86% for the prior quarter and 3.69% for the same period last year. The modest decrease from the previous quarter is mainly due to the difference in the full tax equivalent benefit of tax-exempt municipal securities and loans, pertaining to the lower federal income tax rate as described above. The increase compared to the first quarter of 2017, is mainly due to loan growth and the positive impact of rising rates.

 

Non-interest expense totaled $6,732,000 for the quarter ended March 31, 2018, compared to $6,222,000 in the previous quarter and $6,207,000 in the same quarter a year ago. The increase compared to prior periods corresponds to staffing increases and general operating costs related to servicing the growing loan and deposit portfolios.

 

 

 

 

Non-interest income was $1,332,000 for the quarter ended March 31, 2018, compared to $1,193,000 for the prior quarter and $1,471,000 for the same period last year. The increase compared to the prior quarter is due to gains recorded on the sale of an OREO property and an investment security. The decrease compared to the first quarter of 2017, was due to a decrease in gains on called investment securities.

 

“We are pleased to report another strong quarter with solid earnings. Despite the drop-off in gross loans at quarter-end, average earning assets realized growth during the quarter fueling net interest income expansion. As always, we remain committed to the relationship banking model and we are confident in our team’s ability to make meaningful connections with the people and families behind the locally owned businesses that are the lifeblood of our community,” stated Chris Courtney, President and CEO.

 

Total assets were $1.05 billion at March 31, 2018, an increase of $18.0 million over December 31, 2017 and an increase of $62.9 million over March 31, 2017. Gross loans were $648.4 million at March 31, 2018, a decrease of $14.2 million over December 31, 2017, and an increase of $35.5 million over March 31, 2017. The Company’s total deposits were $955.3 million as of March 31, 2018, an increase of $16.5 million and $56.2 million over December 31, 2017 and March 31, 2017, respectively.

 

As of March 31, 2018, non-performing assets were $1.3 million or 0.12% of total assets, compared to $1.6 million or 0.15% of total assets as of December 31, 2017 and $3.8 million or 0.38% of total assets as of March 31, 2017. The decrease in non-performing assets is the result of continued payments on non-performing loans and the sale of two OREO properties during the prior twelve months.

 

The Company did not record a provision for loan losses during the first quarter of 2018 due to a decline in gross loans and an improvement in credit quality as described above. As a result, the ratio of allowance for loan losses to gross loans increased to 1.26% at March 31, 2018, compared to 1.23% at December 31, 2017 and 1.28% at March 31, 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, a loan production office in Downtown Sacramento, 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)

 

1st Quarter

   

4th Quarter

   

3rd Quarter

   

2nd Quarter

   

1st Quarter

 

Selected Quarterly Operating Data:

 

2018

   

2017

   

2017

   

2017

   

2017

 
                                         

Net interest income

  $ 9,117     $ 9,023     $ 8,620     $ 8,455     $ 8,082  

Provision for loan losses

    -       245       70       35       -  

Non-interest income

    1,332       1,193       1,276       2,036       1,471  

Non-interest expense

    6,732       6,222       6,060       6,076       6,207  

Net income before income taxes

    3,717       3,749       3,766       4,380       3,346  

Provision for income taxes

    915       2,160       1,298       1,550       1,139  

Net income

  $ 2,802     $ 1,589     $ 2,468     $ 2,830     $ 2,207  
                                         

Earnings per common share - basic

  $ 0.35     $ 0.20     $ 0.31     $ 0.35     $ 0.27  

Earnings per common share - diluted

  $ 0.35     $ 0.20     $ 0.31     $ 0.35     $ 0.27  

Dividends paid per common share

  $ 0.130     $ -     $ 0.125     $ -     $ 0.125  

Return on average common equity

    12.47 %     6.93 %     11.04 %     13.14 %     10.73 %

Return on average assets

    1.08 %     0.62 %     0.98 %     1.14 %     0.91 %

Net interest margin (1)

    3.80 %     3.86 %     3.78 %     3.74 %     3.69 %

Efficiency ratio (2)

    63.40 %     58.35 %     59.55 %     61.14 %     63.88 %
                                         

Capital - Period End

                                       

Book value per common share

  $ 11.19     $ 11.21     $ 11.07     $ 10.89     $ 10.40  
                                         

Credit Quality - Period End

                                       

Nonperforming assets/ total assets

    0.12 %     0.15 %     0.16 %     0.32 %     0.38 %

Loan loss reserve/ gross loans

    1.26 %     1.23 %     1.24 %     1.26 %     1.28 %
                                         

Period End Balance Sheet

                                       

($ in thousands)

                                       

Total assets

  $ 1,052,813     $ 1,034,852     $ 996,721     $ 1,020,495     $ 989,879  

Gross loans

    648,367       662,544       636,609       623,809       612,894  

Nonperforming assets

    1,310       1,564       1,564       3,242       3,777  

Allowance for loan losses

    8,165       8,166       7,917       7,854       7,827  

Deposits

    955,341       938,882       901,716       925,786       899,169  

Common equity

    91,595       90,767       89,676       88,100       84,061  
                                         

Non-Financial Data

                                       

Full-time equivalent staff

    168       167       164       164       159  

Number of banking offices

    16       16       16       16       16  
                                         

Common Shares outstanding

                                       

Period end

    8,183,005       8,098,605       8,098,605       8,089,705       8,082,205  

Period average - basic

    8,074,961       8,073,805       8,064,690       8,062,026       8,041,829  

Period average - diluted

    8,077,304       8,090,826       8,083,137       8,080,030       8,071,768  
                                         

Market Ratios

                                       

Stock Price

  $ 22.30     $ 19.54     $ 16.79     $ 13.90     $ 13.20  

Price/Earnings

    15.85       25.02       13.83       9.87       11.86  

Price/Book

    1.99       1.74       1.52       1.28       1.27  

 

(1) Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 34% in 2017, and 21% in 2018.

(2) Ratio computed on a fully tax equivalent basis using a marginal federal tax rate of 34% 2017, and 21% in 2018.

       A marginal federal/state combined tax rate of 41.15% in 2017 and 29.56% in 2018, was used for applicable revenue.

 

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