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

ovly20200124_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 23, 2020
(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)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

OVLY

The Nasdaq Stock Market, LLC


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 23, 2020 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, 2019.

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 January 23, 2020

 


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 24, 2020

 

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 January 23, 2020

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

ex_170337.htm

Exhibit 99.1

 

 

PRESS RELEASE


 

For Immediate Release

 

Date:

January 23, 2020

Contact:

Chris Courtney/Rick McCarty

Phone: (209) 848-2265 
  www.ovcb.com

 

OAK VALLEY BANCORP REPORTS 4th QUARTER RESULTS AND ANNOUNCES CASH DIVIDEND

 

OAKDALE, CA–Oak Valley Bancorp (NASDAQ: OVLY) (the “Company”), the bank holding company for Oak Valley Community Bank (the “Bank”) and their Eastern Sierra Community Bank division, recently reported unaudited consolidated financial results. For the three months ended December 31, 2019, consolidated net income was $3,191,000 or $0.39 per diluted share (EPS), as compared to $3,231,000, or $0.40 EPS, for the prior quarter and $2,979,000, or $0.37 EPS for the same period a year ago. Consolidated net income for the year ended December 31, 2019 totaled $12,489,000, or $1.54 EPS, representing an increase of 8.3% compared to $11,537,000 or $1.42 EPS for 2018. The decrease from the prior quarter is due to net interest margin compression as a result of recent FOMC interest rate cuts during the third and fourth quarters of 2019, which negatively impacted yields on earning assets. The year-over-year net income increase was primarily driven by strong earning asset growth and corresponding increases to net interest income

 

Net interest income was $10,350,000 and $41,034,000 for the fourth quarter and year ended December 31, 2019, respectively, compared to $10,445,000 during the prior quarter, $10,179,000 for the fourth quarter of 2018 and $38,567,000 for the year ended December 31, 2018. Net interest margin increased to 3.98% and 4.13% for the fourth quarter and year ended December 31, 2019, respectively, as compared to 3.96% and 3.89% for the same periods of 2018. The net interest income and net interest margin increases over the comparable periods of the prior year were the result of strong loan growth. In addition, yields on earning assets increased slightly for 2019 as compared to 2018, as a result of the positive impact from interest rate increases during 2018, which were partially offset by rate cuts beginning in August 2019 when monetary policy shifted.

 

Non-interest income for the fourth quarter and year ended December 31, 2019 totaled $1,254,000 and $5,046,000, respectively, compared to $1,275,000 during the prior quarter, $1,232,000 for the fourth quarter of 2018, and $4,712,000 for the year ended December 31, 2018. The fourth quarter and year-to-date increases compared to 2018 were mainly due earnings on new bank owned life insurance policies purchased in July 2019 and transaction fee income on bank debit cards related to the growth of our core deposit base and an overall shift towards electronic payment forms.

 

 

 

 

Non-interest expense for the fourth quarter and year ended December 31, 2019 totaled $7,146,000 and $28,846,000, respectively, compared to $7,157,000 during the prior quarter, $6,921,000 for the fourth quarter of 2018 and $27,378,000 for the year ended December 31, 2018. The fourth quarter and year-to-date increases compared to 2018 corresponds to staffing expense and general operating costs related to servicing the growing loan and deposit portfolios.

 

Total assets were $1.15 billion at December 31, 2019, an increase of $46.4 million over September 30, 2019 and $52.7 million over December 31, 2018. Gross loans were $751.0 million as of December 31, 2019, an increase of $18.7 million over September 30, 2019, and an increase of $39.1 million over December 31, 2018. The Company’s total deposits were $1.02 billion as of December 31, 2019, an increase of $41.9 million over September 30, 2019, and an increase of $33.4 million over December 31, 2018.

 

“Steady core deposit growth throughout the year and a robust second-half for loan production combined to elevate annual net income to a new all-time high. We are very happy with our 2019 results,” stated Chris Courtney, President and CEO of the Company and the Bank. “As we continue to instill a culture of client service, credit quality, and community in our employees, we are confident our team – working together – can execute our growth, service, and profitability goals in the prudent and deliberate fashion we call the Oak Valley way.”

 

Non-performing assets as of December 31, 2019 were $1,103,000, or 0.10% of total assets, compared to $1,200,000, or 0.11% of total assets, as of September 30, 2019, and $920,000, or 0.08% at December 31, 2018.  The decrease in non-performing assets compared to the prior quarter is the result of payments on non-performing loans. The increase compared to December 31, 2018 was a result of two consumer residential loans that were placed on non-accrual status during the third quarter of 2019.

 

The allowance for loan losses to gross loans was 1.22% at December 31, 2019, compared to 1.23% at September 30, 2019 and 1.22% at December 31, 2018. The Company recorded provision for loan losses of $210,000 and $545,000 during the fourth quarter and year ended December 31, 2019, respectively, which corresponded to growth of the loan portfolio, as loan loss reserves relative to gross loans remain at acceptable levels and credit quality remains strong.

 

 

 

 

The Board of Directors of Oak Valley Bancorp at their January 21, 2020 meeting, declared the payment of a cash dividend of $0.14 per share of common stock to its shareholders of record at the close of business on February 3, 2020. The payment date will be February 14, 2020 and will amount to approximately $1,149,000. This is the first dividend payment made by the Company in 2020.

 

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 17 conveniently located branches: Oakdale, Turlock, Stockton, Patterson, Ripon, Escalon, Manteca, Tracy, Sacramento, 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)

 

4th Quarter

   

3rd Quarter

   

2nd Quarter

   

1st Quarter

   

4th Quarter

 

Selected Quarterly Operating Data:

 

2019

   

2019

   

2019

   

2019

   

2018

 
                                         

Net interest income

  $ 10,350     $ 10,445     $ 10,128     $ 10,111     $ 10,179  

Provision for loan losses

    210       240       95       -       555  

Non-interest income

    1,254       1,275       1,242       1,275       1,232  

Non-interest expense

    7,146       7,157       7,310       7,233       6,921  

Net income before income taxes

    4,248       4,323       3,965       4,153       3,935  

Provision for income taxes

    1,057       1,092       1,002       1,049       956  

Net income

  $ 3,191     $ 3,231     $ 2,963     $ 3,104     $ 2,979  
                                         

Earnings per common share - basic

  $ 0.39     $ 0.40     $ 0.37     $ 0.38     $ 0.37  

Earnings per common share - diluted

  $ 0.39     $ 0.40     $ 0.37     $ 0.38     $ 0.37  

Dividends paid per common share

  $ -     $ 0.135     $ -     $ 0.135     $ -  

Return on average common equity

    11.38 %     11.86 %     11.39 %     12.54 %     12.16 %

Return on average assets

    1.12 %     1.18 %     1.13 %     1.17 %     1.08 %

Net interest margin (1)

    3.98 %     4.18 %     4.23 %     4.16 %     3.96 %

Efficiency ratio (2)

    59.74 %     59.67 %     62.27 %     62.20 %     58.78 %
                                         

Capital - Period End

                                       

Book value per common share

  $ 13.71     $ 13.31     $ 12.98     $ 12.45     $ 12.09  
                                         

Credit Quality - Period End

                                       

Nonperforming assets/ total assets

    0.10 %     0.11 %     0.08 %     0.09 %     0.08 %

Loan loss reserve/ gross loans

    1.22 %     1.23 %     1.22 %     1.23 %     1.22 %
                                         

Period End Balance Sheet

                                       

($ in thousands)

                                       

Total assets

  $ 1,147,785     $ 1,101,132     $ 1,068,310     $ 1,059,130     $ 1,094,887  

Gross loans

    750,985       732,334       718,158       707,408       711,902  

Nonperforming assets

    1,103       1,200       906       967       920  

Allowance for loan losses

    9,146       9,005       8,770       8,677       8,685  

Deposits

    1,019,929       977,993       949,090       938,743       986,495  

Common equity

    112,570       109,320       106,583       102,218       99,038  
                                         

Non-Financial Data

                                       

Full-time equivalent staff

    182       182       184       180       178  

Number of banking offices

    17       17       17       17       17  
                                         

Common Shares outstanding

                                       

Period end

    8,210,147       8,210,637       8,208,853       8,209,750       8,194,805  

Period average - basic

    8,108,360       8,105,294       8,102,807       8,093,106       8,086,748  

Period average - diluted

    8,126,507       8,120,096       8,117,192       8,102,411       8,097,161  
                                         

Market Ratios

                                       

Stock Price

  $ 19.46     $ 16.77     $ 19.55     $ 17.64     $ 18.30  

Price/Earnings

    12.46       10.60       13.33       11.34       12.52  

Price/Book

    1.42       1.26       1.51       1.42       1.51  

 

 

 

 

   

YEAR ENDED DECEMBER 31,

 

($ in thousands, except per share)

 

2019

   

2018

 
                 

Net interest income

  $ 41,034     $ 38,567  

Provision for loan losses

    545       555  

Non-interest income

    5,046       4,712  

Non-interest expense

    28,846       27,378  

Net income before income taxes

    16,689       15,346  

Provision for income taxes

    4,200       3,809  

Net income

  $ 12,489     $ 11,537  
                 

Earnings per common share - basic

  $ 1.54     $ 1.43  

Earnings per common share - diluted

  $ 1.54     $ 1.42  

Dividends paid per common share

  $ 0.270     $ 0.26  

Return on average common equity

    11.78 %     12.26 %

Return on average assets

    1.15 %     1.08 %

Net interest margin (1)

    4.13 %     3.89 %

Efficiency ratio (2)

    60.95 %     61.37 %
                 

Capital - Period End

               

Book value per common share

  $ 13.71     $ 12.09  
                 

Credit Quality - Period End

               

Nonperforming assets/ total assets

    0.10 %     0.08 %

Loan loss reserve/ gross loans

    1.22 %     1.22 %
                 

Period End Balance Sheet

               

($ in thousands)

               

Total assets

  $ 1,147,785     $ 1,094,887  

Gross loans

    750,985       711,902  

Nonperforming assets

    1,103       920  

Allowance for loan losses

    9,146       8,685  

Deposits

    1,019,929       986,495  

Common equity

    112,570       99,038  
                 

Non-Financial Data

               

Full-time equivalent staff

    182       178  

Number of banking offices

    17       17  
                 

Common Shares outstanding

               

Period end

    8,210,147       8,194,805  

Period average - basic

    8,102,442       8,081,482  

Period average - diluted

    8,116,627       8,100,098  
                 

Market Ratios

               

Stock Price

  $ 19.46     $ 18.30  

Price/Earnings

    12.62       12.82  

Price/Book

    1.42       1.51  

 

 

(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.

 

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