Oak Valley Bancorp (NASDAQ: OVLY) (the “Company”), the bank holding company for Oak Valley Community Bank and its Eastern Sierra Community Bank division, recently reported unaudited consolidated financial results. For the three months ended June 30, 2021, consolidated net income was $3,960,000, or $0.48 per diluted share (EPS), as compared to $4,357,000, or $0.53 EPS, for the prior quarter and $2,581,000, or $0.32 EPS, for the same period a year ago. Consolidated net income for the six months ended June 30, 2021 was $8,316,000, or $1.02 EPS, representing an increase of 57.2 percent compared to $5,290,000 or $0.65 EPS for the same period of 2020.
The decrease in second quarter net income compared to the prior quarter was partially due to a decrease in loan interest and fees on Paycheck Protection Program (“PPP”) loans. $2,202,000 in PPP loan interest and fee income was recorded during the second quarter of 2021, compared to $2,590,000 during the prior quarter, and $1,092,000 during the second quarter of 2020. Year-to-date PPP loan interest and fee income totaled $4,793,000 in 2021, as compared to $1,092,000 for the same period of last year. The bank has funded a total of $345 million since the commencement of the PPP loan program, of which $194 million has been paid down through SBA forgiveness payments, leaving an outstanding balance of $151 million as of June 30, 2021.
Net interest income for the three months ended June 30, 2021 was $11,988,000, compared to $12,242,000 in the prior quarter, and $11,146,000 in the same period a year ago. The decrease compared to the prior quarter is attributable to interest and fees on PPP loans as described above. Year-over-year core loan growth, excluding PPP loans, totaled $24.2 million as of June 30, 2021, which partially offset the decreases related to PPP and FOMC rate cuts in March 2020.
Total assets were $1.76 billion at June 30, 2021, an increase of $99.1 million and $299.6 million over March 31, 2021 and June 30, 2020, respectively. Gross loans were $944 million at June 30, 2021, a decrease of $84.9 million and $59.3 million over March 31, 2021 and June 30, 2020, respectively, mainly due to PPP forgiveness payments. The Company’s total deposits were $1.61 billion as of June 30, 2021, an increase of $96.7 million and $314.6 million from March 31, 2021 and June 30, 2020, respectively.
“Our balance sheet growth has been extraordinary over recent quarters and is a testament to our strong business model and commitment to the communities we serve. This growth was driven by expansion of our core banking relationships that will certainly be prosperous for years to come.” stated Chris Courtney, President and CEO.
As of June 30, 2021, non-performing assets (“NPA”) were $362,000 or 0.02 percent of total assets, compared to $927,000 or 0.06 percent of total assets as of June 30, 2020. The year-over-year decrease in non-performing assets is the result of payments on non-accrual loans and the subsequent credit enhancement of said loans back to accrual status which were recorded in the fourth quarter of 2020.
The allowance for loan losses to gross loans increased to 1.20 percent at June 30, 2021, compared to 1.14 percent at June 30, 2020 due to the decrease in outstanding PPP loans that do not require a loan loss reserve as they are guaranteed by the federal government through the SBA program. The Company did not record a provision for loan losses during the second or first quarter of 2021, compared to a provision of $1,860,000 during the second quarter of 2020 corresponding to qualitative risk-based discretionary adjustments in connection with the COVID-19 pandemic and corresponding economic stress.
The Board of Directors of Oak Valley Bancorp at their July 20, 2021, meeting declared the payment of a cash dividend of $0.145 per share of common stock to its shareholders of record at the close of business on Aug. 2, 2021. The payment date will be Aug. 13, 2021 and will amount to approximately $1,194,000. This is the second dividend payment made by the Company in 2021.
Oak Valley Bancorp operates Oak Valley Community Bank and its 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 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.