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Oak Valley Bancorp Announces Cash Dividend
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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 three months ended Dec. 31, 2022, consolidated net income was $9,475,000 or $1.15 per diluted share (EPS), as compared to $6,800,000, or $0.83 EPS, for the prior quarter and $3,466,000, or $0.42 EPS for the same period a year ago. Consolidated net income for the year ended Dec. 31, 2022, totaled $22,902,000, or $2.79 EPS, representing an increase of 40.2 percent compared to $16,337,000 or $2.00 EPS for 2021. The increase in QTD and YTD earnings is mainly due to rising net interest income and a loan loss provision reversal of $1,550,000 recorded during the fourth quarter.

“We are excited to report a truly outstanding financial performance for the quarter and the year. Our team’s dedication to serving our clients’ needs, expanding banking relationships, and delivering a premier banking experience has proven to resonate with clients – time and time again,” stated Chris Courtney, Chief Executive Officer.

Net interest income was $19,113,000 and $60,076,000 for the fourth quarter and year ended Dec. 31, 2022, respectively, compared to $16,772,000 during the prior quarter, $11,309,000 for the fourth quarter of 2021, and $48,835,000 for the year ended Dec. 31, 2021. The increases over prior periods are mainly attributable to increased yields on all earning assets resulting from recent FOMC rate hikes. In addition, gross core loans, excluding PPP loans, grew by $84.4 million and the book value of the investment security portfolio grew by $264.1 million during the year. These increases were offset in part by the decrease in PPP loan interest and fees, as outstanding balances have been paid down to $1.8 million as of Dec. 31, 2022, a year-over-year reduction of $28.7 million due to SBA forgiveness payments.

Net interest margin was 4.09 percent and 3.32 percent for the fourth quarter and year ended Dec. 31, 2022, respectively, as compared to 2.55 percent and 3.04 percent for the same periods of 2021. The interest margin expansion compared to the prior periods was the result of deploying cash balances into higher yielding investments and loans, deposit interest rates remaining relatively flat, and the aforementioned positive impact of FOMC rate hikes on earning asset yield.

The Board of Directors of Oak Valley Bancorp at their Jan. 17, 2023, meeting declared the payment of a cash dividend of $0.16 per share of common stock to its shareholders of record at the close of business on Jan. 30, 2023. The payment date will be Feb. 10, 2023 and will amount to approximately $1,321,000. This is the first dividend payment made by the Company in 2023.

Oak Valley Bancorp operates Oak Valley Community Bank and 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 18 branches: Oakdale, Turlock, Stockton, Patterson, Ripon, Escalon, Manteca, Tracy, Sacramento, Roseville, two branches in Sonora, three branches in Modesto, and three branches in their Eastern Sierra division, which includes Bridgeport, Mammoth Lakes, and Bishop. The Company’s Roseville location opened in early 2022 as a Loan Production Office and as a full-service branch in December 2022.

Non-interest income for the fourth quarter and year ended Dec. 31, 2022, totaled $1,421,000 and $5,571,000, respectively, compared to $1,611,000 during the prior quarter, $1,542,000 for the fourth quarter of 2021, and $5,426,000 for the year ended Dec. 31, 2021. The year-over-year increase was primarily due to a gain of $274,000 from market value changes on a limited partnership equity investment recorded in the third quarter, which consequently resulted in a decrease in the fourth quarter.

Non-interest expense for the fourth quarter and year ended Dec. 31, 2022, totaled $9,611,000 and $37,308,000, respectively, compared to $9,370,000 during the prior quarter, $8,877,000 for the fourth quarter of 2021 and $33,219,000 for the year ended Dec. 31, 2021. The fourth quarter and year-to-date increases compared to prior periods correspond to staffing expense, general operating costs related to servicing the growing loan and deposit portfolios, and a decrease in deferred costs associated with funded loans which is recorded against salary expense.

Total assets were $1.97 billion at Dec. 31, 2022, an increase of $6.4 million over Sept. 30, 2022, and $4.4 million over Dec. 31, 2021. Gross loans were $915.8 million as of Dec. 31, 2022, an increase of $3.5 million from Sept. 30, 2022, and $55.7 million from Dec. 31, 2021. Gross loans were impacted by PPP loan balance decreases of $3.2 million and $28.7 million, during the fourth quarter and trailing twelve months, respectively, due to SBA forgiveness payments. The Company’s total deposits were $1.81 billion as of Dec. 31, 2022, a decrease of $16.6 million from Sept. 30, 2022, and an increase of $7.3 million over Dec. 31, 2021.

Non-performing assets remained at zero as of Dec. 31, 2022, as they were as of Sept. 30, 2022 and Dec. 31, 2021. The allowance for loan losses as a percentage of gross loans decreased to 1.03 percent at Dec. 31, 2022, compared to 1.21 percent at Sept. 30, 2022, and 1.25 percent at Dec. 31, 2021. The Company recorded a $1,550,000 reversal of loan loss provisions during the fourth quarter, mainly related to a COVID-19 risk-based discretionary reserve first recorded during 2020, that was no longer required, as economic conditions have improved. Loan loss reserves relative to gross loans remain at acceptable levels consistent with our internal loan risk model and credit quality remains stable.

For more information, call 1-866-844-7500 or visit www.ovcb.com.