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, 2018, consolidated net income was $2,591,000, or $0.32 per diluted share (EPS), compared to $2,802,000, or $0.35 EPS, for the prior quarter and $2,830,000, or $0.35 EPS, for the same period a year ago. The decrease of $211,000 compared to the prior quarter is mainly due to non-recurring gains on the sale of an OREO property and investment securities recorded during the first quarter of 2018. Compared to the second quarter of 2017, the net income decrease of $239,000 is attributable to the $938,000 one-time merger-related settlement payments that were recorded in the second quarter of 2017, which were offset in part by strong core earnings and the lower federal income tax rate in 2018 corresponding to the Tax Cuts and Jobs Act of 2017.
Consolidated net income for the six months ended June 30, 2018 totaled $5,393,000, or $0.67 EPS, representing an increase of 7.1 percent compared to $5,037,000, or $0.62 EPS for the six months ended June 30, 2017. In spite of the non-recurring revenue items recorded in the prior year, the Company has benefited from year-over-year earning asset growth, a higher interest rate environment and a lower federal income tax rate, as the main contributors to the year-to-date net income increase of $356,000.
Net interest income was $9,327,000 for the three months ended June 30, 2018, compared to $9,117,000 for the prior quarter and $8,455,000 for the same period last year. The increase is attributable to the growth of the investment portfolio, combined with the positive impact of recent FOMC rate hikes on earning assets. As a result, the Company’s net interest margin for the three months ended June 30, 2018 increased to 3.83 percent, compared to 3.80 percent for the prior quarter, and 3.74 percent for the same period last year.
Non-interest income for the three months ended June 30, 2018 totaled $1,011,000, compared to $1,332,000 during the prior quarter, and $2,036,000 for the same period last year.
Non-interest expense for the three months ended June 30, 2018 totaled $6,905,000, compared to $6,732,000 during the prior quarter, and $6,076,000 for the same period last year. These increases compared to prior periods correspond to staffing increases partially related to the Company’s upcoming Sacramento expansion, as well as, deposit and loan servicing costs associated with the growing customer base. Additionally, the Company recognized the expense from the remaining contractual lease obligation on a branch premises that was vacated and relocated during the second quarter.
Total assets were $1.07 billion as of June 30, 2018, an increase of $16.8 million over March 31, 2018 and $49.1 million over June 30, 2017. Gross loans were $654.6 million as of June 30, 2018, an increase of $6.2 million over March 31, 2018, and an increase of $30.8 million over June 30, 2017.
“We are pleased to report another quarter of strong core operating results. Net interest income continues to increase and drive profitability,” stated Chris Courtney, President and CEO. “Moving to the second half of the year, we are excited about our expansion into Sacramento and the upcoming opening of our new Capitol Mall Branch. We are proud of the relationship team we have assembled for the market, and the response from the business community has been extremely positive.”
The Board of Directors of Oak Valley Bancorp at their July 17, 2018 meeting, declared the payment of a cash dividend of $0.13 per share of common stock to its shareholders of record at the close of business on July 30, 2018. The payment date will be Aug. 10and will amount to approximately $1,064,000. This is the second dividend payment made by the Company in 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 branches: Oakdale, Turlock, Stockton, Patterson, Ripon, Escalon, Manteca, Tracy, two branches in Sonora, three branches in Modesto, a loan production office (LPO) in Downtown Sacramento, and three branches in their Eastern Sierra division, which includes Bridgeport, Mammoth Lakes and Bishop. The Company has announced plans to elevate its LPO in Sacramento to a full-service branch in August 2018.
For more information, call 1-866-844-7500 or visit www.ovcb.com.