/EINPresswire.com/ -- OAKDALE, CA -- (Marketwired) -- 01/29/16 -- Oak Valley Bancorp (NASDAQ: OVLY) (the "Company"), the bank holding company for Oak Valley Community Bank and Eastern Sierra Community Bank (the "Bank"), recently reported consolidated financial results for the fourth quarter and year of 2015. For the three months ended December 31, 2015, consolidated net income was $490,000, or $0.06 per diluted share. This compared to consolidated net income of $1,382,000, or $0.17 per diluted share, for the prior quarter and $1,642,000, or $0.20 per diluted share for the same period a year ago. The decrease in net income is attributable to one-time merger related expenses of $1,326,000, net of taxes ($1,971,000 pre-tax), associated with the Mother Lode Bank acquisition completed in December 2015.

Consolidated net income for 2015 totaled $4,908,000, or $0.61 per diluted share, representing a decrease of 31.1% compared to consolidated net income of $7,122,000, or $0.89 per diluted share for 2014. Year-to-date results in 2014 included a $1.88 million reversal of loan loss provisions related to the recovery of a charged off loan which bolstered net income in 2014 from normal operations, and combined with the 2015 merger expenses, further contributed to the year-over-year decrease in earnings.

Total assets were $897 million at December 31, 2015, an increase of $103.3 million over September 30, 2015 and $147.4 million over December 31, 2014. Gross loans were $541 million as of December 31, 2015, an increase of $63.7 million over September 30, 2015, and an increase of $86.6 million over December 31, 2014. The Company's total deposits were $814.7 million as of December 31, 2015, an increase of $102.1 million over September 30, 2015, and an increase of $145.1 million over December 31, 2014.

The balance sheet growth figures include acquired balances of $77.3 million in assets, including $45.8 million in gross loans, and $71.1 million in total deposits from Mother Lode Bank, which if excluded would equate to organic year-over-year growth from normal operations of $70.1 million in assets, including $40.8 million in gross loans, and $74.0 million in total deposits.

Net interest income was $6,647,000 for the three months ended December 31, 2015, a slight increase of $26,000 from the $6,621,000 for the same period last year. The Company has managed to offset the compression of loan yield with strong loan growth resulting in the slight increase to net interest income. The Company's net interest margin for the three months ended December 31, 2015 was 3.62%, compared to 3.61% for the prior quarter and 4.19% for the same period last year.

"Fourth quarter results were notably influenced by the Mother Lode acquisition. After absorbing these initial short-term expenses, we are excited about the long-term prospects the merger will bring and the financial impact it will have in 2016," stated Chris Courtney, President and CEO of the Company and the Bank.

Non-interest expense for the three months ended December 31, 2015 totaled $7,085,000, compared to $5,299,000 during the prior quarter, and $5,252,000 for the same period last year. The increase compared to the prior year is mainly attributed to, as previously mentioned, one-time merger related expenses of $1,971,000 recorded in 2015. Additionally, the increase compared to the same period last year corresponds to growth in full time equivalent staff from 148 to 158, as well as, the addition of the newly constructed Downtown Sonora branch which opened in December 2015. Deposit servicing costs have also increased as a result of the increase in the number of deposit accounts.

Non-interest income for the three months ended December 31, 2015 totaled $962,000, compared to $965,000 during the prior quarter, and $1,086,000 for the same period last year. The decrease compared to the fourth quarter of 2014 is primarily the result of a $159,000 decrease in gains on called investment securities.

Non-performing assets as of December 31, 2015 were $8,167,000, or 0.91% of total assets, compared to $5,123,000, or 0.65% of total assets as of September 30, 2015, and $5,584,000, or 0.74% at December 31, 2014. The ratio of loan loss reserves to gross loans decreased to 1.36% as of December 31, 2015, compared to 1.55%, at September 30, 2015, and 1.66% at December 31, 2014. The increase in non-performing assets is due to one existing loan relationship that was placed on non-accrual status during the fourth quarter and the additional non-performing assets that were acquired from Mother Lode Bank. Improvement in economic conditions and noted trends of credit quality have allowed the Company to maintain its reserve level in spite of recent loan growth. Accordingly, the Company did not record a provision for loan losses in 2015. Additionally, loans acquired from Mother Lode Bank are recorded at fair value and thus did not require a loan loss reserve, which further decreased the loan loss reserve as a percentage of gross loans.

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, 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,         4th        3rd        2nd        1st        4th
 except per share)     Quarter    Quarter    Quarter    Quarter    Quarter
Selected Quarterly
 Operating Data:        2015       2015       2015       2015       2014

  Net interest
   income            $    6,647 $    6,354 $    6,200 $    6,201 $    6,621
  (Recovery of)
   provision for
   loan losses                -          -          -       (125)         -
  Non-interest
   income                   962        965      1,156      1,027      1,086
  Non-interest
   expense                7,085      5,299      5,193      5,099      5,252
                     ---------- ---------- ---------- ---------- ----------
  Net income before
   income taxes             524      2,020      2,163      2,254      2,455
  Provision for
   income taxes              34        638        653        728        813
                     ---------- ---------- ---------- ---------- ----------
  Net income         $      490 $    1,382 $    1,510 $    1,526 $    1,642
                     ========== ========== ========== ========== ==========

  Earnings per
   common share -
   basic             $     0.06 $     0.17 $     0.19 $     0.19 $     0.21
  Earnings per
   common share -
   diluted           $     0.06 $     0.17 $     0.19 $     0.19 $     0.20
  Dividends paid per
   common share      $        - $     0.11 $        - $    0.100 $        -
  Return on average
   common equity           2.49%      7.17%      7.94%      8.22%      8.80%
  Return on average
   assets                  0.24%      0.70%      0.81%      0.82%      0.91%
  Net interest
   margin (1)              3.62%      3.61%      3.70%      3.74%      4.19%
  Efficiency ratio
   (2)                    66.65%     66.95%     68.23%     70.56%     64.50%

Capital - Period End
  Book value per
   common share      $     9.69 $     9.55 $     9.43 $     9.39 $     9.29

Credit Quality -
 Period End
  Nonperforming
   assets/ total
   assets                  0.91%      0.65%      0.68%      0.70%      0.74%
  Loan loss reserve/
   gross loans             1.36%      1.55%      1.59%      1.63%      1.66%

Period End Balance
 Sheet
($ in thousands)
  Total assets       $  897,038 $  793,723 $  764,008 $  753,552 $  749,665
  Gross loans           541,032    477,327    463,463    453,165    454,471
  Nonperforming
   assets                 8,167      5,123      5,197      5,246      5,584
  Allowance for loan
   losses                 7,356      7,389      7,390      7,409      7,534
  Deposits              814,679    712,577    683,937    672,991    669,581
  Common equity          78,263     77,147     76,165     75,816     75,041

Non-Financial Data
  Full-time
   equivalent staff         158        150        152        148        148
  Number of banking
   offices                   16         15         15         15         15

Common Shares
 outstanding
  Period end          8,078,155  8,078,155  8,072,655  8,075,355  8,074,855
  Period average -
   basic              7,996,644  7,994,857  7,992,296  7,972,225  7,960,108
  Period average -
   diluted            8,045,090  8,040,577  8,036,691  8,024,756  8,015,511

Market Ratios
  Stock Price        $    10.40 $     9.46 $     9.86 $     9.86 $    10.16
  Price/Earnings          42.78      13.79      13.01      12.70      12.41
  Price/Book               1.07       0.99       1.05       1.05       1.09


                           YEAR ENDED
                          DECEMBER 31,
                        2015       2014
                     ---------- ----------

  Net interest
   income            $   25,402 $   25,289
  (Recovery of)
   provision for
   loan losses             (125)    (1,877)
  Non-interest
   income                 4,110      3,764
  Non-interest
   expense               22,676     20,234
                     ---------- ----------
  Net income before
   income taxes           6,961     10,696
  Provision for
   income taxes           2,053      3,574
                     ---------- ----------
  Net income         $    4,908 $    7,122
                     ========== ==========

  Earnings per
   common share -
   basic             $     0.61 $     0.90
  Earnings per
   common share -
   diluted           $     0.61 $     0.89
  Dividends paid per
   common share      $     0.21 $     0.17
  Return on average
   common equity           6.41%     10.07%
  Return on average
   assets                  0.63%      1.03%
  Net interest
   margin (1)              3.66%      4.11%
  Efficiency ratio
   (2)                    68.07%     67.38%

Capital - Period End
  Book value per
   common share      $     9.69 $     9.29

Credit Quality -
 Period End
  Nonperforming
   assets/ total
   assets                  0.91%      0.74%
  Loan loss reserve/
   gross loans             1.36%      1.66%

Period End Balance
 Sheet
($ in thousands)
  Total assets       $  897,037 $  749,665
  Gross loans           541,032    454,471
  Nonperforming
   assets                 8,167      5,584
  Allowance for loan
   losses                 7,356      7,534
  Deposits              814,679    669,581
  Common equity          78,263     75,041

Non-Financial Data
  Full-time
   equivalent staff         158        148
  Number of banking
   offices                   16         15

Common Shares
 outstanding
  Period end          8,078,155  8,074,855
  Period average -
   basic              7,989,088  7,938,052
  Period average -
   diluted            8,036,845  7,992,731

Market Ratios
  Stock Price        $    10.40 $    10.16
  Price/Earnings          16.93      11.32
  Price/Book               1.07       1.09

  (1) Ratio computed on a fully tax equivalent basis using a marginal
      federal tax rate of 34%.
  (2) Ratio computed on a fully tax equivalent basis using a marginal
      federal tax rate of 34%, and a marginal federal/state combined tax
      rate of 41.15% for applicable revenue.

Contact:
Chris Courtney/Rick McCarty
Phone: (209) 848-2265
www.ovcb.com

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