(By Balaseshan) Oak Valley Bancorp (NASDAQ: OVLY) reported a 5.7% increase in quarterly earnings on lower taxes, loan losses, and non-interest expense. Non-interest income also contributed to the rise in earnings.
Earnings for the fourth quarter were $1.41 million or $0.18 per share, up from $1.33 million or $0.17 per share last year.
Net interest income decreased 3.5% to $6.11 million, due from new loans boarding and maturing loans repricing in a low interest rate environment, causing downward pressure on yields.
The Oakdale, California-based company's net interest margin fell to 4.15% from 4.70%, as excess deposits being deployed into lower yielding securities and cash based investments.
The allowance for loan losses totaled 2.04% of gross loans at December 31, 2012, down from 2.17% last year. The decrease in reserve ratio corresponds with the charge-offs on non-performing assets. The provision for loan losses declined to $250,000 from $300,000.
Non-interest income climbed 34.4% to $855,000, primarily due to growth in deposit related service charges and fee income generated from increased residential mortgage lending.
Non-interest expense rose to $4.51 million from $4.26 million, due to costs associated with operating two additional branches, as well as costs related to servicing deposit growth across all branches.
Total assets grew 7.9% to $660.5 million as of December 31, 2012. Deposits increased 9.5% to $587.0 million. Gross loans at the year-end declined 1.3% to $391.0 million.
Non-performing assets fell to $6.9 million or 1.05% of total assets at December 31, 2012 from $7.5 million or 1.22% of total assets last year.
OVLY is trading up 1.83% at $8.50 on Tuesday. The stock has been trading between $5.02 and $8.69 for the past 52 weeks.