Oak View National Bank Announces 2021 Second Quarter Results

WARRENTON, VA / ACCESSWIRE / August 6, 2021 / Oak View National Bank (OTC PINK:OAKV) reported net income of $215,600 for the quarter ended June 30, 2021, compared to net income of $673,600 for the second quarter of 2020, a decrease of 68.0%. Basic and diluted earnings per share for the second quarter of 2021 were $0.07 compared to $0.23 per share in the second quarter of 2020.

Net income for the six months ended June 30, 2021, was $980,500, compared to $860,100 for the six months ended June 30, 2020. Basic and diluted earnings per share for the six months ended June 30, 2021, were $0.34 compared to $0.30 per share for the six months ended June 30, 2020.

Selected Highlights:

  • During the second quarter of 2021, the Bank incurred several one-time, non-recurring noninterest expenses. Expenses of $435,000 were related to the Bank's conversion of its core data processing system and legal expenses of $95,000 which were related to establishing a holding company. These expenses contributed directly to the increased level of noninterest expense during the period.
  • Total assets were $313.7 million on June 30, 2021, an increase of $14.1 million and $29.6 million compared to March 31, 2021, and December 31, 2020, respectively.
  • Total loans increased to $245.0 million on June 30, 2021, compared to $240.4 million on March 31, 2021, and $245.8 million on December 31, 2020. Excluding Paycheck Protection Program loans (PPP), loan growth was 6.51% and 4.70% compared to March 31, 2021, and December 31, 2020, respectively.
  • Credit quality continues to be outstanding as the Bank had just one non-performing loan at June 30, 2021, totaling $14,800. The Bank had zero past due loans at the end of the second quarter 2021. The allowance for loan losses was $2.1 million or 0.86% of total loans at June 30, 2021, compared to $2.1 million or 0.86% of total loans at March 31, 2021, and $2.2 million 0.88% of total loans at December 31, 2020.
  • Total deposits increased to $270.2 million on June 30, 2021, compared to $254.3 million on March 31, 2021, and $239.9 million on December 31, 2020.

Michael Ewing, Vice Chairman of the Board and CEO said, "While second quarter financial performance was below prior quarters, our one-time expenses incurred during the period were the result of major investments into the Bank's efforts to improve our customers' online banking experience and increase our presence in the communities in which we serve. During the period we converted to a new data processing system, purchased property for future branch expansion, increased our employee base and began working on an enhanced organization structure, all of which will provide growth opportunities for our future. These are very exciting times for our organization." Mr. Ewing continued by stating, "We are encouraged by the business opportunities we are seeing and are excited to provide products and services that contribute to our focus of delivering best-in-class community banking services."

Earnings

Return on average assets was 0.28% and return on average equity was 3.17% for the second quarter of 2021 compared to 0.89% and 10.89% respectively for the second quarter of 2020. Return on average assets was 0.65% and 0.62% for the six months ended June 30, 2021, and 2020, respectively. Return on average equity was 7.33% and 7.04% for the six months ended June 30, 2021, and 2020, respectively.

Paycheck Protection Program (PPP) Update

As of June 30, 2021, the Bank had $15.2 million in outstanding PPP loans, $3.4 million of which were originated in 2020 and the remaining $11.8 million were originated in 2021. Net PPP loan fees recognized for the quarter totaled $268,300, of which $177,500 represented accelerated PPP loan fees earned from PPP loan forgiveness of $9.4 million in principal loan balances during the quarter.

Loan Payment Deferrals

During 2020, the Bank granted payment deferrals on 94 loans with an outstanding principal balance of $24.3 million, representing approximately 9% of the loan portfolio. As of June 30, 2021, all loans have returned to their normal payment cycle.

Net Interest Margin

The net interest margin was 3.43% for the quarter ended June 30, 2021, compared to 3.47% for the quarter ended March 31, 2021, and 2.90% for the quarter ended June 30, 2020. The average yield on earning assets was 3.83% for the quarter ended June 30, 2021, compared to 3.99% for the quarter ended March 31, 2021, and 3.63% for the quarter ended June 30, 2020. The cost of funds was 0.59% in the second quarter of 2021, compared to 0.75% for the quarter ended March 31, 2021, and 1.16% for the quarter ended June 30, 2020.

Noninterest Income

Noninterest income increased by $88,300 or 25.73% to $431,400 for the quarter ended June 30, 2021, compared to the quarter ended March 31, 2021, and increased by $166,200 or 62.67% compared to the quarter ended June 30, 2020. This increase was primarily related to higher levels of debit card fee income and mortgage loan fee income.

Noninterest Expenses

Noninterest expenses increased by $822,000 or 45.5% for the quarter ended June 30, 2021, compared to the quarter ended March 31, 2021, and increased $1.2 million or 90.3% compared to the quarter ended June 30, 2020. The period-over-period increases in noninterest expenses were due primarily to the $435,000 onetime costs associated with the core data processor conversion and $95,000 in expenses related to the creation of the holding company. Also, the comparable periods had extraordinary FAS-91 cost deferrals related to the large volume of PPP loan originations in the comparable periods resulting in the reduction in salary expense of $282,870 and $530,390 for the quarters ended March 31, 2021, and June 30, 2020, respectively.

Oak View National Bank is a locally owned and managed community bank offering a full range of financial services for commercial and retail customers, as well as not-for-profit entities. Oak View National Bank is headquartered in Warrenton, Virginia serving Fauquier, Culpeper, Rappahannock and surrounding counties with full-service offices in Warrenton, Marshall and Culpeper and a loan production office in Washington, Virginia. Visit us at www.oakviewbank.com. Member FDIC.

For additional information, contact Jennifer Knighting, Senior Vice President/Director of Sales & Marketing, Oak View National Bank, at 540-825-2570.

OAK VIEW NATIONAL BANK
Balance Sheets


 
(Unaudited) 
 
 

 
June 30, December 31, 

 
2021 2020 
Assets      
Cash and due from banks
3,469,140 3,640,065 
Federal funds sold
 36,995,000  7,261,000 
Interest-bearing deposits in other banks
 12,518,479  12,579,174 
Securities held to maturity, at cost
 3,286,727  3,149,392 
Restricted stock, at cost
 1,475,005  1,725,605 
Loans, net of allowance for loan losses of $2,110,363 and
      
$2,173,910, respectively
 242,859,587  243,585,780 
Premises and equipment, net
 6,142,931  5,470,408 
Accrued interest receivable
 737,858  889,704 
BOLI investment
 5,256,367  5,204,850 
Deferred tax asset
 660,299  660,299 
Other assets
 334,113  505,926 
       
Total assets
313,735,506 284,672,203 
       
Liabilities and Shareholders' Equity
      
       
Liabilities
      
Deposits:
      
Noninterest bearing
84,298,104 66,056,128 
Savings, interest-bearing checking and money market accounts
 113,915,555  97,972,610 
Time deposits
 71,974,207  75,856,953 
Total deposits
270,187,866 239,885,691 
Federal Home Loan Bank advances
 14,900,000  16,900,000 
Accrued expenses and other liabilities
 1,171,096  1,572,864 
Total liabilities
286,258,962 258,358,555 

 
      
Commitments and Contingent Liabilities
- - - - 

 
      
Shareholders' Equity
      
Preferred stock
      
$ 5 par value, authorized 2,000,000 shares,
      
None issued and outstanding
 - -  - - 
Common stock
      
$1 par value, authorized 10,000,000 shares, 2,956,157 and
      
2,896,502 shares issued and outstanding, respectively
2,956,157 2,896,502 
Additional paid-in capital
 17,776,623  17,538,003 
Retained earnings
 6,743,764  5,879,143 
Accumulated other comprehensive income
 - -  - - 
Total shareholders' equity
27,476,544 26,313,648 
       
Total liabilities and shareholders' equity
313,735,506 284,672,203 
       
OAK VIEW NATIONAL BANK
Statements of Operations
For the Three and Six Months Ended June 30, 2021 and 2020
(Unaudited)
  

 
 Three Months Ended June 30,  Six Months Ended June 30, 

 
 2021  2020  2021  2020 

 
 
 
  
 
  
 
  
 
 
Interest and Dividend Income
 
 
  
 
  
 
  
 
 
Interest and fees on loans
 2,711,039  2,456,092  5,305,423  4,856,133 
Interest on held to maturity securities
  30,256   30,393   60,715   60,939 
Dividends on restricted stock
  18,173   25,809   34,816   57,722 
Interest on interest-bearing deposits in other banks
  53,763   86,812   106,902   181,794 
Interest on federal funds sold
  6,791   7,491   9,731   72,596 
Total interest and dividend income
 2,820,023  2,606,598  5,517,587  5,229,183 
                 
Interest Expense
                
Interest on deposits
 235,180  436,546  529,466  937,845 
Interest on Federal Home Loan Bank advances
  59,243   89,723   121,519   212,568 
Total interest expense
 294,423  526,269  650,985  1,150,413 
                 
Net Interest Income
 2,525,600  2,080,329  4,866,603  4,078,771 
                 
Provision for Loan Losses
  38,457   61,511   (67,542)  324,968 
                 
Net interest income after provision for loan losses
 2,487,143  2,018,819  4,934,145  3,753,803 
                 
Noninterest Income
                
Service charges on deposit accounts
 29,564  14,970  52,959  43,235 
Card Fee Income
  154,146   79,440   248,763   156,855 
Income on BOLI
  25,989   27,089   51,517   54,382 
Other income
  203,504   93,177   386,426   188,493 
Total Noninterest Income
 413,203  214,676  739,665  442,964 
                 
Noninterest Expenses
                
Salaries and employee benefits
 1,195,163  703,640  2,136,646  1,732,404 
Occupancy and equipment expense
  149,051   142,608   298,639   288,877 
Professional services
  150,606   90,598   199,802   171,882 
Data processing
  786,779   246,330   1,157,572   529,845 
Promotional and marketing
  93,055   35,412   148,745   67,683 
Other operating expenses
  252,781   162,280   491,509   317,318 
Total noninterest expenses
 2,627,435  1,380,869  4,432,914  3,108,009 
                 
Net Income Before Tax
 272,911  852,626  1,240,896  1,088,758 
                 
Income tax expense
  57,327   179,051   260,415   228,639 
                 
Net income
 215,583  673,574  980,481  860,119 
                 
Earnings per Share, basic and diluted
 0.07  0.23  0.34  0.30 
                 

SOURCE: Oak View National Bank Warrenton VA



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