Oak View Bankshares, Inc. Announces Financial Results for First Quarter 2022

WARRENTON, VA / ACCESSWIRE / May 6, 2022 / Oak View Bankshares, Inc. (the "Company") (OTC Pink:OAKV), parent company of Oak View National Bank (the "Bank"), reported net income of $596,779 for the quarter ended March 31, 2022, compared to net income of $764,898 for the quarter ended March 31, 2021. Basic and diluted earnings per share for the first quarter were $0.20 compared to $0.26 per share for the first quarter of 2021.

Selected Highlights:

• The net interest margin was 3.12% for the quarter, compared to 3.35% and 3.47% for the quarters ending December 31, 2021, and March 31, 2021, respectively.
• Total assets increased to $379.7 million on March 31, 2022, compared to $345.1 million on December 31, 2021.
• Total loans decreased to $245.4 million on March 31, 2022, compared to $251.2 million on December 31, 2021.
• Credit quality continues to be outstanding. The Company reported no nonperforming loans and no past due loans on March 31, 2022. The Company had only one nonperforming loan totaling $2,385 and one loan totaling $9,148 that was thirty-four days past due on December 31, 2021.
• The Bank recorded a recovery in the provision for loan losses of $55,333 for the quarter, compared to a recovery in the provision for loan losses of $1,796 and $105,999 for the quarters ending December 31, 2021, and March 31, 2021, respectively.
• Total deposits increased to $321.8 million on March 31, 2022, compared to $300.31 million on December 31, 2021, and $254.3 million on March 31, 2021.
• Regulatory capital remains strong with ratios exceeding the well capitalized thresholds in all categories.

Michael Ewing, CEO and Chairman of the Board said, "Our first quarter earnings are in line with our current expectations. Loan growth lagged for the quarter due primarily to unexpected payoffs that were the result of borrowers taking advantage of liquidity events. Our deposits continue to grow, and our branch teammates continue to work extremely hard in keeping pace with the demand for deposit account openings." Mr. Ewing continued by saying, "the current market conditions will present challenges and opportunities throughout the year. We believe the Company is well positioned to execute our strategic objectives by adding key employees to our team, leveraging the increased capital levels, completing our core processor conversion and improving our digital capabilities."

Earnings

Return on average assets was 0.67% and return on average equity was 8.40% for the quarter, compared to 1.01% and 12.19%, respectively, for the prior quarter and 1.06% and 11.66%, respectively, for the first quarter of 2021.

Net Interest Margin

The decrease in the net interest margin was due primarily to growth in lower yielding investments, lower interest income because of lower accretion of net PPP origination fees, higher cost of funds due to the additional interest expense associated with the subordinated debt issuance offset, in part, by the lower average cost of deposits, specifically the shift in balances from time deposits to lower-cost demand deposits, savings, and money market accounts.

Noninterest Income

Noninterest income was $296,254 for the quarter, compared to $372,969 for the prior quarter, and $296,241 for the first quarter of 2021. This represents a decrease of $76,715 when compared to the prior quarter. Mortgage loan fee income was the largest contributor for the change in noninterest income for the quarter based on changes in the interest rate environment relative to secondary market loans.

Noninterest Expense

Noninterest expense was $2.2 million for the quarter, compared to $2.1 million for the prior quarter and $1.8 million for the first quarter of 2021.

Salaries and employee benefits represents the largest category of noninterest expense. Expenses related to salaries and benefits were $1.3 million for the quarter, relatively unchanged when compared to the prior quarter and $941,484 for the first quarter of 2021. Increases to salaries and employee benefits are primarily related to newly added positions, taking advantage of growth opportunities in our markets.

Asset Quality

The allowance for loan losses was $2.1 million on March 31, 2022, and December 31, 2021. Changes in the allowance for loan losses related primarily to the recovery of reserves as previously anticipated credit deterioration, at the onset of the COVID-19 pandemic, has not been experienced. Management believes that the level of the allowance for loan losses is sufficient to absorb losses inherent in the portfolio.

Capital

Total consolidated equity was $27.9 million on March 31, 2022, compared to $28.6 million on December 31, 2021.

The Bank benefited from the downstream of $8.0 million of capital from the Company as a result of the Company's subordinated debt issuance of $13.7 million, net of debt issuance costs of $322,875 during the quarter. This resulted in the Bank's regulatory capital ratios of 16.2% in Common Equity Tier 1 and Total Tier 1 Capital, 17.1% in Total Capital and 10.4% in Leverage Ratio for the quarter ending March 31, 2022. These ratios exceeded the well capitalized thresholds for the period.

About Oak View Bankshares, Inc. and Oak View National Bank

Oak View Bankshares, Inc. is the parent bank holding company for Oak View National Bank, a locally owned and managed community bank serving Fauquier, Culpeper, Rappahannock, and surrounding Counties. For more information about Oak View Bankshares, Inc. and Oak View National Bank, please visit our website at www.oakviewbank.com. Member FDIC.

For additional information, contact Tammy Frazier, Executive Vice President & Chief Financial Officer, Oak View Bankshares, Inc., at 540-359-7155.

SOURCE: Oak View Bankshares, Inc.