OAK RIDGE, N.C., May 04, 2022 (GLOBE NEWSWIRE) -- Oak Ridge Financial Services, Inc. (“Oak Ridge”; or the “Company”) (OTCPink: BKOR), the parent company of Bank of Oak Ridge (the “Bank”), announced unaudited financial results for the first three months of 2022, and an increase in its quarterly cash dividend to $0.08.
First Quarter 2022 Highlights
- Earnings per share of $0.62 for the three months ended March 31, 2022, down 15 cents from the comparable 2021 period.
- Annualized return on average common stockholders’ equity of 13.07% for the three months ended March 31, 2022, compared to 18.45% for the same period in 2021.
- Tangible book value per common share of $18.63 as of March 31, 2022, up 8.1%, or $1.39, from $17.24 as of March 31, 2021.
- Period end loans of $434.5 million, up 1.1% (4.5% annualized) from December 31, 2021.
- Period end allowance for loan losses of $3.9 million, up 3.6%, from $3.8 million on December 31, 2021.
- Nonperforming assets of $1.0 million, down 65.2% from $3.0 million on December 31, 2021.
- Period end deposits of $541.6 million, up 6.4% (26.0% annualized) from December 31, 2021.
- Through March 31, 2022, the Small Business Administration (“SBA”) forgave, and the Bank recognized remaining unamortized fees and associated costs of approximately 92% on the $80.0 million of first and second rounds of SBA Paycheck Protection Program (“PPP”) loans.
Tom Wayne, Chief Executive Officer and Chief Financial Officer, reported, “I am extremely pleased with our continued strong financial performance in the first quarter of 2022 given the reduction in the bank’s income from 2021 to 2022 as our participation in the PPP program ends. Our team has shown great resilience and performance as we navigate the ever changing economic and social environment. In the first quarter of 2022, we experienced solid loan growth despite the reduction in PPP loans, and deposit growth was strong as well. Additionally, our nonperforming assets to total assets declined from 0.51% on December 31, 2021, to 0.16% on March 31, 2022.”
The Company also announced a $0.01 increase in its quarterly cash dividend to $0.08 per share of common stock. The dividend is payable on June 9, 2022, to stockholders of record as of the close of business on May 24, 2022. “We are pleased to increase our quarterly cash dividend to our stockholders,” said Mr. Wayne. “Paying stockholders a portion of our earnings reflects our continuing commitment to enhance stockholder value.”
The Bank has adopted the community bank leverage ratio (“CBLR”) requirement, and as of March 31, 2022, the Bank’s CBLR was 10.2%, unchanged from December 31, 2021. Stockholders’ equity on March 31, 2022, was $50.3 million, down 1.9% from $51.3 million on December 31, 2021, due to a reduction in accumulated other comprehensive income.
With respect to the consolidated statement of operations for the three months ended March 31, 2022, net interest income was $5.4 million, compared to $5.6 million during the same period in 2021. For the three months ended March 31, 2022, the annualized net interest margin was 4.07% compared to 4.26% for the same period in 2021, a decrease of 19 basis points.
The Company recorded a provision for loan losses of $88,000 for the three months ended March 31, 2022, compared to a negative provision of $112,000 for the same period in 2021. The allowance for loan losses as a percentage of total loans was 0.89% on March 31, 2022, compared to 0.87% on December 31, 2021. The allowance for loan losses as a percentage of total loans not including PPP loans was 0.91% on March 31, 2022, and December 31, 2021. The primary risks inherent in the Bank’s loan portfolio, including the adequacy of the allowance or reserve for loan losses, are based on management’s assumptions regarding, among other factors, general and local economic conditions, which are difficult to predict and are beyond the Bank’s control. In estimating these risks, and the related loss reserve levels, management also considers the financial conditions of specific borrowers and credit concentrations with specific borrowers, groups of borrowers, and industries. Nonperforming assets represented 0.16% of total assets on March 31, 2022, compared to 0.51% on December 31, 2021.
Noninterest income totaled $779,000 for the three months ended March 31, 2022, compared with $671,000 for the same period in 2021, an increase of $108,000 or 16.1%. The most significant contributors to the overall increase were increases in Income from Small Business Investment Company (“SBIC”), gain on sale of SBA non-PPP loans, and debit and credit card interchange income of $69,000, $30,000, and $22,000, respectively.
Noninterest expense totaled $4.0 million in the three months ended March 31, 2022, an increase of $293,000, or 7.8%, from the same period in 2021. The most significant contributors to the overall increase were increases in salaries (because of annual salary increases as of November 1, 2021, and lower 2021 payroll tax expense), professional and advertising, and other expense of $163,000, $133,000, and $73,000, respectively.
About Oak Ridge Financial Services, Inc. and Bank of Oak Ridge
At Bank of Oak Ridge, we pride ourselves on knowing your name when you walk through our door. Whether in-person or through our digital offerings, managing your financial well-being is easy, safe, and convenient. We are the longest-running employee-owned community bank in the Triad and have served community members, local businesses, and non-profit organizations since 2000. Learn more about what makes Bank of Oak Ridge the Triad’s community bank by visiting one of our convenient locations in Greensboro, High Point, Summerfield & Oak Ridge.
Oak Ridge Financial Services, Inc. (OTC Pink: BKOR) is the holding company for Bank of Oak Ridge. Bank of Oak Ridge is a member of the FDIC and an Equal Housing Lender.
Awards & Recognitions | Best Bank in the Triad | Triad’s Top Workplace Finalist | 2016 Better Business Bureau Torch Award for Business Ethics | Triad’s Healthiest Employer Winner
Banking for Business & Personal | Mobile & Online Banking | Worldwide ATM | Debit, Credit + Rewards | Checking, Savings & Money Market | Loans + SBA | Mortgage | Insurance | Wealth Management
Let’s Talk | 336.644.9944 | www.BankofOakRidge.com | Extended Hours at all Triad Locations
Forward-looking Information This earnings release contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Company. These forward-looking statements involve risks and uncertainties and are based on the beliefs and assumptions of management of the Company and on the information available to management at the time that these disclosures were prepared. These statements can be identified by the use of words like “expect,” “anticipate,” “estimate” and “believe,” variations of these words and other similar expressions. Readers should not place undue reliance on forward-looking statements as a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, (1) competition in the Company’s markets, (2) changes in the interest rate environment, (3) general national, regional or local economic conditions may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and the possible impairment of collectability of loans, (4) legislative or regulatory changes, including changes in accounting standards, (5) significant changes in the federal and state legal and regulatory environment and tax laws, and (6) the impact of changes in monetary and fiscal policies, laws, rules and regulations. The Company undertakes no obligation to update any forward-looking statements.
Oak Ridge Financial Services, Inc.
Consolidated Balance Sheets
As of March 31, 2022 (Unaudited) and December 31, 2021 (Audited)
(Dollars in thousands)
| 2022 | 2021 | |||
| Assets | ||||
| Cash and due from banks | $ | 10,831 | $ | 8,998 |
| Interest-bearing deposits with banks | 96,711 | 79,086 | ||
| Total cash and cash equivalents | 107,542 | 88,084 | ||
| Securities available-for-sale | 54,370 | 46,948 | ||
| Securities held-to-maturity | 370 | 387 | ||
| Restricted stock, at cost | 1,347 | 1,324 | ||
| Loans, net of allowance for loan losses of $3,891 and | ||||
| $3,756 at March 31, 2022 and December 31, 2021, respectively | 430,640 | 425,900 | ||
| Property and equipment, net | 9,655 | 9,907 | ||
| Accrued interest receivable | 1,819 | 1,842 | ||
| Bank owned life insurance | 6,034 | 6,014 | ||
| Right-of-use assets – operating leases | 1,493 | 1,594 | ||
| Other assets | 5,413 | 4,921 | ||
| Total assets | $ | 618,683 | $ | 586,921 |
| Liabilities and Stockholders’ Equity | ||||
| Liabilities | ||||
| Deposits | ||||
| Noninterest-bearing | $ | 143,338 | $ | 116,525 |
| Interest-bearing | 398,294 | 392,754 | ||
| Total deposits | 541,632 | 509,279 | ||
| Long-term borrowings | 617 | 683 | ||
| Junior subordinated notes – trust preferred securities | 8,248 | 8,248 | ||
| Subordinated debentures | 9,873 | 9,863 | ||
| Lease liabilities – operating leases | 1,493 | 1,594 | ||
| Accrued interest payable | 273 | 110 | ||
| Other liabilities | 6,204 | 5,816 | ||
| Total liabilities | 568,340 | 535,593 | ||
| Stockholders’ equity | ||||
| Common stock, no par value; 50,000,000 shares authorized; | ||||
| 2,702,370 and 2,672,620 issued and outstanding | ||||
| at March 31, 2022 and December 31, 2021, respectively | 25,700 | 25,532 | ||
| Retained earnings | 24,291 | 22,815 | ||
| Accumulated other comprehensive income | 352 | 2,981 | ||
| Total stockholders’ equity | 50,343 | 51,328 | ||
| Total liabilities and stockholders’ equity | $ | 618,683 | $ | 586,921 |
Oak Ridge Financial Services, Inc.
Consolidated Statements of Income (Unaudited)
For the three months ended March 31, 2022 and 2021
(Dollars in thousands)
| 2022 | 2021 | ||||
| Interest and dividend income | |||||
| Loans and fees on loans | $ | 5,489 | $ | 5,874 | |
| Interest on deposits in banks | 27 | 24 | |||
| Restricted stock dividends | 18 | 20 | |||
| Interest on investment securities | 356 | 336 | |||
| Total interest and dividend income | 5,890 | 6,254 | |||
| Interest expense | |||||
| Deposits | 257 | 375 | |||
| Short-term and long-term debt | 211 | 321 | |||
| Total interest expense | 468 | 696 | |||
| Net interest income | 5,422 | 5,558 | |||
| Provision for (recovery of) loan losses | 88 | (112 | ) | ||
| Net interest income after provision for loan losses | 5,334 | 5,670 | |||
| Noninterest income | |||||
| Service charges on deposit accounts | 136 | 135 | |||
| Brokerage commissions on mortgage loans | 73 | 77 | |||
| Insurance commissions | 114 | 121 | |||
| Gain on sale of Small Business Administration loans | 30 | - | |||
| Debit and credit card interchange income | 277 | 254 | |||
| Income from Small Business Investment Company | 69 | - | |||
| Income earned on bank owned life insurance | 20 | 21 | |||
| Other service charges and fees | 60 | 63 | |||
| Total noninterest income | 779 | 671 | |||
| Noninterest expense | |||||
| Salaries | 2,016 | 1,853 | |||
| Employee benefits | 247 | 294 | |||
| Occupancy | 295 | 286 | |||
| Equipment | 252 | 277 | |||
| Data and item processing | 446 | 446 | |||
| Professional and advertising | 290 | 157 | |||
| Stationary and supplies | 27 | 39 | |||
| Impairment loss on securities | - | 10 | |||
| Telecommunications | 108 | 95 | |||
| FDIC assessment | 54 | 58 | |||
| Other expense | 302 | 229 | |||
| Total noninterest expense | 4,037 | 3,744 | |||
| Income before income taxes | 2,076 | 2,597 | |||
| Income tax expense | 414 | 542 | |||
| Net income and income available to common stockholders | $ | 1,662 | $ | 2,055 | |
| Basic income per common share | $ | 0.62 | $ | 0.77 | |
| Diluted income per common share | $ | 0.62 | $ | 0.77 | |
| Basic weighted average shares outstanding | 2,682,982 | 2,675,500 | |||
| Diluted weighted average shares outstanding | 2,682,982 | 2,675,500 | |||
| Selected Financial Data | March 31, 2022 | December 31, 2021 | September 30, 2021 | June 30, 2021 | March 31, 2021 | December 31, 2020 | ||||||||||||||||
| Return on average common stockholders' equity1 | 13.07 | % | 15.70 | % | 16.40 | % | 14.71 | % | 18.45 | % | 9.17 | % | ||||||||||
| Tangible book value per share | $ | 18.63 | $ | 19.20 | $ | 18.53 | $ | 17.93 | $ | 17.24 | $ | 16.85 | ||||||||||
| Return on average assets1 | 1.14 | % | 1.36 | % | 1.41 | % | 1.20 | % | 1.49 | % | 0.73 | % | ||||||||||
| Net interest margin1 | 4.07 | % | 3.65 | % | 3.94 | % | 3.79 | % | 4.26 | % | 3.57 | % | ||||||||||
| Efficiency ratio | 65.10 | % | 69.73 | % | 63.08 | % | 62.80 | % | 59.94 | % | 67.64 | % | ||||||||||
| Nonperforming assets to total assets | 0.16 | % | 0.51 | % | 0.50 | % | 0.55 | % | 0.62 | % | 0.64 | % | ||||||||||
1Annualized
Contact: Tom Wayne, CEO and CFO
Phone: 336.644.9944
