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