Skip to main content

Market Overview

Oak Ridge Financial Services, Inc. Announces Fourth Quarter and Annual Results for 2019, Increase in the Quarterly Cash Dividend to $0.06 Per Share, and Approval from Banking Regulators to Open High Point, NC Branch

Share:

OAK RIDGE, N.C., Feb. 04, 2020 (GLOBE NEWSWIRE) -- Oak Ridge Financial Services, Inc. (the "Company") (OTC:BKOR), the parent company of Bank of Oak Ridge (the "Bank"), announced unaudited financial results for the fourth quarter and full year ending December 31, 2019, an increase of $0.01 in its quarterly cash dividend to $0.06 per share, and approval from banking regulators to open a new, full service branch office in High Point, NC.

Fourth Quarter and Full Year 2019 Highlights

  • Earnings per share of $1.62 for 2019, up 10 cents, or 7%, from 2018; earnings per share of $0.39 for the three months ended December 31, 2019, down 5 cents, or 11%, from 2018
  • Return on average common stockholders' equity of 11.25% for 2019, compared to 12.26% for 2018; return on average common stockholders' equity of 10.23% for the three months ended December 31, 2019, compared to 13.57% for the same period in 2018
  • Period end book value per common share of $15.36, up $2.12, or 16%, from December 31, 2018
  • Period end loans of $388.9 million, up 4.6% from December 31, 2018
  • Period end deposits of $398.6 million, up 4.3% from December 31, 2018
  • Period end noninterest-bearing deposits of $64.9 million, up 10.6% from December 31, 2018
  • Period end nonperforming assets of $3.9 million, up from $2.8 million at December 31, 2018
  • Paid four quarterly cash dividends of $0.05 per share of common stock to stockholders
  • Successfully converted to Fiserv DNA's core banking system in March of 2019
  • Renovated the Oak Ridge and Summerfield banking offices
  • Recognized for the third consecutive year as one of the Top 200 Publicly Traded Community Banks and Thrifts by American Banker magazine, based on three-year average return on equity through December 31, 2018

Tom Wayne, CEO and Chief Financial Officer, reported, "We are very pleased with our 2019 financial results, with continued growth in net income, earnings per share, book value per share, earning assets, and noninterest-bearing deposits. Our conversion to Fiserv DNA's core banking system in March required significant internal resources and our team prepared well for the conversion which is delivering a better banking experience for our clients. Lastly, the recognition we received from American Banker for the third consecutive year affirms of our success in creating value for our stockholders.  I am very pleased with our overall performance in 2019 and thank our dedicated employees, our Board of Directors, and our clients for their continued support."

The Company announced that its Board of Directors has declared a quarterly cash dividend of $0.06 per share of common stock, which is a $0.01 increase from the same period in 2019. The dividend will be paid on or about March 2, 2020 to stockholders of record as of the close of business on February 21, 2020. "We are pleased to announce an increase in the quarterly cash dividend to our stockholders," said Tom Wayne. "We believe that paying stockholders a portion of our earnings reflects our continuing commitment to enhance stockholder value."

The Company also announced that the Bank had received formal approval from its banking regulators to open a new, full service branch office in High Point, NC at 2513 Eastchester Drive. The Bank plans to open the branch in the second half of 2020, and will offer a full suite of business and consumer banking products and services from this location. Tom Wayne commented, "Our opening of the High Point branch will better position us to provide that community with a responsive, local banking alternative. We believe that this office enhances our overall coverage of Guilford County, will contribute to further asset growth, and enhance long term returns for our shareholders."

The Bank's capital ratios remain strong and exceed all regulatory requirements at December 31, 2019. As of December 31, 2019, the Company's stockholders' equity was 8.5% of total assets, compared to 7.6% as of December 31, 2018.

With respect to the consolidated statement of operations for 2019 and 2018, net interest income was $16.3 million for 2019, up $623,000, or 4.0%, from $15.7 million during the year ending December 31, 2018. For 2019, the net interest margin was 3.69% compared to 3.77% for year ending December 31, 2018, a decrease of 8 basis points. The primary reason for the decrease in the net interest margin was an increase in deposit funding costs due to the increase in short-term interest rates in 2019.

The Company recorded a provision for loan losses of $185,000 in 2019, compared with a negative provision of $96,000 in 2018. The allowance for loan losses as a percentage of total loans was 0.74% at December 31, 2019 compared to 0.90% at December 31, 2018. The reduction in the allowance for loan losses in 2019 was due to overall improvements in various quantitative and qualitative factors used in the determination of the allowance. Nonperforming assets represented 0.81% of total assets at December 31, 2019, compared to 0.63% at December 31, 2018.

Noninterest income totaled $3.2 million in 2019, compared with $3.1 million in 2018, an increase of $104,000 or 3.4%. The biggest noninterest income category contributing to the increase was gain on sale of sale of securities, which increased $154,000 from 2018 to 2019.

Noninterest expense totaled $14.1 million in 2019, compared with $14.0 million in 2018, an increase of $112,000 or 0.8%.

About Oak Ridge Financial Services, Inc.
Oak Ridge Financial Services, Inc. (OTC:BKOR) is the holding company for Bank of Oak Ridge. Bank of Oak Ridge delivers personal attention and convenience for every client. Substantially all of the Bank's employees are stockholders in Oak Ridge Financial Services, Inc. through their participation in the Bank's Employee Stock Ownership Plan. We are proud of our many accolades and awards, including seven "Best Bank in the Triad" wins, "Triad's Top Workplace" finalist, "Triad's Healthiest Employer" winner and a 2016 Better Business Bureau "Torch Award" winner.   We offer a complete range of banking services for individuals and businesses. Bank of Oak Ridge is a member of the FDIC and an Equal Housing Lender.

Banking Services | ATM Usage Worldwide | Mobile Banking | Online Billpay | Remote and Mobile Deposit | Checking | Savings | Mortgage | Insurance | Lending | Wealth Management

Visit Us | To learn more, visit us during our extended weekday and Saturday hours at one of our convenient locations in Greensboro, Summerfield and Oak Ridge, North Carolina, or call 336.644.9944, or online at www.BankofOakRidge.com.

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
December 31, 2019 (unaudited) and December 31, 2018
(Dollars in thousands)

           
  2019   2018
Assets          
           
Cash and due from banks $ 4,030   $ 10,153
Interest-bearing deposits with banks   19,539     9,098
Total cash and cash equivalents   23,569     19,251
Securities available-for-sale   43,183     41,443
Securities held-to-maturity (fair values of $898 in 2019 and $1,030 in 2018)   730     892
Federal Home Loan Bank Stock, at cost   1,042     1,023
Loans, net of allowance for loan losses of $2,886 in 2019 and $3,347 in 2018   386,056     368,562
Property and equipment, net   10,491     9,886
Accrued interest receivable   1,478     1,555
Bank owned life insurance   5,837     5,739
Right-of-use assets – operating leases   1,336     -
Other assets   1,984     4,990
Total assets $ 475,706   $ 453,341
           
Liabilities and Stockholders' Equity          
           
Liabilities          
Deposits:          
Noninterest-bearing $ 64,883   $ 58,672
Interest-bearing   333,732     323,646
Total deposits   398,615     382,318
Short-term borrowings   10,000     15,000
Long-term borrowings   6,184     1,304
Junior subordinated notes related to trust preferred securities   8,248     8,248
Subordinated debentures   5,608     5,581
Lease liabilities – operating leases   1,336     -
Accrued interest payable   281     263
Other liabilities   5,119     6,298
Total liabilities   435,391     419,012
           
Stockholders' equity          
Common stock, no par value; 50,000,000 shares authorized; 2,624,815 and 2,592,434  issued and outstanding in 2019 and 2018, respectively   24,850     24,353
Retained earnings   13,146     9,422
Accumulated other comprehensive income   2,319     554
Total stockholders' equity   40,315     34,329
Total liabilities and stockholders' equity $ 475,706   $ 453,341
           

Oak Ridge Financial Services, Inc.
Consolidated Statements of Operations
For the three months and years ended December 31, 2019 and 2018 (Unaudited)
(Dollars in thousands except per share data)                                                                                  

       
  Three months ended December 31, 
  Year ended December 31,
    2019     2018     2019     2018
Interest and dividend income                      
Loans and fees on loans $ 5,029   $ 4,808   $ 20,077   $ 18,007
Interest on deposits in banks   73     84     371     258
Federal Home Loan Bank stock dividends   16     14     66     58
Investment securities   313     346     1,346     1,464
Total interest and dividend income   5,431     5,252     21,860     19,787
                       
Interest expense                      
Deposits   1,106     954     4,398     3,049
Short-term and long-term debt   277     288     1,162     1,061
Total interest expense   1,383     1,242     5,560     4,110
Net interest income   4,048     4,010     16,300     15,677
Provision for loan losses   -     (155)     185     (96)
Net interest income after provision for loan losses   4,048     4,165     16,115     15,773
                       
Noninterest income                      
Service charges on deposit accounts   196     164     732     664
Gain on sale of securities   -     10     164     10
Mortgage commissions   69     45     306     198
Investment commissions   -     -     -     21
Insurance commissions   80     80     349     307
Gain on sale of SBA loans   195     -     278     345
Fee income from accounts receivable financing   -     39     13     199
Debit and credit card interchange income   248     241     963     955
Income earned on bank owned life insurance   25     27     98     104
Other service charges and fees   67     65     267     263
Total noninterest income   880     671     3,170     3,066
                       
Noninterest expense                      
Salaries   1,701     1,713     6,678     6,805
Employee benefits   296     280     1,159     1,169
Occupancy expense   234     230     880     856
Equipment expense   242     196     915     709
Loss (gain) on sale of property and equipment   -     -     -     -
Data and item processing   508     438     1,962     1,654
Professional and advertising   176     94     584     667
Stationary and supplies   29     56     141     236
Net cost of foreclosed assets   40     -     52     2
Impairment loss on securities   12     13     28     28
Telecommunications expense   97     90     403     451
FDIC assessment   -     55     48     219
Accounts receivable financing expense   -     12     3     63
Other expense   338     264     1,222     1,104
Total noninterest expense   3,673     3,441     14,075     13,963
Income before income taxes   1,255     1,395     5,210     4,876
                       
Income tax expense   225     255     960     896
Net income and net income available to common stockholders $ 1,030   $ 1,140   $ 4,250   $ 3,980
Basic net income per common share $ 0.39   $ 0.44   $ 1.62   $ 1.52
Diluted income per common share $ 0.39   $ 0.44   $ 1.62   $ 1.52
Basic weighted average common shares outstanding   2,625,685     2,593,958     2,621,113     2,614,414
Diluted weighted average common shares outstanding   2,634,729     2,602,862     2,629,953     2,623,189
                       

Oak Ridge Financial Services, Inc.
Selected Quarterly Financial Ratios (unaudited)

Selected Financial Data December
31, 2019
September
30, 2019
June 30,
2019
March 31,
2019
December
31, 2018
September
30, 2018
Return on average common stockholders' equity1 10.23% 11.08% 10.75% 11.61% 13.57% 11.70%
Tangible book value per share $15.36 $14.99 $14.37 $13.80 $13.24 $12.59
Return on average assets1 0.86% 0.92% 0.85% 0.89% 1.01% 0.85%
Net interest margin1 3.57% 3.80% 3.72% 3.72% 3.71% 3.76%
Net interest income to average assets1 3.37% 3.51% 3.51% 3.52% 3.54% 3.53%
Efficiency ratio 74.53% 69.9% 71.1% 73.1% 73.5% 74.3%
Nonperforming assets to total assets 0.81% 0.91% 0.50% 0.56% 0.63% 0.63%

1Annualized

Contact: Tom Wayne, CEO and CFO
Phone: 336-644-9944

Primary Logo

View Comments and Join the Discussion!
 
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com