• Home
  • Journal
  • Public Companies
  • Oak Ridge Financial Services, Inc. Announces Third Quarter 2020 Results and Quarterly Cash Dividend of $0.06 Per Share

Oak Ridge Financial Services, Inc. Announces Third Quarter 2020 Results and Quarterly Cash Dividend of $0.06 Per Share

OAK RIDGE, N.C., Nov. 02, 2020 (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 third quarter of 2020 and a quarterly cash common dividend of $0.06 per share.
Third Quarter 2020 HighlightsBasic and diluted earnings per share of $0.33 for the three months ended September 30, 2020, down $0.13, or 28.6%, from $0.46 for the same period in 2019;Return on average common stockholders’ equity of 8.50% (annualized) for the three months ended September 30, 2020, compared to 11.08% (annualized) for the same period in 2019;Loan loss provisions for the nine months ended September 30, 2020 were $2.2 million, up significantly from $185,000 for the same period in 2019; most of the 2020 loan loss provisions are related to the potential adverse economic impact of the COVID-19 pandemic and are the primary reason for the decline in earnings per share and return on average common stockholders’ equity from 2019 to 2020;Outstanding balance of loans granted deferrals of principal and/or interest payments in response to COVID-19 of $23.1 million (5.2% of total loans) as of September 30, 2020;Through the end of the first round of the Small Business Administration (“SBA”) Payroll Protection Program (“PPP”) in August 2020, the Bank funded 587 PPP loans totaling $49.6 million, and has collected fees from the SBA of $1.96 million; these fees and will be recognized as interest income over the life of the PPP loans;Period end loans of $448.4 million, up 15.3% (20.4% annualized) from December 31, 2019;Period end loans, net of PPP loans, of $400.2 million, up 2.9% (3.9% annualized) from December 31, 2019;Period end deposits of $463.7 million, up 16.5% (22.0% annualized) from December 31, 2019;Period end noninterest-bearing deposits of $98.2 million, up 52.6% (70.3% annualized) from December 31, 2019;Period end Allowance for loan losses of $5.1 million, up 75.9%, from $2.9 million at December 31, 2019.Nonperforming assets of $3.5 million, down 8.4% from $3.9 million at December 31, 2019.
Tom Wayne, Chief Executive Officer and Chief Financial Officer, reported, “In the midst of the unprecedented challenges presented by the ongoing COVID-19 pandemic, I am extremely pleased with our financial performance thus far in 2020, and very proud of our Bank’s support of the local community through our participation in the PPP program and our loan deferral program which is structured to assist borrowers that have been impacted by COVID-19. Loans in deferral peaked at 29% of total loans in the second quarter of 2020 and have declined significantly to 5% of total loans at September 30, 2020, a very positive sign. Since the pandemic began, we have followed local, state, and national guidelines, and have adapted our sales and service processes to seamlessly service our clients and new clients while keeping our teams safe. While it is difficult to accurately predict the next few quarters and the impact of COVID-19 on our local and national economy, I am thankful to have our experienced team of bankers and a supportive board of directors as we address future challenges and opportunities.”The quarterly cash dividend of $0.06 per share of common stock is payable on December 1, 2020 to stockholders of record as of the close of business on November 17, 2020. “We are pleased to announce 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’s capital ratios remain strong and exceeded all regulatory requirements at September 30, 2020. As of September 30, 2020, the Company’s stockholders’ equity was $43.2 million, up 7.2%, from $40.3 million at December 31, 2020.With respect to the consolidated statement of operations for the three months ended September 30, 2020, net interest income was $4.5 million, which was an increase from $4.2 million during the same period in 2019. For the three months ended September 30, 2020, the net interest margin was 3.51% compared to 3.80% for the same period in 2019, a decrease of 29 basis points. For the nine months ended September 30, 2020, net interest income was $12.9 million, compared to $12.3 million during the same period in 2019. The net interest margin was 3.55% for the nine months ended September 30, 2020, compared to 3.65% for the same period in 2019, a decrease of 10 basis points.The Company recorded a provision for loan losses of $617,000 for the three months ended September 30, 2020, compared with no provision for the same period in 2019. For the nine months ended September 30, 2020 the Company recorded a provision of $2.2 million compared with a provision of $185,000 for the same period in 2019. The allowance for loan losses as a percentage of total loans was 1.14% at September 30, 2020 compared to 0.90% at December 31, 2019. The allowance for loan losses as a percentage of total loans not including PPP loans was 1.28% as of September 30, 2020. The increase in the allowance for loan losses in 2020 was largely the result of the Company increasing the qualitative factors in its allowance for loan loss model due to the deteriorating economic outlook related to COVID-19. Nonperforming assets represented 0.64% of total assets as of September 30, 2020, compared to 0.82% at December 31, 2019.Noninterest income totaled $900,000 for the three months ended September 30, 2020, compared with $846,000 for the same period in 2019, an increase of $54,000 or 6.4%. The biggest contributor to the increase was a gain on sale of SBA loans (not PPP loans) of $202,000 in the third quarter of 2020 and $83,000 of gains in the comparable period in 2019. A $60,000 decrease in service charges on deposit accounts from 2019 to 2020 offset the increase in gain on sale of SBA loans. Noninterest income totaled $2.5 million for the nine months ended September 30, 2020, compared with $2.3 million for the same period in 2019, an increase of $212,000 or 9.2%. The biggest contributor to the increase was a gain on sale of SBA loans (not PPP loans) of $464,000 in the nine months ended September 30, 2020 compared to $83,000 in the same period in 2019. A $164,000 gain on sale of securities in the nine months ended September 30, 2019, and no such gain in 2020 partially offset the increase in gain on sale of SBA loans.Noninterest expense totaled $3.7 million in the three months ended September 30, 2020, an increase of $195,000, or 5.6%, from the same period in 2019. A decrease in salaries, primarily due to credits in payroll taxes as a result of provisions in the CARES Act, was responsible for most of this decrease. Noninterest expense totaled $10.4 million in the nine months ended September 30, 2020, unchanged from 2019. Salaries declined from 2019 to 2020, primarily due to credits in payroll taxes as a result of provisions in the CARES Act as well as lower incentive payments in 2020 compared to 2019.About Oak Ridge Financial Services, Inc.
Oak Ridge Financial Services, Inc. (OTCPink: 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 ManagementVisit 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.

Disclaimer & Cookie Notice

Welcome to GOLDEA services for Professionals

Before you continue, please confirm the following:

Professional advisers only

I am a professional adviser and would like to visit the GOLDEA CAPITAL for Professionals website.

Cookie Notice

We use cookies to improve your experience on our website

Information we collect about your use of Goldea Capital website

Goldea Capital website collects personal data about visitors to its website.

When someone visits our websites, we use a third party service, Google Analytics, to collect standard internet log information (such as IP address and type of browser they’re using) and details of visitor behavior patterns. We do this to allow us to keep track of the number of visitors to the various parts of the sites and understand how our website is used. We do not make any attempt to find out the identities or nature of those visiting our websites. We won’t share your information with any other organizations for marketing, market research or commercial purposes and we don’t pass on your details to other websites.

Use of cookies
Cookies are small text files that are placed on your computer or other device by websites that you visit. They are widely used to make websites work, or work more efficiently, as well as to provide information to the owners of the site.