OAK VIEW : January 25, 2023 - Oak View Bankshares, Inc. Announces Reocrd Earnings for 2022 and Doubles the Dividend

Oak View Bankshares, Inc. Announces Record Earnings for 2022

and Doubles the Dividend

Warrenton, VA, January 25, 2023 - Oak View Bankshares, Inc. (the "Company") (OTC Pink: OAKV), parent company of Oak View National Bank (the "Bank"), reported net income of $1.20 million for the quarter ended December 31, 2022, compared to net income of $868,000 for the quarter ended December 31, 2021, an increase of 38.68%. Basic and diluted earnings per share for the fourth quarter were $0.41 compared to $0.29 per share for the fourth quarter of 2021.

Net income for the twelve months ended December 31, 2022, was $3.06 million, compared to $2.47 million for the twelve months ended December 31, 2021, an increase of 23.71%. Basic and diluted earnings per share for the twelve months ended December 31, 2022, were $1.03 compared to $0.84 for the twelve months ended December 31, 2021.

On January 19, 2023, the Board of Directors of the Company declared an annual dividend of $0.10 per share to shareholders of record as of the close of business on January 30, 2023, payable on February 6, 2023.

Selected Highlights:

• Return on average assets was 1.02% and return on average equity was 17.64% for the quarter ended December 31, 2022, compared to 1.01% and 12.19%, respectively, for the quarter ended December 31, 2021. Return on average assets was 0.75% and 0.78% and return on average equity was 11.73% and 8.98% for the twelve months ended December 31, 2022, and 2021, respectively.
• Total assets were $497.89 million on December 31, 2022, compared to $345.13 million on December 31, 2021.
• Total loans were $273.87 million on December 31, 2022, compared to $251.19 million on December 31, 2021.
• The investment portfolio increased to $193.31 million on December 31, 2022, compared to $24.94 million on December 31, 2021.
• Total deposits were $422.90 million on December 31, 2022, compared to $300.31 million on December 31, 2021.
• Credit quality continues to be outstanding. There were no nonperforming loans as of December 31, 2022.
• Regulatory capital remains strong with ratios exceeding the "well capitalized" thresholds in all categories.

Michael Ewing, CEO and Chairman of the Board said, "This was a phenomenal year for our Company. We began the year by finalizing a proactive subordinated debt issuance which fortified our capital foundation, allowing us to pursue

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increased deposit market share. Deposits were deployed into loans and securities, with a greater proportion in securities as demand for well-priced and well-structured loans tempered." Mr. Ewing continued, "Management constantly evaluates the most efficient way to deploy the capital entrusted to it, with the aim of striking the optimal balance among safety and soundness, profitability and growth. Our strong liquidity and capital profiles will allow us to continue building franchise value."

Mr. Ewing concluded, "We are very happy to share our success with shareholders by doubling the annual dividend over the prior year, while retaining an appropriate capital cushion to support our strategic objectives."

Net Interest Income

The net interest margin was 3.10% for the quarter ended December 31, 2022, compared to 3.35% for the fourth quarter of 2021, respectively. Year to date net interest margin was 3.29%, compared to 3.37% for the twelve months ended December 31, 2021.

Net interest income was $3.45 million for the quarter ended December 31, 2022, compared to $2.77 million for the quarter ended December 31, 2021. Net interest income was $12.08 million and $10.26 million for the twelve months ended December 31, 2022, and 2021, respectively.

Interest income increased $2.01 million and $3.51 million for the quarter and twelve months ended December 31, 2022, respectively, as a result of increased investment opportunities to deploy capital into investments with attractive risk and return characteristics and increased loan income due primarily to the higher interest rate environment.

Interest expense increased $1.32 million and $1.69 million for the quarter and twelve months ended December 31, 2022, respectively. Increases in interest expense are primarily attributable to interest expense related to the issuance of subordinated debt in February 2022, interest expense paid on deposits resulting from increases in volume and in interest rates and interest expense paid on FHLB advances and other borrowings due to higher balances needed to deploy capital into higher yielding investment opportunities.

Noninterest Income

Noninterest income was $476,000 for the quarter ended December 31, 2022, compared to $373,000 for the quarter ended December 31, 2021. Debit card interchange fee income and mortgage loan fee income were the largest contributors of noninterest income. Debit card interchange fee income was $175,000 for the quarter, compared to $150,000 for the fourth quarter 2021. Mortgage loan fee income was $126,000 for the quarter, compared to $113,000 for the fourth quarter of 2021.

Year to date noninterest income was $1.19 million, compared to $1.48 million for the twelve months ended December 31, 2021. Debit card interchange fee income was $663,000 and $527,000 for the twelve months ended December 31, 2022, and 2021, respectively. Mortgage loan fee income was $295,000 and $564,000 for the twelve months ended December 31, 2022, and 2021, respectively.

During the third and fourth quarters, management sold investment securities and redeployed the proceeds into assets with more attractive risk and return characteristics. As part of the portfolio repositioning, the Company incurred year to date net losses on sales of securities of $250,000.

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Noninterest Expense

Noninterest expense was $2.45 million for the quarter ended December 31, 2022, compared to $2.07 million for the fourth quarter of 2021. Year to date noninterest expense was $9.28 million, compared to $8.71 million for the twelve months ended December 31, 2021.

Salaries and employee benefits were the largest category of noninterest expense. Fourth quarter expenses related to salaries and benefits were $1.48 million for the quarter, compared to $1.25 million for the fourth quarter of 2021. Year to date salary and employee benefit expenses were $5.58 million compared to $4.77 million for the twelve months ended December 31, 2021. Salaries and employee benefits increased primarily related to newly added positions and taking advantage of growth opportunities in our markets.

Asset Quality

On December 31, 2022, the allowance for loan losses was $2.31 million or 0.84% of outstanding loans, net of unearned income, compared to $2.13 million or 0.85% of outstanding loans, net of unearned income, on December 31, 2021.

The provision for loan losses was $27,000 for the quarter ended December 31, 2022, compared to a recovery in the provision for loan losses of $2,000 for the quarter ended December 31, 2021. The provision for loan losses was $189,000 for the twelve months ended December 31, 2022, compared to a recovery in the provision for loan losses of $60,000 for the twelve months ended December 31, 2021.

Shareholders' Equity

Shareholders' equity was $27.02 million on December 31, 2022, compared to $28.63 million on December 31, 2021. Increases in retained earnings of $2.91 million were offset by the increase in unrealized losses in the available-for- sale investment portfolio of $4.52 million. The increase in unrealized losses on the available-for-sale investment portfolio was due to mark-to-market adjustments resulting from rising interest rates.

As of December 31, 2022, the Bank's regulatory capital ratios were 14.25% in Common Equity Tier 1 and Tier 1 Capital, 15.06% in Total Capital and 8.65% in Leverage Ratio. 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.

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OAK VIEW BANKSHARES, INC. AND SUBSIDIARY

Consolidated Balance Sheets

		(Unaudited)
		December 31,			December 31,
		2022			2021
Assets
Cash and due from banks	$	8,638,913	$	12,996,754
Federal funds sold		-			36,995,000
Interest-bearing deposits in other banks		1,921,528			6,412,288
Securities held to maturity, at cost		10,526,520			5,283,291
Securities available for sale, at fair value		182,787,050			19,657,380
Restricted stock, at cost		2,090,617			1,483,955
Loans, net of allowance for loan losses of
$2,307,592 and $2,125,650, respectively		271,558,400			249,061,856
Premises and equipment, net		6,424,142			6,224,005
Accrued interest receivable		1,657,754			722,402
Bank-owned life insurance		9,798,074			5,309,354
Deferred tax asset		1,744,715			602,097
Other assets		739,968			378,580
Total assets	$	497,887,681	$	345,126,962
Liabilities and Shareholders' Equity
Liabilities
Deposits:
Noninterest bearing	$	101,410,604	$	91,242,636
Savings, interest-bearing checking and money market accounts		190,795,644			138,351,659
Time deposits		130,690,781			70,719,527
Total deposits		422,897,029			300,313,822
Federal Home Loan Bank advances and other borrowings		25,406,000			14,900,000
Subordinated debt, net of unamortized issuance costs		13,701,544			-
Accrued expenses and other liabilities		8,865,857			1,281,354
Total liabilities	$	470,870,430	$	316,495,176
Shareholders' Equity
Preferred stock, $ 5.00 par value, 2,000,000 shares authorized,
none issued and outstanding	$	-	$	-
Common stock, $1.00 par value, 10,000,000 shares authorized;
issued and outstanding: 2,956,157 shares		2,956,157			2,956,157
Additional paid-in capital		17,776,623			17,776,623
Retained earnings		11,140,852			8,233,200
Accumulated other comprehensive (loss), net		(4,856,381)			(334,194)
Total shareholders' equity	$	27,017,251		$	28,631,786
Total liabilities and shareholders' equity	$	497,887,681	$	345,126,962

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OAK VIEW BANKSHARES, INC. AND SUBSIDIARY

Consolidated Statements of Income (Unaudited)

	Three Months Ended December 31,		Twelve Months Ended December 31,
		2022			2021			2022			2021
Interest and Dividend Income
Interest and fees on loans	$	3,163,834	$	2,830,733	$	11,319,209	$	10,891,346
Interest on securities		1,714,945			80,755			3,242,227			102,128
Dividends on restricted stock		25,374			24,330			82,864			76,662
Interest on deposits in other banks		20,772			28,218			104,163			271,484
Interest on federal funds sold		58,939			11,225			128,458			30,000
Total interest and dividend income		4,983,864			2,975,261			14,876,921			11,371,620
Interest Expense
Interest on deposits		1,177,112			168,819			1,923,432			900,991
Interest on subordinated debt		140,000			-			472,889			-
Interest on borrowings		212,181			40,913			404,620			206,471
Total interest expense		1,529,293			209,732			2,800,941			1,107,462
Net Interest Income		3,454,571			2,765,529			12,075,980			10,264,158
Provision for (recovery of) Loan Losses		27,109			(1,796)			188,629			(59,644)
		3,427,462			2,767,325			11,887,351			10,323,802
Noninterest Income
Service charges on deposit accounts		39,306			33,775			137,283			117,230
Interchange fee income		174,617			150,326			662,654			527,451
Mortgage loan fee income		125,800			113,166			295,120			563,727
Bank-owned life insurance		62,564			26,369			188,720			104,504
Gain (loss) on sales of securities, net		37,885			-			(249,498)			-
Other income		35,864			49,333			153,708			166,145
Total noninterest income		476,036			372,969			1,187,987			1,479,057
Noninterest Expenses
Salaries and employee benefits		1,484,174			1,253,628			5,578,882			4,767,303
Occupancy and equipment		161,032			137,392			627,756			567,600
Professional services		44,956			34,010			201,749			304,177
Data processing		339,654			303,327			1,290,711			1,723,772
Advertising and marketing		74,006			63,665			322,513			298,784
Regulatory assessments		56,136			64,001			247,961			228,799
Taxes, other		57,470			60,000			228,196			245,280
Other operating expenses		232,657			156,234			782,655			571,434
Total noninterest expenses		2,450,085			2,072,257			9,280,423			8,707,149
Net Income Before Tax		1,453,413			1,068,037			3,794,915			3,095,710
Income tax expense		249,792			200,155			739,455			625,793
Net income	$	1,203,621	$	867,882	$	3,055,460	$	2,469,917

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