OAK RIDGE, N.C., July 31, 2026 (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 second quarter of 2026 and a quarterly cash dividend of $0.16 per common share.
Second Quarter 2026 Highlights
- Earnings per share of $0.79 for the three months ended June 30, 2026, compared to $0.81 for the same period in 2025, and $0.53 for the three months ended March 31, 2026.
- Annualized return on average equity of 12.10% for the three months ended June 30, 2026, compared to 14.13% for the same period in 2025, and 8.24% for the three months ended March 31, 2026.
- Dividends declared per common share of $0.16 for the three months ended June 30, 2026, compared to $0.14 for the same period in 2025.
- Tangible book value per common share of $26.83 as of June 30, 2026, compared to $24.04 as of June 30, 2025, and $25.99 as of March 31, 2026.
- Net interest margin of 4.51% for the three months ended June 30, 2026, the highest quarterly net interest margin in the Company's history, compared to 4.16% for the same period in 2025, and 3.98% for the three months ended March 31, 2026.
- Efficiency ratio of 61.8% for the three months ended June 30, 2026, compared to 59.1% for the same period in 2025, and 64.9% for the three months ended March 31, 2026.
- Loans receivable of $522.1 million as of June 30, 2026, down 2.6% from $535.7 million as of June 30, 2025, and up 1.7% from $513.4 million as of March 31, 2026.
- Nonperforming assets to total assets of 1.42% as of June 30, 2026, compared to 0.73% as of June 30, 2025, and 1.42% as of March 31, 2026.
- Nonperforming assets were $9.4 million at June 30, 2026, including 17 Small Business Administration (SBA) loans with an aggregate outstanding balance of $9.1 million, comprising a guaranteed balance of $7.0 million and nonguaranteed balances of $2.1 million. These loans are carried at net realizable value, reflecting prior write-downs to fair value less estimated costs to sell recognized through the provision for credit losses, and inclusive of expected recoveries from the SBA guarantee.
- Securities available-for-sale and held-to-maturity of $101.0 million as of June 30, 2026, up 1.2% from $99.8 million as of June 30, 2025, and up 4.0% from $97.1 million as of March 31, 2026.
- Total deposits of $505.8 million as of June 30, 2026, down 7.6% from $547.5 million as of June 30, 2025, and down 6.6% from $541.6 million as of March 31, 2026.
- Total short-and long-term borrowings, junior subordinated notes, and subordinated debentures of $70.7 million as of June 30, 2026, up 35.4% from $52.2 million as of June 30, 2025, and up 100.7% from $35.2 million as of March 31, 2026.
- Total stockholders' equity of $74.3 million as of June 30, 2026, up 12.5% from $66.0 million as of June 30, 2025, and up 3.2% from $72.0 million as of March 31, 2026. At June 30, 2026, the Bank's Community Bank Leverage Ratio was 12.5%, up from 11.2% as of June 30, 2025.
Tom Wayne, Chief Executive Officer, stated, "We are pleased with our second quarter results, which rebounded strongly from the first quarter and reflect the fundamental strength of our franchise. While our earnings of $0.79 per share were slightly below the $0.81 reported in the same period in 2025 and up from $0.53 in the first quarter of 2026, our core performance remains excellent - anchored by a 4.51% net interest margin, an annualized return on average equity of 12.10%, and a strong capital position, with the Bank's Community Bank Leverage Ratio improving to 12.5%. While loans and deposits were down year-over-year, loans grew from year-end 2025, and substantially all of our nonperforming assets are SBA loans carried at net realizable value, while our non-SBA portfolio continues to demonstrate excellent credit quality. These accomplishments are a credit to our dedicated employees and the strategic guidance of our Board of Directors, and we remain deeply committed to the enduring success of our stockholders and the communities we serve."
Board of Directors
In a recent development, the Company announced the appointment of Paul Fedorkowicz to its Board of Directors. Mr. Fedorkowicz is a retired partner of Cherry Bekaert LLP and brings more than 30 years of leadership experience in public accounting, audit, corporate governance, and business operations.
Dividend Announcement
A quarterly cash dividend of $0.16 per share of common stock is payable on September 2, 2026 to stockholders of record as of the close of business on August 18, 2026. "We are pleased to pay another quarterly cash dividend to our stockholders," said Mr. Wayne. "Paying stockholders a portion of our earnings reflects our continuing commitment to enhance stockholder value."
Financial Review
Net Interest Income
For the three months ended June 30, 2026 and 2025, net interest income was $7.1 million and $6.8 million, respectively. For the three months ended June 30, 2026 and 2025, the net interest margin was 4.51% and 4.16%, respectively. On a linked-quarter basis, net interest income increased $0.9 million, or approximately 15%, from $6.2 million for the three months ended March 31, 2026, and the net interest margin expanded 53 basis points from 3.98%, representing the highest quarterly net interest margin in the Company's history, primarily reflecting lower funding costs.
For the six months ended June 30, 2026, net interest income was $13.3 million, up from $13.1 million for the same period in 2025. The annualized net interest margin was 4.24%, up 18 basis points from 4.06% in the same period in 2025, due to a decrease in interest expense partially offset by a decrease in interest income.
Provision for Credit Losses
For the three months ended June 30, 2026 and 2025, the Company recorded provisions for credit losses of $241,000 and $402,000, respectively. On a linked-quarter basis, the provision for the second quarter of 2026 decreased $459,000 from $700,000 for the three months ended March 31, 2026, which had included a one-time general provision adjustment related to performing SBA loans. For the six months ended June 30, 2026 and 2025, the Company recorded provisions for credit losses of $941,000 and $706,000, respectively. The allowance for credit losses as a percentage of total loans was 1.28% and 1.11% on June 30, 2026 and 2025, respectively, and 1.25% on March 31, 2026.
Nonperforming assets represented 1.42% of total assets on June 30, 2026, compared to 0.73% on June 30, 2025, and 1.42% on March 31, 2026. The Bank's nonperforming assets consist entirely of nonperforming loans; the Bank held no other real estate owned in any period presented. As of June 30, 2026, SBA loans represented approximately 19% of the Bank's total loan portfolio. Nonperforming assets were $9.4 million at June 30, 2026, including 17 Small Business Administration (SBA) loans with an aggregate outstanding balance of $9.1 million, comprising a guaranteed balance of $7.0 million and a nonguaranteed balance of $2.1 million. These loans are carried at net realizable value, reflecting prior write-downs to fair value less estimated costs to sell recognized through the provision for credit losses, and inclusive of expected recoveries from the SBA guarantee. Of the total nonperforming SBA loans, the Bank has submitted guarantee purchase requests to the SBA for the repayment of the guaranteed portion of loans totaling $1.7 million. An additional $3.3 million of loans are in the final stage of documentation preparation prior to the formal guarantee purchase request being submitted to the SBA. The remaining $4.1 million of nonperforming SBA loans are being actively serviced and managed through workout efforts with the borrowers to maximize repayment; these loans have not reached the stage of initiating the SBA guarantee claim process, as the Bank continues to work toward a collaborative resolution.
Noninterest Income
Noninterest income totaled $823,000 and $1.2 million for the three months ended June 30, 2026 and 2025, respectively. The most significant driver of the year-over-year decrease was the absence of gains recognized in the prior-year quarter - specifically, gains on the sale of investment securities of $42,000 and gains on the sale of SBA loans of $329,000 recognized in the three months ended June 30, 2025, with no comparable gains in the three months ended June 30, 2026. On a linked-quarter basis, noninterest income decreased $185,000 from $1.0 million for the three months ended March 31, 2026, primarily due to a $224,000 gain on the sale of investment securities recognized in the first quarter of 2026.
Noninterest income totaled $1.8 million and $2.0 million for the six months ended June 30, 2026 and 2025, respectively. This decrease was mainly due to no gains on the sale of SBA loans and gains on sale of investment securities of $223,000 in the six months ended June 30, 2026, compared to gains on the sale of SBA loans of $329,000 and gains on the sale of investment securities of $42,000 in the six months ended June 30, 2025.
Noninterest Expense
Noninterest expense totaled $4.9 million and $4.7 million for the three months ended June 30, 2026 and 2025, respectively, and totaled $9.6 million and $9.4 million for the six months ended June 30, 2026 and 2025, respectively. On a linked-quarter basis, noninterest expense increased $235,000 from $4.7 million for the three months ended March 31, 2026, primarily reflecting higher salaries expense.
Basis of Presentation
Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on previously reported net income, net income available to common shareholders, or stockholders' equity.
About Oak Ridge Financial Services, Inc. and 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, and 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 | Debit, Credit + Rewards | Checking, Savings & Money Market | Loans + SBA | Mortgage | Insurance | Wealth Management
Let's Talk | 336.644.9944 | www.BankofOakRidge.com | Extended Interactive Teller Machine 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 the 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 the words "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 | |||||||||||||||
| (Dollars in thousands, except share data) | |||||||||||||||
| June 30, | March 31, | December 31, | June 30, | ||||||||||||
| 2026 | 2026 | 2025 | 2025 | ||||||||||||
| ASSETS | (unaudited) | (unaudited) | (audited) | (unaudited) | |||||||||||
| Cash and due from banks | - | 8,915 | - | 7,931 | - | 8,840 | - | 8,970 | |||||||
| Interest-bearing deposits with banks | 4,130 | 17,135 | 13,556 | 8,422 | |||||||||||
| Total cash and cash equivalents | 13,045 | 25,066 | 22,396 | 17,392 | |||||||||||
| Securities available-for-sale | 85,692 | 81,801 | 83,105 | 80,157 | |||||||||||
| Securities held-to-maturity, net of allowance for credit losses | 15,265 | 15,271 | 16,030 | 19,647 | |||||||||||
| Restricted stock, at cost | 4,322 | 2,585 | 3,059 | 3,383 | |||||||||||
| Loans receivable | 522,058 | 513,365 | 515,681 | 535,732 | |||||||||||
| Allowance for credit losses | (6,682 | - | (6,425 | - | (6,030 | - | (5,921 | - | |||||||
| Net loans receivable | 515,376 | 506,940 | 509,651 | 529,811 | |||||||||||
| Property and equipment, net | 8,779 | 8,834 | 8,900 | 8,747 | |||||||||||
| Accrued interest receivable | 3,302 | 3,183 | 3,217 | 3,582 | |||||||||||
| Bank owned life insurance | 6,398 | 6,377 | 6,356 | 6,312 | |||||||||||
| Right-of-use assets - operating leases | 2,159 | 2,244 | 2,328 | 2,486 | |||||||||||
| Other assets | 6,299 | 5,594 | 5,243 | 5,516 | |||||||||||
| Total assets | - | 660,637 | - | 657,895 | - | 660,285 | - | 677,033 | |||||||
| LIABILITIES | - | ||||||||||||||
| Noninterest-bearing deposits | - | 135,002 | - | 136,466 | - | 128,408 | - | 131,805 | |||||||
| Interest-bearing deposits | 370,745 | 405,113 | 406,521 | 415,664 | |||||||||||
| Total deposits | 505,747 | 541,579 | 534,929 | 547,469 | |||||||||||
| Federal Funds purchased | - | - | - | 991 | |||||||||||
| Short-term borrowings | 49,500 | 14,000 | 24,000 | 24,000 | |||||||||||
| Long-term borrowings | 7,000 | 7,000 | 7,000 | 14,000 | |||||||||||
| Junior subordinated notes - trust preferred securities | 8,248 | 8,248 | 8,248 | 8,248 | |||||||||||
| Subordinated debentures, net of discount | 6,000 | 6,000 | 6,000 | 6,000 | |||||||||||
| Lease liabilities - operating leases | 2,159 | 2,244 | 2,328 | 2,486 | |||||||||||
| Accrued interest payable | 585 | 512 | 521 | 716 | |||||||||||
| Other liabilities | 7,085 | 6,269 | 5,968 | 7,077 | |||||||||||
| Total liabilities | 586,324 | 585,852 | 588,994 | 610,987 | |||||||||||
| STOCKHOLDERS' EQUITY | - | ||||||||||||||
| Common stock | 27,591 | 27,383 | 27,274 | 27,043 | |||||||||||
| Retained earnings | 46,660 | 44,927 | 43,851 | 40,413 | |||||||||||
| Net unrealized loss on debt securities, net of tax | (443 | - | (466 | - | 313 | (1,180 | - | ||||||||
| Net unrealized loss on hedging derivative instruments, net of tax | 505 | 199 | (147 | - | (230 | - | |||||||||
| Total accumulated other comprehensive loss | 62 | (267 | - | 166 | (1,410 | - | |||||||||
| Total stockholders' equity | 74,313 | 72,043 | 71,291 | 66,046 | |||||||||||
| Total liabilities and stockholders' equity | - | 660,637 | - | 657,895 | - | 660,285 | - | 677,033 | |||||||
| Common shares outstanding | 2,770,250 | 2,772,150 | 2,741,350 | 2,747,170 | |||||||||||
| Common shares authorized | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | |||||||||||
| OAK RIDGE FINANCIAL SERVICES, INC. | |||||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME | |||||||||||||||
| (Dollars in thousands, except share data) | |||||||||||||||
| Three Months Ended | Six month ended | ||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||
| 2026 | 2026 | 2025 | 2026 | 2025 | |||||||||||
| Interest and dividend income: | |||||||||||||||
| Loans and fees on loans | - | 8,555 | - | 7,770 | - | 8,726 | - | 16,325 | - | 17,002 | |||||
| Interest on deposits in banks | 91 | 217 | 199 | 308 | 365 | ||||||||||
| Restricted stock dividends | 53 | 46 | 63 | 100 | 112 | ||||||||||
| Interest on investment securities | 1,144 | 1,147 | 1,224 | 2,291 | 2,506 | ||||||||||
| Total interest and dividend income | 9,843 | 9,180 | 10,212 | 19,024 | 19,985 | ||||||||||
| Interest expense | |||||||||||||||
| Deposits | 2,027 | 2,445 | 2,684 | 4,472 | 5,398 | ||||||||||
| Short-term and long-term debt | 703 | 547 | 759 | 1,250 | 1,526 | ||||||||||
| Total interest expense | 2,730 | 2,992 | 3,443 | 5,722 | 6,924 | ||||||||||
| Net interest income | 7,113 | 6,188 | 6,769 | 13,302 | 13,061 | ||||||||||
| Provision for credit losses | 241 | 700 | 402 | 941 | 706 | ||||||||||
| Net interest income after provision for credit losses | 6,872 | 5,488 | 6,367 | 12,361 | 12,355 | ||||||||||
| Noninterest income: | |||||||||||||||
| Service charges on deposit accounts | 204 | 205 | 229 | 409 | 456 | ||||||||||
| Gain (loss) on sale of securities | - | 224 | 42 | 223 | 42 | ||||||||||
| Gain on sale of foreclosed property | - | (1 | - | - | (1 | - | - | ||||||||
| Insurance commissions | 160 | 158 | 188 | 318 | 339 | ||||||||||
| Gain on sale of Small Business Administration loans | - | - | 329 | - | 329 | ||||||||||
| Debit and credit card interchange income | 292 | 261 | 297 | 554 | 568 | ||||||||||
| Income from Small Business Investment Company | 24 | 16 | 15 | 40 | 15 | ||||||||||
| Income earned on bank owned life insurance | 21 | 21 | 22 | 41 | 44 | ||||||||||
| Other service charges and fees | 122 | 124 | 127 | 246 | 215 | ||||||||||
| Total noninterest income | 823 | 1,008 | 1,249 | 1,830 | 2,008 | ||||||||||
| Noninterest expenses: | |||||||||||||||
| Salaries | 2,564 | 2,228 | 2,423 | 4,792 | 4,777 | ||||||||||
| Employee Benefits | 312 | 307 | 367 | 619 | 702 | ||||||||||
| Occupancy | 262 | 365 | 271 | 627 | 572 | ||||||||||
| Equipment | 192 | 183 | 209 | 375 | 373 | ||||||||||
| Data and Item Processing | 512 | 594 | 436 | 1,105 | 1,050 | ||||||||||
| Professional & Advertising | 274 | 297 | 220 | 571 | 439 | ||||||||||
| Stationary and Supplies | 28 | 27 | 29 | 55 | 60 | ||||||||||
| Telecommunications | 70 | 77 | 101 | 147 | 180 | ||||||||||
| FDIC Assessment | 80 | 73 | 120 | 153 | 240 | ||||||||||
| Other expense | 613 | 521 | 560 | 1,135 | 1,052 | ||||||||||
| Total noninterest expenses | 4,907 | 4,672 | 4,736 | 9,579 | 9,445 | ||||||||||
| Income before income taxes | 2,788 | 1,824 | 2,880 | 4,612 | 4,918 | ||||||||||
| Income tax expense | 612 | 364 | 644 | 976 | 1,113 | ||||||||||
| Net income and income available to common shareholders | - | 2,176 | - | 1,460 | - | 2,236 | - | 3,636 | - | 3,805 | |||||
| Basic income per common share | - | 0.79 | - | 0.53 | - | 0.81 | - | 1.32 | - | 1.39 | |||||
| Diluted income per common share | - | 0.79 | - | 0.53 | - | 0.81 | - | 1.32 | - | 1.39 | |||||
| Basic weighted average shares outstanding | 2,770,736 | 2,744,088 | 2,747,170 | 2,757,412 | 2,747,170 | ||||||||||
| Diluted weighted average shares outstanding | 2,770,736 | 2,744,088 | 2,747,170 | 2,757,412 | 2,747,170 | ||||||||||
| OAK RIDGE FINANCIAL SERVICES, INC. | |||||||||||||||
| Selected Financial Data | |||||||||||||||
| As Of Or For The Three Months Ended, | |||||||||||||||
| June 30, | March 31, | December 31, | September 30, | June 30, | |||||||||||
| 2026 | 2026 | 2025 | 2025 | 2025 | |||||||||||
| Return on average common stockholders' equity1 | 12.10 | - | 8.24 | - | 13.39 | - | 11.25 | - | 14.13 | - | |||||
| Tangible book value per share | - | 26.83 | - | 25.99 | - | 26.01 | - | 24.98 | - | 24.04 | |||||
| Return on average assets1 | 1.32 | - | 0.90 | - | 1.37 | - | 1.10 | - | 1.32 | - | |||||
| Net interest margin1 | 4.51 | - | 3.98 | - | 4.10 | - | 4.18 | - | 4.16 | - | |||||
| Efficiency ratio | 61.8 | - | 64.9 | - | 63.8 | - | 59.0 | - | 59.1 | - | |||||
| Nonperforming assets to total assets | 1.42 | - | 1.42 | - | 1.07 | - | 0.84 | - | 0.73 | - | |||||
| Allowance for credit losses to total loans | 1.28 | - | 1.25 | - | 1.17 | - | 1.19 | - | 1.11 | - | |||||
| 1Annualized | |||||||||||||||
Contact: Skylar Mearing, Marketing Director
Phone: 336.662.4840
