Oxford Bank Corp. (OXBC)

[norweger1979]

OXBC 2015 letter to shareholders

Dear Shareholder:

Clearly, 2015 was the year that Oxford Bank Corporation turned the corner from operating in “work-out” mode to having the ability to focus on growing our business.
The most important element allowing us to focus on growth was the Corporation’s substantial completion of the 2014 capital raise during the fourth quarter of the year.
The increase in the Corporation’s capital ratio, as well as other factors, allowed our regulatory stakeholders to terminate the Consent Agreement last summer. As you can imagine, that was a real milestone achievement that would not have happened without
the seven years of hard work and difficult decisions made by your Board of Directors,my predecessor, Jim Bess, and the bank’s team of employees. Please join me in congratulating and extending our appreciation to them for affording all of us this new opportunity for growth.

Our 2015 financial results reflect the Corporation’s continued positive trend. The Corporation’s pre-tax earnings per share (EPS) grew 75% from 2014’s pre-tax EPS of $0.77 to a pre-tax EPS of $1.35 this year. As you may recall, over $6 million of deferred tax assets were recovered in 2014 bringing after-tax EPS to $6.11 as compared to $0.93 in 2015. From a balance sheet perspective, non-performing assets continue to decline to roughly that of our industry’s peer group’s average while total assets were up 21%. Though we are pleased with such positive results, the team here believes we can do much better in raising actual returns while improving our risk profile. To overcome almost a decade of deferred spending, investments were made in 2015, which will continue into 2016. With the right people in place to significantly grow the Corporation, we believe the Corporation will continue positive growth trends in its 2016 earnings and balance sheet.

Your Board and executive leadership team intend to aggressively grow the Corporation while the opportunity created by continued mergers in the banking industry exists. We have the ability to
add high value employees and clients which will position us to grow under a model that stresses sustainability for the long term. Sustainability is a much overused buzz word but works here because it describes both better risk management and higher returns. Higher returns are critical to our longterm plan as better risk outcomes are unachievable without them. We believe that our business model, which is focused on relationship creation, can yield the Corporation higher returns at lower risk than in the past. To borrow a quote from one of my friends, we have a “simple but not easy” plan.

In a very broad overview, our strategy is to develop valuable employees capable of creating strong relationships with customers which will lead to above-average results for our stakeholders. To achieve this, we have focused our recruiting efforts on high performing relationship managers and leaders to assist with developing new team members. For our business banking group, the team is focused on commercial/industrial companies where the relationship building opportunity is much stronger than with investment real estate-focused borrowers. We have supported our relationship focus with new leaders including those with an expertise in Small Business Administration lending and a best-in-class life of loan process. Our retail team is engaged in our brand of making life more convenient for our customers through a combination of deploying technology for making routine transactions and providing personal advice-based service to fulfill any other of our customers’ financial needs. In short, we believe the leadership team and infrastructure will be completely in place to be “Delivering Value. For Life.” in 2016 and beyond. Thank you for your continuing commitment as an owner of the Corporation, and please visit me in Oxford when you have an opportunity.


David Lamb
President and Chief Executive Officer
Oxford Bank Corporation

https://www.oxfordbank.com/assets/files/n1lHR0MT/2016/03/15/Oxford%20Bank%20Corporation%202015%20Annual%20Report-Final.pdf