Oak Valley Bancorp Reports 3rd Quarter Results

Rhea-AI Summary

Oak Valley Bancorp (NASDAQ: OVLY) reported Q3 2025 unaudited results for the quarter ended September 30, 2025. Net income was $6.693 million, or $0.81 diluted EPS, up from $5.588 million ($0.67) in Q2 2025 but below $7.324 million ($0.89) in Q3 2024. Net interest income rose to $19.197 million and net interest margin was 4.16%. Non-interest income was $1.973 million, aided by a life insurance policy redemption and higher advisory fees. Non-interest expense totaled $12.700 million. Total assets were $1.995 billion, gross loans $1.113 billion and deposits $1.775 billion at quarter end. Nonperforming assets remained 0.00%, and ACL was 1.03% of gross loans.

Positive

• Net income Q3 QoQ +19.8% (from $5.588M to $6.693M)
• Nonperforming assets remained at 0.00% at September 30, 2025
• Efficiency ratio Q3 improved by 368 bps QoQ (61.95% to 58.27%)
• Dividends paid YTD increased 33% (from $0.450 to $0.600 per share)

Negative

• Non-interest expense Q3 YoY +12.1% (from $11.324M to $12.700M)
• Efficiency ratio YTD worsened by 276 bps (58.24% to 61.00%)

Insights

Banking financial analyst

Q3 shows modest sequential profit growth driven by higher net interest income; yearly comparisons mixed due to prior credit reversal and higher expenses.

Net interest income rose to $19,197,000 and net interest margin improved to 4.16%, driven by average earning asset growth and higher loan yields, which lifted consolidated net income to $6,693,000 or $0.81 diluted EPS for the quarter. Asset and deposit growth are clear: total assets reached $1,995,416,000 and deposits $1,774,882,000, supporting higher interest-earning capacity while liquidity remains large at $247,200,000 in cash and equivalents.

Comparisons to last year are tempered by a one-time $1,620,000 allowance reversal in Q3 2024 and higher operating costs; nine-month net income declined to $17,578,000 from $18,940,000. Credit metrics show stability: nonperforming assets stayed at 0.00% and the credit loss reserve to gross loans was 1.03%. However, expense growth and the absence of last year’s sizeable reserve reversal constrain year-over-year earnings.

Watch near term for quarterly trends in net interest margin and loan yield expansion, the trajectory of non-interest expense (recent quarter non-interest expense was $12,700,000), and any changes to the allowance for credit losses as loan balances grow; monitor these over the next 2-4 quarters for confirmation whether revenue growth sustainably outpaces expense increases.

OAKDALE, Calif., Oct. 22, 2025 (GLOBE NEWSWIRE) -- Oak Valley Bancorp (NASDAQ: OVLY) (the “Company”), the bank holding company for Oak Valley Community Bank and their Eastern Sierra Community Bank division, recently reported unaudited consolidated financial results. For the three months ended September 30, 2025, consolidated net income was $6,693,000, or $0.81 per diluted share (EPS), as compared to $5,588,000, or $0.67 EPS, for the prior quarter and $7,324,000, or $0.89 EPS, for the same period a year ago. Consolidated net income for the nine months ended September 30, 2025 was $17,578,000, or $2.12 EPS, compared to $18,940,000 or $2.30 EPS for the same period of 2024.

The increase in third quarter net income compared to the prior quarter was due to earning asset growth, an increase in the yield of the loan portfolio, and the corresponding increase to net interest income. The QTD and YTD decreases compared to the same periods of 2024 are primarily due to a reversal of allowance for credit losses of $1,620,000 recorded in the third quarter of 2024 that was related to loan recoveries, and an increase in general operating expenses.

Net interest income for the three months ended September 30, 2025 was $19,197,000, compared to $18,154,000 in the prior quarter, and $17,655,000 in the same period a year ago. The increase in net interest income over the prior periods is attributed to average earning asset growth, rising loan yields, and a slight decrease in average cost of funds. Net interest margin for the three months ended September 30, 2025 was 4.16% (1), compared to 4.11% (1) for the prior quarter and 4.04% (1) for the same period last year.

Non-interest income was $1,973,000 for the quarter ended September 30, 2025, compared to $1,703,000 for the prior quarter and $1,846,000 for the same period last year. The increases compared to prior periods was mainly due to a one-time gain from a life insurance policy redemption, combined with increased production from our investment advisory service and related fee income, and increased service charge income on deposit accounts.

Non-interest expense totaled $12,700,000 for the quarter ended September 30, 2025, compared to $12,688,000 in the prior quarter and $11,324,000 in the same quarter a year ago. Compared to the prior quarter, non-interest expense was essentially flat. The third quarter increase compared to the same period a year ago is primarily due to staffing expense and general operating costs related to servicing the growing loan and deposit portfolios. Our full-time equivalent employees grew by six during the third quarter in preparation of our 19^th full-service branch which opened in Lodi on October 2, 2025. “Our team continues to execute on our growth strategy while maintaining excellent asset quality and customer relationships,” commented Chris Courtney, Chief Executive Officer. “The opening of our new Lodi branch demonstrates our focus on expanding our presence across the Central Valley.”

Total assets were $2.00 billion at September 30, 2025, an increase of $74.5 million and $95.0 million over June 30, 2025 and September 30, 2024, respectively. Gross loans were $1.11 billion at September 30, 2025, an increase of $3.0 million and $37.7 million over June 30, 2025 and September 30, 2024, respectively. The Company’s total deposits were $1.77 billion as of September 30, 2025, an increase of $63.6 million and $84.6 million from June 30, 2025 and September 30, 2024, respectively. Our liquidity position is very strong as evidenced by $247.2 million in cash and cash equivalents balances at September 30, 2025.

Non-performing assets (“NPA”) remained at zero as of September 30, 2025, as they were for all of 2025 and 2024. The allowance for credit losses (“ACL”) as a percentage of gross loans was 1.03% at September 30, 2025, compared to 1.03% at June 30, 2025 and 1.07% at September 30, 2024. The decrease in the ACL as a percentage of gross loans from last year is partially due to the growth in the loan portfolio. Management has performed a thorough analysis of credit risk as part of the Current Expected Credit Loss (CECL) model’s ACL computation, concluding that the credit loss reserves relative to gross loans remain at acceptable levels, and credit quality remains stable. The Company recorded a reversal of provision for credit losses of $60,000 during the third quarter which was related to a decrease in unfunded loan commitments.

Oak Valley Bancorp operates Oak Valley Community Bank & their Eastern Sierra Community Bank division, through which it offers a variety of loan and deposit products to individuals and small businesses. They currently operate through 19 conveniently located branches: Oakdale, Turlock, Stockton, Patterson, Ripon, Escalon, Manteca, Tracy, Sacramento, Roseville, Lodi two branches in Sonora, three branches in Modesto, and three branches in their Eastern Sierra division, which includes Bridgeport, Mammoth Lakes, and Bishop.

For more information, call 1-866-844-7500 or visit www.ovcb.com.

This press release includes forward-looking statements about the corporation for which the corporation claims the protection of safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are based on management's knowledge and belief as of today and include information concerning the corporation's possible or assumed future financial condition, and its results of operations and business. Forward-looking statements are subject to risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include fluctuations in interest rates, government policies and regulations (including monetary and fiscal policies), legislation, economic conditions, including increased energy costs in California, credit quality of borrowers, operational factors and competition in the geographic and business areas in which the company conducts its operations. All forward-looking statements included in this press release are based on information available at the time of the release, and the Company assumes no obligation to update any forward-looking statement.

Oak Valley Bancorp
Financial Highlights (unaudited)
Selected Quarterly Operating Data:		3rd Quarter			2nd Quarter			1st Quarter			4th Quarter			3rd Quarter
($ in thousands, except per share)			2025			2025			2025			2024			2024
	Net interest income	$	19,197		$	18,154		$	17,807		$	17,846		$	17,655
	(Reversal of) provision for credit losses		(60	)		-			-			-			(1,620	)
	Non-interest income		1,973			1,703			1,613			1,430			1,846
	Non-interest expense		12,700			12,688			12,624			11,548			11,324
	Net income before income taxes		8,530			7,169			6,796			7,728			9,797
	Provision for income taxes		1,837			1,581			1,499			1,720			2,473
	Net income	$	6,693		$	5,588		$	5,297		$	6,008		$	7,324
	Earnings per common share - basic	$	0.81		$	0.68		$	0.64		$	0.73		$	0.89
	Earnings per common share - diluted	$	0.81		$	0.67		$	0.64		$	0.73		$	0.89
	Dividends paid per common share	$	0.300		$	-		$	0.300		$	-		$	0.225
	Return on average common equity		14.30%			12.21%			11.58%			12.86%			16.54%
	Return on average assets		1.35%			1.18%			1.13%			1.25%			1.56%
	Net interest margin (1)		4.16%			4.11%			4.09%			4.00%			4.04%
	Efficiency ratio (2)		58.27%			61.95%			63.00%			58.09%			56.35%
Capital - Period End
	Book value per common share	$	23.63		$	22.17		$	21.89		$	21.95		$	22.18
Credit Quality - Period End
	Nonperforming assets / total assets		0.00%			0.00%			0.00%			0.00%			0.00%
	Credit loss reserve / gross loans		1.03%			1.03%			1.05%			1.04%			1.07%
Balance Sheet - Period End (in thousands)
	Total assets	$	1,995,416		$	1,920,909		$	1,924,365		$	1,900,604		$	1,900,455
	Gross loans		1,112,829			1,109,856			1,090,953			1,106,535			1,075,138
	Nonperforming assets		-			-			-			-			-
	Allowance for credit losses		11,420			11,430			11,448			11,460			11,479
	Deposits		1,774,882			1,711,241			1,713,592			1,695,690			1,690,301
	Common equity		198,280			185,805			183,520			183,436			185,393
Balance Sheet - Average (in thousands)
	Average assets	$	1,961,374		$	1,903,741		$	1,903,585		$	1,909,691		$	1,863,983
	Average earning assets		1,876,588			1,818,430			1,814,338			1,819,649			1,780,056
	Average equity		185,638			183,612			185,592			185,345			175,693
Non-Financial Data
	Full-time equivalent staff		237			231			225			223			222
	Number of banking offices		18			18			18			18			18
Common Shares outstanding
	Period end		8,390,621			8,382,062			8,382,062			8,357,211			8,358,711
	Period average - basic		8,246,666			8,245,147			8,231,844			8,224,504			8,221,475
	Period average - diluted		8,299,039			8,285,299			8,278,301			8,278,427			8,263,790
Market Ratios
	Stock Price	$	28.17		$	27.24		$	24.96		$	29.25		$	26.57
	Price/Earnings		8.75			10.02			9.56			10.09			7.52
	Price/Book		1.19			1.23			1.14			1.33			1.20
(1)	This is a non-GAAP measure that is computed on a fully tax equivalent basis using a federal tax rate of 21%. The resulting adjustment to net
	interest income is $501 thousand, $498 thousand, $497 thousand, $484 thousand and $473 thousand for the three-months ended
	September 30, 2025, June 30, 2025, March 31, 2025, December 31, 2024 and September 30, 2024, respectively.
(2)	This is a non-GAAP measure that is computed on a fully tax equivalent basis using a federal tax rate of 21%, and a federal/state combined
	tax rate of 29.56%. The resulting adjustment to pre-tax income is $626 thousand, $624 thousand, $618 thousand, $604 thousand, and $594 thousand
	for the three-months ended September 30, 2025, June 30, 2025, March 31, 2025, December 31, 2024 and September 30, 2024, respectively.
Profitability		NINE MONTHS ENDED SEPTEMBER 30,
($ in thousands, except per share)			2025			2024
	Net interest income	$	55,158		$	52,188
	(Reversal of) provision for credit losses		(60	)		(1,620	)
	Non-interest income		5,289			5,125
	Non-interest expense		38,012			34,469
	Net income before income taxes		22,495			24,464
	Provision for income taxes		4,917			5,524
	Net income	$	17,578		$	18,940
	Earnings per share - basic	$	2.13		$	2.30
	Earnings per share - diluted	$	2.12		$	2.30
	Dividends paid per share	$	0.600		$	0.450
	Return on average equity		12.71%			14.90%
	Return on average assets		1.22%			1.38%
	Net interest margin (3)		4.12%			4.08%
	Efficiency ratio (4)		61.00%			58.24%
Capital - Period End
	Book value per share	$	23.63		$	22.18
Credit Quality - Period End
	Nonperforming assets/ total assets		0.00%			0.00%
	Credit loss reserve/ gross loans		1.03%			1.07%
Balance Sheet - Period End (in thousands)
	Total assets	$	1,995,416		$	1,900,455
	Gross loans		1,112,829			1,075,138
	Nonperforming assets		-			-
	Allowance for credit losses		11,420			11,479
	Deposits		1,774,882			1,690,301
	Stockholders' equity		198,280			185,393
Balance Sheet - Average (in thousands)
	Average assets	$	1,923,112		$	1,834,386
	Average earning assets		1,836,679			1,754,046
	Average equity		184,947			169,302
Non-Financial Data
	Full-time equivalent staff		237			222
	Number of banking offices		18			18
Common Shares outstanding
	Period end		8,390,621			8,358,711
	Period average - basic		8,241,273			8,216,947
	Period average - diluted		8,287,622			8,252,286
Market Ratios
	Stock Price	$	28.17		$	26.57
	Price/Earnings		9.88			8.65
	Price/Book		1.19			1.20
(3)	This is a non-GAAP measure that is computed on a fully tax equivalent basis using a federal tax rate of 21%. The resulting adjustment to net
	interest income is $1.496 million and $1.552 million for the nine-months ended September 30, 2025 and 2024, respectively.
(4)	This is a non-GAAP measure that is computed on a fully tax equivalent basis using a federal tax rate of 21%, and a federal/state combined
	tax rate of 29.56%. The resulting adjustment to pre-tax income is $1.868 million and $1.873 million for the nine-months ended September 30, 2025
	and 2024, respectively.

Contact:	Chris Courtney/Rick McCarty
Phone:	(209) 848-2265 www.ovcb.com

FAQ

What did Oak Valley Bancorp (OVLY) report for Q3 2025 net income and EPS?

Oak Valley reported net income $6.693M and diluted EPS $0.81 for Q3 2025.

How did Oak Valley Bancorp's net interest margin (NIM) change in Q3 2025?

Net interest margin was 4.16% in Q3 2025, up from 4.11% in Q2 2025.

Did Oak Valley Bancorp (OVLY) report any loan credit issues in Q3 2025?

No; nonperforming assets remained at 0.00% as of September 30, 2025.

What drove Oak Valley Bancorp's higher non-interest income in Q3 2025?

Q3 non-interest income rose due to a life insurance policy redemption and increased advisory and deposit service fees.

How did Oak Valley Bancorp's expenses affect Q3 2025 results?

Non-interest expense rose to $12.700M in Q3 2025, a 12.1% increase YoY.

What were Oak Valley Bancorp's total assets and deposits at September 30, 2025?

Total assets were $1.995B and total deposits were $1.775B at September 30, 2025.