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OVLY's Q3 Earnings Fall Y/Y on Lower Fee Income, Higher Costs
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Shares of Oak Valley Bancorp (OVLY - Free Report) have gained 1.2% since the company reported its earnings for the quarter ended Sept. 30, 2026, outperforming the S&P 500 index’s 1.5% decline over the same period. Over the past month, the stock has declined 0.7%, compared with the S&P 500’s 1.1% decrease.
Oak Valley Bancorp reported third-quarter 2026 earnings per share of 77 cents, which declined 4.9% from 81 cents recorded in the prior-year quarter.
Net income of $6.5 million denoted a 3.6% decline from $6.7 million in the year-ago quarter.
Oak Valley Bancorp Price, Consensus and EPS Surprise
Net interest income increased 3.2% year over year to $19.8 million from $19.2 million.
The improvement primarily reflected growth in average earning assets and higher yields on those assets. Net interest margin expanded to 4.24% from 4.16% in the year-ago quarter, indicating improved interest income generation relative to earning assets.
Non-interest income declined 6.2% year over year to $1.9 million from $2 million, primarily due to a one-time gain from the redemption of a life insurance policy recorded in 2025.
Higher Operating Costs Pressure Profitability
Non-interest expenses increased 5.7% year over year to $13.4 million from $12.7 million, reflecting higher staffing expenses and general operating costs associated with business growth and an expanded branch network.
The efficiency ratio deteriorated to 60.15% from 58.27% in the year-ago quarter. Return on average assets declined to 1.28% from 1.35%, while return on average common equity fell to 12.16% from 14.30%.
Loan Growth and Balance Sheet Trends
As of Sept. 30, 2026, Oak Valley Bancorp's total assets were $1.98 billion, down from $2 billion a year earlier. Gross loans increased 3.7% year over year to $1.2 billion from $1.1 billion.
Total deposits decreased 0.7% year over year to $1.8 billion. The company maintained cash and cash equivalents of $179.7 million at quarter-end, supporting its liquidity position.
Common equity declined to $191.1 million from $198.3 million a year earlier. Book value per common share decreased to $22.70 from $23.63 a year earlier.
Credit Quality Shows Mixed Trends
Non-performing assets totaled $2.6 million at the end of September. The company had reported no non-performing assets a year earlier.
Non-performing assets represented 0.13% of total assets. The allowance for credit losses represented 0.97% of gross loans, compared with 1.03% a year earlier.
The lower year-over-year reserve ratio reflected a $1.7 million loan charge-off recorded during the second quarter of 2026. The company also recorded a $0.04 million provision for credit losses during the third quarter related to off-balance-sheet items.
Management Highlights Core Banking Strength
President and CEO Rick McCarty emphasized stronger net interest income and margin expansion as key highlights of the quarter. Management attributed the operating performance to the strength of the bank's core franchise and disciplined balance sheet management.
The bank operated 19 offices at quarter-end compared with 18 a year earlier, reflecting its expanded operating footprint.
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OVLY's Q3 Earnings Fall Y/Y on Lower Fee Income, Higher Costs
Shares of Oak Valley Bancorp (OVLY - Free Report) have gained 1.2% since the company reported its earnings for the quarter ended Sept. 30, 2026, outperforming the S&P 500 index’s 1.5% decline over the same period. Over the past month, the stock has declined 0.7%, compared with the S&P 500’s 1.1% decrease.
Oak Valley Bancorp reported third-quarter 2026 earnings per share of 77 cents, which declined 4.9% from 81 cents recorded in the prior-year quarter.
Net income of $6.5 million denoted a 3.6% decline from $6.7 million in the year-ago quarter.
Oak Valley Bancorp Price, Consensus and EPS Surprise
Oak Valley Bancorp price-consensus-eps-surprise-chart | Oak Valley Bancorp Quote
Net Interest Income and Margin Improve
Net interest income increased 3.2% year over year to $19.8 million from $19.2 million.
The improvement primarily reflected growth in average earning assets and higher yields on those assets. Net interest margin expanded to 4.24% from 4.16% in the year-ago quarter, indicating improved interest income generation relative to earning assets.
Non-interest income declined 6.2% year over year to $1.9 million from $2 million, primarily due to a one-time gain from the redemption of a life insurance policy recorded in 2025.
Higher Operating Costs Pressure Profitability
Non-interest expenses increased 5.7% year over year to $13.4 million from $12.7 million, reflecting higher staffing expenses and general operating costs associated with business growth and an expanded branch network.
The efficiency ratio deteriorated to 60.15% from 58.27% in the year-ago quarter. Return on average assets declined to 1.28% from 1.35%, while return on average common equity fell to 12.16% from 14.30%.
Loan Growth and Balance Sheet Trends
As of Sept. 30, 2026, Oak Valley Bancorp's total assets were $1.98 billion, down from $2 billion a year earlier. Gross loans increased 3.7% year over year to $1.2 billion from $1.1 billion.
Total deposits decreased 0.7% year over year to $1.8 billion. The company maintained cash and cash equivalents of $179.7 million at quarter-end, supporting its liquidity position.
Common equity declined to $191.1 million from $198.3 million a year earlier. Book value per common share decreased to $22.70 from $23.63 a year earlier.
Credit Quality Shows Mixed Trends
Non-performing assets totaled $2.6 million at the end of September. The company had reported no non-performing assets a year earlier.
Non-performing assets represented 0.13% of total assets. The allowance for credit losses represented 0.97% of gross loans, compared with 1.03% a year earlier.
The lower year-over-year reserve ratio reflected a $1.7 million loan charge-off recorded during the second quarter of 2026. The company also recorded a $0.04 million provision for credit losses during the third quarter related to off-balance-sheet items.
Management Highlights Core Banking Strength
President and CEO Rick McCarty emphasized stronger net interest income and margin expansion as key highlights of the quarter. Management attributed the operating performance to the strength of the bank's core franchise and disciplined balance sheet management.
The bank operated 19 offices at quarter-end compared with 18 a year earlier, reflecting its expanded operating footprint.