Companies

Oak Valley's Net Interest Margin Widens to 4.24%

The Tip Desk · October 23, 2026 · 2 min read

Third-quarter net interest income reached $19.80 million as the margin expanded 9 bps from 4.15% in the second quarter.

Oak Valley Bancorp (OVLY), the bank holding company for Oak Valley Community Bank and its Eastern Sierra Community Bank division, reported net interest income of $19.80 million for the three months ended September 30, 2026, up from $18.94 million in the second quarter.

The company said the increase was driven by growth in average earning assets and a higher yield on those assets. Average earning assets were $1.90 billion in the third quarter. Net interest margin widened 9 bps to 4.24% from 4.15% in the second quarter, after a 3 bps expansion to 4.15% from 4.12% in the first quarter. President and Chief Executive Officer Rick McCarty said the quarter was highlighted by stronger net interest income and an expanded margin.

Gross loans reversed a second-quarter increase. Period-end loans were $1.15 billion at September 30, 2026, down $11.66 million from $1.17 billion at June 30, after an $18.26 million rise in the second quarter. Total deposits were essentially unchanged at $1.76 billion. Total assets were $1.98 billion. Cash and cash equivalents were $179.67 million.

Non-interest income was $1.85 million, up from $1.67 million in the second quarter. The company attributed the increase primarily to higher debit card transaction fee income and dividends received from the Federal Home Loan Bank. Non-interest expense fell to $13.42 million from $14.16 million, which the company said reflected a one-time benefit expense in the second quarter for accelerated vesting of certain restricted stock awards. The efficiency ratio improved to 60.15% from 66.46%.

Consolidated net income was $6.45 million, or $0.77 a share, compared with $5.11 million, or $0.61 a share, in the second quarter. The company said the increase versus the prior quarter was primarily due to higher net interest income, lower non-interest expense, and higher non-interest income.

The provision for credit losses was $42 thousand in the third quarter, related to off-balance-sheet items under the CECL model, after $21 thousand in the second quarter and $464 thousand in the first quarter. Non-performing assets were $2.58 million, or 0.13% of total assets, down from $2.63 million at June 30, after a $1.94 million decline from $4.57 million at March 31. The allowance for credit losses was 0.97% of gross loans, up from 0.96% at June 30.

The company paid a $0.375 a share dividend in the third quarter, matching the first-quarter rate. Full-time equivalent staff were 247, and the company operated 19 banking offices.

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