Oak Valley Bancorp (OVLY) Stock: Earnings Dip Slightly Despite Strong Liquidity and Solid Credit Metrics

TLDR

Q1 2025 net income was $5.3M, down from $6M in Q4 2024. Net interest margin rose to 4.09% despite FOMC rate cuts. Non-performing assets remained at zero. Total deposits increased by $101.2M YoY to $1.71B. Emma Brandstad hired as Commercial Banking Officer in Stockton.

Oak Valley Bancorp (NASDAQ: $OVLY) stock traded at $23.95 at the time of writing, slipping 0.50% in early trading. The company reported unaudited Q1 2025 earnings on April 18, posting a net income of $5.3 million, or $0.64 per diluted share. This marks a decline from $6 million ($0.73 EPS) in Q4 2024 and $5.7 million ($0.69 EPS) in Q1 2024. The drop was attributed primarily to increased operating expenses.

 Oak Valley Bancorp (OVLY)

Non-interest expenses reached $12.6 million, up from $11.5 million in the previous quarter and the same period last year. The rise was linked to higher staffing and general operating costs needed to support expanding loan and deposit portfolios.

Strong Net Interest Margin and Income Stability

Net interest income was $17.8 million for the quarter, slightly below $17.8 million in Q4 2024 but above $17.2 million from Q1 2024. Despite a December 2024 rate cut by the Federal Open Market Committee (FOMC), the bank’s net interest margin improved to 4.09% from 4.00% in the prior quarter. A reduction in deposit interest expense and higher average loan balances contributed to the margin growth.

Average cost of funds dropped to 0.79%, compared to 0.86% in the prior quarter. The yield on earning assets improved due to upward repricing on loans.

Liquidity, Deposits, and Loan Portfolio Trends

As of March 31, 2025, Oak Valley Bancorp held $1.92 billion in total assets, up by $23.8 million from year-end and $118.6 million year-over-year. Total deposits rose to $1.71 billion, an increase of $17.9 million from December 2024 and $101.2 million compared to March 2024.

Gross loans stood at $1.09 billion, reflecting a $15.6 million decrease quarter-over-quarter but a $51.4 million increase from Q1 last year. CEO Chris Courtney described the loan paydowns as modest and typical for early-year activity.

The bank’s cash and equivalents surged to $209.3 million, up by $40.5 million from year-end, reinforcing its robust liquidity position.

Credit Quality Remains Pristine

Non-performing assets remained at zero for the quarter, consistent with the previous periods. The allowance for credit losses stood at 1.05% of gross loans, unchanged from March 2024 and slightly above the 1.04% posted at year-end.

The company performed a detailed review of its commercial real estate exposure as part of its CECL modeling, concluding that the reserve levels are adequate and credit risk is well-contained.

Branch Expansion and Leadership Update

Oak Valley Bancorp currently operates 18 branches across California, including locations in Oakdale, Turlock, Stockton, and the Eastern Sierra region. The 19th branch is expected to open in Lodi later this year.

On April 17, Oak Valley Community Bank announced the hiring of Emma Brandstad as a Commercial Banking Officer based in the Stockton office. Brandstad brings nearly three years of commercial lending experience and holds a degree in agriculture business from CSU Fresno. She is also a CrossFit trainer and community advocate with ties to local agricultural circles.

Outlook

With earnings slightly lower due to increased expenses, Oak Valley Bancorp still presents strong underlying metrics—stable margins, solid deposit growth, and zero non-performing assets. The company remains committed to conservative risk management and continued expansion in its regional markets.

Earnings Date: July 16–21, 2025.

The post Oak Valley Bancorp (OVLY) Stock: Earnings Dip Slightly Despite Strong Liquidity and Solid Credit Metrics appeared first on CoinCentral.