Oak Valley Bancorp (NASDAQ: OVLY) lifts quarterly profit as nine-month income slips

What happened

Oak Valley Bancorp (NASDAQ: OVLY) reported third-quarter net income of $6.45 million for the period ended September 30, 2026. Diluted EPS was $0.77, compared with $0.61 in the prior quarter and $0.81 a year earlier. Net interest income was $19.80 million, and net interest margin was 4.24%. Non-interest income was $1.85 million, led by debit card transaction fee income and dividends from the Federal Home Loan Bank. Non-interest expense was $13.42 million.

For the first nine months of 2026, net income was $16.87 million, or $2.02 a share, versus $17.58 million and $2.12 a share in the same period of 2025. Total assets were $1.98 billion, gross loans were $1.15 billion and total deposits were $1.76 billion at September 30, 2026. Cash and cash equivalents were $179.67 million, non-performing assets were $2.58 million and the bank had 19 branches.

Key numbers

Metric	Latest	Change	Source
Quarterly net income	$6.45 million	from $6.69 million, -3.6%	Oak Valley Bancorp press release dated October 21, 2026
Diluted EPS	$0.77	from $0.81, -4.9%	Oak Valley Bancorp press release dated October 21, 2026
Net interest income	$19.80 million	from $19.20 million, +3.2%	Oak Valley Bancorp press release dated October 21, 2026
Net interest margin	4.24%	from 4.16%, +0.08 percentage points	Oak Valley Bancorp press release dated October 21, 2026
Nine-month net income	$16.87 million	from $17.58 million, -4.0%	Oak Valley Bancorp press release dated October 21, 2026
ACL ratio	0.97%	from 1.03%, -0.06 percentage points	Oak Valley Bancorp press release dated October 21, 2026

Read more: Oak Valley Bancorp (OVLY) stock analysis and investment case

Why it matters

Quarterly net income rose 26.1% from $5.11 million in the prior quarter. The filing says the gain came from higher net interest income, lower non-interest expense and higher non-interest income. It also says net interest income rose on growth in average earning assets and a higher yield on average earning assets.

Net interest margin widened to 4.24% from 4.15% in the prior quarter, and the efficiency ratio improved to 60.15% from 66.46%. Return on average assets was 1.28%, and return on average common equity was 12.16%. OptimistFi's case is that Oak Valley Bancorp's value depends on sticky local funding and disciplined credit more than on rapid balance-sheet growth.

The filing is still mixed. Deposits were essentially unchanged at $1.76 billion, while total assets fell from $2.00 billion at June 30 to $1.98 billion at September 30. The allowance for credit losses was 0.97% of gross loans, down from 1.03% a year earlier. But the release says that lower ACL reflects a $1.74 million loan charge-off in the second quarter of 2026, so the year-over-year credit picture is not a clean improvement.

Non-performing assets were 0.13% of total assets, up from zero a year earlier, and nine-month net income fell 4.0% from 2025.

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What's next

The next quarterly report will show whether net interest margin stays above 4% and deposits hold steady. A stronger update would extend the earnings rebound. Weaker credit or funding figures would keep the case mixed.

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