- Oak Valley Bancorp (OVLY, Financial) reported a 12% decline in net income for Q1 2025, primarily due to increased operating expenses.
- Net interest margin improved to 4.09% despite the Fed rate cut in December 2024.
- Total deposits increased by $17.9 million from the previous quarter, while maintaining zero non-performing assets.
Oak Valley Bancorp (OVLY) has released its financial results for the first quarter of 2025, showcasing a decrease in net income to $5.3 million or $0.64 per share, compared to $6.0 million or $0.73 per share in the previous quarter. The decline mainly results from a 9.3% increase in operating expenses totaling $12.6 million.
The bank's net interest income for Q1 2025 was $17.8 million, slightly down from $17.8 million in Q4 2024. Despite a Federal Open Market Committee rate cut in December 2024, the net interest margin improved to 4.09% from 4.00% in the previous quarter, benefiting from a decrease in deposit interest expense.
Total assets rose to $1.92 billion, marking an increase of $23.8 million from the end of 2024. Oak Valley Bancorp reported $1.71 billion in total deposits, reflecting a $17.9 million increase quarter-over-quarter. The company maintained strong liquidity with $209.3 million in cash and cash equivalents.
Loan quality remained robust with zero non-performing assets and an allowance for credit losses at 1.05% of gross loans. Gross loans experienced a modest decrease of $15.6 million from the previous quarter, amounting to $1.09 billion at the end of Q1 2025.
While Oak Valley Bancorp continues its expansion with a new branch scheduled to open in Lodi later this year, the increase in staffing and general operating costs to manage its growing portfolio raises some concerns over efficiency. The efficiency ratio deteriorated to 65.01% in Q1 from 59.91% in Q4 2024.
