Oak Valley Bancorp Reports $5.3 Million Net Income in Q1 2025, Down from $5.7 Million

Oak Valley Bancorp reported a net income of $5.3 million for the first quarter of 2025, a decrease from $5.7 million in the same period of 2024. This decline is attributed to increased interest expenses on deposit accounts and higher operating costs. The company's net interest income rose to $17.8 million, up from $17.2 million year-over-year, primarily due to an increase in earning asset balances, despite a rise in interest expenses. The net interest margin remained stable at 4.09%, reflecting a balance between rising loan yields and increased costs of funds.

Total assets for Oak Valley Bancorp increased by $23.8 million, or 1.3%, to $1.92 billion as of March 31, 2025. The bank's total deposits also saw a rise, increasing by $23.7 million, or 1.4%, to $1.71 billion. However, net loans decreased by $15.8 million, or 1.4%, to $1.08 billion, while investment securities fell by $7.7 million, or 1.5%. The increase in cash and cash equivalents was significant, rising by $40.5 million, or 24%, indicating a strong liquidity position.

In terms of operational metrics, Oak Valley Bancorp maintained a stable credit quality, with no loans on non-accrual status and no provisions for credit losses recorded during the quarter. The allowance for credit losses slightly decreased to $11.4 million, representing 1.05% of total loans. The bank's focus on commercial real estate loans continues, with approximately 87% of its loan portfolio in this category. The company has also committed to investing an additional $5 million in low-income housing tax credit funds, reflecting its ongoing commitment to community development.

Looking ahead, Oak Valley Bancorp anticipates continued growth in its business portfolios, although management acknowledges the potential for rising operational costs. The bank remains focused on enhancing shareholder value while managing its capital efficiently. The company’s capital ratios remain strong, with total capital to risk-weighted assets at 15.6%, well above regulatory minimums. Management is committed to monitoring economic conditions and adjusting strategies as necessary to maintain financial stability and growth.