Oak Valley Bancorp reported its financial results for the third quarter and nine months ended September 30, 2024, reflecting a mixed performance compared to the same periods in 2023. The company’s net income for the third quarter was $7.324 million, slightly down from $7.354 million in the prior year. For the nine-month period, net income decreased to $18.940 million from $24.983 million in 2023. This decline in profitability was attributed to increased interest expenses on deposit accounts, which negatively impacted net interest income.

Total interest income for the third quarter rose to $21.146 million from $20.349 million year-over-year, while for the nine months, it increased to $61.382 million from $60.448 million. However, net interest income fell to $17.655 million for the third quarter, down from $18.938 million, and for the nine months, it decreased to $52.188 million from $57.888 million. The average cost of funds significantly increased, reaching 0.83% for the third quarter compared to 0.33% in 2023, contributing to the reduced net interest margin, which fell to 4.04% from 4.34%.

Non-interest income showed positive growth, with total non-interest income for the third quarter increasing to $1.846 million from $1.566 million, and for the nine months, it rose to $5.125 million from $4.876 million. This growth was driven by unrealized gains on equity securities and increased investment advisory service fees.

On the balance sheet, total assets increased by $58.033 million (3.1%) to $1.93 billion as of September 30, 2024. The loan portfolio grew to $1.075 billion, up from $1.017 billion at the end of 2023, with commercial real estate loans comprising 86% of the total. Deposits also rose to $1.690 billion, reflecting a 2.4% increase from $1.651 billion.

The company’s retained earnings improved to $169.494 million from $154.301 million, and total shareholders’ equity increased to $185.393 million from $166.092 million. The adoption of the Current Expected Credit Loss (CECL) model in January 2023 resulted in an increase in the allowance for credit losses, which stood at $11.479 million as of September 30, 2024.

Overall, Oak Valley Bancorp's financial results indicate a challenging environment with rising costs impacting profitability, despite growth in total assets and deposits. The company continues to focus on maintaining strong credit quality, with no non-accrual loans reported during the period.