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OV

Oak Valley Bancorp (OVLY)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 EPS was $0.67, down 5.6% year over year but up 4.7% sequentially; net income was $5.588M with NIM stable at 4.11% and efficiency ratio improving to 63.9% .
  • Net interest income increased sequentially to $18.154M on loan growth (+$18.9M QoQ) and rising loan yields; non-interest income was $1.703M (+$90k QoQ) .
  • Balance sheet quality remained exceptional with zero NPAs, ACL/Gross Loans at 1.03%, and strong liquidity ($198.9M cash and equivalents) .
  • Board declared a $0.30 dividend payable Aug 8; quarterly dividend level maintained vs Q1’s $0.30 payment .
  • Wall Street consensus estimates (EPS and revenue) were not available from S&P Global for OVLY; use actuals and trend indicators for positioning [GetEstimates—no consensus data available]*.

What Went Well and What Went Wrong

What Went Well

  • Loan growth and yield expansion drove sequential net interest income improvement; NIM held 4.11%, supported by declining cost of funds to 0.77% (“stable interest margins demonstrates our ability to navigate changing market conditions”) .
  • Credit metrics remain pristine: NPAs at 0.00%, no provision recorded; ACL/Gross Loans at 1.03% reflects portfolio growth with stable credit quality .
  • Liquidity strong and deposits broadly stable YoY (+$66.5M), supporting “relationship-based deposit growth” and lending strategy .

What Went Wrong

  • Year-over-year EPS and net income contraction vs Q2 2024 driven by higher deposit interest expense and general operating expenses; efficiency ratio remains elevated vs 2024 .
  • Deposits declined $2.4M QoQ to $1.711B, modest sequential softness despite positive YoY trend .
  • Non-interest expense rose to $12.688M (+$1.072M YoY) on operating costs to service growing portfolios, weighing on profitability .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Net Interest Income ($USD Thousands)$17,292 $17,807 $18,154
Non-Interest Income ($USD Thousands)$1,760 $1,613 $1,703
Net Income ($USD Thousands)$5,889 $5,297 $5,588
Diluted EPS ($USD)$0.71 $0.64 $0.67
Net Interest Margin (%)4.11% 4.09% 4.11%
Efficiency Ratio (%)60.97% 65.01% 63.90%
ROA (%)1.30% 1.13% 1.18%
ROE (%)14.19% 11.58% 12.21%
Average Cost of Funds (%)0.73% 0.79% 0.77%

Notes: Net interest margin is disclosed as a non-GAAP tax-equivalent measure at a 21% rate; efficiency ratio was changed to GAAP basis beginning Q4 2024 and prior quarters restated .

Balance Sheet KPIs (Period End)Q2 2024Q1 2025Q2 2025
Total Assets ($USD Millions)$1,840.5 $1,924.4 $1,920.9
Gross Loans ($USD Millions)$1,070.0 $1,091.0 $1,109.9
Deposits ($USD Millions)$1,644.7 $1,713.6 $1,711.2
Cash & Equivalents ($USD Millions)n/a$209.3 $198.9
ACL / Gross Loans (%)1.04% 1.05% 1.03%
NPAs / Total Assets (%)0.00% 0.00% 0.00%

Segment breakdown: Not applicable; OVLY reports as a single community bank franchise .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per shareNext payment (Aug 8, 2025)$0.30 declared Jan 21, 2025; paid Feb 14, 2025 $0.30 declared July 15, 2025; payable Aug 8, 2025 Maintained
Branch expansion2025Lodi branch planned “later this year” Lodi branch opening “later this year” reaffirmed Maintained
Formal financial guidance (revenue/margins/OpEx/tax)2025None providedNone providedn/a

Earnings Call Themes & Trends

No Q2 2025 earnings call transcript was found or filed; themes below reflect management press release commentary.

TopicPrevious Mentions (Q4 2024 and Q1 2025)Current Period (Q2 2025)Trend
Loan growth & yieldsQ4: Loans +$31.4M QoQ; yields rising . Q1: Higher gross loan balance YoY; upward repricing aided margin .Loans +$18.9M QoQ; yields continue to trend upward; NIM 4.11% .Improving
Deposit cost trajectoryQ4: Higher deposit expense pressured margins; avg cost of funds 0.78% (2024) . Q1: Cost of funds fell to 0.79% .Cost of funds down to 0.77% .Improving
Credit qualityQ4/Q1: NPAs 0.00%; ACL % stable; CECL analysis of CRE risk .NPAs 0.00%; ACL/Gross Loans 1.03%; no provision recorded .Stable/Strong
Operating expensesQ4: Elevated OpEx (audit, data processing, licensing) . Q1: Higher staffing and general operating costs .OpEx up YoY to $12.688M; servicing growing portfolios .Pressure persists
Capital & dividendsQ4: $0.30 dividend declared; first 2025 payment . Q1: Dividend paid $0.30 .$0.30 dividend declared for Aug 8 payment .Maintained shareholder return
ExpansionQ1: Lodi branch planned later in 2025 .Lodi opening reaffirmed; community initiatives (AHP grants) .On track

Management Commentary

  • “The increase in net interest income due to loan growth and stable interest margins demonstrates our ability to navigate changing market conditions. Our commitment to relationship-based deposit growth remains strong, enabling us to maintain a competitive lending strategy and manage profitability.” — Rick McCarty, President & COO .
  • “We are pleased with the continued expansion of our loan portfolio and the overall strength of our balance sheet…Our growth is a testament to the unwavering dedication and collaboration of our team members.” — Chris Courtney, CEO .
  • Q1 context: “We remain committed to delivering steady growth while maintaining a conservative approach to risk management.” — Chris Courtney, CEO .

Q&A Highlights

No earnings call transcript for Q2 2025 was available; therefore no Q&A themes or clarifications were filed for this period [ListDocuments—no transcript found June–Aug 2025].

Estimates Context

  • S&P Global consensus estimates for EPS and revenue were not available for OVLY for Q2 2025; actuals should anchor positioning. EPS actual: $0.67; revenue drivers: net interest income $18.154M and non-interest income $1.703M .
  • Where estimates may need to adjust: sequential NIM stability and loan growth support revenue trajectory; persistent OpEx pressure and deposit dynamics temper margin expansion .

Note: Values retrieved from S&P Global where used; consensus unavailable*.

Key Takeaways for Investors

  • Sequential earnings momentum with EPS up QoQ to $0.67 driven by loan growth and rising yields; NIM held at 4.11%, supported by a lower cost of funds (0.77%) .
  • Credit quality remains a differentiator: zero NPAs and no provision in Q2; ACL/Gross Loans at 1.03% amidst portfolio growth suggests disciplined underwriting .
  • Expense intensity is the headwind: non-interest expense increased YoY to $12.688M; monitor efficiency trajectory and staffing/servicing costs .
  • Liquidity and deposits are resilient: $198.9M cash & equivalents; deposits +$66.5M YoY despite slight QoQ decline; supports lending capacity .
  • Dividend durability: $0.30/share declared for Aug 8, following $0.30 in Q1; supports income-focused holders and signals capital confidence .
  • Tactical: With no consensus coverage, trade the narrative—focus on loan growth cadence, NIM stability vs rate path, and expense control; any surprise on deposit mix/costs could move shares .
  • Medium-term: Branch expansion (Lodi) and community initiatives (AHP grants) enhance franchise value; sustained credit quality and funding discipline underpin ROE recovery potential .