Oak Valley earnings recovered in the third quarter of 2026 as stronger net interest income and lower quarterly expenses lifted unaudited net income to $6.45 million, or $0.77 per diluted share. The results, announced on October 21 for the quarter ended September 30, improved from $5.114 million in the preceding quarter but remained below the year-earlier level.
Key Takeaways
- Quarterly net income rose 26.1% sequentially but fell 3.6% from a year earlier.
- Net interest margin widened to 4.24%, supported by growth in average earning assets and higher yields.
- Nine-month profit remained below 2025 as higher operating expenses outweighed income growth.
Table of Contents
- Oak Valley earnings improve, but trail the prior year
- Interest income strengthens as quarterly expenses ease
- Loans contract sequentially while credit measures stabilize
- Conclusion
Oak Valley earnings improve, but trail the prior year
Diluted earnings per share increased from $0.61 in the second quarter. Higher net interest income, lower non-interest expense and stronger non-interest income all contributed to the sequential profit recovery.
The bank’s third-quarter 2025 results announcement established the year-earlier comparison at $6.693 million in net income and $0.81 per diluted share. The latest quarter therefore marked a rebound from the preceding quarter rather than year-over-year earnings growth.
For the first nine months of 2026, net income totaled $16.873 million, or $2.02 per diluted share, compared with $17.578 million, or $2.12 per share, in the same period of 2025. The company attributed that decline primarily to higher non-interest expense, partly offset by increases in both interest and non-interest income.
| Item | Details |
|---|---|
| Total assets at September 30, 2026 | $1.976 billion |
| Gross loans at September 30, 2026 | $1.154 billion |
| Deposits at September 30, 2026 | $1.763 billion |
| Cash and cash equivalents | $179.669 million at September 30, 2026 |
Interest income strengthens as quarterly expenses ease
Net interest income reached $19.802 million, up from $18.944 million in the second quarter and $19.197 million a year earlier. Oak Valley attributed the increases to growth in average earning assets and higher yields on those assets.
Net interest margin widened to 4.24%, compared with 4.15% in the preceding quarter and 4.16% a year earlier. That represents improvements of nine and eight basis points, respectively.
Non-interest expense fell to $13.420 million from $14.157 million sequentially because the second quarter included a one-time benefit expense for accelerated vesting of certain restricted stock awards. Expenses nevertheless exceeded the year-earlier $12.700 million, reflecting staffing and operating costs supporting growth and the expanded branch network.
Non-interest income rose to $1.851 million from $1.665 million in the second quarter, helped by debit card transaction fees and Federal Home Loan Bank dividends. It was below the year-earlier $1.973 million, which included a one-time life insurance policy redemption gain.
Loans contract sequentially while credit measures stabilize
Gross loans declined by $11.660 million from June 30 but remained $41.226 million above September 2025. Deposits were essentially unchanged from the preceding quarter, while total assets decreased.
Non-performing assets edged down to $2.581 million from $2.631 million in June, remaining at 0.13% of total assets. There were no non-performing assets a year earlier.
The allowance for credit losses represented 0.97% of gross loans, compared with 0.96% in June and 1.03% a year earlier. The company attributed the annual decline in that ratio to a $1.735 million loan charge-off in the second quarter. It recorded a $42,000 third-quarter credit-loss provision related to off-balance-sheet items.
Conclusion
The third quarter brought stronger interest income and a sequential profit recovery, but not a return to year-over-year earnings growth. The next quarterly comparison will test whether income gains can offset the higher operating-cost base; the announcement provided no date for that release.
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