On July 19, 2024, Oak Valley Bancorp (OVLY, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. Oak Valley Bancorp is a bank holding company operating through Oak Valley Community Bank, offering a range of financial services including business checking and savings accounts, commercial and real estate loans, and various other banking services.
Quarterly Financial Highlights
For the three months ended June 30, 2024, Oak Valley Bancorp reported consolidated net income of $5.89 million, or $0.71 per diluted share, compared to $5.73 million, or $0.69 per diluted share, in the prior quarter. This represents a quarter-over-quarter increase in net income, driven by growth in deposit and loan portfolios and an increase in non-interest income. However, net income decreased from $8.40 million, or $1.02 per diluted share, in the same period last year, primarily due to higher deposit interest expenses and general operating costs.
Key Financial Metrics
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Net Interest Income | $17.29 million | $17.24 million | $19.41 million |
| Non-Interest Income | $1.76 million | $1.52 million | $1.66 million |
| Non-Interest Expense | $11.62 million | $11.53 million | $10.06 million |
| Net Income | $5.89 million | $5.73 million | $8.40 million |
| Earnings Per Share (Diluted) | $0.71 | $0.69 | $1.02 |
| Return on Average Assets | 1.30% | 1.26% | 1.79% |
| Net Interest Margin | 4.11% | 4.09% | 4.45% |
Performance Analysis
Net interest income for Q2 2024 was $17.29 million, slightly up from $17.24 million in the prior quarter but down from $19.41 million in Q2 2023. The increase over the prior quarter is attributed to loan growth and a 6 basis point increase in the average earning asset yield. However, the year-over-year decrease is due to a rise in the average cost of funds to 73 basis points, compared to 16 basis points in Q2 2023.
Non-interest income rose to $1.76 million in Q2 2024 from $1.52 million in Q1 2024, driven by increased production from investment advisory services. Non-interest expense increased to $11.62 million from $11.53 million in the prior quarter, reflecting higher operating costs associated with servicing the growing loan and deposit portfolios.
Balance Sheet and Asset Quality
Total assets stood at $1.84 billion as of June 30, 2024, up $34.1 million from March 31, 2024, but down $21.2 million from June 30, 2023. Gross loans increased to $1.07 billion, up $30.5 million from the prior quarter and $119.5 million year-over-year. Total deposits were $1.64 billion, up $32.3 million from the prior quarter but down $37.6 million year-over-year, reflecting the migration of rate-sensitive deposits before the bank's rate increases in July 2023.
Non-performing assets remained at zero, and the allowance for credit losses as a percentage of gross loans was 1.04%, slightly down from 1.05% in the prior quarter but up from 0.99% a year ago. The company did not record a provision for credit losses during the second quarter, indicating stable credit quality.
Dividend Announcement
The Board of Directors declared a cash dividend of $0.225 per share, payable on August 9, 2024, to shareholders of record as of July 29, 2024. This marks the second dividend payment by the company in 2024.
“Our earnings performance reflects our consistent and prudent approach to managing our business. We continue to focus on relationship-based core deposit growth which enables us to maintain our lending activity and enhance profitability,” stated Rick McCarty, President and Chief Operating Officer.
“We are pleased to report another strong financial performance and solid earnings for the quarter. We have achieved steady growth, driven by our ability to meet the needs of our customers and communities,” stated Chris Courtney, CEO.
For more detailed information, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Oak Valley Bancorp for further details.
