Oak Valley Bancorp reported unaudited consolidated net income of $6,450,000 for the third quarter ended September 30, 2026, representing a diluted earnings per share of $0.77. This figure compares to $5,114,000, or $0.61 per diluted share, for the second quarter of 2026, and $6,693,000, or $0.81 per diluted share, for the same period in 2025. The bank holding company, which operates Oak Valley Community Bank and the Eastern Sierra Community Bank division, attributed the quarterly improvement to higher net interest income, lower non-interest expense, and increased non-interest income.
Net interest income rose to $19,802,000 in the third quarter of 2026 from $18,944,000 in the prior quarter and $19,197,000 in the third quarter of 2025. Management stated this growth was driven by an increase in the yield on average earning assets and growth in those assets. Consequently, the net interest margin expanded to 4.24% for the three months ended September 30, 2026, up from 4.15% in the second quarter and 4.16% in the same period a year earlier.
Non-interest income for the quarter was $1,851,000, an increase from $1,665,000 in the prior quarter. The company cited higher debit card transaction fee income and dividends from the Federal Home Loan Bank as primary drivers for this rise. However, non-interest income was lower than the $1,973,000 recorded in the third quarter of 2025, a difference management linked to a one-time gain from a life insurance policy redemption recorded in the prior year.
Non-interest expense decreased to $13,420,000 in the third quarter of 2026 from $14,157,000 in the second quarter. This reduction followed a one-time benefit expense recorded in the previous quarter for accelerated vesting of restricted stock awards. Despite the sequential drop, expenses were higher than the $12,700,000 reported in the third quarter of 2025 due to staffing costs and general operating expenses associated with company growth and an expanded branch network.
Total assets stood at $1.98 billion as of September 30, 2026. This represented a decrease of $25,404,000 from June 30, 2026, and a decrease of $19,242,000 from September 30, 2025. Gross loans totaled $1.15 billion at quarter-end, down $11,660,000 from the previous quarter but up $41,226,000 from a year ago. Total deposits were $1.76 billion, essentially unchanged from June 30 but down $12,299,000 from September 30, 2025.
The company reported cash and cash equivalent balances of $179,669,000 at September 30, 2026. Non-performing assets totaled $2,581,000 at quarter-end compared to $2,631,000 at June 30 and no non-performing assets at September 30, 2025. Non-performing assets accounted for 0.13% of total assets at September 30, consistent with the June figure.
Rick McCarty, President and Chief Executive Officer of Oak Valley Bancorp, stated that the results highlighted stronger net interest income and an expanded net interest margin. He noted that these figures reflect the strength of the core banking franchise and the team's disciplined approach to balance sheet management.