Financial Performance - The Company reported net income of $7,324,000 and $18,940,000 for the three and nine-month periods ended September 30, 2024, representing decreases of $30,000 and $6,043,000 compared to the same periods in 2023[117]. - The Company experienced a decrease in net income before provisions for income taxes by $8,063,000 for the nine-month period ended September 30, 2024, compared to the same period in 2023[125]. - Non-interest income for Q3 2024 was $1,846,000, an increase of $280,000 or 17.9% compared to Q3 2023[144]. - The Company recorded provisions for income taxes of $5,524,000 for the nine months ended September 30, 2024, reflecting a decrease of $2,020,000 compared to the same period in 2023[159]. Interest Income and Expenses - Net interest income decreased by $1,283,000 and $5,700,000 for the three and nine-month periods ended September 30, 2024, primarily due to increased interest expense on deposit accounts[119]. - For the three months ended September 30, 2024, net interest income was $17,655,000, a decrease of $1,283,000 compared to the same period in 2023[127]. - For the nine months ended September 30, 2024, net interest income was $52,188,000, a decrease of $5,700,000 compared to the same period in 2023[127]. - The net interest margin for the three months ended September 30, 2024, was 4.04%, down from 4.34% in the same period of 2023[128]. - The average cost of funds increased to 0.83% for the three months ended September 30, 2024, compared to 0.33% in the same period of 2023[127]. - The net interest spread for the three months ended September 30, 2024, was 3.54%, down from 4.11% in the same period of 2023[131]. Non-Interest Expenses - Non-interest expense increased by $746,000 and $4,072,000 for the three and nine-month periods ended September 30, 2024, primarily due to staffing increases and overhead related to servicing growing business portfolios[121]. - Total non-interest expense for Q3 2024 was $11,324,000, an increase of $746,000 or 7.1% compared to Q3 2023[153]. - Salaries and employee benefits increased by $672,000 or 10.3% in Q3 2024 compared to Q3 2023, indicating rising labor costs[153]. - Non-interest expenses increased by $4,072,000 or 13.4% for the nine months ended September 30, 2024, compared to the same period in 2023[154]. - Salaries and employee benefits rose by $2,420,000 or 12.6% for the nine months ended September 30, 2024, primarily due to additional staffing expenses[154]. Asset and Deposit Growth - Total assets increased by $58,033,000 or 3.1%, total net loans increased by $57,953,000 or 5.8%, and deposits increased by $39,767,000 or 2.4% from December 31, 2023, to September 30, 2024[122]. - Total deposits as of September 30, 2024, were $1,690,301,000, an increase of $39,767,000 or 2.4% from $1,650,534,000 as of December 31, 2023[175]. - Average deposits decreased by $84,279,000 to $1,640,761,000 for the nine-month period ended September 30, 2024, compared to the same period in 2023[175]. - The increase in deposits is attributed to an advertising campaign launched in January 2024, resulting in an increase in DDA checking accounts[177]. Credit Quality - A credit loss provision reversal of $1,620,000 was recorded during the three and nine months ended September 30, 2024, compared to provisions of $300,000 and a reversal of $160,000 in the comparable periods of 2023[118]. - The company recorded a reversal of provisions for credit losses of $1,620,000 in Q3 2024, compared to provisions of $300,000 in Q3 2023, indicating improved credit quality[142]. - Non-performing assets remained at $0 as of September 30, 2024, indicating strong credit quality within the loan portfolio[163]. - The allowance for credit losses increased to $11,479,000 as of September 30, 2024, due to net loan recoveries of $2,242,000 during the first nine months of 2024[165]. Capital Ratios - Total capital to risk-weighted assets ratio was 15.3% as of September 30, 2024, exceeding the regulatory minimum of 10.5%[185]. - Tier I capital to risk-weighted assets ratio was 14.4% as of September 30, 2024, above the regulatory minimum of 8.5%[185]. - Common equity Tier 1 capital to risk-weighted assets ratio was 14.4% as of September 30, 2024, exceeding the regulatory minimum of 7.0%[185]. Regulatory Compliance - The CFPB finalized a rule to implement Section 1033 of the Dodd-Frank Act, requiring data providers to make consumer financial data available upon request, impacting compliance by April 1, 2029 for certain institutions[193]. - The Company continues to evaluate the potential impacts of the CFPB rule on its operations and compliance requirements[193].
Oak Valley Bancorp(OVLY) - 2024 Q3 - Quarterly Report