Oak Valley Bancorp (OVLY): Business Model Canvas [Dec-2025 Updated]

You're trying to map out how a focused community bank successfully navigates today's rate environment, so let's look directly at Oak Valley Bancorp's Business Model Canvas. Honestly, what jumps out is their hyper-local, relationship-driven strategy in California's Central Valley, which has delivered pristine asset quality-zero non-performing assets as of 2025-while they manage a $\mathbf{\$1.11 \text{ billion}}$ gross loan portfolio supported by $\mathbf{\$1.77 \text{ billion}}$ in stable deposits. This model, which pulled in $\mathbf{\$19.197 \text{ million}}$ in Net Interest Income in Q3 2025, clearly shows how deep local expertise translates into tangible financial results; read on to see the nine building blocks that drive this performance.

Oak Valley Bancorp (OVLY) - Canvas Business Model: Key Partnerships

You're looking at the relationships Oak Valley Bancorp (OVLY) cultivates to execute its strategy, especially in community investment and operational support. These aren't just casual connections; they are structured alliances that help Oak Valley Community Bank meet its Community Reinvestment Act (CRA) obligations and drive local impact. Honestly, these partnerships are crucial for their franchise value in Stanislaus and Tuolumne counties.

The most visible partnerships revolve around securing and deploying community development funding, primarily through the Federal Home Loan Bank of San Francisco (FHLBank San Francisco). This relationship is key to their community investment strategy.

The 2025 Affordable Housing Program (AHP) grants are a prime example of this structure in action. Oak Valley Bancorp, through its subsidiary Oak Valley Community Bank, acts as the sponsor and advocate, channeling funds from FHLBank San Francisco to local implementers.

Here's a breakdown of the major grant-related partnerships confirmed for 2025:

The total AHP funding channeled by Oak Valley Community Bank in July 2025 amounted to $5,346,000. To be fair, the FHLBank San Francisco awarded a total of $49.7 million in AHP grants across Arizona, California, and Nevada in 2025, showing the scale of the overall program Oak Valley Bancorp participates in.

The specific projects supported by the AHP funds highlight the nature of the partnership with local non-profits and regional authorities. These are concrete deliverables, not just abstract commitments.

• Grace Place (Modesto Gospel Mission): Renovation for 67 transitional housing units with wraparound services.
• Hannah's House (Modesto Gospel Mission): Conversion of a warehouse into 50 transitional housing units.
• Westside Subdivision (TEDA): Delivery of 30 new single-family homes for low- to moderate-income households, including 6 homes for those experiencing homelessness.

The AHEAD grant partnership with the City Ministry Network focuses on workforce development for Latino youth across Stanislaus and San Joaquin counties, introducing a "career ready" curriculum.

Oak Valley Bancorp's Community Reinvestment Officer, Jose Sabala, is noted as the advocate providing supplemental input for these grants, solidifying the bank's role as a facilitator between the FHLBank San Francisco and the community organizations. This is how they build deep local ties. The AHEAD program itself is designed to give a critical boost to local economic development programs.

Regarding technology vendors for digital banking and core processing, specific partner names and contract values for late 2025 aren't publicly detailed in the recent financial releases reviewed. However, the bank does offer a suite of digital services, including Online Banking and Bill Payment, Mobile Banking, and Express Deposit, which necessitates ongoing relationships with specialized technology providers to maintain service levels. Finance: draft a memo by next Tuesday detailing the top three non-grant-related vendors by 2025 spend.

Oak Valley Bancorp (OVLY) - Canvas Business Model: Key Activities

You're looking at the core engine of Oak Valley Bancorp (OVLY) as of late 2025. The bank's key activities center on disciplined, relationship-driven financial intermediation within its defined geographic footprint. This isn't about chasing every loan or deposit; it's about deep local engagement, which you see reflected in their lending focus and deposit base stability.

The primary engine for revenue generation is lending, specifically concentrated in commercial real estate and business loans. This focus is a defining characteristic of Oak Valley Bancorp's asset strategy. As of the third quarter of 2025, the bank was actively managing a $1.11 billion gross loan portfolio. This portfolio composition is critical to understand, as it dictates the bank's primary credit risk exposure.

The concentration in commercial lending is significant. You should note that commercial real estate (CRE) loans, which typically involve higher principal amounts and are tied to property operations, constitute 87% of the entire loan portfolio. This concentration means the bank's performance is heavily linked to the health of the local commercial property markets in the Central Valley and Eastern Sierra.

Complementing the lending activity is the focus on funding. Oak Valley Bancorp's second key activity is relationship-based deposit gathering and management. This strategy aims for 'sticky' deposits, which are generally less rate-sensitive and less prone to rapid outflow compared to brokered or wholesale funding sources. As of September 30, 2025, total deposits stood at $1.77 billion. This is up from $1.71 billion at the end of Q2 2025. The bank's commitment to this model is what management points to for maintaining a competitive lending strategy.

Finally, the physical footprint is an active part of the strategy, supporting the relationship model. Oak Valley Bancorp continues its strategic expansion of the physical branch network to enhance accessibility and capture new local relationships. You saw this culminate with the opening of the 19th full-service branch in Downtown Lodi on October 2, 2025. This Lodi location is the sixth in San Joaquin County, building on a footprint that previously included 18 locations. This physical presence is where the relationship-based activities are executed daily.

Here's a quick look at the scale of the lending and funding activities as of late 2025:

The operational execution of these activities involves several focused efforts:

• Focusing commercial and agricultural lending efforts at the new Lodi location.
• Maintaining pristine credit quality, with zero non-accrual loans as of September 30, 2025.
• Balancing loan growth with deposit stability to manage the net interest margin, which was 4.16% for Q3 2025.
• Expanding the physical network to 19 branches to support local client acquisition.

The bank defintely prioritizes the quality of the loan and deposit relationship over sheer volume, which is clear when you look at the loan mix. Finance: draft the Q4 2025 loan portfolio breakdown by Friday.

Oak Valley Bancorp (OVLY) - Canvas Business Model: Key Resources

You're looking at the core assets Oak Valley Bancorp is using to run the business as of late 2025. These aren't just numbers on a page; they represent the capital base and the human element that drives their community banking model.

The balance sheet strength is defintely a primary resource. As of September 30, 2025, Oak Valley Bancorp reported total assets reaching $2.00 billion.

Liquidity management is clearly a focus, keeping dry powder ready. You see this in their cash position, which stood at $247.2 million in cash and cash equivalents on that same date. That's a solid buffer, so to speak.

The deposit base is the engine for lending, and theirs is substantial and, by management's description, quite sticky. Total deposits were reported at $1.77 billion at the end of the third quarter of 2025. This stable funding source lets them maintain a competitive lending strategy.

Here's a quick look at how the main balance sheet components stacked up at the end of September 2025:

Beyond the financials, the people and their local knowledge are critical. Oak Valley Bancorp operates primarily in the California Central Valley around Sacramento, Stockton, Modesto, and the Eastern Sierras. This geographic focus necessitates deep local expertise among their commercial banking officers. The commitment to this model is visible in recent operational moves; for instance, the company grew its full-time equivalent employees by six during the third quarter of 2025 in preparation for the opening of its 19th full-service branch in Lodi on October 2, 2025. That's a tangible investment in the human resource side of the business.

The key human and operational resources include:

• Deep local expertise across the Central Valley and Eastern Sierras markets.
• Experienced commercial banking officers driving relationship-based business.
• A growing physical footprint, evidenced by the 19th branch opening in October 2025.
• A strong, relationship-driven deposit base totaling $1,774,882,000 as of September 30, 2025.

Finance: draft 13-week cash view by Friday.

Oak Valley Bancorp (OVLY) - Canvas Business Model: Value Propositions

Oak Valley Bancorp cultivates lifelong customers by executing a unique brand of relationship service. This focus on personal connection is central to the value delivered to both businesses and individuals across its operating footprint in the California Central Valley and Eastern Sierras. The bank emphasizes its commitment to service, integrity, teamwork, performance, and community.

Pristine asset quality stands as a core differentiator, providing a foundation of stability that larger institutions often struggle to match. For the entirety of 2025 through the third quarter, Non-Performing Assets (NPA) remained at zero.

The Allowance for Credit Losses (ACL) as a percentage of gross loans remained at acceptable levels, standing at 1.03% as of June 30, 2025, and September 30, 2025. This credit discipline supports a growing loan book, which reached $1.11 billion in gross loans by June 30, 2025, and further expanded to $1,112,829,000 by September 30, 2025.

Oak Valley Bancorp delivers a full suite of lending solutions, with the primary revenue source being loans to middle-market businesses. The loan portfolio composition as of September 30, 2025, reflects this focus:

The agility and responsiveness value proposition is evidenced by strategic, localized expansion and operational improvements. The opening of the new Lodi branch on October 2, 2025, positions the bank for incremental deposit gathering and lending growth in that area. This localized execution helps the bank maintain a customer-centric approach.

Operational efficiency, a proxy for responsiveness, showed sequential improvement in the third quarter of 2025:

• Efficiency Ratio improved to 58.27% for the three months ended September 30, 2025.
• This represents an improvement from the 61.95% reported for the second quarter of 2025.

The bank's liquidity position remains strong, providing flexibility for its growth strategy. Cash and cash equivalents stood at $247.2 million as of the third quarter end of 2025.

Oak Valley Bancorp (OVLY) - Canvas Business Model: Customer Relationships

You're looking at how Oak Valley Bancorp (OVLY) keeps its customers close, which is the bedrock of a community bank's strategy. Their approach centers on a high-touch, localized service model that contrasts with the branch closures seen at larger national players.

Dedicated, long-term personalized relationship management.

The commitment to personalized service is stated directly by the leadership. CEO Chris Courtney commented in October 2025 that the team continues to execute on its growth strategy while maintaining excellent asset quality and customer relationships. This focus is supported by strategic hiring, such as bringing on Emma Brandstad in April 2025 to focus on business development and fostering strong client relationships in the Stockton Office. The bank's differentiation is characterized by a strong emphasis on local presence and personalized customer service.

High-touch, in-person service at 19 branch locations.

Oak Valley Bancorp maintains a significant physical footprint, which is key to its high-touch model. As of late 2025, following the opening of the Lodi branch on October 2, 2025, the total network stands at 19 full-service branches. This physical network is spread across the Central Valley and the Eastern Sierras. The Lodi location itself is the bank's sixth in San Joaquin County, signaling a deepening of physical accessibility in that market. This contrasts with the trend of national banks closing branches; for example, some larger competitors have closed over 2,000 branches nationwide since 2020.

Here are the key figures reflecting the size and stability of the customer funding base as of September 30, 2025:

Community-first ethos fostering high customer retention.

The bank's culture is explicitly community-driven, which helps build the 'sticky' deposits that insulate the bank from liquidity issues. This ethos is supported by internal recognition; Oak Valley Bancorp was recognized for increasing its workforce by 10% or more throughout 2024, signaling investment in the local human capital that delivers service. The deposit base reflects this relationship focus, with 90% being non-maturity funds as of mid-2025, which is considered a shield against liquidity crunches. Furthermore, the cost of funds, which relates to deposit rates paid, showed a slight decline in the first half of 2025, ending at 0.77% in Q2 2025, suggesting stability in funding costs relative to the market.

• Hiring new Commercial Banking Officers to manage loan portfolios and foster strong client relationships.
• Recognition for 'Growing the Economy' by increasing workforce by over 10% in 2024.
• Maintaining zero Non-Performing Assets (NPA) as of September 30, 2025.

Digital self-service via online and mobile banking platforms.

While emphasizing in-person service, Oak Valley Bancorp supports its customer relationships with digital tools. The services offered include Internet, online, and mobile banking, alongside remote deposit capture. The success of fee-based services, which often utilize these platforms, is evident in the Q3 2025 results. Non-interest income rose to $1,973,000 for the quarter ended September 30, 2025, driven partly by 'increased production from our investment advisory service and related fee income, and increased service charge income on deposit accounts.' This indicates that customers are engaging with the bank's digital and fee-based offerings to complement their core relationship banking.

Finance: draft 13-week cash view by Friday.

Oak Valley Bancorp (OVLY) - Canvas Business Model: Channels

You're looking at how Oak Valley Bancorp gets its value proposition to its customers across the Central Valley and Eastern Sierras. It's a mix of boots-on-the-ground presence and digital access, which makes sense for their operating area.

Physical branch network across the Central Valley and Eastern Sierras.

Oak Valley Bancorp operates its services through two divisions: Oak Valley Community Bank and Eastern Sierra Community Bank. As of October 2025, the physical footprint stands at 19 full-service branches, reflecting the recent addition of the Lodi location. This network is intentionally spread across the key geographic areas they serve.

The opening of the Lodi branch on October 2, 2025, specifically enhances their presence in the northern part of San Joaquin County.

Online and Mobile Banking for remote account management.

Oak Valley Bancorp offers online banking services, which support the full line of personal and commercial banking products. While the specific metrics for active digital users or the percentage of transactions processed remotely are not publicly detailed in the latest reports, this channel is a necessary component for serving a geographically dispersed customer base.

Network of Automated Teller Machines (ATMs).

Accessibility is supported by a network of ATMs. The new Lodi branch, for instance, includes a traditional walk-up ATM for customer convenience. The total number of ATMs across all 19 locations isn't itemized, but each full-service branch is equipped to provide this access point.

Direct commercial banking officers for complex loan origination.

Complex commercial and agricultural lending is facilitated through direct, relationship-focused officers embedded in key markets. These officers are organized by region to serve local business owners directly. Here are some of the key personnel driving this channel as of late 2025:

• EVP Commercial Banking Group Leader: Gary Stephens
• EVP Commercial Real Estate Group: Cathy Ghan
• SVP Commercial Banking (Home Office: Oakdale): Jeff Hushaw
• SVP Commercial Banking (Home Office: Modesto McHenry): Lynette Fletcher
• VP Commercial Banking (Home Office: Stockton): Michael Stevens
• VP Commercial Banking (Home Office: Sacramento): Mark Kisting
• VP Commercial Banking (Home Office: Roseville): Mona Dmitrenko, Damon Munoz, Eric Manning, David Skitarelic
• VP Commercial Banking Officer (Lodi/Commercial & Ag Lending): Matt Brown, Emma Brandstad
• VP Commercial Banking Officer (Home Office: Oakdale): Heidy Bowers

These officers focus on business development and managing loan portfolios, which is how Oak Valley Bancorp supports the financial goals of its business clients.

Oak Valley Bancorp (OVLY) - Canvas Business Model: Customer Segments

You're looking at the core customer base for Oak Valley Bancorp as of late 2025, which is heavily defined by its loan portfolio composition and its deep roots in specific California regions. The bank's strategy centers on relationship banking within the California Central Valley and Eastern Sierras, using its branches across 18 locations to serve these distinct groups.

The primary source of revenue for Oak Valley Bancorp is providing loans, and the breakdown of that loan book tells you exactly who they are banking. As of September 30, 2025, the total gross loan portfolio stood at $1,112,829,000. This portfolio is clearly weighted toward commercial activity, especially in real estate.

Here is how the loan book segments-which directly reflects the key customer groups Oak Valley Bancorp serves:

The focus on CRE is significant; nearly nine out of every ten dollars loaned is tied up in commercial real estate, which means investors and developers in their service area are a critical segment. Still, the bank maintains a presence for other needs, which is typical for a community-oriented institution.

The customer segments are:

• Small to medium-sized businesses (SMBs) in the local market.
• Individuals and families requiring consumer and mortgage loans.
• Commercial Real Estate (CRE) investors and developers.
• Agricultural businesses in the Central Valley region.

For the SMBs, Oak Valley Bancorp provides general commercial use loans, making up about 7% of the total portfolio as of the third quarter of 2025. This segment, along with agricultural clients, benefits from the bank's local knowledge across its footprint, which includes branches in Oakdale, Sonora, Modesto, Stockton, and the Eastern Sierra division covering Bridgeport, Mammoth Lakes, and Bishop.

Individuals and families are served through residential real estate and other consumer loans, which collectively represent 3% of the loan book. To support this base, Oak Valley Bancorp relies on its relationship-based deposit strategy, with total deposits reaching $1.77 billion as of September 30, 2025. This deposit base is the funding source for all lending activities.

The agricultural businesses are a specialized niche, also accounting for 3% of the loan portfolio, which makes sense given the bank's strong presence in the Central Valley. The bank's commitment to these local segments is underscored by its focus on maintaining strong customer relationships, which is a cornerstone of its community banking approach.

Finance: review the Q4 2025 loan pipeline to see if the 87% CRE concentration is expected to shift by year-end.

Oak Valley Bancorp (OVLY) - Canvas Business Model: Cost Structure

The Cost Structure for Oak Valley Bancorp is heavily influenced by the cost of funding its balance sheet and the operational expenses required to service its growing asset base. You see this pressure reflected in the year-over-year comparison of profitability.

Interest expense on deposits remains a key area of focus, especially given the rate environment. While the average cost of funds declined sequentially to 0.77% for the three months ended June 30, 2025, down from 0.79% in the prior quarter, it was still higher than the 0.73% seen in the second quarter of 2024. This upward trend in funding costs contributed to the contraction in year-over-year net income for the first half of 2025, which totaled $10,885,000, down from $11,616,000 in the same period of 2024.

Non-interest expense is clearly rising as Oak Valley Bancorp supports its expansion. For the second quarter of 2025, this expense category hit $12,688,000. That's an increase of $1,072,000 compared to the second quarter of 2024.

Here's a quick look at how that non-interest expense has trended:

Personnel costs are a significant driver of this increase. The commentary suggests that increases in non-interest expense correspond primarily to staffing expenses needed to service the growing loan and deposit portfolios. You can see the scale of the workforce supporting this:

• Full-time equivalent staff stood at 231 as of June 30, 2025.
• The company maintains 18 banking offices.

General operating and regulatory compliance costs are also baked into that non-interest expense figure. These costs are explicitly mentioned as being related to servicing the growing loan and deposit portfolios. Specific components contributing to operating costs in prior periods included items like audit, data processing, and software licensing, which you should expect to continue as the business scales its operations and adheres to regulatory requirements.

The breakdown of the non-interest expense growth is tied to scaling activities:

• Increases are due to general operating costs related to servicing the growing loan and deposit portfolios.
• Staffing expenses are a primary component of the year-over-year rise.
• General operating costs are rising to support the balance sheet growth.

Finance: draft 13-week cash view by Friday.

Oak Valley Bancorp (OVLY) - Canvas Business Model: Revenue Streams

The revenue streams for Oak Valley Bancorp are primarily driven by traditional banking activities, centered on the spread between interest earned on assets and interest paid on liabilities, supplemented by fee-based services.

The core of the revenue generation is clearly seen in the third quarter of 2025 performance. For the quarter ending September 30, 2025, Oak Valley Bancorp reported a Net Interest Income of $19.197 million. This figure reflects the primary engine of profitability, which is the interest and fees on the growing loan portfolio, supported by rising loan yields and growth in earning assets.

Beyond the net interest margin, Oak Valley Bancorp captures revenue through non-interest sources. The Non-interest income from deposit fees and investment advisory services contributes to the top line. For the three months ended September 30, 2025, this component totaled $1.973 million. This non-interest income included a one-time gain from a life insurance policy redemption, alongside stronger investment advisory and service charge income on deposit accounts.

The overall revenue picture for the quarter is captured by the mandated total figure, which aggregates these streams. The Total revenue for the quarter ending September 30, 2025, was $21.23 million.

You can see the breakdown of the primary income sources for the quarter ending September 30, 2025, below:

The drivers for the interest income component are tied directly to the asset base, as you would expect from a community bank. The growth in this area is a direct result of the expanding loan book and the pricing power on those assets.

Key components contributing to the interest-based revenue include:

• Interest and fees on the loan portfolio.
• Yields on earning assets.
• Growth in the loan portfolio, which stood at $1,112,829,000 as of September 30, 2025.

The non-interest income stream relies on service charges and advisory fees, which are typically more stable than one-time gains, though the Q3 2025 figure was boosted by a specific event.

The non-interest income is sourced from:

• Investment advisory service and related fee income.
• Service charge income on deposit accounts.
• A one-time gain from a life insurance policy redemption.

Finance: draft 13-week cash view by Friday.