Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 United States Securities and Exchange Commission Washington, D.C. 20549 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________ Commission file number 000-20914 OHIO VALLEY BANC CORP. (Exact name of registrant as specified in its charter) Ohio 31-1359191 (State of Inc ...

Shares of Ohio Valley Banc Corp. (OVBC) have lost 0.8% since the company reported earnings for the quarter ended March 31, 2025, underperforming the S&P 500 Index’s 1.3% gain during the same period. However, over the past month, OVBC stock surged 44.1%, notably outpacing the S&P 500’s 0.6% decline.For the first quarter of 2025, Ohio Valley Banc reported a consolidated net income of $4.4 million, up 57.8% from $2.8 million in the same quarter a year ago. Earnings per share jumped 62.1% to $0.94 from $0.58. ( ...

GALLIPOLIS, Ohio, April 25, 2025 /PRNewswire/ -- Ohio Valley Banc Corp. [Nasdaq: OVBC] (the "Company") reported consolidated net income for the quarter ended March 31, 2025, of $4,406,000, an increase of $1,613,000, or 57.8%, from the same period the prior year. Earnings per share for the first quarter of 2025 were $.94, compared to $.58 for the first quarter of 2024. Return on average assets and return on average equity were 1.20% and 11.82%, respectively, for the first quarter of 2025, versus .83% and 7.7 ...

Core Viewpoint - Zacks Investment Research has initiated coverage of Ohio Valley Banc Corp. (OVBC) with an "Outperform" recommendation, highlighting strong core earnings momentum and disciplined cost actions [1] Company Overview - Ohio Valley Banc, based in Gallipolis, OH, is a financial holding company providing commercial and consumer banking services, personal and commercial loans, construction and real estate loans, safe deposit boxes, and trust services [2] - The company operates through its main banking subsidiary, The Ohio Valley Bank Company, offering a wide range of community banking services in southeastern Ohio and western West Virginia [2] Financial Performance - In 2024, OVBC achieved solid loan growth, resulting in a $2.8 million increase in net interest income, totaling $48.8 million [3] - The company experienced a $148 million rise in deposits, primarily due to participation in state-subsidized homebuyer savings programs [3] - A strategic capital deployment into securities led to a $105 million increase in 2024, with interest and dividend income from securities rising over 50% year over year [4] - Non-interest income increased by 4.3% in 2024, contributing to earnings stability amid an uncertain rate environment [4] Strategic Initiatives - Ohio Valley Banc is focused on streamlining expenses, which is expected to improve the efficiency ratio over time [4] - The stock has significantly outperformed industry peers and the broader market over the past year, indicating a compelling entry point for long-term investors [6] - The company's modest market capitalization of $136.9 million suggests potential for growth in a promising but risky market segment [7]

Financial Performance - Ohio Valley's consolidated assets increased to approximately $1,503,412,000 in 2024, up from $1,352,135,000 in 2023, representing a growth of 11.2%[13] - The total shareholders' equity rose to approximately $150,328,000 in 2024, compared to $144,007,000 in 2023, marking an increase of 4.6%[13] - The Company's loan portfolio grew by $89,925,000 to reach $1,061,825,000 in 2024, with residential real estate loans increasing by $54,030,000 (16.9%) and commercial loans by $51,235,000 (10.7%) while consumer loans decreased by $15,340,000 (8.9%)[33] - Consolidated interest and fee revenue from loans accounted for 73.02% of total consolidated revenues in 2024, slightly down from 73.59% in 2023[33] - Revenues from interest and dividends on securities represented 7.17% of total consolidated revenues in 2024, up from 5.59% in 2023[39] Regulatory Environment - The Economic Growth, Regulatory Relief and Consumer Protection Act eased regulations for bank holding companies with consolidated assets under $100 billion, including Ohio Valley[60] - The Federal Reserve Board requires a minimum common equity tier 1 capital ratio of 4.5%, a tier 1 capital ratio of 6.0%, and a total risk-based capital ratio of 8.0%[73] - The Company is subject to regular examinations to ensure compliance with consumer protection laws, including the Dodd-Frank Act and regulations from the CFPB[64] - The Company is regulated by the Federal Reserve Board and must maintain capital adequacy and liquidity requirements to support its subsidiaries[52] - The Bank met the capital ratio requirements to be deemed "well-capitalized" with a common equity tier 1 capital ratio of at least 6.5%, a total risk-based capital ratio of at least 10.0%, and a tier 1 risk-based capital ratio of at least 8.0% as of December 31, 2024[82] Competition and Market Conditions - The Company faces increasing competition from both traditional and nontraditional financial service providers, impacting interest rates and service quality[45] - The Company competes with local banks, credit unions, and non-financial institutions, which may have lower cost structures due to less regulatory oversight[45] - The company operates in a highly competitive market with significant competition from various financial institutions, which may impact its ability to maintain strong financial performance[137] - The target market consists of small to medium-sized businesses that generally have fewer financial resources, making them vulnerable to economic downturns[138] Risk Management - Changes in interest rates are anticipated to have a material adverse effect on the company's financial condition, as earnings depend significantly on the interest rate spread[131] - The company has implemented measures to manage interest rate risks, but there is no assurance that these measures will be effective in avoiding undue interest rate risk[131] - The company is closely monitoring the impact of adverse changes in financial markets, which may affect the value of investment securities held[133] - The company acknowledges the systemic risk posed by potential defaults of larger financial institutions, which could lead to market-wide liquidity and credit problems[136] - Liquidity risk is a concern, as a decline in customer deposits could lead to increased interest expenses and negatively impact profitability and net interest margin[168] Corporate Governance and Compliance - The company adopted a clawback policy in September 2023, allowing recovery of incentive compensation based on erroneous financial information for the three completed fiscal years preceding a restatement[107] - The company is subject to regulations limiting the disclosure of non-public consumer information to nonaffiliated third parties[94] - The Bank is required to establish a program for obtaining identifying information from customers under the Patriot Act and related regulations[95] - The Company has established policies to comply with the requirements of the Anti-Money Laundering Act of 2020, which modernizes U.S. bank secrecy and anti-money laundering laws[96] Employee Relations - Ohio Valley and its subsidiaries had approximately 271 employees and officers as of December 31, 2024, with management considering the relationship with employees to be good[109] Shareholder Information - As of February 28, 2025, the company had approximately 2,082 shareholders, with common shares traded under the symbol "OVBC" on NASDAQ[191] - The company plans to continue paying quarterly cash dividends, subject to operational results and regulatory requirements[192] - The company did not purchase any of its common shares during the three months ended December 31, 2024[195] Technology and Cybersecurity - The financial services industry is undergoing rapid technological changes, and failure to adopt new technologies could negatively impact growth and revenue[143] - The company has implemented a comprehensive Information Security Program to manage cybersecurity risks, including regular assessments and third-party evaluations[180] - The SEC adopted final rules on July 26, 2023, requiring public companies to disclose material cybersecurity incidents within four business days and to provide detailed information on cybersecurity risk management annually[104] - The company is continuously monitoring state-level developments regarding privacy and cybersecurity standards, as several states have recently adopted regulations requiring financial institutions to implement cybersecurity programs[105]

Core Points - Ohio Valley Banc Corp reported a consolidated net income of $2,515,000 for Q4 2024, down $708,000 from the same period last year, with earnings per share decreasing to $0.53 from $0.68 [1] - For the full year 2024, net income totaled $10,999,000, a decrease of 12.9% from 2023, with earnings per share at $2.32 compared to $2.65 in 2023 [1] - The decrease in net income was attributed to two one-time expenses totaling $3.8 million, including a $3.3 million voluntary early retirement program and $496,000 in bonuses for new depositors [2] Financial Performance - Net interest income for Q4 2024 increased by $1,755,000, and for the full year, it rose by $2,777,000, driven by a $187 million increase in average earning assets [2] - Average loans increased by $86 million in 2024, primarily in commercial and residential real estate lending segments [2] - Noninterest income for Q4 2024 was $3,920,000, up $339,000 from the previous year, with total noninterest income for 2024 reaching $13,171,000, an increase of $542,000 [4] Expenses and Loss Provisions - Noninterest expense for Q4 2024 totaled $13,306,000, an increase of $3,004,000 from the same period last year, with salaries and employee benefits being the largest contributor [5][6] - The provision for credit losses for Q4 2024 was $617,000, a decrease of $72,000 from the previous year, while the full year provision increased to $2,469,000 [3] Asset and Equity Growth - Total assets as of December 31, 2024, were $1.503 billion, an increase of $151 million from the previous year, with total loans increasing by $90 million [8] - Shareholders' equity increased by $6.3 million from the previous year, primarily due to net income and an increase in accumulated other comprehensive income [8] Market Position and Strategy - The company is participating in the Ohio Homebuyer Plus program, which has contributed to the growth in deposits and the establishment of the Sweet Home Ohio deposit account [8] - The company has exited the indirect lending business for autos and recreational vehicles to focus on more profitable loan segments [8]

Financial Performance - Net income for Q3 2024 was $2,719, an increase of $468 from Q3 2023, with earnings per share rising to $0.58 from $0.47[137] - Noninterest income increased by $286, or 11.1%, in Q3 2024 compared to Q3 2023, largely from service charges and trust fee income[141] - Net interest income increased by $1,205, or 10.6%, for the three months ended September 30, 2024, compared to the same period in 2023[183] - Total interest and fee income increased by $3,473, or 21.8%, during the third quarter of 2024 compared to the same period in 2023[185] - Noninterest expense rose by $841, or 8.1%, in Q3 2024, mainly due to increased salaries and employee benefits[142] - The efficiency ratio improved to 72.0% during the three months ended September 30, 2024, from 73.6% during the same period in 2023, but increased to 72.3% for the nine months ended September 30, 2024, from 70.3% in 2023[201] Assets and Liabilities - Total assets increased to $1,494,023, up $141,888 from year-end 2023, driven by a $108,855 increase in securities and a $77,012 increase in loans[144] - Total liabilities rose to $1,341,870, an increase of $133,742 from year-end 2023, primarily due to a $134,284 increase in deposit balances[145] - Total shareholders' equity increased to $152,153, up $8,146 from December 31, 2023, driven by year-to-date net income[146] - Total cash and cash equivalents, HTM securities maturing within one year, and AFS securities totaled $354,566, representing 23.7% of total assets at September 30, 2024, compared to $290,781 and 21.5% at December 31, 2023[209] Loans and Credit Quality - Loans grew by 7.9% from year-end 2023, with commercial real estate loans up 13.2% and residential real estate loans up 12.5%[144] - The loan portfolio increased to $1,048,912, representing a $77,012 increase, or 7.9%, compared to $971,900 at December 31, 2023[160] - Commercial real estate loans increased by $42,603, or 13.2%, from year-end 2023, making up 34.8% of the total loan portfolio[161] - Residential real estate loans increased by $39,805, or 12.5%, from year-end 2023, representing 34.3% of the total loan portfolio[164] - Nonperforming loans to total loans increased to 0.44% at September 30, 2024, from 0.26% at December 31, 2023[172] - The allowance for credit losses (ACL) for loans totaled $9,919, or 0.95% of total loans, an increase of $1,152, or 13.1%, from $8,767, or 0.90%, at year-end 2023[170] - The increase in ACL was primarily due to a $72,333 increase in collectively evaluated loan balances, mainly from residential and commercial real estate segments[170] Deposits - Total deposits increased by $134,284, or 11.9%, to $1,267,000 at September 30, 2024, compared to year-end 2023[174] - Interest-bearing NOW account balances increased by $120,194, or 70.5%, primarily due to the Ohio Homebuyer Plus program[175] - Deposits increased by 30.3% from year-end 2023, while noninterest-bearing deposits decreased by 1.9%[209] Investment and Securities - Total securities increased by $108,855, or 63.9%, compared to year-end 2023, with U.S. Government securities increasing from $50,297 to $168,842[151] - The fair value of available for sale securities increased by $5,432 during the third quarter of 2024 due to a decrease in long-term reinvestment rates[152] - The company plans to invest excess funds into longer-term, higher-yielding assets during periods of heightened liquidity[150] Credit Losses and Provisions - The provision for credit loss expense increased by $32 in Q3 2024 compared to Q3 2023, primarily due to a specific reserve on an impaired loan[139] - Provision for credit losses expense totaled $920 for the three months ended September 30, 2024, an increase of $32 from $888 in the same period in 2023[190] - Credit loss expense decreased by $140 and $137 during the three and nine months ended September 30, 2024, compared to the same periods in 2023, primarily from the commercial real estate construction segment[192] Corporate Governance and Compliance - As of September 30, 2024, the Company's disclosure controls and procedures were evaluated as effective by the Chief Executive Officer and Chief Financial Officer[220] - There were no changes in the Company's internal control over financial reporting during the fiscal quarter ended September 30, 2024, that materially affected its internal control[221] - The Company is involved in various claims and legal actions arising in the ordinary course of business, but does not believe these will have a material adverse effect on its financial position or results[222] Strategic Decisions - The Company participated in the Ohio Homebuyer Plus program, resulting in a $134,284 increase in total deposits from year-end 2023[136] - The company exited the indirect lending business for automobiles and recreational vehicles effective October 11, 2024, to focus on higher yielding loan portfolios[165] - The Bank had utilized 59.53% of its FHLB capacity as of September 30, 2024, an increase from 51.74% at December 31, 2023[210] - The Company engages in off-balance sheet credit-related activities, including commitments to extend credit and standby letters of credit, which may require cash payments if specified future events occur[214] - The determination of the Allowance for Credit Losses (ACL) involves significant judgment and complexity, with management evaluating past events and current conditions to maintain a sufficient reserve level[217] - The Company maintains a diversified credit portfolio, with residential real estate loans being the most significant portion, and avoids material concentrations of loans to any industry or consumer group[218]

Core Insights - Ohio Valley Banc Corp. reported a consolidated net income of $2,719,000 for Q3 2024, a 20.8% increase from the same period last year, with earnings per share rising to $0.58 from $0.47 [1][10] - For the first nine months of 2024, net income totaled $8,484,000, a decrease of $924,000 compared to the same period in 2023, with earnings per share dropping to $1.79 from $1.97 [1][10] Financial Performance - Net interest income for Q3 2024 increased by $1,205,000, and for the nine months ended September 30, 2024, it rose by $1,022,000 compared to the previous year [2] - The increase in quarterly net interest income was driven by a $159 million rise in average earning assets, despite a 9 basis point decrease in net interest margin [2] - The provision for credit loss expense for Q3 2024 was $920,000, up $32,000 from the same period last year, with a year-to-date provision of $1,852,000, an increase of $451,000 [3] Asset and Loan Growth - Total assets reached $1.494 billion as of September 30, 2024, an increase of $142 million from December 31, 2023 [7] - Total loans increased by $77 million, primarily in the commercial and residential real estate segments, while consumer loans were deemphasized [7] - The Sweet Home Ohio deposit account contributed significantly to asset growth, with a total balance of $5.3 million and $100 million deposited by the Treasurer [7] Noninterest Income and Expenses - Noninterest income for Q3 2024 rose by $286,000, largely due to service charges on deposit accounts and trust fees [4] - Noninterest expenses increased by $841,000 for Q3 2024, with salaries and employee benefits being the largest contributor, rising by $687,000 [5][6] - The company established a voluntary early retirement program, incurring $295,000 in severance expenses as of September 30, 2024, with an anticipated additional expense of $3,043,000 in Q4 2024 [6] Shareholder Metrics - The book value per share was $32.30 as of September 30, 2024, compared to $28.66 in the same period last year [11] - The dividend payout ratio was 38.12% for Q3 2024, down from 46.68% in the previous year [11]

Core Viewpoint - Ohio Valley Banc Corp. has extended its stock buyback program to August 31, 2025, allowing for continued repurchase of shares up to $5 million [1][2]. Group 1: Stock Buyback Program - The stock buyback program was initially approved in 2021 and was set to expire on August 31, 2024, but has now been extended for an additional year [2][3]. - As of August 21, 2024, the company has repurchased approximately $2,967,000 in common stock under this program [2]. - No changes were made to the terms of the stock buyback program other than the extension, and the Board retains the right to terminate or amend the program at any time before the new expiration date [3]. Group 2: Company Overview - Ohio Valley Banc Corp. is traded on the NASDAQ Global Market under the symbol OVBC and is based in Gallipolis, Ohio [4]. - The company owns The Ohio Valley Bank Company, which operates 17 offices in Ohio and West Virginia, and Loan Central, Inc., which has six consumer finance offices in Ohio [4].

Financial Performance - Net income for Q2 2024 was $2,972, a decrease of $277 from Q2 2023, with earnings per share at $0.63 compared to $0.68 in the prior year[103] - For the first six months of 2024, net income totaled $5,765, down $1,392 from the same period in 2023, with earnings per share decreasing from $1.50 to $1.21[103] - The return on assets decreased to 0.84% for the first half of 2024, down from 1.16% in the same period of 2023, while return on equity decreased to 8.01% from 10.63%[103] Income and Expenses - Noninterest income decreased by $12, or 0.4%, in Q2 2024 and $83, or 1.3%, for the first half of 2024, largely due to the closure of Race Day Mortgage[106] - Noninterest expense increased by $448, or 4.3%, in Q2 2024 and $917, or 4.4%, for the first half of 2024, primarily due to higher salaries and employee benefits[107] - The net interest income for Q2 2024 increased by $349, or 3.0%, but decreased by $183, or 0.8%, for the first half of 2024 compared to the same periods in 2023[104] - Total interest and fee income rose by $3,635 million, or 24.2%, in Q2 2024, and $7,525 million, or 26.1%, in the first half of 2024 compared to the same periods in 2023, driven by a 22.6% increase in loan interest[142] - Total interest expense on interest-bearing liabilities increased by $3,286 million, or 25.5%, in Q2 2024, and $7,708 million, or 25.5%, in the first half of 2024 compared to the same periods in 2023[145] Asset and Liability Management - Total assets as of June 30, 2024, were $1,403,317, an increase of $51,182 from year-end 2023, driven by a $68,384 increase in loans[108] - Total liabilities increased to $1,257,560, up $49,432 from year-end 2023, primarily due to a $51,292 increase in deposit balances[108] - Cash and cash equivalents decreased by $20,447, or 16.0%, to $107,679 from year-end 2023, mainly due to a reduction in interest-bearing deposits[111] - Total deposits increased by $51,292, or 4.6%, with interest-bearing deposits up by $30,305, or 3.8%[133] - Noninterest-bearing deposits increased by $20,987, or 6.5%[133] Loan Portfolio - Total loan balances increased to $1,040,284, representing a 7.0% increase from $971,900 at December 31, 2023[120] - Residential real estate loans increased by $39,844, or 12.5%, making up 34.5% of the total loan portfolio[122] - Commercial real estate loans increased by $28,890, or 8.9%, contributing to a total commercial loan portfolio increase of $34,476, or 7.2%[123] - The Company experienced a $5,936, or 3.4% decrease in the consumer loan portfolio from year-end 2023[124] Credit Quality - The provision for credit loss expense increased by $157 in Q2 2024 and $419 for the first half of 2024 compared to the same periods in 2023[105] - Allowance for Credit Losses (ACL) for loans totaled $9,431, or 0.91% of total loans, up from $8,767, or 0.90% at year-end 2023[130] - Nonperforming loans to total loans increased to 0.50% at June 30, 2024, compared to 0.26% at December 31, 2023[131] - Provision for credit losses increased to $181 million in Q2 2024, up from $24 million in Q2 2023, and totaled $932 million for the first half of 2024, compared to $513 million in the same period in 2023[148] Shareholder Returns - Cash dividends paid totaled $2,105 during the first half of 2024, equating to $0.44 per share[163] - The Company repurchased approximately $2,967 in common stock under its treasury repurchase program[139] Efficiency and Ratios - The Company's efficiency ratio increased to 73.4% for Q2 2024, up from 71.9% in Q2 2023, and year-to-date efficiency rose to 72.4% from 68.7%[156] - The net interest margin decreased to 3.74% in Q2 2024 from 4.03% in Q2 2023, and year-to-date net interest margin decreased to 3.68% from 4.12%[147] Funding and Liquidity - The Bank's Community Bank Leverage Ratio (CBLR) was 10.48% as of June 30, 2024, following the adoption of the CBLR framework[162] - The Company maintains a contingency funding plan to manage liquidity risks and has established multiple sources of funding to meet liquidity demands[164] - Uninsured deposits accounted for 35.9% of total deposits, amounting to $422,598, as of June 30, 2024[168] - The Bank's total wholesale funding sources represented 12.53% of total assets, with a capacity to borrow an additional $381 million[167] Other Observations - Average loan balances increased from $928,418 million in Q2 2023 to $1,013,845 million in Q2 2024, reflecting a 9.2% growth in higher-yielding loans[142] - Overhead expenses increased by 4.3% in Q2 2024, attributed to higher merit adjustments and health insurance premiums[156] - Total cash and cash equivalents represented 19.3% of total assets at June 30, 2024, down from 21.5% at December 31, 2023[166] - The Company experienced a 7.0% growth in loans, funded primarily by increases in NOW, savings, and money market deposits, which rose by 5.8%[166]