United States Securities and Exchange Commission Washington, D.C. 20549 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR For the transition period from ____________ to ____________ Commission file number 000-20914 OHIO VALLEY BANC CORP. (Exact name of registrant as specified in its charter) Form 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 (740) 446-2631 (Registrant's t ...

Core Viewpoint - Ohio Valley Banc Corp. (OVBC) reported strong earnings growth in Q2 2025, but its stock performance has lagged behind the S&P 500 Index, indicating potential market concerns despite positive financial results [1][2]. Financial Performance - In Q2 2025, OVBC's consolidated net income reached $4.2 million, a 41.7% increase from $2.9 million in the same quarter last year, with earnings per share (EPS) rising 41.3% to $0.89 from $0.63 [2]. - For the first half of 2025, net income surged 49.5% to $8.6 million, and EPS increased 51.2% to $1.83 from $1.21 in the prior-year period, driven by a $2.6 million rise in net interest income for the quarter and $4.5 million for the six-month period [3]. Key Business Metrics - Net interest margin expanded to 4.17% in Q2 2025 from 3.74% a year earlier, with a first-half margin of 4.01%, up from 3.68%, attributed to a favorable shift in asset mix towards higher-yielding loans and securities [4]. - Average earning assets grew by $122 million for the six months ended June 30, 2025, reflecting a $99 million rise in securities and $60 million in loans [4]. Credit Quality and Loss Provisions - The provision for credit losses in Q2 totaled $1.1 million, up from $0.2 million the prior year, due to increased loan balances and higher modeled loss rates, while asset quality remained stable with non-performing loans at 0.45% of total loans [5]. Non-Interest Income and Expenses - Non-interest income rose 5.4% in Q2, primarily driven by a 4.6% increase in debit and credit card interchange fees, while non-interest expenses increased 1.7% year over year to $11 million [6]. Operational Efficiency - The efficiency ratio improved significantly to 63.09% in Q2 2025 from 73.37% a year ago, indicating stronger revenue generation relative to operating costs [7]. Management Commentary and Strategic Initiatives - Management attributed earnings momentum to participation in the Ohio Homebuyer Plus Program and a focus on commercial and real estate lending, launching the "Sweet Home Ohio" deposit product which attracted $77 million in subsidized deposits [8]. - The reduction in funds held at the Federal Reserve by $29 million allowed for redeployment into higher-yielding assets, supporting margin expansion [8]. Loan Growth and Funding Costs - Significant loan growth of $58 million was noted, reversing a $19 million decline in the first quarter, with lower funding costs improving profitability [9][11]. Future Outlook - While OVBC did not provide formal forward-looking guidance, management indicated potential increases in the warehouse line of credit tied to mortgage volume recovery and noted that modeled loss rates may be influenced by macroeconomic indicators [10].

Core Points - Ohio Valley Banc Corp. has been added to the Russell 3000® Index, effective June 30, 2025, as part of the annual reconstitution of the Russell indexes [1][2] - Membership in the Russell 3000® Index also includes Ohio Valley Banc Corp. in the small-cap Russell 2000® Index and relevant growth and value style indexes [2] - The Russell indexes are widely utilized by investment managers and institutional investors, with approximately $10.6 trillion in assets benchmarked against them as of June 2024 [3] Company Information - Ohio Valley Banc Corp. is headquartered in Gallipolis, Ohio, and owns The Ohio Valley Bank Company, which operates 17 offices in Ohio and West Virginia, as well as Loan Central, Inc., which has six consumer finance offices in Ohio [4]

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) Presents the unaudited consolidated financial statements and management's discussion and analysis for Q1 2025 [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents unaudited consolidated financial statements for Ohio Valley Banc Corp. as of March 31, 2025, and for the three-month period then ended [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Total assets reached **$1,513,105 thousand** as of March 31, 2025, primarily due to increased cash, with shareholders' equity growing to **$155,715 thousand** Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$1,513,105** | **$1,503,412** | | Total cash and cash equivalents | $120,608 | $83,107 | | Net loans | $1,033,157 | $1,051,737 | | **Total Liabilities** | **$1,357,390** | **$1,353,084** | | Total deposits | $1,284,169 | $1,275,178 | | **Total Shareholders' Equity** | **$155,715** | **$150,328** | [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q1 2025 significantly increased to **$4,406 thousand** from **$2,793 thousand** in Q1 2024, driven by a 17.4% rise in net interest income Income Statement Highlights (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Interest Income | $13,140 | $11,190 | | Provision for credit losses | $416 | $751 | | Noninterest Income | $3,646 | $3,696 | | Noninterest Expense | $10,818 | $10,741 | | **Net Income** | **$4,406** | **$2,793** | | **Earnings per share** | **$0.94** | **$0.58** | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income for Q1 2025 rose to **$6,424 thousand** from **$2,325 thousand** in Q1 2024, primarily due to higher net income and positive unrealized gains on securities Comprehensive Income (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $4,406 | $2,793 | | Other comprehensive income (loss), net of tax | $2,018 | $(468) | | **Total comprehensive income (loss)** | **$6,424** | **$2,325** | [Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity increased to **$155,715 thousand** by Q1 2025, driven by net income and other comprehensive income, partially offset by dividends - Shareholders' equity increased by **$5,387 thousand** in Q1 2025, primarily due to net income of **$4,406 thousand** and other comprehensive income of **$2,018 thousand**[15](index=15&type=chunk) - The company paid cash dividends of **$0.22 per share**, totaling **$1,037 thousand** for the quarter[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents increased by **$37,501 thousand** in Q1 2025, with positive contributions from investing and financing activities Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $496 | $928 | | Net cash provided by (used in) investing activities | $30,351 | $(19,260) | | Net cash provided by financing activities | $6,654 | $19,266 | | **Change in cash and cash equivalents** | **$37,501** | **$934** | [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies, including CECL methodology for credit losses, fair value measurements, and composition of the loan portfolio and deposits - The company operates as a single business segment: banking[22](index=22&type=chunk) - The Allowance for Credit Losses (ACL) for loans was **$10,139 thousand** as of March 31, 2025, up from **$10,088 thousand** at year-end 2024, with a corresponding provision expense of **$476 thousand** for Q1 2025[43](index=43&type=chunk) - The ACL for off-balance sheet credit exposures was **$522 thousand** at March 31, 2025, resulting in a provision recovery of **$60 thousand** for the quarter[49](index=49&type=chunk) Loan Portfolio Composition (in thousands) | Loan Type | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Residential real estate | $348,826 | $373,534 | | Commercial real estate | $380,979 | $373,027 | | Commercial and industrial | $164,630 | $158,440 | | Consumer | $148,861 | $156,864 | | **Total Loans** | **$1,043,296** | **$1,061,825** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 financial performance, highlighting increased net income driven by higher net interest income and reduced credit loss provision, alongside balance sheet changes and capital resources [Financial Results Overview](index=37&type=section&id=Financial%20Results%20Overview) Q1 2025 net income rose by **$1,613 thousand** year-over-year, driven by a **17.4%** increase in net interest income and a **44.6%** decrease in provision for credit loss expense Q1 2025 vs Q1 2024 Key Metrics (in thousands) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $4,406 | $2,793 | +$1,613 | | Earnings Per Share | $0.94 | $0.58 | +$0.36 | | Net Interest Income | $13,140 | $11,190 | +$1,950 (+17.4%) | | Provision for Credit Loss | $416 | $751 | -$335 (-44.6%) | - Return on assets (ROA) increased by **37 basis points** to **1.20%** and return on equity (ROE) increased by **405 basis points** to **11.82%** for Q1 2025 compared to the same period in 2024[114](index=114&type=chunk) [Comparison of Financial Condition (Balance Sheet Analysis)](index=38&type=section&id=Comparison%20of%20Financial%20Condition%20(Balance%20Sheet%20Analysis)) Total assets increased by **$9,700 thousand** to **$1,513,105 thousand** by March 31, 2025, with a rise in cash offsetting decreases in loans and securities - Total loans decreased by **$18,500 thousand**, or **1.7%**, from year-end 2024, mainly due to a **$31,500 thousand** paydown on a single warehouse line of credit extended to another mortgage lender[136](index=136&type=chunk)[137](index=137&type=chunk) - The company exited the indirect lending business for automobiles and recreational vehicles in Q4 2024, contributing to a **$4,700 thousand** decrease in auto loans in Q1 2025[138](index=138&type=chunk) - Total deposits increased by **$9,000 thousand** (**0.7%**), driven by a **$10,500 thousand** increase in interest-bearing deposits, particularly savings and money market accounts[148](index=148&type=chunk)[149](index=149&type=chunk) - The Allowance for Credit Losses (ACL) for loans increased slightly to **$10,139 thousand** (**0.97%** of total loans) from **$10,088 thousand** (**0.95%** of total loans) at year-end[145](index=145&type=chunk) [Comparison of Results of Operations (Income Statement Analysis)](index=42&type=section&id=Comparison%20of%20Results%20of%20Operations%20(Income%20Statement%20Analysis)) Net interest income grew by **$1,950 thousand** (**17.4%**) in Q1 2025 due to higher earning assets and an expanded net interest margin, improving the efficiency ratio - Net interest margin improved to **3.85%** in Q1 2025 from **3.61%** in Q1 2024, driven by higher yields on loans and securities and a shift to lower-cost deposits[162](index=162&type=chunk) - Salaries and employee benefits expense decreased by **$155 thousand** (**2.5%**) YoY, primarily due to a voluntary early retirement program implemented in 2024[170](index=170&type=chunk) - The efficiency ratio improved significantly to **63.95%** for Q1 2025, compared to **71.47%** for Q1 2024, due to strong net interest income growth and controlled expenses[176](index=176&type=chunk) [Capital Resources and Liquidity](index=46&type=section&id=Capital%20Resources%20and%20Liquidity) The company maintains strong capital with a **10.13%** CBLR and robust liquidity supported by core deposits and significant unused borrowing capacity - The Bank's Community Bank Leverage Ratio (CBLR) was **10.13%** as of March 31, 2025, well above the **9.0%** regulatory requirement[181](index=181&type=chunk) - Liquid assets (cash, maturing HTM, AFS securities) represented **25.2%** of total assets at March 31, 2025[184](index=184&type=chunk) - The company has significant additional borrowing capacity, including **$89,600 thousand** from the FHLB and **$50,700 thousand** from the FRB[185](index=185&type=chunk) - Uninsured deposits were **$497,400 thousand**, or **38.7%** of total deposits, as of March 31, 2025[186](index=186&type=chunk) [Critical Accounting Estimates](index=47&type=section&id=Critical%20Accounting%20Estimates) The Allowance for Credit Losses (ACL) is identified as the most critical accounting estimate due to its significant judgment and potential impact on earnings - The determination of the Allowance for Credit Losses (ACL) is identified as the most critical accounting estimate due to its high degree of judgment, complexity, and subjectivity[193](index=193&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that this item is not applicable - The company indicates that this section is not applicable for this filing[196](index=196&type=chunk) [Item 4. Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of March 31, 2025[197](index=197&type=chunk) - No material changes were made to internal control over financial reporting during the first quarter of 2025[198](index=198&type=chunk) [PART II. OTHER INFORMATION](index=49&type=section&id=PART%20II.%20OTHER%20INFORMATION) Presents other required information including legal proceedings, risk factors, and equity security sales [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) Ongoing legal proceedings arising in the ordinary course of business are not expected to have a material adverse effect on the company's financial condition - The company states that ongoing legal proceedings arising in the ordinary course of business are not expected to have a material adverse effect[199](index=199&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) No material changes from the risk factors previously disclosed in the company's 2024 Form 10-K are reported - No material changes from the risk factors disclosed in the 2024 Form 10-K are reported[200](index=200&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not sell any unregistered equity securities or repurchase its own shares during the first quarter of 2025 - No unregistered equity securities were sold in Q1 2025[201](index=201&type=chunk) - No company shares were repurchased in Q1 2025[202](index=202&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company states that this item is not applicable - The company indicates that this section is not applicable[203](index=203&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company states that this item is not applicable - The company indicates that this section is not applicable[204](index=204&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) No director or officer trading plans (Rule 10b5-1) were adopted, modified, or terminated during the first quarter of 2025 - No director or officer trading plans (Rule 10b5-1) were adopted, modified, or terminated in Q1 2025[205](index=205&type=chunk) [Item 6. Exhibits](index=51&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO, and XBRL data files - Lists filed exhibits, including CEO/CFO certifications (Rule 13a-14(a)/15d-14(a) and Section 1350) and XBRL data[207](index=207&type=chunk)

Core Viewpoint - Ohio Valley Banc Corp. (OVBC) reported strong earnings growth for Q1 2025, with a significant increase in net income and earnings per share, despite a slight decline in stock performance relative to the S&P 500 during the same period [1][2]. Financial Performance - Consolidated net income for Q1 2025 was $4.4 million, a 57.8% increase from $2.8 million in Q1 2024 [2]. - Earnings per share rose 62.1% to $0.94 from $0.58 year over year [2]. - Net interest income increased by 17.4% to $13.1 million, driven by a 10.8% rise in average earning assets and an improved net interest margin of 3.85%, up from 3.61% [2]. Revenue and Expenses - Non-interest income decreased by 1.4% to $3.6 million, while non-interest expenses increased by 0.7% to $10.8 million [3]. - The bank's efficiency ratio improved to 63.95% from 71.47%, indicating better cost management [4]. Asset and Loan Growth - Total assets grew to $1.51 billion as of March 31, 2025, from $1.50 billion at the end of 2024, primarily due to a $35 million increase in cash held at the Federal Reserve [6]. - Despite an overall decline in loan balances, the company achieved $12 million in organic loan growth in commercial and residential real estate segments [7]. Credit Quality - The provision for credit losses decreased by 44.6% year over year to $0.4 million [5]. - Non-performing loans slightly increased to 0.48% of total loans from 0.37% a year ago [5]. Management Insights - Management attributed the strong performance to strategic actions aimed at expanding earning assets and enhancing net interest margins [8]. - The bank's operational discipline was highlighted, with a focus on cost management reflected in the improved efficiency ratio [8]. Strategic Initiatives - The bank's participation in the Ohio Homebuyer Plus program contributed to earning asset growth, with the "Sweet Home Ohio" deposit account attracting $7.7 million in participant deposits [9][10]. - A favorable shift in deposit mix was noted, with lower-cost accounts growing significantly year over year [11]. Future Outlook - While no specific forward guidance was provided, management expressed optimism regarding future growth in the warehouse line of credit, contingent on increased mortgage volume [12].

Core Insights - Ohio Valley Banc Corp. reported a consolidated net income of $4,406,000 for Q1 2025, marking a 57.8% increase from the same period in the previous year [1] - Earnings per share rose to $0.94 in Q1 2025 from $0.58 in Q1 2024, with return on average assets at 1.20% and return on average equity at 11.82% [1][10] Financial Performance - Net interest income increased by $1,950,000 year-over-year, driven by growth in average earning assets and an improved net interest margin [2] - Average earning assets grew by $136 million, with $96 million in average securities and $68 million in average loans [2] - The net interest margin improved to 3.85% in Q1 2025 from 3.61% in Q1 2024, attributed to higher yields on earning assets and lower funding costs [3][10] Credit Quality - The provision for credit loss expense was $416,000, down $335,000 from the previous year, with nonperforming loans at 0.48% of total loans [4] - The allowance for credit losses was 0.97% of total loans as of March 31, 2025, compared to 0.93% a year earlier [4] Noninterest Income and Expenses - Noninterest income totaled $3,646,000, a slight decrease of $50,000 from the previous year, while noninterest expenses rose to $10,818,000, an increase of $77,000 [5] - Salaries and employee benefits decreased by 2.5% due to a voluntary early retirement program, offset by merit increases [5] Balance Sheet Highlights - Total assets increased to $1.513 billion, up $10 million from the end of 2024, primarily due to a $35 million rise in balances at the Federal Reserve [6][7] - Total deposits increased by $9 million, mainly in time deposits, while total shareholders' equity rose by $5.4 million [7][10]

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]