Ohio Valley Banc (OVBC) - 2024 Q2 - Quarterly Report

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]