Ohio Valley Banc (OVBC) - 2024 Q4 - Annual Report

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]