Ohio Valley Banc (OVBC) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Presents the unaudited consolidated financial statements and management's discussion and analysis for Q1 2025 Item 1. Financial Statements (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 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 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 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 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] - The company paid cash dividends of $0.22 per share, totaling $1,037 thousand for the quarter[15] Condensed Consolidated Statements of Cash Flows 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 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] - 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] - 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] 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 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 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] Comparison of Financial Condition (Balance Sheet Analysis) 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][137] - 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] - 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][149] - 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] Comparison of Results of Operations (Income Statement Analysis) 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] - Salaries and employee benefits expense decreased by $155 thousand (2.5%) YoY, primarily due to a voluntary early retirement program implemented in 2024[170] - 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] Capital Resources and Liquidity 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] - Liquid assets (cash, maturing HTM, AFS securities) represented 25.2% of total assets at March 31, 2025[184] - The company has significant additional borrowing capacity, including $89,600 thousand from the FHLB and $50,700 thousand from the FRB[185] - Uninsured deposits were $497,400 thousand, or 38.7% of total deposits, as of March 31, 2025[186] Critical Accounting Estimates 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] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company states that this item is not applicable - The company indicates that this section is not applicable for this filing[196] Item 4. Controls and Procedures 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] - No material changes were made to internal control over financial reporting during the first quarter of 2025[198] PART II. OTHER INFORMATION Presents other required information including legal proceedings, risk factors, and equity security sales Item 1. Legal Proceedings 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] Item 1A. Risk Factors 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] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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] - No company shares were repurchased in Q1 2025[202] Item 3. Defaults Upon Senior Securities The company states that this item is not applicable - The company indicates that this section is not applicable[203] Item 4. Mine Safety Disclosures The company states that this item is not applicable - The company indicates that this section is not applicable[204] Item 5. Other Information 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] Item 6. Exhibits 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]