Ohio Valley Banc (OVBC) - 2025 Q3 - Quarterly Report

Financial Performance - Net income for Q3 2025 was $3,030, an increase of $311 from Q3 2024, with earnings per share rising to $0.64 from $0.58[115] - Net interest income grew by 16.0% in Q3 2025, totaling an increase of $2,016, driven by a 7.3% rise in average earning assets[116] - Noninterest income decreased by $1,106, or 38.8%, in Q3 2025, largely due to a $1,219 loss on the sale of securities[119] - Noninterest expenses rose by $269, or 2.4%, in Q3 2025, led by increases in data processing and marketing costs[120] - The income tax provision increased by $138 in Q3 2025, with operating income rising by 13.6% and the effective tax rate increasing to 19.1%[184] - The efficiency ratio improved to 69.70% in Q3 2025, down from 72.01% in Q3 2024, reflecting better management of expenses and increased earning assets[183] Asset and Liability Management - Total assets increased to $1,570,043, up $66,631 from year-end 2024, primarily due to a $68,709 increase in loans[122] - Total liabilities increased to $1,405,626, up $52,542 from year-end 2024, primarily due to higher interest-bearing deposit balances[123] - Shareholders' equity rose to $164,417, an increase of $14,089 from December 31, 2024, driven by net income and unrealized gains on AFS securities[124] - Cash and cash equivalents increased by $6,209, or 7.5%, to $89,316, primarily from interest-bearing deposits with banks[126] - Total deposits increased by $57,309, or 4.5%, to reach $1,329,000 at September 30, 2025, primarily driven by a $56,844 increase in interest-bearing deposits, which rose by 6.0%[151] Loan Portfolio and Credit Quality - The Company's total loan balances increased to $1,130,534, representing a growth of $68,709, or 6.5%, compared to $1,061,825 at year-end 2024[138] - The commercial real estate loan portfolio increased by $69,520, or 18.6%, from year-end 2024, making it the largest segment at 39.1% of total loans[139] - The allowance for credit losses (ACL) for loans totaled $11,420, or 1.01% of total loans, up from $10,088, or 0.95% at year-end 2024, reflecting a $1,332, or 13.2% increase[147] - Nonperforming loans to total loans decreased to 0.42% at September 30, 2025, down from 0.46% at December 31, 2024[148] - Provision for credit losses expense totaled $1,112 for the three months ended September 30, 2025, an increase of $192 from $920 in the same period in 2024[168] Securities and Investment - The Company experienced a $7,930, or 2.9% decrease in total securities from year-end 2024, influenced by lower needs for securities related to the Homebuyers Plus program[128] - Agency mortgage-backed securities increased by $55,677, or 59.1%, from year-end 2024, with total purchases during the first nine months of 2025 amounting to $78,284[128] - The fair value of AFS securities increased by $7,245 during the first nine months of 2025, attributed to a decrease in long-term market rates[130] - The Company recorded a realized loss of $1,219 from the sale of three Agency mortgage-backed securities, but expects future income to benefit from the shift to higher-yielding securities[129] - Total interest income from securities increased by $3,011, or 80.8%, during the first nine months of 2025, compared to the same period in 2024[162] Deposits and Funding - The Company targeted growth in retail CDs, resulting in a $69,423 increase in time deposit balances, or 17.6%, from year-end 2024[153] - Total deposits increased by 8.5% from year-end 2024, with uninsured deposits at 37.4% of total deposit balances[193] Off-Balance Sheet Activities - 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[196] - The Allowance for Credit Losses (ACL) is determined based on evaluations of past events, historical credit loss experience, current conditions, and forecasts affecting cash flow collectability[200] - The Company maintains a diversified credit portfolio, with residential real estate loans being the most significant portion, and aims to limit credit risk by avoiding industry concentrations[202]