Ohio Valley Banc (OVBC) - 2024 Q1 - Quarterly Report

Financial Performance - Net income for Q1 2024 was $2,793, a decrease of $1,115 or 28.5% from Q1 2023, with earnings per share dropping to $0.58 from $0.82[110] - Noninterest income decreased by $71, or 1.9%, largely due to the closure of Race Day, which resulted in no mortgage application referral income in 2024 compared to $231 in Q1 2023[113] - Noninterest expense rose by $469, or 4.6%, in Q1 2024, with salaries and employee benefits increasing by $283 due to merit increases and higher health insurance premiums[168] - The efficiency ratio increased to 71.5% in Q1 2024 from 65.7% in Q1 2023, reflecting lower net interest and noninterest revenue alongside higher overhead costs[173] Income and Expenses - Net interest income decreased by $532, or 4.5%, primarily due to a reduction in net interest margin from 4.21% in Q1 2023 to 3.61% in Q1 2024[111] - Total interest and fee income from earning assets increased by $3,890 or 28.2%, with interest on loans rising by $2,912 or 25.2%[156] - Total interest expense on interest-bearing liabilities increased by $4,422 in Q1 2024 compared to Q1 2023, with the total weighted average cost rising from 1.07% to 2.94%[160] - The net interest margin decreased to 3.61% in Q1 2024 from 4.21% in Q1 2023, primarily due to higher costs associated with interest-bearing liabilities and a shift to higher-cost retail CDs[161] Credit Losses and Reserves - Provision for credit loss expense increased by $262, or 53.6%, in Q1 2024 compared to Q1 2023, driven by higher net charge-offs and increased reserves[112] - The allowance for credit losses (ACL) for loans totaled $9,229 or 0.93% of total loans, up from $8,767 or 0.90% at year-end 2023[143] - Provision for credit losses increased by $262, or 53.6%, totaling $751 in Q1 2024, driven by additional reserves related to residential and commercial real estate loans[162] - Nonperforming loans to total loans increased to 0.37% at March 31, 2024, compared to 0.26% at December 31, 2023[144] Assets and Liabilities - Total assets as of March 31, 2024, were $1,372,599, an increase of $20,464 or 1.5% from year-end 2023, primarily due to a $17,962 increase in loans[116] - Total liabilities increased to $1,226,817, up $18,689 from year-end 2023, with higher deposit balances contributing $21,648 to this increase[117] - Total shareholders' equity rose to $145,782, an increase of $1,775 from December 31, 2023, mainly from quarterly net income[118] - Total deposits increased by $21,648 or 1.9%, driven by a $37,296 or 4.6% rise in interest-bearing deposits[147] Loan Portfolio - The loan portfolio increased by $78,997, or 10.5%, year-over-year, with significant growth in commercial and residential real estate loans[111] - The Company's loan balances increased to $989,862, up $17,962 or 1.8% from $971,900 at December 31, 2023[133] - The commercial loan portfolio rose by $16,178 or 3.4%, with commercial real estate loans increasing by $13,003 or 4.0%[134] - Residential real estate loans increased by $5,234 or 1.6%, while long-term fixed rate loans decreased by $1,527[137] - The consumer loan portfolio decreased by $3,450 or 2.0%, primarily due to a $3,171 or 4.2% drop in other consumer loans[138] Liquidity and Capital - The Bank's CBLR was 10.65% as of March 31, 2024, following the adoption of the CBLR framework, which allows for simplified capital requirements[178] - The Company’s liquidity position includes on-balance sheet liquidity exceeding the balance of uninsured deposits, with AFS securities in an unrealized loss position[183] - Management does not rely on a single source of liquidity and monitors liquidity levels based on various financial condition factors[184] - 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 under certain conditions[186] Cash and Dividends - Cash and cash equivalents increased by $934, or 0.7%, to $129,060, primarily from higher cash on hand and noninterest-bearing deposits[122] - Cash dividends paid totaled $1,050 during the first three months of 2024, equating to $0.22 per share[179]