GALLIPOLIS, Ohio, April 27,
2023 /PRNewswire/ -- Ohio Valley Banc Corp. [Nasdaq:
OVBC] (the "Company") reported consolidated net income for the
quarter ended March 31, 2023, of
$3,908,000, a decrease of
$217,000, or 5.3%, from the same
period the prior year. Earnings per share for the first quarter of
2023 were $.82, compared to
$.87 for the first quarter of 2022.
Return on average assets and return on average equity were 1.28%
and 11.85%, respectively, for the first quarter of 2023, versus
1.34% and 11.78%, respectively, for the same period the prior
year.
Ohio Valley Banc Corp. President and CEO, Larry Miller stated, "Managing through and
overcoming challenges has been something our company has been
successfully doing for over 150 years now. The recent failure of
two high profile banks, one on each coast, is a good reminder that
we need to stay humble and remember the basic principles of banking
in terms of diversification as well as maintaining a proper,
balanced approach. Given the challenging environment in which we
operate, I am particularly pleased with our first quarter
results."
For the first quarter of 2023, net interest income increased
$1,732,000 from the first quarter of
2022. Contributing to the increase in net interest income was the
increase in the net interest margin. In relation to the significant
increase in market interest rates based on actions taken by the
Federal Reserve, the net interest margin has responded positively
due to the yield on earning assets increasing more than the cost of
interest-bearing liabilities. For the quarter ended March 31, 2023, the net interest margin was
4.21%, compared to 3.51% for the same period the prior year. The
net interest margin also benefited from the higher relative
balances maintained in loans, as opposed to the Federal Reserve,
which generally yields less than loans. The average balance of
loans for the first quarter of 2023 was $897
million, an increase of $79
million from the first quarter of 2022. For the same period,
the average balances maintained at the Federal Reserve decreased
$92 million.
For the three months ended March 31,
2023, the provision for credit loss expense was $489,000, an increase of $1,615,000 from the first quarter of 2022. The
provision for credit loss expense for the first quarter of 2023 was
primarily related to quarterly net charge-offs of $290,000 and to the general reserves associated
with the $21 million increase in
total loans since December 31, 2022.
The increase in provision for credit loss expense from the first
quarter of 2022 was related to the negative provision expense
recognized in that quarter due to lower criticized and classified
loans and the partial release of the COVID reserve for the pandemic
environment. The allowance for credit losses was .84% of total
loans at March 31, 2023, compared to
.60% at December 31, 2022 and .65% at
March 31, 2022. The increase in the
allowance for credit losses at March 31,
2023 was related to the Company adopting the new accounting
guidance for measuring the credit losses on financial instruments
or Accounting Standards Update (ASU) No. 2016-13. Under this
guidance, the Company established a Current Expected Credit Losses
(CECL) model to estimate future credit losses, which replaced the
former incurred loss methodology. Upon adoption of CECL, the
Company increased the allowance for credit losses by $2,162,000. In addition, a reserve for unfunded
commitments and held-to-maturity securities was established
totaling $631,000 and $3,000, respectively.
Noninterest income totaled $3,767,000 for the first quarter of 2023, an
increase of $47,000 from the same
period last year. For the first quarter of 2023, other noninterest
income increased $263,000 from the
first quarter of 2022. The increase was largely related to
commissions earned by Race Day Mortgage for mortgage application
referrals. This was partially offset by a $188,000 decrease in mortgage banking income from
selling loans to the secondary market. With elevated mortgage
rates, mortgage customers are selecting in-house mortgage products
instead of long-term fixed rate products that are sold to the
secondary market.
Noninterest expense totaled $10,272,000 for the first quarter of 2023, an
increase of $484,000, or 4.9%, from
the same period last year. The Company's largest noninterest
expense, salaries and employee benefits, increased $314,000, or 5.6%, from the first quarter of
2022. The increase was primarily related to annual merit increases.
Further contributing to higher noninterest expense was software
expense. For the three months ended March
31, 2023, software expense increased $59,000 from the same period last year. Also
contributing to higher noninterest expense for the first quarter of
2023 was a $56,000 increase in FDIC
insurance premiums and a $48,000
increase in data processing expense, as compared to the same period
last year.
The Company's total assets at March 31,
2023 were $1.266 billion, an
increase of $55 million from
December 31, 2022. The increase in
assets was related to a $43 million
increase in balances maintained at the Federal Reserve and to a
$21 million increase in loans. The
increase in Federal Reserve balances was related to the growth in
deposits exceeding the growth in loans. At March 31, 2023, total deposits increased
$54 million from year end 2022, which
occurred primarily within time deposits. Total shareholders' equity
increased $2.5 million from year end
2022. The growth in shareholders' equity was impacted by the
adoption of CECL, which required a $2.2
million charge to retained earnings.
Ohio Valley Banc Corp. common stock is traded on the NASDAQ
Global Market under the symbol OVBC. The holding company owns The
Ohio Valley Bank Company, with 17 offices in Ohio and West
Virginia; Loan Central, Inc. with six consumer finance
offices in Ohio; and Race Day
Mortgage, Inc., an online consumer direct mortgage company. Learn
more about Ohio Valley Banc Corp. at www.ovbc.com.
Caution Regarding Forward-Looking Information
Certain statements contained in this earnings release that are
not statements of historical fact constitute forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Words such as "believes," "anticipates,"
"expects," "appears," "intends," "targeted" and similar expressions
are intended to identify forward-looking statements but are not the
exclusive means of identifying those statements. Forward-looking
statements involve risks and uncertainties. Actual results may
differ materially from those predicted by the forward-looking
statements because of various factors and possible events,
including: (i) impacts from the coronavirus (COVID-19) pandemic on
our business, operations, customers and capital position; (ii) the
impact of COVID-19 on local, national and global economic
conditions; unexpected changes in interest rates or disruptions in
the mortgage market related to COVID-19 or responses to the health
crisis; (iii) changes in political, economic or other factors, such
as inflation rates, recessionary or expansive trends, taxes, the
effects of implementation of federal legislation with respect to
taxes and government spending and the continuing economic
uncertainty in various parts of the world; (iv) competitive
pressures; (v) fluctuations in interest rates; (vi) the level of
defaults and prepayment on loans made by the Company; (vii)
unanticipated litigation, claims, or assessments; (viii)
fluctuations in the cost of obtaining funds to make loans; (ix)
regulatory changes; and (x) other factors that may be described in
the Company's Annual Reports on Form 10-K and Quarterly Reports on
Form 10-Q as filed with the Securities and Exchange Commission from
time to time. Forward-looking statements speak only as of the date
on which they are made, and the Company undertakes no obligation to
update any forward-looking statement to reflect events or
circumstances after the date on which the statement is made to
reflect unanticipated events.
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OHIO VALLEY BANC
CORP - Financial Highlights (Unaudited)
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Three months
ended
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March 31,
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2023
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2022
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PER SHARE
DATA
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Earnings per
share
|
|
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$
0.82
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$
0.87
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|
Dividends per
share
|
|
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$
0.21
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$
0.21
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Book value per
share
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$
28.80
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$
28.63
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Dividend payout
ratio (a)
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25.64 %
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24.20 %
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Weighted average
shares outstanding
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4,773,461
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4,761,072
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DIVIDEND REINVESTMENT
(in 000's)
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Dividends
reinvested under
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employee stock ownership
plan (b)
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$
193
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$
154
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Dividends
reinvested under
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dividend reinvestment plan
(c)
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$
510
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$
515
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PERFORMANCE
RATIOS
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Return on
average equity
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11.85 %
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11.78 %
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Return on
average assets
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1.28 %
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1.34 %
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Net interest
margin (d)
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4.21 %
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3.51 %
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Efficiency ratio
(e)
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65.70 %
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70.81 %
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Average earning
assets (in 000's)
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$
1,141,835
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$
1,167,366
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(a) Total dividends
paid as a percentage of net income
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(b) Shares may be
purchased from OVBC and on secondary market
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(c) Shares may be
purchased from OVBC and on secondary market
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(d) Fully
tax-equivalent net interest income as a percentage of average
earning assets
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(e) Noninterest expense
as a percentage of fully tax-equivalent net interest income plus
noninterest income
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OHIO VALLEY BANC
CORP - Consolidated Statements of Income (Unaudited)
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Three months
ended
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(in $000's)
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March 31,
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2023
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2022
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Interest
income:
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Interest and fees on
loans
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$
12,276
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$
9,798
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Interest and dividends on
securities
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|
1,092
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|
805
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Interest on interest-bearing
deposits with banks
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426
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54
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Total interest income
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13,794
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10,657
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Interest
expense:
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Deposits
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1,832
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519
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Borrowings
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240
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|
148
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Total interest expense
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2,072
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667
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Net interest
income
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11,722
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9,990
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Provision for
(recovery of) credit losses
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489
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(1,126)
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Noninterest
income:
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Service charges on deposit
accounts
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611
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558
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Trust fees
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|
|
86
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|
81
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Income from bank owned life
insurance and
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annuity
assets
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207
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274
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Mortgage banking
income
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47
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235
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Electronic refund
check/deposit fees
|
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540
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540
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Debit / credit card
interchange income
|
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1,173
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1,135
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Tax preparation
fees
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631
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688
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Other
|
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472
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209
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Total noninterest income
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3,767
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3,720
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Noninterest
expense:
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Salaries and employee
benefits
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5,884
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5,570
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Occupancy
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462
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478
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Furniture and
equipment
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|
298
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|
266
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Professional fees
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433
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489
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Marketing expense
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241
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229
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FDIC insurance
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|
138
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|
82
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Data processing
|
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|
720
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672
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Software
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562
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503
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Foreclosed assets
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2
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|
1
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Amortization of
intangibles
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7
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|
10
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Other
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1,525
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1,488
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Total noninterest expense
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10,272
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9,788
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Income before income
taxes
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4,728
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|
5,048
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Income taxes
|
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|
820
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923
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NET
INCOME
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$
3,908
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$
4,125
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OHIO VALLEY BANC
CORP - Consolidated Balance Sheets (Unaudited)
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(in $000's, except
share data)
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March 31,
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December 31,
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2023
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2022
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ASSETS
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Cash and
noninterest-bearing deposits with banks
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$
15,506
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$
14,330
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Interest-bearing
deposits with banks
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74,342
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31,660
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Total cash and cash
equivalents
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89,848
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45,990
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Certificates of deposit
in financial institutions
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735
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1,862
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Securities available
for sale
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179,753
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184,074
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Securities held to
maturity, net of allowance for credit losses of $3 in 2023 and $0
in 2022;
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9,001
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9,226
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(estimated fair
value: 2023 - $8,398; 2022 - $8,460)
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Restricted investments
in bank stocks
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4,093
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5,953
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Total loans
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906,313
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885,049
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Less:
Allowance for credit losses
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(7,607)
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(5,269)
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Net loans
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898,706
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879,780
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Premises and equipment,
net
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20,488
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20,436
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Premises and equipment
held for sale, net
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588
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|
593
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Accrued interest
receivable
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3,225
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3,112
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Goodwill
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7,319
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7,319
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Other intangible
assets, net
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|
23
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|
29
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Bank owned life
insurance and annuity assets
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|
39,834
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39,627
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Operating lease
right-of-use asset, net
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1,246
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1,294
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Deferred tax
assets
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6,160
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6,266
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Other assets
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5,446
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|
5,226
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Total assets
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$
1,266,465
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$
1,210,787
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LIABILITIES
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Noninterest-bearing
deposits
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$ 339,594
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$ 354,413
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Interest-bearing
deposits
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741,601
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673,242
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Total deposits
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1,081,195
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1,027,655
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Other borrowed
funds
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|
17,330
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17,945
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Subordinated
debentures
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8,500
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8,500
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Operating lease
liability
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1,246
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1,294
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Allowance for credit
losses on off-balance sheet commitments
|
655
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|
0
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Other
liabilities
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|
19,994
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20,365
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Total liabilities
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1,128,920
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|
1,075,759
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SHAREHOLDERS'
EQUITY
|
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Common stock ($1.00
stated value per share, 10,000,000 shares authorized;
|
|
2023 - 5,470,453
shares issued; 2022 - 5,465,707 shares issued)
|
5,470
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|
5,465
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Additional paid-in
capital
|
|
|
|
51,842
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51,722
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Retained
earnings
|
|
|
|
110,017
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109,320
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Accumulated other
comprehensive income (loss)
|
|
(13,118)
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|
(14,813)
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Treasury stock, at cost
(693,933 shares)
|
|
(16,666)
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|
(16,666)
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Total shareholders' equity
|
|
|
|
137,545
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|
135,028
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Total liabilities and shareholders' equity
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|
$
1,266,465
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$
1,210,787
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Contact: Scott Shockey, CFO (740)
446-2631
View original
content:https://www.prnewswire.com/news-releases/ohio-valley-banc-corp-reports-1st-quarter-earnings-301810332.html
SOURCE Ohio Valley Banc Corp.