GALLIPOLIS, Ohio, Oct. 26,
2023 /PRNewswire/ -- Ohio Valley Banc Corp. [Nasdaq:
OVBC] (the "Company") reported consolidated net income for the
quarter ended September 30, 2023, of
$2,251,000, a decrease of
$1,439,000 from the same period the
prior year. Earnings per share for the third quarter of 2023 were
$.47 compared to $.77 for the prior year third quarter. For the
nine months ended September 30, 2023,
net income totaled $9,408,000, a
decrease of $406,000 from the same
period the prior year. Earnings per share were $1.97 for the first nine months of 2023 versus
$2.06 for the first nine months of
2022. Return on average assets and return on average equity were
1.00% and 9.21%, respectively, for the first nine months of 2023,
compared to 1.03% and 9.56%, respectively, for the same period in
the prior year.
Ohio Valley Banc Corp. President and CEO, Larry Miller said, "Given the historic rise in
interest rates resulting from the Federal Reserve's action to
reduce inflation, we have been pleased with the resilience of our
loan demand. However, the competition for deposits to fund this
growth has been challenging, putting pressure on our margins, and
we expect that to be the case for some time. Even though there is
much uncertainty in the world right now, your Company is well
positioned with a dedicated team of community bankers and a strong
balance sheet to navigate these challenges."
For the three months ended September 30,
2023, net interest income decreased $469,000 from the same period last year. The
decrease was largely related to the decrease in the net interest
margin. For the third quarter of 2023, the net interest margin was
3.85%, a decrease from the 4.03% for the third quarter of 2022.
During 2022, the Company experienced an increasing trend in the net
interest margin in relation to the significant increase in market
interest rates based on actions taken by the Federal Reserve, which
contributed to the yield on earning assets increasing more than the
cost of interest-bearing liabilities. During 2023, the net interest
margin has experienced a decreasing trend because the Company has
been increasing rates on deposit accounts to attract deposits as
market competition increased and the deposit composition has
trended toward higher cost certificates of deposit. Furthermore,
the higher utilization of wholesale funding sources to fund loan
growth contributed to a higher cost of funds. For the nine months
ended September 30, 2023, net
interest income increased $2,324,000
from the same period last year. Contributing to the increase was
the higher year-to-date net interest margin and the higher relative
balances maintained in loans, as opposed to the Federal Reserve,
which generally yields less than loans. For the nine months ended
September 30, 2023, the net interest
margin was 4.03%, compared to 3.73% for the same period the prior
year. For the nine months ended September
30, 2023, average loans increased $88
million and average balances maintained at the Federal
Reserve decreased $74 million from
the first nine months of last year.
For the three months ended September 30,
2023, the provision for credit loss expense totaled
$888,000, an increase of $1,266,000 from the same period last year. The
quarterly provision for credit loss expense was primarily related
to the additional reserves associated with certain qualitative risk
factors incorporating the national trend of higher loan
delinquencies and charge offs. Furthermore, additional provision
for credit loss expense was related to quarter-to-date net
charge-offs of $210,000 and the
$11 million quarterly increase in
loan balances. Partially offsetting these increases was lower
expected loss rates in relation to an improved unemployment and
gross domestic product forecast. For the nine months ended
September 30, 2023, the provision for
credit losses was $1,401,000, an
increase of $2,092,000 from the same
period last year. The year-to-date provision for credit loss
expense was primarily associated with net charge-offs of
$649,000, loan growth of $76 million and additional reserves for the
change in qualitative risk factors mentioned above. These increases
were partially offset by lower expected loss rates in relation to
improved economic forecasts. Comparatively, the first nine months
of 2023 had a larger provision for credit losses than the same
period in 2022 because there was negative provision for loan loss
expense experienced during the first nine months of 2022 due to a
decrease in certain economic risk factors, such as the level of
classified and criticized loans and the partial release of the
COVID reserve. The allowance for credit losses was .85% of total
loans at September 30, 2023, compared
to .60% at December 31, 2022, and
.56% at September 30, 2022. The
increase in the allowance for credit losses at September 30, 2023, as compared to December 31, 2022, was primarily related to the
Company adopting the new accounting guidance for measuring the
credit losses on financial instruments on January 1, 2023. 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. The ratio of nonperforming loans to
total loans improved to .28% at September
30, 2023, compared to .43% at December 31, 2022, and .46% at September 30, 2022.
For the three months ended September 30,
2023, noninterest income totaled $2,568,000, a decrease of $47,000 from the same period last year. The
decrease was related to lower mortgage banking income. For the nine
months ended September 30, 2023,
noninterest income totaled $9,048,000, an increase of $77,000 from the same period last year. The
increase was largely due to higher service charges on deposit
accounts, interchange income on debit and credit cards, and
commissions earned by Race Day Mortgage for mortgage application
referrals. As part of winding down Race Day Mortgage, the
commissions earned on mortgage application referrals ended in
April 2023. These increases were
partially offset by a decrease in mortgage banking income from
selling loans to the secondary market. With elevated mortgage
rates, mortgage customers are selecting in-house variable rate
mortgage products instead of long-term fixed rate products that are
sold to the secondary market.
For the three months ended September 30,
2023, noninterest expense totaled $10,379,000, an increase of $32,000 from the same period last year. For the
nine months ended September 30, 2023,
noninterest expense totaled $31,066,000, an increase of $908,000 from the same period last year. The
Company's largest noninterest expense, salaries and employee
benefits, increased $42,000 as
compared to the third quarter of 2022 and increased $514,000 as compared to the first nine months of
2022. The increase was primarily related to annual merit increases.
However, the growth in salary and employee benefit expense was
offset due to the elimination of staffing for Race Day Mortgage by
April 2023. As a result, a savings in
salary and employee benefit expense was realized totaling
$253,000 for the third quarter of
2023 and $500,000 for the first nine
months of 2023, when compared to the same periods last year.
Further contributing to higher noninterest expense were FDIC
insurance premiums and software expense. For the three months and
nine months ended September 30, 2023,
FDIC insurance premiums increased $61,000 and $171,000, respectively, from the same periods
last year. The increase was related to higher assessment rates on
all insured depository institutions. Software expense increased
$60,000 during the third quarter of
2023 and increased $151,000 during
the first nine months of 2023, as compared to the same periods in
2022. The increase was related to investments in loan processing
platforms to enhance efficiency.
The Company's total assets at September
30, 2023 were $1.314 billion,
an increase of $103 million, or 8.5%,
from December 31, 2022. Since
December 31, 2022, loan balances
increased $76 million and
interest-bearing deposits with banks increased $44 million due to higher balances being
maintained at the Federal Reserve. These increases were primarily
funded by a $68 million increase in
deposits and a $28 million increase
in borrowed funds. The growth in deposits was impacted by the
utilization of wholesale deposit funding sources. At September 30, 2023, shareholders' equity
increased $1.8 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. In addition, the
decrease in the fair value of securities classified as
available-for-sale limited the growth in shareholders'
equity. Based on the increase in market rates during 2023,
the fair value of securities decreased $1.7
million on an after-tax basis.
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, and Loan Central, Inc. with six consumer finance
offices in Ohio. 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) 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; (ii) competitive
pressures; (iii) fluctuations in interest rates; (iv) the
level of defaults and prepayment on loans made by the Company; (v)
unanticipated litigation, claims, or assessments; (vi) fluctuations
in the cost of obtaining funds to make loans; (vii) regulatory
changes; and (viii) 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.
Contact: Scott Shockey, CFO
(740) 446-2631
|
OHIO VALLEY BANC
CORP - Financial Highlights (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
PER SHARE
DATA
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
$
0.47
|
|
$
0.77
|
|
$
1.97
|
|
$
2.06
|
|
Dividends per
share
|
|
|
$
0.22
|
|
$
0.21
|
|
$
0.80
|
|
$
0.78
|
|
Book value per
share
|
|
|
$
28.66
|
|
$
26.95
|
|
$
28.66
|
|
$
26.95
|
|
Dividend payout
ratio (a)
|
|
|
46.68 %
|
|
27.16 %
|
|
40.60 %
|
|
37.88 %
|
|
Weighted average
shares outstanding
|
4,775,308
|
|
4,771,774
|
|
4,775,103
|
|
4,768,246
|
|
|
|
|
|
|
|
|
|
|
|
|
DIVIDEND REINVESTMENT
(in 000's)
|
|
|
|
|
|
|
|
|
Dividends
reinvested under
|
|
|
|
|
|
|
|
|
|
|
employee stock ownership
plan (b)
|
|
$
-
|
|
$
-
|
|
$
193
|
|
$
154
|
|
Dividends
reinvested under
|
|
|
|
|
|
|
|
|
|
|
dividend reinvestment plan
(c)
|
|
|
$
397
|
|
$
516
|
|
$
1,544
|
|
$
1,741
|
|
|
|
|
|
|
|
|
|
|
|
|
PERFORMANCE
RATIOS
|
|
|
|
|
|
|
|
|
|
|
Return on
average equity
|
|
|
6.46 %
|
|
11.00 %
|
|
9.21 %
|
|
9.56 %
|
|
Return on
average assets
|
|
|
0.70 %
|
|
1.15 %
|
|
1.00 %
|
|
1.04 %
|
|
Net interest
margin (d)
|
|
|
3.85 %
|
|
4.03 %
|
|
4.03 %
|
|
3.73 %
|
|
Efficiency ratio
(e)
|
|
|
73.62 %
|
|
70.95 %
|
|
70.28 %
|
|
72.30 %
|
|
Average earning
assets (in 000's)
|
|
|
$
1,186,548
|
|
$
1,177,124
|
|
$ 1,166,889
|
|
$
1,173,118
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Total dividends
paid as a percentage of net income.
|
|
|
|
|
|
|
|
(b) Shares may be
purchased from OVBC and on secondary market.
|
|
|
|
|
|
|
|
(c) Shares may be
purchased from OVBC and on secondary market.
|
|
|
|
|
|
|
|
(d) Fully
tax-equivalent net interest income as a percentage of average
earning assets.
|
|
|
|
|
|
(e) Noninterest expense
as a percentage of fully tax-equivalent net interest income plus
noninterest income.
|
|
|
|
OHIO VALLEY BANC CORP - Consolidated Statements of
Income (Unaudited)
|
|
|
|
|
|
|
Three months
ended
|
|
Nine months
ended
|
|
(in $000's)
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Interest income:
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
|
$
14,299
|
|
$
10,984
|
|
$
39,868
|
|
$
30,802
|
|
Interest and dividends on
securities
|
|
1,032
|
|
1,032
|
|
3,177
|
|
2,806
|
|
Interest on interest-bearing
deposits with banks
|
601
|
|
516
|
|
1,698
|
|
802
|
|
Total interest income
|
|
|
15,932
|
|
12,532
|
|
44,743
|
|
34,410
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
4,058
|
|
504
|
|
8,981
|
|
1,530
|
|
Borrowings
|
|
|
498
|
|
183
|
|
1,050
|
|
492
|
|
Total interest expense
|
|
|
4,556
|
|
687
|
|
10,031
|
|
2,022
|
|
Net interest income
|
|
|
11,376
|
|
11,845
|
|
34,712
|
|
32,388
|
|
Provision for (recovery of) credit
losses
|
888
|
|
(378)
|
|
1,401
|
|
(691)
|
|
Noninterest income:
|
|
|
|
|
|
|
|
|
|
|
Service charges on deposit
accounts
|
714
|
|
662
|
|
1,978
|
|
1,815
|
|
Trust fees
|
|
|
79
|
|
80
|
|
247
|
|
247
|
|
Income from bank owned life
insurance and
|
|
|
|
|
|
|
|
|
annuity
assets
|
|
|
219
|
|
205
|
|
637
|
|
674
|
|
Mortgage banking
income
|
|
|
42
|
|
185
|
|
133
|
|
640
|
|
Electronic refund
check/deposit fees
|
0
|
|
0
|
|
675
|
|
675
|
|
Debit / credit card
interchange income
|
1,285
|
|
1,291
|
|
3,673
|
|
3,603
|
|
Tax preparation
fees
|
|
|
3
|
|
3
|
|
667
|
|
741
|
|
Other
|
|
|
226
|
|
189
|
|
1,038
|
|
576
|
|
Total noninterest income
|
|
|
2,568
|
|
2,615
|
|
9,048
|
|
8,971
|
|
Noninterest expense:
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits
|
|
|
5,909
|
|
5,867
|
|
17,634
|
|
17,120
|
|
Occupancy
|
|
|
493
|
|
517
|
|
1,440
|
|
1,419
|
|
Furniture and
equipment
|
|
|
351
|
|
296
|
|
979
|
|
841
|
|
Professional fees
|
|
|
430
|
|
418
|
|
1,296
|
|
1,405
|
|
Marketing expense
|
|
|
241
|
|
260
|
|
723
|
|
718
|
|
FDIC insurance
|
|
|
141
|
|
80
|
|
421
|
|
250
|
|
Data processing
|
|
|
737
|
|
776
|
|
2,183
|
|
2,136
|
|
Software
|
|
|
621
|
|
561
|
|
1,771
|
|
1,620
|
|
Foreclosed assets
|
|
|
6
|
|
11
|
|
15
|
|
48
|
|
Amortization of
intangibles
|
|
|
5
|
|
8
|
|
18
|
|
28
|
|
Other
|
|
|
1,445
|
|
1,553
|
|
4,586
|
|
4,573
|
|
Total noninterest expense
|
|
|
10,379
|
|
10,347
|
|
31,066
|
|
30,158
|
|
Income before income
taxes
|
|
|
2,677
|
|
4,491
|
|
11,293
|
|
11,892
|
|
Income taxes
|
|
|
426
|
|
801
|
|
1,885
|
|
2,078
|
|
NET INCOME
|
|
|
$
2,251
|
|
$
3,690
|
|
$
9,408
|
|
$
9,814
|
|
OHIO VALLEY BANC
CORP - Consolidated Balance Sheets (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in $000's, except
share data)
|
|
|
|
|
|
|
September
30,
|
|
December 31,
|
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
Cash and
noninterest-bearing deposits with banks
|
|
|
|
|
$
15,929
|
|
$
14,330
|
|
Interest-bearing
deposits with banks
|
|
|
|
|
|
75,261
|
|
31,660
|
|
Total cash and cash
equivalents
|
|
|
|
|
|
|
91,190
|
|
45,990
|
|
Certificates of deposit
in financial institutions
|
|
|
|
|
0
|
|
1,862
|
|
Securities available
for sale
|
|
|
|
|
|
|
166,842
|
|
184,074
|
|
Securities held to
maturity, net of allowance for credit losses of $2 in 2023 and $0
in 2022;
|
8,946
|
|
9,226
|
|
(estimated fair
value: 2023 - $7,929; 2022 - $8,460)
|
|
|
|
|
|
|
|
|
Restricted investments
in bank stocks
|
|
|
|
|
|
5,062
|
|
5,953
|
|
Total
loans
|
|
|
|
|
|
|
961,222
|
|
885,049
|
|
Less:
Allowance for credit losses
|
|
|
|
|
|
|
(8,173)
|
|
(5,269)
|
|
Net loans
|
|
|
|
|
|
|
953,049
|
|
879,780
|
|
Premises and equipment,
net
|
|
|
|
|
|
|
21,351
|
|
20,436
|
|
Premises and equipment
held for sale, net
|
|
|
|
|
578
|
|
593
|
|
Accrued interest
receivable
|
|
|
|
|
|
|
3,743
|
|
3,112
|
|
Goodwill
|
|
|
|
|
|
|
7,319
|
|
7,319
|
|
Other intangible
assets, net
|
|
|
|
|
|
|
11
|
|
29
|
|
Bank owned life
insurance and annuity assets
|
|
|
|
|
40,478
|
|
39,627
|
|
Operating lease
right-of-use asset, net
|
|
|
|
|
|
1,251
|
|
1,294
|
|
Deferred tax
assets
|
|
|
|
|
|
|
7,050
|
|
6,266
|
|
Other assets
|
|
|
|
|
|
|
7,082
|
|
5,226
|
|
Total assets
|
|
|
|
|
|
|
$ 1,313,952
|
|
$
1,210,787
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
|
|
|
|
|
|
$
326,545
|
|
$
354,413
|
|
Interest-bearing
deposits
|
|
|
|
|
|
|
768,995
|
|
673,242
|
|
Total deposits
|
|
|
|
|
|
|
1,095,540
|
|
1,027,655
|
|
Other borrowed
funds
|
|
|
|
|
|
|
45,751
|
|
17,945
|
|
Subordinated
debentures
|
|
|
|
|
|
|
8,500
|
|
8,500
|
|
Operating lease
liability
|
|
|
|
|
|
|
1,251
|
|
1,294
|
|
Allowance for credit
losses on off-balance sheet commitments
|
|
|
|
643
|
|
0
|
|
Other
liabilities
|
|
|
|
|
|
|
25,474
|
|
20,365
|
|
Total liabilities
|
|
|
|
|
|
|
1,177,159
|
|
1,075,759
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
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
|
|
5,465
|
|
Additional paid-in
capital
|
|
|
|
|
|
|
51,842
|
|
51,722
|
|
Retained
earnings
|
|
|
|
|
|
|
112,699
|
|
109,320
|
|
Accumulated other
comprehensive income (loss)
|
|
|
|
|
(16,470)
|
|
(14,813)
|
|
Treasury stock, at cost
(2023 - 697,321 shares, 2022 - 693,933 shares)
|
|
|
(16,748)
|
|
(16,666)
|
|
Total shareholders' equity
|
|
|
|
|
|
|
136,793
|
|
135,028
|
|
Total liabilities and shareholders' equity
|
|
|
|
|
$ 1,313,952
|
|
$
1,210,787
|
View original
content:https://www.prnewswire.com/news-releases/ohio-valley-banc-corp-reports-3rd-quarter-earnings-301969448.html
SOURCE Ohio Valley Banc Corp.