GALLIPOLIS, Ohio, Jan. 25,
2024 /PRNewswire/ -- Ohio Valley Banc Corp.
[Nasdaq: OVBC] (the "Company") reported consolidated net income for
the quarter ended December 31, 2023,
of $3,223,000, a decrease of
$301,000 from the same period the
prior year. Earnings per share for the fourth quarter of 2023 were
$.68 compared to $.74 for the prior year fourth quarter. For the
year ended December 31, 2023, net
income totaled $12,631,000, a
decrease of $707,000, or 5.3%, from
the same period the prior year. Earnings per share were
$2.65 for 2023 versus $2.80 for 2022. Return on average assets and
return on average equity were .99% and 9.24%, respectively, for the
year ended December 31, 2023,
compared to 1.06% and 9.86%, respectively, for the same period in
the prior year.
Ohio Valley Banc Corp. President and CEO, Larry Miller stated, "While our results for 2023
didn't quite match the record year we celebrated in 2022, I want to
commend our team of dedicated bankers who worked hard to produce
these solid results. Our lending team turned in a particularly
strong performance with double-digit average loan growth while our
deposit gathering staff did their part to fund this strong growth
despite challenging market dynamics. Even though the cost of doing
business and funding our balance sheet increased substantially in
2023, our employees and your company continued to invest time and
resources in support of our Community First Mission."
For the three months ended December 31,
2023, net interest income decreased $1,075,000 from the same period last year. The
decrease was largely related to the decrease in the net interest
margin, which was partially offset by growth in average earning
assets of $92 million, led by strong
growth in the loan portfolio. For the fourth quarter of 2023, the
net interest margin was 3.71%, a decrease from the 4.38% for the
fourth 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. The net interest margin improvement peaked during the
fourth quarter of 2022. 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 year ended
December 31, 2023, net interest
income increased $1,249,000 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 or
securities, which generally yield less than loans. For the year
ended December 31, 2023, the net
interest margin was 3.94%, compared to 3.89% for the same period
the prior year. For the year ended December
31, 2023, average loans increased $91
million, average balances maintained at the Federal Reserve
decreased $51 million and average
securities decreased $19 million from
the same period last year.
For the three months ended December 31,
2023, the provision for credit losses was $689,000, an increase of $30,000 from the same period last year. The
provision for credit loss expense for the fourth quarter of 2023
was primarily related to higher expected loss rates in relation to
a worsened unemployment and gross domestic product forecast along
with higher reserves related to an extension in the expected life
of loans due to slower expected prepayments on loans. Furthermore,
additional provision for credit loss expense was related to
quarter-to-date net charge-offs of $45,000 and the $11
million quarterly increase in loan balances. For the year
ended December 31, 2023, the
provision for credit losses was $2,090,000, an increase of $2,122,000 from the same period last year. The
year-to-date provision for credit loss expense was primarily
associated with net charge-offs of $694,000, loan growth of $87 million and additional reserves associated
with certain qualitative risk factors incorporating the national
trend of higher loan delinquencies and charge offs, particularly
within commercial real estate and construction loans.
Comparatively, 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 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 .90% of total loans at December 31, 2023, compared to .60% at
December 31, 2022. The increase in
the allowance for credit losses at December
31, 2023, as compared to December 31,
2022, was partly 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 .26% at December 31, 2023, compared to .43% at
December 31, 2022.
For the three months ended December 31,
2023, noninterest income totaled $3,581,000, an increase of $2,390,000 from the same period last year. For
the year ended December 31, 2023,
noninterest income totaled $12,629,000, an increase of $2,467,000 from the same period last year. The
increase for both the quarter and the year-to-date periods was
primarily due to a $1,514,000
decrease in the loss on the sale of securities from the same period
the prior year. During the fourth quarter of 2022, the Company sold
$12.5 million in securities at a loss
of $1,537,000. The proceeds were
reinvested into higher-yielding securities to increase future
interest income. In addition, the revenue recognized during the
fourth quarter of 2023, as part of our settlement agreement with a
tax refund processor, increased $726,000 from the same period the prior year. The
increase was related to the impact of the higher interest rate
environment on the revenue earned per the agreement. These
increases were partially offset by a $522,000 year-to-date decrease in mortgage
banking income from selling loans to the secondary market. The
decrease was related to the closing of Race Day Mortgage and to
elevated mortgage rates, which contributed to mortgage customers
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 December 31,
2023, noninterest expense totaled $10,302,000, an increase of $1,420,000 from the same period last year. For
the year ended December 31, 2023,
noninterest expense totaled $41,368,000, an increase of $2,328,000 from the same period last year. The
Company's largest noninterest expense, salaries and employee
benefits, increased $1,262,000 as
compared to the fourth quarter of 2022, and $1,776,000 as compared to the year ended
December 31, 2022. The increase was
primarily related to annual merit increases and nonqualified
benefit plan expense. During the fourth quarter of 2022, the
nonqualified benefit plan liabilities were evaluated and based on
higher market interest rates, the benefit plan liabilities were
reduced, leading to a lump sum decrease in expense. A comparable
adjustment was not required in 2023. As a result, the 2023 expense
associated with the nonqualified benefit plans increased
$1,162,000 for the fourth quarter and
$1,099,000 for the year-to-date
period when compared to the same respective periods the prior year.
However, the growth in salary and employee benefit expense was
reduced 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
$199,000 for the fourth quarter of
2023 and $699,000 for the year ended
December 31, 2023, when compared to
the same periods last year.
Further contributing to higher noninterest expense were software
expense and FDIC insurance premiums. Software expense increased
$301,000 during the fourth quarter of
2023 and increased $452,000 during
the year ended December 31, 2023, as
compared to the same periods in 2022. The increase was related to
investments in loan processing platforms to enhance efficiency and
to termination fees for software agreements for Race Day Mortgage.
For the three months and year ended December
31, 2023, FDIC insurance premiums increased $63,000 and $234,000, respectively, from the same periods
last year. The increase was related to higher assessment rates on
all insured depository institutions. Partially offsetting the
increase in noninterest expense was marketing expense. The decrease
in marketing expense was primarily related to select donations made
during the fourth quarter of 2022 to support the communities that
we serve and reflective of our Community First mission. Marketing
expense decreased $423,000 and
$418,000 during the three and twelve
months ended December 31, 2023,
compared to the same periods in 2022, respectively.
The Company's total assets at December
31, 2023 were $1.352 billion,
an increase of $141 million, or
11.7%, from December 31, 2022. Since
December 31, 2022, loan balances
increased $87 million and
interest-bearing deposits with banks increased $82 million due to higher balances being
maintained at the Federal Reserve. These increases were primarily
funded by a $99 million increase in
deposits, a $27 million increase in
borrowed funds and a $23 million
decrease in securities. The growth in deposits was supplemented by
the utilization of wholesale deposit funding sources. At
December 31, 2023, shareholders'
equity increased $9 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 $3.4 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)
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Three months
ended
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Twelve months
ended
|
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|
|
December 31,
|
|
December 31,
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|
|
2023
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|
2022
|
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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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|
$
0.68
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|
$
0.74
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|
$
2.65
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|
$
2.80
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Dividends per
share
|
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|
$
0.22
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|
$
0.21
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|
$
1.02
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|
$
0.99
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Book value per
share
|
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|
$
30.17
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|
$
28.30
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|
$
30.17
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|
$
28.30
|
Dividend payout
ratio (a)
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|
32.59 %
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28.44 %
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|
38.56 %
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|
35.39 %
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Weighted average
shares outstanding
|
4,773,132
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4,771,774
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4,774,607
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|
4,769,135
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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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|
$
-
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|
$
-
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|
$
193
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|
$
154
|
Dividends
reinvested under
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|
|
|
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|
|
|
dividend reinvestment plan
(c)
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|
|
$
405
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|
$
531
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|
$
1,949
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|
$
2,272
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|
|
|
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PERFORMANCE
RATIOS
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Return on
average equity
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9.32 %
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|
10.81 %
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|
9.24 %
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|
9.86 %
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Return on
average assets
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|
|
0.97 %
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|
1.14 %
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|
0.99 %
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|
1.06 %
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Net interest
margin (d)
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|
|
3.71 %
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|
4.38 %
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|
3.94 %
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|
3.89 %
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Efficiency ratio
(e)
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|
|
68.47 %
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|
64.76 %
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|
69.82 %
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|
70.44 %
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Average earning
assets (in 000's)
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|
|
$
1,227,454
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|
$
1,135,547
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|
$ 1,182,155
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$
1,163,999
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|
(a) Total dividends
paid as a percentage of net income.
|
(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.
|
(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.
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OHIO VALLEY BANC
CORP - Consolidated Statements of Income (Unaudited)
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Three months
ended
|
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Twelve months
ended
|
(in $000's)
|
|
|
December 31,
|
|
December 31,
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Interest
income:
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
|
$
14,953
|
|
$
11,471
|
|
$
54,821
|
|
$
42,273
|
Interest and dividends on
securities
|
|
997
|
|
1,044
|
|
4,174
|
|
3,850
|
Interest on interest-bearing
deposits with banks
|
1,172
|
|
691
|
|
2,870
|
|
1,493
|
Total interest income
|
|
|
17,122
|
|
13,206
|
|
61,865
|
|
47,616
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
5,193
|
|
600
|
|
14,174
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|
2,130
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Borrowings
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|
|
614
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|
216
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|
1,664
|
|
708
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Total interest expense
|
|
|
5,807
|
|
816
|
|
15,838
|
|
2,838
|
Net interest
income
|
|
|
11,315
|
|
12,390
|
|
46,027
|
|
44,778
|
Provision for
(recovery of) credit losses
|
689
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|
659
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|
2,090
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|
(32)
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Noninterest
income:
|
|
|
|
|
|
|
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|
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Service charges on deposit
accounts
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722
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|
628
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|
2,700
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|
2,443
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Trust fees
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|
|
79
|
|
78
|
|
326
|
|
325
|
Income from bank owned life
insurance and
|
|
|
|
|
|
|
|
annuity
assets
|
|
|
223
|
|
209
|
|
860
|
|
883
|
Mortgage banking
income
|
|
|
42
|
|
57
|
|
175
|
|
697
|
Electronic refund
check/deposit fees
|
0
|
|
0
|
|
675
|
|
675
|
Debit / credit card
interchange income
|
1,187
|
|
1,259
|
|
4,860
|
|
4,862
|
Loss on sale of
securities
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|
|
(23)
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|
(1,537)
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|
(23)
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|
(1,537)
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Tax preparation
fees
|
|
|
2
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|
2
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|
669
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|
743
|
Other
|
|
|
1,349
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|
495
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|
2,387
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|
1,071
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Total noninterest income
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|
|
3,581
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|
1,191
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|
12,629
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|
10,162
|
Noninterest
expense:
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|
Salaries and employee
benefits
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|
5,757
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4,495
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23,391
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|
21,615
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Occupancy
|
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|
463
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|
491
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|
1,903
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|
1,910
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Furniture and
equipment
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|
342
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|
329
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|
1,321
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|
1,170
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Professional fees
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|
360
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|
204
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|
1,656
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|
1,609
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Marketing expense
|
|
|
287
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|
710
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|
1,010
|
|
1,428
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FDIC
insurance
|
|
|
148
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|
85
|
|
569
|
|
335
|
Data
processing
|
|
|
626
|
|
625
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|
2,809
|
|
2,761
|
Software
|
|
|
878
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|
577
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|
2,649
|
|
2,197
|
Foreclosed assets
|
|
|
0
|
|
15
|
|
15
|
|
63
|
Amortization of
intangibles
|
|
|
3
|
|
7
|
|
21
|
|
35
|
Other
|
|
|
1,438
|
|
1,344
|
|
6,024
|
|
5,917
|
Total noninterest expense
|
|
|
10,302
|
|
8,882
|
|
41,368
|
|
39,040
|
Income before income
taxes
|
|
|
3,905
|
|
4,040
|
|
15,198
|
|
15,932
|
Income taxes
|
|
|
682
|
|
516
|
|
2,567
|
|
2,594
|
NET
INCOME
|
|
|
$
3,223
|
|
$
3,524
|
|
$
12,631
|
|
$
13,338
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OHIO VALLEY BANC
CORP - Consolidated Balance Sheets (Unaudited)
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(in $000's, except
share data)
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
|
2023
|
|
2022
|
ASSETS
|
|
|
|
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|
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|
Cash and
noninterest-bearing deposits with banks
|
|
|
|
|
$
14,252
|
|
$
14,330
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Interest-bearing
deposits with banks
|
|
|
|
|
|
113,874
|
|
31,660
|
Total cash and cash
equivalents
|
|
|
|
|
|
|
128,126
|
|
45,990
|
Certificates of deposit
in financial institutions
|
|
|
|
|
0
|
|
1,862
|
Securities available
for sale
|
|
|
|
|
|
|
162,258
|
|
184,074
|
Securities held to
maturity, net of allowance for credit losses of $2 in 2023 and $0
in 2022;
|
7,986
|
|
9,226
|
(estimated fair
value: 2023 - $7,390; 2022 - $8,460)
|
|
|
|
|
|
|
|
Restricted investments
in bank stocks
|
|
|
|
|
|
5,037
|
|
5,953
|
Total
loans
|
|
|
|
|
|
|
971,900
|
|
885,049
|
Less:
Allowance for credit losses
|
|
|
|
|
|
|
(8,767)
|
|
(5,269)
|
Net loans
|
|
|
|
|
|
|
963,133
|
|
879,780
|
Premises and equipment,
net
|
|
|
|
|
|
|
21,450
|
|
20,436
|
Premises and equipment
held for sale, net
|
|
|
|
|
573
|
|
593
|
Accrued interest
receivable
|
|
|
|
|
|
|
3,606
|
|
3,112
|
Goodwill
|
|
|
|
|
|
|
7,319
|
|
7,319
|
Other intangible
assets, net
|
|
|
|
|
|
|
8
|
|
29
|
Bank owned life
insurance and annuity assets
|
|
|
|
|
40,593
|
|
39,627
|
Operating lease
right-of-use asset, net
|
|
|
|
|
|
1,205
|
|
1,294
|
Deferred tax
assets
|
|
|
|
|
|
|
6,306
|
|
6,266
|
Other assets
|
|
|
|
|
|
|
4,535
|
|
5,226
|
Total assets
|
|
|
|
|
|
|
$ 1,352,135
|
|
$
1,210,787
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
deposits
|
|
|
|
|
|
|
$
322,222
|
|
$
354,413
|
Interest-bearing
deposits
|
|
|
|
|
|
|
804,914
|
|
673,242
|
Total deposits
|
|
|
|
|
|
|
1,127,136
|
|
1,027,655
|
Other borrowed
funds
|
|
|
|
|
|
|
44,593
|
|
17,945
|
Subordinated
debentures
|
|
|
|
|
|
|
8,500
|
|
8,500
|
Operating lease
liability
|
|
|
|
|
|
|
1,205
|
|
1,294
|
Allowance for credit
losses on off-balance sheet commitments
|
|
|
|
692
|
|
0
|
Other
liabilities
|
|
|
|
|
|
|
26,002
|
|
20,365
|
Total liabilities
|
|
|
|
|
|
|
1,208,128
|
|
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
|
|
|
|
|
|
|
114,871
|
|
109,320
|
Accumulated other
comprehensive income (loss)
|
|
|
|
|
(11,428)
|
|
(14,813)
|
Treasury stock, at cost
(2023 - 697,321 shares, 2022 - 693,933 shares)
|
|
|
(16,748)
|
|
(16,666)
|
Total shareholders' equity
|
|
|
|
|
|
|
144,007
|
|
135,028
|
Total liabilities and shareholders' equity
|
|
|
|
|
$ 1,352,135
|
|
$
1,210,787
|
View original
content:https://www.prnewswire.com/news-releases/ohio-valley-banc-corp-reports-4th-quarter-and-fiscal-year-earnings-302045135.html
SOURCE Ohio Valley Banc Corp.