GALLIPOLIS, Ohio, July 27,
2023 /PRNewswire/ -- Ohio Valley Banc Corp.
[Nasdaq: OVBC] (the "Company") reported consolidated net income for
the quarter ended June 30, 2023, of
$3,249,000, an increase of
$1,250,000 from the same period the
prior year. Earnings per share for the second quarter of 2023 were
$.68 compared to $.42 for the prior year second quarter. For the
six months ended June 30, 2023, net
income totaled $7,157,000, an
increase of $1,033,000, or 16.9%,
from the same period the prior year. Earnings per share were
$1.50 for the first six months of
2023 versus $1.29 for the first six
months of 2022. Return on average assets and return on average
equity were 1.16% and 10.63%, respectively, for the first half of
2023, compared to .98% and 8.87%, respectively, for the same period
in the prior year.
Ohio Valley Banc Corp. President and CEO, Larry Miller said, "This has been an active
quarter for the Company. In Waverly, our team of community bankers moved
into a new, renovated office. This new location provides us with
another opportunity to bring an even better banking experience to
our customers. Our customers are the key to our longevity – they
are the reason why we have remained and will strive to continue to
remain an independent, community bank. To celebrate and thank our
customers, all of our OVB locations have hosted special customer
appreciation days and are actively planning more events for the
coming months. This summer, we have also continued our involvement
with the local county fairs. We are proud to support these
wonderful community events."
For the three months ended June 30,
2023, net interest income increased $1,061,000, and for the six months ended
June 30, 2023, net interest income
increased $2,793,000 from the same
respective periods last year. Contributing to the increase in net
interest income was the increase in the net interest margin. As a
result of 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 June 30, 2023, the
net interest margin was 4.03%, compared to 3.64% for the same
period the prior year. For the six months ended June 30, 2023, the net interest margin was 4.12%,
compared to 3.58% for the same period the prior year. Although the
net interest margin increased over the prior year periods, on a
linked quarter basis, the net interest margin decreased to 4.03%
for the second quarter of 2023 versus 4.21% for the first quarter
of 2023. The decrease is a result of the Company offering higher
rates on deposit accounts as market competition increased and to
the higher utilization of wholesale funding sources to fund asset
growth. The net interest margin for 2023 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 six months ended June 30, 2023 was $913
million, an increase of $86
million from the first six months of 2022. For the same
period, the average balances maintained at the Federal Reserve
decreased $81 million.
For the three months ended June 30,
2023, the provision for credit loss expense totaled
$24,000, a decrease of $789,000 from the same period last year. The
quarterly provision for credit loss expense was primarily
associated with quarter-to-date net charge-offs of $149,000 and the $44
million quarterly increase in loan balances, which was
partially offset by lower expected loss rates in relation to an
improved unemployment forecast. For the six months ended
June 30, 2023, the provision for
credit losses was $513,000, an
increase of $826,000 from the same
period last year. The year-to-date provision for credit loss
expense was primarily associated with net charge-offs of
$439,000 and loan growth of
$65 million, which was partially
offset by the improved expected loss rates mentioned previously.
Comparatively, the first six months of 2023 had a larger provision
for credit losses than the same period in 2022 because there was a
negative provision for loan loss expense experienced during the
first half 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 .80% of total loans at June 30,
2023, compared to .60% at December
31, 2022 and June 30, 2022.
The increase in the allowance for credit losses at June 30, 2023 was related to the Company adopting
the new accounting guidance for measuring the credit losses on
financial instruments. 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 .29% at
June 30, 2023, compared to .43% at
December 31, 2022 and .46% at
June 30, 2022.
For the three and six months ended June
30, 2023, noninterest income increased $77,000 and $124,000, respectively, from the same periods
last year. The increases were 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 we wind down Race Day Mortgage,
management does not expect to earn commissions on referrals going
forward. This was 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 June 30,
2023, noninterest expense totaled $10,415,000, an increase of $392,000 from the same period last year. For the
six months ended June 30, 2023,
noninterest expense totaled $20,687,000, an increase of $876,000 from the same period last year. The
Company's largest noninterest expense, salaries and employee
benefits, increased $158,000 as
compared to the second quarter of 2022 and increased $472,000 as compared to the first half of 2022.
The increase was primarily related to annual merit increases.
Further contributing to higher noninterest expense were FDIC
insurance premiums, software expense, and data processing. For the
three months and six months ended June 30,
2023, FDIC insurance premiums increased $54,000 and $110,000, respectively, from the same periods
last year. Software expense increased $32,000 during the second quarter of 2023 and
increased $91,000 during the first
half of 2023, as compared to the same periods in 2022. The increase
was related to investments in loan processing platforms to enhance
efficiency. For the three months and six months ended June 30, 2023, data processing expense increased
$38,000 and $86,000, respectively, from the same periods last
year. The increase was related to enhancements to the digital
platform for customers.
The Company's total assets at June 30,
2023 were $1.274 billion, an
increase of $63 million from
December 31, 2022. Since December 31, 2022, loan balances increased
$65 million, which was largely
related to commercial and real estate loan segments. The increase
was primarily funded by a $49 million
increase in deposits and a $9 million
increase in borrowed funds. The growth in deposits was impacted by
the utilization of wholesale deposit funding sources. At
June 30, 2023, shareholders' equity
increased $3 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 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) 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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Six months
ended
|
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|
June 30,
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June 30,
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|
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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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|
$
0.42
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$
1.50
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$
1.29
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Dividends per
share
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$
0.37
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$
0.36
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$
0.58
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$
0.57
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Book value per
share
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$
28.91
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$
27.78
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$
28.91
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$
27.78
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Dividend payout
ratio (a)
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54.39 %
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85.89 %
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38.69 %
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44.35 %
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Weighted average
shares outstanding
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4,776,520
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4,771,774
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4,774,999
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4,766,453
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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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|
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|
dividend reinvestment plan
(c)
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|
$
637
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|
$
710
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|
$
1,147
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|
$
1,225
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PERFORMANCE
RATIOS
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Return on
average equity
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9.46 %
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5.87 %
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10.63 %
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8.87 %
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Return on
average assets
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1.03 %
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0.63 %
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1.16 %
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|
0.98 %
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Net interest
margin (d)
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4.03 %
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3.64 %
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4.12 %
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|
3.58 %
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Efficiency ratio
(e)
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|
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71.93 %
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|
75.33 %
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|
68.70 %
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73.03 %
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Average earning
assets (in 000's)
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|
|
$
1,171,792
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$
1,174,755
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$ 1,156,896
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$
1,171,081
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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.
|
(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)
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Three months
ended
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Six months
ended
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(in $000's)
|
|
June 30,
|
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June 30,
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|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Interest income:
|
|
|
|
|
|
|
|
|
Interest and fees on
loans
|
|
$
13,293
|
|
$
10,020
|
|
$
25,569
|
|
$
19,818
|
Interest and dividends on
securities
|
|
1,053
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|
969
|
|
2,145
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|
1,775
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Interest on interest-bearing
deposits with banks
|
|
671
|
|
232
|
|
1,097
|
|
285
|
Total interest income
|
|
15,017
|
|
11,221
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|
28,811
|
|
21,878
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Interest expense:
|
|
|
|
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Deposits
|
|
3,091
|
|
507
|
|
4,923
|
|
1,026
|
Borrowings
|
|
312
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|
161
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|
552
|
|
309
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Total interest expense
|
|
3,403
|
|
668
|
|
5,475
|
|
1,335
|
Net interest income
|
|
11,614
|
|
10,553
|
|
23,336
|
|
20,543
|
Provision for (recovery of) credit
losses
|
|
24
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|
813
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|
513
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|
(313)
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Noninterest income:
|
|
|
|
|
|
|
|
|
Service charges on deposit
accounts
|
|
653
|
|
595
|
|
1,264
|
|
1,153
|
Trust fees
|
|
82
|
|
86
|
|
168
|
|
167
|
Income from bank owned life
insurance and
|
|
|
|
|
|
|
|
|
annuity
assets
|
|
211
|
|
195
|
|
418
|
|
469
|
Mortgage banking
income
|
|
44
|
|
220
|
|
91
|
|
455
|
Electronic refund
check/deposit fees
|
|
135
|
|
135
|
|
675
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|
675
|
Debit / credit card
interchange income
|
|
1,215
|
|
1,177
|
|
2,388
|
|
2,312
|
Tax preparation
fees
|
|
33
|
|
50
|
|
664
|
|
738
|
Other
|
|
340
|
|
178
|
|
812
|
|
387
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Total noninterest income
|
|
2,713
|
|
2,636
|
|
6,480
|
|
6,356
|
Noninterest expense:
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Salaries and employee
benefits
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|
5,841
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|
5,683
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|
11,725
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|
11,253
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Occupancy
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|
485
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|
424
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|
947
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|
902
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Furniture and
equipment
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|
330
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|
279
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|
628
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|
545
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Professional fees
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433
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|
498
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866
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|
987
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Marketing expense
|
|
241
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|
229
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|
482
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|
458
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FDIC
insurance
|
|
142
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|
88
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|
280
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|
170
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Data
processing
|
|
726
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|
688
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1,446
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1,360
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Software
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|
588
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|
556
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|
1,150
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|
1,059
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Foreclosed assets
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|
7
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|
36
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|
9
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|
37
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Amortization of
intangibles
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|
6
|
|
10
|
|
13
|
|
20
|
Other
|
|
1,616
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|
1,532
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|
3,141
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|
3,020
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Total noninterest expense
|
|
10,415
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|
10,023
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|
20,687
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|
19,811
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Income before income
taxes
|
|
3,888
|
|
2,353
|
|
8,616
|
|
7,401
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Income taxes
|
|
639
|
|
354
|
|
1,459
|
|
1,277
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NET INCOME
|
|
$
3,249
|
|
$
1,999
|
|
$
7,157
|
|
$
6,124
|
OHIO VALLEY BANC CORP - Consolidated Balance Sheets
(Unaudited)
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(in $000's, except
share data)
|
|
June 30,
|
|
December 31,
|
|
|
2023
|
|
2022
|
ASSETS
|
|
|
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Cash and
noninterest-bearing deposits with banks
|
|
$
14,919
|
|
$
14,330
|
Interest-bearing
deposits with banks
|
|
41,876
|
|
31,660
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Total cash and cash
equivalents
|
|
56,795
|
|
45,990
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Certificates of deposit
in financial institutions
|
|
245
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|
1,862
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Securities available
for sale
|
|
174,508
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|
184,074
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Securities held to
maturity, net of allowance for credit losses of $2 in 2023 and $0
in 2022;
|
|
8,964
|
|
9,226
|
(estimated fair
value: 2023 - $8,218; 2022 - $8,460)
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Restricted investments
in bank stocks
|
|
4,204
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|
5,953
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Total
loans
|
|
949,952
|
|
885,049
|
Less:
Allowance for credit losses
|
|
(7,571)
|
|
(5,269)
|
Net loans
|
|
942,381
|
|
879,780
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Premises and equipment,
net
|
|
21,091
|
|
20,436
|
Premises and equipment
held for sale, net
|
|
583
|
|
593
|
Accrued interest
receivable
|
|
3,164
|
|
3,112
|
Goodwill
|
|
7,319
|
|
7,319
|
Other intangible
assets, net
|
|
16
|
|
29
|
Bank owned life
insurance and annuity assets
|
|
40,045
|
|
39,627
|
Operating lease
right-of-use asset, net
|
|
1,297
|
|
1,294
|
Deferred tax
assets
|
|
6,412
|
|
6,266
|
Other assets
|
|
7,206
|
|
5,226
|
Total assets
|
|
$ 1,274,230
|
|
$
1,210,787
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Noninterest-bearing
deposits
|
|
$
338,974
|
|
$
354,413
|
Interest-bearing
deposits
|
|
737,598
|
|
673,242
|
Total deposits
|
|
1,076,572
|
|
1,027,655
|
Other borrowed
funds
|
|
26,904
|
|
17,945
|
Subordinated
debentures
|
|
8,500
|
|
8,500
|
Operating lease
liability
|
|
1,297
|
|
1,294
|
Allowance for credit
losses on off-balance sheet commitments
|
|
565
|
|
0
|
Other
liabilities
|
|
22,320
|
|
20,365
|
Total liabilities
|
|
1,136,158
|
|
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
|
|
111,499
|
|
109,320
|
Accumulated other
comprehensive income (loss)
|
|
(14,073)
|
|
(14,813)
|
Treasury stock, at cost
(693,933 shares)
|
|
(16,666)
|
|
(16,666)
|
Total shareholders' equity
|
|
138,072
|
|
135,028
|
Total liabilities and shareholders' equity
|
|
$ 1,274,230
|
|
$
1,210,787
|
View original
content:https://www.prnewswire.com/news-releases/ohio-valley-banc-corp-reports-2nd-quarter-earnings-301887724.html
SOURCE Ohio Valley Banc Corp.