Ohio Valley Banc Corp. Reports 3rd Quarter Earnings

Rhea-AI Summary

Ohio Valley Banc Corp. (OVBC) reported a consolidated net income of $3.69 million for Q3 2022, marking a 21.5% increase from the previous year, with earnings per share rising to $0.77 from $0.63. For the first nine months of 2022, net income reached $9.81 million, a 4.1% increase. Net interest income grew by $1.49 million in Q3, driven by a higher net interest margin of 4.03%. Noninterest expenses increased by $878,000 in Q3, largely due to rising salaries and operational expenses. Total assets were $1.252 billion, with total deposits up $14 million but shareholders' equity down by $13 million.

Positive

• Net income increased by 21.5% to $3.69 million for Q3 2022.
• Earnings per share rose to $0.77 from $0.63 year-over-year.
• Net interest income grew by $1.49 million in Q3 2022.
• Net interest margin improved to 4.03% in Q3 2022, up from previous quarters.
• Total assets reached $1.252 billion, reflecting growth.

Negative

• Noninterest expenses rose by $878,000 in Q3 2022.
• Shareholders' equity decreased by $13 million from year-end 2021.

GALLIPOLIS, Ohio, Oct. 28, 2022 /PRNewswire/ -- Ohio Valley Banc Corp. [Nasdaq: OVBC] (the "Company") reported consolidated net income for the quarter ended September 30, 2022, of $3,690,000, an increase of $654,000, or 21.5%, from the same period the prior year. Earnings per share for the third quarter of 2022 were $.77 compared to $.63 for the prior year third quarter. For the nine months ended September 30, 2022, net income totaled $9,814,000, an increase of $386,000, or 4.1%, from the same period the prior year. Earnings per share were $2.06 for the first nine months of 2022 versus $1.97 for the first nine months of 2021. Return on average assets and return on average equity were 1.04% and 9.56%, respectively, for the first nine months of 2022, compared to 1.03% and 9.13%, respectively, for the same period in the prior year.

Ohio Valley Banc Corp. President and CEO, Larry Miller said, "It has been another active quarter at OVBC. We believe the best way to maximize shareholder value is by serving our communities as a growing, independent community bank. In this spirit of continued growth, we recently opened our newest location in Ironton, which enabled us to expand our footprint into Lawrence County, Ohio. In addition, we have enjoyed a great year of celebrating Ohio Valley Bank's 150th anniversary with special customer appreciation events and giveaways across all of our locations. As November 1 marks the day we officially opened our doors for the first time, it makes me think about our future. I am eager to see the bank continue to grow and be a strong force within our communities for the next 150 years."

For the third quarter of 2022, net interest income increased $1,486,000, and for the nine months ended September 30, 2022, net interest income increased $1,766,000 from the same respective periods last year. Contributing to the increase in net interest income was the increase in the net interest margin and the growth in average earning assets. In relation to the significant increase in market interest rates during 2022 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. During 2022, the quarterly net interest margin increased from 3.51% for the first quarter, to 3.64% for the second quarter, and 4.03% for the third quarter. As a result of this positive trend, the current net interest margin now exceeds the prior year. For the nine months ended September 30, 2022, the net interest margin was 3.73%, compared to 3.62% for the same period the prior year. For the nine months ended September 30, 2022, average earning assets increased $30 million from the same period the prior year. The increase was primarily due to average securities, which increased $46 million from the first nine months of last year due to higher average deposit balances. Partially offsetting the growth in securities was the $5 million decrease in average loan balances. The decrease in average loans was related to the repayment of all SBA Paycheck Protection Program (PPP) loans as of the first quarter of 2022. As a result of these repayments, the average balance of PPP loans decreased $18 million and the corresponding interest and fees on PPP loans decreased $960,000 for the first nine months of 2022, as compared to the same period last year.

For the three months ended September 30, 2022, the provision for loan losses was negative $378,000, a decrease of $285,000 from the same period last year. The negative provision expense for the third quarter of 2022 was primarily related to the elimination of a $297,000 specific reserve on a collateral dependent impaired loan due to the full collection of the loan balance. For the nine months ended September 30, 2022, the provision for loan losses was negative $691,000, a decrease of $573,000 from the same period last year. The negative provision for loan loss expense experienced during the first nine months of 2022 was 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. These improvements contributed to lower general reserves, which more than offset the year-to-date net charge-offs of $981,000, of which $613,000 was related to a single loan relationship. The allowance for loan losses was .56% of total loans at September 30, 2022, compared to .78% at December 31, 2021 and .79% at September 30, 2021.  The ratio of nonperforming loans to total loans improved to .46% at September 30, 2022, compared to .56% at December 31, 2021 and .72% at September 30, 2021.

For the three months ended September 30, 2022, noninterest income totaled $2,615,000, an increase of $3,000 from the same period last year. For the nine months ended September 30, 2022, noninterest income totaled $8,971,000, an increase of $514,000 from the same period last year. The increase in year-to-date noninterest income was due to a $506,000 increase in service charges on deposit accounts and a $143,000 increase in interchange income on debit and credit card transactions. These increases were partially offset by a $197,000 decrease in the gain on sale of premises.

For the three months ended September 30, 2022, noninterest expense totaled $10,347,000, an increase of $878,000 from the same period last year. For the nine months ended September 30, 2022, noninterest expense totaled $30,158,000, an increase of $2,205,000 from the same period last year. The Company's largest noninterest expense, salaries and employee benefits, increased $391,000 as compared to the third quarter of 2021 and increased $1,095,000 as compared to the first nine months of 2021. The increase was primarily related to the staffing of Race Day Mortgage and to annual merit increases. Further contributing to higher noninterest expense was other noninterest expense, software expense and data processing. The increase in other noninterest expense was primarily related to the expense associated with purchasing mortgage loan marketing leads for Race Day Mortgage. As a result, other noninterest expense increased $119,000 and $419,000 during the three and nine months ended September 30, 2022, compared to the same periods in 2021, respectively. For the three months and nine months ended September 30, 2022, software expense increased $97,000 and $273,000, respectively, from the same periods last year. The increase was partly due to software platforms utilized by Race Day Mortgage. During the three months ended September 30, 2022, data processing expense increased $109,000, and increased $234,000 during the first nine months of 2022 as compared to the same periods in 2021. The increase was related to higher debit and credit card transaction volume.

The Company's total assets at September 30, 2022 were $1.252 billion, an increase of $3 million from December 31, 2021. During the first nine months of 2022, the Company deployed a portion of the heightened cash balance into higher yielding earning assets. Since December 31, 2021, loan balances increased $25 million and securities increased $7 million.  These increases were funded by a $39 million decrease in cash and cash equivalents. At September 30, 2022, total deposits increased $14 million and shareholders' equity decreased $13 million from year end 2021. The decrease in shareholders' equity was related to recording the fair value adjustment for securities classified as available-for-sale. Based on the increase in market rates during the first nine months of 2022, the fair value of securities decreased $19 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; 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.

 

	OHIO VALLEY BANC CORP - Financial Highlights (Unaudited)
				Three months ended				Nine months ended
				September 30,				September 30,
				2022		2021		2022		2021
	PER SHARE DATA
	Earnings per share			$             0.77		$             0.63		$               2.06		$             1.97
	Dividends per share			$             0.21		$             0.21		$               0.78		$             0.63
	Book value per share			$           26.95		$           29.54		$             26.95		$           29.54
	Dividend payout ratio (a)			27.16 %		33.11 %		37.88 %		31.99 %
	Weighted average shares outstanding			4,771,774		4,783,886		4,768,246		4,786,246
	DIVIDEND REINVESTMENT (in 000's)
	Dividends reinvested under
	employee stock ownership plan (b)			$                   -		$                   -		$                154		$              188
	Dividends reinvested under
	dividend reinvestment plan (c)			$              516		$              426		$             1,741		$           1,288
	PERFORMANCE RATIOS
	Return on average equity			11.00 %		8.63 %		9.56 %		9.13 %
	Return on average assets			1.15 %		0.96 %		1.04 %		1.03 %
	Net interest margin (d)			4.03 %		3.57 %		3.73 %		3.62 %
	Efficiency ratio (e)			70.95 %		72.32 %		72.30 %		70.88 %
	Average earning assets (in 000's)			$   1,177,124		$   1,164,309		$     1,173,118		$   1,142,658
	(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,
				2022		2021		2022		2021
	Interest income:
	Interest and fees on loans			$         10,984		$         10,522		$          30,802		$         31,649
	Interest and dividends on securities			1,032		654		2,806		1,791
	Interest on interest-bearing deposits with banks			516		50		802		111
	Total interest income			12,532		11,226		34,410		33,551
	Interest expense:
	Deposits			504		692		1,530		2,374
	Borrowings			183		175		492		555
	Total interest expense			687		867		2,022		2,929
	Net interest income			11,845		10,359		32,388		30,622
	Provision for (recovery of) loan losses			(378)		(93)		(691)		(118)
	Noninterest income:
	Service charges on deposit accounts			662		514		1,815		1,309
	Trust fees			80		70		247		212
	Income from bank owned life insurance and
	annuity assets			205		253		674		701
	Mortgage banking income			185		179		640		544
	Electronic refund check/deposit fees			0		0		675		675
	Debit / credit card interchange income			1,291		1,237		3,603		3,460
	Gain on other real estate owned			0		0		7		1
	Tax preparation fees			3		3		741		752
	Other			189		356		569		803
	Total noninterest income			2,615		2,612		8,971		8,457
	Noninterest expense:
	Salaries and employee benefits			5,867		5,476		17,120		16,025
	Occupancy			517		483		1,419		1,415
	Furniture and equipment			296		287		841		852
	Professional fees			418		425		1,405		1,282
	Marketing expense			260		128		718		664
	FDIC insurance			80		84		250		242
	Data processing			776		667		2,136		1,902
	Software			561		464		1,620		1,347
	Foreclosed assets			11		10		48		32
	Amortization of intangibles			8		11		28		38
	Other			1,553		1,434		4,573		4,154
	Total noninterest expense			10,347		9,469		30,158		27,953
	Income before income taxes			4,491		3,595		11,892		11,244
	Income taxes			801		559		2,078		1,816
	NET INCOME			$           3,690		$           3,036		$            9,814		$           9,428

 

	OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited)
	(in $000's, except share data)							September 30,		December 31
								2022		2021
	ASSETS
	Cash and noninterest-bearing deposits with banks							$          13,587		$         14,111
	Interest-bearing deposits with banks							99,524		137,923
	Total cash and cash equivalents							113,111		152,034
	Certificates of deposit in financial institutions							1,868		2,329
	Securities available for sale							184,844		177,000
	Securities held to maturity (estimated fair value:  2022 - $8,655; 2021 - $10,450)							9,642		10,294
	Restricted investments in bank stocks							5,953		7,265
	Total loans							855,913		831,191
	Less:  Allowance for loan losses							(4,811)		(6,483)
	Net loans							851,102		824,708
	Premises and equipment, net							20,490		20,730
	Premises and equipment held for sale, net							598		438
	Other real estate owned, net							15		15
	Accrued interest receivable							3,053		2,695
	Goodwill							7,319		7,319
	Other intangible assets, net							35		64
	Bank owned life insurance and annuity assets							39,417		37,281
	Operating lease right-of-use asset, net							1,170		1,195
	Deferred tax assets							7,056		2,217
	Other assets							6,801		4,185
	Total assets							$     1,252,474		$   1,249,769
	LIABILITIES
	Noninterest-bearing deposits							$        353,352		$       353,578
	Interest-bearing deposits							720,973		706,330
	Total deposits							1,074,325		1,059,908
	Other borrowed funds							18,085		19,614
	Subordinated debentures							8,500		8,500
	Operating lease liability							1,170		1,195
	Other liabilities							21,774		19,196
	Total liabilities							1,123,854		1,108,413
	SHAREHOLDERS' EQUITY
	Common stock ($1.00 stated value per share, 10,000,000 shares authorized;
	2022 - 5,465,707 shares issued; 2021 - 5,447,185 shares issued)							5,465		5,447
	Additional paid-in capital							51,722		51,165
	Retained earnings							106,799		100,702
	Accumulated other comprehensive income							(18,700)		708
	Treasury stock, at cost (693,933 shares)							(16,666)		(16,666)
	Total shareholders' equity							128,620		141,356
	Total liabilities and shareholders' equity							$     1,252,474		$   1,249,769

 

Contact:  Scott Shockey, CFO (740) 446-2631

 

View original content:https://www.prnewswire.com/news-releases/ohio-valley-banc-corp-reports-3rd-quarter-earnings-301662553.html

SOURCE Ohio Valley Banc Corp.

FAQ

What was Ohio Valley Banc Corp's net income for Q3 2022?

Ohio Valley Banc Corp reported a net income of $3.69 million for Q3 2022.

How much did earnings per share increase for OVBC in Q3 2022?

Earnings per share increased to $0.77 in Q3 2022 from $0.63 the previous year.

What is the net interest margin for Ohio Valley Banc Corp in Q3 2022?

The net interest margin for Q3 2022 was 4.03%.

What were the total assets reported by Ohio Valley Banc Corp?

Total assets stood at $1.252 billion as of September 30, 2022.

Did Ohio Valley Banc Corp experience an increase or decrease in noninterest expenses?

Yes, noninterest expenses increased by $878,000 in Q3 2022.