OVBC Ohio Valley Banc

Filed: 28 Apr 21, 4:07pm

Washington, D.C. 20549


Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): April 28, 2021

(Exact Name of Registrant as Specified in Its Charter)

(Commission File Number)

(State or Other Jurisdiction of Incorporation)(I.R.S. Employer Identification No.)

GALLIPOLIS, Ohio 45631
(Address of principal executive offices, including zip code)

(740) 446-2631
(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class 
 Name of each exchange on which registered
Common Shares, without par value


The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Section 2 – Financial Information

Item 2.02.  Results of Operations and Financial Condition

GALLIPOLIS, Ohio - Ohio Valley Banc Corp. [Nasdaq: OVBC] (the “Company”) reported consolidated net income for the quarter ended March 31, 2021, of $3,531,000, an increase of $2,529,000 from the same period the prior year.  Earnings per share for the first quarter of 2021 was $.74, compared to $.21 for the first quarter of 2020.  Return on average assets and return on average equity were 1.20% and 10.47%, respectively, for the first quarter of 2021, versus .40% and 3.14%, respectively, for the same period the prior year.

“A fantastic quarter as our communities begin to emerge from the pandemic and move into 2021.  However, our management team remains vigilant as interest rates continue at an extreme low and the boon seen from government pandemic recovery programs wane,” said Chairman and CEO Tom Wiseman. Wiseman also noted an encouraging increase in income from mortgage banking and interchange fees for the quarter.

For the first quarter of 2021, net interest income increased $44,000 from the same period last year.  For the three months ended March 31, 2021, average earning assets increased $170 million from the same period the prior year.  The increase was partly due to average loans, which increased $72 million from the first quarter of last year in relation to higher commercial loan balances.  Approximately $27 million of the growth in average loans was related to the Company’s participation in the SBA’s Paycheck Protection Program (PPP) to assist various businesses in our market during the pandemic.  Also contributing to earning asset growth was the $83 million increase in average balances maintained at the Federal Reserve.  In relation to the various stimulus payments received by customers, the Company experienced a significant increase in deposit balances and, to the extent those deposits are not invested in loans or investments, they are invested at the Federal Reserve to be readily available for future funding needs.  The earnings contribution from the higher balance of earning assets was mostly offset by a decrease in the net interest margin.  For the quarter ended March 31, 2021, the net interest margin was 3.73%, compared to 4.34% for the same period the prior year.  The decrease was primarily related to the actions taken by the Federal Reserve to reduce interest rates by 150 basis points in March of 2020.  In relation to the decrease in market rates, the Company experienced a greater decrease in yield on earning assets than the average cost on interest-bearing liabilities.  This trend was partly due to certain deposits already being at or near their interest rate floor, which limited the Company’s ability to reduce deposit costs to the same magnitude as experienced on earning assets.  Furthermore, the current rate on balances maintained at the Federal Reserve is .10% and, when combined with the heightened balances it has a dilutive effect on the net interest margin.

For the three months ended March 31, 2021, the provision for loan loss expense was negative $52,000, a decrease of $3,898,000 from the first quarter of 2020.  The negative provision for loan loss expense for the first quarter of 2021 was primarily related to lower general reserves in association with improved economic risk factors and a decrease in loan balances since December 31, 2020, which was partly offset by quarterly net charge-offs of $222,000.  The decrease in provision for loan loss expense from the prior year first quarter was due to a decrease in net loan charge-offs of $1,168,000 and to the provision expense associated with the establishment of an economic risk factor for the pandemic during the first quarter of 2020, which resulted in additional provision expense of $1,942,000.  The allowance for loan losses was .83% of total loans at March 31, 2021, compared to .84% at December 31, 2020 and 1.13% at March 31, 2020.

For the first quarter of 2021, noninterest income totaled $3,339,000, a decrease of $1,103,000 from the first quarter of 2020.  The decrease was primarily due to the receipt of a $2,000,000 settlement payment from a third-party tax software product provider for early termination of its contract during the first quarter of 2020.  As part of the settlement agreement, the Bank is scheduled to process a certain amount of tax items starting in 2021 and ending in 2025.  For the first quarter of 2021, the Bank recognized $540,000 of additional income under the agreement.  This income along with higher interchange fees of $107,000, lower losses on foreclosed properties of $102,000 and higher mortgage banking income of $89,000, partially offset this year’s decrease in noninterest income related to the litigation settlement payment received the prior year.

Noninterest expense totaled $9,187,000 for the first quarter of 2021, a decrease of $332,000, or 3.5%, from the same period last year.  The Company’s largest noninterest expense, salaries and employee benefits, decreased $185,000, or 3.4%, from the first quarter of 2020.  The decrease was primarily related to the expense savings associated with a lower number of employees.  Further contributing to lower noninterest expense was professional fees.  For the three months ended March 31, 2021, professional fees decreased $168,000 from the same period last year due to lower legal fees associated with collecting troubled loans.  Partially offsetting the expense reductions above was an increase in software expense, which increased $68,000 from the prior year first quarter.  The increase was mostly due to software utilized to process PPP loan applications.  Lastly, FDIC insurance expense increased $79,000 from the first quarter of last year since there was no FDIC insurance expense incurred in the first quarter of 2020 as a result of assessment credits received from the FDIC.

The Company’s total assets at March 31, 2021 were $1.225 billion, an increase of $38 million, or 3.2%, from December 31, 2020.  The increase in assets was related to a $38 million increase in cash and cash equivalents.  The increase in cash and cash equivalents was related to the heightened deposit balances received during the first quarter of 2021 from additional stimulus payments received by customers.  At March 31, 2021, total deposits increased $39 million, or 3.9%, from year end 2020.

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 15 offices in Ohio and West Virginia, and Loan Central, with six consumer finance offices in Ohio.  Learn more about Ohio Valley Banc Corp. at

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 novel coronavirus (COVID-19) pandemic on our business, operations, customers and capital position; (ii) higher default rates on loans made to our customers related to COVID-19 and its impact on our customers’ operations and financial condition; (iii) 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;  (iv) the effects of various governmental responses to the COVID-19 pandemic; (v) 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; (vi) competitive pressures;  (vii) fluctuations in interest rates; (viii) the level of defaults and prepayment on loans made by the Company; (ix) unanticipated litigation, claims, or assessments; (x) fluctuations in the cost of obtaining funds to make loans; (xi) regulatory changes; (xii) and 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 
        March 31, 
        2021  2020 
PER SHARE DATA            
  Earnings per share       $0.74  $0.21 
  Dividends per share       $0.21  $0.21 
  Book value per share       $28.77  $27.26 
  Dividend payout ratio (a)        28.47%  100.34%
  Weighted average shares outstanding      4,787,446   4,787,446 
DIVIDEND REINVESTMENT (in 000's)            
  Dividends reinvested under              
 employee stock ownership plan (b)     $188  $154 
  Dividends reinvested under              
     dividend reinvestment plan (c)       $425  $372 
  Return on average equity        10.47%  3.14%
  Return on average assets        1.20%  0.40%
  Net interest margin (d)        3.73%  4.34%
  Efficiency ratio (e)        68.03%  65.42%
  Average earning assets (in 000's)     $1,105,984  $936,008 
(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 
(in $000's)  

  March 31, 

   2021   2020 
Interest income:  

     Interest and fees on loans $

  $10,565  $10,873 
     Interest and dividends on securities  

   533   750 
     Interest on interest-bearing deposits with banks  

   28   162 
          Total interest income  

   11,126   11,785 
Interest expense:  


   883   1,509 

   195   272 
          Total interest expense  

   1,078   1,781 
Net interest income  

   10,048   10,004 
Provision for (recovery of) loan losses  

)  (52)  3,846 
Noninterest income:  

     Service charges on deposit accounts  

   405   493 
     Trust fees  

   72   68 
     Income from bank owned life insurance and         
       annuity assets  

   248   217 
     Mortgage banking income  

   179   90 
     Electronic refund check/deposit fees

   540   ---- 
     Debit / credit card interchange income  

   1,050   943 
     Gain (loss) on other real estate owned  

)  1   (101)
     Tax preparation fees  

   694   615 
     Litigation settlement  

   ----   2,000 

   150   117 
          Total noninterest income  

   3,339   4,442 
Noninterest expense:  

     Salaries and employee benefits  

   5,270   5,455 

   467   432 
     Furniture and equipment  

   296   262 
     Professional fees  

   430   598 
     Marketing expense  

   268   268 
     FDIC insurance  

   79   ---- 
     Data processing  

   575   599 

   449   381 
     Foreclosed assets  

   14   43 
     Amortization of intangibles  

   13   17 

   1,326   1,464 
          Total noninterest expense  

   9,187   9,519 
Income before income taxes  

   4,252   1,081 
Income taxes  

   721   79 

  $3,531  $1,002 

OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited) 
(in $000's, except share data) March 31,  December 31 
  2021  2020 
Cash and noninterest-bearing deposits with banks $15,884  $14,989 
Interest-bearing deposits with banks  160,536   123,314 
     Total cash and cash equivalents  176,420   138,303 
Certificates of deposit in financial institutions  2,255   2,500 
Securities available for sale  126,394   112,322 
Securities held to maturity (estimated fair value:  2021 - $11,376; 2020 - $10,344)  11,137   10,020 
Restricted investments in bank stocks  7,506   7,506 
Total loans  831,050   848,664 
  Less:  Allowance for loan losses  (6,887)  (7,160)
     Net loans  824,163   841,504 
Premises and equipment, net  21,127   21,312 
Premises and equipment held for sale, net  633   637 
Other real estate owned, net  0   49 
Accrued interest receivable  3,257   3,319 
Goodwill  7,319   7,319 
Other intangible assets, net  99   112 
Bank owned life insurance and annuity assets  36,247   35,999 
Operating lease right-of-use asset, net  1,133   880 
Other assets  7,494   5,150 
          Total assets $1,225,184  $1,186,932 
Noninterest-bearing deposits $327,976  $314,777 
Interest-bearing deposits  704,652   678,962 
     Total deposits  1,032,628   993,739 
Other borrowed funds  26,691   27,863 
Subordinated debentures  8,500   8,500 
Operating lease liability  1,133   880 
Accrued liabilities  18,492   19,626 
          Total liabilities  1,087,444   1,050,608 
Common stock ($1.00 stated value per share, 10,000,000 shares authorized; 
  5,447,185 shares issued)  5,447   5,447 
Additional paid-in capital  51,165   51,165 
Retained earnings  95,514   92,988 
Accumulated other comprehensive income  1,326   2,436 
Treasury stock, at cost (659,739 shares)  (15,712)  (15,712)
          Total shareholders' equity  137,740   136,324 
               Total liabilities and shareholders' equity $1,225,184  $1,186,932 


Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:April 28, 2021By:/s/Thomas E. Wiseman
Thomas E. Wiseman
Chief Executive Officer