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Ohio Valley Banc Corp. Reports 1st Quarter Earnings

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Ohio Valley Banc Corp. reported a decrease in net income for the 1st quarter of 2024 compared to the same period in 2023. Despite challenges from the interest rate environment impacting net interest margin, the company remains focused on quality loan growth. The net interest margin decreased due to increased funding costs, although average earning assets grew. Loan balances increased, with commercial and residential real estate lending leading the growth. Noninterest income saw a decline due to the closure of Race Day Mortgage, while noninterest expenses increased primarily due to salaries and employee benefits. The provision for credit loss expense and nonperforming loans increased, but the allowance for credit losses also grew. Total assets, deposits, and shareholders' equity showed positive growth. Ohio Valley Banc Corp.'s common stock trades on the NASDAQ Global Market under the symbol OVBC.
Ohio Valley Banc Corp. ha segnalato una diminuzione del reddito netto per il primo trimestre del 2024 rispetto allo stesso periodo del 2023. Nonostante le sfide derivanti dall'ambiente dei tassi di interesse che hanno influenzato il margine di interesse netto, la compagnia rimane concentrata sulla crescita di prestiti di qualità. Il margine di interesse netto è diminuito a causa dell'aumento dei costi di finanziamento, anche se gli asset medi produttivi sono cresciuti. I saldi dei prestiti hanno registrato un aumento, con i prestiti commerciali e immobiliari residenziali che hanno guidato la crescita. Il reddito non derivante dagli interessi è diminuito a seguito della chiusura di Race Day Mortgage, mentre le spese non derivanti dagli interessi sono aumentate principalmente a causa di stipendi e benefici per i dipendenti. La provvista per le perdite su crediti e i prestiti non performanti sono aumentati, ma anche la riserva per le perdite su crediti è cresciuta. Gli asset totali, i depositi e il patrimonio degli azionisti hanno mostrato una crescita positiva. Le azioni comuni della Ohio Valley Banc Corp. sono negoziate sul NASDAQ Global Market con il simbolo OVBC.
Ohio Valley Banc Corp. informó una disminución en el ingreso neto para el primer trimestre de 2024 comparado con el mismo período de 2023. A pesar de los desafíos del entorno de tasas de interés que afectaron el margen de interés neto, la compañía sigue enfocada en el crecimiento de préstamos de calidad. El margen de interés neto disminuyó debido al aumento en los costos de financiamiento, aunque los activos promedio rentables aumentaron. Los saldos de préstamos aumentaron, siendo los préstamos comerciales y de bienes raíces residenciales los que lideraron el crecimiento. Los ingresos no derivados de intereses disminuyeron debido al cierre de Race Day Mortgage, mientras que los gastos no derivados de intereses aumentaron principalmente por los salarios y beneficios de los empleados. La provisión para gastos por pérdidas crediticias y los préstamos no productivos aumentaron, pero también lo hizo la reserva para pérdidas crediticias. Los activos totales, los depósitos y el patrimonio de los accionistas mostraron un crecimiento positivo. Las acciones comunes de Ohio Valley Banc Corp. se negocian en el NASDAQ Global Market bajo el símbolo OVBC.
오하이오 밸리 은행 코퍼레이션은 2024년 1분기에 2023년 같은 기간에 비해 순이익이 감소했다고 보고했습니다. 금리 환경의 도전에도 불구하고 회사는 고품질 대출 성장에 중점을 두고 있습니다. 평균 수익 자산은 증가했음에도 불구하고 자금 조달 비용의 증가로 순이자 마진이 감소했습니다. 대출 잔액은 상업 및 주거용 부동산 대출이 성장을 주도하며 증가했습니다. Race Day Mortgage의 폐쇄로 이자 이외의 수입이 감소했고, 주로 급여와 직원 복지 혜택으로 인해 이자 이외의 비용이 증가했습니다. 신용 손실 비용 준비금과 부실 대출이 증가했지만, 신용 손실 충당금도 증가했습니다. 총 자산, 예금 및 주주 자본은 긍정적인 성장을 보였습니다. 오하이오 밸리 은행 코퍼레이션의 보통주는 나스닥 글로벌 마켓에서 OVBC 기호로 거래됩니다.
Ohio Valley Banc Corp. a rapporté une baisse du bénéfice net pour le premier trimestre de 2024 par rapport à la même période de 2023. Malgré les défis liés à l'environnement des taux d'intérêt affectant la marge d'intérêt nette, la société reste concentrée sur la croissance de prêts de qualité. La marge d'intérêt net a diminué en raison de l'augmentation des coûts de financement, bien que les actifs moyens gagnant aient crû. Les soldes de prêts ont augmenté, avec les prêts commerciaux et immobiliers résidentiels menant la croissance. Les revenus non-intérêt ont diminué à cause de la fermeture de Race Day Mortgage, tandis que les dépenses non-intérêt ont augmenté principalement à cause des salaires et avantages des employés. La provision pour pertes sur crédits et les prêts non performants ont augmenté, mais l'allocation pour pertes sur créances a également augmenté. Les actifs totaux, les dépôts et les capitaux propres des actionnaires ont montré une croissance positive. Les actions ordinaires d'Ohio Valley Banc Corp. sont échangées sur le NASDAQ Global Market sous le symbole OVBC.
Die Ohio Valley Banc Corp. berichtete über einen Rückgang des Nettoeinkommens für das erste Quartal 2024 im Vergleich zum gleichen Zeitraum in 2023. Trotz Herausforderungen aus dem Zinsumfeld, die die Nettozinsmarge beeinflussten, konzentriert sich das Unternehmen weiterhin auf qualitatives Kreditwachstum. Die Nettozinsmarge sank aufgrund gestiegener Finanzierungskosten, obwohl die durchschnittlichen Ertragswerte stiegen. Die Kreditsalden nahmen zu, wobei gewerbliche und Wohnimmobilienkredite das Wachstum anführten. Die Nichtzins-Einnahmen gingen durch die Schließung von Race Day Mortgage zurück, während die Nichtzins-Ausgaben hauptsächlich aufgrund von Gehältern und Mitarbeiterleistungen zunahmen. Die Vorsorge für Kreditverluste und die nicht leistungsfähigen Kredite stiegen, jedoch erhöhte sich auch die Rückstellung für Kreditverluste. Die Gesamtaktiva, Einlagen und das Eigenkapital der Aktionäre zeigten ein positives Wachstum. Die Stammaktien der Ohio Valley Banc Corp. werden an der NASDAQ Global Market unter dem Symbol OVBC gehandelt.
Positive
  • Consolidated net income for the 1st quarter of 2024 was $2,793,000, a decrease of 28.5% from the same period in 2023.
  • Earnings per share for the 1st quarter of 2024 were $.58, compared to $.82 in 2023.
  • Return on average assets and return on average equity were .83% and 7.77%, respectively, for the 1st quarter of 2024.
  • Net interest income decreased by $532,000 in the 1st quarter of 2024 compared to 2023.
  • Provision for credit loss expense increased by $262,000 in the 1st quarter of 2024.
  • Noninterest income decreased by $71,000 in the 1st quarter of 2024.
  • Noninterest expense increased by $469,000 in the 1st quarter of 2024.
  • Total assets at March 31, 2024, were $1.373 billion, an increase of $20 million from December 31, 2023.
  • Total deposits increased by $22 million at March 31, 2024, compared to year-end 2023.
  • Total shareholders' equity increased by $1.8 million from year-end 2023.
Negative
  • The decrease in net income and earnings per share compared to the prior year.
  • The decrease in net interest income and net interest margin.
  • The increase in provision for credit loss expense and nonperforming loans.
  • The decrease in noninterest income related to the closure of Race Day Mortgage.
  • The increase in noninterest expense, particularly in salaries and employee benefits.

Insights

An analysis of Ohio Valley Banc Corp.'s recent earnings report indicates a notable 28.5% decrease in net income compared to the previous year. Given that earnings per share also decreased from $.82 to $.58, these figures suggest a contraction in profitability which could cause some concern among investors. The reported return on average assets and equity have also diminished, highlighting a potential efficiency issue within the company.

It's also significant that the net interest margin has contracted from 4.21% to 3.61%. This compression indicates that the income generated from interest-earning assets, relative to the cost of servicing liabilities, has declined. While the company attributes this to an unfavorable interest rate environment, the strategy to attract deposits via higher rates should be monitored to assess its sustainability and impact on profitability.

From a credit perspective, the uptick in the provision for credit loss expense to $751,000, an increase of $262,000, is a noteworthy development. This rise corresponds with a slight increase in the ratio of nonperforming loans to total loans from the end of the last year. An increase in provisions may indicate the company is expecting higher loan defaults or a deteriorating credit environment, which requires close scrutiny by investors. However, the allowance for credit losses as a percentage of total loans has increased modestly, indicating a conservative stance towards potential future loan losses.

Regarding noninterest income, the closure of Race Day Mortgage and the consequent absence of mortgage application referral income marks a shift in business operations that should be evaluated for its effect on revenue diversification. Service charges on deposit accounts have risen, which may reflect changing customer behavior or fee adjustments. Additionally, the increase in total assets and deposits, particularly within time deposits, could point to a solid base for funding future loan growth, albeit potentially at higher costs given competitive rates.

GALLIPOLIS, Ohio, April 25, 2024 /PRNewswire/ -- Ohio Valley Banc Corp. [Nasdaq: OVBC] (the "Company") reported consolidated net income for the quarter ended March 31, 2024, of $2,793,000, a decrease of $1,115,000, or 28.5%, from the same period the prior year. Earnings per share for the first quarter of 2024 were $.58, compared to $.82 for the first quarter of 2023. Return on average assets and return on average equity were .83% and 7.77%, respectively, for the first quarter of 2024, versus 1.28% and 11.85%, respectively, for the same period the prior year.

Ohio Valley Banc Corp. President and CEO, Larry Miller stated, "Though this year's unfavorable interest rate environment slowed earnings by reducing the net interest margin as we expected, the Company still netted nearly $2.8 million for the quarter. We believe consistent, quality loan growth is key. We are determined to work even harder to maximize returns and improve the quality of life for our shareholders, employees, customers, and the community as a whole."

For the first quarter of 2024, net interest income decreased $532,000 from the first quarter of 2023. The decrease was largely related to the decrease in the net interest margin, which was partially offset by growth in average earning assets, led by strong growth in the loan portfolio. For the first quarter of 2024, the net interest margin was 3.61%, a decrease from 4.21% for the first quarter of 2023. The decrease in the net interest margin was related to the cost of funding sources increasing more than the yield on earning assets. This increase in the cost of funding was partially linked to the Company's decision to increase rates on deposit accounts to attract deposits amidst heightened market competition for such funds. In addition, the composition of funding sources trended toward certificates of deposit and wholesale funding sources, which generally cost more than other funding sources, such as, checking, NOW, savings and money market deposit products. Partially offsetting the decrease in the net interest margin was the $119 million growth in average earning assets. The average balance of loans for the first quarter of 2024 was $976 million, an increase of $79 million from the first quarter of 2023, led by commercial and residential real estate lending. For the same period, the average balance maintained at the Federal Reserve increased $60 million and average securities decreased $17 million, as maturities were deployed into higher yielding loans.

For the three months ended March 31, 2024, the provision for credit loss expense was $751,000, an increase of $262,000 from the first quarter of 2023. The provision for credit loss expense for the first quarter of 2024 was primarily related to quarterly net charge-offs of $396,000, general reserves associated with the $18 million increase in total loans since December 31, 2023, and a minor increase in select qualitative risk factors. The ratio of nonperforming loans to total loans was .37% at March 31, 2024, compared to .26% at December 31, 2023 and .39% at March 31, 2023. The allowance for credit losses was .93% of total loans at March 31, 2024, compared to .90% at December 31, 2023 and .84% at March 31, 2023.

Noninterest income totaled $3,696,000 for the first quarter of 2024, a decrease of $71,000 from the same period last year. For the first quarter of 2024, other noninterest income decreased $161,000 from the first quarter of 2023. The decrease was largely related to the closure of Race Day Mortgage at the end of 2023. Due to the closure, there was no mortgage application referral income earned in 2024 compared to $231,000 in commissions earned during the first quarter of 2023. The decline in other noninterest income was partially offset by a $114,000 increase in service charges on deposit accounts.

Noninterest expense totaled $10,741,000 for the first quarter of 2024, an increase of $469,000, or 4.6%, from the same period last year. The Company's largest noninterest expense, salaries and employee benefits, increased $283,000, or 4.8%, from the first quarter of 2023. The increase was primarily related to annual merit increases and higher health insurance premiums. However, the growth in salaries and employee benefit expense was partially offset by the elimination of staffing for Race Day Mortgage by April 2023, which resulted in a savings of $192,000 for the first quarter of 2024, when compared to the same period last year. For the three months ended March 31, 2024, data processing expense increased $87,000 from the same period last year. The increase was primarily related to debit card processing due to higher transaction volume. Also contributing to higher noninterest expense for the first quarter of 2024 was a $59,000 increase in software expense, as compared to the same period last year.

The Company's total assets at March 31, 2024 were $1.373 billion, an increase of $20 million from December 31, 2023. The increase in assets was primarily the result of an $18 million increase in loans. At March 31, 2024, total deposits increased $22 million from year end 2023, which occurred primarily within time deposits. Total shareholders' equity increased $1.8 million from year end 2023.

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.

 

OHIO VALLEY BANC CORP - Financial Highlights (Unaudited)



















Three months ended







March 31,







2024


2023

PER SHARE DATA









  Earnings per share






$               0.58


$             0.82

  Dividends per share






$               0.22


$             0.21

  Book value per share






$            30.41


$           28.80

  Dividend payout ratio (a)






37.60 %


25.64 %

  Weighted average shares outstanding




4,785,773


4,773,461










DIVIDEND REINVESTMENT (in 000's)







  Dividends reinvested under









     employee stock ownership plan (b)





$                202


$              193

  Dividends reinvested under









     dividend reinvestment plan (c)






$                391


$              510










PERFORMANCE RATIOS









  Return on average equity






7.77 %


11.85 %

  Return on average assets






0.83 %


1.28 %

  Net interest margin (d)






3.61 %


4.21 %

  Efficiency ratio (e)






71.47 %


65.70 %

  Average earning assets (in 000's)






$     1,261,217


$   1,141,835










(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,




2024


2023

Interest income:






     Interest and fees on loans



$          15,250


$         12,276

     Interest and dividends on securities


1,017


1,092

     Interest on interest-bearing deposits with banks


1,417


426

          Total interest income



17,684


13,794

Interest expense:






     Deposits



5,899


1,832

     Borrowings



595


240

          Total interest expense



6,494


2,072

Net interest income



11,190


11,722

Provision for (recovery of) credit losses 


751


489

Noninterest income:






     Service charges on deposit accounts


725


611

     Trust fees



104


86

     Income from bank owned life insurance and





       annuity assets



225


207

     Mortgage banking income



39


47

     Electronic refund check/deposit fees


540


540

     Debit / credit card interchange income


1,145


1,173

     Tax preparation fees



607


631

     Other



311


472

          Total noninterest income



3,696


3,767

Noninterest expense:






     Salaries and employee benefits



6,167


5,884

     Occupancy 



469


462

     Furniture and equipment 



334


298

     Professional fees



486


433

     Marketing expense



225


241

     FDIC insurance 



148


138

     Data processing 



807


720

     Software



621


562

     Foreclosed assets



(2)


2

     Amortization of intangibles



3


7

     Other 



1,483


1,525

          Total noninterest expense



10,741


10,272

Income before income taxes



3,394


4,728

Income taxes



601


820

NET INCOME



$            2,793


$           3,908

 

OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited)














(in $000's, except share data)







March 31,


December 31,








2024


2023

ASSETS










Cash and noninterest-bearing deposits with banks





$          15,422


$         14,252

Interest-bearing deposits with banks






113,638


113,874

     Total cash and cash equivalents







129,060


128,126

Securities available for sale 







162,186


162,258

Securities held to maturity, net of allowance for credit losses of $2 in 2024 and 2023;


7,968


7,986

 (estimated fair value:  2024 - $7,248; 2023 - $7,390)








Restricted investments in bank stocks






4,983


5,037

Total loans 







989,862


971,900

  Less:  Allowance for credit losses 







(9,229)


(8,767)

     Net loans







980,633


963,133

Premises and equipment, net







21,728


21,450

Premises and equipment held for sale, net





568


573

Accrued interest receivable







4,338


3,606

Goodwill







7,319


7,319

Other intangible assets, net







5


8

Bank owned life insurance and annuity assets





40,745


40,593

Operating lease right-of-use asset, net






1,159


1,205

Deferred tax assets







6,438


6,306

Other assets







5,469


4,535

          Total assets







$     1,372,599


$   1,352,135











LIABILITIES










Noninterest-bearing deposits







$        306,574


$       322,222

Interest-bearing deposits







842,210


804,914

     Total deposits







1,148,784


1,127,136

Other borrowed funds 







43,261


44,593

Subordinated debentures







8,500


8,500

Operating lease liability







1,159


1,205

Allowance for credit losses on off-balance sheet commitments




586


692

Other liabilities







24,527


26,002

          Total liabilities







1,226,817


1,208,128











SHAREHOLDERS' EQUITY










Common stock ($1.00 stated value per share, 10,000,000 shares authorized;





  2024 - 5,490,995 shares issued; 2023 - 5,470,453 shares issued)




5,491


5,470

Additional paid-in capital







52,321


51,842

Retained earnings







116,614


114,871

Accumulated other comprehensive income (loss)





(11,896)


(11,428)

Treasury stock, at cost (697,321 shares)





(16,748)


(16,748)

          Total shareholders' equity







145,782


144,007

               Total liabilities and shareholders' equity





$     1,372,599


$   1,352,135

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

Cision View original content:https://www.prnewswire.com/news-releases/ohio-valley-banc-corp-reports-1st-quarter-earnings-302128123.html

SOURCE Ohio Valley Banc Corp.

FAQ

What was Ohio Valley Banc Corp.'s net income for the 1st quarter of 2024?

Ohio Valley Banc Corp. reported a consolidated net income of $2,793,000 for the 1st quarter of 2024, a decrease of $1,115,000 from the same period in 2023.

What is Ohio Valley Banc Corp.'s stock symbol?

Ohio Valley Banc Corp.'s common stock trades on the NASDAQ Global Market under the symbol OVBC.

How did the net interest margin change in the 1st quarter of 2024 compared to 2023?

The net interest margin decreased from 4.21% in the 1st quarter of 2023 to 3.61% in the 1st quarter of 2024.

What led to the increase in noninterest expenses in the 1st quarter of 2024?

Noninterest expenses increased primarily due to salaries and employee benefits, annual merit increases, and higher health insurance premiums.

What was the provision for credit loss expense in the 1st quarter of 2024?

The provision for credit loss expense was $751,000 for the 1st quarter of 2024, an increase of $262,000 from the same period in 2023.

Ohio Valley Banc Corp

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