Ohio Valley Banc Corp. Reports 2nd Quarter Earnings

Rhea-AI Summary

Ohio Valley Banc Corp. (NASDAQ: OVBC) reported strong Q2 2025 financial results, with consolidated net income of $4.21 million, up 41.7% year-over-year. Earnings per share reached $0.89, compared to $0.63 in Q2 2024.

For H1 2025, net income totaled $8.62 million, a 49.5% increase, with EPS of $1.83. The company achieved a return on average assets of 1.16% and return on average equity of 11.30%. Key growth drivers included participation in the Ohio Homebuyer Plus Program and focus on commercial and real estate lending.

Total assets reached $1.51 billion, with loan balances increasing by $39 million since December 2024. The net interest margin improved to 4.17% in Q2 2025 from 3.74% in Q2 2024, while maintaining strong asset quality with nonperforming loans at 0.45% of total loans.

Positive

• Net income increased 41.7% YoY to $4.21 million in Q2 2025
• Strong loan growth of $58 million in Q2 2025
• Net interest margin improved to 4.17% from 3.74% YoY
• Nonperforming loans ratio improved to 0.45% from 0.50% YoY
• Successful participation in Ohio Homebuyer Plus Program with $77 million in deposits

Negative

• Provision for credit losses increased by $967,000 to $1.15 million in Q2
• Net charge-offs increased to $740,000 in H1 2025
• Data processing expenses increased $299,000 due to higher transaction costs
• Consumer loan segment showing decline due to strategic deemphasis

Insights

Financial Analyst

Ohio Valley Banc Corp delivered exceptional Q2 results with 41.7% net income growth driven by strategic participation in Ohio's homebuyer program.

OVBC reported $4.21 million in Q2 2025 net income, a substantial 41.7% increase year-over-year, with earnings per share rising from $0.63 to $0.89. For the first half of 2025, net income reached $8.62 million, jumping 49.5% from 2024, while return on average assets improved to 1.16% from 0.84%.

The bank's strategic decision to participate in the Ohio Homebuyer Plus Program has proven remarkably effective. This initiative enabled OVBC to receive $77 million in deposits from the Ohio Treasurer at subsidized rates, which the bank then invested in securities pledged as collateral. This clever funding mechanism contributed significantly to the $122 million growth in average earning assets.

Net interest income showed exceptional improvement, increasing by $2.57 million for Q2 and $4.52 million for H1 year-over-year. The net interest margin expanded impressively to 4.17% in Q2 2025 from 3.74% in Q2 2024, demonstrating enhanced earning power.

Loan growth was robust, particularly in the second quarter with $58 million in new loans, focusing on higher-margin segments like commercial real estate, commercial and industrial, and residential real estate. This strategic shift away from less profitable consumer loans demonstrates management's disciplined approach to capital allocation.

Asset quality remains solid with nonperforming loans at just 0.45% of total loans, down from 0.50% a year earlier. Meanwhile, the allowance for credit losses increased to 0.99% of total loans, providing additional protection against potential defaults.

Cost control has been effective, with noninterest expenses increasing only 1.2% year-over-year for H1 2025. The voluntary early retirement program implemented in 2024 is generating savings, offsetting annual merit increases. These efficiency gains are reflected in the improved efficiency ratio of 63.51% for H1 2025 compared to 72.41% for H1 2024.

Overall, OVBC is executing effectively on multiple fronts: growing its loan portfolio in targeted segments, improving its funding mix, expanding its interest margin, maintaining strong asset quality, and controlling expenses.

GALLIPOLIS, Ohio, July 25, 2025 /PRNewswire/ -- Ohio Valley Banc Corp. [Nasdaq: OVBC] (the "Company") reported consolidated net income for the quarter ended June 30, 2025, of $4,210,000, an increase of $1,238,000, or 41.7%, from the same period the prior year. Earnings per share for the second quarter of 2025 were $.89 compared to $.63 for the prior year second quarter. For the six months ended June 30, 2025, net income totaled $8,616,000, an increase of $2,851,000, or 49.5%, from the same period the prior year. Earnings per share were $1.83 for the first six months of 2025 versus $1.21 for the first six months of 2024. Return on average assets and return on average equity were 1.16% and 11.30%, respectively, for the first half of 2025, compared to .84% and 8.01%, respectively, for the same period in the prior year.

Ohio Valley Banc Corp. President and CEO, Larry Miller said, "We continue to reap the benefits of last year's decision to participate in the Ohio Homebuyer Plus Program as well as our continued focus on commercial and real estate lending. The strong growth in net income coupled with stable asset quality are essential pillars of our strategy to increase shareholder value."

For the three months ended June 30, 2025, net interest income increased $2,572,000, and for the six months ended June 30, 2025, net interest income increased $4,522,000 from the same respective periods last year. These increases were related to the increase in both average earning assets and the net interest margin for the respective periods. For the six months ended June 30, 2025, average earning assets increased $122 million from the same period last year, led by the $99 million growth in average securities and the $60 million growth in average loans. The growth in average securities was related to the Company participating in a program offered by the Ohio Treasurer called Ohio Homebuyer Plus starting in the third quarter of 2024. As a participant in the program, the Company developed the Sweet Home Ohio deposit account to offer participants an above-market interest rate along with a deposit bonus to assist customers in achieving their home savings goals. For each Sweet Home Ohio account that was opened, the Company received a deposit from the Ohio Treasurer at a subsidized interest rate. At June 30, 2025, the balance of Sweet Home Ohio accounts totaled $8.4 million and the amount deposited by the Treasurer totaled $77 million. Since the Treasurer deposits are classified as public funds, which are required to be collateralized, the Company invested the funds in securities to be pledged as collateral to the Treasurer. The investment of these funds was the primary contributor to the increase in securities from the first half of 2024. The growth in average loans was related to the commercial real estate, commercial and industrial, and residential real estate lending segments. The growth in these segments was partially offset by a decrease in consumer loans, as this segment was deemphasized by the Company starting in 2024 to focus on more profitable portfolio segments. For the same period, the average balance of cash maintained at the Federal Reserve decreased $37 million to assist with funding loan growth and to generate a higher rate of return. Most of the growth in other funding sources occurred in NOW and money market accounts, which increased $103 million from the first half of 2024. A large portion of this growth was related to the Ohio Treasurer's matching funds received for the Ohio Homebuyer Plus program. Based on the growth in these lower-cost deposits, the average growth in higher-cost certificates of deposit was limited to $6 million for the first half of 2025 versus the same period last year.

For the second quarter of 2025, the net interest margin was 4.17%, an increase from 3.74% for the second quarter of 2024. For the six months ended June 30, 2025, the net interest margin was 4.01%, an increase from 3.68% for the same period last year. The increase in the net interest margin was related to the yield on earning assets increasing, while the cost of funding sources decreased. The yield on earning assets improved in relation to the growth in higher yielding securities and loans, along with the recognition of a market discount on purchased loans totaling $817,000. The cost of funding sources decreased as the composition of funding sources shifted to lower cost deposit sources, such as, NOW and money market accounts. Furthermore, the average cost of certificates of deposit, the largest funding segment, decreased as higher costing certificates repriced to lower current market rates.

For the three months ended June 30, 2025, the provision for credit loss expense totaled $1,148,000, an increase of $967,000 from the same period last year. The quarterly provision for credit loss expense was primarily associated with the $58 million quarterly increase in loan balances, the quarter-to-date net charge-offs of $315,000, and the increase in modeled loss rates in relation to the regression in GDP and unemployment projections. For the six months ended June 30, 2025, the provision for credit losses was $1,564,000, an increase of $632,000 from the same period last year. The year-to-date provision for credit loss expense was primarily associated with net charge-offs of $740,000, an increase in modeled loss rates due to the regression in the economic indicators mentioned above, and $39 million in loan growth. The ratio of nonperforming loans to total loans was .45% at June 30, 2025, compared to .46% at December 31, 2024, and .50% at June 30, 2024. The allowance for credit losses was .99% of total loans at June 30, 2025, compared to .95% at December 31, 2024, and .91% at June 30, 2024.

For the three and six months ended June 30, 2025, noninterest income increased $147,000 and $97,000, respectively, from the same periods last year. The increases were largely due to the interchange income earned on debit and credit cards, which increased $56,000 and $60,000 during the three and six months ended June 30, 2025, compared to the same periods from 2024, respectively.

For the three months ended June 30, 2025, noninterest expense totaled $11,049,000, an increase of $186,000 from the same period last year. For the six months ended June 30, 2025, noninterest expense totaled $21,867,000, an increase of $263,000, or only 1.2%, from the same period last year. The Company's largest noninterest expense, salaries and employee benefits, increased $8,000 as compared to the second quarter of 2024, and decreased $147,000 as compared to the first half of 2024. The year-to-date decrease was primarily related to the savings realized from the voluntary early retirement program implemented in 2024, which was partially offset by annual merit increases. Higher noninterest expense came primarily from data processing expense, which increased $181,000 during the second quarter of 2025, and $299,000 during the first half of 2025, compared to the same periods from 2024. Higher costs in this category were related to debit and credit card processing due to higher transaction volume and conversion costs for the Company's new rewards platform. Further contributing to higher noninterest expense was marketing expense. For the three and six months ended June 30, 2025, marketing expense increased $58,000 and $112,000, respectively, from the same periods last year. The increase was primarily related to advertising and costs associated with supporting the communities we serve.

The Company's total assets at June 30, 2025 were $1.510 billion, an increase of $7 million from December 31, 2024. Since December 31, 2024, loan balances increased $39 million, which was driven by strong second quarter loan growth of $58 million. The second quarter loan growth more than offset the $19 million decrease in loans that occurred in the first quarter that was primarily the result of a $31 million decrease in a warehouse line of credit extended to another mortgage lender. The paydown in the first quarter was a result of lower mortgage volume due to higher mortgage rates and the increase in the lead bank's internal capacity in relation to a capital infusion. At June 30, 2025, the balance of this line of credit was $0, but may increase in future periods if mortgage volume increases and the funding needs of the lead bank changes. The growth in loans occurred mostly in the targeted areas of commercial real estate, commercial and industrial, and residential real estate. The growth in these segments was partially offset by a decrease in consumer loans, as this segment has been deemphasized by the Company due to profitability relative to other loan portfolio segments. The increase in loans was primarily funded by a $29 million decrease in funds maintained at the Federal Reserve. At June 30, 2025, shareholders' equity increased $10.4 million from year end 2024. This was primarily from year-to-date net income of $8.6 million and an increase in accumulated other comprehensive income of $3.9 million, partially offset by cash dividends paid of $2.1 million.

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, tariffs 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)
			Three months ended				Six months ended
			June 30,				June 30,
			2025		2024		2025		2024
PER SHARE DATA
Earnings per share			$             0.89		$             0.63		$               1.83		$             1.21
Dividends per share			$             0.23		$             0.22		$               0.45		$             0.44
Book value per share			$           34.12		$           30.94		$             34.12		$           30.94
Dividend payout ratio (a)			25.74 %		35.48 %		24.61 %		36.51 %
Weighted average shares outstanding			4,711,001		4,740,073		4,711,001		4,762,923
DIVIDEND REINVESTMENT (in 000's)
Dividends reinvested under
employee stock ownership plan (b)			$                  -		$                  -		$                195		$              202
Dividends reinvested under
dividend reinvestment plan (c)			$             330		$             391		$                712		$              782
PERFORMANCE RATIOS
Return on average equity			10.79 %		8.25 %		11.30 %		8.01 %
Return on average assets			1.12 %		0.86 %		1.16 %		0.84 %
Net interest margin (d)			4.17 %		3.74 %		4.01 %		3.68 %
Efficiency ratio (e)			63.09 %		73.37 %		63.51 %		72.41 %
Average earning assets (in 000's)			$   1,408,945		$   1,300,720		$     1,403,233		$   1,280,968

	‌
(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				Six months ended
(in $000's)			June 30,				June 30,
			2025		2024		2025		2024
Interest income:
Interest and fees on loans			$         17,984		$         16,130		$          34,679		$         31,380
Interest and dividends on securities			2,416		1,076		4,695		2,093
Interest on interest-bearing deposits with banks			639		1,446		1,465		2,863
Total interest income			21,039		18,652		40,839		36,336
Interest expense:
Deposits			5,988		6,102		12,121		12,001
Borrowings			516		587		1,043		1,182
Total interest expense			6,504		6,689		13,164		13,183
Net interest income			14,535		11,963		27,675		23,153
Provision for (recovery of) credit losses			1,148		181		1,564		932
Noninterest income:
Service charges on deposit accounts			723		731		1,443		1,456
Trust fees			100		101		203		205
Income from bank owned life insurance and
annuity assets			243		226		483		451
Mortgage banking income			40		40		77		79
Electronic refund check/deposit fees			135		135		675		675
Debit / credit card interchange income			1,279		1,223		2,428		2,368
Tax preparation fees			38		26		634		633
Other			290		219		551		530
Total noninterest income			2,848		2,701		6,494		6,397
Noninterest expense:
Salaries and employee benefits			6,194		6,186		12,206		12,353
Occupancy			493		537		1,014		1,006
Furniture and equipment			338		326		688		660
Professional fees			500		507		1,000		993
Marketing expense			279		221		558		446
FDIC insurance			164		161		347		309
Data processing			969		788		1,894		1,595
Software			587		541		1,128		1,162
Other			1,525		1,596		3,032		3,080
Total noninterest expense			11,049		10,863		21,867		21,604
Income before income taxes			5,186		3,620		10,738		7,014
Income taxes			976		648		2,122		1,249
NET INCOME			$           4,210		$           2,972		$            8,616		$           5,765

 

OHIO VALLEY BANC CORP - Consolidated Balance Sheets (Unaudited)
(in $000's, except share data)							June 30,		December 31,
							2025		2024
ASSETS
Cash and noninterest-bearing deposits with banks							$          16,805		$         15,704
Interest-bearing deposits with banks							37,822		67,403
Total cash and cash equivalents							54,627		83,107
Securities available for sale							265,342		268,120
Securities held to maturity, net of allowance for credit losses of $1 in 2025 and 2024							6,493		7,049
Restricted investments in bank stocks							5,007		5,007
Total loans							1,101,267		1,061,825
Less:  Allowance for credit losses							(10,856)		(10,088)
Net loans							1,090,411		1,051,737
Premises and equipment, net							20,842		21,229
Premises and equipment held for sale, net							497		507
Accrued interest receivable							4,941		4,805
Goodwill							7,319		7,319
Bank owned life insurance and annuity assets							42,416		42,048
Operating lease right-of-use asset, net							935		1,024
Deferred tax assets							6,065		7,218
Other assets							5,463		4,242
Total assets							$     1,510,358		$    1,503,412
LIABILITIES
Noninterest-bearing deposits							$        331,373		$       322,383
Interest-bearing deposits							945,389		952,795
Total deposits							1,276,762		1,275,178
Other borrowed funds							37,177		39,740
Subordinated debentures							8,500		8,500
Operating lease liability							935		1,024
Allowance for credit losses on off-balance sheet commitments							637		582
Other liabilities							25,587		28,060
Total liabilities							1,349,598		1,353,084
SHAREHOLDERS' EQUITY
Common stock ($1.00 stated value per share, 10,000,000 shares authorized;
5,490,995 shares issued)							5,491		5,491
Additional paid-in capital							52,321		52,321
Retained earnings							128,188		121,693
Accumulated other comprehensive income (loss)							(6,547)		(10,484)
Treasury stock, at cost (779,994 shares)							(18,693)		(18,693)
Total shareholders' equity							160,760		150,328
Total liabilities and shareholders' equity							$     1,510,358		$   1,503,412

 

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SOURCE Ohio Valley Banc Corp.

FAQ

What was OVBC's earnings per share in Q2 2025?

OVBC reported earnings per share of $0.89 in Q2 2025, compared to $0.63 in Q2 2024, representing a significant increase.

How much did Ohio Valley Banc Corp's net income grow in Q2 2025?

OVBC's net income grew by 41.7% year-over-year to $4.21 million in Q2 2025.

What was OVBC's net interest margin in Q2 2025?

OVBC's net interest margin was 4.17% in Q2 2025, an increase from 3.74% in Q2 2024.

How much are OVBC's total assets as of Q2 2025?

OVBC reported total assets of $1.51 billion as of June 30, 2025, an increase of $7 million from December 31, 2024.

What is the status of OVBC's loan quality in Q2 2025?

OVBC maintained strong loan quality with nonperforming loans at 0.45% of total loans, improved from 0.50% year-over-year.

How much did OVBC's loan balances increase in 2025?

OVBC's loan balances increased by $39 million since December 2024, driven by strong Q2 loan growth of $58 million.